Document:

Exhibit 10.2

 

SECURITY AGREEMENT

THIS SECURITY AGREEMENT (the "Security Agreement") is executed as of June 29, 2016, by Summer Energy, LLC, a Texas limited liability company, whose address is 800 Bering Drive, Suite 260, Houston, Texas 77057-2228 (hereinafter called "Borrower") to and in favor of Blue Water Capital Funding, LLC, a Florida limited liability company, whose address is 9855 West 78th Street, Suite 300, Eden Prairie, Minnesota 55344 (hereinafter called "Lender").  Borrower does hereby grant to Lender a security interest in the following described property (hereinafter called "Collateral"):

1. Collateral.

		A.	All equipment of Borrower, whether now owned or hereafter acquired, including, but not limited to, all present and future machinery, fixtures, parts and tools, and goods described in any equipment schedule or list herewith or hereafter furnished to Lender by Borrower (but no such schedule or list need be furnished in order for the security interest granted herein to be valid as to all of Borrower's equipment).

		B.	All inventory of Borrower, including but not limited to (i) personal property which are held for sale or lease or are furnished or are to be furnished under a contract of service or which constitute raw materials, work in process or materials used or consumed or to be used or consumed in the Borrower's business, (ii) all inventory, wherever located, evidenced by negotiable and non-negotiable documents of title, warehouse receipts and bills of lading, and (iii) all of the Borrower's rights in, to and under all purchase orders now owned or hereinafter received or acquired by it for goods or services, whether now owned or hereafter acquired and wherever located.

		C.	Each and every right of Borrower for the payment of money, whether such right to payment now exists or hereafter arises, whether such right to payment arises out of a sale, lease or other disposition of goods or other property by Borrower, out of a loan by Borrower, out of the overpayment of taxes or other liabilities of Borrower, or otherwise arises under any contract or agreement, whether such right to payment is or is not already earned by performance, and howsoever such right to payment may be evidenced, together with all other rights and interests (including all liens and security interests) which Borrower may at any time have by law or agreement against any account Borrower or other obligor obligated to make any such payment or against any of the property of such account Borrower or other obligor; all including, but not limited to, all present and future debt instruments, chattel paper, loans and obligations receivables, accounts or accounts receivable, tax refunds and accounts, including checking, escrow, deposit, maintenance, earnest money and certificate of deposits.

		D.	All general intangibles of Borrower, whether now owned or hereafter acquired, including, but not limited to, applications for patents, copyrights, trademarks, trade secrets, goodwill, trade names, customer lists, permits and franchises, and the right to use Borrower's name.

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All substitutions and replacements for and products of any of the foregoing property not constituting consumer goods and together with proceeds of any and all of the foregoing property and, in case of all tangible collateral, together with all accessions and, except in the case of consumer goods, together with all accessories, attachments, parts, equipment and repairs now or hereafter attached or affixed to or used in connection with any such goods.

2. To secure prompt payment to Lender at the address stated above or such other place as designated in that certain a Revolving Promissory Note of even date herewith, executed by Borrower to and in favor of Lender in the sum of Five Million and no/100 Dollars ($5,000,000.00) with interest as provided therein, and any and all extensions and renewals thereof, and any and all future advances made by Lender to Borrower at Lender's option, together with all other liabilities of Borrower to Lender (primarily, secondarily, direct, contingent, sole, joint, or several) due or to become due or which may have been heretofore, or may be hereafter, contracted or acquired and the performance by Borrower of all of the terms and conditions of this Security Agreement (hereinafter referred to as "Obligations").  Lender shall be allowed to file any document, including a UCC Financing Statement, to evidence the security interest granted by this Security Agreement.

BORROWER WARRANTS, REPRESENTS AND AGREES THAT:

1. Borrower is or will be the owner of the Collateral which shall be acquired after the date hereof, free of all liens, encumbrances and security interests except the security interest hereby created and the security interests in favor of DTE Energy Trading, Inc. as described in the Subordination Agreement.  For the purpose of this Security Agreement, "Subordination Agreement" shall mean and refer to that certain Subordination Agreement executed and delivered by Lender whereby Lender agrees to subordinate its security interest in the assets of Borrower to DTE Energy Trading, Inc., a Michigan corporation pursuant to that certain Credit Agreement dated April 1, 2014, by and between Borrower and DTE Energy Trading, Inc.

2. The execution, delivery and performance of this Security Agreement and the creation of the security interests provided for herein (i) are within the Borrower's limited liability company power, (ii) have been duly authorized by all necessary limited liability company action, (iii) are not in contravention of any provisions of the Borrower's certificate of formation or limited liability company agreement, (iv) do not violate any law or regulation or any order or decree of any court of government instrumentality applicable to the Borrower, (v) do not conflict with or result in a breach of, or constitute default under, any indenture, mortgage, deed of trust, lease, agreement or other instrument to which the Borrower is a party or by which it or any of its properties are bound, and (vi) do not require the consent or approval of any governmental body, agency or official or other person other than those that have been obtained.  This Security Agreement has been duly executed and delivered by the Borrower and constitutes the legal, valid and binding obligation of the Borrower, enforceable against it in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting the enforceability of creditors' rights generally and by general provisions of equity (regardless of whether such enforceability is considered a proceeding in equity or at law).

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3. Any and all accounts receivable which are Collateral are genuine and enforceable, and there are no offsets, counterclaims, or defenses to any of them.

4. Borrower's inventory, books, records, contract rights and other property above specified relating to the Collateral are or will be kept  at the address of the Borrower on the first page of this Security Agreement and Borrower will not, without the prior written consent of Lender, remove or permit the same to be removed from the location or locations set forth above.

5. Borrower will keep the Collateral insured at all times against loss by fire and/or other hazards concerning which, in the judgment of Lender, insurance protection is reasonably necessary, in a company or companies satisfactory to Lender and in amounts sufficient to protect Lender against loss or damage to said Collateral and will pay the premiums therefor; that such policy or policies of insurance will be delivered to and held by Lender, together with loss payable clauses in favor of Lender as its interest may appear, in form satisfactory to Lender.

6. No financing statement covering the Collateral, or any part thereof, is on file in any public office in connection with financing granted to Borrower concurrent herewith and the Lender.

7. Borrower will at any time or times hereafter execute such financing statements and other instruments and perform such acts as Lender may request to establish and maintain a valid security interest in the Collateral, and will pay all costs of filing and recording.

8. Upon an Event of Default and until Lender shall notify Borrower of the revocation of such power and authority, Borrower will, at its own expense, endeavor to collect, as and when due, any accounts which are Collateral.  Upon the occurrence of an Event of Default (as defined herein) Borrower will, at the Lender's request, deliver all proceeds of such collections to Lender at its request.

9. Borrower will not lien, pledge or take any action or inaction which would cause a material adverse change in  any accounts which are Collateral without the prior written consent of Lender.

10. At any time after an Event of Default, Lender may, and at the request of Lender Borrower shall, promptly notify any account borrower or obligor of any account, instrument, chattel paper, other right to payment or general intangible constituting Collateral that the same has been assigned to Lender and direct such account borrower or obligor to make all future payments to Lender.

11. Borrower will at all times keep accurate and complete records of the Collateral and permit Lender to inspect the same, and the Collateral, at all reasonable times.  Borrower will, upon request of Lender, furnish to Lender such reports and statements as Lender may request with respect to the Collateral and the operation of the Property.

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12. Upon the occurrence and continuance of an Event of Default, Lender, in the name and on behalf of the Borrower or, at its option in its own name, may perform or observe such agreements and take any action which Lender may deem necessary or desirable to cure or correct such failure. Upon the occurrence and continuance of an Event of Default, Borrower irrevocably authorizes Lender and grants Lender a limited power of attorney in the name and on behalf of Borrower or, at its option in its own name, to take any action deemed by Lender to be necessary or desirable to establish, perfect, protect or enforce the security interest created by this Security Agreement.

13. Borrower will keep and maintain the Collateral in good order and repair and will not sell, encumber, offer to sell, transfer, lease or otherwise dispose of the Collateral other than in the ordinary course of its business without the written consent of Lender.

14. Borrower will advise Lender promptly and in reasonable detail, (i) of any lien, security interest, encumbrance or claim made or asserted against any of the Collateral, other than that of DTE Energy as described in the Subordination Agreement, (ii) of any material change in the composition of the Collateral, and (iii) of the occurrence of any other event which would have a material effect on the aggregate value of the Collateral or on the security interests granted to the Lender in this Security Agreement.

15. Until the occurrence of an Event of Default, the Borrower shall be entitled to possession of the Collateral.

16. Borrower shall be in default under this Security Agreement upon the occurrence of an Event of Default under the Loan Agreement, or if any covenant, warranty or representation of this Security Agreement shall prove to be untrue in any material respect.

17. In the event of an occurrence of an Event of Default:

		(a)	Lender shall have the right, at its option and without demand or notice, to declare all or any part of the Obligations immediately due and payable;

		(b)	Lender may exercise, in addition to the rights and remedies granted hereby, all of the rights and remedies of a Lender under the Uniform Commercial Code or any other applicable law;

		(c)	Lender may effect all necessary insurance, pay the premiums thereon, and may pay any taxes, liens and encumbrances on the Collateral, and any such payments made by Lender with interest at the highest legal rate allowed by law shall be a part of the Obligations;

		(d)	Borrower agrees to make the Collateral available to Lender; and

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		(e)	Borrower agrees to pay all costs and expenses of Lender, including reasonable attorneys' fees, in the collection of any of the Obligations or the enforcement of any of Lender's rights.

		(f)	Lender may by judicial process, or without judicial process if it can done without breach of the peace, enter any premises where any of such Collateral is or may be located, and without charge or liability to Lender, seize and remove such Collateral from such premises and have access to and use of the Borrower's books and records relating to such Collateral.

18. The following terms and conditions shall apply to this Security Agreement:

		(a)	If any notification of intended disposition of any of the Collateral is required by law, such notification shall be deemed reasonable and properly given if mailed at least ten (10) days before such disposition, postage prepaid, addressed to Borrower at the address shown herein.

		(b)	Waiver of any default hereunder by Lender shall not be a waiver of any other default or of a same default on a later occasion.  No delay or failure by Lender to exercise any right or remedy shall be a waiver of such right or remedy and no single or partial exercise by Lender of any right or remedy shall preclude other or further exercise thereof or the exercise of any other right or remedy at any other time.

		(c)	This Security Agreement and all rights and obligations hereunder, including matters of construction, validity and performance, shall be governed by the laws of Minnesota, without regard to principles of conflicts of law.  If any part of this Security Agreement shall be adjudged invalid, the remainder shall not thereby be invalidated.

		(d)	If more than one party shall sign this Security Agreement, the term "Borrower" shall mean all such parties and each of them and all such parties shall be jointly and severally obligated hereunder.  All rights of Lender shall inure to the benefit of the Lender's successors and assigns, and all obligations of Borrower shall bind Borrower's successors and assigns.

		(e)	This Security Agreement contains the entire agreement between the parties, and no oral agreements shall be binding.

17. The Borrower represents, certifies, warrants and agrees that the Borrower understands all of the provisions of this Security Agreement. The Borrower also agrees that compliance by the Lender with the express provisions of this Security Agreement shall constitute good faith and shall be considered reasonable for all purposes.

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LENDER:

BLUE WATER CAPITAL

FUNDING, LLC,

a Florida limited liability company

By: /s/ Jeffrey Reed 

Jeffrey Reed

Its:  Chief Operating Officer

BORROWER:

SUMMER ENERGY, LLC,

a Texas limited liability company

 

By: /s/ Jaleea P. George

Jaleea P. George

Its:  CFO

6Exhibit 10.3

 

GUARANTY

THIS GUARANTY (the "Guaranty") is made effective as of June 29, 2016, by SUMMER ENERGY HOLDINGS, INC., a Nevada corporation (the "Guarantor"), for the benefit of BLUE WATER CAPITAL FUNDING, LLC, a Florida limited liability company ("Lender"), with reference to the following facts:

A. Lender has agreed to make a loan (the "Loan") to SUMMER ENERGY, LLC, a Texas limited liability company ("Borrower"), as evidenced by that certain Revolving Promissory Note dated of even date herewith in the principal amount of $5,000,000.00 ("Revolving Note"), which Note is secured by, inter alia, that certain Security Agreement, dated June 29, 2016, given by Borrower to Lender (collectively, the "Loan Documents").

B. The Loan Documents are hereby made a part of this Guaranty by reference thereto with the same force and effect as if fully set forth herein and, to the best of the Guarantor's knowledge, all representations and warranties made by the Borrower in the Loan Documents are true and correct.  Unless otherwise defined herein, all terms shall have the same meaning given to them in the Loan Documents.

C. As a condition of the making of the Loan and as additional security for the Loan, Lender has required that Guarantor guarantee the obligations of Borrower under the Revolving Note in accordance with the terms of this Guaranty.

D. The Guarantor, is the sole member of Borrower, and as a result will derive direct and indirect benefits from the Loan given by Lender to Borrower.

NOW, THEREFORE, in consideration of Lender's agreement to make the Loan and as an inducement to Lender to do so, Guarantor covenants and agrees with Lender, for the benefit of the holder from time to time of the Notes, as follows:

ARTICLE ONE - REPRESENTATIONS AND WARRANTIES

Guarantor makes the following representations and warranties which shall be continuing representations and warranties until this Guaranty expires in accordance with the provisions contained herein:

1.01 Guaranty Authorized and Binding.  The execution, delivery and performance of this Guaranty do not require the consent or approval of any governmental body or other regulatory authority; are not in contravention of, or in conflict with, any law or regulation; and this Guaranty is a valid and legally binding obligation of Guarantor enforceable in accordance with its terms.

1.02 No Conflict. The execution and delivery of this Guaranty are not, and the performance of this Guaranty will not be, in contravention of, or in conflict with, any agreement, indenture or undertaking to which Guarantor is a party or by which Guarantor or Guarantor's property is or may be bound or affected and do not, and will not cause any security interest, lien or other encumbrance to be created or imposed upon any such property.

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1.03 Solvency. The execution and delivery of this Guaranty will not (i) render Guarantor insolvent under generally accepted accounting principles nor render Guarantor Insolvent (as defined below), (ii) leave Guarantor with remaining assets which constitute unreasonably small capital given the nature of Guarantor's business, or (iii) result in the incurrence of Debts beyond Guarantor's ability to pay them when and as they mature. For the purposes of this Section, "Insolvent" means that the present fair saleable value of assets is less than the amount that will be required to pay the probable liability on existing Debts as they become absolute and matured. For the purposes of this Section, "Debts" includes any legal liability for indebtedness, whether matured or unmatured, liquidated or unliquidated, absolute, fixed or contingent.

1.04 Financial or Other Benefit or Advantage. Guarantor hereby acknowledges and warrants that Guarantor has derived or expects to derive a financial or other benefit or advantage from the Loan and from each and every renewal, extension, release of collateral or other relinquishment of legal rights made or granted or to be made or granted by Lender to Borrower in connection with the Loan.

1.05 Bankruptcy.  There are no: (i) bankruptcy proceedings involving Guarantor and none is contemplated; (ii) unsatisfied judgments of record against Guarantor; or (iii) tax liens filed against Guarantor.

1.06 Other Obligations.  Guarantor is not: (i) in default in the payment or performance of any of Guarantor's obligations in connection with borrowed money or any other major obligation; or (ii) in default under any other material contract or agreement to which Guarantor is a party.

ARTICLE TWO - AGREEMENTS

2.01 Guaranty. Guarantor hereby unconditionally and irrevocably guarantees the due and punctual payment of the principal due under the Revolving Note up to the amount of Five Million and 00/100 Dollars ($5,000,00.00), plus interest, late fees, reasonable attorneys' fees and costs (and all renewals, extensions, modifications and rearrangements thereof (the "Guaranteed Obligations") and whether or not the Guaranteed Obligations are valid and enforceable against the Borrower, whenever the Guaranteed Obligations become due, whether on demand, at maturity or by reason of acceleration, or at the time the Borrower or the Guarantor shall become the subject of any bankruptcy or insolvency proceeding. This is a guaranty of payment and not of collection only.

2.02 Obligations Absolute. The obligations of Guarantor hereunder shall remain in full force and effect without regard to, and shall not be affected or impaired by the following, any of which may occur or be taken without the consent of, or notice to, Guarantor, nor shall any of the following give Guarantor any recourse or right of action against Lender:

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(a) Any express or implied amendment, modification, renewal, addition, supplement, extension (including, without limitation, extensions beyond the original term) or acceleration of or to any of the Loan Documents;

(b) Any exercise or non-exercise by Lender of any right or privilege under this Guaranty or any of the Loan Documents;

(c) Any bankruptcy, insolvency, reorganization, composition, adjustment, dissolution, liquidation or other like proceeding relating to Guarantor or Borrower, or any guarantor (which term shall include any other party at any time directly or contingently liable for any of the Borrower's obligations under the Loan Documents or any affiliate of Borrower), or any action taken with respect to this Guaranty by any trustee or receiver, or by any court, in any such proceeding, whether or not Guarantor shall have had notice or knowledge of any of the foregoing;

(d) Any release or discharge of the Borrower from its liability under any of the Loan Documents or any release or discharge of any endorser or guarantor or of any other party at any time directly or contingently liable for the Guaranteed Obligations or any compromise or settlement by Lender of any of its claims against any of them;

(e) Any subordination, compromise, release (by operation of law or otherwise), discharge, compound, collection, or liquidation of any or all of the Collateral or otherwise in any manner, or any substitution with respect thereto;

(f) Any assignment or other transfer of this Guaranty in whole or in part or of any of the Loan Documents;

(g) Any acceptance of partial performance of the Guaranteed Obligations;

(h) Any consent to the transfer of, or actual transfer of, the Collateral which is not in conformity with such agreements or otherwise;

(i) Any bid or purchase at any sale of the Collateral, or any portion thereof;

(j) Any taking and/or acceptance of any additional guarantees, collateral or security; and

(k) Any failure to perfect or to continue the perfection of any security.

2.03 Waivers. Guarantor unconditionally waives any defense to the enforcement of this Guaranty, including, without limitation:

(a) All presentments, demands for performance, notices of nonperformance, protests, notices of protest, notices of dishonor, and notices of acceptance of this Guaranty;

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(b) Any right to require Lender to proceed against Borrower or any guarantor at any time or to proceed against or exhaust any security held by Lender at any time or to pursue any other remedy whatsoever at any time;

(c) The defense of any statute of limitations affecting the liability of Guarantor hereunder, the liability of Borrower or any guarantor under the Loan Documents, or the enforcement hereof; to the extent permitted by law;

(d) Any defense arising by reason of any invalidity or unenforceability of any of the Loan Documents or any disability of Borrower or any guarantor or of any manner in which Lender has exercised its rights and remedies under the Loan Documents, or by any cessation from any cause whatsoever of the liability of Borrower or any guarantor;

(e) Any defense based upon an election of remedies by Lender, including, without limitation, any election to proceed by judicial or nonjudicial foreclosure of any security, whether real property or personal property security, or by deed in lieu thereof; and whether or not every aspect of any foreclosure sale is commercially reasonable, or any election of remedies, including but not limited to remedies relating to real property or personal property security, which destroys or otherwise impairs the subrogation rights of Guarantor or the rights of Guarantor to proceed against Borrower or any other guarantor for reimbursement, or both;

(f) Any duty of Lender to advise Guarantor of any information known to Lender regarding the financial condition of Borrower and all other circumstances affecting Borrower's ability to perform its obligations to Lender, it being agreed that Guarantor assumes the responsibility for being and keeping informed regarding such condition or any such circumstances; and

(g) Any rights of subrogation, reimbursement, exoneration, contribution and indemnity, and any rights or claims of any kind or nature against Borrower which arise out of or are caused by this Guaranty, and any rights to enforce any remedy which Lender now has or may hereafter have against Borrower and any benefit of; and any right to participate in, any security now or hereafter held by Lender, until all of the Guaranteed Obligations have been fully paid and performed.

2.04 Subrogation. Guarantor understands that the exercise by Lender of certain rights and remedies may affect or eliminate Guarantor's right of subrogation against Borrower or any guarantor and that Guarantor may therefore incur partially or totally nonreimbursable liability hereunder. Nevertheless, Guarantor hereby authorizes and empowers Lender, its successors, endorsees and/or assigns, to exercise in its or their sole discretion, any rights and remedies, or any combination thereof; which may then be available, it being the purpose and intent of Guarantor that the obligations hereunder shall be absolute, continuing, independent and unconditional under any and all circumstances.

2.05 Additional Waivers. No Guarantor shall be released or discharged, either in whole or in part, by  Lender's failure or delay to (i) perfect or continue the perfection of any lien or security interest in any collateral which secures the obligations of the Borrower or Guarantor, or (ii) protect the property covered by such lien or security interest.

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2.06 Independent and Separate Obligations. The obligation of Guarantor hereunder is independent of the obligation of Borrower and, in the event of any default hereunder, a separate action or actions may be brought and prosecuted against Guarantor whether or not Guarantor is the alter ego of Borrower and whether or not Borrower is joined therein or a separate action or actions are brought against Borrower. Lender's rights hereunder shall not be exhausted until all of the Guaranteed Obligations have been fully paid and performed.

2.07 Bankruptcy No Discharge; Repayments. So long as any of the Guaranteed Obligations guaranteed hereunder shall be owing to Lender, Guarantor shall not, without the prior written consent of Lender, commence or join with any other party in commencing any bankruptcy, reorganization or insolvency proceedings of or against Borrower. Guarantor understands and acknowledges that by virtue of this Guaranty, it has specifically assumed any and all risks of a bankruptcy or reorganization case or proceeding with respect to Borrower. As an example and not in any way of limitation, a subsequent modification of the Guaranteed Obligations in any reorganization case concerning Borrower shall not affect the obligation of Guarantor to pay and perform the Guaranteed Obligations in accordance with their respective original terms. If claim is ever made upon Lender for repayment of the obligations under the Loan Documents and Lender repays all or any part of said amount, then, notwithstanding any revocation or termination of this Guaranty or the cancellation of the Revolving Note or any other instrument evidencing the Loan, Guarantor shall be and remain jointly and severally liable to Lender for the amount so repaid to the same extent as if such amount had never originally been received by Lender.

ARTICLE THREE - MISCELLANEOUS

3.01 Expenses. In addition to the Guaranteed Obligations, Guarantor agrees to pay all costs and expenses, including reasonable attorneys' fees, which may be incurred by Lender in any effort to collect or enforce any of the Loan Documents or the obligations of Guarantor hereunder, whether or not any lawsuit is filed including, without limitation, all costs and reasonable attorneys' fees incurred by Lender in any bankruptcy proceeding (including, without limitation, any action for relief from the automatic stay of any bankruptcy proceeding, whether or not Lender prevails therein) and in any judicial or nonjudicial foreclosure action. Such amounts shall bear interest until paid at a rate equal to the Interest Rate, as defined in the Revolving Note.

3.02 Amendments; Successors. Neither this instrument nor any term hereof may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the party against which enforcement of the change, waiver, discharge or termination is sought. All of the terms of this instrument shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, executors, administrators, personal representatives, successors and assigns. In the event of the death of any individual person included in the term "Guarantor," this Guaranty shall be enforceable as a claim against that individual's estate or otherwise against the representatives of the individual's estate, the individual's heirs-at-law, the devisees and beneficiaries of the individual's total estate and each of them. The term "Borrower" shall mean both the named Borrower and any other person or entity at any time assuming or otherwise becoming primarily liable on all or any part of the obligations set forth in the Loan Documents. No delay or failure by Lender to exercise any remedy against Borrower or Guarantor will be construed as a waiver of that right or remedy. All remedies of Lender are cumulative and may be exercised singly, simultaneously, consecutively and in any order. In the event that the provisions of this Guaranty are claimed or held to be inconsistent with any other instrument evidencing or securing the Loan, or the obligations of Guarantor, the terms of this Guaranty shall remain fully valid and effective.  When the context in which the words are used in this Guaranty indicates that such is the intent, words in the singular number shall include the plural and vice-versa. All references to "Guarantor" shall be interpreted to include Guarantor. If any one or more of the provisions of this Guaranty should be determined to be illegal or unenforceable, all other provisions shall remain effective. Guarantor shall not have the right to assign any of its rights or obligations under this Guaranty.

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3.03 Governing Law. This Guaranty shall be governed by and be construed pursuant to the laws of the State of Minnesota applicable to contracts made and performed in the State of Minnesota without reference to any conflict or choice of law rules that would otherwise apply. Any suit, action or proceeding arising out of or in connection with this Agreement may be brought in any state or federal court in Hennepin County, Minnesota, as Lender elects, and the parties hereto irrevocably submit and consent to the jurisdiction of each such court and agree that any summons, complaint, writ, judgment or other notice or service or legal process may be sufficiently served upon it in connection with any such suit, action or proceeding, if sent to the last known address of the applicable party in accordance with the provisions of Section 3.07 hereof. The submission to said jurisdiction shall not (and shall not be construed so as to) limit the right of the Lender to take proceedings against the Guarantor, in whatsoever jurisdictions shall be appropriate nor shall the taking of proceedings in any one or more jurisdictions preclude the taking of proceedings in any other jurisdiction, whether concurrently or not.

THE LENDER BY ITS ACCEPTANCE HEREOF AND THE GUARANTOR HEREBY VOLUNTARILY, KNOWINGLY AND INTENTIONALLY WAIVES ANY AND ALL RIGHTS TO TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING ARISING UNDER THIS GUARANTY OR CONCERNING THE GUARANTEED OBLIGATIONS AND/OR ANY COLLATERAL CONTEMPLATED THEREBY, REGARDLESS OF WHETHER SUCH ACTION OR PROCEEDING CONCERNS ANY CONTRACTUAL OR TORTIOUS OR OTHER CLAIM.  THE GUARANTOR ACKNOWLEDGES THAT THIS WAIVER OF JURY TRIAL IS A MATERIAL INDUCEMENT TO THE LENDER IN EXTENDING THE TO THE BORROWER, THAT THE LENDER WOULD NOT HAVE EXTENDED THE LOAN WITHOUT THIS JURY TRIAL WAIVER, AND THAT THE GUARANTOR HAS BEEN REPRESENTED BY AN ATTORNEY OR HAS HAD AN OPPORTUNITY TO CONSULT WITH AN ATTORNEY IN CONNECTION WITH THIS JURY TRIAL WAIVER AND UNDERSTANDS THE LEGAL EFFECT OF THIS WAIVER.

3.04 Assignability by Lender. Lender may, at any time and from time to time, assign, conditionally or otherwise, all of the rights of Lender under the Revolving Note and under this Guaranty, whereupon the assignee shall succeed to all rights of Lender hereunder to the extent that such rights may be assigned to it. Lender, or each successor holder of the Revolving Note, may give written notice to Guarantor of any such assignment, but any failure to give, or delay in giving, such notice shall not affect the validity or enforceability of any such assignment.

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3.05 Demands. Each demand by Lender for performance or payment hereunder shall be in writing and shall be made in the manner set forth in Section 3.07 below. A dated statement signed by an officer of Lender setting forth the amount of indebtedness at the time owing to Lender by Borrower under the Loan Documents shall be presumptive evidence thereof (subject to rebuttal) as between Guarantor and Lender in any legal proceedings against Guarantor in connection with this Guaranty.

3.06 Term. The obligations of Guarantor under this Guaranty shall continue in full force and effect until the obligations under the Loan Documents shall have been fully paid and performed.

3.07 Notices. All notices and demands hereunder shall be deemed to have been duly given if personally delivered or mailed by United States registered or certified mail, with return receipt requested, postage prepaid to the parties at the following addresses (or at such other addresses as shall be given by written notice by any party to the others) and shall be deemed complete upon any such mailing:

To Guarantor:                                        Summer Energy Holdings, Inc.

Attn:  Jaleea P. George

800 Bering Drive, Suite 260

Houston, TX 77057

With a copy to:                                     Kirton McConkie, PC

 60 E. South Temple, Suite 1800

Salt Lake City, Utah 84111

Tel: (801) 328-3600

Fax: (801) 212-2006

Attention: Alexander N. Pearson

Email: apearson@kmclaw.com

To Lender:                                             Blue Water Capital Funding, LLC

9855 West 78th Street, Suite 300

Eden Prairie, Minnesota 55344

3.08 Complete Agreement. This Guaranty supersedes any prior negotiations, discussions or communications between Guarantor and Lender and constitutes the entire agreement between Lender and Guarantor with respect to the Guaranteed Obligations. This Guaranty may be executed in one or more counterparts, all of which, taken together, shall constitute one and the same Guaranty.

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3.09 Obligation Absolute.  This Guaranty and the obligations of Guarantor hereunder shall be effective upon delivery to the Guarantor, without further act, condition or acceptance by the Lender, shall be binding upon the Guarantor and the heirs, representatives, successors and assigns of the Guarantor, and shall inure to the benefit of the Lender and its participants, successors and assigns.  The Guarantor further waives notice of Lender's acceptance hereof.

3.10 Headings.  The captions and headings to the sections and paragraphs of this Guaranty are for convenience only and shall not be deemed part of the text of the respective sections or paragraphs and shall not vary, by implication or otherwise, any of the provisions of this Guaranty.

[SIGNATURE PAGE FOLLOWS.]

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IN WITNESS WHEREOF, the undersigned Guarantor has executed this Guaranty as of the date first above written.

GUARANTOR:

SUMMER ENERGY HOLDINGS, INC.,

a Nevada corporation

By:  /s/ Jaleea P. George 

Its:  CFO

9

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00259-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00259-of-00352.parquet"}]]