Document:

STOCK PLEDGE AND SECURITY
AGREEMENT

    

    This STOCK PLEDGE AND SECURITY
AGREEMENT (“Stock Pledge
Agreement”) is executed effective as of June 30, 2010 by and among
HEMIWEDGE INDUSTRIES, INC. (formerly called Shumate Industries, Inc.), a
Delaware corporation (“Pledgor”),
and EADS INVESTMENTS I, LLC., of 18305 Kitzman Road, Cypress, Texas, 77429,
(“Investments”)
and D. BRADLEY MCWILLIAMS (“McWilliams”),
of 710 North Post Oak Road, Suite 400, Houston, Texas, 77024, (Investments and
McWilliams herein collectively called the (“Secured
Parties”).

    

    RECITALS:

    

    A.  The Pledgor and Hemiwedge
Valve Corporation, a Texas corporation (“Hemiwedge
Valve”) (Pledgor and Hemiwedge Valve, collectively “Borrowers”)
are liable to the Secured Parties for the indebtedness and obligations described
in that certain Amended and Restated Loan Agreement (“Loan
Agreement”) and Amended and Restated Promissory Note (Demand Note)
(“Note”) and
all other related loan documents executed by the Grantors in connection with
such Loan Agreement and Note, each of even date herewith (collectively, the
“Loan
Documents”).

    

    B.  Pledgor owns one hundred
percent (100%) of the issued and outstanding stock of Hemiwedge
Valve.

    

    C.  Pledgor has agreed to
secure payment of the indebtedness and obligations under the Loan Documents and
other indebtedness and obligations described herein (collectively, the “Indebtedness”)
by granting the security interests described in this Stock Pledge
Agreement.

     

    D.  The Pledgor has
determined that the execution, delivery and performance of this Stock Pledge
Agreement directly benefits and are in the best interests of the
Pledgor.

     

    WITNESSETH:

     

    NOW,
THEREFORE, in consideration of the premises and covenants contained herein, to
induce Secured Parties to continue the Loan to the Borrowers under the Loan
Documents, and for other good and valuable consideration, the receipt of which
is hereby acknowledged, Pledgor and Secured Parties hereby agree as
follows:

    
      
         

      

      
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    ARTICLE
I

    

    GRANT OF SECURITY INTEREST
AND PLEDGE

    

    Pledgor,
for itself and its successors, assigns, and legal representatives, hereby
pledges and assigns unto Secured Parties for the ratable benefit of each of
them, and grants to Secured Parties, a first lien and security interest in, the
Collateral (described in Article II of this Stock Pledge Agreement) to secure
(a) the punctual payment when due of any and all principal, interest, Fees,
costs, expenses and other sums owed by Borrowers under the Loan Documents,
("Indebtedness"),
and (b) the due and punctual performance and observance of all covenants
required hereunder or required of Borrowers under the Loan Documents, or to be
performed or observed by the Pledgor and Borrowers in respect therewith ("Obligations").

    

    ARTICLE
II

    

    COLLATERAL

    

    The
Collateral subject to this Pledge Agreement (the "Collateral")
is:

    

    (a)       Certificate
No. 1, in the name of Excalibur Industries, Inc. (now called Hemiwedge
Industries, Inc.), representing 800,000 shares of common stock, having $0.001
par value each, of Hemiwedge Valve represented thereby, and (hereinafter called
the "Pledged
Shares");

    

    (b)      all
dividends, cash, instruments, proceeds, payments, shares, securities, and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Pledged Shares; and

    

    (c)      all
stock rights, warrants, right to subscribe for, and additional shares of stock
of Hemiwedge Valve or any successor or assignee of Hemiwedge Valve from time to
time acquired by Pledgor in any manner, and the certificates representing such
additional shares, and all dividends, cash, instruments, securities, and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any and all of such shares;

    

    provided, however, that, notwithstanding
any provision herein to the contrary, unless and until a Default or an Event of
Default (as defined in Article V hereof) has occurred, Pledgor shall, pursuant
to the provisions of the Loan Documents, be entitled to receive, use, consume
and otherwise appropriate to its own use, any and all cash dividends and
distributions permitted by the provisions of the Loan Documents in connection
with the Collateral without any further consent of the Secured Parties or
Lenders; provided, further that immediately upon
the occurrence of an Event of Default or demand for payment by Lenders under the
Note, Pledgor's right to use and take any such permitted cash dividends and
distributions shall cease, and all cash payments shall revert to the Secured
Parties’ possession and control as herein provided.

    
      
         

      

      
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    ARTICLE
III

    

    DELIVERY OF
COLLATERAL

    

    All
certificates or instruments representing or evidencing the Collateral shall be
delivered to and held in trust for the benefit of Secured Parties pursuant
hereto and shall be in suitable form for transfer by delivery, or shall be
accompanied by duly executed instruments of transfer or assignment in
blank.  Secured Parties shall have the right, at any time following
the occurrence of an Event of Default and without notice to Pledgor, to transfer
to or to register in the name of Secured Parties any or all of the
Collateral.

    

    In the
event that Pledgor receives any property that would constitute Collateral,
Pledgor will hold such property in trust for Secured Parties and will
immediately deliver same to Secured Parties to be held pursuant to this Stock
Pledge Agreement.

    

    All
Collateral is delivered and pledged to Secured Parties by Pledgor hereunder to
be held by Secured Parties as collateral for the Indebtedness.

    
      
         

      

      
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    ARTICLE
IV

    

    REPRESENTATIONS AND
WARRANTIES

    

    Pledgor
represents, warrants, and agrees that: (a) this Stock Pledge Agreement has been
duly and validly executed and delivered by Pledgor and constitutes a legal,
valid and binding obligation of Pledgor enforceable against it in accordance
with its terms except as the enforceability hereof may be limited by applicable
bankruptcy, moratorium or similar laws relating to the enforcement of creditors'
rights generally; (b) all financial or credit statements relied upon by and
Collateral deposited with Secured Parties prior to, contemporaneously with, or
subsequent to the execution of this Stock Pledge Agreement are or will be true,
correct complete, valid and genuine; (c) Pledgor is not a party to any contract
or agreement or subject to any restriction which materially and adversely
affects the Collateral, and neither the execution nor delivery of this Stock
Pledge Agreement nor compliance with the terms and provisions hereof will be
contrary to the provisions of, or constitute default under, any law or any
regulation, order, writ, injunction or decree of any court or governmental
instrumentality or any agreement (including, but not limited to, any
shareholders' agreement) to which the Pledgor is a party or by which it is bound
or to which it is subject, (d) with respect to all investment securities,
instruments, chattel paper, and any like property delivered to Secured Parties
as Collateral, (i) the same are genuine, free from adverse claims or other
security interests, default, prepayment of defenses with the exception of the
liens granted Second Lien Holders; (ii) all persons appearing to be obligated
thereon have authority and capacity to contract and are bound thereon as they
appear to be from the facts thereof; and (iii) the same comply with applicable
laws concerning form, content, and manner of preparation and execution; (e)
Pledgor owns the Collateral and has the right to transfer any interest therein
and the Pledged Shares constitute one hundred percent (100%) of the issued and
outstanding shares of common voting stock of Hemiwedge Valve, (f) Excalibur
Industries, Inc. named in the Stock Certificate referenced in Article II(a)
above is a former name of Pledgor and is the same corporation now called
Hemiwedge Industries, Inc.; (g) the Collateral is not subject to the interest in
or lien of any third person or entity; (h) Pledgor will not pledge, assign,
encumber or grant a security interest in the Collateral to any person other than
Secured Parties and the Second Lien Holders; (i) Pledgor will defend the
Collateral and its proceeds against the claims and demands of all third persons;
(j) Secured Parties' duty with reference to the Collateral shall be solely to
use reasonable care in the custody and preservation of the Collateral in Secured
Parties' possession, and Secured Parties shall not be responsible in any way for
any depreciation in the value of the Collateral, nor shall any duty or
responsibility whatsoever rest on Secured Parties to take necessary steps to
preserve rights against prior parties or to enforce collection of the
Collateral; (k) any demand, notice, protest, and all demands and notices of any
action taken by Secured Parties under this Stock Pledge Agreement or in
connection with any note or notes, guaranty or other instrument or agreement,
except as otherwise provided in this Stock Pledge Agreement, are hereby waived,
and any indulgence of Secured Parties, substitution for, or exchange or release
of, Collateral, in whole or in part, or addition or release of any person liable
on the Collateral is hereby assented and consented to; and (l) Pledgor shall pay
prior to delinquency all Taxes, charges, Liens, and assessments against the
Collateral, and upon Pledgor's failure to do so, Secured Parties at its option
may pay any of them and shall be the sole judge of the legality or validity
thereof and the amount necessary to discharge the same, and Pledgor shall pay to
Secured Parties on demand all expenses, including reasonable attorneys' fees and
legal expenses incurred or paid by Secured Parties in exercising or protecting
its interests, rights, and remedies hereunder.

    

    ARTICLE
V

    

    DEFAULT

    

    Pledgor
shall be in default (“Default”)
under this Stock Pledge Agreement upon the happening of any of the following
events or conditions (each of which is herein referred to as an "Event of
Default"):

    

    (a) any
Event of Default shall occur under the Loan Documents; or

    

    (b) any
of the Collateral is levied on or seized or attached.

    
      
         

      

      
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    ARTICLE
VI

    

    ASSIGNMENT AND
REMEDIES

    

    This
Stock Pledge Agreement, Secured Parties' rights hereunder, and the Indebtedness
secured hereby may be assigned from time to time, and in any such case the
assignee shall be entitled to all of the rights, privileges, and remedies
granted in this Stock Pledge Agreement to Secured Parties, and Pledgor will
assert no claims or defenses it may have against Secured Parties or Lenders
against such assignee except those expressly granted in this Stock Pledge
Agreement.

    

    Secured
Parties may, at any time following an Event of Default hereunder, on behalf of
the Lenders, transfer the Collateral to itself or its nominees, receive income,
including money, thereon and hold the income as Collateral or apply the income
to any Indebtedness and the manner of said application shall be in the sole
discretion of Secured Parties.  Secured Parties may at any time
demand, on behalf of the Lenders, sue for, collect or make any compromise or
settlement with reference to the Collateral as Secured Parties, in its sole
discretion, chooses.  Secured Parties may delay exercising or may omit
to exercise any right or remedy under this Stock Pledge Agreement without
waiving that or any other past, present or future right or remedy.

    

    In
protecting, exercising, or assuring their interests, rights, and remedies under
this Stock Pledge Agreement, Secured Parties may execute, sign, and endorse
negotiable and other instruments for the payment, shipment, or storage of any
form of Collateral or proceeds on behalf of and in the name of
Pledgor.

    

    Upon the
occurrence of an Event of Default, and at any time thereafter: (a) Secured
Parties shall have, then or at any time thereafter, the rights and remedies
provided by applicable law, including the rights and remedies of a Secured
Parties on default under the Uniform Commercial Code of Texas; and (b) in
addition to the rights and remedies referred to above, Secured Parties may, in
its discretion, sell, assign, and deliver all or any part of the Collateral at
any exchange, broker's board or at Secured Parties’ office or elsewhere, or at
public or private sale without advertisement, for cash, on credit or for future
delivery, upon such terms as Secured Parties may deem commercially reasonable,
and Secured Parties may bid and become purchaser at any public sale or at any
broker's board, in accordance with applicable securities laws.  To the
extent required by law, Secured Parties shall give written notice to Pledgor not
less than five (5) days prior to the date of public sale of the Collateral or
prior to the date after which private sale of the Collateral will be made, by
mailing such notice to Pledgor at the address designated in the Loan Agreement
with a copy to Borrower at its address set forth in the Loan Agreement, which
notice Pledgor agrees shall constitute “reasonable notification” within the
meaning of the Uniform Commercial Code (to the extent
applicable).

    
      
         

      

      
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    All
rights and remedies of Secured Parties expressed in the Stock Pledge Agreement
(including, without limitation, rights and powers granted under Articles VII,
VIII, IX and X hereof) are in addition to all other rights and remedies
possessed by Secured Parties in the Loan Documents and in any other agreement or
instrument relating to the Indebtedness and are granted to and exercisable by
Secured Parties.

    

    ARTICLE
VII

    

    POWER OF
ATTORNEY

    

    Pledgor
hereby irrevocably appoints Secured Parties to be Pledgor's attorney-in-fact,
effective upon and during the continuance of an Event of Default, with full
authority in the place and stead of Pledgor and in the name of Pledgor, Secured
Parties or otherwise, from time to time in Secured Parties’ discretion, to take
any action and to execute any instrument which Secured Parties may deem
necessary or advisable to accomplish the purpose of this Stock Pledge Agreement,
including, without limitation:

    

    (a)       to
ask, demand, collect, sue for, recover, compound, receive and give acquittance
and receipts for moneys due and to become due under or in respect of any of the
Collateral;

    

    (b)    
  to receive, endorse and collect any drafts or other instruments,
documents and chattel paper in connection with clause (a) above,
and

    

    (c)       to
file any claims or take any action or institute any proceedings which Secured
Parties may deem necessary or desirable for the collection of any of the
Collateral or otherwise to enforce the rights of Secured Parties with respect to
any of the Collateral.

    

    ARTICLE
VIII

    

    RIGHTS AND OBLIGATIONS
ABSOLUTE

    

    All
rights of Secured Parties, all obligations of Pledgor hereunder and the security
interest hereunder, shall, to the extent permitted by applicable law, be
absolute and unconditional, irrespective of:

    

    (a)      any
lack of validity or enforceability of the Agreement, the Notes or any of the
other Loan Documents or any other agreement or security document relating
thereto or executed in connection with or pursuant to any Loan
Document;

    
      
         

      

      
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    (b)      any
change in the time, manner or place of payment of, or in any other term of, all
or any of the Indebtedness or any other amendment or waiver of or any consent to
any departure from the Agreement, the Note, any of the other Loan Documents, or
any other agreement or instrument relating thereto or executed in connection
with or pursuant to any Loan Document;

    

    (c)      any
exchange, release or non-perfection of any other collateral, or any release or
amendment or waiver of or consent to departure from any other guaranty, for all
or any of the Indebtedness; or

    

    (d)      any
other circumstances which might otherwise constitute a defense available to, or
a discharge of, Pledgor or any other person that is a party to any Loan Document
in respect of the Indebtedness.

    

    ARTICLE
IX

    

    CONTINUING SECURITY
INTEREST

    

    This
Stock Pledge Agreement and the delivery of the Collateral to Secured Parties
create a continuing security interest in the Collateral and shall (a) remain in
full force and effect until termination of the obligations of Secured Parties to
continue the Loan and payment in full thereafter of the Indebtedness, (b) be
binding upon Pledgor and its successors and assigns, and (c) inure to the
benefit of Secured Parties and its respective successors, transferees and
assigns.  Without limiting the generality of the foregoing clause (c),
Secured Parties may assign or otherwise transfer any of its rights under this
Stock Pledge Agreement to any other person, and such person shall thereupon
become vested with all the benefits in respect thereof granted herein or
otherwise to Secured Parties.  Upon termination of the obligations
under the Loan Documents and the payment in full thereafter of the Indebtedness
and the performance of all of the Obligations, Pledgor shall be entitled to the
return, upon its request and its expense, of such of the Collateral as shall not
have been sold or otherwise applied pursuant to the terms hereof.

    

    ARTICLE
X

    

    MISCELLANEOUS
PROVISIONS

    

    All
rights of marshalling of assets of Pledgor, including any such right with
respect to the Collateral, are hereby waived by Pledgor.

    

    All
rights, remedies and powers provided in this Stock Pledge Agreement may be
exercised only to the extent that the exercise thereof does not violate any
applicable provision of law, and all the provisions of this Stock Pledge
Agreement are intended to be subject to all applicable mandatory provisions of
law which may be controlling and to be limited to the extent necessary so that
they will not render this Stock Pledge Agreement invalid, unenforceable, in
whole or in part, or not entitled to be recorded, registered or filed under the
provisions of any applicable law.

    
      
         

      

      
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    After the
irrevocable and indefeasible cash payment in full of all of the Obligations and
termination of the Loan and Note, the Pledgor shall be entitled to the return of
the Pledged Shares and of all the Collateral which has not been used or applied
toward payment in full of the Obligations.

    

    Should
any clause, sentence, paragraph, subsection or Article of this Stock Pledge
Agreement be judicially declared to be invalid, unenforceable or void, such
decision will not have the effect of invalidating or voiding the remainder of
this Stock Pledge Agreement, and the parties hereto agree that the part or parts
of this Stock Pledge Agreement so held to be invalid, unenforceable or void will
be deemed to have been stricken here from by the parties hereto, and the
remainder will have the same force and effectiveness as if such stricken part or
parts had never been included herein.

    

    The
pronouns used in this instrument are of neutral gender but shall be construed as
feminine or masculine as the occasion may require.  “Secured Parties”,
“Borrowers”, and “Pledgor” as used in this instrument include the heirs,
executors, administrators, successors, representatives, receivers, trustees, and
assigns of those parties.

    

    This
instrument is governed by and is to be governed, construed and interpreted in
accordance with the laws of the State of Texas and applicable federal
law.

    

    The
provisions of the Loan Agreement concerning usury and the Maximum Rate of
interest shall apply to all interest which may be contracted for, paid by or
collected from Pledgor under the provisions of this Stock Pledge
Agreement.

    

    This
Stock Pledge Agreement may be executed in any number of counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

    

    Capitalized
terms used but not otherwise defined in this Stock Pledge Agreement shall bear
the meanings assigned to them in the Loan Agreement and other Loan Documents, as
applicable.

    

    THIS
STOCK PLEDGE AND SECURITY AGREEMENT REPRESENTS THE FINAL AGREEMENT AND
OBLIGATION OF THE PARTIES WITH RESPECT TO THE PLEDGE OF THE COLLATERAL AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS
BETWEEN THE PARTIES HERETO.

    

    [The signatures appear on the
following page]

    
      
         

      

      
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    IN
WITNESS WHEREOF, the parties hereto have executed and delivered this Stock
Pledge Agreement as of the date first above written.

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          	
                                  PLEDGOR:

                                
	 
      	 
      
	
                                  HEMIWEDGE
      INDUSTRIES, INC.

                                
	 
      	 
      
	
                                  By:

                                	 
      
	
                                  Name:  Matthew
      C. Flemming

                                
	
                                  Title:
      CFO and Secretary

                                
	 
      	 
      
	
                                  SECURED
      PARTIES:

                                
	 
      	 
      
	
                                  EADS
      INVESTMENTS I, LLC.

                                
	 
      	 
      
	
                                  By:

                                	 
      
	
                                  Name:
      Rodney Eads

                                
	
                                  Title:
      Member

                                
	 
      	 
      
	
                                  By:

                                	 
      
	
                                  D.
      BRADLEY
McWILLIAMS

                                

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
        

      

      
        Page 9 of 9ASSIGNMENT OF NOTE, LOAN
DOCUMENTS AND SECURITY INTERESTS

    

    This ASSIGNMENT OF NOTE, LOAN DOCUMENTS
AND SECURITY INTERESTS (this “Assignment
Agreement”), dated effective June 30, 2010, is made by STILLWATER
NATIONAL BANK AND TRUST COMPANY (the “Assignor”)
in favor of EADS INVESTMENTS I, LLC and D. BRADLEY MCWILLIAMS (collectively, the
“Assignee”).

    

    RECITALS:

    

    A.           Assignor has previously
extended credit to HEMIWEDGE INDUSTRIES, INC. (formerly
called Shumate Industries, Inc.), a Delaware corporation (“Industries”), SHUMATE MACHINE WORKS, INC., a
Texas corporation (“Machine”), and HEMIWEDGE VALVE
CORPORATION,  a Texas corporation (“Hemiwedge”) (Industries, Machine and Hemiwedge
(collectively, the “Borrowers”) which is currently
evidenced by that certain Amended and Restated Promissory Note (Term Note) in
the original principal face amount of $751,000.00 dated September 30, 2008 (the
“Note”).

     

    B.           A
Loan Agreement and additional documents have been signed by the Borrowers and
other various parties as guarantors (“Guarantors”)
in favor of the Assignor to evidence and secure the indebtedness now evidenced
by the Note and which are otherwise executed in connection with or related to
the indebtedness now evidenced by the Note, including but not limited to loan
agreements, guaranty agreements, security agreements, stock pledge agreements,
financing statements and certain amendments thereto as described in Appendix A
to this Assignment Agreement (the “SNB Loan
Documents”).

    

    C.           Assignor
wishes to assign and transfer to Assignee, all of Assignor’s benefits, rights,
title, interest, liens and security interests in and to the Notes and all of the
SNB Loan Documents.

    

    D.           On
even date herewith, the Borrowers and certain of the Guarantors executed a
Consent and Acknowledgement of Assignment and Release consenting to the
assignment of the SNB Loan Documents and Assigned Rights (defined below) by
Assignor to Assignee.

    

    NOW
THEREFORE, in consideration of the mutual promises, covenants and conditions
hereinafter set forth and for other good and valuable consideration, the receipt
and sufficiency of which are hereby expressly acknowledged, the parties hereto
hereby agree as follows:

     

    
      
        
        

      

      
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    AGREEMENT:

     

    Assignment.  In
consideration of the payment made contemporaneously herewith by the Assignee to
the Assignor of the Purchase Price (as defined below), Assignor hereby assigns
and transfers to Assignee, for the equal and ratable benefit of each Assignee,
all of Assignor’s right, title and interest in and to the Note and the SNB Loan
Documents and all debts, obligations, liens, security interests and contract
rights evidenced thereby and any and all claims and rights of action the
Assignor has or may have against the Borrowers with respect to the Note and SNB
Loan Documents (collectively, the “Assigned
Rights”), WITHOUT RECOURSE, AND IN AN “AS IS” CONDITION AND BASIS AND
WITHOUT REPRESENTATIONS AND WARRANTIES, EXPRESS OR IMPLIED, OF ANY TYPE, KIND OR
CHARACTER, SAVE AND EXCEPT THE EXPRESS REPRESENTATIONS OR WARRANTIES SET FORTH
IN PARAGRAPH 5 OF THIS ASSIGNMENT AGREEMENT.

     

    1.           Purchase
Price.  Contemporaneously herewith, the Assignee has paid the
Assignor the purchase price for the Assigned Rights in an amount equal to
$575,000.00 in current funds by wire transfer (the “Purchase
Price”).

     

    2.           Assignments of Specific
Documents.  Contemporaneously herewith on receipt of the
Purchase Price, Assignor will (a) execute and deliver to Assignee this
Assignment Agreement and originals of all SNB Loan Documents listed and
described in Appendix A hereto (b) record or deliver to the Assignee UCC-3
Amendments reflecting an assignment of all of the Assignor’s filed financing
statements covering the collateral described in the SNB Loan Documents, (c)
execute and deliver such further instruments as may be necessary to assign the
Note and all of the SNB Loan Documents to the Assignee, (d) deliver all
collateral in the possession of Assignor, including certain stock certificates,
and (e) endorse the Note as follows and deliver the same to the
Assignee:

     

    “For
value received, pay to the order of EADS INVESTMENTS I, LLC and D.BRADLEY
MCWILLIAMS, for their equal and ratable benefit, without recourse and without
representation or warranty of any kind except as provided in that certain
Assignment of Note, Loan Documents and Security Interests of even date
herewith.”

     

    
      
        
        

      

      
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                    STILLWATER
      NATIONAL BANK AND TRUST COMPANY

                  
	 
      
	
                    By:      
      _________________________________

                  
	 
	
                    Name: 
      _________________________________

                  
	 
	
                    Title:   
      _________________________________

                  

          

        

      

    

     

    3.         Representations and
Warranties.  Assignor represents and warrants to Assignee as
follows:

     

    (a)           Authority to
Execute.  Assignor is duly authorized and has full corporate
and Bank power, authority and legal capacity to execute, deliver and perform its
obligations under this Assignment Agreement and to sell the Assigned Rights to
Assignee as contemplated herein.

     

    (b)           Owner and
Holder.  Assignor is the owner and holder of and has good title
to the Note, SNB Loan Documents and all other Assigned Rights, and warrants
title to said Assigned Rights in and to the Assignee and its successors, heirs
and assigns.

     

    (c)           Balance as of June 30,
2010.  The outstanding principal balance on the Note as of June
30, 2010, is $673,125.00.  Interest accrued but unpaid through June
30, 2010 is $12,219.70.

     

    (d)           No
Actions.  Although the maturity date on the Note has passed,
Assignor has not instituted, and will not institute or threaten to take, any
legal action or enforcement claim  or  any other action
against the Borrowers on, or with respect to, the SNB Loan Documents or the
Assigned Rights, the Note or against the Collateral secured by the SNB Loan
Documents either by written notice to the Borrowers or by any other action or
proceeding.

     

    
      
        
        

      

      
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    (e)           No Liens or
Encumbrances.  The Assigned Rights are not subject to any
liens, encumbrances or security interests created by the Assignor in favor of
any person or entity and Assignor has not previously transferred, assigned or
hypothecated its interest in the Assigned Rights to any other person or
entity.

     

    (f)           No Prior Approval
Required.  Assignor’s execution, delivery and performance of
this Assignment Agreement do not require prior approval of any other lender or
person including, without limitation, any state or federal governmental
authority having jurisdiction over Assignor.

     

    (g)           Absence of
Claims/Lawsuits.  There are no demands, claims, lawsuits,
actions, arbitrations or disputes pending or threatened by Borrowers or any of
them or any Guarantor under the SNB Loan Documents or any of their officers,
directors, members or shareholders against Assignor in connection with the Note,
the SNB Loan Documents or Assigned Rights.

     

    All
parties hereto acknowledge that Assignor has made no representations or
warranties to Assignee except as expressly set forth in this Paragraph 5 of this
Assignment Agreement.

     

    4.           Representations, Warranties
and Agreement of Assignee.  Assignee hereby agrees as follows
and represents and warrants to Assignor that the following statements are true
and correct, as of the date of this Assignment Agreement:

     

    (a)           Authority to
Execute.  Assignee has full power, authority and legal capacity
to execute, deliver and perform its obligations under this Assignment Agreement,
and to purchase the Assigned Rights from Assignor.

     

    (b)           Business
Judgment.  Assignee has exercised Assignee’s own independent
judgment, as determined by Assignee to be necessary and advisable, in making
Assignee’s decision to enter this Assignment Agreement and purchase the Assigned
Rights, that Assignee has reviewed copies of the Note and the SNB Loan Documents
and has been provided an opportunity to ask questions and obtain such
information as Assignee deems necessary to make an informed decision prior to
executing this Assignment Agreement and purchasing the Assigned
Rights.

     

    
      
        
        

      

      
        Page 4 of 12

        
          

        

      

      
        
        

      

    

     

    (c)           Business
Knowledge.  Assignee (either alone or with Assignee’s
attorneys, accountants or other advisors) possesses the requisite business and
investment knowledge and experience to evaluate the potential risks and merits
of its purchase of the Assigned Rights.

     

    (d)           Own
Account.  Assignee has sufficient financial ability and net
worth to bear the economic risk of its investment in the Assigned Rights for an
indefinite period of time and to withstand a total loss of such investment and
Assignee represents that it is purchasing the Assigned Rights for Assignee’s own
account.

     

    (e)           Potential
Bankruptcy.  Assignee is aware of the precarious financial
condition of Borrower.

     

    7.           Disclaimer.  EXCEPT
FOR THOSE EXPRESSED IN PARAGRAPH 5 HEREOF, NO WARRANTIES OR REPRESENTATIONS,
EXPRESS OR IMPLIED, HAVE BEEN MADE BY ASSIGNOR OR BY ANYONE ACTING ON ASSIGNOR’S
BEHALF, PARTICULARLY, BUT WITHOUT IN ANY WAY LIMITING THE GENERALITY OF THE
FOREGOING, NO WARRANTIES OR REPRESENTATIONS REGARDING (i) THE COLLECTABILITY OF
THE NOTE, (ii) THE CREDITWORTHINESS OF BORROWERS, (iii) THE VALUE OF ANY
COLLATERAL SECURING PAYMENT OF THE NOTE, (iv) THE ENFORCEABILITY OF THE NOTE AND
COLLATERAL DOCUMENTS SECURING THE NOTE, OR (v) THE CONDITION OF THE UNDERLYING
COLLATERAL INCLUDING BUT NOT LIMITED TO ANY ENVIRONMENTAL MATTER OR CONDITION,
WHETHER LATENT OR PATENT.  ALL ASSIGNED RIGHTS SOLD TO ASSIGNEE UNDER
THIS ASSIGNMENT AGREEMENT ARE SOLD AND TRANSFERRED WITHOUT RECOURSE EXCEPT AS
MAYBE OTHERWISE SET FORTH HEREIN.

     

    
      
        
        

      

      
        Page 5 of 12

        
          

        

      

      
        
        

      

    

     

     8.          
Miscellaneous.

     

    (a)           Costs and
Expenses.  Assignee shall pay the legal fees and expenses
incurred by Assignor in connection with this Assignment Agreement and the
transactions contemplated hereby provided that it is acknowledged that such
legal fees are included in the Purchase Price that has been paid
contemporaneously herewith and nothing further is owed by Assignee to Assignor
in this regard.  All recording fees, transfer taxes, documentary
taxes, title charges, or other costs necessitated by the assignment of the
Assigned Rights to Assignee, if any, shall be borne and paid by
Assignee.

     

    (b)           Time is of the
Essence.  Time is of the essence of this Assignment Agreement
with respect to closing on the date hereof.  No extension of time for
closing shall be granted to either party hereunder without the express written
consent of the other party.

     

    (c)           Waiver.  No
waiver by either party hereto of the other party’s breach of any term, covenant
or condition contained in this Assignment Agreement shall be deemed to be a
waiver of any subsequent breach of the same or any other term, covenant or
condition of this Assignment Agreement.

     

    (d)           Severability.  If
any term, covenant, condition or provision of this Assignment Agreement is
unlawful, invalid or unenforceable, such illegality, invalidity or
unenforceability shall not affect the remaining provisions of this Assignment
Agreement, which shall remain in full force and effect and shall be binding upon
the parties.

     

    (e)           Headings.  The
headings of the sections of this Assignment Agreement are inserted for
convenience only and shall not affect the meaning or interpretation of this
Assignment Agreement or any provision thereof.

     

    (f)           Governing
Law.  The parties hereto agree that this Assignment Agreement
shall be construed, and the rights and obligations of the parties under the
Assignment Agreement shall be determined, in accordance with the laws of the
State of Texas, without regard to its conflicts of law provisions.

     

    
      
        
        

      

      
        Page 6 of 12

        
          

        

      

      
        
        

      

    

     

    (g)         Entire
Agreement.  This Assignment Agreement, including any
agreements, attachments, exhibits and schedules referred to herein and attached
hereto, constitutes the entire agreement between the parties hereto pertaining
to the subject matter hereof and supersedes any and all prior agreements,
representations and understanding of the parties, written or oral.

     

    (h)         Amendment.  This
Assignment Agreement may only be modified, amended or waived by a written
instrument duly executed by authorized representatives of all of the parties
hereto.

     

    (i)           Construction.  Unless
the context requires otherwise, singular nouns and pronouns used herein shall be
deemed to include the plural, and pronouns of one gender shall be deemed to
include the equivalent pronoun of the other gender.

     

    (j)           Counterparts;
Effectiveness.  This Assignment Agreement may be executed in
any number of counterparts, each of which shall be deemed an original and all of
which shall constitute one and the same instrument.

     

    (k)          Facsimile
Execution.  This Assignment Agreement may be executed by
facsimile signature which shall be considered an original in all
respects.

     

    (l)           Waiver of Jury
Trial.  All parties hereto waive the right to a trial by jury
of any actions brought to enforce, construe, or interpret this Assignment
Agreement.

     

    (m)         Notice of
License.   On or about October 15, 2008, Hemiwedge and
Tejas Research & Engineering, L.P., a Texas limited partnership("Tejas")
entered into an Intellectual Property Agreement by which Tejas, among other
things, received a license to use certain of Hemiwedge’s intellectual
property.  The Assigned Rights are subject to such license and Tejas' (or
any of its assignees') rights thereunder.

     

    [the signatures appear on the
following page]

     

    
      
        
        

      

      
        Page 7 of 12

        
          

        

      

      
        
        

      

    

     

    IN WITNESSWHEREOF, the parties hereto
have caused this Assignment Agreement to be duly executed as of the date written
above.

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  	 
      	
                                                          STILLWATER
      NATIONAL BANK AND TRUST

                                                        
	 
      	
                                                          COMPANY

                                                        
	 
      	 
      	 
      
	 
      	
                                                          By:

                                                        	 
      
	 	 	 
	 
      	
                                                          Name:

                                                        	 
      
	 	 	 
	 
      	
                                                          Title:

                                                        	 
      
	 
      	 
      
	 
      	
                                                          (the  “Assignor”)

                                                        
	 
      	 
      	 
      
	 
      	
                                                          EADS
      INVESTMENTS I, LLC

                                                        
	 
      	 
      	 
      
	 
      	
                                                          By:

                                                        	 
      
	 	 	 
	 
      	
                                                          Name:

                                                        	
                                                          Rodney Eads

                                                        
	 	 	 
	 
      	
                                                          Title:

                                                        	
                                                          Member

                                                        
	 
      	 
      	 
      
	 
      	
                                                          and

                                                        
	 
      	
                                                           

                                                        
	 
      	
                                                          D.
      BRADLEY MCWILLIAMS,
individually

                                                        

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    (the  “Assignee”)

     

    
      
        
        

      

      
        Page 8 of 12

        
          

        

      

      
        
        

      

    

     

    APPENDIX
A

     

    LIST OF
LOAN DOCUMENTS ASSIGNED TO ASSIGNEE

     

    
      	
               
      

            	
              1.

            	
              Amended and Restated
      Promissory Note (Term Note) in the amount of $751,000.00, among
      Shumate Industries
      Inc., Shumate
      Machine Works Inc., Hemiwedge Valve
      Corporation, and Stillwater National Bank and
      Trust Company, dated with effect on September 30,
    2008.

            

    

     

    
      	
               
      

            	
              2.

            	
              Amended and Restated
      Security Agreement among Shumate Industries
      Inc., Shumate
      Machine Works Inc., Hemiwedge Valve
      Corporation, and Stillwater National Bank and
      Trust Company, dated with effect on September 30,
    2008.

            

    

     

    
      	
               
      

            	
              3.

            	
              Assignment
      Agreement between Shumate Industries Inc.
      and Hemiwedge Valve
      Corporation, dated with effect on December 2,
  2005.

            

    

     

    
      	
               
      

            	
              4.

            	
              Assignment of Loan
      Documents and Security Interests and Assumption Agreement among
      Stillwater National Bank
      and Trust Company, Eads Investments I LLC,
      and Bradley
      McWilliams, dated with effect on April 23,
  2010.

            

    

     

    
      	
               
      

            	
              5.

            	
              Contribution
      Agreement between Shumate Industries Inc.
      and Hemiwedge Valve
      Corporation, dated with effect on December 3,
  2005.

            

    

     

    
      
        
        

      

      
        Page 9 of 12

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              6.

            	
              Guaranty
      Agreement between Russell T. Clark and
      Stillwater National Bank
      and Trust Company, dated with effect on September 30,
      2008.

            

    

     

    
      	
               
      

            	
              7.

            	
              Guaranty
      Agreement between Matthew C. Flemming and
      Stillwater National Bank
      and Trust Company, dated with effect on September 30,
      2008.

            

    

     

    
      	
               
      

            	
              8.

            	
              Loan and Consolidation
      Agreement among Shumate Industries
      Inc., Shumate
      Machine Works Inc., Hemiwedge Valve
      Corporation, Matthew C. Flemming,
      Russell T. Clark,
      Larry Shumate,
      and Stillwater National
      Bank and Trust Company, dated with effect on September 30,
      2008.

            

    

     

    
      	
               
      

            	
              9.

            	
              Lockbox
      Agreement among Shumate Industries
      Inc., Shumate
      Machine Works Inc., Hemiwedge Valve
      Corporation, and Stillwater National Bank and
      Trust Company, dated with effect on January 25,
    2008.

            

    

     

    
      	
            	
              10.

            	
              Lockbox
      Agreement among Shumate Industries
      Inc., Shumate
      Machine Works Inc., and Stillwater National Bank and
      Trust Company, dated with effect on October 19,
    2005.

            

    

     

    
      	
            	
              11.

            	
              Lockbox
      Agreement among Excalibur Holdings
      Inc., Excalibur
      Industries Inc., Shumate Machine Works
      Inc., and Stillwater National Bank and
      Trust Company, dated with effect on September 29,
    2004.

            

    

     

    
      	
            	
              12.

            	
              Security
      Agreement between Hemiwedge Valve
      Corporation and Stillwater National Bank and
      Trust Company, dated with effect on December 3,
    2005.

            

    

     

    
      	
            	
              13.

            	
              Security
      Agreement among Shumate Industries
      Inc., Shumate
      Machine Works Inc., Hemiwedge Valve
      Corporation, and Stillwater National Bank and
      Trust Company, dated with effect on January 25,
    2008.

            

    

     

    
      
        
        

      

      
        Page 10 of 12

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              14.

            	
              Amended and Restated
      Security Agreement among Shumate Industries
      Inc., Shumate
      Machine Works Inc., Hemiwedge Valve
      Corporation, and Stillwater National Bank and
      Trust Company, dated with effect on June 26,
  2008.

            

    

     

    
      	
            	
              15.

            	
              Security
      Agreement among Shumate Machine Works
      Inc., Excalibur
      Holdings Inc., Excalibur Industries
      Inc., and Stillwater National Bank and
      Trust Company, dated with effect on March 23,
  2004.

            

    

     

    
      	
            	
              16.

            	
              Security
      Agreement among Excalibur Industries
      Inc., Shumate
      Machine Works Inc., and Stillwater National Bank and
      Trust Company, dated with effect on March 31,
  2005.

            

    

     

    
      	
            	
              17.

            	
              Security
      Agreement between Shumate Machine Works Inc.
      and Stillwater
      National Bank and Trust Company, dated with effect on May 8,
      2002.

            

    

     

    
      	
            	
              18.

            	
              Security
      Agreement among Shumate Industries
      Inc., Shumate
      Machine Works Inc., Hemiwedge Valve
      Corporation, and Stillwater National Bank and
      Trust Company, dated with effect on May 23,
  2008.

            

    

     

    
      	
            	
              19.

            	
              Security
      Agreement among Shumate Industries
      Inc., Shumate
      Machine Works Inc., and Stillwater National Bank and
      Trust Company, dated with effect on October 19,
    2005.

            

    

     

    
      	
            	
              20.

            	
              Security Agreement
      (Accounts, Contracts, Furniture, Fixtures, Equipment, General Intangibles,
      Inventory) among Excalibur Holdings
      Inc., Excalibur
      Industries Inc., Shumate Machine Works
      Inc., and Stillwater National Bank and
      Trust Company, dated with effect on September 29,
    2004.

            

    

     

    
      	
            	
              21.

            	
              Stock Pledge
      Agreement between Excalibur Holdings Inc.
      and Stillwater National
      Bank and Trust Company, dated with effect on March 23,
      2004.

            

    

     

    
      	
            	
              22.

            	
              Stock Pledge
      Agreement between Excalibur Industries
      Inc. and Stillwater National Bank and
      Trust Company, dated with effect on March 23,
  2004.

            

    

     

    
      
        
        

      

      
        Page 11 of 12

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              23.

            	
              All Financing
      Statements filed of record by Stillwater National Bank and
      Trust Company with respect to the Previous Note in the Uniform
      Commercial Code records of Texas and Delaware, and all other jurisdictions
      where such Bank may have filed any financing statements in connection with
      liens securing the obligations of Borrowers under the Previous
      Note.

            

    

     

    
      
        
        

      

      
        Page 12 of 12

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