Document:

ex10-4.htm

Exhibit 10.4

Client#: ________

ACCOUNT PURCHASE AGREEMENT

June 21, 2013

1. Parties: The parties to this Agreement are as follows:

	
  

	
a. Crown Financial, LLC ("Buyer''); and

	
  

	
b. STW ENERGY SERVICES, LLC ("Seller")

 

The parties agree as follows:

2. Definitions: the following terms are defined for purposes of this Agreement:

	
  

	
a. "Accounts" shall mean all amounts due to Seller pursuant to Approved Invoices.

	
  

	
b. "Advance Rate Percentage" shall mean 80 %, unless otherwise changed on

	
  

	
the Funding Report as provide in Section 3.

	
  

	
c. "Approved Invoices" shall mean invoices approved by Buyer for purchase in a Funding Report prepared by Buyer pursuant to this Agreement.

	
  

	
d. "Funding Report" shall mean the Funding Report prepared by Buyer in accord with Section 3 of this Agreement.

	
  

	
e. "Customer" shall mean Seller's customer with respect to the applicable invoice.

	
  

	
f "Invoice Amount" shall mean the net amount due to Seller as reflected in the

	
  

	
applicable invoice.

	
  

	
g. "Purchase Date" shall mean the date on which Buyer advances funds with respect to the applicable Approved Invoice.

	
  

	
h. "Purchase Price" shall have the meaning set forth in Section 5.

	
  

	
i. "Rebate Amount" shall have the meaning set forth in Section 6.

	
  

	
j. "Repurchase Obligation" shall have the meaning set forth in Section 7.

	
  

	
k. "Security Agreement shall have the meaning set forth in Section 8.

	
  

	
l. "Uncollected Invoice" shall have the meaning set forth in Section 7.

3. Account Approval Process:

	
  

	
a. Seller shall submit invoices to Buyer for Buyer's review and approval by Buyer in its sole discretion. Seller shall submit original invoices to Buyer for approval along with proof satisfactory to Buyer that the goods or services charged for in the invoice have been received by Seller's Customer without complaint. By making each submission, Seller reconfinns the representations and wal1"anties set forth in Section 10 with respect to the submitted invoice.

	
  

	
b. Before approving any invoice or any time thereafter, Buyer shall have the right to conduct such investigations of the Seller's Customer and the transaction giving rise to the invoice as Buyer deems appropriate. Buyer shall have the right pe1iodically to verify that the Seller's Customer is satisfied with the goods or services furnished by Seller in connection therewith and to conduct credit searches on the Seller's Customer. Any investigations or other information obtained by Buyer with respect to the Seller's Customer is for the sole benefit of Buyer.

	
  

	
c. Before or after approving any invoice for purchase, Buyer shall have the right to require acknowledgement from Seller's Customer of the sale of the invoice and direct that all payments made on the invoice be made directly to Buyer.

  

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d. Buyer is not obligated to approve any invoices for purchase, but invoices that Buyer approves for purchase shall be governed by this Agreement. To the extent that Buyer approves invoices, Buyer shall prepare a Funding Report indentifying with respect to each invoice approved for purchase, the Seller's Customer, the Seller's hwoice Number, the Advance Rate Percentage and the Purchase Amount. Buyer may indicate in the Funding Repoti that its approval of any invoice is subject to Seller's consent to accepting a different Advance Rate Percentage or Rebate Amount other than that specified in Sections 5 and 6 of this Agreement. Seller may indicate its consent to changes in the Advance Rate Percentage or Rebate Amount in writing, orally, electronically or by accepting the funding by Buyer.

4. Account Purchase: Seller sells and transfers the Accounts to Buyer.

5. Purchase Price: With respect to each Approved Invoice, Buyer shall pay to Seller a "Purchase Price" equal to the Advance Rate Percentage Applied to the Invoice Amount.

6. Account Collection and Rebate: Buyer shall have the exclusive iight to collect the Accounts from Seller's Customer. With respect to each Approved Invoice, Buyer shall pay a Rebate Amount dete1mined by the schedule set forh below.

	
  

	
a. 18.50% of the Invoice Amount if Crown collects the full Invoice Amount within 30 days of the Purchase Date.

	
  

	
b. 17.00 % of the Invoice Amount if Crown collects the full Invoice Amount between 31and60 days of the Purchase Date.

	
  

	
c. 15.50 % of the Invoice Amount if Crown collects the full Invoice Amount between 61 and 90 days of the Purchase Date.

	
  

	
d. 00.00 % of the Invoice Amount if Crown collects the full Invoice Amount more than 90 days after the Purchase Date.

Crown shall pay the Rebate Amount to the Seller within one business day of collecting the full amount of the invoice.

7. Recourse Nature of Sale and Repurchase Obligation:

	
  

	
a. In the event that Crown does not collect the full Invoice Amount of an Approved Invoice from Seller's Customer within 90 days from the Purchase Date, Seller shall be obligated to repurchase that invoice (an "Uncollected Invoice") from Crown. Crown may in its sole discretion waive its claim against Seller for repurchase of an Uncollected Invoice by approving in writing a substitute invoice submitted by Seller.

	
  

	
b. In the absence of Crown approving in writing a substitute invoice submitted by Seller, Seller shall be obligated to pay Crown for repurchase of an Uncollected Invoice an amount equal to the "Repurchase Obligation”, as calculated as the Purchase Price paid by Crown for the Uncollected Invoice, plus interest at the maximum lawful interest rate per annum from the Purchase Date less the amounts of any payments received by Crown on the Uncollected Invoice.

	
  

	
c. With respect to an Uncollected Invoice, Crown may concurrently seek to recover both the Repurchase Obligation from the Seller and the Invoice Amount from Sellers Customer, provided that Crown shall rebate to Seller an amount equal to:

i. the total amount actually collected by Crown from Seller less

attorneys fees and expenses incurred by Crown in collecting from Seller, plus

ii. the total amount actually collected by Crown from Seller's Customer

less attorneys fees and expenses incu11'ed by Crown in collecting from Seller's Customer, minus

iii. the Invoice Amount with respect to the Uncollected Invoice.

iv.

	
  

	
d. Crown may determine in its sole discretion to collect concurrently from Seller and Sellerrs Customer in separate actions.

  

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8. Security Agreement for Repurchase Obligation. Contemporaneous with the execution of this Agreement, Seller is entering into a security agreement ("Security Agreement") with Buyer, whereby Seller is granting to Buyer a first Lien and security interest in various collateral. Any default by Seller under the Security Agreement shall additionally constih1te a default by Seller under this Agreement.

9. Right to Settle Accounts. Buyer may, in its good faith discretion, settle or compromise any Uncollected Invoice. Buyer may exercise this discretion with respect to any reason that an Approved Invoice becomes an Uncollected Invoice including, without linritation, invoicing error, dissatisfaction with the goods and/or services rendered by Seller or the inability or difficulty of the Customer to pay the full amount of the Approved Invoice.

10. Representations and Warranties of Seller: As an inducement for Buyer to enter into this Agreement, and with knowledge that the trnth and accuracy of such representations and warranties are being relied upon by Buyer (notwithstanding any investigation by Buyer), Seller represents and warrants to Buyer that:

	
  

	
a. Seller is the sole owner and beneficiary of the Accounts and has not previously assigned, transferred or encumbered the Accounts or any interest therein, in whole or in part.

	
  

	
b. Seller has the full power and authority to sell the Accounts to Buyer and has duly authorized its sale to Buyer in accordance with this Agreement.

	
  

	
c. The Seller was duly organized or incorporated pursuant to the laws of the state indjcated in the signature block of this agreement with the organization number indicated as well.

	
  

	
d. With respect to each invoice submitted or that Seller later submits to Buyer under this Agreement:

	
  

	
i. The invoice is the result of a bona fide sale and delivery of goods or pe1fomiance of services rendered by Seller to Seller's Customer in a commercial enterprise and not merely a purchase order

	
  

	
ii. All goods, services or other consideration to be provided by Seller in

	
  

	
connection with the Invoice have in fact been provided by Seller to Seller's Customer;

	
  

	
111. Seller's Customer has made no complaint or claim of deficiency with respect to the goods, services or other consideration provided by Seiler in connection with the invoice;

	
  

	
iv. Seller has not collected any portion of the invoice;

	
  

	
v. The full amount of the Invoice is presently due and owing to Seller;

	
  

	
vi. The payment of the invoice by Seller's Customer is not contingent upon fulfillment of any other obligation at any time; and

	
  

	
vii. There are no setoffs, deductions, disputes, contingencies or counterclaims against Seller of any kind whatsoever which could affect payment of the invoice.

	
  

	
vm. To the best of Seller's knowledge, Seller's customer will be able to pay the invoice no later than 90 days after its due date and Seller has no reason to believe that Seller's customer will dispute the invoice or fail to pay the invoice for any reason whatsoever.

	
  

	
e. To the best of Seller's knowledge, all financial infonnation concerning Seller or Customer delivered by Seller to Buyer in connection with this Agreement or the purchase and sale of the Accounts are true, accurate and complete in all material respects.

	
  

	
f. Seller will not modify the terms of the Accounts with Seller's Customer

	
  

	
unless Buyer gives its prior written consent.

	
  

	
g. To the best of Seller's knowledge, Seller has all requisite licenses, patents and trademarks to allow it to lawfully complete the transaction made the subject of each Invoice.

11. Covenants of Seller: Seller hereby covenants and agrees with Buyer as follows:

	
  

	
a. Should Seller receive payment of all or any portion of an Approved Invoice, Seller shall promptly notify Buyer and shall hold all checks and other payments in trust for Buyer and deliver to Buyer such checks and other payments within two business days of receipt.

	
  

	
b. Seller shall deliver to Buyer upon request such resolutions or certificates as Buyer may reasonably request from time to time to evidence Seller's power and authority to act under this Agreement.

	
  

	
c. Seller shall not change its corporate structure, existence or name without the prior written consent of Buyer, which consent shall not be unreasonably withheld.

  

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d. Seller shall promptly notify Buyer of any change of address of Seller.

	
  

	
e. Seller shall not sell, transfer, pledge, encumber or grant a security interest in any of the Accounts than to Buyer.

	
  

	
f. Seller shall promptly notify Buyer of any complaint from or disagreement or dispute with Seller's Customer within three business days after Seller learns of such complaint, disagreement or dispute.

	
  

	 

12. Remedies. In the event of a breach by Seller of any of its representations, wan-anties and covenants set forth in this Agreement, or in the event Seller otherwise defaults on its obligations hereunder, Buyer may exercise any one or more of the following remedies, to the maximum extent allowed by law:

	
  

	
a. Require Seller to re-purchase the Account pursuant to Section 7 of this Agreement;

	
  

	
b. Enforce Buyer's rights and remedies under the Security Agreement.

	
  

	
c. If same can be accomplished peaceably, enter Seller's business premises and take possession of all books and records relating to the Accounts.

	
  

	
d. Exercise any other rights or remedies available pursuant to this Agreement,

	
  

	
at law or in equity.

13. Termination. This Agreement shall continue in full force and effect until tenninated by either party upon 30 days written notice to the other. No tem1ination shall relieve either party of any rights or obligations accrned as of the date of termination.

14. Attorney- in- Fact. Seller hereby irrevocably appoints Buyer, or any person designated by Buyer, its true and lawful special attorney-in-fact and agent, with power to do the following:

	
  

	
a. Receive, open and dispose of all mail addressed to Seller.

	
  

	
b. Endorse the name of Seller on any notes, acceptances, checks, drafts, money orders or other remittances for payment of the Accounts.

	
  

	
c. Endorse the name of Seller on any invoice, freight, or express bill or bill of lading, storage receipt, warehouse receipt or other instrument or document in respect to any Account.

	
  

	
d. Sign the name of Seller to drafts against Seller, assignments or verifications of Accounts and notices to Customer.

	
  

	
e. Send notices and file liens against third parties to the same extent that Seller

	
  

	
could do so.

	
  

	
f. Do all other acts and things necessaiy to cany out the intent of this Agreement.

15. Miscellaneous:

	
  

	
a.Account Purchase Agreement: This is an account purchase agreement pursuant to the Texas Finance Code.

	
  

	
b. No Assumption. Buyer does not, by this Agreement or otherwise, assume any obligation of Seller under any Approved Invoice or other invoice.

	
  

	
c. Financing Statement: Seller authorizes Buyer to file a financing statement to record this transaction.

	
  

	
d. Governing Law. The substantive law, without regard to choice oflaw rules, of the State of Texas shall govern the interpr.etation and enforcement of this Agreement and the documents executed pursuant to it.

	
  

	
e. Counterparts. This Agreement may be executed in two or more counterparts each of which shall be deemed an original but all of which together shall constitute but one Agreement.

	
  

	
f. Electronic Means: The Parties agree to conduct this transaction by electronic

	
  

	
means pursuant to the provisions ofUnifom1 Electronic Transactions Act.

	
  

	
g. Entire Agreement. This Agreement, any Exhibits attached hereto and any documents executed pursuant to this Agreement, constitute the entire agreement among the parties pertaining to the subject matter hereof and are the final, complete and exclusive expression of the tenns and conditions thereof: All prior or contemporaneous agreements, representations, negotiations and understandings of the pruties hereto, oral or written, express or implied, are hereby superseded and merged herein.

  

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h. Modification. No amendment or addition to, or modification of any provision contained in this Agreement shall be effective unless fully set forth in writing signed by all of the parties.

	
  

	
i. Additional Documents. Each of the paiiies hereto agrees on behalf of itself

	
  

	
and its pennitted successors and assigns, that it will, without further consideration, execute, acknowledge and deliver such other documents and instrnments and take such other actions as may be necessary or convenient to carry out the purposes of this Agreement.

	
  

	
j. Successors and Assigns. Buyer may assign it rights and obligations under

	
  

	
this Agreement without the consent of Seller. No assignment by Seller of its rights or obligations under this Agreement shall be effoctive without the express written consent of Buyer.

	
  

	
k. Due Authority. Each Signatory for each respective party hereunder hereby

	
  

	
represents and warrants that he, acting with any other signatory for such party, has all the authority necessary to execute this Agreement on behalf of such pmiy.

	
  

	
1. No Partnership or Joint Venture. Nothing contained herein shall be deemed to cause Buyer to be considered partners or joint venturers with any of Seller or any owner, officer, employee or agent of Seller.

	
  

	
m. Waivers. All waivers hereunder shall be in writing. No waiver by either party hereto of any breach or anticipated breach of any provision of this Agreement by any other party shall be deemed a waiver of any other contemporaneous> preceding or succeeding breach or anticipated breach, whether or not similar, on the part of the same or any other party.

	
  

	
n. Severability. Ifany provision of this Agreement shall be unenforceable or inoperable as a matter of law, the remaining provisions of this Agreement shall remain in Ii.ill force and effect.

	
  

	
o. Time of Essence. Time is of the essence of this Agreement with respect to each and every provision of this Agreement in which time is a factor. There shall be no grace period in connection with this Agreement.

	
  

	
p. Representation by Counsel. Each of the parties hereto has had adequate opportunity to obtain representation by legal counsel in connection with the transactions contemplated by this Agreement and to the extent so desired each party has consulted with such counsel.

	
  

	
q. Survival of Agreements and Representations. The respective indemnities, agreements, representations, warranties and other statements of Seller as set fo1th in this Agreement will remain in foll force and effect, regardless of any investigation made by or on behalf of Buyer.

CROWN FINANCIAL, LLC (“BUYER”)

By: /s/ Chad Tribe

Name: Chad Tribe

Title: Manager

STW ENERGY SERVICES, LLC ("SELLER")

an organization organized under the laws of TEXAS

By: /s/ Lee Maddox

Name: Lee Maddox

Title:  President

Date: 7-11-13

 

 

-5-ex10-5.htm

Exhibit 10.5

Security Agreement

STW ENERGY SERVICES, LLC (the "Debtor"), and Crown Financial, LLC (the "Secured Party") agree as set out below.

1. Definitions.

a. All capitalized terms used in this Agreement shall have the meaning set forth in the Account Purchase Agreement unless otherwise expressly provided in this Agreement.

b. All terms defined in the Uniform Commercial Code shall have the same meaning in this Agreement unless expressly provided otherwise.

c. "Account Purchase Agreement'' means the account purchase agreement between Debtor and Secured Party dated on or around the same effective day as this Agreement (as amended and in effect from time to time.

d. "Collateral" has the meaning set fo1ih in Section 2.

e. "Default" means the failure of the Debtor to pay or perform any of the Obligations as and when due to be paid or performed under the tenns of the Account Purchase Agreement or this Agreement.

f. "Obligations" means all of the indebtedness, obligations and liabilities of the Debtor to the Secured Party, individually or collectively, whether direct or indirect, joint or several, absolute or contingent, due or to become due, now existing or hereafter arising under or in respect of the Account Purchase Agreement or this Agreement.

2. Grant of Security Interest. To secure the payment and performance in full of all of the Obligations, Debtor grants to the Secured Party a security interest in the following property, assets and rights of the Debtor, wherever located, whether now owned or hereafter acquired or arising, and all proceeds and products thereof (all of the same being hereinafter called the "Collateral11 : all instrnments (including promissory notes), documents, accounts (including health-care-insurance receivables), chattel paper (whether tangible or electronic), deposit accounts, any other contract rights or rights to the payment of money, insurance claims and proceeds, a11 general intangibles (including all payment intangibles), and all equipment. The Secured Party acknowledges that the attachment of its security interest in any additional commercial tmi claim as original collateral is subject to the Debtor's compliance with Section 4.1.

3. Authorization to File Financing Statements. The Debtor in-evocably authorizes the Secured Party at any time and from time to time to file in any filing office in any Unifonn Commercial Code jurisdiction any initial financing statements and amendments thereto with respect to the Collateral.

4. Other Actions. To further the attachment, perfection and first priority of, and the ability of the Secured Party to enforce, the Secured Party's security interest in the Collateral, and without limitation on the Debtor's other obligations in this Agreement, the Debtor agrees, in each case at the Debtor's expense, to take the following actions with respect to the following Collateral:

4.1 Commercial Tort Claims. If the Debtor shall at any time hold or acquire a commercial tort claim, the Debtor shall immediately notify the Secured Party in a writing signed by the Debtor of the particulars thereof and grant to the Secured Party in such writing a security interest therein and in the proceeds thereof, all upon the tenns of this Agreement, with such writing to be in fonn and substance satisfactory to the Secured Party.

  

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4.2 Other Actions as to Any and All Collateral. The Debtor further agrees, at the request and option of the Secured Party, to take any and all other actions the Secured Party may detennine to be necessary or useful for the attachment, perfection and first priority of, and the ability of the Secured Party to enforce, the Secured Party's security interest in any and all of the Collateral, including, without limitation, (a) causing the Secured Party's name to be noted as secured paiiy on any certificate of title for a titled good if such notation is a condition to attachment, perfection or priority of, or ability of the Secured Party to enforce, the Secured Party's security interest in such Collateral, (b) complying with any provision of any statute, regulation or treaty of the United States as to any Collateral if compliance with such provision is a condition to attachment, perfection or priority of, or ability of the Secured Party to enforce, the Secured Party's security interest in such Collateral, (c) obtaining governmental and other third pmiy waivers, consents and approvals in fonn and substance satisfactory to Secured Paiiy, including, without limitation, any consent of any licensor, lessor or other person obligated on Collateral, (d) obtaining waivers from m01igagees and landlords in fonn and substance satisfactory to the Secured Party and (e) taking all actions under any earlier versions of the Unifonn Commercial Code or under any other law, as reasonably detennined by the Secured Party to be applicable in any relevant Unifonn Co1mnercial Code or other jUiisdiction, including any foreign ju1isdiction.

5. Representations and Warranties Concerning Collateral, etc. The Debtor further represents and warrants to the Secured Party as follows: (a) the Debtor is the owner of (or has otl1er rights in or power to transfer) the Collateral, free from any right or claim or any person or any adverse lien, security interest or other encumbrance, except for the security interest created by this Agreement and other than the liens permitted by the Account Purchase Agreement, (b) none of the Collateral constitutes, or is the proceeds of, "frum products" as defined in Section 9 102(a)(34) of the Uniform Commercial Code of the State, and (c) none of the account debtors or other persons obligated on any of the Collateral is a governmental authority covered by the Federal Assignment of Claims Act or like federal, state or local statute or rule in respect of such Collateral.

6. Covenants Concerning Collateral, etc. The Debtor further covenants with the Secured Party as follows: (a) except for the secmity interest herein granted, the Debtor shall be the owner of or have other rights in the Collateral free from any right or claim of any other person, lien, security interest or other encumbrance, and the Debtor shall defend the same against all claims and demands of all persons at any tin1e claiming the same or any interests therein adverse to the Secured Party, (b) the Debtor shall not pledge, m01tgage or create, or suffer to exist any right of any person in or claim by any person to the Collateral, or any security interest, lien or encumbrance in the Collateral in favor of any person, other than the Secured Party, (c) the Debtor will pay promptly when due all taxes, assessments, govenunental charges and levies upon the Collateral or incurred in connection with the ownership of such Collateral or incurred in connection with this Agreement, and (d) the Debtor will not sell or othenvise dispose, or offer to sell or otherwise dispose, of the Collateral or any interest therein.

7. Securities and Deposits. The Secured Party may at any time following and dming the continuance of a Default, at its option, transfer to itself or any nominee any securities constituting Collateral, receive any income thereon and hold such income as additional Collateral or apply it to the Obligations. Whether or not any Obligations are due, the Secured Party may following and during the continuance of a Default demand, sue for, collect, or make any settlement or compromise which it deems desirable with respect to the Collateral. Regardless of the adequacy of Collateral or any other secmity for the Obligations, any deposits or other sums at any time credited by or due from the Secured Paiiy to the Debtor may at any time be applied to or set off against any of the Obligations.

8. Power of Attorney.

8.1. Appointment and Powers of Secured Party. The Debtor hereby irrevocably constitutes and appoints the Secured Party and any officer or agent thereof, with full power of substitution, as its true and lawful attorneys-in-fact with full inevocable power and authority in the place and stead of the Debtor or in the Secured Party's own name, for the purpose of can-ying out the terms of this Agreement, to take any and all appropriate action and to execute any and all documents and instruments that may be necessary or useful to accomplish the purposes of this Agreement and, without limiting the generality of the foregoing, hereby gives said attorneys the power and right, on behalf of the Debtor, without notice to or assent by the Debtor, to do the following:

  

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(a) upon the occurrence and during the continuance of a Default, generally to sell, transfer, pledge, make any agreement with respect to or otherwise dispose of or deal with any of tl1e Collateral in such mam1er as is consistent with the Uniform Commercial Code of the State and as fully and completely as though the Secured Party were the absolute owner thereof for all purposes, and to do, at the Debtor's expense, at any time, or from time to time, all acts and things which the Secured Party deems necessary or useful to protect, preserve or realize upon the Collateral and the Secured Party's security interest therein, in order to effect the intent of this Agreement, all at least as fully and effectively as the Debtor might do, including, without limitation, (i) the filing and prosecuting ofregistration and transfer applications with the appropriate federal, state, local or other agencies or authorities with respect to trademarks, copyrights and patentable jnventions and processes, (ii) upon written notice to the Debtor, the exercise of voting rights with respect to voting securities, which rights may be exercised, if the Secured Party so elects, with a view to causing the liquidation of assets of the issuer of any such securities, and (iii) the execution, delivery and recording, in connection with any sale or other disposition of any Collateral, of the endorsements, assignments or other instruments of conveyance or transfer with respect to such Collateral; and

(b) to the extent that the Debtor's autho1ization given in Section 3 is not sufficient, to file such financing statements with respect hereto, with or without the Debtor's signature, or a photocopy of this Agreement in substitution for a financing statement, as the Secured Party may deem appropriate and to execute in the Debtor's name such financing statements and amendments thereto and continuation statements which may require the Debtor's signature.

8.2. Ratification by Debtor. To the extent pennitted by law, the Debtor hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof This power of attorney is a power coupled with an interest and is irrevocable.

8.3. No Duty on Secured Party. The powers conferred on the Secured Party hereunder are solely to protect its interests in the Collateral and shall not impose any duty upon it to exercise any such powers. The Secured Party shall be accountable only for the amounts that it actually receives as a result of the exercise of such powers, and neither it nor any of its officers, directors, employees or agents shall be responsible to the Debtor for any act or failure to act, except for the Secured Pa1ty's own gross negligence or 'Willful misconduct.

9. Rights and Remedies. If any Default shall have occurred and be continuing, the Secured Party, without any other notice to or demand upon the Debtor have in any jurisdiction in which enforcement hereof is sought, in addition to all other rights and remedies, the rights and remedies of a secured pa1ty under the Uniform Commercial Code of the State and any additional rights and remedies which may be provided to a secured party in any jurisdiction in which Collateral is located, including, without limitation, the right to take possession of the Collateral, and for that purpose the Secured Paity may, so far as the Debtor can give authority therefor, enter upon any premises on which the Collateral may be situated and remove the same therefrom. The Secured Paity may in its discretion require the Debtor to assemble all or any part of the Collateral at such location or locations within the jurisdiction(s) of the Debtor's principal office(s) or at such other locations as the Secured Party may reasonably designate. Unless the Collateral is perishable or threatens to decline speedily in value or is of a type customatily sold on a recognized market, the Secured Party shall give to the Debtor at least five Business Days prior written notice of the time and place of any public sale of Collateral or of the time after which any private sale or any other intended disposition is to be made. The Debtor hereby acknowledges that five Business Days prior wiitten notice of such sale or sales shall be reasonable notice. In addition, the Debtor waives any and all rights that it may have to a judicial hearing in advance of the enforcement of any of the Secured Party's rights and remedies hereunder, including, without limitation, its right following a Default to take immediate possession of the Collateral and to exercise its rights and remedies with respect thereto.

  

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10. Standards for Exercising Rights and Remedies. To the extent that applicable law imposes duties on the Secured Party to exercise remedies in a co1mnercially reasonable manner, the Debtor acknowledges and agrees that it is not commercially unreasonable for the Secured Party (a) to fajJ to incur expenses reasonably deemed significant by the Secured Party to prepare Collateral for disposition or otherwise to fail to complete raw material or work in process into finished goods or other finished products for disposition, (b) to fail to obtain third party consents for access to Collateral to be disposed of, or to obtain or, if not required by other law, to fail to obtain governmental or third party consents for the collection or disposition of Collateral to be collected or disposed of, (c) to fail to exercise collection remedies against account debtors or other persons obligated on Collateral or to fail to remove liens or encumbrances on or any adverse claims against Collateral, (d) to exercise collection remedies against account debtors and other persons obligated on Collateral directly or through the use of collection agencies and other collection specialists, (e) to advertise dispositions of Collateral through publications or media of general circulation, whether or not the Collateral is of a specialized nature, (f) to contact other persons, whether or not in the same business as the Debtor, for expressions of interest in acquiring all or any portion of the Collateral, (g) to hire one or more professional auctioneers to assist in the disposition of Collateral, whether or not the collateral is of a specialized nature, (h) to dispose of Collateral by utilizing Internet sites that provide for the auction of assets of the types included in the Collateral or that have the reasonable capability of doing so, or that match buyers and sellers of assets, (i) to dispose of assets in wholesale rather than retail markets, G) to disclaim disposition warranties, (k) to purchase insurance or credit enhancements to insure the Secured Party against risks of loss, collection or disposition of Collateral or to provide to the Secured Party a guaranteed return from the collection or disposition of Collateral, or (1) to the extent deemed appropriate by the Secured Party, to obtain the services of other brokers, investment bankers, consultants and other professionals to assist the Secured Party in the collection or disposition of any of the Collateral. The Debtor acknowledges that the purpose of this Section is to provide non-ex11austive indications of what actions or omissions by the Secured Party would fulfill the Secured Party's duties under the Unifo1m Commercial Code or other law of the State or any other relevant jurisdiction in the Secured Party's exercise of remedies against the Collateral and that other actions or omissions by the Secured Party shall not be deemed to fail to fulfill such duties solely on account of not being indicated in this Section. Without limitation upon the foregoing, nothing contained in this Section shall be construed to grant any rights to the Debtor or to impose any duties on the Secured Party that would not have been granted or imposed by this Agreement or by applicable law in the absence of this Section.

11. No Waiver by Secured Party, etc. The Secured Party shall not be deemed to have waived any of its rights or remedies in respect of the Obligations or the Collateral unless such waiver shall be in writing and signed by the Secured Party. No delay or omission on the part of the Secured Party in exercising any right or remedy shall operate as a waiver of such right or remedy or any other right or remedy. A waiver on any one occasion shall not be construed as a bar to or waiver of any right or remedy on any future occasion. AU rights and remedies of the Secured Party with respect to the Obligations or the Collateral, whether evidenced hereby or by any other instrument or papers, shall be cumulative and may be exercised singularly, alternatively, successively or concurrently at such time or at such times as the Secured Party deems expedient.

12. Suretyship Waivers by Debtor. The Debtor waives demand, notice, protest, notice of acceptance of this Agreement, notice of loans made, credit extended, Collateral received or delivered or other action taken in reliance hereon and all other demands and notices of any description. With respect to both the Obligations and the Collateral, the Debtor assents to any extension or postponement of the time of payment or any other indulgence, to any substitution, exchange or release of or failure to perfect any security interest in any Collateral, to the addition or release of any party or person primarily or secondarily liable, to the acceptance of partial payment thereon and the settlement, compromising or adjusting of ai1y thereof, all in such manner and at such time or times as the Secured Party may deem advisable. The Secured Party shall have no duty as to the collection or protection of the Collateral or any income therefrom, the preservation of rights against prior parties, or the preservation of any rights pertaining thereto beyond the safe custody thereof The Debtor further waives ai1y ai1d all other suretyship defenses.

  

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13. Marshalling. The Secured Party shall not be required to marshal any present or future collateral security (including but not limited to the Collateral) for, or other assurances of payment of, the Obligations or any of them or to reso1i to such collateral security or other assurances of payment in ai1y particular order, and all of its rights and remedies hereunder and in respect of such collateral security and other assurances of payment shall be cumulative and in addition to all other rights and remedies, however existing or arising. To the extent that it lawfully may, the Debtor hereby agrees that it will not invoke any law relating to the marshalling of collateral which might cause delay in or impede the enforcement of the Secured Party's rights and remedies under this Agreement or under any other instrument creating or evidencing any of the Obligations or under which any of the Obligations is outstanding or by which any of the Obligations is secured or payment thereof is otherwise assured, and, to the extent that it lawfully may, the Debtor hereby irrevocably waives the benefits of all such laws.

14. Proceeds of Dispositions; Expenses. The Debtor shall pay to the Secured Party on demand any and all expenses, including reasonable attorneys' fees and disbursements, incun-ed or paid by the Secured Party in protecting, preserving or enforcing the Secured Paiiy's rights ai1d remedies under or in respect of any of the Obligations or ai1y of the Collateral. After deducting all ·of said expenses, the residue of any proceeds of collection or sale or other disposition of the Collateral shall, to the extent actually received in cash, be applied to the payment of the Obligations in such order or preference as is provided in the Account Purchase Agreement, proper allowance and provision being made for any Obligations not then due. Upon the final payment and satisfaction in full of all of the Obligations and after making any payments required by Sections 9-608(a)(l)(C) or 9-615(a)(3) of the Unifonn C01mnercial Code of the State, any excess shall be returned to the Debtor. In the absence of final payment and satisfaction in full of all of the Obligations, the Debtor shall remain liable for any deficiency.

15. Overdue Amounts. Until paid, all amounts due and payable by the Debtor hereunder shall be a debt secured by the Collateral and shall bear, whether before or after judgment, interest at the rate set forth in the Account Purchase Agreement.

16. Governing Law; Consent to Jurisdiction. THIS AGREEMENT IS INTENDED TO TAKE EFFECT AS A SEALED INSTRUMENT AND SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS. The Debtor agrees that any action or claim arising out of, or any dispute in connection with, this Agreement or the Account Purchase Agreement, any rights, remedies, obligations, or duties hereunder or under the Account Purchase Agreement, or the performance or enforcement hereof or thereof, may be brought in the courts of the State or any federal court sitting therein and consents to the non­ exclusive jurisdiction of such court and to service of process in any such suit being made upon the Debtor by mail at the address specified in the Account Purchase Agreement. The Debtor hereby waives any objection that it may now or hereafter have to the venue of any such suit or any such court or that such suit is brought in an inconvenient court.

17. Waiver of Jury Trial. THE DEBTOR WANES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT OR THE ACCOUNT PURCHASE AGREEMENT, ANY RIGHTS, REMEDIES, OBLIGATIONS, OR DUTIES HEREUNDER OR UNDER THE ACCOUNT PURCHASE AGREEMENT, OR THE PERFORMANCE OR ENFORCEMENT HEREOF OR UNDER THE ACCOUNT PURCHASE AGREEMENT. Except as prohibited by law, the Debtor waives any right which it may have to claim or recover in any litigation referred to in the preceding sentence any special, exemplary, punitive or consequential damages or any damages other than, or in addition to, actual damages. The Debtor (i) certifies that neither the Secured Party nor any representative, agent or attorney of the Secured Party has represented, expressly or otherwise, that the Secured Party would not, in the event of litigation, seek to enforce the foregoing waivers or other waivers contained in this Agreement, and (ii) acknowledges that, in entering into the Account Purchase Agreement, the Secured Party is relying upon, among other things, the waivers and certifications contained in this Section.

  

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18. Miscellaneous. The headings of each section of this Agreement are for convenience only and shall not define or Hmit the provisions thereof. This Agreement and all rights and obligations hereunder shall be binding upon the Debtor and its respective successors and assigns, and shall i1rnre to the benefit of the Secured Party and its successors and assigns. If any terr:n of this Agreement shaJl be hold to be invalid, illegal or unenforceable, the validity of all other terms hereof shall in no way be affected thereby, and this Agreement shall be construed and be enforceable as if such invalid, illegal or unenforceable term had not been included herein, The Debtor acknowledges receipt of a copy of this Agreement.

lN WITNESS WHEREOF, intending to be legally bound, the Deblor has caused this Agreement to be duly executed as of the date set out below.

STW ENERGY SERVICES, LLC ("DEBTOR")

an organization organized under the laws of TEXAS

By: /s/ Lee Maddox

Name: Lee Maddox

Title: President

Date: 7-11-13

Accepted: Crown Financial, LLC, (SECURED PARTY)

/s/ Chad Tribe

By; Chad Tribe

Its: Manager

Dated: June 21, 2013

 

 

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