8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 30, 2015

STW RESOURCES HOLDING CORP.

(Exact name of registrant as specified in its charter)

Nevada	000-52654	26-1945743
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(IRS Employer Identification No.)

3424 South County Road 1192 Midland, Texas 79706	79706
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code:(432) 686-7777

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[  ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a -12)

[  ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d -2(b))

[  ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e -4(c))

Section 1 – Registrant's Business and Operations

Item 1.01. Entry into a Material Definitive Agreement

Financing Arrangements

On April 30, 2015, our wholly owned subsidiary, STW Water Process & Technologies, LLC (“STW Water”) entered into a work-in-process financing agreement with Crown Financial, LLC ("Crown"), pursuant to an Account Purchase Agreement and Guaranty (the “Account Purchase Agreement”), with the Company and the Company’s CEO, Stanley T. Weiner as guarantors for STW Water’s obligations.  The Account Purchase Agreement is secured through a Security Agreement between STW Water as Debtor and Crown as the Secured Party (the “Security Agreement”), by a security interest in (the “Collateral”) STW Water’s instruments, accounts, contracts and rights to the payment of money, all general intangibles and all equipment; the Security Agreement also includes a list of items that are specifically excluded from Collateral.

Crown has authorized up to a $5,000,000 credit limit to STW Water under the Account Purchase Agreement, all obligations of which are guaranteed by the Company and Mr. Weiner personally.  Neither the Company nor Stanley T. Weiner has received any compensation related to their serving as Guarantors of the Account Purchase Agreement.  The Account Purchase Agreement is not a securities transaction and no Company securities are issuable thereunder; therefore, the Account Purchase Agreement and transactions contemplated thereby will not have any dilutive effect on the Company’s outstanding shares of common stock.

 Under the terms of the Account Purchase Agreement, Crown may, at its sole discretion, accept certain of STW Water’s eligible large project contracts nominated by STW Water for the installation of reverse osmosis concentrates or desalination equipment with cities, water districts or other governmental entities. The Account Purchase Agreements is implemented as a form of purchase order financing for work invoiced by STW Water to its project customers for work yet to be performed by STW Water, and is not factoring of invoices for work already performed by STW Water.  Upon Crown’s acceptance of a nominated project contract that STW Water has invoiced its customer for a project with milestone payments due as the work progresses, Crown will advance to the Company 20% of the entire project contract invoice for project start-up costs.  Thereafter, STW Water submits work-in-process invoices from its vendors which Crown pays.  As STW Water’s customer makes milestone payments on each project contract, Crown is repaid its advances, interest due and fees, with the remainder being paid to STW Water.  Crown is entitled to deduct from the amounts paid to STW Water in connection with the accepted project contracts a Gross Contract Fee of 4% of the total amount to be billed by STW Water to its customer under the nominated/accepted project contract.  As a result of the Guaranty Agreement, Crown will generally have full recourse against STW Water, Mr. Weiner and the Company in the event of nonpayment of any such purchased account.  Crown has the discretion to require STW Water to repurchase any invoice related to an accepted contract which has not been fully paid within 95 days of original invoicing, plus STW Water will be obligated to pay Crown the Purchase Price of such uncollected project invoice plus interest at the maximum lawful interest rate per annum, minus any payments made on the project invoice.  The Company and Weiner are also guarantors of STW Water’s repurchase obligations.

The Account Purchase Agreement shall continue until terminated by either party upon 30 days written notice.  The Account Purchase Agreement contains covenants that are customary for agreements of this type and appoints Crown as attorney in fact for various activities associated with the purchased accounts receivable, including opening our mail, endorsing its name on related notes and payments, and filing liens against related third parties. The failure to satisfy covenants under the Account Purchase Agreement or the occurrence of other specified events that constitute an event of default could result in the acceleration of our repayment obligations or Crown enforcing its rights under the Security Agreement and taking possession of the collateral. The Account Purchase Agreement contains provisions relating to events of default that are customary for agreements of this type.

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The information contained in this Current Report on Form 8-K is not an offer to sell or the solicitation of an offer to buy the Company's common stock or any other securities of the company, but merely included to disclose the terms of the transaction mentioned herein.

The Account Purchase Agreement contains representations and warranties by the Company which are customary for transactions of this type.

The foregoing description of the terms of the Account Purchase Agreement and Security Agreement is qualified in its entirety by reference to the provisions of the Account Purchase Agreement and Security Agreement which are filed as Exhibits 10.1 and 10.2 to this Current Report, respectively, and are incorporated by reference herein.

Important Notice regarding the Transaction Documents

The Account Purchase Agreement and Security Agreement(collectively, the "Transaction Documents") have been included as exhibits to this Current Report on Form 8-K to provide security holders with information regarding their terms. They are not intended to provide any other financial information about the Company or its subsidiaries. The representations, warranties and covenants contained in the Transaction Documents were made only for purposes of those agreements and as of specific dates; were solely for the benefit of the parties to the Transaction Documents; may be subject to limitations agreed upon by the parties, including being qualified by disclosures made for the purposes of allocating contractual risk between the parties to the Transaction Documents instead of establishing these matters as facts; and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Investors should not rely on the representations, warranties and covenants or any description thereof as characterizations of the actual state of facts or condition of the Company. Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the date of the Transaction Documents, which subsequent information may or may not be fully reflected in public disclosures by the Company.

Section 9 - Financial Statements and Exhibits

Item 9.01  Exhibits

Exhibit No.	Description
10.1	Account Purchase Agreement and Guaranty between STW Water Process & Technologies, LLC and Crown Financial, LLC, with the Company and Stanley T. Weiner as Guarantors
10.2	Security Agreement between STW Water Process & Technologies, LLC and Crown Financial, LLC

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: May 6, 2015	STW Resources Holding Corp.
	By:	/s/ Stanley Weiner
		Stanley Weiner, CEO

EX-10.1

Exhibit 10.1

ACCOUNT PURCHASE AGREEMENT and GUARANTY

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

a.Crown Financial, LLC (“Crown”);

b.STW Water Process & Technologies, LLC (“STW”); and

c.STW Resources Holding Corp. and Stanley Weiner, individually (collectively, “Guarantor”).

The parties agree as set forth below:

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

a.“Accepted Contract” has the meaning set forth in Section 3(b).

b.“Accounts” has the meaning set forth in Section 4(a).

c.“Contracting Entity” has the meaning set forth in Section 3(a).

d.“Crown Advances” has the meaning set forth in Section 5(a).

e.“Factoring Advance: has the meaning set forth in Section 5(c).

f.“Fees” means the fees and charges Crown is entitled to take under Section 6 along with the Gross Contract Fee set forth in Section 5. .

g.“Nominated Contract” means contracts nominated by STW to Crown pursuant to Section 3(a).

h.“Repurchase Obligation” has the meaning set forth in Section 7(b).

3.   Water Contract Nomination and Acceptance

a.STW shall nominate contracts for the installation of reverse osmosis concentrators or desalination equipment with cities, water districts or other governmental entities (“Contracting Entity”) for Crown’s consideration under the terms of this Agreement. In nominating a contract, STW shall provide Crown with the following:

i.The fully executed contract between STW and the Contracting Entity;

ii.Any correspondence, emails or other documents reflecting any understanding or agreements between STW and the Contracting Entity that are not expressly set forth in the Nominated Contract;

iii.Documentation of all necessary approvals and authorizations for the Contracting Entity to have entered into the Nominated Contract;

iv.In the form of Exhibit A, an estimate of costs required to fulfill the requirements of the Nominated Contract, the timing of those costs, the amounts to be invoiced pursuant to the Nominated Contracts by STW and the anticipated timing of invoicing and payments of the invoices.

b.Within five business days of receiving from STW the information required above with respect to a Nominated Contract, Crown will decide in its sole discretion whether to accept the Nominated Contract and notify STW of its decision.  A Nominated Contract accepted by Crown shall be referred to as an “Accepted Contract.”

c. Before accepting any Nominated Contract, Crown shall have the right to conduct such investigation as Crown deems appropriate.  Any investigation or other information obtained by Crown is for the sole benefit of Crown.  STW acknowledges that Crown is relying on STW’s representations and warranties notwithstanding any investigation it may conduct.

d.Crown is not obligated to accept any Nominated Contract, but Accepted Contracts shall be governed by this Agreement.  Crown may condition its acceptance of Nominated Contracts on changes in the Fees charged by Crown as set forth in Section 6.   STW may indicate its consent to changes in the Fees in writing, orally, electronically or by causing or allowing Crown to advance or pay any portion of the cost of the Nominated Contract.

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4.   Account Purchase:

a.“Accounts” means the accounts receivable arising out of any Accepted Contract.

b.STW sells and transfers the Accounts to Crown.

5.   Crown Advances and Factoring:

a.Provided that: (i) STW is not in default under this Agreement or any other Agreement with Crown; (ii) the representations made by STW pursuant to this Agreement were true when made and remain true; and (iii) no material deviations from the amounts or timing set forth in the Exhibit A associated with the Accepted Contract have occurred and none are reasonably expected, Crown shall make advances (“Crown Advances”) as set forth in that Exhibit A to purchase materials and to pay subcontractors to perform Accepted Contracts. Crown Advances shall be made direct to subcontractors and material suppliers.

b.As STW invoices the Contracting Entity with respect to an Accepted Contract, Crown shall factor the invoice, provided all the following conditions are met:

i.The Contracting Entity being invoiced signs a letter agreement with Crown providing that the invoice is in line for payment and not subject to offsets, reductions or defenses of any kind;

ii.The Contracting Entity being invoiced agrees to make payment to an account or address designated by Crown;

iii.The representations and warranties made by STW pursuant to this Agreement were true when made and remain true;  and

iv.STW has performed all of its obligations pursuant to this Agreement.

c.The amount that Crown shall pay to STW as the “Factoring Advance” with respect to each invoice shall be 80 per cent of the face amount of the invoice, less the amount of Crown Advances associated with the Accepted Contract. Further,  Crown shall be entitled to deduct from the amount paid to STW in connection with factoring invoices a “Gross Contract Fee” equal to 4 percent of the total amount to be billed by STW pursuant to the Nominated Contract. This shall not reduce the amount of the Factoring Advance. Crown may only collect this Gross Contract Fee one time with respect to any Accepted Contract.

d.When there are outstanding Crown Advances at the time that Crown factors an invoice, the amount of the Crown Advances shall be reduced by the amount of the invoice, less the Gross Contract Fee if applicable.

6.   Collection of Accounts and Fees

a.Crown shall have the exclusive right to collect proceeds from any Accepted Contract. STW shall not collect any proceeds from any Accepted Contract.

b.Upon receipt of proceeds from an invoice of an Accepted Contract, Crown shall distribute such proceeds in the following order:

i.   First, to itself to repay any outstanding Crown Advances.

ii.   Second, to itself to repay 80 percent of the face amount of the invoice.

iii.   Third, to repay to itself any amounts due to Crown under this Agreement or any other agreement with STW.

iv.   Third, to pay itself a fee that would produce a return on investment equal to 0.1644 percent per day with respect to the Crown Advances.

v.   Fourth, to pay itself a fee equal to .09863 percent per day applied to the amount of the invoice from the date of invoice until the date of collection.

vi.   Sixth, to pay STW any additional proceeds with respect to the Accepted Contract.

c.Exhibit A attached illustrates the amount of Fees to be charged based on the amounts and dates set forth.

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7.   Recourse Nature of Sale and Repurchase Obligation:

a.Crown may, in its sole discretion, require STW to re-purchase from it any Account relating to an Accepted Contract under the following conditions:

i.    STW has breached any of its representations or warranties;

ii.   STW has breached its covenants; or

iii.   STW as determined by Crown has not met the schedule for sending invoices under the Accepted Contract;

iv.   Any invoice under the Accepted Contract has not been fully paid within 95 days of its date. An Account that Crown requires STW to repurchase shall be referred to as a “Repurchase Account.”

b.STW shall be obligated to pay Crown for repurchase of an Repurchase Account an amount (the “Repurchase Obligation”) equal to the outstanding Crown Advances plus all Factoring Advances plus interest at the maximum lawful interest rate per annum from the date of each portion of the Crown Advances and any Factoring Advances, less the amounts of any payments received by Crown on the Repurchase Account.

c.With respect to a Repurchase Account, Crown may concurrently seek to recover both the Repurchase Obligation from the STW and the Account itself from the Contracting Entity, provided that Crown shall rebate to STW an amount equal to:

i.the total amount actually collected by Crown from STW less attorneys fees and expenses incurred by Crown in collecting from STW, plus

ii.the total amount actually collected by Crown from the Contracting Entity less attorneys fees and expenses incurred by Crown in collecting from Contracting Entity, minus

iii.the outstanding Crown Advances plus 80 percent of the factored invoice amounts.

d.Crown may determine in its sole discretion to collect concurrently from STW and the Contracting Entity in separate actions.

8.   Security Agreement for Repurchase Obligation.

a.To secure all of its repurchase obligations under this Agreement and any amounts owed to Crown under any other agreement, STW grants to Crown a security interest in all of its accounts and any amounts due to it under this Agreement.  In this context, “accounts” has the meaning set forth in the Uniform Commercial Code and is not limited to “Accounts” as defined in this Agreement.

b.Contemporaneous with the execution of this Agreement, STW may further enter into a separate, more formal security agreement (“Security Agreement”) with Crown, in which STW grants to Crown a first Lien and security interest in various collateral.

c.A default by STW under this Agreement shall be a default under any Security Agreement with Crown.

9.   Right to Settle Accounts.   After consulting with STW, Crown may, in its good faith discretion, settle or compromise any Accounts.  Crown may exercise this discretion based on any reason including, without limitation, invoicing error, dissatisfaction with the goods and/or services rendered by STW or the inability or difficulty of the Contracting Entity to pay the full amount of the Account.  Crown shall not be required to obtain the consent of STW before settling or compromising any Accounts.

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

a.STW has conducted a reasonable and prudent investigation of any Nominated Contract and as a result of such investigation it has reasonably and in good faith estimated and communicated to Crown the amount on Crown Advances that will be required for it to perform all of its obligations under the Nominated Contract;

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b.The materials provided by STW to Crown in nominating a contract, including those items set forth in Section 3(a), are complete and accurate in all material respects, and any estimates of costs, the timings of costs, invoice amounts, the timing of invoicing, payments, and the timing of payments were made in good faith by STW based on its best efforts to complete and accurate.

c.STW has the full power and authority to enter into this Agreement with Crown.

d.STW was duly organized or incorporated pursuant to the laws of the state indicated in the signature block of this agreement with the stated organization number.

11.    Covenants of STW:  STW hereby covenants and agrees with Crown as follows:

a.STW shall perform all of its obligations under an Accepted Contract.

b.In invoicing any Contracting Entity on an Accepted Contract, STW shall instruct the Contracting Entity to pay to a lockbox account under Crown’s control and as designated by Crown. This shall apply to Accepted Contracts whether or Crown has required repurchase of the associated account pursuant to the terms of this agreement.

c.STW shall copy Crown on all invoices and associated documentation sent to any Contracting Entity.

d.If STW receives payment for performance on any Accepted Contract, STW shall immediately notify Crown and shall hold all checks and other payments in trust for Crown and deliver to Crown such checks and other payments within two business days of receipt.

e.STW shall provide to Crown semi-monthly progress reports with respect to each Accepted Contract reflecting the status of performance in terms of work done and work remaining to be done, including a description of that work, the cost to perform that work and the amount to be invoiced upon completion of each portion of the work.  These progress reports shall be due on the 15th day of each month and the last day of each month until Crown is fully paid under this Agreement;

f.STW shall deliver to Crown upon request such resolutions or certificates as Crown may reasonably request from time to time to evidence STW’s power and authority to act under this Agreement.

g.STW shall not change its corporate structure, existence or name without the prior written consent of Crown, which consent shall not be unreasonably withheld.

h.STW shall promptly notify Crown of any change of address of STW.

i.STW shall not sell, transfer, pledge, encumber or grant a security interest in any of its accounts other than to Crown.

j.STW shall promptly notify Crown of any complaint from or disagreement or dispute with the Contracting Entity on any Accepted Contract within three business days after STW learns of such complaint, disagreement or dispute.    Such notification shall include providing and updating Crown with any correspondence, emails or other documents setting out such complaints, disagreements or disputes and any responses of STW.

12.   Remedies.  In the event of a breach by STW of any of its representations, warranties and covenants set forth in this Agreement, or in the event STW otherwise defaults on its obligations under this Agreement, Crown may exercise any one or more of the following remedies, to the maximum extent allowed by law:

a.Enforce Crown’s rights and remedies under the Security Agreement.

b.If same can be accomplished peaceably, enter STW’s business premises and take possession of all books and records relating to any Accepted Contract.

c.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 terminated by either party upon 30 days written notice to the other.  No termination shall relieve either party of any rights or obligations accrued as of the date of termination.

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14.   Attorney- in- Fact.  STW hereby irrevocably appoints Crown, or any person designated by Crown, 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 STW.

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

c.Endorse the name of STW 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 STW to drafts against STW, assignments or verifications of Accounts and notices to Customer.

e.Send notices and file liens against third parties to the same extent that STW could do so.

f.Do all other acts and things necessary to carry out the intent of this Agreement.

15.   Guaranty

a.STW Resources Holding Corp. and Stanley Weiner, individually (collectively, “Guarantor”) guaranty to Crown that:

i.STW shall perform all of its obligations under this Agreement and other any other agreements, oral or written with Crown;

ii.Each representation and warranty made by STW in connection with this Agreement is accurate, complete and not misleading in any way.

b.This guaranty is absolute, irrevocable, unconditional, and continuing. Crown need not join any other party, including STW, in connection with any action on this guaranty. Guarantor, waives all notice in connection with this guaranty including notice of acceptance, default by STW, release or substitution of collateral and every other notice of any kind. Guarantor’s obligations shall not be released by

i.Any renewal, extension, or modification of the matters guaranteed;

ii.The insolvency or liquidation of STW;

iii.The failure by Crown to obtain, perfect or preserve any security interest or lien;

iv.The release or substitution of any collateral; or

v.The failure of Crown to exercise diligence, commercial reasonableness, or reasonable care with respect to any collateral.

c.If Guarantor is comprised of more than one entity, the liability of each entity included in Guarantor shall be joint and several.

16.   Nature of Transaction: Account Purchase Agreement

a.This is an account purchase agreement pursuant to the Texas Finance Code.

b.Crown and STW do not intend by this agreement or otherwise create any partnership or joint venture between Crown and STW or between Crown and any owner, officer, employee or agent of STW.

c.STW is not an agent of Crown pursuant to the terms of this Agreement or otherwise.  STW is not empowered to commit Crown to pay any amounts or otherwise.

d.Crown is not taking title to any goods included in any Nominated Contract or Accepted Contract pursuant to the terms of this Agreement or otherwise.  Crown assumes no obligations or liabilities with respect to any Accepted Contract pursuant to the terms of this Agreement or otherwise.  STW is solely responsible for complying with any environmental or other regulations associated with any Accepted Contract.

e.Crown does not, by this Agreement or otherwise, assume any obligation of STW under any Accounts or any contracts.

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17.Miscellaneous:

a.Financing Statement: STW authorizes Crown to file a financing statement to record this transaction.

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

c.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.

d.Electronic Means: The Parties agree to conduct this transaction by electronic means pursuant to the provisions of Uniform Electronic Transactions Act.

e.Entire Agreement.  This Agreement, any attached Exhibits and the documents executed pursuant to this Agreement or contemporaneously with 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 terms and conditions of that agreement.  All prior or contemporaneous agreements and understandings of the parties, oral or written, express or implied, are hereby superseded and merged into this Agreement.  Except as expressly set forth or incorporated in this Agreement, all prior or contemporaneous representations of the parties, oral or written, express or implied, are hereby superseded and merged into this Agreement.

f.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.

g.Additional Documents.  Each of the parties hereto agrees on behalf of itself and its permitted successors and assigns, that it will, without further consideration, execute, acknowledge and deliver such other documents and instruments and take such other actions as may be necessary or convenient to carry out the purposes of this Agreement.

h.Successors and Assigns.  Crown may assign it rights and obligations under this Agreement without the consent of STW.  No assignment by STW of its rights or obligations under this Agreement shall be effective without the express written consent of Crown.

i.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 party.

j.Waivers. All waivers under this Agreement 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.

k.Severability.  If any provision of this Agreement shall be unenforceable or inoperable as a matter of law, the remaining provisions of this Agreement shall remain in full force and effect.

l.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.

m.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. Don Fogel has represented only Crown in connection with this Agreement.

n.Survival of Agreements and Representations.  The respective indemnities, agreements, representations, warranties and other statements of STW as set forth in this Agreement will remain in full force and effect, regardless of any investigation made by or on behalf of Crown.

18.   Waiver of Jury Trial.  The parties unconditionally waive their right to a jury trial of any and all claims or causes of action arising from or relating to their relationship. The parties acknowledge that a right to a jury is a constitutional right, that they have had an opportunity to consult with independent counsel, and that this jury waive has been entered into knowingly and voluntarily. This agreement may be filed as a written consent to a trial by the court.

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DATE:     April ___, 2015.

CROWN FINANCIAL, LLC  ("CROWN")

By: ______________________________

Name:  Chad Tribe

Title:    Manager

STW Water Process & Technologies, LLC (“STW”)

an organization organized under the laws of TEXAS, File No. 801972949

By: _______________________________

Name:  D. Grant Seabolt, Jr.

Title:    _______________________

Guarantor:

STW Resources Holding Corp.

By: _______________________________

Name:  ______________________

Title:    _______________________

Guarantor:

Stanley Weiner

__________________________

Stanley Weiner, individually

Macintosh HD:Users:fogeldon:Dropbox:Crown re STW:drafts:STW Account Purchase Agreement.doc

EX-10.2

                                                                                                                                                                                                                                                                                                                                                                                                                                     Exhibit 10.2

Security Agreement

STW Water Process & Technologies, 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  and guaranty 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 forth 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 terms 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 "Collateral"):

a.           all personal and fixture property of every kind and nature including without limitation all goods (including inventory, equipment and any accessions thereto);

b.           instruments (including promissory notes), documents;

c.           accounts (including health-care-insurance receivables);

d.           chattel paper (whether tangible or electronic), deposit accounts, letter-of-credit rights (whether or not the letter of credit is evidenced by a writing), commercial tort claims, securities and all other investment property, supporting obligations, any other contract rights or rights to the payment of money, insurance claims and proceeds; and

e.           all general intangibles (including all payment intangibles).

f.           The security interests granted by Debtor in foregoing subparagraphs 2a-2e shall not apply to Debtor’s property interests in: (i) designed built owned and operated water related projects ( arising out of or related to water processing, water and wastewater reclamation and water drilling projects and water stations), wherever located, and specifically including the Capitan Reef Aquifer water drilling and water station development project with the City of Ft. Stockton, Texas (the “Excluded Projects”); and (ii)  any special purpose entities chartered by Debtor to sponsor such Excluded Projects.  Provided, however,  that the Excluded Projects shall not include projects limited to the sale and installation of equipment, such as, for example, the Horizon Regional Project and the Pioneer Projects. Further, any accounts receivable in Excluded Projects which are, in fact, offered by Debtor and purchased by Secured Party shall be included in the Collateral.

The Secured Party acknowledges that the attachment of its security interest in any additional commercial tort claim as original collateral is subject to the Debtor's compliance with Section 4.1.

3.           Authorization to File Financing Statements. The Debtor irrevocably authorizes the Secured Party at any time and from time to time to file in any filing office in any Uniform 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:

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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 terms of this Agreement, with such writing to be in form and substance satisfactory to the Secured Party.

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 determine 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 party 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 party waivers, consents and approvals in form and substance satisfactory to Secured Party, including, without limitation, any consent of any licensor, lessor or other person obligated on Collateral, (d) obtaining waivers from mortgagees and landlords in form and substance satisfactory to the Secured Party and (e) taking all actions under any earlier versions of the Uniform Commercial Code or under any other law, as reasonably determined by the Secured Party to be applicable in any relevant Uniform Commercial Code or other jurisdiction, including any foreign jurisdiction.

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 other 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, "farm 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 security 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 time claiming the same or any interests therein adverse to the Secured Party, (b) the Debtor shall not pledge, mortgage 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, governmental 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 otherwise 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 during 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 security for the Obligations, any deposits or other sums at any time credited by or due from the Secured Party 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 irrevocable power and authority in the place and stead of the Debtor or in the Secured Party's own name, for the purpose of carrying 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 the Collateral in such manner 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 of registration and transfer applications with the appropriate federal, state, local or other agencies or authorities with respect to trademarks, copyrights and patentable inventions 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 authorization 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 permitted 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 Party'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 party 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 Party 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 Party 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 customarily 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 written 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 commercially reasonable manner, the Debtor acknowledges and agrees that it is not commercially unreasonable for the Secured Party (a) to fail 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, (j) 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 (l) 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-exhaustive indications of what actions or omissions by the Secured Party would fulfill the Secured Party's duties under the Uniform 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. All 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 any 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 any and 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 resort to such collateral security or other assurances of payment in any 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, incurred or paid by the Secured Party in protecting, preserving or enforcing the Secured Party's rights and remedies under or in respect of any of the Obligations or any 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)(1)(C) or 9-615(a)(3) of the Uniform Commercial 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 WAIVES 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.

18.           Miscellaneous. The headings of each section of this Agreement are for convenience only and shall not define or limit 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 inure to the benefit of the Secured Party and its successors and assigns.   If any term of this Agreement shall be held 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.

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

By:  STW Water Process & Technologies, LLC (DEBTOR)

By: ___________________

Name: Stanley Weiner, CEO

Date: __________________

Accepted:                      Crown Financial, LLC, (SECURED PARTY)

_______________________

By: Chad Tribe

Its:  Manager

Dated: April 30, 2105

Macintosh HD:iMac:Docs:Forms:Security Agreements:Shortened all assets security agreement.doc