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