AGREEMENT AND PLAN OF MERGER
Exhibit
10.1
THIS AGREEMENT AND PLAN OF
MERGER is made as of the 17 day of January, 2010
AMONG:
WOOZYFLY, INC., a corporation
formed pursuant to the laws of the State of Nevada and located at 000 Xxxxx
Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000
(“Woozyfly”)
AND:
STW ACQUISITION, INC., a body
corporate formed pursuant to the laws of the State of Nevada and a wholly owned
subsidiary of Woozyfly
(the
"Acquirer")
AND:
STW RESOURCES, INC., a body
corporate formed pursuant to the laws of the State of Nevada and having an
office for business located at 000 X. Xxxxx Xxx., Xxxxx 000, Xxxxxxx, XX
00000
("STW
Resources")
AND:
The
shareholders of STW Resources as set forth on Exhibit A
(collectively
the “STW Resources Shareholders”)
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WHEREAS:
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A. STW
Resources is a Nevada corporation engaged in the business of providing water
reclamation services;
B. The
STW Resources Shareholders own 14,092,788 STW Resources Shares, which constitute
53% of the presently issued and outstanding STW Resources Shares;
C. Woozyfly
is a reporting company whose common stock is quoted on the OTC Bulletin Board
under the symbol WZYFQ;
D. Woozyfly
has filed for Chapter 11 bankruptcy protection (the “Bankruptcy”) in the United
States Bankruptcy Court for the Southern District of New York (the
“Court”);
E. Woozyfly
has requested that the Court approve a plan pursuant to which Woozyfly, through
the Acquirer, acquire STW Resources and allow Woozyfly to exit
bankruptcy;
F. The
respective Boards of Directors of Woozyfly, STW Resources and the Acquirer,
subject to the approval of the Court, deem it advisable and in the best
interests of Woozyfly, STW Resources and the Acquirer that STW Resources merge
with and into the Acquirer (the "Merger") pursuant to this Agreement and the
Certificate of Merger, and the applicable provisions of the laws of the State of
Nevada; and
G. It
is intended that the Merger shall qualify for United States federal income tax
purposes as a reorganization within the meaning of Section 368 of the Internal
Revenue Code of 1986, as amended.
NOW THEREFORE THIS AGREEMENT
WITNESSETH THAT in consideration of the premises and the mutual
covenants, agreements, representations and warranties contained herein, and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE
1
DEFINITIONS
AND INTERPRETATION
Definitions
1.1 In this
Agreement the following terms will have the following meanings:
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(a)
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“Acquisition Shares”
means the 26,543,075 Woozyfly Common Shares to be issued to the
shareholders of STW Resources at Closing pursuant to the terms of the
Merger;
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(b)
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“Agreement” means this
agreement and plan of merger among Woozyfly, the Acquirer, STW Resources,
and the STW Resources Shareholders;
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(c)
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“Closing” means the
completion, on the Closing Date, of the transactions contemplated hereby
in accordance with Article 9
hereof;
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(d)
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“Closing Date” means the
day on which all conditions precedent to the completion of the transaction
as contemplated hereby have been satisfied or
waived;
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(e)
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“Effective Time” means
the date of the filing of an appropriate Certificate of Merger in the form
required by the State of Nevada, which certificate shall provide that the
Merger shall become effective upon such
filing;
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(f)
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“Merger” means the
merger, at the Effective Time, of STW Resources and the Acquirer pursuant
to this Agreement and Plan of
Merger;
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(g)
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“Merger Consideration”
means the Acquisition Shares;
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(h)
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“Place of Closing” means
the Law Offices of Xxxxxxx X. Xxxxxxx PLLC, 00 Xxxxx Xxxxxx, Xxxxx #000,
Xxxxxxxxx Xxxxxx, Xxx Xxxx 00000, or such other place as Woozyfly and STW
Resources may mutually agree upon;
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(i)
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“State Corporation Law”
means the general corporation law of the State of
Nevada;
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(j)
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“STW Resources
Debentures” means the convertible debentures on Schedule “C” to be
cancelled upon receipt of the WoozyFly
Debentures;
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(k)
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“STW Resources Options”
means the stock options and the common stock purchase warrants on Schedule
“D” to be cancelled upon receipt of the Woozy Fly
Options;
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(l)
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“STW Resources Accounts Payable
and Liabilities” means all accounts payable and liabilities of STW
Resources, due and owing or otherwise constituting a binding obligation of
STW Resources as set forth in the STW Resources Financial
Statements;
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(m)
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“STW Resources Accounts
Receivable” means all accounts receivable and other debts owing to
STW Resources, as of September 30, 2009 as set forth in the STW Resources
Financial Statements;
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(n)
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“STW Resources Assets“
means the undertaking and all the property and assets of the STW Resources
Business of every kind and description wheresoever situated including,
without limitation, STW Resources Equipment, STW Resources Inventory, STW
Resources Material Contracts, STW Resources Accounts Receivable, STW
Resources Cash, STW Resources Intangible Assets and STW Resources
Goodwill, and all credit cards, charge cards and banking cards issued to
STW Resources;
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(o)
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“STW Resources Bank
Accounts” means all of the bank accounts, lock boxes and safety
deposit boxes of STW Resources or relating to the STW Resources Business a
list which has previously been provided to
Woozyfly;
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(p)
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“STW Resources Business”
means all aspects of the business conducted by STW
Resources;
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(q)
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“STW Resources Cash”
means all cash on hand or on deposit to the credit of STW Resources on the
Closing Date;
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(r)
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“STW Resources Debt to Related
Parties” means the debts owed by STW Resources and its subsidiaries
to the STW Resources Shareholders or to any family member thereof, or to
any affiliate, director or officer of STW Resources or the STW Resources
Shareholders as described in the STW Resources Financial
Statements;
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(s)
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“STW Resources Equipment”
means all machinery, equipment, furniture, and furnishings used in the STW
Resources Business as set forth in the STW Resources Financial
Statements;
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(t)
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“STW Resources Financial
Statements” means collectively, the audited consolidated financial
statements of STW Resources for the period from inception (January 28,
2008) through December 31, 2008 together with the auditors' reports
thereon, a true copy of which is attached as Schedule “B” hereto as well
as the unaudited financial statements for the period ending September 30,
2009, a true copy of which is attached as Schedule “B”
hereto;
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(u)
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“STW Resources Goodwill”
means the goodwill of the STW Resources Business together with the
exclusive right of Woozyfly to represent itself as carrying on the STW
Resources Business in succession of STW Resources subject to the terms
hereof, and the right to use any words indicating that the STW Resources
Business is so carried on including the right to use the name "STW
Resources” or “STW Global" or any variation thereof as part of the name of
or in connection with the STW Resources Business or any part thereof
carried on or to be carried on by STW Resources, the right to all
corporate, operating and trade names associated with the STW Resources
Business, or any variations of such names as part of or in connection with
the STW Resources Business, all telephone listings and telephone
advertising contracts, all lists of customers, books and records and other
information relating to the STW Resources Business, all necessary licenses
and authorizations and any other rights used in connection with the STW
Resources Business;
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(v)
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“STW Resources Insurance
Policies” means the public liability insurance and insurance
against loss or damage to STW Resources Assets and the STW Resources
Business, which have been previously provided to
Woozyfly;
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(w)
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“STW Resources Intangible
Assets” means all of the intangible assets of STW Resources,
including, without limitation, STW Resources Goodwill, all trademarks,
logos, copyrights, designs, and other intellectual and industrial property
of STW Resources and its subsidiaries as set forth in the STW Resources
Financial Statements;
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(x)
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“STW Resources Inventory”
means all inventory and supplies of the STW Resources Business as of
September 30, 2009 as set forth in the STW Resources Financial
Statements;
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(y)
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“STW Resources Material
Contracts” means the burden and benefit of and the right, title and
interest of STW Resources in, to and under all trade and non-trade
contracts, engagements or commitments, whether written or oral, to which
STW Resources is entitled in connection with the STW Resources Business
whereunder STW Resources is obligated to pay or entitled to receive the
sum of $20,000 or more including, without limitation, any pension plans,
profit sharing plans, bonus plans, loan agreements, security agreements,
indemnities and guarantees, any agreements with employees, lessees,
licensees, managers, accountants, suppliers, agents, distributors,
officers, directors, attorneys or others which cannot be terminated
without liability on not more than one month's notice, and those contracts
described in the STW Resources Financial Statements;
and
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(z)
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“STW Resources Shares”
means all of the issued and outstanding shares of STW Resources' equity
stock.
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(aa)
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“Surviving Company” means
the Acquirer following the merger with STW
Resources.
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(bb)
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“Woozyfly Accounts Payable and
Liabilities” means all accounts payable and liabilities of
Woozyfly, on a consolidated basis, due and owing or otherwise constituting
a binding obligation of Woozyfly and its subsidiaries as in the Woozyfly
Financial Statements;
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(cc)
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“Woozyfly Accounts
Receivable” means all accounts receivable and other debts owing to
Woozyfly, on a consolidated basis, as of September 30, 2009 as set forth
in the Woozyfly Financial
Statements;
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(dd)
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“Woozyfly Assets” means
the undertaking and all the property and assets of the Woozyfly Business
of every kind and description wheresoever situated including, without
limitation, Woozyfly Equipment, Woozyfly Inventory, Woozyfly Material
Contracts, Woozyfly Accounts Receivable, Woozyfly Cash, Woozyfly
Intangible Assets and Woozyfly Goodwill, and all credit cards, charge
cards and banking cards issued to
Woozyfly;
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(ee)
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“Woozyfly Bank Accounts”
means all of the bank accounts, lock boxes and safety deposit boxes of
Woozyfly and its subsidiaries or relating to the Woozyfly Business as set
forth in the Woozyfly Financial
Statements;
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(ff)
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“Woozyfly Business” means
all aspects of any business conducted by Woozyfly and its
subsidiaries;
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(gg)
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“Woozyfly Cash” means
all cash on hand or on deposit to the credit of WOOZYFLY and its
subsidiaries on the Closing Date;
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(hh)
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“Woozyfly Common Shares”
means the shares of common stock in the capital of
Woozyfly;
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(ii)
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“Woozyfly Debentures”
means the convertible debentures on Schedule “C” to be issued to the
holders of the STW Debentures upon
closing;
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(jj)
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“Woozyfly Equipment”
means all machinery, equipment, furniture, and furnishings used in the
Woozyfly Business, including, without limitation, the items more
particularly described in the Woozyfly Financial
Statements;
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(kk)
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“Woozyfly Financial
Statements” means the financial statements contained within
Woozyfly’s Form 10-K for the year ended December 31, 2008 as filed with
the Securities and Exchange Commission on April 15, 2009 and Woozyfly’s
Form 10-Q for the quarter ended September 30, 2009 as filed with the
Securities and Exchange Commission on October 29, 2009, copies of which
are attached hereto as Schedule
“A”;
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(ll)
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“Woozyfly Goodwill” means
the goodwill of the Woozyfly Business including the right to all
corporate, operating and trade names associated with the Woozyfly
Business, or any variations of such names as part of or in connection with
the Woozyfly Business, all books and records and other information
relating to the Woozyfly Business, all necessary licenses and
authorizations and any other rights used in connection with the Woozyfly
Business;
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(mm)
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Intentionally
left blank;
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(nn)
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“Woozyfly Intangible
Assets" means all of the intangible assets of Woozyfly and its
subsidiaries, including, without limitation, Woozyfly Goodwill, all
trademarks, logos, copyrights, designs, and other intellectual and
industrial property of Woozyfly and its
subsidiaries;
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(oo)
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“Woozyfly Inventory”
means all inventory and supplies of the Woozyfly Business as of
September 30, 2009, as set forth in as contained in the Woozyfly Financial
Statements;
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(pp)
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“Woozyfly Material
Contracts” means the burden and benefit of and the right, title and
interest of Woozyfly and its subsidiaries in, to and under all trade and
non-trade contracts, engagements or commitments, whether written or oral,
to which Woozyfly or its subsidiaries are entitled whereunder Woozyfly or
its subsidiaries are obligated to pay or entitled to receive the sum of
$20,000 or more including, without limitation, any pension plans, profit
sharing plans, bonus plans, loan agreements, security agreements,
indemnities and guarantees, any agreements with employees, lessees,
licensees, managers, accountants, suppliers, agents, distributors,
officers, directors, attorneys or others which cannot be terminated
without liability on not more than one month's notice, and those contracts
described in the Woozyfly Financial Statements;
and
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(qq)
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“Woozyfly Options” means
the stock options and the common stock purchase warrants on Schedule “D”
to be issued to the holders of the STW Resources Options upon
closing.
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Any other
terms defined within the text of this Agreement will have the meanings so
ascribed to them.
Captions
and Section Numbers
1.2 The
headings and section references in this Agreement are for convenience of
reference only and do not form a part of this Agreement and are not intended to
interpret, define or limit the scope, extent or intent of this Agreement or any
provision thereof.
Section
References and Schedules
1.3 Any
reference to a particular “Article”, “section”, “paragraph”, “clause” or other
subdivision is to the particular Article, section, clause or other subdivision
of this Agreement and any reference to a Schedule by letter will mean the
appropriate Schedule attached to this Agreement and by such reference the
appropriate Schedule is incorporated into and made part of this
Agreement. The Schedules to this Agreement are as
follows:
Information
concerning Woozyfly
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Schedule
“A”
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Woozyfly
Financial Statements
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Information
concerning STW Resources
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Schedule
“B”
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STW
Resources Financial Statements
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Severability
of Clauses
1.4 If
any part of this Agreement is declared or held to be invalid for any reason,
such invalidity will not affect the validity of the remainder which will
continue in full force and effect and be construed as if this Agreement had been
executed without the invalid portion, and it is hereby declared the intention of
the parties that this Agreement would have been executed without reference to
any portion which may, for any reason, be hereafter declared or held to be
invalid.
ARTICLE
2
THE
MERGER
The
Merger
2.1 At
Closing, STW Resources shall be merged with and into the Acquirer pursuant to
this Agreement and Plan of Merger and the separate corporate existence of STW
Resources shall cease and the Acquirer, as it exists from and after the Closing,
shall be the Surviving Company.
Effect
of the Merger
2.2 The
Merger shall have the effect provided therefor by the State Corporation Law.
Without limiting the generality of the foregoing, and subject thereto, at
Closing (i) all the rights, privileges, immunities, powers and franchises, of a
public as well as of a private nature, and all property, real, personal and
mixed, and all debts due on whatever account, including without limitation
subscriptions to shares, and all other causes in action, and all and every other
interest of or belonging to or due to STW Resources or the Acquirer, as a group,
subject to the terms hereof, shall be taken and deemed to be transferred to, and
vested in, the Surviving Company without further act or deed; and all property,
rights and privileges, immunities, powers and franchises and all and every other
interest shall be thereafter as effectually the property of the Surviving
Company, as they were of STW Resources and the Acquirer, as a group, and (ii)
all debts, liabilities, duties and obligations of STW Resources and the
Acquirer, as a group, subject to the terms hereof, shall become the debts,
liabilities and duties of the Surviving Company and the Surviving Company shall
thenceforth be responsible and liable for all debts, liabilities, duties and
obligations of STW Resources and the Acquirer, as a group, and neither the
rights of creditors nor any liens upon the property of STW Resources or the
Acquirer, as a group, shall be impaired by the Merger, and may be enforced
against the Surviving Company.
Certificate
of Incorporation; Bylaws; Directors and Officers
2.3 The
Certificate of Incorporation of the Surviving Company from and after the Closing
shall be the Certificate of Incorporation of the Acquirer until thereafter
amended in accordance with the provisions therein and as provided by the
applicable provisions of the State Corporation Law. The Bylaws of the
Surviving Company from and after the Closing shall be the Bylaws of the Acquirer
as in effect immediately prior to the Closing, continuing until thereafter
amended in accordance with their terms, the Certificate of Incorporation of the
Surviving Company and as provided by the State Corporation Law. The
Directors of the Acquirer at the Effective Time shall continue to be the
Directors of the Acquirer.
Conversion
of Securities
2.4 At
the Effective Time, by virtue of the Merger and without any action on the part
of the Acquirer, STW Resources or the STW Resources Shareholders or any other
shareholder of STW Resources, the shares of capital stock of each of STW
Resources and the Acquirer shall be converted as follows:
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(a)
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Capital Stock of the
Acquirer. Each issued and outstanding share of the Acquirer's
capital stock shall continue to be issued and outstanding. Each
stock certificate of the Acquirer evidencing ownership of any such shares
shall continue to evidence ownership of such shares of capital stock of
the Acquirer.
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(b)
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Conversion of STW
Resources Shares. Each STW Resources Share that is issued and
outstanding at the Effective Time shall automatically be cancelled and
extinguished and converted, without any action on the part of the holder
thereof, into the right to receive at the time and in the amounts
described in this Agreement an amount of Woozyfly Common Shares equal to
26,543,075 divided by the number of STW Resources Shares outstanding
immediately prior to Closing. All such STW Resources Shares, when so
converted, shall no longer be outstanding and shall automatically be
cancelled and retired and shall cease to exist, and each holder of a
certificate representing any such shares shall cease to have any rights
with respect thereto, except the right to receive the Acquisition Shares
paid in consideration therefor upon the surrender of such certificate in
accordance with this Agreement.
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(c)
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Conversion of STW
Resources Securities. The STW Resources Debentures and STW
Resources Options that are issued and outstanding at the Effective Time
shall be cancelled and extinguished and converted, without any action upon
the holder thereof and the holders thereof shall receive Woozyfly
Debentures and Woozyfly Options as provided in this
Agreement. All such STW Resources Debentures and STW Resources
Options, when so converted, shall no longer be outstanding and shall
automatically be cancelled and retired and shall cease to exist, and each
holder of a STW Resources Debentures and STW Resources Options shall cease
to have any rights with respect thereto, except the right to receive the
Woozyfly Debentures and Woozyfly Options paid in consideration therefor
upon the surrender of such STW Resources Debentures and STW Resources
Options in accordance with this
Agreement.
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Adherence
with Applicable Securities Laws
2.5 The
STW Resources Shareholders agree that they are acquiring a pro rata amount of
the Acquisition Shares for investment purposes and will not offer, sell or
otherwise transfer, pledge or hypothecate any of the Acquisition Shares issued
to them (other than pursuant to an effective Registration Statement under the
Securities Act of 1933,
as amended) directly or indirectly unless:
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(a)
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the
sale is to Woozyfly;
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(b)
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the
sale is made pursuant to the exemption from registration under the Securities Act of 1933,as
amended, provided by Rule 144 thereunder;
or
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(c)
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the
Acquisition Shares are sold in a transaction that does not require
registration under the Securities Act of 1933, as
amended, or any applicable United States state laws and regulations
governing the offer and sale of securities, and the vendor has furnished
to Woozyfly an opinion of counsel to that effect or such other written
opinion as may be reasonably required by
Woozyfly.
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The STW Resources Shareholders
acknowledge that the certificates representing the Acquisition Shares shall bear
the following legend:
NO SALE,
OFFER TO SELL, OR TRANSFER OF THE SHARES REPRESENTED BY THIS CERTIFICATE SHALL
BE MADE UNLESS A REGISTRATION STATEMENT UNDER THE FEDERAL SECURITIES ACT OF
1933, AS AMENDED, IN RESPECT OF SUCH SHARES IS THEN IN EFFECT OR AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF SAID ACT IS THEN IN FACT APPLICABLE TO
SAID SHARES.
ARTICLE
3
REPRESENTATIONS
AND WARRANTIES
OF
WOOZYFLY
Representations
and Warranties
3.1 Woozyfly
represents and warrants in all material respects to STW Resources, with the
intent that STW Resources will rely thereon in entering into this Agreement and
in approving and completing the transactions contemplated hereby, that upon
exiting the Bankruptcy and prior to the Merger:
Woozyfly
- Corporate Status and Capacity
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(a)
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Incorporation.
Woozyfly is a corporation duly incorporated and validly subsisting under
the laws of the State of Nevada, and is in good standing with the office
of the Secretary of State for the State of
Nevada;
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(b)
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Carrying on
Business. Woozyfly has filed the Bankruptcy with the Court and
presently does not have operations. The nature of the Woozyfly
Business does not require Woozyfly to register or otherwise be qualified
to carry on business in any other
jurisdictions;
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(c)
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Corporate
Capacity. Woozyfly has the corporate power, capacity and authority
to own the Woozyfly Assets and to enter into and complete this
Agreement;
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(d)
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Reporting Status;
Listing. Woozyfly is required to file current reports with the
Securities and Exchange Commission pursuant to section 12(g) of the
Securities Exchange Act of 1934, the Woozyfly Common Shares are quoted on
the OTC Bulletin Board, and all reports required to be filed by Woozyfly
with the Securities and Exchange Commission have been timely
filed;
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Acquirer
- Corporate Status and Capacity
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(e)
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Incorporation.
The Acquirer is a corporation duly incorporated and validly subsisting
under the laws of the State of Nevada, and is in good standing with the
office of the Secretary of State for the State of
Nevada;
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(f)
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Corporate
Capacity. The Acquirer has the corporate power, capacity and
authority to enter into and complete this
Agreement;
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Woozyfly
- Capitalization
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(g)
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Authorized
Capital. The authorized capital of Woozyfly consists of 100,000,000
Woozyfly Common Shares, $0.001 par value, of which 4,400,000 Woozyfly
Common Shares will be issued and outstanding upon exiting the Bankruptcy
and prior to the Merger and 10,000,000 preferred stock, $0.001 par value,
of which zero will be issued and outstanding upon exiting the Bankruptcy
and prior to the Merger;
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(h)
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No Option. No
person, firm or corporation has any agreement or option or any right
capable of becoming an agreement or option for the acquisition of Woozyfly
Common Shares or for the purchase, subscription or issuance of any of the
unissued shares in the capital of Woozyfly upon exiting the Bankruptcy and
prior to the Merger;
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(i)
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Capacity.
Woozyfly has the full right, power and authority to enter into this
Agreement on the terms and conditions contained
herein;
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Acquirer
Capitalization
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(j)
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Authorized
Capital. The authorized capital of the Acquirer consists of 200
shares of common stock, $0.0001 par value, of which one share of common
stock is presently issued and
outstanding;
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(k)
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No Option. No
person, firm or corporation has any agreement or option or any right
capable of becoming an agreement or option for the acquisition of any
common or preferred shares in Acquirer or for the purchase, subscription
or issuance of any of the unissued shares in the capital of
Acquirer;
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(l)
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Capacity. The
Acquirer has the full right, power and authority to enter into this
Agreement on the terms and conditions contained
herein;
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Woozyfly
- Records and Financial Statements
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(m)
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Charter
Documents. The charter documents of Woozyfly and the Acquirer have
not been altered since the incorporation of each, respectively, except as
filed in the record books of Woozyfly or the Acquirer, as the case may
be;
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(n)
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Corporate Minute
Books. The corporate minute books of Woozyfly and its subsidiaries
are complete and each of the minutes contained therein accurately reflect
the actions that were taken at a duly called and held meeting or by
consent without a meeting. All actions by Woozyfly and its subsidiaries
which required director or shareholder approval are reflected on the
corporate minute books of Woozyfly and its subsidiaries. Woozyfly and its
subsidiaries are not in violation or breach of, or in default with respect
to, any term of their respective Certificates of Incorporation (or other
charter documents) or by-laws.
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(o)
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Woozyfly Financial
Statements. The Woozyfly Financial Statements present fairly, in
all material respects, the assets and liabilities (whether accrued,
absolute, contingent or otherwise) of Woozyfly, on a consolidated basis,
as of the respective dates thereof, and the sales and earnings of the
Woozyfly Business during the periods covered thereby, in all material
respects and have been prepared in substantial accordance with generally
accepted accounting principles consistently
applied;
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(p)
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Woozyfly Accounts
Payable and Liabilities. There are no material liabilities,
contingent or otherwise, of Woozyfly or its subsidiaries which are not
disclosed in the Woozyfly Financial Statements except those incurred in
the ordinary course of business since the date of the Woozyfly Financial
Statements, and neither Woozyfly nor its subsidiaries have guaranteed or
agreed to guarantee any debt, liability or other obligation of any person,
firm or corporation. Without limiting the generality of the foregoing, all
accounts payable and liabilities of Woozyfly and its subsidiaries as of
September 31, 2009 are set forth in the Woozyfly Financial
Statements;
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(q)
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Woozyfly Accounts
Receivable. All the Woozyfly Accounts Receivable result from bona
fide business transactions and services actually rendered without, to the
knowledge and belief of Woozyfly, any claim by the obligor for set-off or
counterclaim;
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(r)
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No Debt to Related
Parties. Except as set forth in the Woozyfly Financial Statements,
neither Woozyfly nor its subsidiaries are, and on Closing will not be,
materially indebted to any affiliate, director or officer of Woozyfly
except accounts payable on account of bona fide business transactions of
Woozyfly incurred in normal course of the Woozyfly Business, including
employment agreements, none of which are more than 30 days in
arrears;
|
|
(s)
|
No Related Party Debt
to Woozyfly. Upon exiting the Bankruptcy and prior to the Merger,
no director or officer or affiliate of Woozyfly will be indebted to or
under any financial obligation to Woozyfly or its subsidiaries on any
account whatsoever, except for advances on account of travel and other
expenses not exceeding $5,000 in
total;
|
|
(t)
|
No Dividends.
No dividends or other distributions on any shares in the capital of
Woozyfly have been made, declared or authorized since the date of Woozyfly
Financial Statements;
|
|
(u)
|
No Payments. No
payments of any kind have been made or authorized since the date of the
Woozyfly Financial Statements to or on behalf of officers, directors,
shareholders or employees of Woozyfly or its subsidiaries or under any
management agreements with Woozyfly or its subsidiaries, except payments
made in the ordinary course of business and at the regular rates of salary
or other remuneration payable to
them;
|
|
(v)
|
No Pension
Plans. There are no pension, profit sharing, group insurance or
similar plans or other deferred compensation plans affecting Woozyfly or
its subsidiaries;
|
|
(w)
|
No Adverse
Events. Except as set forth in its reports as filed with the
Securities and Exchange Commission (the “34 Act Reports”), since the date
of the Woozyfly Financial
Statements
|
|
(i)
|
there
has not been any material adverse change in the financial position or
condition of Woozyfly, its subsidiaries, its liabilities or the Woozyfly
Assets or any damage, loss or other change in circumstances materially
affecting Woozyfly, the Woozyfly Business or the Woozyfly Assets or
Woozyfly’ right to carry on the Woozyfly Business, other than changes in
the ordinary course of business,
|
|
(ii)
|
there
has not been any damage, destruction, loss or other event (whether or not
covered by insurance) materially and adversely affecting Woozyfly, its
subsidiaries, the Woozyfly Business or the Woozyfly
Assets,
|
|
(iii)
|
there
has not been any material increase in the compensation payable or to
become payable by Woozyfly to any of Woozyfly’ officers, employees or
agents or any bonus, payment or arrangement made to or with any of
them,
|
|
(iv)
|
the
Woozyfly Business has been and continues to be carried on in the ordinary
course,
|
|
(v)
|
Woozyfly
has not waived or surrendered any right of material
value,
|
|
(vi)
|
Neither
Woozyfly nor its subsidiaries have discharged or satisfied or paid any
lien or encumbrance or obligation or liability other than current
liabilities in the ordinary course of business,
and
|
|
(vii)
|
no
capital expenditures in excess of $10,000 individually or $30,000 in total
have been authorized or made.
|
Woozyfly
- Income Tax Matters
|
(x)
|
Tax Returns.
All tax returns and reports of Woozyfly and its subsidiaries required by
law to be filed have been filed and are true, complete and correct, and
any taxes payable in accordance with any return filed by Woozyfly and its
subsidiaries or in accordance with any notice of assessment or
reassessment issued by any taxing authority have been so
paid;
|
|
(y)
|
Current Taxes.
Adequate provisions have been made for taxes payable for the current
period for which tax returns are not yet required to be filed and there
are no agreements, waivers, or other arrangements providing for an
extension of time with respect to the filing of any tax return by, or
payment of, any tax, governmental charge or deficiency by Woozyfly or its
subsidiaries. Woozyfly is not aware of any contingent tax
liabilities or any grounds which would prompt a reassessment including
aggressive treatment of income and expenses in filing earlier tax
returns;
|
Woozyfly
- Applicable Laws and Legal Matters
|
(z)
|
Licenses.
Woozyfly and its subsidiaries hold all licenses and permits as may be
requisite for carrying on the Woozyfly Business in the manner in which it
has heretofore been carried on, which licenses and permits have been
maintained and continue to be in good standing except where the failure to
obtain or maintain such licenses or permits would not have a material
adverse effect on the Woozyfly
Business;
|
|
(aa)
|
Applicable
Laws. Neither Woozyfly nor its subsidiaries have been charged with
or received notice of breach of any laws, ordinances, statutes,
regulations, by-laws, orders or decrees to which they are subject or which
apply to them the violation of which would have a material adverse effect
on the Woozyfly Business, and to Woozyfly’s knowledge, neither Woozyfly
nor its subsidiaries are in breach of any laws, ordinances, statutes,
regulations, bylaws, orders or decrees the contravention of which would
result in a material adverse impact on the Woozyfly
Business;
|
|
(bb)
|
Pending or Threatened
Litigation. Except as set forth on Schedule 3.1(bb), there is no
material litigation or administrative or governmental proceeding pending
or threatened against or relating to Woozyfly, its subsidiaries, the
Woozyfly Business, or any of the Woozyfly Assets nor does Woozyfly have
any knowledge of any deliberate act or omission of Woozyfly or its
subsidiaries that would form any material basis for any such action or
proceeding;
|
|
(cc)
|
No Bankruptcy.
Except for the Bankruptcy, neither Woozyfly nor its subsidiaries have made
any voluntary assignment or proposal under applicable laws relating to
insolvency and bankruptcy and no bankruptcy petition has been filed or
presented against Woozyfly or its subsidiaries and no order has been made
or a resolution passed for the winding-up, dissolution or liquidation of
Woozyfly or its subsidiaries;
|
|
(dd)
|
Labor Matters.
Neither Woozyfly nor its subsidiaries are party to any collective
agreement relating to the Woozyfly Business with any labor union or other
association of employees and no part of the Woozyfly Business has been
certified as a unit appropriate for collective bargaining or, to the
knowledge of Woozyfly, has made any attempt in that
regard;
|
|
(ee)
|
Finder's Fees.
Neither Woozyfly nor its subsidiaries are party to any agreement which
provides for the payment of finder's fees, brokerage fees, commissions or
other fees or amounts which are or may become payable to any third party
in connection with the execution and delivery of this Agreement and the
transactions contemplated herein;
|
Execution
and Performance of Agreement
|
(ff)
|
Authorization and
Enforceability. The execution and delivery of this Agreement, and
the completion of the transactions contemplated hereby, have been duly and
validly authorized by all necessary corporate action on the part of
Woozyfly and the Acquirer;
|
|
(gg)
|
No Violation or
Breach. The execution and performance of this Agreement will
not:
|
|
(i)
|
violate
the charter documents of Woozyfly or the Acquirer or result in any breach
of, or default under, any loan agreement, mortgage, deed of trust, or any
other agreement to which Woozyfly or its subsidiaries are
party,
|
|
(ii)
|
give
any person any right to terminate or cancel any agreement including,
without limitation, the Woozyfly Material Contracts, or any right or
rights enjoyed by Woozyfly or its
subsidiaries,
|
|
(iii)
|
result
in any alteration of Woozyfly’s or its subsidiaries’ obligations under any
agreement to which Woozyfly or its subsidiaries are party including,
without limitation, the Woozyfly Material
Contracts,
|
|
(iv)
|
result
in the creation or imposition of any lien, encumbrance or restriction of
any nature whatsoever in favor of a third party upon or against the
Woozyfly Assets,
|
|
(v)
|
result
in the imposition of any tax liability to Woozyfly or its subsidiaries
relating to the Woozyfly Assets, or
|
|
(vi)
|
violate
any court order or decree to which either Woozyfly or its subsidiaries are
subject;
|
The
Woozyfly Assets - Ownership and Condition
|
(hh)
|
Business
Assets. The Woozyfly Assets comprise all of the property and assets
of the Woozyfly Business, and no other person, firm or corporation owns
any assets used by Woozyfly or its subsidiaries in operating the Woozyfly
Business, whether under a lease, rental agreement or other arrangement,
other than as disclosed in Schedules “A”
hereto;
|
|
(ii)
|
Title. Woozyfly
or its subsidiaries are the legal and beneficial owner of the Woozyfly
Assets, free and clear of all mortgages, liens, charges, pledges, security
interests, encumbrances or other claims whatsoever, save and except as
disclosed in the Woozyfly Financial
Statements;
|
|
(jj)
|
No Option. No
person, firm or corporation has any agreement or option or a right capable
of becoming an agreement for the purchase of any of the Woozyfly
Assets;
|
|
(kk)
|
No Default.
Except as set forth on Schedule 3.1(kk), there has not been any default in
any material obligation of Woozyfly or any other party to be performed
under any of the Woozyfly Material Contracts, each of which is in good
standing and in full force and effect and unamended, and Woozyfly is not
aware of any default in the obligations of any other party to any of the
Woozyfly Material Contracts;
|
Woozyfly
Assets - Woozyfly Equipment
|
(ll)
|
Woozyfly
Equipment. The Woozyfly Equipment has been maintained in a manner
consistent with that of a reasonably prudent owner and such equipment is
in good working condition;
|
Woozyfly
- Acquisition Shares
|
(mm)
|
Acquisition
Shares. The Acquisition Shares when delivered to the holders of STW
Resources Shares pursuant to the Merger shall be validly issued and
outstanding as fully paid and non-assessable shares and the Acquisition
Shares shall be transferable upon the books of Woozyfly, in all cases
subject to the provisions and restrictions of all applicable securities
laws.
|
Non-Merger
and Survival
3.2 The
representations and warranties of Woozyfly contained herein will be true at and
as of Closing in all material respects as though such representations and
warranties were made as of such time. Notwithstanding the completion
of the transactions contemplated hereby, the waiver of any condition contained
herein (unless such waiver expressly releases a party from any such
representation or warranty) or any investigation made by STW Resources or the
STW Resources Shareholders, the representations and warranties of Woozyfly shall
survive the Closing.
Indemnity
3.3 Woozyfly
agrees to indemnify and save harmless STW Resources and the STW Resources
Shareholders from and against any and all claims, demands, actions, suits,
proceedings, assessments, judgments, damages, costs, losses and expenses,
including any payment made in good faith in settlement of any claim (subject to
the right of Woozyfly to defend any such claim), resulting from the breach by it
of any representation or warranty made under this Agreement or from any
misrepresentation in or omission from any certificate or other instrument
furnished or to be furnished by Woozyfly to STW Resources or the STW Resources
Shareholders hereunder.
ARTICLE
4
COVENANTS
OF WOOZYFLY
Covenants
4.1 Woozyfly
covenants and agrees with STW Resources that it will:
|
(a)
|
Conduct of
Business. Until the Closing, conduct its business diligently and in
the ordinary course consistent with the manner in which it generally has
been operated up to the date of execution of this
Agreement;
|
|
(b)
|
Preservation of
Business. Until the Closing, use its best efforts to
preserve the Woozyfly Business and the Woozyfly Assets and, without
limitation, preserve for STW Resources Woozyfly’s and its subsidiaries’
relationships with any third party having business relations with
them;
|
|
(c)
|
Access. Until
the Closing, give STW Resources, the STW Resources Shareholders, and their
representatives full access to all of the properties, books, contracts,
commitments and records of Woozyfly, and furnish to STW Resources, the STW
Resources Shareholders and their representatives all such information as
they may reasonably request;
|
|
(d)
|
Procure
Consents. Until the Closing, take all reasonable steps required to
obtain, prior to Closing, any and all third party consents required to
permit the Merger and to preserve and maintain the Woozyfly Assets
notwithstanding the change in control of STW Resources arising from the
Merger;
|
Authorization
4.2 Woozyfly
hereby agrees to authorize and direct any and all federal, state, municipal,
foreign and international governments and regulatory authorities having
jurisdiction respecting Woozyfly and its subsidiaries to release any and all
information in their possession respecting Woozyfly and its subsidiaries to STW
Resources. Woozyfly shall promptly execute and deliver to STW Resources any and
all consents to the release of information and specific authorizations which STW
Resources reasonably requires to gain access to any and all such
information.
Survival
4.3 The
covenants set forth in this Article shall survive the Closing for the benefit of
STW Resources and the STW Resources Shareholders.
ARTICLE
5
REPRESENTATIONS
AND WARRANTIES OF
THE
STW RESOURCES SHAREHOLDERS
Representations
and Warranties
5.1 The
STW Resources Shareholders represent and warrants in all material respects to
Woozyfly, with the intent that it will rely thereon in entering into this
Agreement and in approving and completing the transactions contemplated hereby,
that:
STW
Resources - Corporate Status and Capacity
|
(a)
|
Incorporation.
STW Resources is a corporation duly incorporated and validly subsisting
under the laws of the State of Nevada, and is in good standing with the
office of the Secretary of State for the State of
Nevada;
|
|
(b)
|
Carrying on
Business. STW Resources carries on business primarily in the state
of Texas and the state of Pennsylvania and does not carry on any material
business activity in any other jurisdiction. STW Resources has an office
in Houston, Texas and in no other locations. The nature of the STW
Resources Business does not require STW Resources to register or otherwise
be qualified to carry on business in any jurisdictions other than Texas
and Pennsylvania;
|
|
(c)
|
Corporate
Capacity. STW Resources has the corporate power, capacity and
authority to own STW Resources Assets, to carry on the Business of STW
Resources and to enter into and complete this
Agreement;
|
STW
Resources - Capitalization
|
(d)
|
Authorized
Capital. The authorized capital of STW Resources consists of
250,000,000 shares of common stock, $.00001 par value per share, and
10,000,000 shares of preferred stock, $.00001 par value per
share;
|
|
(e)
|
Ownership of STW
Resources Shares. The issued and outstanding share capital of STW
Resources will on Closing consist of 26,543,075 common shares (being the
STW Resources Shares), which shares on Closing shall be validly issued and
outstanding as fully paid and non-assessable shares. The STW Resources
Shareholders will be at Closing the registered and beneficial owners of
________ STW Resources Shares. The STW Resources Shares owned by the STW
Resources Shareholders, as well as all other outstanding STW Resources
Shares, will on Closing be free and clear of any and all liens, charges,
pledges, encumbrances, restrictions on transfer and adverse claims
whatsoever;
|
|
(f)
|
No Option.
Except as set forth in the STW Resources Financial Statements and on Schedule
5.1(f), no person, firm or corporation has any agreement, option,
warrant, preemptive right or any other right capable of becoming an
agreement or option for the acquisition of STW Resources Shares held by
the STW Resources Shareholders or for the purchase, subscription or
issuance of any of the unissued shares in the capital of STW
Resources;
|
|
(g)
|
No
Restrictions. There are no restrictions on the transfer, sale or
other disposition of STW Resources Shares contained in the charter
documents of STW Resources or under any
agreement;
|
STW
Resources - Records and Financial Statements
|
(h)
|
Charter
Documents. The charter documents of STW Resources have not been
altered since its incorporation date, except as filed in the record books
of STW Resources;
|
|
(i)
|
Corporate Minute
Books. The corporate minute books of STW Resources are complete and
each of the minutes contained therein accurately reflect the actions that
were taken at a duly called and held meeting or by consent without a
meeting. All actions by STW Resources which required director or
shareholder approval are reflected on the corporate minute books of STW
Resources. STW Resources is not in violation or breach of, or in default
with respect to, any term of its Certificates of Incorporation (or other
charter documents) or by-laws.
|
|
(j)
|
STW Resources
Financial Statements. The STW Resources Financial Statements
present fairly, in all material respects, the assets and liabilities
(whether accrued, absolute, contingent or otherwise) of STW Resources, on
consolidated basis, as of the respective dates thereof, and the sales and
earnings of the STW Resources Business during the periods covered thereby,
in all material respects, and have been prepared in accordance with
generally accepted accounting principles consistently
applied;
|
|
(k)
|
STW Resources Accounts
Payable and Liabilities. There are no material liabilities,
contingent or otherwise, of STW Resources which are not disclosed in the
STW Resources Financial Statements except those incurred in the ordinary
course of business since the date of the said schedule and the STW
Resources Financial Statements, and STW Resources has not guaranteed or
agreed to guarantee any debt, liability or other obligation of any person,
firm or corporation. Without limiting the generality of the foregoing, all
accounts payable and liabilities of STW Resources as of September 30, 2009
are described in the STW Resources Financial
Statements;
|
|
(l)
|
STW Resources Accounts
Receivable. All STW Resources Accounts Receivable result from bona
fide business transactions and services actually rendered without, to the
knowledge and belief of STW Resources, any claim by the obligor for
set-off or counterclaim;
|
|
(m)
|
No Debt to Related
Parties. Except as disclosed in the STW Resources Financial
Statements, STW Resources is not, and on Closing will not be, materially
indebted to the STW Resources Shareholders nor to any family member
thereof, nor to any affiliate, director or officer of STW Resources or the
STW Resources Shareholders except accounts payable on account of bona fide
business transactions of STW Resources incurred in normal course of STW
Resources Business, including employment agreements with the STW Resources
Shareholders, none of which are more than 30 days in
arrears;
|
|
(n)
|
No Related Party Debt
to STW Resources. Neither the STW Resources Shareholders nor any
director, officer or affiliate of STW Resources are now indebted to or
under any financial obligation to STW Resources on any account whatsoever,
except for advances on account of travel and other expenses not exceeding
$5,000 in total;
|
|
(o)
|
No Dividends.
No dividends or other distributions on any shares in the capital of STW
Resources have been made, declared or authorized since the date of the STW
Resources Financial Statements;
|
|
(p)
|
No Payments. No
payments of any kind have been made or authorized since the date of the
STW Resources Financial Statements to or on behalf of the STW Resources
Shareholders or to or on behalf of officers, directors, shareholders or
employees of STW Resources or under any management agreements with STW
Resources, except payments made in the ordinary course of business and at
the regular rates of salary or other remuneration payable to
them;
|
|
(q)
|
No Pension
Plans. Except as set forth on Schedule 5.1(q), there are no
pension, profit sharing, group insurance or similar plans or other
deferred compensation plans affecting STW Resources, except that with
STW’s existing employees and two former employees have agreements in
effect to defer 50% of said employees’ pay in exchange for paying 200% of
the deferred pay amounts to said employees by means of a one-year
corporate promissory note which the employees may convert, at their
option, into shares of the Company’s common stock at $0.25 per share or
await payment in cash;
|
|
(r)
|
No Adverse
Events. Except as set forth on Schedule
5.1(r), since the date of the STW Resources Financial
Statements:
|
|
(i)
|
there
has not been any material adverse change in the consolidated financial
position or condition of STW Resources, its liabilities or the STW
Resources Assets or any damage, loss or other change in circumstances
materially affecting STW Resources, the STW Resources Business or the STW
Resources Assets or STW Resources’ right to carry on the STW Resources
Business, other than changes in the ordinary course of
business,
|
|
(ii)
|
there
has not been any damage, destruction, loss or other event (whether or not
covered by insurance) materially and adversely affecting STW Resources,
the STW Resources Business or the STW Resources
Assets,
|
|
(iii)
|
there
has not been any material increase in the compensation payable or to
become payable by STW Resources to the STW Resources Shareholders or to
any of STW Resources's officers, employees or agents or any bonus, payment
or arrangement made to or with any of
them,
|
|
(iv)
|
the
STW Resources Business has been and continues to be carried on in the
ordinary course,
|
|
(v)
|
STW
Resources has not waived or surrendered any right of material
value,
|
|
(vi)
|
STW
Resources has not discharged or satisfied or paid any lien or encumbrance
or obligation or liability other than current liabilities in the ordinary
course of business, and
|
|
(vii)
|
no
capital expenditures in excess of $10,000 individually or $30,000 in total
have been authorized or made;
|
STW
Resources - Income Tax Matters
|
(s)
|
Tax Returns.
All tax returns and reports of STW Resources required by law to be filed
have been filed and are true, complete and correct, and any taxes payable
in accordance with any return filed by STW Resources or in accordance with
any notice of assessment or reassessment issued by any taxing authority
have been so paid;
|
|
(t)
|
Current Taxes.
Adequate provisions have been made for taxes payable for the current
period for which tax returns are not yet required to be filed and there
are no agreements, waivers, or other arrangements providing for an
extension of time with respect to the filing of any tax return by, or
payment of, any tax, governmental charge or deficiency by STW Resources.
STW Resources is not aware of any contingent tax liabilities or any
grounds which would prompt a reassessment including aggressive treatment
of income and expenses in filing earlier tax
returns;
|
|
|
STW
Resources - Applicable Laws and Legal
Matters
|
|
(u)
|
Licenses. STW
Resources holds all licenses and permits as may be requisite for carrying
on the STW Resources Business in the manner in which it has heretofore
been carried on, which licenses and permits have been maintained and
continue to be in good standing except where the failure to obtain or
maintain such licenses or permits would not have a material adverse effect
on the STW Resources Business;
|
|
(v)
|
Applicable
Laws. STW Resources has not been charged with or received notice of
breach of any laws, ordinances, statutes, regulations, by-laws, orders or
decrees to which it is subject or which applies to it the violation of
which would have a material adverse effect on the STW Resources Business,
and, to STW Resources’s knowledge, STW Resources is not in breach of any
laws, ordinances, statutes, regulations, by-laws, orders or decrees the
contravention of which would result in a material adverse impact on the
STW Resources Business;
|
|
(w)
|
Pending or Threatened
Litigation. Except as set forth on Schedule 5.1(w), there is no
material litigation or administrative or governmental proceeding pending
or threatened against or relating to STW Resources, the STW Resources
Business, or any of the STW Resources Assets, nor does STW Resources have
any knowledge of any deliberate act or omission of STW Resources that
would form any material basis for any such action or
proceeding;
|
|
(x)
|
No Bankruptcy.
STW Resources has not made any voluntary assignment or proposal under
applicable laws relating to insolvency and bankruptcy and no bankruptcy
petition has been filed or presented against STW Resources and no order
has been made or a resolution passed for the winding-up, dissolution or
liquidation of STW Resources;
|
|
(y)
|
Labor Matters.
STW Resources is not a party to any collective agreement relating to the
STW Resources Business with any labor union or other association of
employees and no part of the STW Resources Business has been certified as
a unit appropriate for collective bargaining or, to the knowledge of STW
Resources, has made any attempt in that regard and STW Resources has no
reason to believe that any current employees will leave STW Resources'
employ as a result of this Merger.
|
|
(z)
|
Finder's Fees.
Except as set forth on Schedule 5.1(z), STW Resources is not a party to
any agreement which provides for the payment of finder's fees, brokerage
fees, commissions or other fees or amounts which are or may become payable
to any third party in connection with the execution and delivery of this
Agreement and the transactions contemplated
herein;
|
Execution
and Performance of Agreement
|
(aa)
|
Authorization and
Enforceability. The execution and delivery of this Agreement, and
the completion of the transactions contemplated hereby, have been duly and
validly authorized by all necessary corporate action on the part of STW
Resources;
|
|
(bb)
|
No Violation or
Breach. The execution and performance of this Agreement will
not
|
|
(i)
|
violate
the charter documents of STW Resources or result in any breach of, or
default under, any loan agreement, mortgage, deed of trust, or any other
agreement to which STW Resources is a
party,
|
|
(ii)
|
give
any person any right to terminate or cancel any agreement including,
without limitation, STW Resources Material Contracts, or any right or
rights enjoyed by STW Resources,
|
|
(iii)
|
result
in any alteration of STW Resources' obligations under any agreement to
which STW Resources is a party including, without limitation, the STW
Resources Material Contracts,
|
|
(iv)
|
result
in the creation or imposition of any lien, encumbrance or restriction of
any nature whatsoever in favor of a third party upon or against the STW
Resources Assets,
|
|
(v)
|
result
in the imposition of any tax liability to STW Resources relating to STW
Resources Assets or the STW Resources Shares,
or
|
|
(vi)
|
violate
any court order or decree to which either STW Resources is
subject;
|
STW
Resources Assets - Ownership and Condition
|
(cc)
|
Business
Assets. The STW Resources Assets comprise all of the property and
assets of the STW Resources Business, and neither the STW Resources
Shareholders nor any other person, firm or corporation owns any assets
used by STW Resources in operating the STW Resources Business, whether
under a lease, rental agreement or other
arrangement;
|
|
(dd)
|
Title. STW
Resources is the legal and beneficial owner of the STW Resources Assets,
free and clear of all mortgages, liens, charges, pledges, security
interests, encumbrances or other claims
whatsoever;
|
|
(ee)
|
No Option. No
person, firm or corporation has any agreement or option or a right capable
of becoming an agreement for the purchase of any of the STW Resources
Assets;
|
|
(ff)
|
STW Resources
Insurance Policies. STW Resources maintains the public liability
insurance and insurance against loss or damage to the STW Resources Assets
and the STW Resources Business;
|
|
(gg)
|
STW Resources Material
Contracts. The STW Resources Material Contracts set forth in the
STW Resources Financial Statements constitute all of the material
contracts of STW Resources;
|
|
(hh)
|
No Default.
Except as set forth on Schedule 5.1(hh), there has not
been any default in any material obligation of STW Resources or any other
party to be performed under any of STW Resources Material Contracts, each
of which is in good standing and in full force and effect and unamended,
and STW Resources is not aware of any default in the obligations of any
other party to any of the STW Resources Material
Contracts;
|
STW
Resources Assets - STW Resources Equipment
|
(ii)
|
STW Resources
Equipment. The STW Resources Equipment has been maintained in a
manner consistent with that of a reasonably prudent owner and such
equipment is in good working
condition;
|
STW
Resources Assets - STW Resources Goodwill and Other Assets
|
(jj)
|
STW Resources
Goodwill. STW Resources carries on the STW Resources Business only
under the name "STW Resources Incorporated" and variations thereof and
under no other business or trade names. STW Resources does not have any
knowledge of any infringement by STW Resources of any patent, trademark,
copyright or trade secret;
|
|
|
The
Business of STW Resources
|
|
(kk)
|
Maintenance of
Business. Since the date of the STW Resources Financial Statements,
the STW Resources Business has been carried on in the ordinary course and
STW Resources has not entered into any material agreement or commitment
except in the ordinary course; and
|
|
(ll)
|
Subsidiaries.
Except as set forth on Schedule 5.1(ll), STW Resources
does not own any subsidiaries and does not otherwise own, directly or
indirectly, any shares or interest in any other corporation, partnership,
joint venture or firm and STW Resources does not own any subsidiary and
does not otherwise own, directly or indirectly, any shares or interest in
any other corporation, partnership, joint venture or
firm.
|
Non-Merger
and Survival
5.2 The
representations and warranties of the STW Resources Shareholders contained
herein will be true at and as of Closing in all material respects as though such
representations and warranties were made as of such
time. Notwithstanding the completion of the transactions contemplated
hereby, the waiver of any condition contained herein (unless such waiver
expressly releases a party from any such representation or warranty) or any
investigation made by Woozyfly, the representations and warranties of the STW
Resources Shareholders shall survive the Closing.
Indemnity
5.3 The
STW Resources Shareholders agrees to indemnify and save harmless Woozyfly from
and against any and all claims, demands, actions, suits, proceedings,
assessments, judgments, damages, costs, losses and expenses, including any
payment made in good faith in settlement of any claim (subject to the right of
the STW Resources Shareholders to defend any such claim), resulting from the
breach by any of them of any representation or warranty of such party made under
this Agreement or from any misrepresentation in or omission from any certificate
or other instrument furnished or to be furnished by the STW Resources
Shareholders to Woozyfly hereunder.
ARTICLE
6
COVENANTS
OF STW RESOURCES AND
THE
STW RESOURCES SHAREHOLDERS
Covenants
6.1 STW
Resources and the STW Resources Shareholders covenant and agree with Woozyfly
that they will:
|
(a)
|
Conduct of
Business. Until the Closing, conduct the STW Resources Business
diligently and in the ordinary course consistent with the manner in which
the STW Resources Business generally has been operated up to the date of
execution of this Agreement;
|
|
(b)
|
Preservation of
Business. Until the Closing, use their best efforts to
preserve the STW Resources Business and the STW Resources Assets and,
without limitation, preserve for Woozyfly STW Resources’ relationships
with their suppliers, customers and others having business relations with
them;
|
|
(c)
|
Access. Until
the Closing, give Woozyfly and its representatives full access to all of
the properties, books, contracts, commitments and records of STW Resources
relating to STW Resources, the STW Resources Business and the STW
Resources Assets, and furnish to Woozyfly and its representatives all such
information as they may reasonably
request;
|
|
(d)
|
Procure
Consents. Until the Closing, take all reasonable steps required to
obtain, prior to Closing, any and all third party consents required to
permit the Merger and to preserve and maintain the STW Resources Assets,
including the STW Resources Material Contracts, notwithstanding the change
in control of STW Resources arising from the
Merger;
|
Authorization
6.2 STW
Resources hereby agrees to authorize and direct any and all federal, state,
municipal, foreign and international governments and regulatory authorities
having jurisdiction respecting STW Resources to release any and all information
in their possession respecting STW Resources to Woozyfly. STW
Resources shall promptly execute and deliver to Woozyfly any and all consents to
the release of information and specific authorizations which Woozyfly reasonably
require to gain access to any and all such information.
Survival
6.3 The
covenants set forth in this Article shall survive the Closing for the benefit of
Woozyfly.
ARTICLE
7
CONDITIONS
PRECEDENT
Conditions
Precedent in favor of Woozyfly
7.1 Woozyfly’s
obligations to carry out the transactions contemplated hereby are subject to the
fulfillment of each of the following conditions precedent on or before the
Closing:
|
(a)
|
all
documents or copies of documents required to be executed and delivered to
Woozyfly hereunder will have been so executed and
delivered;
|
|
(b)
|
all
of the terms, covenants and conditions of this Agreement to be complied
with or performed by STW Resources or the STW Resources Shareholders at or
prior to the Closing will have been complied with or
performed;
|
|
(c)
|
Woozyfly
shall have completed its review and inspection of the books and records of
STW Resources and shall be satisfied with same in all material
respects;
|
|
(d)
|
title
to the STW Resources Shares held by the STW Resources Shareholders and to
the STW Resources Assets will be free and clear of all mortgages, liens,
charges, pledges, security interests, encumbrances or other claims
whatsoever, save and except as disclosed
herein;
|
|
(e)
|
the
Certificate of Merger shall be executed by STW Resources in form
acceptable for filing with the Nevada Secretary of
State;
|
|
(f)
|
subject
to Article 8 hereof, there will not have
occurred
|
|
(i)
|
any
material adverse change in the financial position or condition of STW
Resources, its liabilities or the STW Resources Assets or any damage, loss
or other change in circumstances materially and adversely affecting the
STW Resources Business or the STW Resources Assets or STW Resources' right
to carry on the STW Resources Business, other than changes in the ordinary
course of business, none of which has been materially adverse,
or
|
|
(ii)
|
any
damage, destruction, loss or other event, including changes to any laws or
statutes applicable to STW Resources or the STW Resources Business
(whether or not covered by insurance) materially and adversely affecting
STW Resources, the STW Resources Business or the STW Resources Assets;
and
|
|
(g)
|
the
transactions contemplated hereby shall have been approved by all other
regulatory authorities having jurisdiction over the subject matter hereof,
if any.
|
Waiver
by Woozyfly
7.2 The
conditions precedent set out in the preceding section are inserted for the
exclusive benefit of Woozyfly and any such condition may be waived in whole or
in part by Woozyfly at or prior to Closing by delivering to STW Resources a
written waiver to that effect signed by Woozyfly. In the event that the
conditions precedent set out in the preceding section are not satisfied on or
before the Closing, Woozyfly shall be released from all obligations under this
Agreement.
Conditions
Precedent in Favor of STW Resources and the STW Resources
Shareholders
7.3 The
obligation of STW Resources and the STW Resources Shareholders to carry out the
transactions contemplated hereby is subject to the fulfillment of each of the
following conditions precedent on or before the Closing:
|
(a)
|
all
documents or copies of documents required to be executed and delivered to
STW Resources hereunder will have been so executed and
delivered;
|
|
(b)
|
all
of the terms, covenants and conditions of this Agreement to be complied
with or performed by Woozyfly at or prior to the Closing will have been
complied with or performed;
|
|
(c)
|
STW
Resources shall have completed its review and inspection of the books and
records of Woozyfly and its subsidiaries and shall be satisfied with same
in all material respects;
|
|
(d)
|
Woozyfly
will have delivered the Acquisition Shares to be issued pursuant to the
terms of the Merger to STW Resources at the Closing and the Acquisition
Shares will be registered on the books of Woozyfly in the name of the
holder of STW Resources Shares at the Effective
Time;
|
|
(e)
|
title
to the Acquisition Shares will be free and clear of all mortgages, liens,
charges, pledges, security interests, encumbrances or other claims
whatsoever;
|
|
(f)
|
the
Certificate of Merger shall be executed by the Acquirer in form acceptable
for filing with the Nevada Secretary of
State;
|
|
(g)
|
subject
to Article 8 hereof, there will not have
occurred
|
|
(i)
|
any
material adverse change in the financial position or condition of
Woozyfly, its subsidiaries, their liabilities or the Woozyfly Assets or
any damage, loss or other change in circumstances materially and adversely
affecting Woozyfly, the Woozyfly Business or the Woozyfly Assets or
Woozyfly’s right to carry on the Woozyfly Business, other than changes in
the ordinary course of business, none of which has been materially
adverse, or
|
|
(ii)
|
any
damage, destruction, loss or other event, including changes to any laws or
statutes applicable to Woozyfly or the Woozyfly Business (whether or not
covered by insurance) materially and adversely affecting Woozyfly, its
subsidiaries, the Woozyfly Business or the Woozyfly
Assets;
|
|
(h)
|
the
transactions contemplated hereby shall have been approved by all other
regulatory authorities having jurisdiction over the subject matter hereof,
if any; and
|
|
(i)
|
the
Court shall approve the Merger and all parties entitled to vote on the
matter shall have approved the
Merger.
|
Waiver
by STW Resources and the STW Resources Shareholders
7.4 The
conditions precedent set out in the preceding section are inserted for the
exclusive benefit of STW Resources and the STW Resources Shareholders and any
such condition may be waived in whole or in part by STW Resources or the STW
Resources Shareholders at or prior to the Closing by delivering to Woozyfly a
written waiver to that effect signed by STW Resources and the STW Resources
Shareholders. In the event that the conditions precedent set out in the
preceding section are not satisfied on or before the Closing STW Resources and
the STW Resources Shareholders shall be released from all obligations under this
Agreement.
Nature
of Conditions Precedent
7.5 The
conditions precedent set forth in this Article are conditions of completion of
the transactions contemplated by this Agreement and are not conditions precedent
to the existence of a binding agreement. Each party acknowledges receipt of the
sum of $1.00 and other good and valuable consideration as separate and distinct
consideration for agreeing to the conditions of precedent in favor of the other
party or parties set forth in this Article.
Termination
7.6 Notwithstanding
any provision herein to the contrary, if the Closing does not occur on or before
January 29, 2010, this Agreement will be at an end and will have no further
force or effect, unless otherwise agreed upon by the parties in
writing.
Confidentiality
7.7 Notwithstanding
any provision herein to the contrary, the parties hereto agree that the
existence and terms of this Agreement are confidential and that if this
Agreement is terminated pursuant to the preceding section the parties agree to
return to one another any and all financial, technical and business documents
delivered to the other party or parties in connection with the negotiation and
execution of this Agreement and shall keep the terms of this Agreement and all
information and documents received from STW Resources and Woozyfly and the
contents thereof confidential and not utilize nor reveal or release same,
provided, however, that Woozyfly will be required to issue news releases
regarding the execution and consummation of this Agreement and file a Current
Report on Form 8-K with the Securities and Exchange Commission and the US
Bankruptcy Court, US Trustee respecting the proposed Merger contemplated hereby
together with such other documents as are required to maintain the currency of
Woozyfly’s filings with the Securities and Exchange Commission.
ARTICLE
8
RISK
Material
Change in the Business of STW Resources
8.1 If
any material loss or damage to the STW Resources Business occurs prior to
Closing and such loss or damage, in Woozyfly's reasonable opinion, cannot be
substantially repaired or replaced within sixty (60) days, Woozyfly shall,
within two (2) days following any such loss or damage, by notice in writing to
STW Resources, at its option, either:
|
(a)
|
terminate
this Agreement, in which case no party will be under any further
obligation to any other party; or
|
|
(b)
|
elect
to complete the Merger and the other transactions contemplated hereby, in
which case the proceeds and the rights to receive the proceeds of all
insurance covering such loss or damage will, as a condition precedent to
Woozyfly's obligations to carry out the transactions contemplated hereby,
be vested in STW Resources or otherwise adequately secured to the
satisfaction of Woozyfly on or before the Closing
Date.
|
Material
Change in the Woozyfly Business
8.2 If
any material loss or damage to the Woozyfly Business occurs prior to Closing and
such loss or damage, in STW Resources's reasonable opinion, cannot be
substantially repaired or replaced within sixty (60) days, STW Resources shall,
within two (2) days following any such loss or damage, by notice in writing to
Woozyfly, at its option, either:
|
(a)
|
terminate
this Agreement, in which case no party will be under any further
obligation to any other party; or
|
|
(b)
|
elect
to complete the Merger and the other transactions contemplated hereby, in
which case the proceeds and the rights to receive the proceeds of all
insurance covering such loss or damage will, as a condition precedent to
STW Resources's obligations to carry out the transactions contemplated
hereby, be vested in Woozyfly or otherwise adequately secured to the
satisfaction of STW Resources on or before the Closing
Date.
|
ARTICLE
9
CLOSING
Closing
9.1 The
Merger and the other transactions contemplated by this Agreement will be closed
at the Place of Closing in accordance with the closing procedure set out in this
Article.
Documents
to be Delivered by STW Resources
9.2 On
or before the Closing, STW Resources and the STW Resources Shareholders will
deliver or cause to be delivered to Woozyfly:
|
(a)
|
the
original or certified copies of the charter documents of STW Resources and
all corporate records documents and instruments of STW Resources, the
corporate seal of STW Resources and all books and accounts of STW
Resources;
|
|
(b)
|
all
reasonable consents or approvals required to be obtained by STW Resources
for the purposes of completing the Merger and preserving and maintaining
the interests of STW Resources under any and all STW Resources Material
Contracts and in relation to STW Resources
Assets;
|
|
(c)
|
certified
copies of such resolutions of the shareholder and director of STW
Resources as are required to be passed to authorize the execution,
delivery and implementation of this
Agreement;
|
|
(d)
|
an
acknowledgement from STW Resources and the STW Resources Shareholders of
the satisfaction of the conditions precedent set forth in section 7.3
hereof;
|
|
(e)
|
the
Certificate of Merger, duly executed by STW Resources;
and
|
|
(f)
|
such
other documents as Woozyfly may reasonably require to give effect to the
terms and intention of this
Agreement.
|
Documents
to be Delivered by Woozyfly
9.3 On
or before the Closing, Woozyfly shall deliver or cause to be delivered to STW
Resources and the STW Resources Shareholders:
|
(a)
|
share
certificates representing the Acquisition Shares duly registered in the
names of the holders of shares of STW Resources Common
Stock;
|
|
(b)
|
certified
copies of such resolutions of the directors of Woozyfly as are required to
be passed to authorize the execution, delivery and implementation of this
Agreement;
|
|
(c)
|
a
certified copy of a resolution of the directors of Woozyfly dated as of
the Closing Date appointing the nominees of STW Resources as officers of
STW Resources;
|
|
(d)
|
an
acknowledgement from Woozyfly of the satisfaction of the conditions
precedent set forth in section 7.1
hereof;
|
|
(e)
|
the
Certificate of Merger, duly executed by the
Acquirer;
|
|
(f)
|
order
of the Court approving the Merger and approval of all parties entitled to
vote on the matter in the
Bankruptcy;
|
|
(g)
|
such
other documents as STW Resources may reasonably require to give effect to
the terms and intention of this
Agreement.
|
ARTICLE
10
POST-CLOSING
MATTERS
Forthwith after the Closing,
Woozyfly, STW Resources and the STW Resources Shareholders agree to use all
their best efforts to:
|
(a)
|
file
the Certificate of Merger with Secretary of State of the State of
Nevada;
|
|
(b)
|
issue
a news release reporting the
Closing;
|
|
(c)
|
file
a Form 8-K with the Securities and Exchange Commission disclosing the
terms of this Agreement and which includes audited financial statements of
STW Resources as well as pro forma financial information of STW Resources
and Woozyfly as required by Regulation SK as promulgated by the Securities
and Exchange Commission; and
|
|
(d)
|
file
reports on Forms 13D and 3 with the Securities and Exchange Commission
disclosing the acquisition of the Acquisition Shares by the STW Resources
Shareholders as required.
|
ARTICLE
11
GENERAL
PROVISIONS
Arbitration
11.1 The
parties hereto shall attempt to resolve any dispute, controversy, difference or
claim arising out of or relating to this Agreement by negotiation in good
faith. If such good negotiation fails to resolve such dispute,
controversy, difference or claim within fifteen (15) days after any party
delivers to any other party a notice of its intent to submit such matter to
arbitration, then any party to such dispute, controversy, difference or claim
may submit such matter to arbitration in the City of Las Vegas,
Nevada.
Notice
11.2 Any
notice required or permitted to be given by any party will be deemed to be given
when in writing and delivered to the address for notice of the intended
recipient by personal delivery, prepaid single certified or registered mail, or
telecopier. Any notice delivered by mail shall be deemed to have been received
on the fourth business day after and excluding the date of mailing, except in
the event of a disruption in regular postal service in which event such notice
shall be deemed to be delivered on the actual date of receipt. Any notice
delivered personally or by telecopier shall be deemed to have been received on
the actual date of delivery.
Addresses
for Service
11.3 The
address for service of notice of each of the parties hereto is as
follows:
|
(a)
|
Woozyfly
or the Acquirer:
|
Woozyfly,
Inc.
000 Xxxxx
Xxxxxx, Xxxxx 0000
Xxx Xxxx,
Xxx Xxxx 00000
Phone: (000)
000-0000
Telecopier:
000-000-0000
|
(b)
|
STW
Resources or the STW Resources
Shareholders
|
STW
Resources, Inc.
000 X.
Xxxxx Xxx., Xxxxx 000,
Xxxxxxx,
XX 00000
Phone: (000)
000-0000
Telecopier:
(000) 000-0000
With a
copy to:
Law
Offices of Xxxxxxx X. Xxxxxxx PLLC
00 Xxxxx
Xxxxxx, Xxxxx 000
Xxxxxxxxx
Xxxxxx, Xxx Xxxx 00000
Phone: (000)
000-0000
Telecopier:
(000) 000-0000
Change
of Address
11.4 Any
party may, by notice to the other parties change its address for notice to some
other address in North America and will so change its address for notice
whenever the existing address or notice ceases to be adequate for delivery by
hand. A post office box may not be used as an address for service.
Further
Assurances
11.5 Each
of the parties will execute and deliver such further and other documents and do
and perform such further and other acts as any other party may reasonably
require to carry out and give effect to the terms and intention of this
Agreement.
Time
of the Essence
11.6 Time
is expressly declared to be the essence of this Agreement.
Entire
Agreement
11.7 The
provisions contained herein constitute the entire agreement among STW Resources,
the STW Resources Shareholders, the Acquirer and Woozyfly respecting the subject
matter hereof and supersede all previous communications, representations and
agreements, whether verbal or written, among STW Resources, the STW Resources
Shareholders, the Acquirer and Woozyfly with respect to the subject matter
hereof.
Enurement
11.8 This
Agreement will enure to the benefit of and be binding upon the parties hereto
and their respective heirs, executors, administrators, successors and permitted
assigns.
Assignment
11.9 This
Agreement is not assignable without the prior written consent of the parties
hereto.
Counterparts
11.10 This
Agreement may be executed in counterparts, each of which when executed by any
party will be deemed to be an original and all of which counterparts will
together constitute one and the same Agreement. Delivery of executed copies of
this Agreement by telecopier will constitute proper delivery, provided that
originally executed counterparts are delivered to the parties within a
reasonable time thereafter.
Applicable
Law
11.11 This
Agreement is subject to the laws of the State of New York.
[Remainder
of page intentionally left blank.]
- -
IN WITNESS WHEREOF the parties
have executed this Agreement effective as of the day and year first above
written.
WOOZYFLY,
INC.
By:__/s/ XXXX
XXXXXXXXXXXX
Xxxx
Xxxxxxxxxxxx, Interim President
STW
ACQUISITION, INC.
By:__/s/ XXXX
STOPPENHAGEN__
Xxxx
Xxxxxxxxxxxx, President
STW
RESOURCES, INC.
By:___/s/ XXXXXXX
WEINER__________
Xxxxxxx
Xxxxxx, Chief Executive Officer
and
President
[STW
RESOURCES SHAREHOLDERS ARE LOCATED ON THE FOLLOWING PAGE]
- -
STW
RESOURCES SHAREHOLDERS
___________________________________ ___________________________________
|
Name:
|
Name:
|
No. of
Shares
of No.
of Shares of
Common
Stock: Common
Stock:
___________________________________ ___________________________________
|
Name:
|
Name:
|
No. of
Shares
of No.
of Shares of
Common
Stock: Common
Stock:
___________________________________ ___________________________________
|
Name:
|
Name:
|
No. of
Shares
of No.
of Shares of
Common
Stock: Common
Stock:
___________________________________ ___________________________________
|
Name:
|
Name:
|
No. of
Shares
of No.
of Shares of
Common
Stock: Common
Stock:
- -
|
Schedule
“A”
|
Woozyfly
Financial Statements
|
|
Schedule
“B”
|
STW
Resources Financial Statements
|
|
|
TO
BE DELIVERED UPON CLOSING
|
|
Schedule
“C”
|
STW
Resources Debentures and Woozyfly
Debentures
|
|
|
TO
BE DELIVERED UPON CLOSING
|
|
Schedule
“D”
|
STW
Resources Options/Warrants and Woozyfly
Options/Warrants
|
|
|
TO
BE DELIVERED UPON CLOSING
|
Schedule
3.1(bb) Pending or Threatened Litigation
Schedule
3.1(kk) No Default
Schedule
5.1(f) – STW Options
Schedule
5.1(q) – No Pension Plans
Schedule
5.1(r) – No Adverse Events
Schedule
5.1(w) – Pending or Threatened Litigation
Schedule
5.1(z) – Finder’s Fees
Schedule
5.1(hh) - No Default
Schedule 5.1 (ll)
Subsidiaries
- -
|
|
Exhibit
A
|
|
|
STW
Resources Shareholders
|
|
Name
of Shareholders
|
No.
of Shares of STW
|
|
Xxxx
XxXxxxxxxxx
|
1,815,787
|
|
Xxxx
Xxxxxx
|
550,000
|
|
Xxxx
Xxxxxx
|
424,438
|
|
Xxxx
Xxxxxxxx
|
520,000
|
|
Triumph
Small Cap Fund Ltd.
|
1,500,000
|
|
SEI
Private Trust Co. FAO XX Xxxxxxx Co. Master Trust
|
582,500
|
|
Xxxxxx
Family Trust
|
424,438
|
|
Xxxxxxx
Xxxxxx
|
7,932,500
|
|
Coronado
Capital Partners LP
|
343,125
|
