Contract
THIS NOTE
HAS NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE. THE SECURITIES
ARE BEING OFFERED PURSUANT TO A SAFE HARBOR FROM REGISTRATION UNDER REGULATION D
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). THE
SECURITIES ARE “RESTRICTED” AND MAY
NOT BE OFFERED OR SOLD UNLESS THE SECURITIES ARE REGISTERED UNDER THE ACT,
PURSUANT TO REGULATION D OR PURSUANT TO AVAILABLE EXEMPTIONS FROM THE
REGISTRATION REQUIREMENTS OF THE ACT AND THE COMPANY WILL BE PROVIDED WITH
OPINION OF COUNSEL OR OTHER SUCH INFORMATION AS IT MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH EXEMPTIONS ARE AVAILABLE. FURTHER HEDGING
TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE MADE EXCEPT IN COMPLIANCE WITH
THE ACT.
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Amount:
$1,400,000
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Midland,
Texas
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August
31, 2010
FOR VALUE RECEIVED, the adequacy of
which is hereby acknowledged, STW Resources Holding Corp., a Nevada corporation
(“Borrower”), hereby promises to pay to the order of GE Ionics, Inc. (the
“Lender”), the principal sum of one million and four hundred thousand dollars
($1,400,000) (the “Principal Amount”), in lawful money of the United States of
America, thirteen (13) months from the date hereof (the “Maturity
Date”).
Xxxxxx
is entitled to the benefits of this Note (“the Note”) and, subject to the terms
and conditions set forth herein and therein, may enforce the agreements
contained herein and therein and exercise the remedies provided for hereby and
thereby or otherwise available in respect hereto and thereto.
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1.
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Seniority. The
Note shall be senior to all other obligations of the Borrower, whether
secured or unsecured.
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2.
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Interest. The
interest on the Principal Amount, commencing on the date hereof shall
accrue and be calculated on the basis of a 365-day year for the actual
days elapsed, and shall be at a rate of the WSJ Prime Rate (as published
daily in the Wall Street Journal) plus two percent (2%) per annum paid
upon the reducing balance of the Principal Amount, upon maturity of the
Note. As of the date of this Agreement, the WSJ Prime Interest Rate is
3.25%.
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Page
1
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3.
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Repayment Schedule
prior to maturity of Note. After execution of
this Agreement and the Note, upon the consummation and closing of a debt
or equity financing, STW will pay GE thirty percent (30%) of any and all
Tranches (“Tranches” being defined as the cash receipts of the proceeds of
any equity investments in or loans to STW or any affiliated entity by
third parties, but excluding any conversions of pre-existing debt to
equity by any of STW’s current convertible note holders or creditors)
until the Note is paid in full, with accrued interest on the
Note. STW must inform GE within three (3) business days
whenever a Tranche is received, noting the date and amount
received. Thereafter, payment of the thirty percent (30%) shall
be made to GE within the earlier to expire of (i) ten (10) business days
from STW’s receipt of GE’s invoice (by e-mail or facsimile transmission)
or (ii) ninety days from STW’s receipt of the relevant
Tranche. STW’s obligation to pay the Note and accrued interest
to GE is unconditional and not conditioned on the level of Tranches
received by STW.
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4.
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Events of
Default. The following events shall constitute an “Event of
Default” under this Note: Failure by Borrower to pay principal,
fees, or accrued interest when due.
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5.
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Remedies Upon an Event
of Default. If an Event of Default shall occur for any
reason whatsoever (and whether such occurrences shall be voluntary or
involuntary, or come about or be effected by operation of law or pursuant
to or in compliance with any judgment, decree, or order of any court, or
any order, rule or regulation of any administrative or governmental body),
or the discovery by Lender of the occurrence of any Event of Default,
Lender shall have all of the rights and remedies under applicable law and,
in addition, without limiting the foregoing, the right to (a) cure such
defaults, with the result that all costs and expenses incurred or paid by
Lender in effecting such cure shall bear interest at the highest rate
permitted by law, and shall be payable upon demand; and (b) accelerate the
maturity of the Note and demand the immediate payment thereof, without
presentment, demand, protest or other notice of any kind, all of which are
expressly waived, and the Lender shall have all of the rights, powers.,
and remedies available under the terms of this Agreement and all
applicable laws.
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To the
extent permitted by applicable law, Borrower hereby waives, and releases Lender
from, all errors and all rights of exemption, appeal, stay of execution,
inquisition, and other rights to which Borrower may otherwise be entitled under
the laws or the United States of America or of any state or possession of the
United States of America now in force and which may hereafter be
enacted.
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6.
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Expenses.
Xxxxxxxx agrees to pay any and all expenses (including attorneys’ fees and
expenses) incurred by the Lender which are incurred in endeavoring to
collect any amounts payable hereunder which are not paid when due (whether
by acceleration or otherwise) or in otherwise enforcing any rights under
this Note.
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7.
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Notices. All
notices and other communications provided for herein shall be in writing
and shall be deemed to have been duly given if delivered personally, sent
by registered or certified mail, return receipt requested, postage
prepaid, sent via overnight delivery service or sent via facsimile, and
shall be effective (1) when personally delivered, (2) on the day following
delivery to an overnight courier service if sent for delivery within the
United States (or on the second business day following delivery to such
courier service if sent for delivery outside the United States), (3) on
the business day following receipt of transmission if sent via facsimile,
or (4) on the fifth business day after the date of mailing if sent by
registered or certified mail, in each case to the following
addresses:
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Page
2
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(a)
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If
to the Borrower:
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Xxxxxxx
X. Xxxxxx, CEO
STW
Resources, Inc.
000 Xxxx
Xxxxx Xxx, Xxxxx 000
Midland,
TX 79701
E-Mail:
xxx@xxxxxxxxxxxx.xxx
With a
Copy to:
X. Xxxxx
Xxxxxxx, Xx., Esq.
Xxxxxxxxx
Xxxxxxx, PC
0000
Xxxxxx X. Xxxxxxx Xxx, Xxxxx 0000
Dallas,
TX 75240
Phone: (000)
000-0000
Fax:
(000-000-0000
E-Mail:
xxxxxxxx@xxxxxxx.xxx
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(b)
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If
to the Lender
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GE Water
& Process Technologies
0000
Xxxxxxx Xxx, Xxxxx 000
Bellevue,
WA 98004
Attention: Xxxxxxx
X. Xxxxx
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8.
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Assignment.
This Note shall be binding on the Borrower and its successors and
permitted assigns, and shall be binding upon and inure to the benefit of
the Lender, any future holder of this Note and their respective successors
and permitted assigns. The Borrower may not assign or transfer
this Note or any of its rights or obligations hereunder (other than by
operation of law) without the Lender’s prior written consent. The Lender
may assign this Note to the maximum extent permitted by applicable
law.
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9.
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Waivers;
Amendments. No delay or omission of Lender in exercising any right
or power hereunder shall impair such right or power or be a waiver of any
default or an acquiescence therein; and no single or partial exercise of
any such right or power shall preclude other or further exercise thereof,
or the exercise of any other right; and no waiver shall be valid unless in
writing signed by Xxxxxx, and then only to the extent specifically set
forth in such writing. All remedies hereunder or by law
afforded shall be cumulative and shall be available to Lender until the
principal amount of and all interest on this Note have been paid in
full. No amendment of any provision of this Note shall be
effective unless the same shall be in writing and signed by the Borrower
and the Lender.
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Page
3
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10.
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Governing Law.
This Note shall be governed by and construed in accordance with the laws
of the State of New York, without regard for the conflicts of laws
principles thereof, and any actions, claims or proceedings shall be
subject to the exclusive venue and jurisdiction of the State and Federal
Courts in the Borough of Manhattan in the City of New
York.
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11.
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Severability.
In the event any one or more of the provisions contained in this Note
shall for any reason be held to be invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not
affect any other provision hereof, and this Note shall be construed as if
such invalid, illegal or unenforceable provision had never been contained
herein.
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IN
WITNESS WHEREOF, Xxxxxxxx has executed this Note as of the date first
above written.
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BORROWER:
STW
Holding Corp.
By:______________________
Signature
Name: Xxxxxxx
X. Xxxxxx
Title: CEO
and President
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IN
WITNESS WHEREOF, Xxxxxx has executed this Note as of the date first above
written.
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LENDER:
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G.E. Ionics, Inc.
By:___________________________
Signature
Name: Xxxxxxx
X. Xxxxx
Title:
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