STW Resources Holding Corp SUBSCRIPTION AGREEMENT
STW
Resources Holding Corp
November
__, 2010
Gentlepersons:
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1.
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Subscription. The
undersigned (the "Purchaser"), intending to be legally bound, hereby
irrevocably agrees to purchase from STW Resources Holding
Corp. (the "Company") the aggregate number of [__________] units
(the “Units”) at a price per Unit of $0.25. Each Unit shall consist of one
share of par value $0.001 common stock of the Company (“Common Stock”) and
a warrant to purchase, at any time prior to the second anniversary of the
date of issuance, a share of Common Stock at an exercise price of $0.50
(the “Warrant Shares”). The Units, the shares of Common Stock,
the warrants underlying the Units, and the Warrant Shares are referred to
collectively as the “Securities”. This subscription is submitted to you in
accordance with and subject to the terms and conditions described in this
Subscription Agreement, relating to the offering by the Company of up to
20,000,000 Units (the
"Offering").
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2.
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Payment. The
Purchaser encloses herewith a check made payable to TD Bank, Escrow Agent
for STW Resources Holding Corp or by wire to TD Bank, N.A, ABA#_________,
BNF: TD Wealth Management, DDA# _________, FFC:
STW/VP A/C# _________ in the full amount of the purchase
price of the Securities being subscribed for. Such funds will be marked
for the Purchaser's benefit, and will be returned promptly, without
interest, penalty, expense or deduction if this Subscription Agreement is
not accepted by the Company, or the Offering is terminated by the
Company.
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3.
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Deposit of
Funds. All payments made as provided in Section 2 hereof
shall be deposited by the Escrow Agent, until the subscription has been
accepted by the Company and the Subscription Agreement, as executed by the
Company, has been delivered to the
Purchaser.
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4.
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Acceptance of
Subscription. The Purchaser understands and agrees that
the Company, in its sole discretion, reserves the right to accept or
reject this or any other subscription for Securities, in whole or in part,
notwithstanding prior receipt by the Purchaser of notice of acceptance of
this subscription. The Company shall have no obligation hereunder until
the Company shall execute and deliver to the Purchaser an executed copy of
this Subscription Agreement. If this subscription is rejected
in whole, or the Offering is terminated, all funds received from the
Purchaser will be returned without interest, penalty, expense or
deduction, and this Subscription Agreement shall thereafter be of no
further force or effect. If this subscription is rejected in
part, the funds for the rejected portion of this subscription will be
returned without interest, penalty, expense or deduction, and this
Subscription Agreement will continue in full force and effect to the
extent this subscription was
accepted.
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5.
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Representations and
Warranties. The Purchaser hereby acknowledges,
represents, warrants, and agrees as
follows:
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a)
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None
of the Securities offered are registered under the Securities Act of 1933,
as amended (the "Securities Act"), or any state securities
laws. The Purchaser understands that the offering and sale of
the Securities is intended to be exempt from registration under the
Securities Act, by virtue of Section 4(2) thereof and the provisions of
Regulation D promulgated thereunder and/or Regulation S, based, in part,
upon the representations, warranties and agreements of the Purchaser
contained in this Subscription
Agreement;
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b)
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The
Purchaser and the Purchaser's attorney, accountant, purchaser
representative and/or tax advisor, if any (collectively, the "Advisors"),
have received the Subscription Agreement and all other documents requested
by the Purchaser, have carefully reviewed them and understand the
information contained therein, and the Purchaser and the Advisors, if any,
prior to the execution of this Subscription
Agreement;
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c)
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Neither
the Securities and Exchange Commission nor any state securities commission
has approved the Securities, or passed upon or endorsed the merits of the
Offering or confirmed the accuracy or determined the adequacy of the
offering documents. The offering documents have not been
reviewed by any federal, state, provincial or other regulatory
authority;
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d)
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All
documents, records, and books pertaining to the investment in the
Securities have been made available for inspection by such Purchaser and
the Advisors;
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e)
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The
Purchaser and the Advisors, if any, have had a reasonable opportunity to
ask questions of and receive answers from a person or persons acting on
behalf of the Company concerning the offering of the Securities and the
business, financial condition, results of operations and prospects of the
Company, and all such questions have been answered to the full
satisfaction of the Purchaser and the
Advisors;
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f)
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In
evaluating the suitability of an investment in the Company, the Purchaser
has not relied upon any representation or other information (oral or
written) other than as stated in the offering documents or as contained in
documents or answers to questions so furnished to the Purchaser or the
Advisors by the Company;
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g)
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The
Purchaser is unaware of, is no way relying on, and did not become aware of
the offering of the Securities through or as a result of, any form of
general solicitation or general advertising including, without limitation,
any article, notice, advertisement or other communication published in any
newspaper, magazine or similar media or broadcast over television or
radio, in connection with the offering and sale of the Securities and is
not subscribing for Securities and did not become aware of the offering of
the Securities through or as a result of any seminar or meeting to which
the Purchaser was invited by, or any solicitation of a subscription by, a
person not previously known to the Purchaser in connection with
investments in securities
generally;
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h)
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The
Purchaser has taken no action which would give rise to any claim by any
person for brokerage commissions, finders' fees or the like relating to
this Subscription Agreement or the transactions contemplated
hereby;
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i)
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The
Purchaser or the Purchaser’s representative, as the case may be, together
with the Advisors, have such knowledge and experience in financial, tax,
and business matters, and, in particular, investments in securities, so as
to enable them to utilize the information made available to them in
connection with the offering of the Securities to evaluate the merits and
risks of an investment in the Securities and the Company and to make an
informed investment decision with respect
thereto;
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j)
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The
Purchaser is not relying on the Company, or any of its employees or agents
with respect to the legal, tax, economic and related considerations of an
investment in the Securities, and the Purchaser has relied on the advice
of, or has consulted with, only his own
Advisors;
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k)
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The
Purchaser is acquiring the Securities solely for such Purchaser's own
account for investment and not with a view to resale or distribution
thereof, in whole or in part. The Purchaser has no agreement or
arrangement, formal or informal, with any person to sell or transfer all
or any part of the Securities, and the Purchaser has no plans to enter
into any such agreement or
arrangement;
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l)
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The
Purchaser must bear the substantial economic risks of the investment in
the Securities indefinitely because the securities may not be sold,
hypothecated or otherwise disposed of unless subsequently registered under
the Securities Act and applicable state securities laws or an exemption
from such registration is available. Legends shall be placed on
the securities underlying the Securities to the effect that they have not
been registered under the Securities Act or applicable state securities
laws and appropriate notations thereof will be made in the Company's stock
books. Stop transfer instructions will be placed with the
transfer agent of the securities constituting the
Securities.
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m)
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The
Purchaser has adequate means of providing for such Purchaser's current
financial needs and foreseeable contingencies and has no need for
liquidity of the investment in the Securities for an indefinite period of
time;
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n)
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The
Purchaser is aware that an investment in the Securities involves a number
of very significant risks, and, in particular, acknowledges that the
Company has had a limited operating history and is engaged in a highly
competitive business;
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o)
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The
Purchaser meets the requirements of at least one of the suitability
standards for an "accredited investor" as set forth on the Accredited
Investor Certification contained
herein;
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p)
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The
Purchaser (i) if a natural person, represents that the Purchaser has
reached the age of 21 and has full power and authority to execute and
deliver this Subscription Agreement and all other related agreements or
certificates and to carry out the provisions hereof and thereof; (ii) if a
corporation, partnership, or limited liability company or partnership, or
association, joint stock company, trust, unincorporated organization or
other entity, represents that such entity was not formed for the specific
purpose of acquiring the Securities, such entity is duly organized,
validly existing and in good standing under the laws of the state of its
organization, the consummation of the transactions contemplated hereby is
authorized by, and will not result in a violation of state law or its
charter or other organizational documents, such entity has full power and
authority to execute and deliver this Subscription Agreement and all other
related agreements or certificates and to carry out the provisions hereof
and thereof and to purchase and hold the Securities, the execution and
delivery of this Subscription Agreement has been duly authorized by all
necessary action, this Subscription Agreement has been duly executed and
delivered on behalf of such entity and is a legal, valid and binding
obligation of such entity; or (iii) if executing this Subscription
Agreement in a representative or fiduciary capacity, represents that it
has full power and authority to execute and deliver this Subscription
Agreement in such capacity and on behalf of the subscribing individual,
▇▇▇▇, partnership, trust, estate, corporation, or limited liability
company or partnership, or other entity for whom the Purchaser is
executing this Subscription Agreement, and such individual, partnership,
▇▇▇▇, trust, estate, corporation, or limited liability company or
partnership, or other entity has full right and power to perform pursuant
to this Subscription Agreement and make an investment in the Company, and
represents that this Subscription Agreement constitutes a legal, valid and
binding obligation of such entity. The execution and delivery
of this Subscription Agreement will not violate or be in conflict with any
order, judgment, injunction, agreement or controlling document to which
the Purchaser is a party or by which it is
bound;
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q)
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The
Purchaser and the Advisors have had the opportunity to obtain any
additional information, to the extent the Company had such information in
its possession or could acquire it without unreasonable effort or expense,
necessary to verify the accuracy of the information contained in the
Memorandum and all documents received or reviewed in connection with the
purchase of the Securities and have had the opportunity to have
representatives of the Company provide them with such additional
information regarding the terms and conditions of this particular
investment and the financial condition, results of operations, business
and prospects of the Company deemed relevant by the Purchaser or the
Advisors, if any, and all such requested information, to the extent the
Company had such information in its possession or could acquire it without
unreasonable effort or expense, has been provided to the full satisfaction
of the Purchaser and the Advisors;
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r)
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The
Purchaser represents to the Company that any information which the
undersigned has heretofore furnished or furnishes herewith to the Company
is complete and accurate and may be relied upon by the Company in
determining the availability of an exemption from registration under
Federal and state securities laws in connection with the offering of the
Securities. The Purchaser further represents and warrants that it will
notify and supply corrective information to the Company immediately upon
the occurrence of any change therein occurring prior to the Company's
issuance of the Securities;
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s)
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The
Purchaser has significant prior investment experience, including
investment in non-listed and non-registered securities. The
Purchaser is knowledgeable about investment considerations in
development-stage companies. The Purchaser has a sufficient net
worth to sustain a loss of its entire investment in the Company in the
event such a loss should occur. The Purchaser's overall
commitment to investments which are not readily marketable is not
excessive in view of the Purchaser’s net worth and financial circumstances
and the purchase of the Securities will not cause such commitment to
become excessive. The investment is a suitable one for the
Purchaser;
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t)
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The
Purchaser is satisfied that the Purchaser has received adequate
information with respect to all matters which it or the Advisors, if any,
consider material to its decision to make this
investment;
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u)
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Within
five days after receipt of a request from the Company, the Purchaser will
provide such information and deliver such documents as may reasonably be
necessary to comply with any and all laws and ordinances to which the
Company is subject;
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v)
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THE
SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF CERTAIN STATES AND ARE
BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION
REQUIREMENTS OF SAID ACT AND SUCH LAWS. THE SECURITIES ARE
SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE
TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER SAID ACT AND SUCH LAWS
PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. THE SECURITIES HAVE NOT
BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION,
ANY STATE SECURITIES COMMISSION OR ANY OTHER REGULATORY AUTHORITY, NOR
HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS
OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THE
MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS
UNLAWFUL;
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w)
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(For Connecticut residents
only) The undersigned acknowledges that the
Securities have not been registered under the Connecticut Uniform
Securities Act, as amended (the "Connecticut Act"), and are subject to
restrictions on transferability and sale of securities as set forth
herein. The undersigned hereby agrees that such Securities will
not be transferred or sold without registration under the Connecticut Act
or exemption therefrom;
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x)
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(For Maine residents
only) These Securities are being sold pursuant to
an exemption from registration with the Bank Superintendent of the State
of Maine under Section 10502(2)(R) of Title 32 of the Maine Revised
Statutes. These Securities may be deemed restricted securities
and as such the holder may not be able to resell the Securities unless
pursuant to registration under state or federal securities laws or unless
an exemption under such laws
exists;
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y)
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(For Missouri residents
only) The undersigned acknowledges that the
Securities have not been registered under the Missouri Uniform Securities
Act, as amended (the “Missouri Act”), and are subject to restrictions on
transferability and sale of securities as set forth herein. The
undersigned hereby acknowledges that such Securities may be disposed of
only
through a licensed broker-dealer. It is a felony to sell
securities in violation of the Missouri
Act;
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z)
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(For Texas residents
only) The undersigned hereby acknowledges that the
Securities cannot be sold unless they are subsequently registered under
the Securities Act of 1933, as amended, and the Texas Securities Act, or
an exemption from registration is available. The undersigned
further acknowledges that because the Securities are not readily
transferrable, the undersigned must bear the economic risk of his
investment for an indefinite period of time;
and
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6.
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Indemnification. The
Purchaser agrees to indemnify and hold harmless the Company, and its
officers, directors, employees, agents, control persons and affiliates
from and against all losses, liabilities, claims, damages, costs, fees and
expenses whatsoever (including, but not limited to, any and all expenses
incurred in investigating, preparing or defending against any litigation
commenced or threatened) based upon or arising out of any actual or
alleged false acknowledgment, representation or warranty, or
misrepresentation or omission to state a material fact, or breach by the
Purchaser of any covenant or agreement made by the Purchaser herein or in
any other document delivered in connection with this Subscription
Agreement.
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7.
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Irrevocability; Binding
Effect. The Purchaser hereby acknowledges and agrees
that the subscription hereunder is irrevocable by the Purchaser, except as
required by applicable law, and that this Subscription Agreement shall
survive the death or disability of the Purchaser and shall be binding upon
and inure to the benefit of the parties and their heirs, executors,
administrators, successors, legal representatives, and permitted
assigns. If the Purchaser is more than one person, the
obligations of the Purchaser hereunder shall be joint and several and the
agreements, representations, warranties, and acknowledgments herein shall
be deemed to be made by and be binding upon each such person and such
person's heirs, executors, administrators, successors, legal
representatives, and permitted
assigns.
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8.
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Modification. This
Subscription Agreement shall not be modified or waived except by an
instrument in writing signed by the party against whom any such
modification or waiver is
sought.
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9.
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Notices. Any
notice or other communication required or permitted to be given hereunder
shall be in writing and shall be mailed by certified mail, return receipt
requested, or delivered against receipt to the party to whom it is to be
given (a) if to the Company, at the address set forth above, or (b) if to
the Purchaser, at the address set forth on the signature page hereof (or,
in either case, to such other address as the party shall have furnished in
writing in accordance with the provisions of this Section
9). Any notice or other communication given by certified mail
shall be deemed given at the time of certification thereof, except for a
notice changing a party's address which shall be deemed given at the time
of receipt thereof.
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10.
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Assignability. This
Subscription Agreement and the rights, interests and obligations hereunder
are not transferable or assignable by the Purchaser and the transfer or
assignment of the Securities shall be made only in accordance with all
applicable laws.
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11.
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Applicable
Law. This Subscription Agreement shall be governed by
and construed in accordance with the laws of the State of New York
relating to contracts entered into and to be performed wholly within such
State. The Purchaser hereby irrevocably submits to the jurisdiction of any
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Federal court sitting in New York
County over any action or proceeding arising out of or relating to this
Subscription Agreement or any agreement contemplated hereby, and the
Purchaser hereby irrevocably agrees that all claims in respect of such
action or proceeding may be heard and determined in such New York State or
Federal court. The Purchaser further waives any objection to
venue in such State and any objection to an action or proceeding in such
State on the basis of a non-convenient forum. The Purchaser
further agrees that any action or proceeding brought against the Company
shall be brought only in New York State or United States Federal courts
sitting in New York County. THE PURCHASER AGREES TO WAIVE ITS RIGHTS TO A
JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF
THIS SUBSCRIPTION AGREEMENT OR ANY DOCUMENT OR AGREEMENT CONTEMPLATED
HEREBY.
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12.
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Blue Sky
Qualification. The purchase of Securities under this
Subscription Agreement is expressly conditioned upon the exemption from
qualification of the offer and sale of the Securities from applicable
Federal, state and provincial securities laws. The Company
shall not be required to qualify this transaction under the securities
laws of any jurisdiction and, should qualification be necessary, the
Company shall be released from any and all obligations to maintain its
offer, and may rescind any sale contracted, in the
jurisdiction.
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13.
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Use of
Pronouns. All pronouns and any variations thereof used
herein shall be deemed to refer to the masculine, feminine, neuter,
singular or plural as the identity of the person or persons referred to
may require.
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14.
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Confidentiality. The
Purchaser acknowledges and agrees that any information or data the
Purchaser has acquired from or about the Company, not otherwise properly
in the public domain, was received in confidence. The Purchaser
agrees not to divulge, communicate or disclose, except as may be required
by law or for the performance of this Agreement, or use to the detriment
of the Company or for the benefit of any other person or persons, or
misuse in any way, any confidential information of the Company, including
any scientific, technical, trade or business secrets of the Company and
any scientific, technical, trade or business materials that are treated by
the Company as confidential or proprietary, including, but not limited to,
ideas, discoveries, inventions, developments and improvements belonging to
the Company and confidential information obtained by or given to the
Company about or belonging to third
parties.
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15.
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Miscellaneous.
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a)
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This
Agreement constitutes the entire agreement between the Purchaser and the
Company with respect to the subject matter hereof and supersedes all prior
oral or written agreements and understandings, if any, relating to the
subject matter hereof. The terms and provisions of this
Agreement may be waived, or consent for the departure therefrom granted,
only by a written document executed by the party entitled to the benefits
of such terms or provisions.
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b)
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The
Purchaser's representations and warranties made in this Agreement shall
survive the execution and delivery hereof and delivery of the
Securities.
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c)
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Each
of the parties hereto shall pay its own fees and expenses (including the
fees of any attorneys, accountants, appraisers or others engaged by such
party) in connection with this Agreement and the transactions contemplated
hereby whether or not the transactions contemplated hereby are
consummated.
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d)
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This
Agreement may be executed in one or more counterparts each of which shall
be deemed an original, but all of which shall together constitute one and
the same instrument.
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e)
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Each
provision of this Subscription Agreement shall be considered separable
and, if for any reason any provision or provisions hereof are determined
to be invalid or contrary to applicable law, such invalidity or illegality
shall not impair the operation of or affect the remaining portions of this
Subscription Agreement.
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f)
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Paragraph
titles are for descriptive purposes only and shall not control or alter
the meaning of this Subscription Agreement as set forth in the
text.
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8
Accredited Investor
Certification
(Initial
the appropriate item(s))
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(i)
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The
Purchaser is a natural person who had individual income of more than
$200,000 in each of the most recent two years or joint income with my
spouse in excess of $300,000 in each of the most recent two years and
reasonably expect to reach that same income level for the current year
(“income”, for purposes hereof, should be computed as follows: individual
adjusted gross income, as reported (or to be reported) on a federal income
tax return, increased by (1) any deduction of long-term capital gains
under section 1202 of the Internal Revenue Code of 1986 (the “Code”), (2)
any deduction for depletion under Section 611 et seq. of the Code, (3) any
exclusion for interest under Section 103 of the Code and (4) any losses of
a partnership as reported on Schedule E of Form
1040);
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(ii)
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The
Purchaser is a natural person whose individual net worth (i.e. total
assets in excess of total liabilities), or joint net worth with my spouse,
will at the time of purchase of the common stock be in excess of
$1,000,000, excluding the value of the investor’s primary
residence;
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(iii)
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The
Purchaser is a trust (other than a revocable grantor trust), which trust
has total assets in excess of $5,000,000, which is not formed for the
specific purpose of acquiring the common stock offered hereby and whose
purchase is directed by a sophisticated person as described in Rule
506(b)(2)(ii) of Regulation D and who has such knowledge and experience in
financial and business matters that he is capable of evaluating the risks
and merits of an investment in the common
stock;
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_____
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(iv)
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The
Purchaser is an employee benefit plan within the meaning of Title I of the
Employee Retirement Income security Act of 1974, and either (a) the
investment decision will be made by a plan fiduciary, as defined in
Section 3(21) of such Act, which is either a bank, insurance company, or a
registered investment adviser; or (b) the employee benefit plan has total
assets in excess of $5,000,000; or (c) the employee benefit plan is a
self-directed plan, including an Individual Retirement Account, with the
meaning of Title I of such act, and the person directing the purchase is
an Accredited Investor.
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*NOTE. If
the Purchaser is relying solely on Item (iv) for its Accredited Investor status,
please print the name of the person directing the purchase in the following
space and furnish a completed and signed Accredited Investor Certification for
such person.
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(v)
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The
Purchaser is an investor otherwise satisfying the requirements of Sections
501(a)(l), (2) or (3) of Regulation D promulgated under the Securities
Act, which includes but is not limited to, a self-directed employee
benefit plan where investment decisions are made solely by persons who are
“accredited investors” as otherwise defined in Regulation
D;
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_____
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(vi)
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The
Purchaser is a director or executive officer of [_______________________];
or
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_____
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(vii)
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The
Purchaser is an entity (including an ▇▇▇ or revocable grantor trust but
other than a conventional trust) in which all of the equity owners meet
the requirements of at least one of the above
subparagraphs.
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[_______________________]
SIGNATURE
PAGE
Subscriber
hereby elects to subscribe under the Subscription Agreement for a total of
$_________________ of Securities (NOTE: to be completed by
subscriber).
Date
(NOTE: To be completed by subscriber): ______________, 2010
Please
indicate (circle one)
whether the purchaser is investing as a(n):
INDIVIDUAL
JOINT TENANTS
TENANTS IN COMMON
COMMUNITY PROPERTY
PARTNERSHIP
CORPORATION
LIMITED LIABILITY COMPANY
TRUST
Please
fill out this section if the purchaser is an INDIVIDUAL, and if purchased as
JOINT TENANTS, as TENANTS IN COMMON, or as COMMUNITY PROPERTY (If the investment is being made as
JOINT TENANTS, TENANTS IN COMMON, or as COMMUNITY PROPERTY, please be sure to
fill out this section for all purchasers
named):
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Print
Name(s)
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Social
Security Number(s)
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Print
Name(s) (if more than
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Social
Security Number(s)
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1
individual)
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Signature(s)
of Investor(s)
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Signature
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Date
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Address
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Please
fill out this section if the purchaser is a PARTNERSHIP, CORPORATION, LIMITED
LIABILITY COMPANY or TRUST:
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Name
of Partnership,
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Federal
Taxpayer
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Corporation,
Limited
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Identification
Number
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Liability
Company or
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Trust
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By:
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Name:
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State
of Organization
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Title:
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Address | |
SUBSCRIPTION
FOR $_______ OF SECURITIES, ACCEPTED AND AGREED TO
this day
of ,
2010
[_______________________]
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By:
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Name/Title:
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