Exhibit 10.1

AGREEMENT AND PLAN OF MERGER

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 244 Fifth Avenue, Suite 1878, New York, New York 10001
 
(“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 619 W. Texas Ave., Suite
126, Midland, TX 79701

("STW Resources")

AND:

The shareholders of STW Resources as set forth on Exhibit A

(collectively the “STW Resources Shareholders”)

 
WHEREAS:

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:

(a)  
“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;

(b)  
“Agreement” means this agreement and plan of merger among Woozyfly, the
Acquirer, STW Resources, and the STW Resources Shareholders;

(c)  
“Closing” means the completion, on the Closing Date, of the transactions
contemplated hereby in accordance with Article 9 hereof;

(d)  
“Closing Date” means the day on which all conditions precedent to the completion
of the transaction as contemplated hereby have been satisfied or waived;

(e)  
“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;

(f)  
“Merger” means the merger, at the Effective Time, of STW Resources and the
Acquirer pursuant to this Agreement and Plan of Merger;

(g)  
“Merger Consideration” means the Acquisition Shares;

(h)  
“Place of Closing” means the Law Offices of Stephen M. Fleming PLLC, 49 Front
Street, Suite #206, Rockville Centre, New York 11570, or such other place as
Woozyfly and STW Resources may mutually agree upon;

(i)  
“State Corporation Law” means the general corporation law of the State of
Nevada;

(j)  
“STW Resources Debentures” means the convertible debentures on Schedule “C” to
be cancelled upon receipt of the WoozyFly Debentures;

(k)  
“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;

(l)  
“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;

(m)  
“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;

(n)  
“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;

(o)  
“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;

(p)  
“STW Resources Business” means all aspects of the business conducted by STW
Resources;

(q)  
“STW Resources Cash” means all cash on hand or on deposit to the credit of STW
Resources on the Closing Date;

(r)  
“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;

(s)  
“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;

(t)  
“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;

(u)  
“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;

(v)  
“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;

(w)  
“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;

(x)  
“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;

(y)  
“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

(z)  
“STW Resources Shares” means all of the issued and outstanding shares of STW
Resources' equity stock.

(aa)  
“Surviving Company” means the Acquirer following the merger with STW Resources.

(bb)  
“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;

(cc)  
“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;

(dd)  
“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;

(ee)  
“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;

(ff)  
“Woozyfly Business” means all aspects of any business conducted by Woozyfly and
its subsidiaries;

(gg)  
“Woozyfly Cash” means all cash on hand or on deposit to the credit of WOOZYFLY
and its subsidiaries on the Closing Date;

(hh)  
“Woozyfly Common Shares” means the shares of common stock in the capital of
Woozyfly;

(ii)  
“Woozyfly Debentures” means the convertible debentures on Schedule “C” to be
issued to the holders of the STW Debentures upon closing;

(jj)  
“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;

(kk)  
“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”;

(ll)  
“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;

(mm)  
Intentionally left blank;

(nn)  
“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;

(oo)  
“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;

(pp)  
“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

(qq)  
“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.

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

Schedule “A”
Woozyfly Financial Statements

Information concerning STW Resources

Schedule “B”
STW Resources Financial Statements

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:

(a)  
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.

(b)  
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.

(c)  
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.

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:

(a)  
the sale is to Woozyfly;

(b)  
the sale is made pursuant to the exemption from registration under the
Securities Act of 1933,as amended, provided by Rule 144 thereunder; or

(c)  
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.

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

(a)  
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;

(b)  
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;

(c)  
Corporate Capacity. Woozyfly has the corporate power, capacity and authority to
own the Woozyfly Assets and to enter into and complete this Agreement;

(d)  
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;

Acquirer - Corporate Status and Capacity

(e)  
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;

(f)  
Corporate Capacity. The Acquirer has the corporate power, capacity and authority
to enter into and complete this Agreement;

 
Woozyfly - Capitalization

(g)  
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;

(h)  
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;

(i)  
Capacity. Woozyfly has the full right, power and authority to enter into this
Agreement on the terms and conditions contained herein;

Acquirer Capitalization

(j)  
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;

(k)  
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;

(l)  
Capacity. The Acquirer has the full right, power and authority to enter into
this Agreement on the terms and conditions contained herein;

 
Woozyfly - Records and Financial Statements

(m)  
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;

(n)  
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.

(o)  
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;

(p)  
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;

(q)  
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;

(r)  
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.
244 Fifth Avenue, Suite 1878
New York, New York 10001
Phone:  (949) 903-0468
Telecopier: 949-258-5379

(b)  
STW Resources or the STW Resources Shareholders

STW Resources, Inc.
619 W. Texas Ave., Suite 126,
Midland, TX 79701
Phone:  (281) 905-2672
Telecopier: (281) 596-4591

With a copy to:

Law Offices of Stephen M. Fleming PLLC
49 Front Street, Suite 206
Rockville Centre, New York 11570
Phone:  (516) 833-5034
Telecopier: (516) 977-1209

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.]

 
 

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IN WITNESS WHEREOF the parties have executed this Agreement effective as of the
day and year first above written.

WOOZYFLY, INC.

By:__/s/ ERIC
STOPPENHAGEN                                                                           
Eric Stoppenhagen, Interim President

STW ACQUISITION, INC.

By:__/s/ ERIC
STOPPENHAGEN__                                                                           
Eric Stoppenhagen, President

STW RESOURCES, INC.

By:___/s/ STANLEY
WEINER__________                                                                           
Stanley Weiner, Chief Executive Officer
  and President

[STW RESOURCES SHAREHOLDERS ARE LOCATED ON THE FOLLOWING PAGE]

 
 

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-  -

 

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:

 
 

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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

 
 

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Exhibit A

 
STW Resources Shareholders

Name of Shareholders
No. of Shares of STW
Paul DiFrancesco
1,815,787
Seth Leyton
550,000
John Dillen
424,438
Cody Corrubia
520,000
Triumph Small Cap Fund Ltd.
1,500,000
SEI Private Trust Co. FAO JM Smucker Co. Master Trust
582,500
Levine Family Trust
424,438
Stanley Weiner
7,932,500
Coronado Capital Partners LP
343,125
       

 
 

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