Unassociated Document


    SETTLEMENT
AGREEMENT

    


    This Settlement Agreement (the
“Agreement”) is made the 31st day of
August 2010 (the “Execution Date”) by and between GE Ionics, Inc., 3006 Northup
Way, Suite 200, Bellevue, WA 98004, a Massachusetts corporation (“GE”), and STW
Resources Holding Corporation, 619 West Texas Ave, Suite 126, Midland
TX  a Nevada corporation  (“STW”) (each a “Party” and
collectively the “Parties”).

    


    WITNESSETH:

    


    WHEREAS, STW Resources, Inc.,
a Nevada corporation, was merged into and is now a wholly owned subsidiary of
STW.

    


    WHEREAS, on or about May 22,
2008, STW Resources, Inc. and GE entered into a Teaming Agreement as may
subsequently have been amended by documents, correspondence and e-mails between
the Parties (together the “Teaming Agreement”);

    


    WHEREAS on or about April 4,
2008 the STW Resources, Inc. and GE entered into a Purchase Order as may
subsequently have been amended by documents, correspondence and e-mails between
the Parties (together the “Purchase Order”);

    


    WHEREAS, under the Purchase
Order, there exists and is due and unpaid a debt by STW Resources, Inc. to GE,
including principal, accrued interest as at August 31 2010 and late fees of
$11,239,437.00 (the “Original Debt”).

    


    WHEREAS, STW has assumed the
rights and obligations of STW Resources, Inc. under the original Purchase Order
(including the Original Debt) and Teaming Agreement, such that all releases
contained in the Agreement between the Parties shall run in favor of both
entities;

    


    WHEREAS, the Parties to this
Agreement now desire to resolve all disputes existing between them;
and,

    


    NOW, THEREFORE, in
consideration of the mutual promises, releases, and payments provided for
herein, the Parties hereto agree as follows:

     

    1. Obligations
Among the Contractual Parties. By the Parties executing this Agreement,
GE shall allow STW to substitute for STW Resources, Inc. as to all rights and
obligations under the Purchase Order (including the Original Debt) and Teaming
Agreement, for which STW represents to GE that STW is authorized to
assume.  Accordingly, to fully discharge STW Resources, Inc.’s
financial obligations to GE under the Purchase Order, STW shall pay GE
$1,400,000.00 pursuant to the note annexed hereto as set forth on Exhibit A
(the “Note”).

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    A.           Under
the terms of the Note, STW will have thirteen (13) months from the date of the
Note to pay off the $1,400,000.00, plus interest accrued under the Note in
accordance with its terms.  After execution of this Agreement and the
Note, upon the consummation and closing of a debt or equity financing, STW will
pay GE thirty percent (30%) of any and all Tranches (“Tranches” being defined as
the cash receipts of the proceeds of any equity investments in or loans to STW
or any affiliated entity by third parties, but excluding any conversions of
pre-existing debt to equity by any of STW’s current convertible note holders or
creditors) until the Note is paid in full, with accrued interest on the
Note.  STW must inform GE within three (3) business days whenever a
Tranche is received, noting the date and amount received.  Payment of
the thirty percent (30%) shall be made to GE within the earlier to expire of (i)
ten (10) business days from STW’s receipt of GE’s invoice (by e-mail or
facsimile transmission) or (ii) ninety days from STW’s receipt of the relevant
Tranche..  STW’s obligation to pay the Note and accrued interest to GE
is unconditional and not conditioned on the level of Tranches received by
STW.

     

    B.           Upon
timely payment in full of the Note plus accrued interest, GE will release STW
from its Original Debt to GE.  Should STW default on the Note, any
prior payments on the Note will be applied first to interest due on the Note and
any previously paid principal payments on the note will be applied on a
dollar-for-dollar basis to STW’s undiscounted Original Debt to GE.

     

    C.           GE
will retain all monies paid to date by STW under the Purchase Order and the
Note, as well as the equipment (thermal evaporator) ordered and fabricated
(partially or fully) under the Purchase Order.  Once the Note has been
paid in full prior to the expiration of the thirteen (13) month period, STW
Resources, Inc. and STW shall have no further financial obligations to
GE.  If, for any reason, STW defaults under the Note and GE chooses to
enforce the Original Debt, this Agreement shall not affect any defenses which
would be available to STW as a “buyer” under the UCC with respect to goods which
are subsequently sold to a third party.  Provided, however, that STW may
not assert any such defenses to its obligation of to pay the $1,400,000 and
accrued interest and costs under the Note.  By GE entering into this
Agreement, and the related Note, GE is not prejudiced from its right to claim
the Original Debt from STW or any other right or remedy that may be available to
GE under the UCC or otherwise at law.  In the event of any default
hereunder, GE shall be entitled to recover under both this Agreement and/or the
Note up to a total equal to the Original Debt plus accrued interest at the
interest rate specified in the original Purchase Order.

     

    D.           Upon
execution of this Agreement, GE and STW confirm the termination of the Teaming
Agreement and the Purchase Order, except for any post-termination obligations
contained in said agreements, including, but not limited to STW’s Original Debt
obligation to GE until said obligation is discharged by STW’s timely performance
under the Note or, if said Note is in default, until the Original Debt is paid
in full. For the avoidance of doubt, GE shall have no post-termination
obligations of exclusivity to STW in respect of the Teaming
Agreement.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      E.           Publicity:  Under
this Agreement, STW has a continuing obligation to keep its website and
publicity materials free from any references to GE, other than material which
has been pre-approved by GE in writing.  In addition, STW shall not
make any public statements concerning this settlement between STW and GE without
GE's prior approval in writing.  GE shall not unreasonably withhold
STW's requests for approval of publicity regarding GE and this settlement with
GE, and upon receipt of a publicity approval request(s) by STW, shall have five
(5) business days to approve, reject, or suggest modifications to said
request(s).

    

     

    2. Releases:
Except for STW’s Original Debt to GE which will not be released until STW’s
timely payment in full to GE of the Note and accrued interest thereon, the
Parties hereby mutually release each other from and against any and all claims,
choses in action and from any and all debts, obligations, claims, and causes of
action either of them may have against the other and against the other‘s
respective agents, representatives, employees, predecessors, successors,
officers, directors, shareholders, partners, subsidiaries (including STW’s
subsidiary, STW Resources, Inc.), parents, or affiliates, whether such debts,
obligations, claims, or causes of action are accrued or unaccrued, or known or
unknown, all as at the date hereof,.  This release includes but is not
limited to any and all claims relating to any interest, penalties or fees
resulting from the Teaming Agreement and the Purchase Order.  STW’s
release of GE pursuant to this paragraph shall also be considered a release by
STW Resources, Inc.  None of the releases under this paragraph act to
release the Parties’ obligations set forth in this Agreement or STW’s
obligations to GE under the Note.

     

    3. No
Admission of Liability: No party admits any default, error, liability, or
wrongdoing by entering into this Agreement.  Neither shall any party
hereto portray this Agreement or any act taken under or in connection with it as
an explicit or implicit statement or admission of the strength or weakness of
any position taken by any party.  Instead, the Parties enter into this
Agreement to constructively resolve disputes between them and to avoid
litigation.

     

    4. No Oral
Modifications: This Agreement and the Note set forth the entire agreement
between the Parties and supersedes in its entirety any and all prior agreements,
understandings or representations relating to the subject matter hereof and may
not be changed or terminated orally.  The Parties represent that in
entering this Agreement they do not rely on any statement or fact not set forth
herein.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    5. Governing
Law, Remedies, Venue and Jurisdiction: This Agreement shall be governed
exclusively by the Laws of the State of New York, and any actions, claims or
proceedings shall be subject to the exclusive venue and jurisdiction of the
state and Federal Courts in the Borough of Manhattan in the City of New York.
The Parties hereby waive any right to a jury trial. In the event of a default by
either Party, the other Party’s sole remedy shall be to enforce the terms of
this Agreement.  STW agrees to pay any and all expenses (including
attorneys’ fees and expenses) incurred by GE which are incurred in endeavoring
to collect any amounts payable under this Agreement and the related Note which
are not paid when due (whether by acceleration or otherwise) or in otherwise
enforcing any rights under this Note.  In the event a Party to this
Agreement must institute suit or a cause of action to enforce the terms of this
Agreement, the prevailing party will be entitled to fees and costs, including
reasonable attorney’s fees. This shall also include any attorney’s fees required
for the purposes of executing and collecting on the amounts due pursuant to the
Stipulated Judgment, the actual Judgment and the Security Interest.

     

     

    6. Notices:
All notices, requests, demands, claims, and other communications hereunder shall
be in writing and delivered via overnight courier.  Any notice,
request, demand, claim, or other communication hereunder shall be deemed duly
given as of the next business day.  Such notices shall be addressed to
the intended recipient(s) as set forth below:

     

    
    

     

    
      
        
          
            	
                    If to
      STW:  

                  	619 West Texas Ave,
      Suite 126,
      
                    Midland
      TX 79701

                    E-Mail:
      stw@stwresources.com

                    Attn:
      Stanley Weiner

                  
	 	 
	
                    With a Copy
      to:  

                  	D. Grant Seabolt,
      Jr., Esq.
      
                    Underwood
      Perkins, PC

                    5420
      Lyndon B. Johnson Fwy., Suite 1900

                    Dallas,
      TX 75240

                    (972)
      788-3310 Phone

                    (972)
      788-3360 Fax

                    E-Mail:
      gseabolt@uplawtx.com

                  
	 	 
	
                    If to GE
      Ionics: 

                  	GE Ionics, Inc.,
      
                    3006
      Northup Way, Suite 200,

                    Bellevue,
      WA 98004

                    Attn:
      William Heins

                    E-Mail:
      William.heins@ge.com

                  
	 	 


          

        

      

    

     

                                                       

    
      
         

      

      
         

        
          

        

      

      
         

      

    

                                                    

     

    7. No
Representations: Neither party has relied upon any representations or
statements made by the other party hereto which are not specifically set forth
in this Agreement.

     

    8. Severability:  In
the event that any provision of this Agreement becomes or is declared by a court
of competent jurisdiction to be illegal, unenforceable or void, this Agreement
shall continue in full force and effect without said provision.

     

    9. Entire
Agreement:  This Agreement and the Note represent the entire
agreement and understanding between the Parties concerning the termination of
the Purchase Order and Teaming Agreement (collectively the “Agreements”), and
supersede and replace any and all prior agreements and understandings concerning
the Agreements.

     

    10. Binding
Effect: This Agreement shall be binding upon and inure to the benefit of
the Parties named herein and their respective successors, assigns, distributees,
heirs, and grantees of any revocable trusts of a Party. No Party may assign
either this Agreement or any of its or his or her rights, interests, or
obligations hereunder without the prior written approval of the other
Parties.

     

    11. No
Third-Party Beneficiaries: This Agreement shall not confer any rights or
remedies upon any person other than the Parties and their respective successors
and permitted assigns.

     

    12. Headings
and Counterparts: The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement. This Agreement may be executed in
counterparts, and each counterpart shall have the same force and effect as an
original and shall constitute an effective, binding agreement on the part of
each of the undersigned.  Facsimile and photocopies of this Agreement
shall have the same effect as originals.

     

    13. Waivers:
No waiver by any Party of any default, misrepresentation, or breach of warranty
or covenant hereunder, whether intentional or not, shall be deemed to extend to
any prior or subsequent default, misrepresentation, or breach of warranty or
covenant hereunder or affect in any way any rights arising by virtue of any
prior or subsequent such occurrence and all waivers must be in writing, signed
by the waiving Party, to be effective.

     

    14. Further
Assurances: Each Party shall, at the reasonable request of any other
Party hereto, execute and deliver to such other Party all such further
instruments, assignments, assurances and other documents, and take such actions
as such other Party may reasonably request in connection with the carrying out
the terms and provisions of this Agreement.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    15. Voluntary
Execution of Agreement:  This Agreement is executed voluntarily
and without any duress or undue influence on the part or behalf of the Parties
hereto, with the full intent of releasing all claims. The Parties acknowledge
that:

    


    
      	
               
      

            	
              (a)

            	
              They
      have read this Agreement;

            


    

    


    
      	
               
      

            	
              (b)

            	
              They
      have been represented in the preparation, negotiation, and execution of
      this Agreement by legal counsel of their own choice or that they have
      voluntarily declined to seek such
counsel;

            


    

    


    
      
        	
                 
      

              	
                (c)

              	
                They
      understand the terms and consequences of this Agreement and of the
      releases it contains;

              
	 	 	 
	 	(d)	      
                They
      are fully aware of the legal and binding effect of this Agreement;
      and

              
	 	 	 
	 	(e)	      
                Each
      signatory to this Agreement below represents that he/she has the requisite
      authority and has been duly authorized by his/her respective corporation
      to execute this
Agreement.

              


      

    

     

    IN
WITNESS WHEREOF, the Parties have executed this Agreement on the respective
dates set forth below.

    


    STW
RESOURCES Holdings Corp.

    


    


    By:
____________________________

    Stanley T. Weiner, Its Chairman &
CEO

    


    


    Agreement Ratified and
Approved by STW Resources, Inc.

    


    By:                                _______________

    Stanley T. Weiner, Its
President

    


    ­­­­­­­­­­­­­­­­­­­­

    GE Ionics, Inc.

    


    By:  ____________________________

    William Heins,
its___________