Exhibit 2.2
SAND HILLS PARTNERS, L.L.C.
A Maryland limited liability company
Limited Recourse Promissory Note
(the "Note"")
FIXED DOLLAR PRINCIPAL: USD$1,500,000
Original Issue Date: March 1, 2006
FOR VALUE RECEIVED, Sand Hills Partners, L.L.C., a Delaware limited liability
company (hereinafter called the "Company" or "Maker") which term includes any
successor corporation, hereby promises to pay to David M. Klausmeyer or his
heirs, executors or assigns ("Holder"), the principal sum of One Million Five
Hundred Thousand Dollars ($1,500,000) ("Fixed Dollar Principal"), as follows:
1. Payment of Fixed dollar Principal.
A. Maker shall pay to Holder, an amount equal to 50% of any "Net
Proceeds" derived by Maker from its ownership interests in and to the
shares of G/O International, Inc., a Colorado corporation ("G/O")
and/or Waterbury Resources, Ltd., a Cayman Islands company and
subsidiary of G/O ("Waterbury") until payment of USD$200,000 have
been paid to Holder, after which the balance of the Fixed Dollar
Principal of $1,300,000 shall be paid through the tender of an amount
equal to 37% of any Net Proceeds derived by Maker from its ownership
interests in and to the shares of G/O and/or Waterbury, until the
full Fixed Dollar Amount is paid in full.
B. Holder shall be entitled to the lesser of: (1) the balance of any
Fixed Dollar Principal due and owing and not otherwise paid pursuant
to Paragraph A herein above or (2) an amount equal to 37% of the
"Transaction Value" in the event of: (i) the sale of the Company's
assets ("Asset Sale"), (ii) the unauthorized sale or other transfer
of any existing partnership interests in the Company ("Sale or
Transfer of Existing Partnership Interests"). The "Transaction Value"
shall equal the total sum of all amounts payable to all of the
Company's Partners, by reason of their interests in the Company as
the result of an Asset Sale, or a Sale or Transfer of Existing
Partnership Interests as defined herein above,
C. Holder shall be entitled to the balance of the Fixed Dollar Principal
upon the occurrence of an event of default as provided in paragraph 5
herein below ("Default Event").
D. Net Proceeds shall mean any cash derived by the Company or SHP as the
result of the ownership of shares of G/O and or Waterbury along with
any other shares that may be distributed by either G/O or Waterbury
("distributed shares") which, distributed shares, shall either be
sold for cash by the Company or further distributed to Holder in
which case, for purposes of calculating the amount paid to Holder as
Fixed Dollar Principal, hereunder, shall be deemed to be payment
equal to the value place on such interests at the time of
distribution by G/O or Waterbury.
2. Pledge Agreement. Simultaneous with the execution and delivery of this
Note, Maker has executed and delivered to Holder its Pledge Agreement ("Pledge
Agreement") thereby securing its performance under this Note by the pledge of
one hundred percent of its interests in and to the Company. Holder hereby
acknowledges that this is a limited recourse note and Holders sole remedy in
the event of a default hereunder shall be to proceed against the collateral
provided under the Pledge Agreement or any collateral pledged by the
Guarantor, as provided herein.
3. Unconditional Guaranty and Pledge. The obligation of Maker to pay all
sums due and owing under this Note is guaranteed by the Company's limited
guarantee, which guaranty is secured only by its pledge of all of its assets
(the "Limited Guaranty and Pledge Agreement").
4. Timing and Form of Payment. Payments on this Note due under paragraph 1A
will be made by Maker within ten business days after receipt of any Net
Proceeds by the Company. Payments on this Note due under paragraph 1B will be
made by Maker within 30 business days after completion of an Asset Sale or
Sale or Transfer of Existing Partnership Interests. Payment on this Note under
paragraph 1C shall be due upon the occurrence of an event of default, or in
the event that payment is due pursuant by check delivered to the offices of
Holder located at such location as shall from time to time be designated to
Maker in writing by Holder, in such coin or currency of the United States of
America as it the time of payment is legal tender for payment of public and
private debts.
5. Default. The occurrence of any of the following events of default shall,
at the option of the Holder hereof, make all sums of Principal (both Fixed
Dollar and/or Variable) and interest then remaining unpaid hereon and all
other amounts payable hereunder immediately due an payable, all without
demand, presentment or notice, all of which hereby are expressly waived:
5.1 Failure to Pay Principal or Interest. The Maker fails to pay any
installment of Fixed Dollar Principal.
5.2 Breach of Covenant. The Maker breaches any covenant or other
term or condition of this Note, the Security Agreement or the Partnership
Interest Purchase Agreement or the Guarantor breaches any covenant or other
term or condition of the Guaranty and Pledge, or any document or instrument
executed and delivered in connection therewith.
5.3 Breach of Representations and Warranties. Any representation or
warranty of the Maker made in this Note, the Security Agreement or the
Partnership Interest Purchase Agreement or in any agreement, statement or
certificate given in writing pursuant hereto or in connection herewith; or any
representation or warranty made by the Guarantor in Guaranty and Pledge or any
document or instrument executed and delivered in connection therewith shall be
false or misleading in any material respect.
5.4 Receiver or Trustee. The Maker or any Guarantor shall make an
assignment for the benefit of creditors, or apply for or consent to the
appointment of a receiver or trustee for it or for a substantial part of its
property or business; or such a receiver or trustee shall otherwise be
appointed.
5.5 Judgments. Any money judgment, writ or similar process shall be
entered or filed against Maker or any Guarantor or any of their respective
properties or other assets for more than $25,000, and shall remain unvacated,
unbonded or unstayed for a period of ten (10) days.
5.6 Bankruptcy. Bankruptcy, insolvency, reorganization or
liquidation proceedings or other proceedings or relief under any bankruptcy
law or any law for the relief of debtors shall be instituted by or against the
Maker or any Guarantors.
5.7 Notice of Event of Default. Maker shall provide Holder written
notice of the occurrence of an event of default within 24 hours after Maker is
notified or becomes aware of such event of default. Failure to provide such
notice shall be deemed a further event of default.
8. Application of Payments. Any payment made against the indebtedness
evidenced by this Note shall be applied against the following items in the
following order: (1) cost of collection including reasonable attorney's fees
incurred or paid and all costs, expense, default interest, late charges and
other expense incurred by Holder and reimbursable to Holder pursuant to this
Note; (2) outstanding Fixed Dollar Principal due under this Note.
9. Assignment of Note. This Note may not be assigned by Holder without the
express written consent of the Maker.
10. Waiver of Presentment. Maker and Guarantors shall be jointly and
severally liable for the obligations hereby and hereby jointly and severally
waive presentment and demand for payment, notice of dishonor, protest and
notice of protest, and any and all lack of diligence or delays in commencement
or enforcement hereof. Said parities consent to any modification or extension
of time (whether one or more) of payment hereof, the release of all or any
part of the security for the payment hereof and the release of any party
liable for payment of this obligation. Any modification, extension or release
may be without notice to any such party and shall be discharge said parties'
liability hereunder.
IN WITNESS WHEREOF, each of the parties have caused this instrument to be duly
executed as of the date first above written.
MAKER
Sand Hills Partners, L.L.C. a Delaware
Limited Liability Company
/s/ George Jarkesy
George Jarkesy, Voting Member
HOLDER
/s/ David M. Klausmeyer
David M. Klausmeyer