RESCISSION AND SUBSTITUTION AGREEMENT AND RELEASE
Exhibit 10.35
RESCISSION
AND SUBSTITUTION AGREEMENT AND RELEASE
THIS RESCISSION AND SUBSTITUTION
AGREEMENT, made this 24th day of August, 2007 by and
between:
GLOBAL RESOURCE CORPORATION, a
Nevada corporation with its principal offices located at 000 Xxxxxxxxxx Xxxx,
Xxxx #0, Xxxx Xxxxxx, Xxx Xxxxxx 00000 (hereinafter "Global")
AND
NUTMEG/MERCURY FUND, LLLP, a
limited liability limited partnership organized under the laws of Minnesota with
principal offices located at 000 Xxxxxx Xxxxx, Xxxxx 00, Xxxxxxxxxx, Xxxxxxxx
(hereinafter "Nutmeg")
WITNESSETH
THAT:
WHEREAS, Global engaged Westor
Capital Group, Inc. ("Westor") to conduct a private placement of its securities
(the "Westor investment transaction"), such "securities" consisting of 10%
Convertible Debentures together with Class A Common Stock Purchase Warrants,
Class B Common Stock Purchase Warrants, and Class C Common Stock Purchase
Warrants;
WHEREAS, such private
placement offering was to have been completed within 45 days following certain
defined events which, in fact, occurred by April 26, 2007;
WHEREAS, by the end of the 45
days thereafter only Nutmeg and one other fund had invested, and Nutmeg had
subscribed for $500,000 and had paid in 50% of that ($250,000) and the private
placement, as a whole, had not been completed as between Westor and
Global;
WHEREAS, certain events
occurred, including (1) the de-listing of Global's Common Stock from the OTC
Bulletin Board and its trading on the so-called Pink Sheets and (2) the refusal
of the trustee of the liquidating trusts to delay the distribution of the Global
shares held by it for a period of 6 months after effectiveness of the
registration statement, as a result of which Global violated certain covenants
and/or representations contained in the private placement documents or related
documents and Global determined not to extend the offering, but to withdraw it,
and Westor and the Escrow (Citizens Bank) were so notified;
WHEREAS, Nutmeg and the other
fund, as the two investors, have notified Global of what it believes to be
misrepresentations and Global made an offer of rescission to both Nutmeg and the
other fund;
WHEREAS, the parties have
negotiated, have reached certain understandings, and desire to formalize and
evidence their understandings;
NOW, THEREFORE, intending to
be legally bound, and in consideration of the mutual promises and covenants
contained herein, the parties have agreed, and do hereby agree, as
follows:
ARTICLE
I
RESCISSION
AND SUBSTITUTION
The
parties hereby mutually rescind the entire Westor investment transaction. The
intent is: (i) to nullify and void, ab initio,
the execution by the parties of:
a. The
10% Secured Convertible Debenture;
b. The
Class A Common Stock Purchase Warrants;
c. The
Class B Common Stock Purchase Warrants;
d. The
Class C Common Stock Purchase Warrants;
e. The
Registration Rights Agreement;
f. The
Securities Purchase Agreement; and
g. All
other documents and instruments related to the Westor investment transaction;
and (ii) to return the parties to their original status as though such documents
had never been executed and none of such documents shall have any legal effect.
Global has previously repaid to Nutmeg the sum invested ($250,000) together with
interest at the rate of9% (being the legal rate of interest on judgments in the
State of Illinois) from April 27, 2007 to the date of such rescission
repayment.
In
substitution and exchange for the rescinded investments, Global shall
issue to Nutmeg, the following:
a. Two
Hundred Fifty Thousand (250,000) Common Stock Purchase Warrants, exercisable at
eighty cents ($.80) per share, at any time and from time to time until the
expiration date, at the option of the warrant holder. The expiration date shall
be December 31, 2009. In
recognition of the fact that Nutmeg has been at market risk during the
period from April 27, 2007 to the date hereof, the Warrants shall bear an
issuance date of April 27, 2007. These warrants shall not contain any
anti-dilution or cashless exercise provisions.
b. Two
Hundred Fifty Thousand (250,000) Common Stock Purchase Warrants, of which 83,333
shall be exercisable at one dollar and sixty-five cents ($1.65), 83,333 shall be
exercisable at one dollar and eighty-five cents ($1.85) and 83,334 shall be
exercisable at two dollars. The warrants shall be exercisable at any time and
from time to time until the expiration date, at the option of the warrant
holder. The expiration date shall be December 31, 2009. These warrants shall
contain a cashless exercise provision but shall not contain any anti-dilution
provisions. In
recognition of the fact that Nutmeg has been at market risk during the
period from April 27, 2007 to the date hereof, the Warrants shall bear an
issuance date of April 27, 2007.
Global
shall include the shares underlying the foregoing 500,000 warrants in its SB-2
Registration Statement currently in preparation and, following effectiveness,
shall keep such Registration Statement current at all times until December 31,
2009. In
the event that Global does not file the Registration Statement including
such shares with the SEC by September 30, 2007 Global shall issue to Nutmeg
31,250 shares of its Common Stock as penalty. In
the event that Global has not secured effectiveness of the Registration
Statement by February 29, 2008, Global shall issue to Nutmeg an additional
31,250 shares of its Common Stock as a penalty.
ARTICLE
II
RELEASES,
COVENANTS NOT TO XXX AND CONSIDERATION THEREFOR
Nutmeg
hereby remises, releases and forever discharges Global, its subsidiaries and
affiliates, its past, present and future officers, directors, employees,
accountants, attorneys, agents and representatives and stockholders of and from
any and all debts, demands, actions, causes of action, suits, proceedings,
agreements, contracts, judgments, damages, accounts, reckonings, executions,
claims and liabilities whatsoever of every name and nature, whether known or
unknown, whether or not well founded in fact or in law, and whether in law or in
equity or otherwise, which Nutmeg ever had, now has, or which Nutmeg's
assignees, shareholders, members, partners and successors can, shall or may have
for or by reason of any matter, cause, or anything whatsoever, arising, directly
or indirectly, from the Westor investment transaction and/or the documents
rescinded above.
Page 2 of
5
Nutmeg
shall not, directly, or indirectly, as an investor in the Westor investment
transaction, file, commence, initiate or instigate any formal or informal
investigation by any regulatory or administrative agency or body, or any suit
(at law or in Equity), arbitration, administrative proceeding, or any other
action or proceeding of any kind against Global, its past, present and future
officers, directors, employees, accountants, attorneys, agents, consultants and
representatives and stockholders.
Global
hereby remises, releases and forever discharges Nutmeg, their members, managers
and affiliates, their past, present and future officers, directors, employees,
accountants, attorneys, agents and representatives and stockholders of and from
any and all debts, demands, actions, causes of action, suits, proceedings,
agreements, contracts, judgments, damages, accounts, reckonings, executions,
claims and liabilities whatsoever of every name and nature, whether known or
unknown, whether or not well founded in fact or in law, and whether in law or in
equity or otherwise, which Global ever had, now has, or Global and/or Global's
assignees, shareholders, members, partners and successors can, shall or may have
for or by reason of any matter, cause, or anything whatsoever, arising, directly
or indirectly, from the Westor investment transaction and/or the documents
rescinded above.
Global
shall not, in connection with the Westor investment transaction, directly, or
indirectly, file, commence, initiate or instigate any suit (at law or in
Equity), arbitration, administrative proceeding, or any other action or
proceeding of any kind against Nutmeg, its past, present and future officers,
directors, employees, accountants, attorneys, agents, consultants and
representatives and stockholders.
The
parties acknowledge and agree that the foregoing releases and covenants are
related solely to the rescission of the Westor Investment Transaction and are in
consideration for each other, not separate or additional consideration
hereunder. No claim shall be made by either party that its release and/or
covenant constitutes consideration with respect to the substituted securities or
the exercise of the warrants.
ARTICLE
III
ADDITIONAL
INVESTMENT
During the period from the date hereof
to October 31, 2007 Global shall advise Nutmeg, within three (3) business days
thereof, of the terms of each and every financing offer (and any amendments
thereto) made to Global by any third party and each and every financing offer
(and any amendments thereto) made by Global to any third party, and Nutmeg shall
have the right to participate in such financing upon the same terms and
conditions as the third party to the dollar amount ($500,000) of its original,
rescinded subscription under Article I.
Page 3 of
5
ARTICLE
IV
MISCELLANEOUS
1.
THIRD
PARTY BENEFICIARY.
This Agreement shall not confer any rights or remedies upon any person
other than the parties and their respective successors and permitted
assigns.
2. CONTROLLING LAW;
VENUE. This
Agreement and each of the other documents ancillary hereto shall be governed by,
and interpreted and construed in accordance with, the internal laws of the State
of Illinois (without regard to its conflicts of law principles). Venue for the
adjudication of any claim or dispute arising out of this Agreement or any of the
other ancillary documents shall be proper only in the state or federal courts of
the State of Illinois, and all parties to this Agreement and its ancillary
documents hereby consent to such venue.
3. EXPENSES. Each party shall be
responsible for its own costs and expenses) incurred in connection with this
Agreement and the transactions contemplated hereby.
4. PUBLIC
DISCLOSURE. Nutmeg
acknowledges that Global is a reporting company under the Securities Exchange
Act of 1934 and must disclose this Agreement and the terms and conditions
hereof. Accordingly, Nutmeg authorizes Global to issue such press release and
file such periodic report as may be required.
5. ATTORNEY
FEES. Should a
party default in the terms or conditions of this Agreement and suit be filed as
a result of such default, the prevailing party shall be entitled to recover all
costs incurred as a result of such default including all costs and reasonable
attorney fees, expenses and court costs through trial and appea1.
6. WAIVER OF
BREACH. The
waiver by a party of a breach of any provision of this Agreement by another
party shall not operate or be construed as a waiver of any subsequent breach by
the breaching party.
7. BENEFIT OF AGREEMENT
AND ASSIGNMENT. The
rights and obligations of the parties under this Agreement shall inure to the
benefit of, and shall be binding upon, the successors and assigns of the
parties. This agreement may not be assigned by either party or by operation of
law or otherwise.
8. NOTICES. Any notice required or
permitted to be given under this Agreement shall be sufficient if in writing,
and if sent by certified mail, return receipt requested, to the principal office
or residence of the party being notified.
Page 4 of
5
9. ENTIRE
AGREEMENT. This instrument contains the entire
agreement of the parties and may be modified only be agreement in
writing, signed by the party against whom enforcement of any waiver,
change, modification, extension or discharge is sought. If any provision of this
Agreement is declared void, such provision shall be deemed severed from this
Agreement, which shall otherwise remain in full force and effect. The terms
herein may not be modified or waived orally, but only by an instrument in
writing signed by the party against which enforcement of the modification
or waiver (as the case may be) is sought.
10.
ARBITRATION. Any controversy or claim arising out of
or relating to this Agreement shall be settled by arbitration in Xxxx County,
Illinois, in accordance with the applicable rules, then obtaining, of the
American Arbitration Association.
11. COUNTERPARTS. This Agreement may be
executed in two or more counterparts, each of which shall be deemed an original
but all of which together shall constitute one and the same
instrument.
IN WITNESS
WHEREOF, the
parties hereto, intending to be
legally bound, have executed this Agreement.
|
GLOBAL
RESOURCE CORPORATION
|
|
|
By:
/s/ Xxxxx X.
Xxxxxxx
|
|
|
Xxxxx
X. Xxxxxxx, Pres./CEO
|
|
|
NUTMEG/MERCURY FUND, LLLP
|
|
|
By:
/s/
signature
|
|
|
Manager
|
Page
5 of 5
