EXHIBIT 10.12
SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (this "Agreement") is made as of
December 21, 2007, by and between GLOBAL RESOURCE CORPORATION, a Nevada
corporation (the "Company") with an office at Bloomfield Business Park, 408
Bloomfield Dr. Xxxx 0, Xxxx Xxxxxx, Xxx Xxxxxx 00000, and PROFESSIONAL OFFSHORE
OPPORTUNITY FUND, LTD. (the "Purchaser").
RECITALS
WHEREAS, the Company has authorized the sale and issuance of common stock,
warrants and common stock issuable upon exercise of the warrants (collectively,
the "Securities") as provided herein;
WHEREAS, at the Closing (as defined herein), the Company desires to sell,
and the Purchaser desires to purchase, severally and not jointly, the Securities
upon the terms and conditions stated in this Agreement; and
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
promises, representations, warranties and covenants hereinafter set forth and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1
AUTHORIZATION AND SALE OF SECURITIES
1.1 AUTHORIZATION. The Company has authorized the sale and issuance of up
to 1,250,000 shares of its common stock, par value $.001 per share (the "Common
Stock"), representing as of the Closing Date 1.091% of the total issued and
outstanding share capital of the Company on a fully diluted basis, and warrants
(the "Warrants") to purchase up to 625,000 shares of its Common Stock.
1.2 SALE OF SECURITIES. At the Closing, subject to the terms and conditions
of this Agreement, the Company agrees to issue and sell to the Purchaser and the
Purchaser agrees to purchase from the Company Securities consisting of the
instruments identified in (a) and (b) below, and to execute and deliver the
other documents identified in (c) and (d) below:
(A) Stock certificates for the number of shares of Common Stock set
forth opposite the Purchaser's name on Exhibit A under the heading "Common
Stock," together with a no-stop letter (the "No-Stop Agreement") in form
satisfactory to the Purchaser, addressed to the Company's transfer agent. Such
shares are referred to herein as the "Shares.";
(B) Warrants to purchase the number of shares of Common Stock set
forth opposite the Purchaser's name on EXHIBIT A under the heading "Common
Shares Underlying Warrants". The shares of Common Stock issuable upon exercise
of the Warrants are referred to herein as the "WARRANT SHARES." The number of
Warrant Shares shall be 625,000;
(C) An Escrow Agreement (the "Escrow Agreement") in respect of the
Adjustment Shares (defined in Section 2.3 below); and
(D) A Registration Rights Agreement (the "Registration Rights
Agreement") between the Company and the Purchaser.
(E) A Lock-up Agreement (the "Lock-Up Agreement") between the Company
and MJACC in connection with 1,000 shares of Preferred Stock of the Company
owned by MJACC. This Agreement, the Lock-Up Agreement, the Escrow Agreement, the
Registration Rights Agreement, the No-Stop Agreement and the Opinion are
sometimes collectively referred to herein as the "Transaction Documents."
ARTICLE 2
CLOSING DATE; DELIVERY
2.1 CLOSING DATE. The closing of the purchase and sale of the Securities
hereunder (the "CLOSING") shall be held at the offices of Xxxxxxxx & Worcester
LLP, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 10:00 a.m. New
York time on the date hereof or at such other time and place upon which the
Company and the Purchaser shall agree.
2.2 DELIVERY. At the Closing, the Company will deliver to the Purchaser a
duly executed stock certificate for the Shares set forth opposite the
Purchaser's name on Exhibit A, a Warrant representing the right to purchase the
number of Warrant Shares which the Purchaser is entitled to purchase and a
signed counterpart of each of the other Transaction Documents. In consideration
for such delivery the Purchaser shall deliver to the Escrow Agent (the "Escrow
Agent") the purchase price therefor (the "Purchase Price") by wire transfer of
immediately available funds, and the Escrow Agent will hold it in escrow and
release it in accordance with the terms of Section 2.3 hereof and the Escrow
Agreement. The Company shall also deliver to the Purchaser (a) the legal opinion
of Xxx X. Xxxxxxx, P.C., counsel to the Company, in form and substance
satisfactory to the Purchaser, including, without limitation, as to the
Purchaser's ability to rely on Rule 144 under the Securities Act of 1933, as
amended (the "Securities Act"), and (b) a certificate from a duly authorized
officer of the Company certifying that the representations made by the Company
in Article 3 are true and correct as of the Closing.
2.3 PURCHASE PRICE. In consideration for the Shares sold and issued by the
Company to the Purchaser in accordance with the terms and conditions of this
Agreement, the Purchaser will pay to the Company One Million Two Hundred Fifty
Thousand Dollars, which will be paid as follows: (i) One Million Dollars which
will be released by the Escrow Agent upon the delivery of all duly executed
Transaction Documents, including the Opinion and the No-Stop Agreement and the
filing by the Company of a Current Report on Form 8-K, as evidenced on the SEC's
website (xxx.xxx.xxx); and (ii) Two Hundred Fifty Thousand Dollars ($250,000)
(the "Escrow Amount") which will be held by the Escrow Agent for a period of up
to fifteen (15) days after the Trigger Date, and released, at Purchaser's sole
discretion and instructions to Escrow Agent, as follows: (x) to the Company, in
which case the Purchaser will retain all of the Adjustment Shares, or (y) to
Purchaser, in which case Purchaser shall relinquish Two Hundred Fifty Thousand
Adjustment Shares back to the Company.
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2.4 ADJUSTMENT SHARES. At the Closing, the Company shall deliver to the
Escrow Agent two stock certificates, each in the name of the Purchaser, one of
which shall be for an aggregate of Four Hundred Thousand (400,000) shares of
Common Stock, and the second of which shall be for an aggregate of Two Hundred
Fifty Thousand (250,000) shares of Common Stock (collectively, the "Adjustment
Shares"). The Adjustment Shares shall be released to the Purchaser under the
circumstances described in Section 5.3 of this Agreement and in accordance with
the terms and conditions of the Escrow Agreement.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Purchaser, as of the date
hereof, as follows:
3.1 ORGANIZATION AND STANDING. The Company is a corporation duly organized
and validly existing under, and by virtue of, the laws of the State of Nevada
and is in good standing under the laws of said state, with requisite corporate
power and authority to own its properties and assets and to carry on its
business as currently conducted. The Company is not in violation of any of the
provisions of its Articles of Incorporation (the "Articles") or Bylaws.
3.2 CORPORATE POWER; AUTHORIZATION. The Company has all requisite legal and
corporate power and has taken all requisite corporate action to execute and
deliver this Agreement and the other Transaction Documents, to sell and issue
the Securities, to issue the Warrant Shares upon exercise of the Warrants in
accordance with the terms of such Warrants, and to carry out and perform all of
its obligations under this Agreement and the Warrants. This Agreement, the
Warrants, the Escrow Agreement and the Registration Rights Agreement constitute,
legal, valid and binding obligations of the Company, enforceable in accordance
with their respective terms, except (a) as limited by applicable bankruptcy,
insolvency, reorganization or similar laws relating to or affecting the
enforcement of creditors' rights generally and (b) as limited by equitable
principles generally. The execution and delivery of the Transaction Documents do
not, and the performance of the Transaction Documents and the compliance with
the provisions hereof and thereof, including the issuance, sale and delivery of
the Securities by the Company will not, conflict with, or result in a breach or
violation of the terms, conditions or provisions of, or constitute a default
under, or result in the creation or imposition of any lien pursuant to the terms
of, the Articles or Bylaws of the Company, each as amended to date, or any
statute, law, rule or regulation or any state or federal order, judgment or
decree or any indenture, mortgage, lease or other agreement or instrument to
which the Company or any of its properties is subject, except for any conflict,
breach, violation, default or imposition of a lien (other than pursuant to the
terms of the Articles or Bylaws) that would not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
assets, liabilities, financial condition, business or operations of the Company.
3.3 ISSUANCE AND DELIVERY OF THE SECURITIES. The Securities, including,
without limitation, the Adjustment Shares, are duly authorized and, when issued
at the Closing, will be validly issued, fully paid and nonassessable and the
Warrant Shares are duly authorized and, upon exercise of the Warrants in
accordance with the terms thereof, will be validly issued, fully paid and
nonassessable and shall have been issued in compliance with all applicable
federal and state securities laws, including, without limitation, the Securities
Act. The issuance and delivery of the Securities are not subject to any right of
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first refusal, preemptive right, right of participation, or any similar right
existing in favor of any person or any liens or encumbrances. When issued in
compliance with the provisions of this Agreement and the Articles, the issuance
of the Securities hereunder does not require the approval of the Company's
stockholders under the provisions of the Articles or Nevada law, or, any stock
exchange or self-regulatory organization.
3.4 SEC DOCUMENTS; FINANCIAL STATEMENTS. Each report delivered to the
Purchaser is a true and complete copy of such document as filed by the Company
with the Securities and Exchange Commission (the "SEC"). The Company has filed
in a timely manner all documents that the Company was required to file with the
SEC, such documents, together with the exhibits thereto (the "SEC DOCUMENTS"),
under the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT")
during the twelve calendar months preceding the date hereof. As of their
respective filing dates, all SEC Documents complied in all material respects
with the requirements of the Exchange Act. None of the SEC Documents as of their
respective dates contained any untrue statement of material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they were
made, not misleading. The financial statements of the Company included in the
SEC Documents (the "FINANCIAL STATEMENTS") comply in all material respects with
applicable accounting requirements and with the published rules and regulations
of the SEC with respect thereto. The Financial Statements have been prepared in
accordance with generally accepted accounting principles consistently applied
and fairly present the consolidated financial position of the Company and its
subsidiaries, if any, at the dates thereof and the consolidated results of their
operations and consolidated cash flows for the periods then ended (subject, in
the case of unaudited statements, to normal, recurring adjustments or to the
extent that such unaudited statements do not include footnotes). The Company has
complied with all requirements under applicable securities laws to enable the
Purchaser to use Rule 144 under the Securities Act for sales of the Common
Stock, subject only to the applicable holding period therefor.
3.5 GOVERNMENTAL CONSENTS. No consent, approval, order or authorization of,
or registration, qualification, designation, declaration or filing with, any
federal, state, or local governmental authority on the part of the Company is
required in connection with the consummation of the transactions contemplated by
this Agreement except for compliance with the securities and blue sky laws in
the states in which the Shares and Warrants are offered and/or sold, which offer
and sale will be effected in compliance with such laws.
3.6 CAPITALIZATION.
(A) The authorized capital stock of the Company consists solely of
2,000,000,000 shares of Common Stock of which, as of the date hereof,
immediately prior to the Closing, 30,726,363 shares were issued and are
outstanding, and 50,000,000 shares of preferred stock, of which as of the date
hereof One Thousand (1,000) shares designated MJACC Preferred Stock were issued
and are outstanding in the name of X.X. Advanced Corporate Communication, Inc.
and 35,236,188 shares designated 2006 Series of Convertible Preferred Stock were
issued and are outstanding in the name of Xxxxx X. Xxxxxxx.
(B) The One Million Two Hundred Fifty Thousand (1,250,000) shares of
Common Stock to be issued to the Purchaser in accordance with the terms and
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conditions of this Agreement, shall represent, immediately after the Closing
1.091% of the Company's total issued and outstanding share capital on a fully
diluted basis.
(C) Except (i) as disclosed to the Purchaser in Schedule 3.6 hereto or
(ii) as contemplated herein, there are no outstanding warrants, options,
convertible or exchangeable securities or other rights, agreements or
arrangements of any character under which the Company is or may be obligated to
issue any equity securities of any kind.
3.7 LITIGATION. There are no actions, suits, proceedings or investigations
pending or, to the best of the Company's knowledge, threatened against the
Company or any of its properties before or by any court or arbitrator or any
governmental body, agency or official in which there is a reasonable likelihood
(in the reasonable judgment of the Company) of an adverse decision that (a)
could have a material adverse effect on the assets, liabilities, financial
condition, business or operations of the Company, or (b) could impair the
ability of the Company to perform in any material respect its obligations under
this Agreement or the Warrants or any other Transaction Document.
3.8 COMPANY NOT AN "INVESTMENT COMPANY". The Company has been advised by
competent counsel of the rules and requirements under the Investment Company Act
of 1940, as amended (the "INVESTMENT COMPANY ACT"). The Company is not, and
immediately after receipt of payment for the Securities will not be, an
"investment company" or an entity "controlled" by an "investment company" within
the meaning of the Investment Company Act and shall conduct its business in a
manner so that it will not become subject to the Investment Company Act.
3.9 COMPLIANCE. The Company's Common Stock is registered pursuant to
Section 12(g) of the Exchange Act and is listed on the over-the-counter bulletin
board (the "OTCBB"), and the Company has taken no action designed for the
purpose of, or likely to have the effect of, terminating the registration of its
Common Stock under the Exchange Act or de-listing the Common Stock from the
OTCBB, nor has the Company received any notification that the SEC or the OTCBB
is contemplating terminating such registration or listing. The Company is in
material compliance with the listing and maintenance requirements for continued
listing of the Common Stock on the OTCBB.
3.10 USE OF PROCEEDS. The proceeds of the sale of the Securities shall be
used by the Company for working capital.
3.11 BROKERS AND FINDERS. Except as otherwise disclosed to the Purchaser in
writing prior to the date hereof, no person or entity will have, as a result of
or in connection with the transactions contemplated by this Agreement, any valid
right, interest or claim against or upon the Company or the Purchaser for any
commission, fee or other compensation pursuant to any agreement, arrangement or
understanding, written or oral, entered into by or on behalf of the Company.
3.12 INTELLECTUAL PROPERTY.
(A) "INTELLECTUAL PROPERTY" shall mean patents, patent applications,
trademarks, trademark applications, service marks, trade names, copyrights,
trade secrets, licenses, information and other proprietary rights and processes.
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(B) Except as disclosed in the SEC Documents and to the best knowledge
of the Company, the Company owns or has the valid right to use all of the
Intellectual Property that is necessary for the conduct of the Company's
business as currently conducted or as currently proposed to be conducted free
and clear of all material liens and encumbrances.
(C) Except as disclosed to the Purchaser in writing or as disclosed in
the SEC Documents and to the knowledge of the Company, (i) the conduct of the
Company's business as currently conducted does not infringe or otherwise
conflict with (collectively, "INFRINGE") any Intellectual Property rights of any
third party or any confidentiality obligation owed by the Company to a third
party and the Company has not received any written notice of any such
Infringement, and (ii) the Intellectual Property and confidential information of
the Company are not being Infringed by any third party.
3.13 QUESTIONABLE PAYMENTS. Neither the Company nor, to the best knowledge
of the Company, any of its current or former stockholders, directors, officers,
employees, agents or other persons acting on behalf of the Company, has on
behalf of the Company or in connection with its business: (a) used any corporate
funds for unlawful contributions, gifts, entertainment or other unlawful
expenses relating to political activity; (b) made any direct or indirect
unlawful payments to any governmental officials or employees from corporate
funds; (c) established or maintained any unlawful or unrecorded fund of
corporate monies or other assets; (d) made any false or fictitious entries on
the books and records of the Company; or (e) made any unlawful bribe, rebate,
payoff, influence payment, kickback or other unlawful payment of any nature.
3.14 TRANSACTIONS WITH AFFILIATES. Except as disclosed to the Purchaser in
Schedule 3.14 hereto and in the SEC Documents, none of the officers, directors
or shareholders of the Company and, to the best knowledge of the Company, none
of the employees of the Company is presently a party to any transaction with the
Company or to a presently contemplated transaction (other than for services as
employees, officers and directors) that would be required to be disclosed
pursuant to Item 404 of Regulation S-B promulgated under the Securities Act of
1933.
3.15 INSURANCE. The Company maintains and will continue to maintain
insurance with financially sound and reputable insurers in such amounts and
covering such risks and in such amounts as are reasonably adequate, prudent and
consistent with industry practice for the conduct of its business and the value
of its property, all of which insurance is in full force and effect. The Company
has not received notice from, and has no knowledge of any threat by, any insurer
that has issued any insurance policy to the Company that such insurer intends to
deny coverage under or cancel, discontinue or not renew any insurance policy in
force as of the date hereof.
3.16 NO ADDITIONAL AGREEMENTS. The Company does not have any agreement or
understanding with the Purchaser with respect to the transactions contemplated
by this Agreement other than as specified in this Agreement.
3.17 ABSENCE OF UNDISCLOSED LIABILITIES. The Company has no material
liabilities of any nature (whether absolute, accrued, contingent or otherwise),
except (i) as and to the extent reflected in the Financial Statements as of and
for the period ended September 30, 2007, and (ii) for liabilities that have been
incurred in the ordinary course of business consistent with past practice since
September 30, 2007 and that would not, individually and in the aggregate,
reasonably be expected to have a material adverse effect on the assets,
financial condition, business or operations of the Company.
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3.18 GOVERNMENTAL AUTHORIZATIONS. The Company has all permits, licenses and
other authorizations of governmental authorities that are required for the
conduct of its business and operations as currently conducted or as currently
proposed to be conducted, the lack of which could materially and adversely
affect the assets, financial condition, business or operations of the Company,
except as described in the SEC Documents. The Company is, and at all times has
been, in compliance with the provisions of its material permits, licenses and
other governmental authorizations.
3.19 NO MATERIAL ADVERSE CHANGE. Except as otherwise disclosed herein or in
the SEC Documents, since September 30, 2007, there have not been any changes in
the assets, liabilities, financial condition or operations of the Company from
that reflected in the Financial Statements except changes in the ordinary course
of business which have not been, either individually or in the aggregate,
materially adverse. The Company does not have pending before the SEC any request
for confidential treatment of information.
3.20 RESERVATION. The Company has duly reserved for issuance such number of
shares of Common Stock as may be issuable from time to time upon exercise or
conversion, as the case may be, of the Securities.
3.21 INTERNAL ACCOUNTING CONTROLS. The Company maintains a system of
internal accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
asset accountability, (iii) access to assets is permitted only in accordance
with management's general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. The
Company has established disclosure controls and procedures (as defined in
Exchange Rules 13a-15 and 15d-15) for the Company and designed such disclosure
controls and procedures to ensure that material information relating to the
Company is made known to the certifying officers by others within those
entities, particularly during the period in which the Company's Form 10-K or
10-Q, as the case may be, is being prepared.
3.22 TITLE TO ASSETS. The Company has good and marketable title in fee
simple to all real property owned by it that is material to the business of the
Company and good and marketable title in all tangible personal property owned by
them that is material to the business of the Company in each case free and clear
of all liens, except for liens that do not materially affect the value of such
property and do not materially interfere with the use made and proposed to be
made of such property by the Company and liens for the payment of federal, state
or other taxes, the payment of which is neither delinquent nor subject to
penalties. Any real property and facilities held under lease by the Company is
held by it under valid, subsisting and enforceable leases with which the Company
is in material compliance.
3.23 REGISTRATION RIGHTS. Except as disclosed to the Purchaser in writing
including the disclosure in Section 2.1(d) of the Registration Rights Agreement,
the Company has not granted or agreed to grant to any person any rights
(including "piggy back" registration rights) to have any securities of the
Company registered with the SEC or any other governmental authority.
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3.24 MATERIAL NON-PUBLIC INFORMATION. The Company confirms that it has not
provided the Purchaser or their agents or counsel with any information that
constitutes or might constitute material non-public information as of the
Closing Date. The Company understands and confirms that the Purchaser shall be
relying on the foregoing representations in effecting transactions in securities
of the Company.
ARTICLE 4
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASER
The Purchaser hereby represents and warrants to the Company:
4.1 AUTHORIZATION. (a) Purchaser has all requisite legal and corporate or
other power and capacity and has taken all requisite corporate or other action
to execute and deliver this Agreement, the Escrow Agreement and the Registration
Rights Agreement, to purchase the Shares and the Warrants to be purchased by it
and to carry out and perform all of its obligations under this Agreement and the
other Transaction Documents, and (b) this Agreement and the other Transaction
Documents to which a Purchaser is a party constitutes the legal, valid and
binding obligation of such Purchaser, enforceable in accordance with its terms,
except (i) as limited by applicable bankruptcy, insolvency, reorganization, or
similar laws relating to or affecting the enforcement of creditors' rights
generally and (ii) as limited by equitable principles generally.
4.2 NO LEGAL, TAX OR INVESTMENT ADVICE. Purchaser understands that nothing
in this Agreement or any other materials presented to Purchaser in connection
with the purchase and sale of the Shares and the Warrants constitutes legal, tax
or investment advice. Purchaser has consulted such legal, tax and investment
advisors as it, in its sole discretion, has deemed necessary or appropriate in
connection with its purchase of the Shares, the Adjustment Shares and the
Warrants.
4.3 INVESTMENT PURPOSE. The Purchaser is purchasing the Securities for its
own account and not with a present view towards the public sale or distribution
thereof, except pursuant to sales registered or exempted from registration under
the 1933 Act.
4.4 ACCREDITED INVESTOR STATUS. The Purchaser is an "accredited investor"
as that term is defined in Rule 501(a) of Regulation D (an "Accredited
Investor").
4.5 RELIANCE ON EXEMPTIONS. The Purchaser understands that the Securities
are being offered and sold to it in reliance upon specific exemptions from the
registration requirements of United States federal and state securities laws and
that the Company is relying upon the truth and accuracy of, and the Purchaser's
compliance with, the representations, warranties, agreements, acknowledgments
and understandings of the Purchaser set forth herein in order to determine the
availability of such exemptions and the eligibility of the Purchaser to acquire
the Shares and the Warrants.
4.6 INFORMATION. The Purchaser and its advisors, if any, have been
furnished with all materials relating to the business, finances and operations
of the Company and materials relating to the offer and sale of the Securities
which have been requested by the Purchaser or its advisors. The Purchaser and
its advisors, if any, have been afforded the opportunity to ask questions of the
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Company. Neither such inquiries nor any other due diligence investigation
conducted by Purchaser or any of its advisors or representatives shall modify,
amend or affect Buyer's right to rely on the Company's representations and
warranties contained in Section 2 above.
4.7 GOVERNMENTAL REVIEW. The Purchaser understands that no United States
federal or state agency or any other government or governmental agency has
passed upon or made any recommendation or endorsement of the Securities.
4.8 TRANSFER OR RESALE. The Purchaser understands that the sale or re-sale
of the Securities has not been and is not being registered under the 1933 Act or
any applicable state securities laws, and the Securities may not be transferred
unless
(1) the Securities are sold pursuant to an effective registration statement
under the 1933 Act,
(2) the Purchaser shall have delivered to the Company an opinion of
counsel, which opinion and counsel are acceptable to the Company, to the effect
that the Securities to be sold or transferred may be sold or transferred
pursuant to an exemption from such registration,
(3) the Securities are sold or transferred to an "affiliate" (as defined in
Rule 144 promulgated under the 1933 Act (or a successor rule) ("Rule 144")) of
the Purchaser who agrees to sell or otherwise transfer the Securities only in
accordance with this Section 2(f) and who is an Accredited Investor,
(4) the Securities are sold pursuant to Rule 144;
(ii) any sale of such Securities made in reliance on Rule 144 may be made
only in accordance with the terms of Rule 144 and further, if Rule 144 is not
applicable, any resale of such Securities under circumstances in which the
seller (or the person through whom the sale is made) may be deemed to be an
underwriter (as that term is defined in the 0000 Xxx) may require compliance
with some other exemption under the 1933 Act or the rules and regulations of the
SEC thereunder; and
(iii) neither the Company nor any other person is under any obligation to
register such Securities under the 1933 Act or any state securities laws or to
comply with the terms and conditions of any exemption thereunder.
(iv) LEGENDS. The Purchaser understands that until such time as the Shares,
the Warrants and the Warrant Shares have been registered under the 1933 Act or
otherwise may be sold pursuant to Rule 144 without any restriction as to the
number of securities as of a particular date that can then be immediately sold,
the Shares, the Warrants and the Warrant Shares will bear a restrictive legend
in substantially the following form (and a stop-transfer order will be placed
against transfer of the certificates for such Securities):
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended. The securities
may not be sold, transferred or assigned in the absence of an effective
registration statement for the securities under said Act, or an opinion
of counsel, which opinion and counsel are acceptable to the Company,
that registration is not required under said Act or unless sold
pursuant to Rule 144 under said Act."
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The legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of any Security upon which it is
stamped, if, unless otherwise required by applicable state securities laws, (a)
such Security is registered for sale under an effective registration statement
filed under the 1933 Act or otherwise may be sold pursuant to Rule 144 without
any restriction as to the number of securities as of a particular date that can
then be immediately sold, or (b) such holder provides the Company with an
opinion of counsel, which opinion and counsel are acceptable to the Company, to
the effect that a public sale or transfer of such Security may be made without
registration under the 1933 Act and such sale or transfer is effected. The
Purchaser agrees to sell all Securities, including those represented by a
certificate(s) from which the legend has been removed, in compliance with
applicable prospectus delivery requirements, if any.
ARTICLE 5
ADDITIONAL AGREEMENTS OF THE COMPANY AND THE PURCHASER
5.1 SECURITIES LAWS DISCLOSURE; PUBLICITY. The Company shall, by 1:30 p.m.
Eastern time on the business day following the Closing Date of this Agreement,
issue a press release and file a Current Report on Form 8-K, in each case
reasonably acceptable to the Purchaser, disclosing the transactions contemplated
hereby. The Company agrees and acknowledges that the filing of the Current
Report on Form 8-K as evidenced on the SEC website, is a condition precedent to
the release of the Purchase Price as described in Section 2.2 herein. The
Company and the Purchaser shall consult with each other in issuing any press
releases with respect to the transactions contemplated hereby, and none of the
Company, the Purchaser shall issue any such press release or otherwise make any
such public statement without the prior consent of the Company, with respect to
any press release of the Purchaser, with respect to any press release of the
Company, which consent shall not unreasonably be withheld, except if such
disclosure is required by law, in which case the disclosing party shall promptly
provide the other party with notice of such public statement or communication
and consult with each other with respect thereto prior to such public
disclosure. Notwithstanding the foregoing, other than as set forth above, the
Company shall not publicly disclose the name of the Purchaser, or include the
name of the Purchaser in any filing with the SEC or any regulatory agency or
stock exchange, except to the extent such disclosure is required by law or stock
exchange regulation, in which case the Company shall provide the Purchaser with
prior notice of such disclosure.
5.2 LISTING OF COMMON STOCK. The Company hereby agrees to use commercially
reasonably efforts to maintain the listing on the OTCBB of the Common Stock sold
hereunder or issuable upon exercise of the Warrants. The Company further agrees,
if the Company applies to have its Common Stock traded on any other stock
exchange or quotation system, it will include in such application the Common
Stock issuable upon exercise of the Warrants, and will take such other action as
is necessary or desirable in the opinion of the Purchaser to cause the Common
Stock issuable upon exercise of the Warrants to be listed on such other stock
exchange or quotation system as promptly as possible.
5.3 RELEASE OF ADJUSTMENT SHARES. In the event (i) the registration
statement required under the Registration Right Agreement is not effective under
the Securities Act by no later than June 30, 2008 (the "Trigger Date") or (ii)
the closing stock price of the Company's Common Stock for any day prior to the
Trigger Date is less than $1.00 per share, then in each such instance the
Company hereby authorizes the Purchaser to direct the Escrow Agent immediately
to release the Adjustment Shares to the Purchaser and the Company shall join in
such direction, provided that the Escrow Agent may act solely on the direction
of the Purchaser.
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5.4 RELEASE OF ESCROW AMOUNT. After release of the Adjustment Shares to the
Purchaser in accordance with Section 5.3 above, the Purchaser in its sole
discretion, shall have the option to: (i) instruct the Escrow Agent to release
the Escrow Amount to the Company, in which case the Purchaser will retain all of
the Adjustment Shares, or (ii) have the Escrow Amount returned to Purchaser, at
which case Purchaser shall relinquish Two Hundred Fifty Thousand Adjustment
Shares back to the Company. In each such instance the Company hereby authorizes
the Purchaser to direct the Escrow Agent immediately to release the Escrow
Amount as directed by the Purchaser and the Company shall join in such
direction, provided that the Escrow Agent may act solely on the direction of the
Purchaser
5.5 RULE 144 REPORTING. With a view to making available to the Purchaser
the benefits of certain rules under applicable securities laws and without
limiting the obligations of the Company under the Registration Rights Agreement,
the Company agrees to:
(i) make and keep public information available, as those terms are
understood and defined in SEC Rule 144, at all times;
(ii) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act;
and
(iii) furnish to the Purchaser so long as the Purchaser owns any
Shares, promptly upon the request of the Purchaser, a written statement by the
Company that it has complied with the reporting requirements of said Rule 144
and of the Securities Act and of the Exchange Act, a copy of the most recent
annual or quarterly report of the Company and such other publicly disseminated
reports and documents as the Purchaser may reasonably request.
5.5 COVENANT OF PURCHASER. Purchaser shall not engage in any unlawful
trading activity in connection with the Company securities.
ARTICLE 6
MISCELLANEOUS
6.1 WAIVERS AND AMENDMENTS. The terms of this Agreement may be waived or
amended only upon the written consent of the Company and the Purchaser.
6.2 GOVERNING LAW; JURISDICTION. This Agreement, and any claims arising out
of relating to this Agreement or any of the Transaction Documents, whether in
contract or tort, statutory or common law, shall be governed exclusively by, and
construed in accordance with the laws of the State of New York without regard to
principles of conflicts of laws. No other state's law shall apply to any claim
relating to or arising from this Agreement or any transaction relating to this
Agreement or any of the Transaction Documents. THE COMPANY AND THE PURCHASER
CONSENT THAT ANY LEGAL ACTION OR PROCEEDING AGAINST EITHER OF THEM UNDER,
ARISING OUT OF OR IN ANY MANNER RELATING TO THIS AGREEMENT, OR ANY OTHER
INSTRUMENT OR DOCUMENT EXECUTED AND DELIVERED IN CONNECTION HEREWITH SHALL BE
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BROUGHT EXCLUSIVELY IN ANY COURT OF THE STATE OF NEW YORK OR IN THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, IN EACH CASE, IN
THE COUNTY OF NEW YORK. THE COMPANY AND THE PURCHASER, BY THE EXECUTION AND
DELIVERY OF THIS AGREEMENT, EXPRESSLY AND IRREVOCABLY CONSENTS AND SUBMITS TO
THE PERSONAL JURISDICTION OF ANY OF SUCH COURTS IN ANY SUCH ACTION OR
PROCEEDINGS. THE COMPANY AND THE PURCHASER AGREE THAT PERSONAL JURISDICTION OVER
EITHER OF THEM MAY BE OBTAINED BY THE DELIVERY OF A SUMMONS (POSTAGE PREPAID) IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 6.6 OF THIS AGREEMENT. ASSUMING
DELIVERY OF THE SUMMONS IN ACCORDANCE WITH THE PROVISIONS OF SECTION 6.6 OF THIS
AGREEMENT, THE COMPANY AND THE PURCHASER HEREBY EXPRESSLY AND IRREVOCABLY WAIVE
ANY ALLEGED LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON
CONVENIENS OR ANY SIMILAR BASIS.
6.3 SURVIVAL. The representations, warranties, covenants and agreements
made in this Agreement shall survive any investigation made by the Company or
the Purchaser and the Closing.
6.4 SUCCESSORS AND ASSIGNS. The Purchaser shall not assign this Agreement,
or the rights and obligations of the arties hereunder without the prior written
consent of the Company.
6.5 ENTIRE AGREEMENT. This Agreement and the other Transaction Documents
constitute the full and entire understanding and agreement between the parties
with regard to the subjects thereof.
6.6 NOTICES, ETC. All notices and other communications required or
permitted under this Agreement shall be in writing and may be delivered in
person, by telecopy, overnight delivery service or registered or certified
United States mail, addressed to the Company or the Purchaser, as the case may
be, at their respective addresses set forth at the beginning of this Agreement
or on EXHIBIT A, or at such other address as the Company, on the one hand, or
the Purchaser, on the other hand, shall have furnished to the other party in
writing. All notices and other communications shall be effective upon the
earlier of actual receipt thereof by the person to whom notice is directed or
(a) in the case of notices and communications sent by personal delivery or
telecopy, one business day after such notice or communication arrives at the
applicable address or was successfully sent to the applicable telecopy number,
(b) in the case of notices and communications sent by overnight delivery
service, at noon (local time) on the second business day following the day such
notice or communication was sent, and (c) in the case of notices and
communications sent by United States mail, seven days after such notice or
communication shall have been deposited in the United States mail.
6.7 SEVERABILITY OF THIS AGREEMENT. If any provision of this Agreement
shall be judicially determined to be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
6.8 COUNTERPARTS; SIGNATURES BY FACSIMILE. This Agreement may be executed
in any number of counterparts, each of which shall be an original, but all of
which together shall constitute one instrument. This Agreement, once executed by
a party, may be delivered to the other parties hereto by facsimile transmission
of a copy of this Agreement bearing the signature of the party so delivering
this Agreement.
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6.9 FURTHER ASSURANCES. Each party to this Agreement shall do and perform
or cause to be done and performed all such further acts and things and shall
execute and deliver all such other agreements, certificates, instruments and
documents as the other party hereto may reasonably request in order to carry out
the intent and accomplish the purposes of this Agreement and the consummation of
the transactions contemplated hereby.
6.10 EXPENSES. Each party shall bear its own expenses, except that the
Company agrees to pay Professional Offshore Opportunity Fund, Ltd. for their
expenses, including, without limitation, counsel fees with respect to this
Agreement and the transactions contemplated in the aggregate amount of $20,000
and due diligence fee, payable to Professional Traders Management LLC, of
$10,000. Expenses under this provision shall be paid at Closing. In addition,
the Purchaser shall be entitled to recover their reasonable attorneys' fees,
costs and expenses in connection with any action taken to enforce the terms of
the Transaction Documents or to collect any amounts due.
6.11 REPLACEMENT OF SECURITIES. If any certificate or instrument evidencing
any Securities is mutilated, lost, stolen or destroyed, the Company shall issue
or cause to be issued in exchange and substitution for and upon cancellation
thereof, or in lieu of and substitution therefore, a new certificate or
instrument, but only upon receipt of evidence reasonably satisfactory to the
Company of such loss, theft or destruction and customary and reasonable
indemnity, if requested. The applicants for a new certificate or instrument
under such circumstances shall also pay any reasonable third-party costs
associated with the issuance of such replacement Securities.
IN WITNESS WHEREOF, this Agreement is hereby executed as of the date first
above written.
GLOBAL RESOURCE CORPORATION
By:________________________________
Name:
Title:
PROFESSIONAL OFFSHORE
OPPORTUNITY FUND, LTD.
By:________________________________
Name:
Title:
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EXHIBIT A
SCHEDULE OF PURCHASER
COMMON
SHARES
COMMON UNDERLYING ADJUSTMENT PURCHASE
PURCHASER SHARES WARRANT SHARES PRICE
-------------------------------------------------------------------------------
1,250,000 625,000 650,000 $1,000,000
+
Professional Offshore $250,000
Opportunity Fund, Ltd. (Escrow-
0000 Xxx Xxxxxxx Xxxx Xxxxxx)
Xxxxx 000
Xxxxxxxx, Xxx Xxxx 00000
Total $1,250,000
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