globalresource_8k-ex1001.htm

 

    
      

    

    Exhibit 10.1

     

    


     

    RESERVE EQUITY FINANCING
AGREEMENT


     

     

    THIS AGREEMENT dated as of the
24th day
of November 2009 (the “Agreement”) between
AGS Capital Group, LLC a
New York limited liability corporation (the “Investor”), and Global Resource Corp. a
corporation organized and existing under the laws of the State of Nevada (the
“Company”).

     

    WHEREAS, the parties desire
that, upon the terms and subject to the conditions contained herein, the Company
shall issue and sell to the Investor, from time to time as provided herein, and
the Investor shall purchase from the Company up to Ten Million Dollars
($10,000,000) of the Company’s common stock, par value $.001 per share (the
“Common Stock”)
as provided herein; and

     

    WHEREAS, such investments will
be made in reliance upon the provisions of Regulation D (“Regulation D”)
of the Securities Act of 1933, as amended, and the regulations promulgated
thereunder (the “Securities Act”), and
or upon such other exemption from the registration requirements of the
Securities Act as may be available with respect to any or all of the investments
to be made hereunder.

     

    NOW, THEREFORE, the parties hereto
agree as follows:

     

    ARTICLE
I.

    Certain
Definitions

     

    Section 1.1.
“Advance” shall
mean the portion of the Commitment Amount requested by the Company in the
Advance Notice.

     

    Section 1.2.
“Advance Date”
shall mean the first Trading Day after expiration of the applicable Pricing
Period for each Advance.

     

    Section 1.3.
“Advance
Notice” shall mean a written notice in the form of Exhibit A attached
hereto to the Investor executed by an officer of the Company and setting forth
the Advance amount that the Company requests from the Investor.

     

    Section 1.4.
“Advance Notice
Date” shall mean each date the Company delivers (in accordance with
Section 2.2(b) of this Agreement) to the Investor an Advance Notice
requiring the Investor to purchase the number of shares of Common Stock
specified in the Advance Notice, subject to the terms of this Agreement. No
Advance Notice Date shall be less than five (5) Trading Days after the
prior Advance Notice Date.

     

    Section 1.5.
“Bid Price”
shall mean, on any date, the closing bid price (as reported by Bloomberg L.P. or
other comparable reporting service) of the Common Stock on the Principal Market
or if the Common Stock is not traded on a Principal Market, the highest reported
bid price for the Common Stock, as furnished by the Financial Industry
Regulatory Authority.

     

    Section 1.6. “Closing” shall mean
one of the closings of a purchase and sale of Common Stock pursuant to
Section 2.3.

     

    Section 1.7.
“Commitment
Amount” shall mean the aggregate amount of up to Ten Million Dollars
($10,000,000) which the Investor has agreed to provide to the Company in order
to purchase the Company’s Common Stock pursuant to the terms and conditions of
this Agreement.

     

    Section 1.8.
“Commitment
Period” shall mean the period commencing on the Effective Date, and
expiring upon the termination of this Agreement in accordance with
Section 10.2.

     

    Section 1.9.
“Common Stock”
shall mean the Company’s common stock, par value $.001 per share.

     

    


    
      
        
           


        

        
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    Section 1.10.
“Condition
Satisfaction Date” shall have the meaning set forth in
Section 7.2.

     

    Section 1.11.
“Damages” shall
mean any loss, claim, damage, liability, costs and expenses (including, without
limitation, reasonable attorney’s fees and disbursements and costs and expenses
of expert witnesses and investigation).

     

    Section 1.12.
“Effective
Date” shall mean the date on which the SEC first declares effective a
Registration Statement registering the resale of the Registrable Securities as
set forth in Section 7.2(a).

     

    Section 1.13.
Intentionally
Omitted.

     

    Section 1.14.
“Exchange Act”
shall mean the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.

     

    Section 1.15.
“Material Adverse
Effect” shall mean any condition, circumstance, or situation that may
result in, or reasonably be expected to result in (i) a material adverse
effect on the legality, validity or enforceability of the Agreement, (ii) a
material adverse effect on the results of operations, assets, business or
condition (financial or otherwise) of the Company, taken as a whole, or
(iii) a material adverse effect on the Company’s ability to perform in any
material respect on a timely basis its obligations under the
Agreement.

     

    Section 1.16.
“Market Price”
shall mean the VWAP of the Common Stock during the Pricing Period.

     

    Section 1.17.
“Maximum Advance
Amount” shall equal 50% of the average daily trading volume for the 10
days as reported by Bloomberg or comparable financial news service (U.S market
only) (“ADV”) immediately preceding the Advance Notice Date.

     

    Section 1.18.
“FINRA” shall
mean the Financial Industry Regulatory Authority.

     

    Section 1.19.
“Person” shall
mean an individual, a corporation, a partnership, an association, a trust or
other entity or organization, including a government or political subdivision or
an agency or instrumentality thereof.

     

    Section 1.20. “Pricing Period” shall
mean the five (5) consecutive Trading Days after the Advance Notice
Date.

     

    Section 1.21.
“Principal
Market” shall mean the Nasdaq Global Select Market, the Nasdaq Global
Market, the Nasdaq Capital Market, the American Stock Exchange, the OTC Bulletin
Board, the Pink Sheets or the New York Stock Exchange, whichever is at the time
the principal trading exchange or market for the Common Stock.

     

    Section 1.22.
“Purchase
Price” shall mean ninety one percent (91%) of the Market Price during the
Pricing Period.

     

    Section 1.23.
“Registrable
Securities” shall mean the shares of Common Stock to be issued hereunder
(i) in respect of which the Registration Statement has not been declared
effective by the SEC, (ii) which have not been sold under circumstances
meeting all of the applicable conditions of Rule 144 (or any similar
provision then in force) under the Securities Act (“Rule 144”) or
(iii) which have not been otherwise transferred to a holder who may trade
such shares without restriction under the Securities Act, and the Company has
delivered a new certificate or other evidence of ownership for such securities
not bearing a restrictive legend.

     

    Section 1.24.
“Registration Rights
Agreement” shall mean the Registration Rights Agreement dated the date
hereof, regarding the filing of the Registration Statement for the resale of the
Registrable Securities, entered into between the Company and the
Investor.

     

    Section 1.25.
“Registration
Statement” shall mean a registration statement on Form S-1 or Form S-3
(if use of such form is then available to the Company pursuant to the rules of
the SEC and, if not, on such other form promulgated by the SEC for which the
Company then qualifies and which counsel for the Company shall deem appropriate,
and which form shall be available for the resale of the Registrable Securities
to be registered thereunder in accordance with the provisions of this Agreement
and the Registration Rights Agreement, and in accordance with the intended
method of distribution of such securities), for the registration of the resale
by the Investor of the Registrable Securities under the Securities
Act.

     

    


    
      
        
           


        

        
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    Section 1.26.
“Regulation D”
shall have the meaning set forth in the recitals of this Agreement.

     

    Section 1.27.
“SEC” shall
mean the United States Securities and Exchange Commission.

     

    Section 1.28.
“Securities
Act” shall have the meaning set forth in the recitals of this
Agreement.

     

    Section 1.29.
“Trading Day”
shall mean any day during which the New York Stock Exchange shall be open for
business.

     

    Section 1.30.
“VWAP” means,
as of any date, the daily dollar volume-weighted average price for such security
as reported by Bloomberg, LP through its “Historical Price Table Screen (HP)”
with Market: Weighted Ave function selected (or comparable financial news
service (U.S market only), or, if no dollar volume-weighted average price is
reported for such security by Bloomberg, LP (or comparable financial news
service (U.S market only), the average of the highest closing bid price and the
lowest closing ask price of any of the market makers for such security as
reported in the “pink sheets” by Pink Sheets LLC.

     

     

    ARTICLE
II.

    Advances

     

    Section 2.1.
“Advances”  Before a
registration statement for any Stock to be purchased by the
Investor is declared effective (the “Effective Date”) by the U.S. Securities and Exchange
Commission (“SEC”), upon the mutual
agreements of the Investor and the Company, the Investor will purchase
restricted Stock Advanced by the Company for the Purchase Price. Such restricted
Stock shall be issued in the name of the Investor or its designee, and shall be
included in a Registration Statement. After the
Effective Date, the Investor shall commit to purchase up to (x) $10,000,000 of the Company’s Stock over the
course of 36 months (“REF Period”), less (y)
amounts purchased by the Investor before the Effective Date.  Each
such purchase shall be effected pursuant to an advance (individually an
“Advance” and collectively, the “Advances”) to be made by the Company to the
Investor.

     

    Section 2.2.
Mechanics.

     

    (a)    
Advance Notice.
At any time during the Commitment Period the Company may require the Investor to
purchase shares of Common Stock by delivering an Advance Notice to the Investor,
subject to the conditions set forth in Section 2.1 and 7.2; provided,
however, the amount for each Advance as designated by the Company in the
applicable Advance Notice shall not be more than the Maximum Advance Amount and
the aggregate amount of the Advances pursuant to this Agreement shall not exceed
the Commitment Amount. The Company acknowledges that the Investor may sell
shares of the Company’s Common Stock corresponding with a particular Advance
Notice after the Advance Notice is received by the Investor. There shall be a
minimum of five (5) Trading Days between each Advance Notice.

     

    (b)     
Date of Delivery of
Advance Notice. An Advance Notice shall be deemed delivered on
(i) the Trading Day it is received by email (to the address set forth in
Section 11.1 herein) by the Investor if such notice is received prior to 5:00 pm
Eastern Time, or (ii) the immediately succeeding Trading Day if it is
received by email after 5:00 pm Eastern Time on a Trading Day or at any time on
a day which is not a Trading Day. No Advance Notice may be deemed delivered on a
day that is not a Trading Day.

     

    Section 2.3.
Closings.

     

    (a)       On
the day of the Advance Notice, the Company shall deliver to the Investor such
number of shares of the Common Stock registered in the name of the Investor as
shall equal the number of shares specified in the Advance Notice. On the
later of the Advance Date or one Trading Day following receipt of the shares of
Common Stock corresponding to the Advance Notice, the Investor shall deliver to
the Company the amount of the Advance by wire transfer of immediately available
funds. On or prior to the Advance Date, each of the Company and the Investor
shall deliver to the other all documents, instruments and writings required to
be delivered by either of them pursuant to Section 2.3(b) below in order to
implement and effect the transactions contemplated herein. To the extent the
Company has not paid the fees, expenses, and disbursements of the Investor in
accordance with Section 12.4, the amount of such fees, expenses, and
disbursements may be deducted by the Investor (and shall be paid to the relevant
party) directly out of the proceeds of the Advance with no reduction in the
amount of shares of the Company’s Common Stock to be delivered on such Advance
Date.

     

    


    
      
        
           


        

        
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     (b)     Obligations Upon
Closing. The Investor agrees to advance the amount corresponding to the
Advance Notice to the Company upon completion of each of the following
conditions:

     

    (i)     
The Company shall deliver to the Investor the shares of Common Stock applicable
to the Advance in accordance with Section 2.3(a). The certificates
evidencing such shares shall be free of restrictive legends.

     

    (ii)   
 The Registration Statement filed pursuant to the Registration Rights
Agreement shall be effective and available for the resale of all applicable
shares of Common Stock to be issued in connection with the Advance and
certificates evidencing such shares shall be free of restrictive
legends;

     

    (iii)   
the Company shall have obtained all material permits and qualifications required
by any applicable state for the offer and sale of the Registrable Securities, or
shall have the availability of exemptions therefrom. The sale and issuance of
the Registrable Securities shall be legally permitted by all laws and
regulations to which the Company is subject;

     

    (iv) 
  the Company shall have filed with the SEC in a timely manner all reports,
notices and other documents required of a “reporting company” under the Exchange
Act and applicable Commission regulations;

     

    (v)  
  the Company shall pay any unpaid fees as set forth in Section 12.4
below or withhold such amounts as provided in Section 2.3; and

     

    (vi)  
the Company’s transfer agent shall be DWAC eligible.

     

    (vii)  
the conditions in Section 7.2.3(a)(i) above and provided the Company is in
compliance with its obligations in Section 2.3, the Investor shall deliver to
the Company the amount of the Advance specified in the Advance Notice by wire
transfer of immediately available funds are satisfied.

     

    Section 2.4.
Lock Up Period.
Prior to the first Advance, the Company shall obtain from each officer and
director a lock-up agreement, as defined below, in the form annexed hereto as
Schedule 2.4.

     

    Section 2.5.
Hardship. In
the event the Investor sells shares of the Company’s Common Stock after receipt
of an Advance Notice and the Company fails to perform its obligations as
mandated in Section 2.3, and specifically the Company fails to deliver to
the Investor on the Advance Date the shares of Common Stock corresponding to the
applicable Advance pursuant to Section 2.3(a)(i), the Company acknowledges
that the Investor shall suffer financial hardship and therefore shall be liable
for any and all losses, commissions, fees, or financial hardship caused to the
Investor.

     

    


    ARTICLE
III.

    Representations
of Investor

     

    Investor
hereby represents and warrants to, and agrees with, the Company that the
following are true and correct as of the date hereof and as of each Advance
Date:

     

    


    
      
        
           


        

        
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    Section 3.1.
Organization and
Authorization. The Investor is duly incorporated or organized and validly
existing in the jurisdiction of its incorporation or organization and has all
requisite power and authority to purchase and hold the securities issuable
hereunder. The decision to invest and the execution and delivery of this
Agreement by such Investor, the performance by such Investor of its obligations
hereunder and the consummation by such Investor of the transactions contemplated
hereby have been duly authorized and requires no other proceedings on the part
of the Investor. The undersigned has the right, power and authority to execute
and deliver this Agreement and all other instruments (including, without
limitations, the Registration Rights Agreement), on behalf of the Investor. This
Agreement has been duly executed and delivered by the Investor and, assuming the
execution and delivery hereof and acceptance thereof by the Company, will
constitute the legal, valid and binding obligations of the Investor, enforceable
against the Investor in accordance with its terms.

     

    Section 3.2.
Evaluation of
Risks. The Investor has such knowledge and experience in financial, tax
and business matters as to be capable of evaluating the merits and risks of, and
bearing the economic risks entailed by, an investment in the Company and of
protecting its interests in connection with this transaction. It recognizes that
its investment in the Company involves a high degree of risk.

     

    Section 3.3.
No Legal Advice From
the Company. The Investor acknowledges that it had the opportunity to
review this Agreement and the transactions contemplated by this Agreement with
his or its own legal counsel and investment and tax advisors. The Investor is
relying solely on such counsel and advisors and not on any statements or
representations of the Company or any of its representatives or agents for
legal, tax or investment advice with respect to this investment, the
transactions contemplated by this Agreement or the securities laws of any
jurisdiction.

     

    Section 3.4.
Investment
Purpose. The securities are being purchased by the Investor for its own
account, and for investment purposes. The Investor agrees not to assign or in
any way transfer the Investor’s rights to the securities or any interest therein
and acknowledges that the Company will not recognize any purported assignment or
transfer except in accordance with applicable Federal and state securities laws.
No other person has or will have a direct or indirect beneficial interest in the
securities. The Investor agrees not to sell, hypothecate or otherwise transfer
the Investor’s securities unless the securities are registered under Federal and
applicable state securities laws or unless, in the opinion of counsel
satisfactory to the Company, an exemption from such laws is
available.

     

    Section 3.5.
Accredited
Investor. The Investor is an “Accredited Investor”
as that term is defined in Rule 501(a) of Regulation D of the
Securities Act.

     

    Section 3.6. Information. The
Investor and its advisors (and its counsel), if any, have been furnished with
all materials relating to the business, finances and operations of the Company
and information it deemed material to making an informed investment decision.
The Investor and its advisors, if any, have been afforded the opportunity to ask
questions of the Company and its management. Neither such inquiries nor any
other due diligence investigations conducted by such Investor or its advisors,
if any, or its representatives shall modify, amend or affect the Investor’s
right to rely on the Company’s representations and warranties contained in this
Agreement. The Investor understands that its investment involves a high degree
of risk. The Investor is in a position regarding the Company, which, based upon
employment, family relationship or economic bargaining power, enabled and
enables such Investor to obtain information from the Company in order to
evaluate the merits and risks of this investment. The Investor has sought such
accounting, legal and tax advice, as it has considered necessary to make an
informed investment decision with respect to this transaction.

     

    Section 3.7.
Receipt of
Documents. The Investor and its counsel have received and read in their
entirety: (i) this Agreement and the Exhibits annexed hereto; (ii) all
due diligence and other information necessary to verify the accuracy and
completeness of such representations, warranties and covenants; (iii) the
Company’s Form 10-Q for the period ended June 30, 2009 and other SEC filings ;
and (iv) answers to all questions the Investor submitted to the Company
regarding an investment in the Company; and the Investor has relied on the
information contained therein and has not been furnished any other documents,
literature, memorandum or prospectus.

     

    


    
      
        
           


        

        
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    Section 3.8.
No General
Solicitation. Neither the Company, nor any of its affiliates, nor any
person acting on its or their behalf, has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D
under the Securities Act) in connection with the offer or sale of the shares of
Common Stock offered hereby.

     

    Section 3.9.
Not an
Affiliate. The Investor is not an officer, director or a person that
directly, or indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with the Company or any “Affiliate” of the
Company (as that term is defined in Rule 405 of the Securities
Act).

     

    Section 3.10.
Trading
Activities. The Investor’s trading activities with respect to the
Company’s Common Stock shall be in compliance with all applicable federal and
state securities laws, rules and regulations and the rules and regulations of
the Principal Market on which the Company’s Common Stock is listed or
traded.

     

    ARTICLE IV.

    Representations
and Warranties of the Company

     

    Except as
stated below, on the disclosure schedules attached hereto or in the SEC
Documents (as defined herein), the Company hereby represents and warrants to,
and covenants with, the Investor that the following are true and correct as of
the date hereof:

     

    Section 4.1.
Organization and
Qualification. The Company is duly incorporated or organized and validly
existing in the jurisdiction of its incorporation or organization and has all
requisite corporate power to own its properties and to carry on its business as
now being conducted. Each of the Company and its subsidiaries is duly qualified
as a foreign corporation to do business and is in good standing in every
jurisdiction in which the nature of the business conducted by it makes such
qualification necessary, except to the extent that the failure to be so
qualified or be in good standing would not have a Material Adverse Effect on the
Company and its subsidiaries taken as a whole.

     

    Section 4.2.
Authorization,
Enforcement, Compliance with Other Instruments. (i) The Company has
the requisite corporate power and authority to enter into and perform this
Agreement, the Registration Rights Agreement and any related agreements, in
accordance with the terms hereof and thereof, (ii) the execution and
delivery of this Agreement, the Registration Rights Agreement and any related
agreements by the Company and the consummation by it of the transactions
contemplated hereby and thereby, have been duly authorized by the Company’s
Board of Directors and no further consent or authorization is required by the
Company, its Board of Directors or its stockholders, (iii) this Agreement,
the Registration Rights Agreement and any related agreements have been duly
executed and delivered by the Company, (iv) this Agreement, the
Registration Rights Agreement and assuming the execution and delivery thereof
and acceptance by the Investor and any related agreements constitute the valid
and binding obligations of the Company enforceable against the Company in
accordance with their terms, except as such enforceability may be limited by
general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally, the enforcement of creditors’ rights and
remedies.

     

    Section 4.3.
Capitalization.
The authorized capital stock of the Company consists of 200,000,000 shares of
Common Stock, of which 64,850,664 shares of Common Stock are issued and
outstanding, and 100,000,000 shares of authorized Preferred Stock, of which no
shares are issued and outstanding  All of such outstanding shares have
been validly issued and are fully paid and nonassessable. Except as disclosed in
the SEC Documents (as defined in paragraph 4.5), no shares of Common Stock are
subject to preemptive rights or any other similar rights or any liens or
encumbrances suffered or permitted by the Company. Except as disclosed in the
SEC Documents and on Schedule 4.3, as of the date hereof, (i) there
are no outstanding options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, any shares of capital stock of the Company or any of its
subsidiaries, or contracts, commitments, understandings or arrangements by which
the Company or any of its subsidiaries is or may become bound to issue
additional shares of capital stock of the Company or any of its subsidiaries or
options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into, any
shares of capital stock of the Company or any of its subsidiaries,
(ii) there are no outstanding debt securities (iii) there are no outstanding
registration statements; and (iv) there are no agreements
or arrangements under which the Company or any of its subsidiaries is obligated
to register the sale of any of their securities under the Securities Act (except
pursuant to the Registration Rights Agreement), except pursuant to the terms of
an agreement between the Company and the Investor. There are no securities or
instruments containing anti-dilution or similar provisions that will be
triggered by this Agreement or any related agreement or the consummation of the
transactions described herein or therein. The Company has furnished to the
Investor true and correct copies of the Company’s Certificate of Incorporation,
as amended and as in effect on the date hereof (the “Certificate of
Incorporation”), and the Company’s By-laws, as in effect on the date
hereof (the “By-laws”), and the
terms of all securities convertible into or exercisable for Common Stock and the
material rights of the holders thereof in respect thereto.

     

    


    
      
        
           


        

        
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    Section 4.4.
No Conflict.
The execution, delivery and performance of this Agreement by the Company and the
consummation by the Company of the transactions contemplated hereby will not
(i) result in a violation of the Certificate of Incorporation, any
certificate of designations of any outstanding series of preferred stock of the
Company or By-laws or (ii) conflict with or constitute a default (or an
event which with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the Company or
any of its subsidiaries is a party, or result in a violation of any law, rule,
regulation, order, judgment or decree (including federal and state securities
laws and regulations and the rules and regulations of the Principal Market on
which the Common Stock is quoted) applicable to the Company or any of its
subsidiaries or by which any material property or asset of the Company or any of
its subsidiaries is bound or affected and which would cause a Material Adverse
Effect. Except as disclosed in the SEC Documents, neither the Company nor its
subsidiaries is in violation of any term of or in default under its Articles of
Incorporation or By-laws or their organizational charter or by-laws,
respectively, or any material contract, agreement, mortgage, indebtedness,
indenture, instrument, judgment, decree or order or any statute, rule or
regulation applicable to the Company or its subsidiaries. The business of the
Company and its subsidiaries is not being conducted in violation of any material
law, ordinance, regulation of any governmental entity. Except as specifically
contemplated by this Agreement and as required under the Securities Act and any
applicable state securities laws, the Company is not required to obtain any
consent, authorization or order of, or make any filing or registration with, any
court or governmental agency in order for it to execute, deliver or perform any
of its obligations under or contemplated by this Agreement or the Registration
Rights Agreement in accordance with the terms hereof or thereof. All consents,
authorizations, orders, filings and registrations which the Company is required
to obtain pursuant to the preceding sentence have been obtained or effected on
or prior to the date hereof. The Company and its subsidiaries are unaware of any
fact or circumstance which might give rise to any of the foregoing.

     

    Section 4.5.
SEC Documents;
Financial Statements. The Company is current on all its reports,
schedules, forms, statements and other documents required to be filed by it with
the SEC under the Securities Exchange Act (all of the foregoing filed prior to
the date hereof or amended after the date hereof and all exhibits include therein and financial statements and schedules thereto and
documents incorporated by reference therein, being hereinafter referred to as
the “SEC
Documents”) on timely basis or has received a valid extension of such
time of filing and has filed any such SEC Document prior to the expiration of
any such extension. The Company has delivered to the Investor or its
representatives, or made available through the SEC’s website at
http://www.sec.gov., true and complete copies of the SEC Documents. As of their
respective dates, the SEC Documents complied in all material respects with the
requirements of the Exchange Act and the rules and regulations of the SEC
promulgated thereunder applicable to the SEC Documents, and none of the SEC
Documents, at the time they were filed with the SEC, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. As of
their respective dates, the financial statements of the Company included in the
SEC Documents complied as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto. Such financial statements have been prepared in accordance with
generally accepted accounting principles, consistently applied, during the
periods involved (except (i) as may be otherwise indicated in such
financial statements or the notes thereto, or (ii) in the case of unaudited
interim statements, to the extent they may exclude footnotes or may be condensed
or summary statements) and fairly present in all material respects the financial
position of the Company as of the dates thereof and the results of its
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments). No other
information provided by or on behalf of the Company to the Buyers which is not
included in the SEC Documents contains any untrue statement of a material fact
or omits to state any material fact necessary in order to make the statements
therein, in the light of the circumstance under which they are or were made and
not misleading.

     

    


    
      
        
           


        

        
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    Section 4.6.
10b-5 . The SEC
Documents do not include any untrue statements of material fact, nor do they
omit to state any material fact required to be stated therein necessary to make
the statements made, in light of the circumstances under which they were made,
not misleading.

     

    Section 4.7.
No Default.
Except as disclosed in the SEC Documents, the Company is not in default in the
performance or observance of any material obligation, agreement, covenant or
condition contained in any indenture, mortgage, deed of trust or other material
instrument or agreement to which it is a party or by which it is or its property
is bound and neither the execution, nor the delivery by the Company, nor the
performance by the Company of its obligations under this Agreement or any of the
exhibits or attachments hereto will conflict with or result in the breach or
violation of any of the terms or provisions of, or constitute a default or
result in the creation or imposition of any lien or charge on any assets or
properties of the Company under its Certificate of Incorporation, By-Laws, any
material indenture, mortgage, deed of trust or other material agreement
applicable to the Company or instrument to which the Company is a party or by
which it is bound, or any statute, or any decree, judgment, order, rules or
regulation of any court or governmental agency or body having jurisdiction over
the Company or its properties, in each case which default, lien or charge is
likely to cause a Material Adverse Effect on the Company’s business or financial
condition.

     

    Section 4.8. Absence of Events of
Default. Except for matters described in the SEC Documents and/or this
Agreement, no Event of Default, as defined in the respective agreement to which
the Company is a party, and no event which, with the giving of notice or the
passage of time or both, would become an Event of Default (as so defined), has
occurred and is continuing, which would have a Material Adverse Effect on the
Company’s business, properties, prospects, financial condition or results of
operations.

     

    Section 4.9.
Intellectual Property
Rights. The Company and its subsidiaries own or possess adequate rights
or licenses to use all material trademarks, trade names, service marks, service
mark registrations, service names, patents, patent rights, copyrights,
inventions, licenses, approvals, governmental authorizations, trade secrets and
rights necessary to conduct their respective businesses as now conducted. The
Company and its subsidiaries do not have any knowledge of any infringement by
the Company or its subsidiaries of trademark, trade name rights, patents, patent
rights, copyrights, inventions, licenses, service names, service marks, service
mark registrations, trade secret or other similar rights of others, and, to the
knowledge of the Company, there is no claim, action or proceeding being made or
brought against, or to the Company’s knowledge, being threatened against, the
Company or its subsidiaries regarding trademark, trade name, patents, patent
rights, invention, copyright, license, service names, service marks, service
mark registrations, trade secret or other infringement; and the Company and its
subsidiaries are unaware of any facts or circumstances which might give rise to
any of the foregoing.

     

    Section 4.10.
Employee
Relations. Neither the Company nor any of its subsidiaries is involved in
any labor dispute nor, to the knowledge of the Company or any of its
subsidiaries, is any such dispute threatened. None of the Company’s or its
subsidiaries’ employees is a member of a union and the Company and its
subsidiaries believe that their relations with their employees are
good.

     

    Section 4.11.
Environmental
Laws. Except as set forth in the SEC Documents, the Company and its
subsidiaries are (i) in compliance with any and all applicable material
foreign, federal, state and local laws and regulations relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants (“Environmental Laws”),
(ii) have received all permits, licenses or other approvals required of
them under applicable Environmental Laws to conduct their respective businesses
and (iii) are in compliance with all terms and conditions of any such
permit, license or approval.

     

    Section 4.12.
Title. Except
as set forth in the SEC Documents, the Company has good and marketable title to
its properties and material assets owned by it, free and clear of any pledge,
lien, security interest, encumbrance, claim or equitable interest other than
such as are not material to the business of the Company. Any real property and
facilities held under lease by the Company and its subsidiaries are held by them
under valid, subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the use made and proposed to be made of such
property and buildings by the Company and its subsidiaries.

     

    


    
      
        
           


        

        
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     Section 4.13.
Insurance. The
Company and each of its subsidiaries are insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts as
management of the Company believes to be prudent and customary in the businesses
in which the Company and its subsidiaries are engaged. Neither the Company nor
any such subsidiary has been refused any insurance coverage sought or applied
for and neither the Company nor any such subsidiary has any reason to believe
that it will not be able to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage from similar insurers as may
be necessary to continue its business at a cost that would not materially and
adversely affect the condition, financial or otherwise, or the earnings,
business or operations of the Company and its subsidiaries, taken as a
whole.

     

    Section 4.14.
Regulatory
Permits. The Company and its subsidiaries possess all material
certificates, authorizations and permits issued by the appropriate federal,
state or foreign regulatory authorities necessary to conduct their respective
businesses and neither the Company nor any such subsidiary has received any
notice of proceedings relating to the revocation or modification of any such
certificate, authorization or permit.

     

    Section 4.15.
Internal Accounting
Controls. The Company and each of its subsidiaries maintain 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 generally accepted
accounting principles and the rules and regulations as promulgated by the SEC 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.

     

    Section 4.16.
No Material Adverse
Breaches, etc. Except as set forth in the SEC Documents, neither the
Company nor any of its subsidiaries is subject to any charter, corporate or
other legal restriction, or any judgment, decree, order, rule or regulation
which in the judgment of the Company’s officers has or is expected in the future
to have a Material Adverse Effect on the business, properties, operations,
financial condition, results of operations or prospects of the Company or its
subsidiaries. Except as set forth in the SEC Documents, neither the Company nor
any of its subsidiaries is in breach of any contract or agreement which breach,
in the judgment of the Company’s officers, has or is expected to have a Material
Adverse Effect on the business, properties, operations, financial condition,
results of operations or prospects of the Company or its
subsidiaries.

     

    Section 4.17.
Absence of
Litigation. Except as set forth in the SEC Documents, there is no action,
suit, proceeding, inquiry or investigation before or by any court, public board,
government agency, self-regulatory organization or body pending against or
affecting the Company, the Common Stock or any of the Company’s subsidiaries,
wherein an unfavorable decision, ruling or finding would (i) have a
Material Adverse Effect on the transactions contemplated hereby (ii) adversely
affect the validity or enforceability of, or the authority or ability of the
Company to perform its obligations under, this Agreement or any of the documents
contemplated herein, or (iii) have a Material Adverse Effect on the business,
operations, properties, financial condition or results of operation of the
Company and its subsidiaries taken as a whole.

     

    Section 4.18. Subsidiaries. Except
as disclosed in the SEC Documents, the Company does not presently own or
control, directly or indirectly, any interest in any other corporation,
partnership, association or other business entity.

     

    Section 4.19.
Tax Status.
Except as disclosed in the SEC Documents, the Company and each of its
subsidiaries has made or filed all federal and state income and all other tax
returns, reports and declarations required by any jurisdiction to which it is
subject and (unless and only to the extent that the Company and each of its
subsidiaries has set aside on its books provisions reasonably adequate for the
payment of all unpaid and unreported taxes) has paid all taxes and other
governmental assessments and charges that are material in amount, shown or
determined to be due on such returns, reports and declarations, except those
being contested in good faith and has set aside on its books provision
reasonably adequate for the payment of all taxes for periods subsequent to the
periods to which such returns, reports or declarations apply. There are no
unpaid taxes in any material amount claimed to be due by the taxing authority of
any jurisdiction, and the officers of the Company know of no basis for any such
claim.

     

    Section 4.20.
Certain
Transactions. Except as set forth in the SEC Documents none of the
officers, directors, or employees of the Company is presently a party to any
transaction with the Company (other than for services as employees, officers and
directors), including any contract, agreement or other arrangement providing for
the furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Company, any corporation,
partnership, trust or other entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner.

     

    


    
      
        
           


        

        
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    Section 4.21.
Rights of First
Refusal. The Company is not obligated to offer the securities offered
hereunder on a right of first refusal basis or otherwise to any third parties
including, but not limited to, current or former shareholders of the Company,
underwriters, brokers, agents or other third parties.

     

    Section 4.22.
Use of
Proceeds. The Company shall use the net proceeds from this offering for
working capital and other general corporate purposes including paying relevant
fees and commissions incurred from this transaction.

     

    Section 4.23.
Maintenance of Listing
or Quotation on Principal Market. For so long as any securities issuable
hereunder held by the Investor remain outstanding, the Company acknowledges,
represents, warrants and agrees that it will /maintain the listing or quotation,
as applicable, of its Common Stock on the Principal Market.

     

    Section 4.24.
Opinion of
Counsel. Investor shall receive an opinion letter from counsel to the
Company on the date hereof.

     

    Section 4.25.
Opinion of
Counsel. The Company will obtain for the Investor, at the Company’s
expense, any and all opinions of counsel which may be reasonably required in
order to sell the securities issuable hereunder without
restriction.

     

    Section 4.26.
Dilution. The
Company is aware and acknowledges that issuance of shares of the Company’s
Common Stock could cause dilution to existing shareholders and could
significantly increase the outstanding number of shares of Common
Stock.

     

    Section 4.27. Acknowledgment Regarding
Investor’s Purchase of Shares. The Company acknowledges and agrees that
the Investor is acting solely in the capacity of an arm’s length investor with
respect to this Agreement and the transactions contemplated hereunder. The
Company further acknowledges that the Investor is not acting as a financial
advisor or fiduciary of the Company (or in any similar capacity) with respect to
this Agreement and the transactions contemplated hereunder and any advice given
by the Investor or any of its representatives or agents in connection with this
Agreement and the transactions contemplated hereunder is merely incidental to
the Investor’s purchase of the Common Stock hereunder. The Company is aware and
acknowledges that it may not be able to request Advances under this Agreement if
it cannot obtain an effective Registration Statement or if any issuances of
Common Stock pursuant to any Advances would violate any rules of the Principal
Market. The Company further is aware and acknowledges that any fees paid
pursuant to Section 12.4 hereunder or shares issued pursuant to
Section 12.4(b) hereunder shall be earned on the date hereof and not
refundable or returnable under any circumstances.

     

    Section 4.28.
No Legal Advice From
the Investor. The Company acknowledges that it had the opportunity to
review this Agreement and the transactions contemplated by this Agreement with
his or its own legal counsel and investment and tax advisors. The Company is
relying solely on such counsel and advisors and not on any statements or
representations of the Investor or any of its representatives or agents for
legal, tax or investment advice with respect to this investment, the
transactions contemplated by this Agreement or the securities laws of any
jurisdiction.  The Company is not relying on any representation except
for the representations of the Investor contained in this
Agreement.

    


    
      
        
           


        

        
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    ARTICLE
V.

    Indemnification

     

    The
Investor and the Company represent to the other the following with respect to
itself:

     

    Section 5.1.
Indemnification.

     

     (a)  In
consideration of the Investor’s execution and delivery of this Agreement, and in
addition to all of the Company’s other obligations under this Agreement, the
Company shall defend, protect, indemnify and hold harmless the Investor, and all
of its officers, directors, partners, employees and agents (including, without
limitation, those retained in connection with the transactions contemplated by
this Agreement) (collectively, the “Investor
Indemnitees”) from and against any and all actions, causes of action,
suits, claims, losses, costs, penalties, fees, liabilities and damages, and
expenses in connection therewith (irrespective of whether any such Investor
Indemnitee is a party to the action for which indemnification hereunder is
sought), and including reasonable attorneys’ fees and disbursements (the “Indemnified
Liabilities”), incurred by the Investor Indemnitees or any of them as a
result of, or arising out of, or relating to (a) any misrepresentation or
breach of any representation or warranty made by the Company in this Agreement
or the Registration Rights Agreement or any other certificate, instrument or
document contemplated hereby or thereby, (b) any breach of any covenant,
agreement or obligation of the Company contained in this Agreement or the
Registration Rights Agreement or any other certificate, instrument or document
contemplated hereby or thereby, or (c) any cause of action, suit or claim
brought or made against such Investor Indemnitee not arising out of any action
or inaction of an Investor Indemnitee, and arising out of or resulting from the
execution, delivery, performance or enforcement of this Agreement or any other
instrument, document or agreement executed pursuant hereto by any of the
Investor Indemnitees. To the extent that the foregoing undertaking by the
Company may be unenforceable for any reason, the Company shall make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities, which is permissible under applicable law.

     

    (b)  In consideration of the Company’s execution and
delivery of this Agreement, and in addition to all of the Investor’s other
obligations under this Agreement, the Investor shall defend, protect, indemnify
and hold harmless the Company and all of its officers, directors, shareholders,
employees and agents (including, without limitation, those retained in
connection with the transactions contemplated by this Agreement) (collectively,
the “Company
Indemnitees”) from and against any and all Indemnified Liabilities
incurred by the Company Indemnitees or any of them as a result of, or arising
out of, or relating to (a) any misrepresentation or breach of any
representation or warranty made by the Investor in this Agreement, the
Registration Rights Agreement, or any instrument or document contemplated hereby
or thereby executed by the Investor, (b) any breach of any covenant,
agreement or obligation of the Investor(s) contained in this Agreement, the
Registration Rights Agreement or any other certificate, instrument or document
contemplated hereby or thereby executed by the Investor, or (c) any cause
of action, suit or claim brought or made against such Company Indemnitee not
arising out of any action or inaction of a Company Indemnitee, and arising out
of or resulting from the execution, delivery, performance or enforcement of this
Agreement or any other instrument, document or agreement executed pursuant
hereto by any of the Company Indemnitees provided, however, that the Investor
shall not be liable under this Section 5.1 to a Company Indemnitee to the extent
that such Indemnified Liabilities resulted or arose from the breach by a Company
Indemnitee of any representation, warranty, covenant or agreement of a Company
Indemnitee contained in this Agreement or the Registration Rights Agreement or
the negligence, recklessness, willful misconduct or bad faith of a Company
Indemnitee. To the extent that the foregoing undertaking by the Investor may be
unenforceable for any reason, the Investor shall make the maximum contribution
to the payment and satisfaction of each of the Indemnified Liabilities, which is
permissible under applicable law.

     

    (c) 
The obligations of the parties to indemnify or make contribution under this
Section 5.1 shall survive termination.

     

    


    
      
        
           


        

        
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    Section
5.2  Notification of Claims for
Indemnification. Each party entitled to indemnification under this
Article V (an “Indemnified Party”)
shall, promptly after the receipt of notice of the commencement of any claim
against such Indemnified Party in respect of which indemnity may be sought from
the party obligated to indemnify such Indemnified Party under this Article V
(the “Indemnifying
Party”), notify the Indemnifying Party in writing of the commencement
thereof. Any such notice shall describe the claim in reasonable detail. The
failure of any Indemnified Party to so notify the Indemnifying Party of any such
action shall not relieve the Indemnifying Party from any liability which it may
have to such Indemnified Party (a) other than pursuant to this Article V or
(b) under this Article V unless, and only to the extent that, such failure
results in the Indemnifying Party’s forfeiture of substantive rights or defenses
or the Indemnifying Party is prejudiced by such delay. The procedures listed
below shall govern the procedures for the handling of indemnification
claims.

     

    (a)   Any
claim for indemnification for Indemnified Liabilities that do not result from a
Third Party Claim as defined in the following paragraph, shall be asserted by
written notice given by the Indemnified Party to the Indemnifying Party. Such
Indemnifying Party shall have a period of thirty (30) days after the
receipt of such notice within which to respond thereto. If such Indemnifying
Party does not respond within such thirty (30) day period, such
Indemnifying Party shall be deemed to have refused to accept responsibility to
make payment as set forth in Section 5.1. If such Indemnifying Party does
not respond within such thirty (30) day period or rejects such claim in
whole or in part, the Indemnified Party shall be free to pursue such remedies as
specified in this Agreement.

     

    (b)   If
an Indemnified Party shall receive notice or otherwise learn of the assertion by
a person or entity not a party to this Agreement of any threatened legal action
or claim (collectively a “Third Party Claim”),
with respect to which an Indemnifying Party may be obligated to provide
indemnification, the Indemnified Party shall give such Indemnifying Party
written notice thereof within twenty (20) days after becoming aware of such
Third Party Claim.

     

    (c)   An
Indemnifying Party may elect to defend (and, unless the Indemnifying Party has
specified any reservations or exceptions, to seek to settle or compromise) at
such Indemnifying Party’s own expense and by such Indemnifying Party’s own
counsel, any Third Party Claim. Within thirty (30) days after the receipt
of notice from an Indemnified Party (or sooner if the nature of such Third Party
Claim so requires), the Indemnifying Party shall notify the Indemnified Party
whether the Indemnifying Party will assume responsibility for defending such
Third Party Claim, which election shall specify any reservations or exceptions.
If such Indemnifying Party does not respond within such thirty (30) day
period or rejects such claim in whole or in part, the Indemnified Party shall be
free to pursue such remedies as specified in this Agreement. In case any such
Third Party Claim shall be brought against any Indemnified Party, and it shall
notify the Indemnifying Party of the commencement thereof, the Indemnifying
Party shall be entitled to assume the defense thereof at its own expense, with
counsel satisfactory to such Indemnified Party in its reasonable judgment;
provided, however, that any Indemnified Party may, at its own expense, retain
separate counsel to participate in such defense at its own expense.
Notwithstanding the foregoing, in any Third Party Claim in which both the
Indemnifying Party, on the one hand, and an Indemnified Party, on the other
hand, are, or are reasonably likely to become, a party, such Indemnified Party
shall have the right to employ separate counsel and to control its own defense
of such claim if, in the reasonable opinion of counsel to such Indemnified
Party, either (x) one or more significant defenses are available to the
Indemnified Party that are not available to the Indemnifying Party or (y) a
conflict or potential conflict exists between the Indemnifying Party, on the one
hand, and such Indemnified Party, on the other hand, that would make such
separate representation advisable; provided, however, that in such circumstances
the Indemnifying Party (i) shall not be liable for the fees and expenses of
more than one counsel to all Indemnified Parties and (ii) shall reimburse
the Indemnified Parties for such reasonable fees and expenses of such counsel
incurred in any such Third Party Claim, as such expenses are incurred, provided
that the Indemnified Parties agree to repay such amounts if it is ultimately
determined that the Indemnifying Party was not obligated to provide
indemnification under this Article IX. The Indemnifying Party agrees that it
shall not, without the prior written consent of the Indemnified Party, settle,
compromise or consent to the entry of any judgment in any pending or threatened
claim relating to the matters contemplated hereby (if any Indemnified Party is a
party thereto or has been actually threatened to be made a party thereto) unless
such settlement, compromise or consent includes an unconditional release of such
Indemnified Party from all liability arising or that may arise out of such
claim. The Indemnifying Party shall not be liable for any settlement of any
claim effected against an Indemnified Party without the Indemnifying Party’s
written consent, which consent shall not be unreasonably withheld, conditioned
or delayed. The rights accorded to an Indemnified Party hereunder shall be in
addition to any rights that any Indemnified Party may have at common law, by
separate agreement or otherwise; provided, however, that notwithstanding the
foregoing or anything to the contrary contained in this Agreement, nothing in
this Article V shall restrict or limit any rights that any Indemnified Party may
have to seek equitable relief.

     

    


    
      
        
           


        

        
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    ARTICLE
VI.

    Covenants
of the Company

     

    Section 6.1.
Registration
Rights. The Company shall cause the Registration Rights Agreement to
remain in full force and effect and the Company shall comply in all material
respects with the terms thereof.

     

    Section 6.2.
Quotation of Common
Stock. The Company shall maintain the Common Stock’s authorization for
quotation on the Principal Market.

     

    Section 6.3.
Exchange Act
Registration. The Company will cause its Common Stock to continue to be
registered under Section 12(g) of the Exchange Act, will file in a timely manner
all reports and other documents required of it as a reporting company under the
Exchange Act and will not take any action or file any document (whether or not
permitted by Exchange Act or the rules thereunder) to terminate or suspend such
registration or to terminate or suspend its reporting and filing obligations
under said Exchange Act.

     

    Section 6.4.
Transfer Agent
Instructions. On the Advance Notice Date, the Company shall deliver
instructions to its transfer agent to issue shares of Common Stock to the
Investor free of restrictive legends on the Advance Notice Date .

     

    Section 6.5.
Corporate
Existence. The Company will take all steps necessary to preserve and
continue the corporate existence of the Company.

     

    Section 6.6. Notice of Certain Events
Affecting Registration; Suspension of Right to Make an Advance. The
Company will immediately notify the Investor upon its becoming aware of the
occurrence of any of the following events in respect of a registration statement
or related prospectus relating to an offering of Registrable Securities:
(i) receipt of any request for additional information by the SEC or any
other Federal or state governmental authority during the period of effectiveness
of the Registration Statement for amendments or supplements to the registration
statement or related prospectus; (ii) the issuance by the SEC or any other
Federal or state governmental authority of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any proceedings
for that purpose; (iii) receipt of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; (iv) the happening of any
event that makes any statement made in the Registration Statement or related
prospectus of any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires the making of any
changes in the Registration Statement, related prospectus or documents so that,
in the case of the Registration Statement, it will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, and
that in the case of the related prospectus, it will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and (v) the
Company’s reasonable determination that a post-effective amendment to the
Registration Statement would be appropriate; and the Company will promptly make
available to the Investor any such supplement or amendment to the related
prospectus. The Company shall not deliver to the Investor any Advance Notice
during the continuation of any of the foregoing events.

     

    Section 6.7.
RESERVED.

     

    Section 6.8.
Consolidation;
Merger. The Company shall not, at any time after the delivery of an
Advance Notice and before the Advance Date applicable to such Advance Notice,
effect any merger or consolidation of the Company with or into, or a transfer of
all or substantially all the assets of the Company to another entity (a “Consolidation Event”)
unless the resulting successor or acquiring entity (if not the Company) assumes
by written instrument the obligation to deliver to the Investor such shares of
stock and/or securities as the Investor is entitled to receive pursuant to this
Agreement.

     

    


    
      
        
           


        

        
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    Section 6.9.
Issuance of the
Company’s Common Stock. The sale of the shares of Common Stock shall be
made in accordance with the provisions and requirements of Regulation D and
any applicable state securities law.

     

    Section 6.10.
Review of Public
Disclosures. All SEC filings (including, without limitation, all filings
required under the Exchange Act, which include Forms 10-Q, 10-K, 8-K, etc) and
other public disclosures made by the Company, including, without limitation, all
press releases, investor relations materials, and scripts of analysts meetings
and calls, shall be reviewed and approved for release by the Company’s attorneys
and, if containing financial information, the Company’s independent certified
public accountants.

     

    Section 6.11. Market
Activities   The Company will not, directly or indirectly
take any action designed to cause or result in, or that constitutes or might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Common Stock or (ii) sell, bid for or purchase the Common Stock, or pay
anyone any compensation for soliciting purchases of the Common
Stock.

     

    ARTICLE
VII.

    Conditions
for Advance and Conditions to Closing

     

    Section 7.1.
Conditions Precedent
to the Obligations of the Company. The obligation hereunder of the
Company to issue and sell the shares of Common Stock to the Investor incident to
each Closing is subject to the satisfaction, or waiver by the Investor in
writing, at or before each such Closing, of each of the conditions set forth
below.

     

    (a)   Accuracy of the Investor’s
Representations and Warranties. The representations and warranties of the
Investor shall be true and correct in all material respects.

     

    (b) 
Performance by the
Investor. The Investor shall have performed, satisfied and complied in
all respects with all covenants, agreements and conditions required by this
Agreement and the Registration Rights Agreement to be performed, satisfied or
complied with by the Investor at or prior to such Closing.

     

    Section 7.2.
Conditions Precedent
to the Right of the Company to Deliver an Advance Notice. The right of
the Company to deliver an Advance Notice is subject to the fulfillment by the
Company, on such Advance Notice Date (a “Condition Satisfaction
Date”), of each of the following conditions, any of which may be waived
in writing by the Investor:

     

    (a) 
Registration of the
Common Stock with the SEC. The Company shall have filed with the SEC a
Registration Statement with respect to the resale of the Registrable Securities
in accordance with and subject to the terms of the Registration Rights
Agreement. As set forth in the Registration Rights Agreement, the Registration
Statement shall have previously become effective and shall remain effective on
each Condition Satisfaction Date and (i) neither the Company nor the
Investor shall have received notice that the SEC has issued or intends to issue
a stop order with respect to the Registration Statement or that the SEC
otherwise has suspended or withdrawn the effectiveness of the Registration
Statement, either temporarily or permanently, or intends or has threatened to do
so (unless the SEC’s concerns have been addressed and the Investor is reasonably
satisfied that the SEC no longer is considering or intends to take such action),
and (ii) no other suspension of the use or withdrawal of the effectiveness
of the Registration Statement or related prospectus shall exist. The
Registration Statement must have been declared effective by the SEC prior to the
first Advance Notice Date.

     

    (b) 
Authority. The
Company shall have obtained all permits and qualifications required by any
applicable state in accordance with the Registration Rights Agreement for the
offer and sale of the shares of Common Stock, or shall have the availability of
exemptions therefrom. The sale and issuance of the shares of Common Stock shall
be legally permitted by all laws and regulations to which the Company is
subject.

    


    
      
        
           


        

        
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    (c)  Fundamental Changes.
There shall not exist any fundamental changes to the information set forth in
the Registration Statement which would require the Company to file a
post-effective amendment to the Registration Statement.

     

    (d) 
Performance by the
Company. The Company shall have performed, satisfied and complied in all
material respects with all covenants, agreements and conditions required by this
Agreement and the Registration Rights Agreement to be performed, satisfied or
complied with by the Company at or prior to each Condition Satisfaction
Date.

     

    (e) 
No Injunction.
No statute, rule, regulation, executive order, decree, ruling or injunction
shall have been enacted, entered, promulgated or endorsed by any court or
governmental authority of competent jurisdiction that prohibits or directly and
adversely affects any of the transactions contemplated by this Agreement, and no
proceeding shall have been commenced that may have the effect of prohibiting or
adversely affecting  any of the transactions contemplated by this
Agreement.

     

    (f) 
No Suspension of
Trading in or Delisting of Common Stock. The Common Stock is trading on a
Principal Market. The trading of the Common Stock is not suspended by the SEC or
the Principal Market. The issuance of shares of Common Stock with respect to the
applicable Closing will not violate the shareholder approval requirements of the
Principal Market. The Company shall not have received any notice threatening the
continued quotation of the Common Stock on the Principal Market and the Company
shall have no knowledge of any event which would be more likely than not to have
the effect of causing the Common Stock to not be trading or quoted on a
Principal Market.

     

    (g) 
Maximum Advance
Amount. The amount of an Advance corresponding to the Advance Notice
shall not exceed the Maximum Advance Amount. In addition, unless waived by the
Investor, the Advance amount shall be automatically reduced by 50% if on any day
during the Pricing Period, the VWAP for that day does not meet or exceed the
Floor Price. The Floor Price shall be 85% of the Volume Weighted Average Price
of the Common Stock for the five (5) Trading Days prior to the Advance Notice
Date, or any other price mutually agreed upon by the Company and the Investor in
writing.  In addition, in no event shall the number of shares issuable
to the Investor pursuant to an Advance cause the aggregate number of shares of
Common Stock beneficially owned by the Investor and its affiliates to exceed
9.99% of the then outstanding shares of Common Stock of the Company (“Ownership
Limitation”). Any portion of an Advance that would cause the Investor to
exceed the Ownership Limitation shall automatically be withdrawn. For the
purposes of this section, beneficial ownership shall be calculated in accordance
with Section 13(d) of the Exchange Act.

     

    (h) 
No Knowledge.
The Company has no knowledge of any event which would be more likely than not to
have the effect of causing such Registration Statement to be suspended or
otherwise ineffective at Closing.

     

    (i) 
Executed Advance
Notice. The Investor shall have received the Advance Notice executed by
an officer of the Company and the representations contained in such Advance
Notice shall be true and correct as of each Condition Satisfaction
Date.

    


     

    ARTICLE
VIII.

    Due
Diligence Review; Non-Disclosure of Non-Public Information

     

    Section 8.1.
Non-Disclosure of
Non-Public Information.

     

     (a)  Subject to Section 6.6 and except as otherwise provided
in this Agreement or the Registration Rights Agreement, the Company covenants
and agrees that it shall refrain from disclosing, and shall cause its officers,
directors, employees and agents to refrain from disclosing, any material
non-public information to the Investor without also disseminating such
information to the public.

     

    


    
      
        
           


        

        
          15

          
            

          

        

        
           


        

      

    

    


    (b) Nothing
herein shall require the Company to disclose material, non-public information to
the Investor or its advisors or representatives, and the Company represents that
it does not disseminate material, non-public information to any investors who
purchase stock in the Company in a public offering, to money managers or to
securities analysts in violation of Regulation FD of the Exchange Act, provided,
however, that notwithstanding anything herein to the contrary, the Company will,
as hereinabove provided and subject to compliance with Regulation FD,
immediately notify the advisors and representatives of the Investor and, if any,
underwriters, of any event or the existence of any circumstance (without any
obligation to disclose the specific event or circumstance) of which it becomes
aware, constituting material, non-public information (whether or not requested
of the Company specifically or generally during the course of due diligence by
such persons or entities), which, if not disclosed in the prospectus included in
the Registration Statement would cause such prospectus to include a material
misstatement or to omit a material fact required to be stated therein in order
to make the statements, therein, in light of the circumstances in which they
were made, not misleading. Nothing contained in this Section 8.1 shall be
construed to mean that such persons or entities other than the Investor (without
the written consent of the Investor prior to disclosure of such information) may
not obtain material, non-public information in the course of conducting due
diligence in accordance with the terms of this Agreement and nothing herein
shall prevent any such persons or entities from notifying the Company of their
opinion that based on such due diligence by such persons or entities, that the
Registration Statement contains an untrue statement of material fact or omits a
material fact required to be stated in the Registration Statement or necessary
to make the statements contained therein, in light of the circumstances in which
they were made, not misleading.

     

    ARTICLE
IX.

    Choice
of Law/Jurisdiction

     

    Section 9.1.
Governing Law.
This Agreement shall be governed by and interpreted in accordance with the laws
of the State of New York without regard to the principles of conflict of
laws.

     

    Section 9.2.
Arbitration.  Any
dispute arising out of or in connection with this Agreement or otherwise
relating to the parties relationship that cannot be settled by the Company and
the Investor after discussion shall be settled solely by arbitration. Any such
arbitration shall be fully and finally resolved in binding arbitration in a
proceeding in the State of New York, City of New York, in accordance with the
rules of the American Arbitration Association before a single arbitrator. 
The arbitrator shall not have the authority to modify or change any of the terms
of this Agreement.  The arbitrator may award interim relief and grant
specific performance in addition to monetary damages.  The Company and
the Investor further agree that no demand for punitive or exemplary damages
shall be made in any arbitration proceeding.  Any monetary award shall
be in U.S. dollars.  The arbitrator's award shall be final and binding upon
the parties, and judgment upon the award may be entered in any court of
competent jurisdiction in any state of the United States or country or
application may be made to such court for a judicial acceptance of the award and
an enforcement as the law of such jurisdiction may require or
allow. 

     

    ARTICLE
X.

    Assignment;
Termination

     

    Section 10.1.
Assignment.
Neither this Agreement nor any rights or obligations of the Company or the
Investor hereunder may be assigned to any other Person.

     

    Section 10.2.
Termination.

     

     (a) Unless earlier terminated as provided hereunder,
this Agreement shall terminate automatically on the earliest of (i) the
first day of the month next following the 36-month anniversary of the Effective
Date, or (ii) the date on which the Investor shall have made payment of
Advances pursuant to this Agreement in the aggregate amount of the Commitment
Amount.

     

    (b) The
Company may terminate this Agreement effective upon fifteen Trading Days’ prior
written notice to the Investor; provided that (i) there are no Advances
outstanding, and (ii) the Company has paid all amounts owed to the Investor
pursuant to this Agreement. This Agreement may be terminated at any time by the
mutual written consent of the parties, effective as of the date of such mutual
written consent unless otherwise provided in such written consent. In the event
of any termination of this Agreement by the Company hereunder, so long as the
Investor owns any shares of Common Stock issued hereunder, unless all of such
shares of Common Stock may be resold by the Investor without registration and
without any time, volume or manner of sale limitations pursuant to Rule 144, the
Company shall not (i) cancel the common stock issued to Investor or suspend
(except as provided for in the Registration Rights Agreement)
or  withdraw the Registration Statement or otherwise cause the
Registration Statement to become ineffective, or voluntarily delist the Common
Stock from, the Principal Market without listing the Common Stock on another
Principal Market.

     

    


    
      
        
           


        

        
          16

          
            

          

        

        
           


        

      

    

    


    (c) The
obligation of the Investor to make an Advance to the Company pursuant to this
Agreement shall terminate permanently (including with respect to an Advance Date
that has not yet occurred) in the event that (i) there shall occur any stop
order or suspension of the effectiveness of the Registration Statement for an
aggregate of fifty (50) Trading Days, during the Commitment Period, or
(ii) the Company shall at any time fail materially to comply with the
requirements of Article VI and such failure is not cured within thirty
(30) days after receipt of written notice from the Investor, provided, however, that this
paragraph (c) shall not apply to any period commencing upon the filing of a
post-effective amendment to such Registration Statement and ending upon the date
on which such post effective amendment is declared effective by the
SEC.

     

    (d) Nothing
in this Section 10.2 shall be deemed to release the Company or the Investor
from any liability for any breach under this Agreement, or to impair the rights
of the Company and the Investor to compel specific performance by the other
party of its obligations under this Agreement. The indemnification provisions
contained in Sections 5.1 and 5.2 shall survive termination
hereunder.

     

    ARTICLE
XI.

    Notices

     

    Section 11.1.
Notices. Any
notices, consents, waivers, or other communications required or permitted to be
given under the terms of this Agreement must be in writing and will be deemed to
have been delivered (i) upon receipt, when delivered personally;
(ii) three (3) days after being sent by U.S. certified mail, return
receipt requested, (iii) one (1) day after deposit with a nationally
recognized overnight delivery service, in each case properly addressed to the
party to receive the same or (iv) or upon confirmation of receipt of email by
the recipient emailing back the sender that they are in receipt of the email.
The addresses and emails for such communications shall be:

     

    
      	 
      	 
      	 
      
	
              If
      to the Company, to:

            	 
      	
              Global
      Resource Corporation

            
	 
      	 
      	
              1000
      Atrium Way, Suite 100

            
	 
      	 
      	
              Mount
      Laurel, New Jersey 08054

            
	 
      	 
      	
              Attention:
      Ken Kinsella, CEO

            
	 
      	 
      	
              Telephone:
      (856) 767-5665

            
	 
      	 
      	
              E-Mail:  ken@globalresourcecorp.com

            
	 
      	 
      	 
      
	
              With
      a copy to:

            	 
      	
              Westerman
      Ball Ederer Miller & Sharfstein, LLP

            
	 
      	 
      	
              1201
      RXR Plaza

            
	 
      	 
      	
               Uniondale,
      New York 11556

            
	 
      	 
      	
              Attention:  Alan
      C. Ederer

            
	 
      	 
      	
              Telephone:  (516)
      622-9200 Ext. 410

            
	 
      	 
      	
              E-mail:  aederer@westermanllp.com

            
	 
      	 
      	 
      
	
              If
      to the Investor(s):

            	 
      	
              AGS
      Capital Group, LLC

            
	 
      	 
      	
              2
      Water Street, 17th
      Floor

            
	 
      	 
      	
              New
      York, New York

            
	 
      	 
      	
              Attention:
      Allen Silberstein

            
	 
      	 
      	
              Telephone:
      212-217-9139

            
	 
      	 
      	
              Email:
      asilberstein@agscapitalgroup.com

            
	 
      	 
      	 
      
	 
      	 
      	 
      


    

    Each
party shall provide five (5) days’ prior written notice to the other party
of any change in address or email.

     

    


    
      
        
           


        

        
          17

          
            

          

        

        
           


        

      

    

    


    


     

    ARTICLE
XII.

    Miscellaneous

     

    Section 12.1.
Counterparts.
This Agreement may be executed in two or more identical counterparts, all of
which shall be considered one and the same agreement and shall become effective
when counterparts have been signed by each party and delivered to the other
party.

     

    Section 12.2 Entire Agreement;
Amendments. This Agreement and the Registration Rights Agreement
supersedes all other prior oral or written agreements between the Investor, the
Company, their affiliates and persons acting on their behalf with respect to the
matters discussed herein, and this Agreement, the Registration Rights Agreement
and the instruments referenced herein and therein contain the entire
understanding of the parties with respect to the matters covered herein and
therein and, except as specifically set forth herein or therein, neither the
Company nor the Investor makes any representation, warranty, covenant or
undertaking with respect to such matters. No provision of this Agreement may be
waived or amended other than by an instrument in writing signed by the party to
be charged with enforcement.

     

    Section 12.3.
Reporting Entity for
the Common Stock. The reporting entity relied upon for the determination
of the trading price or trading volume of the Common Stock on any given Trading
Day for the purposes of this Agreement shall be Bloomberg, L.P. or any successor
thereto. The written mutual consent of the Investor and the Company shall be
required to employ any other reporting entity.

     

    Section 12.4.
Fees, Expenses and
Restricted Shares. Each of the parties shall pay its own fees and
expenses (including the fees of any attorneys, accountants, appraisers or others
engaged by such party) in connection with this Agreement and the transactions
contemplated hereby, except that the Company shall pay a Due Diligence fee of
Ten Thousand ($10,000) to Investor upon signing this Agreement, Five Thousand
($5,000) of which has already been paid and Five Thousand ($5,000) which shall
be paid by Company to Investor upon the first Advance.  Company shall
transfer to Investor 300,000 shares of stock three days after signing the
Reserve Equity Financing Agreement. For any fund or entity that the Investor
directly or indirectly introduces to the Company who subsequently provides
bridge financing or assists in providing bridge financing to the Company, the
Company shall deliver an additional 500,000 shares of stock to the Investor
three days after signing the bridge financing agreement.  In the event
that the Company does not obtain bridge financing directly or indirectly through
the Investor but advances $2,500,000 through the Reserve Equity Financing
arrangement, the Company shall issue an additional 500,000 shares of stock three
days after having Advanced an aggregate sum of $2,500,000.  All shares
of stock delivered to Investor by the Company shall be included in a
Registration Statement by the Company. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, the prevailing
party shall be entitled to reasonable fees, costs and disbursements in addition
to any other relief to which such party may be entitled.

     

    Section
12.5 Severability. If 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; provided that, if the severance
of such provision materially changes the economic benefits of this Agreement to
either party as such benefits are anticipated as of the date hereof, then such
party may terminate this Agreement on five (5) business days prior written
notice to the other party.

     

    Section 12.5. Confidentiality. If
for any reason the transactions contemplated by this Agreement are not
consummated, each of the parties hereto shall keep confidential any information
obtained from any other party (except information publicly available or in such
party’s domain prior to the date hereof, and except as required by court order)
and shall promptly return to the other parties all schedules, documents,
instruments, work papers or other written information without retaining copies
thereof, previously furnished by it as a result of this Agreement or in
connection herein.

     

    [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

     

    


    
      
        
           


        

        
          18

          
            

          

        

        
           


        

      

    

    


    


     

     

    IN WITNESS WHEREOF, the
parties hereto have caused this Reserve Equity Financing Agreement to be
executed by the undersigned, thereunto duly authorized, as of the date first set
forth above.

     

    
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
              COMPANY:

            
	 
      	 
      	
              Global
      Resource Corp.

            
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
              By:

            	 
      	/s/
      Kenneth Kinsella
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
              Name:
      Kenneth Kinsella

            
	 
      	 
      	
              Title:
      Chief Executive Officer

            
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
              INVESTOR:

            
	 
      	 
      	
              ags
      capital group, llc

            
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
              By:

            	 
      	/s/
      Allen Silberstein
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
              Name:
      Allen Silberstein

            
	
               
      

            	 
      	
              Title:
      Chief Executive Officer

            


    

     

     

     

     

     

     

     

     

     

     

     

    


    
      
        
           


        

        
          19

          
            

          

        

        
           


        

      

    

    


     

    EXHIBIT A

     

    ADVANCE
NOTICE

     

        Global
Resource Corp.

     

    


     

    The
undersigned, Global Resource
Corp. hereby certifies, with respect to the sale of shares of Common
Stock of ­­­­­­­­­­­­­­­­­­­
Global Resource Corp. (the “Company”) issuable in
connection with this Advance Notice, delivered pursuant to the Reserve Equity
Financing Agreement (the “Agreement”), as
follows:

     

    1. The
undersigned is the duly elected Officer of the Company, its Chief Executive,
President or Chief Financial Officer.

     

    2. There
are no fundamental changes to the information set forth in the Registration
Statement which would require the Company to file a post effective amendment to
the Registration Statement.

     

    3. The
Company has performed in all material respects all covenants and agreements to
be performed by the Company and has complied in all material respects with all
obligations and conditions contained in the Agreement on or prior to the Advance
Notice Date, and shall continue to perform in all material respects all
covenants and agreements to be performed by the Company through the applicable
Advance Date. All conditions to the delivery of this Advance Notice are
satisfied as of the date hereof.

     

    4. The
undersigned hereby represents, warrants and covenants that it has made all
filings (“SEC
Filings”) required to be made by it pursuant to applicable securities
laws (including, without limitation, all filings required under the Securities
Exchange Act of 1934, which include Forms 10-Q or, 10-K or, 8-K, etc.). All SEC
Filings and other public disclosures made by the Company, including, without
limitation, all press releases, analysts meetings and calls, etc. (collectively,
the “Public
Disclosures”), have been reviewed and approved for release by the
Company’s attorneys and, if containing financial information, the Company’s
independent certified public accountants. None of the Company’s Public
Disclosures contain, as of their respective dates, any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.

     

    5. The
Advance requested is  _____shares .

     

    The
undersigned has executed this Certificate this  _____  day of
 _____.

     

    
      	 
      	 
      	 
      	 
      	 
      
	 
      	
              ____________________________

               

            	 
      
	 
      	
              By:  

            	 
      	 
      
	 
      	 
      	
              Name:  

            	 
      	 
      
	 
      	 
      	
              Title:  

            	 
      	 
      
	 
      


    

     

    If
Returning This Advance Notice via email Please Send To: asilberstein@agscapitalgroup.com

    
      	 
      	 
      	 
      
	
              If
      by Mail, via Federal Express To:

            	 
      	
              AGS
      Capital Group, LLC, Attention Allen Silberstein

            
	 
      	 
      	
              2
      Water Street, 17th
      Floor, New York, New York, 10004

            


    

     

    


    


    
      
        
           


        

        
          20

          
            

          

        

        
           


        

      

    

    


     

    SCHEDULE
2.4

     

          Global
Resource Corp.

     

     

    The
undersigned hereby agrees that for a period commencing on November 24, 2009 and
expiring upon the termination of the Reserve Equity Financing Agreement dated
November 24, 2009  between the Company and the Investor (the “Lock-up Period”), he,
she or it will not, directly or indirectly, without the prior written consent of
the Investor, issue, offer, agree or offer to sell, sell, grant an option for
the purchase or sale of, transfer, pledge, assign, hypothecate, distribute or
otherwise encumber or dispose of any securities of the Company, including common
stock or options, rights, warrants or other securities underlying, convertible
into, exchangeable or exercisable for or evidencing any right to purchase or
subscribe for any common stock (whether or not beneficially owned by the
undersigned), or any beneficial interest therein (collectively, the “Securities”) except
in accordance with the volume limitations set forth in Rule 144(e) of the
General Rules and Regulations under the Securities Act of 1933, as amended.
Notwithstanding the forgoing, nothing herein shall prevent the undersigned from
disposing of Securities (i) if the recipient of the Securities agrees to be
bound by the terms of this Lock-up, or (ii) in connection with a merger
where the Company is not the surviving entity.

     

    In order
to enable the aforesaid covenants to be enforced, the undersigned hereby
consents to the placing of legends and/or stop-transfer orders with the transfer
agent of the Company’s securities with respect to any of the Securities
registered in the name of the undersigned or beneficially owned by the
undersigned, and the undersigned hereby confirms the undersigned’s investment in
the Company.

     

     

    Dated:
___________________, 2009

    
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
              Signature

            
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	
              Name:

            	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
              Address:

            	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
              City,
      State, Zip Code:

            	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
              _____________________________________________________________

            
	 
      	 
      	
              Print
      Social Security Number

            
	 
      	 
      	
              or
      Taxpayer I.D. Number

            


    

     

    


    


     

    


    
      
        
           


        

        
          21