Document:

Exhibit 10.01

 

MUTUAL RESCISSION OF

NOTE CONVERSION(S) AND

REINSTATEMENT
OF DEBT AGREEMENT

 

This Mutual Rescission of Note
Conversion(s) and Reinstatement of Debt Agreement (the “Rescission Agreement” or “Agreement”) is
entered into effective this 23rd day of July, 2013 by and between Verity Corp (f/k/a AquaLiv Technologies, Inc.), a Nevada
corporation (“Verity”), Silverdale Partners, LP, a Washington state limited partnership (“Silverdale”),
Old Sawmill Partners, LLC, a Washington state limited liability company (“Old Sawmill”), Amboy Equities, Inc., a
New York corporation (“Amboy”), Fide Management, Inc., a New York corporation (“Fide”), and Virtu
Consulting Services, Inc., a New York corporation (“Virtu”). Each of Verity, Silverdale, Old Sawmill, Amboy,
Fide, and Virtu shall be referred to as a “Party” and collectively as the “Parties.”

 

RECITALS

 

WHEREAS, Silverdale entered into an
Assignment Agreement dated December 10, 2012 assigning certain debts owed by Verity in the amount of $95,182.16 to Old Sawmill,
Amboy, Fide, and Virtu;

 

WHEREAS, Verity entered into Note Conversion
Agreement(s) dated December 10, 2012 (the “Conversion Agreement(s)”) with Old Sawmill, Amboy, Fide, and Virtu;

 

WHEREAS, the Parties wish to rescind
the Conversion Agreement(s) of Amboy, Fide, and Virtu, and reinstate the associated debt of $72,000 back to the books of Verity
in the form of a Restated Promissory Note (attached as Exhibit A) for the benefit of Old Sawmill;

 

WHEREAS, the Parties wish for the 900,000
post-split free trading shares of Verity associated with the rescinded Conversion Agreement(s) of Amboy, Fide, and Virtu be cancelled
and returned to the Verity treasury.

 

NOW, THEREFORE, for good and adequate
consideration, the receipt of which is hereby acknowledged, the Parties covenant, promise and agree as follows:

 

AGREEMENT

 

1.    RESCISSION: Effective on the
date hereof, the Conversion Agreement(s) of Amboy, Fide, and Virtu are hereby rescinded in their entirety, and upon the
completion of the deliveries set forth in Section 3 below, the obligations of each Party to the other Parties shall be
terminated. All agreements entered into as contemplated by the Conversion Agreement(s) are terminated effective on the date
hereof.

 

2.    DEBT REINSTATEMENT: In conjunction
with this Rescission Agreement, Verity shall execute and deliver to Old Sawmill a Restated Promissory Note in the amount of $72,000.

 

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3.    DELIVERIES: Within five (5) business
days of the execution of this Rescission Agreement, the following shall occur:

 

(a)    Amboy
shall deliver to Verity Three Hundred Thousand (300,000) post-split shares of Verity common stock (the “Verity Shares”),
together with a medallion guaranteed stock power, endorsed in blank;

 

(b)    Fide
shall deliver to Verity Three Hundred Thousand (300,000) Verity Shares, together with a medallion guaranteed stock power, endorsed
in blank;

 

(c)    Virtu
shall deliver to Verity Three Hundred Thousand (300,000) Verity Shares , together with a medallion guaranteed stock power, endorsed
in blank;

 

(d)    Verity
shall deliver to Old Sawmill a Restated Promissory Note in the amount of $72,000, within two (2) business days of the receipt
of all of the foregoing Verity Shares and stock powers.

 

4.    REPRESENTATIONS AND WARRANTIES:
Each of the Parties hereby represents, warrants and agrees as follows:

 

(a)    Each
Party has all requisite corporate power and authority to enter into and perform this Rescission Agreement and to consummate the
transactions contemplated hereby.

 

(b)    Each
Party hereby agrees to indemnify and defend the other Parties and their directors and officers and hold them harmless from and
against any and all liability, damage, cost or expense incurred on account of or a rising out of the actions of an indemnifying
party for:

 

(i)    Any
breach of or inaccuracy in representations, warranties or agreements herein;

 

(ii)    Any
action, suit or proceeding based on a claim that any of said representations, warranties or agreements were inaccurate or misleading
or otherwise cause for obtaining damages or redress from an indemnifying party or any of its directors or officers.

 

(c)    The
representations, warranties and agreements contained in this Rescission Agreement shall be binding on each Parties’ successors,
assigns, heirs and legal representatives and shall inure to the benefit of the respective successors and assigns of the other
Parties.

 

5.    This Rescission Agreement may
not be amended, canceled, revoked or otherwise modified except by written agreement subscribed by all of the Parties to be
charged with such modification.

 

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6.    All Parties hereto agree to pay
their own costs and attorneys’ fees.

 

7.    This Agreement and the rights
of the parties hereunder shall be governed by and construed in accordance with the laws of the State of Nevada including all matters
of construction, validity, performance, and enforcement and without giving effect to the principles of conflict of laws. Venue
for any action brought under this Agreement shall be in the appropriate court in Clark County, Nevada, at the discretion of the
Party first bringing the action.

 

8.    The Parties agree and stipulate
that each and every term and condition contained in this Agreement is material, and that each and every term and condition may
be reasonably accomplished within the time limitations, and in the manner set forth in this Agreement.

 

9.    The Parties agree and stipulate
that time is of the essence with respect to compliance with each and every item set forth in this Agreement.

 

10.    This Agreement, along with
the exhibits hereto, sets forth the entire agreement and understanding of the Parties hereto and supersedes any and all prior
agreements, arrangements and understandings related to the subject matter hereof. No understanding, promise, inducement,
statement of intention, representation, warranty, covenant or condition, written or oral, express or implied, whether by
statute or otherwise, has been made by any party hereto which is not embodied in this Agreement or the written statements,
certificates, or other documents delivered pursuant hereto or in connection with the transactions contemplated hereby, and no
Party hereto shall be bound by or liable for any alleged understanding, promise, inducement, statement, representation,
warranty, covenant or condition not so set forth.

 

11.    This Agreement may be executed
in one or more counter parts, each of which when executed and delivered shall be an original, and all of which when executed shall
constitute one and the same instrument.

 

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blank]

 

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IN WITNESS WHEREOF,
the Parties hereto, agreeing to be bound hereby, execute this Agreement upon the date first set forth above.

 

	“VERITY” 	 	“SILVERDALE” 
	 	 	 
	Verity Corp. 	 	Silverdale Partners, LP
	 	 	 
	/s/ DUANE SPADER	 	/s/ TERRY STEIN
	By: 	Duane Spader	 	By: 	Terry Stein
	Its:	 President / CEO	 	Its:	 Managing Partner

 

	“OLD SAWMILL” 	 	“AMBOY” 
	 	 	 
	Old Sawmill Partners, LLC	 	Amboy
    Equities, Inc. 
	 	 	 
	/s/ TERRY STEIN	 	/s/ RALPH TORRES
	By: 	Terry Stein	 	By:	 Ralph Torres
	Its:	 Manager	 	Its:	 President 

 

	“FIDE” 	 	“VIRTU” 
	 	 	 
	Fide Management, Inc. 	 	Virtu Consulting Services, Inc. 
	 	 	 
	/s/ MICHAEL MALOKU	 	/s/ JAMES CHRISTOPHER
	By:	 Michael Maloku	 	By: 	James Christopher
	Its:	 President 	 	Its:	 President 

 

    	Page 4 of 4Exhibit 10.02

 

AMENDED AND RESTATED PROMISSORY NOTE

 

THIS PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. NO SALE OR DISPOSITION MAY BE EFFECTED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR AN EXEMPTION THEREFROM.

 

	US$72,000	Original Issue Date: February 5, 2009
	 	Amended and Restated as of the Effective Time

 

For value received and pursuant
to the terms of this Amended and Restated Promissory Note (“Amended Note”), Verity Corp., a
Nevada corporation (“Payor”), promises to pay to Old Sawmill Partners, LLC(the
“Lender”), or its successors or assigns, the principal sum of US $72,000. Interest on the
outstanding principal amount shall accrue at the rate of 6% per annum (“Interest Rate”) or at
the Default Rate (as defined herein). Interest shall commence on August 1, 2013 and shall continue on the outstanding
principal until paid in full. Interest shall be computed on the basis of a year of 365 days for the actual number of days
elapsed. This Amended Note shall be effective and enforceable immediately upon, but not until, the Closing (as defined
herein) (the “Effective Time”). At the Effective Time, this Amended Note shall supplant and
replace, in its entirety, that certain Promissory Note, dated February 5, 2009, the Assignment Agreement, dated December 10,
2012, and certain Note Conversion Agreement(s), dated December 10, 2012.

 

1. Definitions. The following terms shall have
the meanings herein specified:

 

“Closing” means
the consummation of the transactions contemplated by that certain Mutual Rescission of Note Conversion(s) and Reinstatement of
Debt Agreement, dated July 23, 2013, by and among Verity Corp., Silverdale Partners, LP, Old Sawmill Partners, LLC, Amboy Equities,
Inc., Fide Management, Inc., and Virtu Consulting Services, Inc.

 

“Event of Default”
means an event specified in Section 3 hereof.

 

“Holder” means
Lender and each endorsee, pledgee, assignee, owner and holder of this Note, as such; and any consent, waiver or agreement in writing
by the then Holder with respect to any matter or thing in connection with this Note, whether altering any provision hereof or otherwise,
shall bind all subsequent Holders. Notwithstanding the foregoing, Payor may treat the registered holder of this Note as Holder
for all purposes.

 

Words of one gender include the other gender; the singular
includes the plural; and the plural includes the singular, unless the context otherwise requires.

 

2. Payment of the Note – Principal and Interest

 

a. Term. All principal and all
unpaid accrued interest shall be due and payable on or before 5:00 p.m., Pacific time, on January 15, 2014 (the “Maturity
Date”). The Maturity Date may be extended by Holder, at the option of Holder and in its sole discretion, effective
upon written notice of such extension by Holder to Payor not less than 15 calendar days prior to the Maturity Date. At any time
after the Maturity Date (as it may be extended pursuant to this Section 2(a)), Holder may proceed to collect the entire outstanding
principal balance hereof, together with accrued but unpaid interest thereon. All payments of interest and principal shall be in
lawful money of the United States of America and shall be made to Holder at the address stated in Section 9 below. All payments
shall be applied first to accrued interest, and thereafter to principal.

 

    	 

    	 

    

 

b. Payment on Event of
Default. If any Event of Default occurs hereunder, then, at the option and upon the declaration of Holder of this Note
and upon written notice to Payor this Note shall accelerate and all principal and unpaid accrued interest shall become due
and payable, and, at any time thereafter, Holder may proceed to collect such principal and accrued interest and/or proceed
with any remedies available to Holder under applicable law.

 

d. Default Interest Rate. In the
event Payor fails to pay the entire unpaid principal balance when due or interest when due, Payor shall pay a default penalty (the
“Default Penalty”) in an amount equal to 10% of the then outstanding principal and accrued and outstanding
interest under this Note and the entire unpaid principal balance, accrued and outstanding interest, and the Default Penalty (if
not paid) shall thereafter bear interest at a default interest rate equal of 12

 

e. Prepayment. Payor may prepay
this Note at any time following the Original Issue Date.

 

3. Events of Default. The occurrence of the
following, if uncured within twenty (20) days from written notice thereof and only in the first instance of such failure or
breach and any instance thereafter, upon the occurrence, shall constitute an “Event of Default”:

 

a. Payor fails to pay timely any of the
principal amount due under this Note on the date the same becomes due and payable or any accrued interest or other amounts due
under this Note on the date the same becomes due and payable;

 

4. Loss or Mutilation of Note. Upon receipt
by Payor of evidence reasonably satisfactory to Payor of the loss, theft, destruction or mutilation of this Note, together with
an indemnity reasonably satisfactory to Payor, in the case of loss, theft, or destruction, or the surrender and cancellation of
this Note, in the case of mutilation, Payor shall execute and deliver to Holder a new Note of like tenor and denomination as this
Note.

 

5. Waiver or Amendment. Any term of this Note
may be amended or waived with the written consent of Payor and Holder. The failure of Holder to enforce at any time any of the
provisions of this Note shall not, absent an express written waiver signed by Holder specifying the provision being waived, be
construed to be a waiver of any such provision, nor in any way to affect the validity of this Note or any part hereof or the right
of Holder thereafter to enforce each and every such provision. No waiver of any breach of this Note shall be held to be a waiver
of any other or subsequent breach.

 

6. Notices. All notices or other communications
to a party required or permitted hereunder shall be in writing and shall be delivered personally or by facsimile (receipt confirmed
electronically) to such party (or, in the case of an entity, to an executive officer of such party) or shall be sent by a reputable
express delivery service or by certified mail, postage prepaid with return receipt requested, addressed as follows:

 

if to Holder to:

Old Sawmill Partners, LLC

Bremerton, WA 98311

Attention: Terry Stein, Manager

 

if to Payor to:

 

Verity Corp..

47184 258th Street

Sioux Falls, SD 57107

Attention: Duane Spader, President 

 

Any party may change the above specified recipient and/or
mailing address by notice to all other parties given in the manner herein prescribed. All notices shall be deemed given on the
day when actually delivered as provided above (if delivered personally or by facsimile, provided that any such facsimile is received
during regular business hours at the recipient’s location) or on the day shown on the return receipt (if delivered by mail
or delivery service).

 

    	 

    	 

    
 

7. Headings. The titles and headings to the
Sections herein are inserted for the convenience of reference only and are not intended to be a part of or to affect the meaning
or interpretation of this Note. This Note shall be construed without regard to any presumption or other rule requiring construction
hereof against the party causing this Note to be drafted.

 

8. Governing Law; Waiver of Jury Trial. This
Note shall be governed by and construed under the laws of the State of Nevada, without giving effect to conflicts of laws principles
that would require the application of the laws of any other jurisdiction. THE PARTIES EACH HEREBY, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, WAIVE THEIR RESPECTIVE RIGHTS TO JURY TRIAL OF ANY DISPUTE BASED UPON OR ARISING OUT OF THIS AGREEMENT.

 

	Payor:	 	Lender:
	 	 	 	 	 
	Verity Corp. 	 	Old Sawmill Partners, LLC
	 	 	 	 	 
	/s/ DUANE SPADER	 	/s/ TERRY STEIN
	By:	Duane Spader	 	By:	Terry Stein
	Its:	President / CEO	 	Its:	Manager

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