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EXHIBIT 10.6
PLAN AND AGREEMENT OF REORGANIZATION
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UNDER I.R.C. SS.368(a)(1)(C)
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GLOBAL RESOURCE CORPORATION
AND
CARBON RECOVERY CORPORATION
THIS PLAN AND AGREEMENT OF REORGANIZATION, dated this 26th day of
July,
2006, made by and between:
GLOBAL RESOURCE CORPORATION,, a Nevada corporation having its
principal
business office located at 219 Robwood Road, Baltimore MD 21222
(hereinafter
referred to as "Buyer");
AND
CARBON RECOVERY CORPORATION (hereinafter referred to as "Seller"),
a
New Jersey corporation having its principal business office located
at
Bloomfield Business Park, 408 Bloomfield Drive, Unit 3, West
Berlin, New Jersey
08091 (hereinafter "Seller"):
WITNESSETH THAT:
WHEREAS, Seller desires to transfer to Buyer at the Closing (as
hereinafter defined), and Buyer desires to acquire from Seller at
the Closing,
substantially all of Seller's assets, as more fully described
herein, upon and
subject to the terms and conditions contained in this Agreement;
and
WHEREAS, it is intended by the parties that the transaction qualify
as
a tax-free reorganization within the meaning of Section
368(a)(1)(C) of the
Internal Revenue Code of 1986, as amended (the "Code") and that for
accounting
purposes it is intended that the transaction be treated as a
"purchase";
NOW, THEREFORE, intending to be legally bound, and in consideration
of the
foregoing recitals and the mutual promises and covenants contained
herein, and
other good and valuable consideration, the receipt and sufficiency
of which are
hereby acknowledged, Buyer and Seller hereby agree as follows:
ARTICLE I
DEFINITIONS
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Definitions. In addition to the terms defined elsewhere in this
Agreement, when used in this Agreement the following capitalized
terms shall
have the meanings indicated:
"Act of Bankruptcy" when used in reference to any Person, shall
mean
the occurrence of any of the following with respect to such Person:
(a) such
Person shall have made an assignment of all or substantially all of
its assets
for the benefit of his or its creditors; (b) such Person shall have
filed a
voluntary petition in bankruptcy; (c) such Person shall have been
adjudicated
bankrupt or insolvent; (d) such Person shall have filed any
petition or answer
seeking for himself or itself any reorganization, liquidation,
dissolution or
similar relief, (e) such Person shall have sought or consented to,
or acquiesced
in, the appointment of any trustee, receiver, or liquidator of such
Person of
all or substantially all of the properties of such Person; or (f)
sixty (60)
days shall have elapsed after the commencement of an action against
such Person
seeking reorganization, arrangement liquidation, dissolution or
similar relief
without such action having been dismissed.
"Affiliate" when used in reference to any Person, shall mean any
Person
that, directly or indirectly through one or more intermediaries,
controls, is
controlled by or is under common control with the Person in
question.
"Applicable Law(s)" shall mean any applicable federal, state, local
or
foreign law, ordinance, order, regulation, rule or requirement of
any
governmental or quasi-governmental agency, instrumentality, board,
commission,
bureau or other authority having jurisdiction.
"Assets" shall mean (i) all right, title and interest of Seller in
and
to the assets, real property, personal property, equipment,
intellectual
property, software and other property of Seller set forth on
Exhibit 1 attached
hereto, (ii) all transferable net operating losses, capitalized
expenses and
research and development costs of Seller which may benefit the
Buyer, and (iii)
cash and/or cash equivalents in an amount equal to all cash on
hand/on deposit,
less only an amount not to exceed $10,000 to be used to pay
liabilities unpaid
as of Closing and not being assumed by the Buyer..
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"Material Adverse Effect" shall mean any material adverse change or
any
development involving a prospective material adverse change in or
affecting the
general affairs, business, prospects, management, financial
position,
stockholders' equity or results of operations of a Person, taken as
a whole.
"Person" shall mean any individual, corporation, partnership,
joint
venture, limited liability company, unincorporated association,
trust or other
legal entity.
"Tax Returns" shall mean all federal, state, local and foreign
tax
returns and reports, including by way of illustration and not of
limitation,
income tax returns, payroll tax returns, unemployment tax returns,
sales and use
tax returns, wage tax returns, withholding tax returns and
franchise tax
returns.
ARTICLE II
SALE AND TRANSFER OF ASSETS AND ASSUMPTION OF CERTAIN
LIABILITES
2.1 Transfer of Assets. Except as otherwise herein expressly set
forth,
Seller hereby agrees that at the Closing provided for in Section
4.1 hereof (the
"Closing"), Seller shall sell, assign, transfer, convey and deliver
to Buyer all
of Seller's right, title and interest in and to the Assets. Seller
represents
that the Assets, as set forth on Exhibit 1, are substantially all
of the assets
of Seller.
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2.2 Excluded Assets. Seller and Buyer understand and agree that
the
sale, assignment, transfer, conveyance and delivery specified in
Section 2.1
hereof shall not include any assets, rights or property of Seller
other than
those expressly included in the definition of Assets. Seller
represents that any
assets not set forth on Exhibit 1 are immaterial and DI MINIMUS and
that Buyer
is acquiring substantially all of the assets of Seller.
2.3 Assumed Obligations. Buyer agrees that at the Closing, Buyer
shall
assume only those specific contracts, agreements, leases,
covenants, obligations
and liabilities on the list attached hereto as Exhibit 2
(collectively, the
"Assumed Liabilities") which liabilities shall include the issuance
of Common
Stock Purchase Warrants. As of the Closing Date, Seller, as soon as
reasonably
practicable thereafter, will terminate any and all of Seller's
other
(non-assumed) contracts, leases, licenses and agreements and
Seller, shall
remain liable for any and all of its liabilities or encumbrances
not
specifically assumed by Buyer pursuant to this Section 2.3,
including but not
limited to:
(a) liens and encumbrances to which the Assets are subject, or
would
have been subject to, immediately prior to Closing;
(b) any liability or obligation relating to taxes of Seller,
including
any interest or penalties related thereto;
(c) any warranty or performance liability claims relating to the
assets
which arose prior to the Closing; and
(d) any liability or obligation of the Seller, absolute or
contingent,
known or unknown not expressly agreed to be assumed pursuant to
this Agreement.
ARTICLE III
CONSIDERATION
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3.1 Assumption of Certain Liabilities, Stock Issuance and Common
Stock
Purchase Warrants Issuance. In full and complete payment for the
Assets, Buyer
agrees to (i) assume the Assumed Liabilities pursuant to Section
2.3 hereof,
which liabilities shall include the issuance of Common Stock
Purchase Warrants,
(ii) issue to the Seller 50,000,000 post-split shares of Common
Stock of the
Buyer, priced at $1.00 per post-split share, issued in the name of
and paid to
Seller (the Common Stock is hereinafter referred to as the "Global
Resource
Stock)", and (iii) issue to the Seller that number of Common Stock
Purchase
Warrants, containing terms equivalent to those of Seller's Class
"B", Class "D"
and Class "E" Common Stock Purchase Warrants, equal to the total
number of
Seller's Classes "B", "D" and "E" Warrants issued and outstanding
at Closing. It
is understood and agreed that to the extent that the "B", "D" and
"E" warrants
are not exercised, within the provided exercise periods, by the
registered
holders thereof, or their legal assignees, such warrants shall
become null and
void and of no further effect.
3.2 INVESTMENT REPRESENTATIONS. Seller acknowledges, agrees and
represents that:
(a) It has been advised that none of the shares or Warrants of
Buyer
being acquired hereunder have been registered under the Securities
Act of 1933
(the "1933 Act").
(b) All of the securities of Buyer being acquired hereunder are
being,
and will be, acquired and held for investment, not for resale or
distribution to
the public and not for the purpose of effecting or causing to be
effected a
public offering of such securities and, further, that none of such
securities
will be sold, transferred, assigned or disposed of except to a
liquidating trust
for the benefit of Seller's shareholders and Class "B", "D" and
"E"
Warrantholders, in accordance with the 1933 Act and the Rules and
Regulations of
the Securities and Exchange Commission promulgated thereunder.
(c) It has been advised and is aware of the fact, that by reason of
the
foregoing investment representations and restrictions upon
transfer: (i) the
shares of the Buyer's Common Stock and the Warrants must be held
indefinitely
unless they are subsequently registered under the 1933 Act or an
exemption from
such registration is available; (ii) if Rule 144 of the Rules and
Regulations
promulgated by the SEC is applicable to any future routine sales of
any such
securities, such sales can be made only in limited amounts in
accordance with
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the terms and conditions of that Rule; (iii) in the case of
securities to which
that Rule is not applicable, compliance with some applicable
disclosure
exemption, if any be available, will be required; (iv) all of the
certificates
for the shares of Buyer's Common Stock and the Warrant certificates
will bear a
legend restricting transfer thereof; and (v) the Transfer Agent of
Buyer's
Common Stock will be given "stop-transfer" instructions so as to
prevent any
illegal transfer of such shares or warrants.
(d) It has
relied only and exclusively upon its own investigation into
Buyer and its financial condition for purposes of deciding to enter
into and
close this Agreement and to accept shares of Buyer's Common Stock
and warrants
in exchange for its Assets. It has not relied upon any oral or
written
representation made by Buyer or any of its officers or directors
or
representatives of Buyer and that no representation, or statements
shall survive
the Closing with the sole exception of the representations and
warranties
contained in this Agreement.
(e) It has received the audited financial statements of the Buyer
for
the periods ended March 31, 2005 and March 31, 2006, as well as the
Buyer's
10-KSB for the fiscal year ended March 31, 2006 and has had full
opportunity to
review and inspect all books and records of Buyer.
3.3 Liquidation of Seller; Liquidating Trust. Seller
acknowledges
awareness that (i) following the transfer of the Assets it is
required by the
Code to dissolve and in connection therewith to distribute the
Global Resource
Stock to its shareholders, (ii) the Global Resource Stock has not
been
registered with the Securities and Exchange Commission and cannot
be distributed
without either an effective registration statement or an eligible
exemption from
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such registration, and (iii) it must use a liquidating trust to
hold the shares
of Global Resource Stock for the benefit of its shareholders,
pending the
ability to make a legal distribution thereof. Seller agrees to
establish such a
liquidating trust for the benefit of its shareholders and its Class
"B", "D" and
"E" Warrantholders and to transfer the shares and warrants to such
trust pending
compliance by Buyer with Securities and Exchange Commission
requirements for
their distribution.
3.4 Piggy-back Registration Rights. If, during a period of twelve
(12)
months following Closing, Buyer shall file a registration statement
under the
Securities Act of 1933 with the Securities and Exchange Commission,
it shall
give at least thirty (30) days prior notice of such filing to the
trustees of
the liquidating trust. If the trustees so elect, and give written
notice to
Buyer within five (5) business days after notice from Buyer, Buyer
shall include
such shares of the Global Resource Stock (including those issuable
upon the
exercise of warrants) in the registration statement as the trustees
shall elect.
3.5 Demand Registration Rights. Unless the shares have been
registered
pursuant to Section 3.4 during the initial twelve month period, at
any time
thereafter, the trustees of the liquidating trust may serve written
demand on
Buyer that the shares held by the trust and the shares issuable
upon exercise of
the warrants held by the trust be registered. Buyer shall, upon
receipt of such
a demand, in good faith, and with all deliberate speed, effect the
filing of a
registration statement for such shares and shall prosecute such
registration
statement to effectiveness.
ARTICLE IV
CLOSING AND CONDITIONS OF CLOSING
4.1 Closing. The Closing shall occur upon the later of (i) the
close of
business on August 31, 2006 or (ii) as soon thereafter as
practicable following
the satisfaction or waiver of all of the Conditions to Closing set
forth in
Section 4.2 of this Agreement (the "Closing Date").
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4.2 Conditions to Closing. The obligations of Seller to sell the
Assets
and Buyer to purchase the Assets are subject to the satisfaction of
the
following conditions precedent at or prior to the Closing (unless
waived in
writing by the Parties prior to Closing or by the act of
Closing):
(a) Reverse Stock Split. Seller shall have effectuated a 1 for
10
reverse stock split of its Common Stock and shall have only 72,150
shares of its
Common Stock issued and outstanding at Closing, prior to the
issuance of the
Global Resource Stock.
(b) Documents. Buyer shall have received each of the following
items:
(i) This Agreement, duly executed by Seller;
(ii) Any amendment, consent or waiver from any Person necessary
to
fully give binding effect to this Agreement, including but not
limited to
consents to the assignment of contracts and leases, duly executed
by Seller and
such Persons (the "Consents") (each party hereto acknowledges that
this
condition is for the benefit of both Buyer and Seller;
(iii) A Bill of Sale duly executed by Seller;
(iv) Such certificates, documents of title and other instruments
of
conveyance and transfer, if any, as shall be effective to vest in
Buyer good and
marketable title in and to the Assets free and clear of all
encumbrances; and
(v) An
Officer's Certificate, duly executed by an officer of Seller.
(c) Documents. Seller shall have received each of the following
items:
(i) This Agreement, duly executed by Buyer; (
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ii) An Assumption Agreement duly executed by Buyer;
(iii) An Officer's Certificate duly executed by an officer of
Buyer;
(iv) The Global Resource Stock
