MUTUAL RESCISSION OF
NOTE CONVERSION(S) AND
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.”
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post-split free trading shares of Verity associated with the rescinded Conversion Agreement(s) of Amboy, Fide, and Virtu be cancelled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:
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date hereof, the Conversion Agreement(s) of Amboy, Fide, and Virtu are hereby rescinded in their entirety, and upon the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
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.
3. DELIVERIES: Within five (5) business
days of the execution of this Rescission Agreement, the following shall occur:
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;
shall deliver to Verity Three Hundred Thousand (300,000) Verity Shares, together with a medallion guaranteed stock power, endorsed
shall deliver to Verity Three Hundred Thousand (300,000) Verity Shares , together with a medallion guaranteed stock power, endorsed
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:
Party has all requisite corporate power and authority to enter into and perform this Rescission Agreement and to consummate the
transactions contemplated hereby.
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
breach of or inaccuracy in representations, warranties or agreements herein;
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.
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
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.
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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IN WITNESS WHEREOF,
the Parties hereto, agreeing to be bound hereby, execute this Agreement upon the date first set forth above.
||Silverdale Partners, LP|
|/s/ DUANE SPADER
||/s/ TERRY STEIN|
|| President / CEO
|| Managing Partner|
|Old Sawmill Partners, LLC
Equities, Inc. |
|/s/ TERRY STEIN
||/s/ RALPH TORRES|
|| Ralph Torres|
|| President |
|Fide Management, Inc.
||Virtu Consulting Services, Inc. |
|/s/ MICHAEL MALOKU
||/s/ JAMES CHRISTOPHER|
|| Michael Maloku
|| President |