AGREEMENT AND PLAN OF MERGER
by and
among
GREENSHIFT CORPORATION
a Delaware corporation,
and
GS CLEANTECH ACQUISITION, INC.,
a Delaware corporation,
and
GS CARBON ACQUISITION, INC.,
a Delaware corporation,
and
GS CLEANTECH CORPORATION,
a Delaware corporation,
and
GS CARBON CORPORATION,
a Delaware corporation,
<PAGE>
THIS AGREEMENT AND PLAN OF MERGER (the "Agreement"), dated as of APRIL 3, 2007,
by and among GREENSHIFT CORPORATION, a Delaware corporation (the
"Company"), GS
CLEANTECH ACQUISITION, INC. ("CT Acquisition"), GS CARBON
ACQUISITION, INC. ("CR
Acquisition"), GS CLEANTECH CORPORATION, a Delaware Corporation
("GSCT"), and GS
CARBON CORPORATION, a Delaware corporation ("GSCR").
RECITALS
WHEREAS, CT
Acquisition is a
wholly-owned
subsidiary of the Company which has
been recently formed
for the purpose of facilitation a merger with GSCT, and CT
Acquisition has not
engaged in any
business activities and has no assets or
liabilities; and
WHEREAS, the Company
and GSCT desire to merge CT Acquisition with and into GSCT
whereby GSCT shall be the surviving entity pursuant to the terms and
conditions
set forth herein and
whereby the
transaction
is intended to qualify
as a tax
free reorganization
pursuant to Section
368(a) of the Internal Revenue Code of
1986, as amended (the "IRC"), to the extent permitted by applicable
law; and
WHEREAS, in
furtherance
of such combination, the Boards of Directors of the
Company, CT Acquisition and GSCT have each approved the merger of
CT Acquisition
with and into GSCT (the "Merger"), upon the terms and subject to the
conditions
set forth herein, in
accordance with the applicable provisions of the Delaware
General Corporation Law (the "DGCL"); and
WHEREAS, CR
Acquisition is a
wholly-owned
subsidiary of the Company which has
been recently formed
for the purpose of facilitation a merger with GSCR, and CR
Acquisition has not
engaged in any
business activities and has no assets or
liabilities; and
WHEREAS, the Company
and GSCR desire to merge CR Acquisition with and into GSCR
whereby GSCR shall be the surviving entity pursuant to the terms and
conditions
set forth herein and
whereby the
transaction
is intended to qualify
as a tax
free reorganization
pursuant to Section
368(a) of the Internal Revenue Code of
1986, as amended (the "IRC"), to the extent permitted by applicable
law; and
WHEREAS, in
furtherance
of such combination, the Boards of Directors of the
Company, CR Acquisition and GSCR have each approved the merger of
CR Acquisition
with and into GSCR (the "Merger"), upon the terms and subject to the
conditions
set forth herein, in
accordance with the applicable provisions of the Delaware
General Corporation Law (the "DGCL"); and
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and
agreements herein contained, and intending to be legally bound
hereby, the
parties agree as follows:
<PAGE>
ARTICLE I
GS CLEANTECH MERGER
1.1
The CT Merger. At the
Effective Time (as hereinafter defined) and
subject to and upon the terms and conditions of this Agreement and
the DGCL, CT
Acquisition shall be
merged with and into GSCT. Following the CT Merger,
GSCT
shall continue as the surviving corporation (the "CT Surviving
Corporation") and
the separate corporate
existence of CT
Acquisition shall cease. As part of the
CT Merger and as more
fully described in Section 2.1, (i) the issued and
outstanding shares of
the GSCT Common Stock and GSCT Preferred Stock shall be
exchanged for Company Common Stock and Company Preferred Stock at the relevant
Common and Preferred
Exchange Ratios (as
defined below) and (ii) each share of
CT Acquisition's issued and outstanding shares of common stock, par
value $0.001
per share (the "CT
Acquisition Capital
Stock"), shall be converted into one
validly issued, fully
paid and non-assessable share of common stock, par
value
$0.001 per share, of the CT Surviving Corporation (the "CT
Surviving Corporation
Capital Stock").
1.2
Effective Time. The CT Merger shall be consummated as promptly as
practicable after
satisfaction
of all conditions to the CT Merger set forth
herein, by filing
with the Secretary of State of the State of
Delaware of a
certificate of merger or similar document (the "Certificate of CT
Merger"), and
all other appropriate
documents,
executed in accordance with the relevant
provisions of the DGCL. The CT Merger shall become effective upon the filing of
the Certificate
of CT Merger with the
Secretary of the State of the State of
Delaware. The time of
such filing shall be referred to herein as the "Effective
Time."
1.3
Effects of the CT
Merger. At the Effective Time, all the rights,
privileges, immunities, powers and franchises of CT Acquisition and
GSCT and all
property, real, personal and mixed, and every other interest of, or
belonging to
or due to each of CT
Acquisition
and GSCT shall vest in the CT Surviving
Corporation, and
all debts, liabilities, obligations and duties of CT
Acquisition and GSCT shall become the debts, liabilities,
obligations and duties
of the CT Surviving
Corporation without
further act or deed, all in the manner
and to the full extent provided by the DGCL. Whenever a conveyance,
assignment,
transfer, deed or
other instrument or
act is necessary to vest any property or
right in the CT
Surviving Corporation, the directors and officers of the
respective constituent corporations shall execute, acknowledge and deliver such
instruments and
perform such acts, for which purpose the separate existence of
the constituent corporations and the authority of their respective
directors and
officers shall continue, notwithstanding the CT Merger.
1.4
Certificate of Incorporation. The Certificate of Incorporation of
GSCT,
as in effect
immediately prior to
the Effective Time, shall be the Certificate
of Incorporation of
the CT Surviving
Corporation and thereafter may be amended
or repealed in accordance with its terms and applicable law.
1.5
By-Laws. At the
Effective Time and
without any further
action on the
part of the CT Surviving Corporation, the By-laws of GSCT shall be the
By-laws
of the CT Surviving
Corporation and
thereafter
may be amended or
repealed in
accordance with
their terms or the Certificate of Incorporation of the CT
Surviving Corporation and as provided by law.
1.6
Directors.
The directors of GSCT
at the Effective
Time shall be the
directors of
the CT Surviving Corporation, until the earlier of their
resignation or removal or until their respective successors are
duly elected and
qualified, as the case may be.
1.7
Officers. The officers of GSCT at the Effective Time shall be the
officers of the CT Surviving Corporation, until the earlier of
their resignation
or removal
or until their respective successors are duly appointed and
qualified, as the case may be.
1.8
Tax-Free Reorganization. The parties intend that the CT Merger
shall be
treated as a tax-free
reorganization
pursuant to Section 368(a) of the IRC, to
the extent permitted by applicable law.
ARTICLE II
CONVERSION OF GSCT SHARES
2.1
Conversion and
Cancellation of GSCT Capital Stock. As of the Effective
Time, by virtue
of the CT Merger
and without any action on the part of the
Company, CT
Acquisition
or GSCT or the
holders of any shares
of the capital
stock of GSCT:
(a)
GSCT Common Stock.
Subject to the
provisions of Sections 2.2 and 2.3,
each share of GSCT
common stock (the "GSCT Common Stock Shares")
issued and outstanding
immediately prior to the Effective Time (other
than shares canceled
in accordance
with Section 2.1(c)) shall be
converted on a 3 to 1 basis, or into 0.001 (the "Common Stock
Exchange
Ratio") of a validly
issued, fully paid and
nonassessable
share of
Company Common Stock (the "Company Common Stock Shares"). As of the
Effective Time,
each GSCT Common Stock Share shall no longer be
outstanding and shall
automatically
be canceled and cease
to exist,
and each holder of a
certificate
representing any GSCT
Common Stock
Share shall cease to have any rights with respect thereto other than
the right to
receive Company Common Stock Shares to be issued in
exchange therefor
upon the surrender of
such certificate,
properly
endorsed to the Company.
<PAGE>
(b)
GSCT Preferred Stock. Subject to the provisions of
Sections 2.2 and
2.3, each share of GSCT preferred stock (the "GSCT Preferred Stock
Shares") issued and
outstanding
immediately
prior to the
Effective
Time (other than shares canceled in accordance
with Section
2.1(c))
shall be converted on a 1 to 1 basis, or into 1 (the "Preferred
Stock
Exchange Ratio") validly issued, fully paid and nonassessable share
of
Company Preferred Stock (the "Company Preferred Stock Shares")
having
the same rights
and privileges with respect to the CT Surviving
Corporation as the
GSCT Preferred
Stock Shares have with
respect to
GSCT. As of the Effective Time, each GSCT Preferred Stock
Share shall
no longer be outstanding and shall automatically be canceled and
cease
to exist, and each
holder of a certificate representing any GSCT
Preferred Stock Share
shall cease to have any rights
with respect
thereto other than the right to receive Company Preferred Stock
Shares
to be issued in
consideration therefor
upon the surrender of such
certificate, properly endorsed to the Company.
(c)
Each share of GSCT Capital Stock held in the treasury of the GSCT
shall be canceled
without any conversion thereof and no payment,
distribution or
other consideration shall be made with respect
thereto.
2.2
Adjustment
of the Exchange Ratio. In the event that, prior to the
Effective Time, any stock split, combination, reclassification or
stock dividend
with respect to the
Company Common Stock
or GSCT Common Stock,
any change or
conversion of Company Common Stock or GSCT Common Stock or into
other securities
or any other dividend or distribution with respect to the Company Common
Stock
or GSCT Common Stock
should occur or, if a record date with
respect to any of
the foregoing should occur, appropriate and proportionate
adjustments shall
be
made to the Exchange
Ratio, and thereafter
all references to an Exchange Ratio
shall be deemed to be to such Exchange Ratio as so adjusted.
2.3
No Fractional Shares. No certificates or scrip representing
fractional
shares of Company
Common Stock shall be issued upon the surrender for exchange
of certificates
and such fractional share shall not entitle the record or
beneficial owner
thereof to vote or to any other rights as a stockholder of the
Company. Any
fractional shares held by a shareholder of GSCT as a result of
the
CT Merger shall be rounded up to one full Company Common Stock
Share.
2.4
Further Assurances. If at any time after the
Effective Time the CT
Surviving Corporation
shall consider or be advised
that any deeds,
bills of
sale, assignments
or assurances or any other acts or things
are necessary,
desirable or proper (a) to vest, perfect or confirm, of record or
otherwise, in
the CT Surviving
Corporation, its
right, title or interest in, to or under any
of the rights, privileges, powers, franchises, properties or assets of GSCT
or
(b) otherwise
to carry out the
purposes of this
Agreement,
the CT Surviving
Corporation and its
proper officers and
directors or their
designees shall be
authorized (to the fullest extent allowed under applicable law) to execute and
deliver, in the name
and on behalf
of GSCT, all such deeds, bills of sale,
assignments and
assurances and do, in
the name and on behalf of GSCT, all such
other acts and things necessary, desirable or proper to vest,
perfect or confirm
its right, title or
interest in, to or under any of the
rights, privileges,
powers, franchises,
properties or assets
of GSCT, as applicable, and otherwise
to carry out the purposes of this Agreement.
ARTICLE III
GS CARBON MERGER
3.1
The CR Merger. At the
Effective Time (as hereinafter defined) and
subject to and upon the terms and conditions of this Agreement and
the DGCL, CR
Acquisition shall be
merged with and into GSCR. Following the CR Merger,
GSCR
shall continue as the surviving corporation (the "CR Surviving
Corporation") and
the separate corporate
existence of CR
Acquisition shall cease. As part of the
CR Merger and as more
fully described in Section 4.1, (i) the issued and
outstanding shares of
the GSCR Common Stock and GSCR Preferred Stock shall be
exchanged for Company Common Stock and Company Preferred Stock at the relevant
Common and Preferred
Exchange Ratios (as
defined below) and (ii) each share of
CR Acquisition's issued and outstanding shares of common stock, par
value $0.001
per share (the "CR
Acquisition Capital
Stock"), shall be converted into one
validly issued, fully
paid and non-assessable share of common stock, par
value
$0.001 per share, of the CR Surviving Corporation (the "CR
Surviving Corporation
Capital Stock").
3.2
Effective Time. The CR Merger shall be consummated as promptly as
practicable after
satisfaction
of all conditions to the CR Merger set forth
herein, by filing
with the Secretary of State of the State of
Delaware of a
certificate of merger or similar document (the "Certificate of CR
Merger"), and
all other appropriate
documents,
executed in accordance with the relevant
provisions of the DGCL. The CR Merger shall become effective upon the filing of
the Certificate
of CR Merger with the
Secretary of the State of the State of
Delaware. The time of
such filing shall be referred to herein as the "Effective
Time."
<PAGE>
3.3
Effects of the CR
Merger. At the Effective Time, all the rights,
privileges, immunities, powers and franchises of CR Acquisition and
GSCR and all
property, real, personal and mixed, and every other interest of, or
belonging to
or due to each of CR
Acquisition
and GSCR shall vest in the CR Surviving
Corporation, and
all debts, liabilities, obligations and duties of CR
Acquisition and GSCR shall become the debts, liabilities,
obligations and duties
of the CR Surviving
Corporation without
further act or deed, all in the manner
and to the full extent provided by the DGCL. Whenever a conveyance,
assignment,
transfer, deed or
other instrument or
act is necessary to vest any property or
right in the CR
Surviving Corporation, the directors and officers of the
respective constituent corporations shall execute, acknowledge and deliver such
instruments and
perform such acts, for which purpose the separate existence of
the constituent corporations and the authority of their respective
directors and
officers shall continue, notwithstanding the CR Merger.
3.4
Certificate of Incorporation. The Certificate of Incorporation of
GSCR,
as in effect
immediately prior to
the Effective Time, shall be the Certificate
of Incorporation of
the CR Surviving
Corporation and thereafter may be amended
or repealed in accordance with its terms and applicable law.
3.5
By-Laws. At the
Effective Time and
without any further
action on the
part of the CR Surviving Corporation, the By-laws of GSCR shall be the
By-laws
of the CR Surviving
Corporation and
thereafter
may be amended or
repealed in
accordance with
their terms or the Certificate of Incorporation of the CR
Surviving Corporation and as provided by law.
3.6
Directors.
The directors of GSCR
at the Effective
Time shall be the
directors of
the CR Surviving Corporation, until the earlier of their
resignation or removal or until their respective successors are
duly elected and
qualified, as the case may be.
3.7
Officers. The officers of GSCR at the Effective Time shall be the
officers of the CR Surviving Corporation, until the earlier of
their resignation
or removal
or until their respective successors are duly appointed and
qualified, as the case may be.
3.8
Tax-Free Reorganization. The parties intend that the CR Merger
shall be
treated as a tax-free
reorganization
pursuant to Section 368(a) of the IRC, to
the extent permitted by applicable law.
ARTICLE IV
CONVERSION OF GSCR SHARES
4.1
Conversion and
Cancellation of GSCR Capital Stock. As of the Effective
Time, by virtue
of the CR Merger
and without any action on the part of the
Company, CR
Acquisition
or GSCR or the
holders of any shares
of the capital
stock of GSCR:
(a)
GSCR Common Stock.
Subject to the
provisions of Sections 4.2 and 4.3,
each share of GSCR
common stock (the "GSCR Common Stock Shares")
issued and outstanding
immediately prior to the Effective Time (other
than shares canceled
in accordance
with Section 2.1(c)) shall be
converted on a 3 to 1 basis, or into 0.001 (the "Common Stock
Exchange
Ratio") of a validly
issued, fully paid and
nonassessable
share of
Company Common Stock (the "Company Common Stock Shares"). As of the
Effective Time,
each GSCR Common Stock Share shall no longer be
outstanding and shall
automatically
be canceled and cease
to exist,
and each holder of a
certificate
representing any GSCR
Common Stock
Share shall cease to have any rights with respect thereto other than
the right to
receive Company Common Stock Shares to be issued in
exchange therefor
upon the surrender of
such certificate,
properly
endorsed to the Company.
(b)
GSCR Preferred Stock. Subject to the provisions of
Sections 2.2 and
2.3, each share of GSCR preferred stock (the "GSCR Preferred Stock
Shares") issued and
outstanding
immediately
prior to the
Effective
Time (other than shares canceled in accordance
with Section
2.1(c))
shall be converted on a 1 to 1 basis, or into 1 (the "Preferred
Stock
Exchange Ratio") validly issued, fully paid and nonassessable share
of
Company Preferred Stock (the "Company Preferred Stock Shares")
having
<PAGE>
the same rights
and privileges with respect to the CR Surviving
Corporation as the
GSCR Preferred
Stock Shares have with
respect to
GSCR. As of the Effective Time, each GSCR Preferred Stock
Share shall
no longer be outstanding and shall automatically be canceled and
cease
to exist, and each
holder of a certificate representing any GSCR
Preferred Stock Share
shall cease to have any rights
with respect
thereto other than the right to receive Company Preferred Stock
Shares
to be issued in
consideration therefor
upon the surrender of such
certificate, properly endorsed to the Company.
(c)
Each share of GSCR Capital Stock held in the treasury of the GSCR
shall be canceled
without any conversion thereof and no payment,
distribution or
other consideration shall be made with respect
thereto.
4.2
Adjustment
of the Exchange Ratio. In the event that, prior to the
Effective Time, any stock split, combination, reclassification or
stock dividend
with respect to the
Company Common Stock
or GSCR Common Stock,
any change or
conversion of Company Common Stock or GSCR Common Stock or into
other securities
or any other dividend or distribution with respect to the Company Common
Stock
or GSCR Common Stock
should occur or, if a record date with
respect to any of
the foregoing should occur, appropriate and proportionate
adjustments shall
be
made to the Exchange
Ratio, and thereafter
all references to an Exchange Ratio
shall be deemed to be to such Exchange Ratio as so adjusted.
4.3
No Fractional Shares. No certificates or scrip representing
fractional
shares of Company
Common Stock shall be issued upon the surrender for exchange
of certificates
and such fractional share shall not entitle the record or
beneficial owner
thereof to vote or to any other rights as a stockholder of the
Company. Any
fractional shares held by a shareholder of GSCR as a result of
the
CR Merger shall be rounded up to one full Company Common Stock
Share.
4.4
Further Assurances. If at any time after the
Effective Time the CR
Surviving Corporation
shall consider or be advised
that any deeds,
bills of
sale, assignments
or assurances or any other acts or things
are necessary,
desirable or proper (a) to vest, perfect or confirm, of record or
otherwise, in
the CR Surviving
Corporation, its
right, title or interest in, to or under any
of the rights, privileges, powers, franchises, properties or assets of GSCR
or
(b) otherwise
to carry out the
purposes of this
Agreement,
the CR Surviving
Corporation and its
proper officers and
directors or their
designees shall be
authorized (to the fullest extent allowed under applicable law) to execute and
deliver, in the name
and on behalf
of GSCR, all such deeds, bills of sale,
assignments and
assurances and do, in
the name and on behalf of GSCR, all such
other acts and things necessary, desirable or proper to vest,
perfect or confirm
its right, title or
interest in, to or under any of the
rights, privileges,
powers, franchises,
properties or assets
of GSCR, as applicable, and otherwise
to carry out the purposes of this Agreement.
ARTICLE V
CLOSING
Subject to satisfaction of the conditions to closing set forth in
this Agreement
and unless this
Agreement is otherwise terminated in accordance with the
provisions contained
herein, the closing of the CT Merger and CR Merger (the CT
Merger and the CR
Merger shall be collectively referred to herein as the
"Merger") and the Contemplated Transactions (the "Closing") shall
take place at
the offices of the Company, at One Penn Plaza, Suite 1612, New
York, New York as
promptly as practicable after satisfaction of the conditions set
forth in this
Agreement.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.1
Representations and
Warranties of the Company. Except as disclosed in
the Reports (as defined below) or in a document of even date
herewith referring
to the representations and warranties in this Agreement and
delivered by Company
prior to the execution and delivery of this Agreement (the "Company Disclosure
Schedule"), the
Company hereby make the following representations and
warranties, all of which shall survive the Closing:
(a)
Organization
and Good Standing. The Company is a corporation duly
organized, validly existing and in good standing under the laws of
the
State of Delaware,
with full corporate power and authority to conduct
its business
as it is now being conducted, to own or use the
properties and assets
that it owns or uses,
and to perform
all its
obligations under this
Agreement. Company has
no subsidiaries
other
than as set forth on the Company Disclosure Schedule (individually,
a
"Subsidiary" and
collectively, the
"Subsidiaries").
The Company is
duly qualified
to do business
and is in good
standing as a
foreign
corporation in each
jurisdiction in which either the ownership or use
of the
properties owned or used by it, or the nature of the activities
conducted by it, requires such qualification, except for such
failures
to be so qualified or in good standing that would not have a
Material
Adverse Effect.
(b)
Authority; No
Conflict.
i. This
Agreement and any agreement executed in connection herewith
by Company constitute the legal, valid and binding obligations
of
the Company,
enforceable against
the Company in accordance with
their respective terms, except as such enforceability is
limited
by bankruptcy,
insolvency and other laws affecting the rights of
creditors and by general equitable principles. The Company has
the absolute
and unrestricted right, power, authority and
capacity to execute and deliver this Agreement and any agreement
executed by
it in connection herewith and to perform its
obligations hereunder and thereunder.
ii. Neither
the execution and delivery of this Agreement by the
Company, nor the
consummation or performance by it of any of its
obligations contained in this Agreement or in connection with
the
Contemplated
Transactions will,
directly or indirectly (with or
without notice or lapse of time):
a. contravene,
conflict with or result in a violation
of (x)
any provision
of the Organizational Documents of the
Company, or (y) any
resolution
adopted by the board of
directors or the
stockholders of the
Company, as the
case
may
be;
b. contravene,
conflict with or
result in a material violation
of, or give any governmental body or other Person the right
to challenge
any of the
Contemplated
Transactions
or to
exercise any remedy or
obtain any relief
under, any Legal
Requirement or any
Order to which the Company or any of the
assets owned or used by the Company may be subject;
c. contravene, conflict with or
result in a violation or breach
of any provision of, or give any Person the right to declare
a default or exercise any remedy under, or to accelerate the
maturity or
performance
of, or to cancel, terminate or
modify, this Agreement, or any Applicable Contract;
d. result
in the imposition or creation of any material
encumbrance upon or
with respect to any of the material
assets owned or used by the Company;
e. cause the
Company to become
subject to, or to become liable
for the payment of, any tax; or
f. cause
any of the assets owned by the Company to be
reassessed or
revalued by any taxing authority or other
governmental body.
(c)
Capitalization.
The capitalization of
the Company as of June 30, 2006
is as set forth in the
Form 10-QSB for the period ended June 30, 2006,
and increased as set forth in the next sentence. The Company has not
issued any capital
stock since that date
other than pursuant to
(i)
employee benefit plans disclosed in the Reports (as defined in
Section
4.1(d)) or (ii)
outstanding warrants,
options or other securities
disclosed in the
Reports, except as set
forth on Company
Disclosure
Schedule, or (iii)
pursuant to a compensation agreement. All of the
issued and outstanding
shares of the Company
Capital Stock have been
duly authorized
and validly issued and are fully paid and
non-assessable. None
of the outstanding
Company Capital Stock was
issued in violation of the Securities Act or any other legal
requirement.
(d)
Financial Statements. The Company has delivered or made available
copies of its Form
10-KSB Annual
Report for the
fiscal year ended
December 31, 2005 and copies of its quarterly reports on Form 10-QSB
for the quarters ended
March 31, 2006, June
30, 2006, and
September
30, 2006 each as filed with the SEC and including, in each case, any
amendments thereto
(collectively,
the "Reports"). The financial
statements contained
are in all material
respects in accordance with
the books and
records of the Company and have been prepared in
accordance with GAAP
applied on a
consistent basis
throughout
the
periods indicated, all
as more particularly set forth in the notes to
such statements.
The consolidated balance sheets contained in
such
Reports (the "Company
Balance Sheets") present fairly in all material
respects as of their dates the consolidated financial condition of
the
Company and its subsidiaries. Except as and to the extent reflected
or
reserved
against in the Company
Balance Sheets
(including the
notes
thereto), the Company did not have, as of the date of any such
Company
Balance Sheet, any
material liabilities
or obligations
(absolute or
contingent) of a
nature customarily
reflected in a balance
sheet or
the notes thereto. The consolidated statements of operations,
consolidated
statements of
stockholders'
equity and changes in
consolidated
statements of cash flows present fairly in all material
respects the results of operations and changes in financial
position
of the Company and its subsidiaries for the periods indicated.
(e)
SEC Filings. The Company has filed all reports
required to be
filed
with the SEC under the rules and regulations of the SEC and all such
reports have complied in all material respects, as of their
respective
filing dates and
effective dates, as the case may be, with all
the
applicable
requirements of the
Securities
Exchange Act of 1934,
as
amended. As of the respective filing and effective dates, none of
such
reports (including
without limitation, the Reports) 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 light of the
circumstances
under which they
were made, not misleading.
(f)
Absence of Material Adverse Change. Since the date of the latest
Company Balance
Sheets, there have been no events, changes or
occurrences
which have
had or are reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect.
(g)
Issuance of Company
Securities. The
Company Common Stock Shares, when
issued in accordance
with this Agreement,
shall be duly
authorized,
validly issued,
fully-paid and
nonassessable. Except
as set forth in
the Reports, there is no equity line of credit or convertible
security
or instrument outstanding of the Company.
(h)
Undisclosed
Liabilities.
Except as disclosed in
any Schedule to this
Agreement, the Company
has no material
obligations and
liabilities
(contingent or
otherwise)
except those liabilities (i) that are
reflected in the Company Balance Sheets or in the notes
thereto, or
disclosed in the
notes therein in accordance with GAAP or, in
accordance with
GAAP, are not required to be so reflected or
disclosed, or (ii)
that were incurred
after the date of the
Company
Balance Sheets
in the Ordinary Course of Business, none of which
results from, arises
out of, relates to, is
in the nature of, or was
caused by any breach of contract, breach of warranty, tort,
infringement,
or violation of law or
could reasonably be
expected to
have a Material Adverse Effect.
(i)
Taxes.
i. The Company
has filed or caused to be filed on a timely basis all
tax returns that are or were required to be filed by it
pursuant
to applicable Legal
Requirements. The
Company has paid, or made
provision for the
payment of, all taxes that have or may
have
become due
pursuant to those tax returns or otherwise, or
pursuant to any assessment received by the Company,
except such
taxes, if any, as are listed in the Company Disclosure Schedule
and are being
contested in good faith as to which adequate
reserves have been provided in the Company Balance Sheets.
ii. All tax
returns filed by the Company are true, correct and
complete in all material respects.
(j)
Employee Benefits. Except as disclosed in the Reports, the Company
does not sponsor or
otherwise maintain a
"pension plan"
within the
meaning of Section
3(2) of ERISA or any other retirement plan other
than the Company
Profit Sharing and 401(k) Plan and Trust that is
intended to qualify under Section 401 of the Code, nor do any
unfunded
liabilities exist with
respect to any employee benefit plan, past or
present. No employee benefit plan, any trust created thereunder or
any
trustee or
administrator
thereof
has engaged in a "prohibited
transaction," as defined in Section 4975 of the Code, which may
have a
Material Adverse Effect.
(k)
Governmental
Authorizations.
The Company
has all permits that are
legally required
to enable them to conduct their business in all
material respects as now conducted.
(l)
Legal Proceedings;
Orders.
i. Except as set
forth in the Reports,
there is no material pending
Proceeding:
a. that has been
commenced by or
against the Company or any of
the assets owned or used by the Company; or
b. that
challenges, or that
may have the effect of preventing,
delaying, making illegal, or otherwise interfering with, any
Contemplated Transaction.
ii. Except as set
forth in the Reports:
a. there is no
material Order to which the Company or any of
the assets owned or used by the Company is subject; and
b. no officer,
director, agent, or employee of the Company
is
subject to any
material Order that
prohibits such offer,
director, agent or
employee from engaging
in or continuing
any conduct, activity
or practice relating
to the business
of the Company.
(m)
Absence of Certain Changes and Events. Except as set forth in the
Reports, since the
date of the most recent Company Balance Sheets,
except as heretofore
set forth,
the Company,
since the date of
its
inception, has
conducted its business only in the Ordinary Course of
Business, and other
than as contemplated
by this Agreement or the
Contemplated Transactions there has not been any:
i. damage
to or destruction or loss of any material asset or
property of the
Company, whether or
not covered by
insurance,
causing a Material Adverse Effect;
ii. receipt
of notice that any of its substantial customers have
terminated or intends
to terminate
their relationship, which
termination would have a Material Adverse Effect;
iii. sale (other than sales of inventory in the Ordinary Course of
Business), lease, or
other disposition of
any asset or property
of the Company or mortgage, pledge, or imposition of any lien
or
other encumbrance
on any material asset or property of the
Company;
iv. cancellation
or waiver of any
claims or rights
with a value to
the Company in excess of $10,000;
v. material
change in the accounting methods used by the Company; or
vi. agreement,
whether oral or
written, by the
Company to do any of
the foregoing.
(n)
No Default or
Violation.
The Company
(i) is in material
compliance
with all applicable
material terms and
requirements of each material
contract under which
they have or had any
obligation or liability or
by
which it or any of the
assets owned or used
by it is or was bound
and (ii) is not in material violation of any Legal Requirement.
(o)
Certain Payments. Since the most recent date of the
Company Balance
Sheets, neither the
Company, nor any director, officer, agent or
employee of the
Company has directly or indirectly (a) made any
contribution, gift, bribe, rebate, payoff, influence payment,
kickback
or other payment to any Person, private or public, regardless of
form,
whether in
money, property or services (i) to obtain favorable
treatment in securing
business, (ii) to pay
for favorable
treatment
for business
secured, (iii) to obtain special concessions or for
special concessions already obtained, for or in respect of the
Company
or (iv) in violation of any Legal Requirement, or (b) established or
maintained any fund or
asset that has not been recorded in the books
and records of the Company.
(p)
Brokers or Finders.
The Company has not
incurred any
obligation
or
liability, contingent
or otherwise, for brokerage or finders' fees or
agents' commissions or
other similar payment
in connection with this
Agreement.
6.2
Representations and Warranties of GSCT. GSCT hereby makes the
following
representations and
warranties to the
Company, all of which
shall survive the
Closing:
(a)
Organization,
Good Standing and
Purpose. GSCT is a
corporation duly
organized, validly existing and in good standing under the laws of
the
State of Delaware
with full power and authority to conduct its
businesses as it is now being conducted, to own or use the properties
and assets that it owns or uses, and to perform all of its
obligations
under this Agreement.
GSCT is duly qualified to do business and is in
good standing as a foreign corporation in each jurisdiction in which
either the ownership or use of the properties owned or used by it, or
the nature
of the activities conducted by it, requires such
qualification, except
for such failures to be so qualified or in good
standing would not have a Material Adverse Effect.
(b)
Authority; No
Conflict.
i. This
Agreement and any agreement executed in connection herewith
have been duly
authorized
by all required action of GSCT and
constitute the legal,
valid and binding obligations of GSCT,
enforceable against
GSCT in accordance with their respective
terms. GSCT has the
absolute and unrestricted right, power and
authority to
execute and deliver this Agreement and any
agreements executed in
connection
herewith and to perform its
obligations hereunder and thereunder.
ii Neither the
execution and delivery of this Agreement by GSCT, nor
the consummation
or performance by it
of any of its obligations
contained in
this Agreement or in connection with the
Contemplated
Transactions by
the Company will, directly or
indirectly (with or without notice or lapse of time):
a. contravene,
conflict with or result in a violation
of (x)
any provision of the Organizational Documents of GSCT or (y)
any resolution
adopted by the board of directors or the
stockholders of GSCT;
b. contravene,
conflict with or result in a violation
of, or
give any governmental
body or other
Person the right to
challenge any
of the Contemplated Transactions or to
exercise any remedy or
obtain any relief
under, any Legal
Requirement or any
Order to which GSCT or any of the assets
owned or used by GSCT may be subject;
c. contravene,
conflict with or result in a violation or breach
of any provision of, or give any Person the right to declare
a default or exercise any remedy under, or to accelerate the
maturity or
performance
of, or to cancel, terminate or
modify, this
Agreement,
the Purchase Agreement or any
Applicable Contract;
d. result
in the imposition or creation of any material
encumbrance upon or
with respect to any of the material
assets owned or used by GSCT;
e. cause GSCT to become subject
to, or to become liable for the
payment of, any tax; or
f. cause any of
the assets owned by
GSCT to be reassessed
or
revalued by any taxing authority or other governmental body.
iii. GSCT is not
required to obtain any
consent from any Person in
connection with the
execution and delivery of this Agreement or
the consummation
or performance of any of the Contemplated
Transactions,
other than
the requisite approval of its
shareholders.
(c)
Capitalization.
The entire
authorized GSCT
Capital Stock consists of
500,000,000 shares
GSCT Common
Stock, of which about 325,000,000
shares are issued
and outstanding, and 10,000,000 shares of GSCT
Preferred Stock,
of which about 2,692,000 shares are issued and
outstanding. With the
exception of the GSCT Common Stock
Sh
