Exhibit 2.1
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AGREEMENT AND PLAN OF MERGER
Among
GREEN MT. LABS., INC.,
GREEN MT. ACQUISITIONS, INC.
And
HYDROGEN ENGINE CENTER, INC.
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and
entered into as of this 3rd day of June 2005 by and among GREEN MT. LABS., INC.,
a Nevada Corporation ("Green Mt."), GREEN MT. ACQUISITIONS, INC., a Nevada
corporation ("Merger Sub"); H. Xxxxxxx Xxxxxxxx and Xxxxxx X. Xxxxx, principal
stockholders of Green Mt. who will make certain representations and warranties
herein ("Principal Stockholders"); and Hydrogen Engine Center, Inc., an Iowa
corporation ("HECI").
WHEREAS, Green Mt. desires to acquire HECI as a wholly owned subsidiary
and to issue shares of Green Mt. common stock to the security holders of HECI
upon the terms and conditions set forth herein. Merger Sub is a newly-created,
wholly-owned subsidiary corporation of Green Mt. that will be merged with and
into HECI, whereupon HECI will be the surviving corporation and will become the
wholly owned subsidiary of Green Mt. Merger Sub and HECI are sometimes
collectively hereinafter referred to herein as the "Constituent Corporations");
WHEREAS, the boards of directors of Green Mt., Merger Sub and HECI,
respectively, deem it advisable and in the best interests of such corporations
and their respective stockholders that Merger Sub merges with and into HECI
pursuant to this Agreement and the Certificate of Merger (in the form attached
hereto as Exhibit "A") and pursuant to applicable provisions of law (such
transaction is hereafter referred to as the "Merger"); and
WHEREAS, each of the parties to this Agreement desires to make certain
representations, warranties and agreements in connection with the transactions
contemplated herein and also to prescribe various conditions thereto.
NOW THEREFORE, in consideration of the premises, mutual covenants set out
herein and other good and valuable consideration, the sufficiency of which is
hereby acknowledged, the parties agree as follows:
SECTION 1 Acquisition of Hydrogen Engine Center, Inc. The parties to this
Agreement do hereby agree that Merger Sub will be merged with and into HECI upon
the terms and conditions set forth herein and in accordance with the provisions
of the Nevada Revised Statutes ("NRS"). It is the intention of the parties
hereto that this transaction qualifies as a tax-free reorganization under
Section 368(a)(2)(E) of the Internal Revenue Code of 1986, as amended, and
related sections thereunder.
SECTION 2 Terms of Merger. In accordance with the provisions of this
Agreement and the requirements of applicable law, Merger Sub will be merged with
and into HECI as of the Effective Time of the Merger (the terms "Closing" and
"Effective Time of the Merger" are defined in Section 6 hereof). HECI will be
the surviving corporation (hereinafter sometimes referred to as the "Surviving
Corporation") and the separate existence of Merger Sub will cease at the
Effective Time of the Merger. HECI, as the Surviving Corporation, will succeed
to and assume all the rights and obligations of Merger Sub in accordance with
the NRS, as described below. Consummation of the Merger will be upon the
following terms and subject to the conditions set forth herein:
(a) Corporate Existence. Commencing at the Effective Time of the Merger,
the separate corporate existence of Merger Sub will cease and the
Surviving Corporation will continue its corporate existence as an Iowa
corporation; and
(i) it will thereupon and thereafter possess all rights,
privileges, powers, franchises and property (real, personal
and mixed) of each of the Constituent Corporations;
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(ii) all debts due to either of the Constituent Corporations, on
whatever account, all causes in action and all other things
belonging to either of the Constituent Corporations will,
except as otherwise set forth herein, be taken and deemed to
be transferred to and will be vested in the Surviving
Corporation by virtue of the Merger without further act or
deed; and
(iii) all rights of creditors and all liens, if any, upon any
property of any of the Constituent Corporations will be
preserved unimpaired, limited in lien to the property
affected by such liens immediately prior to the Effective
Time of the Merger, and all debts, liabilities and duties of
the Constituent Corporations will thenceforth attach to the
Surviving Corporation.
(b) Effective Time of the Merger. At the Effective Time of the Merger,
(i) the Certificate of Incorporation and the Bylaws of HECI, as existing
and in effect immediately prior to the Effective Time of the Merger, will
be and remain the Certificate of Incorporation and Bylaws of the
Surviving Corporation; (ii) the members of the Board of Directors of HECI
holding office immediately prior to the Effective Time of the Merger will
remain as the members of the Board of Directors of the Surviving
Corporation until their respective successors are elected or appointed
and qualified (if on or after the Effective Time of the Merger a vacancy
exists on the Board of Directors of the Surviving Corporation, such
vacancy may thereafter be filled in a manner provided by applicable law
and the Bylaws of the Surviving Corporation); and (iii) until the Board
of Directors of the Surviving Corporation otherwise determines, all
persons who hold offices of HECI at the Effective Time of the Merger will
continue to hold the same offices of the Surviving Corporation.
(c) Conversion of Securities. At the Effective Time of the Merger and
without any action on the part of Green Mt., Merger Sub, HECI or the
holders of any of the securities of any of these corporations, each of
the following will occur:
(i) The outstanding shares of capital stock of HECI will be
converted into the right to receive an aggregate of
12,222,290 shares of Green Mt. common stock, which shares
will reflect the 1.5 shares for 1 share forward stock split
to be effected prior to the Closing of the Merger and as
depicted in Section 4(d) below. Accordingly, the 2,000,000
shares of HECI Common Stock issued and outstanding currently
and immediately prior to the Effective Time of the Merger
will be converted into the right to receive 12,222,290 shares
of Green Mt common stock. No fraction of any share of Green
Mt. common stock will be issued to any former holder of
capital stock of HECI; rather, the number of shares of Green
Mt. common stock otherwise issuable, if other than a whole
number, will be rounded to the nearest whole number. The
holders of such certificates previously evidencing shares of
HECI Common Stock outstanding immediately prior to the
Effective Time of the Merger will cease to have any rights
with respect to such shares of HECI's common stock except as
otherwise provided herein or by law.
(ii) Green Mt. will issue an aggregate of 1,358,100 shares of
Green Mt. common stock to those persons and/or entities
depicted in Attachment 2(c)(ii), annexed hereto and by this
reference made a part hereof (those parties to be referred to
herein as the "Xxxxxxxx Group"), in consideration for
services rendered and to be rendered in connection with the
merger, which shares will be subject to the terms and
conditions set forth in Section (4)(h) below.
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(iii) Any shares of HECI capital stock held in the treasury of HECI
immediately prior to the Effective Time of the Merger will
automatically be canceled and extinguished without any
conversion thereof and no payment will be made with respect
thereto. At the Effective Time of the Merger, the stock
transfer books of HECI will be closed and thereafter, there
will be no further registration of transfers on the stock
transfer books of the Surviving Corporation of any shares of
capital stock of HECI which were outstanding immediately
prior to the Effective Time.
(iv) Each share of capital stock of Merger Sub issued and
outstanding immediately prior to the Effective Time of the
Merger will remain in existence as one share of common stock
of the Surviving Corporation, which will be owned by Green
Mt.
(v) The 1,006,000 shares of Green Mt. common stock issued and
outstanding immediately prior to the Merger, which shares
will be increased to approximately 1,509,000 shares as a
result of the 1.5 shares for 1 share Forward Stock Split
described in Section 2(d) below, will remain issued and
outstanding after the Effective Time of the Merger.
(d) Forward Stock Split. Prior to the Closing of the Merger, Green Mt.
will take all requisite and necessary action to effect a forward stock
split (the "Forward Stock Split") of its issued and outstanding shares of
common stock on a 1.5 shares for 1 share basis, the effect of which will
increase the number of issued and outstanding shares of Green Mt. common
stock to approximately 1,509,000 shares. In connection with the Forward
Stock Split, no fraction of any share Green Mt. Shares will be issued;
rather, the number of shares otherwise issuable, if other than a whole
number, will be rounded up to the next whole number.
(e) Restricted Securities.
(i) None of (i) the shares of Green Mt. common stock into which
the shares of capital stock of HECI are to be converted, or
(ii) the shares issued to the Xxxxxxxx Group will, at the
Effective Time of the Merger, be registered under the
Securities Act of 1933, as amended (the "Securities Act")
but, rather, will be deemed to have been issued pursuant to
an exemption therefrom (subject to the satisfaction of
certain other terms and conditions hereof) and will be
considered "restricted securities" within the meaning of Rule
144 promulgated under the Securities Act. All shares of Green
Mt. common stock to be issued pursuant to this Agreement will
bear a legend worded substantially as follows:
"The shares represented by this certificate have not
been registered under the Securities Act of 1933 (the
"Act") and are "restricted securities" as that term is
defined in Rule 144 under the Act. The shares may not
be offered for sale, sold or otherwise transferred
except pursuant to an exemption from registration under
the Act, the availability of which is to be established
to the satisfaction of the corporation."
(ii) At the Closing, Green Mt. will direct its transfer agent to
record, as soon as practicable after the Closing, the
issuance of Green Mt. common stock to the holders of HECI's
capital stock and to the Xxxxxxxx Group pursuant to the
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provisions set forth above. The transfer agent will annotate
its records to reflect the restrictions on transfer embodied
in the legend set forth above. There will be no requirement
of Green Mt. to register under the Securities Act any shares
of Green Mt. common stock in connection with the Merger.
(f) Other Matters.
(i) Immediately prior to the Effective Time of the Merger, HECI
will have no more than 2,000,000 shares of HECI Common Stock
issued and outstanding. Immediately prior to the Effective
Time of the Merger, Green Mt. will have no more than
1,509,000 shares of Green Mt. common stock (post split and
without taking into consideration the additional shares to be
issued due to rounding up of fractional shares resulting from
the Forward Stock Split) and no other series of capital stock
issued and outstanding.
(ii) From and after the Closing and with a view to making
available to holders of Green Mt. common stock issuable
hereunder, the benefits of Rule 144 of the Securities Act or
any other similar rule or regulation of the Securities and
Exchange Commission ("SEC"), Green Mt. will take all action
as may be required as a condition to the availability of Rule
144 under the Securities Act (or any successor exemptive rule
hereinafter in effect) with respect to Green Mt. common stock
and furnish to any holder of Green Mt. common stock
forthwith, upon request, a written statement by Green Mt. as
to its compliance with the reporting requirements of Rule
144, a copy of the most recent annual or quarterly report of
Green Mt. as filed with the SEC and such other reports and
documents as a holder may reasonably request in availing
itself of any rule or regulation of the SEC allowing a holder
to sell any such Green Mt. common stock without registration,
upon satisfaction of all applicable provisions of Rule 144.
Green Mt. agrees to facilitate and expedite transfers of the
shares of Green Mt. common stock pursuant to Rule 144 under
the Securities Act, which efforts will include timely notice
to its transfer agent to expedite such transfers of such
shares.
(iii) At the Closing, the then existing directors of Green Mt. will
nominate and elect to the Green Mt. Board of Directors Xxx
Xxxxxxxxx and four other nominees designated by Xx.
Xxxxxxxxx, and Green Mt. will cause all of the persons then
serving as directors and officers of Green Mt. immediately
prior to the Closing to resign from all of their respective
positions with Green Mt., effective immediately upon the
Closing.
(iv) At the Closing of this Agreement, the Xxxxxxxx Group will be
entitled to receive from the parties hereto a one-time fee of
$250,000 in consideration for certain services in connection
with the consummation of this Agreement and other services.
Green Mt. and HECI agree that the $250,000 fee is to be paid
as set forth below in Section 4(g) below.
(v) If, at any time after the Closing, any further action is
necessary or desirable to carry out the purposes of this
Agreement, the officers and directors of Green Mt. are hereby
fully authorized to take, and will use their reasonable
efforts to take, all such lawful and necessary action.
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(g) Financing.
(i) Following the execution of this Agreement and prior to the
Closing, at the request of HECI the Xxxxxxxx Group will use
its best efforts to arrange for interim financing for HECI of
between $500,000 and $750,000, to be negotiated in good faith
by the parties. The Xxxxxxxx Group will participate only as a
finder in any prospective financing and will not negotiate or
participate in the actual sale of any securities. Any interim
financing will close simultaneously with the Closing of this
Agreement. HECI will have the discretion to secure such
interim financing from other sources without the assistance
of the Xxxxxxxx Group. If the interim financing is in the
form of Green Mt. equity securities, then the minimum price
per share will be $1.00 and, if in a form of preferred stock
or other instrument convertible into common stock, the price
of conversion into common stock will be a minimum of $1.00
per share.
(ii) Following the date of this Agreement, the Xxxxxxxx Group will
use its best efforts to arrange for a minimum of $3 million
in financing for the benefit of HECI and Green Mt. The
Xxxxxxxx Group will participate only as a finder in any
prospective financing and will not negotiate or participate
in the actual sale of any securities. Green Mt., at its sole
discretion, will have the right to accept prospective
financing in any form. If the financing is in the form of
equity securities, the price of common stock used for such
financing will be at a minimum of $1.00 per share. If the
financing is in the form of preferred stock or other
instrument convertible into common stock, then the minimum
price per share will be $1.00 on an as-converted basis. Upon
the closing of a minimum of $3 million in financing, the
$250,000 fee payable to the Xxxxxxxx Group as per Section
4(f)(iv) above will be due and payable out of the proceeds of
the financing.
(iii) Following the Closing of the Agreement and the
financing set forth in paragraph 4(g)(ii) above, current
holders of HECI promissory notes, in an aggregate amount not
to exceed $500,000, will be provided the opportunity to
convert their notes into shares of Green Mt. common stock at
a conversion price equal to the offering price in such
financing.
(h) Escrow of Shares. Upon the Closing of this Agreement, 1/2 of the
1,358,100 shares, or approximately 679,050 shares, to be issued at the
Closing to the Xxxxxxxx Group, will be placed into escrow pursuant to a
separate escrow agreement. These shares are to remain in escrow until
such time as a minimum of $3 million in financing has been provided to
Green Mt. as per 4(g)(ii) above and, at such time, the 679,050 shares
held in escrow will be released and delivered to the Xxxxxxxx Group
and/or their assigns. The Xxxxxxxx Group will participate only as a
finder in any prospective financing and will not negotiate or participate
in the actual sale of any securities. If the financing has not closed
within two years from the consummation of the acquisition of HECI, the
escrowed shares will be surrendered to Green Mt. to be cancelled.
SECTION 3 Delivery of Shares. On or as soon as practicable after the
Effective Time of the Merger, HECI will use reasonable efforts to cause all
holders of HECI's capital stock (the "HECI Stockholders") to surrender to Green
Mt.'s transfer agent for cancellation certificates representing their shares of
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HECI's capital stock, against delivery of certificates representing the shares
of Green Mt. common stock for which HECI's capital stock is to be converted in
the Merger pursuant to Section 2 hereof. Until surrendered and exchanged as
herein provided, each outstanding certificate which, prior to the Effective Time
of the Merger, represented HECI capital stock, will be deemed for all corporate
purposes to evidence ownership of the same number of shares of Green Mt. common
stock into which the shares of HECI capital stock represented by such HECI
certificate will have been so converted.
SECTION 4 Representations of HECI. HECI hereby makes as of the date
hereof and as of the Effective Time of the Merger, the following representations
and warranties:
(a) As of the date hereof, the total number of shares of HECI Common
Stock issued and outstanding is 2,000,000 shares.
(b) HECI Common Stock constitutes duly authorized and validly issued
shares of capital stock of HECI. All shares are fully paid and
nonassessable.
(c) The audited financial statements of HECI as of and for the year ended
December 31, 2004 and unaudited interim financial statements of HECI for
the period ended March 31, 2005, which have been delivered to Green Mt.,
or will be delivered prior to the Closing (hereinafter referred to as the
"HECI Financial Statements"), fairly present the financial condition of
HECI as of the dates thereof and the results of its operations for the
periods covered thereby. Other than as set forth in any schedule or
exhibit attached hereto, and except as may otherwise be set forth or
referenced herein, there are no material liabilities or obligations,
either fixed or contingent, not disclosed or referenced in HECI Financial
Statements or in any exhibit or notes thereto other than contracts or
obligations occurring in the ordinary course of business since March 31,
2005; and no such contracts or obligations occurring in the ordinary
course of business constitute liens or other liabilities which materially
alter the financial condition of HECI as reflected in HECI Financial
Statements. HECI has, or will have at the Closing, good title to all
assets, properties or contracts shown on HECI Financial Statements
subject only to dispositions and other transactions in the ordinary
course of business, the disclosures set forth therein and liens and
encumbrances of record.
(d) Except as disclosed in writing to Green Mt., since March 31, 2005,
there has not been any material adverse changes in the financial position
of HECI except changes arising in the ordinary course of business, which
changes will not materially and adversely affect the financial position
of HECI.
(e) HECI is not a party to any material pending litigation or, to the
knowledge of its executive officers (herein, the "HECI's Knowledge"), any
governmental investigation or proceeding, not reflected in HECI Financial
Statements, and, to HECI's Knowledge, no material litigation, claims,
assessments or any governmental proceedings are threatened in writing
against HECI.
(f) Neither HECI nor any of its officers, employees or agents, nor any
other person acting on behalf of HECI, has directly or indirectly, within
the past five years, given or agreed to give any gift or similar benefit
to any person who is or may be in a position to help or hinder HECI's
business, or assist it in connection with any actual or proposed
transaction, which (i) might subject it to any material damage or penalty
in any action or which might have a material effect on HECI or its assets
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and properties, (ii) if not given in the past, might have had a material
effect on HECI's business or its assets and properties, or (iii) if not
continued in the future, might have a material effect on HECI's business
or its assets and properties or subject it to suit or penalty in any
action.
(g) HECI is in good standing in its state of incorporation, and is in
good standing and duly qualified to do business in each state where
required to be so qualified, except where the failure to so qualify would
have no material adverse effect on the business, financial condition or
results of operations of HECI.
(h) HECI has, or by the Effective Time of the Merger will have, filed all
material tax, governmental and/or related forms and reports (or
extensions thereof) due or required to be filed in the ordinary course of
business and has (or will have) paid or made adequate provisions for all
taxes or assessments which have become due as of the Effective Time of
the Merger.
(i) HECI has not materially breached any material agreement to which it
is a party. HECI has previously given Green Mt. copies of or access to
all material contracts, commitments and/or agreements to which HECI is a
party.
(j) HECI has the requisite corporate power and authority to enter into
this Agreement together with such other agreements and documents
requisite to this Agreement (the "Transaction Documents") to which it is
a party and to perform its obligations hereunder and thereunder. The
execution and delivery of this Agreement and other Transaction Documents
to which it is a party and the consummation of the transactions
contemplated hereby and thereby have been, or will prior to the Closing
and the Effective Time of the Merger be, duly authorized by HECI's Board
of Directors and by HECI's stockholders (if necessary). The execution of
this Agreement and other Transaction Documents does not materially
violate or breach any material agreement or contract to which HECI is a
party, and HECI, to the extent required, has, or will have by Closing,
obtained all necessary approvals or consents required by any agreement to
which HECI is a party. The execution and performance of this Agreement
and other Transaction Documents will not violate or conflict with any
provision of HECI's Certificate of Incorporation in effect as of the date
hereof, or Bylaws of HECI.
(k) Information regarding HECI, which has been delivered by HECI to Green
Mt. for use in connection with the Merger is, to HECI's Knowledge, true
and accurate in all material respects.
(l) To HECI's Knowledge, HECI has and at the Closing will have, disclosed
in writing to Green Mt. all events, conditions and facts materially
affecting the business, financial conditions (including any liabilities,
contingent or otherwise) or results of operations of HECI.
(m) All information regarding HECI which has been provided to Green Mt.
by HECI or set forth in any document or other communication, disseminated
to any former, existing or potential HECI Stockholders, or to the public
or filed with any state or federal securities regulators or authorities
is, to HECI's Knowledge, true, complete, accurate in all material
respects.
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(n) To HECI's Knowledge HECI is and has been in compliance with, and HECI
has conducted any business previously owned or operated by it in
compliance with, all applicable laws, orders, rules and regulations of
all governmental bodies and agencies, including applicable securities
laws and regulations and environmental laws and regulations, except where
such noncompliance has and will have, in the aggregate, no material
adverse effect. HECI has not received notice of any noncompliance with
the foregoing, nor is it aware of any claims or threatened claims in
connection therewith.
(o) To HECI's Knowledge without limiting the foregoing, (i) HECI and any
other person or entity for whose conduct HECI is legally held responsible
are and have been in material compliance with all applicable federal,
state, regional, local laws, statutes, ordinances, judgments, rulings and
regulations relating to any matters of pollution, protection of the
environment, health or safety, or environmental regulation or control,
and (ii) neither HECI nor any other person for whose conduct HECI is
legally held responsible has manufactured, generated, treated, stored,
handled, processed, released, transported or disposed of any hazardous
substance on, under, from or at any of HECI's properties or in connection
with HECI's operations.
(p) Except as and to the extent specifically disclosed in this Agreement
and as may be specifically disclosed or reserved against it as to amount
in the latest balance sheet contained in HECI Financial Statements, there
is no basis for any assertion against HECI of any material liabilities or
obligations of any nature, whether absolute, accrued, contingent or
otherwise and whether due or to become due, including, without
limitation, any liability for taxes (including e-commerce sales or other
taxes), interest, penalties and other charges payable with respect
thereto. Neither the execution and delivery of this Agreement or other
Transaction Documents to which it is a party, nor the consummation of the
transactions contemplated hereby or thereby will
(i) result in any payment (whether severance pay, unemployment
compensation or otherwise) becoming due from HECI to any
person or entity, including without limitation any employee,
director, officer or affiliate or former employee, director,
officer or affiliate of HECI;
(ii) increase any benefits otherwise payable to any person or
entity, including without limitation any employee, director,
officer or affiliate or former employee, director, officer or
affiliate of HECI; or
(iii) result in the acceleration of the time of payment or vesting
of any such benefits.
(q) To HECI's Knowledge, no aspect of HECI's past or present business,
operations or assets is of such a character as would restrict or
otherwise hinder or impair HECI from carrying on the business of HECI as
it is presently being conducted by HECI.
(r) Except as disclosed to Green Mt. in writing and annexed hereto as
Attachment 4(r), to HECI's Knowledge HECI has no material contracts,
commitments, arrangements, or understandings relating to its business,
operations, financial condition, prospects, or otherwise. For purposes of
this Section 4, "material" means payment or performance of a contract,
commitment, arrangement or understanding in the ordinary course of
business, which is expected to involve payments from HECI to any third
party in excess of $100,000.
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(s) To HECI's Knowledge, no representation or warranty by HECI contained
in this Agreement and no statement contained in any certificate, schedule
or other communication furnished pursuant to, or in connection with, the
provisions hereof contains or will contain any untrue statement of a
material fact or omits to state a material fact necessary in order to
make the statements therein not misleading. To HECI's Knowledge, there is
no current or prior event or condition of any kind or character
pertaining to HECI that may reasonably be expected to have a material
adverse effect on the business, financial condition or results of
operations of HECI. Except as specifically indicated elsewhere in this
Agreement, all documents delivered by HECI in connection herewith have
been and will be complete originals, or exact copies thereof.
(t) To HECI's Knowledge, all information to be supplied by it in writing,
specifically for inclusion or incorporation by reference in the
definitive Information Statement to be filed with the SEC by Green Mt.
and disseminated by Green Mt. to its stockholders (the "Information
Statement"), will not, at the time the Information Statement is so
disseminated, or at any time it is amended or supplemented thereafter,
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 light of the circumstances under which they were
made, not misleading.
SECTION 5 Representations of Green Mt. and Merger Sub. Green Mt., Merger
Sub and Principal Stockholders hereby make jointly and severally, as of the date
hereof and as of the Effective Time of the Merger, the following representations
and warranties:
(a) As of the date hereof and the Effective Time of the Merger, the
shares of Green Mt. common stock to be issued and delivered to the
security holders of HECI and to the Xxxxxxxx Group hereunder and in
connection herewith will, when so issued and delivered, constitute duly
authorized, validly and legally issued, fully-paid, nonassessable shares
of Green Mt. capital stock, free of all liens and encumbrances.
(b) Each of Green Mt. and Merger Sub has the requisite corporate power to
enter into this Agreement and to perform its respective obligations
hereunder. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby (i) have been or
will prior to the Closing and the Effective Time of the Merger be duly
authorized by the respective Boards of Directors of Green Mt. and Merger
Sub and by Green Mt. as the sole stockholder of Merger Sub, and (ii)
except as set forth in Section 7(e) hereof, do not have to be approved or
authorized by the stockholders of Green Mt. The execution and performance
of this Agreement will not constitute a material breach of any agreement,
indenture, mortgage, license or other instrument or document to which
Green Mt. or Merger Sub is a party or to which it is otherwise subject
and will not violate any judgment, decree, order, writ, law, rule,
statute, or regulation applicable to Green Mt., Merger Sub or their
properties. The execution and performance of this Agreement will not
violate or conflict with any provision of the respective Certificates of
Incorporation or Bylaws of either Green Mt. or Merger Sub.
(c) Green Mt. has delivered to HECI a true and complete copy of its
audited financial statements for the fiscal years ended December 31,
2004, and 2003, and unaudited financial statements for the three-month
period ended March 31, 0000 (xxx "Xxxxx Xx. Financial Statements"). The
Green Mt. Financial Statements are complete, accurate and fairly present
the financial condition of Green Mt. as of the dates thereof and the
results of its operations for the periods then ended. There are no
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material liabilities or obligations either fixed or contingent not
reflected therein. The Green Mt. Financial Statements have been prepared
in accordance with United States generally accepted accounting principles
applied on a consistent basis (except as may be indicated therein or in
the notes thereto) and fairly present the financial position of Green Mt.
as of the dates thereof and the results of its operations and changes in
financial position for the periods then ended. Green Mt. agrees to
provide updated quarterly financial statements as required by the SEC.
Merger Sub has no financial statements because it was recently formed
solely for the purpose of effectuating the Merger and it has been, is and
will remain inactive except for purposes of the Merger and it has no
assets, liabilities, contracts or obligations of any kind other than as
incurred in the ordinary course in connection with its incorporation in
Nevada. Green Mt. has no subsidiaries or affiliates except for Merger Sub
and Merger Sub has no subsidiaries or affiliates.
(d) Since March 31, 2005, there have not been any material adverse
changes in the business, financial condition or results of operation of
Green Mt. At the Closing, neither Green Mt. nor Merger Sub will have any
material assets and neither such corporation now has, nor will it have,
any liabilities of any kind other than those reflected in the most recent
balance sheet set forth in the Green Mt. Financial Statements and any
costs or liabilities incurred in connection with the Merger (which costs
and liabilities, including those liabilities reflected in the most recent
balance sheet set forth in the Green Mt. Financial Statements,
collectively will be paid in full by Green Mt. prior to the Closing so
that at Closing, Green Mt. has no outstanding liabilities).
(e) Neither Green Mt. nor Merger Sub is a party to, or the subject of,
any material pending litigation, claims, or governmental investigation or
proceeding not reflected in the Green Mt. Financial Statements, and to
the knowledge of the executive officers of Green Mt. and of the Principal
Stockholders (herein "Green Mt.'s Knowledge"), there are no material
lawsuits, claims, assessments, investigations, or similar matters,
threatened in writing against Merger Sub, Green Mt., or the management or
properties of Green Mt. or Merger Sub.
(f) Green Mt. and Merger Sub are each duly organized, validly existing
and in good standing under the laws of the jurisdiction of their
respective incorporation; each has the corporate power to own its
property and to carry on its business as now being conducted and is duly
qualified to do business in any jurisdiction where so required except
where the failure to so qualify would have no material negative impact.
Neither corporation is required to be qualified to do business in any
state other than the State of Nevada.
(g) To Green Mt.'s Knowledge, Green Mt. and Merger Sub have filed all
federal, state, county and local income, excise, property and other tax,
governmental and/or other returns, forms, filings, or reports, which are
due or required to be filed by it prior to the date hereof and have paid
or made adequate provision in the Green Mt. Financial Statements for the
payment of all taxes, fees, or assessments which have or may become due
pursuant to such returns, filings or reports or pursuant to any
assessments received. Neither Green Mt. nor Merger Sub is delinquent or
obligated for any tax, penalty, interest, delinquency or charge and there
are no tax liens or encumbrances applicable to either corporation.
Neither Green Mt. nor Merger Sub is deemed to be an "S Corporation" as
defined by Internal Revenue Code of 1986, as amended.
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(h) As of the date of this Agreement, Green Mt.'s authorized capital
stock consists solely of 50,000,000 shares of Green Mt. common stock,
$0.001 par value, of which 1,006,000 shares are presently issued and
outstanding. Prior to the Closing, Green Mt. will have outstanding
1,006,000 shares of common stock (prior to the Forward Stock Split) and
no other capital stock. Prior to the Closing, Green Mt. will amend its
Certificate of Incorporation to increase its authorized capitalization to
100 million shares of common stock, par value $0.001 per share, and 10
million shares of "blank check" preferred stock, and to reflect the 1.5
shares for 1 share forward stock split to be effected prior to the
Closing. Merger Sub's capitalization consists solely of 1,000 authorized
shares of $0.001 par value common stock ("Merger Sub's Common Stock"), of
which 1,000 shares are outstanding, all of which are owned by Green Mt.,
free and clear of all liens, claims and encumbrances. All outstanding
shares of capital stock of Green Mt. and Merger Sub are, and will be at
the Closing, duly authorized, validly issued, fully paid and
nonassessable. There are no existing options, calls, claims, warrants,
preemptive rights, registration rights or commitments of any character
relating to the issued or unissued capital stock or other securities of
either Green Mt. or Merger Sub.
(i) The financial records, minute books, and other documents and records
of Green Mt. and Merger Sub have been made available to HECI prior to the
Closing The records and documents of Green Mt. and Merger Sub that have
been delivered to HECI constitute all of the material records and
documents of Green Mt. and Merger Sub that they are aware of or that are
in their possession or in the possession of Green Mt. or Merger Sub.
(j) Neither Green Mt. nor Merger Sub has materially breached any material
agreement to which it is or has been a party. Prior to the execution of
the Agreement, Green Mt. has given to HECI copies or access to all
material contracts, commitments and/or agreements to which Green Mt. is a
party. There are no currently existing agreements with any affiliates,
related or controlling persons or entities. Green Mt. has no leasehold
interest or other ownership interest, and no obligations under any real
estate or any mining claims.
(k) Green Mt. has complied with all provisions relating to the issuance
of shares and for the registration thereof under the Securities Act and
all applicable state securities laws, or appropriate exemption from
registration therefrom. To the best of Green Mt.'s Knowledge, there are
no outstanding, pending or threatened stop orders or other actions or
investigations relating thereto involving federal and state securities
laws.
(l) Green Mt. currently has no, and for the past five years has not had,
any employees, consultants or independent contractors other than its
attorneys, accountants and transfer agent. Xxxxx Xxxxxxxx and Xxx Xxxxxxx
are, and will be at the Closing, the sole directors and sole executive
officers of Green Mt., and Xxxxx Xxxxxxxx and Xxx Xxxxxxx are, and will
be at the Closing the sole directors and sole executive officers of
Merger Sub.
(m) Green Mt. and Merger Sub have, and at the Closing will have,
disclosed in writing to HECI all events, conditions and facts materially
affecting the business, financial conditions, including any liabilities,
contingent or otherwise, or results of operations of either Green Mt. or
Merger Sub, since March 31, 2005.
(n) To Green Mt.'s Knowledge, Green Mt. was originally organized for the
purposes of, and with a specific plan for the ownership and operations of
mining claims. Subsequently, Green Mt. revised its business to seeking
potential operating businesses and business opportunities with the intent
to acquire or merge with such businesses.
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(o) To Green Mt.'s Knowledge, all information regarding Green Mt. which
has been provided to HECI by Green Mt., or set forth in any document or
other communication, disseminated to any former, existing or potential
stockholders of Green Mt., to the public or filed with the SEC or any
state securities regulators or authorities, is true, complete, accurate
in all material respects, not misleading, and was and is in full
compliance with all securities laws and regulations. Without limiting the
generality of the foregoing, Green Mt. has filed all required reports,
schedules, forms, statements and other documents with the SEC since the
filing of its registration statement on Form 10-SB on January 8, 2004,
including all filed reports, schedules, forms, statements and other
documents whether or not required (the "SEC Documents"). As of their
respective dates, the SEC Documents complied in all material respects
with the requirements of the Securities Act or the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), as the case may be, and the
rules and regulations of the SEC promulgated thereunder applicable to the
SEC Documents. Except to the extent that information contained in any SEC
Document has been revised or superseded by a later filed SEC Document,
none of the SEC Documents contains any untrue statement of a material
fact or omits to state any 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. The financial
statements of HECI included in the SEC Documents are true and complete
and comply as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with
respect thereto.
(p) To Green Mt.'s Knowledge, Green Mt. is and has been in compliance
with, and Green Mt. has conducted any business owned or operated by it in
compliance with, all applicable laws, orders, rules and regulations of
all governmental bodies and agencies, including applicable securities
laws and regulations, including, but not limited to, the Xxxxxxxx-Xxxxx
Act of 2002, and environmental laws and regulations, except where such
noncompliance has and will have, in the aggregate, no material adverse
effect. Green Mt. has not received notice of any noncompliance with the
foregoing, nor is it aware of any claims or threatened claims in
connection therewith. To its Knowledge, Green Mt. has never conducted any
operations or engaged in any business transactions of a material nature
other than as set forth in the reports Green Mt. has previously filed
with the SEC.
(q) The certificates of the Chief Executive Officer and Principal
Accounting Officer of Green Mt. required by Rules 13a-14 and 15d-14 of
the Exchange Act or Section 906 of the Xxxxxxxx-Xxxxx Act of 2002 with
respect to the SEC Documents, as applicable, are true and correct as of
the date of this Agreement as they relate to a particular SEC Document,
as though made as of the date of this Agreement. HECI has established and
maintains disclosure controls and procedures, has conducted the
procedures in accordance with their terms and has otherwise operated in
compliance with the requirements under Rules 13a-15 and 15d-15 of the
Exchange Act. (r) Except as and to the extent specifically disclosed in
this Agreement and as may be specifically disclosed or reserved against
as to amount in the latest balance sheet contained in the Green Mt.
Financial Statements, there is no basis for any assertion against Green
Mt. of any material liabilities or obligations of any nature, whether
absolute, accrued, contingent or otherwise and whether due or to become
due, including, without limitation, any liability for taxes, including
e-commerce sales or other taxes, interest, penalties and other charges
payable with respect thereto. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby
will
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(i) result in any payment, whether severance pay, unemployment
compensation or otherwise, becoming due from Green Mt. to any
person or entity, including without limitation any employee,
director, officer;
(ii) increase any benefits otherwise payable to any person or
entity, including without limitation any employee, director,
officer or affiliate; or
(iii) result in the acceleration of the time of payment or vesting
of any such benefits.
(s) To Green Mt.'s Knowledge, no aspect of Green Mt.'s business,
operations or assets is of such a character as would restrict or
otherwise hinder or impair Green Mt. from carrying on the business of
Green Mt. as it is presently being conducted by Green Mt., and as
anticipated following consummation of the Merger.
(t) To Green Mt.'s Knowledge, other than retention of accountants,
attorney, and transfer agent, Green Mt. has no other contracts,
commitments, arrangements, or understandings relating to its business,
operations, financial condition, prospects or otherwise.
(u) None of Green Mt., Merger Sub or any other affiliate thereof has or
maintains any employee benefit, bonus, incentive compensation,
profit-sharing, equity, stock bonus, stock option, stock appreciation
rights, restricted stock, other stock-based incentive, executive
compensation agreement, employment agreement, deferred compensation,
pension, stock purchase, employee stock ownership, savings, pension,
retirement, supplemental retirement, employment related
change-in-control, severance, salary continuation, layoff, welfare
(including, without limitation, health, medical, prescription, dental,
disability, salary continuation, life, accidental death, travel accident,
and other insurance), vacation, holiday, sick leave, fringe benefit, or
other benefit plan, program, or policy, whether qualified or nonqualified
and any trust, escrow, or other agreement related thereto, covering any
present or former employees, directors, or their respective dependents.
(v) There are no actions, proceedings or investigations pending or, to
Green Mt.'s Knowledge after making appropriate investigation, threatened
before any federal or state environmental regulatory body, or before any
federal or state court, alleging noncompliance by Green Mt. or any
predecessor in interest with the Comprehensive Environmental Response,
Compensation and Liability Act of 1990 ("CERCLA") or any other
Environmental Laws. To Green Mt.'s Knowledge after due investigation;
(i) there is no reasonable basis for the institution of any
action, proceeding or investigation against Green Mt. under
any Environmental Law;
(ii) Green Mt. is not responsible under any Environmental Law for
any release by any person at or in the vicinity of real
property of any hazardous substance (as defined by CERCLA),
caused by the spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping
or disposing of any such hazardous substance into the
environment;
(iii) Green Mt. is not responsible for any costs of any remedial
action required by virtue of any release of any toxic or
hazardous substance, pollutant or contaminant into the
environment including, without limitation, costs arising from
security fencing, alternative water supplies, temporary
evacuation and housing and other emergency assistance
undertaken by any environmental regulatory body;
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(iv) Green Mt. is in material compliance with all applicable
Environmental Laws; and
(v) no real property, now or in the past, used, owned, managed or
controlled by Green Mt. contains any toxic or hazardous
substance including, without limitation, any asbestos, PCBs
or petroleum products or byproducts in any form, the
presence, location or condition of which (x) violates any
Environmental Law, or (y) cannot be cleaned by ordinary
reclamation procedures customary in the oil and gas industry.
For purposes of this Agreement, "Environmental Laws" will mean any
federal, state, local or municipal statute, ordinance or regulation, or
order, ruling or other decision of any court, administrative agency or
other governmental authority pertaining to the release of hazardous
substances (as defined in CERCLA) into the environment.
(w) To Green Mt.'s Knowledge, no representation or warranty by Green Mt.
or Merger Sub contained in this Agreement and no statement contained in
any certificate, schedule or other communication furnished pursuant to or
in connection with the provisions hereof, contains or will contain any
untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements therein not misleading. There
is no event or condition of any kind or character pertaining to Green Mt.
that may reasonably be expected to have a material adverse effect on
Green Mt. or its subsidiaries. Except as specifically indicated elsewhere
in this Agreement, all documents delivered by Green Mt. in connection
herewith have been and will be complete originals, or exact copies
thereof.
SECTION 6 Closing. The Closing of the transactions contemplated herein
will take place on such date (the "Closing") as mutually determined by the
parties hereto, but no later than five (5) days after all conditions precedent
have been satisfied or waived and all required documents have been delivered.
The parties will use their reasonable commercial efforts to cause the Closing to
occur on or before August 1, 2005. The "Effective Time of the Merger" will be
that date and time specified in the Certificate of Merger as the date on which
the Merger will become effective.
SECTION 7 Actions Prior to Closing.
(a) Prior to the Closing, HECI on the one hand, and Green Mt. and Merger
Sub on the other hand, will be entitled to make such investigations of
the assets, properties, business and operations of the other party and to
examine the books, records, tax returns, financial statements and other
materials of the other party as such investigating party deems necessary
in connection with this Agreement and the transactions contemplated
hereby. Any such investigation and examination will be conducted at
reasonable times and under reasonable circumstances, and the parties
hereto will cooperate fully therein. The representations and warranties
contained in this Agreement will not be affected or deemed waived by
reason of the fact that either party hereto discovered or should have
discovered any representation or warranty is or might be inaccurate in
any respect. Until the Closing, the parties hereto and their respective
affiliates will keep confidential and will not use in any manner
inconsistent with the transactions contemplated by this Agreement any
information or documents obtained from the other concerning its assets,
properties, business or operations, If the Closing will not occur for any
reason (including, without limitation, pursuant to a termination of this
Agreement), the parties hereto and their respective affiliates will not
disclose, nor use for their own benefit, any such information or
documents obtained from the other, in either case, unless and to the
extent
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(i) readily ascertainable from public or published information,
or trade sources;
(ii) received from a third party not under an obligation to such
HECI or Green Mt., as the case may be, to keep such
information confidential; or
(iii) required by any applicable law, rule, regulation or court
order.
If the Closing does not occur for any reason, each of the parties and
their respective affiliates will promptly return or destroy all such
confidential information and compilations thereof as is practicable, and
will certify such destruction or return to the other party.
(b) Prior to the Closing, any written news releases or public disclosure
by either party pertaining to this Agreement will be submitted to the
other party for its review and approval prior to such release or
disclosure, provided, however, that
(i) such approval will not be unreasonably withheld, and
(ii) such review and approval will not be required of disclosures
required to comply, in the judgment of counsel, with federal
or state securities or corporate laws or policies.
(c) Prior to the Effective Time of the Merger, Green Mt. will amend its
Certificate of Incorporation to (i) increase its authorized
capitalization to 100 million shares of common stock, par value $0.001
per share, and 10 million shares of "blank check" preferred stock, and
(ii) change Green Mt.'s corporate name to Hydrogen Engine Center, Inc.
(d) Except as contemplated by this Agreement, there will be no stock
dividend, stock split, recapitalization, or exchange of shares with
respect to or rights issued in respect of Green Mt. common stock after
the date hereof and there will be no dividends or other distributions
paid on Green Mt.'s Common Stock after the date hereof, in each case
through and including the Effective Time of the Merger. Green Mt. and
Merger Sub will conduct no business activities prior to the Closing other
than in the ordinary course of business or as may be necessary in order
to consummate the transactions contemplated hereby.
(e) Green Mt., acting through its Board of Directors, will authorize the
effectuation of the 1.5 shares for 1 share Forward Stock Split and take
all requisite and necessary action to finalize the stock split and, in
accordance with applicable law, give notice of and submit for action by
written consent of its stockholders;
(i) an amendment to its Certificate of Incorporation to increase
the authorized capitalization of Green Mt. to 100 million
shares of common stock and 10 million shares of "blank check"
preferred stock;
(ii) a proposal to prepare and approve an employee / directors
incentive compensation plan and allocate 1,000,000 shares of
Green Mt. common stock to the plan (the "Hydrogen Engine
Center Incentive Compensation Plan"); and
(iii) an amendment to its Certificate of Incorporation to change
Green Mt.'s corporate name to Hydrogen Engine Center, Inc.
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(f) Green Mt. will take the requisite and necessary actions to obtain the
written consent for those actions discussed in Section 7(e) above as soon
as practicable after the execution of this Agreement and, as promptly as
practicable thereafter will:
(i) prepare and file with the SEC a preliminary Information
Statement relating to the matters stated above;
(ii) take the appropriate action to obtain and furnish the
information required by the SEC to be included in the
definitive Information Statement; and
(iii) after consultation with counsel to HECI, respond promptly to
any comments made by the SEC with respect to the preliminary
Information Statement and cause the Information Statement to
be mailed to its stockholders as promptly as practicable
following clearance from the SEC.
(g) HECI will provide to Green Mt. any information for inclusion in the
Information Statement which may be required under applicable law and
which is reasonably requested by Green Mt. Each of HECI, Green Mt. and
Merger Sub, respectively, agree promptly to correct any information
provided by any of them for use in the Information Statement if, and to
the extent that, such information will have become false or misleading in
any material respect and Green Mt. further agrees to take all necessary
steps to cause the Information Statement as so corrected to be filed with
the SEC and to be disseminated to its stockholders to the extent required
by applicable federal securities laws.
(h) Green Mt. hereby represents and warrants that the information
supplied or to be supplied by Green Mt. for inclusion or incorporation by
reference in (i) the Information Statement or (ii) the Other Filings (as
defined below) will, at the respective times filed with the SEC and, in
addition, in the case of the Information Statement, as of the date it or
any amendment or supplement thereto is mailed to stockholders, not
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they
are made, not misleading. The Information Statement will comply as to
form in all material respects with the requirements of the Exchange Act
and the rules and regulations promulgated thereunder. HECI hereby
represents and warrants that the information supplied or to be supplied
by HECI for inclusion or incorporation by reference in the Information
Statement or Other Filings will, at the respective times filed with the
SEC and, in addition, in the case of the Information Statement, as of the
date it or any amendment or supplement thereto is mailed to stockholders,
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they
are made, not misleading.
(i) As soon as practicable following the date hereof and following the
Effective Time of the Merger, each of Green Mt. and HECI will properly
prepare and file any other filings required under the Exchange Act or any
other federal, state or foreign law relating to the Merger (collectively,
the "Other Filings"). (j) Except as required by law, Green Mt. and Merger
Sub will not voluntarily take any action that would, or that is
reasonably likely to, result in any of the conditions to the Merger not
being satisfied. Without limiting the generality of the foregoing Green
Mt. and Merger Sub will not take any action that would result in (i) any
of its representations and warranties set forth in this Agreement that
are qualified as to materiality becoming untrue or (ii) any of such
representations and warranties that are not so qualified becoming untrue
in any material respect.
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(k) Green Mt. common stock will continue to be approved for quotation on
the OTC Bulletin Board and Green Mt. will have continued to satisfy
throughout the period from the date hereof through the Closing Date (i)
its filing requirements under Section 13 of the Exchange Act and (ii) the
requirements of Rule 15c2-11 as promulgated by the SEC under the Exchange
Act.
SECTION 8 Conditions Precedent to the Obligations of HECI. All
obligations of HECI under this Agreement to effect the Merger and the other
transactions contemplated hereby are subject to the fulfillment, prior to or as
of the Closing and/or the Effective Time of the Merger, as indicated below, of
each of the following conditions:
(a) The representations and warranties by or on behalf of Green Mt.,
Merger Sub and Principal Stockholders contained in this Agreement, or in
any certificate or document delivered pursuant to the provisions hereof
or in connection herewith, will be true at and as of the Closing and
Effective Time of the Merger as though such representations and
warranties were made at and as of such time.
(b) Green Mt. and Merger Sub will have performed and complied with, in
all material respects, all covenants, agreements, and conditions required
by this Agreement to be performed or complied with by them prior to or at
the Closing. No preliminary or permanent injunction or other order,
decree or ruling issued by a court or other governmental authority of
competent jurisdiction nor any statute, rule, regulation or executive
order promulgated or enacted by any governmental authority of competent
jurisdiction will be in effect which would have the effect of (i) making
the consummation of the Merger illegal, or (ii) otherwise prohibiting the
consummation of the Merger.
(c) On or before the Closing, the directors of Green Mt. and Merger Sub,
and Green Mt. as sole stockholder of Merger Sub, will have approved in
accordance with applicable provisions of the NRS the execution and
delivery of this Agreement and the consummation of the transactions
contemplated herein, and will have approved the amendment to its
Certificate of Incorporation and the Hydrogen Engine Center Incentive
Compensation Plan and submitted the same for approval by the stockholders
of Green Mt., as required.
(d) On or before the Closing, Green Mt. and Merger Sub will have
delivered certified copies of resolutions of the sole stockholder and
directors of Merger Sub and of the directors and stockholders of Green
Mt. approving and authorizing (i) the execution, delivery and performance
of this Agreement and all necessary and proper actions to enable Green
Mt. and Merger Sub to comply with the terms of this Agreement, (ii) the
election of HECI's nominees to the Board of Directors of Green Mt. and
all matters outlined or contemplated herein, (iii) the Forward Stock
Split and (iv) the submission of the amendment to the Certificate of
Incorporation and the Hydrogen Engine Center Incentive Compensation Plan
to the stockholders of Green Mt. and the filing of the amendment to the
Certificate of Incorporation upon approval thereof.
(e) Each of HECI Stockholders will have delivered to Green Mt. a letter
commonly known as an "investment letter" agreeing that the shares of
Green Mt. common stock to be issued in the Merger are, among other
things, (i) being acquired for investment purposes and not with a view to
public resale; (ii) being acquired for the investor's own account, (iii)
that the investor is an "accredited investor" as defined under Regulation
D of the Securities Act, and (iv) that the shares of Green Mt. common
stock are restricted and may not be resold, except in reliance of an
exemption under the Act.
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(f) The Merger will be permitted by applicable state law and otherwise
and Green Mt. will have sufficient shares of its capital stock authorized
to complete the Merger at the Effective Time and the transactions
contemplated hereby.
(g) The amendment to the Certificate of Incorporation and Hydrogen Engine
Center Incentive Compensation Plan will have been approved by the
requisite vote of the stockholders of Green Mt., acting by written
consent in lieu of a special meeting thereof, and the amendment to the
Certificate of Incorporation will have been filed in accordance with the
applicable requirements of the NRS.
(h) At Closing, all of the directors and officers of Green Mt. and Merger
Sub will have resigned in writing from their positions as directors and
officers of Green Mt. and Merger Sub, respectively, effective upon the
election and appointment of HECI nominees, and the directors of Green Mt.
will have taken such action as may be deemed necessary or desirable by
HECI regarding such election and appointment of HECI nominees.
(i) At the Closing, all instruments and documents delivered by Green Mt.
or Merger Sub, including to HECI Stockholders pursuant to the provisions
hereof, will be reasonably satisfactory to legal counsel for HECI.
(j) The capitalization of Green Mt. and Merger Sub will be the same as
described in Section 5(h) above and will reflect the effectiveness of the
amendment to the Certificate of Incorporation increasing Green Mt.'s
authorized capitalization.
(k) The shares of Green Mt. common stock to be issued to HECI
Stockholders at Closing will be validly issued, nonassessable and fully
paid under the applicable provisions of the NRS and will be issued in a
nonpublic offering in compliance with all federal, state and applicable
securities laws.
(l) HECI will have received all necessary and required approvals and
consents from required parties and from its stockholders.
(m) At the Closing, Green Mt. and Merger Sub will have delivered to HECI
an opinion of Green Mt.'s legal counsel dated as of the Closing to the
effect that:
(i) Each of Green Mt. and Merger Sub is a corporation duly
organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation;
(ii) Green Mt. and Merger Sub each has the corporate power to
execute, deliver and perform its respective obligations under
this Agreement;
(iii) This Agreement has been duly authorized, executed and
delivered by Green Mt. and Merger Sub and is a valid and
binding obligation of Green Mt. and Merger Sub enforceable in
accordance with its terms, subject to applicable bankruptcy,
insolvency, moratorium or other similar laws relating to
creditors' rights and general principles of equity;
(iv) Green Mt. and Merger Sub each through its Board of Directors
and/or stockholders, as required, have taken all corporate
action necessary for performance under this Agreement;
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(v) The documents executed by Green Mt. and delivered to HECI and
HECI Stockholders hereunder are valid and binding in
accordance with their terms and vest in HECI Stockholders all
right, title and interest in and to the shares of Green Mt.'s
Common Stock to be issued pursuant to Section 2 hereof, and
the shares of Green Mt. common stock when issued will be duly
and validly issued, fully paid and nonassessable;
(vi) The shares of Green Mt. common stock issued pursuant to this
Agreement will be deemed "restricted securities" and may be
sold or otherwise transferred upon the satisfaction of the
provisions of Rule 144, or pursuant to any other appropriate
exemption or registration under the Securities Act;
(vii) Green Mt. has satisfied its reporting requirements pursuant
to the Exchange Act and has fulfilled all disclosure
obligations under such Act and applicable securities laws;
and
(viii)Current stockholders of Green Mt. common stock will have no
appraisal or similar rights as a result of consummation of
this Agreement and the transactions contemplated hereby.
(n) HECI will have completed its financial and legal due diligence
investigation of Green Mt. with results thereof satisfactory to HECI in
its sole discretion.
Section 9 Conditions Precedent to the Obligations of Green Mt. and Merger
Sub. All obligations of Green Mt. and Merger Sub under this Agreement are
subject to the fulfillment, prior to or at the Closing and/or the Effective Time
of the Merger, of each of the following conditions:
(a) The representations and warranties by HECI contained in this
Agreement or in any certificate or document delivered pursuant to the
provisions hereof or in connection herewith, will be true at and as of
the Closing and the Effective Time of the Merger as though such
representations and warranties were made at and as of such times.
(b) HECI will have performed and complied with, in all material respects,
all covenants, agreements, and conditions required by this Agreement to
be performed or complied with by it prior to or at the Closing.
(c) On or before the Closing, the directors of HECI will have approved in
accordance with applicable state corporation law the execution and
delivery of this Agreement and the consummation of the transactions
contemplated herein and will have submitted the same to the stockholders
of HECI.
(d) On or before the Closing Date, HECI will have delivered certified
copies of resolutions of the stockholders and directors of HECI approving
and authorizing the execution, delivery and performance of this Agreement
and the other Transaction Documents and authorizing all of the necessary
and proper action to enable HECI to comply with the terms of this
Agreement.
(e) The Merger will be permitted by applicable state law and otherwise.
(f) At the Closing, all instruments and documents delivered by HECI
pursuant to the provisions hereof will be reasonably satisfactory to
legal counsel for Green Mt.
(g) The capitalization of HECI will be the same as described in Section
4(a) hereof.
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(h) Green Mt. will have received all necessary and requisite approvals
and consents from required parties and from its stockholders, and this
Agreement and the Merger will have been adopted and approved by the
requisite vote of HECI Stockholders.
(i) At the Closing, HECI will have delivered to Green Mt. an opinion of
HECI's legal counsel dated as of the Closing to the effect that:
(i) HECI is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its
incorporation;
(ii) This Agreement has been duly authorized, executed and
delivered by HECI and is a valid and binding obligation of
HECI enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, moratorium or other
similar laws relating to creditors' rights and general
principles of equity;
(iii) HECI, through its Board of Directors and stockholders has
taken all corporate action necessary for performance of its
obligations under this Agreement; and
(iv) HECI has the corporate power to execute, deliver and perform
its obligations under this Agreement.
(j) Green Mt. will have an exemption from registration under the
Securities Act and the securities laws of the state of Iowa and the
various states of residence of HECI Stockholders for issuance of the
shares of Green Mt. common stock to be issued to HECI Stockholders in the
Merger.
(k) Green Mt. will have received from HECI Stockholders the investment
letters described in Section 8(e) hereof.
SECTION 10 Survival. The representations and warranties contained in this
Agreement and any other document or certificate relating hereto will survive and
continue in full force and effect for a period of two years after the Effective
Time of the Merger.
SECTION 11 Nature of Representations. All of the parties hereto are
executing and carrying out the provisions of this Agreement in reliance solely
on the representations, warranties, covenants and agreements contained in this
Agreement and the other documents delivered at the Closing and not upon any
representation, warranty, agreement, promise or information, written or oral,
made by the other party or any other person other than as specifically set forth
herein.
SECTION 12 Documents at Closing. At the Closing, the following documents
will be delivered:
(a) HECI will deliver, or will cause to be delivered, to Green Mt. the
following:
(i) a certificate executed by the President of HECI to the effect
that all representations and warranties made by HECI under
this Agreement are true and correct as of the Closing and as
of the Effective Time of the Merger, the same as though
originally given to Green Mt. or Merger Sub on said date and
that HECI has performed or complied in all material respects
with all agreements and covenants required by this Agreement
to be performed or complied with by it on or prior to the
Effective Time of the Merger;
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(ii) a certificate from the state of HECI's incorporation dated
within five business days of the Closing to the effect that
HECI is in good standing under the laws of said state;
(iii) such other instruments, documents and certificates, if any,
as are required to be delivered pursuant to the provisions of
this Agreement and the other Transaction Documents;
(iv) executed copy of the Certificate of Merger for filing in
Iowa;
(v) certified copies of resolutions adopted by HECI Stockholders
and the directors of HECI approving the Merger Agreement and
other Transaction Documents and authorizing the Merger;
(vi) the opinion of HECI's counsel as described in Section 9(i)
above; and
(vii) all other items, the delivery of which is a condition
precedent to the obligations of Green Mt. and Merger Sub, as
set forth herein.
(b) Green Mt. and Merger Sub will deliver or cause to be delivered to
HECI:
(i) stock certificates representing those securities of Green Mt.
to be issued as a part of the Merger as described in Section
2 hereof;
(ii) a certificate of the President of Green Mt. and Merger Sub,
respectively, to the effect that all representations and
warranties of Green Mt. and Merger Sub made under this
Agreement are true and correct as of the Closing, the same as
though originally given to HECI on said date; and that each
of Green Mt. and Merger Sub has performed or complied in all
material respects with all agreements and covenants required
by this Agreement to be performed or complied with by it on
or prior to the Effective Time of the Merger;
(iii) certified copies of resolutions adopted by Green Mt.'s and
Merger Sub's Board of Directors and Merger Sub's sole
stockholder approving the Merger Agreement and authorizing
the Merger and all related matters; and certified copies of
resolutions adopted by the stockholders of Green Mt.
approving the matters described in Section 7(e) above.
(iv) certificates from the jurisdiction of incorporation of Green
Mt. and Merger Sub dated within five business days of the
Closing Date that each of said corporations is in good
standing under the laws of said state;
(v) executed copy of the Certificate of Merger for filing in
Nevada;
(vi) opinion of Green Mt.'s counsel as described in Section 8(m)
above;
(vii) such other instruments and documents as are required to be
delivered pursuant to the provisions of this Agreement;
(viii)written resignation of all of the officers and directors of
Green Mt. and Merger Sub; and
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(ix) all other items, the delivery of which is a condition
precedent to the obligations of HECI, as set forth in Section
8 hereof.
SECTION 13 Finder's Fees. Green Mt. and Merger Sub, jointly and
severally, represent and warrant to HECI, and HECI represents and warrants to
Green Mt. and Merger Sub, that none of them, or any party acting on their
behalf, has incurred any liabilities, either express or implied, to any "broker"
or "finder" or similar person in connection with this Agreement or any of the
transactions contemplated hereby.
SECTION 14 Additional Covenants. Between the date hereof and the Closing,
except with prior written consent of the other party:
(a) Green Mt., Merger Sub and HECI will conduct their business only in
the usual and ordinary course and the character of such business will not
be changed nor will any different business be undertaken;
(b) No change will be made in the Certificate of Incorporation or Bylaws
of Green Mt., Merger Sub or HECI except as described herein;
(c) No change will be made in the authorized or issued shares of Green
Mt. except as set forth herein;
(d) Neither Green Mt. nor HECI will discharge or satisfy any lien or
encumbrance or obligation or liability, other than current liabilities
shown on the financial statements heretofore delivered and current
liabilities incurred since that date in the ordinary course of business;
and
(e) Green Mt. will not make any payment or distribution to its
stockholders or purchase or redeem any shares or capital stock except as
set forth herein.
SECTION 15 Post-Closing Covenants. After the Closing, HECI will cause
Green Mt. to timely file with the SEC a current report on Form 8-K to report the
Merger. In addition, for a period of 12 months following the Closing, HECI will
cause Green Mt. to use its commercially reasonable efforts to timely file all
reports and other documents required to be filed by Green Mt. under the Exchange
Act.
SECTION 16 Termination. This Agreement may be terminated at any time
prior to the Effective Time of the Merger, by action taken or authorized by the
Board of Directors of the terminating party or parties and, except as provided
below, whether before or after approval of the matters presented in connection
with the Merger by the stockholders of Green Mt. or HECI:
(a) By mutual written consent of Green Mt. and HECI;
(b) By either Green Mt. or HECI, if the Effective Time of the Merger will
not have occurred on or before August 31, 2005 (the "Termination Date");
provided, however, that the right to terminate this Agreement under this
Section 16(b) will not be available to any party whose failure to fulfill
any obligation under this Agreement has been the cause of or resulted in,
the failure of the Effective Time of the Merger to occur on or before the
Termination Date;
(c) By either Green Mt. or HECI if any governmental entity (i) will have
issued an order, decree or ruling or taken any other action (which the
parties will use their reasonable best efforts to resist, resolve or
lift, as applicable) permanently restraining, enjoining or otherwise
prohibiting the transaction contemplated by this Agreement and such
order, decree, ruling or other action will have become final and
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nonappealable, or (ii) will have failed to issue an order, decree or
ruling or to take any other action and such denial of a request to issue
such order, decree, ruling or take such other action will have become
final and nonappealable (which order, decree, ruling or other action the
parties will have used their reasonable best efforts to obtain); if such
action under (i) and/or (ii) is necessary to fulfill the conditions set
forth in Sections 8 and 9, as applicable;
(d) By either Green Mt. or HECI, if the approvals of the respective
stockholders of either Green Mt. or HECI contemplated by this Agreement
will not have been obtained by reason of the failure to obtain the
required vote of stockholders or consent to the respective matters as to
which such approval was sought;
(e) By Green Mt., if HECI will have breached or failed to perform any of
its representations, warranties, covenants or other agreements contained
in this Agreement, such that the conditions set forth in Section 9 are
not capable of being satisfied on or before the Termination Date; or
(f) By HECI, if Green Mt. will have breached or failed to perform any of
its representations, warranties, covenants or other agreements contained
in this Agreement, such that the conditions set forth in Section 8 are
not capable of being satisfied on or before the Termination Date.
SECTION 17 Effect of Termination. In the event of termination of this
Agreement by either Green Mt. or HECI as provided in Section 16 (other than
Sections 16(e) or (f)), this Agreement will forthwith become void and there will
be no liability or obligation on the part of any of the parties or their
respective officers or directors.
SECTION 18 Miscellaneous.
(a) Further Assurances. At any time and from time to time after the
Effective Time of the Merger, each party will execute such additional
instruments and take such action as may be reasonably requested by the
other party to confirm or perfect title to any property transferred
hereunder or otherwise to carry out the intent and purposes of this
Agreement.
(b) Waiver. Any failure on the part of any party hereto to comply with
any of its obligations, agreements or conditions hereunder may be waived
in writing by the party (in its sole discretion) to whom such compliance
is owed.
(c) Amendment. This Agreement may be amended only in writing as agreed to
by all parties hereto.
(d) Notices. All notices and other communications hereunder will be in
writing and will be deemed to have been given if delivered in person or
sent by prepaid first class registered or certified mail, return receipt
requested to the last known address of the noticed party.
(e) Headings. The section and subsection headings in this Agreement are
inserted for convenience only and will not affect in any way the meaning
or interpretation of this Agreement.
(f) Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, each of which will be deemed an original, but all of
which together will constitute one and the same instrument.
(g) Binding Effect. This Agreement will be binding upon the parties
hereto and inure to the benefit of the parties, their respective heirs,
administrators, executors, successors and assigns.
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(h) Entire Agreement. This Agreement and the attached Exhibits, including
the Certificate of Merger, is the entire agreement of the parties
covering everything agreed upon or understood in the transaction. There
are no oral promises, conditions, representations, understandings,
interpretations or terms of any kind as conditions or inducements to the
execution hereof.
(i) Severability. If any part of this Agreement is deemed to be
unenforceable, the balance of the Agreement will remain in full force and
effect.
(j) Responsibility and Costs. Whether the Merger is consummated or not
and except as otherwise set forth below, all fees, expenses and
out-of-pocket costs including, but not limited to, fees and disbursements
of counsel, financial advisors and accountants and expenses associated
with fulfillment of the obligations set forth herein, that are incurred
by the parties hereto will be borne solely and entirely by the party that
has incurred such costs and expenses, unless the failure to consummate
the Merger constitutes a breach of the terms hereof, in which event the
breaching party will be responsible for all costs of all parties hereto.
Notwithstanding the above, the parties agree to pay to Xxxxxxx X.
Xxxxxxx, Attorney at Law, all legal fees, expenses and costs associated
with the preparation and execution of this Agreement and all
transactions, agreements and documents contemplated hereby, from the
proceeds of the interim financing depicted in Section 2(g)(i) above or
other financing that may be secured by HECI and/or Green Mt. prior to the
Closing, which amount for such legal fees and expenses will not exceed
$25,000. No other pre-Merger fees, expenses or other costs incurred by
Green Mt. prior to the Effective Time of the Merger will be the
obligation of Green Mt. at or following the Effective Time of the Merger.
(k) Governing Law. This Agreement will be governed and construed in
accordance with the laws of the State of Nevada without regard to
principles of conflicts of law.
[Signatures on the Following Page]
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IN WITNESS WHEREOF, the parties have executed this Agreement the day and
year first above written.
HYDROGEN ENGINE CENTER, INC.
By: /s/ Xxx Xxxxxxxxx
-----------------------------------------
Xxx Xxxxxxxxx
Its: President
GREEN MT. LABS., INC.
By: /s/ Xxxxx Xxxxxxxx
-----------------------------------------
Xxxxx Xxxxxxxx
Its: President
GREEN MT. ACQUISITIONS, INC.
By: /s/ Xxx Xxxxxxx
-----------------------------------------
Xxx Xxxxxxx
Its: President
PRINCIPAL STOCKHOLDERS
/s/ H. Xxxxxxx Xxxxxxxx
-----------------------------------------
H. Xxxxxxx Xxxxxxxx
/s/ Xxxxxx X. Xxxxx
-----------------------------------------
Xxxxxx X. Xxxxx