Agreement And Plan of Merger

EX 10.1

AGREEMENT AND PLAN OF MERGER

BY AND AMONG

GLOBAL-TECH CAPITAL CORP., a Nevada corporation

AND

SOURCE DIRECT INCORPORATED, an Idaho corporation


SEPTEMBER 29, 2003


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AGREEMENT AND PLAN OF MERGER

AGREEMENT AND PLAN OF MERGER (" Agreement" ), dated as of September 29, 2003, by and among GLOBAL-TECH CAPITAL CORP., a Nevada corporation (" Global-Tech" ) and SOURCE DIRECT INCORPORATED, an Idaho corporation (" Source Direct" ). The corporate parties hereto are sometimes hereinafter referred to collectively as the " Companies," or individually as a " Company."


RECITALS:


WHEREAS, the respective Boards of Directors of the Companies deem it advisable and in the best interests of their respective stockholders that Source Direct be acquired by and become a wholly owned subsidiary of Global-Tech and, in furtherance thereof, the Boards of Directors of the Companies have approved, as applicable, the merger of an Idaho corporation to be formed and to be a wholly owned subsidiary of Global-Tech (" Acquisition Sub" ) with and into Source Direct, upon the terms and subject to the conditions set forth herein; and


WHEREAS, for federal income tax purposes, it is intended that the merger shall qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the " Code" );


NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants, and agreements set forth herein, the parties hereto agree as follows:

ARTICLE I
THE MERGER


1.1

The Merger. Subject to the terms and conditions of this Agreement, at the Effective Time (as defined in Section 1.2 hereof), Acquisition Sub shall be merged (the " Merger" ) with and into Source Direct, with Source Direct being the surviving corporation in the Merger (the " Surviving Corporation" ) and the separate existence of Acquisition Sub shall thereupon cease. The Merger shall have the effects set forth in the Idaho Business Corporation Act (the " IBCA" ).


1.2

Effective Time of the Merger. The Merger shall become effective (the " Effective Time" ) upon the completion of the filing of properly executed Articles of Merger with the Secretary of State of the State of Idaho, which filing shall be made on the Closing Date after satisfaction of the conditions set forth in Article VII hereof.

ARTICLE II


THE SURVIVING CORPORATION


2.1

Articles of Incorporation of the Surviving Corporation. The Articles of Incorporation of Source Direct shall be the Articles of Incorporation of the Surviving Corporation.


2.2

Bylaws of the Surviving Corporation. The Bylaws of Source Direct as in effect at the Effective Time shall be the Bylaws of the Surviving Corporation until thereafter amended in accordance with the Bylaws or applicable law.


2.3

Directors and Officers of the Surviving Corporation.


(a)

The directors of Source Direct at the Effective Time shall be the initial directors of the Surviving Corporation and shall hold office from the Effective Time until their respective successors are duly elected or appointed and qualified in the manner provided in the Articles of Incorporation and Bylaws of the Surviving Corporation, or as otherwise provided by law.


(b)

The officers of Source Direct at the Effective Time shall be the initial officers of the Surviving Corporation and shall hold office from the Effective Time until removed or until their respective successors are duly elected or appointed and qualified in the manner provided in the Articles of Incorporation and Bylaws of the Surviving Corporation, or as otherwise provided by law.


ARTICLE III
CONVERSION OF SHARES


3.1

Exchange Ratio. At the Effective Time, and subject to Section VII, by virtue of the Merger and without any action on the part of the holder thereof:


(a)

Each share of common stock of Source Direct (" Source Direct Common Share" ) issued and outstanding immediately prior to the Effective Time shall be converted at the Effective Time into the right to receive one and one-half (1.5) shares of restricted common stock, par value $.001 per share, of Global-Tech (" Global-Tech Shares" ). The aggregate number of Global-Tech Shares to be received by the Source Direct shareholders shall be not more than 63,030,000. The Merger shall be abandoned before the Effective Time if at Closing holders of at least 34,000,000 Source Direct Common Shares shall not exchange their shares for Global-Tech Shares pursuant to this subparagraph 3.1(a).


(b)

Notwithstanding anything to the contrary in this Agreement, any holder of Source Direct Shares who shall exercise the rights of a dissenting shareholder pursuant to and strictly in accordance with the provisions of the IBCA shall be entitled to receive only the payment therein provided for and shall not be entitled to receive Global-Tech Shares, provided that if holders of Source Direct Shares holding in excess of 10,000 of such shares at Closing shall exercise the rights of dissenting shareholders, either Global-Tech or Source Direct may terminate this Agreement prior to the Effective Time. Such payment shall be made directly by the Surviving Corporation.


(c)

Notwithstanding anything to the contrary in this Agreement, any holder of Source Direct Shares who does not reasonably represent that he, she, or it is (i) an " accredited investor" as defined in Rule 501(a) of Regulation D promulgated by the Securities and Exchange Commission (the " SEC" ), or (ii) either alone or with a purchaser representative, a sophisticated investor as reasonably determined by Global-Tech, and who does not exercise the rights of a dissenting shareholder as provided above, shall exchange Source Direct Common Shares for $0.05 per share plus interest at the rate of 10% per annum from the date of issuance of such shares, provided that if holders of Source Direct Shares to be converted pursuant to this subparagraph hold in excess of 10,000 of such shares at Closing, either Global-Tech or Source Direct may terminate this Agreement prior to the Effective Time. Pa yment under this subparagraph shall be made directly by the Surviving Corporation.


(d)

At the Effective Time, all Source Direct Shares shall no longer be outstanding and shall automatically be canceled and retired and shall cease to exist. Each certificate previously representing any such Source Direct Shares shall thereafter represent the Global-Tech Shares into which such Source Direct Shares have been converted, except for such shares converted pursuant to subparagraphs (b) and (c) above. Each certificate previously representing any such Source Direct Shares, which are converted pursuant to subparagraphs (b) and (c) above shall thereafter represent the right to receive a cash payment as provided in such subparagraphs. Certificates representing Source Direct Shares shall be exchanged for certificates representing whole Global-Tech Shares, except as provided in subparagraphs (b) and (c) above.


(e)

Each Source Direct Share held in treasury shall be canceled and retired and cease to exist, and no Global-Tech Shares shall be issued in exchange therefore.


(f)

The Merger shall be abandoned if at Closing the issuance of the Global-Tech Shares cannot reasonably qualify for exemption from the registration provisions of the Securities Act as provided in Rule 506 of Regulation D promulgated by the Securities and Exchange Commission.


3.2

Exchange of Shares .


(a)

The transfer agent for Global-Tech shall act as Exchange Agent hereunder (the " Exchange Agent" ). No later than the Effective Time, Global-Tech shall make available, and each holder of Source Direct Shares shall be entitled to receive, upon surrender to the Exchange Agent of one or more certificates representing such Source Direct Shares for cancellation, certificates representing the number of Global-Tech Shares into which such Source Direct Shares are converted in the Merger. The Global-Tech Shares into which the Source Direct Shares shall be converted in the Merger shall be deemed to have been issued at the Effective Time.


(b)

As soon as reasonably practicable after the Effective Time, the Exchange Agent shall mail to each holder of record of a certificate or certificates which immediately prior to the Effective Time represented outstanding Source Direct Shares (the " Certificates" ) whose Shares were converted into Global-Tech Shares pursuant to Section 3.1, (i) a letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon delivery of the Certificates to the Exchange Agent and shall be in such form and have such other provisions as Global-Tech and the other Companies may reasonably specify) and (ii) instructions for use in effecting the surrender of the Certificates in exchange for certificates representing Global-Tech Shares. Upon surrender of a Certificate for cancellation to the Exchange Agent together with such letter of trans mittal, duly executed, the holder of such Certificate shall be entitled to receive in exchange therefor a certificate representing that number of whole restricted Global-Tech Shares which such holder has the right to receive in respect of the Certificates surrendered pursuant to the provisions of this Article III.


(c)

In the event that any stock certificate representing Source Direct Shares shall have been lost, stolen, or destroyed, upon the making of an affidavit of that fact by the person claiming such certificate to be lost, stolen, or destroyed, Global-Tech shall issue or cause to be issued in exchange for such lost, stolen, or destroyed certificate the number of Global-Tech Shares into which such shares are converted in the Merger in accordance with this Article III. When authorizing such issuance in exchange therefor, the Board of Directors of Global-Tech may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen, or destroyed certificate to give Global-Tech a bond in such sum as it may direct as indemnity, or such other form of indemnity as it shall direct, against any claim that may be made against Global-Tech with respect to the certificate alleged to have been lost, stolen, or destroyed.


3.3

Dividends; Transfer Taxes. No dividends shall be declared or paid on Global-Tech Shares prior to the Effective Time.


3.4

No Fractional Securities. No certificates or scrip representing fractional Global-Tech Shares shall be issued pursuant to this Article III and no dividend, stock split-up, or other change in the capital structure of Global-Tech shall relate to any fractional security, and such fractional interests shall not entitle the owner thereof to vote or to any rights of a security holder. In lieu of any such fractional securities, each holder of Shares who would otherwise have been entitled to a fraction of a Global-Tech Share upon surrender of stock certificates for exchange pursuant to this Article III shall receive a Global-Tech Share rounded to the next highest number.


3.5

Closing of Transfer Books. At the Effective Time, the stock transfer books of Source Direct shall be closed and no transfer of Source Direct Shares shall thereafter be made. If, after the Effective Time, certificates representing Source Direct Shares are presented to the Surviving Corporation, they shall be canceled and exchanged for certificates representing Global-Tech Shares in accordance with the terms hereof. At and after the Effective Time, the holders of Source Direct Shares to be exchanged for Global-Tech Shares pursuant to this Agreement shall cease to have any rights as shareholders of Source Direct except for the right to surrender such stock certificates in exchange for Global-Tech Shares as provided hereunder.


3.6

Dissenting Shares. If holders of Source Direct Shares are entitled to dissent from the Merger and demand appraisal of any such Source Direct Shares in accordance with the provisions of the IBCA concerning the right of such holders to dissent from the Merger and demand appraisal of their shares (" Dissenting Holders" ), any Source Direct Shares held by a Dissenting Holder as to which appraisal has been so demanded (" Excluded Source Direct Shares" ) shall not be converted as described in Section 3.1, but shall from and after the Effective Time represent only the right to receive such consideration as may be determined to be due to such Dissenting Holder pursuant to the IBCA; provided, however, that each Source Direct Share held by a Dissenting Holder who shall, after the Effective Time, withdraw his demand for appraisal or lose his right of appraisal with respect to such Source D irect Shares, in either case pursuant to the IBCA, shall not be deemed Excluded Source Direct Shares but shall be deemed to be converted, as of the Effective Time, into the right to receive Global-Tech Shares in accordance with the Source Direct Exchange Ratio, as applicable.


3.7

Non-Qualified Shares. If holders of Source Direct Shares do not qualify as accredited or sophisticated investors as set forth in subsection 3.1(c), any Source Direct Shares held by such shareholder shall not be converted as described in Section 3.1, but shall from and after the Effective Time represent only the right to receive such consideration as may be determined to be due pursuant to subsection 3.1(c).


3.8

Closing. The closing of the transactions contemplated by this Agreement (the " Closing" ) shall take place at the offices of Ronald N. Vance, P.C., 57 West 200 South, Suite 310, Salt Lake City, Utah, at 10 a.m., local time, on October 14, 2003 (the " Closing Date" ) after the later of (a) the day on which the meeting of the stockholders of Source Direct approving the Merger is held in compliance with applicable law, or (b) the day on which all of the conditions set forth in Article VII hereof are satisfied or waived (other than those conditions which are to be satisfied at Closing), or at such other date, time and place as the Companies shall agree. At Closing Global-Tech shall deliver to new management all books and records, including accounting records, of Global-Tech.


3.9

Supplementary Action. If at any time after the Effective Time, any further assignments or assurances in law or any other things are necessary or desirable to vest or to perfect or confirm of record in the Surviving Corporation the title to any property or rights of either Global-Tech or Source Direct, or otherwise to carry out the provisions of this Agreement, the officers and directors of the Surviving Corporation are hereby authorized and empowered on behalf of each, in the name of and on behalf of them as appropriate, to execute and deliver any and all things necessary or proper to vest or to perfect or confirm title to such property or rights in the Surviving Corporation, and otherwise to carry out the purposes and provisions of this Agreement.


ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SOURCE DIRECT


As used in this Agreement, (i) the term " Material Adverse Effect" means, with respect to Global-Tech or Source Direct, as the case may be, a material adverse effect on the business, assets, results of operations, or financial condition of such party and its subsidiaries taken as a whole or in the ability of such party to perform its obligations hereunder, and (ii) the word " subsidiary" when used with respect to any party means any corporation or other organization, whether incorporated or unincorporated, of which such party or any other subsidiary of such party is a general partner (excluding partnerships the general partnership interests of which held by such party or any subsidiary of such party do not have a majority of the voting interests in such partnership) or of which at least a majority of the securities or other interests having by their terms ordinary voting power to elect a m ajority of the board of directors or others performing similar functions with respect to such corporations or other organizations is directly or indirectly owned or controlled by such party and/or by any one or more of the subsidiaries.


Source Direct represents and warrants, with respect to Source Direct, except as disclosed to Global-Tech in the Source Direct Schedule of Exceptions (the " Source Direct Schedule" ), attached hereto and incorporated herein by this reference, as follows:


4.1

Organization. Source Direct is a corporation duly organized, validly existing, and in good standing under the laws of its jurisdiction of incorporation and has the corporate or other power to carry on its business as it is now being conducted or presently proposed to be conducted. Source Direct is duly qualified as a foreign corporation or entity to do business, and is in good standing (to the extent the concept of good standing exists), in each jurisdiction where the character of its properties owned or held under lease or the nature of its activities makes such qualification necessary, except where the failure to be so qualified shall not have a Material Adverse Effect.


4.2

Capitalization. The authorized capital stock of Source Direct is as set forth in Section 4.2 of the Source Direct Schedule. As of the date hereof the number of Shares of Source Direct which are issued and outstanding is as set forth in Section 4.2 of the Source Direct Schedule. As of the Effective Time the number of Shares of Source Direct which shall be outstanding shall not exceed 42,020,000. All of the issued and outstanding Shares of Source Direct are or will be validly issued, fully paid, and non-assessable and free of preemptive rights or similar rights created by statute, the Articles of Incorporation or Bylaws of Source Direct or any agreement by which Source Direct is a party or by which it is bound.


4.3

Authority Relative to this Agreement. Source Direct has the corporate power to enter into this Agreement and to carry out its obligations hereunder. The execution and delivery of this Agreement by Source Direct and the consummation by Source Direct of the transactions contemplated hereby have been duly authorized by its Board of Directors, and, except for approval by the requisite votes cast by shareholders of Source Direct at the meeting provided for herein, no other corporate proceedings on the part of Source Direct are necessary to approve this Agreement or the transactions contemplated hereby.


4.4

Consents and Approvals; No Violations. Except filing and recordation of Articles of Merger under the IBCA, no filing with, and no permit, authorization, consent, or approval of, any public body or authority is necessary for the consummation by Source Direct of the transactions contemplated by this Agreement. Except as set forth in Section 4.4 of the Source Direct Schedule, neither the execution and delivery of this Agreement by Source Direct, nor the consummation by it of the transactions contemplated hereby, nor compliance by Source Direct with any of the provisions hereof, shall (a) result in any breach of the Articles of Incorporation or Bylaws of Source Direct, (b) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, cancellation, or acceleration) under, any of the terms, conditions , or provisions of any note, bond, mortgage, indenture, license, contract, agreement, or other instrument or obligation to which Source Direct is a party or by which it or any of its properties or assets may be bound or (c) violate any order, writ, injunction, decree, statute, rule, or regulation applicable to Source Direct, or any of its properties or assets, except in the case of clauses (b) and (c) for violations, breaches, or defaults that would not have a Material Adverse Effect on Source Direct.


4.5

Financial Statements. The audited financial statements as of June 30, 2003, and from the date of inception on July 8, 2002, through June 30, 2003, fairly present in all material respects the financial position of Source Direct as of the date thereof, and the other related statements (including the related notes) included therein fairly present in all material respects the results of operations, changes in stockholders' equity and cash flows of Source Direct for the period or as of the respective date set forth therein, all in conformity with generally accepted accounting principles consistently applied during the period involved, except as otherwise noted therein.


4.6

Absence of Certain Changes or Events; Undisclosed Liabilities.


(a)

Since June 30, 2003, except as set forth in Section 4.6 of the Source Direct Schedule, Source Direct has not: (i) incurred any liability material to Source Direct except in the ordinary course of its business, consistent with past practices; (ii) suffered a change, or any event involving a prospective change, in the business, assets, financial condition, or results of operations of Source Direct which has had, or is reasonably likely to have, individually or in the aggregate, a Material Adverse Effect on Source Direct, (other than as a result of changes or proposed changes in federal or state regulations of general appl ...