AGREEMENT AND PLAN OF MERGER

AGREEMENT AND PLAN OF MERGER

This Agreement and Plan of Merger ("Agreement"), is made and entered into this 7th day of August 2009, by and among CRC CRYSTAL RESEARCH CORPORATION, a Nevada Corporation ("CRC"), ARIZONA QUARTZ TECH, INC., an Arizona Corporation ("AZQT”). CRC, and AZQT are hereinafter sometimes collectively referred to as the "Parties."

 

RECITALS:

 

A.           CRC desires to acquire all of the issued and outstanding capital stock of AZQT, through a merger with and into CRC (the "Merger"), with CRC as the surviving corporation of the Merger.

 

B.           It is the intention of the parties hereto that: (i) the Merger shall qualify as a tax free reorganization under Section 368 of the Internal Revenue Code of 1986, as amended, and related sections thereunder; and the parties intend this Agreement to qualify as a "plan of reorganization" within the meaning of Treasury Regulation Sections 1.368-2(g) and 1.368-3(a), and (ii) the Merger shall qualify as a transaction in securities exempt from registration or qualification under the Securities Act of 1933, as amended, and under the applicable securities laws of each state or jurisdiction where the CRC Security Holders reside.

 

C.           The board of directors of each of CRC, and AZQT and the CRC Security Holders each deem it to be in the best interests of CRC and AZQT and their respective shareholders to consummate the Merger, as a result of which CRC shall acquire all of the issued and outstanding capital stock of AZQT.

 

NOW, THEREFORE, in consideration of the mutual covenants, agreements, representations and warranties contained in this Agreement, the parties hereto agree as follows:

 

CERTAIN DEFINITIONS

 

As used in this Agreement, the following terms shall have the meanings set forth below:

 

"Applicable Law" means any domestic or foreign law, statute, regulation, rule, policy, guideline or ordinance applicable to the businesses of the Parties, the Merger and/or the Parties.

 

"Articles of Merger" shall mean the certificate of merger of AZQT with and into CRC pursuant to the NRS.

 

"Business Day" shall mean any day, excluding Saturday or Sunday or any other day on which national banks located in Arizona shall be closed for business.

 

"dollar" and "$" means lawful money of the United States of America.

 

"CRC Common Stock" shall mean the shares of common stock of CRC, $.001 par value per share.

"CRC Fully-Diluted Common Stock" means, as at the time in question, the maximum number shares of CRC Common Stock that are issued and outstanding, after giving effect to: (a) the issuance of all of the Merger Shares; and (b) the issuance of any other shares of CRC Common Stock that are issuable upon conversion of any CRC notes or shares of CRC Preferred Stock, or upon the exercise of options, warrants or other rights to purchase shares of CRC capital stock, but only to the extent that such securities are (i) outstanding as at the Effective Time of the Merger, or (ii) issued subsequent to the Effective Time of the Merger.

 

"CRC Preferred Stock" means the shares of preferred stock of CRC, $.001 par value per share.

 

"Effective Time" shall mean the date upon which the Merger of CRC into AZQT shall be consummated pursuant to the filing of the Articles of Merger with the Secretary of State of Nevada.

 

"Exchange Act" means the Securities Exchange Act of 1934, as amended.

 

"GAAP" means generally accepted accounting principles in the United States of America as promulgated by the American Institute of Certified Public Accountants and the Financial Accounting Standards Board or any successor Institutes concerning the treatment of any accounting matter.

 

"Investor Questionnaire" means those certain documents provided to AZQT by the CRC Security Holders establishing accredited investor status as defined in Rule 501 of Regulation D.

 

"Knowledge" means the knowledge after reasonable inquiry.

 

"Lien" means, with respect to any property or asset, any mortgage, lien, pledge, charge, security interest, encumbrance or other adverse claim of any kind in respect of such property or asset.

 

"Material Adverse Effect" with respect to any entity or group of entities means any event, change or effect that has or would have a materially adverse effect on the financial condition, business or results of operations of such entity or group of entities, taken as a consolidated whole.

 

"Merger Shares" shall mean that number of shares of CRC Common Stock or Preferred Stock to be issued to the AZQT Security Holders on the Closing Date and as at the Effective Time of the Merger.

 

"NRS" means the Nevada Revised Statutes.

 

"Person" means any individual, corporation, partnership, trust or unincorporated organization or a government or any agency or political subdivision thereof.

 

"AZQT Common Stock" shall mean the shares of common stock of AZQT, $0.01 par value per share.

 

"AZQT Fully-Diluted Common Stock" means the maximum number shares of AZQT Common Stock that are issued and outstanding at the Effective Time of the Merger, plus all additional shares of AZQT Common Stock that would be issuable at the Effective Time of the Merger upon the exercise of all outstanding options, warrants or other rights to purchase shares of AZQT capital stock.

 

"AZQT Principal Executive Officer" shall mean the Chairman or anyone of the Board of Directors, the President and Chief Executive Officer, respectively, of AZQT.

 

"AZQT Securities" means, as at the date in question, all of the issued and outstanding equity securities of AZQT, consisting of the AZQT Common Stock and (if applicable) any AZQT Preferred Stock.

 

"AZQT Security Holders" means the collective reference to all of the record holders of the AZQT Securities at the Effective Time of the Merger, including the AZQT Principal Executive Officers.

 

"Stock Subscription Agreement" means that certain agreement by and between CRC and the AZQT Security Holders providing for the acquisition by the CRC Security Holders of the AZQT Common Stock.

 

"Surviving Entity" shall mean CRC as the surviving entity in the Merger as provided in Section 1.1.

 

"Tax" (and, with correlative meaning, "Taxes" and "Taxable") means:

 

 

"Tax Return" means any return, declaration,· form, claim for refund or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

 

THE MERGER

 

SECTION 1. THE MERGER: EFFECTIVE TIME .

 

1.1           The Merger. At the Effective Time and subject to and upon the terms and conditions of this Agreement, AZQT shall merge with and into CRC in accordance with the provisions of the NRS, the separate corporate existence of AZQT shall cease and CRC shall continue as the Surviving Entity, with AZQT as a fully owned subsidiary of CRC. The Effective Time of the Merger shall occur upon the filing of the Articles of Merger executed in accordance with the applicable provisions of the NRS with the Secretary of State of Nevada, or at such later time as may be agreed to by CRC and AZQT and specified in the Certificate of Merger subject to the satisfaction or waiver of each of the conditions set forth in Section 4. The date on which the Effective Time occurs is referred to as the "Effective Date." Provided that this Agreement has not been terminated, the Parties will cause the Articles of Merger to be filed on the Closing Date, as hereafter defined in Section 1.3.

 

(a)           Upon the terms and subject to the conditions set forth in this Agreement and in accordance with the NRS, at the Effective Time, all AZQT Securities shall be converted into the right to receive the Merger Shares existing and to be issued by CRC.

 

(b)            Exchange Agent. , Joseph L. Pittera, Esq. shall act as the exchange agent (the "Exchange Agent") for the purpose of exchanging AZQT Securities for the Merger Shares. At or within thirty (30) days after the Effective Date, CRC shall deliver to the Exchange Agent certificates evidencing the Merger Shares. The Merger Shares issued at the Effective Time of the Merger shall be registered in the names of the AZQT Security Holders.

 

1.2            Conversion of Securities.

 

(a)            Conversion of AZQT Securities . At the Effective Time, by virtue of the Merger and without any action on the part of CRC, AZQT or the holders of any of their respective securities:

 

 

1.3            Closing.

 

The closing of the Merger (the "Closing") will take place at the offices of Joseph L. Pittera Esq., counsel to AZQT, at their office in Torrance, California, within one (1) Business Day following the satisfaction or waiver of the conditions precedent set forth in Section 4 or at such other date as CRC, and AZQT shall agree (the "Closing Date"), but in no event shall the Closing Date occur later than August 7, 2009.

 

1.4            Effect Of The Merger.

 

At the Effective Time, all the properties, rights, privileges, powers and franchises of AZQT  shall vest in CRC, and all debts, liabilities and duties of AZQT shall become the debts, liabilities and duties of CRC.

 

1.5            Certificate Of Incorporation and Bylaws; Directors And Officers . Prior to the Effective Time of the Merger:

 

(a)           The Certificate of Incorporation of CRC are made a part hereof shall be the Certificate of Incorporation of CRC following the Merger. The Bylaws of CRC are made a part hereof shall be the Bylaws of CRC following the Merger.

 

(b)           The initial board of directors of AZQT subsequent to the Merger shall consist of Daniel Gura and Doug Hermanson. The officers of CRC subsequent to the Merger shall be the current officers of CRC.

 

1.6            Further Actions .

 

(a)           After closing and upon issuance of CRC Common Stock to Security Holders AZQT shall transfer its outstanding common stock to CRC.

 

(b)           If, at any time after the Effective Time, CRC considers or is advised that any deeds, bills of sale, assignments, assurances or any other actions or things are necessary or desirable to vest, perfect or confirm (of record or otherwise) in CRC its right, title or interest in, to or under any of the rights, properties, or assets of AZQT, or otherwise to carry out the intent and purposes of this Agreement, the officers and directors of CRC will be authorized to execute and deliver, in the name and on behalf of each of AZQT and CRC, all such deeds, bills of sale, assignments and assurances and to take and do, in the name and on behalf of each of AZQT and CRC, all such other actions and things as the Board of Directors of CRC may determine to be necessary or desirable to vest, perfect or confirm any and all right, title and interest in, to and under such rights, properties or assets in CRC or otherwise to carry out the intent and purposes of this Agreement.

 

( a)            The Merger Shares . The Merger Shares will not be registered under the Securities Act, or the securities laws of any state, and cannot be transferred, hypothecated, sold or otherwise disposed of until: (i) a registration statement with respect to such securities is declared effective under the Securities Act, or (ii) CRC receives an opinion of counsel for the stockholder, reasonably satisfactory to counsel for CRC, that an exemption from the registration requirements of the Securities Act is available.

 

 

The certificates representing the Merger Shares to be issued on the Effective Date pursuant to this Agreement shall contain a legend substantially as follows:

1.8            Exchange of Certificates .

 

(a)           After the Effective Time and pursuant to a customary letter of transmittal or other instructional form provided by the Exchange Agent to the AZQT Security Holders, the AZQT Security Holders shall be required to surrender all their AZQT Securities to the Exchange Agent, and the AZQT Security Holders shall be entitled upon such surrender to receive in exchange therefor certificates representing the number of Merger Shares into which the AZQT Securities theretofore represented by the stock transfer forms so surrendered shall have been exchanged pursuant to this Agreement. Until so surrendered, each outstanding certificate, which, prior to the Effective Time, represented AZQT Securities, shall be deemed for all corporate purpose, subject to the further provisions of this Article I, to evidence the ownership of the number of whole Merger Shares for which such AZQT Securities have been so exchanged. No dividend payable to holders of Merger Shares of record as of any Date subsequent to the Effective Time shall be paid to the owner of any certificate which, prior to the Effective Time, represented AZQT Securities, until such certificate or certificates representing all the relevant AZQT Securities, together with a stock transfer form, are surrendered as provided in this Article I or pursuant to letters of transmittal or other instructions with respect to lost certificates provided by the Exchange Agent.

 

(b)           All Merger Shares for which the AZQT Securities shall have been exchanged pursuant to this Article I shall be deemed to have been issued in full satisfaction of all rights pertaining to the AZQT Securities.

 

(c)           On the Effective Date, the stock transfer book of AZQT shall be deemed to be closed and no transfer of AZQT Securities shall thereafter be recorded thereon.

SECTION 2. REPRESENTATIONS AND WARRANTIES OF AZQT

 

AZQT hereby represents and warrants as follows:

 

2.1            Organization and Good Standing: Ownership of Shares. AZQT is a corporation duly organized and validly existing under the laws of the State of Arizona. There are no outstanding subscriptions, rights, options, warrants or other agreements obligating AZQT to issue, sell or transfer any stock or other securities of AZQT other than those represented in Schedule A.

 

2.2             Corporate Authority. AZQT has the 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 transaction contemplated hereby have been duly authorized by the Board of Directors of AZQT. 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 AZQT is a party and will not violate any judgment, decree, order, writ, rule, statute, or regulation applicable to AZQT or its properties. The execution and performance of this Agreement will not violate or conflict with any provision of the respective Articles of Incorporation or bylaws of AZQT.

 

2.3            Ownership of Shares. The AZQT Security Holders are the owners of record and beneficially of all of the issued and outstanding restricted shares of AZQT Common Stock, options and warrants to purchase shares of AZQT Common Stock, which AZQT Securities, to the best of AZQT's knowledge, are owned free and clear of all rights, claims, liens and encumbrances, and have not been sold, pledged, assigned or otherwise transferred except pursuant to this Agreement.

 

2.4           Financial Statements, Books and Records. Will consist of the unaudited financial Statements (balance sheet, income Statement, notes) of AZQT as of the Closing Date (the "Financial Statements"). The Financial Statements fairly represent the financial position of AZQT as at such Dates and the results of their operations for the periods then ended. The books of account and other financial records of AZQT are in all respects complete and correct in all material respects and are maintained in accordance with good business and accountings practices, and are capable of being audited.

 

2.5            Access to Records. The corporate financial records, minute books and other documents and records of AZQT have been made available to CRC prior to the Closing hereof.

 

2.6            No Material Adverse Changes. Between the execution and Closing of this Agreement, there shall not have been:

 

(a)           any material adverse change in the financial position of AZQT except changes arising in the ordinary course of business, which changes will in noevent materially and adversely affect the financial position of AZQT;

 

(b)           any damage, destruction or loss materially affecting the assets, prospective business, operations or condition (financial or otherwise) of AZQT whether or not covered by insurance;

(c)           any declaration, setting aside or payment of any dividend or distribution with respect to any redemption or repurchase of AZQT capital stock;

 

(d)           any sale of an asset (other than in the ordinary course of business) or any mortgage or pledge by AZQT of any properties or assets, other than as set forth in Sections 2.13 or 2.14 below; or

 

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