AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (herein, together with all
Exhibits, "Agreement") is entered in to as of September _6_, 2002 by and
between Pro Glass Technologies, Inc., a Nevada corporation ("PGTC") and
MicroSignal Corporation, a Pennsylvania corporation ("MSC").
This Agreement sets forth the terms and conditions upon which MSC will be
acquired by PGTC (the "Merger"), pursuant to an Agreement and Plan of Merger
(the "Merger Agreement") in substantially the form attached hereto as Exhibit A,
which provides, among other things, for the conversion and exchange of all
outstanding and issued shares of common stock of MSC ("MSC Shares") into
17,051,344 shares of voting $.001 par value common stock of PGTC ("PGTC Common
Stock").
In consideration of the mutual promises and covenants contained herein, MSC
and PGTC agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms (whether used in singular or
plural forms) shall have the following meanings:
"MSC Shareholders" shall mean the shareholders of MSC as of the date of
closing.
"MSC Shares" shall mean the Shares of the Common Stock of MSC to be
exchanged for shares of PGTC common stock to the MSC Shareholders.
"Closing Date" shall mean the date upon which the reorganization shall have
occurred in accordance with the terms and conditions set forth herein.
"Contract" means any written contract, mortgage, deed of trust, bond,
indenture, lease, license, note, franchise, certificate, option, warrant, right,
or other instrument, document or agreement, and any oral obligation, right or
agreement.
"Controlled Group" means all trades or businesses (whether or not
incorporated) under common control that, together with MSC, are treated as a
single employer under Section 414(b) or 414(c) of the Code or Section 4001 of
ERISA.
"GAAP" means generally accepted accounting principles, as the term is
defined by the American Institute of Certified Public Accountants under the
first standard of reporting under its generally accepted accounting standards.
"Knowledge" of MSC of or with respect to any matter means that any of the
executive officers, directors or managers of MSC has, or after due inquiry and
investigation would have, actual awareness or knowledge of such matter, and
"Knowledge" of PGTC of or with respect to any matter means that any of the
executive officers, directors, or senior managers of PGTC has, or after due
inquiry and investigation would have, actual awareness or knowledge of such
matter.
"Legal Requirements" means applicable common law and any statute,
ordinance, code or other law, rule regulation, order, technical or other
standard requirement, judgment or procedure enacted, adopted, promulgated,
applied or followed by any governmental authority, including judgments.
"Lien" means any security agreement, financing statement filed with any
governmental authority, conditional sale statement filed with any governmental
authority, conditional sale or other title retention agreement, any lease
consignment or bailment given for purposes of security, any lien, mortgage,
indenture, pledge, option, encumbrance, adverse interest, constructive trust or
other trust, claim, attachment, exception to or defect in title or other
ownership interest (including but not limited to reservations, rights of entry,
possibilities of reverter, encroachments, casement, rights of way, restrictive
covenants leases and licenses) of any kind, which otherwise constitutes an
interest in or claim against property, whether arising pursuant to any Legal
Requirement, Contract or otherwise.
"Reorganization" shall mean the acquisition by PGTC of the MSC Shares in
exchange for the PGTC Shares as further defined herein.
"PGTC Shares" shall mean the Shares of the Common Stock of PGTC to be
issued to the MSC Shareholders.
ARTICLE 2
MERGER
Section 2.1 Plan and Agreement of Reorganization. A plan of
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reorganization is hereby adopted to as follows:
A. Subject to the terms and conditions hereinafter set forth, on the
Closing Date, and in the manner hereinafter proved, (i) the MSC Shareholders
shall exchange their MSC Shares for the PGTC Shares in the amounts set forth
herein and MSC shall cease to exist;
B. PGTC and MSC, respectively, shall take, or cause to be taken, such
action as may be necessary or appropriate in order to effectuate the
transactions contemplated hereby. Such action shall include, but not be limited
to, the filing of Articles of Merger with the Nevada and Pennsylvania
Secretaries of State. In the event that after the Closing Date, any further
action is necessary or desirable to carry out the purposes of this Agreement and
to vest PGTC or the MSC Shareholders with full title to the securities to be
exchanged hereby, the officers and directors of PGTC or the MSC Shareholders, as
the case may be, shall take all such necessary action.
Section 2.2 Effective Date of the Reorganization for Accounting Purposes.
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The transactions contemplated by this Agreement shall be effective as of a date
to be mutually agreed upon for accounting purposes and for all other purposes to
the extent permissible by law.
Section 2.3 Consideration and Basis of Exchange of Shares. The manner and
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basis of exchanging the MSC Shares for the Common Shares of PGTC shall be as
follows:
A Total of 17,051,344 shares of PGTC's common stock, $.001 par value (the "PGTC
Shares") to be issued as follows:
(a) A Registration Statement on Form SB-2 shall be filed as soon as possible
after Closing with the Securities and Exchange Commission (the "SEC") by PGTC
which will register 4,262,836 Shares of Common Stock ("Registered Stock") for
the benefit of the MSC Shareholders. Upon effectiveness of the Registration
Statement, 532,854.5 shares will be released to MSC, to be distributed to the
MSC Shareholders. Additional lots of 532,854.5 shares will be released
quarterly to MSC for the benefit of the MSC Shareholders over the subsequent
seven quarters until all Registered Shares have been delivered to MSC and/or the
MSC Shareholders.
(b) The remaining 12,788,508 shares shall be released at a rate of one common
share to be issued for each US$.025 of gross revenues of MSC reported after
Closing. The amount of shares to be issued under this section shall be
calculated and released twice a year, based upon the prior two quarters'
reviewed and/or audited financial statements. These shares shall be
"restricted" shares and bear appropriate legends.
(c) On the Closing Date, the MSC Shareholders shall deliver to PGTC certificates
aggregating 4,596,339 MSC Shares, or 100% of the issued and outstanding MSC
Shares, duly endorsed in favor of PGTC with signatures guaranteed; the MSC
Shareholders shall be issued, in exchange for the MSC Shares held of record on
the Closing Date, an aggregate of 17,051,344 PGTC Shares as described
hereinabove. The MSC Shareholders and PGTC agree that the MSC Shares and the
PGTC Shares exchanged hereby shall be "restricted securities" as that term is
defined in Rule 144 under the Securities Act of 1933, as amended (the "1933
Act") and all certificates issued under this Agreement shall bear an appropriate
legend to such effect except to the extent that certain shares will be
registered as described hereinabove. MSC will have received the necessary
approval of its shareholders to this transaction.
(d) The PGTC Board of Directors will resign after appointing the following MSC
directors at Closing: Xxxxxx X. Xxxxx, Xxxxxxx X. XxXxxxxxx and Xxxxxx Xxxxxxxx.
Section 2.4 Closing. Closing of this Agreement shall be held at a date to
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be mutually agreed upon by the parties at the offices of PGTC, or such other
place as the parties may mutually agree. The parties shall exchange such other
documents and take such other actions as may be necessary or appropriate for
completing the transactions contemplated by the Agreement.
Section 2.5 Mechanics for Closing Merger. Upon the approval of the MSC
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Shareholder, the executed Articles of Merger shall be filed with the Nevada and
Pennsylvania Secretaries of State, if required.
Section 2.6 Further Assurances. At or after Closing, MSC, at the request
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of PGTC, shall promptly execute and deliver, or cause to be delivered, to PGTC
all such documents and instruments, in form and substance satisfactory to PGTC,
as PGTC reasonably may request in order to carry out or evidence the terms of
this Agreement.
Section 2.7 PGTC and MSC agree that neither will allow nor implement a
reverse stock-split of the common stock of PGTC for a period of twelve months
following Closing.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF MSC
MSC represents and warrants to PGTC, as of the date of this Agreement and
as of the Closing, as follows:
Section 3.1 Organization and Qualification of MSC. MSC is a corporation
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duly organized, validly existing and in good standing under the laws of the
State of Pennsylvania. MSC has full corporate power and authority to conduct
its business as now conducted and to own or lease and operate the assets and
property now owned or leased or operated by it. MSC is qualified to transact
business in those jurisdictions wherein its business requires such action.
Section 3.2 Authority. MSC has all requisite corporate power and authority
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to execute, deliver and perform this Agreement. The execution, delivery and
performance of this Agreement by MSC has been duly and validly executed and
delivered by MSC, and is a valid and binding obligation of MSC, enforceable
against MSC in accordance with its terms.
Section 3.3 Ownership and Shareholders of MSC. The shareholder set forth
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on Exhibit 3.3 owns the MSC Shares shown thereon, beneficially and of record,
free and clear of all liens. The MSC Shares are not subject to, or bound or
affected by, any proxies, voting agreements, or other restrictions on the
incidents or ownership hereof. There are not, and will not at Closing, be more
than 105 shareholders of MSC.
Section 3.4 Subsidiaries. MSC has no subsidiaries.
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Section 3.5 No Conflicts; Required Consent. The execution, delivery, and
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performance by MSC of this Agreement will not: (i) conflict with or violate any
provision of the articles or certificate of incorporation of MSC; (ii) violate
any Legal Requirements; (iii) result in the creation or imposition of any Lien
against or upon the MSC Shares or any of the assets or properties owned or
leased by MSC; or (iv) require any consent, approval, or authorization of, or
filing of any certificate, notice, application, report or other document with,
any governmental authority or other person.
Section 3.6 Litigation. There is no litigation pending or, to MSC's
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knowledge, threatened, by or before any governmental authority or private
arbitration tribunal, against MSC or its operations, except as described in
Exhibit 3.6 attached hereto and incorporated herein by this reference, nor, to
MSC's knowledge, is there any basis for any such litigation.
Section 3.7 Compliance with Applicable Legal Requirements. Conduct by MSC
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of its activities as currently conducted does not violate or infringe any Legal
Requirements currently in effect, or, to the knowledge of MSC, proposed to
become effective; and MSC has received no notice of any violation by MSC,
proposed to become effective; and MSC has received no notice of any violation by
MSC of any Legal Requirements applicable to MSC or its activities as currently
conducted; and MSC knows of no basis for the allegation of any such violation.
Section 3.8 Financial Statements. MSC will deliver to PGTC the audited
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balance sheet and statements of operations of MSC as of December 31, 2000 and
2001. The financial statements will be prepared in accordance with United
States GAAP and present fairly the financial position of MSC as of the dates
indicated and the results of operations of MSC for the periods ended December
31, 2000 and 2001. In addition, MSC will provide financial statements for the
periods ended June 30, 2002 and September 30, 2002 which have been reviewed by
its auditor for SEC reporting requirements.
Section 3.9 Liabilities. MSC has no liabilities or obligations, whether
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absolute, accrued, contingent, or otherwise, that are not reflected in the
Balance Sheet or non-delinquent obligations for ordinary and recurring expenses,
including expenses occurring in the ordinary course of business of MSC since the
date of the Balance Sheet. Attached as Exhibit 3.9 is a list of all accounts
payable of MSC.
Section 3.10 Tax Returns and Payments. MSC has filed all federal, state,
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local and foreign tax returns required to be filed, and has timely paid all
taxes, including all federal and state payroll taxes, that have become due and
payable, whether or not so shown on any such tax returns, except as shown in
Schedule 3.10. MSC has not received any notice of, nor does MSC have any
knowledge of, any deficiency or assessment of proposed knowledge of, any
deficiency or assessment of proposed deficiency or assessment from any taxing
governmental authority except as disclosed in Schedule 3.10. There are no tax
audits pending with respect to MSC, and there are no outstanding agreements or
waivers by or with respect to MSC, that extend the statutory period of
limitations applicable to any federal, state, local or foreign tax returns for
any period except as disclosed in Schedule 3.10.
Section 3.11 Absence of Certain Changes or Events. Since the date of
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Balance Sheet there has not occurred:
(a) any material and adverse change in the financial condition or
operations of MSC;
(b) any damage, destruction or loss to or of any of the material assets of
properties owned or leased by MSC;
(c) the creation or attachment of any Lien against the Common Stock of MSC;
(d) any waiver, release, discharge, transfer, or cancellation by MSC of any
rights or claims of material value;
(e) any issuance by MSC of any securities, or any merger or consolidation
of MSC with any other Person, or any acquisition by MSC of the business of any
other Person;
(f) any incurrence, assumption or guarantee by MSC of any indebtedness or
liability;
(g) any declaration, setting aside or payment by MSC of any dividends on,
or any other distribution with respect to, any capital stock of MSC or any
repurchase, redemption, or other acquisition of any capital stock of MSC;
(h) (A) any payment of any bonus, profit sharing, pension or similar
payment or arrangement or special compensation to any employee of MSC, except in
the ordinary course of the administration of MSC, or (B) any increase in the
compensation payable to any employee of MSC; or
(i) the entry by MSC into any Contract to do any of the foregoing.
Section 3.12 Material MSC Contracts. As of the date of this Plan of
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Reorganization, MSC does not have, except as discussed in Exhibit 3.12, (i)
contracts evidence or evidencing or relating to any liabilities or obligations
of MSC, whether absolute, accrued, contingent or otherwise, or granting any
Person a Lien or against any properties or assets owned or leased by MSC; (ii)
joint venture or partnership Contracts between MSC and any other person; (iii)
Contracts limiting the freedom of MSC to engage in or to complete in any
activity, or to use or disclose any information in its possession; (iv) any
guarantees of indebtedness for any other entity; and (v) any other Contracts to
which MSC is a party or by which it or the assets or properties owned or leased
by it are bound or affected that are not set forth on other Exhibits hereto,
which in aggregate contemplate payments to or by MSC exceeding $5,000 in any
twelve-month period (collectively herein as the "Material MSC Contract"). MSC
has delivered to PGTC true and complete copies of each of the Material MSC
Contracts, including any amendments thereto (or, in the case or oral Material
MSC Contracts, a memorandum of such contract) and all Material MSC Contracts are
valid, in full force and effect and enforceable in accordance with its terms
against the parties thereto other than MSC, and MSC has fulfilled when due, or
has taken all action necessary to enable it to fulfill when due all of its
obligations thereunder; (ii) there has not occurred any default (without regard
to lapse of time, the giving notice, or the election of any person other then
MSC, or any combination thereof) by MSC, nor, to the knowledge of MSC, has there
occurred any default (without regard to lapse of time, the giving of notice, or
the election of MSC, or any combination thereof) by any other person, under any
of the Material MSC Contracts; and (iii) neither MSC nor, to the knowledge of
MSC, any other person is in arrears in the performance or satisfaction of its
obligation under any of the Material MSC Contracts, and no waiver has been
granted by any of the parties thereto.
Section 3.13 Real Property. As of the date of this Plan of Reorganization,
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MSC does not own any real property.
Section 3.14 Employees. As of the date of this Plan of Reorganization, MSC
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has four employees.
Section 3.15 Books and Records. All of the books, records and accounts of
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MSC are in all material respects true and complete, are maintained in accordance
with good business practice and all applicable Legal Requirements, accurately
present and reflect in all material respects all of the transactions therein
described, and are reflected accurately in the Financial Statements. MSC has
previously delivered to PGTC true and complete copies of all the minutes and
meetings and all other corporate actions of the officers, directors and
shareholders of MSC since the date of its incorporation.
Section 3.16 Certain Interests. None of MSC or its officers or directors,
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directly or indirectly is, or owns any interest in, or controls, or is an
employee, officer or director or partner of or participant in, or consultant to,
any person which is a competitor, supplier or customer of MSC except as set
forth in Schedule 3.16.
Section 3.17 Bank Accounts. Exhibit 3.17 sets forth all bank accounts,
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brokerage accounts, and safe deposit boxes of any kind maintained by MSC and, in
each case, identifies the persons that are authorized signatories for, or which
are authorized to have access to, each of them.
Section 3.18 Changes in Circumstances. MSC has no knowledge of (i) any
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current condition or state of facts of circumstances which could reasonably be
expected to result in a material and adverse change in the financial condition
of operations of MSC, or (ii) any Legal Requirements currently in effect from
which MSC currently is, or any currently proposed Legal Requirements from which
MSC would be, except by reason of any "grandfather" clauses of provisions
contained therein, but which would be applicable to PGTC following closing.
Section 3.19 Accuracy of Information. None of the written information and
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documents which have been or will be furnished by MSC or any representatives of
MSC to PGTC or any of the representatives of PGTC in connection with the
transactions contemplated by this Agreement contains or will contain, as the
case may be, any untrue statement of a material fact, or omits or will omit to
state a material fact necessary in order to make the statements therein not
misleading in light of the circumstances in which made. To the knowledge of
MSC, MSC has disclosed to PGTC as the purchaser of MSC Interests all material
information relating to MSC and its activities as currently conducted.
Section 3.20 Investment. MSC is acquiring PGTC Common Stock for investment
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purposes, and not with a view to distribution or resale thereof in violation of
applicable securities Legal Requirements.
Section 3.21 Compliance with ERISA. MSC does not maintain or contribute
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to any Plan other than as set forth in Schedule 3.21. MSC and each member of the
Controlled Group have fulfilled their obligations under the minimum funding
standards of ERISA and the Code with respect to each Plan and are in compliance
in all material respects with the applicable provisions of ERISA and the Code,
and have not incurred any liability to the PBGC or a Plan under Title IV of
ERISA; and no "prohibited transaction" or "reportable event" (as such terms are
defined in ERISA) has occurred with respect to any Plan.
Section 3.22 Environmental Matters.
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(a) MSC has obtained all permits, licenses and other
authorizations which are required under all Environmental Laws, except to the
extent failure to have any such permit, license or authorization would not have
a material adverse effect on the business, financial condition or operations of
MSC. MSC is in compliance with the terms and conditions of all such permits,
licenses and authorizations, and is also in compliance with all other
limitations, restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules and timetables contained in any applicable Environmental
Law or in any regulation, code, plan, order, decree, judgment, injunction,
notice or demand letter issued, entered, promulgated or approved thereunder,
except to the extent failure to comply would not have a material adverse effect
on the business, financial condition or operations of MSC.
(b) No notice, notification, demand, request for information,
citation, summons or order has been issued, no complaint has been filed, no
penalty has been assessed and no investigation or review is pending or
threatened by any governmental or other entity with respect to any alleged
failure by MSC or any of its Subsidiaries to have any permit, license or
authorization required in connection with the conduct of its business or with
respect to any Environmental Laws, including, without limitation, Environmental
Laws relating to the generation, treatment storage, recycling, transportation,
disposal or release of any Hazardous Materials.
(c) To the best of MSC's knowledge, no material oral or written
notification of a release of a Hazardous Material has been filed by or on behalf
of MSC and no property now or previously owned, leased or used by MSC is listed
or proposed for listing on the National Priorities List under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, or
on any similar state list of sites requiring investigation or clean-up.
(d) There are no liens or encumbrances arising under or pursuant
to any Environmental Laws on any of the real property or properties owned,
leased or used by MSC and no governmental actions have been taken or are in
process which could subject any of such properties to such liens or encumbrances
or, as a result of which MSC would be required to place any notice or
restriction relating to the presence of Hazardous Materials at any property
owned by it in any deed to such property.
(e) Neither MSC nor, to the best knowledge of MSC, any previous
owner, tenant, occupant or user of any property owned, leased or used by MSC has
(i) engaged in or permitted any operations or activities upon or any use or
occupancy of such property, or any portion thereof, for the purpose of or in any
way involving the handling, manufacture, treatment, storage, use, generation,
release, discharge, refining, dumping or disposal (whether legal or illegal,
accidental or intentional) of any Hazardous Materials on, under, in or about
such property, except in compliance with all Environmental Laws, or (ii)
transported any Hazardous Materials to, from or across such property except in
compliance with all Environmental Laws; nor to the best knowledge of MSC have
any Hazardous Materials migrated from other properties upon, about or beneath
such property, nor, to the best knowledge of MSC, are any Hazardous Materials
presently constructed, deposited, stored or otherwise located on, under, in or
about such property except in compliance with all Environmental Laws.
Section 3.24 Franchises, Patents, Copyrights, Etc. Schedule 3.24 sets
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forth an accurate and complete list of all franchises, patents, copyrights,
trademarks, trade names, trademark registrations, service names, service marks,
licenses, formulas and applications therefor owned by MSC or used or required by
MSC in the operation of its business, title to each of which is, except as set
forth in Schedule 3.24 hereto, held by MSC free and clear of all adverse claims,
liens, security agreements, restrictions or other encumbrances. Except as set
forth in Schedule 3.24, MSC owns or possesses adequate (and will use its best
efforts to obtain as expediently as possible any additional) licenses or other
rights to use all patents, trademarks, trade names, service marks, trade secrets
or other intangible property rights and know-how necessary to entitle MSC to
conduct its business as presently being conducted. There is no infringement
action, lawsuit, claim or complaint which asserts that MSC's operations violate
or infringe the rights or the trade names, trademarks, trademark registrations,
service names, service marks or copyrights of others with respect to any
apparatus or method of MSC or any adversely held trademarks, trade names,
trademark registrations, service names, service marks or copyrights, and MSC is
not in any way making use of any confidential information or trade secrets of
any person, except with the consent of such person. Except as set forth in
Schedule 3.24, MSC has taken reasonable steps to protect its proprietary
information (except disclosure of source codes pursuant to licensing agreements)
and is the lawful owner of the proprietary information free and clear of any
claim of any third party. MSC's proprietary rights are adequate for the conduct
of its business substantially as now conducted without known conflict with any
rights of others.
Section 3.25 No Materially Adverse Contracts, Etc. MSC is not subject
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to any charter, corporate or other legal restriction, or any judgment, decree,
order, rule or regulation that has or is expected in the future to have a
materially adverse effect on the business, assets or financial condition of MSC.
MSC is not a party to any contract or agreement that has or is expected, in the
judgment of MSC's officers, to have any materially adverse effect on the
business of MSC.
Section 3.26 Compliance With Other Instruments, Laws, Etc. MSC is not
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in violation of any provision of its certificate of incorporation, by-laws, or
any agreement or instrument to which it may be subject or by which it or any of
its properties may be bound, or any decree, order, judgment, statute, license,
rule or regulation, in any of the foregoing cases in a manner that could result
in the imposition of substantial penalties or materially and adversely affect
the financial condition, properties or business of MSC.
Section 3.27 Absence of UCC Financing Statements, Etc. There is no
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financing statement, security agreement, chattel mortgage, real estate mortgage
or other document filed or recorded with any filing records, registry, or other
public office, that purports to cover, affect or give notice of any present or
possible future lien on, or security interest in, any Collateral or rights
thereunder.
Section 3.28 Certain Transactions. Except as set forth in Schedule
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3.28, none of the officers, trustees, directors, or employees of MSC is
presently a party to any transaction with MSC, including any contract, agreement
or other arrangement providing for the furnishing of services to or by,
providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, trustee, director or employee or, to
the knowledge of MSC, any corporation, partnership, trust or other entity in
which any officer, trustee, director, or any employee has a substantial interest
or is an officer, director, trustee or partner.
Section 3.29 Capitalization. MSC's authorized capital stock consists
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solely of 10,000,000 shares of Common Stock, $.01 par value per share, of which
4,596,339 fully diluted shares are issued and outstanding and no shares are
reserved for issuance upon the exercise or conversion of warrants, options and
other rights to purchase or otherwise obtain (by exchange or otherwise) shares
of Common Stock. All outstanding shares of Common Stock have been duly
authorized, are validly issued, fully paid and nonassessable.
Section 3.30 Fees/Commissions. Except as set forth in Schedule 3.30
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hereto, MSC has not agreed to pay any finder's fee, commission, origination fee
or other fee or charge to any Person with respect to the transactions
contemplated hereunder.
Section 3.31 Employees. MSC has no current labor problems or disputes
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which have resulted in, or are reasonably believed by MSC could have, a material
adverse effect on the operations, properties or financial condition of MSC.
Section 3.32 Other Representations and Warranties. All
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representations, warranties, and covenants made by MSC in connection with this
transaction are true and correct in all material respects, and do not omit to
state a material fact necessary in order to make the statements made, in the
light of the circumstances under which they were made, not misleading.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PGTC
PGTC represents and warrants to MSC, as of the date of this Agreement and
as of Closing, as follows:
Section 4.1 Organization and Qualification of PGTC. PGTC is a corporation
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duly organized, validly existing, and in good standing under the laws of the
State of Nevada, and has all requisite corporate power and authority to own and
lease the properties and assets it currently owns and leases and to conduct its
activities as currently conducted. PGTC is duly qualified to do business as a
foreign corporation in all jurisdictions in which the ownership or leasing of
the properties and assets owned or leased by it or the nature of its activities
makes such qualification necessary.
Section 4.2 Authority. PGTC has all requisite corporation and authority to
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execute, deliver and perform this Agreement. The execution, delivery, and
performance of this Agreement by PGTC have been duly and validly authorized by
all necessary action on the part of PGTC. This Agreement has been duly and
validly executed and delivered by PGTC and is the valid and binding obligation
of PGTC, enforceable against PGTC in accordance with its terms.
Section 4.3 No Conflicts; Required Consents. The execution, delivery and
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performance by PGTC of this Agreement does not and will not: (i) conflict with
or violate any provisions of the articles of certificate of incorporation or
bylaws of PGTC; (ii) violate any provisions of any Legal Requirements; or (iii)
conflict with, violate result in a breach of, constitute a default under
(without regard to requirements of notice, lapse of time, or elections of other
persons, or any combination thereof) or accelerate or permit the acceleration of
the performance required by, and Contract or Lien to which PGTC is a party or by
which PGTC or the assets or properties owned or leased by it are bound or
affected; or (iv) require any consent, approval or authorization, report or
other document with, any Governmental Authority or other person.
Section 4.4 Validity and Ownership of PGTC Common Stock. The PGTC Common
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Stock received by the members of MSC at Closing will be validly issued and
outstanding, duly paid and nonassessable. The PGTC Common Stock will not be
subject to, nor bound or affected by, any proxies, voting agreements, or other
restrictions on the ownership thereof.
Section 4.5 Ownership and Number of Shares of PGTC Common Stock. There are
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not, and will not at Closing, be more than 1,131,213 outstanding shares of PGTC
Common Stock.
Section 4.6 Subsidiaries. PGTC has three subsidiaries: Windshield
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Superstore Ltd. ("WS"); Canada Autoglass Warranty Inc. ("CAW") and 765488
Alberta Ltd. ("76 Alberta"). All of the subsidiaries are wholly owned by PGTC
and all are being transferred to a buyer at Closing. WS is the operating entity
of PGTC and the other two companies are inactive and have no operations. As
part of this transaction, PGTC is selling its current operations to its
President along with these subsidiaries. A copy of the sales agreement is
attached hereto as Exhibit 4.6 and incorporated herein by this reference.
Section 4.7 Capitalization of PGTC. The authorized capital stock of PGTC
----------------------
consists of 100,000,000 duly authorized shares of common stock $.001 per share
par value, of which 1,131,213 are validly issued and outstanding, fully paid and
nonassessable. There are no other authorized or outstanding subscriptions,
options, convertible securities, warrants, calls or other rights or any kind
issued or granted by, or binding upon, PGTC to purchase or otherwise acquire any
securities of or equity interest in PGTC.
Section 4.8 Litigation. There is no litigation pending or, to PGTC
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knowledge, threatened, by or before any governmental authority or private
arbitration tribunal, against PGTC or its operations, nor, to PGTC knowledge, is
there any basis for any such litigation.
Section 4.9 Liabilities. Except as disclosed in Exhibit 4.10, PGTC has no
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liabilities or obligations, whether absolute, accrued, contingent, or otherwise
that have not been disclosed to MSC.
Section 4.10 Tax Returns and Payments. Except as disclosed in Schedule
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4.11, PGTC has filed all federal, state, local and foreign tax returns required
to be filed, and has timely paid all taxes that have become due and payable,
whether or not so shown on any such tax returns. PGTC has not received any
notice of, nor does PGTC have any knowledge of, any deficiency or assessment of
proposed knowledge of, any deficiency or assessment of proposed deficiency or
assessment from any taxing governmental authority. There are no tax audits
pending with respect to PGTC, and there are no outstanding agreements or waivers
by or with respect to PGTC, that extend the statutory period of limitations
applicable to any federal, state, local or foreign tax returns for any period.
PGTC makes no representation or warranty concerning whether or not its net
operating loss carryforwards will be available for use by MSC following this
transaction.
Section 4.11 Books and Records. All of the books, records and accounts of
-----------------
PGTC are in all material respects true and complete, are maintained in
accordance with good business practice and all applicable Legal Requirements,
accurately present and reflect in all material respects all of the transactions
therein described, and are reflected accurately in the Financial Statements.
PGTC has previously delivered to MSC the complete stock record book of PGTC and
true and complete copies of all the minutes and meetings and all other corporate
actions of the stockholders, Board of Directors and committees of the Board of
Directors of PGTC since the date of its incorporation.
Section 4.12 Accuracy of Information. None of the written information and
-----------------------
documents which have been or will be furnished by PGTC or any representatives of
PGTC to MSC or any of the representatives of MSC in connection with the
transactions contemplated by this Agreement contains or will contain, as the
case may be, any untrue statement of a material fact, or omits or will omit to
state a material fact necessary in order to make the statements therein not
misleading in light of the circumstances in which made. To the knowledge of
PGTC, PGTC has disclosed to MSC as the purchaser of PGTC common stock all
material information relating to PGTC and its activities.
ARTICLE 5
COVENANTS OF MSC AND PGTC
Section 5.1 Affirmative Covenants of MSC. Except as PGTC may otherwise
------------------------------
consent in writing, between the date of this Agreement and Closing, MSC shall:
(a) conduct its business only in the usual, regular and ordinary course and
in accordance with past practices;
(b) (1) duly comply with all applicable Legal Requirements; (2) perform all
of its obligations under all MSC Contacts without default; and (3) maintain its
books, records, and accounts on a basis consistent with past practices;
(c) (1) give to PGTC its counsel, accountants and other representatives
reasonable access during normal business hours to the premises of MSC, all of
the assets and properties owned or leased by MSC, MSC's books and records, and
MSC's personnel; (2) furnish to PGTC and such representatives all such
additional documents (certified by an officer of MSC, if requested), financial
information and other information as MSC may from time to time reasonably
request and (3) cause MSC's accountants to permit PGTC and its accountants to
examine the records and working papers pertaining to MSC's financial statements'
provided that no investigation by PGTC of its representatives will affect or
limit the scope of any of the representations and warranties of MSC herein or in
any other related document;
(d) use of best efforts to obtain in writing as promptly as possible all
approvals and consents required to be obtained by MSC in order to consummate the
transactions contemplated hereby and deliver to PGTC copies, satisfactory in
form and substance to PGTC, of such approvals and consents;
(e) promptly deliver to PGTC true and complete copies of all monthly and
quarterly financial statements of MSC and any reports with respect to the
activities of MSC which are prepared by or for MSC at any time from the date
hereof until Closing; and
(f) promptly notify PGTC of any circumstances, event or action, by MSC or
otherwise, (A) which, if known at the date of this Agreement, would have been
required to be disclosed in or pursuant to this Agreement, or (B) the existence,
occurrence or taking of which would result in any of the representations and
warranties of MSC in this Agreement or in any Transaction Documents not being
true and correct in all material respects.
Section 5.2 Negative Covenants of MSC. Except as PGTC may otherwise
----------------------------
consent in writing, between the date of this Agreement and Closing, MSC shall
not:
(a) change the character of its business;
(b) incur any liability or obligation or enter into any Contract except, in
each case, in the ordinary course of business consistent with prior practices
and not prohibited by any other provision hereof;
(c) incur, assume or guarantee any indebtedness or liability in respect of
borrowed money;
(d) make any capital expenditure or commitment for capital expenditure
exceeding $5,000 for a single project or $10,000 for all projects, whether or
not in the ordinary course of business, or waive, lease, discharge, transfer or
cancel any rights or claims of material value;
(e) modify, terminate, or abrogate any Material MSC Contact other than in
the ordinary course of business, or waive, lease, discharge, transfer or cancel
any rights or claims of material value;
(f) create or permit the creation or attachment of any Lien against any of
the assets or properties owned or leased by it;
(g) except as otherwise required by this Agreement, prepay any material
liabilities or obligations;
(h) issue any securities, or merge or consolidate with any other person or
acquire any of the securities, partnership or joint venture interests, or
business of any other person;
(i) declare, set aside or pay any dividends on, or make any other
distribution with respect to, any of its capital stock, or repurchase, redeem,
or otherwise acquire any of its capital stock; and
(j) enter into any transaction or permit the taking of any action that
would result in any of the representations and warranties in this Agreement not
being true and correct in all material respects at Closing.
Section 5.3 Covenants of PGTC. Except as MSC may otherwise agree in
-------------------
writing, between the date of this Agreement and Closing, PGTC shall:
(a) use it best efforts to obtain in writing as promptly as possible all
approvals and consents required to be obtained by PGTC in order to consummate
the transaction contemplated hereby and deliver to MSC copies, satisfactory in
form and substance to MSC, of such approvals and consents;
(b) promptly notify MSC of any circumstance, event or action, by PGTC or
otherwise, (i) which, if known at the date of this Agreement, would have been
required to be disclosed in or pursuant to this Agreement, or (ii) the
existence, occurrence or taking of which would result in any of the
representations and warranties of MSC in this Agreement or in any Transaction
Document not being true and correct in all material respects;
(c) undertake all other actions necessary to put into force and effect this
Agreement.
Section 5.4 Joint Undertakings. Each of PGTC and MSC shall cooperate and
------------------
exercise commercially reasonable efforts to facilitate the consummation of the
transactions contemplated by this Agreement so as to permit Closing to take
place on the date provided herein and to raise the satisfaction of conditions to
Closing set forth in Article 6. Both parties hereto agree that they will use
their best efforts to cause a Form 8-K to be filed with the Securities and
Exchange Commission concerning this transaction which Form 8-K will require
audited financial statements for MSC and pro forma financial information for the
companies as merged.
Section 5.5 Confidentiality.
---------------
(a) Any non-public information that PGTC may obtain from MSC in connection
with this Agreement, including but not limited to information concerning trade
secrets, licenses, research projects, costs, profits, markets, sales, customer
lists, strategies, plans for future development and any other information of a
similar nature, shall be deemed confidential and, unless and until Closing shall
occur, PGTC shall not disclose any such information to any third party (other
than its directors, officers and employees and persons whose knowledge thereof
is necessary to facilitate the consummation of the transactions contemplated
hereby) or use such information to the detriment of MSC; provided that (i) PGTC
may use and disclose any such information once it has been publicly disclosed
(other than by PGTC in breach of its obligations under this Section) or which
rightfully has come into the possession of PGTC (other than from MSC) and (ii)
to the extent that PGTC may become complied by Legal Requirements to disclose
any of such information, PGTC may disclose such information if it shall have
used all reasonable efforts, and shall have afforded MSC the opportunity to
obtain an appropriate protective order, or other satisfactory assurance of
confidential treatment for the protective order, or other satisfactory assurance
of confidential treatment, for the information compelling to be disclosed. In
the event of termination of this Agreement, PGTC shall use all reasonable
efforts to cause to be delivered to MSC, and retain no copies of, any documents,
work papers and other materials obtained by PGTC or on its behalf from MSC,
whether so obtained before or after the execution hereof.
(b) Any non-public information that MSC may obtain from PGTC in connection
with this Agreement, including but not limited to information concerning trade
secrets, licenses, research projects, costs, profits, markets, sales, customer
lists, strategies, plans for future development and any other information of a
similar nature, shall be deemed confidential and, unless and until Closing shall
occur, MSC shall not disclose any such information to any third party (other
than its directors, officers and employees, and persons whose knowledge thereof
is necessary to facilitate the consummation of the transactions contemplated
hereby) or use such information to the detriment of PGTC; provided that (i) MSC
may use and disclose any such information once it has been publicly disclosed
(other than by MSC in breach of obligations under this Section) or which
rightfully has come into the possession of MSC (other than from PGTC) and (ii)
to the extent that MSC may become complied by Legal Requirements to disclose any
of such information, MSC may disclose such information if it shall have used all
reasonable efforts, and shall have afforded PGTC the opportunity, to obtain an
appropriate protective order, or other satisfactory assurance of confidential
treatment, for the information compelled to be disclosed. In the event of
termination of this Agreement, MSC shall use all reasonable efforts to cause to
be delivered to PGTC, and retain no copies of, any documents, work papers and
other materials obtained by MSC or on its behalf from PGTC, whether so obtained
before or after the execution hereof.
Section 5.6 Publicity. PGTC and MSC shall each consult with and obtain the
---------
consent of the other before issuing any press release or making any other public
disclosure concerning this Agreement or the transactions contemplated hereby
unless, in the reasonable judgment of the disclosing party, a release or
disclosure is required to discharge its disclosure obligations under applicable
legal requirements, in which case it shall in good faith consult with the other
party about the form, content and timing of such release or disclosure prior to
its release of disclosure.
ARTICLE 6
CONDITIONS PRECEDENT
Section 6.1 Conditions to MSC's Obligations. The obligations of MSC to
---------------------------------
consummate the transactions contemplated by this Agreement are subject to the
following conditions:
(a) Accuracy of Representations. The representations of PGTC in this
Agreement or in any Transaction Document shall be true and accurate in all
material respects at and as of Closing with the same effect as if made at and as
of Closing, except as affected by the transactions contemplated hereby.
(b) Performance of Agreements. PGTC shall have performed all obligations
and agreements and complied with all covenants in this Agreement to be performed
and complied with by it at or before Closing.
(c) Officers's Certificate. MSC shall have received a certificate executed
by an executive officer of PGTC, dated as of Closing, reasonably satisfactory in
form and substance to MSC certifying that the conditions stated in subparagraphs
(a) and (b) of this Section have been satisfied.
(d) Legal Proceedings. There shall be no Legal Requirement, and no
judgment shall have been entered and not vacated by any governmental authority
of competent jurisdiction and no litigation shall be pending which restrains,
makes illegal or prohibits consummation of the transactions contemplated hereby.
(e) Consents. MSC shall have obtained evidence, in form and substance
satisfactory to it, that there have been obtained all consents, approvals and
authorizations required by this Agreement.
(f) Legal Matters Satisfactory to MSC's Counsel. All actions, proceedings,
instruments and documents required to carry out the transactions contemplated by
this Agreement or incidental thereto and all related matters shall be reasonably
satisfactory to and approved by MSC's counsel, and such counsel shall have been
furnished with such certified copies of actions and proceedings and such other
instruments and documents as it shall have reasonably requested.
(g) Opinion of Counsel Concerning Organization and Transaction. MSC
shall have received from counsel for PGTC a favorable opinion addressed to MSC
and dated as of the Closing Date, satisfactory in form and content to MSC,
concerning the organization and this transaction.
Section 6.2 Conditions to PGTC' Obligations. The obligations of PGTC to
--------------------------------
consummate the transactions contemplated by this Agreement are subject to the
following conditions:
(a) Accuracy of Representations. The representations of MSC in this
Agreement or in any Transaction Document shall be true and accurate (in all
material respects) at and as of Closing with the same effect as if they were
made at and as of Closing, except as afforded by the transactions contemplated
hereby.
(b) Performance of Agreements. MSC shall have performed all obligations
and agreements and complied with all covenants in this Agreement or in any
Transaction Document to which it is a party to be performed and complied with by
it at or before closing.
(c) Officers's Certificate. PGTC shall have received a certificate
executed by an executive officer of MSC, dated as of Closing, reasonably
satisfactory in form and substance to PGTC, certifying that the conditions
stated in subparagraphs (a) and (b) of this Section have been satisfied.
(d) Legal Proceedings. There shall be no Legal Requirement, and no
judgment shall have been entered and not created by any governmental authority
of competent jurisdiction and no litigation shall be pending which restrains,
makes illegal or prohibits consummation of the transactions contemplated hereby.
(e) Consents. PGTC shall have obtained evidence, in form and substance
satisfactory to it, that there have been obtained all consents, approvals and
authorizations required by this Agreement.
(f) Legal Matters Satisfactory to PGTC Counsel. All actions, proceedings,
instruments and documents required to carry out the transactions contemplated by
this Agreement or incidental thereto and all related legal matters shall be
reasonably satisfactory to and approved by PGTC counsel, and such counsel shall
have been furnished with such copies of actions and proceedings and such other
instruments and documents as it shall have reasonably requested.
(g) Opinion of Counsel Concerning Organization and Transaction. PGTC
shall have received from counsel for MSC a favorable opinion addressed to PGTC
and dated as of the Closing Date, satisfactory in form and content to PGTC,
concerning the organization and this transaction.
ARTICLE 7
INDEMNIFICATION
Section 7.1 Indemnification by MSC Shareholders. From and after the
--------------------------------------
Closing, the MSC Shareholder shall indemnify and hold harmless PGTC, its
officers, directors, agents and representatives, and any person claiming by or
through any of them as the case my be, from and against any and all losses and
related expenses arising out of or resulting from:
(a) any representations and warranties of MSC in this Agreement not being
true and accurate when made or when required by this Agreement to be true and
accurate; or
(b) any failure by MSC to perform any of its covenants, agreements or
obligations in this Agreement; or
(c) all undisclosed abilities and obligations relating to, or arising out
of activities of MSC during periods prior to Closing.
Section 7.2 Indemnification by PGTC. From and after the Closing, PGTC
-------------------------
shall indemnify and hold harmless MSC, its officers, directors, agents and
representatives, and any person claiming by or through any of them as the case
my be, from and against any and all losses and related expenses arising out of
or resulting from:
(a) any representations and warranties of PGTC in this Agreement not being
true and accurate when made or when required by this Agreement to be true and
accurate; or
(b) any failure by PGTC to perform any of its covenants, agreements or
obligations in this Agreement; or
(c) all undisclosed abilities and obligations relating to, or arising out
of activities of PGTC during periods prior to Closing.
Section 7.3 Indemnification Against Third Party Claims. Promptly after
--------------------------------------------
receipt entitled to indemnification hereunder (the "Indemnitee") of written
notice of the assertion of any claim or the commencement of any Litigation with
respect to any matter referred to Sections 7.1 or 7.2, the Indemnitee shall give
written notice thereof to the party from whom indemnification is sought pursuant
hereto (the "Indemnitor") and thereafter shall keep the Indemnitor reasonably
informed with respect thereto, may provided that failure of the Indemnitee to
give the Indemnitor notice as provided herein shall not relieve the Indemnitor
of its obligations hereunder. In case any litigation is brought against any
Indemnitee, the Indemnitor shall be entitled to participate in (and at the
request of the Indemnitee shall assume) the defense thereof with counsel
satisfactory to Indemnitee at the Indemnitor's expense. If the Indemnitor, at
the Indemnitee's request, shall assume the defense of any settlement shall
include as an unconditional term thereof the giving by the claimant or the
plaintiff of a release of the Indemnitee, satisfactory to the Indemnitee, from
all liability with respect to such litigation.
Section 7.4 Time and Manner of Certain Claims. The representations and
-----------------------------------
warranties of PGTC and the Principal Shareholders in this Agreement shall
survive Closing; provided, however, that neither PGTC nor the Members shall have
any liability under Section 7.1 or 7.2, respectively, unless a claim is asserted
by the party seeking indemnification thereunder by written notice to the party
from whom indemnification is sought within three years after Closing, and such
party commences litigation seeking such indemnification within 180 days
following the date of such notice.
Section 7.5 Effect of de minimus Damage on Indemnity by Principal
-------------------------------------------------------------
Shareholders. The Members shall have no indemnity obligations under this
Article 7 unless aggregate amount payable by them under this Article 7 is in
excess of $10,000.
Section 7.6 Tax Effect. In calculating amount payable to an Indemnitee
-----------
hereunder (i) the amount of the indemnified losses shall be reduced by the
amount of any reduction in the Indemnitee's liability for taxes resulting from
the facts or occurrence giving rise to the indemnified losses; and (ii) the
amount of the indemnified losses shall be grossed up by the amount of any
increase in liability for taxes resulting from indemnification with respect
thereto.
ARTICLE 8
TERMINATION
Section 8.1 Termination Events. This Agreement may be terminated and the
------------------
transactions contemplated hereby may be abandoned:
(a) at any time, by the mutual agreement of PGTC and MSC.
(b) by either PGTC and MSC, if the other is in material breach or default
of its respective covenants, agreements or other obligations hereunder or if any
of its representations and warranties herein are not true and accurate in all
material respects when made or when otherwise required by this Agreement to be
true and accurate.
(c) by either PGTC or MSC upon written notice to the other, if the
transactions contemplated by this Agreement are not consummated on or prior to
September 30, 2002, for any reason other than material breach or default by such
party of its respective representations, warranties, covenants, agreements or
other obligations hereunder.
Section 8.2 Effect of Termination. If this Agreement shall be terminated,
---------------------
all obligations of the parties hereunder shall terminate, except for the
obligations set forth in section 5.5, 5.6 and 9.3.
ARTICLE 9
MISCELLANEOUS
Section 9.1 Expenses. Each party shall pay its own expenses incurred as a
--------
result of this transaction.
Section 9.2 Waiver and Modifications. Any of the provisions of this
--------------------------
Agreement may be waived at any time by the party entitled to the benefit
thereof, upon the authority of the Board of Directors of such party. Any of
the provisions of this Agreement (including the exhibits and the Agreement of
Merger) may be modified at any time prior to and after the vote of the MSC
Shareholders by agreement in writing approved by the Board of Directors of each
party and executed in the same manner (but necessarily by the same persons) as
this Agreement, provided that such modification, after the last vote of the MSC
Shareholders shall not be allowed, if in the judgment of the Board of Directors
of MSC, it affects materially and adversely the benefits of MSC's Shareholders
under this Agreement of Merger. To the extent permitted by law, the powers of
the Board of Directors may be delegated by the Board of the Executive Committee
of such Board or by such Board (or by the Executive Committee to the extent any
matter has been delegated to such Committee by the Board) to any officer or
officers of such party, and any notices, consents or other action referred to in
this Agreement may be given or taken by any officer so authorized.
Section 9.3 Finder commissions. PGTC and MSC each represents and warrants
------------------
that no broker or finder is entitled to any brokerage or finder's fee or other
commission based on agreements, arrangements or understandings made by it with
respect to the transactions contemplated by this Agreement or by the Agreement
of Merger, other than set forth in Exhibit 9.3.
Section 9.4 Notices. Any notice request, instruction or other documents to
-------
be given hereunder or under the Agreement of Merger by any part to another shall
be in writing and delivered personally or sent by registered or certified mail,
postage prepaid,
if to PGTC, addressed to:
Pro Glass Technologies, Inc.
#0 0000 Xxxxxxxx Xxxxx XX
Xxxxxxx Xxxxxxx X0X 0X0
with a copy to:
Xxxxxxx X. Xxxxx, Esq.
Xxxxxxx X. Xxxxx Attorney At Law
00000 Xxxxxxx Xxxx. Xxxxx 000
Xxxxxxxx Xxxxx XX 00000
if to MSC, addressed to:
MicroSignal Corporation
000 Xxxxxxxxxx Xxxxx
Xxxxxxx XX 00000
with a copy to:
Xxxx Xxxxx, Esq.
Xxxxx & Fraade, P.C.
000 Xxxxxxx Xxx.
Xxx Xxxx, XX 00000
Section 9.5 Abandonment. At any time before the effective Date, this
-----------
Merger Agreement may be terminated and the merger may be abandoned by the Board
of Directors of PGTC or MSC or both, notwithstanding approval of this Agreement
by the MSC Shareholder or PGTC Shareholders or both.
Section 9.6 Entire Agreement. This Agreement and Plan of Merger represents
----------------
the entire agreement between the parties. Any and all oral or written
agreements concerning this merger shall be deemed null and void.
Section 9.6 Governing Law. This Agreement shall be governed by, construed,
-------------
and enforced in accordance with the laws of the State of Nevada.
Section 9.7 Counterparts. In order to facilitate the filing and recording
------------
of this Merger Agreement, the same may be executed in any number of
counterparts, each of which shall be deemed to be an original.
IN WITNESS WHEREOF, PGTC and MSC, by their duly authorized officers, have
executed and delivered this Agreement effective as of the date first above
written.
PRO GLASS TECHNOLOGIES, INC.
By:/s/ Xxxxx Xxxxxx
------------------
Xxxxx Xxxxxx, President
MICROSIGNAL CORP.
By:/s/ Xxxxxxx X. XxXxxxxxx
Xxxxxxx X. XxXxxxxxx, President