Username:
  
  Password:
  
  

Exhibit 2.1

AGREEMENT AND PLAN OF MERGER

by and among

TECHNISCAN, INC. ,

a Utah corporation,

CASTILLO, INC.,
a Delaware corporation,

TECHNISCAN ACQUISITION, INC.,
a Utah corporation,

and EMILIA OCHOA

October 9, 2009

 


 

TABLE OF CONTENTS

 

 

 

 

 

 

Page No.

Article I DEFINITIONS

 

 

1

1.1 Definitions

 

 

1

1.2 Additional Terms

 

 

4

Article II THE MERGER

 

 

5

2.1 Merger

 

 

5

2.2 The Closing

 

 

5

2.3 Effective Time

 

 

5

2.4 Legal Effects of the Merger

 

 

5

2.5 Articles of Incorporation and Bylaws of the Surviving Entity

 

 

5

2.6 Directors and Officers of the Surviving Entity

 

 

6

Article III MANNER OF CONVERTING SECURITIES

 

 

6

3.1 Conversion of Shares in the Merger

 

 

6

3.2 Surrender and Exchange of TechniScan Securities

 

 

6

3.3 Transfer Books; No Further Ownership Rights in TechniScan Common Stock

 

 

7

3.4 No Fractional Shares for Parent Common Stock

 

 

7

3.5 Dissenting Shares

 

 

7

Article IV REPRESENTATIONS AND WARRANTIES OF TECHNISCAN

 

 

7

4.1 Organization and Standing

 

 

7

4.2 Corporate Power

 

 

8

4.3 Authorization

 

 

8

4.4 Subsidiaries

 

 

8

4.5 Noncontravention

 

 

8

4.6 Capitalization

 

 

8

4.7 Financial Statements

 

 

9

4.8 Absence of Certain Changes or Events

 

 

9

4.9 Material Agreements

 

 

10

4.10 Intellectual Property

 

 

10

4.11 Title to Properties and Assets; Liens

 

 

11

4.12 Compliance with Laws

 

 

12

4.13 Litigation

 

 

12

4.14 Governmental Consents

 

 

12

4.15 Permits

 

 

12

4.16 Brokers or Finders

 

 

12

4.17 Tax Returns and Payments

 

 

12

4.18 Employees

 

 

12

4.19 Employee Benefit Plans

 

 

13

4.20 Obligations of Management

 

 

13

4.21 Obligations to Related Parties

 

 

13

4.22 Environmental Laws

 

 

13

4.23 Internal Controls

 

 

13

4.24 Customers and Suppliers

 

 

13

4.25 Products; Product Warranties; Product Liability

 

 

14

4.26 Absence of Certain Commercial Practices

 

 

14

4.27 Disclosure

 

 

14

Article V REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB

 

 

14

5.1 Organization and Standing

 

 

14

5.2 Corporate Power

 

 

15

5.3 Authorization

 

 

15

5.4 Authorized Securities

 

 

15

5.5 Noncontravention

 

 

15

5.6 Capitalization

 

 

15

i


 

 

 

 

 

 

 

Page No.

5.7 SEC Reports; Financial Statements

 

 

15

5.8 Compliance with Laws

 

 

16

5.9 Litigation

 

 

16

5.10 Governmental Consents

 

 

16

5.11 Permits

 

 

16

5.12 Brokers or Finders

 

 

16

5.13 Tax Returns and Payments

 

 

16

5.14 Employee Benefit Plans

 

 

17

5.15 Obligations to Related Parties

 

 

17

5.16 Environmental Laws

 

 

17

5.17 No Assets; No Liabilities

 

 

17

5.18 Operations of Merger Sub

 

 

17

5.19 Trading Matters

 

 

17

5.20 Disclosure

 

 

18

Article VI ADDITIONAL AGREEMENTS

 

 

18

6.1 Tax-Free Reorganization

 

 

18

6.2 Transaction Form 8-K; Other Filings

 

 

18

6.3 Parent Directors

 

 

18

6.4 Parent Officers

 

 

18

6.5 Further Assurances

 

 

18

6.6 Notices and Consents

 

 

19

6.7 Intentionally Left Blank

 

 

19

6.8 Post-Closing Restructuring

 

 

19

6.9 TechniScan Shareholder Approval

 

 

19

6.10 Notice of Developments

 

 

19

Article VII INDEMNIFICATION

 

 

19

7.1 Survival; Timing of Claims

 

 

19

7.2 Indemnification

 

 

19

7.3 Sole Remedy

 

 

20

7.4 Mitigation

 

 

20

7.5 Waiver of Damage

 

 

20

7.6 Right to Indemnification Not Affected by Knowledge or Waiver

 

 

20

Article VIII MISCELLANEOUS

 

 

20

8.1 Successors and Assigns

 

 

20

8.2 Counterparts

 

 

20

8.3 Notices

 

 

20

8.4 Amendments

 

 

21

8.5 Enforceability; Severability

 

 

21

8.6 Governing Law

 

 

21

8.7 Waiver of Jury Trial

 

 

21

8.8 No Third Party Beneficiaries

 

 

22

8.9 Entire Agreement

 

 

22

8.10 Waivers

 

 

22

8.11 No Strict Construction

 

 

22

8.12 Expenses

 

 

22

8.13 Construction

 

 

22

8.14 Arm’s Length Negotiations

 

 

22

ii


 

AGREEMENT AND PLAN OF MERGER

      THIS AGREEMENT AND PLAN OF MERGER (this “ Agreement ”), dated as of October 9, 2009 (the “ Execution Date ”), is entered into by and among TECHNISCAN, INC., a Utah corporation (“ TechniScan ”), CASTILLO, INC., a Delaware corporation (“ Parent ”), TECHNISCAN ACQUISITION, INC., a Utah corporation, which is a wholly owned Subsidiary of Parent (“ Merger Sub ”) and EMILIA OCHOA, an individual (“ Parent Shareholder ”).

      WHEREAS , Parent is the sole shareholder of Merger Sub;

      WHEREAS , the Parent, as the sole shareholder of Merger Sub, and the boards of directors of each of Merger Sub and TechniScan (each a “ Board ”) have, pursuant to the Laws of their respective states of organization, declared that this Agreement is advisable, fair and in the best interests of their respective shareholders, and have approved this Agreement and the consummation of the transactions contemplated hereby, including the merger of Merger Sub with and into TechniScan in exchange for shares of Parent Common Stock (the “ Merger ”); and

      WHEREAS , the parties to this Agreement intend that the Merger will qualify as a transaction described in Section 368 of the Internal Revenue Code of 1986, as amended (the “ Code ”), and the parties have agreed not to take actions that would cause the Merger not to so qualify.

      NOW, THEREFORE , in consideration of the covenants, promises and representations set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby expressly and mutually acknowledged, and intending to be legally bound hereby, the parties hereto agree as follows:

ARTICLE I
DEFINITIONS

     Unless the context otherwise requires, the terms defined in this Article I shall have the meanings herein specified for all purposes of this Agreement, applicable to both the singular and plural forms of any of the terms herein defined.

     1.1 Definitions . As used herein, the following terms shall have the following meanings:

     “ Acquired Entity ” means any of TechniScan or its Subsidiaries and “ Acquired Entities ” means TechniScan and its Subsidiaries, collectively.

     “ Current SEC Reports ” means the following SEC Reports of Parent: Annual Report on Form 10-K for the fiscal year ended December 31, 2008; Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2009; and Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2009.

     “ Dissenter’s Act ” means Sections 16-10a-1301 - 1331 of the Utah Revised Business Corporation Act.

     “ Employee Benefit Plans ” means all “employee benefit plans” (as defined in Section 3(3) of ERISA) and all other employee benefit plans, policies, agreements or arrangements, including any bonus or other incentive compensation, stock purchase, equity or equity-based compensation, deferred compensation, change in control, termination, severance, sick leave, vacation, loans, perquisites, salary continuation, health, disability, life insurance and educational assistance plans, policies, agreements or arrangements for the benefit of any current or former employees, officers, directors or managers of a Person. For the avoidance of doubt, “Employee Benefit Plans” do not include employee agreements.

1


 

     “ Environmental Law ” means any Law of any Governmental Authority in effect as of the Execution Date relating to pollution or protection of the environment, including Laws related to emissions, discharges, releases, or threatened releases of Hazardous Substances.

     “ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended.

     “ Exchange Act ” means the Securities Exchange Act of 1934, as amended.

     “ GAAP ” means accounting principles generally accepted in the United States of America, as in effect from time to time.

     “ Governmental Authority ” means any foreign, federal, national, state or local judicial, legislative, executive or regulatory body, authority or instrumentality.

     “ Hazardous Substances ” means any substance, waste, contaminant, pollutant or material defined or regulated as toxic or as a pollutant, contaminant or waste, or words of similar meaning including petroleum or petroleum products, under any Environmental Law.

     “ Immediate Family ” with respect to a specified natural Person, means such Person’s spouse, parents and children, including adoptive relationships and relationships through marriage.

     “ Indebtedness ” of any Person means, without duplication (a) all indebtedness for borrowed money; (b) all obligations issued, undertaken or assumed as the deferred purchase price of property or services (other than trade payables entered into in the ordinary course of business consistent with past practices); (c) all reimbursement or payment obligations with respect to letters of credit, surety bonds and other similar instruments; (d) all obligations evidenced by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in connection with the acquisition of property, assets or businesses; (e) all indebtedness created or arising under any conditional sale or other title retention agreement, or incurred as financing, in either case with respect to any property or assets acquired with the proceeds of such indebtedness (even though the rights and remedies of the seller or bank under such agreement in the event of default are limited to repossession or sale of such property); (f) all monetary obligations under any leasing or similar arrangement which, in connection with GAAP, consistently applied for the periods covered thereby, is classified as a capital lease; (g) all indebtedness referred to in clauses (a) through (f) above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon or in any property or assets (including accounts and contract rights) owned by any Person, even though the Person which owns such assets or property has not assumed or become liable for the payment of such indebtedness; and (h) all guaranties in respect of indebtedness or obligations of others of the kinds referred to in clauses (a) through (g) above.

     “ Insolvent ” means, with respect to any Person: (a) the present fair saleable value of such Person’s assets is less than the amount required to pay such Person’s total liabilities as they come due; (b) such Person is unable to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured; (c) such Person intends to incur or believes that it will incur debts that would be beyond its ability to pay as such debts mature; or (d) such Person has unreasonably small capital with which to conduct its business as such business is now conducted and is proposed to be conducted.

     “ Intellectual Property ” means all trademarks and trademark rights, trade names and trade name rights, service marks and service mark rights, service names and service name rights, patents and patent rights, patent term extensions, supplementary protection certificates, market or data exclusivities, brand names, trade dress, product designs, product packaging, business and product names, logos, slogans, rights of publicity, trade secrets, inventions, formulae, industrial models, processes, designs, specifications, data, technology,

2


 

methodologies, computer programs (including all source codes), any other confidential and proprietary right or information, whether or not subject to statutory registration, and all related technical information, manufacturing, engineering and technical drawings, know-how and all pending applications for and registrations of patents, trademarks, service marks and copyrights, and the right to sue for past infringement, if any, in connection with any of the foregoing, and all documents, disks and other media on which any of the foregoing is stored.

     “ Knowledge, ” with respect to: (a) TechniScan and/or the Acquired Entities, means the actual and imputed knowledge of David Robinson; and (b) Parent, means the actual and imputed knowledge of Emilia Ochoa; provided , that for purposes hereof, “imputed knowledge” means, with respect to any individual, the knowledge that an individual holding a similar office or position as such individual would reasonably be expected to have after a reasonable inquiry.

     “ Law ” means any federal, state or local law, statute, rule, regulation, judgment, decree, injunction, order, ordinance, code, regulation, arbitration award or other legally enforceable requirement of or by any Governmental Authority.

     “ Lien ” means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind, including, without limitation, any conditional sale or other title retention agreement, any lease in the nature thereof and including any lien or charge arising by Law.

     “ Material Adverse Effect ” means a material adverse effect on the operations, condition (financial or other), assets, liabilities, earnings, prospects or business of the Person affected or the ability of any Person to timely consummate the transactions contemplated hereby; provided , however , that none of the following shall be deemed to constitute, and none of the following shall be taken into account in determining whether there has been or would be, a “Material Adverse Effect” on or with respect to the Person affected: (a) any adverse change or effect that is demonstrated to be primarily caused by conditions affecting the United States economy generally; (b) any adverse change, event or effect that is demonstrated to be primarily caused by the announcement or pendency of the Merger or of the transactions contemplated hereby; or (c) the taking of any action contemplated by this Agreement and other agreements contemplated hereby. All references in this Agreement to a “Material Adverse Effect on TechniScan” shall mean a Material Adverse Effect on TechniScan and its Subsidiaries, taken as a whole and a “Material Adverse Effect on Parent” shall mean a Material Adverse Effect on Parent and Merger Sub, taken as a whole.

     “ Organizational Documents ” means the certificate of incorporation or articles of incorporation, as amended and/or restated, bylaws, as amended and/or restated and/or other organizational or governing documents of a Person, as the case may be, as each may be amended from time to time.

     “ OTCBB ” means the over-the-counter bulletin board market maintained by The Nasdaq Stock Market, Inc.

     “ Parent Common Stock ” means the common stock of Parent, par value $.001 per share.

     “ Person ” means all natural persons, corporations, business trusts, associations, unincorporated organizations, limited liability companies, partnerships and other entities and Governmental Authorities or any department or agency thereof.

     “ Proceeding ” means an action, claim, suit, investigation or proceeding (including, without limitation, a partial proceeding, such as a deposition) by or before any Governmental Authority or arbitrator.

     “ SEC ” means the U.S. Securities and Exchange Commission.

3


 

     “ Securities Act ” means the Securities Act of 1933, as amended.

     “ Subsidiary ” means any corporation, association, business entity, partnership, limited liability company or other entity of which a Person, either alone or together with one or more other Subsidiaries: (a) directly or indirectly owns or controls securities or other interests representing more than fifty (50%) of the voting power of such entity; or (b) is entitled, by contract or otherwise, to elect, appoint or designate managers or directors constituting a majority of the managers or members of such entity’s board of directors or other governing body.

     “ Tax ” or “ Taxes ” means all taxes of any kind, and fees or other assessments in the nature of taxes, imposed by any Governmental Authority, and any and all interest, penalties and additions relating thereto. “Tax” or “Taxes” includes, without limitation, all add-on minimum, alternative minimum, capital stock, currency, customs, documentary, disability, employee, employer, environmental, estimated, excise, export, FICA, franchise, FUTA, gross receipts, income, import, natural resources, license, occupation, payroll, personal property, premium, real property, registration, sales, severance, social security, stamp, transfer, unemployment, use, value added, windfall profit and withholding taxes and duties. “Tax” or “Taxes” also includes any transferee or secondary liability for Taxes and any liability pursuant to an agreement or otherwise, including liability arising as a result of being or ceasing to be a member of any affiliated group, or being included or required to be included in any Tax Return relating thereto.

     “ Tax Return ” means any tax return, filing or information statement required to be filed in connection with or with respect to any Taxes.

     “ TechniScan Common Stock ” means the Common Stock of TechniScan, par value $.001 per share.

     “ Transaction Expenses ” means all out-of-pocket fees and expenses (including legal and accounting fees and expenses) with respect to this Agreement and the transactions contemplated hereby, including without limitation all fees and expenses relating to the preparation and filing of the Transaction Form 8-K.

     “ Utah Act ” means the Utah Revised Business Corporation Act.

     1.2 Additional Terms . Each of the following additional terms is defined in the Section set forth opposite such term:

 

 

 

Term

 

Section

Agreement

 

Preamble

Articles of Merger

 

Section 2.3

Balance Sheet

 

Section 4.7(b)

Balance Sheet Date

 

Section 4.7(b)

Closing

 

Section 2.2

Closing Date

 

Section 2.2

Code

 

Recitals

Damages

 

Section 7.2(a)

Director Nominees

 

Section 6.3

Division

 

Section 2.3

Effective Time

 

Section 2.3

Exchange Ratio

 

Section 3.1(a)

Execution Date

 

Preamble

Merger

 

Recitals

Merger Shares

 

Section 5.4

Merger Sub

 

Preamble

Parent

 

Preamble

4


 

 

 

 

Term

 

Section

Parent Indemnified Party

 

Section 7.2(b)

Parent Related Person

 

Section 5.15

Parent Shareholder

 

Preamble

Permitted Liens

 

Section 4.11

Products

 

Section 4.25

Related Person

 

Section 4.21

TechniScan

 

Preamble

TechniScan Dissenting Shares

 

Section 3.5

TechniScan Financial Statements

 

Section 4.7

TechniScan Indemnified Party

 

Section 7.2(a)

TechniScan Intellectual Property

 

Section 4.10(a)

TechniScan Material Agreement

 

Section 4.9(a)

SEC Reports

 

Section 5.6

Surviving Entity

 

Section 2.1

Transaction Form 8-K

 

Section 6.2

ARTICLE II
THE MERGER

     2.1 Merger . On the terms and subject to the conditions set forth in this Agreement, at the Effective Time, in accordance with the provisions of the Utah Act, Merger Sub shall be merged with and into TechniScan. TechniScan shall continue as the surviving entity (the “ Surviving Entity ”) and the separate existence of Merger Sub shall cease.

     2.2 The Closing . The closing of the Merger and the other transactions contemplated by this Agreement (the “ Closing ”) shall take place at the offices of Greenberg Traurig, P.A., in Boca Raton, Florida on October 9, 2009, subject to the satisfaction or waiver of all conditions to the obligations of the parties to consummate the transactions contemplated hereby (other than conditions with respect to actions the respective parties will take at the Closing itself, but subject to the fulfillment or waiver of those conditions) or such other date as the parties may mutually determine (the “ Closing Date ”).

     2.3 Effective Time . Prior to the Closing, Parent, Merger Sub and TechniScan shall prepare, and, on the Closing Date, TechniScan shall file with the Department of Commerce, Division of Corporations and Commercial Code of the State of Utah (the “ Division ”), Articles of Merger (the “ Articles of Merger ”), and/or such other appropriate documents executed in accordance with the applicable provisions of the Utah Act and shall make all other filings or recordings required under the Utah Act to effect the Merger. The Merger shall become effective at such time as the Articles of Merger are filed with the Division on the Closing Date, or such other time and/or date specified in the Articles of Merger (the “ Effective Time. ”)

     2.4 Legal Effects of the Merger . At the Effective Time, the effect of the Merger shall be as provided in this Agreement and the applicable provisions of the Utah Act. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, all of the assets, properties, rights, privileges, powers and franchises of TechniScan and Merger Sub shall vest in the Surviving Entity.

     2.5 Articles of Incorporation and Bylaws of the Surviving Entity .

          (a)  Articles of Incorporation . As of the Effective Time, by virtue of the Merger and without any action on the part of Parent, Merger Sub or TechniScan, the Articles of Incorporation of Merger Sub as in effect immediately prior to the Effective Time shall be the Articles of Incorporation of the Surviving Entity until thereafter amended in accordance with the Utah Act.

5


 

          (b)  Bylaws . As of the Effective Time, by virtue of the Merger and without any action on the part of Parent, Merger Sub or TechniScan, the Bylaws of Merger Sub, as in effect immediately prior to the Effective Time, shall be the Bylaws of the Surviving Entity until thereafter amended in accordance with the Utah Act and the Articles of Incorporation of the Surviving Entity.

     2.6 Directors and Officers of the Surviving Entity . The initial director and officer of the Surviving Entity shall be David Robinson, until his successor is duly elected or appointed and qualified.

ARTICLE III
MANNER OF CONVERTING SECURITIES

     3.1 Conversion of Shares in the Merger . Subject to the provisions of this Article III , at and as of the Effective Time, by virtue of the Merger and without any action on the part of Parent, Merger Sub or TechniScan, or any of the shareholders of any of the foregoing, the outstanding securities of TechniScan and Merger Sub shall be converted as follows:

          (a)  TechniScan Common Stock . Each share of TechniScan Common Stock issued and outstanding immediately prior to the Effective Time (other than TechniScan Dissenting Shares) shall, at the Effective Time, by virtue of the Merger and without any action on the part of Parent, TechniScan or Merger Sub, cease to be outstanding and shall be converted into and exchanged for the right to receive one (1) validly issued, fully paid and nonassessable share of Parent Common Stock (the “ Exchange Ratio ”).

          (b)  TechniScan Options . Each option to purchase shares of TechniScan Common Stock that is outstanding immediately prior to the Effective Time shall, at the Effective Time, by virtue of the Merger and without any action on the part of Parent, TechniScan or Merger Sub, cease to be outstanding and shall be converted into and exchanged for an option to purchase an equivalent number of shares of Parent Common Stock pursuant to the terms of a stock option plan which shall be adopted by the Board of Parent to be effective as of the Effective Time.

          (c)  Merger Sub Shares . Each share of common stock, par value $.001 per share, of Merger Sub issued and outstanding immediately prior to the Effective Time shall, at the Effective Time, by virtue of the Merger and without any action on the part of Parent, TechniScan or Merger Sub, be converted into and represent the right to receive one (1) validly issued, fully paid and nonassessable share of the common stock, par value $.001 per share, of the Surviving Entity.

          (d)  Parent Common Stock . Each share of Parent Common Stock owned by TechniScan shall, at the Effective Time, be canceled and retired and shall cease to exist, and no consideration shall be delivered in exchange therefor.

     3.2 Surrender and Exchange of TechniScan Securities . As soon as practicable


This is only a partial view of this document. We have millions of legal documents and clauses drafted by top law firms. learn more search for free browse for free learn more