EXHIBIT 10.21
AGREEMENT OF MERGER
THIS AGREEMENT OF MERGER (the "Agreement of Merger"), is made and entered
into as of the ____ day of May, 2006, by and among BRIDGETECH HOLDINGS
INTERNATIONAL, INC., a Delaware corporation ("Bridgetech"), CLARITY ACES, INC.,
a Delaware corporation (the "Surviving Corporation"), and ADVANCED CAPSULE
ENDOSCOPY SERVICES, LLC, an Ohio limited liability company, (the "Merged
Company"), XX. XXXX XXXXXX and XXXXXX XXXXX (the "Members"). The Merged Company
and the Surviving Corporation hereinafter sometimes together referred to as the
"Constituent Entities".
R E C I T A L S:
A. The Surviving Corporation was formed and exists under the laws of the
State of Delaware. The Surviving Corporation is a wholly owned subsidiary of
Bridgetech.
B. Bridgetech is a publicly held company which was formed and exists under
the laws of the State of Delaware.
C. The Merged Company was formed and exists under the laws of the State of
Ohio. The Merged Company has filed an election on IRS Form 8832 to be treated
for federal income tax purposes as a corporation effective as of April 1, 2006.
D. The respective members of the Merged Company and the members of the
Board of Directors of Bridgetech and the Surviving Corporation deem it advisable
for the mutual benefit of such entities that the Merged Company be merged with
and into the Surviving Corporation pursuant to the applicable provisions of the
Delaware General Corporation Law and upon the terms and conditions hereinafter
set forth ("Merger").
NOW THEREFORE, in consideration of the foregoing recitals and of the
promises and mutual agreements herein contained and in accordance with the laws
of the State of Delaware, the Constituent Entities do hereby agree to merge upon
the terms and conditions set forth herein.
1. Agreement to Merge. The Merged Company shall be merged into the
Surviving Corporation. The existence of the Merged Company shall cease upon the
effective date of the Merger. The Surviving Corporation shall continue its
existence under the laws of the State of Delaware and shall become the owner,
without other act or deed, of all the rights and property of the Constituent
Entities and subject to any liability for all the debts and obligations of the
Constituent Entities.
2. Cancellation of Equity Interests. On the effective date of the Merger:
(a) all of the outstanding units of the Merged Company shall be canceled; (b)
all of the issued and outstanding shares of stock of the Surviving Corporation
shall remain outstanding and in full force and effect; and (c) the two (2)
Members of the Merged Company shall each receive (i) One Hundred Seventy-Seven
Thousand (177,000) common shares of Bridgetech (the "Shares"); (ii) a payment at
the time this Agreement of Merger is executed of One Hundred Thirty-Two Thousand
Five Hundred Dollars
($132,500.00), which shall be paid by wire transfer of funds to accounts
designated by the two (2) Members; (iii) a second payment on, but not before,
January 3, 2007 of One Hundred Thirty Two Thousand Five Hundred Dollars
($132,500.00), which shall also be paid by wire transfer of fund to accounts
designated by the two (2) Members; and (iv) books and accounting records for the
Merged Company will be kept separately and if EBITDA for the Five States
Business is equal to or exceeds Seven Hundred Fifty Thousand Dollars
($750,000.00) during the first twelve (12) months following the effective date
of this merger, then each Member shall receive One Hundred Thousand Dollars
($100,000.00); if EBITDA for the Five States Business for the first twenty-four
(24) months following the effective date of the merger equals or exceeds One
Million Five Hundred Thousand Dollars ($1,500,000.00), then each Member will
receive One Hundred Fifty Thousand Dollars ($150,000.00). "EBITDA" as used
herein shall mean "Earnings Before Interest, Taxes, Depreciation and
Amortization" which is a measure of a company's operating cash flow based on
data from the company's income statement. It is calculated by looking at
earnings before the deduction of interest expenses, taxes, depreciation and
amortization. "Five States Business" means the business conducted by the
Surviving Company in the States of Ohio, Kentucky, Indiana, Illinois and
Tennessee.
3. Transfer of Assets, Liabilities and Equity. The assets, liabilities and
equity of the Merged Company shall be recorded on the books of the Surviving
Corporation in the amounts at which they are stated on the books of the Merged
Company on the effective date of the Merger.
4. Articles of Incorporation and Bylaws. The present Articles of
Incorporation and Bylaws of the Surviving Corporation shall continue to be the
Articles of Incorporation and Bylaws of the Surviving Corporation on and after
the effective date of the Merger.
5. Principal Place of Office. The principal office of the Surviving
Corporation shall continue to be located at 000 Xxxx Xxxxxxxx, Xxxxx 000, Xxx
Xxxxx, Xxxxxxxxxx 00000.
6. Copy of Agreement of Merger. A copy of the Agreement of Merger will be
on file at the principal place of office of the Surviving Corporation. A copy of
the Agreement of Merger will be furnished by the Surviving Corporation upon
written request and without cost, to any stockholder or member of either
Constituent Entity.
7. Effective Date of Merger. The effective date of the Merger shall be
upon filing of the State of Delaware, Certificate of Merger of Domestic
Corporation and Foreign Limited Liability Company with the Delaware Secretary of
State.
8. Execution. This Agreement of Merger may be executed in any number of
counterparts, each of which shall be deemed an original, but all of such
counterparts taken together shall constitute one and the same instrument.
9. Captions and Paragraph Headings. Captions and paragraph headings used
herein are for convenience only and are not a part of this Agreement of Merger
and shall not be used in construing it.
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10. Representations and Warranties. The Members represent and warrant as
follows:
(a) Organization and Standing of the Merged Company. The Merged Company is
a limited liability company duly organized, validly existing, and in good
standing under the laws of the State of Ohio. The Merged Company has filed an
election on IRS Form 8832 to be treated as a corporation for federal income tax
purposes effective April 1, 2006.
(b) Subsidiaries. The Merged Company has no subsidiaries.
(c) Financial Statements. The Merged Company has no financial statements
and has no or minimal assets. The Merged Company was only recently formed and
has no revenue from services except as set forth herein. The Merged Company's
primary asset is a method of doing business with capsule endoscopy which it
believes will be profitable. Twenty (20) test cases were run using the capsule
endoscopy techniques. Income for these tests has yet to be received but bills
have been sent to the twenty (20) test patients' health insurance carriers. All
costs incurred related to those procedures and other start up costs of the
Merged Company have been paid except for a fee for reading the test cases of
Fifty Dollars ($50.00) per case for a total of One Thousand Dollars ($1,000.00)
which costs will be paid by the Surviving Corporation and legal fees of the
Merged Company relating to this merger which fees will be paid for by the
Members. Accounts receivables connected with the twenty (20) test cases should
cover the liability to the physician(s) who read the twenty (20) test cases.
Except as stated herein, there are no undisclosed liabilities of the Merged
Company.
(d) Contracts. The Merged Company has not entered into any contracts.
(e) Litigation. There is no litigation or proceedings pending, or to the
Merged Company's knowledge, threatened against or relating to the Merged
Company, its properties, or business, nor does the Merged Company know or have
reasonable grounds to know of any basis for any such action or of any
governmental investigation relative to the Merged Company, its properties, or
business.
(f) Capitalization. The outstanding equity interests of the Merged Company
consist solely of the membership interests owned by the Members. There are no
options, warrants, subscriptions, puts, calls or other rights, commitments,
undertakings or understandings to acquire, dispose of or restrict the transfer
of any equity interests of the Merged Company.
(g) Investment. The Members will acquire the Shares for investment for
their own account, and not with a view to, or for the offer or sale in
connection with, any distribution thereof. The Members acknowledge that neither
the Shares nor the issuance of the Shares to the Members has been registered
under the Securities Act of 1933, as amended (the "Securities Act"), or any
state securities laws, and that the Shares may not be transferred or sold except
pursuant to the registration provisions of the Securities Act and any applicable
state securities laws or pursuant to an applicable exemption therefrom.
Purchaser hereby acknowledges and agrees that the certificates representing the
Shares will bear a legend substantially in the form of the following legend:
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THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
STATE SECURITIES LAW AND MAY NOT BE SOLD OR TRANSFERRED UNLESS SO
REGISTERED OR UNLESS AN EXEMPTION FROM APPLICABLE REGISTRATION
REQUIREMENTS IS AVAILABLE.
The parties hereto have caused this Agreement of Merger to be signed by
its respective member or officer on the day and year first above written.
SURVIVING CORPORATION MERGED COMPANY
CLARITY ACES, INC. ADVANCED CAPSULE ENDOSCOPY,
a Delaware corporation LLC, an Ohio limited liability company
By: /s/ Xxxxxx X. Xxxx III By: /s/ Xxxxxx Xxxxx
----------------------------------- ----------------------------------
Xxxxxx Xxxxx, Member
Print Name: ___________________________
Title: ________________________________
BRIDGETECH HOLDINGS THE MEMBERS:
INTERNATIONAL, INC.,
a Delaware corporation
/s/ Xx. Xxxx Xxxxxx
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By: /s/ Xxxxxx X. Xxxx III Xx. Xxxx Xxxxxx
-----------------------------------
Print Name: Xxxxxx X. Xxxx III
/s/ Xxxxxx Xxxxx
--------------------------------------
Title: President Xxxxxx Xxxxx
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