AGREEMENT OF MERGER
THIS AGREEMENT OF MERGER (hereinafter called "this Agreement"),
effective as of the day of September, 2005, by and among Xxxxxx
Systems International, Inc., a Colorado corporation ("Xxxxxx"), on
its behalf and on behalf of its wholly-owned subsidiary, Klancy Newco,
Inc., a Puerto Rico corporation to be formed ("Newco"), and
Urban Transit Solutions, Inc., a Puerto Rico corporation ("UTS").
WHEREAS, Xxxxxx currently owns 72% of the issued and
outstanding capital stock of UTS.WHEREAS, the Boards of Directors
of Xxxxxx, Newco and UTS deem it advisable for the mutual benefit
of Xxxxxx, Newco and UTS, and their respective stockholders, that
Xxxxxx acquire the remaining 28% of UTS by the merger of Newco
into UTS under the terms and conditions hereinafter set forth.
NOW THEREFORE, in consideration of the premises and of the mutual
agreements, representations, warranties and covenants contained
herein, the parties hereto, intending to be legally bound, hereby
agree as follows:
ARTICLE I
THE MERGER
Section 1.1 Actions to be Taken. Subject to the terms and conditions
of this Agreement, including the fulfillment (or waiver) of all
conditions to the obligations of the parties contained herein,
at the Closing Date (as hereinafter defined) and pursuant to the
Puerto Rico General Corporation Law (the "PRGCL"), the following
shall occur:
(a) Newco shall be merged with and into UTS (such transaction
hereafter referred to as the "Merger"), and UTS shall be the
surviving corporation (the "Surviving Corporation"). The separate
existence and corporate organization of Newco shall cease upon
filing of this Agreement with the Department of State in
Puerto Rico, and thereupon UTS and Newco shall be a single
corporation.
(b) The Certificate of Incorporation of UTS shall constitute
the certificate of incorporation of the Surviving Corporation.
(c) The By-Laws of UTS shall constitute the by-laws of the
Surviving Corporation.
(d) The officers and directors of UTS shall continue as
the officers and directors, respectively, of the Surviving
Corporation until their successors shall have been elected and
qualified.
(e) On September 26, 2005, or such other date as the
may mutually agree upon (the "Closing Date"), the parties shall
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execute such documents as may be necessary to consummate the Closing.
Facsimile signatures may be used for closing. On the Closing Date,
this Agreement shall be executed and forwarded for filing to the
Department of State in Puerto Rico.
Section 1.2 Conversion of UTS Securities; Consideration. As of the
Closing Date, by virtue of the Merger and without any action on
the part of any holder thereof, 14,000 shares of UTS Common Stock
issued and outstanding immediately prior to the Closing Date and not held
by Xxxxxx shall be converted into 17,500,000 restricted shares (the
"Merger Shares") of the common stock, par value $0.0001 per share,
of Xxxxxx "Xxxxxx Common Stock"). By virtue of the merger,
all outstanding shares in Newco shall be cancelled.
Section 1.3 Issuance and Delivery of Xxxxxx Common Stock. Xxxxxx
shall cause the release of the Xxxxxx Common Stock upon surrender
of certificates representing shares of UTS Common Stock. The Merger
Shares shall be deemed, for all corporate purposes, to have been
issued by Xxxxxx at the Closing Date. Certificates representing
the Merger Shares in the names and amounts set forth in Schedule
1.3 shall be issued by Xxxxxx on the Closing Date. Delivery of
the Merger Shares shall be made to the respective shareholders
of UTS upon receipt by Xxxxxx of a duly executed Subscription
Agreement and Investment Representation Letter in form satisfactory
to Xxxxxx.
Section 1.4 UTS Stock Transfer Books. At the Closing Date, the
stock transfer books of UTS shall be closed and no transfer of UTS
Common Stock shall thereafter be made on such stock transfer books
until after the Closing Date. Certificates representing all
of the outstanding shares of UTS not held by Xxxxxx shall be
tendered to Xxxxxx on the Closing Date. If any UTS certificates
are not tendered, then Xxxxxx shall not release the corresponding
Merger Shares for the UTS certificates not tendered.
Section 1.5 Filing of Merger Documents. As soon as practicable
after the Closing Date, UTS and Newco shall, in accordance with
Section 1.1(e), cause this Agreement to be filed with
the Puerto Rico Department of State and UTS, Newco and Xxxxxx
will take such other and further actions as may be required
by the PRGCL in connection with such filing and in order to
complete the Merger.
Section 1.6 Approval of Board of Directors and Shareholders. The
parties acknowledge that Closing is contingent on obtaining
approval of the Merger by: (i) the Board of Directors of UTS,
Xxxxxx and Newco; and (ii) the shareholders of UTS and Newco.
In addition, the UTS shareholders receiving Merger Shares shall
have executed a Subscription Agreement and Investment Representation
Letter in form satisfactory to Xxxxxx.
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ARTICLE 2
MISCELLANEOUS PROVISIONS
Section 2.1 Amendment and Modification. To the fullest extent
provided by applicable law, this Agreement may be amended, modified
and supplemented with respect to any of the terms contained herein
by mutual consent of UTS and Xxxxxx pursuant to action by their
respective officers, duly authorized by their respective Boards
of Directors, by an appropriate written instrument executed at
any time prior to the Closing Date.
Section 2.2 Mediation and Arbitration; Forum. Any disputes
arising in connection with this Agreement shall be resolved
first by mediation, and if no resolution can be attained, then
by binding arbitration in accordance with the rules of the
American Arbitration Association. The arbitration shall
occur in the Denver, Colorado metropolitan area.
Section 2.3 Waiver of Compliance. To the fullest extent permitted
by law, each of Xxxxxx, Newco and UTS may, pursuant to action
by its respective officers, duly authorized by its Board of
Directors, by an instrument in writing extend the time for or
waive the performance of any of the obligations of the others
or waive compliance by the others with any of the covenants, or
waive any of the conditions to its obligations, contained herein.
No such extension of time or waiver shall operate as a waiver of,
or estoppel with respect to, any subsequent or other failure.
Section 2.4 Counterparts. This Agreement may be executed in
one or more counterparts, all of which shall be considered
one and the same agreement, and shall become effective when one
or more counterparts have been signed by each of the parties and
delivered to the other parties. Facsimile signatures shall have
the same force and effect as original signatures.
Section 2.5 Choice of Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Colorado.
Section 2.6 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered by hand
or overnight courier or mailed by registered or certified mail
(return receipt requested) to the parties at the following addresses
(or at such other addresses for a party as shall be specified by
like notice) and shall be deemed given on the date on which so
hand-delivered, or on the business day following the day on which
sent by overnight courier or on the third business day following
the date on which so mailed:
If to Xxxxxx or Newco:
Xxxxxx Systems International, Inc.
ATTN: Xxxxxxx Xxxxxxx, President
0000 X. Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Facsimile: 000-000-0000
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with a copy to:
Xxxxx, Figa & Will, PC
Attn: Xxxxxxx X. Xxxxxxxxx, Esq.
0000 X. Xxxxxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
If to UTS :
Urban Transit Solutions, Inc.
ATTN: Xxx Xxxxxxx, President
X.X. Xxx 00000
Xxx Xxxx, XX 00000-0000
Facsimile: 000-000-0000
Section 2.7 Descriptive Headings. The descriptive headings are
for convenience of reference only and sell not control or affect
the meaning or construction of any provision of this
agreement.
Section 2.8 Entire Agreement. This Agreement (including the Exhibits
and Schedules hereto) (a) constitutes the entire agreement, and
supersedes all other prior agreements and understandings, both written
and oral, among the parties, or any of them, with respect to the subject
matter hereof, (b) is not intended to and shall not confer upon
any person other than the parties hereto any rights or remedies
hereunder and (c) shall not be assignable by operation of law or
otherwise, without the written consent of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date and year first written above.
XXXXXX SYSTEMS INTERNATIONAL, INC.
By: ___/Xxxxxxx Xxxxxxx/________________
Xxxxxxx Xxxxxxx, President
KLANCY NEWCO, INC.,
a corporation to be formed under the PRGCL
By:_/Xxxxxxx Wolfson_________
Xxxxxxx Xxxxxxx, President
URBAN TRANSIT SOLUTIONS, INC.
By /Xxx Xxxxxxx/___________
Xxx Xxxxxxx, President
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