AGREEMENT OF MERGER
THIS AGREEMENT OF MERGER (hereinafter called "this Agreement"),
effective as of the 26th 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 ("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 parties may
mutually agree upon (the "Closing Date"), the parties shall execute
such documents as may be necessary to consummate the Closing.
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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: /s/Xxxxxxx X. Xxxxxxx
Xxxxxxx Xxxxxxx, President
KLANCY NEWCO, INC.
By:/s/Xxxxxxx X. Xxxxxxx
Xxxxxxx Xxxxxxx, President
URBAN TRANSIT SOLUTIONS, INC.
By: /s/Xxx Xxxxxxx
Xxx Xxxxxxx, President
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