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Exhibit
10.6
BY AND AMONG
GMS CAPITAL CORP.
AND
METRATECH RETAIL SYSTEMS, INC.
RECITALS
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A.
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The
Boards of Directors of Company and Parent believe it is in the best
interests of their respective companies and the stockholders of
their respective companies that Company and the Parent complete a
reverse merger of the Company into the Parent through a share
exchange (the "Merger") and, in furtherance thereof, have approved
the Merger.
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B.
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Pursuant
to the Merger, among other things, the outstanding shares of
Company Common Stock ("Company Common Stock") shall be exchanged
for shares of Parent Common Stock ("Parent Common Stock"), at the
rate set forth herein.
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C.
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Company
and Parent desire to make certain representations and warranties
and other agreements in connection with the Merger.
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D.
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The
parties intend, by executing this Agreement, to adopt a plan of
reorganization within the meaning of Section 368 of the Internal
Revenue Code of 1986, as amended (the "Code"), and to cause the
Merger to qualify as a reorganization under the provisions of
Sections 368(a)(1)(B) of the Code, so that such exchange will
constitute a tax-free share exchange under the Code.
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NOW, THEREFORE , in consideration of the mutual covenants
and premises contained herein, and for other good and valuable
consideration, the receipt and adequacy of which are hereby
conclusively acknowledged, the parties hereto, intending to be
legally bound, agree as follows:
ARTICLE 1
THE MERGER
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1.1.
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THE MERGER . At the Closing Date (as defined in Section 1.2)
and subject to and upon the terms and conditions of this Agreement
including the exchange of shares described herein, the Company
shareholders shall receive shares of Common Stock of Parent (the
“Parent Common Stock”), the Parent shall receive all
the outstanding Common Stock of the Company presently owned by the
Company’s shareholders, and the Parent shall continue as the
surviving corporation. Parent as the surviving
corporation after the Merger is hereinafter sometimes referred to
as the "Surviving Corporation."
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1.2.
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CLOSING . The closing of the transactions contemplated
hereby (the "Closing") shall take place as soon as practicable
after the satisfaction or waiver of each of the conditions set
forth in Article VI hereof or at such other time as the parties
hereto agree (the "Closing Date"). The Closing shall be held at the
offices of the Company, or at such other location as the parties
hereto agree.
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1.3.
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EFFECT OF THE MERGER . At the Closing Date, the effect of
the Merger shall be as provided in this Agreement. Without limiting
the generality of the foregoing, and subject thereto, at the
Closing Date, the Company shall become a wholly owned subsidiary of
the Parent.
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1.4.
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CERTIFICATE OF INCORPORATION; BYLAWS .
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1.4.1.
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At
the Closing Date, the Articles of Incorporation of Parent shall be
the Articles of Incorporation of the Surviving
Corporation.
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1.4.2.
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The
Bylaws of Parent, as in effect immediately prior to the Closing
Date, shall be the Bylaws of the Surviving Corporation until
thereafter amended.
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1.5.
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DIRECTORS AND OFFICERS . At the Closing Date, the directors
of the Company shall be appointed as the directors of the Parent,
in each case until their successors are elected or appointed and
qualified, or until their earlier resignation or removal. The
officers of the Company shall be appointed as officers of the
Parent, until their respective successors are duly appointed and
qualified or until their earlier resignation or
removal.
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1.6.
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EFFECT ON CAPITAL STOCK . By virtue of the Merger and
without any action on the part of the Company or the holders of any
of the following securities:
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1.6.1.1.
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CONVERSION OF COMPANY COMMON STOCK . At the Closing Date,
(i) all of the shares of the Company’s Common Stock issued
and outstanding immediately prior to the Closing Date will be
transferred and assigned to the Parent in consideration for the
issuance of Two Million, Five Hundred and Seventy Eight Thousand
(2,578,000) shares of the Parent’s Common Stock (the
"Exchange Ratio") (the “Merger Consideration”)as
follows:.
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Shareholder
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# of shares issued
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Metratech
Business Solutions Inc.
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1,000,000
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Marcel
Côté
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600,000
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Spiro
Krallis
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582,500
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George
Samaan
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320,500
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Epicad
Design Inc.
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25,000
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Marc
Gagnon
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25,000
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9091-5000
Quebec Inc.
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25,000
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Total
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2,578,000
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Each
certificate evidencing shares represented by the Merger
Consideration issued pursuant to this Section 1.6.1 shall bear the
following legend (in addition to any legend required under
applicable state securities laws).
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THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED
UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT
COVERING SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH RULE
144 UNDER THE ACT, OR THE CORPORATION RECEIVES AN OPINION OF
COUNSEL FOR THE HOLDER OF THESE SECURITIES REASONABLY SATISFACTORY
TO THE CORPORATION STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR
HYPOTHECATION IS EXEMPT FROM REGISTRATION AND PROSPECTUS DELIVERY
REQUIREMENTS OF SUCH ACT."
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1.7.
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TAX CONSEQUENCES . It is intended by the parties hereto that
the Merger shall constitute a reorganization within the meaning of
Section 368 (a)(1)(B) of the Code.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES OF COMPANY
In
this Agreement, any reference to any event, change, condition
or effect being "material" with respect to any person means
any material event, change, condition or effect related to the
condition (financial or otherwise), properties, assets
(including intangible assets), liabilities, business,
operations or results of operations of such person and its
subsidiaries, taken as a whole. In this Agreement, any
reference to a "Material Adverse Effect" with respect to any
person means any event, change or effect that is materially
adverse to the condition (financial or otherwise), properties,
assets, liabilities, business, operations or results of
operations of such person and its subsidiaries, taken as a
whole.
In
this Agreement, any reference to a party's "Knowledge" means
such party's actual knowledge after reasonable inquiry of
executive officers and directors (within the meaning of Rule
405 under the Securities Act of 1933, as amended ("Securities
Act").
The
Company represents and warrants to Parent as
follows:
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2.1
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ORGANIZATION, STANDING AND POWER . The Company is a
corporation duly organized, validly existing and in good standing
in Canada, and no certificate of dissolution has been filed under
the laws of its jurisdiction of organization. The Company has the
power to own its properties and to carry on its business as now
being conducted and as presently proposed to be conducted, and is
duly authorized and qualified to do business and is in good
standing in each jurisdiction in which the failure to be so
qualified and in good standing would have a Material Adverse Effect
on Company. The Company is not in violation of any of the
provisions of its charter or bylaws or equivalent organization
documents.
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2.2
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AUTHORITY . The Company has all requisite corporate power
and authority to enter into this Agreement and to consummate the
transactions contemplated hereby and thereby. The execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by all
necessary corporate action on the part of Company, subject only to
the adoption of this Agreement by Company's stockholders holding a
majority of the outstanding shares of Company Common Stock. This
Agreement has been duly executed and delivered by Company and
constitutes the valid and binding obligation of Company enforceable
against Company in accordance with its terms, except as
enforceability may be limited by bankruptcy and other laws
affecting the rights and remedies of creditors generally and
general principles of equity. The execution and delivery of this
Agreement by Company does not, and the consummation of the
transactions contemplated hereby will not, conflict with, or result
in any violation of, or default under (with or without notice or
lapse of time, or both), or give rise to a right of termination,
cancellation or acceleration of any obligation or loss of any
benefit under (i) any provision of the Company Articles of
Incorporation or Bylaws of Company, as amended, or (ii) any
mortgage, indenture, lease, contract or other agreement or
instrument, permit, concession, franchise, license, judgment,
order, decree, statute, law, ordinance, rule or regulation
applicable to the Company or any of its properties or assets. No
consent, approval, order or authorization of, or registration,
declaration or filing with, any court, administrative agency or
commission or other governmental authority or instrumentality
("Governmental Entity") is required by or with respect to Company
in connection with the execution and delivery of this Agreement by
Company or the consummation by Company of the transactions
contemplated hereby.
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2.3
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ABSENCE OF CERTAIN CHANGES . The Company has no liabilities
or obligations (whether known or unknown, absolute, accrued,
contingent or otherwise and whether due or to become due) other
than as separately disclosed to the Parent .
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2.4
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COMPLIANCE WITH LAWS . The Company has complied
with and is not in violation of, and have not received any notices
of violation with respect to, any federal, state, provincial, local
or foreign statute, law or regulation with respect to the conduct
of its business, or the ownership or operation of its business,
except for such violations or failures to comply as would not be
reasonably expected to have a Material Adverse Effect on the
Company.
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2.5
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BROKERS' AND FINDERS' FEES
. The Company has not incurred, nor will it
incur, directly or indirectly, any liability for brokerage or
finders' fees or agents' commissions or investment bankers' fees or
any similar charges in connection with this Agreement or any
transaction contemplated hereby.
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2.6
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BOARD APPROVAL . The Board of
Directors and the holders of the majority of the voting stock of
Company has approved this Agreement and the Merger. The Board of
Directors has (i) determined that this Agreement and the Merger are
advisable and in the best interests of the stockholders of Company
and are on terms that are fair to such stockholders and (ii)
recommended that the stockholders of Company adopt and approve this
Agreement and the consummation of the
Merger.
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REPRESENTATIONS COMPLETE . None
of the representations or warranties made by Company herein or in
any Schedule hereto, including the Company Disclosure Schedule, or
certificates furnished by Company pursuant to this Agreement, when
all such documents are read together in their entirety, contains or
will contain at the Closing Date any untrue statement of a material
fact, or omits or will omit at the Closing Date to state any
material fact necessary in order to make the statements contained
herein or therein, in the light of the circumstances under which
made, not misleading. All projected, forecasted or prospective
financial information provided by Company to Parent has been
prepared in good faith on the basis of assumptions that the Company
believes are reasonable and supportable.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT
Parent
represents and warrants to the Company as
follows:
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ORGANIZATION, STANDING AND POWER . Parent is a
corporation duly organized in the state of Florida and no
certificates of dissolution have been filed under the laws of its
jurisdiction of organization. Parent represents and warrants that
Parent has filed all applicable annual reports in the State of
Florida, as required. Parent has the power to own its properties
and to carry on its business as now being conducted and as
presently proposed to be conducted and is duly authorized and
qualified to do business and is in good standing in each
jurisdiction in which the failure to be so qualified and in good
standing would have a Material Adverse Effect on
Parent.
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CAPITAL STRUCTURE . The authorized capital stock of Parent
consists of 125,000,000 shares of common stock, $0.001 par value.
There are presently 0 shares issued and
outstanding. All outstanding shares of Parent
Common Stock are duly authorized, validly issued, fully paid and
non-assessable and are free of any liens or encumbrances other than
any liens or encumbrances created by or imposed upon the holders
thereof, and are not subject to preemptive rights or rights of
first refusal created by statute, the Articles of Incorporation or
Bylaws of Parent or any agreement to which Parent is a party or by
which it is bound. There are no contracts, commitments or
agreements relating to voting, purchase or sale of Parent's capital
stock (i) between or among Parent and any of its stockholders and
(ii) to the best of Parent's knowledge, between or among any of
Parent's stockholders.
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AUTHORITY. Parent has all requisite corporate power and
authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary
corporate action on the part of Parent. This Agreement
has been duly executed and delivered by Parent a and constitutes
the valid and binding obligations of Parent enforceable against
Parent a in accordance with its terms, except as enforceability may
be limited by bankruptcy and other laws affecting the rights and
remedies of creditors generally and general principles of equity.
The execution and
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