EXHIBIT 1(3)
Ontario Corporation Number
Numero de la compagnie en
Ontario
1148160
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Trans Line Comp Method
Code No. Stat Type Incorp. Share
Director / Directeur ------- ------- ------ ------ -------- -------
Business Corporation Act / Lot sur les sociates par actions A O O A 3 S
------- ------- ------ ------ -------- -------
18 20 28 29 30 31
Notice Jurisdiction
Req'd
------- ------------------------------- -------
N ONTARIO A
------- ------------------------------- -------
32 33 47 57
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ARTICLES OF AMALGAMATION
STATUTS DE FUSION
1. The name of the amalgamated corporation is: Denomination sociale de la compagnie issue de la fusion:
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P E N S T A R W I R E C O M , L T D .
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2. The address of the registered office is: Address du siege social:
95 WELLINGTON STREET WEST, SUITE 904, BOX 44
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(Street & Number or R.R. Number & Multi-Office Building give Room No.)
(Rue et numero ou numero de la R.R. et, s'il s'agit d'un edifice a bureaux,
numbero du bureau)
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CITY OF TORONTO M 5 J 2 N 7
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(Name of Municipality or Post Office) (Postal Code)
(Nom de la municipalite ou du bureau de poste) (Code postal)
MUNICIPALITY OF
CITY OF TORONTO in METROPOLITAN TORONTO
- --------------------------------- dans le/la ---------------------------------
(Name of Municipality, Geographic County, District, Regional
Township)(Nom de la municipalite Municipality)(Comte, district,
du carton) municipalite, regionale)
3. Number (or minimum and maximum number) NOMBRE (OU NOMBRES MINIMAL ET
of directors is: MAXIMAL) D'ADMINISTRATEURS:
A MINIMUM OF THREE (3) AND A MAXIMUM OF TEN (10).
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4. The director(s) is/are:
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Resident
PREMIER(S)_ ADMINISTRATEUR(S): Canadian
State
First name, initials and last name Residence address, giving Street & No. or R.R. No., Yes or NO
PRENOM, INITIALES ET NOM DE FAMILLE Municipality and postal code
RESIDENT
ADRESSE PERSONNELLE, Y COMPRIS LA RUE ET LE NUMERO, CANADIEN
LE NUMERO DE LA R.R., LE NOM DE LA MUNICIPALITE OUI/NON
ET LE CODE POSTAL
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FREDERICK H. SCHUCHARDT 2 MT. WITTENBURG COURT NO
SAN RAFAEL, CALIFORNIA 94903-1058
CHARLES P. MASON, III 665 SAN MARTIN PLACE NO
LOS ALTOS, CALIFORNIA 94024
JOHN R. MOSES 280 SIMCOE STREET, P.H. #8 YES
TORONTO, ONTARIO M5T 2Y5
MURRAY R. NYE 280 MCLEAN STREET YES
WINNIPEG, MANITOBA R3R 0V7
MAX A. POLINSKY 425 CORDOVA STREET YES
WINNIPEG, MANITOBA R3N 1A5
5. A) The amalgamation agreement has A) Les actionnaires de chaque
been duly adopted by the compagnie qui fusionne ont
shareholders of each of the dument adopte la convention de
amalgamating corporations as fusion conformement au
required by subsection 176(4) paragraphe 176(4) de la Loi sur
of the Business Corporation Act les compagnies a la date
on the date set out below. mentionnee ci-dessous.
/ X /
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Check Cocher
A or B A ou B
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/ /
B) The amalgamation has been B) Les administrateurs de chaque
approved by the directors of each compagnie qui fusionne ont
amalgamating corporation by a approuve a l'article 177 de la
resolution as required by section 177 Loi sur les compagnies a la
of the Business Corporations Act on date mentionnee ci-dessous. Les
the date set out below. statuts de fusion reprennent
The articles of amalgamation in essentiellement les
substance contain the provisions of dispositions des statuts
the articles of incorporation of constitutifs de
and are more particularly set out et sont enonces textuellement
in these articles. aux presents statuts.
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Names of amalgamating corporations Ontario Corporation Number Date of Adoption/Approval
Denomination sociale des compagnies qui fusionnent Numero de la compagnie en Ontario Date d'adoption ou d'approbation
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PENSTAR WIRECOM, LTD. 1092964 APRIL 19, 1995.
WINTEROAD RESOURCES LIMITED 395388 APRIL 19, 1995.
6. Restrictions, if any, on business the Limites, s'il y a lieu, imposees
corporation may carry on or on powers aux activities commerciales ou aux
the corporation exercise. pouvoirs de la compagnie.
NO RESTRICTIONS
7. The classes and any maximum number of Categories et nombre maximal,
shares that the corporation is s'il y a lieu, d'actions que la
authorized to issue: compagnie est autorisee a emettre
AN UNLIMITED NUMBER OF COMMON SHARES.
8. Rights, privileges, restrictions and Droits, privileges, restrictions
conditions (if any) attaching to each et conditions, s'il y a lieu,
class of shares and directors rattaches a chaque categorie
authority with respect to any class d'actions et pouvoirs des
of shares which may be issued in administrateurs relatifs a chaque
series: categorie d'actions qui peut etre
emise en serie:
The rights, privileges, restrictions and conditions attaching to the
Common Shares shall be as follows:
(a) VOTING
(i) Holders of Common Shares shall be entitled to receive notice of and to
attend and vote at all meetings of shareholders of the Corporation, except
meetings of holders of another class of shares. Each Common Share shall entitle
the holder thereof to one vote.
(b) DIVIDENDS
(i) Common Shares from time to time with respect to the payment of
dividends, holders of Common Shares shall be entitled to receive, if, as and
when declared by the Board of Directors, such dividends as may be declared
thereon by the Board of Directors from time to time.
(c) LIQUIDATION, DISSOLUTION OR WINDING-UP
(i) In the event of the voluntary or involuntary liquidation, dissolution
or winding-up of the Corporation, or any other distribution of its assets among
its shareholders for the purpose of winding-up its affairs (such event referred
to herein as a "Distribution"), holders of Common Shares shall be entitled to
share equally, share for share, in the remaining property of the Corporation.
9. The issue, transfer or ownership of 10. L'emission, le transfert ou la
shares is/is not restricted and the propriete d'actions est/n'est
restrictions (if any) are as follows: pas restreinte. Les
restrictions, s'il y a lieu,
sont les suivantes:
NO RESTRICTIONS
11. Other provisions (if any): Autres dispositions, s'il y a
lieu:
NONE.
12. The statements required by subsection Les declarations exigees aux
178(2) of the Business Corporations termes ou paragraphe 178(2) de
Act are attached as Schedule "A". la Loi sur les compagnies
constituent l'annexe "A".
13. A copy of the amalgamation agreement Une copie de la de fusion ou
or directors convention (as the case les resolutions ces
may be) is/are attached as Schedule "B". resolutions ces
administrateurs (selon le cas)
constitute(nt) l'annexe "B".
These article are signed in duplicate. Les presents status sont
signes en double exemplaire
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Names of the amalgamating corporations and Denomination sociale des
signatures and descriptions of office of compagnies qui fusionnent,
their proper officers. signature et fonction de leurs
dirigeants regulierement
designes.
PENSTAR WIRECOM, LTD. WINTEROAD RESOURCES LIMITED
Per: Per:
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President President
SCHEDULE "A"
STATEMENT OF DIRECTOR OR OFFICER
PURSUANT TO SUBSECTION 177(2) OF
THE BUSINESS CORPORATIONS ACT, 1982
I, JOHN R. MOSES. of the City of Toronto, in the Municipality of Metropolitan
Toronto, hereby certify and state as follows:
1. This Statement is made pursuant to subsection 177(2) of the Business
Corporations Act, 1982 (the "Act").
2. I am the President of Winteroad Resources Limited ("WINTEROAD") and as
such have knowledge of its affairs.
3. I have conducted such examinations of the books and records of
Winteroad as are necessary to enable me to make the statements
hereinafter set forth.
4. There are reasonable grounds for believing that (i) Winteroad is, and
the corporation to be formed by the amalgamation of Winteroad and
PenStar Wirecom, Ltd. will be, able to pay its liabilities as they
become due, and (ii) the realizable value of such amalgamated
corporation's assets will not be less than the aggregate of its
liabilities and the stated capital of all classes.
5. There are reasonable grounds for believing that no creditor of either
of the amalgamating corporations will be prejudiced by the
amalgamation.
6. No creditor of Winteroad has notified such corporation that he objects
to the amalgamation.
7. Based on the statements made above, Winteroad is not obligated to given
notice to any creditor.
This Statement is made on the 19th day of April, 1995.
-----------------------------------
JOHN R. MOSES, PRESIDENT
CANADA
IN THE MATTER of the ONTARIO BUSINESS
PROVINCE OF ONTARIO CORPORATIONS ACT and the articles of
amalgamation of Penstar Wirecom, Ltd. and
CITY OF TORONTO Winteroad Resources Limited.
TO WIT:
I, Frederick Schuchardt, of the City of San Rafael, in the State of
California, do solemnly declare that:
1. I am a director of Penstar Wirecom, Ltd. ("Penstar") and as such have
personal knowledge of the matters herein declared to.
2. I have conducted such examinations of the books and records of Penstar
and have made such enquiries and investigations as are necessary to enable me to
make this declaration.
3. I have satisfied myself that:
(a) Penstar, and the corporation (the "Amalgamated Corporation") to be
formed from the amalgamation of Penstar and Winteroad Resources
Limited will be, able to pay its liabilities as they become due;
and
(b) the realizable value of the assets of the Amalgamated Corporation
will not be less than the aggregate of its liabilities and stated
capital of all classes.
4. There are reasonable grounds for believing that no creditor will be
prejudiced by the amalgamation.
And I make this solemn declaration conscientiously believing the
same to be true and knowing that it is of the same force and effect as if made
under oath and by virtue of the CANADA EVIDENCE ACT.
DECLARED BEFORE ME at the City of )
Toronto, in the Province of Ontario, )
this 19th day of April, A.D. 1995. )
)
)
)
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Charles L.K. Higgins, a Notary Public Frederick Schuchardt
In and for the Province of Ontario
SCHEDULE "B"
THE AMALGAMATION AGREEMENT dated as of March 14, 1995.
BETWEEN:
WINTEROAD RESOURCES LIMITED, a corporation
incorporated under the laws of Ontario,
(hereinafter called "WINTEROAD") OF THE FIRST PART
-and-
PENSTAR WIRECOM, LTD., a corporation
incorporated under the laws of Ontario,
(hereinafter called "PENSTAR") OF THE SECOND PART
WHEREAS Winteroad and PenStar have agreed to complete an amalgamation
under the BUSINESS CORPORATIONS ACT (ONTARIO) (hereinafter referred to as the
"BCA') whereby they will amalgamate and continue under the name PenStar Wirecom,
Ltd.;
AND WHEREAS upon the amalgamation being effective, shares of each of
the Amalgamating Corporations (as defined below) will be exchanged for shares of
Amalco;
NOW THEREFORE THIS AGREEMENT WITNESSETH THAT THE PARTIES HERETO
COVENANT AND AGREE AS FOLLOWS:
1. ARTICLE ONE - Definitions
1.1 In this Agreement:
"Agreement" means this Amalgamation Agreement;
"Amalco" means the continuing corporation constituted upon the
Amalgamation becoming effective;
"Amalco Shares" means the common shares without nominal or par value in
the capital of Amalco;
"Amalgamating Corporations" means Winteroad and PenStar;
"Amalgamation" means the amalgamation of Winteroad and PenStar pursuant
to the BCA as contemplated by this Agreement;
"Business Day" means a day on which securities may be quoted for
trading through the Canadian Dealing Network ("CDN");
"Dissenting Shareholders" means holders of Winteroad Shares or PenStar
Shares who exercise rights of dissent in the manner set forth in
Section 185 of the BCA with respect to the Amalgamation:
"Effective Date" means the date set forth in the Certificate of
Amalgamation issued pursuant to the BCA with respect to the
Amalgamation.
"Escrowed Winteroad Shares" means the 1,325,000 Winteroad Shares held
in escrow.
"PenStar Shares" means the common shares without nominal or par value
in the capital of PenStar as constituted on the date hereof;
"Information Circular" means a joint management information circular
which will accompany the notices of shareholders meetings of Winteroad
and PenStar called, among other things, to approve and adopt this
Agreement;
"Transfer Agent" means the transfer agent for the Amalco Shares,
"Winteroad Statements" means the audited financial statements of
Winteroad for the fiscal year ended September 30, 1994 and comparative
financial statements for the fiscal year ended September 30, 1993,
together with the notes and auditor's report thereto set out in
Schedule "A" hereto;
"Winteroad Shares" means the common shares without nominal or par value
in the capital of Winteroad as constituted on the date hereof.
1.2 Unless the context otherwise requires, words and phrases used herein
that are defined in the BCA shall have the same respective meaning
herein as in BCA.
2. ARTICLE TWO - Representations and Warranties
2.1 Winteroad represents and Warrants to and agrees with PenStar that:
2.1.1 Winteroad is a corporation duly incorporated and organized
and validly subsisting under the BCA and has the corporate
power and authority to own or lease its assets as now owned
or leased and to carry on its business as now carried on and
holds all necessary federal, provincial arid municipal
governmental licenses, permits and authorizations in
connection therewith;
2.1.2 the authorized capital of Winteroad consists of an unlimited
number of common shares of which 5,897,250 Winteroad Shares
are validly issued and outstanding at the date hereof as
fully paid and non-assessable shares;
2.1.3 Only 1,325,000 of the issued and outstanding, existing
Winteroad Shares are held in escrow.
2.1.4 Winteroad has the corporate power and authority to enter into
this Agreement and, subject to obtaining the requisite
approvals contemplated hereby, to perform its obligations
herewith;
2.1.5 no person, firm or corporation has any agreement, warrant or
option, or any right capable of becoming an agreement,
warrant or option, for the purchase or issue of any unissued
shares in the capital of Winteroad, except as disclosed
herein;
2.1.6 the Winteroad Statements are complete and accurate and
present fairly the financial position of Winteroad and have
been prepared in accordance with Canadian generally accepted
accounting principles applied on a consistent basis;
2.1.7 there have been no changes since September 30, 1994 in the
condition, financial or otherwise, or in the results of
operations of Winteroad from that shown on or reflected in
the Winteroad Statements which have had or may reasonably be
expected to have a materially adverse effect on the business,
prospects, property, financial condition or results of
operations of Winteroad taken as a whole;
2.1.8 since the date of the Winteroad Statements, Winteroad has not
acquired any assets or incurred any liabilities of any
nature, contingent or otherwise;
2.1.9 since the date of the Winteroad Statements, Winteroad has
conducted its business in the ordinary course, except as
otherwise disclosed herein;
2.1.10 the execution and delivery of this Agreement and the
completion of the transactions contemplated herein have been
duly authorized by the board of directors of Winteroad and
this Agreement constitutes a valid and binding obligation of
Winteroad enforceable against it in accordance with its
terms;
2.1.11 Winteroad is not in breach or violation of any provisions of
its constating documents, its by-laws or any agreements or
instruments to which it is a party (whether oral or written)
or to which any of its assets are subject;
2.1.12 none of the execution and delivery of this Agreement, the
consummation of the Amalgamation and the fulfillment of and
compliance with the terms and provisions hereof will (i)
result in or constitute a default under, the articles or
by-laws of Winteroad or any agreement to which Winteroad is a
party or any Winteroad assets are bound, (ii) constitute an
event which would permit any party to any agreement with
Winteroad to terminate such agreement or to accelerate the
maturity of any indebtedness of Winteroad or other obligation
of Winteroad, or (iii) result in the creation of imposition
of any encumbrance upon the Winteroad Shares or any assets of
Winteroad;
2.1.13 there is no legal, arbitrable, governmental or other action,
proceeding, or investigation pending or threatened against or
otherwise affecting Winteroad or any of its assets and, to
the best of its knowledge, Winteroad is not aware of any
event or events which have occurred that could give rise to
any such action, proceeding or investigation;
2.1.14 Winteroad has not declared or paid any dividend or other-wise
made any distribution of any kind to shareholders and
Winteroad has not disposed of or entered into any agreement
to dispose of any of its assets or incurred indebtedness,
except as disclosed herein;
2.1.15 to the best of its knowledge, information and belief, is in
compliance wit all applicable governmental, judicial and
administrative laws, by-laws, regulations and orders relevant
to Winteroad's corporate existence, operations or properties
and the execution and delivery of this Agreement will not
violate such laws, by-laws, regulations and orders;
2.1.16 Winteroad is a "reporting issuer" as defined in the
securities legislation of Ontario and is not in default of
any filings required to be made pursuant thereto or the
regulations made thereunder;
2.1.17 the Winteroad Shares are quoted for trading on the CDN;
2.1.18 Winteroad is not a party to any:
2.1.18.1 contract or commitment for the employment of any
officer, individual, employee or agent or any oral
or written agreement to pay any director, officer,
shareholder or employee (or any person related
thereto) any amount for the purchase or supply of
materials, supplies, equipment or services, or any
amount by reason of or arising out of or related to
this Agreement or the transactions contemplated
hereby;
2.1.18.2 contract with or commitment to any labour union or
employee association, and there are no current
attempts by any employee to organize or establish
any labour union or employee association of
Winteroad;
2.1.18.3 contract with an unexpired term of one year or
more;
2.1.18.4 lease or agreement in the nature of a lease,
whether as lessor or lessee;
2.1.18.5 continuing material contract or commitment for the
purchase or supply of materials, supplies,
equipment or services;
2.1.18.6 bonus, pension, profit sharing, deterred
compensation. retirement, hospitalization,
insurance or similar plan or practice, formal or
informal, in effect with respect to employees or
others;
2.1.18.7 contract or commitment for the purchase or sale of
any fixed or capital assets; or
2.1.18.8 contract or commitment not made in the ordinary
course of business;
2.1.19 Winteroad has timely filed all taxed returns required to be
filed by it under all applicable income tax and other
taxation legislation; all such filings are substantially
true, complete and correct and all amounts of taxes due and
owing have been paid;
2.1.20 There are no actions, suits or other proceedings,
investigations, ongoing audits, claims or proposed
deficiencies now threatened or pending against Winteroad in
respect of taxes, governmental charges or assessments;
Winteroad has properly withheld ad remitted all amounts
required to be withheld and remitted by it in respect of
taxes; Winteroad is not aware of any contingent tax
liabilities or any grounds that could prompt an assessment or
reassessment and Winteroad has not received any indication
from any taxation authorities that an assessment or
reassessment, regardless of its merits, is proposed or under
consideration;
2.1.21 Winteroad has been and is in compliance with all federal,
provincial, municipal or local laws, regulations, orders,
government decrees or ordinances with respect to environment,
health and safety matters (collectively "Environmental Laws")
and has not received any written notice of non-compliance and
does not know, or does not have reasonable grounds to know,
of any facts which would give rise to a notice of
non-compliance and for greater certainty and without limiting
the foregoing:
2.1.21.1 there have been no unrectified spills, releases,
deposits or discharges of hazardous or toxic
substances, contaminants or wastes on any of the
real property owned or leased by Winteroad or under
its control, nor has any such real property been
used at any time by any person as a landfill or
waste disposal site;
2.1.21.2 there have been no material releases, deposits or
discharges, in violation of environmental Laws, of
any hazardous or toxic substances, contaminants or
wastes into the earth, air or into any body of
water or any municipal or other sewer or drain
water systems by Winteroad;
2.1.21.3 no orders, directions or notices have been issued
and remain outstanding pursuant to any
Environmental Laws relating to the business or
assets of Winteroad;
2.1.21.4 Winteroad has not received any notification
pursuant to any Environmental Laws that any work,
repairs, construction or capital expenditures are
required to be made by it as a condition of
continued compliance with any Environmental Laws,
or any license, permit or approval issued pursuant
thereto, or that any license, permit or approval
referred to above is about to be reviewed, made
subject to limitations or conditions, revoked
withdrawn or terminated;
2.1.22 the information contained in the Information Circular related
to Winteroad will be true, correct and complete in all
material respects and will not contain any untrue statement
of any material fact or omit to state any material fact
required to be stated therein or that is necessary in order
to make the statement not misleading in light of the
circumstances in which it was made.
2.2 PenStar represents and warrants to and agrees with Winteroad that:
2.2.1 PenStar is a corporation duly incorporated and organized and
validly subsisting under the BCA and has the corporate power
and authority to own or lease its assets as now owned or
leased and to carry on its business as now carried on and
holds all necessary federal, provincial or State and
municipal governmental licenses, permits and authorizations
in connection therewith:
2.2.2 the authorized capital of PenStar consists of an unlimited
number of common shares of which 7,810,645 common shares are
validly issued and outstanding at the date hereof as fully
paid and non-accessible shares;
2.2.3 PenStar has the corporate power and authority to enter into
this Agreement;
2.2.4 no person, firm or corporation has any agreement, warrant or
option, or any right capable of becoming an agreement,
warrant or option, for the purchase of any unissued shares in
the capital of PenStar, except as disclosed in the
Information Circular;
2.2.5 the audited financial statements of PenStar for the period
ending December 31, 1994, together with the notes thereto
(the "PenStar Statements"), present fairly the financial
position of PenStar and have been prepared in accordance with
generally accepted accounting principles applied on a
consistent basis;
2.2.6 there have been no changes since December 31, 1994 in the
condition, financial or otherwise, or in the results of
operations of PenStar as shown on or reflected in the PenStar
Statements which have had or may reasonably be expected to
have a materially adverse effect on the business, prospects,
property, financial condition or results of operations of
PenStar taken as a whole;
2.2.7 none of the execution and delivery of this Agreement, the
consummation of the Amalgamation and the fulfillment of and
compliance with the terms and provisions hereof will (i)
result in or constitute a default under, the articles or
by-laws of PenStar or any agreement to which PenStar is a
parry or any PenStar assets are bound, (ii) constitute an
event which would permit any parry to any agreement with
PenStar to terminate such agreement or to accelerate the
maturity of indebtedness of PenStar or other obligation of
PenStar, or (iii) result in the creation of imposition of any
encumbrances upon the PenStar Shares or any assets of
PenStar,
2.2.8 there is no legal. arbitrable, governmental or other action,
proceeding or investigation pending or threatened against or
otherwise affecting PenStar or any of its assets and. to the
best of its knowledge, PenStar is not aware of any event or
events which have occurred that could give rise to any such
action, proceeding or investigation;
2.2.9 PenStar has not declared or paid any dividend or otherwise
made any distribution of any kind to shareholders and PenStar
has nor disposed of or entered into any agreement to dispose
of any of its assets or incurred indebtedness, of PenStar as
disclosed herein;
2.2.10 to the best of its knowledge, information and belief, PenStar
is in compliance with all applicable governmental laws,
by-laws, regulations and orders relevant to PenStar's
corporate existence, operations or properties;
2.2.11 PenStar is a private company and is not a reporting issuer in
any jurisdiction; and
2.2.12 the information in the Information Circular relating to
PenStar will be true, correct and complete in all material
respect and will nor contain any untrue statement of any
material fact or omit to State any material fact required to
be stated therein or necessary in order to make the
statements therein nor misleading in light of the
circumstances in which they were made.
2.3 The representations and warranties herein shall survive the performance
of the parties' respective obligations hereunder and the termination of this
Agreement but all representations and warranties shall expire two years after
the Effective Date, except for representations and warranties relating to tax
matters or matters involving environmental liabilities which shall expire four
years and six years after the Effective Date, respectively.
3. ARTICLE THREE - Conditions Precedent
3.1 The respective obligations of PenStar and Winteroad to complete the
transaction contemplated by this Agreement shall be subject to the satisfaction,
on or before the effective Date, of the following conditions:
3.1.1 the shareholders of each of Winteroad and PenStar shall have
approved this Agreement and the transactions contemplated
thereby as required by the BCA:
3.1.2 all necessary regulatory approvals have been obtained
including, without limitation, any approvals required for the
continued trading of Amalco Shares on the CDN.
3.2 The obligation of PenStar to complete the transaction contemplated by
this Agreement is subject to the satisfaction, on or before the Effective Date,
of the following conditions, any of which may be waived by PenStar in whole or
in part without prejudice to PenStar's right to rely on any other condition in
favour of PenStar.
3.2.1 The Escrowed Winteroad Shares shall have been cancelled.
3.2.2 The covenants of Winteroad to be performed on or before the
Effective Date pursuant to the terms of this Agreement shall
have been duly performed.
3.2.3 Winteroad shall have furnished PenStar with certified copies
of resolutions duly passed by the board of directors of
Winteroad approving dais Agreement and the completion of the
transactions contemplated hereunder.
3.2.4 All of the assets and liabilities of Winteroad shall have
been transferred to Subco in accordance with Section 4.2
hereof.
3.2.5 PenStar shall have received from Subco an indemnity, in a
form satisfactory to PenStar, indemnifying and saving PenStar
harmless from any and all actions, causes of action, claims
and demands of any kind or nature whatsoever arising as a
result of the transactions contemplated herein.
3.2.6 The number of Winteroad Shares or PenStar Shares held by
shareholders who are Dissenting Shareholders (and who have
not withdrawn their dissent in accordance with the BCA) shall
not be a material number in the opinion of the board of
directors of PenStar.
3.2.7 The representations and warranties of Winteroad set out in
this Agreement shall be true and correct on the Effective
Date (before giving affect to the Amalgamation) as if made on
and as of the Effective Date.
3.3 The obligation of Winteroad to complete the transactions contemplated
by this Agreement is subject to the satisfaction, on or before the Effective
Date, of the following conditions, any of which may be waived by Winteroad in
whole or in pan without prejudice to Winteroad's right to rely on any other
condition in favour of Winteroad.
3.3.1 The covenants of PenStar to be performed on or before the
Effective Date pursuant to the terms of this Agreement shall
have been duly performed.
3.3.2 PenStar shall have Furnished Winteroad with certified copies
of resolutions duly passed of the board of directors of
PenStar approving this Agreement and the completion of the
transactions contemplated hereunder.
3.3.3 The Share Exchange Agreement among PenStar, Frederick H.
Schuchardt and Charles P. Mason III has been completed.
3.3.4 The representations and was warranties of PenStar set out in
this Agreement shall be true and correct on the Effective
Date (before giving effect to the Amalgamation) as if made on
and as of the Effective Date.
4. ARTICLE FOUR - Covenants
4.1 Each party hereto agrees with the other that:
4.1.1 Neither Winteroad nor PenStar will prior to or on the
Effective Date allot or issue any shares of its capital or
enter into any agreement except this Agreement providing *for
the issue of shares of its capital.
4.1.2 Winteroad will use its best efforts to cause the resignation,
effective as of the Effective Date, of such directors and
officers of Winteroad as requested by PenStar.
4.2 Prior co the Effective Date, Winteroad shall create a wholly-owned
subsidiary ("Subco"). Winteroad will pay all outstanding liabilities, including
the costs of the forthcoming annual and special meeting of shareholders at which
the approval of the shareholders is being sought for this transaction. All of
the remaining assets of Winteroad, including its mining property, will be
transferred to Subco. Additionally, Subco will assume all rights and liabilities
under all executory agreements such as leases and royalty agreements currently
held by Winteroad. The shares of Subco will be distributed to the existing,
shareholders of Winteroad as a return of stated or paid up capital and the
deficiency will be reduced, if approved by the shareholders.
5. ARTICLE FIVE - Amalgamation
5.1 The Amalgamating Corporations hereby agree to amalgamate pursuant to
the provisions of the BCA and to continue as one corporation on the terms and
conditions set forth in this Agreement.
5.2 Each of Winteroad and PenStar shall call and hold a meeting of
shareholders in accordance with the BCA and applicable securities laws for the
purpose of approving the Agreement as required by the BCA
5.3 On the Effective Date, the Amalgamation shall become effective; the
property of each Amalgamating Corporation shall continue to be the property of
Amalco; Amalco shall continue to be liable for the obligations of each
Amalgamating Corporation: any existing cause of action, claim or liability to
prosecution shall be unaffected; any civil, criminal or administrative action or
proceeding pending by or against an Amalgamating Corporation may be continued to
be prosecuted by or against Amalco; any conviction against, or ruling under a
judgment in favour of or against, an Amalgamating Corporation may be enforced by
or against Amalco; and the Articles of Amalgamation shall be deemed to be the
Articles of Incorporation of Amalco;
5.4 On the Effective Date, the share certificates evidencing Winteroad
Shares shall cease to represent any claim upon or interest in Winteroad or
Amalco, but rather shall represent only the right of the holder of such
Winteroad Shares to receive a certificate representing Amalco Shares in
denominations as determined in accordance with the terms of this Agreement and
the Amalgamation.
6. ARTICLE SIX - Amalco
6.1 The name of Amalco shall be PenStar Wirecom, Ltd.
6.2 There shall be no restriction on the business which Amalco is
authorized to carry on.
6.3 The registered office of Amalco until changed by the Board of
Directors, shall be Suite 906, 95 Wellington Street West, Toronto, Ontario. M5J
2N7.
6.4 Amalco shall be authorized to issue an unlimited number of common
shares. herein defined as "Amalco Shares".
6.5 The rights, privileges, restrictions and conditions attaching to the
Amalco Shares as a class are as follows:
6.5.1 one vote for each Amalco Share held at all meetings of
shareholders of Amalco, ocher than meetings at which the
holders of another specified class or series of shares are
entitled to vote separately as a class or series;
6.5.2 receive any dividend declared by the Board of Directors of
Amalco in respect of the Amalco Shares; and
6.5.3 subject to the prior rights of the holders of any class of
shares ranking senior the Amalco Shares, to receive the
remaining property of Amalco in the event of liquidation,
dissolution or winding-up of Amalco, whether voluntarily or
involuntarily, or any other distribution of the assets of
Amalco among its shareholders for the purpose of winding-up
its affairs.
6.6 There shall be no restrictions on the issue, transfer or ownership of
shares in the capital of Amalco.
6.7 The Board of Directors of Amalco shall, until otherwise changed in
accordance with the BCA, consist of a minimum of three and a maximum of ten
directors, the number of which shall be fixed from time to time by the
directors.
6.8 On the Effective Date, the number of directors shall be 5. The first
directors of Amalco shall be the persons whose names and addresses appear below.
NAME AND PROPOSED OFFICE (IF ANY) ADDRESS RESIDENCY
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Frederick H. Schuchardt San Rafael, California American
President and Chief Executive
Officer (CEO) and Director
Charles P. Mason III Los Altos, California American
Director
John R. Moses Toronto, Ontario Canadian
Director
Murray R. Nye Winnipeg, Manitoba Canadian
Secretary and Director
Max A. Polinsky Winnipeg, Manitoba Canadian
Director
6.9 The by-laws of Amalco, until repealed, amended or altered shall be as
set out in the Information Circular. The by-laws may be examined at Suite 906,
95 Wellington Avenue West, Toronto, Ontario, M5J 2N7.
6.10 The initial Auditors of Amalco shall be KPMG Peat Marwick Thorne,
Chartered Accountants, the auditors of Winteroad, or such other auditors as
Winteroad and PenStar mutually designate prior to the Effective Date.
6.11 The initial Registrar and Transfer Agent of Amalco shall be Equity
Transfer Services Inc., Suite 800, 120 Adelaide St. W., Toronto, Ontario MSH
3VI.
7. ARTICLE SEVEN - Conversion of Shares
7.1 Subject to sections 8.1 and 9. 1, the shares in the capital of
Winteroad and PenStar which are issued and outstanding prior to the Effective
Date shall, on and from the Effective Date, be converted into issued and
outstanding shares in the capital of Amalco as follows:
7.1.1 each three (3) issued and outstanding Winteroad Shares (other
than Winteroad Shares held by registered holders who have
exercised dissent rights in accordance with section 185 who
are ultimately entitled to be paid fair value for such
shares) shall be converted into one (1) issued, fully paid
and non-assessable Amalco Share; and
7.1.2 each one (1) issued and outstanding PenStar Share (other than
PenStar Shares held by registered holders who have exercised
dissent rights in accordance with section 135 who are
ultimately entitled to be paid fair value for such shares)
shall be convened into one (1) issued, fully-paid and
non-assessable Amalco Share.
7.2 In accordance with the terms of the options and warrants issued by
Winteroad and PenStar which are outstanding on the date hereof, upon the
Amalgamation becoming effective such outstanding options and warrants will
become outstanding options and warrants to purchase Amalco Shares upon the same
terms and subject, to appropriate adjustments.
8. ARTICLE EIGHT - Fractional Shares
8.1 Fractional Amalco Shares will not be issued. A holder of Winteroad
Shares or PenStar Shares who would otherwise be entitled to receive a fraction
of an Amalco Share shall be issued a whole Amalco Share.
9. ARTICLE NINE - Dissenting Shareholders
9.1 Dissenting Shareholders who:
9.1.1 ultimately are entitled to be paid fair value for their
Winteroad Shares or PenStar Shares shall be deemed to have
had their Winteroad Shares or PenStar Shares, as the case may
be, cancelled on the Effective Date and Amalco shall not be
required to recognize such holders as shareholders of Amalco
from and after the Effective Date and the names of such
holders shall be deleted from the register of holders of
Amalco Shares from and after the Effective Date, and
9.1.2 ultimately are riot entitled to be paid fair value, for any
reason, for their Winteroad Shares or PenStar Shares, shall
be deemed to have participated in the Amalgamation as of and
from the Effective Date on the same basis as the
non-dissenting shareholders and shall be deemed to have
converted their Winteroad Shares or PenStar Shares, as the
case may be, into Amalco Shares on the Effective Date as
provided in sections 7.1 and 8. 1 hereof.
10. ARTICLE TEN - Articles of Amalgamation
10.1 After this Agreement has been approved in accordance with the BCA
and all other terms and conditions contained in section 3.1 hereof have been
fulfilled or waived pursuant to section 3.2 hereof, the Amalgamating
Corporations shall, on such day as the directors of Winteroad and PenStar may
select, jointly file with the Director under the BCA, Articles of Amalgamation
and such other documents as may be required to complete the Amalgamation.
11. ARTICLE ELEVEN - Amendment and Termination
11.1 This Agreement may, at any time and from time to time before and
after the holding of the Meetings of Shareholders of PenStar and of Winteroad.
but not later than the Effective Date, be amended by written amendment of the
parties hereto without further notice to or authorization on the part of the
holders of PenStar Shares or the Winteroad Shares. Without limiting the
generality of the foregoing, any such amendment may:
11.1.1 change the time for performance of any of the covenants
contained herein or in any document to be delivered pursuant
hereto; or
11.1.2 waive any inaccuracies or modify any of the covenants
contained herein or in any document to be delivered pursuant
hereto: or
11.1.3 waive compliance with or modify any of the covenants herein
contained or waive or modify performance of any of the
obligations of the parties hereto;
provided that, notwithstanding the foregoing, the consideration to be
received by holders of Winteroad Shares or PenStar Shares shall not be
decreased without the approval of the holders of Winteroad Shares or
PenStar Shares, as the case may be, given in the same manner as
required for the approval of the Amalgamation.
11.2 This Agreement may, at any time before or after the holding of the
Meetings of Shareholders of PenStar and Winteroad, but prior to the Effective
Date, be terminated by agreement of the parties without further action on the
part of the holders of Winteroad Shares or PenStar Shares.
This Agreement shall be terminated without further action on the part
of the holders of Winteroad Shares or the PenStar Shares if the
Certificate of Amalgamation giving effect to the Agreement has not been
obtained from the Register on or before _______________ 31, 1995.
12. ARTICLE TWELVE - Amendment and Termination
12.1 Notices - All notices which may or are required to be given
pursuant to any provision of this Agreement shall be given or made in writing
and shall be served personally or by telex or telecopy, in each case to the
attention of the President and in the case of Winteroad addressed to:
Suite 906, 95 Wellington Street West
Toronto, Ontario
M5J 2N7
and in the case of PenStar addressed to:
406 - 138 Portage Avenue East
Winnipeg, Manitoba
R3C 0A1
Attention: Murray R. Nye
or such other address of which a parry may, from time to time, advise
the other parries hereto by notice in writing given in accordance with
the foregoing. Date of receipt of any such notice shall be deemed to be
the date of delivery thereof.
12.2 Assignment - No party may assign its rights or obligations under this
Agreement or the Amalgamation without the prior written consent of the other
parties hereto.
12.3 This Agreement shall be governed by and construed in accordance with
the laws of the Province of Ontario and the federal laws of Canada applicable
herein.
12.4 In the event any one or more of the provisions of this Agreement is
invalid or otherwise unenforceable, the enforceability of the remaining
provisions shall be unimpaired.
12.5 This Agreement may be executed in several counterparts, each of which
when so executed shall be deemed to be an original and such counterparts
togetherconstitute one and the same instrument and notwithstanding the date of
execution shall be deemed to bear date as of the date written in the beginning
of this Agreement.
IN WITNESS WHEREOF this Agreement has been executed by the parties
hereto.
Winteroad Resources Limited PenStar Wirecom, Ltd.
by: by:
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by: by:
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