EXHIBIT 2.2
AMALGAMATION AGREEMENT dated as of May 30, 2003.
BETWEEN:
ZIM Technologies International Inc., a corporation governed by the
Canada Business Corporations Act, having its registered office in the
City of Ottawa in the Province of Ontario,
(hereinafter referred to as "ZIM Technologies")
AND
PCI-ZTI Canada, Inc., a corporation governed by the Canada Business
Corporations Act and a wholly owned subsidiary of ZIM Corporation,
having its registered office in the City of Ottawa in the Province of
Ontario,
(hereinafter referred to as "PCI-ZTI")
AND
ZIM Corporation, a corporation governed by the Canada Business
Corporations Act, having its registered office in the City of Ottawa
in the Province of Ontario.
(hereinafter referred to as "ZIM Corporation")
WHEREAS ZIM Corporation was incorporated pursuant to the laws of Canada
on October 17, 2002 with authorized capital consisting of an unlimited number of
common shares of which one is currently issued and outstanding and an unlimited
number of special shares of which none are currently issued and outstanding;
AND WHEREAS PCI-ZTI was incorporated pursuant to the laws of Canada on
September 17, 2002 with authorized capital consisting of an unlimited number of
common shares of which one common share is currently issued and outstanding;
AND WHEREAS the parties hereto have determined that it is desirable
that ZIM Technologies and PCI-ZTI should amalgamate under the authority
contained in the Canada Business Corporations Act, and continue as one
corporation upon the terms and conditions hereinafter set out.
NOW THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained (the adequacy of which is hereby
mutually admitted), the parties hereto have agreed as follows:
ARTICLE ONE
INTERPRETATION
1.01 DEFINITIONS. Whenever used in this Agreement, the following terms
shall have the respective meanings ascribed to them as follows:
(a) "Act" means the Canada Business Corporations Act as
heretofore enacted or as the same may from time to time be amended or
re-enacted, or any other legislation hereafter enacted in substitution therefor
or replacement thereof, and includes any regulations heretofore or hereafter
made pursuant to such Act or other legislation, and any term defined in the Act
and not otherwise defined herein is used in this Agreement with the same
meaning;
(b) "Amalgamating Corporations" mean ZIM Technologies and
PCI-ZTI;
(c) "Amalgamated Corporation" means the corporation continuing
from the amalgamation of the Amalgamating Corporations;
(d) "Amalgamation Agreement" or "Agreement" means this
Amalgamation Agreement;
(e) "Articles" means the articles of amalgamation by which the
Amalgamated Corporation is incorporated as a result of this Agreement;
(f) "Business Day" means any day other than a Saturday,
Sunday or civic or statutory holiday in the City of Ottawa;
(g) "Certificate of Amalgamation" means the certificate of
amalgamation issued by the Director in respect of the Amalgamation;
(i) "Common Shares" means the common shares of the Amalgamated
Corporation, the rights, privileges, restrictions and conditions attaching to
such shares being as set forth in Section 3.06 herein;
(j) "Director" means the Director appointed under the Act;
(k) "Dissenting Shareholder" means a holder of ZIM Corporation
Shares or ZIM Technologies Shares, as the case may be, who has exercised its
right of dissent in respect of the special resolution authorizing the
amalgamation in strict compliance with section 190 of the Act and has been paid
fair value in accordance therewith;
(n) "Effective Date" means the date of the Certificate of
Amalgamation which is shall be June 1, 2003;
(o) "Expiry Time" means 5:00 p.m. (Ottawa time) on that
date which is 30 days following the Effective Date;
(p) "PCI-ZTI Shares" means the issued and outstanding common
shares of PCI-ZTI;
(q) "Share Provisions" means the rights, privileges,
restrictions and conditions attaching to the Common Shares being as set forth in
Schedule "I" attached hereto;
(r) "ZIM Corporation Common Shares" means the common shares of
ZIM Corporation;
(s) "ZIM Corporation Shares" means the common shares and
special shares of ZIM Corporation;
(t) "ZIM Corporation Special Shares" means the special shares
of ZIM Corporation;
(u) "ZIM Technologies Common Shares" means the common shares
of ZIM Technologies;
(v) "ZIM Technologies Shares" means the common shares and
special shares of ZIM Technologies; and
(w) "ZIM Technologies Special Shares" means special shares of
ZIM Technologies.
ARTICLE TWO
IMPLEMENTATION
2.01 IMPLEMENTATION. The Amalgamating Corporations and each of them do
hereby agree to amalgamate under the provisions of the Act effective immediately
upon the commencement of the 1st day of June, 2003, under the terms and
conditions hereinafter set out. After this Agreement has become effective,
subject to Section 2.02 hereof, Articles of Amalgamation in prescribed form
shall be delivered to the Director, together with all other documents necessary
to bring the amalgamation into effect.
2.02 TERMINATION. Notwithstanding the approval of this Agreement by the
shareholders of the Amalgamating Corporations, the Board of Directors of any of
the Amalgamating Corporations may, without further shareholder approval,
terminate the amalgamation and this Agreement at any time before the issuance of
a Certificate of Amalgamation.
ARTICLE THREE
ORGANIZATION
3.01 NAME. The name of the Amalgamated Corporation shall be ZIM
Technologies International Inc.
3.02 REGISTERED OFFICE. The registered office of the Amalgamated
Corporation shall be in the City of Ottawa in the Province of Ontario. Until
changed in accordance with the provisions of the Act, the address of the
Registered Office shall be 200-20 Colonnade Road, Ottawa, Ontario, K2E 7M6.
3.03 NUMBER OF DIRECTORS. The number of directors of the Amalgamated
Corporation, until changed in accordance with the provisions of the Act, shall
be a minimum of 1 and a maximum of 10.
3.04 DIRECTORS. The first directors of the Amalgamated Corporation
shall be:
NAME RESIDENTIAL ADDRESS RESIDENT CANADIAN
---- ------------------- -----------------
Jim Stechyson 5597 Goddard Street Yes
Manotick, ON K4M 1C5
Steve Houck 608-1409 South Lamar Street No
Dallas, TX USA 75215
Charles Saikaley 119 Kamloops Avenue Yes
Ottawa, ON K1V 7C8
3.05 RESTRICTIONS ON BUSINESS. There shall be no restrictions on the
business of the Amalgamated Corporation or on the powers that the Amalgamated
Corporation may exercise.
3.06 AUTHORIZED CAPITAL. The Amalgamated Corporation is authorized to
issue an unlimited number of Common Shares and the rights, privileges,
restrictions and conditions attaching to such shares are as set forth in
Schedule "I" attached hereto.
3.07 RESTRICTED TRANSFER. The right to transfer shares in the capital
stock of the Amalgamated Corporation shall be restricted and no shares shall be
transferred without either:
(a) the consent of the majority of the directors of the
Amalgamated Corporation expressed by a resolution passed by the board of
directors; or
(b) the consent of the holders of the common shares for the
time being outstanding expressed by a resolution passed by such shareholders.
3.08 OTHER PROVISIONS. The other provisions to be included in the
Articles of Amalgamation shall be as follows:
(a) the number of shareholders of the Amalgamated Corporation
exclusive of persons who are in its employment and exclusive of persons who,
having been formerly in the employment of the Amalgamated Corporation, were,
while in that employment, and have continued after the termination of that
employment to be, shareholders of the Amalgamated Corporation, is limited to not
more than 50, two or more persons who are the joint registered owners of one or
more shares being counted as one shareholder;
(b) any invitation to the public to subscribe for the
securities of the Amalgamated Corporation shall be prohibited;
(c) the board of directors may from time to time, without
authorization of the shareholders, in such amounts and on such terms as it deems
expedient:
(i) borrow money on the credit of the Amalgamated
Corporation;
(ii) issue, reissue, sell or pledge debt obligations
(secured or unsecured) of the Amalgamated Corporation;
(iii) give a guarantee on behalf of the Amalgamated
Corporation to secure performance of an obligation of any person or
body corporate; and
(iv) charge, mortgage, hypothecate, pledge, cede and
transfer or otherwise create a security interest in all or any of the
currently owned or subsequently acquired real or personal, movable or
immovable, property of the Amalgamated Corporation, including book
debts, rights, powers, franchises and undertaking, to secure any debt
obligations or any money borrowed, or other debt or liability of the
Amalgamated Corporation; and
(d) the board of directors may from time to time delegate to such one
or more directors and officers of the Amalgamated Corporation as may be
designated by the board all or any of the powers conferred on the board pursuant
to subparagraph (c) above to such extent and in such manner as the board of
directors shall determine at the time of each such delegation.
(e) the number of directors of the Corporation within the minimum and
maximum numbers of directors provided for in the articles of the Corporation
shall be as determined from time to time by ordinary resolution of the
shareholders of the Corporation or, if the ordinary resolution empowers the
directors to determine such number, by resolution of the directors of the
Corporation.
(f) The directors of the Corporation may appoint one or more directors,
who shall hold office for a term expiring not later than the close of the next
annual meeting of shareholders of the Corporation, but the total number of
directors so appointed shall not exceed one third of the number of directors
elected at the previous annual meeting of shareholders of the Corporation.
(g) the Amalgamated Corporation shall have a lien on the shares
registered in the name of a shareholder or his legal representative for a debt
of that shareholder to the Amalgamated Corporation.
ARTICLE FOUR
ISSUED CAPITAL
4.01 EXCHANGE OF SHARES. At the time the Amalgamation becomes
effective:
(a) each PCI-ZTI Share shall be exchanged for issued and fully paid
Common Shares of the Amalgamated Corporation on the basis of one (1) Common
Share of the Amalgamated Company for one (1) PCI-ZTI Share;
(b) each ZIM Technologies Common Share other than those held by
Dissenting Shareholders shall be exchanged for issued and fully paid ZIM
Corporation Common Shares on the basis of one (1) ZIM Corporation Common Share
for one (1) ZIM Technologies Common Share;
(c) each ZIM Technologies Special Share other than those held by
Dissenting Shareholders shall be exchanged for issued and fully paid ZIM
Corporation Special Shares on the basis of one (1) ZIM Corporation Special Share
for one (1) ZIM Technologies Special Share;
(d) each ZIM Technologies Share held by Dissenting Shareholders
tendered for cancellation in accordance with the provisions of section 190 of
the Act shall be cancelled;
(e) all ZIM Technologies Shares which have been exchanged or tendered
in accordance with this section 4.01 shall thereupon be cancelled; and
(f) all authorized but unissued shares in the capital of PCI-ZTI and
ZIM Technologies shall be cancelled.
4.02 FRACTIONAL SHARES. No fractional shares of ZIM Corporation will be
issued to any holder of ZIM Technologies Shares. In lieu thereof such
shareholders shall receive a whole ZIM Corporation Share.
4.03 SHARE CERTIFICATES. After the Effective Date:
(a) the holders of ZIM Technologies Shares (other than
Dissenting Shareholders holding such shares) shall be entitled to receive
certificates representing ZIM Corporation Shares on the basis provided for in
sections 4.01 and 4.02 hereof on presentation and surrender for cancellation of
the certificates representing the ZIM Technologies Shares held by them, or such
other properly executed documentation as the Amalgamated Corporation may request
in lieu of such certificates, at the office of ZIM Corporation; and
(b) the holders of PCI-ZTI Shares (other than Dissenting
Shareholders holding such shares) shall be entitled to receive certificates
representing Common Shares on the basis provided for in section 4.01 on
presentation and surrender for cancellation of the certificates representing the
PCI-ZTI Shares held by them, or such other properly executed documentation as
the Amalgamated Corporation may request in lieu of such certificates at the
office of the Amalgamated Corporation.
4.04 DISSENTING SHAREHOLDER. Notwithstanding anything in this Agreement
to the contrary, ZIM Technologies Shares, in respect of which a Dissenting
Shareholder shall dissent shall not, at the Effective Date, be converted into
ZIM Corporation Shares as provided in Sections 4.01 and 4.02 hereof, and no ZIM
Corporation Shares shall be issued to such Dissenting Shareholder, as provided
in Sections 4.01 and 4.02 hereof; provided however, that in the event that a
Dissenting Shareholder who has exercised the right of dissent under section 190
of the Act fails to perfect or withdraws or forfeits his or her right to make a
claim under section 190 of the Act or his or her rights as a shareholder are
otherwise reinstated such shareholder's ZIM Technologies Shares shall thereupon
be deemed to have been exchanged as at the Effective Date into ZIM Corporation
Shares as provided in Sections 4.01 and 4.02 hereof, and ZIM Corporation shall
be deemed to have issued to such shareholder as at the Effective Date ZIM
Corporation Shares as provided in Sections 4.01 and 4.02 hereof.
4.05 STATED CAPITAL. The aggregate stated capital of each class of
shares in the capital of the Amalgamated Corporation shall be equal to the
aggregate stated capital of the class(es) of shares in the capital of the
Amalgamating Corporations which it replaced immediately before such amalgamation
becomes effective.
ARTICLE FIVE
MISCELLANEOUS
5.01 ARTICLES. Upon the shareholders of ZIM Technologies and PCI-ZTI
approving this Agreement in accordance with the provisions of the Act and the
obtaining of all other consents or orders of all regulatory authorities,
federal, provincial, domestic or foreign, ZIM Technologies and PCI-ZTI shall
forthwith complete and send to the Director the Articles in prescribed form and
such other related documents as may be required pursuant to the Act or any other
regulatory authority.
5.02 FURTHER ASSURANCES. The parties hereto shall with reasonable
diligence do all things and provide all reasonable assurances as may be required
to complete the transactions contemplated by this Agreement, and each party
hereto shall provide such further documents or instruments required by any other
party as may be reasonably necessary or desirable to give effect to this
Agreement and to carry out its provisions.
5.03 AMENDMENT. This Agreement may be amended by an agreement in
writing signed by each of the parties hereto, provided that the amendment is
approved by a special resolution of the shareholders of each Amalgamating
Corporation.
5.04 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of Ontario and the federal laws of Canada applicable
therein.
5.05 BY-LAWS. The by-laws of PCI-ZTI shall, so far as applicable, be
the by-laws of the Amalgamated Corporation, until repealed, amended, altered or
added to and a copy of such by-laws may be examined at the registered office
address of the Amalgamated Corporation.
IN WITNESS WHEREOF this Amalgamation Agreement has been duly executed
by the parties hereto as witnessed by the signatures of their proper officers in
that behalf.
ZIM TECHNOLOGIES INTERNATIONAL INC.
By: /s/ Michael Cowpland
--------------------------------------
Michael Cowpland
President
PCI-ZTI CANADA, INC.
By: /s/ Stuart D. Cooper
--------------------------------------
Stuart D. Cooper
President
ZIM CORPORATION
By: /s/ Stuart D. Cooper
-------------------------------------
Stuart D. Cooper
President