EXHIBIT 3(A)
AMALGAMATION AGREEMENT
THIS AMALGAMATION AGREEMENT dated as of May 5, 1995.
BETWEEN:
XXXXX XXXX RESOURCES LTD., a
corporation incorporated under the laws of
Ontario
("Xxxxx Xxxx")
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SEVEN SEAS PETROLEUM INC., a
corporation incorporated under the laws of
British Columbia
("Seven Seas")
WHEREAS Xxxxx Xxxx and Seven Seas have agreed to complete an amalgamation
under the British Columbia Company Act whereby they will amalgamate and continue
under the name "Seven Seas Petroleum Inc.";
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 AS FOLLOWS: ARTICLE ONE
Definitions
1.1 In this Agreement:
"Affiliate" has the meaning ascribed thereto in the Securities Act
(Ontario);
"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 Xxxxx Xxxx and Seven Seas;
"Amalgamation" means the amalgamation of Xxxxx Xxxx and Seven Seas pursuant
to the British Columbia Act as contemplated by this Agreement;
"British Columbia Act" means the Company Act (British Columbia);
"Business Day" means a day on which securities may be traded on the
Canadian Dealing Network;
"Continuance" means the continuance of Xxxxx Xxxx pursuant to the British
Columbia Act, as contemplated by this Agreement;
"Dissenting Shareholders" means holders of Xxxxx Xxxx Shares or Seven Seas
Shares who exercise rights of dissent under the Ontario Act or the British
Columbia Act, respectively, with respect to the Continuance or
Amalgamation, as the case may be;
"Effective Date" means the effective date set forth in the Certificate of
Amalgamation issued pursuant to the British Colombia Act with respect to
the Amalgamation;
"Joint Special Meeting of Shareholders" means the joint special meeting of
the shareholders of Xxxxx Xxxx and Seven Seas to be held for the purpose of
considering a special resolution relating to the Amalgamation and related
matters, including the Continuance in the case of the shareholders of Xxxxx
Xxxx;
"Ontario Act" means the Business Corporations Act (Ontario);
"Proxy Statement" means a joint management information circular which will
accompany the notices of shareholders meetings of Xxxxx Xxxx and Seven Seas
called, among other things, to approve and adopt this Agreement;
"Xxxxx Xxxx Shares" means the common shares without nominal or par value in
the capital of Xxxxx Xxxx as constituted on the date hereof;
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"Seven Seas Shares" means the common shares without nominal or par value in
the capital of Seven Seas as constituted on the date hereof;
"Transfer Agent" means the transfer agent for the Amalco Shares.
1.2 Unless the context otherwise requires, words and phrases used herein that
are defined in the Ontario Act and the British Columbia Act shall have the same
respective meaning herein as in such Act, and in the event of a conflict, the
British Columbia shall govern.
ARTICLE TWO
Representations and Warranties
2.1 Xxxxx Xxxx represents and warrants to and agrees with Seven Seas that:
(a) Xxxxx Xxxx is a corporation duly incorporated and organized and
validly subsisting and in good standing under the Ontario Act 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 and municipal governmental
licenses, permits and authorizations in connections therewith;
(b) the authorized capital of Xxxxx Xxxx consists of an unlimited number
of common shares of which 9,698,984 Xxxxx Xxxx Shares are validly
issued and outstanding at the date hereof as fully paid and
non-assessable shares;
(c) Xxxxx Xxxx has the corporate power and authority to enter into this
Agreement;
(d) 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 Xxxxx Xxxx;
(e) the audited financial statements of Xxxxx Xxxx for the twelve months
ended December 31, 1994 and 1993 and the unaudited financial
statements for the three months ended March 31, 1995, together with
the notes thereto (collectively, the Xxxxx Xxxx Statements), present
fairly the financial position of Xxxxx Xxxx and have been prepared in
accordance with generally accepted accounting principles applied on a
consistent basis;
(f) there have been no changes since March 31, 1995 in the condition,
financial or otherwise, or in the results of operations of Xxxxx Xxxx
as shown on or
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reflected in the Xxxxx Xxxx 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 Xxxxx Xxxx taken as a whole, except as disclosed in the
Proxy Statement;
(g) 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 Xxxxx Xxxx or any agreement to which
Xxxxx Xxxx is a party or any Xxxxx Xxxx assets are bound, (ii)
constitute an event which would permit any party to any agreement with
Xxxxx Xxxx to terminate such agreement or to accelerate the maturity
of any indebtedness of Xxxxx Xxxx or other obligation of Xxxxx Xxxx,
or (iii) result in the creation of imposition of any encumbrance upon
the Xxxxx Xxxx Shares or any assets of Xxxxx Xxxx;
(h) there is no legal, arbitrable, governmental or other action,
proceeding or investigation pending or threatened against or otherwise
affecting Xxxxx Xxxx or any of its assets and, to the best of its
knowledge, Xxxxx Xxxx is not aware of any event or events which have
occurred that could give rise to any such action, proceeding or
investigation, except as disclosed in the Proxy Statement;
(i) Xxxxx Xxxx has not declared or paid any dividend or otherwise made any
distribution of any kind to shareholders and Xxxxx Xxxx has not
disposed of or entered into any agreement to dispose of any of its
assets or incurred indebtedness;
(j) Xxxxx Xxxx is in compliance with all applicable governmental laws,
by-laws, regulations and orders relevant to Xxxxx Xxxx'x corporate
existence, operations or properties;
(k) Xxxxx Xxxx 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;
(l) the Xxxxx Xxxx Shares are quoted for trading on the Canadian Dealing
Network;
(m) the information in the Proxy Statement relating to Xxxxx Xxxx 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 necessary in order to
make the statements therein not misleading in light of the
circumstances in which they were made;
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(n) there is no indebtedness of Xxxxx Xxxx which is not disclosed or
reflected in the Xxxxx Xxxx Statements;
(o) Xxxxx Xxxx has no employment, consulting or management contracts or
commitments with any party which cannot be terminated without cause
upon giving 30 days written notice;
(p) Xxxxx Xxxx has not guaranteed or agreed to guarantee any indebtedness
or other obligation of any third party; and
(q) all tax returns and reports of Xxxxx Xxxx required by law to be filed
to the date hereof have been filed and are true, complete and correct
and all taxes required to be paid have been paid.
2.2 Seven Seas represents and warrants to and agrees with Xxxxx Xxxx that:
(a) Seven Seas is a corporation duly incorporated and organized and
validly subsisting under the British Columbia Act 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 and municipal governmental licenses,
permits and authorizations in connection therewith;
(b) the authorized capital of Seven Seas consists of an authorized capital
of 100,000,000 Seven Seas Shares and 10,000,000 preferred shares
issuable in series of which 5,000,000 Seven Seas Shares are validly
issued and outstanding at the date hereof as fully paid and
non-assessable shares, no preferred shares are issued and outstanding
and a total of 8,288,349 Seven Seas Shares subject to issuance
pursuant to a pending private placement (6,999,999 Seven Seas Shares),
a pending settlement of Xxxxx Xxxx debt and outstanding management
incentive options (885,000 Seven Seas Shares);
(c) Seven Seas has the corporate power and authority to enter into this
Agreement;
(d) no persons, 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 Seven Seas
except as disclosed herein;
(e) the audited financial statements for the period ended March 31, 1995,
together with the notes thereto (collectively the "Seven Seas
Statements"), present fairly the financial position of Seven Seas and
have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis;
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(f) there have been no changes since March 31, 1995 in the condition,
financial or otherwise, or int he results of the operations of Seven
Seas as shown on or reflected in the Seven Seas 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 Seven Seas taken as a whole, except as disclosed in
the Proxy Statement;
(g) none of the execution and delivery of this Agreement, the consummation
of the Amalgamation and the fulfillment of or compliance with the
terms and provisions hereof will (i) result in or constitute a breach
of any term or provision of, or constitute a default under, the
articles or by-laws of Seven Seas or any agreement to which Seven Seas
is a party or any of Seven Seas's assets are bound, (ii) constitute an
event which would permit any party to any agreement with Seven Seas to
terminate such agreement or to accelerate the maturity of any
indebtedness of Seven Seas or other obligation of Seven Seas, or (iii)
result in the creation or imposition of any encumbrance upon Seven
Seas's Shares or any assets of Seven Seas.
(h) there is no legal, arbitrable, governmental or other action,
proceeding or investigation pending or threatened against or otherwise
affecting Seven Seas or any of its assets and to the best of its
knowledge, Seven Seas is not aware of any event or events which have
occurred that could give rise to any such action, proceeding or
investigation, except as disclosed in the Proxy Statement;
(i) except as disclosed in the Proxy Statement, Seven Seas has not
declared or paid any dividends or otherwise made any distribution of
any kind or nature to any of its shareholders and Seven Seas has not
disposed of or entered in any agreement to dispose of any of its
assets or incur indebtedness;
(j) Seven Seas is in compliance with all applicable governmental laws,
by-laws, regulations and order relevant to Seven Seas's corporate
existence, operations or properties;
(k) the information in the Proxy Statement relating to Seven Seas 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 necessary in order to
make the statements therein not misleading in light of the
circumstances in which they were made.
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ARTICLE THREE
Conditions Precedent
3.1 Subject to section 3.2 hereof, this Agreement shall have no force and
effect whatsoever and shall be null and void unless:
(a) the shareholders of Xxxxx Xxxx shall have approved the Continuance of
Xxxxx Xxxx to the British Columbia Act and Xxxxx Xxxx shall have
effected the Continuance;
(b) the shareholders of each of Xxxxx Xxxx and Seven Seas shall have
approved this Agreement as required by the British Columbia Act;
(c) the Agreement shall have been approved by order of the Supreme Court
of British Columbia;
(d) the shares of Amalco shall be accepted for quotation on the Canadian
Dealing Network;
(e) the private placement of Seven Seas Shares and the settlement of Xxxxx
Xxxx debt in exchange for Seven Seas Shares shall have been completed
on the terms as described in the Proxy Statement;
(f) Xxxxx Xxxx or Seven Seas shall not have received prior to the
Effective Date written objections to the Continuance or Amalgamation,
as the case may be pursuant to the dissent rights provided in the
Ontario Act or British Columbia Act from the holders of that number of
Xxxxx Xxxx Shares or Seven Seas Shares (excluding objections which
have been withdrawn) which in the opinion of the directors of Xxxxx
Xxxx or Seven Seas is material to the transactions; and
(g) all representations and warranties of Xxxxx Xxxx and Seven Seas
contained herein are true and correct on the Effective Date.
3.2 If any condition set out in section 3.1 (other than 3.1(a) or (b)) shall
not be fulfilled or performed, the party entitled to the benefit of such
condition shall be entitled to terminate this Agreement or to waive the
condition.
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ARTICLE FOUR
Covenants
4.1 Each party hereto agrees with the other that it will not prior to or on the
Effective Date; (i) allot or issue any shares of its capital or enter into any
agreement except this Agreement providing for either certainly or contingently
or contemplating the issue of shares of its capital, except the issue of shares
pursuant to options or other rights disclosed herein; (ii) declare dividends;
(iii) sell all or any part of its assets, or otherwise enter into any
transactions or negotiations which could reasonably be expected to interfere
with or be inconsistent with the consummation of the Amalgamation; (iv) amend
its constating documents; or (v) incur any further liabilities out of the
ordinary course of business.
ARTICLE FIVE
Amalgamation
5.1 The Amalgamating Corporations hereby agree to amalgamate pursuant to the
provisions of the British Columbia Act and to continue as one corporation on the
terms and conditions set for in this Agreement.
5.2 Each of Xxxxx Xxxx and Seven Seas shall call and hold a meeting of
shareholders in accordance with the Ontario Act and the British Columbia Act,
respectively, and applicable securities laws for the purpose of approving this
Agreement and the Continuance as required by the Ontario Act and the British
Columbia Act.
5.3 On the Effective Date, the amalgamation of the Amalgamating Corporations
and their continuance as one corporation 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 favor of or against, an Amalgamating Corporation may be enforced by
or against Amalco; and the Articles of Amendment with respect to the
Amalgamation shall be deemed to be the Articles of Incorporation of Amalco.
ARTICLE SIX
Amalco
6.1 The name of Amalco shall be SEVEN SEAS PETROLEUM INC.
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6.2 There shall be no restriction on the business which Amalco is authorized to
carry on.
6.3 The registered office of Amalco shall be in the City of Vancouver in the
Province of British Columbia. Until changed by the board of directors, the
address of the registered office of Amalco in the City of Vancouver shall be 000
Xxxx Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0.
6.4 Amalco shall be authorized to issue 100,000,000 common shares without par
value, herein defined as "Amalco Shares", and 10,000,000 preferred shares
without par value, issuable in one or more series.
6.5 The rights, privileges, restrictions and conditions attaching to the Amalco
Shares as a class are as follows:
(a) one vote for each Amalco Share held at all meetings of shareholders of
Amalco, other than meetings at which the holders of another specified
class or series of shares are entitled to vote separately as a class
or series;
(b) receive any dividend declared by the board of directors of Amalco in
respect of the Amalco Shares; and
(c) subject to the prior rights of the holders of any class of shares
ranking senior to the Amalco Shares, to receive the remaining property
of Amalco in the event of the 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 The rights, privileges, restrictions and conditions attacking to a
particular series of the preferred shares of Amalco shall be as specified by the
directors of Amalco in the resolution authorized the creation of such series of
shares.
6.7 There shall be no restrictions on the issue, transfer or ownership of
shares in the capital of Amalco.
6.8 The board of directors of Amalco shall, until otherwise changed in
accordance with the Act, consist of a minimum of three and a maximum of twenty
directors, the number of which shall be fixed from time to time by the
directors.
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6.9 On the Effective Date, the number of directors shall be seven. The first
directors of Amalco shall be the persons whose names and addresses appear below:
NAME AND ADDRESS RESIDENCY
PROPOSED OFFICE (IF ANY) ------- ---------
------------------------
Xxxxxx X. Xxxxxxxxx 0 X. 0xx Xxxxxx Xxxxxx Xxxxxx
Xxxxx 000
Xxxxx, XX
00000-0000
Xxxxxx X. Xxxxxx 0000-000 Xxxx Xxxxxxx Xx. Xxxxxx
Xxxxxxxxx, X.X.
X0X 0X0
Xxxxxxx X. XxXxxxxx 00 - 0000 Xxxxxxx Xxxxx Xxxxxx
Xxxxxxxxx, X.X.
X0X 0X0
Xxxxxx X. Xxxxxxxx 000 Xxxxxx Xxx. Xxxxxx
Xxxxxxxx Xxxxx, X.X.
X0X 0X0
Xxxxx X. Xxxxxxx 000 Xxxx Xxxxxx Xxxxxx Xxxxxx
401-9th Ave. S.W.
Calgary, Alberta
T2P 2M2
Xxxx X. Xxxxxxxx, Q.C. 0000-0000 0xx Xx. X.X. Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Xxxxxxx X. Xxxxxxxx 0000 Xxxx Xxxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxx
00000
6.10 The memorandum and articles of Amalco shall be as set out in Schedules I
and II respectively and approved in writing under the provisions of the British
Columbia Act.
6.11 Without limiting the borrowing powers of Amalco as set forth in the Act,
as amended from time to time, Amalco may, from time to time, with or without the
authority of any articles or the authorization of the shareholders:
(a) borrow money upon the credit of Amalco including by way of overdraft;
(b) issue, reissue, sell or pledge bonds, debentures, notes or other
evidences of indebtedness or guarantees of Amalco whether secured or
unsecured;
(c) charge, mortgage, hypothecate, pledge or otherwise create a security
interest in the undertaking or in all or any currently owned or
subsequently acquired real or personal, movable or immovable property
of Amalco, including book
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debts, rights, powers and franchises, to secure any such bonds,
debentures, notes or other evidences of indebtedness or guarantees or
any other present or future indebtedness or liability of Amalco.
6.12 The Auditors of Amalco shall be Xxxxxx Xxxxxxxx, 2300 - 0000 X. Xxxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0 and the directors of Amalco may
from time to time fix the renumeration of the auditors.
6.13 The Registrar and Transfer Agent of Amalco shall be Montreal Trust Company
of Canada at either its offices in Vancouver (510 Burrard Street, Vancouver,
British Columbia, V6C 2O9) or Toronto (151 Xxxxx Xxxxxx Xxxx, 0xx Xxxxx,
Xxxxxxx, Xxxxxxx, X0X 0X0).
6.14 The fiscal year end of Amalco will be December 31.
6.15 The first annual general meeting of Amalco will be conducted in the month
of June, 1996.
ARTICLE SEVEN
Exchange of Shares
7.1 Subject to section 8.1, the shares in the capital of Xxxxx Xxxx and Seven
Seas which are issued and outstanding immediately 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:
(a) each thirty-five issued and outstanding Xxxxx Xxxx Shares shall be
converted into one issued and fully paid Amalco Share; and
(b) each and outstanding Seven Seas shall be converted into one issued and
fully-paid Amalco Share.
In accordance with the terms of the management incentive options be issued
by Xxxxx Xxxx, upon the Amalgamation becoming effective such management
incentive options will become options to purchase Amalco Shares upon the same
terms and subject to appropriate adjustments.
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ARTICLE EIGHT
Fractional Shares
8.1 Fractional Amalco Shares will not be issued. A holder of Xxxxx Xxxx Shares,
or Seven Seas Shares who would otherwise be entitled to receive a fraction of an
Amalco Share shall be issued a whole Amalco Share.
ARTICLE NINE
Dissenting Shareholders
9.1 Dissenting Shareholders who:
(a) ultimately are entitled to be paid fair value for their Xxxxx Xxxx
Shares or Seven Seas shall be deemed to have had their Xxxxx Xxxx
Shares or Seven Seas 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
(b) ultimately are not entitled to be paid fair value, for any reason, for
their Xxxxx Xxxx Shares or Seven Seas Shares, shall be deemed to have
had their Xxxxx Xxxx Shares or Seven Seas Shares cancelled on the
Effective Date, shall be deemed to have been issued Amalco Shares for
their shares on the Effective Date as provided in section 7.1 hereof;
ARTICLE TEN
Special Meetings of Shareholders of Xxxxx Xxxx and Seven Seas
10.1 Xxxxx Xxxx and Seven Seas agree to use their best efforts to cause the
Xxxxx Xxxx shareholders and Seven Seas shareholders, respectively, to vote in
favor of the special resolution pertaining to the Amalgamation at the Joint
Special Meeting of Shareholders.
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ARTICLE ELEVEN
Court Approval
11.1 After this Agreement has been approved in accordance with the Ontario Act
and British Columbia Act, 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, within the time prescribed under the
British Columbia Act, jointly apply to the Supreme Court of British Columbia for
an order approving the Amalgamation.
ARTICLE TWELVE
General
12.1 This Agreement shall be governed by and construed in accordance with the
laws of the province of British Columbia and the federal laws of Canada
applicable herein.
12.2 Xxxxx Xxxx shall be responsible for all reasonable costs and expenses
incurred in connection with the preparation of this Agreement and the
consummation of the transactions contemplated hereby.
IN WITNESS WHEREOF this Agreement has been executed by the parties
hereto.
Xxxxx Xxxx Resources Ltd.
by:
by:
Seven Seas Petroleum Inc.
by:
by:
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