<PAGE> 1
Exhibit 3.3
<TABLE>
<S> <C> <C>
For Ministry Use Only Ontario Corporation Number 1
A l'usage exclusif du ministere Numero de la compagnie en Ontario
[SEAL] Ministry of Ministere de
Consumer and la Consommation 1401922
Commercial Relations et du Commerce
CERTIFICATE CERTIFICAT
This is to certify that these Ceci certifie que les presents Trans Line Comp Method
articles are effective on statuts entrent en vigueur le Code No. Stat. Type Incorp. Share
A 0 0 A 3 S
FEBRUARY 15 FEVRIER, 2000 18 20 28 29 30 31
------------------------------ ------------------------------
[SIGNATURE] Notice
Director/Directeur Req'd Jurisdiction
Business Corporations Act/Lor sur les societes par actions N ONTARIO A
32 33 47 57
------------------------------------------------------------------------------------------------------------------------------------
ARTICLES OF AMALGAMATION
STATUTS DE FUSION
1. The name of the amalgamated corporation is: Denomination sociale de la compagnie issue
de la fusion:
Form 4
Business
Corporations D E L A N O T E C H N O L O G Y C O R P O R A T I O N
Act
Formule
numero 4
Loi 2. The address of the registered office is: Addresse du siege social:
sur les
compagnies
40 West Wilmot Street
------------------------------------------------------------------------------------------------------------------
(Street & No. or R.R. No. & if Multi-Office Building give Room No.)
(Rue et numero ou numero de la R.R. et, s'il s'agit d'un
edifice a bureau, numero du bereau)
Richmond Hill, Ontario L4B 1H8
------------------------------------------------------------------------------------------------------------------
(Name of Municipality of Post Office) (Postal Code)
(Nom de la municipalite ou du bureau de poste) (Code Postal)
3. Number (or minimum and maximum number) Nombre (ou nombres minimal et maximal)
of director is: d'administrateurs:
A minimum of three (3) and a maximum of ten (10).
-------------------------------------------------------------------------------------------------------------------
4. The director(s) is/are: Administrateur(s): Resident Canadian
State
First name, initials and last name Residence address, giving Street & No. or Yes or No
Prenom, initiales et nom de famille R.R. No., Municipality and Postal Code Resident Canadien
Adresse personnelle, y compris la rue et Oui/Non
le numero, le numero de la R.R., le nom de
la municipalite et le code postal
------------------------------------------------------------------------------------------------------------------
See Attached page 1A
</TABLE>
<PAGE> 2
1A
4. The directors are:
<TABLE>
<CAPTION>
First Name, initials
and last name Residence address Resident Canadian
----------------------- ----------------- -----------------
<S> <C> <C>
Bahman Koohestani 16 Portsmith Road Yes
Toronto, Ontario
M2L 2W8
Dennis Bennie 52 Owen Blvd. Yes
Toronto, Ontario
M2P 1E9
John Gregory Foresi 56 Falling Leaf Court Yes
Aurora, Ontario
L4G 6K6
Ian Giffen 5 Orchard Street Yes
Markham, Ontario
L3P 2S9
Albert Amato 364 Glencairn Avenue Yes
Toronto, Ontario
M5N 1V1
David Woodley 874042 5th Line EHS Yes
Mono Township
L9W 2Y8
</TABLE>
<PAGE> 3
5. A) The amalgamation agreement has A) Les actionnaires de chaque compagnie 2
been duly adopted by the qui fusionne ont dument adopte la
shareholders of each of the convention de fusion conformement au
amalgamating corporations as paragraphe 176(4) de la Loi sur les
required by subsection 176(4) compagnies a la date mentionee
of the Business Corporations ci-dessous.
Act on the date set out below.
[ X ]
Check Cocher
A or B A ou B
[ ]
B) The amalgamation has been B) Les administrateurs de chaque
approved by the directors of compagnie qui fusionne ont approuve
each amalgamating corporation la fusion par voie de resolution
by a resolution as required by conformement a l'article 177 de la
section 177 of the Business Loi sur les compagnies a la date
Corporations Act on the date mentionee ci-dessous. Les statuts de
set out below. fusion reprennent essentiellement
The articles of amalgamation les despositions des status
in substance contain the constituifs de
provisions of the articles of
incorporation of
--------------------------------------------------------------------------------
and are more particularly set et sont enonces tetuellement aux
out in these articles. presents status.
<TABLE>
<CAPTION>
Names of amalgamating Ontario Corporation Number Date of Adoption/Approval
corporations Numero de la compagnie en Date d'adoption ou
Denomination sociale Ontario d'approbation
des compagnies qui
fusionnent
--------------------------------------------------------------------------------
<S> <C> <C>
Delano Technology 1294608 December 13, 1999
Corporation
XDL Delano Holdings 1305170 February 7, 2000
Inc.
</TABLE>
<PAGE> 4
3
6. Restrictions, if any, on business the corporation may carry on or on powers
the corporation exercise.
Limites, sil ya lieu, imposees aux activites commerciales ou aux pouvoirs
de la compagnie.
None
7. The classes and any maximum number of shares that the corporation is
authorized to issue.
Categories et nombre maximal, s'il y a lieu, d'actions que la compagnie est
autorisee a emettre:
An unlimited number of Common Shares; and
an unlimited number of Preference Shares.
<PAGE> 5
4
8. Rights, privileges, restrictions and conditions (if any) attaching to each
class of shares and directors authority with respect to any class of shares
which may be issued in series:
Droits, privileges, restrictions et conditions, s'il y a lieu, rattaches a
chaque categorie d'actions et pouvoirs des administrateurs relatifs a
chaque categorie d'actions qui peut etre emise en serie :
See pages 4A and 4B.
<PAGE> 6
4A
COMMON SHARES
1. VOTING RIGHTS
Each holder of Common Shares shall be entitled to receive notice of and to
attend all meetings of shareholders of the Corporation and to vote thereat,
except meetings at which only holders of a specified class of shares (other
than Common Shares) or specified series of shares are entitled to vote. At all
meetings of holders of Common Shares, each holder of Common Shares shall be
entitled to one vote in respect of each Common Share held by such holder.
2. DIVIDENDS
The Common Shares shall be entitled, subject to the rights, privileges,
restrictions and conditions attaching to any other class of shares of the
Corporation, to receive any dividend declared by the Board of Directors of the
Corporation.
3. LIQUIDATION, DISSOLUTION OR WINDING-UP
In the event of any liquidation, dissolution or winding-up of the Corporation
or other distribution of assets of the Corporation among its shareholders for
the purpose of winding-up its affairs, subject to the rights, privileges,
restrictions and conditions attaching to any other class of shares of the
Corporation, the assets and funds of the Corporation available for distribution
to shareholders shall be distributed among the holders of the Common Shares,
pro rata based on the number of Common Shares held by each holder and any other
participating outstanding series or class of shares convertible into Common
Shares.
PREFERENCE SHARES
The Preference Shares, as a class, shall have the following rights, privileges,
restrictions and conditions:
1. One or more series -- The Preference Shares may from time to time be
issued in one or more series;
2. Terms of each series -- Subject to the following provisions, and subject
to the filing of articles of amendment in prescribed form and the endorsement
thereon of a certificate of amendment, in accordance with the Business
Corporations Act (Ontario), the directors may fix from time to time before such
issue the number of shares that is to comprise each series and the
designation, rights, privileges, restrictions and conditions attaching to each
series of Preference Shares including, without limiting the generality of the
foregoing, the issue price per share, the rate or amount of any dividends or
the method of calculating any dividends, the dates of payment thereof, any
redemption, purchase and/or conversion prices and terms and conditions of any
redemption, purchase and/or conversion, and any sinking fund or other
provisions;
<PAGE> 7
-2-
4B
3. Ranking of Preference Shares -- The Preference Shares of each series
shall, with respect to the payment of any dividends and any distribution of
assets or return of capital in the event of liquidation, dissolution or winding
up of the Corporation, whether voluntary or involuntary, or any other return of
capital or distribution of the assets of the Corporation among its shareholders
for the purpose of winding up its affairs, rank on a parity with the Preference
Shares of every other series and be entitled to a preference over the Common
Shares, and over any other shares of the Corporation ranking junior to the
Preference Shares. The Preference Shares of any series may also be given such
other preferences, not inconsistent with these articles, over the Common
Shares, and any other shares of the Corporation ranking junior to such
Preference Shares as amy be fixed in accordance with section 2;
4. Cumulative Dividends and Payments on the Return of Capital -- If any
cumulative dividends, whether or not declared, or any amounts payable on the
return of capital in the event of the liquidation, dissolution or winding up of
the Corporation, in respect of a series of Preference Shares are not paid in
full, the shares of such series of Preference Shares shall participate rateably
with the shares of all other series of Preference Shares in respect of, all
accumulated cumulative dividends, whether or not declared, or all amounts
payable on the return of capital in the event of the liquidation, dissolution
or winding up of the Corporation, as the case may be.
5. Conversion into Common Shares -- The Preference Shares of any series may
be made convertible into Common Shares;
6. Voting -- Subject to the provisions of the Business Corporations Act
(Ontario), and section 7 below, the Preference Shares shall have no voting
rights as a class;
7. Variation of rights -- The provisions attaching to the Preference Shares
as a class may be amended or repealed at any time with such approval as may
then be required by law to be given by the holders of the Preference Shares as
a class.
<PAGE> 8
5
9. The issue, transfer or ownership of shares is/is not restricted and the
restrictions (if any) are as follows:
L'emission, le transfert ou la propriete d'actions est/n'est pas
restreinte. Les restrictions, s'il y a lieu, sont les suivantes:
None
10. Other provisions (if any):
Autres dispositions, s'il y a lieu:
Pursuant to the terms of the Amalgamation Agreement dated November 30,
1999, as amended by Amendment No. 1 dated February 7, 2000, the effective
date and time of the amalgamation is February 15, 2000 at 5:00 p.m.
11. The statements required by subsection 178(2) of the Business Corporations
Act are attached as Schedule "A".
Les declarations exigees aux termes du paragraphe 178(2) de la Loi sur les
compagnies constituent l'annexe "A".
12. A copy of the amalgamation agreement or directors resolutions (as the case
may be) is/are attached as Schedule "B".
Une copie de la convention de fusion ou les resolutions des
administrateurs (selon le cas) constitute(nt) l'annexe "B".
<PAGE> 9
6
These articles are signed in duplicate
Les presents statuts sont signes en double exemplaire.
Names of the amalgamating corporations and signatures and descriptions of
office of their proper officers
Denomination sociale des compagnies qui fusionnent, signature et fonction de
leurs dirigeants regulierement designes.
DELANO TECHNOLOGY CORPORATION
By: /s/ David Lewis
-------------------------------
David Lewis
Secretary
XDL DELANO HOLDINGS INC.
By: /s/ David Latner
-------------------------------
David Latner
Vice-President and Secretary
<PAGE> 10
SCHEDULE "A"
STATEMENT OF DIRECTOR OR OFFICER
1. John Gregory Foresi, of the Town of Aurora, in the Province of Ontario,
solemnly state that:
1. I am the President and a director of Delano Technology Corporation, one of
the amalgamating corporations (hereinafter called the "Corporation") and as
such have personal knowledge of the matters herein deposed to.
2. There are reasonable grounds for believing that:
(a) the Corporation is and the amalgamated corporation will be able to pay
its liabilities as they become due:
(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; and
(c) no creditor of the Corporation will be prejudiced by the amalgamation.
DATED February 14, 2000.
/s/ John Gregory Foresi
--------------------------
John Gregory Foresi
<PAGE> 11
SCHEDULE "A"
STATEMENT OF DIRECTOR OR OFFICER
I, David Latner, of the City of Toronto, in the Province of Ontario,
solemnly state that:
1. I am a director and Vice-President and Secretary of XDL Delano Holdings
Inc., one of the amalgamating corporations (hereinafter called the
"Corporation") and as such have personal knowledge of the matters herein
deposed to.
2. There are reasonable grounds for believing that:
(a) the Corporation is and the amalgamated corporation will be able to pay
its liabilities as they become due;
(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; and
(c) no creditor of the Corporation will be prejudiced by the amalgamation.
DATED February 14, 2000.
/s/ David Latner
-------------------------
David Latner
<PAGE> 12
SCHEDULE "B"
AMALGAMATION AGREEMENT made as of the 30th day of
November, 1999.
BETWEEN:
DELANO TECHNOLOGY CORPORATION, a corporation
governed by the Business Corporations Act (Ontario), ("Delano")
-- and --
XDL DELANO HOLDINGS INC., a corporation governed by
the Business Corporations Act (Ontario), ("Holdings")
RECITALS:
A. Delano was incorporated pursuant to the provisions of the Business
Corporations Act (Ontario) by Certificate and Articles of Incorporation
dated May 7, 1998 and its authorized capital consists of an unlimited
number of Common Shares, Class A Preferred Shares, Class B Preferred Shares
and Class C Preferred Shares, of which 3,500,000 Common Shares, 4,000,000
Class A Preferred Shares and 3,789,476 Class B Preferred Shares have been
issued and are currently outstanding.
B. Prior to the Effective Date of the amalgamation referenced in this
Agreement, it is anticipated that 4,326,924 Class C Preferred Shares of
Delano will be issued pursuant to the exercise of previously issued special
warrants.
C. Holdings was incorporated pursuant to the provisions of the Business
Corporations Act (Ontario) by Certificate and Articles of Incorporation
dated July 14, 1998 and its authorized capital consists of an unlimited
number of Common Shares and Class A Preferred Shares of which 3,150 Common
Shares and 1,100 Class A Preferred Shares have been issued and are
currently outstanding.
D. The parties to this Agreement, having made full disclosure each to the
other of all their respective assets and liabilities, have determined that
it is desirable that their amalgamation should be effected and, acting
under the authority contained in the Business Corporations Act (Ontario),
have agreed to amalgamate and continue as one corporation upon the terms
and conditions set out in this Agreement.
NOW THEREFORE, the parties agree as follows:
ARTICLE 1
INTERPRETATION
1.1 Definitions
Whenever used in this Agreement, the following terms shall have the respective
meanings ascribed to them as follows:
<PAGE> 13
-2-
(a) "Act" means the Business Corporations Act (Ontario) as amended from
time to time and includes any regulations made pursuant to such Act
and any term defined in the Act and not otherwise defined herein is
used in this Agreement with the same meaning;
(b) "Board" means the board of directors of the Corporation, it being
understood that references herein to matters to be decided by the
Board shall not be in derogation of the rights of the Board pursuant
to the provisions of Section 127 of the Act;
(c) "Corporation" means the corporation continuing from the amalgamation
of the parties hereto;
(d) "Expiry Date" shall have the meaning ascribed to it in the Special
Warrant Indenture, which, as at the date hereof is the date which is
the earlier to occur of (i) the fifth business day after the date on
which a receipt has been issued by the last of the securities
regulatory authorities in each province of Canada in which holders of
Special Warrants are resident for the (final) prospectus qualifying
the issuance of shares of Delano upon exercise of the Special Warrants
and (ii) June 24, 2000;
(e) "Special Warrants" means, collectively, the special warrants of Delano
issued pursuant to the Special Warrant Indenture;
(f) "Special Warrant Indenture" means the special warrant indenture dated
as of June 24, 1999 between Delano and The Trust Company of Bank of
Montreal, as such indenture may be amended or supplemented from time
to time; and
(g) "Fair Market Value" means, except as otherwise explicitly set forth
herein, (a) in respect of the Class A Preferred Shares, the Class B
Preferred Shares and the Class C Preferred Shares, in the event that
the Common Shares of Delano have been approved for trading on NASDAQ,
the closing price of the Common Shares on the date prior to the Expiry
Date, or if there is no such closing price, the opening price of the
Common Shares on the Expiry Date, or if there is no such opening price
prior to the effective time of the amalgamation, the price of the
Common Shares issued by Delano in the public offering to which the
NASDAQ listing of Common Shares relates; or (b) in the event that the
Common Shares of Delano have not been approved for trading on NASDAQ,
the amount, as determined by the directors of Delano who are not
precluded from voting in respect of the amalgamation by virtue of
Section 132(5) of the Act, in their sole discretion, that is
equivalent to the price of the share or other property, as the case
may be, on the effective date of the amalgamation in an open and
unrestricted market between informed prudent parties, acting at arm's
length and under no compulsion to act.
<PAGE> 14
-3-
ARTICLE 2
IMPLEMENTATION
2.1 EFFECTIVE DATE
Delano and Holdings shall amalgamate under the provisions of the Act effective
immediately following the deemed exercise of Special Warrants on the Expiry
Date and shall continue as one corporation upon the terms and conditions set
out in this Agreement. Subject to Section 2.3, articles of amalgamation in
prescribed form shall be sent to the Director under the Act, together with all
other documents necessary to bring the amalgamation into effect.
2.2 EFFECT
Upon the amalgamation of Delano and Holdings and their continuance as one
corporation becoming effective:
(a) the Corporation shall possess all the property, rights, privileges
and franchises and shall be subject to all liabilities; including
civil, criminal and quasi-criminal and all contracts, disabilities and
debts of each of Delano and Holdings;
(b) a conviction against, or ruling, order or judgment in favour or
against any of Delano or Holdings may be enforced by or against the
Corporation;
(c) the Corporation shall be deemed to be the party plaintiff or the party
defendant, as the case may be, in any civil action commenced by or
against Delano or Holdings before the amalgamation has become
effective; and
(d) except for the purposes specified in the Act, the Corporation's
articles of amalgamation shall be deemed to be its articles of
incorporation and the Corporation's certificate of amalgamation shall
be deemed to be its certificate of incorporation.
2.3 TERMINATION
Notwithstanding the approval of this Agreement by their shareholders, the
board of directors of any of Delano and Holdings, without further shareholder
approval, may terminate the amalgamation and this Agreement at any time before
the issuance of a certificate of amalgamation.
ARTICLE 3
CONDITIONS PRECEDENT
3.1 MUTUAL CONDITION PRECEDENT
The amalgamation is subject to the condition that the amalgamation and this
Agreement shall be approved by:
(a) (i) not less than two-thirds of the votes cast by the holders of
Common Shares of Holdings who vote in respect of the special
resolution to approve the amalgamation and this Agreement and not less
than two-thirds of the votes cast
<PAGE> 15
-4-
by the holders of Class A Preferred Shares of Holdings, voting
separately as a class, who vote in respect of the special resolution
to approve the amalgamation and this Agreement at a special meeting of
Holdings' Shareholders called for that purpose or (ii) all of the
holders of Common Shares and Class A Preferred Shares of Holdings, in
writing.
(b) (i) not less than two-thirds of the votes cast by the holders of
Common Shares, Class A Preferred Shares, Class B Preferred Shares and
Class C Preferred Shares, each voting separately as a single class,
who vote in respect of the special resolution to approve the
amalgamation and this Agreement at a special meeting of Delano
shareholders called for that purpose or (ii) all of the holders of
Common Shares, Class A Preferred Shares, Class B Preferred Shares and
Class C Preferred Shares of Delano, in writing; and
(c) Mr. Bahman Koohestani, in accordance with the terms of the amended and
restated shareholders agreement in respect of Delano dated as of
January 27, 1999.
ARTICLE 4
ORGANIZATION
4.1 NAME
The name of the Corporation shall be DELANO TECHNOLOGY CORPORATION.
4.2 AUTHORIZED CAPITAL
The Corporation shall be authorized to issue the following shares:
(a) an unlimited number of Common Shares;
(b) an unlimited number of Class A Special Shares;
(c) an unlimited number of Class B Special Shares; and
(d) an unlimited number of Class C Special Shares.
provided that, notwithstanding the foregoing, the Corporation shall be
authorized to issue an unlimited number of Common Shares.
The holders of the Common Shares, the Class A Special Shares, the Class B
Special Shares, the Class C Special Shares and Preference Shares shall have the
rights, privileges, and are subject to the restrictions and conditions set
out in Schedule A to this Agreement or, in the event that the issued and
outstanding Special Shares of Delano have been converted to Common Shares of
Delano in accordance with their terms prior to the effective time of the
amalgamation, the holders of Common Shares and Preference Shares shall have the
rights, privileges, and are subject to the restrictions and conditions set out
in Schedule B to this Agreement.
<PAGE> 16
- 5-
4.3 BUSINESS
There shall be no restrictions on the business the Corporation may carry on or
on the powers the Corporation may exercise.
4.4 REGISTERED OFFICE
Until changed in accordance with the Act, the place in Ontario where the
registered office of the Corporation is to be situated is the City of Toronto,
in the Province of Ontario, and the address of the registered office of the
Corporation shall be 40 West Wilmot Street, Richmond Hill, Ontario, L4B 1H8.
4.5 BY-LAWS
Until repealed, amended, altered or added to, so far as applicable, the by-laws
of Delano at the time the amalgamation becomes effective shall be the by-laws
of the Corporation. A copy of the by-laws may be examined at the registered
office of the Corporation.
4.6 SHARE CERTIFICATE
Until altered, the forms of share certificates for the Common Shares, the Class
A Special Shares, the Class B Special Shares and the Class C Special Shares of
the Corporation shall be in the same forms respectively as the share
certificates for the Common Shares, the Class A Preferred Shares, the Class B
Preferred Shares and the Class C Preferred Shares of Delano, as such share
certificate shall be amended from time to time.
4.7 BANKING
Until repealed, amended, altered or added to, so far as applicable, the banking
resolutions of the Corporation shall be the same as the banking resolutions of
Delano.
ARTICLE 5
DIRECTORS AND OFFICERS
5.1 DIRECTORS
Until changed in accordance with the Act, the Board of the Corporation shall
consist of the Board of Delano at the time the amalgamation becomes effective.
Each director shall hold office until the first meeting of shareholders of the
Corporation, or until his successor is elected or appointed. The election of
subsequent directors shall take place thereafter in accordance with the
provisions of the by-laws of the Corporation and the Act. Subject to the
provisions of the Act and any unanimous shareholder agreement, the Board shall
manage or supervise the management of the business and affairs of the
Corporation.
5.2 OFFICERS
The officers of the Corporation shall consist of the officers of Delano at the
time the amalgamation becomes effective, until their successors are duly
elected or appointed.
<PAGE> 17
-6-
ARTICLE 6
ISSUED CAPITAL
6.1 TRANSITION
At the time the amalgamation of Delano and Holdings becomes effective, their
shares become issued and fully paid shares of the Corporation, or are cancelled,
as the case may be, as follows:
(a) Class A Preferred Shares (Holdings) -- all of the issued and
outstanding Class A Preferred Shares in the capital of Holdings shall be
converted into fully paid and non-assessable Class A Special Shares, Class B
Special Shares and Class C Special Shares of the Corporation equal to that
percentage (the "Class A Preferred Applicable Percentage") of each of (A)
4,000,000 Class A Preferred Shares, (B) 2,631,580 Class B Preferred Shares and
(C) 124,308 Class C Preferred Shares that the Fair Market Value of the Class A
Preferred Shares of Holdings is of the Fair Market Value of Holdings; and for
this purpose the Fair Market Value of the Class A Preferred Shares of Holdings
is $4,646,401.60 and the aggregate Fair Market Value of Holdings is the
aggregate Fair Market Value of each of 4,000,000 Class A Preferred Shares,
2,631,308 Class B Preferred Shares and 124,308 Class C Preferred Shares.
Accordingly, each Class A Preferred Share of Holdings shall be converted
into fully paid and non-assessable Class A Special Shares, Class B Special
Shares and Class C Special Shares in accordance with the following formula:
Number of Class A Special Shares =
Class A Preferred Applicable Percentage x 4,000,000
---------------------------------------------------
1,100
Number of Class B Special Shares =
Class A Preferred Applicable Percentage x 2,631,580
---------------------------------------------------
1,100
Number of Class C Special Shares =
Class A Preferred Applicable Percentage x 124,308
---------------------------------------------------
1,100
(b) Common Shares (Holdings) -- all of the issued and outstanding Common
Shares in the capital of Holdings shall be converted into fully paid and
non-assessable Class A Special Shares, Class B Special Shares and Class C
Special Shares of the Corporation equal to that percentage (the "Common Share
Applicable Percentage") of each of (A) 4,000,000 Class A Preferred Shares, (B)
2,631,580 Class B Preferred Shares and (C) 124,308 Class C Preferred Shares that
the Fair Market Value of the Common Shares of Holdings is of the Fair Market
Value of Holdings and for this purpose the Fair Market Value of the Class A
Preferred Shares of Holdings is $4,646,401.60 and the Fair Market Value of
Holdings is the
<PAGE> 18
-7-
aggregate Fair Market Value of each of 4,000,000 Class A Preferred Shares
and 2,631,308 Class B Preferred Shares and 124,308 Class C Preferred Shares
and the Fair Market Value of the Common Shares of Holdings is equal to the
Fair Market Value of Holdings less the Fair Market Value of the Class A
Preferred Shares of Holdings.
Accordingly, each Common Share of Holdings shall be converted into fully
paid and non-assessable Class A Special Shares, Class B Special Shares and
Class C Special Shares in accordance with the following formula:
Number of Class A Special Shares =
Common Share Applicable Percentage x 4,000,000
----------------------------------------------
3,150
Number of Class B Special Shares =
Common Share Applicable Percentage x 2,631,580
----------------------------------------------
3,150
Number of Class C Special Shares =
Common Share Applicable Percentage x 124,308
--------------------------------------------
3,150
(c) Common Shares -- all of the issued and outstanding Common Shares in the
capital of Delano held by shareholders other than Holdings shall be
converted into fully paid and non-assessable Common Shares of the
Corporation on the basis of one Common Share of the Corporation for each
Common Share of Delano.
(d) Class B Preferred Shares -- all of the issued and outstanding Class B
Preferred Shares in the capital of Delano held by Shareholders other than
Holdings shall be converted into fully paid and non-assessable Class B
Special Shares of the Corporation on the basis of one Class B Special Share
of the Corporation for each Class B Preferred Share of Delano;
(e) Class C Preferred Shares -- all of the issued and outstanding Class C
Preferred Shares in the capital of Delano held by shareholders other than
Holdings shall be converted into fully paid and non-assessable Class C
Special Shares of the Corporation on the basis of one Class C Special Share
of the Corporation for each Class C Preferred Share of Delano; and
(f) Cancelled Shares -- the following shares are cancelled:
(i) the 4,000,000 issued and outstanding Class A Preferred Shares in the
capital of Delano, without any repayment of capital in respect
thereof;
(ii) the 2,631,580 Class B Preferred Shares in the capital of Delano owned
by Holdings, without any repayment of capital in respect thereof;
<PAGE> 19
-8-
(iii) the 124,308 Class C Preferred Shares in the capital of
Delano owned by Holdings, without any repayment of capital
in respect thereof;; and
(iv) all authorized but unissued shares in the capital of Delano
and Holdings;
6.2 CONVERSION TO COMMON SHARES OF DELANO
In the event that the issued and outstanding preferred shares of Delano have
been converted to Common Shares of Delano in accordance with their terms prior
to the effective time of the amalgamation, all references in this Agreement to
Special Shares of the Corporation shall be deemed to be references to Common
Shares of the Corporation, as if such Special Shares were Class A Preferred
Shares, Class B Preferred Shares or Class C Preferred Shares of Delano, as the
case may be, and were converted to Common Shares in accordance with their
terms and, in the case of the Class C Preferred Shares (in addition to and in
the same manner as the Class A Preferred Shares and Class B Preferred Shares),
as adjusted to give effect to any stock split in respect of the Common Shares.
6.3 FRACTIONAL SHARES
Notwithstanding anything herein contained, no fractional shares of the
Corporation will be issued in connection with the amalgamation. Where the
aggregate number of Class A Special Shares, Class B Special Shares, Class C
Special Shares of the Corporation, as the case may be, to be issued to a holder
of Class A Preferred Shares or Common Shares of Holdings would result in a
fraction of a share being issued, such holder shall receive, in lieu of such
fractional share, a cash payment from the Corporation equal to the fraction of
a Class A Special Share, Class B Special Share, Class C Special Share or Common
Share of the Corporation otherwise issuable, multiplied by the Fair Market
Value of the Class A Preferred Share or Common Share of Holdings, as the case
may be.
6.4 STATED CAPITAL
The aggregate stated capital of the Corporation shall be equal to the aggregate
stated capital of Holdings plus the aggregate stated capital of Delano
immediately prior to the amalgamation, less the stated capital attributable to
the shares of Delano owned by Holdings which are to be cancelled on the
amalgamation and shall be allocated among the shares of the Corporation as
follows:
(a) $1,500,018.65 to the Class A Special Shares of the Corporation;
(b) $3,600,014.37 to the Class B Special Shares of the Corporation;
(c) $22,500,005.58 to the Class C Special Shares of the Corporation; and
(d) $3,500 to the Common Shares of the Corporation
6.5 SHARE CERTIFICATES
After the amalgamation becomes effective, the shareholders of Delano and
Holdings, if and when requested by the Corporation, shall surrender for
cancellation the certificates representing
<PAGE> 20
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shares held by them in Delano and Holdings, respectively, and shall be
entitled to receive, upon request, certificates for shares of the Corporation
on the basis aforesaid.
ARTICLE 7
GENERAL
7.1 INDEMNITY
XDL Ventures Corp. covenants and agrees with Delano to indemnify and save
harmless Delano from and against any and all liabilities of Holdings that
Delano may assume pursuant to the amalgamation.
7.2 EXPENSES
Whether or not the amalgamation is consummated, Holdings agrees to pay or to
reimburse Delano for all out of pocket expenses of Delano relating to the
amalgamation.
7.3 JOINDER
XDL Ventures Corp. has executed this Agreement for the purpose of agreeing to
be bound by the provisions of Section 7.1.
IN WITNESS WHEREOF the parties have executed this Agreement as of the date
first written above.
DELANO TECHNOLOGY CORPORATION
By: /s/ David Latner
---------------------------------------
Name: David Latner
Title: Secretary
XDL DELANO HOLDINGS INC.
By: /s/ David Latner
---------------------------------------
Name: David Latner
Title: Vice President and Secretary
EXECUTED as of the date first written above, for the purposes of agreeing to be
bound by Section 6.1.
XDL VENTURES CORP.
By: /s/ David Latner
---------------------------------------
Name: David Latner
Title: Director
<PAGE> 21
SCHEDULE "B"
AMENDMENT NO. 1 DATED FEBRUARY 7, 2000 TO THE AMALGAMATION AGREEMENT
MADE AS OF THE 30TH DAY OF NOVEMBER, 1999.
BETWEEN:
DELANO TECHNOLOGY CORPORATION, a corporation governed by the Business
Corporations Act (Ontario), ("Delano")
- and -
XDL DELANO HOLDINGS INC., a corporation governed by the Business
Corporations Act (Ontario), ("Holdings")
RECITALS:
A. Delano and Holdings have entered into an Amalgamation Agreement dated as of
the 30th day of November, 1999;
B. Delano and Holdings wish to amend the Amalgamation Agreement in certain
respects, which amendments have been approved in writing by the
shareholders of each of Delano and Holdings.
NOW THEREFORE, the parties agree as follows:
ARTICLE 1
1.1 Section 4.2 of the Amalgamation Agreement is hereby deleted in its entirety
and replaced by the following:
4.2 AUTHORIZED CAPITAL
The Corporation shall be authorized to issue the following shares:
(a) an unlimited number of Common Shares;
(b) an unlimited number of Class A Special Shares;
(c) an unlimited number of Class B Special Shares; and
(d) an unlimited number of Class C Special Shares.
provided that, notwithstanding the foregoing, in the event that the issued
and outstanding Special Shares of Delano have been converted to Common
Shares of Delano in accordance with their terms prior to the effective time
of the amalgamation, the Corporation shall be authorized to issue an
unlimited number of Common Shares and an unlimited number of Preference
Shares.
The holders of the Common Shares, the Class A Special Shares, the Class B
Special Shares the Class C Special Shares and Preference Shares shall have
the rights, privileges, and are subject to the restrictions and conditions
set out in Schedule A to this Agreement
<PAGE> 22
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or, in the event that the issued and outstanding Special Shares of Delano
have been converted to Common Shares of Delano in accordance with their
terms prior to the effective time of the amalgamation, the holders of
Common Shares and Preference Shares shall have the rights, privileges, and
are subject to the restrictions and conditions set out in Schedule B to
this Agreement.
1.2 Section 6.1 of the Amalgamation Agreement is hereby amended by deleting
Section 6.1(c) in its entirety and replacing it with the following:
(c) Common shares -- all of the issued and outstanding Common Shares in
the capital of Delano held by shareholders other than Holdings shall be
converted into fully paid and non-assessable Common Shares of the
Corporation on the basis of one Common Share of the Corporation for each
Common Share of Delano.
1.3 Section 6.2 of the Amalgamation Agreement is hereby deleted in its
entirety and replaced by the following:
6.2 CONVERSION TO COMMON SHARES OF DELANO
In the event that the issued and outstanding preferred shares of Delano
have been converted to Common Shares of Delano in accordance with their
terms prior to the effective time of the amalgamation, all references in
this Agreement to Special Shares of the Corporation shall be deemed to be
references to Common Shares of the Corporation, as if such Special Shares
were Class A Preferred Shares, Class B Preferred Shares or Class C
Preferred Shares of Delano, as the case may be, and were converted to
Common Shares in accordance with their terms and, in the case of the Class
C Preferred Shares (in addition to and in the same manner as the Class A
Preferred Shares and Class B Preferred Shares), as adjusted to give effect
to any stock split in respect of the Common Shares.
1.4 Section 6.5 of the Amalgamation Agreement is hereby deleted in its entirety
and replaced by the following:
6.5 SHARE CERTIFICATES
After the amalgamation becomes effective, the shareholders of Delano and
Holdings, if and when requested by the Corporation, shall surrender for
cancellation the certificates representing shares held by them in Delano
and Holdings, respectively, and shall be entitled to receive, upon request,
certificates for shares of the Corporation on the basis aforesaid.
1.5 Schedule A of the Amalgamation Agreement is hereby amended by adding at the
end thereof the following:
PREFERENCE SHARES
The Preference Shares, as a class, shall have the following rights,
privileges, restrictions and conditions:
1. One or more series -- The Preference Shares may from time to time be
issued in one or more series;
<PAGE> 23
-3-
2. Terms of each series -- Subject to the following provisions, and
subject to the filing of articles of amendment in prescribed form and the
endorsement thereon of a certificate of amendment, in accordance with the
Business Corporations Act (Ontario), the directors may fix from time to time
before such issue the number of shares that is to comprise each series and the
designation, rights, privileges, restrictions and conditions attaching to each
series of Preference Shares including, without limiting the generality of the
foregoing, the issue price per share, the rate or amount of any dividends or the
method of calculating any dividends, the dates of payment thereof, any
redemption, purchase and/or conversion prices and terms and conditions of any
redemption, purchase and/or conversion, and any sinking fund or other
provisions;
3. Ranking of Preference Shares -- The Preference Shares of each series
shall, with respect to the payment of any dividends and any distribution of
assets or return of capital in the event of liquidation, dissolution or winding
up of the Corporation, whether voluntary or involuntary, or any other return of
capital or distribution of the assets of the Corporation among its shareholders
for the purpose of winding up its affairs, rank on a parity with the Preference
Shares of every other series and be entitled to a preference over the Common
Shares, and over any other shares of the Corporation ranking junior to the
Preference Shares. The Preference Shares of any series may also be given such
other preferences, not inconsistent with these articles, over the Common Shares,
and any other shares of the Corporation ranking junior to such Preference Shares
as may be fixed in accordance with section 2;
4. Cumulative Dividends and Payments on the Return of Capital -- If any
cumulative dividends, whether or not declared, or any amounts payable on the
return of capital in the event of the liquidation, dissolution or winding up of
the Corporation, in respect of a series of Preference Shares are not paid in
full, the shares of such series of Preference Shares shall participate rateably
with the shares of all other series of Preference Shares in respect of, all
accumulated cumulative dividends, whether or not declared, or all amounts
payable on the return of capital in the event of the liquidation, dissolution or
winding up of the Corporation, as the case may be.
5. Conversion into Common Shares -- The Preference Shares of any series
may be made convertible into Common Shares;
6. Voting -- Subject to the provisions of the Business Corporations Act
(Ontario), and section 7 below, the Preference Shares shall have no voting
rights as a class;
7. Variation of rights -- The provisions attaching to the Preference
Shares as a class may be amended or repealed at any time with such approval as
may then be required by law to be given by the holders of the Preference Shares
as a class.
1.6 The Amalgamation Agreement is hereby amended by adding the following as
Schedule B thereto:
<PAGE> 24
- 4 -
COMMON SHARES
1. VOTING RIGHTS
Each holder of Common Shares shall be entitled to receive notice of and to
attend all meetings of shareholders of the Corporation and to vote thereat,
except meetings at which only holders of a specified class of shares (other than
Common Shares) or specified series of shares are entitled to vote. At all
meetings of holders of Common Shares, each holder of Common Shares shall be
entitled to one vote in respect of each Common Share held by such holder.
2. DIVIDENDS
The Common Shares shall be entitled, subject to the rights, privileges,
restrictions and conditions attaching to any other class of shares of the
Corporation, to receive any dividend declared by the Board of Directors of the
Corporation.
3. LIQUIDATION, DISSOLUTION OR WINDING-UP
In the event of any liquidation, dissolution or winding-up of the Corporation or
other distribution of assets of the Corporation among its shareholders for the
purpose of winding-up its affairs, subject to the rights, privileges,
restrictions and conditions attaching to any other class of shares of the
Corporation, the assets and funds of the Corporation available for distribution
to shareholders shall be distributed among the holders of the Common Shares, pro
rata based on the number of Common Shares held by each holder and any other
participating outstanding series or class of shares convertible into Common
Shares.
PREFERENCE SHARES
The Preference Shares, as a class, shall have the following rights, privileges,
restrictions and conditions:
1. One or more series - The Preference Shares may from time to time be issued
in one or more series;
2. Terms of each series - Subject to the following provisions, and subject to
the filing of articles of amendment in prescribed form and the endorsement
thereon of a certificate of amendment, in accordance with the Business
Corporations Act (Ontario), the directors may fix from time to time before such
issue the number of shares that is to comprise each series and the designation,
rights, privileges, restrictions and conditions attaching to each series of
Preference Shares including, without limiting the generality of the foregoing,
the issue price per share, the rate or amount of any dividends or the method of
calculating any dividends, the dates of payment thereof, any redemption,
purchase and/or conversion prices and terms and conditions of any redemption,
purchase and/or conversion, and any sinking fund or other provisions;
<PAGE> 25
- 5 -
3. Ranking of Preference Shares -- The Preference Shares of each series
shall, with respect to the payment of any dividends and any distribution
of assets or return of capital in the event of liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, or any
other return of capital or distribution of the assets of the Corporation
among its shareholders for the purpose of winding up its affairs, rank on a
parity with the Preference Shares of every other series and be entitled to
a preference over the Common Shares, and over any other shares of the
Corporation ranking junior to the Preference Shares. The Preference Shares
of any series may also be given such other preferences, not inconsistent
with these articles, over the Common Shares, and any other shares of the
Corporation ranking junior to such Preference Shares as may be fixed in
accordance with section 2;
4. Cumulative Dividends and Payments on the Return of Capital -- If any
cumulative dividends, whether or not declared, or any amounts payable on
the return of capital in the event of the liquidation, dissolution or
winding up of the Corporation, in respect of a series of Preference Shares
are not paid in full, the shares of such series of Preference Shares shall
participate rateably with the shares of all other series of Preference
Shares in respect of, all accumulated cumulative dividends, whether or not
declared, or all amounts payable on the return of capital in the event of
the liquidation, dissolution or winding up of the Corporation, as the case
may be.
5. Conversion into Common Shares -- The Preference Shares of any series
may be made convertible into Common Shares;
6. Voting -- Subject to the provisions of the Business Corporations Act
(Ontario), and section 7 below, the Preference Shares shall have no voting
rights as a class;
7. Variation of rights -- The provisions attaching to the Preference
Shares as a class may be amended or repealed at any time with such approval
as may then be required by law to be given by the holders of the Preference
Shares as a class.
IN WITNESS WHEREOF the parties have executed this Agreement as of the date first
written above.
DELANO TECHNOLOGY CORPORATION
By: /s/ David Lewis
-----------------------------------
Name: David Lewis
Title: Secretary
XDL DELANO HOLDINGS INC.
By: /s/ David Latner
-----------------------------------
Name: David Latner
Title: Vice President and Secretary
