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Following the closing of the Merger Agreement, PCMA intends to continue to pursue its
objectives as a leading industry voice for its members in respect of promoting and fostering
the private capital markets in Canada. It intends to continue to pursue this objective in
accordance with its current Articles and bylaws, subject only to the Amendment Resolution
described herein. NEMA, as a legal entity, would be wound-up and dissolved. However, the
PCMA would recognize NEMA as a founding member of the PCMA, and the founding directors
and leadership team of NEMA will be recognized in a manner substantially equivalent to the
founding Directors and leadership team of the PCMA.
MERGER AGREEMENT
To effect the Merger, on December 14, 2017, PCMA and NEMA entered into an Asset
Purchase Agreement (the “Merger Agreement”) whereby the PCMA agreed to acquire certain
assets of NEMA for One ($1.00) Dollar. Such assets to be acquired include, among other
things, the cash on the NEMA balance sheet, the NEMA name, and its previous name,
Western Exempt Market Association, its industry and membership contacts and relations, its
intellectual property rights, including those in its publication, “Private Investor” (formerly
known as “Exempt Edge”) and its website, and its content management technology used for
publishing. NEMA’s intellectual property rights do not however include the name “Exempt
Edge” as it is not owned by NEMA. The PCMA will not be assuming any liabilities that NEMA
may have.
To further effect the Merger, the parties intend to nominate certain members from their
respective leadership teams. To do so, as a condition of and subject to closing the Merger
Agreement, each of the NEMA Nominees will be appointed as directors and or executives of
the PCMA. See details under the heading “NEMA Nominees”, below.
The Merger Agreement provides for a January 12, 2018 closing date, or such other date as
the parties may agree. However, closing of the Merger is subject to the satisfaction of
certain conditions. In addition to conditions to closing typically provided for in transactions
similar in nature and size to those contemplated under the Merger Agreement, the Merger
Agreement includes a condition for the benefit of each party that their respective members
approve the Merger Agreement and the transactions contemplated thereunder. Pursuant to
the Merger Agreement, each party has agreed to call a special meeting of its members for
this purpose.
The Merger Agreement further provides that NEMA will seek to obtain the approval of its
members to wind-up and dissolve immediately following the closing of the transactions
under the Merger Agreement. Approval of the wind-up and dissolution of NEMA is also a
condition to closing the Merger Agreement to the benefit of the PCMA.
