PNF.P Penfold Cap Acquisition Iii Cp

TORONTO, July 19 /CNW/ -- TORONTO, July 19 /CNW/ - Penfold Capital Acquisition II Corporation (PAC.P:TSXV) ("Penfold II") and Penfold Capital Acquisition III Corporation (PNF.P:TSXV) ("Penfold III") are pleased to announce that they have reached an agreement to amalgamate pursuant to the Canada Business Corporations Act (the "CBCA") and in accordance with the policies of the TSX Venture Exchange (the "Exchange"). Penfold II and Penfold III, as capital pool companies pursuant to Policy 2.4 Capital Pool Companies of the Exchange ("Policy 2.4"), share the sole business objective of identifying and evaluating assets and/or businesses with a view to completing a Qualifying Transaction. Penfold II and Penfold III also have identical directors and officers. Management of each of Penfold II and Penfold III reviewed several potential opportunities for acquiring a business or assets for the purposes of completing a Qualifying Transaction. However, Penfold II and Penfold III each determined that they would be better positioned to complete a Qualifying Transaction as a combined entity (the "Resulting Issuer"). The amalgamation of Penfold II and Penfold III (the "Amalgamation") is expected to become effective on or before October 4, 2010. Upon completion of the Amalgamation: (i) each issued and outstanding share of Penfold II will be exchanged for one-half of one (0.5) share of the Resulting Issuer; (ii) each issued and outstanding share of Penfold III will be exchanged for one (1) share of the Resulting Issuer; (iii) each convertible security of Penfold II will automatically entitle the holder thereof to purchase one-half of one (0.5) share of the Resulting Issuer at an exercise price equal to the exercise price specified in the agreement governing such convertible security; and (iv) each convertible security of Penfold III will automatically entitle the holder thereof to purchase one (1) share of the Resulting Issuer at an exercise price equal to the exercise price specified in the agreement governing such convertible security. Pursuant to Section 190 of the CBCA, registered shareholders of Penfold II and Penfold III are entitled to dissent in respect of the Amalgamation. If the Amalgamation is completed, dissenting shareholders who have complied with the dissent procedures under Section 190 of the CBCA will be entitled to be paid the fair value of their shares. The Amalgamation is considered a "business combination" and "related party transaction" under Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions and, accordingly, requires approval by the holders of a majority of the shares of each of Penfold II and Penfold III, excluding shares held by interested parties ("Majority of the Minority Shareholder Approval") (1,750,000 shares in respect of Penfold II and 1,640,000 shares in respect of Penfold III) at each of the shareholders meetings to be called by Penfold II and Penfold III to seek approval for the Amalgamation (the "Meetings"), in addition to the requirements under the CBCA which require that the Amalgamation be approved by at least two-thirds (66 2/3%) of all votes cast at each of the Meetings. As a result, the Amalgamation is conditional upon (among other things) the Amalgamation being approved at each of the Meetings by: (i) special resolution (affirmative vote of at least two-thirds (66 2/3%) of the votes cast thereon); and (ii) Majority of the Minority Shareholder Approval. If the requisite shareholder approval is obtained at each of the Meetings, and all of the conditions precedent to the completion of the Amalgamation have been satisfied or waived, Penfold II and Penfold III intend to complete the Amalgamation under the CBCA. In connection with the Meetings a detailed joint information circular will be prepared and distributed to shareholders and filed on SEDAR. Immediately following the completion of the Amalgamation, the shareholders of Penfold II will collectively own 25.93% of the shares of the Resulting Issuer and the shareholders of Penfold III will collectively own the 74.07% of the shares of the Resulting Issuer (in each case, calculated on a non-diluted basis). Completion of the Amalgamation remains conditional on obtaining all necessary regulatory and shareholder approvals, including the approval of the Exchange. About Penfold Capital Acquisition II Corporation Penfold II is a capital pool company under the Policy 2.4. Pursuant to Policy 2.4, Penfold II was required to complete a Qualifying Transaction by July 2, 2010. As Penfold II did not complete a Qualifying Transaction by July 2, 2010, trading in the Penfold II Shares was suspended by the Exchange effective July 5, 2010 for failure to complete a Qualifying Transaction within the prescribed time period in accordance with Policy 2.4. As a result, Penfold II was placed by the Exchange on notice to delist and that, in order to avoid delisting, it must, on or by October 4, 2010, complete (i) a Qualifying Transaction, (ii) a transfer to the NEX, or (iii) the Amalgamation. About Penfold Capital Acquisition III Corporation Penfold II is a capital pool company under the Policy 2.4. Pursuant to Policy 2.4, Penfold III is required to complete a Qualifying Transaction by December 10, 2010. Penfold II and Penfold III are part of the Penfold Capital group of companies. Penfold Capital is a private merchant bank. For more information see www.penfoldcapital.com. The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved of the contents of this release. The information in this news release includes certain information and statements about management's view of future events, expectations, plans and prospects that constitute forward looking statements. These statements are based upon assumptions that are subject to significant risks and uncertainties. Because of these risks and uncertainties and as a result of a variety of factors, the actual results, expectations, achievements or performance may differ materially from those anticipated and indicated by these forward looking statements. Although Penfold II and Penfold III believe that the expectations reflected in forward looking statements are reasonable, they can give no assurances that the expectations of any forward looking statements will prove to be correct. Except as required by law, Penfold II and Penfold III disclaim any intention and assume no obligation to update or revise any forward looking statements to reflect actual results, whether as a result of new information, future events, changes in assumptions, changes in factors affecting such forward looking statements or otherwise. Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. Penfold Capital Corporation: Gary Clifford-Managing Director, Phone: (416) 418-9802; Salil Munjal-Managing Director, Phone: (416) 722-2227

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