LongReach Group Limited, in the matter of LongReach Group Limited
[2006] FCA 1586
•18 SEPTEMBER 2006
FEDERAL COURT OF AUSTRALIA
LongReach Group Limited, in the matter of LongReach Group Limited
[2006] FCA 1586IN THE MATTER OF LONGREACH GROUP LIMITED (ACN 006 584 596)
LONGREACH GROUP LIMITED (ACN 006 584 596)
NSD 1776 OF 2006
LINDGREN J
22 NOVEMBER 2006
SYDNEY
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NSD 1776 OF 2006
IN THE MATTER OF LONGREACH GROUP LIMITED (ACN 006 584 596)
LONGREACH GROUP LIMITED (ACN 006 584 596)
Plaintiff
JUDGE:
LINDGREN J
DATE OF ORDER:
18 SEPTEMBER 2006
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1. Pursuant to s 411(1) of the Corporations Act 2001:
(a)The plaintiff, LongReach Group Limited (‘LongReach’), convene a meeting (‘Share Meeting’) of its shareholders (‘LongReach Shareholders’) for the purpose of considering, and if thought fit, agreeing (with or without modification) to a scheme of arrangement proposed to be made between LongReach and the LongReach Shareholders (‘Share Scheme’), being the scheme substantially in the form of the draft contained in Attachment 2 of the explanatory memorandum in relation to the Share Scheme, being Exhibit A (‘Explanatory Memorandum’).
(b)LongReach convene a meeting (‘Note Meeting’) of the holders of LongReach convertible notes (‘LongReach Noteholders’) for the purpose of considering, and if thought fit, agreeing (with or without modification) to a scheme of arrangement proposed to be made between LongReach and the LongReach Noteholders (‘Note Scheme’), being the scheme substantially in the form of the draft contained in Attachment 4 of the Explanatory Memorandum.
(c)LongReach convene a meeting (‘Options Meeting’) of the holders of LongReach Options (‘LongReach Optionholders’) for the purpose of considering, and if thought fit, agreeing (with or without modification) to a scheme of arrangement proposed to be made between LongReach and the LongReach Optionholders (‘Option Scheme’), being the scheme substantially in the form of the draft contained in Attachment 3 of the Explanatory Memorandum.
(d)Each of the Share Meeting, Note Meeting and Options Meeting be held at AGSM, CBD Campus, Level 6, 10 O’Connell Street, Sydney on Wednesday, 1 November 2006 at 11.00 am in the case of the Share Meeting; at 11.15 am in the case of the Note Meeting (or as soon after that time as the Share Meeting has concluded or is adjourned); and at 11.30 am in the case of the Options Meeting (or as soon after that time as the Note Meeting has concluded or is adjourned).
(e)The Chairperson of each of the Share Meeting, Note Meeting and Options Meeting be Allan Richard Farrar, and in his absence, Stephe Peter Wilks.
(f)The Chairperson appointed to each of the Share Meeting, Note Meeting and Options Meeting has the power to adjourn the meeting in his absolute discretion.
(g)All voting at each of the Share Meeting, Note Meeting and Options Meeting be by poll as declared by the Chairperson.
(h)The explanatory statement in the Explanatory Memorandum be approved for distribution to LongReach Shareholders, LongReach Optionholders and LongReach Noteholders.
2.Regulations 5.6.12 and 5.6.14 to 5.6.36A of the Corporations Regulations 2001 shall not apply to any of the Share Meeting, Note Meeting and Options Meeting.
3.The proceeding be stood over to 9.30 am on Thursday, 9 November 2006 before Lindgren J for the hearing of any application to approve the Share Scheme, Option Scheme and Note Scheme.
4. Liberty to restore on two days’ notice.
5. These Orders be entered forthwith.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NSD 1776 OF 2006
IN THE MATTER OF LONGREACH GROUP LIMITED (ACN 006 584 596)
LONGREACH GROUP LIMITED (ACN 006 584 596)
Plaintiff
JUDGE:
LINDGREN J
DATE OF ORDER:
9 NOVEMBER 2006
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1.Pursuant to s 411(4)(b) of the Corporations Act2001 (‘the Act’) the scheme of arrangement between the plaintiff and its shareholders in the form annexed hereto and marked with the letter ‘A’ [Annexure A comprises 16 pages and is not attached to this copy, but is available electronically] be approved.
2.Pursuant to s 411(4)(b) of the Act, the scheme of arrangement between the plaintiff and its noteholders in the form annexed hereto and marked with the letter ‘B’ [Annexure B comprises 16 pages and is not attached to this copy, but is available electronically] be approved.
3.Pursuant to s 411(4)(b) of the Act, the scheme of arrangement between the plaintiff and its optionholders in the form annexed hereto and marked with the letter ‘C’ [Annexure C comprises 16 pages and is not attached to this copy, but is available electronically] be approved.
4.Pursuant to s 411(12) of the Act, the plaintiff be exempted from compliance with s 411(11) of the Act in relation to each of the orders at paragraphs 1, 2 and 3.
5. These orders be entered forthwith.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NSD 1776 OF 2006
IN THE MATTER OF LONGREACH GROUP LIMITED (ACN 006 584 596)
LONGREACH GROUP LIMITED (ACN 006 584 596)
Plaintiff
JUDGE:
LINDGREN J
DATE:
22 NOVEMBER 2006
PLACE:
SYDNEY
REASONS FOR JUDGMENT
(first and second court hearings)
These are my reasons for orders that I made on 18 September and 9 November 2006. They relate to the first and second court hearings respectively of an application under s 411 of the Corporations Act 2001 (Cth) (‘the Act’).
The plaintiff (‘LongReach’) is a public company limited by shares, registered in Victoria.
On 7 June 2006, the directors of LongReach and the directors of Allied Technologies Group Limited (‘Allied’), another public company limited by shares, announced they had reached an agreement for a merger. The securities of both companies are listed on the Australian Stock Exchange.
The merger was to be achieved by an acquisition by Allied of the shares, convertible notes and options on issue in LongReach, pursuant to three schemes of arrangement between LongReach and, respectively, its shareholders, noteholders and optionholders – the ‘Share Scheme’, the ‘Convertible Notes Scheme’ and the ‘Options Scheme’.
The three schemes are straightforward. They provided for all the LongReach shares, convertible notes and options to be transferred to Allied for the following consideration:
·one fully paid ordinary share in Allied for every three fully paid ordinary shares in LongReach;
·one fully paid new convertible note in Allied for every three LongReach convertible notes;
·one fully paid new option in Allied for every three LongReach options.
The directors of LongReach recommended that the schemes be agreed to by the LongReach shareholders, noteholders and optionholders.
The evidence before the Court included a report by PKF Corporate Advisory Services (NSW) Pty Ltd, which concluded that the proposal was in the best interests of each group of security holders, that is, the holders of the shares, convertible notes and options. The independent expert’s report was verified by an affidavit of Vincent John Fayad, a partner of PKF Chartered Accountants and Business Advisers, and a director of PKF Corporate Advisory Services (NSW) Pty Ltd.
For the above reasons, on 18 September 2006, I made orders under s 411(1) of the Act that LongReach convene meetings of its shareholders, noteholders and optionholders on 1 November 2006 to consider the respective schemes.
The meetings were duly convened and held, and the shareholders, noteholders and optionholders respectively voted to agree to the Share Scheme, the Convertible Notes Scheme and the Options Scheme, by, in each case, the required majority.
On 7 November 2006, the Australian Securities and Investments Commission (‘ASIC’) wrote to Henry Davis York, the solicitors for LongReach, advising, with reference to s 411(17)(b) of the Act, that ASIC had no objection to the schemes.
It should be noted that Nightingale Partners Pty Limited (‘Nightingale’), which apparently holds some 15 percent of the shares in Allied, indicated through its solicitors Maddens Lawyers, an intention to oppose implementation of the schemes unless the proposal was first put to a vote by Allied’s shareholders. However, in the event, Nightingale did not pursue the matter, and, in particular, did not appear in Court to oppose the Court’s approval of the schemes.
Accordingly, on 9 November 2006 I ordered that the Share Scheme, the Convertible Notes Scheme and the Options Scheme be approved pursuant to s 411(4)(b) of the Act.
I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren. Associate:
Dated: 22 November 2006
Counsel for the Plaintiff: Mr M B Oakes SC Solicitor for the Plaintiff Henry Davis York Date of Hearing: 18 September, 9 November 2006 Date of Judgment: 18 September, 9 November 2006 Date of Publication of Reasons: 22 November 2006 A
Share Scheme
Longreach Group Limited
ABN 64 006 584 596Each person registered as a holder of fully paid ordinary shares in Longreach Group Limited as at 5.00pm on the Record Date
1........ . INTERPRETATION........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ 3
2........ . BACKGROUND........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ...... 6
3........ . Scheme........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ 8
4........ . FRACTIONS........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ . 11
5........ . DEALINGS IN SCHEME SECURITIES........ ........ ........ ........ ........ ........ ........ ........ . 12
6........ . Allied'S OBLIGATIONS........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ..... 13
7........ . WHEN SCHEME BECOMES BINDING........ ........ ........ ........ ........ ........ ........ ........ 14
8........ . GENERAL........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .... 15
Share SchemeScheme of Arrangement
Pursuant to section 411 of the Corporations Act, between:
Longreach Group Limited ABN 64 006 584 596 of Unit 3, 118-122 Bowden Street, Meadowbank NSW 2114 (LongReach)
Each person registered as a holder of fully paid ordinary shares in LongReach as at 5.00pm on the Record Date.
AGREEMENT
1INTERPRETATION
1.1Definitions
The following words have these meanings in this agreement:
Allied means Allied Technologies Group Limited ABN 57 010 597 672.
Allied's Register means the register of members of Allied.
Allied Share means a fully paid ordinary share in the capital of Allied.
ASIC means the Australian Securities and Investments Commission.
ASX means Australian Stock Exchange Limited ABN 98 008 624 691.
ASX Market Rules Procedures means the market rules procedures of ASX.
Business Day means a day (other than a Saturday, Sunday or public holiday) on which banks are open for general banking business in Sydney, New South Wales.
CHESS means the Clearing House Electronic Subregister System, which facilitates electronic security transfer in Australia.
Corporations Act means the Corporations Act 2001 (Cth).
Corporations Regulations means the Corporations Regulations 2001 (Cth).
Court means a court in New South Wales of competent jurisdiction under the Corporations Act.
Deed Poll means the deed poll dated 15 September 2006 declared by Allied in favour of each Scheme Participant.
Effective Date means the date on which an office copy of the order of the Court approving the Scheme under section 411(4)(b) of the Corporations Act is lodged with ASIC.
Foreign Member means a Scheme Participant with an address on the LongReach Register outside Australia.
Implementation Agreement means the Implementation Agreement dated 7 June 2006 between LongReach and Allied as amended from time to time relating to the implementation of the Scheme.
Implementation Date means the Business Day immediately following the Record Date.
Independent Expert's Report means an independent expert's report prepared by PKF Corporate Advisory Services (NSW) Pty Limited (PKF), stating whether or not, in PKF's opinion, the Scheme is in the best interests of the LongReach Shareholders and setting out the reasons for that opinion.
Ineligible Foreign Member means a Foreign Member other than one in respect of whom Allied is satisfied that the laws of the Foreign Member's country of residence (as shown in the LongReach Register) would permit the allotment and issue of Allied Shares to the Foreign Member, either unconditionally or after compliance with conditions which Allied in its sole discretion, regards as acceptable and not unduly onerous.
LongReach Convertible Notes means convertible notes issued by LongReach.
LongReach Options means an option to subscribe for a LongReach Share.
LongReach Register means the register of LongReach Shareholders.
LongReach Share means a fully paid ordinary share in the capital of LongReach.
LongReach Shareholder means each person entered in the LongReach Register as a holder of LongReach Shares.
Nominee means a person nominated by LongReach to sell the relevant Scheme Consideration that is attributable to Ineligible Foreign Members under the terms of the relevant Schemes.
Record Date means the day which is five Business Days after the Effective Date, or any other date agreed by LongReach and Allied to be the record date.
Registered Address means, in relation to a LongReach Shareholder, the address shown in the LongReach Register.
Scheme means this scheme of arrangement subject to any alterations made with the approval, or at the discretion, of the Court which are agreed by Allied and LongReach (each acting reasonably).
Scheme Booklet means the information memorandum in respect of the Scheme to be approved by the Court and dispatched to LongReach Shareholders and includes the Scheme, the Deed Poll, an explanatory statement complying with the requirements of the Corporations Act and the Corporations Regulations, the Independent Expert's Report and relevant notices of meeting and proxy forms.
Scheme Consideration means the consideration provided by Allied to Scheme Participants pursuant to clause 3.2.
Scheme Meeting means the meeting of LongReach Shareholders to be convened by the Court, to consider and vote on the Scheme.
Scheme Participant means each LongReach Shareholder other than Allied (if it holds LongReach Shares), as at 5.00pm on the Record Date (taking into account registration of all registrable transfers and transmission applications received at the LongReach Register by the Record Date).
Scheme Securities means each of the LongReach Shares on issue as at the Record Date.
Scheme Transfer means, for each Scheme Participant, a duly completed and executed instrument of transfer of LongReach Shares for the purposes of section 1071B of the Corporations Act, which may be a master transfer of all Scheme Securities.
Second Court Date means the last day on which the Court hears the application for orders under section 411(4)(b) of the Corporations Act approving the Scheme or, if the application is adjourned or subject to appeal for any reason, the last day on which the adjourned or appealed application is heard.
Sunset Date means 31 December 2006, or any other date agreed by LongReach and Allied under the Implementation Agreement.
1.2Interpretation
The following apply in the interpretation of this agreement, unless the context requires otherwise.
(a)A reference to this agreement, this document or a similar term means either the agreement set out in this document or the document itself, as the context requires.
(b)A reference to any Act, regulation, rule or similar instrument includes any consolidations, amendments or re-enactments of it, any replacements of it, and any regulation or other statutory instrument issued under it.
(c)A reference to the singular includes the plural number and vice versa.
(d)A reference to a gender includes a reference to each gender.
(e)A reference to a party means a person who is named as a party to this agreement .
(f)Person includes a firm, corporation, body corporate, unincorporated association and a governmental authority.
(g)A reference to a party or a person includes that party's or person's executors, legal personal representatives, successors, liquidators, administrators, trustees in bankruptcy and similar officers and, where permitted under this agreement, their substitutes and assigns.
(h)An agreement on the part of, or in favour of, two or more persons binds or is for the benefit of them jointly and severally.
(i)Includes means includes but without limitation.
(j)Where a word or expression has a defined meaning, its other grammatical forms have a corresponding meaning.
(k)A reference to doing something includes an omission, statement or undertaking (whether or not in writing) and includes executing a document.
(l)A reference to a clause, schedule or annexure is a reference to a clause of, or a schedule or an annexure to this agreement .
(m)A reference to time is to the time in the place where a thing is to be done, unless specified otherwise.
(n)A reference to dollars or $ is to Australian currency.
1.3A heading is for reference only. It does not affect the meaning or interpretation of this agreement .
1.4Any schedule attached to this agreement forms part of it. If there is any inconsistency between any clause of this agreement and any provision in any schedule or attachment, the clause of this agreement will prevail.
2BACKGROUND
2.1LongReach
(a)LongReach is a public company registered in Victoria and is a company limited by shares.
(b)On 28 July 2006:
(i)175,117,868 LongReach Shares were on issue;
(ii)45,331,020 LongReach Convertible Notes were on issue; and
(iii)3,450,417 LongReach Options were on issue.
There are no other classes of shares, convertible notes or options in LongReach on issue.
(c)LongReach is listed on the stock market conducted by ASX.
2.2Allied
(a)Allied is a public company registered in Queensland and is a company limited by shares.
(b)On 28 July 2006:
(i)52,235,122 Allied Shares were on issue; and
(ii)3,352,050 Allied Options were on issue.
There are no other classes of shares, convertible notes or options in Allied on issue.
(c)Allied is listed on the stock market conducted by ASX.
2.3Effect of the Scheme
If the Scheme becomes Effective, then:
(a)in consideration for the transfer of the LongReach Shares held by Scheme Participants to Allied, Allied will, in accordance with the Deed Poll, issue the Scheme Consideration to Scheme Participants for their LongReach Shares in accordance with this Scheme;
(b)all LongReach Shares and all rights and obligations pertaining to them as at the Implementation Date will be transferred to Allied; and
(c)LongReach will enter the name of Allied in the LongReach Register in respect of all LongReach Shares transferred to Allied in accordance with the terms of this Scheme.
2.4Implementation Agreement and Deed Poll
(a)LongReach and Allied have agreed by executing the Implementation Agreement to implement the terms of this Scheme and take the steps contemplated to follow implementation of the Scheme, insofar as such steps are required to be implemented by each of them.
(b)Allied has agreed by executing the Deed Poll to perform its obligations under this Scheme, including the obligation to issue the Scheme Consideration to Scheme Participants.
2.5Conditions precedent
The Scheme is conditional on:
(a)the conditions set out in clause 3.2 of the Implementation Agreement having been satisfied or waived in accordance with the terms of the Implementation Agreement, which conditions include approval of the Scheme by the Court pursuant to section 411(4)(b) of the Corporations Act; and
(b)the Implementation Agreement and the Deed Poll not having been terminated by LongReach or Allied before 8.00am (Sydney time) on the Second Court Date.
2.6Conditions precedent and operation of clause 3
The satisfaction of clause 2.5 is a condition precedent to the operation of clause 3.
2.7Certificate
LongReach and Allied will provide to the Court at the Second Court Hearing a certificate confirming that all the conditions precedent set out in clause 2.5 have been satisfied or waived.
2.8Sunset Date
The Scheme will lapse and be of no further force or effect if the Effective Date does not occur on or before the Sunset Date or any later date that LongReach and Allied agree in writing.
3Scheme
3.1Transfer and registration of Scheme Securities
On the Implementation Date:
(a)Allied will issue the Scheme Consideration to each Scheme Participant in accordance with clause 3.2; and
(b)the LongReach Shares held by the Scheme Participants, together with all rights and entitlements attaching to the LongReach Shares as at the Implementation Date, will be transferred to Allied without the need for any further act by Scheme Participants (other than acts performed by LongReach as attorney and agent for Scheme Participants under clause 3.7);
(c)Allied will deliver to LongReach a Scheme Transfer for registration;
(d)after the Scheme Transfer is received by LongReach, and Allied has complied with clause 3.1(a), LongReach will enter the name of Allied in the LongReach Register in respect of all LongReach Shares set out in the Scheme Transfer.
Each of the obligations set out in clauses in 3.1(a) to (d) must be completed for the implementation of the Scheme to be completed.
3.2Consideration under the Scheme
The obligation of Allied to provide each Scheme Participant with the Scheme Consideration is satisfied by:
(a)subject to clause 4, issuing to each Scheme Participant other than an Ineligible Foreign Member, 1 New Allied Share for every 3 LongReach Shares held as at 5.00pm on the Record Date; or
(b)if a Scheme Participant is an Ineligible Foreign Member, complying with clause 3.9.
3.3Scheme Participants agree to transfer LongReach Shares and accept Allied Shares
(a)Scheme Participants agree to the transfer of all of their LongReach Shares (and the rights attaching to them) in accordance with the Scheme and agree to become a member of Allied and have their name entered into Allied's Register; and
(b)Scheme Participants are deemed to have accepted Allied Shares issued to them under this Scheme subject to Allied's constituent documents and agree to be bound by Allied's constituent documents.
3.4Warranties by Scheme Participants
Each Scheme Participant is deemed to have warranted to Allied that all their LongReach Shares (including any rights attaching to those LongReach Shares) which are transferred to Allied under the Scheme will, at the date of transfer of them to Allied, be fully paid and free from all mortgages, charges, liens, encumbrances and interests of third parties of any kind, whether legal or otherwise, and restrictions on transfer of any kind, and that they have full power and capacity to sell and to transfer their LongReach Shares together with any rights attaching to those LongReach Shares.
3.5Voting entitlements
Notwithstanding any rule of law or equity to the contrary, holders of LongReach Shares will be entitled to exercise all voting rights attached to their respective LongReach Shares pending their transfer to Allied pursuant to clause 3.1, subject to the restrictions on dealing in clause 5.
3.6Beneficial entitlement to LongReach Shares
Allied will be beneficially entitled to the LongReach Shares transferred to it under the Scheme pending registration by LongReach of Allied in the LongReach Register as the holder of the LongReach Shares.
3.7Authority given to LongReach
Scheme Participants are deemed to have authorised LongReach to do and execute all acts, matters, things and documents on the part of each Scheme Participant necessary to implement the Scheme, including (without limitation) executing, as agent and attorney of each Scheme Participant, a transfer of their Scheme Securities in favour of Allied and any instrument appointing Allied as sole proxy for or, where applicable, corporate representative of each Scheme Participant as contemplated by clause 3.8.
3.8Appointment of sole proxy
(a)Upon the Scheme becoming effective in accordance with clause 7.1 and until LongReach registers Allied as the holder of all LongReach Shares in the LongReach Register, each Scheme Participant:
(i)is deemed to have appointed Allied as attorney and agent (and directed Allied in such capacity) to appoint the chairman of Allied as its sole proxy and, where applicable, corporate representative to attend shareholders meetings, exercise the votes attaching to the LongReach Shares registered in its name and sign any shareholders' resolution, and no Scheme Participant may itself attend or vote at any of those meetings or sign any resolutions, whether in person, by proxy or by corporate representative (other than pursuant to this clause 3.8(a)(i)); and
(ii)must take all other actions in the capacity of a registered holder of LongReach Shares as Allied reasonably directs.
(b)LongReach undertakes in favour of each Scheme Participant that it will appoint the chairman of Allied as that Scheme Participant's proxy or, where applicable, corporate representative in accordance with clause 3.8(a).
3.9Ineligible Foreign Members
Where a Scheme Participant is an Ineligible Foreign Member, the number of Allied Shares to which that Scheme Participant would otherwise be entitled will be issued to the Nominee approved by LongReach who will sell those Allied Shares as soon as practicable in the ordinary course of trading on the stock market conducted by ASX (at the risk of that Scheme Participant) and pay the proceeds received on sale (on an averaged basis so that all Ineligible Foreign Members receive the same price per Allied Share, subject to rounding down to the nearest whole cent) and any income referable to those Allied Shares, after deducting any applicable brokerage, stamp duty and other taxes and charges, to that Scheme Participant in full satisfaction of that Scheme Participant's rights under this Scheme. The sale proceeds are to be paid to each Scheme Participant in the form of a bank cheque drawn on an Australian bank in Australian currency, or as otherwise agreed with the relevant Scheme Participant.
3.10Sending cheques
Despatch to a Scheme Participant of any cheque for the sale proceeds pursuant to clause 3.9 must be by pre-paid ordinary post (or, if the address of the Scheme Participant is outside Australia, by pre-paid airmail post) in an envelope addressed to the address shown in the LongReach Register as at 5.00pm on the Record Date.
3.11Joint Holders
In the case of LongReach Shares held in joint names:
(a)any cheque required to be paid to a Scheme Participant by Allied must be payable to the joint holders and be forwarded to the holder whose name appears first in the LongReach Register as at 5.00pm on the Record Date; and
(b)holding statements, share certificates or equivalent documentation for Allied Shares issued to Scheme Participants must be issued in the names of the joint holders and sent to the holder whose name appears first in the LongReach Register as at 5.00pm on the Record Date.
4FRACTIONS
4.1Fractional entitlements
Subject to clause 4.2, where the calculation of the number of Allied Shares to be issued to a particular Scheme Participant would result in the issue of a fraction of an Allied Share, the fractional entitlement will be rounded up to the nearest whole number of Allied Shares after aggregating all holdings of the Scheme Participant and in a manner which avoids manipulation of a Scheme Participant's holdings to take advantage of the rounding up entitlement.
4.2Shareholder splitting or division
If Allied is of the opinion that two or more Scheme Participants, each of whom holds a number of LongReach Shares which results in rounding in accordance with clause 4.1, have, before the Record Date, been party to shareholding splitting or division in an attempt to obtain advantage by reference to such rounding, Allied may send a notice to those Scheme Participants:
(a)setting out the names and Registered Address of all of them;
(b)stating that opinion; and
(c)attributing to one of them specifically identified in the notice (the Deemed Holder) all of the LongReach Shares held by all of them.
After the notice has been sent, the Deemed Holder will for the purposes of clause 4.1 be taken to hold all the LongReach Shares referred to in the notice. Each of the other Scheme Participants whose names are set out in the notice, will, for the purposes only of clause 4.1, be taken not to hold any of the LongReach Shares set out in the notice.
By complying with this clause 4.2, Allied will be taken to have satisfied and discharged its obligations under the terms of the Scheme to all the Scheme Participants named in the notice.
5DEALINGS IN SCHEME SECURITIES
5.1Pre-Record Date
(a)Until such time as Allied owns all issues LongReach Shares, no shares, convertible notes or options will be allotted or issued by LongReach after the Effective Date.
(b)To establish the identity of Scheme Participants, dealings in LongReach Shares will only be recognised if:
(i)in the case of dealings effected by CHESS, the transferee is registered in the LongReach Register as the holder of the relevant LongReach Shares on or before 5.00pm on the Record Date; and
(ii)in all other cases, registrable transmission applications or transfers in registrable form in respect of those dealings are received before the Record Date at the place where the LongReach Register is kept.
(c)LongReach must register any registrable transmission applications or transfers of LongReach Shares received in accordance with clause 5.1(b)(ii) on or before 5.00pm on the Record Date.
5.2Post-Record Date
(a)Where this Scheme becomes binding as provided by clause 7.1, a holder of Scheme Securities (and any person claiming through that holder) must not dispose of or purport or agree to dispose of any Scheme Securities or any interest in them after the Record Date and any dealings in Scheme Securities received after that time will not be recognised by LongReach or its directors.
(b)LongReach will not accept for registration or recognise for any purpose any transmission application, transfer or other dealing in respect of Scheme Securities received after 5.00pm on the Record Date, other than a transfer to Allied in accordance with this Scheme.
(c)Any statements of holding in respect of LongReach Shares (other than statements of holding in favour of Allied and its successors in title) will cease to have effect from 5.00pm on the Record Date as documents of title in respect of those shares, except as evidence of entitlement to Scheme Consideration. As from 5.00pm on the Record Date, each entry current at that date on the LongReach Register relating to LongReach Shares will cease to be of any effect other than as evidence of entitlement to the Scheme Consideration in respect of the LongReach Shares relating to that entry.
5.3Undertaking
For the purposes of determining entitlements to Scheme Consideration, LongReach will maintain the LongReach Register in accordance with the provisions in this clause 5 until the Scheme Consideration has been provided or paid to all Scheme Participants. Subject to clause 4, only the LongReach Register in this form will determine entitlements to Scheme Consideration.
6Allied'S OBLIGATIONS
6.1LongReach notice
Immediately after the Record Date, LongReach must give to Allied a notice (Notice) specifying:
(a)the names and addresses shown in the LongReach Register of all Scheme Participants and the number of Scheme Securities held by each of them at the Record Date; and
(b)the total number of Allied Shares to be issued to each Scheme Participant pursuant to clauses 3.2, 4.1 or 4.2 (as applicable).
6.2Allied to issue Allied Shares
In accordance with Clause 3.1, but subject to receipt from LongReach of the Notice, on the Implementation Date, Allied must issue Allied Shares to the persons and in the numbers specified by LongReach in the Notice.
6.3Allied Shares
(a)All Allied Shares issued pursuant to the Scheme will rank pari passu in all respects with other Allied Shares issued and outstanding at the Effective Date.
(b)On issue, all Allied Shares issued to Scheme Participants will be fully paid and free from any mortgage, charge, lien, encumbrance and interest of third parties of any kind, whether legal or otherwise.
(c)Provided that the Scheme has been fully implemented in accordance with its terms, LongReach will apply for termination of the official quotation of the LongReach Shares on the market conducted by ASX and the removal of LongReach from the official list of ASX by the fifth Business Day after the Implementation Date or on such other date as LongReach and Allied agree in writing.
(d)Allied must, before the Second Court Date, obtain confirmation from ASX that, as from the Business Day following the Effective Date, the Allied Shares comprising the Scheme Consideration will be listed for quotation on the official list of ASX, initially on a deferred basis and thereafter on an ordinary settlement basis.
(e)Allied must take all steps necessary or expedient to ensure that the Allied Shares comprising the Scheme Consideration will be listed for quotation on the official list of the ASX.
6.4Allied to register Scheme Participants as security holders
As soon as practicable, and in any event no later than 10 Business Days after the Implementation Date, Allied must register those Scheme Participants who received Allied Shares pursuant to clause 6.2 as the holders of the number of Allied Shares which they received.
6.5Holding statements
Uncertificated holding statements, share certificates or equivalent documentation for Allied Shares to be issued under clause 6.2 will be sent to those entitled to them within five Business Days after the Implementation Date.
6.6Discharge of obligations
The issue and dispatch of uncertificated holding statements, share certificates or equivalent documentation in accordance with clause 6.5 will complete the discharge of Allied obligations under clause 6.2.
7WHEN SCHEME BECOMES BINDING
7.1Court order
This Scheme will become binding on LongReach and each Scheme Participant, and the Deed Poll will become binding on Allied, if and only if the Court makes an order under section 411(4)(b) of the Corporations Act approving this Scheme and that order becomes effective under clause 7.2.
7.2Lodgement with ASIC
LongReach will lodge with ASIC an office copy of the order of the Court made under section 411 of the Corporations Act approving this Scheme by 5.00pm within two Business Days after the day on which the Court approves the Scheme
8GENERAL
8.1Scheme binding
The Scheme Participants agree to the transfer of their Scheme Securities to Allied in accordance with the terms of this Scheme and this Scheme binds LongReach and all Scheme Participants (including those who do not attend the Scheme Meeting or do not vote at the Scheme Meeting) notwithstanding any provision in the constitution of LongReach.
8.2Modifications and additions
LongReach may by its counsel or solicitors (and with the consent of Allied, such consent not to be unreasonably withheld or delayed) consent on behalf of all persons concerned to any modification of, or addition to, this Scheme or to any condition which the Court may think fit to approve or impose.
8.3Accidental omissions and non-receipt of notice
The accidental omission to give notice of the Scheme Meeting to any holder of LongReach Shares or the non-receipt of such a notice by any holder of LongReach Shares will not, unless so ordered by the Court, invalidate the Scheme Meeting or the proceedings at the Scheme Meeting.
8.4Definition of "send" and "sent"
(a)For the purpose of this document, the expressions "send" and "sent" mean:
(i)sending by ordinary pre-paid post or courier to the Registered Address of the relevant LongReach Shareholder as at 5.00pm on the Record Date; or
(ii)delivery to that address by any other means at no cost to the recipient.
(b)Where a notice, transfer, transmission application, direction or other communication referred to in the Scheme is sent by ordinary post to LongReach, it will not be deemed to have been received in the ordinary course of post or on a date other than the date (if any) on which it is actually received at LongReach's registered office or at the LongReach's share registry.
8.5Further assurances
(a)LongReach must execute all deeds and other documents and do all acts and things as may be necessary or expedient on its part to implement this Scheme in accordance with its terms.
(b)Each Scheme Participant consents to LongReach doing all things necessary or expedient for or incidental to the implementation of the Scheme.
(c)Allied must execute all deeds and other documents and do all acts and things as may be necessary or expedient on its part to implement this Scheme in accordance with its terms.
8.6No liability
Neither LongReach nor any of its officers will be liable to Scheme Participants for anything done or for anything omitted to be done in performance of this Scheme in good faith.
8.7Stamp Duty
All stamp duty (if any) payable in connection with the transfer of LongReach Shares to Allied will be payable by Allied.
8.8Governing law
(a)The Scheme is governed by the laws of New South Wales.
(b)LongReach, LongReach Shareholders and Allied each submit to the jurisdiction of its courts.
B
Convertible Note Scheme
Longreach Group Limited
ABN 64 006 584 596Each person registered as a holder of fully paid Convertible Notes in Longreach Group Limited as at 5.00pm on the Record Date
1........ . INTERPRETATION........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ 3
2........ . BACKGROUND........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ...... 7
3........ . Scheme........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ 8
4........ . FRACTIONS........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ . 12
5........ . DEALINGS IN SCHEME SECURITIES........ ........ ........ ........ ........ ........ ........ ........ . 12
6........ . Allied'S OBLIGATIONS........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ..... 13
7........ . WHEN SCHEME BECOMES BINDING........ ........ ........ ........ ........ ........ ........ ........ 15
8........ . GENERAL........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .... 15
Convertible Note SchemeScheme of Arrangement
Pursuant to section 411 of the Corporations Act, between:
Longreach Group Limited ABN 64 006 584 596 of Unit 3, 118-122 Bowden Street, Meadowbank NSW 2114 (LongReach)
Each person registered as a holder of fully paid ordinary Convertible Notes in LongReach as at 5.00pm on the Record Date.
AGREEMENT
1INTERPRETATION
1.1Definitions
The following words have these meanings in this agreement:
Allied means Allied Technologies Group Limited ABN 57 010 597 672.
Allied's Register means the register of noteholders of Allied.
Allied Share means a fully paid ordinary share in the capital of Allied.
ASIC means the Australian Securities and Investments Commission.
ASX means Australian Stock Exchange Limited ABN 98 008 624 691.
ASX Market Rules Procedures means the market rules procedures of ASX.
Business Day means a day (other than a Saturday, Sunday or public holiday) on which banks are open for general banking business in Sydney, New South Wales.
CHESS means the Clearing House Electronic Subregister System, which facilitates electronic security transfer in Australia.
Corporations Act means the Corporations Act 2001 (Cth).
Corporations Regulations means the Corporations Regulations 2001 (Cth).
Court means a court in New South Wales of competent jurisdiction under the Corporations Act.
Deed Poll means the deed poll dated 15 September 2006 declared by Allied in favour of each Scheme Participant.
Effective Date means the date on which an office copy of the order of the Court approving the Scheme under section 411(4)(b) of the Corporations Act is lodged with ASIC.
Foreign Member means a Scheme Participant with an address on the LongReach Register outside Australia.
Implementation Agreement means the Implementation Agreement dated 7 June 2006 between LongReach and Allied as amended from time to time relating to the implementation of the Scheme.
Implementation Date means the Business Day immediately following the Record Date.
Independent Expert's Report means an independent expert's report prepared by PKF Corporate Advisory Services (NSW) Pty Limited (PKF), stating whether or not, in PKF's opinion, the Scheme is in the best interests of the LongReach Convertible Noteholders and setting out the reasons for that opinion.
Ineligible Foreign Member means a Foreign Member other than one in respect of whom Allied is satisfied that the laws of the Foreign Member's country of residence (as shown in the LongReach Register) would permit the allotment and issue of New Allied Convertible Notes to the Foreign Member, either unconditionally or after compliance with conditions which Allied in its sole discretion, regards as acceptable and not unduly onerous.
LongReach Convertible Notes means convertible notes issued by LongReach.
LongReach Convertible Noteholder means each person entered in the LongReach Register as a holder of LongReach Convertible Notes.
LongReach Options means an option to subscribe for a LongReach Share.
LongReach Noteholder means each person entered in the LongReach Register as a holder of LongReach Convertible Notes.
LongReach Register means the register of LongReach Noteholders.
LongReach Share means a fully paid ordinary share in the capital of LongReach.
New Allied Convertible Note means a convertible note issued by Allied to Scheme Participants in consideration for their LongReach Convertible Notes.
Nominee means a person nominated by LongReach to sell the relevant Scheme Consideration that is attributable to Ineligible Foreign Members under the terms of the relevant Schemes.
Record Date means the day which is five Business Days after the Effective Date, or any other date agreed by LongReach and Allied to be the record date.
Registered Address means, in relation to a LongReach Noteholder, the address shown in the LongReach Register.
Scheme means this scheme of arrangement subject to any alterations made with the approval, or at the discretion, of the Court which are agreed by Allied and LongReach (each acting reasonably).
Scheme Booklet means the information memorandum in respect of the Scheme to be approved by the Court and dispatched to LongReach Noteholders and includes the Scheme, the Deed Poll, an explanatory statement complying with the requirements of the Corporations Act and the Corporations Regulations, the Independent Expert's Report and relevant notices of meeting and proxy forms.
Scheme Consideration means the consideration provided by Allied to Scheme Participants pursuant to clause 3.2.
Scheme Meeting means the meeting of LongReach Convertible Noteholders to be convened by the Court, to consider and vote on the Scheme.
Scheme Participant means each LongReach Convertible Noteholder other than Allied (if it holds LongReach Convertible Notes), as at 5.00pm on the Record Date (taking into account registration of all registrable transfers and transmission applications received at the LongReach Register by the Record Date).
Scheme Securities means each of the LongReach Convertible Notes on issue as at the Record Date.
Scheme Transfer means, for each Scheme Participant, a duly completed and executed instrument of transfer of LongReach Convertible Notes for the purposes of section 1071B of the Corporations Act, which may be a master transfer of all Scheme Securities.
Second Court Date means the last day on which the Court hears the application for orders under section 411(4)(b) of the Corporations Act approving the Scheme or, if the application is adjourned or subject to appeal for any reason, the last day on which the adjourned or appealed application is heard.
Sunset Date means 31 December 2006, or any other date agreed by LongReach and Allied under the Implementation Agreement.
1.2Interpretation
The following apply in the interpretation of this agreement, unless the context requires otherwise.
(a)A reference to this agreement, this document or a similar term means either the agreement set out in this document or the document itself, as the context requires.
(b)A reference to any Act, regulation, rule or similar instrument includes any consolidations, amendments or re-enactments of it, any replacements of it, and any regulation or other statutory instrument issued under it.
(c)A reference to the singular includes the plural number and vice versa.
(d)A reference to a gender includes a reference to each gender.
(e)A reference to a party means a person who is named as a party to this agreement .
(f)Person includes a firm, corporation, body corporate, unincorporated association and a governmental authority.
(g)A reference to a party or a person includes that party's or person's executors, legal personal representatives, successors, liquidators, administrators, trustees in bankruptcy and similar officers and, where permitted under this agreement, their substitutes and assigns.
(h)An agreement on the part of, or in favour of, two or more persons binds or is for the benefit of them jointly and severally.
(i)Includes means includes but without limitation.
(j)Where a word or expression has a defined meaning, its other grammatical forms have a corresponding meaning.
(k)A reference to doing something includes an omission, statement or undertaking (whether or not in writing) and includes executing a document.
(l)A reference to a clause, schedule or annexure is a reference to a clause of, or a schedule or an annexure to this agreement .
(m)A reference to time is to the time in the place where a thing is to be done, unless specified otherwise.
(n)A reference to dollars or $ is to Australian currency.
1.3A heading is for reference only. It does not affect the meaning or interpretation of this agreement .
1.4Any schedule attached to this agreement forms part of it. If there is any inconsistency between any clause of this agreement and any provision in any schedule or attachment, the clause of this agreement will prevail.
2BACKGROUND
2.1LongReach
(a)LongReach is a public company registered in Victoria and is a company limited by shares.
(b)On 28 July 2006:
(i)175,117,868 LongReach Shares were on issue;
(ii)45,331,020 LongReach Convertible Notes were on issue; and
(iii)3,450,417 LongReach Options were on issue.
There are no other classes of shares, convertible notes or options in LongReach on issue.
(c)LongReach is listed on the stock market conducted by ASX.
2.2Allied
(a)Allied is a public company registered in Queensland and is a company limited by shares.
(b)On 28 July 2006:
(i)52,235,122 Allied Shares were on issue; and
(ii)3,352,050 Allied Options were on issue.
There are no other classes of shares, convertible notes or options in Allied on issue.
(c)Allied is listed on the stock market conducted by ASX.
2.3Effect of the Scheme
If the Scheme becomes Effective, then:
(a)in consideration for the transfer of the LongReach Convertible Notes held by Scheme Participants to Allied, Allied will, in accordance with the Deed Poll, issue the Scheme Consideration to Scheme Participants for their LongReach Convertible Notes in accordance with this Scheme;
(b)all LongReach Convertible Notes and all rights and obligations pertaining to them as at the Implementation Date will be transferred to Allied; and
(c)LongReach will enter the name of Allied in the LongReach Register in respect of all LongReach Convertible Notes transferred to Allied in accordance with the terms of this Scheme.
2.4Implementation Agreement and Deed Poll
(a)LongReach and Allied have agreed by executing the Implementation Agreement to implement the terms of this Scheme and take the steps contemplated to follow implementation of the Scheme, insofar as such steps are required to be implemented by each of them.
(b)Allied has agreed by executing the Deed Poll to perform its obligations under this Scheme, including the obligation to issue the Scheme Consideration to Scheme Participants.
2.5Conditions precedent
The Scheme is conditional on:
(a)the conditions set out in clause 3.2 of the Implementation Agreement having been satisfied or waived in accordance with the terms of the Implementation Agreement, which conditions include approval of the Scheme by the Court pursuant to section 411(4)(b) of the Corporations Act; and
(b)the Implementation Agreement and the Deed Poll not having been terminated by LongReach or Allied before 8.00am (Sydney time) on the Second Court Date.
2.6Conditions precedent and operation of clause 3
The satisfaction of clause 2.5 is a condition precedent to the operation of clause 3.
2.7Certificate
LongReach and Allied will provide to the Court at the Second Court Hearing a certificate confirming that all the conditions precedent set out in clause 2.5 have been satisfied or waived.
2.8Sunset Date
The Scheme will lapse and be of no further force or effect if the Effective Date does not occur on or before the Sunset Date or any later date that LongReach and Allied agree in writing.
3Scheme
3.1Transfer and registration of Scheme Securities
On the Implementation Date:
(a)Allied will issue the Scheme Consideration to each Scheme Participant in accordance with clause 3.2, and
(b)the LongReach Convertible Notes held by the Scheme Participants, together with all rights and entitlements attaching to the LongReach Convertible Notes as at the Implementation Date, will be transferred to Allied without the need for any further act by Scheme Participants (other than acts performed by LongReach as attorney and agent for Scheme Participants under clause 3.7);
(c)Allied will deliver to LongReach a Scheme Transfer for registration;
(d)after the Scheme Transfer is received by LongReach, and Allied has complied with clause 3.1(a), LongReach will enter the name of Allied in the LongReach Register in respect of all LongReach Convertible Notes set out in the Scheme Transfer.
Each of the obligations set out in clauses in 3.1(a) to (d) must be completed for the implementation of the Scheme to be completed.
3.2Consideration under the Scheme
The obligation of Allied to provide each Scheme Participant with the Scheme Consideration is satisfied by:
(a)subject to clause 4, issuing to each Scheme Participant other than an Ineligible Foreign Member, 1 New Allied Convertible Note with an aggregate face value equivalent to the LongReach Convertible Notes held as at 5.00pm on the Record Date; or
(b)if a Scheme Participant is an Ineligible Foreign Member, complying with clause 3.9.
3.3Scheme Participants agree to transfer LongReach Convertible Notes and accept New Allied Convertible Notes
(a)Scheme Participants agree to the transfer of all of their LongReach Convertible Notes (and the rights attaching to them) in accordance with the Scheme and agree to become a convertible noteholder in Allied and have their name entered into Allied's Register; and
(b)Scheme Participants are deemed to have accepted New Allied Convertible Notes issued to them under this Scheme subject to Allied's constituent documents and agree to be bound by Allied's constituent documents.
3.4Warranties by Scheme Participants
Each Scheme Participant is deemed to have warranted to Allied that all their LongReach Convertible Notes (including any rights attaching to those LongReach Convertible Notes) which are transferred to Allied under the Scheme will, at the date of transfer of them to Allied, be fully paid and free from all mortgages, charges, liens, encumbrances and interests of third parties of any kind, whether legal or otherwise, and restrictions on transfer of any kind, and that they have full power and capacity to sell and to transfer their LongReach Convertible Notes together with any rights attaching to those LongReach Convertible Notes.
3.5Voting entitlements
Notwithstanding any rule of law or equity to the contrary, holders of LongReach Convertible Notes will be entitled to exercise all voting rights attached to their respective LongReach Convertible Notes pending their transfer to Allied pursuant to clause 3.1, subject to the restrictions on dealing in clause 5.
3.6Beneficial entitlement to LongReach Convertible Notes
Allied will be beneficially entitled to the LongReach Convertible Notes transferred to it under the Scheme pending registration by LongReach of Allied in the LongReach Register as the holder of the LongReach Convertible Notes.
3.7Authority given to LongReach
Scheme Participants are deemed to have authorised LongReach to do and execute all acts, matters, things and documents on the part of each Scheme Participant necessary to implement the Scheme, including (without limitation) executing, as agent and attorney of each Scheme Participant, a transfer of their Scheme Securities in favour of Allied and any instrument appointing Allied as sole proxy for or, where applicable, corporate representative of each Scheme Participant as contemplated by clause 3.8.
3.8Appointment of sole proxy
(a)Upon the Scheme becoming effective in accordance with clause 7.1 and until LongReach registers Allied as the holder of all LongReach Convertible Notes in the LongReach Register, each Scheme Participant:
(i)is deemed to have appointed Allied as attorney and agent (and directed Allied in such capacity) to appoint the chairman of Allied as its sole proxy and, where applicable, corporate representative to attend Convertible Noteholders meetings, exercise the votes attaching to the LongReach Convertible Notes registered in its name and sign any Convertible Noteholders' resolution, and no Scheme Participant may itself attend or vote at any of those meetings or sign any resolutions, whether in person, by proxy or by corporate representative (other than pursuant to this clause 3.8(a)(i)); and
(ii)must take all other actions in the capacity of a registered holder of LongReach Convertible Notes as Allied reasonably directs.
(b)LongReach undertakes in favour of each Scheme Participant that it will appoint the chairman of Allied as that Scheme Participant's proxy or, where applicable, corporate representative in accordance with clause 3.8(a).
3.9Ineligible Foreign Members
Where a Scheme Participant is an Ineligible Foreign Member, the number of New Allied Convertible Notes to which that Scheme Participant would otherwise be entitled will be issued to the Nominee approved by LongReach who will sell those New Allied Convertible Notes as soon as practicable in the ordinary course of trading on the stock market conducted by ASX (at the risk of that Scheme Participant) and pay the proceeds received on sale (on an averaged basis so that all Ineligible Foreign Members receive the same price per New Allied Convertible Note, subject to rounding down to the nearest whole cent) and any income referable to those New Allied Convertible Notes, after deducting any applicable brokerage, stamp duty and other taxes and charges, to that Scheme Participant in full satisfaction of that Scheme Participant's rights under this Scheme. The sale proceeds are to be paid to each Scheme Participant in the form of a bank cheque drawn on an Australian bank in Australian currency, or as otherwise agreed with the relevant Scheme Participant.
3.10Sending cheques
Despatch to a Scheme Participant of any cheque for the sale proceeds pursuant to clause 3.9 must be by pre-paid ordinary post (or, if the address of the Scheme Participant is outside Australia, by pre-paid airmail post) in an envelope addressed to the address shown in the LongReach Register as at 5.00pm on the Record Date.
3.11Joint Holders
In the case of LongReach Convertible Notes held in joint names:
(a)any cheque required to be paid to a Scheme Participant by Allied must be payable to the joint holders and be forwarded to the holder whose name appears first in the LongReach Register as at 5.00pm on the Record Date; and
(b)holding statements, Convertible Note certificates or equivalent documentation for New Allied Convertible Notes issued to Scheme Participants must be issued in the names of the joint holders and sent to the holder whose name appears first in the LongReach Register as at 5.00pm on the Record Date.
4FRACTIONS
4.1Fractional entitlements
Subject to clause 4.2, where the calculation of the number of New Allied Convertible Notes to be issued to a particular Scheme Participant would result in the issue of a fraction of an New Allied Convertible Note, the fractional entitlement will be rounded up to the nearest whole number of New Allied Convertible Notes after aggregating all holdings of the Scheme Participant and in a manner which avoids manipulation of a Scheme Participant's holdings to take advantage of the rounding up entitlement.
4.2Convertible Noteholder splitting or division
If Allied is of the opinion that two or more Scheme Participants, each of whom holds a number of LongReach Convertible Notes which results in rounding in accordance with clause 4.1, have, before the Record Date, been party to Convertible Noteholding splitting or division in an attempt to obtain advantage by reference to such rounding, Allied may send a notice to those Scheme Participants:
(a)setting out the names and Registered Address of all of them;
(b)stating that opinion; and
(c)attributing to one of them specifically identified in the notice (the Deemed Holder) all of the LongReach Convertible Notes held by all of them.
After the notice has been sent, the Deemed Holder will for the purposes of clause 4.1 be taken to hold all the LongReach Convertible Notes referred to in the notice. Each of the other Scheme Participants whose names are set out in the notice, will, for the purposes only of clause 4.1, be taken not to hold any of the LongReach Convertible Notes set out in the notice.
By complying with this clause 4.2, Allied will be taken to have satisfied and discharged its obligations under the terms of the Scheme to all the Scheme Participants named in the notice.
5DEALINGS IN SCHEME SECURITIES
5.1Pre-Record Date
(a)Until such time as Allied owns all issues LongReach Convertible Notes, no Convertible Notes, convertible notes or options will be allotted or issued by LongReach after the Effective Date.
(b)To establish the identity of Scheme Participants, dealings in LongReach Convertible Notes will only be recognised if:
(i)in the case of dealings effected by CHESS, the transferee is registered in the LongReach Register as the holder of the relevant LongReach Convertible Notes on or before 5.00pm on the Record Date; and
(ii)in all other cases, registrable transmission applications or transfers in registrable form in respect of those dealings are received before the Record Date at the place where the LongReach Register is kept.
(c)LongReach must register any registrable transmission applications or transfers of LongReach Convertible Notes received in accordance with clause 5.1(b)(ii) on or before 5.00pm on the Record Date.
5.2Post-Record Date
(a)Where this Scheme becomes binding as provided by clause 7.1, a holder of Scheme Securities (and any person claiming through that holder) must not dispose of or purport or agree to dispose of any Scheme Securities or any interest in them after the Record Date and any dealings in Scheme Securities received after that time will not be recognised by LongReach or its directors.
(b)LongReach will not accept for registration or recognise for any purpose any transmission application, transfer or other dealing in respect of Scheme Securities received after 5.00pm on the Record Date, other than a transfer to Allied in accordance with this Scheme.
(c)Any statements of holding in respect of LongReach Convertible Notes (other than statements of holding in favour of Allied and its successors in title) will cease to have effect from 5.00pm on the Record Date as documents of title in respect of those Convertible Notes, except as evidence of entitlement to Scheme Consideration. As from 5.00pm on the Record Date, each entry current at that date on the LongReach Register relating to LongReach Convertible Notes will cease to be of any effect other than as evidence of entitlement to the Scheme Consideration in respect of the LongReach Convertible Notes relating to that entry.
5.3Undertaking
For the purposes of determining entitlements to Scheme Consideration, LongReach will maintain the LongReach Register in accordance with the provisions in this clause 5 until the Scheme Consideration has been provided or paid to all Scheme Participants. Subject to clause 4, only the LongReach Register in this form will determine entitlements to Scheme Consideration.
6Allied'S OBLIGATIONS
6.1LongReach notice
Immediately after the Record Date, LongReach must give to Allied a notice (Notice) specifying:
(a)the names and addresses shown in the LongReach Register of all Scheme Participants and the number of Scheme Securities held by each of them at the Record Date; and
(b)the total number of New Allied Convertible Notes to be issued to each Scheme Participant pursuant to clauses 3.2, 4.1 or 4.2 (as applicable).
6.2Allied to issue New Allied Convertible Notes
In accordance with Clause 3.1, but subject to receipt from LongReach of the Notice, on the Implementation Date, Allied must issue New Allied Convertible Notes to the persons and in the numbers specified by LongReach in the Notice.
6.3New Allied Convertible Notes
(a)All New Allied Convertible Notes issued pursuant to the Scheme will rank pari passu in all respects with other New Allied Convertible Notes issued and outstanding at the Effective Date.
(b)On issue, all New Allied Convertible Notes issued to Scheme Participants will be fully paid and free from any mortgage, charge, lien, encumbrance and interest of third parties of any kind, whether legal or otherwise.
(c)Provided that the Scheme has been fully implemented in accordance with its terms, LongReach will apply for termination of the official quotation of the LongReach Convertible Notes on the market conducted by ASX and the removal of LongReach from the official list of ASX by the fifth Business Day after the Implementation Date or on such other date as LongReach and Allied agree in writing.
(d)Allied must, before the Second Court Date, obtain confirmation from ASX that, as from the Business Day following the Effective Date, the New Allied Convertible Notes comprising the Scheme Consideration will be listed for quotation on the official list of ASX, initially on a deferred basis and thereafter on an ordinary settlement basis.
(e)Allied must take all steps necessary or expedient to ensure that the New Allied Convertible Notes comprising the Scheme Consideration will be listed for quotation on the official list of the ASX.
6.4Allied to register Scheme Participants as security holders
As soon as practicable, and in any event no later than 10 Business Days after the Implementation Date, Allied must register those Scheme Participants who received New Allied Convertible Notes pursuant to clause 6.2 as the holders of the number of New Allied Convertible Notes which they received.
6.5Holding statements
Uncertificated holding statements, Convertible Note certificates or equivalent documentation for New Allied Convertible Notes to be issued under clause 6.2 will be sent to those entitled to them within five Business Days after the Implementation Date.
6.6Discharge of obligations
The issue and dispatch of uncertificated holding statements, Convertible Note certificates or equivalent documentation in accordance with clause 6.5 will complete the discharge of Allied obligations under clause 6.2.
7WHEN SCHEME BECOMES BINDING
7.1Court order
This Scheme will become binding on LongReach and each Scheme Participant, and the Deed Poll will become binding on Allied, if and only if the Court makes an order under section 411(4)(b) of the Corporations Act approving this Scheme and that order becomes effective under clause 7.2.
7.2Lodgement with ASIC
LongReach will lodge with ASIC an office copy of the order of the Court made under section 411 of the Corporations Act approving this Scheme by 5.00pm within two Business Days after the day on which the Court approves the Scheme
8GENERAL
8.1Scheme binding
The Scheme Participants agree to the transfer of their Scheme Securities to Allied in accordance with the terms of this Scheme and this Scheme binds LongReach and all Scheme Participants (including those who do not attend the Scheme Meeting or do not vote at the Scheme Meeting) notwithstanding any provision in the constitution of LongReach.
8.2Modifications and additions
LongReach may by its counsel or solicitors (and with the consent of Allied, such consent not to be unreasonably withheld or delayed) consent on behalf of all persons concerned to any modification of, or addition to, this Scheme or to any condition which the Court may think fit to approve or impose.
8.3Accidental omissions and non-receipt of notice
The accidental omission to give notice of the Scheme Meeting to any holder of LongReach Convertible Notes or the non-receipt of such a notice by any holder of LongReach Convertible Notes will not, unless so ordered by the Court, invalidate the Scheme Meeting or the proceedings at the Scheme Meeting.
8.4Definition of "send" and "sent"
(a)For the purpose of this document, the expressions "send" and "sent" mean:
(i)sending by ordinary pre-paid post or courier to the Registered Address of the relevant LongReach Convertible Noteholder as at 5.00pm on the Record Date; or
(ii)delivery to that address by any other means at no cost to the recipient.
(b)Where a notice, transfer, transmission application, direction or other communication referred to in the Scheme is sent by ordinary post to LongReach, it will not be deemed to have been received in the ordinary course of post or on a date other than the date (if any) on which it is actually received at LongReach's registered office or at the LongReach's share registry.
8.5Further assurances
(a)LongReach must execute all deeds and other documents and do all acts and things as may be necessary or expedient on its part to implement this Scheme in accordance with its terms.
(b)Each Scheme Participant consents to LongReach doing all things necessary or expedient for or incidental to the implementation of the Scheme.
(c)Allied must execute all deeds and other documents and do all acts and things as may be necessary or expedient on its part to implement this Scheme in accordance with its terms.
8.6No liability
Neither LongReach nor any of its officers will be liable to Scheme Participants for anything done or for anything omitted to be done in performance of this Scheme in good faith.
8.7Stamp Duty
All stamp duty (if any) payable in connection with the transfer of LongReach Convertible Notes to Allied will be payable by Allied.
8.8Governing law
(a)The Scheme is governed by the laws of New South Wales.
(b)LongReach, LongReach Convertible Noteholders and Allied each submit to the jurisdiction of its courts.
C
Options Scheme
Longreach Group Limited
ABN 64 006 584 596Each person registered as a holder of options Longreach Group Limited as at 5.00pm on the Record Date
1........ . INTERPRETATION........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ 3
2........ . BACKGROUND........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ...... 6
3........ . Scheme........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ 8
4........ . FRACTIONS........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ . 11
5........ . DEALINGS IN SCHEME SECURITIES........ ........ ........ ........ ........ ........ ........ ........ . 12
6........ . Allied'S OBLIGATIONS........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ..... 13
7........ . WHEN SCHEME BECOMES BINDING........ ........ ........ ........ ........ ........ ........ ........ 14
8........ . GENERAL........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .... 14
Options SchemeScheme of Arrangement
Pursuant to section 411 of the Corporations Act, between:
Longreach Group Limited ABN 64 006 584 596 of Unit 3, 118-122 Bowden Street, Meadowbank NSW 2114 (LongReach)
Each person registered as a holder of options in LongReach as at 5.00pm on the Record Date.
AGREEMENT
1INTERPRETATION
1.1Definitions
The following words have these meanings in this agreement:
Allied means Allied Technologies Group Limited ABN 57 010 597 672.
Allied's Register means the register of optionholders of Allied.
Allied Share means a fully paid ordinary share in the capital of Allied.
ASIC means the Australian Securities and Investments Commission.
ASX means Australian Stock Exchange Limited ABN 98 008 624 691.
ASX Market Rules Procedures means the market rules procedures of ASX.
Business Day means a day (other than a Saturday, Sunday or public holiday) on which banks are open for general banking business in Sydney, New South Wales.
CHESS means the Clearing House Electronic Subregister System, which facilitates electronic security transfer in Australia.
Corporations Act means the Corporations Act 2001 (Cth).
Corporations Regulations means the Corporations Regulations 2001 (Cth).
Court means a court in New South Wales of competent jurisdiction under the Corporations Act.
Deed Poll means the deed poll dated 15 September 2006 declared by Allied in favour of each Scheme Participant.
Effective Date means the date on which an office copy of the order of the Court approving the Scheme under section 411(4)(b) of the Corporations Act is lodged with ASIC.
Foreign Member means a Scheme Participant with an address on the LongReach Register outside Australia.
Implementation Agreement means the Implementation Agreement dated 7 June 2006 between LongReach and Allied as amended from time to time relating to the implementation of the Scheme.
Implementation Date means the Business Day immediately following the Record Date.
Independent Expert's Report means an independent expert's report prepared by PKF Corporate Advisory Services (NSW) Pty Limited (PKF), stating whether or not, in PKF's opinion, the Scheme is in the best interests of the LongReach Shareholders and setting out the reasons for that opinion.
Ineligible Foreign Member means a Foreign Member other than one in respect of whom Allied is satisfied that the laws of the Foreign Member's country of residence (as shown in the LongReach Register) would permit the allotment and issue of New Allied Options to the Foreign Member, either unconditionally or after compliance with conditions which Allied in its sole discretion, regards as acceptable and not unduly onerous.
LongReach Convertible Notes means convertible notes issued by LongReach.
LongReach Options means an option to subscribe for a LongReach Share.
LongReach Optionholder means each person entered in the LongReach Register as a holder of LongReach Options.
LongReach Register means the register of LongReach Optionholders.
LongReach Share means a fully paid ordinary share in the capital of LongReach.
New Allied Option means an option over an Allied Share to be issued to Scheme Participants in consideration for their LongReach Options.
Nominee means a person nominated by LongReach to sell the relevant Scheme Consideration that is attributable to Ineligible Foreign Members under the terms of the relevant Schemes.
Record Date means the day which is five Business Days after the Effective Date, or any other date agreed by LongReach and Allied to be the record date.
Registered Address means, in relation to a LongReach Optionholder, the address shown in the LongReach Register.
Scheme means this scheme of arrangement subject to any alterations made with the approval, or at the discretion, of the Court which are agreed by Allied and LongReach (each acting reasonably).
Scheme Booklet means the information memorandum in respect of the Scheme to be approved by the Court and dispatched to LongReach Shareholders and includes the Scheme, the Deed Poll, an explanatory statement complying with the requirements of the Corporations Act and the Corporations Regulations, the Independent Expert's Report and relevant notices of meeting and proxy forms.
Scheme Consideration means the consideration provided by Allied to Scheme Participants pursuant to clause 3.2.
Scheme Meeting means the meeting of LongReach Optionholders to be convened by the Court, to consider and vote on the Scheme.
Scheme Participant means each LongReach Optionholder other than Allied (if it holds LongReach Options), as at 5.00pm on the Record Date (taking into account registration of all registrable transfers and transmission applications received at the LongReach Register by the Record Date).
Scheme Securities means each of the LongReach Options on issue as at the Record Date.
Scheme Transfer means, for each Scheme Participant, a duly completed and executed instrument of transfer of LongReach Options for the purposes of section 1071B of the Corporations Act, which may be a master transfer of all Scheme Securities.
Second Court Date means the last day on which the Court hears the application for orders under section 411(4)(b) of the Corporations Act approving the Scheme or, if the application is adjourned or subject to appeal for any reason, the last day on which the adjourned or appealed application is heard.
Sunset Date means 31 December 2006, or any other date agreed by LongReach and Allied under the Implementation Agreement.
1.2Interpretation
The following apply in the interpretation of this agreement, unless the context requires otherwise.
(a)A reference to this agreement, this document or a similar term means either the agreement set out in this document or the document itself, as the context requires.
(b)A reference to any Act, regulation, rule or similar instrument includes any consolidations, amendments or re-enactments of it, any replacements of it, and any regulation or other statutory instrument issued under it.
(c)A reference to the singular includes the plural number and vice versa.
(d)A reference to a gender includes a reference to each gender.
(e)A reference to a party means a person who is named as a party to this agreement .
(f)Person includes a firm, corporation, body corporate, unincorporated association and a governmental authority.
(g)A reference to a party or a person includes that party's or person's executors, legal personal representatives, successors, liquidators, administrators, trustees in bankruptcy and similar officers and, where permitted under this agreement, their substitutes and assigns.
(h)An agreement on the part of, or in favour of, two or more persons binds or is for the benefit of them jointly and severally.
(i)Includes means includes but without limitation.
(j)Where a word or expression has a defined meaning, its other grammatical forms have a corresponding meaning.
(k)A reference to doing something includes an omission, statement or undertaking (whether or not in writing) and includes executing a document.
(l)A reference to a clause, schedule or annexure is a reference to a clause of, or a schedule or an annexure to this agreement .
(m)A reference to time is to the time in the place where a thing is to be done, unless specified otherwise.
(n)A reference to dollars or $ is to Australian currency.
1.3A heading is for reference only. It does not affect the meaning or interpretation of this agreement .
1.4Any schedule attached to this agreement forms part of it. If there is any inconsistency between any clause of this agreement and any provision in any schedule or attachment, the clause of this agreement will prevail.
2BACKGROUND
2.1LongReach
(a)LongReach is a public company registered in Victoria and is a company limited by shares.
(b)On 28 July 2006:
(iv)175,117,868 LongReach Shares were on issue;
(v)45,331,020 LongReach Convertible Notes were on issue; and
(vi)3,450,417 LongReach Options were on issue.
There are no other classes of shares, convertible notes or options in LongReach on issue.
(c)LongReach is listed on the stock market conducted by ASX.
2.2Allied
(a)Allied is a public company registered in Queensland and is a company limited by shares.
(b)On 28 July 2006:
(i)52,235,122 Allied Shares were on issue; and
(ii)3,352,050 Allied Options were on issue.
There are no other classes of shares, convertible notes or options in Allied on issue.
(c)Allied is listed on the stock market conducted by ASX.
2.3Effect of the Scheme
If the Scheme becomes Effective, then:
(a)in consideration for the transfer of the LongReach Options held by Scheme Participants to Allied, Allied will, in accordance with the Deed Poll, issue the Scheme Consideration to Scheme Participants for their LongReach Options in accordance with this Scheme;
(b)all LongReach Options and all rights and obligations pertaining to them as at the Implementation Date will be transferred to Allied; and
(c)LongReach will enter the name of Allied in the LongReach Register in respect of all LongReach Options transferred to Allied in accordance with the terms of this Scheme.
2.4Implementation Agreement and Deed Poll
(a)LongReach and Allied have agreed by executing the Implementation Agreement to implement the terms of this Scheme and take the steps contemplated to follow implementation of the Scheme, insofar as such steps are required to be implemented by each of them.
(b)Allied has agreed by executing the Deed Poll to perform its obligations under this Scheme, including the obligation to issue the Scheme Consideration to Scheme Participants.
2.5Conditions precedent
The Scheme is conditional on:
(a)the conditions set out in clause 3.2 of the Implementation Agreement having been satisfied or waived in accordance with the terms of the Implementation Agreement, which conditions include approval of the Scheme by the Court pursuant to section 411(4)(b) of the Corporations Act; and
(b)the Implementation Agreement and the Deed Poll not having been terminated by LongReach or Allied before 8.00am (Sydney time) on the Second Court Date.
2.6Conditions precedent and operation of clause 3
The satisfaction of clause 2.5 is a condition precedent to the operation of clause 3.
2.7Certificate
LongReach and Allied will provide to the Court at the Second Court Hearing a certificate confirming that all the conditions precedent set out in clause 2.5 have been satisfied or waived.
2.8Sunset Date
The Scheme will lapse and be of no further force or effect if the Effective Date does not occur on or before the Sunset Date or any later date that LongReach and Allied agree in writing.
3Scheme
3.1Transfer and registration of Scheme Securities
On the Implementation Date:
(a)Allied will issue the Scheme Consideration to each Scheme Participant in accordance with clause 3.2, and
(b)the LongReach Options held by the Scheme Participants, together with all rights and entitlements attaching to the LongReach Options as at the Implementation Date, will be transferred to Allied without the need for any further act by Scheme Participants (other than acts performed by LongReach as attorney and agent for Scheme Participants under clause 3.7);
(c)Allied will deliver to LongReach a Scheme Transfer for registration;
(d)after the Scheme Transfer is received by LongReach, and Allied has complied with clause 3.1(a), LongReach will enter the name of Allied in the LongReach Register in respect of all LongReach Options set out in the Scheme Transfer.
Each of the obligations set out in clauses in 3.1(a) to (d) must be completed for the implementation of the Scheme to be completed.
3.2Consideration under the Scheme
The obligation of Allied to provide each Scheme Participant with the Scheme Consideration is satisfied by:
(a)subject to clause 4, issuing to each Scheme Participant other than an Ineligible Foreign Member, 1 New Allied Option for every 3 LongReach Options held as at 5.00pm on the Record Date with a corresponding inverse proportional adjustment to the respective option exercise price; or
(b)if a Scheme Participant is an Ineligible Foreign Member, complying with clause 3.9.
3.3Scheme Participants agree to transfer LongReach Options and accept New Allied Options
(a)Scheme Participants agree to the transfer of all of their LongReach Options (and the rights attaching to them) in accordance with the Scheme and agree to become a optionholder in Allied and have their name entered into Allied's Register; and
(b)Scheme Participants are deemed to have accepted New Allied Options issued to them under this Scheme subject to Allied's constituent documents and agree to be bound by Allied's constituent documents.
3.4Warranties by Scheme Participants
Each Scheme Participant is deemed to have warranted to Allied that all their LongReach Options (including any rights attaching to those LongReach Options) which are transferred to Allied under the Scheme will, at the date of transfer of them to Allied, be fully paid and free from all mortgages, charges, liens, encumbrances and interests of third parties of any kind, whether legal or otherwise, and restrictions on transfer of any kind, and that they have full power and capacity to sell and to transfer their LongReach Options together with any rights attaching to those LongReach Options.
3.5Voting entitlements
Notwithstanding any rule of law or equity to the contrary, holders of LongReach Options will be entitled to exercise all voting rights attached to their respective LongReach Options pending their transfer to Allied pursuant to clause 3.1, subject to the restrictions on dealing in clause 5. For the purposes of voting on a show of hands, each LongReach Optionholder will have one vote for each LongReach Option held. For the purposes of voting on a poll, each LongReach Optionholder will have that number of votes that equals the aggregate value of their LongReach Options, as calculated by reference to the valuation of the LongReach Options in Section 11 of the Independent Expert's Report.
3.6Beneficial entitlement to LongReach Options
Allied will be beneficially entitled to the LongReach Options transferred to it under the Scheme pending registration by LongReach of Allied in the LongReach Register as the holder of the LongReach Options.
3.7Authority given to LongReach
Scheme Participants are deemed to have authorised LongReach to do and execute all acts, matters, things and documents on the part of each Scheme Participant necessary to implement the Scheme, including (without limitation) executing, as agent and attorney of each Scheme Participant, a transfer of their Scheme Securities in favour of Allied and any instrument appointing Allied as sole proxy for or, where applicable, corporate representative of each Scheme Participant as contemplated by clause 3.8.
3.8Appointment of sole proxy
(a)Upon the Scheme becoming effective in accordance with clause 7.1 and until LongReach registers Allied as the holder of all LongReach Options in the LongReach Register, each Scheme Participant:
(i)is deemed to have appointed Allied as attorney and agent (and directed Allied in such capacity) to appoint the chairman of Allied as its sole proxy and, where applicable, corporate representative to attend optionholders meetings, exercise the votes attaching to the LongReach Options registered in its name and sign any optioneholders' resolution, and no Scheme Participant may itself attend or vote at any of those meetings or sign any resolutions, whether in person, by proxy or by corporate representative (other than pursuant to this clause 3.8(a)(i)); and
(ii)must take all other actions in the capacity of a registered holder of LongReach Options as Allied reasonably directs.
(b)LongReach undertakes in favour of each Scheme Participant that it will appoint the chairman of Allied as that Scheme Participant's proxy or, where applicable, corporate representative in accordance with clause 3.8(a).
3.9Ineligible Foreign Members
Where a Scheme Participant is an Ineligible Foreign Member, the New Allied Options that would have been issued to the Ineligible Foreign Member will be valued by an independent expert appointed by Allied who will be instructed to apply the Black-Scholes option pricing model. The expert to value the New Allied Options will be appointed on the Business Day after the Record Date. Allied will as soon as is reasonably practicable following receipt of the valuation of the New Allied Options that would have been issued to the Ineligible Foreign Member account to the Ineligible Foreign Member for that value.
3.10Sending cheques
Despatch to a Scheme Participant of any cheque for the sale proceeds pursuant to clause 3.9 must be by pre-paid ordinary post (or, if the address of the Scheme Participant is outside Australia, by pre-paid airmail post) in an envelope addressed to the address shown in the LongReach Register as at 5.00pm on the Record Date.
3.11Joint Holders
In the case of LongReach Options held in joint names:
(a)any cheque required to be paid to a Scheme Participant by Allied must be payable to the joint holders and be forwarded to the holder whose name appears first in the LongReach Register as at 5.00pm on the Record Date; and
(b)holding statements, option certificates or equivalent documentation for New Allied Optionss issued to Scheme Participants must be issued in the names of the joint holders and sent to the holder whose name appears first in the LongReach Register as at 5.00pm on the Record Date.
4FRACTIONS
4.1Fractional entitlements
Subject to clause 4.2, where the calculation of the number of New Allied Options to be issued to a particular Scheme Participant would result in the issue of a fraction of an New Allied Option, the fractional entitlement will be rounded up to the nearest whole number of New Allied Options after aggregating all holdings of the Scheme Participant and in a manner which avoids manipulation of a Scheme Participant's holdings to take advantage of the rounding up entitlement.
4.2Optionholder splitting or division
If Allied is of the opinion that two or more Scheme Participants, each of whom holds a number of LongReach Options which results in rounding in accordance with clause 4.1, have, before the Record Date, been party to optionholding splitting or division in an attempt to obtain advantage by reference to such rounding, Allied may send a notice to those Scheme Participants:
(a)setting out the names and Registered Address of all of them;
(b)stating that opinion; and
(c)attributing to one of them specifically identified in the notice (the Deemed Holder) all of the LongReach Options held by all of them.
After the notice has been sent, the Deemed Holder will for the purposes of clause 4.1 be taken to hold all the LongReach Options referred to in the notice. Each of the other Scheme Participants whose names are set out in the notice, will, for the purposes only of clause 4.1, be taken not to hold any of the LongReach Options set out in the notice.
By complying with this clause 4.2, Allied will be taken to have satisfied and discharged its obligations under the terms of the Scheme to all the Scheme Participants named in the notice.
5DEALINGS IN SCHEME SECURITIES
5.1Pre-Record Date
(a)Until such time as Allied owns all issues LongReach Options, no shares, convertible notes or options will be allotted or issued by LongReach after the Effective Date.
(b)To establish the identity of Scheme Participants, dealings in LongReach Options will only be recognised if:
(i)in the case of dealings effected by CHESS, the transferee is registered in the LongReach Register as the holder of the relevant LongReach Options on or before 5.00pm on the Record Date; and
(ii)in all other cases, registrable transmission applications or transfers in registrable form in respect of those dealings are received before the Record Date at the place where the LongReach Register is kept.
(c)LongReach must register any registrable transmission applications or transfers of LongReach Options received in accordance with clause 5.1(b)(ii) on or before 5.00pm on the Record Date.
5.2Post-Record Date
(a)Where this Scheme becomes binding as provided by clause 7.1, a holder of Scheme Securities (and any person claiming through that holder) must not dispose of or purport or agree to dispose of any Scheme Securities or any interest in them after the Record Date and any dealings in Scheme Securities received after that time will not be recognised by LongReach or its directors.
(b)LongReach will not accept for registration or recognise for any purpose any transmission application, transfer or other dealing in respect of Scheme Securities received after 5.00pm on the Record Date, other than a transfer to Allied in accordance with this Scheme.
(c)Any statements of holding in respect of LongReach Options (other than statements of holding in favour of Allied and its successors in title) will cease to have effect from 5.00pm on the Record Date as documents of title in respect of those options, except as evidence of entitlement to Scheme Consideration. As from 5.00pm on the Record Date, each entry current at that date on the LongReach Register relating to LongReach Options will cease to be of any effect other than as evidence of entitlement to the Scheme Consideration in respect of the LongReach Options relating to that entry.
5.3Undertaking
For the purposes of determining entitlements to Scheme Consideration, LongReach will maintain the LongReach Register in accordance with the provisions in this clause 5 until the Scheme Consideration has been provided or paid to all Scheme Participants. Subject to clause 4, only the LongReach Register in this form will determine entitlements to Scheme Consideration.
6Allied'S OBLIGATIONS
6.1LongReach notice
Immediately after the Record Date, LongReach must give to Allied a notice (Notice) specifying:
(a)the names and addresses shown in the LongReach Register of all Scheme Participants and the number of Scheme Securities held by each of them at the Record Date; and
(b)the total number of New Allied Options to be issued to each Scheme Participant pursuant to clauses 3.2, 4.1 or 4.2 (as applicable).
6.2Allied to issue New Allied Options
In accordance with Clause 3.1, but subject to receipt from LongReach of the Notice, on the Implementation Date, Allied must issue New Allied Options to the persons and in the numbers specified by LongReach in the Notice.
6.3New Allied Options
(a)All New Allied Options issued pursuant to the Scheme will rank pari passu in all respects with other New Allied Options issued and outstanding at the Effective Date.
(b)On issue, all New Allied Options issued to Scheme Participants will be fully paid and free from any mortgage, charge, lien, encumbrance and interest of third parties of any kind, whether legal or otherwise.
6.4Allied to register Scheme Participants as security holders
As soon as practicable, and in any event no later than 10 Business Days after the Implementation Date, Allied must register those Scheme Participants who received New Allied Options pursuant to clause 6.2 as the holders of the number of New Allied Options which they received.
6.5Holding statements
Uncertificated holding statements, option certificates or equivalent documentation for New Allied Options to be issued under clause 6.2 will be sent to those entitled to them within five Business Days after the Implementation Date.
6.6Discharge of obligations
The issue and dispatch of uncertificated holding statements, option certificates or equivalent documentation in accordance with clause 6.5 will complete the discharge of Allied obligations under clause 6.2.
7WHEN SCHEME BECOMES BINDING
7.1Court order
This Scheme will become binding on LongReach and each Scheme Participant, and the Deed Poll will become binding on Allied, if and only if the Court makes an order under section 411(4)(b) of the Corporations Act approving this Scheme and that order becomes effective under clause 7.2.
7.2Lodgement with ASIC
LongReach will lodge with ASIC an office copy of the order of the Court made under section 411 of the Corporations Act approving this Scheme by 5.00pm within two Business Days after the day on which the Court approves the Scheme
8GENERAL
8.1Scheme binding
The Scheme Participants agree to the transfer of their Scheme Securities to Allied in accordance with the terms of this Scheme and this Scheme binds LongReach and all Scheme Participants (including those who do not attend the Scheme Meeting or do not vote at the Scheme Meeting) notwithstanding any provision in the constitution of LongReach.
8.2Modifications and additions
LongReach may by its counsel or solicitors (and with the consent of Allied, such consent not to be unreasonably withheld or delayed) consent on behalf of all persons concerned to any modification of, or addition to, this Scheme or to any condition which the Court may think fit to approve or impose.
8.3Accidental omissions and non-receipt of notice
The accidental omission to give notice of the Scheme Meeting to any holder of LongReach Options or the non-receipt of such a notice by any holder of LongReach Options will not, unless so ordered by the Court, invalidate the Scheme Meeting or the proceedings at the Scheme Meeting.
8.4Definition of "send" and "sent"
(a)For the purpose of this document, the expressions "send" and "sent" mean:
(i)sending by ordinary pre-paid post or courier to the Registered Address of the relevant LongReach Optionsholder as at 5.00pm on the Record Date; or
(ii)delivery to that address by any other means at no cost to the recipient.
(b)Where a notice, transfer, transmission application, direction or other communication referred to in the Scheme is sent by ordinary post to LongReach, it will not be deemed to have been received in the ordinary course of post or on a date other than the date (if any) on which it is actually received at LongReach's registered office or at the LongReach's option registry.
8.5Further assurances
(a)LongReach must execute all deeds and other documents and do all acts and things as may be necessary or expedient on its part to implement this Scheme in accordance with its terms.
(b)Each Scheme Participant consents to LongReach doing all things necessary or expedient for or incidental to the implementation of the Scheme.
(c)Allied must execute all deeds and other documents and do all acts and things as may be necessary or expedient on its part to implement this Scheme in accordance with its terms.
8.6No liability
Neither LongReach nor any of its officers will be liable to Scheme Participants for anything done or for anything omitted to be done in performance of this Scheme in good faith.
8.7Stamp Duty
All stamp duty (if any) payable in connection with the transfer of LongReach Options to Allied will be payable by Allied.
8.8Governing law
(a)The Scheme is governed by the laws of New South Wales.
(b)LongReach, LongReach Optionholders and Allied each submit to the jurisdiction of its courts.
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