1
EXHIBIT 2.1
THE IMPLEMENTATION AGREEMENT
CHIP APPLICATION TECHNOLOGIES LIMITED
AND
NOVATEC INC.
IMPLEMENTATION AGREEMENT
2
THIS IMPLEMENTATION AGREEMENT is made the 2nd day of September, 1999
BETWEEN CHIP APPLICATION TECHNOLOGIES LIMITED ACN 057 883 333 of Xxxxx
0, 000 - 000 Xxxxx Xxxxxx, Xxxx Xxxxxx in the State of New South
Wales ("C.A.T.")
AND NOVATEC INC. ARBN 000 000 000 a company incorporated in the
State of Delaware, USA whose Australian registered office is
located at Xxxxx 00, Xxx Xxxxx & Young Building, 000 Xxxx
Xxxxxx, Xxxxxx in the State of New South Wales ("NOVATEC INC.")
RECITALS
A. The C.A.T. Shares are listed on the ASX.
B. C.A.T. has been advised that it would be advantageous and in the
interests of C.A.T. Shareholders for the holding company of the C.A.T.
Group to be a company incorporated in the United States of America and
to have a listing on the ASX and on The Nasdaq SmallCap Market in the
United States. NovaTec Inc. will apply for a listing on ASX prior to
implementation of the Schemes and will consider making an application
for a listing on The Nasdaq SmallCap Market after implementation of the
Schemes.
C. For this purpose the Schemes have been proposed which provide, among
other things, for:
(i) the transfer of the C.A.T. Shares to NovaTec Inc. following
which NovaTec Inc. will become the parent company of C.A.T.;
(ii) the issue by NovaTec Inc. on the Shares Scheme Implementation
Date, with effect from the Effective Date, to each Scheme
Shareholder of a number of NovaTec Inc. Shares (credited as
fully paid) equal in number to the C.A.T. Shares of which each
Scheme Shareholder is registered as holder at Close of
Registers;
(iii) the deeming from the Effective Date of any Statement of Holding
issued in respect of C.A.T. Shares to be a Statement of Holding
issued in respect of NovaTec Inc. Shares until a new Statement
of Holding or certificate is issued by NovaTec Inc.;
(iv) variation of all C.A.T. Options so as to:
(A) exclude any provision which allows C.A.T. to elect to
have a parent company of C.A.T. issue a share in the
parent company for each unexercised C.A.T. Option;
(B) replace all references referred to in clause 10.1 under
the heading, "Method of Exercise of Options" to "100"
with a reference to "100"; and
(C) include an overriding provision which prevents the
options being exercised if, at the time of exercise,
C.A.T. is not a listed company and is a subsidiary of
another company;
3
3
(v) the issue by NovaTec Inc. to the Scheme Optionholders on the
Options Scheme Implementation Date of NovaTec Inc. Options equal
in number to the C.A.T. Options of which the Scheme Optionholder
is registered as holder at Close of Registers so as to provide
that upon exercise of the NovaTec Inc. Option the holder of the
NovaTec Inc. Option will obtain shares in NovaTec Inc.
D. Each of C.A.T. and NovaTec Inc. consider that it is to its advantage
that NovaTec Inc. should acquire the C.A.T. Shares, that the terms of
the C.A.T. Options be varied and that new NovaTec Inc. Options should be
issued by NovaTec Inc. to the Scheme Optionholders on the Options Scheme
Implementation Date, and that the acquisitions, variations and issues
should be effected pursuant to the terms of the Schemes.
E. Implementation of the Schemes is subject to the conditions precedent
referred to below.
OPERATIVE PROVISIONS
1 DEFINITIONS AND INTERPRETATION
1.1 Definitions
In this agreement unless the context otherwise requires:
"AEST" means Australian Eastern Standard Time, being the time in Sydney, New
South Wales.
"ASIC" means the Australian Securities and Investments Commission.
"ASSOCIATE" has the meaning given by the Corporations Law.
"ASX" means Australian Stock Exchange Limited.
"BUSINESS DAY" means a business day as defined in the Listing Rules.
"C.A.T." means Chip Application Technologies Limited ACN 057 883 333 and, where
the context permits, includes its subsidiaries.
"C.A.T. GROUP" means C.A.T. and any of its subsidiaries.
"C.A.T. OPTIONS" means all options issued by C.A.T. including those set out in
Schedule 1.
"C.A.T. OPTIONHOLDERS" means holders of C.A.T. Options.
"C.A.T. SHAREHOLDERS" means holders of C.A.T. Shares.
"C.A.T. SHARES" means fully paid ordinary shares in the capital of C.A.T.
"CHARTER DOCUMENTS" means the Certificate of Incorporation and By-Laws of
NovaTec Inc.
"CLOSE OF REGISTERS" means 5.00 pm (AEST), or in the case of proper
SCH transfers such time as permitted by SCH, on the Record Date.
"COMPANY" means C.A.T. or NovaTec Inc. as the context requires.
4
4
"CONSOLIDATION RESOLUTION" means the ordinary resolution to approve the
consolidation of C.A.T.'s share capital on a one-for-ten basis.
"COURT" means the Supreme Court of New South Wales.
"COURT APPROVAL" means the order of the Court to approve the Shares Scheme and
the Options Schemes pursuant to Section 411(4) of the Corporations Law.
"COURT APPROVAL DATE" means the date upon which the Court makes orders approving
the Shares Scheme and the Options Scheme.
"DEFERRED SETTLEMENT" means a settlement in the trading of NovaTec Inc. Shares
in which the obligation to settle on a trade date plus three business days is
deferred until the time fixed by the ASX (following the despatch of a Statement
of Holding).
"DGCL" means the Delaware General Corporation Law, as amended.
"DIRECTOR" or "BOARD" means the directors of C.A.T., whose names are set out in
Part 3 section 2 of the Information Memorandum.
"EFFECTIVE DATE" means the date on which an office copy of the Court Approval is
lodged with the ASIC.
"ENTITLEMENT DATE" means the date 48 hours prior to the Court-ordered Meetings
of C.A.T. Shareholders and C.A.T. Optionholders to approve the Schemes of
Arrangement.
"EXPLANATORY STATEMENT" means the statement in relation to the Schemes which
complies with Section 412(l) of the Corporations Law.
"FIRST COURT-ORDERED MEETING" means the meeting of C.A.T. Shareholders convened
by order of the Court pursuant to section 411 of the Corporations Law to
consider, and if thought fit, to agree to the Shares Scheme.
"IMPLEMENTATION AGREEMENT" means this agreement.
"INFORMATION MEMORANDUM" means the Information Memorandum for the Proposed
Schemes of Arrangement between C.A.T. and its shareholders and optionholders in
relation to the proposal from NovaTec Inc. and for the Extraordinary General
Meeting of C.A.T. shareholders.
"LISTING RULES" means the Official Listing Rules of the ASX.
"MEETINGS" means the First Court-ordered Meeting and the Second Court-ordered
Meeting.
"NOVATEC INC." means NovaTec Inc. ARBN (000 000 000) a company incorporated in
the State of Delaware, USA.
"NOVATEC INC. OPTIONHOLDER" means the holder of NovaTec Inc. Options.
"NOVATEC INC. OPTIONS" means the options in NovaTec Inc. issued upon the same
terms and conditions (excluding the variation pursuant to the Options Scheme
which prevents double exercise of the NovaTec Inc. Options and the C.A.T.
Options) as the C.A.T. Options.
5
5
"NOVATEC INC. SHARE OPTION DEED" means each of the share option deeds in
respect of NovaTec Inc. Options between C.A.T., NovaTec Inc., and each of the
Other Parties.
"NOVATEC INC. SHARES" means fully paid common stock in NovaTec Inc.
"OFFICIAL LIST" means the official list of ASX.
"OPTIONS SCHEME IMPLEMENTATION DATE" means the day which is one (1) Business Day
after the Shares Scheme Implementation Date.
"OPTION REGISTER" means the register of holders of C.A.T. Options and includes
any branch register.
"OPTIONS SCHEME" means the scheme of arrangement between C.A.T. and the C.A.T.
Optionholders set out in this Information Memorandum, subject to any alterations
or conditions made or required pursuant to subsection 411(6) of the Corporations
Law.
"OTHER PARTIES" means each of Xxxxxxxxx X. Xxxxxx, Xxxxx X X'Xxxxxx, X.X.
Xxxxxx, Jenolan Pty Ltd (ACN 061 674 691), Medi-Box Pty Limited (ACN 070 649
320) and J Malkin as trustee of the Adelphi Superannuation Fund.
"PRELIMINARY EVENTS" means the events mentioned in clause 1.1 in Part III of
each of the Shares Scheme and the Options Scheme.
"PROPER SCH TRANSFER" has the meaning given in the Corporations Law (relating to
the Exchange's electronic settlement and transfer system called "CHESS").
"PUT AND CALL OPTION DEED" means each of the put and call option deeds in
respect of C.A.T. Shares between C.A.T., NovaTec Inc. and each of the Other
Parties.
"RECORD DATE" means the date 5 Business Days after the Effective Date.
"REGISTERED ADDRESS" means the address recorded in the Share Register.
"RESOLUTION 1" means the resolution to be considered by C.A.T. Shareholders at
an extraordinary general meeting dated on or about 25 October 1999 to confirm
and endorse a resolution of the Board of Directors' to allot and issue bonus
shares in the capital of C.A.T.
"RESOLUTION 2" means the resolution to be considered by C.A.T. Shareholders at
an extraordinary general meeting dated on or about 25 October 1999 to approve
the consolidation of all of the share capital of C.A.T. on a one-for-one basis.
"SCH" means the securities clearing house.
"SCHEMES" means the Shares Scheme and the Options Scheme.
"SCHEME OPTIONHOLDER" means each person who is registered in the Options
Register as the holder of Options as at the Close of Registers.
6
6
"SCHEME SHAREHOLDER" means each person who is registered in the Share Register
at the Close of Registers as the holder of C.A.T. Shares, after the registration
by C.A.T. of transfers and transmissions in accordance with the Shares Scheme.
"SECOND COURT-ORDERED MEETING" means the meeting of C.A.T. Optionholders
convened by order of the Court pursuant to section 411 of the Corporations Law
to consider and if thought fit, to agree to the Options Scheme.
"SHARES SCHEME IMPLEMENTATION DATE" means the, day which is eight (8) Business
Days after trading in the NovaTec Inc. Shares on a Deferred Settlement basis
commences.
"SHARE REGISTER" means the register of C.A.T. Shareholders and includes any
branch register.
"SHARE REGISTRY" means Computershare Registry Services Pty Ltd, Xxxxx 0, 00
Xxxxxxxxxx Xxxxxx, Xxxxxx, XXX, 0000.
"SHARES SCHEME" means the scheme of arrangement between C.A.T. and the C.A.T.
Shareholders set out in this Information Memorandum, subject to any alterations
or conditions made or required pursuant to subsection 411(6) of the Corporations
Law.
"STATEMENT OF HOLDING" when used in relation to C.A.T. Shares or NovaTec Inc.
Shares held or to be allotted to a person who has elected in a form acceptable
to C.A.T. and NovaTec Inc. to hold those C.A.T. Shares or NovaTec Inc. Shares in
uncertificated form includes a statement or certificate showing the holdings of
those C.A.T. Shares or NovaTec Inc. Shares which conforms with the business
rules of the ASX.
"UNDERLYING C.A.T. SHARES" means the shares underlying each of the C.A.T.
Options held by the Other Parties.
"USA" or "UNITED STATES" means the United States of America.
1.2 Interpretation
Unless expressed to the contrary:
(a) the singular includes the plural and vice versa;
(b) each gender includes each other gender;
(c) terms binding more than one person shall be construed as binding
them jointly and severally;
(d) references to persons include references to corporations;
(e) references to clauses by number are references to the numbered
clauses of this agreement and references to sections by number
are references to the numbered sections of the Explanatory
Statement in the Scheme booklet to be sent to C.A.T.
Shareholders and C.A.T. Optionholders;
(f) headings and sub-headings shall not affect the construction of
the substantive provisions of this document;
7
7
(g) terms defined in the Corporations Law and the Listing Rules
shall bear their defined meaning where used in this document;
and
(h) references to "AUD$" means Australian dollars and "US$" means
American dollars.
2 UNDERTAKINGS BY C.A.T.
In consideration of the undertakings given by NovaTec Inc. pursuant to
this document, C.A.T. agrees to:
(a) pay to NovaTec Inc. a fee of AUD$20,000.00;
(b) do all such things and to execute all such deeds and other
documents that may be necessary or expedient on its part to
implement the Schemes including, without limitation:
(i) to apply to the Court pursuant to the provisions of
Section 411(1) of the Corporations Law for orders
convening a meeting of the holders of C.A.T. Shares and
a meeting of the holders of C.A.T. Options;
(ii) if the Schemes are approved at the meetings held for the
purposes of the Shares Scheme and the Options Scheme, to
seek the approval of the Court to the Schemes pursuant
to Section 411(4) of the Corporations Law;
(iii) if the Court Approval is granted by the Court, to lodge
forthwith with ASIC a copy of the Court Approval
together with such other documents as may be required
pursuant to the Corporations Law;
(iv) to make application for any relevant approval of the
regulatory authorities in Australia to the issue of
NovaTec Inc. Shares to holders of C.A.T. Shares and
C.A.T. Options pursuant to the terms of the Schemes;
(v) if shareholder confirmation and endorsement is given at
the Extraordinary Meeting on 25 October 1999 in relation
to Resolution 1, Court Approval is granted for the
Schemes and ASX approval is granted for the listing of
NovaTec Inc. on the ASX and all conditions (if any)
relating to this approval are satisfied, to allot and
issue bonus shares to certain C.A.T. Shareholders in
accordance with a resolution of the Board;
(vi) if shareholder approval is given at the Extraordinary
Meeting on 25 October 1999 in relation to Resolution 2,
Court Approval is granted for the Schemes and ASX
approval is granted for the listing of NovaTec Inc. on
the ASX and any conditions relating to this approval are
satisfied, to consolidate the C.A.T. Shares and C.A.T.
Options on a one-for-ten basis as at 12:02am on the
Effective Date; and
(c) enter into a deed with NovaTec Inc. and the directors of NovaTec
Inc. pursuant to which the directors of NovaTec Inc. undertake
to resign from their office as
8
8
directors of NovaTec Inc. on or about the Shares Scheme
Implementation Date and the directors of NovaTec Inc. also agree
to procure the appointment of A.S. Xxxxxx, X. XxxXxxxx, X.X.
X'Xxxxxx and D. Mount as directors of NovaTec Inc. on or about
the Shares Scheme Implementation Date.
3 UNDERTAKINGS BY NOVATEC INC.
In consideration of the undertakings given by C.A.T. pursuant to this
document, NovaTec Inc. agrees to do all things and execute all such
deeds and other documents that may be necessary or expedient on its part
to implement the Schemes including, without limitation:
(a) apply for admission to the Official List and for quotation of
the NovaTec Inc. Shares on ASX;
(b) change its name to a name of C.A.T.'s choice when directed in
writing by C.A.T. and if the Schemes are not implemented in
accordance with the Information Memorandum, give up all rights
or licences to the new name and change its name to a name which
does not include any reference to "C.A.T.", or "Chip Application
Technologies" or any substantially identical or deceptively
similar name on such date as is notified by C.A.T. in writing;
(c) issue on the Shares Scheme Implementation Date, with effect from
the Effective Date, to each Scheme Shareholder a number of
NovaTec Inc. Shares (credited as fully paid) equal in number to
the C.A.T. Shares of which the Scheme Shareholder is registered
as holder at the Close of Registers;
(d) issue to each Scheme Optionholder on the Options Scheme
Implementation Date and with effect from the Options Scheme
Implementation Date, a certificate for the same number of
NovaTec Inc. Options as the number of C.A.T. Options of which
the Scheme Optionholder is registered as holder at the Close of
Registers;
(e) enter in NovaTec Inc.'s share register situated in Sydney on the
Shares Scheme Implementation Date, with effect from the
Effective Date, the name and address of each Scheme Shareholder
as the holder of the NovaTec Inc. Shares issued or transferred
to that Scheme Shareholder pursuant to clause 3(c);
(f) deem with effect from the Effective Date a Statement of Holding
issued in respect of C.A.T. Shares to be a Statement of Holding
issued in respect of NovaTec Inc. Shares until a new Statement
of Holding or certificate is issued by NovaTec Inc.;
(g) enter in NovaTec Inc.'s option register situated in Sydney on
the Options Scheme Implementation Date, with effect from the
Options Scheme Implementation Date, the name and address of each
Scheme Optionholder as the holder of the NovaTec Inc. Options
issued to that Scheme Optionholder pursuant to clause 3(d);
(h) deem with effect from the Options Scheme Implementation Date a
Statement of Holding issued in respect of C.A.T. Options to be a
Statement of Holding issued in respect of NovaTec Inc. Options
until a new Statement of Holding is issued by NovaTec Inc;
9
9
(i) to enter into the Put and Call Option Deeds and the NovaTec Inc.
Share Option Deeds as soon as possible after execution of this
document; and
(j) enter into a deed with C.A.T. and the directors of NovaTec Inc.
pursuant to which the directors of NovaTec Inc. undertake to
resign from their office as directors of NovaTec Inc. on or
about the Shares Scheme Implementation Date and the directors of
NovaTec Inc. also agree to procure the appointment of A.S.
Xxxxxx, X. XxxXxxxx, X.X. X'Xxxxxx and D. Mount as directors of
NovaTec Inc. on or about the Shares Scheme Implementation Date.
4 FURTHER UNDERTAKINGS BY NOVATEC INC.
4.1 In consideration of the undertakings given by C.A.T. pursuant to this
agreement, NovaTec Inc. agrees and undertakes to sign all documents and
do all things necessary to procure the listing of the NovaTec Inc.
Shares by the ASX (subject to Court Approval of the Schemes) as soon as
practicable after executing this agreement.
4.2 In consideration of the undertakings given by C.A.T. pursuant to this
agreement, NovaTec Inc. also agrees and undertakes on and after the
Effective Date to:
(a) conduct the business of NovaTec Inc. in the best interests of
C.A.T. and its members;
(b) do all things necessary to ensure the efficient implementation
of the Schemes.
4.3 NovaTec Inc. hereby undertakes to do all those things and execute all
those deeds and other documents as may be necessary or expedient on its
part to implement the Schemes and, without limiting the generality of
the foregoing, to perform each of the undertakings given by it in
clauses 3 and 4 of this document.
4.4 NovaTec Inc. agrees that from the time it commences use of the new name
advised by C.A.T. it will not do anything or fail to do anything that
may, or may be calculated to, prejudice or bring into disrepute the
names C.A.T. or Chip Application Technologies Limited.
4.5 NovaTec Inc. and C.A.T. hereby acknowledge and agree that the benefit of
each of the covenants given by NovaTec Inc. in this document shall be
held by C.A.T. on trust for all Scheme Shareholders and Scheme
Optionholders as beneficiaries of those covenants.
4.6 NovaTec Inc. hereby acknowledges and agrees that to the extent of any
inconsistency between the Schemes and NovaTec Inc.'s Charter Documents,
the Schemes override NovaTec Inc.'s Charter Documents and bind NovaTec
Inc. and all NovaTec Inc. shareholders.
4.7 NovaTec Inc. undertakes that it will choose that section 124-385 of the
Income Tax Assessment Act 1997 ("the Act") applies to it and will make
this choice in accordance with the Act within two months after the
completion time (as defined in section 124-365(1) of the Act) or within
such further time as the Commissioner of Taxation allows.
5 CONDITIONS PRECEDENT
10
10
5.1 The agreements contained in this document shall be subject in all
respects to the following conditions:
(a) the approval by meetings of C.A.T. Shareholders and C.A.T.
Optionholders of the Shares Scheme and the Options Scheme
respectively;
(b) the Schemes being approved by the Court pursuant to Section
411(4) of the Corporations Law with or without modification;
(c) receipt by NovaTec Inc. of ASX's approval to list NovaTec Inc.
on the ASX and satisfaction of any conditions set out in ASX's
approval; and
(d) any relevant approval of the regulatory authorities in Australia
being obtained to the issue of NovaTec Inc. Shares to Scheme
Shareholders and Scheme Optionholders pursuant to the terms of
the Schemes.
6 SEQUENCE
The obligations set out in clauses 2, 3, 4 and 5 of this document shall
be fulfilled by the respective parties in the sequence set out in the
Schemes.
7 MISCELLANEOUS
7.1 The parties shall execute all documents and do all acts and things
necessary for the full and effectual performance of the agreements
contained in this document and the Schemes.
7.2 The obligations of the parties under this document shall terminate if
the Schemes (with or without modification) do not become effective in
accordance with their terms by 31 March 2000 or such other date as may
be agreed between the parties in writing, but such termination shall not
affect the liability of any party in respect of failure to perform an
obligation under this document.
7.3 This document is governed by and is to be construed in accordance with
the laws in force in the State of New South Wales.
7.4 Each party irrevocably and unconditionally submits to the non-exclusive
jurisdiction of the courts of New South Wales and any courts which have
jurisdiction to hear appeals from any of those courts and waives any
right to object to any proceedings being brought in those courts.
11
11
THE COMMON SEAL of
CHIP APPLICATION TECHNOLOGIES [SEAL]
LIMITED
is affixed in the
presence of:
/S/ XXXX WEIHEN /S/ XXXXX XXX XXXXX
--------------------------- ------------------------------------
Company Secretary Director
/S/ XXXX WEIHEN /S/ XXXXX XXX XXXXX
--------------------------- ------------------------------------
Name of Company Secretary/(print) Name of Director (print)
NOVATEC INC.
By: /S/ XXXXX XXXXXX XXXXXX
---------------------------
Name XXXXX XXXXXX XXXXXX
Title: [Secretary]
12
12
SCHEDULE 1
C.A.T. OPTIONS
NO. OF OPTIONS
WITH "CONDITION EXERCISE
NO. OF OPTIONS OF EXERCISE" PRICE EXPIRY DATE (EXERCISE PERIOD)
-------------- ------------ ----- -----------------------------
3,169,338 $0.75 30 June 2000
521,370 6,370 $0.30 31 March 2001
43,630 43,630 $0.30 31 March 2001
23,333 $0.48 31 March 2001
123,334 $0.50 31 March 2001
393,169 $0.75 31 March 2001
24,527 $0.75 31 May 2001
250,000 $0.33 1 August 2001
250,000 $0.66 1 August 2002
250,000 250,000 $0.99 1 August 2003
500,000 $1.00 (1 July 1999 to anniversary 1 of issue date)
500,000 500,000 $1.15 (1 July 2000 to anniversary 2 of issue date)
500,000 500,000 $1.20 (1 July 2001 to anniversary 4 of issue date)
500,000 $1.60 (1 July 1999 to anniversary 5 of issue date)
295,000 82,500 $0.95 (Range of dates in 1999)
(The vesting date
for 50,000 of these
options is
31 September
1999)
422,500 422,500 $0.95 (Range of dates in 2000)
365,000 365,000 $0.95 (Range of dates in 2001)
130,000 130,000 $0.95 (Range of dates in 2002)
Note:
The "Condition of Exercise" referred to above is a condition that the
optionholder continue to be employed by C.A.T. as at a particular vesting date.
