FEDERAL COURT OF AUSTRALIA Coventry Resources Limited; in the matter of Coventry Resources Limited (No 2) [2012] FCA 1473 Citation: Coventry Resources Limited; in the matter of Coventry Resources Limited (No 2) [2012] FCA 1473 Party: COVENTRY RESOURCES LIMITED (ACN 082 901 362) File number: WAD 300 of 2012 Judge: BARKER J Date of judgment: 19 December 2012 Catchwords: CORPORATIONS – application pursuant to s 411 Corporations Act 2001 (Cth) – application to approve scheme of arrangement Legislation: Corporations Act 2001 (Cth) s 411(4), s 411(4)(a), s 411(4)(b), s 411(11), s 411(12), s 411(17), s 412(1)(a) Securities Act of 1933 (US) s 3(a)(10) Cases cited: Coventry Resources Limited, in the matter of Coventry Resources Limited [2012] FCA 1252 Heartware Limited, in the matter of Heartware Limited [2008] FCA 1997 Professional Investment Holdings Limited, in the matter of Professional Investment Holdings Limited (No 2) [2010] FCA 1336 Date of hearing: 19 December 2012 Place: Perth Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 26 Counsel for the Plaintiff: Mr MJ Feutrill with Mr AJ Papamatheos Solicitor for the Plaintiff: Steinepreis Paganin IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION WAD 300 of 2012 COVENTRY RESOURCES LIMITED (ACN 082 901 362) Plaintiff JUDGE: BARKER J DATE OF ORDER: 19 DECEMBER 2012 WHERE MADE: PERTH THE COURT ORDERS THAT: 1. Pursuant to section 411(4)(b) of the Corporations Act 2001 (Cth) (Corporations Act): (a) the scheme of arrangement between the plaintiff and its members, a copy of which is annexed hereto and marked "A", is approved; and (b) the scheme of arrangement between the plaintiff and the holders of certain options to acquire shares in the plaintiff, a copy of which is annexed hereto and marked "B", is approved. 2. Pursuant to section 411(12) of the Corporations Act, the plaintiff is exempted from compliance with section 411(11) of the Corporations Act, in relation to the schemes of arrangement referred to in order 1. 3. The plaintiff is to lodge an office copy of these orders with Australian Securities and Investments Commission as soon as practicable. Annexure "A" COVENTRY RESOURCES LIMITED ACN 082 901 362 (Coventry) and THE HOLDERS OF FULLY PAID ORDINARY SHARES IN COVENTRY RESOURCES LIMITED SCHEME OF ARRANGEMENT - PURSUANT TO SECTION 411 OF THE CORPORATIONS ACT CONTENTS PAGE 1. DEFINITIONS AND INTERPRETATION 1 1.1 Definitions 1 1.2 Interpretation 4 1.3 Best and reasonable endeavours 5 1.4 Business Day 5 2. CONDITIONS 5 2.1 Conditions to this Share Scheme 5 2.2 Certificates in relation to conditions 6 2.3 Termination of Merger Implementation Deed 6 3. SCHEME 6 3.1 Effective Date of Scheme 6 3.2 End Date 6 4. IMPLEMENTATION OF SCHEME 6 4.1 Lodgement 6 4.2 Transfer of Share Schemes 7 4.3 Timing 7 4.4 Provision of Scheme Consideration to the holders of Excluded Shares 7 5. SHARE SCHEME CONSIDERATION 7 5.1 Election Procedure 7 5.2 Share Scheme Consideration 8 5.3 Rounding Entitlements 8 5.4 Provision of Share Scheme Consideration 8 5.5 Joint holders 10 5.6 Binding instruction or notifications 10 5.7 Ineligible Overseas Shareholders 10 5.8 Status of Crescent Shares 11 6. DEALINGS IN COVENTRY SHARES 12 6.1 Dealings in Coventry Shares by Scheme Shareholders 12 6.2 Coventry Share Register 12 6.3 Information to be made available to Crescent 12 6.4 Effect of Share Certificates and holding statements 12 6.5 Disposals after Record Date 12 6.6 Quotation of Coventry Shares 13 7. GENERAL PROVISIONS 13 7.1 Effect of Scheme 13 7.2 Appointment of agent and attorney 13 7.3 Enforcement of Deed Poll 13 7.4 Scheme Shareholders' consent 13 7.5 Scheme Shareholders' agreements 14 7.6 Transfer with clear title and warranty by Scheme Shareholders 14 7.7 Title to Scheme Shares 14 7.8 Appointment of Crescent as sole proxy 15 7.9 Alterations or conditions 15 7.10 Notices 15 7.11 Inconsistencies 15 7.12 Further Assurances 15 7.13 Stamp Duty 15 7.14 Fees and Charges 16 7.15 Governing Law 16 7.16 Limitation of Liability 16 7.17 Definition of "send" 16 Scheme of Arrangement made under section 411 of the Corporations Act 2001 (Cth) BETWEEN COVENTRY RESOURCES Limited (ACN 082 901 362) of Suite 9, 5 Centro Avenue, Subiaco, Western Australia (Coventry); AND THE HOLDERS OF COVENTRY SHARES. RECITALS A. Coventry is a public company incorporated in the state of Western Australia and is admitted to the official list of the ASX. B. Crescent Resources Corp. is a company existing under the laws of the Province of British Columbia with its head office at 1490 – 1075 West Georgia Street, Vancouver, British Columbia, Canada, V6E 3C9 (Crescent) and its common shares are listed for trading on the TSX-V. C. Coventry and Crescent have entered into a merger implementation deed dated 7 September 2012 (Merger Implementation Deed) pursuant to which, amongst other things, Coventry has agreed to propose this Share Scheme to Coventry Shareholders, and each of Coventry and Crescent have agreed to take certain steps to give effect to this Share Scheme. D. If this Share Scheme becomes Effective (as defined below), then: (a) all of the Scheme Shares will be transferred to Crescent and the Share Scheme Consideration will be provided to the Scheme Shareholders in accordance with the provisions of this Share Scheme; and (b) Coventry will enter the name and address of Crescent in the Coventry Share Register as the holder of all of the Scheme Shares. E. Crescent has entered into the Deed Poll for the purpose of covenanting in favour of Scheme Shareholders to perform the obligations contemplated of it under this Share Scheme. 1. DEFINITIONS AND INTERPRETATION 1.1 Definitions In this document, unless the contrary intention appears or the context requires otherwise: ASIC means the Australian Securities and Investments Commission. ASX means ASX Limited (ACN 008 624 691) or the Australian Securities Exchange, as the context requires.. ASX Listing Rules means the official listing rules of ASX. ASX Settlement means ASX Settlement and Transfer Corporation Pty Ltd (ABN 49 008 504 532). Business Day is any day that is both a business day within the meaning given in the ASX Listing Rules and a day that banks in Perth, Western Australia and Vancouver, Canada are open for business. Canadian Securities Laws means all applicable Canadian Securities Laws and rules and regulations thereunder, together with all applicable published instruments, notices and orders of the securities regulatory authorities thereof and all applicable rules and policies of the TSX-V. CHESS means the Clearing House Electronic Sub-Register System operated by ASX Settlement. Condition means a condition to this Share Scheme set out in clause 2.1. Corporations Act means the Corporations Act 2001 (Cth). Court means the Federal Court of Australia or such other court of competent jurisdiction as Coventry and Crescent agree in writing. Coventry Option Register means the register of holders of Coventry Options maintained by or on behalf of Coventry in accordance with section 168(1) of the Corporations Act. Coventry Optionholder means each person who is registered in the Coventry Option Register as a holder of a Coventry Option at the date of the Merger Implementation Deed. Coventry Options means the options to subscribe for Coventry Shares described in Schedule 6 of the Merger Implementation Deed. Coventry Share means a fully paid ordinary share in the capital of Coventry. Coventry Shareholder means each person who is registered as a holder of a Coventry Share. Coventry Share Register means the register of members of Coventry maintained by or on behalf of Coventry in accordance with section 168(1) of the Corporations Act. Crescent CDI means a CHESS Depositary Interest, being a unit of beneficial ownership in a Crescent Share registered in the name of the Depositary. Crescent Share means a fully paid and non-assessable common share in the capital of Crescent. Crescent Share Register means the register of holders of Crescent Shares maintained by or on behalf of Crescent. Deed Poll means the deed poll to be executed by Crescent in favour of the Scheme Shareholders (subject to any amendments permitted by its terms) prior to the despatch of the Explanatory Memorandum to Coventry Shareholders. Depositary means CHESS Depositary Nominees Pty Limited (ACN 071 346 506) the entity that will provide depositary services in respect of the Crescent CDIs. Effective means, when used in relation to this Share Scheme, the coming into effect, pursuant to section 411(10) of the Corporations Act, of the order of the Court made under section 411(4)(b) (and, if applicable, section 411(6)) of the Corporations Act in relation to this Share Scheme. Effective Date means the date on which this Share Scheme becomes Effective. Election Form means the form accompanying the Explanatory Memorandum pursuant to which holders of Coventry Shares (other than Ineligible Overseas Shareholders) may elect whether to receive their Share Scheme Consideration in the form of Crescent Shares or Crescent CDIs. End Date means December 31, 2012 or such later date as is agreed by Coventry and Crescent in writing. Excluded Shares means any Coventry Share held by, or by any person on behalf of or for the benefit of, Crescent or its Related Bodies Corporate. Explanatory Memorandum means the explanatory memorandum to be prepared by Coventry in respect of this Share Scheme approved by the Court under section 411(1) of the Corporations Act for distribution to Coventry Shareholders containing, among other things, the explanatory statement required by Part 5.1 of the Corporations Act relating to this Share Scheme and a notice convening the Share Scheme Meeting. Implementation Date means the date which is 5 Business Days after the Record Date or such other date as Coventry and Crescent agree in writing. Ineligible Overseas Shareholder means a Coventry Shareholder whose address as shown in the Coventry Share Register at 5.00 pm on the Record Date is a place outside Australia and its external territories, New Zealand, Canada, the United States, Hong Kong and Singapore unless Crescent and Coventry are satisfied, acting reasonably, that the laws of that Coventry Shareholder's country of residence (as shown in the Coventry Share Register) permit the issue and allotment of Crescent Shares to that Coventry Shareholder, either unconditionally or after compliance with conditions which Crescent in its sole discretion regards as acceptable. Record Date means the date which is 5 Business Days after the Effective Date. Registered Address means, in relation to a Coventry Shareholder, the address of that Coventry Shareholder shown in the Coventry Share Register. Regulatory Authority means: (a) any government, semi-government or local authority and any department, minister or agency of any government; and (b) any other authority, agency, commission, administrative, fiscal or judicial body (including the Court), tribunal or similar entity having powers or jurisdiction under any law or regulation or the listing rules of any recognised stock or securities exchange, including without limitation the ASX and TSX-V. Related Body Corporate means the meaning given in section 9 of the Corporations Act. Sale Nominee means the person appointed by Crescent to sell the Crescent Shares that are attributable to Ineligible Overseas Shareholders under the terms of this Share Scheme. Scheme Share means each Coventry Share on issue as at 5.00 pm on the Record Date other than the Excluded Shares. Scheme Shareholder means each person registered in the Coventry Share Register as the holder of Scheme Shares. Second Court Date means the first day of hearing of an application made to the Court for an order pursuant to section 411(4)(b) of the Corporations Act approving this Share Scheme or, if the hearing of such application is adjourned for any reason, means the first day of the adjourned hearing. Share Scheme means the scheme of arrangement under Part 5.1 of the Corporations Act between Coventry and Scheme Shareholders as set out in this document, subject to any alterations or conditions made or required by the Court pursuant to section 411(6) of the Corporations Act and approved in writing by Crescent and Coventry. Share Scheme Consideration means the consideration to be provided to Scheme Shareholders under the terms of this Share Scheme being (subject to clauses 5.3 and 5.7) 0.2513 of a fully paid Crescent Share (post completion of the consolidation of the Crescent Shares on a 5:1 basis) (subject to clauses 4.4 and 4.7 of the Merger Implementation Deed) for every one Scheme Share. Share Scheme Meeting means the meeting of Coventry Shareholders ordered by the Court in relation to this Share Scheme pursuant to section 411(1) of the Corporations Act. TSX-V means the TSX Venture Exchange. 1.2 Interpretations In this document unless the contrary intention appears or the context requires otherwise: (a) a word importing the singular includes the plural and vice versa, and word indicating gender includes every other gender (b) if a word or phrase is given a defined meaning, any other part of speech or grammatical form of that word or phrase has a corresponding meaning; (c) references to a person includes an individual the estate of an individual, a corporation, an authority, an association or a joint venture (whether incorporated or unincorporated), a partnership and a trust; (d) a reference to a statute includes any regulations or other instruments made under it and a reference to a statute or any regulation or other instrument made under it or a provision of any such statute, regulation or instrument includes consolidations, amendments, re-enactments and replacements; (e) a reference to a party includes a reference to that party's executors, administrators, and permitted assigns, s including persons taking by novation and, in the case of a trustee, includes any substituted or additional trustee; (f) if a time period is specified and dates from a given date or the day of an act or event, it is to be calculated exclusive of that day; (g) a reference to any time is a reference to that time in Perth, Australia; (h) a reference to "$" or "A$" is to the lawful currency of the Commonwealth of Australia; (i) a reference to a document is that document as varied, novated, ratified or replaced from time to time; (j) a reference to a party, clause, schedule, exhibit, attachment or annexure is a reference to a party, clause, schedule, exhibit, attachment or annexure to or of this document, and a reference to this document includes all schedules, exhibits, attachments and annexures to it (k) this document must not be construed adversely to a party just because that party prepared it or caused it to be prepared; and (l) the word including or any form of that word is not a word of limitation. 1.3 Best and reasonable endeavours Any provision of this document which requires a party to use best endeavours or reasonable endeavours, or to take all steps reasonably necessary, to procure that something is performed or occurs does not include any obligation: (a) to pay any money or to provide any financial compensation, valuable consideration or any other incentive to or for the benefit of any person; or (b) to commence any legal action or proceeding against any person, to procure that that thing is done or happens, except for payment of any applicable fee for the lodgement or filing of any relevant application with any Regulatory Authority, except where that provision expressly specifies otherwise. 1.4 Business Day Except where otherwise expressly provided, where under this document the day on which any act, matter or thing is to be done is a day other than a Business Day, such act, matter or thing shall be done on the immediately following Business Day. 2. CONDITIONS 2.1 Conditions to this Share Scheme This Share Scheme is conditional upon, and will have no force or effect until, the satisfaction of each of the following conditions, and the provisions of clauses 3, 4 and 5 will not come into effect unless and until each of these conditions have been satisfied: (a) as at 8.00 am on the Second Court Date each of the conditions set out in clause 3.1 of the Merger Implementation Deed (other than the condition relating to the approval of the Court set out in clause 3.1(j) of the Merger Implementation Deed) have been satisfied or waived in accordance with the terms of the Merger Implementation Deed; (b) as at 8.00 am on the Second Court Date the Merger Implementation Deed has not been terminated; (c) the Court approves this Share Scheme under section 411(4)(b) of the Corporations Act with or without modification; (d) such other conditions made or required by the Court under section 411(6) of the Corporations Act in relation to this Share Scheme as are acceptable to Crescent and Coventry have been satisfied; and (e) the coming into effect, pursuant to section 411(10) of the Corporations Act, of the orders of the Court made under section 411(4)(b) of the Corporations Act (and, if applicable, section 411(6) of the Corporations Act) in relation to this Share Scheme. 2.2 Certificates in relation to conditions (a) At or before the Court hearing on the Second Court Date, Coventry and Crescent will each provide to the Court a certificate (or such other evidence as the Court may request) confirming whether or not all of the conditions set out in clause 3.1 (other than the condition set out in clause 3.1(j) of the Merger Implementation Deed) of the Merger Implementation Deed have been satisfied or waived in accordance with the terms of the Merger Implementation Deed. (b) The certificates given by Coventry and Crescent constitute conclusive evidence that the conditions have been satisfied or waived (as the case may be). 2.3 Termination of Merger Implementation Deed Without limiting any rights under the Merger Implementation Deed, in the event that the Merger Implementation Deed is terminated in accordance with its terms before 8.00 am on the Second Court Date, Coventry and Crescent are each released from: (a) further obligation to take steps to implement this Share Scheme; and (b) any liability with respect to this Share Scheme. 3. SCHEME 3.1 Effective Date of Scheme Subject to clause 3.2, this Share Scheme will take effect on and from the Effective Date. 3.2 End Date This Share Scheme will lapse and be of no further force or effect if the Effective Date has not occurred on or before the End Date. 4. IMPLEMENTATION OF SCHEME 4.11 Lodgement If the Conditions are satisfied, Coventry must lodge with ASIC in accordance with section 411(10) of the Corporations Act an office copy of the Court order approving this Share Scheme promptly after, and in any event by no later than 4.00 pm on the Business Day following the date on which the Court approves this Share Scheme (or such other Business Day as Coventry and Crescent agree in writing). 4.2 Transfer of Scheme Shares On the Implementation Date, subject to the provision of the Share Scheme Consideration in the manner contemplated by clause 5 and Crescent having provided Coventry with written confirmation thereof, all of the Scheme Shares will, together with all rights and entitlements attaching to the Scheme Shares, be transferred to Crescent without the need for any further act by any Scheme Shareholder (other than acts performed by Coventry or its directors as attorney or agent for Scheme Shareholders under this Share Scheme), by: (a) Coventry delivering to Crescent a duly completed and executed share transfer form or forms to transfer all of the Scheme Shares to Crescent (executed by Coventry as the attorney and agent of each Scheme Shareholder under clause 7.2) (which may be a master transfer of all or part of the Scheme Shares); (b) Crescent duly executing such share transfer form or forms and delivering it or them to Coventry for registration; and (c) immediately after receipt of the share transfer form or forms under clause 4.2(b), Coventry entering, or procuring the entry of, the name and address of Crescent in the Coventry Share Register as the holder of all of the Scheme Shares. 4.3 Timing Notwithstanding any other provision of this Share Scheme, while Crescent Shares and Crescent CDIs forming part of the Share Scheme Consideration must be issued (and relevant registers updated to record their issuance) on the Implementation Date, any requirements under clause 5 for the sending of share certificates, holding statements or allotment advices may be satisfied within 10 Business Days after the Implementation Date. 4.4 Provision of Scheme Consideration to the holders of Excluded Shares Nothing in this Share Scheme requires Crescent to provide Share Scheme Consideration to any holder of Excluded Shares. 5. Share Scheme Consideration 5.1 Election procedure (a) Subject to the remaining provisions of this clause 5.1, each Scheme Shareholder will be entitled to elect to receive as consideration for the transfer of its Scheme Shares to Crescent under this Share Scheme either Crescent Shares or Crescent CDIs by completing the Election Form and returning it to the address specified in the Election Form so that it is received by 3.00 pm on the Record Date. An election (other than a deemed election) under this clause 5.1 must be made in accordance with the terms and conditions on the Election Form. (b) An Ineligible Overseas Shareholder may not make any election pursuant to this clause 5.1 and any election purportedly made will be invalid. Ineligible Overseas Shareholders will be deemed to have elected to receive Crescent Shares and the Crescent Shares will be dealt with in accordance with clause 5.7. (c) A Scheme Shareholder (other than an Ineligible Overseas Shareholder) who does not validly elect between Crescent Shares and Crescent CDIs will be deemed to have elected to receive Crescent CDIs. Accordingly, a Scheme Shareholder who wishes to receive Crescent CDIs does not need to make an election under this clause 5.1. (d) Subject to clause 5.1(e), an election made or deemed to be made by a Scheme Shareholder under this clause 5.1 will be deemed to apply in respect of the Scheme Shareholder's entire registered holding of Scheme Shares at the Record Date, regardless of whether the Scheme Shareholder's holding of Scheme Shares at the Record Date is greater or less than the Scheme Shareholder's holding at the time of the election. (e) A Scheme Shareholder who is noted on the Coventry Share Register as holding one or more parcels of Coventry Shares as trustee or nominee for, or otherwise on account of another person, may make separate elections under this clause 5.1 in relation to each of those parcels of Coventry Shares (subject to it providing to Coventry and Crescent any substantiating information they reasonably require), and an election made in respect of any such parcel, or an omission to make an election in respect of any such parcel, will not be taken to extend to the other parcels. (f) Coventry may, with the agreement of Crescent, settle as it thinks fit any difficulty, matter of interpretation or dispute which may arise in connection with determining the validity of any election, and any such decision will be conclusive and binding on Coventry and Crescent and the relevant Scheme Shareholder. 5.2 Share Scheme Consideration Subject to this Share Scheme becoming Effective, in consideration of the transfer to Crescent of each Scheme Share held by a Scheme Shareholder under this Share Scheme, Crescent will provide the Share Scheme Consideration to each Scheme Shareholder for each Scheme Share held by it on the Implementation Date. 5.3 Rounding entitlements If the number of Scheme Shares held by a Scheme Shareholder as at 5.00 pm on the Record Date is such that the aggregate entitlement of the Scheme Shareholder to Share Scheme Consideration is such that a fractional entitlement to a Crescent Share or Crescent CDI (as the case may be) arises, then the entitlement of that Scheme Shareholder must be rounded down to the nearest whole number of Crescent Shares or Crescent CDIs (as the case may be). 5.4 Provision of Share Scheme Consideration Subject to clause 4.3, the obligations of Crescent under this Share Scheme to provide the Share Scheme Consideration to Scheme Shareholders will be satisfied: (a) in the case of Crescent Shares which are required to be issued to Scheme Shareholders under this clause 5, by Crescent procuring that: (i) the name and address of each such Scheme Shareholder is entered into the Crescent Share Register on the Implementation Date in respect of the Crescent Shares to which it is entitled under this clause 5; and (ii) either a share certificate is sent to the Registered Address of each such Scheme Shareholder representing the number of Crescent Shares issued to the Scheme Shareholder pursuant to this Share Scheme, or the Scheme Shareholders is entered into a direct registration system or other electronic book-entry system as holding the number of Crescent Shares issued to the Scheme Shareholders pursuant to this Share Scheme; (b) in the case of Crescent CDIs which are required to be issued to Scheme Shareholders under this clause 5, by Crescent: (i) issuing to the Depositary to be held on trust that number of Crescent Shares that will enable the Depositary to issue Crescent CDIs as envisaged by clause 5.4(b)(iii) on the Implementation Date; (ii) procuring that the name and address of the Depositary is entered into the Crescent Share Register in respect of those Crescent Shares on the Implementation Date and that a share certificate in the name of the Depositary representing those Crescent Shares is sent to the Depositary; (iii) procuring that on the Implementation Date the Depositary issues to each such Scheme Shareholder the number of Crescent CDIs to which it is entitled under this clause 5; (iv) procuring that on the Implementation Date the name of each such Scheme Shareholder is entered in the records maintained by the Depositary as the holder of the Crescent CDIs issued to that Scheme Shareholder on the Implementation Date; (v) in the case of each such Scheme Shareholder who held Coventry Shares on the CHESS subregister – procuring that the Crescent CDIs are held on the CHESS subregister on the Implementation Date and sending or procuring the sending of an allotment advice that sets out the number of Crescent CDIs issued and procuring that ASX Settlement will provide at the end of the month of allotment a CDI holding statement confirming the number of Crescent CDIs held on the CHESS subregister by that Scheme Shareholder; and (vi) in the case of each such Scheme Shareholder who held Coventry Shares on the issuer sponsored subregister – procuring that the CDIs are held on the issuer sponsored subregister on the Implementation Date and sending or procuring the sending of a CDI holding statement to each Scheme Shareholder which sets out the number of Crescent CDIs held on the issuer sponsored subregister by that Scheme Shareholder; and (c) in the case of Crescent Shares to be issued in respect of Share Scheme Consideration due to Ineligible Overseas Shareholders – by Crescent procuring that: (i) the name and address of the Sale Nominee is entered into the Crescent Share Register on the Implementation Date in respect of the Crescent Shares required to be issued to it under this clause 5; (ii) a share certificate in the name of the Sale Nominee is sent to the Sale Nominee representing the number of Crescent Shares so issued to it; and (iii) the Sale Nominee sells those Crescent Shares on behalf of the Ineligible Overseas Shareholders, and pays the proceeds in accordance with clauses 5.7. 5.5 Joint holders In the case of Scheme Shares held in joint names: (a) any cheque required to be paid to Scheme Shareholders will be payable to the joint holders; and (a) the Crescent Shares or Crescent CDIs (as the case may be) to be issued under this Share Scheme will be issued to and registered in the names of the joint holders, and will be forwarded to the holder whose name appears first in the Coventry Share Register as at 5.00 pm on the Record Date. 5.6 Binding instruction or notifications Except for a Scheme Shareholder's tax file number, any binding instruction or notification between a Scheme Shareholder and Coventry relating to Scheme Shares as at 5.00 pm on the Record Date (including any instructions relating to payment of dividends or to communications from Coventry) will, from 5.00 pm on the Record Date, be deemed (except to the extent determined otherwise by Crescent in its sole discretion) to be a similarly binding instruction or notification to, and accepted by Crescent, in respect of the Crescent Shares or Crescent CDIs (as the case may be) issued to the Scheme Shareholder until that instruction or notification is revoked or amended in writing addressed to Crescent, provided that any such instructions or notifications accepted by Crescent will apply to and in respect of the issue of Crescent Shares or Crescent CDIs (as the case may be) as the Share Scheme Consideration only to the extent that they: (a) are not inconsistent with the other provisions of this Share Scheme; or (b) are recognised under Canadian law or Crescent's constituent documents. 5.7 Ineligible Overseas Shareholders (a) Unless Crescent and Coventry are satisfied, acting reasonably, that the laws of an Ineligible Overseas Shareholder's country of residence (as shown in the Coventry Share Register) permit the issue and allotment of Crescent Shares or Crescent CDIs (as the case may be) to the Ineligible Overseas Shareholder, either unconditionally or after compliance with conditions which Crescent in its sole discretion regards as acceptable, Crescent will issue the Crescent Shares to which that Ineligible Overseas Shareholder would otherwise be entitled to the Sale Nominee, and Crescent will be under no obligation under this Share Scheme to issue, and will not issue, any Crescent Shares (or Crescent CDIs) to any such Ineligible Overseas Shareholder. (b) Crescent will procure that, as soon as reasonably practicable and in any event not more than 15 Business Days after the Implementation Date, the Sale Nominee: (i) sells on the financial market on which the Crescent Shares are then listed all of the Crescent Shares issued to the Sale Nominee pursuant to clause 5.7(a) in such manner, at such price and on such other terms as the Sale Nominee determines in good faith and at the risk of the Ineligible Overseas Shareholders; and (ii) remits to Crescent the proceeds of sale (after converting to Australian dollars and deducting any applicable brokerage, stamp duty and other selling costs, taxes and charges), subject to any applicable withholding taxes. (c) Promptly after the last sale of Crescent Shares in accordance with clause 5.7(b), Crescent will pay to each Ineligible Overseas Shareholder the proportion of the net proceeds of sale received by Crescent pursuant to clause 5.7(b)(ii) to which that Ineligible Overseas Shareholder is entitled (calculated on an average basis so that all Ineligible Overseas Shareholders receive the same price per Scheme Share subject to rounding). (d) Crescent will pay the relevant fraction of the proceeds of sale referred to in clause © to each Ineligible Overseas Shareholder by sending, or procuring the despatch to each such Ineligible Overseas Shareholder by prepaid post to the registered address of the Ineligible Overseas Shareholder at 5.00 pm on the Record Date, a cheque in the name of that Ineligible Overseas Shareholder for the relevant amount (denominated in Australian dollars). (e) Each Ineligible Overseas Shareholder appoints Coventry as its agent to receive on its behalf any financial services guide or other notices (including any updates of those documents) that the Sale Nominee is required to provide to Ineligible Overseas Shareholders under the Corporations Act. 5.8 Status of Crescent Shares Subject to this Share Scheme becoming Effective, Crescent will: (a) issue the Crescent Shares required to be issued by it under this Share Scheme on terms such that each such Crescent Share will rank equally in all respects with each existing Crescent Share; (b) ensure that each Crescent Share issued as Share Scheme Consideration is duly issued and is fully paid, non assessable and free from any mortgage, charge, lien, encumbrance or other security interest; and (c) use all reasonable endeavours to ensure that: (i) all Crescent Shares issued as Share Scheme Consideration are approved for listing and trading on the TSX-V as of the first trading day on the TSX-V following the Effective Date (or such later date as the TSX-V or ASX requires); and (ii) as from the Business Day following the Effective Date (or such later date as the TSX-V or ASX requires) the Crescent CDIs are listed for quotation on the official list of the ASX initially on a deferred settlement basis and on an ordinary settlement basis. 6. DEALINGS IN COVENTRY SHARES 6.1 Dealings in Coventry Shares by Scheme Shareholders For the purposes of establishing who are Scheme Shareholders, dealings in Coventry Shares will be recognised by Coventry provided that: (a) in the case of dealings of the type to be effected on CHESS, the transferee is registered in the Coventry Share Register as the holder of the relevant Coventry Shares by 5.00 pm on the Record Date; and (b) in all other cases, registrable transfers or transmission applications in respect of those dealings are received at the place where the Coventry Share Register is kept on or before 5.00 pm on the Record Date, and Coventry will not accept for registration, or recognise for the purpose of establishing who are Scheme Shareholders, any transmission application or transfer in respect of Coventry Shares received after 5.00 pm on the Record Date. 6.2 Coventry Share Register Coventry will, until the Share Scheme Consideration has been paid and Crescent has been entered in the Coventry Share Register as the holder of all of the Scheme Shares, maintain the Coventry Share Register in accordance with the provisions of this clause 6 and the Coventry Share Register in this form and the terms of this Share Scheme will solely determine entitlements to the Share Scheme Consideration. 6.3 Information to be made available to Crescent Coventry must procure that as soon as practicable following the Record Date, details of the names, registered addresses and holdings of Coventry Shares of every Scheme Shareholder shown in the Coventry Share Register at 5.00 pm on the Record Date are made available to Crescent in such form as Crescent may reasonably require. 6.4 Effect of Share certificates and holding statements As from 5:00 pm the Record Date, all share certificates and holding statements for the Scheme Shares (other than for Crescent following the Implementation Date) will cease to have effect as documents of title, and each entry on the Coventry Share Register at that date will cease to have any effect other than as evidence of entitlement to the Share Scheme Consideration. 6.5 Disposals after Record Date If this Share Scheme becomes Effective, a Scheme Shareholder, and any person claiming through that Scheme Shareholder, must not dispose of or purport or agree to dispose of any Scheme Shares or any interest in them after the Record Date. 6.6 Quotation of Coventry Shares (a) It is expected that suspension of trading in Coventry Shares on the ASX will occur from the close of trading on ASX on the Effective Date. (b) At a time after the Implementation Date to be determined by Crescent, Coventry will apply: (i) for termination of official quotation of Coventry Shares on ASX; and (ii) to have itself removed from the official list of ASX. 7. GENERAL PROVISIONS 7.1 Effect of Scheme Each Scheme Shareholder acknowledges that this Share Scheme binds Coventry and all of the holders for the time being of Coventry Shares (including those who do not attend the meeting of Coventry Shareholders to approve this Share Scheme or who do not vote at that meeting or who vote against this Share Scheme at that meeting) and, to the extent permitted by law, overrides the constitution of Coventry. 7.2 Appointment of agent and attorney Each Scheme Shareholder, without the need for any further act, is deemed to have irrevocably appointed Coventry as its agent and attorney for the purpose of: (a) executing any document or form or doing any other act necessary to give effect to the terms of this Share Scheme including, without limitation, the execution of the share transfer(s) to be delivered under clause 4.2(a) and the giving of the Scheme Shareholders' consent under clause 7.4; and (b) enforcing the Deed Poll against Crescent, and Coventry accepts such appointment. Coventry, as agent of each Scheme Shareholder, may sub-delegate its functions, authorities or powers under this clause 7.2 to all or any of its directors and officers (jointly, severally, or jointly and severally). 7.3 Enforcement of Deed Poll Coventry undertakes in favour of each Scheme Shareholder that it will enforce the Deed Poll against Crescent on behalf of and as agent and attorney for the Scheme Shareholder. 7.4 Scheme Shareholders' consent Each Scheme Shareholder irrevocably: (a) consents to Coventry and Crescent doing all things and executing all deeds, instruments, transfers or other documents as may be necessary, incidental or expedient to the implementation and performance of this Share Scheme; and (b) acknowledges that this Share Scheme binds Coventry and all of the Coventry Shareholders from time to time (including those who do not attend the Share Scheme Meeting, do not vote at that meeting or vote against this Share Scheme). 7.5 Scheme Shareholder's agreements Under this Share Scheme: (a) each Scheme Shareholder (other than an Ineligible Overseas Shareholder) who is issued Crescent Shares under this Share Scheme agrees to become a shareholder of Crescent in respect of those Crescent Shares, to be bound by the articles and notice of articles of Crescent and to have their name entered in the Crescent Share Register; (b) each Scheme Shareholder (other than an Ineligible Overseas Shareholder) who is issued Crescent CDIs under this Share Scheme agrees to become a holder of Crescent CDIs; (c) each Scheme Shareholder that is an Ineligible Overseas Shareholder agrees and acknowledges that the payment to it of an amount in accordance with clause 5.7 constitutes the satisfaction in full of its entitlement under this Share Scheme; and (d) each Scheme Shareholder agrees to the transfer of its Scheme Shares, together with all rights and entitlements attaching to those Scheme Shares, to Crescent in accordance with the terms of this Share Scheme. 7.6 Transfer with clear title and warranty by Scheme Shareholders (a) To the extent permitted by law, the Scheme Shares transferred to Crescent under this Share Scheme must be transferred free from all mortgages, charges, liens, encumbrances and interests of third parties of any kind, whether legal or otherwise. (b) Each Scheme Shareholder is deemed to have warranted to Coventry, in its own right and for the benefit of Crescent, that all their Scheme Shares (including any rights and entitlements attaching to those shares) will, at the date of the transfer of them to Crescent, 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 Scheme Shares to Crescent under this Share Scheme. 7.7 Title to Scheme Shares Crescent will be beneficially entitled to the Scheme Shares transferred to it under this Share Scheme pending registration by Coventry of Crescent in the Coventry Share Register as the holder of the Scheme Shares. 7.8 Appointment of Crescent as sole proxy From the Effective Date until Coventry registers Crescent as the holder of all of the Coventry Shares in the Coventry Share Register, each Scheme Shareholder: (a) appoints Crescent as attorney and agent (and directs Crescent in each capacity) to appoint any officer or agent nominated by Crescent as its sole proxy and where applicable, corporate representative, to attend shareholders' meetings, exercise the votes attaching to Coventry Shares registered in its name and sign any shareholders resolution, and no Scheme Shareholder 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 7.8(a); and (b) must take all other actions in the capacity of the registered holder of Coventry Shares as Crescent directs. 7.9 Alterations or conditions Coventry may, by its counsel or solicitors, and with the consent of Crescent, consent on behalf of all persons concerned, including a Scheme Shareholder, to any alteration or condition to this Share Scheme which the Court thinks fit to make or impose. 7.10 Notices (a) Where a notice, transfer, transmission application, direction or other communication referred to in this Share Scheme is sent by post to Coventry, it will for all purposes be deemed to be received on the date (if any) on which it is actually received at Coventry's registered office (and it will not be deemed to be received in the ordinary course of post). (b) The accidental omission to give notice of the Share Scheme Meeting to any Coventry Shareholder, or the non-receipt of such a notice by any Coventry Shareholder, will not, unless ordered by the Court, invalidate this Share Scheme or the proceedings at the Share Scheme Meeting. 7.11 Inconsistencies This Share Scheme binds Coventry and all Coventry Shareholders, and to the extent of any inconsistency, overrides the constitution of Coventry. 7.12 Further assurances The Coventry Shareholders consent to Coventry doing all things necessary for the implementation and performance of its obligations under this Share Scheme. Coventry will execute all documents and do all acts and things as may be necessary or expedient for the implementation of, and performance of its obligations under, this Share Scheme. 7.13 Stamp duty Crescent will pay any stamp duty payable on the transfer by Scheme Shareholders of the Scheme Shares to Crescent. 7.14 Fees and charges Coventry must pay all filing, application or similar fees due in relation to this Share Scheme. 7.15 Governing law This Share Scheme is governed by the laws of the State of Western Australia. Each of Coventry and Crescent and the holders of Coventry Shares irrevocably and unconditionally submits, in connection with this Share Scheme, to the non-exclusive jurisdiction of the Court and any courts which have jurisdiction to hear appeals from the Court and waives any right to object to any proceedings being brought in these courts. 7.16 Limitation of liability None of Coventry or Crescent nor any officer of any of them is liable for anything done or omitted to be done in the performance of this Share Scheme in good faith. 7.17 Definition of "send" For the purposes of clause 5, the word "send" (or any variant thereof) means: (a) sending by ordinary pre-paid post or courier to the Registered Address of the Scheme Shareholder; or (b) delivering to that address by any other means at no cost to the recipient. Annexure "B" COVENTRY RESOURCES LIMITED ACN 082 901 362 (Coventry) and THE HOLDERS OF OPTIONS TO SUBSCRIBE FOR FULLY PAID ORDINARY SHARES IN COVENTRY RESOURCES LIMITED SCHEME OF ARRANGEMENT - PURSUANT TO SECTION 411 OF THE CORPORATIONS ACT CONTENTS PAGE 1. DEFINITIONS AND INTERPRETATION 1 1.1 Definitions 1 1.2 Interpretation 4 1.3 Best and reasonable endeavours 5 1.4 Business Day 5 2. CONDITIONS 5 2.1 Conditions to this Option Scheme 5 2.2 Certificates in relation to conditions 6 2.3 Termination of Merger Implementation Deed 6 3. OPTION SCHEME 6 3.1 Effective Date of Option Scheme 6 3.2 End Date 6 4. IMPLEMENTATION OF OPTION SCHEME 6 4.1 Lodgement 6 4.2 Transfer of Scheme Options 7 4.3 Timing 7 5. OPTION SCHEME CONSIDERATION 7 5.1 Option Scheme Consideration 7 5.2 Rounding Entitlements 7 5.3 Terms of Crescent Options 7 5.4 Provision of Option Scheme Consideration 7 6. EXERCISE OF COVENTRY OPTIONS 8 6.1 Issue of Coventry Shares 8 6.2 Coventry Option Register 8 6.3 Information to be made available to Crescent 8 6.4 Effect of Option Certificates 8 6.5 No disposals after Record Date 8 7. GENERAL PROVISIONS 8 7.1 Effect of Option Scheme 9 7.2 Appointment of agent and attorney 9 7.3 Enforcement of Deed Poll 9 7.4 Scheme Optionholders' consent 9 7.5 Scheme Optionholders' agreements 9 7.6 Transfer with clear title and warranty by Scheme Optionholders 10 7.7 Title to Scheme Options 10 7.8 Crescent directions 10 7.9 Alterations or conditions 10 7.10 Notices 10 7.11 Inconsistencies 10 7.12 Further Assurances 11 7.13 Stamp Duty 11 7.14 Fees and Charges 11 7.15 Governing Law 11 7.16 Limitation of Liability 11 7.17 Definition of "send" 11 SCHEDULE 1 - TERMS OF CRESCENT OPTIONS TO BE ISSUED AS OPTION SCHEME CONSIDERATION 12 Scheme of Arrangement made under section 411 of the Corporations Act 2001 (Commonwealth) BETWEEN COVENTRY RESOURCES Limited (ACN 082 901 362) of Suite 9, 5 Centro Avenue, Subiaco, Western Australia (Coventry); AND THE HOLDERS OF COVENTRY OPTIONS. RECITALS A. Coventry is a public company incorporated in the state of Western Australia and is admitted to the official list of the ASX. B. Crescent Resources Corp. is a company existing under the laws of the Province of British Columbia with a head office at 1490 – 1075 West Georgia Street, Vancouver, British Columbia V6E 3C9 (Crescent) and its common shares are listed for trading on the TSX-V. C. Coventry and Crescent have entered into a merger implementation deed dated 7 September 2012 (Merger Implementation Deed) pursuant to which, amongst other things, Coventry has agreed to propose this Option Scheme to Coventry Optionholders, and each of Coventry and Crescent have agreed to take certain steps to give effect to this Option Scheme. D. If this Option Scheme becomes Effective (defined below), then: (a) subject to clause 5.2, all of the Scheme Options will be transferred to Crescent and the Option Scheme Consideration will be provided to the Scheme Optionholders in accordance with the provisions of this Option Scheme; and (b) Coventry will enter the name and address of Crescent in the Coventry Option Register as the holder of all of the Scheme Options. E. Crescent has entered into the Deed Poll for the purpose of covenanting in favour of Scheme Optionholders to perform the obligations contemplated of it under this Option Scheme. 1. DEFINITIONS AND INTERPRETATION 1.1 Definitions In this document, unless the contrary intention appears or the context requires otherwise: Announcement has that meaning given to it in the Merger Implementation Deed. ASIC means the Australian Securities and Investments Commission. ASX means ASX Limited (ACN 008 624 691) or the Australian Securities Exchange, as the context requires. ASX Listing Rules means the official listing rules of ASX. Business Day is any day that is both a Business Day within the meaning given in the ASX Listing Rules and a day that banks in Perth, Western Australia and Vancouver, Canada are open for business. Canadian Securities Laws means all applicable Canadian securities laws and the rules and regulations thereunder, together with all applicable published instruments, notices and orders of the securities regulatory authorities thereof and all applicable rules and policies of the TSX-V. Condition means a condition to this Option Scheme set out in clause 2.1. Corporations Act means the Corporations Act 2001 (Cth). Court means the Federal Court of Australia or such other court of competent jurisdiction as Coventry and Crescent agree in writing. Coventry Option Register means the register of optionholders of Coventry maintained by or on behalf of Coventry in accordance with section 168(1) of the Corporations Act. Coventry Option means an option to subscribe for Coventry Shares described in Schedule 6 of the Merger Implementation Deed. Coventry Optionholder means a person who is registered in the Coventry Option Register as a holder of Coventry Options. Coventry Share means a fully paid ordinary share in the capital of Coventry. Crescent CDI means a CHESS Depositary Interest, being a unit of beneficial ownership in a Crescent Share registered in the name of the Depositary. Crescent Option means an option to subscribe for one Crescent Share. Crescent Option Register means the register of holders of Crescent Options maintained by or on behalf of Crescent. Crescent Share means a fully paid and non-assessable common share in the capital of Crescent. Deed Poll means the deed poll to be executed by Crescent in favour of the Scheme Optionholders (subject to any amendments permitted by its terms) prior to the despatch of the Explanatory Memorandum to Coventry Optionholders. Depositary means CHESS Depositary Nominees Pty Limited (ACN 071 346 506). Effective means, when used in relation to this Option Scheme, the coming into effect, pursuant to section 411(10) of the Corporations Act, of the order of the Court made under section 411(4)(b) (and, if applicable, section 411(6)) of the Corporations Act in relation to this Option Scheme. Effective Date means the date on which this Option Scheme becomes Effective. End Date means December 31, 2012 or such later date as is agreed by Coventry and Crescent in writing. Explanatory Memorandum means the explanatory memorandum to be prepared by Coventry in respect of this Option Scheme approved by the Court under section 411(1) of the Corporations Act for distribution to Coventry Optionholders containing, among other things, the explanatory statement required by Part 5.1 of the Corporations Act relating to this Option Scheme and a notice convening the Option Scheme Meeting. Implementation Date means the date which is 5 Business Days after the Record Date, or such other date as Coventry and Crescent agree in writing. Option Scheme means the scheme of arrangement under Part 5.1 of the Corporations Act between Coventry and Scheme Optionholders as set out in this document, subject to any alterations or conditions made or required by the Court pursuant to section 411(6) of the Corporations Act and approved in writing by Crescent and Coventry. Option Scheme Consideration means, subject to clause 5.2, the consideration to be provided to Scheme Optionholders under the terms of this Option Scheme, being Crescent Options (issued on the terms set out in SCHEDULE 1). Option Scheme Meeting means the meeting of Coventry Optionholders ordered by the Court in relation to this Option Scheme pursuant to section 411(1) of the Corporations Act. Record Date means the date which is 5 Business Days after the Effective Date. Registered Address means, in relation to a Coventry Optionholder, the address of that Coventry Optionholder shown in the Coventry Option Register. Regulatory Authority means: (a) any government, semi-government or local authority and any department, minister or agency of any government; and (b) any other authority, agency, commission, administrative, fiscal or judicial body (including the Court), tribunal or similar entity having powers or jurisdiction under any law or regulation or the listing rules of any recognised stock or securities exchange, including without limitation the ASX and TSX-V. Related Body Corporate means the meaning given in section 9 of the Corporations Act. Scheme Option means each Coventry Option on issue as at 5.00 pm on the Record Date. Scheme Optionholder means each person registered in the Coventry Option Register as the holder of Scheme Options. Second Court Date means the first day of hearing of an application made to the Court for an order pursuant to section 411(4)(b) of the Corporations Act approving this Option Scheme or, if the hearing of such application is adjourned for any reason, means the first day of the adjourned hearing. Share Scheme means the scheme of arrangement under Part 5.1 of the Corporations Act between Coventry and the holders of Coventry Shares, as contemplated in the Merger Implementation Deed. TSX-V means TSX Venture Exchange. 1.2 Interpretation In this document, unless the contrary intention appears or the context requires otherwise: (a) a word importing the singular includes the plural and vice versa, and a word indicating gender includes every other gender; (b) if a word or phrase is given a defined meaning, any other part of speech or grammatical form of that word or phrase has a corresponding meaning ; (c) references to a person includes an individual, the estate of an individual, a corporation, an authority, an association or a joint venture (whether incorporated or unincorporated), a partnership and a trust; (d) a reference to a statute includes any, regulations or other instruments made under it and a reference to a statute or any regulation or other instrument made under it or a provision of any such statute, regulation or instrument includes consolidations, amendments, re-enactments and replacements; (e) a reference to a party includes a reference to that party's executors, administrators, successors, and permitted assigns, s including, without limitation, persons taking by novation and, in the case of a trustee, includes any substituted or additional trustee; (f) if a time period is specified and dates from a given date or the day of an act or event, it is to be calculated exclusive of that day; (g) a reference to any time is a reference to that time in Perth, Australia; (h) a reference to "$" or "A$" is to the lawful currency of the Commonwealth of Australia; (i) a reference to a document is that document as varied, novated, ratified or replaced from time to time; (j) a reference to a party, clause, schedule, exhibit, attachment or annexure is a reference to a party, clause, schedule, exhibit, attachment or annexure to or of this document, and a reference to this document includes all schedules, exhibits, attachments and annexures to it (k) this document must not be construed adversely to a party just because that party prepared it or caused it to be prepared; and (l) the word including or any form of that word is not a word of limitation. 1.3 Best and reasonable endeavours Any provision of this document which requires a party to use best endeavours or reasonable endeavours, or to take all steps reasonably necessary, to procure that something is performed or occurs does not include any obligation: (a) to pay any money or to provide any financial compensation, valuable consideration or any other incentive to or for the benefit of any person; or (b) to commence any legal action or proceeding against any person, to procure that that thing is done or happens, except for payment of any applicable fee for the lodgement or filing of any relevant application with any Regulatory Authority, except where that provision expressly specifies otherwise. 1.4 Business Day Except where otherwise expressly provided, where under this document the day on which any act, matter or thing is to be done is a day other than a Business Day, such act, matter or thing shall be done on the immediately following Business Day. 2. CONDITIONS 2.1 Conditions to this Option Scheme This Option Scheme is conditional upon, and will have no force or effect until, the satisfaction of each of the following conditions, and the provisions of clauses 3, 4 and 5 will not come into effect unless and until each of these conditions have been satisfied: (a) as at 8:00 am on the Second Court Date each of the conditions set out in clause 3.2 of the Merger Implementation Deed (other than the condition relating to the approval of the Court and the condition relating to the Effectiveness of the Share Scheme, as set out in clause 3.2(e) and clause 3.2(a) respectively of the Merger Implementation Deed) have been satisfied or waived in accordance with the terms of the Merger Implementation Deed; (b) as at 8:00 am on the Second Court Date the Merger Implementation Deed has not been terminated; (c) the Court approves this Option Scheme under section 411(4)(b) of the Corporations Act with or without modification; (d) such other conditions made or required by the Court under section 411(6) of the Corporations Act in relation to this Option Scheme as are acceptable to Crescent and Coventry have been satisfied; and (e) the coming into effect, pursuant to section 411(10) of the Corporations Act, of the orders of the Court made under section 41I(4)(b) of the Corporations Act (and, if applicable, section 411(6) of the Corporations Act) in relation to this Option Scheme and the Share Scheme. 2.2 Certificates in relation to conditions (a) At or before the Court hearing on the Second Court Date, Coventry and Crescent will each provide to the Court a certificate (or such other evidence as the Court may request) confirming whether or not all of the conditions set out in clause 3.2 of the Merger Implementation Deed (other than the condition referred to in clause 3.2(e) of the Merger Implementation Deed) have been satisfied or waived in accordance with the terms of the Merger Implementation Deed. (b) The certificates given by Coventry and Crescent constitute conclusive evidence that the conditions have been satisfied or waived (as the case may be). 2.3 Termination of Merger Implementation Deed Without limiting any rights under the Merger Implementation Deed, in the event that the Merger Implementation Deed is terminated in accordance with its terms before 8:00 am on the Second Court Date, Coventry and Crescent are each released from: (a) any further obligation to take steps to implement this Option Scheme; and (b) any liability with respect to this Option Scheme. 3. OPTION SCHEME 3.1 Effective Date of Option Scheme Subject to clause 3.2, this Option Scheme will take effect on and from the Effective Date. 3.2 End Date This Option Scheme will lapse and be of no further force or effect if the Effective Date has not occurred on or before the End Date. 4. IMPLEMENTATION OF OPTION SCHEME 4.1 Lodgement If the Conditions are satisfied, Coventry must lodge with ASIC in accordance with section 411(10) of the Corporations Act an office copy of the Court order approving this Option Scheme promptly after, and in any event by no later than 4.00 pm on the Business Day following the date on which the Court approves this Option Scheme (or such other Business Day as Coventry and Crescent agree in writing). 4.2 Transfer of Scheme Options On the Implementation Date, subject to the provision of the Option Scheme Consideration in the manner contemplated by clause 5 and Crescent having provided Coventry with written confirmation thereof, all of the Scheme Options will, together with all rights and entitlements attaching to the Scheme Options, be transferred to Crescent without the need for any further act by any Scheme Optionholder (other than acts performed by Coventry or its directors as attorney or agent for Scheme Optionholders under this Option Scheme), by: (a) Coventry delivering to Crescent a duly completed and executed option transfer form or forms to transfer all of the Scheme Options to Crescent (executed by Coventry as the attorney and agent of each Scheme Optionholder under clause 7.2) (which may be a master transfer of all or part of the Scheme Options); (b) Crescent executing such option transfer form or forms and delivering it or them to Coventry for registration; and (c) immediately after receipt of the option transfer form or forms under clause 4.2(b), Coventry entering, or procuring the entry of, the name and address of Crescent in the Coventry Option Register as the holder of all of the Scheme Options. 4.3 Timing Notwithstanding any other provision of this Option Scheme, while Crescent Options forming part of the Option Scheme Consideration must be issued (and relevant registers updated to record their issuance) on the Implementation Date, any requirements under clause 5 for the sending of option certificates, holding statements or allotment advices may be satisfied within 10 Business Days after the Implementation Date. 5. OPTION SCHEME CONSIDERATION 5.1 Option Scheme Consideration Subject to this Option Scheme becoming Effective, in consideration of the transfer to Crescent of each Scheme Option held by a Scheme Optionholder under this Option Scheme, Crescent will provide the Option Scheme Consideration to each Scheme Optionholder for each Scheme Option held by it on the Implementation Date. 5.2 Rounding entitlements If the number of Scheme Options held by a Scheme Optionholder as at 5:00 pm on the Record Date is such that the aggregate entitlement of the Scheme Optionholder to Option Scheme Consideration is such that a fractional entitlement to a Crescent Option arises, then the entitlement of that Scheme Optionholder must be rounded down to the nearest whole number of Crescent Options. 5.3 Terms of Crescent Options Each Crescent Option issued pursuant to this Option Scheme (as Option Scheme Consideration) will be issued on the terms set out in SCHEDULE 1. 5.4 Provision of Option Scheme Consideration Subject to clause 4.3, the obligations of Crescent under this Option Scheme to provide the Option Scheme Consideration to Scheme Optionholders will be satisfied by Crescent procuring that: (a) the name and address of each such Scheme Optionholder is entered into the Crescent Option Register on the Implementation Date in respect of the Crescent Options to which it is entitled, under this clause 5; and (b) a certificate or other instrument is sent to the Registered Address of each such Scheme Optionholder representing and governing the terms of Crescent Options issued to the Scheme Optionholder pursuant to this Option Scheme. 6. EXERCISE OF COVENTRY OPTIONS 6.1 Issue of Coventry Shares (a) Coventry will issue Coventry Shares in accordance with any valid exercise of a Coventry Option which is received on or before 12:00 noon on the Business Day prior to the Record Date. (a) Coventry will not accept for registration or recognise for any purpose any exercise of a Coventry Option received after 12:00 noon on the Business Day prior to the Record Date and, after such time, the Coventry Options shall not be capable of exercise notwithstanding any terms on which such Coventry Options were granted. 6.2 Coventry Option Register Coventry will, until the Option Scheme Consideration has been provided and Crescent has been entered in the Coventry Option Register as the holder of all of the Scheme Options, maintain the Coventry Option Register in accordance with the provisions of this clause 6 and the Coventry Option Register in this form and the terms of this Option Scheme will solely determine entitlements to the Option Scheme Consideration. 6.3 Information to be made available to Crescent Coventry must procure that as soon as practicable following the Record Date, details of the names, registered addresses and holdings of Coventry Options of every Scheme Optionholder shown in the Coventry Option Register at 5.00 pm on the Record Date are made available to Crescent in such form as Crescent may reasonably require. 6.4 Effect of Option certificates As from 5:00 pm the Record Date, all option certificates for the Scheme Options (and other than for Crescent following the Implementation Date) will cease to have effect as documents of title, and each entry on the Coventry Option Register at that date will cease to have any effect other than as evidence of entitlement to the Option Scheme Consideration. 6.5 No disposals after Record Date If this Option Scheme becomes Effective, a Scheme Optionholder, and any person claiming through that Scheme Optionholder, must not dispose of or purport or agree to dispose of any Scheme Options or any interest in them after the Record Date. 7 GENERAL PROVISIONS 7.1 Effect of Option Scheme Each Scheme Optionholder acknowledges that this Option Scheme binds Coventry and all of the holders for the time being of Coventry Options (including those who do not attend the meeting of Coventry Optionholders to approve this Option Scheme or who do not vote at that meeting or who vote against this Option Scheme at that meeting) and, to the extent permitted by law, overrides the constitution of Coventry and the terms of the Coventry Options. 7.2 Appointment of agent and attorney Each Scheme Optionholder, without the need for any further act, is deemed to have irrevocably appointed Coventry as its agent and attorney for the purpose of: (a) executing any document or form or doing any other act necessary to give effect to the terms of this Option Scheme including, without limitation, the execution of the option transfer(s) to be delivered under clause 4.2(a) and the giving of the Scheme Optionholders' consent under clause 7.4; and (b) enforcing the Deed Poll against Crescent, and Coventry accepts such appointment. Coventry, as agent of each Scheme Optionholder, may sub-delegate its functions, authorities or powers under this clause 7.2 to all or any of its directors and officers (jointly, severally, or jointly and severally). 7.3 Enforcement of Deed Poll Coventry undertakes in favour of each Scheme Optionholder that it will enforce the Deed Poll against Crescent on behalf of and as agent and attorney for the Scheme Optionholders. 7.4 Scheme Optionholders' consent Each Scheme Optionholder irrevocably: (a) consents to Coventry and Crescent doing all things and executing all deeds, instruments, transfers or other documents as may be necessary, incidental or expedient to the implementation and performance of this Option Scheme; and (b) acknowledges that this Option Scheme binds Coventry and all of the Coventry Optionholders from time to time (including those who do not attend the Option Scheme Meeting, do not vote at that meeting or vote against this Option Scheme). 7.5 Scheme Optionholder's agreements Under this Option Scheme: (a) each Scheme Optionholder who is issued Crescent Options under this Option Scheme agrees to become an optionholder of Crescent in respect of those Crescent Options and to have their name entered in the Crescent Option Register; (b) each Scheme Optionholder agrees to the transfer of its Scheme Options, together with all rights and entitlements attaching to those Scheme Options, to Crescent in accordance with the terms of this Option Scheme; and (c) each Scheme Optionholder acknowledges and agrees that the terms of the Crescent Options issued under the Option Scheme remain subject to TSX-V approval and requirements. 7.6 Transfer with clear title and warranty by Scheme Optionholders (a) To the extent permitted by law, the Scheme Options transferred to Crescent under this Option Scheme must be transferred free from all mortgages, charges, liens, encumbrances and interests of third parties of any kind, whether legal or otherwise. (b) Each Scheme Optionholder is deemed to have warranted to Coventry, in its own right and for the benefit of Crescent, that all their Scheme Options (including any rights and entitlements attaching to those options) will, at the date of the transfer of them to Crescent, be 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 Scheme Options to Crescent under this Option Scheme. 7.7 Title to Scheme Options Crescent will be beneficially entitled to the Scheme Options transferred to it under this Option Scheme pending registration by Coventry of Crescent in the Coventry Option Register as the holder of the Scheme Options. 7.8 Crescent directions From the Effective Date until Coventry registers Crescent as the holder of all of the Coventry Options in the Coventry Option Register, each Scheme Optionholder must take all actions in the capacity of the registered holder of Coventry Options as Crescent directs. 7.9 Alterations or conditions Coventry may, by its counsel or solicitors, and with the consent of Crescent, consent on behalf of all persons concerned, including a Scheme Optionholder, to any alteration or condition to this Option Scheme which the Court thinks fit to make or impose. 7.10 Notices (a) Where a notice, transfer, transmission application, direction or other communication referred to in this Scheme is sent by post to Coventry, it will for all purposes be deemed to be received on the date (if any) on which it is actually received at Coventry's registered office (and it will not be deemed to be received in the ordinary course of post). (b) The accidental omission to give notice of the Option Scheme Meeting to any Coventry Optionholder, or the non-receipt of such a notice by any Coventry Optionholder, will not unless ordered by the Court, invalidate the Option Scheme or the proceedings at the Option Scheme Meeting. 7.11 Inconsistencies This Option Scheme binds Coventry and all Coventry Optionholders, and to the extent of any inconsistency, overrides the constitution of Coventry. 7.12 Further assurances The Coventry Optionholders consent to Coventry doing all things necessary for the implementation and performance of its obligations under this Option Scheme. Coventry will execute all documents and do all acts and things as may be necessary or expedient for the implementation of and performance of its obligations under, this Option Scheme. 7.13 Stamp duty Crescent will pay any stamp duty payable on the transfer by Scheme Optionholders of the Scheme Options to Crescent. 7.14 Fees and charges Coventry must pay all filing, application or similar fees due in relation to this Option Scheme. 7.15 Governing law This Option Scheme is governed by the laws of the State of Western Australia. Each of Coventry and Crescent, and the holders of Coventry Shares irrevocably and unconditionally submits, in connection with this Scheme, to the non-exclusive jurisdiction of the Court and any courts which have jurisdiction to hear appeals from the Court and waives any right to object to any proceedings being brought in these courts. 7.16 Limitation of liability None of Coventry or Crescent nor any officer of any of them is liable for anything done or omitted to be done in the performance of-this Option Scheme in good faith. 7.17 Definition of "send" For the purposes of clause 5, the word "send" (or any variant thereof) means: (a) sending by ordinary pre-paid post or courier to the Registered Address of the Scheme Optionholder; or (b) delivering to that address by any other means at no cost to the recipient. SCHEDULE 1 – TERMS OF CRESCENT OPTIONS TO BE ISSUED AS OPTION SCHEME CONSIDERATION Each Crescent Option will be granted on terms consistent (to the greatest extent permitted by Canadian Securities Laws) with the terms of the Coventry Options except that each such Crescent Option will: 1. entitle the holder to purchase Crescent Shares in lieu of Coventry Shares on the basis of 0.2513 Crescent Shares (post completion of the consolidation of the Crescent Shares on a 5:1 basis) for each Coventry Share the Coventry Optionholder was theretofore entitled to purchase upon payment of an exercise price that has been simultaneously and proportionately adjusted; 2. have an exercise period equal to the unexpired exercise period of the Coventry Option it replaces; 3. be fully vested and immediately capable of exercise; and 4. be exercisable into Crescent Shares (unless the option holder elects, at or before the time of exercise, to receive a Crescent CDI). Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION WAD 300 of 2012 IN THE MATTER OF COVENTRY RESOURCES LIMITED COVENTRY RESOURCES LIMITED (ACN 082 901 362) Plaintiff JUDGE: BARKER J DATE: 19 DECEMBER 2012 PLACE: PERTH REASONS FOR JUDGMENT 1 On 19 December 2012, I approved schemes of arrangement in relation to the plaintiff (Coventry). These are the reasons for so doing. 2 This is the second hearing of Coventry's application for orders approving a scheme of arrangement between it (Coventry) and its members (shareholders), which may be referred to as the share scheme, and between Coventry and its optionholders, which may be referred to as the option scheme, pursuant to s 411(4)(b) of the Corporations Act 2001 (Cth) (Corporations Act); and exempting Coventry pursuant to s 411(12) of the Corporations Act from compliance with the requirements of s 411(11). 3 Two primary questions arise: (1) whether approval should be granted for the share scheme where all shares in Coventry will be transferred to Crescent Resources Corporation (Crescent) and shares in Crescent will be issued as consideration for the transfer; (2) whether the Court should grant its approval for the option scheme where all options to acquire shares in Coventry will be transferred to Crescent and options to acquire shares in Crescent will be issued as consideration for the transfer. 4 At the first hearing of the application, an order was made for the convening of meetings of shareholders and optionholders and the Court then approved the explanatory statement required by s 412(1)(a) to accompany notices of the meetings: see Coventry Resources Limited, in the matter of Coventry Resources Limited [2012] FCA 1252. 5 Section 411(4) primarily controls the process by which the schemes may become binding, and so the matters to be considered at the second hearing, in the following terms: (4) A compromise or arrangement is binding on the creditors, or on a class of creditors, or on the members, or on a class of members, as the case may be, of the body and on the body or, if the body is in the course of being wound up, on the liquidator and contributories of the body, if, and only if: (a) at a meeting convened in accordance with an order of the Court under subsection (1) or (1A): (i) in the case of a compromise or arrangement between a body and its creditors or a class of creditors—the compromise or arrangement is agreed to by a majority in number of the creditors, or of the creditors included in that class of creditors, present and voting, either in person or by proxy, being a majority whose debts or claims against the company amount in the aggregate to at least 75% of the total amount of the debts and claims of the creditors present and voting in person or by proxy, or of the creditors included in that class present and voting in person or by proxy, as the case may be; and (ii) in the case of a compromise or arrangement between a body and its members or a class of members—a resolution in favour of the compromise or arrangement is: (A) unless the Court orders otherwise—passed by a majority in number of the members, or members in that class, present and voting (either in person or by proxy); and (B) if the body has a share capital—passed by 75% of the votes cast on the resolution; and (b) it is approved by order of the Court. 6 The first question is whether there have been meetings convened in accordance with the order made by the Court at the first hearing that satisfies the requirements of subparas (i) and (ii) of s 411(4)(a) and whether other matters required by the order have been complied with. 7 In this regard all procedural matters have been satisfied. The scheme booklet approved by the Court on 9 November 2012 has been registered at the Australian Securities and Investments Commission (ASIC). The scheme meetings were advertised in accordance with the meeting orders. This second court hearing was advertised in accordance with the meeting orders. An office copy of the orders made by the Court was lodged with ASIC. The printing and dispatch of the scheme booklet to shareholders and optionholders occurred as of 13 November 2012. 8 It is also clear that the scheme meetings were held in accordance with the constitution of Coventry, the Corporations Act and the meeting orders and that Coventry distributed a copy of the meeting orders to all persons that attended the scheme meetings as required by the meeting orders, and that statutory majorities were obtained at the meetings. 9 It is also clear that proxies received by the share registry were collated and Coventry was provided with a proxy report on 12 December 2012 and that at the meetings the votes cast were recorded. 10 So far as the Court's broad discretion to approve the schemes under s 411(4) is concerned, it is plain that the schemes have achieved the requisite majority support by fully informed voters. 11 There is no evidence to suggest that shareholders and optionholders have not voted in good faith or that they have voted for an improper purpose. 12 A further question is whether the schemes are fair and reasonable so that an intelligent and honest person properly informed and acting alone might approve it. That test is met here. 13 On behalf of Coventry all matters relevant to the exercise of the Court's discretion have been brought to the Court's attention. 14 There is no reason to think that there has not been full and frank disclosure of all information material to the decision made by the shareholders and optionholders. 15 There is no minority shareholder oppression suggested by the efforts in relation to these schemes. 16 Thus, the Court in this case is able to be satisfied that the arrangements proposed are ones capable of being accepted. 17 A report by an independent expert has concluded that the schemes are in the best interests of the shareholders and optionholders on the basis that they will yield commercial benefits to each class. They may be considered fair and reasonable from the view point of an intelligent and honest person. 18 The conditions precedent to the schemes have been satisfied or waived, save for the making of this order, which will now be granted as asked. 19 There is no person who has indicated an intention to appear at this hearing or otherwise intends to object to the approval of the schemes. 20 Section 411(17) provides a set of restraints on the Court's power to approve the schemes: The Court must not approve a compromise or arrangement under this section unless: (a) it is satisfied that the compromise or arrangement has not been proposed for the purpose of enabling any person to avoid the operation of any of the provisions of Chapter 6; or (b) there is produced to the Court a statement in writing by ASIC stating that ASIC has no objection to the compromise or arrangement; but the Court need not approve a compromise or arrangement merely because a statement by ASIC stating that ASIC has no objection to the compromise or arrangement has been produced to the Court as mentioned in paragraph (b). 21 At the second hearing Coventry through counsel produced a statement by ASIC stating that ASIC has no objection to the arrangements. 22 The Court is satisfied that the schemes have not been proposed for the purpose of enabling any person to avoid the operation of the provisions of Ch 6 of the Corporations Act. The nature of the schemes effectively removes this as an issue in this case. 23 The Court is also asked to make an exemption order under s 411(12) of the Corporations Act, which will exempt the plaintiff from the s 411(11) obligation requiring a copy of every order of the Court made for the purposes of s 411(4)(b) to be annexed to every copy of the relevant company's constitution issued after the order was made. In circumstances where Coventry will, from implementation of the schemes become a wholly owned subsidiary of Crescent, the s 411(1) requirements will serve no useful purpose. The Court therefore will make an order to that effect. 24 Coventry also notes that it is proposed that shares in Crescent and options to purchase shares in Crescent that form part of the schemes' consideration will be issued to shareholders and optionholders in the United States. In order to do so, Crescent must meet an exemption from compliance with United States' prospectus law contained in s 3(a)(10) of the Securities Act of 1933 (US) (Securities Act). To qualify for the exemption the following conditions must be met, as discussed in Heartware Limited, in the matter of Heartware Limited [2008] FCA 1997 at [18]: (a) the securities issued in Crescent must be in exchange for other securities (here securities in Coventry); (b) the Court must approve the fairness of the terms and conditions of the exchange; (c) where relevant, the Court must find that the terms and conditions of the exchange are fair to those to whom the securities will be issued and be advised, before the hearing, that the issuers (Crescent) will rely on the s 3(a)(10) Securities Act exemption on the basis of the Court's approval of the schemes; (d) the Court must hold a hearing before approving the fairness of the terms and conditions of the transaction; (e) the fairness hearing must be open to everyone to whom securities will be issued in the proposed exchange; (f) adequate notice must be given to all those persons; (g) there must not be any improper impediment to the appearance by such persons at the hearing. 25 Whilst it is not for the Court to express any view as to whether the procedures or processes of the Court are sufficient to satisfy these requirements, it is appropriate for the Court to note as discussed in Professional Investment Holdings Limited, in the matter of Professional Investment Holdings Ltd (No 2) [2010] FCA 1336 at [44]-[60] and subsequent decisions, that the elements of s 411 that relate to the Securities Act exemption referred to have been met. 26 In those circumstances the Court approves the schemes in the terms proposed by the plaintiff. I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Barker. Associate: Dated: 20 December 2012