Waiver from NZX Listing Rules 4.2.2 and 4.19.1

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13.07.2021
NZ RegCo Decision
EROAD Limited (ERD)
Application for waivers from NZX Listing Rules 4.2.2 and
4.19.1

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Background
1. The information on which these decisions are based is set out in Appendix One to this decision.
These waivers will not apply if that information is not, or ceases to be, full and accurate in all
material respects.
2. The NZX Listing Rules (Rules) to which these decisions relate are set out in Appendix Two.
3. Capitalised terms that are not defined in these decisions have the meanings given to them in the
Rules.
Waiver from Listing Rule 4.2.2
Decision
4. Subject to the conditions set out in paragraph 5 below, and on the basis that the information
provided by EROAD Limited (ERD) is complete and accurate in all material respects, NZ RegCo
grants ERD a waiver from Rule 4.2.2, to the extent that this Rule prohibits ERD from issuing
consideration Shares later than 12 months following shareholder approval for the allotment.
5. The waiver in paragraph 4 above is provided on the conditions that:
a. Any Shares issued as partial satisfaction of the Additional Payment are issued within 24
months of Completion;
b. The waiver, and ERD’s reliance on the waiver is disclosed in ERD’s annual reports during the
period ERD is reliant on the waiver; and
c. The waiver, and ERD’s reliance on the waiver, is disclosed in any Offering Document that
ERD publishes during the period ERD is reliant on the waiver.
Reasons
6. In coming to the decision to provide the waiver set out in paragraph 4 above, NZ RegCo has
considered that:
a. The purpose of Rules 4.2.2 is to ensure that Issuers do not unduly delay the issue or
acquisition of Securities for which they have received shareholder approval. This mischief is
not present where;
i) the number of shares to be issued or acquired in the future is determined by an objective
formula; and
ii) the possibility of issuing or acquiring the Securities is clearly disclosed by ERD during the
period ERD is reliant on this Waiver.
b. ERD’s shareholders will have the opportunity to vote on whether or not to approve the
Proposed Transaction at a special meeting. The notice of special meeting will clearly explain
the Proposed Transaction as well as thisWaiver granted by NZ RegCo. In particular, it will be
clear that the allotment and/or acquisition of Shares will take place later than 12 months after
the date of the meeting, and that ERD has been granted a waiver from the timeframes under
the Rules;
c. The issue of Additional Payment Shares is conditional on the achievement of certain agreed
commercial milestones to the Purchaser’s satisfaction in the 12 months following Completion.
It will therefore not be known if the Additional Payment Shares are to be issued within the 12
months following shareholder approval of the issue;

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d. ERD has submitted, and NZ RegCo has no reason not to accept:
i) that it is common for commercial transactions of this nature to include both contingent
consideration such as the Additional Payment, as well as earn-out mechanisms designed
to adjust the purchase price depending on the actual performance of the business being
acquired;
ii) the timeframes agreed for the Additional Payment are typical for this type of transaction;
and
iii) The agreed timeframes allow ERD’s Board sufficient time to determine whether the
achievement of the commercial milestones will lead to the business outcomes required in
order for the Additional Payment to become payable, and to resolve any dispute should a
dispute arise with the vendors given the inherent complexity of the calculation method.
e. This Waiver, and ERD’s reliance on the Waiver, will be clear to future ERD shareholders as it
will be disclosed in ERD’s Annual Reports and any Offering Document published during the
period ERD is reliant on these Waivers; and
f. There is precedent for waivers of Rule 4.2.2.
Waiver from Listing Rule 4.19.1
Decision
7. Subject to the conditions set out in paragraph 8 below, and on the basis that the information
provided by ERD is complete and accurate in all material respects, NZ RegCo grants ERD a
waiver from Rule 4.19.1, to the extent that this Rule would prohibit the allotment of Shares in
respect of subscriptions received under the Placement later than 10 Business Days after the
closing date for the Placement.
8. The waiver in paragraph 7 above is provided on the conditions that:
a. The waiver, its conditions and its implications are disclosed in the Offering Document;
b. The allotment of Shares to participants in the Placement occurs within 5 Business Days of
shareholder approval to the Placement being obtained; and
c. The waiver, and ERD’s reliance on the waiver, is disclosed in ERD’s annual report for the
financial year ending 31 March 2022.
Reasons
9. In coming to the decision to provide the waiver set out in paragraph 7 above, NZ RegCo has
considered that:
a. the policy behind Rule 4.19.1 is to ensure that, where application monies have been
submitted, subscribers obtain the benefit of their investment without undue delay;
b. ERD has submitted, and NZ RegCo has no reason not to accept, that these circumstances do
not offend the policy behind Rule 4.19.1 because:
i) the delay in allotting the Shares is occurring to ensure that ERD’s shareholders are able
to review and approve the acquisition to which the Placement relates at a special
shareholders’ meeting;
ii) ERD will settle the Shares under the Placement on a delivery versus payment basis, so
subscribers will not be required to submit the subscription money for the relevant Shares

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until the date on which the Shares are allotted (or the immediately preceding day where
settling via ASX);
iii) all Shares allocated under the Share Purchase Plan will be issued within the 10 Business
Day period provided in the Rules; and
iv) Investors will be advised prior to subscribing for Shares under the Placement that the
issue of Shares under the Placement will take place on a date that is later than the 10
Business Day period provided in the Rules. Through its participation in the Placement,
participants will agree to those arrangements; and
c. There is precedent for waivers of Rule 4.19.1
Confidentiality
10. ERD has requested this decision be kept confidential until ERD releases an announcement
relating to the Transaction and the Placement.
11. In accordance with Rule 9.7.2(a), NZ RegCo grants ERD’s request.

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Appendix One
1. EROAD Limited (
ERD
) is a Listed Issuer with Ordinary Shares (
Shares
) Quoted on the NZX
Main Board.
2. ERD intends to enter into a conditional agreement to acquire Coretex Limited, a New Zealand
incorporated company that provides vehicle telematics and fleet management solutions
(
Transaction
). ERD has entered into the Transaction via EROAD Financial Services Limited, a
wholly owned subsidiary (
Purchaser
).
3. The Transaction will be governed by a sale and purchase agreement, with a number of vendors
holding shares in Coretex Limited both directly and indirectly (
Vendors
). The Transaction is
subject to regulatory approvals and clearance, including from the Overseas Investment Office
and Commerce Commission. The intended date for completion is therefore subject to change
but the parties are working towards completed at the end of September, assuming the necessary
approvals and clearance can be obtained (
Completion
).
4. The consideration for the Transaction is to be satisfied as follows:
a) At Completion, the Purchaser will pay the Vendors an initial purchase price of approximately
$77.75 million in cash (with the cash consideration payable on completion remaining subject
to confirmation as to the estimated net working capital and estimated indebtedness) and
procure the issue of approximately 13.3 million ordinary ERD Shares; and
b) Subject to the achievement of certain agreed commercial milestones within 12 months of
Completion, the Purchaser will, approximately 12 months from Completion, pay the Vendors
up to $30.6 million (Additional Payment) by way of an approximate 50/50 split of cash and
Shares.
5. ERD will obtain shareholder approval:
a) for the issue of Shares to be issued as consideration for the Transaction; and
b) for the issue of Shares under the Additional Payment mechanism; and
c) for the issue of Shares under the proposed Offer (as defined below).
6. ERD has applied for a waiver from Rule 4.2.2 to enable it to satisfy the consideration required by
the Transaction without having to seek future shareholder approval. In particular, ERD requests
a waiver from that Rule as it applies with respect to the issue of Shares as partial satisfaction of
the Additional Payment (
Additional Payment Shares
).
7. In order to fund the Transaction, ERD is considering a potential offer of fully paid Shares
comprising:
a) An approximately AUD$60 million placement of new Shares (the
Placement
); and
b) An approximately AUD$15 million share purchase plan of new Shares (Share
Purchase Plan). ERD will prepare an offer booklet in connection with the Share
Purchase Plan (
Offer Document
),
(together, the
Offer
).
8. The Placement is intended to be fully underwritten in accordance with the terms of an
underwriting agreement to be entered into between ERD and Canaccord Genuity (Australia)
Limited (and/or its affiliates). The Offer will be made in New Zealand in reliance on the quoted

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financial product exclusion set out in clause 19 of schedule 1 of the Financial Markets Conduct
Act 2013.
9. ERD undertook a placement and share purchase plan in September 2020 and therefore requires
shareholder approval to the Offer. Accordingly, the allotment of Shares under the Placement will
only occur once that approval has been obtained, being a date more than 10 Business Days
after the closing date for the Placement. ERD has applied for a waiver to enable it to undertake
a conditional Placement and allot Shares shortly after the shareholder meeting to approve the
Placement (among other things, as noted above).

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Appendix Two
Rule 4.2.2
An issue of Equity Securities authorised under Rule 4.2.1 must be completed within:
(a) 36 months after the passing of those resolutions, if the issue is restricted to Employees, and
(b) 12 months after the passing of those resolutions in all other circumstances,
otherwise the issue cannot occur until further approval is obtained under Rule 4.2.1.

Rule 4.19.1
An issuer making an offer of Financial Products intended to be Quoted (other than Equity Securities
issued under Rule 4.8 or 4.9) must allot such Quoted Financial Products no later than 10 Business
Days after the final closing date for the offer.