Comvita enters into Scheme Implementation Agreement
18 August 2025
Comvita enters into Scheme Implementation Agreement
Comvita Limited (NZX: CVT) ("Comvita") has entered into a Scheme Implementation Agreement ("SIA") with
Florenz Limited ("Florenz") under which Florenz has agreed to acquire all the shares in Comvita through a court-
approved scheme of arrangement for $0.80 cents per share ("Scheme").
Highlights
• Under the Scheme, Comvita’s shareholders will receive a cash price of $0.80 cents per share.
• This represents an equity value of approximately $56 million, an enterprise value of approximately $119
million and, as at the close of trading on 15 August 2025:
o A premium of 67% to Comvita’s closing share price;
o A premium of 56% to Comvita’s 90-day VWAP.
• The Scheme is subject to shareholder approval, High Court approval, an Independent Adviser’s Report
concluding that the Scheme consideration is within or above the valuation range for Comvita shares, and
other customary conditions relating to certain events or occurrences prior to implementation, all as
detailed in the SIA.
• The Comvita Board unanimously recommends that shareholders vote in favour of the Scheme, and intend
to vote shares controlled by them in favour of the Scheme, subject to the Independent Adviser concluding
in its report that the $0.80 cents per share is within or above its valuation range for the Comvita shares
and there not being a Superior Proposal (as defined in the SIA).
• China Resources Enterprise and Li Wang, Comvita’s two largest shareholders who together own
approximately 18.3% of Comvita shares on issue, are supportive of the transaction and have entered into
voting commitments with Florenz pursuant to which they have agreed to vote all of their respective
shares in favour of the Scheme, subject to the Independent Adviser concluding in its report that the $0.80
cents per share is within or above its valuation range for the Comvita shares and the Board continuing to
be supportive of the Scheme.
• In addition, we have confidentially appraised certain institutional shareholders, and they have advised
that they are supportive of the offer being put forward to shareholders to consider.
• Comvita shareholder approval will be sought at a special meeting of shareholders expected to be held in
November 2025, but you should expect to receive explanatory documents in October 2025. If all
conditions are satisfied, the Scheme is expected to be implemented in December 2025.
Comvita shareholders do not need to take any action at the current time.
Statement from Comvita Chair – Bridget Coates
The Board unanimously supports the offer given the premium to recent trading, the greater certainty it provides
amid sustained sector, structural and financial challenges, and the liquidity it offers given historically low trading
volumes.
Recent years have been challenging for Comvita and its shareholders, with sustained sector pressures, softer
market conditions and the demands of a complex turnaround weighing on performance. The Board understands
the impact this has had and the importance of delivering a clear, decisive path forward.
Comvita has faced ongoing pressure from structural changes in the Mānuka honey sector, which continues to face
oversupply, price and demand volatility, and intense competition (including online). The environment is
fragmented, with several participants under financial strain. Industry dynamics require consolidation at pace, but
sector leadership demands capital strength, scale and speed, which are not available to Comvita under its current
capital structure.
Compounding these challenges, Comvita’s recent strategy was founded on expectations of sustained market
growth, supported by market insights showing that the best path to capture this was building a premium brand to
meet demand.
Significant capital was invested in brand equity, distribution reach, supply security and scientific credibility to
position Comvita for this opportunity. A number of these investments did not meet their objectives or
deliver expected returns. In parallel, market growth did not materialise at the expected pace, competition
intensified and oversupply created additional headwinds, reducing profitability.
Comvita has taken urgent steps to reduce costs, simplify operations, and protect long-term brand strength – which
are delivering early results – and the brand remains the category leader in key markets. However, these factors
alone are not sufficient to strengthen the balance sheet or position the business for long-term sustainability.
Trading conditions in FY25 have remained challenging and, consistent with previous guidance, Comvita expects to
report a significant loss for FY25 as well as a material write-down of the net assets as a result of impairment testing
and provision against inventories.
Comvita’s lenders are providing short-term accommodation but have signalled that a longer-term solution -
through debt repayment or potential strategic transactions - is required.
Against that backdrop, the Board – alongside its independent advisors, Craigs Investment Partners and Goldman
Sachs – has acted with urgency to consider all strategic options available, including potential acquisitions by
financial sponsors and strategic trade buyers, subordinated debt issuance and an equity capital raise. None would
deliver the same transaction certainty, and several carried significant dilution or execution risk.
In the absence of the Scheme, Comvita could pursue a capital raise or refinancing, but there is no certainty either
would be successful and, in any event, would likely be on less favourable terms with potential erosion of existing
shareholder interests. Even if a capital raising or refinancing were successful, there would continue to be
uncertainty around the time and extent to which the turnaround could be delivered compared with the defined
outcome offered by the Scheme.
The Scheme accelerates a capital return to shareholders, mitigates execution risk over the turnaround and offers a
clear alternative to the capital constraints and prolonged timeframes of a continued standalone strategy. It also
provides shareholders with a full exit opportunity in a stock with historically low trading volumes, which the Board
believes many shareholders will find attractive.
Florenz brings the capital strength and scale needed to operate in this environment and accelerate Comvita’s
growth under a consolidated model. They have expressed their commitment to Comvita’s global team, growing its
New Zealand operations, investing in its international markets and lifting the brand’s profile on the world stage.
They value the expertise within Comvita, its role as a flagship New Zealand brand and are proud to have the
opportunity to keep this iconic company under New Zealand ownership.
Florenz has agreed a standstill on enforcement action with Comvita’s banking syndicate through to the earlier of
the Scheme becoming effective, the SIA being terminated or a bank terminating the standstill in accordance with
its terms following a period of consultation with Florenz.
Until the transaction is complete, the Board and leadership team remain focused on operating the business with
stability and discipline.
The Board will continue to ensure shareholders, staff, customers, and partners are kept informed with clear,
accurate information. We recognise this period may bring uncertainty - particularly for our people - and we are
committed to supporting them throughout the process. We thank the Comvita team for their continued focus and
contribution.
Comvita Board unanimous recommendation and voting intentions
The Board unanimously recommends that Comvita shareholders vote in favour of the Scheme, in the absence of a
Superior Proposal (as defined in the SIA) and subject to the Independent Adviser’s Report concluding that the
Scheme consideration is within or above its valuation range for Comvita shares. Each Director intends to vote any
Comvita shares they control in favour of the Scheme.
Details of the Scheme
The Scheme is subject to Comvita shareholder approval, High Court approval, an Independent Adviser’s Report
concluding that the Scheme consideration is within or above the valuation range for Comvita shares, and other
customary terms and conditions (including the absence of a material adverse change affecting the business and
maintaining certain net-debt levels).
The SIA contains customary exclusivity provisions, including “no shop, no talk and no due diligence” restrictions
(subject to customary exclusions), as well as obligations to notify Florenz of a competing proposal, Florenz then
having a matching right.
The full SIA accompanies this announcement.
Indicative timetable and next steps
Comvita has, with the approval of the Takeovers Panel, appointed Grant Samuel to prepare an Independent
Adviser's Report to assist shareholders to assess the merits of the Scheme.
A Scheme Booklet, containing information relating to the Scheme, the Independent Adviser's Report, the reasons
for the Board’s unanimous recommendation and meeting information, is currently expected to be sent to Comvita
shareholders in October 2025. Comvita shareholders will have the opportunity to vote on the Scheme at a meeting
expected to be held in November 2025. If all conditions are satisfied, the Scheme is expected to be implemented in
December 2025.
Comvita is being advised by Simpson Grierson, Craigs Investment Partners and Goldman Sachs. Comvita will
continue to keep the market informed in relation to the Scheme in line with its continuous disclosure obligations.
ENDS
For further information:
Bridget Coates | Comvita
027 714 0591
bridget.coates@comvita.com
Media contact
Kate Walsh
021 858 619
kate@katewalsh.co.nz
Background information
Comvita (NZX:CVT) was founded in 1974/5, with a purpose to heal and protect the world through the natural
power of the hive. With a team of 400+ people globally, united with more than 1.6 billion bees, we are the global
market leader in Mānuka honey and bee consumer goods. Seeking to understand, but never to alter, we test and
verify all our bee-product ingredients are of the highest quality in our own government-recognised and accredited
laboratory. We are growing scientific knowledge on Mānuka trees, the many benefits of Mānuka honey and
propolis and bee welfare. We have planted millions of native trees, improving our natural ecosystems and
biodiversity, and mitigating climate change in conjunction with our focus on carbon emissions reduction, while
helping ensure the supply of high quality Mānuka honey. In 2023 Comvita was certified B Corp, a global community
of like-minded companies that strive to balance profit with purpose, seeking to use business as a force for good.
Comvita has operations in Australia, China, North America, Southeast Asia, and Europe – and of course, Aotearoa
New Zealand, where our bees are thriving.
About Florenz
Florenz is a subsidiary of Christchurch-based Masthead Limited, which has a strong track record of building world
class businesses over the past four decades.
Florenz was established to develop New Zealand’s largest health and wellness export business. Its portfolio
includes Wedderspoon Organic — North America’s leading seller of Mānuka honey products with distribution in
more than 23,000 stores — along with Xtend-Life, 2before Sports Nutrition, Dry Food New Zealand, and a one-
third stake in iconic Harker Herbals, which is now entering the United States market alongside existing
international sales.
Florenz operates as a holding entity for several high-impact New Zealand natural health and wellness brands, all
positioned to serve global markets:
• Wedderspoon Organic – North America’s top-selling Mānuka honey wellness brand, stocked in over
23,000 stores, spanning products from honey jars to lip balms and lozenges
• Xtend-Life – A vitamins and supplements exporter with customers across over 90 countries
• 2before Performance Nutrition – An advanced science-based pre-workout solution derived from New
Zealand blackcurrants, used by Olympians and athletes across the NBA, NFL, and NRL
• Dry Food New Zealand – A majority-owned manufacturing specialist in nutraceutical and functional food
ingredients, offering end-to-end services from drying to packing
• Harker Herbals – A minority-owned, iconic herbal remedies brand producing liquid herbal supplements
for more than 40 years, with a growing global footprint
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EXECUTION VERSION
S C H E M E I M P L E M E N T A T I O N A G R E E M E N T
I N R E L A T I O N T O C O M V I T A L I M I T E D
FLORENZ LIMITED
COMVITA LIMITED
CONTENTS
CLAUSE PAGE
1. DEFINITIONS AND INTERPRETATION 1
2. PROPOSAL AND IMPLEMENTATION OF SCHEME 18
3. CONDITIONS PRECEDENT 19
4. SCHEME BOOKLET 23
5. SCHEME IMPLEMENTATION STEPS 27
6. OTHER IMPLEMENTATION OBLIGATIONS 31
7. COURT PROCEEDINGS 35
8. RECOMMENDATION AND VOTING INTENTIONS 37
9. INTERIM PERIOD COVENANTS 38
10. REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS 49
11. RELEASES 50
12. EXCLUSIVITY 52
13. BREAK FEE AND REVERSE BREAK FEE 58
14. TERMINATION 66
15. ANNOUNCEMENTS 68
16. PAYMENTS 69
17. GST 69
18. NOTICES 70
19. GENERAL 72
20. GOVERNING LAW AND JURISDICTION 73
SCHEDULES
SCHEDULE 1 PRESCRIBED OCCURRENCES 75
SCHEDULE 2 WARRANTIES AND UNDERTAKINGS 78
SCHEDULE 3 TARGET CAPITAL STRUCTURE 86
SCHEDULE 4 TIMETABLE 88
ANNEXURE 1 SCHEME PLAN 90
ANNEXURE 2 DEED POLL 100
AGREEMENT DATED
17 AUGUST 2025
PARTIES
1.FLORENZ LIMITED(Bidder)
2.COMVITA LIMITED(Target)
BACKGROUND
A.Bidder and Target have agreed that Bidder will acquire all of the Scheme Shares by
means of the Scheme.
B.This agreement is entered into to record and give effect to the terms and conditions
on which Bidder and Target propose to implement the Scheme.
THIS AGREEMENT RECORDS THAT:
1.DEFINITIONS AND INTERPRETATION
1.1Definitions:In this agreement, unless the context indicates otherwise:
Additional Amount has the meaning given to it in clause 17.3;
Adverse Circumstancehas the meaning given to it in clause 3.8;
Associate has the meaning given to it in the Takeovers Code;
Authorisationmeans any permit, licence, consent, approval, registration,
accreditation, certification or other authorisation given or issued by any Government
Agency;
Banking Covenants means the specific financial obligations, ratios, limits or thresholds
within which the Target has agreed with the Target Banks that the Target will operate
that have been fairly disclosed in the Due Diligence Material;
Bidder Groupmeans Bidder and those entities which Bidder Controls at any time prior
to the Implementation Date;
Bidder Indemnified Personsmeans each member of the Bidder Group and each of
their respective directors, officers and employees;
Bidder Informationmeans all information given by Bidder to Target for inclusion in the
Scheme Booklet, including the information concerning any member of the Bidder
Group, their respective businesses and interests and dealings in the Shares;
Bidder Undertakingsmeans the undertakings set out in Section 2 of Part B of
Schedule 2;
Bidder Warrantiesmeans the statements set out in Section 1 of Part B of Schedule 2;
Scheme Implementation Agreement Page 2
Board means the board of directors of Target;
Break Fee means NZ$565,000 plus GST, if any;
Break Fee Arrangements has the meaning given to it in clause 13.7(a);
Business means the business carried on by the Target Group as at the date of this
agreement;
Business Day means a day (other than a Saturday, Sunday or public holiday) on which
banks are generally open in Auckland, New Zealand and excluding any day in the period
beginning on 25 December in any year and ending on 5 January in the following year;
Business Plan means the documents titled “01.02.01 Budget FY26.pdf” along with the
monthly phasing in “01.02.02 Turnaround Potential Plan (Redacted).pdf”, in each case
available to the Bidder in the Data Room as at 7.00pm on Friday, 15 August 2025;
Claim has the meaning given to it at paragraph 25 of Section 1 of Part A of Schedule 2;
Communications Protocol means the communications protocols agreed between
Bidder and Target;
Companies Act means the Companies Act 1993;
Competing Proposal means any proposed:
(a) takeover bid (whether full or partial under the Takeovers Code) for Target;
(b) acquisition of all or a material part of Target by way of a scheme of
arrangement in respect of Target;
(c) transfer or issue of financial products of Target to a Third Party:
(i) for which Shareholder approval is sought under the Takeovers Code
or NZX Listing Rules or otherwise; or
(ii) in respect of financial products that are convertible into, or
exchangeable for, Shares, where shareholder approval would be
required under the Takeovers Code on conversion or exchange of
those financial products;
(d) transfer or issue of financial products of any member of the Target Group
(other than Target) to a Third Party;
(e) sale of assets by the Target Group (or any one or more members of the Target
Group) that represents 20% or more of the total consolidated assets of the
Target Group; or
(f) reverse takeover, capital reduction, sale of securities, strategic alliance, joint
venture, partnership, dual listed companies structure, economic or synthetic
Scheme Implementation Agreement Page 3
merger or combination or other transaction or arrangement which, if
completed, would result in a Third Party:
(i) directly or indirectly acquiring or being entitled to acquire a
Relevant Interest or any other direct or indirect legal, beneficial or
economic interest in, or control over, (A) 20% or more of the shares
of Target, or (B) any other shares in any other member or members
of the Target Group; or
(ii) directly or indirectly acquiring or being entitled to acquire (A) the
whole, or substantially all, of the business or assets of the Target
Group or, (B) any part of the business or assets of the Target Group
that individually or collectively is Significant;
(iii) otherwise acquiring Control of Target or merging or amalgamating
with Target or any other member or members of the Target Group
that individually or collectively is Significant,
or any other proposed transaction which would otherwise require Target to abandon,
or otherwise fail to proceed with, or would be inconsistent with, the implementation
of the Scheme. For the purposes of the definition of Competing Proposal:
(g) any such proposal may be an expression of interest, indicative, conditional
or otherwise non-binding;
(h) paragraphs (a) to (f) above include any agreement (within the meaning of
section 6 of the FMCA) whereby such a transaction is effected through a
series of linked or related transactions which, if conducted as a single
transaction, would constitute a Competing Proposal within the meaning of
any of paragraphs (a) to (f) above;
(i) each successive material modification to, or variation of, a Competing
Proposal will constitute a new Competing Proposal; and
(j) references to a Third Party include all Associates of the Third Party;
Conditions mean the conditions precedent set out in the first column of the table in
clause 3.1;
Confidentiality Agreement means the confidentiality agreement between Bidder and
Target, dated 4 February 2025;
Confirmatory Certificate has the meaning given in Clause 5.3(a);
Consideration means in respect of each Scheme Share held by a Scheme Shareholder,
NZ$0.80 per Scheme Share reduced (except for the purposes of clauses 4.1(a)(iv),
6.2(b), 8.1(d), 8.2(b), 8.3(a), 13.2(a)(ii)(F), 13.2(b) or 15.1) by the per Share value of any
dividends or other distribution (within the meaning of the Companies Act), the record
date for which falls in the period from (and including) the date of this agreement to
(and including) the Implementation Date;
Scheme Implementation Agreement Page 4
Control means, in relation to a person (the "relevant person") and one or more other
persons, where those one or more persons, directly or indirectly, whether by the legal
or beneficial ownership of shares, securities or other equity, by the possession of
voting power, by contract, by trust, or otherwise:
(a) has the power to appoint or remove the majority of the members of the
governing body of the relevant person;
(b) controls or has the power to control the affairs or policies of the relevant
person; or
(c) is in a position to derive more than 50% of the economic benefit of the
existence or activities of the relevant person;
Counter Proposal has the meaning given in clause 12.7(b);
Court means the High Court of New Zealand, Auckland Registry or if leave cannot be
reasonably obtained by Target to move the applicable hearings relating to the Scheme,
the Tauranga Registry;
Data Room means the electronic data room hosted by Ansarada established by Target
for the purposes of the Transaction;
Data Room Index means the index of the information contained in the Data Room, in
a form agreed between the parties in writing on or prior to the date of this agreement;
Deed Poll means the deed poll to be entered into by Bidder in favour of the Scheme
Shareholders in the form attached as Annexure 2 or in such other form as the parties
agree in writing;
Due Diligence Material means:
(a) the written information and documents made available to Bidder or its
Representatives on or before 7.00pm on Friday 15 August 2025, in the Data
Room as listed in the Data Room Index; and
(b) Target’s NZX announcements made through the NZX market announcements
platform in the period commencing at 8.00am on the date that is two years
prior to the date of this agreement to (and including) 5.00pm on the date
that is two Business Days' prior to the date of this agreement; and
(c) the Target Disclosure Letter;
Duty means any stamp, transaction or registration duty or similar charge imposed by
any Government Agency and any penalty, fine, interest or additional charge payable
in relation to any such duty or charge;
D&O Run-off Policy has the meaning given to it in clause 11.3(a);
Effective means, when used in relation to the Scheme, the coming into effect under
section 236(3) of the Companies Act of the order of the Court made under
Scheme Implementation Agreement Page 5
section 236(1) of the Companies Act in relation to the Scheme and all of the conditions
to the implementation of the Scheme having been satisfied or waived (where capable
of waiver) in accordance with this agreement and the Scheme;
Encumbrance means any security interest (within the meaning of section 17(1)(a) of
the Personal Property Securities Act 1999) and any option, right to acquire, right of
pre-emption, assignment by way of security, trust arrangement for the purpose of
providing security, retention arrangement or other security interest of any kind (other
than any reservation of title by suppliers in the ordinary course of business), and any
agreement to create any of the foregoing;
End Date means:
(a) 24 December 2025, provided that if any Condition has not been satisfied by
this date a party (acting reasonably) considers that such Condition is capable
of satisfaction by 31 January 2026, either party may elect, by providing
written notice to the other, to extend the End Date to 31 January 2026;
(b) where clause 12.8(c) applies, a date agreed in writing by the parties (acting
reasonably and in good faith) having regard to market practice and the need
to revise the Timetable to appropriately reflect the steps required in order to
implement a Counter Proposal; or
(c) any other date agreed in writing by the parties;
Excluded Shares means any Shares nominated in writing by Bidder to Target not less
than two Business Days prior to the Record Date and that are held or controlled by
Bidder or any of its Associates at the Record Date;
Exclusivity Period means the period starting on the date of this agreement and ending
on the first to occur of:
(a) termination of this agreement;
(b) the Implementation Date; and
(c) the End Date;
Excluded Total Net Indebtedness Impact has the meaning given in clause 9.4(f);
Expert means, upon the application by either party, an expert appointed by the
President, or their nominee, of the New Zealand Law Society, who must be;
(a) a King's Counsel with appropriate experience in New Zealand commercial
disputes; and
(b) genuinely independent from any party (for example, has not advised any
party in the three years prior to appointment);
Final Orders means orders made on application of Target, that the Scheme is binding
on Target, Bidder, Shareholders and such other persons or class of persons as the Court
Scheme Implementation Agreement Page 6
may specify, in accordance with section 236(1) (and section 237, if applicable) of the
Companies Act;
Final Orders Date means the day on which the Final Orders are granted by the Court;
First Court Date means the first date on which the application is made to the Court for
the Initial Orders in accordance with section 236(2) of the Companies Act;
FMCA means the Financial Markets Conduct Act 2013;
Fundamental Warranties means the Target Warranties set out in paragraphs 1 to 9
(inclusive) and paragraph 13 of Section 1 of Part A of Schedule 2;
FY25 Financial Statements means Target’s draft annual financial statements for the
year ended 30 June 2025 as set out in document titled “01.05 FY25 Financial
Statements – Draft” available to the Bidder in the Data Room as at 7.00pm on Friday,
15 August 2025;
Government Agency means any government, department, officer or minister of any
government and any governmental, semi-governmental, administrative, fiscal, judicial
or quasi-judicial agency, authority, board, commission, tribunal or entity in any
jurisdiction and includes the Overseas Investment Office, the Commerce Commission,
the Takeovers Panel and the Financial Markets Authority;
Group means:
(a) in the case of Target, the Target Group; and
(b) in the case of Bidder, the Bidder Group;
GST means goods and services tax charged or levied under the GST Act, and includes
any GST Default Amounts;
GST Act means the Goods and Services Tax Act 1985;
GST Default Amounts means any penalties, additional tax or interest payable in
respect of goods and services tax;
GST Exclusive Consideration has the meaning given in clause 17.2;
Implementation Date means the day on which the Scheme is to be implemented,
being 2 Business Days after the Record Date, or such other date agreed between the
parties in writing;
Independent Adviser means the person appointed by Target, and approved by the
Takeovers Panel, as independent adviser to prepare the Independent Adviser's Report;
Independent Adviser's Report means the independent adviser's report prepared by
the Independent Adviser in relation to the Scheme in relation to its opinion on the
merits of the Scheme as amended or updated from time to time and including any
supplementary or replacement report;
Scheme Implementation Agreement Page 7
Initial Orders means, on application by Target, orders by the Court for the purposes of
section 236(2) of the Companies Act;
Insolvency Event means, in relation to a person, the occurrence of any of the following:
(a) the person ceases or threatens to cease to carry on all or substantially all of
its business or operations;
(b) an application or an order is made, or a resolution is passed or proposed, for
the person's dissolution;
(c) the person is, or becomes, unable to pay its debts when due (as defined in
the Companies Act), or enters into dealings with any of its creditors with a
view to avoiding, or in expectation of, insolvency, or makes a general
assignment or an arrangement or composition with, or for the benefit of, any
of its creditors, or stops or threatens to stop payments generally;
(d) the person goes into receivership or has a receiver, receiver and manager,
official manager, trustee, statutory manager, voluntary administrator or
other similar officer appointed in respect of all or any of its property;
(e) the person enters into a scheme of arrangement (other than the Scheme) or
composition with, or assignment for the benefit of, all or any class of its
creditors, or it proposes a reorganisation, moratorium or other
administration involving any of them;
(f) a distress, attachment or other execution is levied or enforced upon or
commenced against any of its assets;
(g) any resolution is passed, or any proceeding is commenced, for the liquidation
or dissolution of that person;
(h) the person takes any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the acts referred to in this definition;
and
(i) anything analogous to anything referred to in paragraphs (a) to (h) above or
which has substantially similar effect, occurs with respect to it, including
under any applicable foreign law;
Intellectual Property Rights means all rights and interests (including common law
rights and interests) owned, held, used by, or licensed to, the Target Group, including
domain names, recipes, recipes under development, patents, trade marks, service
marks, copyrights, designs, trade dress, trade names, symbols and logos (in each case
whether or not registered), applications to register trade marks, service marks and
designs, formulae, techniques, know-how, trade secrets, specifications, designs,
procedures, technical and manufacturing specifications, instructions, technical data,
marketing plans, marketing and sales materials, market research and confidential new
product development information (including copyright and all other intellectual
property rights in each of the foregoing), and all rights or forms of protection of a
Scheme Implementation Agreement Page 8
similar nature or having equivalent or similar effect to any of these in any part of the
world;
Leader Share Purchase & Loan Scheme means the Share Purchase and Loan Scheme
announced to NZX on 23 March 2021, under which selected senior executives were
invited to purchase shares in Target funded by way of a loan from Target;
Letter of Intention means a letter from the Takeovers Panel stating that it:
(a) intends to provide a No-objection Statement; and
(b) does not intend to appear at the Court in respect of the application for Initial
Orders;
Loss means all losses, damages, costs, expenses, charges and other liabilities provided
however that the parties shall not be liable for any indirect loss, economic loss, loss of
opportunity or loss of profit whatsoever and however arising, including:
(a) consequential loss or damage; or
(b) loss of use, production, revenue, income, profits, business and savings or
business interruption, (whether or not the indirect loss or damage was
foreseeable);
Matching Period has the meaning given to it in 12.7(a)(vi);
Material Adverse Change means a matter, event, condition or change in
circumstances or thing which occurs or is announced or is discovered on or after the
date of this agreement (each a Specified Event) and which individually, or when
aggregated with all other Specified Events:
(a) reduces or is likely to reduce the consolidated net assets of the Target Group
from the consolidated net assets disclosed in the FY25 Financial Statements
by more than $10 million (excluding any non-cash impairment); or
(b) reduces or is likely to reduce the pre-IFRS 16 EBIT of the Target Group by
more than $5 million against the Modelled EBIT in:
(i) the financial year ended 30 June 2025; or
(ii) the financial year ended 30 June 2026; or
(iii) the financial year ended 30 June 2027; or
(c) in aggregate reduces or is likely to reduce the pre-IFRS 16 EBIT of the Target
Group by more than $7.5 million against the aggregate Modelled EBIT in the
period commencing 1 July 2024 to 30 June 2027 (in each case inclusive of
those dates),
Scheme Implementation Agreement Page 9
determined after excluding:
(d) any out-of-pocket costs reasonably incurred in connection with:
(i) the Transaction (provided such costs have been fairly disclosed in
the Due Diligence Material); or
(ii) without limiting paragraph (d)(i), the Target Group performing its
obligations under this agreement and in respect of the Scheme (but
excluding compliance with its obligations under clause 9.3),
(e) matters, events and circumstances:
(i) to the extent fairly disclosed in the Due Diligence Material;
(ii) done or not done at the written request or with the written
approval of Bidder (or, for the avoidance of doubt, considered by
the Transition Committee and either: (A) approved by a Bidder
representative of that Transition Committee and done; or (B)
declined by a Bidder representative of that Transition Committee
and not done), or resulting from compliance with the terms of, or
the taking or omission of any action expressly required by, this
agreement, and any reasonably foreseeable consequences arising
as a result of the relevant action or omission;
(iii) resulting from, or relating to, legal or regulatory requirements
generally affecting businesses in the industry in which any member
of the Target Group operates;
(iv) resulting from, or relating to, any change:
(A) to generally accepted accounting principles or the
interpretation or enforcement of them by a court of
competent jurisdiction or Government Agency;
(B) to the accounting policies of any member of the Target
Group that is required by law; or
(v) resulting from, or relating to, any changes in geopolitical
conditions, the outbreak or escalation of hostilities, any generalised
or localised rioting or public unrest, civil disobedience, acts of war
and military conditions or activity, sabotage or terrorism,
widespread cyberattacks not specifically targeted at Target, or any
escalation or worsening of any of the foregoing;
(vi) resulting from, or relating to, any natural disaster (including an
earthquake, fire, landslide, volcanic eruption or tidal wave) or
weather developments (including a storm, flood, hurricane,
tornado, cyclone or lightning) or other comparable natural events;
Scheme Implementation Agreement Page 10
(vii) resulting from, or relating to, any change in general economic or
financial conditions (including market interest rates, exchange
rates commodity prices and tariffs) generally affecting business in
the industry in which the Target Group operates or any of the
markets in which the Target Group operates or trades; and
(viii) resulting from, or relating to, a general degradation of the financial
performance of the Business to the extent that the Business has
been carried on in accordance with clause 9.3,
provided that:
(ix) in relation to the exclusions in paragraphs (iii), (iv), (v) and (vii)
above, the effects of such matter, event or circumstance are not
materially disproportionately adverse to the Target Group as
compared to the effects of such matter, event or circumstance on
entities in the industry in which the relevant member of the Target
Group operates; and
(x) nothing in paragraphs (iii), (iv), (v), (vi), (vii) or (viii) above shall
exclude the impact changes in the price of finished goods;
Modelled EBIT means, in respect of a period, the pre-IFRS 16 EBIT of the Target Group
for that period as set out in the Target Disclosure Letter;
No-objection Statement means a written statement under section 236A(2)(b)(ii) of
the Companies Act stating that the Takeovers Panel has no objection to the Court
granting the Final Orders;
No Restraints Condition means the Condition at Clause 3.1(d);
NZX means NZX Limited and, where the context requires, the main board financial
market that it operates;
NZX Listing Rules means the Listing Rules for the NZX Main Board as amended from
time to time;
Performance Share Rights means all rights to acquire 109,487 Shares held by
employees or officers of the Target Group in accordance with the PSR Scheme;
Permitted Encumbrances means in respect of the Target Group's assets, but not the
Scheme Shares:
(a) a reservation of ownership or other purchase money security interest
entered into in respect of supplies to a member of the Target Group in the
ordinary course of business;
(b) a right of set-off or combination thereof arising by operation of law or
practice over money deposited with a bank or financial institution in the
ordinary course of business;
Scheme Implementation Agreement Page 11
(c) a security interest arising by operation of law and in the ordinary course of
business provided that the debt it secures is paid when due or contested in
good faith by appropriate proceedings;
(d) a security interest arising under section 17(1)(b) of the Personal Property
Securities Act 1999 that does not secure payment or performance of an
obligation; and
(e) any security interest (including any mortgage over real property) in favour of
the Target Banks, to the extent that the Target Banks will remain lenders to
the Target Group upon the Scheme becoming Effective,
in each case existing on the date of this agreement or granted by the Target Group in
the period prior to the Implementation Date without breaching clause 9.3;
PPSR means the Personal Property Securities Register established under section 139
of the Personal Property Securities Act 1999;
Prescribed Occurrence means the occurrence of any of the events listed in Schedule 1
other than an event agreed to by Bidder in writing;
PSR Scheme means Target’s performance share rights plan;
PSR Scheme Rules means the rules of the PSR Scheme as fairly disclosed in the Due
Diligence Materials;
Recommendation has the meaning given to it in clause 8.1(a);
Record Date means 5.00pm on the date which is 3 Business Days after the Trading Halt
Date;
Reference Rate means in relation to interest payable on any payment due under this
agreement, the mid or "FRA" rate for 90 day bank accepted bills (expressed as a
percentage) as quoted on Reuters page BKBM (or any successor page) at or about
10.45am on the first Business Day of the period in respect of which such rate of interest
is to be calculated, and thereafter on each succeeding Business Day of the period;
Register means the register of Shares maintained by MUFG Pension & Market Services
(NZ) Limited on behalf of Target;
Registrar has the meaning given in the Companies Act;
Related Party has the meaning given in the NZX Listing Rules;
Relevant Interest has the meaning given in section 235(1) of the FMCA;
Representative means in relation to a person:
(a) any director, officer, employee or agent of, and any accountant, auditor,
financier, financial adviser, legal adviser, technical adviser or other expert
adviser or consultant to, that person; and
Scheme Implementation Agreement Page 12
(b) when used in clauses 2.4, 12.1, 12.2, 12.3, 12.4, 12.6, 12.7 and 15.2 only, also
includes any member of its Group and any director, officer, employee or
agent of, and any accountant, auditor, financier, financial adviser, legal
adviser, technical adviser or other expert adviser or consultant to, any
member of its Group;
Restricted Agreement means any agreement, commitment or arrangement to which
any Target Group member is party and which:
(a) involves any member of the Target Group acquiring or agreeing to acquire
any business or assets, or incurring or agreeing to incur any liabilities, with a
value in excess of $500,000;
(b) provides for any payments by or to a member of the Target Group of more
than $500,000 in any 12 month period;
(c) involves any distributor appointed, or to be appointed, by the Target Group
in any foreign jurisdiction;
(d) involves the exclusive use of any material Intellectual Property Rights by a
Third Party in any place or territory;
(e) has a term of two years or more;
(f) restrains any member of the Target Group from engaging in or competing
with any business in any place; or
(g) is otherwise considered by Target (acting reasonably) to be material to the
Target Group as a whole;
Reverse Break Fee means NZ$565,000 plus GST, if any;
Senior Manager means a person in the following roles (including in an interim
capacity) at the relevant time: Group Chief Executive Officer, Chief Finance Officer,
Group Financial Controller, Chief Digital & Marketing Officer, Chief Science Officer,
Chief Operating Officer, Chief People & Technology Officer, GM Greater China and
Southeast Asia, GM Korea and Japan, VP North America and GM Australia and New
Zealand;
Scheme means a scheme of arrangement under Part 15 of the Companies Act under
which all of the Shares held by Scheme Shareholders will be transferred to Bidder and
the Scheme Shareholders will be entitled to receive the Consideration, in the form of
the Scheme Plan;
Scheme Booklet means the explanatory memorandum (including the notice of
meeting and proxy form) to be prepared in accordance with this agreement in
connection with the Scheme, the despatch of which is to be approved by the Court and
which is to be sent to Shareholders in advance of the Scheme Meeting;
Scheme Implementation Agreement Page 13
Scheme Meeting means the meeting of Shareholders ordered by the Court to be
convened pursuant to the Initial Orders in respect of the Scheme and includes any
adjournment of that meeting;
Scheme Plan means the scheme plan in the form attached at Annexure 1 or in such
other form as Target and Bidder agree in writing and the Court approves under
section 236(1) of the Companies Act;
Scheme Resolution means the resolution to be put to Shareholders at the Scheme
Meeting to approve the Scheme;
Scheme Shareholder means a person who is registered in the Register as the holder of
one or more Scheme Shares as at the Record Date;
Scheme Shares means all of the Shares on issue at 5.00pm on the Record Date other
than any Excluded Shares;
Schemes Guidance Note means the guidance note issued by the Takeovers Panel
regarding schemes of arrangement, published on 31 July 2024 (as may be amended,
modified, revised or replaced from time to time), as available on the Takeovers Panel
website;
Second Court Date means the later of:
(a) if there is no Court hearing in respect of the Final Orders, the last date Target
files affidavit(s) verifying the results of the Scheme Meeting and such other
information as prescribed in the Initial Orders so as to obtain the Final
Orders; and
(b) if there is a hearing in respect of the Final Orders, the first date of such
hearing, provided that if such hearing is adjourned, it means the first date on
which the adjourned application is heard;
Share means a fully paid ordinary share in the capital of Target;
Shareholder means a person who is registered in the Register as the holder of one or
more Shares from time to time;
Significant means, on any date and in respect of any one or more assets, businesses
or entities, those assets, businesses or entities:
(a) contribute 20% or more of the total consolidated revenue of the Target
Group in the 12 months preceding that date or are forecast to so contribute
in the 12 months following that date; or
(b) contribute 20% or more of the pre-IFRS 16 EBIT of the Target Group in the 12
months preceding that date or are forecast to so contribute in the 12 months
following that date; or
(c) represent 20% or more of the total consolidated assets of the Target Group
as at that date;
Scheme Implementation Agreement Page 14
Specified Event has the meaning given to it in the definition of Material Adverse
Change;
Superior Proposal means a written bona fide Competing Proposal received after the
date of this agreement that:
(a) does not result from a breach by Target of any of its obligations under
clause 12, or from any act by a member of the Target Group or its
Representatives which, if done by Target, would constitute a breach of
clause 12 by Target; and
(b) the Board determines, acting in good faith and after having received written
advice from its external financial and legal advisers:
(i) is reasonably capable of being valued and implemented, taking into
account all aspects of the Competing Proposal, including its
conditions precedent, timing considerations, the nature and
amount of the consideration payable, the identity and financial
condition and capacity of the proponent, any regulatory
requirements or obligations applying to it and any other matters
affecting the implementation (including any matters affecting
probability of implementation occurring or the level of certainty in
respect of any required funding) of the Competing Proposal
(together, the relevant aspects); and
(ii) assuming it is completed substantially in accordance with its terms,
is more favourable to Shareholders as a whole than the Scheme (if
applicable, as amended or varied under any Counter Proposal
provided under clause 12.8), taking into account all the terms and
conditions and the other relevant aspects of the Competing
Proposal and the Scheme;
Supplier has the meaning given to it in clause 17.3;
Surviving Clauses means clause 1 (interpretation), clause 11.1 (release of Target
indemnified persons), clause 11.2 (release of Bidder indemnified persons), clause 13
(break fee and reverse break fee), clause 14.5 (effect of termination), clause 15
(announcements), clause 16 (payments), clause 17 (GST), clause 18 (notices),
clause 19 (general) (other than clause 19.7 (further assurance)) and clause 20
(governing law and jurisdiction);
Takeovers Code means the takeovers code in the schedule to the Takeovers
Regulations 2000 (SR 2000/210) as amended, including by any applicable exemption
granted by the Takeovers Panel under the Takeovers Act 1993;
Takeovers Panel means the Takeovers Panel established by section 5(1) of the
Takeovers Act 1993;
Scheme Implementation Agreement Page 15
Target Bank Debt means any indebtedness of any member of the Target Group owed
to any one or more of the Target Banks, and includes any amounts owing under any
hedging arrangements with any Target Bank or their affiliates;
Target Bank Default means:
(a) any Target Bank Debt is not paid when due nor within any originally
applicable grace period;
(b) any event of default or review event (however described) pursuant to the
transaction documents relating to any Target Bank Debt occurs and is not
waived;
(c) any Target Bank Debt is declared to be or otherwise becomes due and
payable prior to its specified maturity; or
(d) any commitment for any Target Bank Debt is cancelled,
but in each case other than solely as a result of the change of control occurring when
the Scheme becomes Effective;
Target Banks has the meaning given to it in clause 9.2;
Target CEO means the Chief Executive Officer of Target;
Target CFO means the Chief Financial Officer of Target;
Target Designated Persons means the Target Directors, Brett Hewlett, Nigel
Greenwood, Jackie Evans, Monica Yianakis, Terry Chen, Tania van Paddenburg, Ben
Duncan, Jenny Zheng, Michael Gleissner, Dylan Hill-Lewis, James Park, Lisa Blackstock,
Trevor Clarke and Karl Gradon (to the extent any such person is employed or engaged
by, or providing services in whatever capacity to, the Target Group) or any person who
replaces such person;
Target Director means each director (or their alternate) of Target from time to time;
Target Disclosure Letter means the written disclosure letter given by or on behalf of
Target to Bidder, and countersigned by Bidder, before execution of this agreement;
Target Exempt Employee Share Scheme means the Comvita Exempt Employee Share
Scheme as described in the Target’s annual financial statements for the year ended
30 June 2024;
Target Group means Target, its wholly owned subsidiaries, and those other entities
which Target Controls at any time prior to the Implementation Date (including, without
limitation, Comvita Share Scheme Trustee Limited);
Target Indemnified Persons means each member of the Target Group and each of
their respective directors (including any alternate directors), officers and employees;
Scheme Implementation Agreement Page 16
Target Information means all information included in the Scheme Booklet other than
the Bidder Information and the Independent Adviser's Report;
Target Undertakings means the undertakings set out in Section 2 of Part A of
Schedule 2;
Target Warranties means the statements set out in Section 1 of Part A of Schedule 2;
Tax means a tax, levy, charge, impost, fee, deduction, withholding or Duty of any
nature, including stamp and transaction Duty or any goods and services tax, value
added tax or consumption tax, which is imposed or collected by a Government Agency
and includes any interest, fine, penalty, charge, fee or other amount imposed in
addition to those amounts;
Tax Authority means any Government Agency in New Zealand or any other jurisdiction
responsible for the collection of Tax;
Third Party means a person other than a member of the Bidder Group;
Timetable means the timetable set out in Schedule 4 or such other timetable, in
respect of the Scheme, as Target and Bidder agree in writing from time to time;
Total Net Indebtedness means total bank indebtedness less cash on hand;
Trading Halt Date means the date on which NZX suspends trading in the Shares as
procured by Target in accordance with clause 5.1(i)(iii)(A);
Transaction means the acquisition by Bidder of all the Scheme Shares through
implementation of the Scheme in accordance with the terms of this agreement;
Transaction Costs means all third party fees, costs and expenses (including the fees,
costs and expenses of all professional advisers) incurred, agreed to be incurred or
payable by or on behalf of the Target Group in connection with the Transaction and /
or any Competing Proposal;
Transition Committee has the meaning given in clause 9.4;
Trigger Dispute means any dispute between the parties in relation to the obligations
of the parties under clause 13; and
Voting Commitment has the meaning given to it in clause 8.1(b).
1.2 Awareness: Where any Target Warranty is qualified by the expression so far as Target
is aware or any similar expression, Target will be deemed to know or be aware of all
matters or circumstances of which any Target Designated Person is actually aware as
at the date the statement is made. For the avoidance of doubt, and without limiting
clause 11.1, no Target Designated Person has any personal liability in respect of the
Target Warranties.
Scheme Implementation Agreement Page 17
1.3 Things required to be done other than on a Business Day: Unless otherwise indicated,
if the day on which any act, matter or thing is to be done is a day other than a Business
Day, that act, matter or thing must be done on or by the next Business Day.
1.4 Consents and approvals: If the doing of any act, matter or thing under this agreement
is dependent on the consent or approval of a party or is within the discretion of a party,
such consent or approval may be given or such discretion may be exercised
conditionally or unconditionally or withheld by the party in its absolute discretion
(unless this agreement specifies otherwise).
1.5 Other rules of interpretation: In this agreement, unless the context requires
otherwise:
(a) any reference, express or implied, to any legislation in any jurisdiction
includes:
(i) that legislation as amended, extended or applied by or under any
other legislation made before or after execution of this agreement;
(ii) any legislation which that legislation re-enacts with or without
modification; and
(iii) any subordinate legislation made before or after execution of this
agreement under that legislation, including (where applicable) that
legislation as amended, extended or applied as described in
clause 1.5(a)(i), or under any legislation which it re-enacts as
described in clause 1.5(a)(ii);
(b) a reference to the NZX Listing Rules includes any variation, consolidation or
replacement of those rules and is to be taken to be subject to any waiver or
exemption granted to the compliance with those rules by a party;
(c) references to persons or entities include natural persons, bodies corporate,
partnerships, trusts and unincorporated associations of persons;
(d) references to an individual or a natural person include their estate and
personal representatives;
(e) a reference to a clause, schedule or annexure is a reference to a clause,
schedule or annexure of or to this agreement (and the schedules and
annexures form part of this agreement);
(f) subject to clause 19.2, references to a party to this agreement include the
successors or assigns (immediate or otherwise) of that party;
(g) a reference to any instrument or document includes any variation or
replacement of it which has been, where relevant, fairly disclosed in the Due
Diligence Material;
(h) unless otherwise indicated, a reference to any time is, a reference to that
time in New Zealand;
Scheme Implementation Agreement Page 18
(i) a reference to $, NZ$ or dollars is to New Zealand currency;
(j) singular words include the plural and vice versa;
(k) a word of any gender includes the corresponding words of any other gender;
(l) if a word or phrase is defined, other grammatical forms of that word have a
corresponding meaning;
(m) general words must not be given a restrictive meaning just because they are
followed by particular examples intended to be embraced by the general
words;
(n) nothing is to be construed adversely to a party just because that party put
forward this agreement or the relevant part of this agreement;
(o) the headings do not affect interpretation; and
(p) a reference to 'fairly disclosed' means disclosed in writing (including via the
Due Diligence Material) such that the matter, information or circumstance
would reasonably be expected to come to the knowledge of a diligent and
reasonable person or any of its representatives in the ordinary course of
carrying out a due diligence exercise in respect of the Target Group based on
the Due Diligence Material and publicly available information, in sufficient
detail such that that person can reasonably be expected to understand the
nature, relevance and materiality of such matter, information or
circumstance.
2. PROPOSAL AND IMPLEMENTATION OF SCHEME
2.1 Target to propose Scheme: Target must, as soon as reasonably practicable, propose
and, subject to the Scheme becoming Effective, implement the Scheme on and subject
to the terms of this agreement.
2.2 Consideration: Each Scheme Shareholder is entitled to receive the Consideration in
respect of each Scheme Share held by that Scheme Shareholder subject to, and in
accordance with, the terms of this agreement and the Scheme.
2.3 Bidder to pay Consideration: In consideration for, and simultaneously with, the
transfer to Bidder of each Scheme Share from each Scheme Shareholder under the
terms of the Scheme, Bidder undertakes in favour of Target (in its own right and on
behalf of the Scheme Shareholders) to pay (or procure the payment of) the
Consideration for each Scheme Share to the relevant Scheme Shareholder in
accordance with the Scheme and the Deed Poll.
2.4 General implementation obligations: Each party must do everything reasonably
necessary, including by procuring that its Representatives work in good faith and in a
timely and co-operative manner with:
(a) in the case of Bidder, Target and its Representatives; and
Scheme Implementation Agreement Page 19
(b) in the case of Target, Bidder and its Representatives,
to implement the Scheme in accordance with this agreement, and all applicable laws
and regulations applicable to the Scheme.
2.5 Timetable: Each party must use all reasonable endeavours to ensure that the Scheme
is implemented in accordance with the Timetable or otherwise as soon as reasonably
practicable. Failure by a party to meet any timeframe or deadline set out in the
Timetable will not constitute a breach of this clause 2.5 to the extent that such failure
is due to circumstances or matters outside the party's control provided that such party
has used reasonable endeavours to meet the Timetable. Each party will keep the other
informed about their progress against the Timetable and notify each other if it believes
that any of the dates in the Timetable is not achievable. If any date in the Timetable is
not able to be achieved due to circumstances or matters outside of a party's control,
the parties must consult in good faith with a view to amending the Timetable to the
extent required to permit the Scheme to be implemented before the End Date.
2.6 No amendment to Scheme without Bidder consent: Target must not promote or
consent to any modification of, or amendment to, the Scheme or the Final Orders, or
the making or imposition by the Court or any Government Agency of any condition to
the Scheme, without:
(a) the consent of counsel to Bidder, where a modification or amendment is
made, imposed or requested at a Court hearing (with Bidder procuring that
such consent is not unreasonably withheld, conditioned or delayed); or
(b) the Bidder’s prior written consent, in the case of any other modification or
amendment (such consent not to be unreasonably withheld, conditioned or
delayed).
3. CONDITIONS PRECEDENT
3.1 Conditions: The Scheme will not become Effective, and the obligations of Bidder under
clause 2.3 do not become binding, unless and until each of the conditions set out in
the first column of the following table has been satisfied or waived in accordance with
this clause 3:
CONDITION RESPONSIBILITY WAIVER
(a) (Independent adviser's report) the
Independent Adviser concludes, prior to the
Scheme Meeting, that the value of the
Consideration is above or within the
Independent Adviser's valuation range for
the Shares;
Target Bidder and
Target
(b) (Shareholder approval) Shareholders
approve the Scheme at the Scheme Meeting
by the requisite majorities in accordance
Target None
Scheme Implementation Agreement Page 20
CONDITION RESPONSIBILITY WAIVER
with sections 236A(2)(a) and 236A(4) of the
Companies Act;
(c) (Court approval) subject to clause 3.3, the
Court approves the Scheme in accordance
with section 236 of the Companies Act;
Target None
(d) (No restraint) no judgment, order, restraint
or prohibition enforced or issued by any
Government Agency is in effect at 8.00am on
the Implementation Date, that prohibits,
prevents or materially restricts the
implementation of the Scheme;
Bidder and Target Bidder and
Target
(e) (No Prescribed Occurrence) no Prescribed
Occurrence occurs between the date of this
agreement and 8.00am on the
Implementation Date (which, in the case of
those Prescribed Occurrences contemplated
by paragraphs 5 and 8 of Schedule 1 has not
been remedied by 5.00pm on the day prior
to the Implementation Date); and
Target Bidder
(f) (No Material Adverse Change) no Material
Adverse Change occurs, is announced or is
discovered between (and including) the date
of this agreement and 8.00am on the
Implementation Date.
None Bidder
3.2 Satisfaction of Conditions: In respect of each Condition:
(a) each party specified in the second column of the table in clause 3.1
corresponding to that Condition must use all reasonable endeavours to
procure that the Condition is satisfied:
(i) in the case of the Conditions in clauses 3.1(a) to 3.1(c), as soon as
practicable and in any event before the End Date; and
(ii) in the case of the Conditions in clauses 3.1(d) to 3.1(f), at all times
before 8.00am on the Implementation Date;
(b) the other party must promptly provide all information and all other
assistance reasonably required by the party referred to in clause 3.2(a) for
the purposes of procuring the satisfaction of the Condition; and
(c) each party must not take any action that will, or is likely to, hinder or prevent
the satisfaction of the Condition,
Scheme Implementation Agreement Page 21
it being agreed and understood that, notwithstanding the foregoing:
(d) no party will be in breach of its obligations under clause 3.2(a), (b) or (c) to
the extent that it takes an action or omits to take an action that is expressly
required or expressly permitted to be done, or expressly permitted not to be
done, under or in accordance with this agreement;
(e) Target will not be in breach of its obligations under clause 3.2(a), (b) or (c) if
it takes, or omits to take, an action in response to a Competing Proposal in a
manner, and only to the extent, permitted by clause 12; and
(f) nothing in this clause 3.2 will require either party to incur any additional costs
(other than customary advisor costs and filing fees) or to offer, agree to or
accept any undertakings, commitments or conditions (other than as required
under clause 3.3).
3.3 Specific obligations relating to Court approval: Notwithstanding any other provision
of this agreement, if the Court's approval of the Scheme in accordance with
section 236(1) of the Companies Act would impose any terms or conditions other than
those set out in the Scheme in the form attached as Annexure 1, then each such term
or condition must be approved in writing by Target and Bidder (both acting reasonably)
prior to the Court granting the Final Orders. For the avoidance of doubt, if the approval
referenced in this clause is not granted, the Condition set out in clause 3.1(c) will not
have been satisfied for the purposes of this agreement.
3.4 Notification:
(a) Each party will keep the other party fully informed as to the progress made
towards procuring the satisfaction of the Conditions.
(b) Each party must promptly notify the other party on becoming aware that a
Condition is, or is likely to be, satisfied or has become incapable of being
satisfied, or of any fact or circumstances which will, or is reasonably likely to,
prevent a Condition from being satisfied, and in any event within two
Business Days of the relevant fact having become known to that party.
(c) Each party must notify the other party in writing of the satisfaction of a
Condition as soon as reasonably practicable after that party becomes aware
of it. Any notification delivered pursuant to this clause 3.4(c) must be
accompanied by sufficient evidence to reasonably satisfy the other party of
the fulfilment of the Condition, including a copy of any consent, approval,
order or other documentation.
3.5 Waiver of Conditions: Where the third column of the table in clause 3.1 corresponding
to a Condition states "none", that Condition may not be waived. Each other Condition
is only for the benefit of, and may only be waived in writing by:
(a) if one party is specified in the third column of the table in clause 3.1
corresponding to that Condition, that party; or
Scheme Implementation Agreement Page 22
(b) if both Target and Bidder are specified in the third column of the table in
clause 3.1 corresponding to that Condition, those parties jointly.
A party entitled to waive, or to join in the waiver of, a Condition may do so in its
absolute discretion.
3.6 Method of waiver: Where a Condition may be waived by one party, that party may
only waive the Condition by giving notice in writing to the other party. Where a
Condition may only be waived by both Target and Bidder jointly, those parties may
only waive the Condition by agreeing in writing to do so.
3.7 Effect of waiver: If a party waives or joins in the waiver of a Condition in accordance
with this clause 3, that waiver does not:
(a) preclude that party from bringing a claim against the other party for any
breach of this agreement; or
(b) constitute a waiver of any other Condition or any other right obligation under
this agreement.
3.8 Notice of Adverse Circumstances:
(a) If, prior to 8.00am on the Implementation Date, Target or Bidder becomes
aware of a matter, event or circumstance that it considers in good faith will
give rise to, or it is reasonably likely to give rise to, a Material Adverse Change
(Adverse Circumstance), it must promptly notify the other party of the
relevant Adverse Circumstance (which notice must state that it is a notice for
the purposes of this clause 3.8).
(b) After giving notice of an Adverse Circumstance, the parties must consult in
good faith for at least five Business Days or, if shorter, until 5.00pm on the
day prior to the Implementation Date, regarding the response to the Adverse
Circumstances and exchange views as to appropriate method of calculating
the adverse financial consequences of the Adverse Circumstance, having
regard to the various matters which are to be excluded under the definition
of Material Adverse Change.
3.9 Additional Material Adverse Change requirements: If Target:
(a) gives notice to Bidder under clause 3.8(a), then that notice must also include
all reasonable details of the relevant Adverse Circumstance (to the extent
reasonably practical to provide in the circumstances), including any good
faith quantification of the estimated financial impact of the Adverse
Circumstance, copies of any workings and relevant materials used to
calculate such financial impact, and details of any matters it considers should
be excluded under the definition of Material Adverse Change in relation to
that Adverse Circumstance; or
(b) receives notice from Bidder of an Adverse Circumstance under clause 3.8(a),
then provided Bidder has included in its notice reasonable details of the
Adverse Circumstance (to the extent reasonably practical to provide in the
Scheme Implementation Agreement Page 23
circumstances) including any good faith quantification of the estimated
financial impact (to the extent the estimated financial impact is reasonably
able to be determined by Bidder at the time of the giving of the notice),
Target must respond in writing to Bidder within five Business Days of
receiving that notice (or, if shorter, by no later than 5.00pm on the Business
Day prior to the Implementation Date) with such information as Bidder
reasonably requests in that notice in order for Bidder to be able to
determine:
(i) the financial impact of the Adverse Circumstance; and
(ii) any matters that should be excluded under the definition of
Material Adverse Change in relation to that Adverse Circumstance
(including the financial impact of that matter).
3.10 Termination: Notwithstanding anything in this clause 3 or any rights of termination
implied by law, this agreement may only be terminated in accordance with clause 14.
4. SCHEME BOOKLET
4.1 Target's obligations: Without limiting clause 2, Target must:
(a) prepare the Scheme Booklet so that it contains:
(i) all information required by the Companies Act, the Schemes
Guidance Note, the NZX Listing Rules and any other applicable laws
or regulations;
(ii) any information required or reasonably requested by the
Takeovers Panel in order for Target to obtain from the Takeovers
Panel a Letter of Intention and a No-objection Statement;
(iii) the responsibility statements referred to in clause 4.4; and
(iv) a statement by the Target Directors reflecting the
Recommendation and Voting Commitment (modified
appropriately if the Consideration is not within or above the
Independent Adviser's valuation range for the Shares);
(b) if not already appointed, appoint the Independent Adviser (including
obtaining approval from the Takeovers Panel for that appointment), and
provide all assistance and information reasonably requested by the
Independent Adviser to enable it to prepare the Independent Adviser's
Report;
(c) as soon as practicable after preparation of an advanced draft of the Scheme
Booklet, provide Bidder with that draft (excluding the Independent Adviser's
Report) and successive drafts of the Scheme Booklet (excluding the
Independent Adviser’s Report) and successive material drafts of any extracts
of the Independent Adviser's Report that contain any factual matters about
Scheme Implementation Agreement Page 24
Bidder, in each case in a timely manner, and so that Bidder has a reasonable
opportunity to review and comment on those drafts;
(d) consider in good faith the reasonable comments of Bidder and its
Representatives when preparing revised drafts of the Scheme Booklet;
(e) as soon as practicable after preparation of an advanced draft of the Scheme
Booklet suitable for review by the Takeovers Panel, provide that draft
(excluding the Independent Adviser’s Report) to Bidder with a request for
Bidder's consent to provide the draft Scheme Booklet to the Takeovers Panel
under clause 4.2(e);
(f) as soon as practicable after receipt of the confirmation from Bidder referred
to in clause 4.2(e), provide the Takeovers Panel the draft Scheme Booklet and
request the Takeovers Panel to issue a Letter of Intention;
(g) keep Bidder reasonably informed of any issues raised by the Takeovers Panel
or NZX in relation to the Scheme Booklet and use reasonable endeavours to,
in consultation with Bidder, resolve any issues expeditiously (provided that,
where such issues relate to the Bidder Information, Target will not take any
steps to address them without Bidder’s written consent, not to be
unreasonably withheld);
(h) in accordance with the Timetable and as soon as practicable after the
approval of the Scheme Booklet by the Takeovers Panel and the provision of
the Letter of Intention, procure that a meeting of the Board is convened to
approve the Scheme Booklet for lodgement with the Court and, subject to
the Initial Orders, for dispatch to Shareholders;
(i) after the Board has provided the approvals contemplated by clause 4.1(h),
promptly lodge the Scheme Booklet with the Court seeking the Initial Orders;
(j) send the Scheme Booklet to Shareholders in accordance with the
requirements set out in the Initial Orders in accordance with the Timetable;
and
(k) advise Bidder promptly if Target becomes aware:
(i) of new information which, had it been known at the time the
Scheme Booklet was prepared, should have been included in the
Scheme Booklet under clause 4.1(a)(i);
(ii) that any part of the Target Information in the Scheme Booklet is
misleading or deceptive in any material respect, including by
omission; or
(iii) that any information that was required to be disclosed in the
Scheme Booklet under applicable law was not included,
and in any case, if Target becomes so aware at any time, or receives advice
from Bidder under clause 4.2(f) (in each case, after consulting with Bidder in
Scheme Implementation Agreement Page 25
good faith as to the need for and content and presentation of the disclosures
discussed below):
(iv) between the approval of the Scheme Booklet in accordance with
clause 4.1(h) and the date of the Scheme Meeting, then, if
considered by Target that supplementary disclosure is required,
provide supplementary disclosure to Shareholders in accordance
with applicable law and after consulting with Bidder as to the
content and presentation of that supplementary disclosure, and
will, if it considers it to be necessary or appropriate:
(A) seek the Court's guidance in respect of the
supplementary disclosure; and
(B) adjourn the Scheme Meeting to the earliest date
reasonably practicable; and
(v) between the date of the Scheme Meeting and the Second Court
Date, then, if considered by Target that supplementary disclosure
to Shareholders is required, apply to the Court for orders as to the
procedure to be followed for the provision of supplementary
disclosure to Shareholders and the effect on the approval of the
Scheme, after consulting with Bidder.
4.2 Bidder's obligations: Without limiting clause 2, Bidder must:
(a) prepare and provide to Target for inclusion in the Scheme Booklet:
(i) information about the Bidder Group;
(ii) confirmation (in a form satisfactory to Target, acting reasonably,
but without disclosing any commercially sensitive terms) that
Bidder will have access to sufficient funds to fund the
Consideration; and
(iii) information equivalent to the information that would meet the
requirements of Schedule 1 to the Takeovers Code,
to the extent required to be included in the Scheme Booklet by the Schemes
Guidance Note, the Companies Act, the Takeovers Panel, the NZX Listing
Rules and any other applicable laws or regulations;
(b) provide Target drafts of the information referred to in clause 4.2(a) in a
timely manner to enable Target to meet its obligations under clause 4.1 and
achieve the Timetable, to provide Target a reasonable opportunity to review
those drafts and consider in good faith the reasonable comments of Target
and its Representatives when preparing revised drafts of that information;
(c) provide all assistance and information reasonably requested by the
Independent Adviser to enable it to prepare the Independent Adviser's
Report;
Scheme Implementation Agreement Page 26
(d) as soon as practicable after receipt of any draft of the Scheme Booklet from
Target, review and provide comments on that draft;
(e) subject to clause 4.3, before Target provides the Scheme Booklet to the
Takeovers Panel in accordance with clause 4.1(f) deliver to Target written
consent from Bidder (not to be unreasonably withheld, conditioned or
delayed) to that provision, including the inclusion of the Bidder Information
in the Scheme Booklet in the form and context it appears;
(f) advise Target if Bidder becomes aware at any time either:
(i) of new information which, had it been known at the time the
Scheme Booklet was prepared, should have been included in the
Bidder Information under any applicable law, the Schemes
Guidance Note or any Takeovers Panel requirement in connection
with the Letter of Intention or the No-objection Statement; or
(ii) that any part of the Bidder Information is misleading or deceptive
in a material respect, including by omission;
(g) at its option or if requested by Target, procure that it is represented by
counsel at the Court hearings convened for the purposes of considering the
Initial Orders and the Final Orders, at which, through its counsel, Bidder will
undertake (if requested by the Court) to do all such things and take all such
steps within its power as are necessary in order to ensure the fulfilment of
its obligations under this agreement and the Scheme. For the avoidance of
doubt, Target will prepare the Court documentation for the Initial Orders and
Final Orders and Bidder's counsel will only prepare submissions to the Court,
if required, in support of Target's application; and
(h) before a draft of the Scheme Booklet is lodged with the Takeovers Panel, and
again before the Scheme Booklet is despatched to Shareholders, deliver to
Target written consent from Bidder (not to unreasonably withheld,
conditioned or delayed) to that action and confirm to Target the accuracy
and completeness of the Bidder Information in the Scheme Booklet,
including that it does not contain any material statement that is false or
misleading in a material respect including because of any omission.
4.3 Bidder confirmations and approvals: If Bidder requires any change to be made to the
form or content of the Bidder Information as a condition of giving its consent as
referred to in clause 4.2(e) or 4.2(h) then:
(a) if Target disagrees with the change, the parties must consult in good faith
about the change and the reasons for it with a view to agreeing an alternative
change that satisfies both parties; and
(b) if the parties are unable to reach agreement, Target must make such changes
to the Bidder Information as Bidder reasonably requires.
Scheme Implementation Agreement Page 27
4.4 Responsibility statements: The Scheme Booklet must contain responsibility
statements, in a form to be agreed between the parties (acting reasonably), to the
effect that:
(a) Target has provided, and is responsible for, the Target Information in the
Scheme Booklet, and that none of Bidder, its Representatives nor any
member of its Group assumes any responsibility for the accuracy or
completeness of the Target Information;
(b) Bidder has provided, and is responsible for, the Bidder Information, and that
none of Target, its Representatives or any member of its Group assumes any
responsibility for the accuracy or completeness of the Bidder Information;
and
(c) the Independent Adviser has provided the Independent Adviser's Report and
is responsible for it and none of Bidder, Target or their respective
Representatives or any member of their respective Group assumes any
responsibility for the accuracy or completeness of the Independent Adviser's
Report.
5. SCHEME IMPLEMENTATION STEPS
5.1 Target's obligations: Without limiting clause 2, Target must, in accordance with the
Timetable:
(a) within five Business Days after the date of this agreement, provide Mayne
Wetherell with a copy of the information as contemplated by limb (a) of the
definition of Due Diligence Material on a USB drive;
(b) before the First Court Date, in consultation with Bidder (and in accordance
with clause 4.1(f)), apply to the Takeovers Panel for a Letter of Intention (for
the purposes of section 236A(2)(b)(ii) of the Companies Act);
(c) prior to sending any material correspondence to the Takeovers Panel relating
to the Scheme (other than correspondence to the extent relating to (x) the
actual or purported termination of this agreement, (y) any claim under, or
disagreement or dispute between the parties in respect of, this agreement
or the Transaction, or (z) a Competing Proposal or a Superior Proposal),
provide Bidder with a draft of that correspondence and consider in good faith
all of the reasonable comments of Bidder on that correspondence;
(d) promptly provide Bidder with a copy of all material correspondence to and
from the Takeovers Panel relating to the Scheme (other than
correspondence to the extent relating to (x) the actual or purported
termination of this agreement, (y) any claim under, or disagreement or
dispute between the parties in respect of, this agreement or the Transaction,
or (z) a Competing Proposal or a Superior Proposal);
(e) apply to the Court (in accordance with clause 4.1(i)) for Initial Orders
convening the Scheme Meeting;
Scheme Implementation Agreement Page 28
(f) if the Court makes and seals those orders:
(i) dispatch the Scheme Booklet to Shareholders and hold the Scheme
Meeting in accordance with, and otherwise complying in all
respects with, the Initial Orders; and
(ii) promptly deliver to the Registrar for registration a copy of the Initial
Orders in accordance with section 236(4) of the Companies Act, by
no later than 10 Business Days after the date the Initial Orders are
granted;
(g) upon sending the Scheme Booklet to the Scheme Shareholders, lodge a copy
of that Scheme Booklet with NZX in accordance with NZX Listing Rule 3.23.1;
(h) if the Scheme Resolution is passed by the requisite majorities of Shareholders
as set out under section 236A(4) of the Companies Act promptly apply to:
(i) the Takeovers Panel for the production of a No-objection
Statement; and
(ii) the Court for its approval of Final Orders (it being agreed that any
such orders will be sought to be subject to the satisfaction of any
Conditions which remain unsatisfied as at the Final Orders Date);
(i) if the Court approves the Scheme in accordance with section 236(1) of the
Companies Act (and once the Final Orders are sealed by the Court):
(i) promptly deliver to the Registrar for registration a copy of the Final
Orders in accordance with section 236(4) of the Companies Act, by
no later than 10 Business Days after the Final Orders Date;
(ii) prior to sending any material correspondence to NZX in respect of
the suspension or cessation of quotation of Shares or de-listing of
Target in connection with the Transaction, provide Bidder with a
draft of that correspondence and consider in good faith any
reasonable comments promptly provided by Bidder;
(iii) apply to NZX to:
(A) and use its best endeavours to procure that NZX, suspend
trading in the Shares from the close of trading on the date
falling two Business Days after the Final Orders Date (or
such other date agreed with Bidder); and
(B) de-list Target with effect from close of trading on the
Implementation Date (or such other date as agreed with
Bidder);
(iv) promptly provide Bidder with a copy of all material correspondence
to and from the NZX in respect of the suspension or cessation of
quotation of Shares or de-listing of Target in accordance with
Scheme Implementation Agreement Page 29
clause 5.1(i)(iii) and keep Bidder reasonably informed of any
matters raised by NZX in respect of the suspension or cessation of
quotation of Shares or de-listing of Target and consult with Bidder
to resolve any such issues expeditiously; and
(v) close the Register as at the Record Date to determine the identity
of the Scheme Shareholders and their entitlements to the
Consideration; and
(j) if the Scheme becomes Effective:
(i) subject to Bidder satisfying its obligations under clause 5.2(c),
effect the transfer of the Scheme Shares to Bidder in accordance
with the Scheme on the Implementation Date; and
(ii) do all other things contemplated of it under the Scheme and all
other things (if any) within its power as may be reasonably
necessary for the implementation of the Scheme and the
Transaction on a basis consistent with this agreement or necessary
for Target to lawfully give effect to the Scheme and the orders of
the Court.
5.2 Bidder's obligations: Without limiting clause 2, Bidder will:
(a) at least five Business Days before the First Court Date, deliver to Target a
copy of the Deed Poll executed by Bidder;
(b) if the Court approves the Scheme in accordance with section 236(1) of the
Companies Act (and once the Final Orders are sealed by the Court and all
Conditions are satisfied (or, where permissible, waived)) do all things (if any)
within its power as may be reasonably necessary for the implementation of
the Transaction on a basis consistent with the Final Orders and this
agreement; and
(c) if the Scheme becomes Effective, accept a transfer of the Scheme Shares and
provide the Consideration in accordance with clause 2.3 and the Deed Poll
on or before the Implementation Date.
5.3 Confirmatory Certificates:
(a) Subject to clause 5.3(b):
(i) between 8.00am and midday on the Business Day following the
Final Orders Date;
(ii) between 8.00am and midday on the day before the
Implementation Date; and
(iii) between 6.00am and 7.00am on the Implementation Date,
Scheme Implementation Agreement Page 30
Target must give Bidder a certificate from Target, signed by the Target CEO
and Target CFO (or any alternative signatories who are approved by Bidder
in writing, acting reasonably), confirming that, so far as Target is aware:
(iv) except to the extent previously waived, the Conditions in
clauses 3.1(d), 3.1(e) and 3.1(f) would have been satisfied if
“8.00am on the Implementation Date” was read as the time the
certificate is given to Bidder and Target is not aware of anything
that would prevent those Conditions being satisfied;
(v) it is not in breach of clauses 9.2 (Conduct of business) or 10.1
(Target representations, warranties and undertakings); and
(vi) there has not been any breach of any other provision of this
agreement that might entitle Bidder to terminate under
clause 14.1,
(the Confirmatory Certificate).
(b) If the statements required to be made in a Confirmatory Certificate would be
inaccurate, Target must provide a qualified Confirmatory Certificate setting
out full details of the matters that cause or are likely to cause that
Confirmatory Certificate not to be accurate.
(c) For the avoidance of doubt:
(i) a Confirmatory Certificate is signed by the Target CEO and Target
CFO (or any alternative signatories who are approved by Bidder in
writing) in their capacity as an employee or officer of Target and in
no other capacity; and
(ii) no personal liability will be assumed by the Target CEO or Target
CFO (or any alternative signatories who are approved by Bidder in
writing) as a result of the statements in a Confirmatory Certificate
and the statements in the Confirmatory Certificate will not give rise
to any liability of the party giving that Confirmatory Certificate or
any other person under this agreement or otherwise.
5.4 Provision of information to the Independent Adviser:
(a) Target must, in relation to any information that it or any of its
Representatives provides to the Independent Adviser in connection with the
preparation of the Independent Adviser’s Report (IAR Information):
(i) prepare and provide that IAR Information to the Independent
Adviser in good faith (including by having regard to material risks,
opportunities and adverse circumstances);
(ii) ensure that the forecasts provided to the Independent Adviser are
prepared in good faith and do not require amendment based on
Scheme Implementation Agreement Page 31
information which has come to their attention since preparation of
those forecasts; and
(iii) provide to the Independent Adviser any information that may be
material in respect of the financial performance, position or
prospects of the Target Group which is known by any Target
Director or Senior Manager at that time, but which had not
previously been provided to the Independent Adviser.
6. OTHER IMPLEMENTATION OBLIGATIONS
6.1 Information about Shareholders: Target must:
(a) comply with any reasonable request by Bidder to require disclosure of
information in accordance with sections 290 and 291 of the FMCA, subject to
its statutory and contractual obligations, and provide Bidder the information
obtained as a result of requiring such disclosure; and
(b) procure that its share registry provides to Bidder details of the Register and
all other information about the Shareholders which Bidder reasonably
requires in order to:
(i) canvas approval of the Scheme by Shareholders; or
(ii) facilitate the provision by Bidder of the Consideration in
accordance with this agreement, the Scheme and the Deed Poll.
6.2 Promotion of Transaction: During the Exclusivity Period, subject to:
(a) there being no Superior Proposal; and
(b) the Independent Adviser's Report having concluded that the Consideration
is within or above the Independent Adviser's valuation range for the Scheme
Shares,
Target will use reasonable endeavours to promote, and will provide all reasonable
cooperation to Bidder in promoting, the merits of the Transaction to Shareholders,
including:
(c) providing (subject to Target’s statutory or contractual obligations) such
information regarding Shareholders and their holdings as Bidder reasonably
requests and will direct its share registry to provide all information
reasonably requested by Bidder;
(d) if requested by Bidder, retaining the services of a proxy solicitation firm
agreed with Bidder, to actively solicit affirmative proxies for the Scheme and
providing Bidder with all information generated by that firm at regular
intervals (but at least on a daily basis on each of the last seven Business Days
before the Scheme Meeting) as to the aggregate tally of votes received by
Target in respect of the Scheme;
Scheme Implementation Agreement Page 32
(e) procuring that senior executives of the Target Group are available on
reasonable notice to:
(i) meet (in person or remotely, as is convenient for the relevant
senior executive) with key Shareholders if reasonably requested to
do so by Bidder; and
(ii) communicate with the employees, joint venture partners and key
suppliers of the Target Group,
in each case to discuss, and promote the merits of, the Transaction to such
persons;
(f) promptly report to Bidder any material information Target becomes aware
of regarding opposition to the Scheme by the Shareholders (excluding
unsubstantiated rumours or similar information or opposition by any
individual Shareholder holding an immaterial number of Shares); and
(g) undertaking, in cooperation with Bidder, other reasonable actions to
promote the affirmative vote of Shareholders for the Transaction, as
reasonably requested by Bidder.
Without limiting the foregoing, Target and Bidder will use reasonable endeavours to
agree, as soon as practicable after the date of this agreement, key messaging and
principles to govern all communications in relation to the promotion of the Scheme
between Bidder (or any Representative of Bidder) and Shareholders, which will apply
throughout the period that the Target Directors continue to unanimously recommend
that Shareholders vote in favour of the Scheme.
6.3 Board changes: Subject to the Consideration having been transferred to the
Shareholders in accordance with, and subject to, the terms of the Scheme, Target must
procure that:
(a) such persons as Bidder nominates (by notice to Target no later than
five Business Days before the Implementation Date) and who have provided
to Target a signed consent to act by that time are appointed as additional
directors of Target and/or such other Target Group members as Bidder may
request on the Implementation Date (by no later than 5.00pm); and
(b) unless otherwise agreed by Bidder in writing, each member of the Board and,
if requested by Bidder, any director of the other Target Group members,
other than those appointed in accordance with clause 6.3(a), resigns as a
director of Target and/or such other Target Group member with effect from
the Implementation Date (by no later than 5.00pm) and acknowledges in
writing that he or she has no claim against any member of the Target Group
other than for accrued directors' fees and expenses.
6.4 Release of Encumbrances: After the signing of this agreement and in addition to its
obligations in clause 9.1, Target will:
Scheme Implementation Agreement Page 33
(a) provide reasonable assistance to Bidder to:
(i) identify any Encumbrances over the assets of the Target Group
which are not Permitted Encumbrances; and
(ii) procure the release of any such Encumbrances identified under
clause 6.4(a)(i) on or before the Implementation Date; and
(b) use reasonable endeavours to procure the:
(i) removal of any financing statements relating to such
Encumbrances identified under clause 6.4(a)(i) from the PPSR; and
(ii) amendment of any financing statements which Target and Bidder
agree (acting reasonably) are overly broad or do not reflect the
extent of the collateral secured by the Encumbrance to which they
relate,
in each case, on or before the Implementation Date.
6.5 Target Performance Incentive Scheme:
(a) Bidder acknowledges and agrees that, as at the date of this agreement,
109,487 Performance Share Rights have been issued by Target for
participants in Target’s PSR Scheme.
(b) Prior to the Record Date, the Board will determine, in accordance with the
PSR Scheme Rules, that (at the Board's discretion) some or all of the
Performance Share Rights will become eligible to convert into Shares prior to
the Record Date and that any remaining Performance Share Rights that do
not convert into Shares prior to the Record Date will lapse and be cancelled.
(c) Target must ensure that:
(i) no further Performance Share Rights are issued prior to the
Implementation Date;
(ii) all Performance Share Rights that do become eligible for
conversion into Shares in accordance with clause 6.5(b) are
converted to Shares prior to the Record Date (with such Shares to
be included as Scheme Shares) and that any Performance Share
Rights that do not become eligible for conversion into Shares in
accordance with clause 6.5(b) lapse or are cancelled or forfeited
prior to the Record Date such that, on the Implementation Date,
there are no Performance Share Rights on issue;
(iii) on conversion of any Performance Share Rights, Shares held by
Target as treasury stock will, as required, be transferred to
Performance Share Right holders first, with the balance (if any) of
any further Shares required to be issued as new Shares;
Scheme Implementation Agreement Page 34
(iv) any remaining treasury shares held by Target following the
conversion of Performance Share Rights into Shares in accordance
with clause 6.5(b) and clause 6.5(c)(iii) are cancelled prior to the
Record Date such that, on the Implementation Date, there are no
treasury shares held by Target and no treasury shares shall form
part of the Scheme Shares;
(v) no action is taken by Target or any Target Director in respect of the
PSR Scheme, which would, or would be reasonably likely to, create
a separate interest class (as referred to in section 236(A)(4) of the
Companies Act) of votes in respect of the Scheme;
(vi) the PSR Scheme is terminated with effect on and from the
Implementation Date; and
(vii) no more than the maximum number of Performance Share Rights
specified in clause 6.5(a) are issued to participants in the PSR
Scheme prior to the Record Date.
6.6 Other Target share plans:
(a) Bidder acknowledges that as at the date of this agreement:
(i) 908,953 Shares are held by certain Target employees under the
Leader Share Purchase & Loan Scheme; and
(ii) 49,455 Shares are held by Comvita Share Scheme Trustee Limited
under the Target Exempt Employee Share Scheme (of which 12,915
Shares are unallocated).
(b) Target must ensure that:
(i) no further Shares are issued pursuant to the schemes described in
clause 6.6(a);
(ii) no further allocations are made under the Target Exempt Employee
Share Scheme or the Leader Share Purchase & Loan Scheme;
(iii) no further awards of phantom shares are made under the Comvita
Phantom Share Bonus Scheme or otherwise;
(iv) any unallocated Shares held by Comvita Share Scheme Trustee
Limited are acquired and cancelled by Target for no net monetary
consideration prior to the Record Date such that, on the
Implementation Date, there are no unallocated shares held by
Comvita Share Scheme Trustee Limited;
(v) subject to the Independent Adviser's Report concluding that the
Consideration is within or above the Independent Adviser's
valuation range for the Shares, Comvita Share Scheme Trustee
Scheme Implementation Agreement Page 35
Limited exercises any votes within its control at the Scheme
Meeting to vote in favour of the Scheme Resolution;
(vi) no action is taken by Target or any Target Director in respect of the
loans granted to Target employees under the Leader Share
Purchase & Loan Scheme (except as contemplated by the terms of
the Leader Share Purchase & Loan Scheme and the relevant loan
agreements);
(vii) no action is taken by Target or any Target Director in respect of the
Leader Share Purchase & Loan Scheme or Target Exempt Employee
Share Scheme, which would, or would be reasonably likely to,
create a separate interest class (as referred to in section 236(A)(4)
of the Companies Act) of votes in respect of the Scheme; and
(viii) the Leader Share Purchase & Loan Scheme and Target Exempt
Employee Share Scheme are terminated with effect on and from
the Implementation Date.
(c) Target must, before the Implementation Date, procure that the shareholder
of Comvita Share Scheme Trustee Limited enters into binding documentation
to the reasonable satisfaction of Bidder pursuant to which that shareholder
transfers legal and beneficial title to all issued share capital in Comvita Share
Scheme Trustee Limited to Comvita Limited or as Bidder otherwise directs in
writing immediately following the Scheme becoming Effective.
7. COURT PROCEEDINGS
7.1 Court documents:
(a) In relation to each Court application made in relation to the Scheme,
including any appeal, Target must prepare and provide Bidder with
successive drafts (to the extent they include material changes) of all
documents required to be given by Target to the Court (including the
originating applications, affidavits, memoranda, submissions and draft Court
orders) a reasonable time before they are due to be submitted to the Court
(and in any event not less than 48 hours before submission unless it is
impractical in the circumstances) and must consider in good faith the
reasonable comments of Bidder and its Representatives on those
documents.
(b) Target must not provide the Court with any Court orders (whether in draft or
not) or applications for Court orders, or consent to any changes to any Court
orders, without Bidder having consented in writing to such documents being
submitted to the Court or such changes being consented to.
7.2 Representation: In relation to each Court application made in relation to the Scheme,
including any appeal:
Scheme Implementation Agreement Page 36
(a) Target must, if requested by Bidder, consent to the separate representation
of Bidder by counsel; and
(b) Bidder may appear and be represented in relation to the Court applications.
7.3 Court proceedings and conditionality:
(a) If the Court declines to make the orders sought by Target under clause 5.1(e)
or 5.1(h)(ii), due in whole or in part to the lack of satisfaction of, or the
potential timing for satisfaction of (or where capable of waiver, waiver of)
the Conditions, Target must promptly make a further application for Initial
Orders or Final Orders (as applicable), as soon as practicable after the parties
satisfying the steps or matters specified by the Court or apparent from its
directions or reasons as required, or desirable, in order to grant the Initial
Orders or Final Orders (as the case may be) (Court Guidance).
(b) Target will use its best endeavours to follow the Court Guidance and any
guidance or requirements of the Takeovers Panel including, if indicated,
providing supplementary information to Shareholders and/or convening a
second Scheme Meeting.
7.4 Appeal if orders not made: If the Court does not make any order sought by Target
under clause 5 (the Decision), to the extent clause 7.3 does not apply:
(a) Target and Bidder must consult in good faith as to the effect of the refusal
and whether to appeal the Decision; and
(b) if, within 10 Business Days after the Decision, Target and Bidder agree to
appeal the Decision or either of those parties obtains an opinion from an
independent King's Counsel, practising in the field of corporate and securities
law litigation, to the effect that there are reasonable prospects of
successfully appealing the Decision, then:
(i) Target must appeal the Court's decision within the timeframe set
out in rule 29 of the Court of Appeal (Civil) Rules 2005;
(ii) the cost of any such appeal is to be borne:
(A) if Target and Bidder agreed to appeal the Decision,
equally between the parties; or
(B) if Target and Bidder did not agree to appeal the Decision,
by the party who obtained the opinion from the
independent King's Counsel;
(iii) if the End Date would otherwise occur before the appeal is finally
determined, the End Date is deferred to the date that is 10 Business
Days after the appeal from the Decision is finally determined; and
(iv) if the appeal is successful and the relevant order is made, the End
Date is further deferred to the date which is X days after the original
Scheme Implementation Agreement Page 37
End Date (disregarding the effect of clause 7.4(b)(iii)) where X is
equal to the number of days between the date of the Decision and
the date on which the appeal from the Court's decision is finally
determined, or to such other date as the parties agree in writing.
8. RECOMMENDATION AND VOTING INTENTIONS
8.1 Recommendation and voting intentions of Target Directors: Target must ensure that:
(a) each Target Director recommends that Shareholders vote in favour of the
Scheme (the Recommendation); and
(b) each Target Director undertakes to vote, or procure the voting of, all Shares
held or controlled by him or her in favour of the Scheme (the Voting
Commitment),
subject, in each case, to:
(c) no Superior Proposal having been received by Target; and
(d) the Independent Adviser's Report concluding that the Consideration is within
or above the Independent Adviser's valuation range for the Shares.
8.2 Change to Recommendation or voting intentions: Target must use best endeavours
to ensure that no Target Director changes, qualifies, withdraws or fails to give effect
to the Recommendation or the Voting Commitment or makes any statement
inconsistent with the Recommendation or the Voting Commitment unless:
(a) there is a Superior Proposal (subject to Target’s compliance with
clause 12.7); or
(b) the Independent Adviser's Report concludes that the Consideration is below
the Independent Adviser's valuation range for the Shares,
provided that reliance by Target on the exclusions to this clause 8.2 will not prevent
Bidder from having the benefit of, and enforcing, its rights under clause 12.7 and
clause 13.2.
8.3 Notification of new circumstances: Without limiting the operation of clauses 8.1, 8.2,
11.3, 12 or 13.2, if:
(a) Target receives, an Independent Adviser’s Report in which the Independent
Adviser concludes that the Consideration is below the Independent Adviser’s
valuation range for the Shares (including either the initial Independent
Adviser’s Report or any update of, or any revision, amendment or
supplement to, that report); or
(b) the Board or Target becomes aware that any one or more of the Target
Directors is reasonably likely to change, qualify, withdraw, adversely modify
or make a statement inconsistent with, the Recommendation or the Voting
Commitment (other than as permitted under clause 8.2(a)), including as a
Scheme Implementation Agreement Page 38
result of the receipt of an unfavourable Independent Adviser's Report
(including any update of or revision, amendment or supplement to, the
Independent Adviser's Report),
then Target must:
(c) immediately notify Bidder of that, and, as soon as reasonably practicable,
provide Bidder with a draft of any statement that the Board or Target intends
to make if such event occurs; and
(d) consult with Bidder in good faith for not less than two Business Days after
the date the notice referred to in paragraph (c) above is given to consider
and determine whether there are any steps that can be taken to avoid such
change, qualification, withdrawal, modification or inconsistent statement,
and if Target is required to consult with Bidder under clause 8.3(d), then Target will
ensure that the Recommendation or the Voting Commitment is not changed, qualified,
withdrawn or modified or an inconsistent statement made until the end of the
consultation period, provided that such consultation shall not preclude the Target
from complying with its continuous disclosure obligations.
9. INTERIM PERIOD COVENANTS
9.1 Access, information and collaboration: From the date of this agreement until and
including the Implementation Date, Target must:
(a) procure that Bidder and its Representatives are given reasonable access to
(x) the properties, books and records, senior executives of Target Group; and
(y) any other information about the Business, in each case, reasonably
requested by Bidder or its Representatives, during normal business hours at
mutually convenient times and on reasonable notice to Target for the
purposes of:
(i) enabling Bidder to understand the Business and operations and its
financial position, transactional banking requirements, financial
performance and prospects;
(ii) implementing the Scheme;
(iii) enabling Bidder to prepare for the transition of ownership of the
Target Group to Bidder; and
(iv) any other purpose agreed between Target and Bidder in writing,
except to the extent that the provision of such access is prohibited by law or
any confidentiality obligations owed to third parties and provided that;
(v) it would not result in unreasonable disruption to the Target Group's
business in the opinion of Target (acting reasonably); or
Scheme Implementation Agreement Page 39
(vi) requires the disclosure of any document that would compromise
the Target Group's legal professional privilege or any information
concerning Target’s consideration of the Scheme or any Competing
Proposal,
but these provisos do not limit Target’s obligations under clause 12;
(b) provide Bidder with copies of the Board minutes and papers provided to the
Board (including audit and risk committee and safety and performance
committee papers and minutes) and monthly management accounts for the
Target Group within five Business Days after they are provided to Target
Directors (provided Target may redact information from such papers to the
extent that it relates to its directors' and management's consideration of the
Transaction or a Competing Proposal);
(c) provide Bidder with a copy of the new Target CEO’s plan for the period from
the date of this agreement until and including the Implementation Date
(whether described as a 100 day plan or otherwise);
(d) provide Bidder with a copy of any information which has been withheld from
public disclosure in reliance on the carve-out in NZX Listing Rule 3.1.2;
(e) keep Bidder updated on all developments in its Business that Target (acting
in good faith) determines are material (including the Target Group’s financial
position, prospects and affairs and any material health and safety, cyber
security or product incidents);
(f) procure that senior executives of the Target Group meet with
Representatives of Bidder on a regular basis (either in person or remotely),
to discuss and consult in good faith with Bidder in respect of material
developments relating to any material matters which Bidder may reasonably
raise from time to time relating to the Business;
(g) provide Bidder with any information or documentation reasonably
requested by Bidder if Bidder demonstrates a reasonable and good faith
basis upon which Bidder may be entitled to exercise a termination right
under this agreement provided, however that:
(i) Bidder’s request outlines the reasons for Bidder’s request by
reference to the relevant termination right under this agreement
that Bidder believes it may be entitled to exercise and the reason
that Bidder believes that it may be entitled to exercise that
termination right;
(ii) the information or documentation requested by Bidder relates to
Bidder’s claim or potential claim;
(iii) Bidder is, to the extent practicable, specific in its request as to the
information or documentation requested; and
Scheme Implementation Agreement Page 40
(h) procure that each other member of the Target Group will, provide all
reasonably requested co-operation and assistance to Bidder and its
Representatives for the purposes of:
(i) implementing the Scheme and enabling Bidder to prepare for the
transition of ownership of the Target Group to Bidder; and
(ii) any other purpose agreed between Target and Bidder in writing.
For the avoidance of doubt, nothing in this clause 9.1 will be construed as requiring
any party to act in breach of applicable law.
9.2 Access to Banks: From the date of this agreement until and including the
Implementation Date, Target will use all reasonable endeavours:
(a) to procure that Bidder and its Representatives are given reasonable access
to the banks which provide debt financing to the Target Group (the Target
Banks) in order to discuss the existing debt financing, change of control
procedures, and the extension and/or refinancing of the Target Group’s debt;
and
(b) to work with Bidder to procure the extension and/or refinancing of the
Target Group debt by one or more of the Target Banks with effect from
Implementation, including without limitation making available (on an in-
person or remote basis, as is convenient for the executive) senior executives
of Target to meet with Bidder to discuss such extension and/or refinancing,
except to the extent that the provision of such access is prohibited by law.
9.3 Conduct of business: Subject to applicable law, from the date of this agreement until
and including the Implementation Date, Target will (and will ensure that each member
of the Target Group will):
(a) carry on its business in the ordinary course and in accordance with, or
factored into, the Business Plan (except to the extent the Target considers it
reasonably necessary in order to comply with the Banking Covenants) and
will not make any significant change to the nature or scale of its business or
enter any business or undertake any activities in which it was not engaged as
at the date of this agreement;
(b) carry on its business without taking any of the following actions (except to
the extent contemplated by, or factored into, the Business Plan or as the
Target considers reasonably necessary in order to comply with the Banking
Covenants):
(i) deferring maintenance or capital expenditure;
(ii) extending payment terms with suppliers beyond standard trading
terms;
(iii) accelerating the collection of receivables outside usual practices;
Scheme Implementation Agreement Page 41
(iv) disposing of inventory or assets at discounted or distressed prices;
(v) reducing staff or staff hours in a manner not aligned with normal
seasonal or business fluctuations;
(vi) delaying or ceasing investment in marketing, development or other
core operational activities; or
(vii) negotiating or entering into arrangements with creditors or
financiers that would not be undertaken in the ordinary course of
business;
(c) maintain insurance in respect of its business and assets covering such risks
and for such amounts as would be maintained in accordance with its ordinary
practice and in any event to a level no less than that in place immediately
prior to the date of this agreement;
(d) maintain all material Authorisations necessary to operate the Business, and
ensures all conditions attaching to those Authorisations are complied with in
all material respects, including by making such applications for new,
additional, renewed, replacement, extended or varied Authorisations as may
be reasonably necessary within the timeframes required to ensure the Target
Group has the continued benefit of such Authorisations, provided that Target
must also take reasonable steps to procure that the terms and conditions of
such Authorisations are not materially more onerous than those applicable
under those comparable Authorisations as are in place as at the date of this
agreement;
(e) maintain in force all material registrations and other protections held by or
on behalf of the Target Group (in any jurisdiction) in respect of all Intellectual
Property Rights;
(f) use all reasonable endeavours to:
(i) keep available the services of its directors and Senior Managers
(other than the “Excluded Senior Managers”);
(ii) maintain its material assets in as good condition and state of repair
as at the date of this agreement (fair wear and tear excluded, but
provided, in the case of fair wear and tear, that the Target Group
continues to comply with its ordinary practices for monitoring and
repairing wear and tear of its assets); and
(iii) preserve its relationships with all Government Agencies and all
material customers, suppliers, licensors, licensees, joint venturers
and others with whom it has material business dealings;
(g) perform and comply, in all material respects, with the material agreements
and commitments to which it is a party or by which it is bound;
Scheme Implementation Agreement Page 42
(h) promptly notify Bidder of (other than any “Excluded Disputes” as identified
in the Target Disclosure Letter), and keep Bidder reasonably and promptly
informed of any material change in the status of:
(i) any action, claim, litigation, prosecution or other form of
proceeding brought by or against Target, or another member of the
Target Group, or any director or employee of any member of the
Target Group (of which it becomes aware), other than any claim or
legal proceeding that has potential maximum liability which is less
than $200,000;
(ii) any actual or threatened material enquiry or investigation by any
Government Agency in relation to the Business (including in
relation to Tax) and any material correspondence with any
Government Agency in relation to the Business;
(iii) any unremedied material breach by any member of the Target
Group, or the relevant contractual counterparty, of any Restricted
Agreement;
(iv) the receipt by the Target Group of any written notification from a
contractual counterparty notifying the Target Group of its intention
to terminate any Restricted Agreement;
(i) use all reasonable endeavours to pay to the relevant Tax Authority where
due all Taxes which become due and payable before the Implementation
Date;
(j) use reasonable endeavours to promptly make payments to creditors as they
fall due (other than where a payment is the subject of a genuine dispute);
(k) ensure that all Transaction Costs are paid in full by 5.00pm on the day prior
to the Implementation Date;
(l) use reasonable endeavours to implement retention arrangements for key
employees (as identified by Bidder) in a manner agreed between Target and
Bidder, each acting reasonably;
(m) not:
(i) except in the ordinary course of business, acquire, transfer, assign,
license, abandon, allow to lapse or expire or otherwise dispose of
or create any Encumbrance that is not a Permitted Encumbrance in
respect of, any assets, rights or properties (excluding shares or
other securities, which are addressed in clause 9.3(m)(x));
(ii) enter into, waive, seek a waiver under, vary (in any material
respect) or terminate any Restricted Agreement (but, for the
avoidance of doubt: (A) excluding any ordinary course renewal of a
Restricted Agreement; or (B) entry into any “Excluded Restricted
Arrangements” as identified in the Target Disclosure Letter);
Scheme Implementation Agreement Page 43
(iii) give any guarantee of, or security for, or indemnity in connection
with the obligations of any person other than a member of the
Target Group (other than indemnities given to directors and
officers in the ordinary course of business);
(iv) create or incur any material liability or indebtedness (whether
contingent or otherwise), except normal liabilities or indebtedness
incurred in the ordinary course of business;
(v) amend any of the terms and conditions of the Target Group’s bank
facility as in place at the date of this agreement or put in place any
new debt facilities;
(vi) draw-down under, or repay, any of the Target Group’s bank
facilities in place as at the date of this agreement other than in the
ordinary course of business;
(vii) agree to, or vary, any break fee, prepayment fee or repayment fee
or other similar early repayment payment obligation (excluding the
repayment of principal and/or payment of interest) in connection
with any renewal or refinancing of the Target Group’s facilities;
(viii) engage in any financing of a type which is not required to be shown
or reflected in its financial statements or notes thereto;
(ix) incur or commit to any unbudgeted capital expenditure, other than
payments not exceeding, when aggregated with all other payments
made in reliance on this clause 9.3(m)(ix), $200,000;
(x) acquire or dispose of any shares or other securities in any body
corporate or any units in any trust, except: (a) for the acquisition of
shares or securities in an entity which, at the time of the
acquisition, was a wholly owned member of the Target Group; or
(b) for the “Disposal Shares” as identified in the Target Disclosure
Letter;
(xi) issue (other than to a wholly owned member of the Target Group),
redeem, or buy back any shares (other than in connection with the
forfeiture of any Performance Share Rights), or increase, reduce or
otherwise alter its share capital, or grant any options or rights for
the issue of shares or other securities (other than to a wholly
owned member of the Target Group);
(xii) enter into, terminate any participation in, or provide any additional
funding to any partnership, joint venture or similar commitment;
(xiii) acquire or sell any interest in land or enter into new material leases
or renew, terminate or change any material terms of any material
leases of any member of the Target Group (other than “Excluded
Leases” identified in the Target Disclosure Letter);
Scheme Implementation Agreement Page 44
(xiv) to the extent a member of the Target Group has standard terms of
trade, amend such standard terms of trade in place as at the date
of this agreement;
(xv) make any amendments to the trading terms with any material
customer from those which apply as at the date of this agreement,
other than in the ordinary course;
(xvi) enter into any agreements, commitments or arrangements to
acquire, any inventory, crop or raw material:
(A) which, in aggregate with all other agreements
commitments or arrangements for the period, are in
excess of $20,000,000; or
(B) which relates to any harvest beyond 30 June 2026;
(xvii) increase the remuneration of, make any bonus payment, retention
payment or termination payment to, grant any equity or equity
based awards to, or otherwise change the terms and conditions of
employment of any director, officer or any employee of any
member of the Target Group whose aggregate annual
remuneration package exceeds $200,000
except:
(A) as contemplated by the “Settlement Arrangements”
and/or “Excluded Employment Arrangements” as
identified in the Target Disclosure Letter;
(B) in accordance with any contractual entitlement existing
as at the date of this agreement and that has been fairly
disclosed to Bidder; and
(C) for salary increases in the ordinary course and consistent
with past business practice of the Target Group not
exceeding 3% of base salary per annum;
(xviii) accelerate the time of payment or vesting, or fund or otherwise
secure payment of, any compensation, rights or benefits (including
any equity or equity-based awards but excluding any acceleration
contemplated by those “Settlement Arrangements” as identified in
the Target Disclosure Letter) or make any material determination
under any incentive plan;
(xix) terminate (other than for “cause”, as determined consistent with
past practice) the employment of, or hire or promote:
(A) any employee or contractor for personal services of any
member of the Target Group with an aggregate annual
remuneration package that exceeds $200,000 per
annum; or
Scheme Implementation Agreement Page 45
(B) any Senior Manager;
(xx) make or forgive any loans to any current or former director,
employee or contractor for personal services of any member of the
Target Group (other than salary advances in the ordinary course of
business consistent with past practice), except to the extent it is an
“Excluded Loan Arrangement” as identified in the Target Disclosure
Letter;
(xxi) amend or terminate any employee benefit plan sponsored or
maintained by the Target Group (except for administrative
amendments to or annual renewals of such plans in the ordinary
course of business or any “Excluded Benefit” as identified in the
Target Disclosure Letter), or establish, adopt, or enter into any new
such arrangement;
(xxii) waive the restrictive covenant obligations of any director, officer,
employee or contractor for personal services, except to the extent
it is an “Excluded Waiver Arrangement” as identified in the Target
Disclosure Letter;
(xxiii) alter, adopt or revoke Target’s constitution or pass any resolution
of shareholders or any class of shareholders (other than: (i) the
Scheme Resolution; (ii) any resolution to appoint (or reappoint) a
director; and (iii) any resolution to authorise the Board to fix the
fees and expenses of its auditor);
(xxiv) fail to comply in any material respect with any laws and / or
regulations applicable to its business or do or omit to do anything
which results in a material risk of termination, revocation,
suspension, modification or non-renewal of any material
Authorisation held by it;
(xxv) fail to comply in any material respect with any material policies of
the Target Group in place as at the date of this agreement, including
in relation to anti-bribery and corruption, data protection and
information technology, and not make any material amendment to
such policies;
(xxvi) commence, compromise or settle any litigation or similar
proceedings for an amount exceeding $200,000, except to the
extent it is an “Excluded Dispute” as identified in the Target
Disclosure Letter;
(xxvii) make any change in accounting policies used by it, or in the
application of such accounting policies, (except in either case if
required by a change in International Financial Reporting
Standards);
Scheme Implementation Agreement Page 46
(xxviii) other than in accordance with past practice, make, change or
revoke any material Tax election, file any amended Tax return,
settle any Tax claim, audit or action, surrender any right to claim a
material Tax refund, offset or other reduction in Tax liability; or
change its method of Tax accounting, in each case, if such action
would have the effect of increasing the Tax liabilities of the Target
Group by an amount that exceeds $200,000;
(xxix) enter into, amend or close out any material foreign exchange,
interest rate, swap, derivative or hedge with a transaction value
exceeding $200,000 (other than to the extent reasonably required
to manage the foreign exchange or interest rate risk of the Target
Group);
(xxx) make any material change to any publicly stated corporate
strategy;
(xxxi) enter into any contract, commitment or arrangement, or make any
payment to any shareholder of the Target Group or a
Representative of the Target Group other than in the ordinary
course of business;
(xxxii) enter into a “major transaction” for the purposes of the Companies
Act;
(xxxiii) enter into, or vary, any agreement or arrangement to which Listing
Rule 5.1.1 applies, or would apply but for the granting of any waiver
or ruling by NZX; or
(xxxiv) agree, conditionally or otherwise, to do any of the things referred
to in the preceding paragraphs of this clause 9.3(m), or announce
or represent to any person that any of those things will be done,
except:
(n) with the prior written consent of Bidder;
(o) to the extent that matter is expressly and specifically provided for in the FY25
or FY26 budgets for Target Group (as disclosed to Bidder prior to the date of
this agreement);
(p) to the extent the relevant act or omission was fairly disclosed in the Due
Diligence Material;
(q) to the extent necessary to comply with any law (including the Commerce Act
1986 and the Companies Act 1993 (and, in particular, sections 131 to 138
(inclusive)) or any regulatory requirement or direction of a Government
Agency;
(r) as necessary for any member of the Target Group to perform its contractual
obligations (as in place as at the date of this agreement);
Scheme Implementation Agreement Page 47
(s) as reasonably and prudently required to respond to any emergency,
pandemic, act of God or other disaster; or
(t) to the extent that it is expressly required to do, permitted to do, or is
permitted not to do, under or in accordance with this agreement,
and in the case of the situations described in 9.3(q), (s) or (t) above, only for so long as
and to the extent that those things are strictly required and provided that Target
informs Bidder as soon as possible of the actions taken or proposed to be taken, and,
to the extent practicable, considers in good faith any feedback or suggestions made by
Bidder as to the proposed course of action. The parties note that the objective of this
clause 9.3 is that no action is taken or not taken, which may affect the future prospects
of the Target Group, without reasonable involvement of Bidder.
9.4 Transition Committee:
(a) As soon as reasonably practicable, and in any event within 5 Business Days
after the date of this agreement, Target and Bidder will form a transition
committee (the Transition Committee) in accordance with this clause 9.4.
The Transition Committee will, subject to this agreement, establish its terms
of reference, meeting schedules and escalation methodologies.
(b) The Transition Committee will comprise three representatives of each of
Target and Bidder. A party may appoint, replace or nominate a
representative by giving written notice to the other party, provided that
Target’s appointees must be approved by Bidder (acting reasonably).
(c) The Transition Committee will, subject at all times to applicable law:
(i) co-ordinate implementation of the Scheme between the parties;
(ii) co-ordinate preparation for the transition of ownership of Target
to Bidder;
(iii) discuss and resolve matters arising in relation to this agreement or
the Transaction within its terms of reference;
(iv) undertake any other matters reasonably requested by a party that
are material in connection with the Transaction; and
(v) be a forum for reasonable discussion of matters arising from
information provided pursuant to clause 9.1.
(d) The representatives of Target on the Transition Committee will have
authority to submit matters that would otherwise be restricted under
clause 9.3 to Bidder for approval in accordance with clause 9.3(n).
(e) The representatives of Bidder on the Transition Committee will have
authority to provide consent in writing on behalf of Bidder for the purposes
Scheme Implementation Agreement Page 48
of clause 9.3(n) to any actions of the Target Group that would otherwise be
restricted under clause 9.3.
(f) To the extent that:
(i) the Target seeks Bidder’s written approval in respect of any action,
matter, event, or circumstance; or
(ii) the Bidder requests the Target take any action or refrain from
taking any action; or
(iii) the Transition Committee considers any action, matter, event or
circumstance that is likely to have an impact on Total Net
Indebtedness of the Target Group and such action, matter, event
or circumstance is either: (A) approved by a Bidder representative
of that Transition Committee and done; or (B) declined by a Bidder
representative of that Transition Committee and not done,
the Transition Committee will, subject to the proviso below, determine (in
good faith) the estimated impact of such action, matter, event or
circumstance in advance of the Target Group taking, or not taking, such
action (each amount so determined being an Excluded Total Net
Indebtedness Impact). If at any time the Target becomes aware that the
actual impact of the relevant decision is or will likely be materially different
to the Excluded Total Net Indebtedness Impact, it will promptly notify the
Transition Committee, which must determine (in good faith) whether to
adjust the Excluded Total Net Indebtedness Impact. Where an action,
matter, event or circumstance is not included in the Business Plan and such
action, matter, event or circumstance is declined by a Bidder representative
of the Transition Committee and not done, it shall be deemed to not have an
Excluded Total Net Indebtedness Impact (unless the parties expressly agree
otherwise).
9.5 Consents to change of control and waivers of pre-emptive and other rights:
(a) Target will use reasonable endeavours to identify those of its material
contracts which require a counterparty notification or consent in relation to
the change of control of Target or a waiver, by a counterparty, in respect of
rights (including rights arising for Target’s financiers under Target’s financing,
including in relation to an event of review or prepayment event, howsoever
described) that arise as a result of the Scheme (each a CoC Contract), and
provide each such CoC Contract (or a summary of such CoC Contract) to the
Bidder.
(b) Unless agreed otherwise in writing between Bidder and Target:
(i) Target and Bidder will agree, in good faith, a communications plan
to notify the relevant counterparty of the implications of the
Scheme under the relevant contract;
Scheme Implementation Agreement Page 49
(ii) Target will, and will procure that each member of the Target Group
will, use reasonable endeavours to obtain the consents or waivers
required; and
(iii) Bidder must co-operate with and use reasonable endeavours to
assist Target to obtain the consents or waivers required,
it being agreed that nothing in this clause 9.5 will require either party to pay
any money or provide any other valuable consideration to or for the benefit
of any person.
9.6 Communications Protocols: The parties acknowledge their obligations under the
Commerce Act 1986 and agree that all communications and sharing of information
pursuant to this clause 9 shall be effected in a manner which complies with the
Communications Protocols.
10. REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS
10.1 Target representations, warranties and undertakings:
(a) Target represents and warrants to Bidder:
(i) on the date of this agreement;
(ii) at 8.00am on the date that the Scheme Booklet is sent to
Shareholders;
(iii) immediately prior to the last affidavits being filed in respect of the
Final Orders; and
(iv) at 8.00am on the Implementation Date,
that each of the Target Warranties is true, accurate and not misleading.
(b) Target undertakes to Bidder to comply with each of the Target Undertakings.
(c) The Target Warranties are given subject to and are qualified by matters and
circumstances:
(i) fairly disclosed to Bidder in the Due Diligence Material (other than
in respect of the Fundamental Warranties); and
(ii) which, as at the date of this agreement, are within the actual
knowledge of Bidder which for these purposes will be taken to
include (and be limited to) the facts, matters and circumstances
which the following individuals are actually aware as at the date of
this agreement: Mark Stewart, Michael Tod, Mark Sadd, Warwick
Webb, Michael Pritchard and Nigel Watson.
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10.2 Bidder representations, warranties and undertakings:
(a) Bidder represents and warrants to Target:
(i) on the date of this agreement;
(ii) at 8.00am on the date that the Scheme Booklet is sent to
Shareholders;
(iii) immediately prior to the last affidavits being filed in respect of the
Final Orders; and
(iv) at 8.00am on the Implementation Date,
that each of the Bidder Warranties is true, accurate and not misleading.
(b) Bidder undertakes to Target to comply with each of the Bidder Undertakings.
10.3 Indemnity by Target: Subject to clause 13.6, Target indemnifies Bidder against, and
must pay to Bidder on demand an amount equal to, all Losses directly incurred or
suffered by the Bidder Indemnified Persons arising out of or in connection with:
(a) any matter or circumstance that results in any of the Target Warranties being
untrue, inaccurate or misleading when given; or
(b) any breach of the Target Undertakings.
10.4 Indemnity by Bidder: Subject to clause 13.6, Bidder indemnifies Target against, and
must pay to Target on demand an amount equal to, all Losses directly incurred or
suffered by the Target Indemnified Persons arising out of or in connection with:
(a) any matter or circumstance that results in any of the Bidder Warranties being
untrue, inaccurate or misleading when given; or
(b) any breach of the Bidder Undertakings.
10.5 Status of representations, warranties, undertakings and indemnities: Each
representation and warranty, undertaking and indemnity made or given under this
clause 10 is severable and survives termination of this agreement and each
undertaking and indemnity given in this clause 10 is a continuing obligation.
10.6 Scheme becoming Effective: After the Scheme becomes Effective, any breach of the
representations and warranties or the undertakings made or given under this clause 10
may only give rise to a claim for damages or under the indemnities in this clause 10
and does not entitle a party to terminate this agreement.
11. RELEASES
11.1 Release of Target Indemnified Persons: Bidder waives and releases, and must procure
that each member of the Bidder Group waives and releases, all rights and claims which
it may have against any Target Indemnified Person (other than Target) in respect of
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any misrepresentation, inaccuracy or omission in or from any information or advice
given by that Target Indemnified Person in connection with any representation,
warranty or undertaking given by Target in this agreement or the preparation of the
Target Information or the Due Diligence Material except where the Target Indemnified
Person has engaged in wilful misconduct or fraud. The parties acknowledge and agree
that:
(a) Target has sought and obtained the waiver and release in this clause 11.1 as
agent for and on behalf of each Target Indemnified Person and may enforce
the provisions of this clause 11.1 on behalf of any Target Indemnified Person;
(b) any Target Indemnified Person may plead this clause 11.1 in response to any
claim made by any member of the Bidder Group against them; and
(c) the undertakings contained in this clause 11.1 are given for the benefit of
each Target Indemnified Person and are intended to be enforceable against
Bidder by each Target Indemnified Person in accordance with the provisions
of the Contract and Commercial Law Act 2017.
11.2 Release of Bidder Indemnified Persons: Target waives and releases, and must procure
that each member of the Target Group waives and releases, all rights and claims which
it may have against any Bidder Indemnified Person (other than Bidder) in respect of
any misrepresentation, inaccuracy or omission in or from any information or advice
given by that Bidder Indemnified Person in connection with any representation,
warranty or undertaking given by Bidder in this agreement or the preparation of the
Bidder Information except where the Bidder Indemnified Person has engaged in wilful
misconduct or fraud. The parties acknowledge and agree that:
(a) Bidder has sought and obtained the waiver and release in this clause 11.2 as
agent for and on behalf of each Bidder Indemnified Person and may enforce
the provisions of this clause 11.2 on behalf of any Bidder Indemnified Person;
(b) any Bidder Indemnified Person may plead this clause 11.2 in response to any
claim made by any member of the Target Group against them; and
(c) the undertakings contained in this clause 11.2 are given for the benefit of
each Bidder Indemnified Person and are intended to be enforceable against
Target by each Bidder Indemnified Person in accordance with the provisions
of the Contract and Commercial Law Act 2017.
11.3 D&O Insurance:
(a) Bidder acknowledges that, subject to clause 11.3(b), Target may, prior to the
Implementation Date, enter into a run-off directors' and officers' liability
insurance policy that is effective on the Implementation Date in respect of
any Target Directors or officers (or the directors or officers of any other
member of the Target Group) for a seven year period (the D&O Run-off
Policy) and pay all premiums required upfront. The Target shall ensure such
premium is paid by in full by 5.00pm on the day prior to the Implementation
Date.
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(b) Provided that the D&O Run-off Policy is, to the extent practicable, obtained
at normal commercial rates and on terms consistent with the terms of
Target's existing directors' and officers' liability insurance policy, Bidder
agrees that:
(i) Target entering into and paying the premium for the D&O Run-off
Policy does not breach any provision of this agreement; and
(ii) after the Implementation Date it will not, and will procure that no
member of the Target Group will, vary or cancel the D&O Run-off
Policy (for so long as such entity remains a member of the Target
Group).
(c) Target and Bidder will consult in good faith on the selection of the D&O Run-
off Policy.
(d) Target will keep Bidder informed of material developments and
communications with brokers and insurers in relation to the obtaining of the
D&O Run-off Policy.
(e) Following the Implementation Date, to the extent permitted by law, Bidder
will procure that Target uses reasonable endeavours to retain a copy of the
Target’s records in a manner consistent with past practice and maintains in
place all indemnities and associated rights of access to information provided
by Target for the benefit of the current and former directors and officers of
Target (including any indemnity provided in accordance with, or set out in,
Target's constitution) and which have been fairly disclosed to Bidder in the
Due Diligence Material.
12. EXCLUSIVITY
12.1 No shop restriction: Subject to clause 12.12, during the Exclusivity Period, Target must
not, and must procure that each of its Representatives does not, directly or indirectly:
(a) solicit, invite, encourage, initiate or otherwise seek to procure any
Competing Proposal or any other offer, proposal, expression of interest,
enquiry, negotiation or discussion with any Third Party in relation to, or for
the purpose of, or that may reasonably be expected to encourage or lead to,
a Competing Proposal; or
(b) assist, encourage, procure or induce any person to do any of the things
referred to in clause 12.1(a) on its behalf.
12.2 No talk restriction: Subject to clause 12.3 and 12.12, during the Exclusivity Period
Target must not, and must procure that each of its Representatives does not, directly
or indirectly:
(a) enter into, permit, continue or participate in, negotiations or discussions
with any Third Party in relation to a Competing Proposal, or for the purpose
of or that may reasonably be expected to encourage or lead to a Competing
Proposal; or
Scheme Implementation Agreement Page 53
(b) assist, encourage, procure or induce any person to do any of the things
referred to in clause 12.2(a) on its behalf; or
(c) communicate to any person an intention to do any of the things referred to
in clause 12.2(a),
even if the Competing Proposal was not directly or indirectly solicited, invited,
encouraged, initiated or otherwise procured by Target or any of its Representatives,
was received before the date of this Agreement and/or has been publicly announced.
12.3 No talk exception: The restriction in clause 12.2 does not apply to the extent that it
restricts Target or its Representatives from taking or refusing to take any action with
respect to a bona fide Competing Proposal (which was not solicited, invited,
encouraged or initiated in contravention of clause 12.1) if:
(a) the Board has determined, after taking advice from its external financial
adviser, that the Competing Proposal is, or is reasonably capable of
becoming, a Superior Proposal or would be reasonably likely to constitute, or
is reasonably capable of becoming, a Superior Proposal if it were to be
proposed; and
(b) acting in good faith and after having taken written advice from its external
legal advisers, the Board has determined that failing to respond to such
Competing Proposal would be likely to constitute a breach of the fiduciary
duties or statutory obligations of any member of the Board.
12.4 No due diligence restriction: Subject to clause 12.5 and clause 12.12 but without
limiting clause 12.2, during the Exclusivity Period, Target must not, and must procure
that each of its Representatives does not, directly or indirectly:
(a) disclose to any Third Party, or cause or permit any Third Party to receive, any
non-public information relating to Target or any member of the Target Group
that may reasonably be expected to assist such Third Party in formulating,
developing or finalising a Competing Proposal; or
(b) assist, encourage, procure or induce any person to do any of the things
referred to in clause 12.4(a) on its behalf.
12.5 No due diligence exception: The restriction in clause 12.4 does not apply in respect of
a bona fide Competing Proposal (which was not solicited, invited, encouraged or
initiated in contravention of clause 12.1) if all of the following requirements are
satisfied:
(a) the Board has determined, after taking advice from its external financial
adviser, that the Competing Proposal is, or is reasonably capable of
becoming, a Superior Proposal or would be reasonably likely to constitute, or
reasonably capable of becoming, a Superior Proposal if it were to be
proposed;
Scheme Implementation Agreement Page 54
(b) acting in good faith and after having taken written advice from its external
legal advisers, the Board has determined that failing to respond to such
Competing Proposal would be likely to constitute a breach of the fiduciary
duties or statutory obligations of any member of the Board;
(c) the Third Party has first entered into a written agreement in favour of Target
restricting the use and disclosure, by the Third Party and its affiliates and
advisers, of the information made available to the Third Party, on terms not
substantially more favourable to the Third Party than those in the
Confidentiality Agreement; and
(d) to the extent that any information made available to the Third Party has not
previously been provided to Bidder (or differs from any information
previously provided to Bidder), Target provides that information to Bidder at
the same time as it is provided to the Third Party.
12.6 General notification obligations:
(a) During the Exclusivity Period, Target must, as soon as practicable in the
circumstances and in any event within 48 hours, notify Bidder if:
(i) Target or any of its Representatives receives any Competing
Proposal or any inquiry, approach, correspondence or other
communication from a Third Party to initiate any discussions or
negotiations that could reasonably be expected to lead to a
Competing Proposal; or
(ii) Target or any of its Representatives receives any request for
information relating to any member of the Target Group or its
business or any request for access to non-public information of any
member of the Target Group in connection with a current or future
Competing Proposal; or
(iii) Target takes, or proposes to take, any action in reliance on the
exceptions in clause 12.3 or clause 12.5,
and such notification will include reasonable detail of the terms of such
approach, action or circumstances (including, for the avoidance of doubt and
to the extent applicable, the information specified in clause 12.6(b)).
(b) A notice given under clause 12.6(a) must be accompanied by all applicable
material details of the relevant event, including (as the case may be):
(i) the identity of the person who provided the Competing Proposal or
made the relevant inquiry or approach to initiate discussions or to
whom any information is proposed to be provided as referred to in
clause 12.6(a);
(ii) all material terms and conditions of the Competing Proposal, such
as the amount and form of consideration to be offered, the
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conditions to which it is subject, the proposed timetable and any
break fee arrangements (to the extent known);
(iii) whether or not Target intends to progress or respond to the
relevant inquiry, approach, offer, bid, proposal or request (or
whether, acting in good faith, Target has not yet been able to make
a decision); and
(iv) the nature of the information or access requested and / or provided
or action proposed to be taken.
(c) Without limiting Target's other obligations under this clause 12.6, Target will
keep Bidder reasonably informed on a prompt and timely basis of the status
and any developments regarding any Competing Proposal which Target
(acting reasonably) considers are material, within 24 hours after receipt or
delivery thereof, including:
(i) any update or amendment to the terms of the Competing Proposal;
and
(ii) if a notice given under clause 12.6(a) states, in accordance with
clause 12.6(b)(iii), that Target has not yet decided whether it
intends to progress or respond to the relevant inquiry, approach,
offer, bid, proposal or request (or similar statement), updating
Bidder on a prompt and timely basis when it makes such a decision.
12.7 Matching rights:
(a) Without limiting clause 12.1 and 12.2, during the Exclusivity Period, Target:
(i) must not, and must procure that each of its Representatives does
not, enter into, or agree to enter into, any agreement, arrangement
or understanding to undertake, give effect to or implement any
Competing Proposal;
(ii) must use best endeavours to procure that no Target Director
changes, qualifies or withdraws his or her recommendation in
favour of the Scheme in order to publicly recommend any
Competing Proposal; and
(iii) must not make, and must use best endeavours to ensure that no
Target Director makes, any public statement recommending any
Competing Proposal to Shareholders,
unless and until:
(iv) acting in good faith and after having taken written advice from its
external financial and legal advisers, the Board has determined
that:
(A) the Competing Proposal is a Superior Proposal; and
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(B) failing to take one or more of the actions specified in
clauses 12.7(a)(i) to (iii) would be likely to constitute a
breach of the fiduciary duties and statutory obligations of
the Target Directors; and
(v) Target has, as soon as reasonably practicable after the Board has
determined that the Competing Proposal is a Superior Proposal in
accordance with clause 12.7(a)(iv), provided Bidder with:
(A) all material terms of the Competing Proposal in
accordance with clause 12.6 to the extent not already
provided;
(B) a written explanation as to why Target considers the
Competing Proposal to be a Superior Proposal; and
(C) to the extent not already provided under clause 12.5(d),
any information that is required to be provided to Bidder
under clause 12.5(d);
(vi) Target has given Bidder at least 5 Business Days from the date that
Target gives notice to Bidder under clause 12.7(a)(v) (including all
of the information required to be provided under that clause) in
respect of the Competing Proposal (Matching Period) in which to
provide a Counter Proposal in accordance with clause 12.7(b); and
(vii) upon the expiry of the Matching Period:
(A) Bidder has not provided a Counter Proposal under
clause 12.7(b); or
(B) if Bidder has provided a Counter Proposal under
clause 12.7(b) and Target having complied with
clause 12.8 then, acting in good faith and after having
taken written advice from its external financial and legal
advisers, the Board has determined that:
(AA) the Competing Proposal nevertheless continues
to be a Superior Proposal (taking into account
the Counter Proposal); and
(BB) failing to respond to such Competing Proposal
would be likely to continue to constitute a
breach of the fiduciary duties or statutory
obligations of the Board.
(b) During the Matching Period, Bidder may offer to amend the terms of the
Scheme and this agreement or make an alternative proposal to Target or
Shareholders with a view to providing an outcome for Shareholders that,
Scheme Implementation Agreement Page 57
taken as a whole, is no less favourable to Shareholders than those offered
under the relevant Competing Proposal (a Counter Proposal).
12.8 Target's response to Counter Proposal: If, during the Matching Period, Bidder makes
a Counter Proposal:
(a) Target must procure that the Board considers the Counter Proposal in good
faith;
(b) if the Board determines that the terms and conditions of the Counter
Proposal, taken as a whole, are less favourable to Shareholders than those in
the relevant Competing Proposal, then Target must, for a period of not less
than 48 hours, consult with Bidder as to the relative merits of the Counter
Proposal and the Competing Proposal; and
(c) if the Board, acting in good faith, determines that the terms and conditions
of the Counter Proposal taken as a whole are no less favourable to
Shareholders than those in the relevant Competing Proposal, then:
(i) the parties must use their reasonable endeavours to agree and
enter into such documentation as is necessary to give effect to and
implement the Counter Proposal as soon as reasonably practicable;
and
(ii) Target must use all reasonable endeavours to procure that each
Target Director makes a public statement recommending the
Counter Proposal to Shareholders.
12.9 Changes to Proposals: Any material change to a Competing Proposal, including:
(a) any material change to the terms referred to in clause 12.6(b); or
(b) any incomplete or non-binding proposal or expression of interest becoming
complete, capable of acceptance or binding on the Third Party bidder,
will be taken to constitute a new Competing Proposal in respect of which Target must
separately comply with its obligations under clause 12.6 to clause 12.8.
12.10 Termination if unmatched Superior Proposal progresses: If Target has complied fully
with clause 12.6 in relation to a Competing Proposal and, in compliance with
clause 12.7:
(a) Target enters into, or agrees to enter into, any agreement, arrangement or
understanding to undertake, give effect to or implement the Competing
Proposal; or
(b) any Target Director changes, qualifies or withdraws his or her
recommendation in favour of the Scheme in order to publicly recommend
the Competing Proposal; or
Scheme Implementation Agreement Page 58
(c) Target makes, or any Target Director makes, any public statement
recommending the Competing Proposal to Shareholders,
then either party may terminate this agreement by notice to the other party in
accordance with clause 14.1(f) or 14.2(c) (as appropriate).
12.11 Standstill arrangements with other parties: During the Exclusivity Period, except with
the prior written consent of Bidder, Target must not amend or waive the terms of any
standstill agreement or arrangement between Target and any person (other than a
member of the Bidder Group), other than in circumstances where clause 12.7(a)(vii)
applies.
12.12 Normal provision of information: Nothing in this clause 12 prevents Target or its
Representatives from:
(a) providing information required to be provided by law, any court of
competent jurisdiction, any Government Agency or the NZX Listing Rules;
(b) providing market announcements through the NZX market announcements
platform as required by the NZX Listing Rules or as are otherwise necessary
or desirable (in the opinion of Target, acting reasonably) to inform
Shareholders of key matters in relation to or in connection with the Scheme;
or
(c) making presentations to, and responding to bona fide enquiries from,
stockbrokers, portfolio investors and equity market analysts in relation to the
Scheme or in accordance with its usual practices.
13. BREAK FEE AND REVERSE BREAK FEE
13.1 Acknowledgement and agreement: Target (on the one hand) and Bidder (on the other
hand) each acknowledges and agrees that:
(a) the other and the members of its Group have incurred and will continue to
incur significant costs and expenses in pursuing the Transaction including:
(i) advisory costs;
(ii) costs of management and directors' time;
(iii) in respect of Bidder, funding costs;
(iv) out of pocket expenses; and
(v) opportunity costs of pursing the Transaction or in not pursuing
alternative transactions or business opportunities;
(b) the costs and expenses actually incurred by each party and the members of
its Group are of such nature that they cannot accurately be ascertained;
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(c) the Break Fee and Reverse Break Fee are each liquidated damages based on
a genuine and reasonable estimate of the costs and expenses that have been
or will be actually incurred by the relevant party and the members of its
Group in pursuing the Transaction;
(d) the parties have negotiated the inclusion of this clause 13 in this agreement
and would not have entered into this agreement without it; and
(e) each party has received external legal and financial advice in relation to this
clause 13 and has concluded that it is reasonable and appropriate for it to
agree to payment of the Break Fee or Reverse Break Fee (as applicable) in
the circumstances described in clause 13.2 or 13.3 (as applicable) in order to
secure the other party's entry into this agreement.
13.2 Circumstances where Break Fee payable:
(a) Subject to the remainder of this clause 13, Target must pay the Break Fee to
Bidder if:
(i) at any time before this agreement is terminated a Competing
Proposal is announced, and the person making the Competing
Proposal (or one or more persons that Control, or are under the
Control of, that person) completes, within 12 months of the date of
termination, a transaction that is, in all material respects, of the
kind referred to in the definition of Competing Proposal; or
(ii) at any time before this agreement is terminated, any Target
Director:
(A) fails to make the Recommendation; or
(B) fails to give the Voting Commitment; or
(C) changes, qualifies or withdraws the Recommendation or
the Voting Commitment; or
(D) makes any public statement materially inconsistent with
the Recommendation or the Voting Commitment,
in each case except:
(E) in response to a Superior Proposal (subject to Target's
compliance with clause 12.7); or
(F) where, the Independent Adviser issues an Independent
Adviser's Report which concludes that the Consideration
is not within or above the Independent Adviser's
valuation range for the Shares; or
(iii) Bidder terminates this agreement as permitted under
clauses 14.1(a), 14.1(b), 14.1(c) or 14.1(d); or
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(iv) either party terminates this agreement under clause 12.10.
(b) If the exception in paragraph 13.2(a)(ii)(F) applies, the Break Fee will
nonetheless be payable by Target to Bidder if, prior to the issue of the
Independent Adviser's Report concluding that the Consideration was not
within or above the Independent Adviser's valuation range, a Competing
Proposal is received by Target or made public and within 12 months after the
date that the Competing Proposal is received or made public, the person
making the Competing Proposal or one or more persons that Control or are
under the Control of that person completes in all material respects a
transaction of the kind referred to in the definition of Competing Proposal.
13.3 Circumstances where Reverse Break Fee payable: Subject to the remainder of this
clause 13, Bidder must pay the Reverse Break Fee to Target if Target terminates this
agreement as permitted under clause 14.2(a) or 14.2(b).
13.4 Payment of Break Fee or Reverse Break Fee: If the Break Fee or Reverse Break Fee
become payable under this agreement, Target or Bidder (as the case requires) must
pay it to or as directed by the other party without withholding or set-off (except as
required by law) within 10 Business Days after receipt of a written demand for
payment from the other party. The obligation to make the payment described in the
preceding sentence will be satisfied by the payment of the relevant amount in
immediately available funds to the recipient's nominated account. For the avoidance
of doubt, if only a portion of the Break Fee or the Reverse Break Fee is held by a Court
to be enforceable, that portion which is payable must be paid within 10 Business Days
of the relevant determination.
13.5 Break Fee or Reverse Break Fee not payable: Notwithstanding anything else in this
agreement:
(a) neither the Break Fee nor Reverse Break Fee is payable if the Scheme
becomes Effective;
(b) the Break Fee and Reverse Break Fee are each payable only once;
(c) in the event that Target is required to pay the Break Fee under this clause 13,
from that point forward, in no circumstances will Bidder be required to pay
the Reverse Break Fee;
(d) in the event that Bidder is required to pay the Reverse Break Fee under this
clause 13, from that point forward, in no circumstances will Target be
required to pay the Break Fee; and
(e) in no circumstances will Bidder be required to pay both the Reverse Break
Fee and payment of any damages or any Losses under clause 10.4.
13.6 Sole and exclusive remedy:
(a) Subject to clause 13.6(c) and 13.9, Bidder acknowledges and agrees that
payment of the Break Fee is the sole and exclusive remedy available to Bidder
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in connection with any event or occurrence referred to in clause 13.2 and
Target is not liable for any loss or damage arising in connection with any such
event or occurrence other than for any liability that it may have to pay Bidder
the Break Fee under this clause 13.
(b) Subject to clause 13.6(c) and 13.9, Target acknowledges and agrees that
payment of the Reverse Break Fee is the sole and exclusive remedy available
to Target in connection with any event or occurrence referred to in 13.3 and
Bidder is not liable for any loss or damage arising in connection with any such
event or occurrence other than for any liability that it may have to pay Target
the Reverse Break Fee under this clause 13.
(c) Nothing in this clause 13.6 limits Target’s or Bidder’s liability for fraud.
13.7 Amendments to Break Fee Arrangements: If any of the following occurs:
(a) the Takeovers Panel indicates to either party in writing that it requires any
modification to the amount of the Break Fee or Reverse Break Fee or the
circumstances in which any of them is to be paid (the Break Fee
Arrangements) as a condition of not opposing the Scheme; or
(b) the Court requires any modification to the Break Fee Arrangements as a
condition of making orders convening the Scheme Meeting,
then the parties must amend this clause 13 to the extent required to give effect to the
requirements of the Takeovers Panel or the Court, as the case may be, and in the
circumstances referred to in clause 13.7(b) must give any required undertakings.
13.8 Qualifications:
(a) To the extent that any amounts have already been paid under this clause 13
and the Scheme becomes Effective, such amounts will be immediately
refunded to Target or Bidder (as applicable).
(b) A statement that shareholders should 'take no action pending further advice'
(or words with a similar effect) is not regarded as a change, qualification or
withdrawal of the Recommendation and Voting Commitment, or a statement
inconsistent with the Recommendation, for the purposes of
clause 13.2(a)(ii).
13.9 Specific performance and other rights:
(a) Subject to clause 13.9(c), nothing in this agreement precludes Target from
suing Bidder for specific performance.
(b) Subject to clause 13.9(d), nothing in this agreement precludes Bidder from
suing Target for specific performance.
(c) Target’s right to receive the Reverse Break Fee or payment of any damages
or any Losses under clause 10.4 will not limit or otherwise affect Target’s
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right to seek specific performance as provided in this clause 13.9, provided
that in no event will Target be entitled to receive both:
(i) specific performance resulting in implementation of the Scheme
and payment of the Reverse Break Fee; or
(ii) specific performance resulting in implementation of the Scheme
and payment of any damages or any Losses under clause 10.4.
(d) Bidder’s right to receive the Break Fee or payment of any damages or any
Losses under clause 10.3 will not limit or otherwise affect Bidder’s right to
seek specific performance as provided in this clause 13.9, provided that in no
event will Bidder be entitled to receive both:
(i) specific performance resulting in implementation of the Scheme
and payment of the Break Fee; or
(ii) specific performance resulting in implementation of the Scheme
and payment of any damages or any Losses under clause 10.3.
(e) Bidder agrees that if Target seeks damages from Bidder, any Loss suffered by
Shareholders as a result of a breach of this agreement or the Deed Poll by
Bidder will be deemed to be suffered by Target (except to the extent that
Bidder pays damages directly to Shareholders on account of any Loss
suffered due to the applicable breach).
13.10 Target's limitation of liability: Notwithstanding any other provision of this agreement
but subject to clause 13.9:
(a) the maximum aggregate liability of Target to Bidder under or in connection
with this agreement, howsoever arising and including in respect of any
breach of this agreement, will be the amount of the Break Fee;
(b) a payment by Target of the Break Fee represents the sole and absolute
liability of Target to Bidder under or in connection with this agreement and
no further damages, fees, expenses or reimbursements of any kind will be
payable by Target to Bidder in connection with this agreement; and
(c) the amount of the Break Fee payable to Bidder under this clause 13 shall be
reduced by the amount of any loss or damage recovered by Bidder in relation
to a breach of any other clause of this agreement,
provided that nothing in this clause 13.10:
(d) limits Target’s liability for fraud or intentional breach of this agreement; or
(e) prevents:
(i) Target from recovering actual costs it incurs in connection with this
agreement and the Scheme (to the extent such costs exceed the
Break Fee); or
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(ii) Shareholders (or Target on behalf of Shareholders) from bringing a
claim for and recovering any Loss,
in either case, if Bidder has breached its obligation to pay the Consideration
to Shareholders pursuant to clause 2.3.
13.11 Bidder's limitation of liability: Notwithstanding any other provision of this agreement
but subject to clause 13.9:
(a) the maximum aggregate liability of Bidder to Target under or in connection
with this agreement, howsoever arising and including in respect of any
breach of this agreement, will be the amount of Reverse Break Fee;
(b) a payment by Bidder of the Reverse Break Fee represents the sole and
absolute liability of Bidder to Target under or in connection with this
agreement and no further damages, fees, expenses or reimbursements of
any kind will be payable by Bidder to Target in connection with this
agreement; and
(c) the amount of the Reverse Break Fee payable to Target under this clause 13
shall be reduced by the amount of any loss or damage recovered by Target
in relation to a breach of any other clause of this agreement,
provided that nothing in this clause 13.11 limits Bidder's liability for fraud or
intentional breach of this agreement.
13.12 Trigger Disputes:
(a) A Trigger Dispute is to be provisionally determined in accordance with
clauses 13.12 to 13.14.
(b) If a Trigger Dispute arises, the party contending that the relevant event has
occurred must, as soon as reasonably practicable, deliver a notice specifying
the details and particulars of its position, the facts upon which it relies, and
enclosing copies of the documents upon which it relies and a statement (not
more than 10 standard pages) explaining the rationale for its position on the
Trigger Dispute. Such statement must be signed or endorsed by a senior
executive or director of the relevant party.
(c) The other party must, within 10 Business Days of the receipt of the
documents provided for in clause 13.12(b) above, deliver a notice specifying
the details and particulars of its position, the facts upon which it relies, and
enclosing copies of the documents upon which it relies and a statement (not
more than 10 standard pages) explaining the rationale for its position on the
Trigger Dispute. Such statement must be signed or endorsed by a senior
executive or director of the relevant party.
(d) Following exchange of statements in accordance with clause 13.12(c), each
party will designate one or more representatives to engage in good faith
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discussions to attempt to resolve the Trigger Dispute within five Business
Days.
13.13 Expert Determination: If the Trigger Dispute is not resolved within 10 Business Days
of the exchange of the documents provided for under clause 13.12(c):
(a) either party may, by written notice to the other, refer the Trigger Dispute to
the Expert to be determined in accordance with sub-paragraphs (b) to (g)
below (such Expert to be appointed jointly by the parties on the basis of these
provisions);
(b) within 10 Business Days of the Expert being appointed, the party referring
the Trigger Dispute to the Expert must provide the Expert (copying the other
party) with:
(i) this agreement;
(ii) the statements provided in accordance with clause 13.12;
(iii) statement(s) of evidence signed or endorsed by a senior executive
or director of the relevant party in reply to the material provided
by the other party under clause 13.12(c), together with any
additional documents referred to in the statement(s); and
(iv) written submissions of not more than 10 standard pages in support
of that party's position;
(c) within 10 Business Days of receiving the documents specified in
clause 13.13(b), the other party must provide the Expert (copying the other
party) with:
(i) statement(s) of evidence signed or endorsed by a senior executive
or director of the relevant party in rejoinder to the statement(s) of
evidence provided by the other party under clause 13.13(b)(iii),
together with any additional documents referred to in its
statement(s); and
(ii) written submissions of not more than 10 standard pages in support
of that party's position;
(d) the parties will procure that the Expert makes his/her determination (with
reasons which substantiate the determination) within 4 weeks of receipt of
the information under clause 13.13(c);
(e) in determining the dispute, the Expert must act as an expert and not an
arbitrator;
(f) the parties agree that there will be no ex parte communication between any
party and the Expert regarding any matter in the Trigger Dispute and that all
written communications by any party to the Expert will be copied to the
other party; and
Scheme Implementation Agreement Page 65
(g) the Expert's fees will be borne equally by the parties.
13.14 Determination is provisional only:
(a) If the Expert determines that a payment is required to be made by a party
under this clause 13, then such payment will be made promptly in
accordance with clause 13.14(c).
(b) After either:
(i) the Expert delivers a decision on the Trigger Dispute; or
(ii) the Expert has failed to deliver a decision on the Trigger Dispute
within eight weeks of receipt of the information under
clause 13.13(c), whichever is earlier,
either party is at liberty to commence proceedings in the New Zealand courts
for the final determination of the Trigger Dispute and any other related
issues, provided that, if the Expert decides that a payment is required to be
made by a party under this clause 13, such payment must be made by that
party in accordance with clause 13.14(a) and clause 13.14(c) before
commencing proceedings.
(c) The party required to make a payment under clause 13.14(a) must:
(i) make such payment within 20 Business Days of the Expert's
determination; or
(ii) if it wishes to further litigate the merits of the Trigger Dispute,
within 20 Business Days of the Expert's determination:
(A) make such payment into a solicitor's trust account to be
held in escrow pending final determination of the Trigger
Dispute by a court, from which no appeal has been or
could be taken; and
(B) file proceedings in the High Court in respect of the Trigger
Dispute and continue thereafter to pursue such
proceedings expeditiously.
(d) It is acknowledged and agreed that:
(i) the purpose of clauses 13.12 to 13.14 (inclusive) is to deliver a
provisional payment outcome but without prejudicing either party
in relation to the further litigation of the underlying Trigger
Dispute; and
(ii) none of the conclusions or findings in the Expert's determination in
any way limit the parties' ability to have the merits of the Trigger
Scheme Implementation Agreement Page 66
Dispute determined on the merits, de novo and afresh through
proceedings in the New Zealand courts.
14. TERMINATION
14.1 Events affecting the Target Group: Subject to clause 14.3, Bidder may terminate this
agreement by giving notice in writing to Target before 8.00am on the Implementation
Date if:
(a) Target is in breach of any Target Warranty (or any event occurs or
circumstance arises that would cause any Target Warranty to be untrue, as
at 8.00am on the Implementation Date) where the consequences of that
breach (other than in respect of a Fundamental Warranty), or failure of a
Target Warranty to be true, are adverse and material in the context of the
Scheme and the Target Group (taken as a whole);
(b) Target is in breach of any Target Undertaking or any other provision under
this agreement, and that breach is adverse and material in the context of the
Scheme or to the Target Group (taken as a whole);
(c) Target breaches clauses 8.1, 8.2 or 12;
(d) a Prescribed Occurrence occurs on or after the date of this agreement
(which, in the case of those Prescribed Occurrences contemplated by
paragraphs 5 and 8 of Schedule 1, has not been remedied by 5.00pm on the
day prior to the Implementation Date);
(e) a Material Adverse Change occurs on or after the date of this agreement; or
(f) clause 12.10 applies and Target has not already terminated this agreement.
14.2 Events affecting Bidder: Subject to clause 14.3, Target may terminate this agreement
by giving notice in writing to Bidder before 8.00am on the Implementation Date if:
(a) a breach of any Bidder Warranty occurs (or any other event occurs or
circumstance arises that would cause any Bidder Warranty to be untrue as at
8.00am on the Implementation Date) where the consequences of that
breach, or the failure of the Bidder Warranty to be true, in each case are
adverse and material in the context of the Scheme;
(b) Bidder is in breach of any Bidder Undertaking or any other provision of this
agreement and that breach is adverse and material in the context of the
Scheme or to the Bidder Group taken as a whole; or
(c) clause 12.10 applies and Bidder has not already terminated this agreement.
14.3 Notice of termination: A party may only exercise a right of termination under
clause 14.1 or clause 14.2 if:
Scheme Implementation Agreement Page 67
(a) the party wishing to terminate has given notice to the other party before
8.00am on the Implementation Date setting out the circumstances that it
considers permit it to do so and stating its intention to do so;
(b) if the relevant circumstances are remediable, the relevant circumstances
have not been remedied within 10 Business Days after the time that the
notice is given or any shorter period ending at 8.00am on the
Implementation Date; and
(c) the party wishing to terminate does so before the earlier to occur of
15 Business Days after the time that the notice is given and 8.00am on the
Implementation Date.
14.4 Events affecting the Scheme:
(a) Either Target or Bidder may terminate this agreement by giving notice in
writing to the other at any time if the Independent Adviser’s Report
concludes, prior to the Scheme Meeting, that the value of the Consideration
is below the Independent Adviser’s valuation range for the Shares.
(b) Either Target or Bidder may terminate this agreement by giving notice in
writing to the other if the Scheme Meeting is held but the Scheme Resolution
is not passed by the requisite majorities in accordance with sections
236A(2)(a) and 236A(4) of the Companies Act and the terminating party has
complied in all material respects with its obligations under this agreement.
(c) Subject first to complying with clauses 7.3 and 7.4, either Target or Bidder
may terminate this agreement by giving notice in writing to the other party
if the Court determines not to grant the Final Orders and the terminating
party has complied in all material respects with its obligations under this
agreement.
(d) If the No Restraints Condition is not satisfied at 8.00am on the
Implementation Date, then either Bidder or Target may terminate this
Agreement by notice to the other, provided that the terminating party has
complied in all material respects with that party’s obligations under this
agreement.
(e) Either Target or Bidder may terminate this agreement by giving notice in
writing to the other if the Scheme has not become Effective by 5.00pm on
the End Date, provided that the terminating party's failure to comply with its
obligations under this agreement has not directly and materially contributed
to the Scheme not becoming Effective by the End Date.
14.5 Effect of termination: If this agreement is terminated under this clause 14 then:
(a) except as provided in clause 14.5(b) and 14.5(c), all the provisions of this
agreement cease to have effect and each party is released from its
obligations to further perform this agreement;
Scheme Implementation Agreement Page 68
(b) each party retains all rights that it has against the other party in respect of
any breach of this agreement occurring before termination; and
(c) the provisions of, and the rights and obligations of each party under, this
clause 14.5 and each of the Surviving Clauses survive termination of this
agreement.
14.6 No other termination:
(a) This clause 14 sets out the only rights for the parties to cancel, rescind or
terminate this agreement. No party has any right to cancel or terminate this
agreement whether before or after the implementation of the Scheme on
any other basis (as a result of any matter, information or circumstance),
including:
(i) for misrepresentation;
(ii) for repudiation, anticipatory breach or breach of this agreement;
or
(iii) in respect of any matter giving rise to, or the subject of, a claim
arising out of or in connection with this agreement (whether arising
in tort (including negligence), in contract, statute, by operation of
law or otherwise).
(b) The parties agree that sections 35 to 49 of the Contract and Commercial Law
Act 2017 do not apply to this agreement.
15. ANNOUNCEMENTS
15.1 Initial announcements: As soon as reasonably practicable after this agreement is
signed Target must issue an announcement in a form agreed with Bidder and including
a statement that contains:
(a) the Recommendation; and
(b) the Voting Commitment,
in each case in the absence of a Superior Proposal and subject to the Independent
Adviser's Report concluding that the Consideration is within or above the Independent
Adviser's valuation range for the Shares.
15.2 Other announcements: Each party must not make, and must procure that its
Representatives do not make, any public announcement concerning the Scheme or the
subject matter of this agreement other than:
(a) the announcement referred to in clause 15.1;
(b) an announcement which provides an update on progress with implementing
the Scheme or, in the case of Target, any administrative information in
relation to the Shareholders approving the Scheme at the Scheme Meeting
Scheme Implementation Agreement Page 69
by the requisite majorities in accordance with sections 236A(2)(a) and
236A(4) of the Companies Act;
(c) with the written consent of the other party, which must not be unreasonably
withheld or delayed; or
(d) if, and to the minimum extent, required by law, any court of competent
jurisdiction, any Government Agency or the NZX Listing Rules but if either
party is so required to make any announcement, it must promptly notify the
other party, where practicable and lawful to do so, before the announcement
is made and must co-operate with the other party regarding the timing and
content of such announcement or any action which the other party may
reasonably elect to take to challenge the validity of such requirement,
provided that the obligations in this clause will not prevent Bidder or Target from
responding to media and other stakeholders where not inconsistent with
announcements that are permitted to be made in accordance with the terms of this
agreement, including this clause 15.2.
16. PAYMENTS
16.1 Manner of payments: Unless otherwise expressly stated (or as otherwise agreed in
the case of a given payment), each payment to be made under this agreement must
be made in NZ$ by transfer of the relevant amount into the relevant account on or
before the date on which the payment is due and in immediately available funds,
without set-off or withholding (except as required by law). The relevant account for a
given payment is the account that the party due to receive the payment specifies, not
less than 10 Business Days before the date on which payment is due, by giving notice
to the party due to make the payment.
16.2 Default interest: If a party defaults in making any payment when due of any sum
payable under this agreement, it must pay interest on that sum from (and including)
the date on which payment is due until (but excluding) the date of actual payment
(after as well as before judgment) at an annual rate of 5% above the Reference Rate
on that sum, which interest accrues from day to day and must be compounded
monthly.
17. GST
17.1 Interpretation: Words and expressions that are defined in the GST Act have the same
meaning when used in this clause 17. For the purposes of this clause 17, references to
GST chargeable and input tax credit entitlements of any entity include GST chargeable
against, and the input tax credit entitlements of, the representative member of the
GST group of which the entity is a member.
17.2 Consideration exclusive of GST: For the avoidance of doubt, the parties agree that the
supply of Scheme Shares pursuant to this agreement is an exempt supply of a financial
service and therefore not subject to GST. All other stated amounts payable or
consideration to be provided under or in connection with this agreement do not
include GST (GST Exclusive Consideration).
Scheme Implementation Agreement Page 70
17.3 Payment of GST: If GST is chargeable on any supply made under or in connection with
this agreement the recipient must pay to the party that has made or will make the
supply (the Supplier), in addition to the GST Exclusive Consideration, an additional
amount equal to the GST chargeable on that supply (the Additional Amount). The
recipient must pay the Additional Amount without set-off, demand or deduction, at
the same time and in the same manner as any GST Exclusive Consideration for that
supply is required to be paid, except that the recipient is not required:
(a) to pay the Additional Amount unless and until the Supplier has issued a tax
invoice (or other similar document or information) under clause 17.4; or
(b) to pay any GST Default Amounts included in the Additional Amount if those
GST Default Amounts result from the Supplier failing to comply with its
obligations under the GST Act.
17.4 Tax invoice or taxable supply information: For any supply to which clause 17.3 applies,
the Supplier must issue a tax invoice (or other similar document or information) which
complies with the GST Act.
17.5 Adjustments: If an event referred to in section 25(1) of the GST Act occurs in relation
to a taxable supply made under or in connection with this agreement, the GST payable
on that supply will be recalculated to reflect that adjustment, a debit note or credit
note (or other similar document or information) will be issued as required by the GST
Act and an appropriate payment will be made between the parties.
17.6 Input tax credits: Notwithstanding any other provision of this agreement, if an amount
payable under or in connection with this agreement is calculated by reference to any
loss, damage, cost, expense, charges or other liability incurred or suffered by a party,
then the amount payable must be reduced by the amount of any input tax credit or
other deduction from output tax to which that entity is entitled in respect of the
acquisition of any supply to which the loss, damage, cost, expense, charge or other
liability relates.
18. NOTICES
18.1 Manner of giving notice: Any notice or other communication to be given under this
agreement must be in writing (which includes email) and may be physically delivered
or sent by email to the party to be served as follows:
(a) to Target at:
Address: 23 Wilson Road South, Paengaroa, Bay of Plenty, 3189,
New Zealand
Email: bridget.coates@comvita.com
For the attention of: Bridget Coates
with a copy (which does not constitute notice) to:
Email: andrew.matthews@simpsongrierson.com
toby.holborow@simpsongrierson.com
For the attention of: Andrew Matthews / Toby Holborow
Scheme Implementation Agreement Page 71
(b) to Bidder at:
Address: Level 1, 2 Hazeldean Road, Addington, Christchurch,
New Zealand
Email: mark.stewart@masthead.co.nz
For the attention of: Mark Stewart
with a copy (which does not constitute notice) to:
Email: michael.pritchard@maynewetherell.com /
callum.bailey@maynewetherell.com
For the attention of: Michael Pritchard / Callum Bailey
or at any such other address or email address notified for this purpose to the other
parties under this clause.
18.2 When notice given: Any notice or other communication is deemed to have been given:
(a) If physically delivered, on the date of delivery; or
(b) if sent by email:
(i) between 9.00am and 5.00pm on a Business Day in the jurisdiction
of the recipient (as recorded on the device from which the sender
sent the email), at the time of transmission unless the sender
receives an automated message that the email has not been
delivered (excluding an "out of office" automated message); or
(ii) if clause 18.2(b)(i) does not apply, at 9.00am on the Business Day
most immediately after the time of sending in the jurisdiction of
the recipient,
but if the notice or other communication would otherwise be taken to be
received after 5.00pm or on a day which is not a Business Day in the place of
receipt then the notice or communication is taken to be received at 9.00 am
on the next Business Day in the place of receipt.
18.3 Proof of service: In proving service of a notice or other communication, it is sufficient
to prove that delivery was made or that the envelope containing the communication
was properly addressed and posted either by prepaid post or by prepaid airmail or that
the e-mail was properly addressed and transmitted by the sender's server into the
network and there was no apparent error in the operation of the sender's e-mail
system, as the case may be.
18.4 Documents relating to legal proceedings: This clause 18 does not apply in relation to
the service of any claim form, notice, order, judgment or other document relating to
or in connection with any proceedings, suit or action arising out of or in connection
with this agreement.
Scheme Implementation Agreement Page 72
19. GENERAL
19.1 Amendments:
(a) This agreement may only be amended prior to the Scheme becoming
Effective.
(b) Any amendment to this agreement will only be effective if it is in writing and
signed by all the parties.
(c) Notwithstanding clauses 11.1(c) and 11.2(c) this agreement may be varied by
the parties to it without the approval of any Target Indemnified Person or
any Bidder Indemnified Person.
19.2 Assignments: None of the rights or obligations of a party under this agreement may
be assigned, transferred or novated without the prior written consent of the other
party.
19.3 Costs: Except as otherwise expressly provided in this agreement, each party must pay
the costs and expenses incurred by it in connection with entering into and performing
its obligations under this agreement, the Scheme and the Deed Poll.
19.4 Entire agreement: This agreement, the Scheme Plan and the Deed Poll, together,
contains the entire agreement between the parties relating to the Transaction and
supersedes all previous agreements, whether oral or in writing, between the parties
relating to the Transaction except for the Confidentiality Agreement.
19.5 Execution in counterparts: This agreement may be executed in counterparts, which
taken together must constitute one and the same agreement, and any party (including
any duly authorised representative of a party) may enter into this agreement by
executing a counterpart. Scanned signatures are taken to be valid and binding to the
same extent as original signatures.
19.6 Exercise and waiver of rights: The rights of each party under this agreement:
(a) may be exercised as often as necessary;
(b) except as otherwise expressly provided by this agreement, are cumulative
and not exclusive of rights and remedies provided by law; and
(c) may be waived only in writing and specifically,
and delay in exercising or non-exercise of any such right is not a waiver of that right.
19.7 Further assurance: Each party undertakes, at the request, cost and expense of the
other party, to sign all documents and to do all other acts, which may be necessary to
give full effect to this agreement.
19.8 Severability: The provisions contained in each clause of this agreement are
enforceable independently of each other clause of this agreement and the validity and
Scheme Implementation Agreement Page 73
enforceability of any clause of this agreement will not be affected by the invalidity or
unenforceability of any other clause.
20. GOVERNING LAW AND JURISDICTION
20.1 Governing law: This agreement and any non-contractual obligations arising out of or
in connection with it is governed by the law applying in New Zealand.
20.2 Jurisdiction: The courts having jurisdiction in New Zealand have non-exclusive
jurisdiction to settle any dispute arising out of or in connection with this agreement
(including a dispute relating to any non-contractual obligations arising out of or in
connection with this agreement) and each party irrevocably submits to the non-
exclusive jurisdiction of the courts having jurisdiction in New Zealand.
[Signatures over]
Scheme Implementation Agreement Page 74
EXECUTED on behalf of Florenz Limited:
Signature of director
Name of director
EXECUTED on behalf of Comvita Limited:
Signature of director
Name of director
Docusign Envelope ID: 622388F4-20E5-464F-9082-03FC982C8978
Mark Stewart
Scheme Implementation Agreement Page 74
EXECUTED on behalf of Florenz Limited:
Signature of director
Name of director
EXECUTED on behalf of Comvita Limited:
Signature of director
Name of director
Docusign Envelope ID: 80ED77A6-A684-4B90-B327-718BB6848B8D
Bridget Coates
SCHEDULE 1
PRESCRIBED OCCURRENCES
1 Target or any other Target Group member authorises, declares, pays, or makes any
dividends, bonuses or other payments or distributions (within the meaning of the
Companies Act) of any nature (including, without limitation, any Share buybacks,
redemptions or other form of capital reduction) on or in respect of, any of the Shares
other than any distribution from a wholly owned Target Group member to Target or
another wholly owned Target Group member.
2 Any Target Group member issuing, agreeing to issue, or granting an option or right to
subscribe for, shares, convertible securities, other securities or financial products of
any nature (including warrants, options, phantom or cash settled rights over Shares,
convertible notes, entitlements, rights or interests in any ordinary shares) other than
the issuing of shares by a wholly owned subsidiary of Target to Target or another
wholly owned subsidiary of Target.
3 Target or a member of the Target Group:
(a) reducing its share capital in any way or reclassifying, combining, splitting or
redeeming or repurchasing directly or indirectly any of its shares;
(b) altering the rights, privileges, benefits, entitlements or restrictions attaching
to any securities (including the Shares) or other securities or financial
products (if any) of any member of the Target Group;
(c) converting all or any of the Shares into a larger or smaller number; or
(d) buys back (or agrees to buy back) any shares or other securities (other than
to the extent it is part of terminating the Senior Leadership Loan Scheme and
is non-cash).
4 Any alteration to the constitutional documents of any member of the Target Group
(except in the ordinary course as required in relation to the appointment and/or
resignation of directors and/or company secretaries).
5 A Target Bank Default occurs.
6 An Insolvency Event occurs in respect of Target.
7 An Insolvency Event occurs in respect of a member of the Target Group (other than
Target) that is Significant.
8 The Total Net Indebtedness of the Target Group taken as a whole is:
(a) at any time greater than $74 million; or
(b) at any time after 30 November 2025 greater than $71 million; or
(c) at any time after 31 December 2025, greater than $67 million,
Schedule 1: Prescribed Occurrences Page 76
in each case determined after excluding Excluded Total Net Indebtedness Impacts.
9 Except as contemplated by this agreement, a resolution is passed for any
amalgamation of any member of the Target Group, or any of them is involved in any
merger or scheme of arrangement (other than a solvent scheme of arrangement or an
amalgamation, merger or scheme of arrangement involving solely Target and/or one
or more wholly owned subsidiaries of Target).
10 The Shares cease to be quoted, or are suspended from trading for a period of longer
than three trading days, on the NZX Main Board (other than in connection with
implementation of the Scheme).
11 A member of the Target Group is, or will be, under any obligation to make payment or
provide any consideration to any of its employees or directors in the event of any
member of the Target Group becoming a subsidiary of Bidder or under Bidder's
Control, and which is material in the context of the Target Group taken as a whole
(other than within the exceptions provided for in clause 9.3 or fairly disclosed in the
Due Diligence Material).
12 A member of the Target Group increases the remuneration of (including with regard
to any superannuation, benefits, incentives or bonuses), or materially varies the terms
of employment of, or terminates the employment of, any of its directors, officers or
Senior Managers, other than within the exceptions provided for in clause 9.3 or as
fairly disclosed in the Due Diligence Material or on the basis of retirement by rotation
under the NZX Listing Rules.
13 A member of the Target Group accelerates the rights of any of its directors, officers or
employees to benefits of any kind, other than within the exceptions provided for in
clause 9.3 or as otherwise fairly disclosed in the Due Diligence Materials.
14 A member of the Target Group enters into a transaction with a Related Party (other
than a Related Party that is also a member of the Target Group) that is either:
(a) material to the Target Group taken as a whole; or
(b) not on arm’s length terms and in the best interests of the Target Group in the
ordinary course of business.
15 Target or another Target Group member amends (or agrees to amend) in a material
respect any agreement or arrangement with any financial adviser in relation to the
Transaction or a Competing Proposal, or enters into an agreement or arrangement
with a new financial adviser, in respect of the Transaction or a Competing Proposal.
16 A member of the Target Group:
(a) disposing, or agreeing to dispose, of; or
(b) granting any person any Encumbrance, other than a Permitted Encumbrance,
over,
Schedule 1: Prescribed Occurrences Page 77
the whole or a Significant part of the Target Group’s business or property.
17 A member of the Target Group pays a director, officer or Senior Manager a termination
payment, other than:
(a) as provided for in an existing employment contract (or equivalent) in place
as at the date of this agreement which has been fairly disclosed in the Due
Diligence Material; or
(b) within the exceptions provided for in clause 9.3 or as fairly disclosed in the
Due Diligence Material;
18 Any:
(a) enforcement action, investigation, or audit is announced or commenced, or
there is a material adverse development in relation to any action,
investigation, or audit by a Government Agency;
(b) decision, determination or ruling by a Government Agency; or
(c) action, claim, litigation, arbitration or prosecution by any party (including by
a Government Agency) is notified or commenced,
against, involving or in respect of, a Target Group entity which is or is reasonably likely
to be materially adverse to the Target Group taken as a whole.
19 The board or shareholders of a member of the Target Group passes a resolution to, or
authorise the doing of any act or matter referred to in any of the preceding paragraphs
of this Schedule 1.
Nothing in this Schedule 1 prohibits, limits, or otherwise affects Target and/or the Board's ability
to deal with the Performance Share Rights, the Leader Share Purchase & Loan Scheme and / or
the Target Exempt Employee Share Scheme in accordance with clauses 6.5 and 6.6, and, for the
avoidance of doubt, Bidder acknowledges that no Prescribed Occurrence will occur as a result
of, or arising out of, the actions contemplated by clauses 6.5 and 6.6.
SCHEDULE 2
WARRANTIES AND UNDERTAKINGS
PART A – TARGET WARRANTIES AND UNDERTAKINGS
Section 1 – Target Warranties
Capacity and Authority
1 Target is a corporation validly existing under the laws of New Zealand.
2 Target has the power to execute and deliver this agreement and to perform its
obligations under this agreement and the Scheme and has taken all necessary
corporate action to authorise such execution and delivery and the performance of such
obligations.
3 Target's obligations under this agreement are legal, valid and binding obligations
enforceable subject to and in accordance with their terms.
4 The execution and delivery by Target of this agreement and the performance of its
obligations under this agreement and the Scheme do not and will not conflict with or
constitute a default under any provision of:
(a) Any material agreement or instrument to which Target is a party;
(b) its constitution; or
(c) any law, order, judgement, award, injunction, decree, rule or regulation by
which Target is bound.
Capital Structure
5 As at the date of this agreement:
(a) the capital structure of Target and each other member of the Target Group
is as set out in Schedule 3;
(b) except as set out in Schedule 3, there are no other shares, options or other
securities (including equity securities, debt securities or convertible
securities) or other instruments which are convertible into securities in a
member of the Target Group on issue, nor has any member of the Target
Group offered or agreed to issue or grant, and no person has any right to call
for the issue or grant of, any such shares, options or other securities or other
instruments to any Third Party; and
(c) there are no more than 21,105 phantom shares in aggregate which have
been awarded, and have not been forfeited, under the Comvita Phantom
Share Bonus Scheme.
Schedule 2: Warranties and Undertakings Page 79
6 As at 8.00am on the Implementation Date, there will be on issue no more than
70,601,643 Shares (being the aggregate of the “Quoted Ordinary Shares” and
“Performance Share Rights” as set out in the table entitled “Target Capital Structure at
Schedule 3), and no securities, options, performance rights or instruments will be
outstanding or become outstanding which give (or may give) any right to or which may
become convertible into Shares.
7 Each member of the Target Group is validly existing under the laws of its jurisdiction
of incorporation.
8 All of the shares in each member of the Target Group are (other than Comvita Share
Scheme Trustee Limited), directly or indirectly, legally and beneficially owned by
Target.
9 As at the date of this agreement, Target has not authorised any dividend or other
distribution payable after the date of this agreement.
Material Information
10 Target has filed with the Registrar and NZX all documents required to be filed with the
Registrar or NZX including pursuant to NZX Listing Rule 3.1 (Target Reporting
Documents) and is not in breach of its continuous and periodic disclosure obligations
under the Companies Act or the NZX Listing Rules and, as at the date of this agreement,
is not relying on the carve-out in NZX Listing Rule 3.1.2 to withhold any information
from public disclosure. The Target Reporting Documents do not contain any untrue
statement of a material fact or omit to state a material fact required to be stated in
them, except to the extent that such statements have been modified or superseded
by a later Target Reporting Document.
11 Since the date of this agreement, no Prescribed Occurrence has occurred.
12 It has prepared the Due Diligence Material in good faith in response to Bidder’s
requests and, as far as Target is aware, all information in the Due Diligence Material is
true and correct in all material respects and is not misleading or deceptive in any
material respect, including by omission.
13 As at the date of this agreement, Target is not in negotiations or discussions (other
than with Bidder and its Representatives) with any party relating to any Competing
Proposal.
14 As at the date of this agreement, so far as Target is aware, there is no matter, event or
circumstance which would, or is likely to, constitute a Material Adverse Change.
Contracts
15 No member of the Target Group is party to:
(a) a contract which restricts its ability to carry on any business activities in any
material respect; or
Schedule 2: Warranties and Undertakings Page 80
(b) any guarantee or indemnity in respect of, or, as far as Target is aware on the
date of this agreement, otherwise liable or contingently liable in any way for
the obligations of, any other person for an amount exceeding $200,000; or
(c) any material contract, commitment or arrangement which Target considers
to be unusual, abnormal or onerous.
16 Neither the execution of this agreement, nor the implementation of the Scheme, will:
(a) entitle any person to cancel, terminate earlier than would otherwise have
been the case, or adversely modify any material contract, commitment or
arrangement to which any member of the Target Group is a party or under
which any member of the Target Group is entitled to a material right or
benefit, or any material provision thereof; or
(b) entitle any person to any payment, or the provision of any other valuable
consideration, by a member of the Target Group; or
(c) otherwise cause or be likely to cause any material right, benefit, interest or
asset held or enjoyed by any member of the Target Group to be acquired by
another person, or cancelled, terminated or lost or adversely qualified or
impaired.
17 As at the date of this agreement:
(a) no member of the Target Group is in material default under any material
document, agreement or instrument binding on it or its assets; and
(b) nothing has occurred, other than the Transaction, which is or would with the
giving of notice or the lapse of time constitute an event of default or
prepayment event,
where the default or the occurrence would be reasonably likely to give rise to a loss or
liability for the Target Group of more than $200,000.
18 The execution of this agreement by Target will not affect any waiver or amendment of
any standstill agreement or arrangement between Target and any person other than
a member of the Bidder Group.
Intellectual Property
19 As at the date of this agreement, as far as Target is aware, the conduct of the Business
does not infringe, misappropriate or otherwise violate the intellectual property of any
person in any material respect.
20 As at the date of this agreement, as far as Target is aware, the Target Group owns, or
has the lawful right to use, all material intellectual property necessary for the Target
Group to conduct the Business in the ordinary course in the manner in which the
Business was conducted on the date of this agreement.
Schedule 2: Warranties and Undertakings Page 81
21 As at the date of this agreement:
(a) no member of the Target Group has received any written notice of any
current claim asserting infringement of the intellectual property of any
person, or challenging the ownership, enforceability, validity, scope or use of
the Intellectual Property Rights and, as far as Target is aware, as at the date
of this agreement, no claim is pending or threatened;
(b) so far as Target is aware, no person is infringing any Intellectual Property
Rights in any material respect;
(c) all of the registered Intellectual Property Rights currently used by the
Business are subsisting, unexpired and, as far as Target is aware, valid and
enforceable; and
(d) all Intellectual Property Rights owned or purported to be owned by the
Target Group are free and clear of all Encumbrances other than Permitted
Encumbrances.
Compliance with laws
22 Each member of the Target Group has:
(a) complied in all material respects with all New Zealand and foreign laws and
regulations applicable to them (save for instances of non-compliance which
do not have a material adverse impact on the Target Group); and
(b) all material Authorisations for them to conduct the business of the Target
Group as presently being conducted.
23 So far as Target is aware no member of the Target Group is under investigation with
respect to the violation of any laws, regulations or applicable Authorisations.
24 As at the date of this agreement, Target is not aware of any circumstances which
entitle or may entitle any Government Agency to suspend, cancel or terminate any
Authorisation held by the Target Group and, so far as Target is aware, none of the
Authorisations held by the Target Group are being or are likely to be withdrawn,
cancelled, qualified, or adversely affected in any manner, whether by reason of the
implementation of the Scheme or otherwise.
25 At the date of this agreement, there is:
(a) no current claim, dispute, demand, action, litigation, prosecution,
arbitration, investigation, audit, mediation or other proceeding (Claim)
which has been notified in writing to, or in respect of which proceedings have
been commenced against, a member of the Target Group, or
(b) so far as Target is aware, no pending or threatened Claim.
Schedule 2: Warranties and Undertakings Page 82
Indebtedness and liabilities
26 As at the date of this agreement, the Target Group does not have any outstanding
financing that is not reflected in its financial statements and notes thereto for the half
year ended 31 December 2024.
27 Between 31 December 2024 and the date of this agreement, no member of the Target
Group has engaged in any financing of a type which is not required to be shown or
reflected in its financial statements or notes thereto.
28 At the date of this agreement, no member of the Target Group has any actual liability
or, as far as Target is aware, contingent liability which exceeds $200,000 except, in
either case, for liabilities or contingent liabilities fairly disclosed in the Due Diligence
Material.
Bribery
29 No member of the Target Group, nor any of their respective directors, officers,
employees, agents, or other persons acting on behalf or for the benefit of the Target
Group has, in connection with any member of the Target Group, offered, promised,
provided, or authorised the provision of any money, property, contribution, gift,
entertainment or other thing of value, directly or indirectly, to any government official
or any other person to influence official action or secure an improper advantage, or to
encourage the recipient to breach a duty of good faith or loyalty or the policies of
his/her employer, or has otherwise violated any anti-bribery or anti-corruption laws.
Schedule 2: Warranties and Undertakings Page 83
Section 2 - Target Undertakings
1 Target will ensure that the Target Information:
(a) is prepared in good faith and on the understanding that each of the Bidder
Indemnified Persons will rely on that information for the purposes of
considering and approving the Bidder Information in the Scheme Booklet;
(b) complies with the Companies Act, the FMCA and all other applicable laws
and the NZX Listing Rules; and
(c) in the form and context in which it appears in the Scheme Booklet, is true
and correct in all material respects and is not misleading or deceptive,
including by omission as at the date the Scheme Booklet is sent to
Shareholders.
2 Target will provide to Shareholders and Bidder all new material information of which
it becomes aware after the Scheme Booklet has been sent to Shareholders and before
the date of the Scheme Meeting which is necessary to ensure that the Target
Information, in the form and context in which it appears in the version of the Scheme
Booklet sent to Shareholders, is not misleading or deceptive, including by omission.
3 All information provided by or on behalf of Target to the Independent Adviser will be
provided in good faith, on the understanding that the Independent Adviser will rely
upon that information for the purpose of preparing the Independent Adviser's report
for inclusion in the Scheme Booklet, will be true and correct in all material respects
and will not be misleading or deceptive including by omission.
Schedule 2: Warranties and Undertakings Page 84
PART B - BIDDER WARRANTIES AND UNDERTAKINGS
Section 1 - Bidder Warranties
Capacity and Authority
1 Bidder is a corporation validly existing under the laws of its place of incorporation.
2 Bidder has, and in relation to the Deed Poll, will have upon execution of the Deed Poll,
the power to execute and deliver and to perform its obligations under this agreement
and the Deed Poll, and has taken or, in relation to the Deed Poll, will take prior to
execution of the Deed Poll, all necessary corporate action to authorise such execution
and delivery and the performance of such obligations.
3 The obligations of Bidder under this agreement are, and the obligations of Bidder
under the Deed Poll will, on execution of the Deed Poll be, legal, valid and binding
obligations enforceable subject to and in accordance with their terms.
4 The execution and delivery by Bidder of this agreement and the execution and, in due
course, delivery by Bidder of the Deed Poll do not and will not conflict with or
constitute a default under any provision of:
(a) any agreement or instrument to which Bidder is a party;
(b) the constitution or equivalent documents of Bidder; or
(c) any law, order, judgment, award, injunction, decree, rule or regulation by
which Bidder is bound.
Material Information
5 As at 8.00am on the Second Court Date Bidder will have binding agreements in place
to fund its obligation to pay the Consideration in accordance with the Scheme and the
Deed Poll conditional only upon:
(a) the Court approving the Scheme and the Scheme becoming Effective; and
(b) the Conditions (to the extent they have not been satisfied or waived prior to
the Second Court Date) and other customary conditions precedent to draw
down.
6 Bidder will, at 8.00am on the Implementation Date, have available to it on an
unconditional basis, sufficient cash reserves (whether from internal cash reserves or
external funding arrangements or a combination of both) to satisfy Bidder's obligations
to pay the Consideration to each Scheme Shareholder in accordance with the Scheme.
Schedule 2: Warranties and Undertakings Page 85
Section 2 - Bidder Undertakings
1 Bidder will ensure that the Bidder Information:
(a) is prepared in good faith and on the understanding that each of the Target
Indemnified Persons will rely on that information to prepare the Scheme
Booklet and to propose and implement the Scheme in accordance with the
Companies Act;
(b) complies with the Companies Act, the FMCA and all other applicable laws;
and
(c) in the form and context in which it appears in the Scheme Booklet is true and
correct in all material respects and is not misleading or deceptive, including
by omission as at the date the Scheme Booklet is sent to Shareholders.
2 Bidder will provide to Target all new material information of which it becomes aware
after the Scheme Booklet has been sent to Shareholders and before the date of the
Scheme Meeting which is necessary to ensure that the Bidder Information, in the form
and context in which that information appears in the version of the Scheme Booklet
sent to Shareholders, is not misleading or deceptive in any material respect, including
by omission.
3 All information provided by or on behalf of Bidder to the Independent Adviser will be
provided in good faith and on the understanding that the Independent Adviser will rely
upon that information for the purpose of preparing the Independent Adviser's Report
for inclusion in the Scheme Booklet, will be true and correct in all material respects
and will not be misleading or deceptive, including by omission.
4 Subject to the Companies Act and the Scheme becoming Effective, Bidder undertakes
in favour of Target and each Target Indemnified Person that it will:
(a) for a period of 7 years from the Implementation Date, ensure that the
constitutions of Target and each Target Group member continue to have
equivalent obligations to those currently contained in their constitutions at
the date of this agreement that provide for each company to indemnify each
of its current and former directors and officers against any liability (excluding
for fraud or wilful misconduct) incurred by that person in his or her capacity
as a director or officer of the company to any person other than a member
of the Target Group member; and
(b) procure that Target and each Target Group member complies with any
provisions in deeds of indemnity, access and insurance made by them in
favour of their respective directors and officers from time to time and
without limiting the foregoing, Bidder will not, and will procure that no
member of the Target Group will, vary or cancel the D&O Run-Off Policy put
in place in accordance with 11.3. For the avoidance of doubt, this
clause does not intend to impose any obligation on Bidder to pay for run-off
insurance or any further insurance to achieve these purposes.
SCHEDULE 3
TARGET CAPITAL STRUCTURE
TYPE OF SECURITY TOTAL NUMBER ON ISSUE
Quoted Ordinary Shares
(including treasury shares)
70,492,156
Treasury shares 0
Performance Share Rights 109,487
OTHER TARGET GROUP MEMBER’S CAPITAL STRUCTURE
Other than Comvita Share Scheme Trustee Limited, each of the following entities is directly or
indirectly wholly owned by Target. The sole share in Comvita Share Scheme Trustee Limited is
held by Nigel Greenwood.
SUBSIDIARIES
COUNTRY OF
INCORPORATI
ON
TYPE AND NUMBER OF SECURITIES ON
ISSUE
Comvita New Zealand Limited New Zealand 100 ordinary shares
Bee & Herbal New Zealand Limited New Zealand 100 ordinary shares
Comvita Share Scheme Trustee
Limited
New Zealand 1 ordinary share
Comvita USA, Inc USA 10,000 common shares
Comvita Japan K.K Japan 200 ordinary shares
Comvita Korea Co Limited Korea 10,000 ordinary shares
Comvita Food (China) Limited China CNY 60,000,000
Comvita Food (Hainan) Co. Ltd China CNY 1,000,000
Comvita China Limited Hong Kong 100 ordinary shares
Comvita Holdings HK Limited Hong Kong 100 ordinary shares
Comvita HK Limited Hong Kong 10,000 ordinary shares
Comvita Malaysia Sdn Bhd Malaysia 1,000,000 ordinary shares
Comvita Singapore Pte Limited Singapore 300,000 ordinary shares
Schedule 3: Target Capital Structure Page 87
SUBSIDIARIES
COUNTRY OF
INCORPORATI
ON
TYPE AND NUMBER OF SECURITIES ON
ISSUE
Comvita Holdings Pty Limited Australia 100 ordinary shares
Comvita Australia Pty Limited Australia 1 ordinary share
Olive Products Australia Pty Limited Australia 100 ordinary shares
Comvita IP Pty Limited Australia 100 ordinary shares
Medihoney Pty Limited Australia 42,888,541 ordinary shares
Medihoney (Europe) Limited United
Kingdom
1 ordinary share
Comvita Holdings UK Limited United
Kingdom
500,000 ordinary shares
Comvita UK Limited United
Kingdom
390,000 ordinary shares
New Zealand Natural Foods Limited United
Kingdom
100 ordinary shares
SCHEDULE 4
TIMETABLE
EVENT CLAUSE REFS INDICATIVE DATE (BUSINESS DAYS)
1 Scheme Implementation
Agreement (SIA) signed
NA -
Preliminary Matters
2 Announcement 15.1 Upon signing SIA
3 Independent Adviser
Engagement
4.1(b) Within 2 Business Days of Item 1
Preparation of Scheme Booklet
4 Draft Bidder Information
provided by Bidder to Target
for inclusion in the Scheme
Booklet
4.2(a) Within 3 Business Days of Item 1
5 Draft Scheme Booklet
(incorporating Bidder
Information) provided to
Bidder by Target
4.1(c) Within 10 Business Days of Item 1
6 Comments on the Scheme
Booklet provided by Bidder to
Target for review
4.2(d) Within 3 Business Days of Item 5
7 Final draft Scheme Booklet
provided to Bidder
4.1(e) Within 3 Business Days of Item 6
8 Bidder to provide consent to
release of Scheme Booklet to
Takeovers Panel
4.2(e) Within 2 Business Days of Item 7
9 Scheme Booklet provided to
the Takeovers Panel for
review and with a request for
Letter of Intention
4.1(f), 5.1(a) Within 1 Business Day of Item 8
10 Scheme Booklet (including
Independent Adviser's
Report) approved by
Takeovers Panel and
Takeovers Panel issues Letter
of Intention
NA Within 12 Business Days of Item 9
Schedule 4: Timetable Page 89
EVENT CLAUSE REFS INDICATIVE DATE (BUSINESS DAYS)
Initial Court Orders
11 Application for Initial Orders
filed
4.1(h), 5.1(e) Within 1 Business Day of Item 10
12 First Court Date NA Within 5 Business Days Item 11
(subject to Court availability)
Scheme Meeting
13 Scheme Booklet sent to
Shareholders (including
Independent Adviser's
Report)
5.1(e) Within 2 Business Days of Item 12
(assuming Court grants Initial
Orders at First Court Date)
14 Scheme Meeting 5.1(e) 20 Business Days following Item 13
15 Application to Takeovers
Panel for No-objection
Statement
5.1(h)(i) Within 1 Business Day of Item 14
Second Court Date and Implementation
16 Documents filed in respect of
Second Court Date
5.1(h)(ii) Within 5 Business Days of the
Scheme Meeting.
17 Second Court Date (if
required) and Final Orders
NA Within 5 Business Days of Item 16
(subject to Court availability)
18 Trading Halt Date NA 2 Business Days after Item 17
19 Record Date NA 3 Business Days after Item 18
20 Implementation Date NA 2 Business Days after Item 19
ANNEXURE 1
SCHEME PLAN
SCHEME OF ARRANGEMENT UNDER PART 15 OF THE COMPANIES ACT 1993
PARTIES
Comvita Limited (Target)
Florenz Limited (Bidder)
Each person who is registered in the Register as the holder of one or more Scheme Shares
(together the Scheme Shareholders)
1. DEFINITIONS AND INTERPRETATION
1.1 Definitions: In this Scheme Plan, unless the context otherwise requires:
Business Day means any day other than a Saturday, Sunday, a statutory public holiday
in Auckland, New Zealand and excluding any day between 25 December and 4 January
in any year (both dates inclusive);
Companies Act means the Companies Act 1993;
Conditions means:
(a) the conditions set out in clause 3.1 of the Scheme Implementation
Agreement; and
(b) such other conditions made or required by the Court under section 236(1) or
section 237(1) of the Companies Act and approved in writing by Target and
Bidder in accordance with clause 3.3 of the Scheme Implementation
Agreement;
Consideration means in respect of each Scheme Share held by a Scheme Shareholder
NZ$0.80 per Scheme Share;
Court means the High Court of New Zealand, Auckland Registry, or if leave cannot be
reasonably obtained by Target to move the applicable hearings relating to the Scheme,
the Tauranga Registry;
Deed Poll means the deed poll entered into by Bidder in favour of the Scheme
Shareholders;
Effective has the meaning given to that term in the Scheme Implementation
Agreement;
Annexure 1: Scheme Plan Page 91
Encumbrance means:
(a) any security interest within the meaning of section 17(1)(a) of the Personal
Property Securities Act 1999 and any option, right to acquire, right of pre-
emption, assignment by way of security or trust arrangement for the purpose
of providing security, retention arrangement or other security interest of any
kind (other than any reservation of title by suppliers in the ordinary course
of business); and
(b) any agreement to create any of the foregoing;
End Date has the meaning given to that term in the Scheme Implementation
Agreement;
Excluded Shares has the meaning in the Scheme Implementation Agreement;
Final Orders means orders made, on application of Target, that the Scheme is binding
on Target, Bidder, the Scheme Shareholders and such other persons or class of persons
as the Court may specify, in accordance with section 236(1) (and section 237, if
applicable) of the Companies Act;
Final Orders Date means the day on which the Final Orders are granted by the Court;
Funds has the meaning given to that term in clause 3.1;
Government Agency means any government, department, officer or minister of any
government and any governmental, semi-governmental, regulatory, administrative,
fiscal, judicial or quasi-judicial agency, authority, board, commission, tribunal or entity
in any jurisdiction, and includes the Overseas Investment Office, the Takeovers Panel,
and the Financial Markets Authority;
Implementation Date has the meaning given in the Scheme Implementation
Agreement and Implementation correspondingly means the time at which
implementation commences with the first step under clause 4.1(a);
NZX means NZX Limited and, where the context requires, the main board financial
market that it operates;
NZX Listing Rules means the NZX Listing Rules for the NZX Main Board;
Registry Agent means MUFG Pension & Market Services (NZ) Limited;
Record Date has the meaning given to that term in the Scheme Implementation
Agreement;
Register means the Share register maintained by the Registry Agent on behalf of
Target;
Registered Address means, in relation to a Shareholder, the address of that
Shareholder shown in the Register as at the Record Date;
Annexure 1: Scheme Plan Page 92
Scheme means this scheme of arrangement, subject to any alterations or conditions
made or required by the Court under Part 15 of the Companies Act and approved by
Target and Bidder in writing;
Scheme Implementation Agreement means the scheme implementation agreement
dated 17 August 2025 between Target and Bidder;
Scheme Meeting means the special meeting of Shareholders ordered by the Court to
be convened pursuant to section 236(2)(b) and 236A(2) of the Companies Act in
respect of the Scheme (and including any meeting convened following any
adjournment or postponement of that meeting);
Scheme Shareholder means a person who is registered in the Register as the holder of
one or more Scheme Shares as at the Record Date;
Scheme Shares means all of the Shares on issue on the Record Date except for any
Excluded Shares;
Share means a fully paid ordinary share in Target;
Shareholder means a person who is registered in the Register as the holder of one or
more Shares from time to time;
Takeovers Panel means the Takeovers Panel established by section 5(1) of the
Takeovers Act 1993;
Trading Halt Date has the meaning given in the Scheme Implementation Agreement;
Trust Account has the meaning given to that term in clause 3.1; and
Unconditional means all of the Conditions having been satisfied or, if capable of waiver
in accordance with the Scheme Implementation Agreement, waived.
1.2 Interpretation: In this Scheme Plan, unless the context otherwise requires:
(a) headings are to be ignored in construing this document;
(b) the singular includes the plural and vice versa;
(c) words of any gender include all genders;
(d) a reference to a clause is a reference to a clause of this Scheme Plan;
(e) a reference to a statute or other law includes regulations and other
instruments under it and consolidations, amendments, re-enactments or
replacements of any of them;
(f) reference to any document (including this Scheme Plan) includes reference
to that document (and, where applicable, any of its provisions) as amended,
novated, supplemented, or replaced from time to time;
Annexure 1: Scheme Plan Page 93
(g) reference to a party, person or entity includes:
(i) an individual, partnership, firm, company, body corporate,
corporation, association, trust, estate, state, government or any
agency thereof, municipal or local authority and any other entity,
whether incorporated or not (in each case whether or not having a
separate legal personality); and
(ii) an employee, sub-contractor, agent, successor, permitted assign,
executor, administrator and other representative of such party,
person or entity;
(h) written and in writing include any means of reproducing words, figures or
symbols in a tangible and visible form;
(i) the words including or includes do not imply any limitation;
(j) a reference to any time is a reference to that time in New Zealand; and
(k) references to money or $ are to New Zealand dollars.
1.3 Things required to be done other than on a Business Day: Unless otherwise indicated,
if the day on which any act, matter or thing is to be done is a day other than a Business
Day, that act, matter or thing must be done on or by the next Business Day.
1.4 No contra proferentem: No term or condition of this Scheme Plan will be construed
adversely to a party solely because that party was responsible for the preparation of
this Scheme Plan or a provision of it.
2. CONDITIONS
2.1 Conditions: The implementation of the Scheme is conditional in all respects on:
(a) all of the Conditions having been satisfied or waived in accordance with the
terms of the Scheme Implementation Agreement by 8.00am on the
Implementation Date; and
(b) neither the Scheme Implementation Agreement nor the Deed Poll having
been terminated in accordance with its terms before 8.00am on the
Implementation Date.
3. CONSIDERATION INTO TRUST ACCOUNT
3.1 Obligation to Make Consideration Available: Subject to the Scheme Implementation
Agreement not having been terminated and the Scheme having become Unconditional
(except for the Conditions set out in clauses 3.1(d) to 3.1(f)of the Scheme
Implementation Agreement), by no later than 5.00pm on the Business Day before the
Implementation Date, Bidder must deposit (or procure the deposit of) in immediately
available cleared funds an amount equal to the aggregate amount of the Consideration
payable to Scheme Shareholders in a New Zealand dollar denominated trust account
operated by the Registry Agent and notified by the Registry Agent to Bidder no later
Annexure 1: Scheme Plan Page 94
than 5.00pm on the Business Day falling five Business Days before the Implementation
Date (the Funds and that account the Trust Account).
3.2 Details of Trust Account:
(a) Subject to clauses 3.2(b), 5.4, 5.5 and 5.6, the Trust Account will be held and
operated by the Registry Agent on the basis that the Funds are held on trust
for Bidder and to its order, such that only Bidder may direct how the Funds
will be paid from the Trust Account.
(b) Clause 3.2(a) is subject to a standing written direction from Bidder to Target
and to the Registry Agent to make payment of the Consideration to the
Scheme Shareholders in accordance with this Scheme Plan upon transfer of
the Scheme Shares to Bidder under clause 4.1(a).
(c) Any interest earned on the amount deposited in the Trust Account up to
Implementation will be payable to Bidder by the Registry Agent as directed
by Bidder (less bank fees and other Third Party charges relating to the Trust
Account).
3.3 Scheme not implemented: Should the implementation of the Scheme not occur by
5.00pm on the Implementation Date or the Scheme becomes void under clause 7.5,
the Registry Agent will immediately repay the Funds to Bidder to such New Zealand
dollar denominated account instructed to the Registry Agent by Bidder.
4. IMPLEMENTATION
4.1 Implementation: Subject to any amendments or variations as may be required by the
Court, the conditions referenced in clause 2 being satisfied (to be confirmed to the
Registry Agent by written notice given by Target and Bidder immediately after 8.00am
on the Implementation Date upon the conditions set out in clause 2 being satisfied)
and the Consideration having been deposited into the Trust Account in accordance
with clause 3.1, commencing at 9.00 am on the Implementation Date, the following
steps will occur sequentially:
(a) first, without any further act or formality, all the Scheme Shares, together
with all rights and entitlements attaching to them as at the Implementation
Date, will be transferred to Bidder, and Target must enter, or procure the
Registry Agent enter, the name of Bidder in the Register as holder of all of
the Scheme Shares; and
(b) second, subject to compliance with clause 4.1(a) in accordance with the
direction set out in clause 3.2(b), the Registry Agent must pay or procure the
payment from the Trust Account of the Consideration to each Scheme
Shareholder based on the number of Scheme Shares held by that Scheme
Shareholder as set out in the Register as at the Record Date.
Annexure 1: Scheme Plan Page 95
5. TRANSFER OF CONSIDERATION
5.1 Method of payment of Consideration: The payment obligations under clause 4.1(b)
will be satisfied by:
(a) where a Scheme Shareholder has, prior to the Record Date, provided bank
account details to enable the Registry Agent and Target to make payments
of New Zealand dollars by electronic funds transfer, the Registry Agent must
pay the Consideration in New Zealand dollars to the Scheme Shareholder by
electronic funds transfer of the relevant amount to the bank account
nominated by that Scheme Shareholder; or
(b) where a Scheme Shareholder has not provided the information and/or taken
the steps contemplated by clause 5.1(a) to enable payment to be made to
such Scheme Shareholder in a manner contemplated by one of those clauses
(or if an electronic payment to such Scheme Shareholder is rejected by the
recipient bank) the Registry Agent must retain the Consideration owed to
that Scheme Shareholder in the Trust Account to be claimed by the Scheme
Shareholder in accordance with clause 5.5.
If a Shareholder has given more than one payment direction, then the later direction
in time of receipt will be followed.
5.2 Joint holders: In the case of Scheme Shares held in joint names:
(a) the Consideration is payable to the bank account nominated by the joint
holders or, at the sole discretion of Target, nominated by the holder whose
name appears first in the Register as at the Record Date; and
(b) any other document required to be sent under this Scheme Plan will be sent
to either, at the sole discretion of Target, the holder whose name appears
first in the Register as at the Record Date or to the joint holders.
5.3 Surplus in Trust Account: To the extent that, following satisfaction of the obligations
under clause 4.1(b), there is a surplus in the Trust Account, that surplus (less the
aggregate amount of the Consideration retained in the Trust Account in accordance
with clause 5.1(b) or clause 5.6(b), and less bank fees and other Third Party charges
relating to the Trust Account) shall be promptly paid in full to Bidder.
5.4 Holding on Trust: Target must, in respect of any monies retained by the Registry Agent
pursuant to clause 5.1(b) or clause 5.6(b), instruct the Registry Agent to hold such
monies in the Trust Account on trust for the relevant Scheme Shareholders for a period
of two years and thereafter, subject to clause 5.6, to pay any remaining money in the
Trust Account to Target.
5.5 Unclaimed monies: During the period of two years commencing on the
Implementation Date, on request in writing from a Scheme Shareholder that has not
received payment of the Consideration in accordance with clause 5.1(a) the Registry
Agent must, if such Scheme Shareholder has taken the necessary steps required to
effect payment to such Scheme Shareholder in a manner contemplated by
clause 5.1(a) pay to that Scheme Shareholder the Consideration held on trust for that
Annexure 1: Scheme Plan Page 96
Scheme Shareholder in a manner contemplated by clause 5.1(a) (or in any other
manner approved by the Registry Agent and agreed to by that Scheme Shareholder).
5.6 Orders of a court or Government Agency: Notwithstanding any other provision of this
Scheme Plan, if written notice is given to Target prior to the Record Date of an order
or direction made by a court of competent jurisdiction or a Government Agency that:
(a) requires Consideration to be provided to a Third Party in respect of Scheme
Shares held by a particular Scheme Shareholder, which would otherwise be
due to that Scheme Shareholder in accordance with clause 4.1(b), Target will
be entitled to procure, and Bidder will be deemed to have instructed the
Registry Agent to ensure, that provision of that Consideration is made in
accordance with that order or direction; or
(b) prevents the Consideration from being provided to any particular Scheme
Shareholder in accordance with clause 4.1(b), or the transfer of such
Consideration is otherwise prohibited by applicable law, Target will be
entitled (for so long as such prohibition remains) to retain the payment
(equal to the number of Scheme Shares held by that Scheme Shareholder
multiplied by the Consideration) in the Trust Account until such time as
provision of the Consideration to the Scheme Shareholder in accordance with
clause 4.1(b), or clause 5.5 (as applicable) is permitted by that order or
direction or otherwise by law;
and such provision or retention (as the case may be) will constitute the full discharge
of Bidder's and Target's obligations under clause 4.1(b) or clause 5.5 (as applicable)
with respect to the amount so provided or retained.
6. DEALING IN SHARES
6.1 Trading Halt:
(a) Following the sealing of the Final Orders, Target will advise NZX of the grant
of the Final Orders and, once known, the Trading Halt Date and Record Date
and use its reasonable endeavours to procure that the NZX suspend trading
in the Shares from the close of trading on the Trading Halt Date.
(b) Target must not accept for registration, nor recognise for any purpose
(except a transfer to Bidder pursuant to this Scheme Plan and any
subsequent transfer by Bidder or its successors in title), any transfer or
transmission application or other request received after the Trading Halt
Date or received prior to such time but not in registrable or actionable forms.
6.2 Register:
(a) Target must register registrable transmission applications or registrable
transfers of Shares received prior to 7.00pm on the Trading Halt Date (the
Trading Halt Time) before the Record Date provided that, for the avoidance
of doubt, nothing in this clause 6.2(a) requires Target to register a transfer
that relates to a transfer of Shares on which Target has a lien.
Annexure 1: Scheme Plan Page 97
(b) A holder of Scheme Shares (and any person claiming through that holder)
must not dispose of, or purport or agree to dispose of, any Scheme Shares,
or any interest in them, after the Trading Halt Time otherwise than pursuant
to this Scheme Plan, and any attempt to do so will have no effect and Target
and Bidder shall be entitled to disregard any such disposal.
(c) For the purposes of determining entitlements to the Consideration but
subject to the requirements of the NZX Listing Rules, Target must maintain
the Register in accordance with the provisions of this clause 6 until the
Consideration has been paid to the Scheme Shareholders. The Register in this
form will solely determine entitlements to the Consideration.
(d) From the Record Date, each entry that is current on the Register (other than
entries on the Register in respect of Excluded Shares), will cease to have
effect except as evidence of entitlement to the Consideration in respect of
the Scheme Shares relating to that entry.
(e) As soon as possible on the first Business Day after the Record Date and in any
event by 7.00pm on that day, Target must make available to Bidder in the
form Bidder reasonably requires, details of the names, Registered Addresses
and holdings of Shares for each Scheme Shareholder as shown in the Register
on the Record Date.
7. GENERAL PROVISIONS
7.1 Amendments to Consideration: Bidder may increase the Consideration by written
notice at any time to Target prior to the Scheme Meeting, provided that the Scheme
Implementation Agreement has not been terminated in accordance with its terms
prior to the receipt of such notice by Target.
7.2 Title to and rights in Scheme Shares:
(a) To the extent permitted by law, the Scheme Shares (including all rights and
entitlements attaching to the Scheme Shares) transferred under this Scheme
Plan to Bidder will, at the time of transfer to Bidder, vest in Bidder free from
all Encumbrances and free from any restrictions on transfer of any kind.
(b) Each Scheme Shareholder is taken to have warranted to Bidder on the
Implementation Date that all their Scheme Shares (including any rights and
entitlements attaching to those Scheme Shares) which are transferred under
this Scheme Plan will, at the time of transfer, be fully paid and free from all
Encumbrances and restrictions on transfer of any kind, and that they have
full power and capacity to transfer their Shares to Bidder together with any
rights and entitlements attaching to those Shares.
7.3 Authority given to Target: Each Scheme Shareholder, without the need for any further
act:
(a) on the Final Orders Date, irrevocably appoints Target as its attorney and
agent for the purpose of enforcing the Deed Poll against Bidder (but without
limiting each Scheme Shareholder's right to itself enforce the Deed Poll); and
Annexure 1: Scheme Plan Page 98
(b) on the Implementation Date, irrevocably appoints Target as its attorney and
agent for the purpose of executing any document or doing or taking any
other act necessary, desirable or expedient to give effect to the Scheme and
the transactions contemplated by it,
and Target accepts each such appointment. Each such attorney and agent, may sub-
delegate its functions, authorities or powers under this clause 7.3 to one or more of
Target's directors or senior executive.
7.4 Binding effect of Scheme:
(a) The Scheme binds:
(i) Target;
(ii) Bidder; and
(iii) all of the Scheme Shareholders (including those who did not attend
the Scheme Meeting to vote on the Scheme, did not vote at the
Scheme Meeting, or voted against the Scheme at the Scheme
Meeting).
(b) In the event of any inconsistency, this Scheme Plan overrides the constitution
of Target.
7.5 End Date: If the Scheme has not become Unconditional on or before the End Date, or
if the Scheme Implementation Agreement is terminated in accordance with its terms
at any time, this Scheme Plan is immediately void and of no further force or effect
(other than any provision of the Scheme or this Scheme Plan relating to the repayment
to Bidder of any Funds deposited in accordance with clause 3 and the interest thereon
(less bank fees and other Third Party charges relating to the Trust Account)).
7.6 No liability when acting in good faith: Each Scheme Shareholder agrees that none of
the directors, officers or employees of Target or Bidder will be liable for anything done
or omitted to be done in the performance of the Scheme in good faith.
7.7 Successor obligations: To the extent that any provision of the Scheme or this Scheme
Plan imposes any obligation on Bidder or Target that continues or arises after the
implementation of the Scheme, such obligation may instead be performed by any
successor or related company of Bidder or Target (as applicable) in which case the
obligation will be satisfied as if performed by Bidder or Target (as applicable).
7.8 Governing law:
(a) This Scheme Plan and any non-contractual obligations arising out of or in
connection with it is governed by and must be construed in accordance with
the laws of New Zealand.
(b) The courts having jurisdiction in New Zealand have non-exclusive jurisdiction
to settle any dispute arising out of or in connection with this Scheme Plan
Annexure 1: Scheme Plan Page 99
(including a dispute relating to any non-contractual obligations arising out of
or in connection with this Scheme Plan) and the parties irrevocably submit to
the non-exclusive jurisdiction of the courts having jurisdiction in New
Zealand.
ANNEXURE 2
DEED POLL
SCHEME DEED POLL
This Deed Poll is made on 2025
PARTIES
Florenz Limited (Bidder)
Each registered holder of Scheme Shares as at 7.00pm on the Record Date (Scheme
Shareholders)
INTRODUCTION
A. Comvita Limited (Target) and Bidder are parties to the Scheme Implementation
Agreement.
B. Target has agreed in the Scheme Implementation Agreement to propose a scheme of
arrangement between Target, Bidder and the Scheme Shareholders, the effect of
which will be that all Scheme Shares will be transferred to Bidder and Bidder will
provide or procure the provision of the Consideration to the Scheme Shareholders.
C. Bidder is entering into this Deed Poll for the purpose of undertaking in favour of
Scheme Shareholders to provide the Consideration to Scheme Shareholders in
accordance with the terms of the Scheme Plan.
IT IS AGREED
1. DEFINED TERMS AND INTERPRETATION
1.1 Defined terms: In this Deed Poll, unless the context requires otherwise:
Final Orders means orders made on application of Target, that the Scheme is binding
on Target, Bidder, the Scheme Shareholders and such other persons or class of persons
as the Court may specify, in accordance with section 236(1) (and section 237, if
applicable) of the Companies Act;
Scheme Implementation Agreement means the scheme implementation agreement
between Target and Bidder dated 17 August 2025; and
Scheme Plan means the scheme plan attached as Annexure 1 to the Scheme
Implementation Agreement, subject to any alterations or conditions approved by
Bidder and Target in writing and which are disclosed to the Court prior to the Court
making the Final Orders.
Annexure 2: Deed Poll Page 101
1.2 Other defined terms: Words defined in the Scheme Plan which are not separately
defined in this Deed Poll have the same meaning when used in this Deed Poll.
1.3 Interpretation: Clauses 1.2, 1.3 and 1.4 of the Scheme Plan apply to the interpretation
of this Deed Poll, except that references to "this Scheme Plan" are to be read as
reference to "this Deed Poll".
2. NATURE OF THIS DEED POLL
2.1 Third party rights and appointment of attorney:
(a) This Deed Poll is intended to, and does, confer a benefit on, and therefore
may be relied on and enforced by, any Scheme Shareholder in accordance
with its terms under Part 2, Subpart 1 of the Contract and Commercial Law
Act 2017 (but not otherwise), even though the Scheme Shareholders are not
party to the Deed Poll.
(b) Under the Scheme Plan, each Scheme Shareholder appoints Target as the
Scheme Shareholder's attorney and agent to enforce this Deed Poll against
Bidder with effect on and from the date prescribed for such appointment in
the Scheme Plan (but without limiting each Scheme Shareholder's right to
itself enforce this Deed Poll).
(c) Notwithstanding clauses 2.1(a) and 2.1(b), this Deed Poll may be varied by
Bidder and Target in accordance with clause 7.2 without the approval of any
Scheme Shareholder.
2.2 Continuing obligations: This Deed Poll is irrevocable and, subject to clause 3, remains
in full force and effect until either:
(a) Bidder has fully performed its obligations under this Deed Poll; or
(b) this Deed Poll is terminated under clause 3.2.
3. CONDITIONS
3.1 Conditions: This Deed Poll, and the obligations of Bidder under it, are conditional in all
respects on the Scheme becoming Unconditional.
3.2 Termination: The obligations of Bidder under this Deed Poll will automatically
terminate, and the terms of this Deed Poll will be of no force or effect, if the Scheme
Implementation Agreement is validly terminated in accordance with its terms before
the Scheme becomes Unconditional, unless Bidder and Target otherwise agree in
writing.
3.3 Consequences of termination: If this Deed Poll is terminated under clause 3.2, then
Bidder is released from its obligations to further perform this Deed Poll.
Annexure 2: Deed Poll Page 102
4. SCHEME CONSIDERATION
4.1 Deposit of Consideration: Subject to:
(a) the Scheme Implementation Agreement not being terminated; and
(b) the Scheme having become Unconditional (save for the Conditions set out in
clauses 3.1(d) to 3.1(f) of the Scheme Implementation Agreement),
Bidder undertakes in favour of each Scheme Shareholder to deposit, or procure the
deposit of, in immediately available cleared funds, by no later than 5.00pm on the
Business Day before the Implementation Date, an amount equal to the aggregate
amount of the Consideration payable to all Scheme Shareholders as set out in the
Scheme Plan, such deposit to be made into the Trust Account to be held and dealt with
by the Registry Agent in accordance with the Scheme Plan.
4.2 Payment of Consideration: Bidder irrevocably acknowledges and agrees that, subject
to the Scheme becoming Unconditional and compliance in full by Target with its
obligations under clause 4.1(a) of the Scheme Plan, the Consideration deposited into
the Trust Account must be, and will be, paid in accordance with clause 4.1(b) of the
Scheme Plan in satisfaction of the Scheme Shareholders' respective entitlements to
receive the Consideration under the Scheme in accordance with the Scheme Plan.
5. WARRANTIES
5.1 Bidder warrants in favour of each Scheme Shareholder that:
(a) it is a corporation validly existing under the laws of its place of incorporation;
(b) it has the corporate power to enter into, and perform its obligations under,
this Deed Poll and to carry out the transactions contemplated by this Deed
Poll;
(c) it has taken all necessary corporate action to authorise its entry into this
Deed Poll and has taken, or will prior to the Implementation Date take, all
necessary corporate action to authorise the performance of this Deed Poll
and to carry out the transactions contemplated by this Deed Poll;
(d) this Deed Poll is valid and binding on it and enforceable against it in
accordance with its terms; and
(e) this Deed Poll does not conflict with, or result in the breach of or default
under, any provision of its constitution, or any writ, order or injunction,
judgment, law, rule or regulation to which it is a party or subject or by which
it is bound.
Annexure 2: Deed Poll Page 103
6. NOTICES
6.1 Manner of giving notice: Any notice or other communication to be given under this
Deed Poll must be in writing and may be physically delivered or sent by email to Bidder
at:
Address: Level 1, 2 Hazeldean Road, Addington, Christchurch, New
Zealand
Email: mark.stewart@masthead.co.nz
For the attention of: Mark Stewart
with a copy (which does not constitute notice) to:
Email: michael.pritchard@maynewetherell.com /
callum.bailey@maynewetherell.com
For the attention of: Michael Pritchard / Callum Bailey
or at any such other address or email address notified for this purpose to the other
parties under this clause.
6.2 When notice given: In the absence of earlier receipt, any notice or other
communication is deemed to have been given:
(a) if delivered, on the date of delivery; or
(b) if sent by email, four business hours (being the hours between 9.00am and
5.00pm on a Business Day in the jurisdiction of the recipient) after the time
sent (as recorded on the device from which the sender sent the email) unless
the sender receives an automated message that the email has not been
delivered (excluding an "out of office" automated message),
but if the notice or other communication would otherwise be taken to be received
after 5.00pm on a Business Day or on a day other than a Business Day in the place of
receipt then the notice or communication is taken to be received at 9.00 am on the
next Business Day in the place of receipt.
6.3 Proof of service: In proving service of a notice or other communication, it is sufficient
to prove that delivery was made or that the e-mail was properly addressed and
transmitted by the sender's server into the network and there was no apparent error
in the operation of the sender's e-mail system, as the case may be.
6.4 Documents relating to legal proceedings: This clause 6 does not apply in relation to
the service of any claim form, notice, order, judgment or other document relating to
or in connection with any proceedings, suit or action arising out of or in connection
with this Deed Poll.
Annexure 2: Deed Poll Page 104
7. GENERAL
7.1 Waiver:
(a) Bidder may not rely on the words or conduct of any Scheme Shareholder as
a waiver of any right in respect of the Scheme unless the waiver is in writing
and signed by the Scheme Shareholder granting the waiver.
(b) For the purposes of clause 7.1(a):
(i) conduct includes a delay in exercising a right;
(ii) right means any right arising under or in connection with this Deed
Poll and includes the right to rely on this clause; and
(iii) waiver includes an election between rights and remedies, and
conduct which might otherwise give rise to an estoppel.
7.2 Variation:
(a) Subject to clauses 7.2(b) and 7.2(c), this Deed Poll may not be varied.
(b) Before the date on which the Final Orders are made, this Deed Poll may be
varied by agreement in writing between Bidder and Target, in which event
Bidder will enter into a further deed poll in favour of the Scheme
Shareholders giving effect to the variation.
(c) If the Court orders that it is a condition of the Scheme that Bidder enters into
a new deed poll which has the effect of reversing any variation under
clause 7.1(b), then, if Bidder so agrees, Bidder must promptly enter into a
further deed poll in favour of the Scheme Shareholders to give effect to the
reversal of that variation.
7.3 Cumulative rights: The rights, powers and remedies of Bidder and Scheme
Shareholders under this Deed Poll are cumulative and do not exclude any other rights,
power or remedies provided by law independently of this Deed Poll.
7.4 Further assurance: Bidder must, at its own expense, do all things reasonably required
of it to give full force and effect to this Deed Poll and the transactions contemplated
by it.
7.5 Assignment: The rights and obligations of Bidder and each Scheme Shareholder under
this Deed Poll are personal. They cannot be assigned, charged or otherwise dealt with
at law or in equity. Any purported dealing in contravention of this clause 7.4 is invalid.
7.6 Governing law and jurisdiction:
(a) This Deed Poll and any non-contractual obligations arising out of or in
connection with it is governed by the law applying in New Zealand.
Annexure 2: Deed Poll Page 105
(b) The courts having jurisdiction in New Zealand have non-exclusive jurisdiction
to settle any dispute arising out of or in connection with this Deed Poll
(including a dispute relating to any non-contractual obligations arising out of
or in connection with this Deed Poll) and Bidder irrevocably submits to the
non-exclusive jurisdiction of the courts having jurisdiction in New Zealand.
Annexure 2: Deed Poll Page 106
EXECUTION
Executed as a deed poll.
Florenz Limited by its sole director in
the presence of:
Director
Witness Name of Director
Name of Witness
Occupation
City/town of residence
---
18 August 2025
Dear Shareholder
Today, Comvita announced that it has entered into a Scheme Implementation Agreement with Florenz
Limited (“Florenz”) under which Florenz has agreed to acquire all shares in Comvita by way of a court-
approved scheme of arrangement (“Scheme”) for a cash price of $0.80 cents per share.
This letter provides a brief overview of the offer, the rationale for the Board’s recommendation, the process
and the next steps. Full details are available in the announcement on the NZX website under the code
CVT and we encourage you to read this in full.
Offer details
Under the Scheme, Comvita shareholders will receive a cash price of $0.80 cents per share, representing:
• An equity value of approximately $56 million and an enterprise value of $119 million
• A premium of 67% to Comvita’s closing share price on 15 August 2025
• A premium of 56% to Comvita’s 90-day VWAP
The Scheme is subject to shareholder approval, High Court approval, an Independent Adviser’s Report
concluding that the Scheme consideration is within or above the valuation range for Comvita shares, and
other customary conditions.
The Board unanimously recommends shareholders vote in favour of the Scheme and intend to vote shares
controlled by them in favour of the Scheme, in the absence of a Superior Proposal (as defined in the SIA) and
subject to the Independent Adviser’s Report concluding that the Scheme consideration is within or above its
valuation range for Comvita shares.
Contextual challenges remain
We recognise that recent years have been challenging for Comvita and for you as a shareholder. The
company has faced sustained pressure from structural changes in the Mānuka honey sector, softer market
conditions, and the demands of a complex business turnaround, which have impacted performance. We
know this has been reflected in Comvita’s share price and in the uncertainty you may have felt about the
company’s direction.
The Board understands the impact this has had and the importance of delivering a clear, decisive path
forward.
The Mānuka honey sector remains under pressure, with significant supply, economic uncertainty, price and
demand fluctuations, and intense competition (including online). The environment is fragmented, with
several participants under financial strain. Industry dynamics require consolidation at pace, but sector
leadership demands capital strength, scale, and speed – resources not available to Comvita under its current
capital structure.
Compounding these challenges, in recent years our strategy was founded on expectations of sustained
market growth, supported by market insights showing that the best path to capture this was through
building a premium brand to meet demand.
Significant capital was invested in brand equity, distribution reach, supply security and scientific credibility to
position Comvita for this opportunity. A number of these investments did not meet their objectives or
deliver expected returns. In parallel, market growth did not materialise at the expected pace, competition
intensified and oversupply created additional headwinds, reducing profitability.
Comvita has taken urgent steps to reduce costs, simplify operations, and protect long-term brand strength –
which are delivering early results – and our brand remains the category leader in key markets. However,
these factors alone are not sufficient to strengthen the balance sheet or position the business for long-term
sustainability.
Trading conditions in FY25 have remained challenging and, consistent with previous guidance, Comvita
expects to report a significant loss for FY25 as well as a material write-down of the net assets as a result of
impairment testing and provision against inventories.
Our lenders are providing short-term accommodation but have signalled that a longer-term solution -
through debt repayment or potential strategic transactions - is required.
Against that backdrop, the Board – alongside its independent advisors, Craigs Investment Partners and
Goldman Sachs – has acted with urgency to consider all strategic options available, including potential
acquisitions by financial sponsors and strategic trade buyers, subordinated debt issuance and an equity
capital raise. None would deliver the same transaction certainty, and several carried significant dilution or
execution risk.
Transaction offers best option against alternatives considered
The Board unanimously supports the Florenz offer given the premium to recent trading, the greater certainty
it provides amid sustained sector, structural and financial challenges and the liquidity it offers given
historically low trading volumes.
In the absence of the Scheme, Comvita could pursue a capital raise or refinancing, but there is no certainty
either would be successful and, in any event, would likely be on less favourable terms and with potential
erosion of existing shareholder interests. Even if a capital raise or refinancing were successful, there would
continue to be uncertainty around the time and extent to which the turnaround could be delivered
compared to the defined outcome offered by the Scheme.
The Scheme accelerates a capital return to shareholders, mitigates the risks involved in executing Comvita’s
strategic plan over time, and offers a clear, logical alternative to the execution risk, capital constraints, and
prolonged timeframes associated with a continued standalone strategy. It also provides shareholders with a
full exit opportunity in a stock with historically low trading volumes, which the Board believes many
shareholders will find attractive.
Florenz brings the capital strength and scale needed to operate in this environment and accelerate Comvita’s
growth under a consolidated model. They have expressed their commitment to our global team, growing
Comvita’s New Zealand operations, investing in our international markets and lifting the brand’s profile on
the world stage. They value the expertise within Comvita, our role as a flagship New Zealand brand and are
proud to have the opportunity to keep this iconic company under New Zealand ownership.
Florenz has agreed a standstill on enforcement action with Comvita’s banking syndicate through to the
earlier of the Scheme becoming effective, the SIA being terminated or a bank terminating the standstill in
accordance with its terms following a period of consultation with Florenz.
Comvita Board unanimous recommendation and voting intentions
The Board unanimously recommends shareholders vote in favour of the Scheme and intend to vote shares
controlled by them in favour of the Scheme, in the absence of a Superior Proposal (as defined in the SIA) and
subject to the Independent Adviser’s Report concluding that the Scheme consideration is within or above its
valuation range for Comvita shares.
China Resources Enterprise and Li Wang, Comvita’s two largest shareholders who together own
approximately 18.3% of Comvita shares on issue, are supportive of the transaction and have entered into
voting commitments with Florenz pursuant to which they have agreed to vote all of their respective shares in
favour of the Scheme, subject to the Independent Adviser concluding in its report that the $0.80 cents per
share is within or above its valuation range for the Comvita shares and the Board continuing to be supportive
of the Scheme.
In addition, we have confidentially appraised certain institutional shareholders, and they have advised that
they are supportive of the offer being put forward to shareholders to consider.
What happens next
An Independent Adviser’s Report is being prepared by Grant Samuel to assist shareholders in assessing the
merits of the Scheme. The Scheme Booklet, containing this report, further details on the Scheme, and
information on how to vote, is expected to be sent to shareholders in October 2025. This will ensure you
have the appropriate information to properly exercise your vote in an informed manner. The shareholder
meeting to consider the Scheme is expected to be held in November 2025. If all conditions are satisfied, the
Scheme is expected to be implemented in December 2025.
At this stage, shareholders are not required to take any action. You should wait to receive and review the
Scheme Booklet before deciding how to vote or making any decisions regarding your shareholding. We
recommend you seek independent professional advice before making any decision.
The Board will continue to ensure shareholders are kept informed with clear, accurate information
throughout this process.
Yours sincerely,
Bridget Coates
Chair of the Board
Comvita Limited
Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.