Page 58 of the presentationA Merger Party could also be subject...

Page 58 of the presentation

A Merger Party could also be subject to regulatory action if a regulator considers that the Merger Party’s arrangements with a pharmacy give a Merger Party an impermissible interest in the pharmacy or undue influence or control. The consequences were this to occur could include the imposition of criminal penalties or the possibility that the arrangements are declared void. Although some agreements, including franchise agreements, are reviewed by State and Territory pharmacy regulators when approvals are obtained, a risk of regulatory action may arise if the regulator considers that it was not aware of the full import of the arrangements between the Merger Party and a franchisee, or forms the view that the in-practice arrangements differ from the documents which were reviewed.

Page 62 of the presentation

Pharmacy franchisees may seek to argue that elements of their agreements with their franchisor and / or supplier are illegal or void under Australia’s pharmacy ownership laws, and therefore unenforceable (which may involve a claim by pharmacy franchisees that certain historical fees received under franchise or other arrangements should be repayable or that future fees should be reduced). If a Merger Party is in a dispute with a franchisee, the position adopted by the franchisee may include additional claims under pharmacy ownership laws (which may not be available to non-pharmacy franchisees), which may make the dispute more protracted or difficult to resolve in a manner satisfactory to the relevant MergerParty.

Page 64

Key individuals within the management team at, or on the board of, CWG, including Mario Verrocchi, Jack Gance, Damien Gance and Danielle Di Pilla(who will be directors of MergeCo following completion of the Proposed Merger) are also key franchisees of CWG. Together with Sam Gance (who will be a substantial shareholder of MergeCo following completion), these individuals (or entities associated with them) have an interest in 158 of the CWG franchisee pharmacies (of which there are 578 in total).

All very murky.........