Ann: WAV/RULE: DIL: Diligent Corporation - Application for...

• Release Date: 15/02/16 09:18
• Summary: WAV/RULE: DIL: Diligent Corporation - Application for waivers from NZX
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15/02/2016 09:18
WAV/RULE
NOT PRICE SENSITIVE
REL: 0918 HRS Diligent Corporation (NS)

WAV/RULE: DIL: Diligent Corporation - Application for waivers from NZX

NZX Regulation Decision
Diligent Corporation (DIL)
Application for waivers from NZX Main Board Listing Rules 3.4.3, 4.2.1,
7.12.2 and 9.3.1

12 February 2016

Waiver from NZX Main Board Listing Rule 3.4.3

Decision

1. Subject to the conditions set out in paragraph 2 below, and on the basis
that the information provided by Diligent Corporation ("DIL") is complete and
accurate in all material respects, NZX Regulation ("NZXR") grants DIL a
waiver from Rule 3.4.3 to the extent that this Rule would otherwise prohibit
any Director from voting on the Transaction Resolutions and being counted in
the quorum at the relevant board meeting(s) due to the Director's
Shareholding, proposed entry into a Voting Agreement and / or conclusion of
the Employment Arrangements.

2. The waiver in paragraph 1 above is granted subject to the conditions that:

a. the Directors are only permitted to vote on such resolutions as are
necessary to give effect to the Transaction Resolutions;

b. the Proxy Statement discloses any Director who is a party to a Voting
Agreement and includes the material particulars of the Voting Agreements;

c. the Proxy Statement discloses any Director who is negotiating or has
concluded Employment Arrangements and the material details of those
Employment Arrangements (to the extent known at the time the Proxy Statement
is released to the market); and

d. none of the Directors have, at the time of the Board vote to approve and
declare advisable the Merger Agreement and recommend approval of the Merger
to Shareholders, entered into an employment agreement or reached an
understanding with the Bidder (or any of its Associated Persons) as to their
employment with Merger Sub II, the Parent, or any of their respective
Associated Persons.

3. The information on which this decision is based is set out in Appendix One
to this decision. This waiver will not apply if that information is not or
ceases to be full and accurate in all material respects.

4. The Rule to which this decision relates is set out in Appendix Two to this
decision.

5. Capitalised terms that are not defined in the decision have the meanings
given to them in the Rules.

Reasons

6. In coming to the decision to provide the waiver set out in paragraph 1
above, NZXR has considered that:

a. the Policy behind Rule 3.4.3 is to prevent situations arising where
directors who have a vested interest in a transaction, may authorise the
entry into, or implementation of, matters that are detrimental to the
interests of security holders as a result of that interest.  The granting of
this waiver does not offend the policy of the Rule;

b. DIL has advised NZX that under Delaware Law a full board is required to
vote on the Transaction Resolutions, and it is best practice that all
Directors unanimously approve the Transaction Resolutions.  Further, DIL has
advised that Voting Agreements are generally expected in the US when a target
has significant shareholders, and should the Directors recommend the approval
of the Merger to DIL's Shareholders, it would be expected that the Directors
who are significant Shareholders would be required to enter into a Voting
Agreement with the Parent;

c. all Directors may be considered to be interested in the Merger Agreement
for the purposes of Rule 3.4.3.  In the absence of a waiver, none of DIL's
Directors would permitted to vote on the Transaction Resolutions;

d. where Director's are interested due to their Shareholdings and any
proposed Voting Agreement between the Parent and the Directors or their
Associated Persons (as Shareholders), the interests are aligned with the
interests of DIL's Shareholders, as the Directors will receive the same
Merger Consideration as all other Shareholders;

e. DIL has advised, and NZXR has no reason not to accept, that it is standard
practice for some Directors of a target to continue in employment with a
bidder after a Merger. The condition in paragraph 2.d. above, provides
comfort that the Employment Arrangement has not been concluded at the time
the Merger Agreement is approved by Directors and therefore will unlikely
have influenced Directors' decisions to approve the Merger;

f. it would be detrimental to Shareholders if they were unable to vote on the
Merger, due to the inability of the Directors to approve the Merger Agreement
and declare it to be advisable to Shareholders.  Further, it would be
detrimental to Shareholders if the Directors could not vote on, or recommend,
an Adverse Recommendation Change or terminate the Merger Agreement as allowed
by that Agreement; and

g. on the listing of DIL it was recognised that there were inconsistencies
between the Rules, which generally reflects New Zealand Companies Law and
best practice, and Delaware Law and US best practice, to which DIL is
subject.  This waiver recognises the different law and best practice that DIL
is expected to comply with as a Delaware incorporated corporation.

Waiver from NZX Main Board Listing Rule 4.2.1

Decision

7. Subject to the conditions set out in paragraph 8 below, and on the basis
that the information provided by DIL is complete and accurate in all material
respects, NZXR grants DIL a waiver from Rule 4.2.1 to the extent that this
Rule would otherwise prohibit DIL from including the Termination Fee
provisions in the Merger Agreement.

8. The waiver in paragraph 7, above, is granted subject to the conditions
that:

a. this waiver and the terms upon which the Termination Fee would be payable
are disclosed in the Proxy Statement; and

b. the Directors provide a certificate to NZXR that, in their opinion, the
Termination Fee is within a market standard range for a Merger.

9. The information on which this decision is based is set out in Appendix One
to this decision. This waiver will not apply if that information is not or
ceases to be full and accurate in all material respects.

10. The Rule to which this decision relates is set out in Appendix Two to
this decision.

11. Capitalised terms that are not defined in the decision have the meanings
given to them in the Rules.

Reasons

12. In coming to the decision to provide the waiver set out in paragraph 7
above, NZXR has considered that:

a. the policy behind Rules 4.2.1 to 4.2.3 is to prevent the Issuer from
putting in place arrangements that will prevent the transfer of shares, which
in turn may affect the takeover process.  The granting of this waiver does
not offend this policy;

b. DIL has advised that a Termination Fee is standard practice for mergers of
this nature, including to cover any termination due to a takeover by a third
party. The condition in paragraph 8.b. above provides comfort that the
Termination fee will be in a market standard range and is not likely to be
material to DIL;

c. DIL has advised, and NZXR has no reason not to accept, that no credible
bidder would agree to a merger agreement without a Termination Fee. The
purpose of the Termination Fee is not to discourage or frustrate a transfer
of shares, but is to facilitate entry into the Merger Agreement; and

d. the Parent will only become a Related Party of DIL through entry into the
proposed Voting Agreements.  But for the proposed Voting Agreements, DIL
would have been able to rely on the exclusion in Rule 4.2.3, as the Directors
consider that the intention is not to restrict or prevent the transfer of
securities.

Waiver from NZX Main Board Listing Rule 7.12.2

Decision

13. Subject to the condition set out in paragraph 14 below, and on the basis
that the information provided by DIL is complete and accurate in all material
respects, NZXR grants DIL a waiver from Rule 7.12.2 to the extent that this
Rule would require DIL to disclose the conversion of Ordinary Shares and
Preference Shares into the right to receive the Merger Consideration, in the
form required by Appendix 7 to the Rules.

14. The waiver in paragraph 13, above, is granted subject to the condition
that an explanation of the nature and timing of the conversion including
pricing, entitlement and conversion ratio information, are disclosed together
in one location, in an appropriate section and a prominent position, in the
Proxy Statement.

15. The information on which this decision is based is set out in Appendix
One to this decision. This waiver will not apply if that information is not
or ceases to be full and accurate in all material respects.

16. The Rule to which this decision relates is set out in Appendix Two to
this decision.

17. Capitalised terms that are not defined in the decision have the meanings
given to them in the Rules.

Reasons

18. In coming to the decision to provide the waiver set out in paragraph 13
above, NZXR has considered that:

a. the information provided in an Appendix 7 is generally provided in advance
of a record date, to ensure that NZX Operations, and market participants have
advance warning of corporate actions which require action.  As DIL proposes
to delist as a part of the Merger, should the Merger be approved, the
Conversion will not likely take place while DIL is listed on NZX's markets;
and

b. the information that would otherwise be provided in an Appendix 7 will
instead be included in the Proxy Statement, as is required by the condition
in paragraph 14 above. This information will be provided well in advance of
the Record Date for the Conversion.  The Proxy Statement will provide more
context to the information, and will allow details and explanation which are
otherwise not able to be included in an Appendix 7 notice.

Waiver from NZX Main Board Listing Rule 9.3.1

Decision

19. Subject to the conditions set out in paragraph 20 below, and on the basis
that the information provided by DIL is complete and accurate in all material
respects, NZXR grants DIL a waiver from Rule 9.3.1 to the extent that this
Rule would disqualify Related Parties who are parties to the transactions or
any Associated Person of those Related Parties, from voting on the resolution
under Rule 9.2.1 to approve the proposed Merger.

20. The waiver in paragraph 19, above, is granted subject to the conditions
that:

a. other than the proposed Voting Agreement and / or Employment Arrangement
(if any), there is no other relationship between DIL, its Directors, or
Substantial Product Holders, or their Associated Persons, and the Bidder;

b. the Directors provide a certificate to NZXR that, in their opinion,:

i. the terms of the Merger Agreement were negotiated on an arms length and
commercial basis;

ii. the method for setting the consideration payable under the Merger
Agreement was set on an arms length and commercial basis;

iii. the terms of the Merger Agreement and entry into the proposed Merger
Agreement are in the best interests of, DIL and its security holders;

iv. other than the Merger Consideration, parties to any proposed Voting
Agreements and their Associated Persons will not receive any additional
direct or indirect benefit from their entry into the Voting Agreement;

v. other than the potential Employment Arrangement with the Executive
Director, no Director will receive any additional direct or indirect benefit
from the Employment Arrangement; and

vi. the outstanding awards granted under DIL's employee share schemes have
been dealt with under the Merger in accordance with the terms of those
schemes as approved by Shareholders previously and the relevant award
agreements;

c. none of the Directors has, at the time of the Board vote to approve and
declare advisable the Merger Agreement and recommend approval of the Merger
to Shareholders, entered into an employment agreement or reached an
understanding with the Bidder (or any of its Associated Persons) as to their
employment with Merger Sub II, the Parent, or any of their Associated
Persons;

d. the Proxy Statement discloses any Director who is a party to a Voting
Agreement and includes the material particulars of the Voting Agreement;

e. the Proxy Statement discloses any Director who is negotiating or has
concluded Employment Arrangements and the material details of those
Employment Arrangements (to the extent known at the time the Proxy Statement
is released to the market);

f. the Proxy Statement discloses the treatment of the outstanding awards
granted under DIL's employee share schemes; and

g. the Board has received an opinion from an appropriately qualified
financial advisor that the Merger Consideration is fair, from a financial
point of view, to DIL's Ordinary Holders.

21. The information on which this decision is based is set out in Appendix
One to this decision. This waiver will not apply if that information is not
or ceases to be full and accurate in all material respects.

22. The Rule to which this decision relates is set out in Appendix Two to
this decision.

23. Capitalised terms that are not defined in the decision have the meanings
given to them in the Rules.

Reasons

24. In coming to the decision to provide the waiver set out in paragraph 1
above, NZXR has considered that:

a. the policy behind Rule 9.3.1 is to prevent Related Parties voting on
decisions to approve Material Transactions where that Related Party may have
used their influence to gain favourable consideration due to its relationship
with the Issuer. In the circumstances of the Merger, the Related Party
relationships, as described below, are immaterial to the promotion, or terms
and conditions of the Merger.  The granting of this waiver therefore does not
offend the policy of this Rule;

b. the Voting Agreements, once executed, create a Related Party relationship
with the Parent, which would prevent parties to those agreements voting at
the Meeting.  The Related Party relationships arise through the negotiation
of the Merger to which the Voting Agreements relate. Prior to negotiations of
the Merger, there was no Related Party relationship with the Parent;

c. DIL has advised that there is no additional consideration or benefit
received for entering into the Voting Agreements. The purpose of the Voting
Agreements is to ensure that counterparties vote in favour of the Merger. DIL
has advised that this is standard practice in the US and Delaware for mergers
of this nature. Without the waiver, the Voting Agreements would serve no
purpose and but for the Voting Agreements, the Related Party relationships
would not exist;

d. as well as the Voting Agreements, the Employment Arrangement (if
concluded) may become part of a related series of transactions with the
Merger.  DIL has advised, and NZXR has no reason not to accept, that it is
standard practice that executive directors of a target will continue in
employment with a bidder after a merger. The condition in paragraph 20.c.
above provides comfort that the negotiation of the Employment Arrangements
have not been concluded at the time the Merger Agreement is entered into.
Further, none of the Non-Executive Directors will receive direct or indirect
benefits from the Employment Arrangements.  The Executive Director holds no
securities with Voting Rights to vote at the Meeting; and

e. DIL has confirmed that all Shareholders will be offered the Merger
Consideration. Other than the possible Employment Arrangement, there is no
additional benefit to the Directors from DIL entering into the Merger. DIL
has advised that there is no other Related Party relationship with the Parent
which would result in influence over the terms and conditions, or promotion
of the Merger. DIL has advised, and NZXR agrees, that it is unlikely that
the Parent will be able to influence the terms of the Merger Agreement
through the Related Party relationships.

Confidentiality

25. DIL has requested this decision be kept confidential until DIL has made
an announcement about the Merger.

26. In accordance with Footnote 1 to Rule 1.11.2, NZXR grants DIL's request.

Appendix One

1. Diligent Corporation ("DIL") is a Listed Issuer with ordinary shares
("Ordinary Shares") Quoted on the NZX Main Board ("Main Board"). DIL also has
on issue unlisted preference shares ("Preference Shares").

2. DIL is a corporation incorporated in the State of Delaware in the United
States of America ("US"). As a Delaware corporation, DIL's internal affairs
are governed by the General Corporation Law of the State of Delaware
("Delaware Law").  Due to inconsistencies between the requirements of
Delaware Law and the Main Board Listing Rules ("Rules"), DIL was granted a
number of waivers from the Rules at the point of listing on the Main Board.

3. DIL is in the advanced stages of negotiating a merger agreement ("Merger
Agreement") with Insight Venture Partners ("Buyer").  The Merger Agreement
provides for DIL and wholly owned subsidiaries of Buyer to merge, in summary,
as follows:

a. the Buyer is using three bodies corporate to participate in the merger:
(i) Parent, which is affiliated with funds managed by Buyer; (ii) Merger Sub
II which is a direct wholly owned subsidiary of Parent; (iii) Merger Sub I
which is a direct wholly owned subsidiary of Merger Sub II.

b. the merger is structured as two mergers, the second occurring immediately
after the first. Under the first merger ("First Merger"), Merger Sub I will
merge with and into DIL, with DIL continuing as the surviving entity and as a
direct wholly-owned subsidiary of Merger Sub II. Under the second merger, DIL
will merge with Merger Sub II, with Merger Sub II continuing as the surviving
entity and as a direct wholly-owned subsidiary of Parent. Consequently, on
the close of the Merger, DIL and Merger Sub I will cease to exist and Merger
Sub II will effectively take DIL's place in the current corporate structure
(the "Merger").

c. pursuant to the First Merger, all of the Ordinary Shares (subject to
dissenter's rights) will be converted into the right to receive fixed cash
consideration (denominated in US dollars) per share (Ordinary Share
Consideration).  This amount will be paid to holders of DIL's Ordinary Shares
("Ordinary Holders").

d. all of the Preference Shares will be converted into the right to receive
the Ordinary Share Consideration, plus an amount equal to the accrued and
unpaid dividends on those preferred shares and the liquidation preference of
US$0.15 per preferred share ("Preference Share Consideration" and, along with
the Ordinary Share Consideration, the "Merger Consideration"). This amount
will be paid to holders of DIL's Preference Shares ("Preference Holders").

e. participants in DIL's employee share schemes will have vested and unvested
rights cancelled pursuant to the terms of the applicable share schemes in
exchange for Ordinary Share Consideration less any applicable exercise price,
as appropriate.

4. Subject to the Merger agreement proceeding, DIL will apply to be delisted
from the Main Board.

5. The Merger will need to be approved under the Delaware Law and DIL's
certificate of incorporation by the affirmative vote of (i) the holders of at
least 60% of DIL's outstanding Preference Shares, consenting or voting
separately as a class and (ii) the holders of a majority in voting power of
the outstanding Preference Shares and outstanding Ordinary Shares, voting as
one class (whether or not individual holders in fact vote). Approval by the
Ordinary Holders is also required by Rules 9.1.1 and 9.2.1.

6. DIL has advised that in the US, agreements are commonly entered into by a
bidder in order to obtain some commercial certainty that key shareholders
will support the transaction ("Voting Agreements"). Any Ordinary Holders or
Preference Holders (together the "Shareholders") who enter into a Voting
Agreement agree to vote their shares to adopt the Merger Agreement as set out
in the Proxy Statement.  The Proxy Statement will also describe the material
terms of the Voting Agreements.  DIL has confirmed that Shareholders do not
receive any consideration, or direct or indirect benefit from entering into a
Voting Agreement.

7. Before the Merger can be put to the Shareholders, Delaware Law requires
that the Merger be approved by the full board of directors of DIL (the
"Directors").

8. Further, Delaware Law contemplates that the Directors may subsequently
change their recommendation that Shareholders approve the Merger.  If, at any
stage, the full board of Directors determines that the Merger is not
advisable, the board is required in the discharge of its fiduciary duties to
vote to approve a change to the recommendation that Shareholders vote in
favour of the Merger (an "Adverse Recommendation Change"). For example, an
Adverse Recommendation Change may arise if there is an unsolicited
alternative proposal for the acquisition of DIL.

9. DIL has advised that it is best practice in the US that all directors of
DIL, as the target in a merger, approve the Merger or any Adverse
Recommendation Change. A Director would not expect to abstain from voting
due to having a shareholding in the target or undertaking employment
negotiations with the bidder, so long as that information is disclosed to
shareholders and the transaction is fair.

10. All Directors have equity interests in DIL, as is standard practice in
the US.  Some Directors may also enter into Voting Agreements in relation to
their Shareholdings.  Further, Brian Stafford who is the Chief Executive
Officer (the "Executive Director") is currently negotiating terms of
employment with Parent (the "Employment Arrangement"). DIL has advised that
the negotiations will not have been concluded or an understanding been
reached between the parties, or agreements been entered into, before the
recommendations are provided by the Board, and the signing of the Merger
Agreement.

11. All other Directors of DIL, but for the Executive Director (the
"Non-Executive Directors"), have indicated that they will not undertake
employment negotiations with the Parent.

12. Depending on the size of an individual Director's Shareholding and the
outcome of the negotiation of the Employment Arrangements, a Director may
derive a material financial benefit from the Merger and therefore be
considered interested in the Merger.  Under Rule 3.4.3, being interested in
the Merger would prevent the Director from voting to:

a. approve the Merger Agreement and ancillary documents;

b. recommend approval of the Merger to DIL's Shareholders;

c. give effect to the Merger, if the Merger is approved by Shareholders;

d. effect any Adverse Recommendation Change; or

e. terminate the Merger Agreement following an Adverse Recommendation Change,
or otherwise in accordance with the terms of the Merger Agreement

(together the "Transaction Resolutions").

13. DIL is therefore seeking a waiver to allow the Directors to vote on the
Transaction Resolutions.

14. The Merger will be put to Shareholders in a proxy statement (being the US
version of a notice of meeting), relating to the Shareholders meeting to vote
on the Merger (the "Proxy Statement" and the "Meeting").

15. The Company has engaged Simmons Corporate Finance Limited to prepare the
Appraisal Report required under Rule 9.2.5(b), to accompany the Proxy
Statement, due to the approval required under Rule 9.2.1.  Approval is
required under Rule 9.2.1 because:

a. the Merger is a Material Transaction under Rule 9.2.2(f); and

b. the following Related Parties of DIL are either parties to the Merger or a
transaction which is part of a related series with the Merger:

i. Parent: will become a Related Party under Rule 9.2.3(b) by virtue of
holding a Relevant Interest in more than 10% of DIL's Preference Shares and
Ordinary Shares under the proposed Voting Agreements with Spring Street
Partners L.P, Carroll Capital Holdings LLC, Greenwood Investments LLC, the
Elizabeth Carroll 2012 Descendants Trust and the Kenneth Carroll 2012 Family
Trust.

ii. Counterparties to the Voting Agreements: Related Parties under Rule
9.2.3(c), as they are Associated Persons of the Parent pursuant to Rule
1.8.3(c), and parties to a transaction which is part of a related series of
transactions with the Merger.

iii. The Executive Director: Related Parties under Rule 9.2.3(a) as he is a
Director of DIL, and a possibly party to a transaction (being the Employment
Arrangement), which is part of a related series of transactions with the
Merger.

16. As 9.2.1 approval is required, the voting restrictions under Rule 9.2.1
would restrict anyone who is a party to the Merger from voting.  DIL has
sought a waiver to allow these parties to vote on the Merger.

17. If a Shareholder does not vote in favour of the Merger and makes a timely
demand to exercise appraisal rights, that shareholder is entitled to apply to
a Delaware Court for a determination of the fair value, in cash, of its
shares. That Shareholder would then be paid that sum (plus interest, if any,
at the statutory rate, from the date of the Merger through to the payment of
the judgment) instead of the Ordinary Share Consideration.

18. Under Section 8.2 of the proposed Merger Agreement, DIL must pay a
termination fee to the Parent if the Merger Agreement is terminated for the
reasons set out in Sections 8.2(b) and 8.2(c) ("Termination Fee").

19. The Termination Fee is to be set at 3.5% of the enterprise value of the
Merger, which DIL advises is a market standard amount for the Termination Fee
and is within the range that the Delaware courts have previously found
acceptable.

20. In summary, the Termination Fee becomes payable by DIL where the Merger
Agreement is terminated in a number of circumstances, as specified in that
agreement, including most relevantly for the purposes of the Rules by:

a. DIL in response to an unsolicited superior acquisition proposal so as to
enter into a definitive agreement with respect to such proposal;

b. Parent where DIL's board has, enacted an Adverse Recommendation Change or
approved, recommended or entered into a definitive agreement with respect to
an alternative acquisition proposal or DIL materially breached its
non-solicitation covenants;

c. Parent where there has been a breach of any representation, warranty,
covenant or agreement on the part of DIL contained in the Merger Agreement
("DIL Breach") such that specific conditions in Merger Agreement would not be
satisfied and such breach has not been cured in 20 days or is incapable of
being cured provided that the breach involves DIL's obligations in as set out
in the Merger Agreement; and

d. Parent or DIL where the sunset date has been reached or shareholders do
not approve the Merger or by Parent due to a DIL Breach not caught under
paragraph 20.c. above, where DIL has, amongst other things, within 12 months
of the date of the Merger Agreement, entered into a definitive agreement with
respect to an alternative acquisition proposal that was announced and not
withdrawn prior to the Meeting or the sunset date or enters into any other
acquisition proposal.

21. As an overseas incorporated issuer, DIL is not a Code Company.
Therefore, the Takeover Provisions in section 4 of the Rules apply to DIL.

22. Rule 4.2.1 prohibits DIL from doing anything that would result in any
material liability or obligation of the Issuer crystallising or arising or
being made due and payable before its normal maturity, by reason of a
Transfer of a Quoted Equity Security of the Issuer, if the agreement is
entered into with a person who is Related Party (Rule 4.2.2(g) and Rule
4.2.3).

23. Should an alternative acquisition be structured so as to be a Transfer of
Quoted Equity Securities of DIL, such as a US tender offer, the payment of
the Termination Fee may trigger Rule 4.2.2(g). While DIL is not aware of any
such alternative acquisition at this time, DIL has sought a waiver to allow
it to include the Termination Fee provisions in the Merger Agreement.

24. As noted above, the Merger will result in the Ordinary Shares and the
Preference Shares converting into the right to receive the Merger
Consideration. As there is a Conversion, Rule 7.12.2 requires that an
Appendix 7 notice including details of the conversion be released to the
market 10 Business Days before the Record Date for the Conversion.  DIL has
sought a waiver to allow it to provide the information required under
Appendix 7, in a different format.

Appendix Two

Rule 3.4 Proceeding and Powers of Directors

Rule 3.4.3 Subject to Rule 3.4.4, a Director shall not vote on a Board
resolution in respect of any matter in which that Director is interested, nor
shall the Director be counted in the quorum for the purposes of consideration
of that matter. For this purpose, the term "interested" bears the meaning
assigned to that term in section 139 of the Companies Act 1993, on the basis
that if an Issuer is not a company registered under that Act, the reference
to the "company" in that section shall be read as a reference to the Issuer.

Rule 4.2 Restricted and Defensive Measures

Rule 4.2.1 Except as permitted or required by Rule 4.3 no Issuer may:

(a) include in its Constitution any provision; or

(b) do anything or omit to do anything;

which would have the effect of causing or permitting an outcome or condition
described in Rule 4.2.2.

Rule 4.2.2 An outcome or condition is prohibited for the purposes of Rule
4.2.1 if:

(a) registration of any transfer of a Quoted Equity Security is prevented or
restricted, or made subject to a precondition, other than as permitted by
Section 11; or

(b) the enjoyment by a new holder of any benefit or right conferred by the
Issuer on the holder of a Quoted Equity Security, is conditional on anything
other than registration of the relevant transfer; or

(c) any benefit or right conferred by the Issuer on the holder of a Quoted
Equity Security is cancelled or varied or made contingent by reason of a
Transfer of that Quoted Equity Security; or

(d) any Quoted Equity Security may be redeemed, cancelled, made forfeit,
disposed of or otherwise dealt with, by reason of a Transfer of that or any
other Quoted Equity Security without the consent of the holder, other than as
permitted by Rule 8.2 and Rule 8.5; or

(e) any benefit or right conferred by the Issuer on the holder of a Security
is enhanced, extended, or crystallises or attaches by reason of a Transfer of
a Quoted Equity Security; or

(f) any material benefit, right or asset of the Issuer terminates or is
disposed of or is made contingent or the subject of a third party option by
reason of a Transfer of a Quoted Equity Security of the Issuer; or

(g) any material liability or obligation of the Issuer crystallises or arises
or can be made due and payable before its normal maturity by a third party by
reason of a Transfer of a Quoted Equity Security of the Issuer.

Nothing in this Rule limits any rule of law, whether relating to the duties
of Directors or otherwise.

Rule 7.12  Announcements

Rule 7.12.2 Where any benefit is to be paid or distributed on Quoted
Securities (including dividends, interest or bonus issues) or any Conversion
of Securities or call on Securities is to take place, the Issuer shall give
to NZX, forthwith after any Director's recommendation and at least 10
Business Days before the Record Date to determine entitlements or
obligations, full details of the benefit, Conversion or call, including the
information in the table below. That information shall be supplied in the
form set out in Appendix 7.

Rule 9.3 Voting Restrictions

Rule 9.3.1 Notwithstanding anything to the contrary in the Rules, on any
resolution of the nature listed in column 1 of the table below, no Vote in
favour of any such resolution shall be cast on any Securities held by a
person of the nature listed in respect of that resolution in column 2 of the
table below, or by any Associated Person of such a person.

RESOLUTION  Resolution under Rule 9.2.1

DISQUALIFIED PERSON Any person referred to in Rule 9.2.3 who is a party or
beneficiary (in terms of Rule 9.2.1(a) or Rule 9.2.1(b)) to or of the
transactions the subject of the resolution.
End CA:00277635 For:DIL    Type:WAV/RULE   Time:2016-02-15 09:18:47