Intention to establish primary listing on NASDAQ with continued (secondary) listing on ASX

AVITA Medical Limited (Company) (ASX: AVH, NASDAQ: RCEL), a regenerative medicine company with a technology platform positioned to address unmet medical needs in therapeutic skin restoration, announced today its intention to redomicile the Company and its subsidiaries (Avita Group) from Australia to the United States of America by way of a scheme of arrangement under Part 5.1 of the Corporations Act 2001 (Cth) (Redomiciliation).

To implement the Redomiciliation, the Company has entered into a Scheme Implementation Agreement dated 20 April 2020 with AVITA Therapeutics, Inc. (Avita US), a newly-formed company incorporated in Delaware in the United States. A copy of the Scheme Implementation Agreement is attached and will be available on the Company’s website.

If the Redomiciliation is implemented:

  • Avita US will become the new holding company of the Avita Group;
  • shareholders will effectively exchange their shares in the Company for equivalent securities in Avita US; and
  • the existing listing of the Company on the Australian Securities Exchange (ASX) (being the Company’s current primary listing) and on the NASDAQ Stock Market (NASDAQ) (being the Company’s current secondary listing) will be inverted and replaced with a new listing of Avita US on NASDAQ (as its future primary listing) and on the ASX (as its future secondary listing).

The Redomiciliation is subject to regulatory and court approvals, as well as approval by the Company’s shareholders at an extraordinary general meeting which will be convened to address the Redomiciliation (Scheme Meeting).

Reasons for the Redomiciliation

After carefully considering the advantages, disadvantages and risks of the Redomiciliation, the directors of the Company (Board) are of the unanimous view that the advantages of the Redomiciliation materially outweigh its disadvantages and risks. In particular, the Board believes that the Redomiciliation will:

  • substantially reduce the costs, burden, resourcing and risks associated with dual financial reporting and related compliance obligations that the Company has become subject to in both the United States and Australia (since 31 December 2019), which is expected to save approximately A$400,000 per annum in external professional costs alone;
  • create a “local” share listing on the NASDAQ exchange in the United States, the largest market for the treatment for burns, and where the Board’s immediate strategy is to further grow the Avita Group’s visibility and presence;
  • increase the attractiveness of the Avita Group to a broader range of investors in the United States capital market, the largest in the world in terms of market capitalisation and trading volume; and
  • better align the Avita Group’s corporate structure with its business operations in the United States, which is where nearly all of the Avita Group’s employees are located. The Company derives virtually all of its revenue from the United States, has no physical presence outside of the United States, and a significant majority of its issued share capital (taking into account its American Depositary Shares (ADSs), which are traded exclusively on NASDAQ) is currently held by investors in the United States.

The Board unanimously recommends the Redomiciliation

The Board unanimously recommends that shareholders vote in favour of the resolution to approve the Redomiciliation at the Scheme Meeting. Each member of the Board intends to vote the shares in the Company which they hold (or which are held on their behalf) in favour of that resolution.

Independent Expert

The Company has engaged BDO Corporate Finance Limited (Independent Expert) to report on whether the Redomiciliation is in the best interests of shareholders as a whole. The scheme booklet in connection with the Redomiciliation (Scheme Booklet) will include the report of the Independent Expert.

Key features of the Redomiciliation

If the Redomiciliation is implemented:

  • Avita US will acquire all of the Company’s ordinary shares (Shares), and in exchange:

- shareholders in eligible jurisdictions who hold Shares (other than the ADS Depositary) will receive 5 CHESS depositary interests (CDIs) in Avita US (Avita US CDIs) for every 100 Shares held by them on the record date for the Redomiciliation (Record Date); and

- the ADS Depositary (who holds Shares for the benefit of holders of the Company’s ADSs) will receive one Avita US Share for every 100 Shares held by it on the Record Date and will distribute to ADS holders one Avita US Share for every 5 ADSs held by them on the Record Date (upon surrender by them of their ADSs and payment of the ADS Depositary’s fee for that surrender).

Therefore, shareholders in eligible jurisdictions and ADS holders (on the Record Date), upon receiving Avita US CDIs or Avita US Shares, will hold an equivalent proportional interest in Avita US as they held in the Company prior to implementation of the Redomiciliation.

Shareholders (on the Record Date) in certain ineligible jurisdictions (which are listed under the definition of “Ineligible Shareholder” in the Scheme Implementation Agreement) will have their entitlements sold pursuant to a sale facility, and those holders will receive the relevant net proceeds of that sale. In addition, shareholders (on the Record Date) who have a fractional entitlement to an Avita US Share or an entitlement to Avita US CDIs that is not sufficient to equate to a whole Avita US Share, will have those fractional interests sold pursuant to the same sale facility and those holders will receive the relevant net proceeds of that sale.

  • If the Redomiciliation is implemented Avita US Shares will be quoted on NASDAQ and Avita US CDIs will be quoted on the ASX. Avita US Shares and Avita US CDIs will be transmutable, so that Avita US shareholders can convert their Avita US Shares (on NASDAQ) into Avita US CDIs (on the ASX) (and vice versa).
  • It is not intended that the Redomiciliation will result in any changes to the operations, management or strategy of the Avita Group.

Implementation of the Redomiciliation is conditional upon the satisfaction of certain conditions, which are set out in the Implementation Agreement, including:

  • The Independent Expert concluding that the scheme to give effect to the Redomiciliation is in the best interests of the Company’s shareholders as a whole;
  • The Company’s shareholders approving the scheme;
  • The Federal Court of Australia approving the scheme;
  • Avita US obtaining approval from the Foreign Investment Review Board;
  • ASX approving Avita US for admission to the official list of the ASX and the Avita US CDIs for official quotation, which approval may be subject to satisfaction of various conditions; and
  • The Avita US Shares being authorised for listing on NASDAQ, subject to official notice of issuance following implementation of the scheme and any customary conditions.

Scheme Meeting

For the Redomiciliation to be implemented, a requisite majority of shareholders must vote to approve the Redomiciliation at the Scheme Meeting, which is intended to be held in June 2020.

Due to the COVID-19 pandemic and the restrictions imposed by Australian governments in response to it, the Company will be making an application to the Federal Court of Australia for orders to permit the Scheme Meeting to be conducted exclusively as a virtual meeting. Accordingly, it is proposed that the Scheme Meeting will be conducted by way of a live webcast only.

Further details on how to participate in the Scheme Meeting by way of live webcast and on how to vote (including by way of proxy, attorney or corporate representative) will be provided in the Scheme Booklet.

Any changes to the proposal that the Scheme Meeting be conducted exclusively as a virtual meeting will be outlined in the Scheme Booklet and thereafter on the ASX, NASDAQ and via news release, and will also be notified on the Company’s website (https://www.avitamedical.com/).

ADS holders will be entitled to vote and participate in the Scheme Meeting through the Bank of New York Mellon, the ADS depositary.

Indicative timetable and next steps

Shareholders do not need to take any action at this time.

The Scheme Booklet is intended to be sent to shareholders in May 2020. The Scheme Booklet will contain, amongst other things, further information relating to the Redomiciliation, reasons for the Board’s unanimous recommendation, information on the Scheme Meeting and on how to vote and the report of the Independent Expert.

If approved by the requisite majorities of shareholders (and subject to regulatory and court approvals), the Avita Group is targeting to implement the Redomiciliation by 30 June 2020, following which Avita US Shares and Avita US CDIs will be issued and can be traded on NASDAQ and the ASX respectively.

These dates are indicative only and subject to, amongst other things, court availability (particularly in the current environment) and the conditions precedent to completion of the Redomiciliation (as set out in the Scheme Implementation Agreement) being satisfied or waived.

Authorized for release by the Chief Financial Officer of AVITA Medical Limited.

###

ABOUT AVITA MEDICAL LIMITED

AVITA Medical is a regenerative medicine company with a technology platform positioned to address unmet medical needs in burns, chronic wounds, and aesthetics indications. AVITA Medical’s patented and proprietary collection and application technology provides innovative treatment solutions derived from the regenerative properties of a patient’s own skin. The medical devices work by preparing a RES® REGENERATIVE EPIDERMAL SUSPENSION, an autologous suspension comprised of the patient’s skin cells necessary to regenerate natural healthy epidermis. This autologous suspension is then sprayed onto the areas of the patient requiring treatment.

AVITA Medical’s first U.S. product, the RECELL® System, was approved by the U.S. Food and Drug Administration (FDA) in September 2018. The RECELL System is indicated for use in the treatment of acute thermal burns in patients 18 years and older. The RECELL System is used to prepare Spray-On Skin™ Cells using a small amount of a patient’s own skin, providing a new way to treat severe burns, while significantly reducing the amount of donor skin required. The RECELL System is designed to be used at the point of care alone or in combination with autografts depending on the depth of the burn injury. Compelling data from randomized, controlled clinical trials conducted at major U.S. burn centers and real-world use in more than 8,000 patients globally, reinforce that the RECELL System is a significant advancement over the current standard of care for burn patients and offers benefits in clinical outcomes and cost savings. Healthcare professionals should read the INSTRUCTIONS FOR USE - RECELL® Autologous Cell Harvesting Device (https://recellsystem.com/) for a full description of indications for use and important safety information including contraindications, warnings and precautions.

In international markets, our products are marketed under the RECELL System brand to promote skin healing in a wide range of applications including burns, chronic wounds and aesthetics. The RECELL System is TGA-registered in Australia and received CE-mark approval in Europe.

To learn more, visit www.avitamedical.com.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This letter includes forward-looking statements. These forward-looking statements generally can be identified by the use of words such as “anticipate,” “expect,” “intend,” “could,” “may,” “will,” “believe,” “estimate,” “look forward,” “forecast,” “goal,” “target,” “project,” “continue,” “outlook,” “guidance,” “future,” other words of similar meaning and the use of future dates. Forward-looking statements in this letter include, but are not limited to, statements concerning, among other things, our ongoing clinical trials and product development activities, regulatory approval of our products, the potential for future growth in our business, and our ability to achieve our key strategic, operational and financial goal. Forward-looking statements by their nature address matters that are, to different degrees, uncertain. Each forward- looking statement contained in this letter is subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statement. Applicable risks and uncertainties include, among others, the timing of regulatory approvals of our products; physician acceptance, endorsement, and use of our products; failure to achieve the anticipated benefits from approval of our products; the effect of regulatory actions; product liability claims; risks associated with international operations and expansion; and other business effects, including the effects of industry, economic or political conditions outside of the company’s control. Investors should not place considerable reliance on the forward-looking statements contained in this letter. Investors are encouraged to read our publicly available filings for a discussion of these and other risks and uncertainties. The forward-looking statements in this letter speak only as of the date of this release, and we undertake no obligation to update or revise any of these statements.

SCHEME IMPLEMENTATION AGREEMENT

AVITA Medical Limited

AVITA Therapeutics, Inc.

KPMG Law

KPMG International Towers Sydney 3 300 Barangaroo Avenue Sydney NSW 2000 ABN 78 399 289 481 | DX1056 Sydney

Liability limited by a scheme approved under Professional Standards Legislation

CONTENTS

1. DEFINITIONS AND INTERPRETATION 2. SCHEME 3. OPTIONS, RSUS AND WARRANTS IN AVITA AUSTRALIA 4. CONDITIONS 5. GENERAL OBLIGATIONS OF PARTIES 6. AVITA AUSTRALIA OBLIGATIONS 7. AVITA US OBLIGATIONS 8. ANNOUNCEMENT 9. TERMINATION 10. REPRESENTATIONS AND WARRANTIES 11. RELEASE 12. COSTS AND STAMP DUTY 13. GST 14. NOTICES 15. AMENDMENT AND ASSIGNMENT 16. GENERAL

DATED 20 April 2020

PARTIES

AVITA Medical Limited ACN 058 466 523 of Level 7, 330 Collins Street, Melbourne, 3000, Victoria, Australia (Avita Australia)

AVITA Therapeutics, Inc., a company incorporated in the State of Delaware in the United States of America, with a principal business address of 28159 Avenue Stanford, Suite 220, Valencia, California 91355 (Avita US)

RECITALS

 A.    

Avita Australia is an Australian public company listed on the ASX (as its primary listing) and on NASDAQ (as its secondary listing).

 B.    

The Avita Australia securities quoted for trading on the ASX are Avita Australia Shares, and the Avita Australia securities quoted for trading on NASDAQ are Avita Australia ADSs.

 C.    

Avita US is a company incorporated in Delaware in the United States, which has been established for the purpose of effecting a redomiciliation of the Avita Group to the United States.

 D.    

The Avita Group wishes to effect a redomiciliation from Australia to the United States by Avita US acquiring all of the Avita Australia Shares by way of a scheme of arrangement between Avita Australia and the Avita Australia Shareholders under Part 5.1 of the Corporations Act.

 E.    

Avita Australia and Avita US propose to implement the Scheme on the terms and conditions of this agreement.

OPERATIVE PROVISIONS

1. DEFINITIONS AND INTERPRETATION

1.1. Definitions

The following definitions apply in this agreement, unless the context requires otherwise:

ADS means an American Depositary Share.

ADS Depositary means The Bank of New York Mellon.

ADS Holder means a holder of Avita Australia ADSs.

Announcement means an announcement, press release or other public statement (other than a draft explanatory statement, an explanatory statement or a supplementary explanatory statement as required under Part 5.1 of the Corporations Act).

ASIC means the Australian Securities and Investments Commission.

ASIC Policy means the regulatory policies (including regulatory guides) issued by ASIC as at the date of this agreement setting out its policy in relation to (among other things) the interpretation and enforcement of relevant sections of the Corporations Act.

ASX means ASX Limited (ABN 98 008 624 691) or the securities market which it operates, as the context requires.

ASX Settlement means ASX Settlement Pty Limited (ABN 49 008 504 532) as the holder of a licence to operate a clearing and settlement facility.

ASX Settlement Operating Rules means the operating rules of the clearing and settlement facility operated by ASX Settlement for the time being and from time to time, as modified by any express written exemption or waiver given by ASX or ASX Settlement.

ATO means the Australian Taxation Office.

ATO Class Ruling means the class ruling which Avita Australia will seek from the ATO to the effect that Australian resident Scheme Participants who hold their Avita Australia Shares (or Australian resident ADS Holders who hold their Avita Australia ADSs) on capital account and who make a capital gain from the exchange of their Avita Australia Shares (or Avita Australia ADSs) for Avita US Shares or Avita US CDIs under the Scheme will be eligible for scrip-for-scrip roll-over relief under the relevant Australian tax laws.

Authorisation means:

 

 

 (a)

 

an approval, authorisation, consent, declaration, exemption, licence, notarisation, permit or waiver (however it is described), including any amendment or renewal and any condition attaching to it by or from a Government Authority; and

 

 

 (b)

 

in relation to anything that could be prohibited or restricted by law if a Government Authority acts in any way within a specified period, the expiry of that period without that action being taken.

Authorised Nominee means CHESS Depositary Nominees Pty Limited (ACN 071 346 503, Australian Financial Services Licence number 254514), an approved general participant of ASX Settlement and a wholly-owned subsidiary of ASX.

Avita Australia means AVITA Medical Limited ACN 058 466 523.

Avita Australia ADS means an ADS representing 20 Avita Australia Shares, which trade on NASDAQ under the ticker code “RCEL”.

Avita Australia Share means an issued fully paid ordinary share in the capital of Avita Australia.

Avita Australia Shareholder means a person entered in the Register as the holder of one or more Avita Australia Shares.

Avita Australia Shareholder Approval means the Scheme Resolution being passed by the majorities of Avita Australia Shareholders required under section 411(4)(a)(ii) of the Corporations Act.

Avita Group means Avita Australia and its Subsidiaries and, after implementation of the Scheme, Avita US and its Subsidiaries.

Avita US means AVITA Therapeutics, Inc..

Avita US CDI means a CDI representing a beneficial interest in 1/5 of an Avita US Share.

Avita US Share means a fully paid share of voting common stock in the capital of Avita US.

Business Day means a day that is not a Saturday, Sunday or a public holiday or bank holiday in Melbourne, Australia.

CDI means a CHESS Depositary Interest, being a unit of beneficial ownership in a share that is registered in the name of the Authorised Nominee in accordance with the ASX Settlement Operating Rules for the purpose of enabling that share to be recorded and transferred in accordance with those operating rules.

Condition means a condition precedent set out in clause 4.1.

Corporations Act means the Australian Corporations Act 2001 (Cth).

Court means the Federal Court of Australia or any other court of competent jurisdiction under the Corporations Act agreed in writing by Avita Australia and Avita US.

Deed Poll means the deed poll to be executed by Avita US substantially in the form of Schedule 3, pursuant to which Avita US covenants in favour of Scheme Participants to perform certain of its obligations under this agreement and certain steps attributed to it under the Scheme, with such amendments as are approved in accordance with its terms.

Effective means, in relation to the Scheme, the coming into effect, under section 411(10) of the Corporations Act, of the order of the Court made under section 411(4)(b) of the Corporations Act in relation to the Scheme, but in any event at no time before an office copy of the order of the Court is lodged with ASIC.

Effective Date means the date on which the Scheme becomes Effective.

FATA means the Foreign Acquisitions and Takeovers Act 1975 (Cth).

FIRB means the Australian Foreign Investment Review Board.

First Court Hearing Date means the first day of the hearing of the Court of an application for an order under section 411(1) of the Corporations Act convening the Scheme Meeting.

Fractional Avita US Share has the meaning given in clause 2.7.

Government Authority means:

   

 (a)

 

a government, whether foreign, federal, state, territorial or local;

   

 (b)

 

a department, office or minister of a government (whether foreign, federal, state, territorial or local) acting in that capacity; or

(c)

a commission, delegate, instrumentality, agency, board, or other government, semi-government, judicial, administrative, monetary or fiscal authority, whether statutory or not and whether foreign, federal, state, territorial or local,

and includes ASX, ASIC, NASDAQ, FIRB, the Takeovers Panel and any regulatory organisation established under statute.

GST has the same meaning as “GST” in A New Tax System (Goods and Services Tax) Act 1999 (Cth).

Implementation means the implementation of the Scheme in accordance with its terms on the Scheme becoming Effective.

Implementation Date means the Business Day which is a minimum of one Business Day, but a maximum of five Business Days, after the Record Date, as Avita Australia and Avita US may agree in writing.

Independent Expert means BDO Corporate Finance Limited (ACN 010 185 725, Australian Financial Services Licence number 245513), being the independent expert in respect of the Scheme appointed by Avita Australia to consider whether the Scheme is in the best interests of Avita Australia Shareholders.

Independent Expert’s Report means a report prepared by the Independent Expert in accordance with ASIC Regulatory Guide 111 for inclusion in the Scheme Booklet.

Ineligible Shareholder means a Scheme Participant whose address, as shown in the Register (as at the Record Date), is in a place outside Australia, the United States, Hong Kong, New Zealand, the United Kingdom, France, Norway, Switzerland, the United Arab Emirates and Singapore (unless Avita Australia is satisfied, acting reasonably, that the laws of that place permit the offer and issue of Avita US Shares or Avita US CDIs to that Scheme Participant and, in Avita US’s sole discretion, it is not unduly onerous or impractical for Avita US to issue Avita US Shares or Avita US CDIs to that Scheme Participant).

Listing Rules means the listing rules of ASX for the time being and from time to time.

NASDAQ means the NASDAQ Stock Market LLC.

Notice has the meaning given to it in clause 14.1.

Option means an option to subscribe for a share in a company, at a certain exercise price, within a certain exercise period (other than a Warrant).

Record Date means 7.00pm (Sydney time) on the day which is two Business Days after the Effective Date, or any other date (after the Effective Date) agreed by the parties to be the record date to determine entitlements to receive the Scheme Consideration under the Scheme.

Register means the register of members of Avita Australia.

Review Draft means the draft of the Scheme Booklet, which is provided to ASIC for approval under section 411(2) of the Corporations Act.

RSU means a restricted security unit of a company, being an unfunded and unsecured contractual entitlement to be issued or transferred a share in the company on a future date (after vesting of the entitlement).

Sale Agent means a person nominated by Avita US to sell the Scheme Consideration referrable to Selling Shareholders in accordance with clause 2.8.

Sale Securities has the meaning given in clause 2.8(a).

Scheme means the scheme of arrangement between Avita Australia and the Scheme Participants under which all of the Scheme Shares will be transferred to Avita US by Scheme Participants under Part 5.1 of the Corporations Act as described in the Scheme, in consideration for the provision of the Scheme Consideration to the Scheme Participants, subject to any alterations or conditions made or required by the Court under section 411(6) of the Corporations Act to the extent they are approved in writing by Avita Australia and Avita US in accordance with the Scheme.

Scheme Booklet means the information booklet in respect of the Scheme to be approved by the Court and despatched to Avita Australia Shareholders to assist them in deciding how to vote on the Scheme, and includes the Scheme, a copy of the Deed Poll executed by Avita US, an explanatory statement (as that term is defined in section 412 of the Corporations Act), the Independent Expert’s Report and a notice of meeting and proxy form.

Scheme Consideration means the consideration payable by Avita US for the transfer of the Scheme Shares under the terms of the Scheme, being one Avita US Share (or five Avita US CDIs) for every 100 Avita Australia Shares held by a Scheme Participant on the Record Date, which will be satisfied in the manner set out in clause 2.4.

Scheme Meeting means the meeting of Avita Australia Shareholders ordered by the Court to be convened under section 411(1) of the Corporations Act to consider the approval of the Scheme Resolution.

Scheme Participant means an Avita Australia Shareholder as at the Record Date, taking into account registration of all registrable transfers and transmission applications received by the Share Registry by the Record Date.

Scheme Resolution means a resolution of Avita Australia Shareholders to approve the Scheme under section 411(4)(a)(ii) of the Corporations Act.

Scheme Share means an Avita Australia Share held by a Scheme Participant as at the Record Date.

SEC means the U.S. Securities and Exchange Commission.

Second Court Hearing Date means the first day on which the Court hears the application for an order under section 411(4)(b) of the Corporations Act approving the Scheme or (if the application is adjourned or subject to appeal for any reason) the first day on which the adjourned or appealed application is heard.

Selling Shareholder has the meaning given in clause 2.8(a).

Share Registry means the person operating the Register, being Computershare Investor Services Pty Limited ACN 078 279 277.

Subsidiary has the meaning ascribed to it in the Corporations Act.

Sunset Date means 5.00pm on 31 December 2020 or such other date and time agreed in writing between the parties.

Takeovers Panel means the Takeovers Panel constituted under the Australian Securities and Investments Commission Act 2001 (Cth).

Timetable means the timetable for the Implementation of the Scheme as set out in Schedule 1, subject to any modifications as the parties may agree in writing.

Treasurer means the Treasurer of the Commonwealth of Australia.

United States or US means the United States of America.

Warrant means an option to subscribe for a share in a company at an exercise price of $0.126 and with an expiry date of 31 December 2020.

1.2. Interpretation

In the interpretation of this agreement, the following provisions apply unless the context otherwise requires:

     (a)  

The singular includes the plural and conversely.

     (b)  

A gender includes all genders.

     (c)  

If a word or phrase is defined, its other grammatical forms have a corresponding meaning.

     (d)  

A reference to a person, corporation, trust, partnership, unincorporated body or other entity includes any of them.

     (e)  

A reference to a clause, schedule or annexure is a reference to a clause of, or schedule or annexure to, this agreement.

     (f)  

A reference to an agreement or document (including a reference to this agreement) is to the agreement or document as amended, varied, supplemented, novated or replaced, except to the extent prohibited by this agreement or that other agreement or document.

     (g)  

A reference to a person includes a reference to the person’s executors, administrators, successors, substitutes (including persons taking by novation) and assigns.

     (h)  

A reference to legislation (including subordinate legislation) or to a provision of legislation includes a modification or re-enactment of it, a legislative provision substituted for it and a regulation or statutory instrument issued under it.

     (i)  

A reference to $ is to the lawful currency of Australia.

     (j)  

Words and phrases not specifically defined in this agreement have the same meanings (if any) given to them in the Corporations Act.

     (k)  

A reference to time is a reference to time in Melbourne, Australia.

     (l)  

The meaning of general words is not limited by specific examples introduced by including, for example, or similar expressions.

1.3. Action by the next Business Day

If the day on or by which a person must do something under this agreement is not a Business Day, the person must do it on or by the next Business Day.

1.4. Reasonable endeavours

A reference in this agreement to a party using or having an obligation to use reasonable endeavours does not oblige that party to:

   

 (a)

 

pay money in the form of an inducement or consideration to a third party to procure something (other than the payment of immaterial expenses or costs, including costs of advisers, to procure the relevant thing) or in circumstances that are commercially onerous or unreasonable in the context of this agreement;

   

 (b)

 

provide other valuable consideration to or for the benefit of any person; or

(c)

agree to commercially onerous or unreasonable conditions.

2. SCHEME

2.1. Agreement to propose and implement the Scheme

   

 (a)

 

Avita Australia agrees to propose and implement the Scheme in accordance with Part 5.1 of the Corporations Act and applicable ASIC Policy and subject to the terms and conditions of this agreement, and to use reasonable endeavours to do so in accordance with the Timetable.

   

 (b)

 

Avita US agrees to assist Avita Australia to propose and implement the Scheme in accordance with Part 5.1 of the Corporations Act and applicable ASIC Policy and subject to the terms and conditions of this agreement, and to use reasonable endeavours to do so in accordance with the Timetable.

2.2. Outline of Scheme

Subject to and in accordance with the terms and conditions of this agreement and the Scheme, the parties agree that the Scheme Participants will be entitled to receive the Scheme Consideration, except that:

   

 (a)

 

where a Scheme Participant would otherwise be entitled under the Scheme to receive a Fractional Avita US Share as part of its Scheme Consideration, the Scheme Participant will receive, in accordance with clause 2.8 , the proceeds arising from the sale of that Fractional Avita US Share; and

   

 (b)

 

Ineligible Shareholders will receive, in accordance with clause 2.8 , the proceeds arising from the sale of the Scheme Consideration that they would otherwise be entitled to receive.

2.3. No amendments to the Scheme without consent

Avita Australia must not consent to any amendment to, or modification of, or the imposition or making by the Court of any condition in respect of, the Scheme without the prior written consent of Avita US (which consent must not be unreasonably withheld).

2.4. Provision of Scheme Consideration

Subject to clauses 2.7 and 2.8, Avita US agrees with Avita Australia that, in consideration of the transfer to Avita US of each Scheme Share held by a Scheme Participant under the terms of the Scheme, Avita US will (subject to the terms and conditions of this agreement, the Deed Poll and the Scheme) on the Implementation Date accept the transfer of the Scheme Shares and:

  1. in the case of a Scheme Participant who holds Avita Australia Shares (other than the ADS Depositary, an Ineligible Shareholder or a Scheme Participant in respect of their entitlement to a Fractional Avita US Share), cause the Authorised Nominee to issue five Avita US CDIs to that Scheme Participant for every 100 Avita Australia Shares held by that Scheme Participant on the Record Date and issue to the Authorised Nominee (as depositary) the relevant number of Avita US Shares underlying such Avita US CDIs (being one Avita US Share for every five Avita US CDIs);
  2. in the case of the Scheme Participant who is the ADS Depositary (who holds its Avita Australia Shares for the benefit of the ADS Holders), issue one Avita US Share to the ADS Depositary for every 100 Avita Australia Shares held by the ADS Depositary and procure the ADS Depositary to then, subject to compliance by the ADS Holders with the terms of the arrangements pursuant to which the ADS Depositary acts as depositary for ADS Holders, deliver (by way of exchange) such Avita US Shares to the ADS Holders on the basis of one Avita US Share for every five Avita Australia ADSs held by the ADS Holder on the Record Date; and
  3. cause the Authorised Nominee to issue the Sale Securities to the Sale Agent in the form of Avita US CDIs in accordance with clauses 2.7 and 2.8 and issue to the Authorised Nominee (as depositary) one Avita US Share for every 5 Avita US CDIs to be issued to the Sale Agent.

2.5. CDIs - registration and notices

  1. On the Business Day prior to the Implementation Date, Avita Australia must procure that Avita US enters in its register of stockholders the name of the Authorised Nominee (as depositary) to hold the Avita US Shares underlying the Avita US CDIs to be issued in accordance with the Scheme.
  2. After the satisfaction of the obligation of Avita Australia in clause 2.5 (a), Avita Australia must procure that Avita US:
  1. on the Implementation Date procures that the Authorised Nominee records in the register of Avita US CDIs each Scheme Participant who is to receive Avita US CDIs under the Scheme and issues Avita US CDIs to the Sale Agent in accordance with clause 2.8; and
  2. as soon as is reasonably practical despatches, or causes to be despatched, to each Scheme Participant who is to receive Avita US CDIs under the Scheme, a holding statement or confirmation advice in the name of that Scheme Participant representing the number of Avita US CDIs issued to that Scheme Participant.

2.6. Avita US Shares - registration and notices

The obligation of Avita Australia to procure that Avita US issues Avita US Shares under clause 2.4 will be satisfied by Avita US, on the Implementation Date, procuring the entry in its register of stockholders of the name of each person who is to receive Avita US Shares.

2.7. Fractional Avita US Shares

Where a Scheme Participant would otherwise be entitled under the Scheme to a fraction of an Avita US Share or a number of Avita US CDIs that will not be sufficient to equate to a whole Avita US Share as part of the Scheme Consideration (each a Fractional Avita US Share), the Scheme Participant’s Fractional Avita US Share will be aggregated with all other Fractional Avita US Shares and issued to the Sale Agent (in the form of Avita US CDIs) in accordance with clause 2.8.

2.8. Sale facility

  1. Where a Scheme Participant is an Ineligible Shareholder and/or is entitled to a Fractional Avita US Share (each, a Selling Shareholder), the number of Avita US Shares or Fractional Avita US Shares to which that Selling Shareholder would otherwise be entitledunder the Scheme as part of the Scheme Consideration will be aggregated with those of all the other Selling Shareholders (together, the Sale Securities) and issued to the Sale Agent in the form of Avita US CDIs to be dealt with in accordance with clause 2.8 (b).  If the number of Sale Securities in aggregate do not represent a whole Avita US Share, then the number of Sale Securities will be rounded up to the next whole Avita US Share and be issued to the Sale Agent.
  2. Avita US will procure that, after the Implementation Date, the Sale Agent must:
    1. as soon as is reasonably practicable (and, in any case, within one month after the Implementation Date) offer all such Sale Securities for sale on the ASX in the form of Avita US CDIs in such manner, at such price and on such other terms as the Sale Agent determines in good faith and at the risk of the Selling Shareholders; and
    2. as soon as is reasonably practicable (and, in any case, within 10 Business Days after settlement of the last of those sales of Sale Securities) remit in Australian dollars the net proceeds to Avita US who will remit to each Selling Shareholder the same portion of the net proceeds of all such sales (after deduction of any applicable brokerage, stamp duty and other charges, fees and taxes) as the Sale Securities issued to the Sale Agent in respect of the Selling Shareholder bears to the total Sale Securities issued to and sold by the Sale Agent in respect of all Selling Shareholders.
  3. The remittance by Avita US to each Selling Shareholder of the sale proceeds contemplated in clause 2.8 (b) is in full and final satisfaction of that Selling Shareholder’s rights and entitlements to the Scheme Consideration referable to it.

3. OPTIONS, RSUS AND WARRANTS IN AVITA AUSTRALIA

The parties acknowledge and agree that:

  1. the existing Options, RSUs and Warrants in Avita Australia arise out of contracts between Avita Australia and the holders of those securities;
  2. under the contracts referred to in clause 3 (a) , the existing Options, RSUs and Warrants in Avita Australia will continue after implementation of the Scheme; however, the entitlements of holders to be issued Avita Australia Shares will instead become entitlements to be issued Avita US Shares (in the ratio of one Avita US Share for every 100 Avita Australia Shares to which the holder would otherwise be entitled);
  3. Avita US will, before the First Court Hearing Date, separately covenant (by way of deed poll, substantially in the form of Schedule 4) in favour of holders of the existingOptions, RSUs and Warrants in Avita Australia to ensure that holders’ entitlements are made available in accordance with the contracts referred to in clause 3 (a) ; and
  4. in all other respects, the existing Options, RSUs and Warrants in Avita Australia will continue to be subject to the contracts referred to in clause 3 (a) .

4. CONDITIONS

4.1. Conditions precedent to implementation of the Scheme

Subject to this clause 4, the Scheme will not become Effective and the obligations of the parties with respect to Implementation (including Avita US’s obligation to provide the Scheme Consideration) do not become binding unless and until each of the following Conditions is satisfied or (to the extent they can be) waived under clause 4.2:

  1. (ASIC and ASX) before 8.00am on the Second Court Hearing Date, ASIC and ASX issue or provide all reliefs, waivers, confirmations, exemptions, consents or approvals, and have performed all other acts, necessary, or which Avita Australia and Avita US agree are desirable, to implement the Scheme and such reliefs, waivers, confirmations, exemptions, consents, approvals or other acts (as the case may be) have not been withdrawn, suspended or revoked at 8.00am on the Second Court Hearing Date.
  2. (Avita Australia Shareholder Approval): Avita Australia Shareholder Approval is obtained at the Scheme Meeting convened in accordance with the orders made under section 411(1) of the Corporations Act.
  3. (Court approval of the Scheme): The Court makes orders under section 411(4)(b) of the Corporations Act approving the Scheme.
  4. (Regulatory Approvals): Before 8.00am on the Second Court Hearing Date:
    1. (FIRB approval) one of the following occurs:
      1. Avita Australia has received written notification by or on behalf of the Treasurer under the FATA to the effect that the Commonwealth Government has no objection (unconditionally or on conditions acceptable to Avita US acting reasonably) under its foreign investment policy to Avita US acquiring all of the Scheme Shares under the Scheme (or is precluded from objecting because the time for doing so has passed);
      2. the period provided for under the FATA during which the Treasurer may make an order or interim order under the FATA prohibiting Avita US from acquiring all of the Scheme Shares under the Scheme has elapsed without such an order being made; or
      3. if an interim order has been made by the Treasurer to prohibit Avita US from acquiring the Scheme Shares under the Scheme, the subsequent period for making a final order under the FATA has elapsed without any final order being made; and

    2. (Other approvals) the approvals of all other Government Authorities which Avita Australia and Avita US agree (acting reasonably) are necessary to implement the Scheme or conduct the Avita Group’s business on and from Implementation occurring are obtained.

  5. (Independent Expert’s Report): The Independent Expert issues an Independent Expert’s Report on or before the date on which the Scheme Booklet is lodged with ASIC, which concludes that the Scheme is in the best interests of Avita Australia Shareholders as a whole, without changing that conclusion prior to 8.00am on the Second Court Hearing Date.

  6. (No restraint adversely affecting Implementation): No temporary restraining order, preliminary or permanent injunction or other order issued by any court of competent jurisdiction or other legal prohibition or restraint preventing the acquisition of all the Scheme Shares by Avita US or otherwise preventing Implementation is in effect as at 8.00am on the Second Court Hearing Date.

  7. (ASX listing and quotation of CDIs): Prior to 8.00am on the Second Court Hearing Date, ASX approves:
    1. Avita US for admission to the official list of ASX; and
    2. the Avita US CDIs for official quotation on the ASX, which approval may be conditional on the Scheme becoming Effective and any such other conditions that are acceptable to the boards of Avita Australia and Avita US.
  8. (NASDAQ listing): Prior to 8.00am on the Second Court Hearing Date, the Avita US Shares have been authorised for listing on NASDAQ, subject to official notice of issuance following Implementation and any customary conditions.
  9. (Sale Agent): Prior to 8.00am on the Second Court Hearing Date, Avita US appoints the Sale Agent and the Sale Agent has agreed to be issued and to sell the Sale Securities as contemplated by clause 2.8 .
  10. (Authorised Nominee): Prior to 8.00am on the Second Court Hearing Date, Avita US appoints the Authorised Nominee and the Authorised Nominee has agreed to the allotment to it of Avita US Shares under the Scheme.
  11. (ATO Class Ruling): The ATO confirms that the ATO Class Ruling will be issued on terms and conditions satisfactory to Avita Australia and Avita US (both acting reasonably).

4.2. Benefit and waiver of Conditions

  1. Each of the Conditions is for the benefit of both Avita Australia and Avita US and a breach or non-fulfilment of a Condition can only be waived with the written consent of both parties and any such waiver will only be effective to the extent specifically set out in the waiver. The Conditions in clauses 4.1 (b) and 4.1 (c) are not capable of waiver.
  2. Each party must use its reasonable endeavours to procure that each Condition is satisfied as soon as practicable after the date of this agreement and continues to be satisfied at all times until the last time it is to be satisfied (as the case may require).

4.3. Parties to provide certificates to Court

Each of Avita Australia and Avita US must provide to the other and to the Court before or at the Second Court Hearing Date a certificate (or such other evidence as the Court requests) confirming whether or not the Conditions have been satisfied or waived.

4.4. Condition not satisfied or waived

If:

  1. there is a non-fulfilment of a Condition which is not waived in accordance with this agreement by the time or date specified in this agreement for the satisfaction of the Condition;
  2. there is an act, failure to act or occurrence which will prevent a Condition being satisfied by the time or date specified in this agreement for the satisfaction of the Condition (and the non-fulfilment which would otherwise occur has not already been waived in accordance with this agreement); or
  3. the Scheme has not become Effective by the Sunset Date, the parties must consult in good faith with a view to determine whether:
  4. the Scheme may proceed by way of alternative means or methods;
  5. to extend the relevant time for satisfaction of the Condition or to adjourn or change the date of an application to the Court; or
  6. to extend the Sunset Date.

4.5. Failure to agree

If the parties are unable to reach agreement under clause 4.4 within five Business Days (or any shorter period ending on 5.00pm on the day before the Second Court Hearing Date), either party may terminate this agreement and such termination will be in accordance with clause 9.3.

5. GENERAL OBLIGATIONS OF PARTIES

Each party must use reasonable endeavours to give effect to the Scheme, subject to compliance with their respective duties, obligations and powers under this agreement, their constituent documents and all applicable laws and the proper performance by the directors of each of Avita Australia and Avita US (respectively) of their fiduciary duties.

6. AVITA AUSTRALIA OBLIGATIONS

Avita Australia must take all reasonable steps to implement the Scheme on a basis consistent with this agreement and as expeditiously as practicable and use all reasonable endeavours to do so in accordance with the Timetable, including taking each of the following steps:

  1. (Announcement): On the date of this agreement, make an Announcement on the ASX (with a copy of such Announcement to be filed with the SEC) in a form agreed between Avita Australia and Avita US.
  2. (Independent Expert’s Report): Commission the preparation of the Independent Expert’s Report and provide all assistance and information reasonably requested by the Independent Expert to enable it to prepare and deliver the Independent Expert’s Report.
  3. (Prepare Scheme Booklet): Prepare the Scheme Booklet and ensure that the Scheme Booklet includes all information required by the Corporations Act, the Corporations Regulations 2001 (Cth), applicable ASIC Policy, applicable Takeovers Panel policy and guidance notes, applicable United States securities laws and regulations, the Listing Rules and the applicable rules of NASDAQ.
  4. (Continuing obligation of disclosure): Between the date of despatch of the Scheme Booklet and the date of the Scheme Meeting, provide to Avita Australia Shareholders such further or new information that may arise during that period and which is necessary to ensure that the information contained in the Scheme Booklet is not false, misleading or deceptive in any material respect (whether by omission or otherwise).
  5. (Court documents): Prepare all documents necessary for the Court proceedings relating to the Scheme in accordance with all applicable laws.
  6. (Consult with Avita US): In a timely manner, consult with Avita US as to the form and content of all documents required for the purposes of the Scheme, including:
    1. the Scheme Booklet; and
    2. the Court proceedings relating to the Scheme.
  7. (Lodgement of Review Draft): As soon as practicable, provide the Review Draft to ASIC (as contemplated by section 411(2) of the Corporations Act).
  8. (Register Scheme Booklet): Request ASIC to register the Scheme Booklet under section 412 of the Corporations Act.
  9. (Apply to Court for order to convene Scheme Meeting): Apply to the Court under section 411(1) of the Corporations Act for an order directing Avita Australia to convene the Scheme Meeting.
  10. (Convene Scheme Meeting): Convene the Scheme Meeting in accordance with any order made by the Court under section 411(1) of the Corporations Act.
  11. (Despatch Scheme Booklet): As expeditiously as practicable following an order made by the Court under section 411(1) of the Corporations Act, despatch a copy of the Scheme Booklet to each Avita Australia Shareholder, each holder of existing Options, RSUs and Warrants in Avita Australia (for information purposes only) and to all other persons entitled to receive notice of the Scheme Meeting.
  12. (ATO Class Ruling): Apply to the ATO for the ATO Class Ruling.
  13. (Section 411(17)(b) statement): Apply to ASIC for:
    1. production of a letter stating that it does not intend to appear at the First Court Hearing Date; and
    2. if Avita Australia Shareholder Approval is obtained, a statement under section 411(17)(b) of the Corporations Act that ASIC has no objection to the Scheme.
  14. (Court approval): Subject to the satisfaction or waiver of all Conditions (other than the Condition in clause 4.1 (c)), apply to the Court for orders approving the Scheme under section 411(4)(b) of the Corporations Act.
  15. (Certificate): Before commencement of the hearing by the Court of the application for the order under section 411(4)(b) of the Corporations Act, give:
    1. to Avita US a certificate signed by Avita Australia stating whether or not each representation or warranty given by Avita Australia is true and correct as at the time it is given or made under clause 10 ; and
    2. to Avita US and the Court the certificate referred to in clause 4.3 .
  16. (Not act inconsistently): Not act in a manner inconsistent with obtaining Court approval for the Scheme.
  17. (Lodge copy of order): If the Court approves the Scheme under section 411(4) of the Corporations Act, lodge an office copy of the Court order with ASIC in accordance with section 411(10) of the Corporations Act by 5.00pm on the first Business Day after the day on which the Court approves the Scheme (unless Avita Australia and Avita US agree on a later date).
  18. (Scheme Participants): Close the Register as at the Record Date and give to the Share Registry details of the names, registered addresses and holdings of Avita Australia Shares of every Scheme Participant as shown in the Register on the Record Date, in such form as Avita US may reasonably require, and determine each Scheme Participant’s respective entitlements to the Scheme Consideration (including under clauses 2.7 and 2.8 ) in accordance with the Scheme.
  19. (Register transfers): Subject to Avita US providing the Scheme Consideration in accordance with the Scheme and the Deed Poll, on the Implementation Date, execute proper instruments of transfer (as applicable) to effect the transfer of all Scheme Shares on issue to Avita US and register all transfers of Scheme Shares in the name of Avita US.
  20. (Suspension of trading): Apply to ASX to suspend trading in Avita Australia Shares with effect from the close of trading on the ASX on the Effective Date, and apply to NASDAQ to suspend trading in Avita Australia ADSs (by way of submission of a “company event form” to NASDAQ in order to transfer the listing of the Avita Australia ADSs to a listing of the Avita US Shares) with effect from the close of trading on NASDAQ on the Implementation Date.
  21. (Scheme): Do all things within its power that are reasonably necessary to lawfully give effect to the Scheme and the orders of the Court approving the Scheme.

7. AVITA US OBLIGATIONS

Avita US must take all reasonable steps to assist Avita Australia to implement the Scheme on a basis consistent with this agreement and as expeditiously as practicable and use all reasonable endeavours to do so in accordance with the Timetable, including performing each of the following steps:

  1. (Scheme Booklet): Promptly provide to Avita Australia for inclusion in the Scheme Booklet all information relating to Avita US, Avita US Shares and Avita US CDIs as is required for Avita Australia to prepare the Scheme Booklet (including giving its consent to the form and context in which that information appears in the Scheme Booklet), and ensure that all such information provided is not false, misleading or deceptive in any material respect (whether by omission or otherwise).
  2. (Additional information): As expeditiously as practicable, give to Avita Australia for inclusion in the Scheme Booklet such additional information regarding Avita US which may arise after the Scheme Booklet has been prepared and is required under the Corporations Act, the Corporations Regulations 2001 (Cth), applicable ASIC Policy, applicable Takeovers Panel policy and guidance notes, applicable US securities laws and regulations, the Listing Rules and the applicable rules of NASDAQ to be included in the Scheme Booklet to ensure that the Scheme Booklet is not false, misleading or deceptive in any material respect (whether by omission or otherwise).
  3. (Independent Expert’s Report): Provide all assistance and information reasonably requested by the Independent Expert in connection with the preparation and delivery of the Independent Expert’s Report.
  4. (Deeds poll): Before the First Court Hearing Date, duly execute and enter into the Deed Poll and the deed poll referred to in clause 3 (c) .
  5. (United States legal opinion): Deliver to Avita Australia an opinion from its United States legal counsel, in a form satisfactory to Avita Australia (acting reasonably), that the Deed Poll and the deed poll referred to in clause 3 (c) are legally binding on and enforceable against Avita US under the laws of Delaware.
  6. (Court documents): Prepare all documents which Avita US is required to submit to the Court, and promptly give such documents to Avita Australia for inclusion in the documents which Avita Australia is required to submit to the Court, in connection with the proceedings relating to the Scheme in accordance with all applicable laws.
  7. (Certificate): Before commencement of the hearing by the Court of the application for the order under section 411(4)(b) of the Corporations Act, give:
    1. to Avita Australia a certificate signed by Avita US stating whether or not each representation or warranty given by Avita US is true and correct as at the time it is given or made under clause 10 ; and
    2. to Avita Australia and the Court the certificate referred to in clause 4.3 .
  8. (Not act inconsistently): Not act in a manner inconsistent with obtaining Court approval for the Scheme.
  9. (Authorised Nominee): Appoint the Authorised Nominee to receive under the Scheme and hold Avita US Shares for the benefit of Scheme Participants who are to receive Avita US CDIs as the Scheme Consideration.
  10. (Share transfers): If the Scheme becomes Effective, accept a transfer of all of the Scheme Shares held by Scheme Participants and execute (or procure the execution of) proper instruments of transfer of those securities to Avita US in accordance with the Scheme.
  11. (Avita US Shares): Apply to NASDAQ to list the Avita US Shares via a transfer of listing from Avita Australia to Avita US (subject to the Scheme becoming Effective) and use reasonable endeavours to obtain the satisfaction of any conditions imposed by NASDAQ for such transfer of listing.
  12. (Avita US CDIs): Apply for the Avita US CDIs to be approved for official quotation on the ASX (subject to the Scheme becoming Effective) and use reasonable endeavours to obtain ASX’s approval for official quotation by 8.00am on the Second Court Hearing Date.
  13. (Issue of Avita US Shares): Do all things necessary to issue the Avita US Shares in accordance with the Scheme and this agreement.
  14. (Issue of Avita US CDIs): Do all things necessary under the ASX Settlement Operating Rules to enable the Avita US CDIs to be issued in accordance with the Scheme and this agreement (including confirm to ASX Settlement that the Avita US Shares underlying the Avita US CDIs have been issued to the Authorised Nominee in accordance with ASX Settlement Operating Rule 13.2.3).
  15. (Scheme Consideration): If the Scheme becomes Effective, provide, or cause to be provided, the Scheme Consideration to Scheme Participants as contemplated by the Scheme and in accordance with the Deed Poll on the Implementation Date.
  16. (Notice to holders of Options, RSUs and Warrants): If Implementation occurs, on or shortly after the Implementation Date,provide a notice to each holder of existing Options, RSUs and Warrants in Avita Australia advising them of particulars relating to the number of Avita US Shares or Avita US CDIs that are capable of being issued to them under their Options, RSUs and Warrants (which Options, RSUs and Warrants will continue to operate in accordance with their existing contractual terms).
  17. (Conversion of Avita Australia to a proprietary limited company): Within 40 Business Days following Implementation, pass a special resolution to convert Avita Australia from a public company to a proprietary company limited by shares and lodge all necessary documentation with ASIC to give effect to that conversion.
  18. (Scheme): Do all things within its power that are reasonably necessary to lawfully give effect to the Scheme and the orders of the Court approving the Scheme.

8. ANNOUNCEMENT

8.1. Announcements

  1. Neither party may make an Announcement about this agreement nor any document or transaction contemplated by this agreement or the Scheme unless:
    1. the other party has approved the form of the Announcement; or
    2. the law, the Listing Rules or SEC or NASDAQ rules or regulations require a party to make the Announcement, subject to clause 8.1 (b) .
  2. If the law, the Listing Rules or SEC or NASDAQ rules or regulations require a party to make an Announcement about either the subject matter of this agreement or any document or transaction contemplated by this agreement or the Scheme, that party must give the other party as much notice as is reasonably practicable and, to the extent reasonably practical, consult with the other party about the form and content of the Announcement or disclosure.

9. TERMINATION

9.1. Termination for breach

Without prejudice to any other rights of termination under this agreement, either party may terminate this agreement by giving the other party written notice at any time prior to 8.00am on the Second Court Hearing Date if:

  1. the other party is in material breach of any term of this agreement, or there has been a material breach of a warranty or representation given by the other party under clause 10.1, before the Second Court Hearing Date;
  2. the non-defaulting party has given written notice to the defaulting party specifying the breach and stating an intention to terminate this agreement; and
  3. the breach is not capable of remedy or has not been remedied within five Business Days (or any shorter period ending at 5.00pm on the last Business Day before the Second Court Hearing Date) from the date a notice under this clause is given.

9.2. Termination by agreement

This agreement may be terminated at any time prior to 8.00am on the Second Court Hearing Date by written agreement between the parties to that effect.

9.3. Effect of termination

If this agreement is terminated under clause 4.5, 9.1 or 9.2:

  1. this agreement and the parties obligations under it cease, other than the obligations under clauses 1 , 10 , 11 , 12 , 13 , 15 and 16 , which will survive termination; and
  2. such termination of this agreement does not affect any accrued rights arising from a breach of this agreement prior to termination.

10. REPRESENTATIONS AND WARRANTIES

10.1. Mutual representations and warranties

Each party represents and warrants to the other party that:

  1. (status): it is a validly existing corporation under the laws of its place of incorporation;
  2. (power): it has full legal capacity and power to:
    1. own its property and carry on its business; and
    2. enter into this agreement and carry out the transactions that this agreement contemplates in accordance with its terms;
  3. (corporate authority): it has taken all corporate action that is necessary or desirable to authorise it entering into this agreement and carrying out the transactions that this agreement contemplates in accordance with its terms;
  4. (authorisations): it holds each material Authorisation that is necessary or desirable to:
    1. enable it to properly execute this agreement and to carry out the transactions that this agreement contemplates in accordance with its terms;
    2. ensure that this agreement is legal, valid, binding and admissible in evidence; and
    3. enable it to properly carry on its business, and it is complying with any material conditions to which any such Authorisation is subject;
  5. (document effective): this agreement constitutes its legal, valid and binding obligations, enforceable against it in accordance with its terms; and

  6. (no contravention): neither its execution of this agreement nor the carrying out by it of the transactions that this agreement contemplates in accordance with its terms does or will contravene, in any material respect:

    1. any law to which it or any of its property is subject or any order of any Government Authority that is binding on it or any of its property;
    2. any Authorisation held by it;
    3. any instrument or undertaking binding on it or any of its property; or
    4. its constitution or by laws, as applicable.

10.2. No other representations

Each party acknowledges and agrees that the other party makes no representation or warranty other than as set out in this clause 10.

10.3. Reliance on representations and warranties

Each party acknowledges that the other party has executed this agreement and agreed to undertake the transactions that this agreement contemplates in reliance on the representations and warranties that are made in clause 10.1.

10.4. When warranties are given

Each representation and warranty given or made under clause 10.1 is given:

  1. as at the date of this agreement;
  2. as at 8.00am on the Second Court Hearing Date; and
  3. at any other date at which the representation or warranty is expressed to be given under this agreement.

11. RELEASE

Each party agrees with the other, and declares and covenants in favour of each party’s officers and employees, as follows:

  1. subject to applicable laws (including section 199A of the Corporations Act) and clause 11 (b) , no officer or employee of a party is liable for anything done or purported to be done in connection with Implementation;
  2. clause 11 (a) does not exclude an officer or employee from any liability which may arise from wilful misconduct or bad faith on the part of that person; and
  3. this clause 11 operates as a deed poll in favour of and for the benefit of each officer and each employee of each party and may be relied on and enforced by each such officer or employee in accordance with its terms even though the officer or employee is not named as a party to this agreement.

12. COSTS AND STAMP DUTY

  1. Subject to clause 12 (b) , Avita Australia will bear all costs and expenses (including professional fees) incurred by Avita Australia and Avita US in connection with the Scheme.
  2. Avita US will pay all stamp duty and any related fines or penalties in respect of the Scheme (including in connection with the acquisition of the Scheme Shares by Avita US under the Scheme).

13. GST

  1. In this clause 13 :
    1. any words or expressions used in this clause which have a particular meaning in the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) have the same meanings given to those terms in the GST Act unless the context otherwise requires; and
    2. Supplier means any party treated by the GST Act as making a Supply under this agreement.
  2. Unless otherwise expressly stated, all prices or other sums payable under or in accordance with this agreement are exclusive of GST.
  3. If GST is imposed on any Supply made under or in accordance with this agreement, the Recipient of the Taxable Supply must pay to the Supplier an additional amount equal to the GST payable on or for the Taxable Supply, subject to the Recipient receiving a valid Tax Invoice in respect of the Supply at or before the time of payment.
  4. Payment of the additional amount must be made at the same time as payment for the Taxable Supply is required to be made in accordance with this agreement.
  5. If this agreement requires a party (the First Party) to pay for, reimburse, set off or contribute to any expense, loss or outgoing (Reimbursable Expense) suffered or incurred by the other party (the Other Party), the amount required to be paid, reimbursed, set off or contributed by the First Party will be the sum of:
    1. the amount of the Reimbursable Expense net of Input Tax Credits (if any) to which the Other Party is entitled in respect of the Reimbursable Expense (Net Amount); and
    2. if the Other Party’s recovery from the First Party is a Taxable Supply, any GST payable in respect of that Supply, such that after the Other Party meets the GST liability, it retains the Net Amount.
  6. If an adjustment event occurs in relation to a Supply made under or in connection with this agreement, the GST payable on or for the Taxable Supply will be recalculated to reflect that adjustment and an appropriate payment will be made between the parties.

14. NOTICES

14.1. How to give notice

Any notice, demand, consent or other communication (Notice) given or made under this agreement:

  1. must be in writing and signed by a person duly authorised by the sender;
  2. must be delivered to the intended recipient by hand, prepaid post or by email to that person’s address or email address set out in clause 14.3 .

14.2. When notice is given

Any Notice given or made under this agreement will be taken to be received:

  1. in the case of delivery by hand, when delivered at the relevant address;
  2. in the case of delivery by post, three Business Days after the date of posting (if posted to an address in the same country) and seven Business Days after the date of posting (if posted to an address outside of the same country); and
  3. in the case of email, when sent by the sender (as recorded on the device from which the sender sent the email) unless the sender receives a delivery failure notification indicating that the email has not been delivered to the addressee, but if the result is that a Notice would be taken to be received on a day that is not a Business Day in the place to which the Notice is sent or is later than 5.00pm (local time), it will be taken to have been duly given or made at 9.00am on the next Business Day in that place.

14.3. Address for notices

A person’s address and email address are those set out below (or as the person subsequently notifies the sender):

Avita Australia

Address: Level 7, 330 Collins Street, Melbourne, 3000, Victoria, Australia

Email address: dmcintyre@avitamedical.com

Attention: David McIntyre

Avita US

Address: 28159 Avenue Stanford, Suite 220, Valencia, California 91355

Email address: dmcintyre@avitamedical.com

Attention: David McIntyre

15. AMENDMENT AND ASSIGNMENT

15.1. Amendment

This agreement can only be amended or replaced by another document duly executed by the parties.

15.2. Assignment

A party may only assign, encumber, declare a trust over or otherwise deal with its rights under this agreement with the prior written consent of the other party.

16. GENERAL

16.1. Consents

Where this agreement contemplates that a party may agree or consent to something (however it is described), unless this agreement expressly contemplates otherwise, the party may:

  1. agree or consent (or not agree or consent) in its absolute and sole discretion; and
  2. agree or consent subject to conditions.

16.2. Further assurances

Each party must do anything within its power (including executing any document) that the other party may reasonably require to give full effect to the provisions of this agreement and the transactions contemplated by it.

16.3. Entire agreement

This agreement contains the entire agreement between the parties as at the date of this agreement with respect to its subject matter and supersedes all prior agreements and understandings between the parties in connection with it.

16.4. Remedies cumulative

Except as provided in this agreement and permitted by law or equity, the rights, powers and remedies provided to each party in this agreement are in addition to, and do not exclude or limit, any right, power or remedy provided by law or equity or by any agreement.

16.5. No merger

The provisions of this agreement will not merge on Implementation. They will survive the execution and delivery of any assignment or other document entered into for the purpose of implementing any transaction contemplated by this agreement.

16.6. Severability of provisions

Any provision of this agreement that is prohibited or unenforceable in any jurisdiction is ineffective as to that jurisdiction to the extent of the prohibition or unenforceability. That does not invalidate the remaining provisions of this agreement nor affect the validity or enforceability of that provision in any other jurisdiction.

16.7. Waivers

  1. Failure to exercise or enforce or a delay in exercising or enforcing or the partial exercise or enforcement of any right, power or remedy provided by law or under this agreement by any party will not in any way preclude, or operate as a waiver of, any exercise or enforcement, or further exercise or enforcement of that or any other right, power or remedy provided by law or under this agreement.
  2. No waiver of a breach of any term of its agreement will operate as a waiver of another breach of that term or of a breach of any other term of this agreement.
  3. Nothing in this agreement obliges a party to exercise a right to waive any conditional term of this agreement that may be in its power.
  4. A provision of or right under this agreement may not be waived except in writing signed by the person granting the waiver.

16.8. Governing law

This agreement is governed by the laws of New South Wales, Australia. The parties submit to the non-exclusive jurisdiction of its courts and courts of appeal from them. The parties will not object to the exercise of jurisdiction by those courts on any basis.

16.9. Counterparts

This agreement may be executed in any number of counterparts. All counterparts together will be taken to constitute one instrument.

SCHEDULE 1 - TIMETABLE

INDICATIVE SCHEME TIMETABLE

Event

Indicative date

Avita Australia and Avita US enter into Scheme Implementation Agreement

The Scheme Implementation Agreement will commit Avita Australia and Avita US to the transactions contemplated by the Scheme and will set out the terms of the Scheme

20 April 2020

Scheme announced publicly

Upon the Scheme Implementation Agreement being signed by Avita Australia and Avita US

20 April 2020

Lodgement of Scheme documents with ASIC and ASX

Avita Australia to lodge the Scheme documents with ASIC for review (which takes a minimum of 14 days) and also with ASX

20 April 2020

Lodgement of Scheme documents with Court

4 May 2020

First Court Hearing Date*

Date of first Court hearing for Avita Australia to seek the Court’s approval to despatch the Scheme Booklet to Avita Australia Shareholders and convene the Scheme Meeting

11 May 2020

Printing of Scheme Booklet

12-13 May 2020

 

Date of Scheme Booklet

Date on which the Scheme Booklet is despatched to Avita Australia Shareholders (together with notice of the Scheme Meeting)

14 May 2020

Avita US applies to ASX for admission

Avita US to apply to ASX for admission to the official list of ASX (usually within 7 days of the date of the Scheme Booklet).

21 May 2020

Proxy forms cut-off date

Latest time and date by which proxy forms for the Scheme Meeting must be received by the Share Registry

9.00am on 13 June 2020

 

Voting Record Date

Time and date for determining eligibility to vote at the Scheme Meeting

7.00pm on 13 June 2020

 

Scheme Meeting

Avita Australia Shareholders attend Scheme Meeting (by way of live webcast) and vote on whether to approve the Scheme

9.00am on 15 June 2020

Following Avita Australia Shareholder Approval:

Event

Indicative date

Second Court Hearing Date*

Date of second Court hearing for approval of the Scheme

22 June 2020

Avita Australia informs ASX of intention to lodge Court order with ASIC

Avita Australia informs ASX of its intention to lodge the Court order with ASIC on the following Business Day (being 23 June 2020)

22 June 2020 (after Second Court Hearing)

Scheme Effective Date

Avita Australia lodges Court order with ASIC and informs ASX. Avita Australia Shares are suspended from trading at the close of trading on the ASX

23 June 2020

Listing of Avita US on the ASX

Avita US CDIs commence trading on the ASX on a deferred settlement basis

24 June 2020

Record Date

Time and date for determining entitlements to Scheme Consideration

7.00pm on 25 June 2020

Implementation Date

The date of transfer of all Scheme Shares to Avita US and subsequent issue of Avita US CDIs and Avita US Shares to eligible Scheme Participants

29 June 2020

Despatch of holding statements (to issuer sponsored holders) and confirmation advices (to CHESS holders)

30 June 2020

Avita US CDIs commence trading on the ASX on a normal basis

30 June 2020

*Subject to the availability of the Court

SCHEDULE 2 - SCHEME OF ARRANGEMENT

Attached.

SCHEDULE 3 - DEED POLL

Attached.

SCHEDULE 4 - DEED POLL (OPTIONS, RSUS AND WARRANTS)

Attached.

EXECUTION

Executed as an agreement

Executed by AVITA Medical Limited in accordance with section 127 of the Corporations Act 2001 (Cth):

 

 

 

 

Signature of director

 

Signature of director / company secretary

 

 

 

 

Name of director (print)

 

Name of director / company secretary (print)

Executed by an authorised signatory of AVITA Therapeutics, Inc.:

 

 

 

 

Signature of authorised person

 

 

 

 

 

 

Name of authorised person (print)

 

 

 

 

 

 

Title of authorised person (print)

 

 

 

U.S. Media Sam Brown, Inc. Christy Curran Phone +1 615 414 8668 christycurran@sambrown.com O.U.S Media Monsoon Communications Rudi Michelson Phone +61 (0)3 9620 3333 Mobile +61 (0)411 402 737 rudim@monsoon.com.au

Investors: Westwicke Partners Caroline Corner Phone +1 415 202 5678 caroline.corner@westwicke.com AVITA Medical Ltd David McIntyre Chief Financial Officer Phone +1 661 367 9178 dmcintyre@avitamedical.com

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