FEDERAL COURT OF AUSTRALIA Little World Beverages Limited, in the matter of Little World Beverages Limited (No 2) [2012] FCA 1058 Citation: Little World Beverages Limited, in the matter of Little World Beverages Limited (No 2) [2012] FCA 1058 Parties: LITTLE WORLD BEVERAGES LIMITED (ACN 081 128 225) File number: WAD 173 of 2012 Judge: MCKERRACHER J Date of judgment: 26 September 2012 Catchwords: CORPORATIONS – scheme of arrangement – approved pursuant to s 411(4)(b) of the Corporations Act 2001 (Cth) Legislation: Corporations Act 2001 (Cth) ss 411(4)(b), 411(11), 411(12) Cases cited: Little World Beverages Limited, in the matter of Little World Beverages Limited [2012] FCA 1057 Re NRMA Ltd (No 1) (2000) 156 FLR 349 Re Peak Coal Ltd (No 2) [2010] FCA 45 Re United Minerals Corporation NL (No 2) [2010] FCA 47 Re Vulcan Resources Ltd (No 2) [2010] FCA 46 Date of hearing: 19 September 2012 Place: Perth Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 14 Counsel for the Plaintiff: S Penglis Solicitor for the Plaintiff: Freehills Counsel for Anglo-Gaelic Investments Pty Ltd: MG Lundberg Solicitor for Anglo-Gaelic Investments Pty Ltd: King & Wood Mallesons IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION WAD 173 of 2012 IN THE MATTER OF LITTLE WORLD BEVERAGES LIMITED (ACN 081 128 225) BETWEEN: LITTLE WORLD BEVERAGES LIMITED (ACN 081 128 225) Plaintiff JUDGE: MCKERRACHER J DATE OF ORDER: 19 SEPTEMBER 2012 WHERE MADE: PERTH THE COURT ORDERS THAT: 1. Pursuant to section 411(4)(b) of the Corporations Act 2001 (Cth) (Act), the scheme of arrangement between the Plaintiff, Little World Beverages Limited ACN 081 128 225 (LWB), and its ordinary shareholders in LWB (other than Anglo-Gaelic Investments Pty Ltd (AGI) or its related bodies corporate and persons holding shares in the Plaintiff for, or on behalf of, such persons) in the form of Annexure A to these orders (Scheme) be approved. 2. Pursuant to section 411(12) of the Act, the Plaintiff be exempted from compliance with section 411(11) of the Act in relation to the Scheme. 3. An office copy of this order be lodged with the Australian Securities & Investments Commission on 19 September 2012. 4. These orders be entered forthwith. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION WAD 173 of 2012 IN THE MATTER OF LITTLE WORLD BEVERAGES LIMITED (ACN 081 128 225) BETWEEN: LITTLE WORLD BEVERAGES LIMITED (ACN 081 128 225) Plaintiff JUDGE: MCKERRACHER J DATE: 26 september 2012 PLACE: PERTH REASONS FOR JUDGMENT INTRODUCTION 1 These are reasons for orders made at the second hearing concerning the scheme of arrangement (the Scheme) described in Little World Beverages Limited, in the matter of Little World Beverages Limited [2012] FCA 1057 (Little World Beverages No 1). 2 In Little World Beverages No 1 on 13 August 2012 I made orders under s 411(1) of the Corporations Act 2001 (Cth) (CA) that amongst other things, that the plaintiff (LWB) convene a scheme meeting of the ordinary shareholders in LWB other than Anglo-Gaelic Investments Pty Ltd (AGI), or its related bodies corporate and persons holding shares in LWB for or on behalf of such persons. The details of the Scheme and various conditions are also discussed in Little World Beverages No 1. 3 The Scheme Booklet was duly distributed on 17 August 2012. Additionally, personalised proxy forms and reply paid envelopes addressed to Security Transfer Registrars Pty Ltd were dispatched to Scheme holders who held shares in LWB at 15 August 2012. Any person who became a Scheme shareholder after that date but before 5.00 pm WST on 15 September 2012, being the cut-off date for entitlement to vote at the Scheme meeting, was also sent Scheme documents. 4 The Scheme meeting was duly conducted at 4.30 pm on 17 September 2012. AGI and its related bodies corporate were excluded from voting at the meeting, either by proxy or in person. At that meeting the Scheme was approved by the requisite majority. LWB then applied to the Court as foreshadowed seeking the final approval to the Scheme pursuant to s 411(4)(b) CA. THE PRINCIPLES 5 It is accepted that in determining whether or not to give final approval to a scheme of arrangement, the Court must determine: (a) whether all relevant conditions as required under s 411 CA have been complied with; (b) whether the majority of members, though acting regularly, have acted in good faith and not in pursuit of some illegitimate purpose; and (c) whether the proposal was sufficiently fair and reasonable for an intelligent, honest person, able to do so, to approve it. See Re NRMA Ltd (No 1) (2000) 156 FLR 349 per Santow J (at 361) as adopted by me in Re Peak Coal Ltd (No 2) [2010] FCA 45 (at [3]). CONSIDERATION 6 In my view, all of those requirements are established. In particular, the evidence shows that 94.49% of the Scheme shareholders present and voting either in person or by proxy at the Scheme meeting voted in favour of the Scheme. It follows that a majority in number present and voting, either in person or by proxy, of the class of members entitled to vote at the Scheme did vote in favour of the Scheme. Further, 99.79% of the votes so cast were in favour of the Scheme. Accordingly, it was passed by at least 75% of the votes cast at the Scheme meeting. 7 On the evidence and detailed submissions, I am satisfied that there has been full compliance with the various orders preparatory to this application. It is desirable to comment on three specifics only. Deed Poll 8 The first of those specifics was the entry by AGI into a Deed Poll as discussed in Little World Beverages No 1 to secure its obligations under the Scheme. That Deed Poll was duly executed and sent to Scheme shareholders in accordance with the Implementation Agreement. There is evidence as to its proper execution. 9 Secondly, there were specific conditions precedent to the implementation of the Scheme to which the LWB Chairman, Mr Ian Howard Cochrane, deposed in his affidavit of 10 August 2012 in the following terms: 30. The conditions precedent to the implementation of the Scheme are set out in clause 3 and schedule 1 of the Scheme Implementation Agreement and include: (a) Scheme Participants approving the Scheme by the requisite majorities in accordance with the Act; (b) obtaining all necessary approvals from ASIC, ASX and the Foreign Investment Review Board; (c) Court approval of the Scheme; (d) an independent expert's report concluding that the Scheme is in the best interests of Scheme Participants; (e) AGI and LWB's representations and warranties being true and correct; and (f) no material adverse changes to LWB or its underlying business. 31. Each of the conditions precedent to the Scheme, other than the Court approval, must be satisfied or waived in accordance with the Scheme Implementation Agreement before 8:00am on the day of the Court hearing to approve the Scheme. 32. At the hearing, LWB and AGI will provide the Court a certificate confirming whether or not the conditions in the Scheme Implementation Agreement (other than the condition relating to Court approval) have been satisfied or waived. 33. As at the date of making this affidavit, I am not aware of any fact, matter or circumstance that has resulted in, or is likely to result in, the failure of any of those conditions. 10 At the hearing before me, counsel for each of LWB and AGI tendered to the Court certificates confirming that the conditions precedent in the Scheme Implementation Agreement, other than the condition relating to Court approval, had either been satisfied or waived. ASIC non-objection 11 By s 411(17) CA, the Court is not to approve any scheme of arrangement unless either s 411(17)(a) or (b) are satisfied. At the second hearing on 19 September 2012, counsel for LWB provided me with a letter from the Australian Securities and Investments Commission (ASIC) dated 18 September 2012 confirming that ASIC had no objection to the Scheme. It was in the usual terms seen in such circumstances. That is sufficient to satisfy the requirements of s 411(17) CA as s 411(17)(a) and (b) CA are in the alternative. The written statement of no objection by ASIC, while not binding on the Court, may remove the requirement that the Court be satisfied that the arrangement has not been proposed for the proscribed purpose: Re United Minerals Corporation NL (No 2) [2010] FCA 47 (at [9]) and Re Vulcan Resources Ltd (No 2) [2010] FCA 46 (at [7]). Fair and reasonable 12 In light of the summary in Little World Beverages No 1 and the matters identified below, I am satisfied that the Scheme is fair and reasonable. Relevant factors include the following: (a) The Scheme received the unanimous support of the independent Directors of LWB, that is, those directors not associated with Lion; (b) Ernst & Young Transaction Advisory Service Limited (Ernst & Young), the independent expert retained by LWB to consider the proposed scheme, concluded that the Scheme in the best interest if Scheme shareholders in the absence of a superior proposal; (c) Ernst & Young assessed the full underlying value of LWB at between $4.32 and $5.05 per share with a mid-point value of $4.68 per LWB share. It follows that the total payment of $5.30 per LWB share under the Scheme suggests a premium to be assessed of between 4.9% and 22.7% with the mid-point of 13.1%; (d) The Scheme was agreed to by an overwhelming majority of Scheme shareholders as set out above at [6]; and (e) The excluded shareholders (those associated with AGI) were excluded from voting at the Scheme meeting. 13 LWB repeated its reference to factors concerning exclusivity and deemed warranty as well as its submissions which I accepted in Little World Beverages No 1 but none of those factors should lead to a conclusion as to unreasonableness of the Scheme. CONCLUSION 14 There being no opponent appearing to argue against the proposed orders, in light of their apparent conformity with all statutory requirements, in light of the apparent reasonableness of the Scheme and it having had overwhelming majority support, the orders were made in the terms as sought on 19 September 2012. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher. Associate: Dated: 26 September 2012 ANNEXURE A Scheme of arrangement This scheme of arrangement is made under section 411 of the Corporations Act 2001 (Cth) Between the parties Little World Beverages Limited ABN 25 081 128 255 of 1/7 Jones Street, O'Connor, Western Australia (LWB) Each person who is a LWB Shareholder as at the Scheme Record Date, other than an Excluded Shareholder. (Scheme Participant) 1 Definitions, interpretation and scheme components 1.1 Definitions Schedule 1 contains definitions used in this Scheme. 1.2 Interpretation Schedule 1 contains interpretation rules for this Scheme. 1.3 Scheme components This Scheme includes any schedule to it. 2 Preliminary matters (a) LWB is a public company limited by shares, registered in Western Australia, and has been admitted to the official list of ASX. (b) As at 13 August 2012: (1) 68,241,176 LWB Shares were on issue and officially quoted on ASX; and (2) 146,479 Achievement Rights were on issue and were not quoted on any stock exchange. (c) Lion is an unlisted proprietary company limited by shares, registered in Victoria. (d) If this Scheme becomes Effective: (1) Lion will pay or procure the payment of the Scheme Consideration to Scheme Participants in accordance with this Scheme and the Deed Poll; and (2) all the Scheme Shares, and all the rights and entitlements attaching to them as at the Implementation Date (other than the right to receive the Special Dividend to the extent that the Special Dividend is determined by the LWB Board), will be transferred to Lion and LWB will enter the name of Lion in the LWB Register in respect of the Scheme Shares. (e) LWB and Lion have agreed, by executing the Scheme Implementation Agreement, to implement this Scheme. (f) This Scheme attributes actions to Lion but does not itself impose an obligation on it to perform those actions. Lion has agreed, by executing the Deed Poll, to perform the actions attributed to it under this Scheme, including the obligation to pay or procure the payment of the Scheme Consideration to the Scheme Participants in accordance with this Scheme and the Deed Poll. 3 Conditions 3.1 Conditions precedent This Scheme is conditional on, and will have no force or effect until, the satisfaction of each of the following conditions precedent: (a) all the conditions in Schedule 1 to the Scheme Implementation Agreement (other than the condition relating to Court approval of this Scheme) having been satisfied or waived in accordance with the terms of the Scheme Implementation Agreement by 8.00am on the Second Court Date; (b) the Scheme Implementation Agreement and the Deed Poll not having been terminated in accordance with their respective terms before 8.00am on the Second Court Date; (c) approval of this Scheme by the Court under section 411(4)(b) of the Corporations Act, including with any alterations made or required by the Court under section 411(6) of the Corporations Act as are acceptable to LWB and Lion; (d) such other conditions made or required by the Court under section 411(6) of the Corporations Act in relation to this Scheme as are acceptable to LWB and Lion; and (e) the orders of the Court made under section 411(4)(b) (and, if applicable, section 411(6)) of the Corporations Act approving this Scheme coming into effect, pursuant to section 411(10) of the Corporations Act. 3.2 End Date This Scheme will lapse and be of no further force or effect if: (a) the Effective Date does not occur on or before the End Date; or (b) the Scheme Implementation Agreement is terminated in accordance its terms, unless LWB and Lion otherwise agree in writing. 3.3 Certificate (a) LWB and Lion will provide to the Court on the Second Court Date a certificate, or such other evidence as the Court requests, confirming (in respect of matters within their respective knowledge) whether or not all of the conditions precedent in clauses 3.1(a) and 3.1(b) have been satisfied or waived as at 8:00am on the Second Court Date. (b) The certificate referred to in clause 3.3(a) constitutes conclusive evidence that such conditions precedent are satisfied, waived or taken to be waived. 4 Implementation of this Scheme 4.1 Lodgement of Court orders with ASIC LWB will lodge with ASIC, in accordance with section 411(10) of the Corporations Act, an office copy of the Court order approving this Scheme as soon as possible and in any event by 5.00pm on the first Business Day after the day on which the Court approves this Scheme or such later time as LWB and Lion agree in writing. 4.2 Transfer of Scheme Shares On the Implementation Date: (a) subject to the payment of the Scheme Consideration in the manner contemplated by clause 5, the Scheme Shares, together with all rights and entitlements attaching to the Scheme Shares as at the Implementation Date (other than the right to receive the Special Dividend to the extent that the Special Dividend is determined by the LWB Board), will be transferred to Lion, without the need for any further act by any Scheme Participant (other than acts performed by LWB as attorney and agent for Scheme Participants under clause 8.5), by: (1) LWB delivering to Lion a duly completed Scheme Transfer, executed on behalf of the Scheme Participants by LWB, for registration; and (2) Lion duly executing the Scheme Transfer, attending to the stamping of the Scheme Transfer (if required) and delivering it to LWB for registration; and (b) as soon as practicable following receipt of the Scheme Transfer in accordance with clause 4.2(a)(2), LWB must enter, or procure the entry of, the name of Lion in the LWB Register in respect of all the Scheme Shares transferred to Lion in accordance with this Scheme. 4.3 Entitlement to Scheme Consideration On the Implementation Date, in consideration for the transfer to Lion of the Scheme Shares in accordance with clause 4.2, each Scheme Participant will be entitled to receive the Scheme Consideration in respect of each of their Scheme Shares in accordance with clause 5. 5 Scheme Consideration 5.1 Provision of Scheme Consideration (a) Lion must, and LWB must use its best endeavours to procure that Lion shall, by no later than two Business Days before the Implementation Date, deposit in cleared funds an amount equal to the aggregate amount of the Scheme Consideration payable to each Scheme Participant, into an Australian dollar denominated trust account operated by LWB as trustee for the Scheme Participants, details of which have been provided by LWB to Lion on or before the date which is 5 Business Days before the Implementation Date (provided that any interest on the amounts deposited (less bank fees and other charges) will be credited to Lion's account). (b) On the Implementation Date, subject to funds having been deposited in the trust account operated by LWB in accordance with clause 5.1(a), LWB must pay or procure the payment from the trust account referred to in clause 5.1(a) of an amount equal to the Scheme Consideration for each Scheme Share transferred to Lion on the Implementation Date by that Scheme Participant. (c) The obligations of LWB under clause 5.1(b) will be satisfied by LWB (in its absolute discretion): (1) where a Scheme Participant has, before the Scheme Record Date, made a valid election in accordance with the requirements of the LWB Registry to receive dividend payments from LWB by electronic funds transfer to a bank account nominated by the Scheme Participant, paying, or procuring the payment of, the relevant amount in Australian currency by electronic means in accordance with that election; or (2) otherwise, whether or not the Scheme Participant has made an election referred to in clause 5.1(c)(1), dispatching, or procuring the dispatch of, a cheque for the relevant amount in Australian currency to the Scheme Participant by prepaid post to their Registered Address (as at the Scheme Record Date), such cheque being drawn in the name of the Scheme Participant (or in the case of joint holders, in accordance with the procedures set out in clause 5.2). 5.2 Joint holders In the case of Scheme Shares held in joint names: (a) subject to clause 5.1(c), the Scheme Consideration is payable to the joint holders and any cheque required to be sent under this Scheme will be made payable to the joint holders and sent to the holder whose name appears first in the LWB Register as at the Scheme Record Date; and (b) any other document required to be sent under this Scheme will be sent to the holder whose name appears first in the LWB Register as at the Scheme Record Date. 5.3 Unclaimed monies (a) LWB may cancel a cheque issued under this clause 5 if the cheque: (1) is returned to LWB; or (2) has not been presented for payment within six months after the date on which the cheque was sent. (b) During the period of one year commencing on the Implementation Date, on request from a Scheme Participant, LWB must reissue a cheque that was previously cancelled under this clause. 5.4 Orders of a court If: (a) written notice is given to LWB (or the LWB Registry) of an order made by a court of competent jurisdiction that requires payment to a third party of a sum in respect of Scheme Shares held by a particular Scheme Participant, which would otherwise be payable to that Scheme Participant by LWB in accordance with this clause 5, then LWB shall be entitled to procure that payment is made in accordance with that order; or (b) written notice is given to LWB (or the LWB Registry) of an order made by a court of competent jurisdiction that prevents LWB from making a payment to any particular Scheme Participant in accordance with clause 5.1(c), or such payment is otherwise prohibited by applicable law, LWB shall be entitled to retain an amount, in Australian dollars, equal to the number of Scheme Shares held by that Scheme Participant multiplied by the Scheme Consideration until such time as payment in accordance with this clause 5 is permitted by that order or otherwise by law. 6 Dealings in LWB Shares 6.1 Determination of Scheme Participants To establish the identity of the Scheme Participants, dealings in LWB Shares or other alterations to the LWB Register will only be recognised if: (a) in the case of dealings of the type to be effected using CHESS, the transferee is registered in the LWB Register as the holder of the relevant LWB Shares on or before the Scheme Record Date; and (b) in all other cases, registrable transfer or transmission applications in respect of those dealings, or valid requests in respect of other alterations, are received on or before the Scheme Record Date at the place where the LWB Register is kept, and LWB will not accept for registration, or recognise for any purpose (except a transfer to Lion pursuant to this Scheme and any subsequent transfer by Lion or its successors in title), any transfer or transmission application or other request in respect of LWB Shares received after such times, or received prior to such times but not in registrable or actionable form. 6.2 Register (a) LWB must register registrable transmission applications or transfers of the Scheme Shares in accordance with clause 6.1(b) on or before the Scheme Record Date, provided that, for the avoidance of doubt, nothing in this clause 6.2(a) requires LWB to register a transfer that would result in a LWB Shareholder holding a parcel of LWB Shares that is less than a 'marketable parcel' (and, for the purposes of this clause 6.2(a), 'marketable parcel' has the meaning given in the Operating Rules of the ASX). (b) If this Scheme becomes Effective, a holder of Scheme Shares (and any person claiming through that holder) must not dispose of or purport or agree to dispose of, any Scheme Shares or any interest in them after the Scheme Record Date in any way except as set out in this Scheme and any such disposal will be void and have no legal effect whatsoever. (c) For the purpose of determining entitlements to the Scheme Consideration, LWB must maintain the LWB Register in accordance with the provisions of this clause 6.2 until the Scheme Consideration has been paid to the Scheme Participants. The LWB Register in this form will solely determine entitlements to the Scheme Consideration. (d) Subject to the provision of the Scheme Consideration and the registration of the transfer to Lion contemplated under clauses 4.2 and 5.1, all statements of holding for LWB Shares (other than statements of holding in favour of Lion or any Excluded Shareholder) will cease to have effect after the Scheme Record Date as documents of title in respect of those shares and, as from that date, each entry current at that date on the LWB Register (other than entries on the LWB Register in respect of Lion or any Excluded Shareholder) will cease to have effect except as evidence of entitlement to the Scheme Consideration in respect of the LWB Shares relating to that entry. (e) As soon as possible on or after the Scheme Record Date, and in any event within one Business Day after the Scheme Record Date, LWB will ensure that details of the names, Registered Addresses and holdings of LWB Shares for each Scheme Participant as shown in the LWB Register are available to Lion in the form Lion reasonably requires. 7 Quotation of LWB Shares (a) LWB will apply to ASX to suspend trading on ASX in LWB Shares with effect from the close of trading on the Effective Date. (b) On a date after the Implementation Date to be determined by Lion, LWB will apply: (1) for termination of the official quotation of LWB Shares on the ASX; and (2) to have itself removed from the official list of the ASX. 8 General Scheme provisions 8.1 Consent to amendments to this Scheme If the Court proposes to approve this Scheme subject to any alterations or conditions: (a) LWB may by its counsel consent on behalf of all persons concerned to those alterations or conditions to which Lion has consented; and (b) each Scheme Participant agrees to any such alterations or conditions which counsel for LWB has consented to. 8.2 Scheme Participants' agreements and warranties (a) Each Scheme Participant: (1) agrees to the transfer of their LWB Shares together with all rights and entitlements attaching to those LWB Shares (other than the right to receive the Special Dividend to the extent that the Special Dividend is determined by the LWB Board) in accordance with this Scheme; (2) agrees to the variation, cancellation or modification of the rights attached to their LWB Shares constituted by or resulting from this Scheme; and (3) acknowledges that this Scheme binds LWB and all Scheme Participants (including those who did not attend the Scheme Meeting, did not vote at the Scheme Meeting, or voted against this Scheme at the Scheme Meeting). (b) Each Scheme Participant is taken to have warranted to LWB and Lion, and appointed and authorised LWB as its attorney and agent to warrant to Lion, that all their LWB Shares (including any rights and entitlements attaching to those shares other than the right to receive the Special Dividend, to the extent that the Special Dividend is determined by the LWB Board) which are transferred under this Scheme will, at the date of transfer, be fully paid and free from all mortgages, charges, liens, encumbrances, pledges, security interests (including any 'security interests' within the meaning of section 12 of the Personal Property Securities Act 2009 (Cth)) and interests of third parties of any kind, whether legal or otherwise, and restrictions on transfer of any kind, and that they have full power and capacity to transfer their LWB Shares to Lion together with any rights attaching to those shares (other than the right to receive the Special Dividend, to the extent that the Special Dividend is determined by the LWB Board). LWB undertakes that it will provide such warranty to Lion as agent and attorney of each Scheme Participant. 8.3 Title to and rights in Scheme Shares (a) To the extent permitted by law, the Scheme Shares (including all rights and entitlements attaching to the Scheme Shares other than the right to receive the Special Dividend, to the extent that the Special Dividend is determined by the LWB Board) transferred under this Scheme to Lion will, at the time of transfer of them to Lion, vest in Lion free from all mortgages, charges, liens, encumbrances, pledges, security interests (including any 'security interests' within the meaning of section 12 of the Personal Property Securities Act 2009 (Cth)) and interests of third parties of any kind, whether legal or otherwise and free from any restrictions on transfer of any kind. (b) Immediately upon the provision of the Scheme Consideration in the manner contemplated by clause 5, Lion will be beneficially entitled to the Scheme Shares to be transferred to it under this Scheme pending registration by LWB of Lion in the LWB Register as the holder of the Scheme Shares. 8.4 Appointment of sole proxy Immediately upon the provision of the Scheme Consideration in the manner contemplated by clause 5, and until LWB registers Lion as the holder of all Scheme Shares in the LWB Register, each Scheme Participant: (a) is deemed to have appointed Lion as attorney and agent (and directed Lion in each such capacity) to appoint any director, officer, secretary or agent nominated by Lion as its sole proxy and, where applicable or appropriate, corporate representative to attend shareholders' meetings, exercise the votes attaching to the Scheme Shares registered in their name and sign any shareholders' resolution; (b) undertakes not to attend or vote at any of shareholders' meetings or sign any resolutions, whether in person, by proxy or by corporate representative (other than pursuant to this clause 8.4(a)); (c) must take all other actions in the capacity of a registered holder of Scheme Shares as Lion reasonably directs; and (d) acknowledges and agrees that in exercising the powers referred to in clause 8.4(a), Lion and any director, officer, secretary or agent nominated by Lion under clause 8.4(a) may act in the best interests of Lion as the intended registered holder of the Scheme Shares. 8.5 Authority given to LWB Each Scheme Participant, without the need for any further act: (a) on the Effective Date, irrevocably appoints LWB and each of its directors, officers and secretaries (jointly and each of them severally) as its attorney and agent for the purpose of enforcing the Deed Poll against Lion, and LWB undertakes in favour of each Scheme Participant that it will enforce the Deed Poll against Lion on behalf of and as agent and attorney for Scheme Participants; and (b) on the Implementation Date, irrevocably appoints LWB and each of its directors, officers and secretaries (jointly and each of them severally) as its attorney and agent for the purpose of executing any document or doing or taking any other act, necessary, desirable or expedient to give effect to this Scheme and the transactions contemplated by it, including (without limitation) executing the Scheme Transfer, and LWB accepts each such appointment. LWB, as attorney and agent of each Scheme Participant, may sub-delegate its functions, authorities or powers under this clause 8.5 to all or any of its directors, officers or employees (jointly, severally or jointly and severally). 8.6 Binding effect of Scheme This Scheme binds LWB and all of the Scheme Participants (including those who did not attend the Scheme Meeting, did not vote at the Scheme Meeting, or voted against this Scheme at the Scheme Meeting) and, to the extent of any inconsistency, overrides the constitution of LWB. 9 General 9.1 Stamp duty Lion will: (a) pay all stamp duty and any related fines and penalties in respect of this Scheme and the Deed Poll, the performance of the Deed Poll and each transaction effected by or made under or in connection with this Scheme and the Deed Poll; and (b) indemnify each Scheme Participant against any liability arising from Lion's failure to comply with clause 9.1. 9.2 Consent Each of the Scheme Participants consents to LWB doing all things necessary or incidental to the implementation of this Scheme. 9.3 Notices (a) If a notice, transfer, transmission application, direction or other communication referred to in this Scheme is sent by post to LWB, it will not be taken to be received in the ordinary course of post or on a date and time other than the date and time (if any) on which it is actually received at LWB's registered office or at the office of the LWB Registry. (b) The accidental omission to give notice of the Scheme Meeting or the non-receipt of such notice by a LWB Shareholder will not, unless so ordered by the Court, invalidate the Scheme Meeting or the proceedings of the Scheme Meeting. 9.4 Governing law (a) This Scheme is governed by the laws in force in Western Australia. (b) The parties irrevocably submit to the non-exclusive jurisdiction of courts exercising jurisdiction in Western Australia and courts of appeal from them in respect of any proceedings arising out of or in connection with this Scheme. The parties irrevocably waive any objection to the venue of any legal process in these courts on the basis that the process has been brought in an inconvenient forum. 9.5 Further action LWB must do all things and execute all documents necessary to give full effect to this Scheme and the transactions contemplated by it. Schedule 1 Definitions and interpretation 1 Definitions The meanings of the terms used in this Scheme are set out below. Term Meaning ASIC the Australian Securities and Investments Commission. ASX ASX Limited ABN 98 008 624 691 and, where the context requires, the financial market that it operates. Business Day a day that is not a Saturday, Sunday, public holiday or bank holiday in Perth, Western Australia or in Sydney, New South Wales. CHESS the Clearing House Electronic Subregister System operated by ASX Settlement Pty Ltd and ASX Clear Pty Limited. Corporations Act the Corporations Act 2001 (Cth). Corporations Regulations the Corporations Regulations 2001 (Cth). Court the Federal Court of Australia (Western Australia registry), or such other court of competent jurisdiction under the Corporations Act agreed in writing by LWB and Lion. Deed Poll the deed poll substantially in the form of Attachment 1 under which Lion covenants in favour of the Scheme Participants to perform its obligations under this Scheme. Effective when used in relation to this Scheme, means the coming into effect, pursuant to 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 this Scheme, but in any event at no time before an office copy of the order of the Court is lodged with ASIC. Effective Date in relation to this Scheme means the date on which this Scheme becomes Effective. End Date the date which is 6 months from the date of the Scheme Implementation Agreement or such other date as Lion and LWB agree. Excluded Shareholder any LWB Shareholder who is Lion or a related body corporate of Lion. Government Agency any foreign or Australian government or governmental, semi-governmental, administrative, fiscal or judicial body, department, commission, authority, tribunal, agency or entity, or any minister of the Crown in right of the Commonwealth of Australia or any state, or any other federal, state, provincial, local or other government, whether foreign or Australian. Implementation Date the fifth Business Day following the Scheme Record Date or such other date as is agreed by Lion and LWB. Lion Anglo-Gaelic Investments Pty Ltd ABN 32 085 204 182 of Level 7, 68 York Street, Sydney, New South Wales. Listing Rules the official listing rules of the ASX. LWB Option an option to acquire a LWB Share. LWB Register the register of members of LWB maintained by or on behalf of LWB in accordance with section 168(1) of the Corporations Act. LWB Registry Security Transfers Registrars Pty Ltd ABN 95 008 894 488. LWB Share an issued fully paid ordinary share in the capital of LWB. LWB Shareholder each person who is registered in the LWB Register as a holder of LWB Shares. Registered Address in relation to a LWB Shareholder, the address shown in the LWB Register in respect of that LWB Shareholder as at the Scheme Record Date. Scheme this scheme of arrangement subject to any alterations or conditions made or required by the Court under section 411(6) of the Corporations Act and agreed to by LWB and Lion. Scheme Consideration the amount of A$5.30 per LWB Share less the amount of any dividend(s) declared or determined to be payable, or paid, by LWB in respect of LWB Shares (including the Special Dividend) from the date of the Scheme Implementation Agreement up to and including the Implementation Date. Scheme Implementation Agreement the scheme implementation agreement dated 17 June 2012 between LWB and Lion relating to the implementation of this Scheme. Scheme Meeting the meeting of the LWB Shareholders, ordered by the Court to be convened pursuant to section 411(1) of the Corporations Act at which LWB Shareholders will vote on this Scheme. Scheme Participant each person who is a LWB Shareholder as at the Scheme Record Date, other than an Excluded Shareholder. Scheme Record Date 7.00pm on the fifth Business Day following the Effective Date or such other date (after the Effective Date) as LWB and Lion agree. Scheme Shares all LWB Shares held by Scheme Participants as at the Scheme Record Date and for the avoidance of doubt includes any LWB Shares issued on or before the Scheme Record Date, including upon the exercise of any LWB Achievement Rights. Scheme Transfer a duly completed and executed proper instrument of transfer in respect of the Scheme Shares for the purposes of section 1071B of the Corporations Act, in favour of Lion as transferee, which may be a master transfer of all or part of the Scheme Shares. Second Court Date the day on which the Court makes an order pursuant to section 411(4)(b) of the Corporations Act approving this Scheme. Special Dividend a dividend of up to A$0.20 per LWB Share paid in accordance with the terms of the Scheme Implementation Agreement. 2 Interpretation In this Scheme: (a) headings and bold type are for convenience only and do not affect the interpretation of this Scheme; (b) the singular includes the plural and the plural includes the singular; (c) words of any gender include all genders; (d) other parts of speech and grammatical forms of a word or phrase defined in this Scheme have a corresponding meaning; (e) a reference to a person includes any company, partnership, joint venture, association, corporation or other body corporate and any Government Agency as well as an individual; (f) a reference to a clause, party, part, schedule, attachment or exhibit is a reference to a clause or part of, and a party, schedule, attachment or exhibit to, this Scheme; (g) a reference to any legislation includes all delegated legislation made under it and amendments, consolidations, replacements or re enactments of any of them; (h) a reference to a document (including this Scheme) includes all amendments or supplements to, or replacements or novations of, that document; (i) a reference to '$', 'A$' or 'dollar' is to Australian currency unless denominated otherwise; (j) a reference to any time is a reference to that time in Perth, Western Australia; (k) a term defined in or for the purposes of the Corporations Act has the same meaning when used in this Scheme; (l) a reference to a party to a document includes that party's successors and permitted assignees; (m) no provision of this Scheme will be construed adversely to a party because that party was responsible for the preparation of this Scheme or that provision; (n) any agreement, representation, warranty or indemnity by two or more parties (including where two or more persons are included in the same defined term) binds them jointly and severally; (o) any agreement, representation, warranty or indemnity in favour of two or more parties (including where two or more persons are included in the same defined term) is for the benefit of them jointly and severally; and (p) a reference to a body, other than a party to this Scheme (including an institute, association or authority), whether statutory or not: (1) which ceases to exist; or (2) whose powers or functions are transferred to another body, is a reference to the body which replaces it or which substantially succeeds to its powers or functions. 3 Interpretation of inclusive expressions Specifying anything in this Scheme after the words 'include' or 'for example' or similar expressions does not limit what else is included. 4 Business Day Where the day on or by which any thing is to be done is not a Business Day, that thing must be done on or by the next Business Day. Attachment 1 Deed Poll Date ► [insert date] This deed poll is made by Anglo-Gaelic Investments Pty Ltd ABN 32 085 204 182 of Level 7, 68 York Street, Sydney, New South Wales (Lion) in favour of each person who is a LWB Shareholder as at the Scheme Record Date, other than an Excluded Shareholder. Recitals 1 The directors of LWB have resolved that LWB should propose the Scheme. The effect of the Scheme will be that all Scheme Shares will be transferred to Lion. 2 LWB and Lion entered into the Scheme Implementation Agreement. 3 In the Scheme Implementation Agreement, Lion agreed to enter into this deed poll. 4 Lion is entering into this deed poll for the purpose of covenanting in favour of the Scheme Participants to perform its obligations in relation to the Scheme. This deed poll provides as follows: 1 Definitions and interpretation 1.1 Definitions (a) In this deed poll, Scheme means the proposed scheme of arrangement under Part 5.1 of the Corporations Act between LWB and the Scheme Participants under which all the Scheme Shares will be transferred to Lion, the form of which is set out in Attachment 1 to this deed poll, subject to any amendments or conditions made or required by the Court pursuant to section 411(6) of the Corporations Act, to the extent they are approved in writing by Lion and LWB in accordance with clause 8.1 of the Scheme. (b) Unless the context otherwise requires, terms defined in the Scheme have the same meaning when used in this deed poll. 1.2 Interpretation Section 2 of Schedule 1 to the Scheme applies to the interpretation of this deed poll, except that references to 'this Scheme' are to be read as references to 'this deed poll'. 1.3 Nature of deed poll Lion acknowledges that this deed poll may be relied on and enforced by any Scheme Participant in accordance with its terms even though the Scheme Participants are not party to it. 2 Conditions to obligations 2.1 Conditions The obligations of Lion under this deed poll are subject to the Scheme becoming Effective. 2.2 Termination The obligations of Lion under this deed poll will automatically terminate and the terms of this deed poll will be of no force or effect if: (a) the Scheme Implementation Agreement is terminated in accordance with its terms; or (b) the Scheme is not Effective by the End Date. 2.3 Consequences of termination If this deed poll is terminated under clause 2.2, in addition and without prejudice to any other rights, powers or remedies available to it: (a) Lion is released from its obligations to further perform this deed poll except those obligations under clause 7.1; and (b) each Scheme Participant retains the rights they have against Lion in respect of any breach of this deed poll which occurred before it was terminated. 3 Scheme obligations 3.1 Undertaking to pay Scheme Consideration Subject to clause 2, Lion undertakes in favour of each Scheme Participant to: (a) deposit in cleared funds by no later than two Business Days before the Implementation Date, an amount equal to the aggregate amount of the Scheme Consideration payable to all Scheme Participants under the Scheme into the Australian dollar denominated trust account operated by LWB as trustee for the Scheme Participants, details of which have been provided to Lion by LWB in accordance with the Scheme, except that any interest on the amounts deposited (less bank fees and other charges) will be credited to Lion's account; (b) comply with its obligations under the Scheme Implementation Agreement and do all things necessary or expedient on its part to give full effect to the Scheme; and (c) undertake all other actions attributed to it under the Scheme, subject to and in accordance with the provisions of the Scheme. 4 Warranties Lion represents and warrants that: (a) it is a corporation validly existing under the laws of its place of registration; (b) it has the corporate power to enter into and perform its obligations under this deed poll and to carry out the transactions contemplated by this deed poll; (c) it has taken all necessary corporate action to authorise its entry into this deed poll and has taken or will take all necessary corporate action to authorise the performance of this deed poll and to carry out the transactions contemplated by this deed poll; (d) this deed poll is valid and binding on it and enforceable against it in accordance with its terms; and (e) this deed poll does not conflict with, or result in the breach of or default under, any provision of the constitution of Lion, or any writ, order or injunction, judgment, law, rule or regulation to which either is a party or subject or by which it is bound. 5 Continuing obligations This deed poll is irrevocable and, subject to clause 2, remains in full force and effect until: (a) Lion has fully performed its obligations under this deed poll; or (b) the earlier termination of this deed poll under clause 2. 6 Notices 6.1 Form of Notice A notice or other communication in respect of this deed poll (Notice) must be: (a) in writing and in English and signed by or on behalf of the sending party; and (b) addressed to Lion in accordance with the details set out below (or any alternative details nominated by Lion by Notice). Attention Company Secretary Address Level 7, 68 York Street Sydney NSW 2000 Fax no +61 8 9338 8500 6.2 How Notice must be given and when Notice is received (a) A Notice must be given by one of the methods set out in the table below. (b) A Notice is regarded as given and received at the time set out in the table below. However, if this means the Notice would be regarded as given and received outside the period between 9.00am and 5.00pm (addressee's time) on a Business Day (business hours period), then the Notice will instead be regarded as given and received at the start of the following business hours period. Method of giving Notice When Notice is regarded as given and received By hand to the nominated address When delivered to the nominated address By pre-paid post to the nominated address At 9.00am (addressee's time) on the second Business Day after the date of posting By fax to the nominated fax number At the time indicated by the sending party's transmission equipment as the time that the fax was sent in its entirety. However, if the recipient party informs the sending party within 4 hours after that time that the fax transmission was illegible or incomplete, then the Notice will not be regarded as given or received. When calculating this 4 hour period, only time within a business hours period is to be included. 7 General 7.1 Stamp duty Lion: (a) will pay all stamp duty and any related fines and penalties in respect of the Scheme and this deed poll, the performance of this deed poll and each transaction effected by or made under the Scheme and this deed poll; and (b) indemnifies each Scheme Participant against any liability arising from Lion's failure to comply with clause 7.1(a). 7.2 Governing law and jurisdiction (a) This deed poll is governed by the law in force in Western Australia. (b) Lion irrevocably submits to the non-exclusive jurisdiction of courts exercising jurisdiction in Western Australia and courts of appeal from them in respect of any proceedings arising out of or in connection with this deed poll. Lion irrevocably waives any objection to the venue of any legal process in these courts on the basis that the process has been brought in an inconvenient forum. 7.3 Waiver Lion may not rely on the words or conduct of any Scheme Participant as a waiver of any right unless the waiver is in writing and signed by the Scheme Participant granting the waiver. The meanings of the terms used in this clause 7.3 are set out below. Term Meaning conduct includes delay in the exercise of a right. right any right arising under or in connection with this deed and includes the right to rely on this clause. waiver includes an election between rights and remedies, and conduct which might otherwise give rise to an estoppel. 7.4 Variation A provision of this deed poll may not be varied unless: (a) if before the First Court Date, the variation is agreed to by LWB; or (b) if on or after the First Court Date, the variation is agreed to by LWB and the Court indicates that the variation would not of itself preclude approval of the Scheme, in which event Lion will enter into a further deed poll in favour of the Scheme Participants giving effect to the variation. 7.5 Cumulative rights The rights, powers and remedies of Lion and the Scheme Participants under this deed poll are cumulative and do not exclude any other rights, powers or remedies provided by law independently of this deed poll. 7.6 Assignment (a) The rights created by this deed poll are personal to Lion and each Scheme Participant and must not be dealt with at law or in equity without the prior written consent of Lion. (b) Any purported dealing in contravention of clause 7.6(a) is invalid. 7.7 Further action Lion must, at its own expense, do all things and execute all documents necessary to give full effect to this deed poll and the transactions contemplated by it. Attachment 1 Scheme Signing page Executed as a deed poll Signed, sealed and delivered by Anglo-Gaelic Investments Pty Ltd by sign here ► Company Secretary/Director print name sign here ► Director print name