SIMONDS GROUP LIMITED — M&A Activity 2016

Sep 25, 2016

ASX ANNOUNCEMENT

SCHEME OF ARRANGEMENT UPDATE - COPY OF SIA AMENDING DEED

Melbourne, 26 September 2016:

Further to the announcement from the Company this morning, a copy of the deed amending the scheme implementation agreement between the Company, SR Residential Pty Ltd, Simonds Family Office Pty Ltd and Roche Holdings Pty Ltd is attached to this announcement.

ENDS

For more information, please contact:

Media Miche Paterson Partner Newgate Communications +61 400 353 762 miche.paterson@newgatecomms.com.au

Investors Matthew Chun Managing Director and CEO Simonds Group +61 3 9682 0700

SR Residential Pty Ltd, Simonds Family Office Pty Ltd and Roche Holdings Pty Ltd Attention: James Roche and Piers O'Brien c/-smorrissy@claytonutz.com and pobrien@simondsfamily.com.au

By Email

Amendments to Scheme Implementation Agreement

We refer to the Scheme Implementation Agreement dated 30 August 2016 between Simonds Group Limited, SR Residential Pty Ltd, Simonds Family Office Pty Ltd and Roche Holdings Pty Ltd (SIA).

Unless otherwise defined in this letter, capitalised terms used in this letter have the meaning given in the SIA.

1 Amendments to SIA

The SIA is hereby amended as follows:

(a) Replace the definitions of 'End Date', 'Implementation Date' and 'Record Date' in clause 1.1 with the following definitions:

End Date means 18 November 2016 or such other date agreed in writing between the Target and the Bidder.

Implementation Date means 18 November 2016 or such later date which is 2 Business Days after the Record Date.

Record Date means 7.00pm on the date which is 3 Business Days after the Effective Date.

• (b) Delete the words 'by the End Date' from clause 3.6(b) and replace those words with the words 'before the End Date'.
• (c) Delete clause 3.6(c).
• (d) Pursuant to clause 4.2(d), the parties agree the following amendments to the Timetable:
• Wednesday, 28 September 2016 First Court Date;
• Monday, 3 October 2016 dispatch of Scheme Booklet;
• Wednesday, 2 November 2016 Scheme Meeting;
• Thursday, 3 November 2016 Second Court Date;
• Tuesday, 8 November 2016 Record Date; and
• Friday, 18 November 2016 Implementation Date.
• (e) Insert the following at the beginning of clause 4.6:

On the Effective Date, the Target must (as designated by the Bidder in writing) cause the appointment to the Target board of up to 2 persons nominated by the Bidder in writing, subject to those persons having provided consents to act as directors of the Target.

• (f) Amend clause 4.6(a) by inserting 'and the Target directors nominated by the Bidder in accordance with this clause 4.6' after 'other than the Interested Target Directors'.
• (g) Insert a new clause 5.7 as follows:
• (a) The Target must provide to the Bidder the Target Group's financial and operating results for the 3 month period to 30 September 2016, including the October 2016 Board pack, at the same time this information is provided to the directors of the Target.
• (b) The Bidder will have the right to terminate this agreement for any reason without any liability to the Target because of that termination by giving the Target notice in writing at any time until the later of:

	Signed sealed and delivered by Simonds Group Limited
sign here >	by Company Secretary/Director	sign here $\blacktriangleright$	Director
print name	Matthew Chu	print name		SUSAN M. OLUER
	Signed sealed and delivered by SR Residential Pty Ltd by
sign here	Company Secretary/Director	sign here $\blacktriangleright$	Director
	print name and the contract of the print name and the contract of the contract of the contract of the contract of the contract of the contract of the contract of the contract of the contract of the contract of the contract
	Signed sealed and delivered by Simonds Family Office Pty Ltd bγ
sign here ►	Company Secretary/Director Contract of the State	sign here ►
			Director
print name	print name and print name		1980 - Andrew Marson, ameri kansk f
	Signed sealed and delivered by Roche Holdings Pty Ltd by			¥.
	sign here > and a manufacturer of the state of the state of the state of the state of the state of the state of the state of the state of the state of the state of the state of the state of the state of the state of the st	sign here ►
	Company Secretary/Director		Director
	print name experience and the contract of the print name of the contract of the contract of the contract of the

Signed sealed and delivered by Simonds Group Limited by
sign here. Company Secretary/Director	sign here $\blacktriangleright$ Director
print name	print name
Signed sealed and delivered by SR Residential Pty Ltd by sign here โหา้panySeoretary/Director RocHK print name	sign here $\blacktriangleright$ Directo Sontace $\int$ ล $\sigma$ ย print name
Signed sealed and delivered by Simonds Family Office Pty Ltd by $sign here \blacktriangleright$ CompanySecretaryDirector printname ? IEAS C.GRIEN	sign here ► Director mark simones print name
Signed sealed and delivered by Roche Holdings Pty Ltd bγ signhere Company Secretary/Director $k$ cith printname	$sign here \blacktriangleright$ Director onnt name

Attachment 1

Scheme of arrangement

Scheme of arrangement

Simonds Group Limited

Scheme Shareholders

Scheme of arrangement

This scheme of arrangement is made under section 411 of the Corporations Act 2001 (Cth)

Between the parties

Target	Simonds Group Limited
	ACN 143 841 801 of Level 1, 570 St Kilda Road, Melbourne VIC 3004
	(Target)
Scheme Shareholders	Each person who holds Scheme Shares, other than the Excluded Shareholders
	(Scheme Shareholders)

1 Definitions and interpretation

1.1 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 ACN 008 624 691 and, where the context requires, the financial market that it operates.
Bidder	SR Residential Pty Ltd ACN 614 474 949.
Business Day	a day that is not a Saturday, Sunday or public holiday and on which banks are open for business generally in Victoria, Australia.
CHESS	the Clearing House Electronic Subregister System operated by ASX Settlement Pty Ltd and ASX Clear Pty Limited.

Term	Meaning
Corporations Act	the Corporations Act 2001 (Cth).
Corporations the Corporations Regulations 2001 (Cth). Regulations
Court	the Supreme Court of Victoria, or such other court of competent jurisdiction as agreed to in writing by the Target and the Bidder.
Deed Poll	the deed poll executed by the Bidder and each Guarantor on [insert date] under which the Bidder and each Guarantors covenant in favour of the Scheme Shareholders to perform the obligations attributed to the Bidder and the Guarantors under this Scheme.
Direction	a written direction given by the Bidder to the Target no later than 14 days prior to the Implementation Date specifying the number of Scheme Shares to be transferred by the Target to each Nominee on the Implementation Date.
Effective	when used in relation to this Scheme, the coming into effect, under subsection 411(10) of the Corporations Act, of the Court order made under paragraph 411(4)(b) of the Corporations Act in relation to this Scheme.
Effective Date	the date on which this Scheme becomes Effective.
End Date	18 November 2016 or such other date agreed in writing between the Target and the Bidder.
Excluded Shareholders	each of Simonds Custodians Pty Ltd ATF Gary Simonds No.1 Family Trust, Simonds Custodians Pty Ltd ATF Gary Simonds No.2 Family Trust, Simonds Custodians Pty Ltd ATF Gary Simonds No.3 Family Trust, Madisson Constructions Pty Ltd ATF Madisson Homes Trust, Simonds Construction Pty Ltd ATF Simonds Homes Discretionary Trust, Gary Simonds and Rhett Simonds.
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.

Term	Meaning
Guarantors	each of SFO and Roche.
Implementation Agreement	the scheme implementation agreement dated 30 August 2016 (as amended on [●] September 2016) between the Target, the Bidder, SFO and Roche relating to the implementation of this Scheme.
Implementation Date	18 November 2016 or such later date which is 2 Business Days after the Scheme Record Date.
Nominee	each related entity of the Bidder nominated by the Bidder to the Target in writing to receive Scheme Shares in accordance with a Direction.
Operating Rules	the official operating rules of ASX.
Registered Address	in relation to a Target Shareholder, the address shown in the Share Register as at the Scheme Record Date.
Roche	Roche Holdings Pty Ltd ACN 007 046 040.
Scheme	this scheme of arrangement under Part 5.1 of the Corporations Act between the Target and the Scheme Shareholders subject to any alterations or conditions made or required by the Court under subsection 411(6) of the Corporations Act and agreed to by the Target and the Bidder.
Scheme Booklet	the scheme booklet published by the Target and dated [insert].
Scheme Consideration	the amount in cash to be provided by the Bidder in consideration for the transfer of each Scheme Share held by a Scheme Shareholder to the Bidder or its Nominees, being, in respect of each Scheme Share, \$0.40.
Scheme Meeting	the meeting to be convened by the Court in relation to the Scheme pursuant to subsection 411(1) of the Corporations Act.
Scheme Record Date	7.00pm on the date which is 3 Business Days after the Effective Date.
Scheme Shareholder	each person who holds Scheme Shares, other than the Excluded

Term	Meaning
	Shareholders.
Scheme Share	a Target Share on issue on the Scheme Record Date.
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 the Bidder or its Nominees as transferee or transferees, which may be a master transfer of all or part of the Scheme Shares.
Second Court Date	the first day of the hearing of an application made to the Court for an order pursuant to paragraph 411(4)(b) of the Corporations Act approving this Scheme or, if the hearing of such application is adjourned for any reason, the first day of the adjourned hearing.
SFO	Simonds Family Office Pty Ltd ACN 602 022 140.
Share Register	the register of members of the Target maintained by or on behalf of the Target in accordance with section 168(1) of the Corporations Act.
Target	Simonds Group Limited ACN 143 841 801.
Target Registry	Boardroom Pty Limited ACN 003 209 836.
Target Share	a fully paid ordinary share in the capital of the Target.
Target Shareholder each person who is registered as the holder of a Target Share in the Share Register.

1.2 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, schedule, attachment or exhibit is a reference to a clause 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 reenactments of any of them (whether passed by the same or another Government Agency with legal power to do so);
• (h) a reference to a document (including this Scheme) includes all amendments or supplements to, or replacements or novations of, that document;
• (i) the word 'includes' in any form is not a word of limitation;
• (j) a reference to '\$', 'A\$' or 'dollar' is to Australian currency;
• (k) a reference to any time is, unless otherwise indicated, a reference to that time in Melbourne, Australia;
• (l) a term defined in or for the purposes of the Corporations Act has the same meaning when used in this Scheme;
• (m) a reference to a party to a document includes that party's successors and permitted assignees;
• (n) 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; and
• (o) 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.

1.3 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.

2 Preliminary matters

• (a) The Target is a public company limited by shares, incorporated in Australia, and has been admitted to the official list of the ASX.
• (b) As at the date of the Implementation Agreement, there were on issue:
• (1) 143,841,655 Target Shares, which are quoted for trading on the ASX; and
• (2) no more than 507,768 performance rights and no more than 28,087 service rights, in each case which are not quoted for trading on any stock exchange.
• (c) SFO is a company limited by shares registered in Victoria.

• (d) Roche is a company limited by shares registered in Victoria.
• (e) The Bidder, a company that is jointly-owned by associates of SFO and Roche, is a company limited by shares registered in Victoria.
• (f) If this Scheme becomes Effective:
• (1) the Bidder must provide, and the Guarantors must procure that the Bidder provides, the Scheme Consideration to the Scheme Shareholders in accordance with the terms of 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, must be transferred to the Bidder or, if applicable, its Nominees. and the Target will enter the name of the Bidder or, if applicable, its Nominees in the Share Register in respect of the Scheme Shares on the Implementation Date.
• (g) The Target and the Bidder have agreed, subject to the terms and conditions of the Implementation Agreement, to implement this Scheme.
• (h) This Scheme attributes actions to the Guarantors and the Bidder but does not itself impose an obligation on them to perform those actions. Each Guarantor and the Bidder have agreed, by executing the Deed Poll, to perform the actions attributed to them under this Scheme, including the provision or procuring the provision of the Scheme Consideration to the Scheme Shareholders.

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 clause 3.1 of the Implementation Agreement (other than the condition in the Implementation Agreement relating to Court approval of this Scheme) having been satisfied or waived in accordance with the terms of the Implementation Agreement by 8.00am on the Second Court Date;
• (b) neither the Implementation Agreement nor the Deed Poll having been terminated in accordance with their terms before 8.00am on the Second Court Date;
• (c) approval of this Scheme by the Court under paragraph 411(4)(b) of the Corporations Act, including with any alterations made or required by the Court under subsection 411(6) of the Corporations Act and agreed to by the Bidder and the Target;
• (d) such other conditions made or required by the Court under subsection 411(6) of the Corporations Act in relation to this Scheme and agreed to by the Bidder and the Target having been satisfied or waived; and
• (e) the orders of the Court made under paragraph 411(4)(b) (and, if applicable, subsection 411(6)) of the Corporations Act approving this Scheme coming into effect, pursuant to subsection 411(10) of the Corporations Act on or before the End Date (or any later date the Target and the Bidder agree in writing).

3.2 Certificate

• (a) The Target and the Bidder 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 knowledge) whether or not all of the conditions precedent in clauses 3.1(a) and 3.1(b) have been satisfied or waived.
• (b) The certificate referred to in clause 3.2(a) constitutes conclusive evidence that such conditions precedent were satisfied, waived or taken to be waived.

4 Implementation of this Scheme

4.1 Lodgement of Court orders with ASIC

The Target must lodge with ASIC, in accordance with subsection 411(10) of the Corporations Act, an office copy of the Court order approving this Scheme as soon as possible after the Court approves this Scheme and in any event by 5.00pm on the first Business Day after the day on which the Court approves this Scheme.

4.2 Transfer of Scheme Shares

On the Implementation Date:

• (a) subject to the provision 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, must be transferred to the Bidder or, if applicable, to its Nominees, without the need for any further act by any Scheme Shareholder (other than acts performed by the Target as attorney and agent for Scheme Shareholders under clause 8.5), by:
• (1) the Target delivering to the Bidder a duly completed Scheme Transfer, executed on behalf of the Scheme Shareholders by the Target, for registration; and
• (2) the Bidder or, if applicable, its Nominees duly executing the Scheme Transfer, attending to the stamping of the Scheme Transfer (if required) and delivering it to the Target for registration; and
• (b) immediately following receipt of the Scheme Transfer in accordance with clause 4.2(a)(2), but subject to the stamping of the Scheme Transfer (if required), the Target must enter, or procure the entry of, the name of the Bidder or, if applicable, its Nominees, in the Share Register in respect of all the Scheme Shares transferred to the Bidder in accordance with this Scheme.

5 Scheme Consideration

5.1 Provision of Scheme Consideration

(a) The Bidder must, and the Guarantors must procure that the Bidder does, by no later than the Business Day before the Implementation Date, deposit in cleared funds an amount equal to the aggregate amount of the Scheme Consideration

payable to each Scheme Shareholder, in an Australian dollar denominated trust account operated by the Target as trustee for the Scheme Shareholders and notified to the Bidder at least 3 Business Days prior to the Implementation Date, (provided that any interest on the amounts deposited (less bank fees and other charges) will be credited to the Bidder's account).

• (b) On the Implementation Date, subject to funds having been deposited in accordance with clause 5.1(a), the Target must pay or procure the payment from the trust account referred to in clause 5.1(a) of the Scheme Consideration to each Scheme Shareholder based on the number of Scheme Shares held by such Scheme Shareholder as set out in the Share Register on the Scheme Record Date.
• (c) The obligations of the Target under clause 5.1(b) will be satisfied by the Target (in its absolute discretion):
• (1) where a Scheme Shareholder has, before the Scheme Record Date, made a valid election in accordance with the requirements of the Target Registry to receive dividend payments from the Target by electronic funds transfer to a bank account nominated by the Scheme Shareholder, 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 Shareholder 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 Shareholder by prepaid post to their Registered Address (as at the Scheme Record Date), such cheque being drawn in the name of the Scheme Shareholder (or in the case of joint holders, in accordance with the procedures set out in clause 5.2).
• (d) To the extent that, following satisfaction of the Target's obligations under clause 5.1(b), there is a surplus in the amount held by the Target as trustee for the Scheme Shareholders in the trust account referred to in that clause, that surplus shall be paid by the Target to the Bidder.

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 either, at the sole discretion of the Target, the holder whose name appears first in the Share Register as at the Scheme Record Date or to the joint holders; and
• (b) any other document required to be sent under this Scheme, will be forwarded to either, at the sole discretion of the Target, the holder whose name appears first in the Share Register as at the Scheme Record Date or to the joint holders.

5.3 Unclaimed monies

• (a) The Target may cancel a cheque issued under this clause 5 if the cheque:
• (1) is returned to the Target; 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 in writing from a Scheme Shareholder to the Target (or the Target Registry) (which request may not be made until the date which is 10 Business Days after the Implementation Date), the Target must reissue a cheque that was previously cancelled under this clause 5.3.
• (c) The Unclaimed Money Act 2008 (Vic) will apply in relation to any Scheme Consideration which becomes 'unclaimed money' (as defined in section 3 of the Unclaimed Money Act 2008 (Vic)).

5.4 Orders of a court or Government Agency

If written notice is given to the Target (or the Target Registry) of an order or direction made by a court of competent jurisdiction or by another Government Agency that:

• (a) requires consideration to be provided to a third party (either through payment of a sum or the issuance of a security) in respect of Scheme Shares held by a particular Scheme Shareholder, which would otherwise be payable or required to be issued to that Scheme Shareholder by the Target in accordance with this clause 5, then the Target shall be entitled to procure that provision of that consideration is made in accordance with that order or direction; or
• (b) prevents the Target from providing consideration to any particular Scheme Shareholder in accordance with this clause 5, or the payment or issuance of such consideration is otherwise prohibited by an applicable law, the Target shall be entitled to (as applicable) retain an amount, in Australian dollars, equal to the number of Scheme Shares held by that Scheme Shareholder multiplied by the Scheme Consideration until such time as provision of the Scheme Consideration in accordance with this clause 5 is permitted by that order or direction or otherwise by law.

6 Dealings in Target Shares

6.1 Determination of Scheme Shareholders

To establish the identity of the Scheme Shareholders, dealings in Target Shares or other alterations to the Share 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 Share Register as the holder of the relevant Target 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 Share Register is kept,

and the Target must not accept for registration, nor recognise for any purpose (except a transfer to the Bidder or, if applicable, its Nominees, pursuant to this Scheme and any subsequent transfer by the Bidder or its successors in title), any transfer or transmission application or other request received after such times, or received prior to such times but not in registrable or actionable form, as appropriate.

6.2 Register

• (a) The Target must register registrable transmission applications or transfers of the Scheme Shares in accordance with clause 6.1(b) before the Scheme Record Date provided that, for the avoidance of doubt, nothing in this clause 6.2(a) requires the Target to register a transfer that would result in a Target Shareholder holding a parcel of Target Shares that is less than a 'marketable parcel' (for the purposes of this clause 6.2(a) 'marketable parcel' has the meaning given in the Operating Rules).
• (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 on or after the Scheme Record Date otherwise than pursuant to this Scheme, and any attempt to do so will have no effect and the Target shall be entitled to disregard any such disposal.
• (c) For the purpose of determining entitlements to the Scheme Consideration, the Target must maintain the Share Register in accordance with the provisions of this clause 6.2 until the Scheme Consideration has been paid to the Scheme Shareholders. The Share Register in this form will solely determine entitlements to the Scheme Consideration.
• (d) All statements of holding for Target Shares (other than statements of holding in favour of 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 Share Register (other than entries on the Share Register in respect of any Excluded Shareholder) will cease to have effect except as evidence of entitlement to the Scheme Consideration in respect of the Target 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, the Target will ensure that details of the names, Registered Addresses and holdings of the Target Shares for each Scheme Shareholder as shown in the Share Register are available to the Bidder in the form the Bidder reasonably requires.

7 Quotation of Target Shares

• (a) The Target must apply to ASX to suspend trading on the ASX in Target Shares with effect from the close of trading on the Effective Date.
• (b) On a date after the Implementation Date to be determined by the Bidder, the Target must apply:
• (1) for termination of the official quotation of Target 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) the Target may by its counsel consent on behalf of all persons concerned to those alterations or conditions to which the Bidder has consented in writing; and
• (b) each Scheme Shareholder agrees to any such alterations or conditions which counsel for the Target has consented to.

8.2 Scheme Shareholders' agreements and warranties

• (a) Each Scheme Shareholder:
• (1) agrees to the transfer of their Target Shares together with all rights and entitlements attaching to those Target Shares in accordance with this Scheme;
• (2) agrees to the variation, cancellation or modification of the rights attached to their Target Shares constituted by or resulting from this Scheme;
• (3) agrees to, on the direction of the Bidder, destroy any holding statements or share certificates relating to their Target Shares; and
• (4) acknowledges and agrees that this Scheme binds the Target and all Scheme Shareholders (including those who do not attend the Scheme Meeting and those who do not vote, or vote against this Scheme, at the Scheme Meeting).
• (b) Each Scheme Shareholder is taken to have warranted to the Target and the Bidder on the Implementation Date, and appointed and authorised the Target as its attorney and agent to warrant to the Bidder on the Implementation Date, that all their Target Shares (including any rights and entitlements attaching to those shares) 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 Target Shares to the Bidder together with any rights and entitlements attaching to those shares. The Target undertakes that it will provide such warranty to the Bidder as agent and attorney of each Scheme Shareholder.

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) transferred under this Scheme to the Bidder or, if applicable, its Nominees, will, at the time of transfer of them to the Bidder or, if applicable, its Nominees, vest in the Bidder or, if applicable, its Nominees, 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 to each Scheme Shareholder in the manner contemplated by clause 5, the Bidder or, if applicable, its Nominees, will be beneficially entitled to the Scheme Shares to be transferred to it under this Scheme pending registration by the Target of the Bidder or, if applicable, its Nominees, in the Share Register as the holder of the Scheme Shares.

8.4 Appointment of sole proxy

Immediately upon the provision of the Scheme Consideration to each Scheme Shareholder in the manner contemplated by clause 5, and until the Target registers the Bidder or, if applicable, its Nominees, as the holder of all Scheme Shares in the Share Register, each Scheme Shareholder:

• (a) is deemed to have appointed the Bidder as attorney and agent (and directed the Bidder in each such capacity) to appoint any director, officer, secretary or agent nominated by the Bidder 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) must not attend or vote at any of those meetings or sign any resolutions, whether in person, by proxy or by corporate representative (other than pursuant to clause 8.4(a));
• (c) must take all other actions in the capacity of a registered holder of Scheme Shares as the Bidder reasonably directs; and
• (d) acknowledges and agrees that in exercising the powers referred to in clause 8.4(a), the Bidder and any director, officer, secretary or agent nominated by the Bidder under clause 8.4(a) may act in the best interests of the Bidder as the intended registered holder of the Scheme Shares.

8.5 Authority given to Target

Each Scheme Shareholder, without the need for any further act:

• (a) on the Effective Date, irrevocably appoints the Target 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 each Guarantor and the Bidder, and the Target undertakes in favour of each Scheme Shareholder that it will enforce the Deed Poll against each Guarantor and the Bidder on behalf of and as agent and attorney for each Scheme Shareholder; and
• (b) on the Implementation Date, irrevocably appoints the Target 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 the Target accepts each such appointment. The Target as attorney and agent of each Scheme Shareholder, may sub-delegate its functions, authorities or powers under this clause 8.5 to all or any of its directors, officers, secretaries or employees (jointly, severally or jointly and severally).

8.6 Binding effect of Scheme

This Scheme binds the Target and all of the Scheme Shareholders (including those who did not attend the Scheme Meeting to vote on this Scheme, 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 the Target.

9 General

9.1 Stamp duty

The Bidder will, and the Guarantors must procure that the Bidder does:

• (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 this Scheme and the Deed Poll; and
• (b) indemnify each Scheme Shareholder against any liability arising from failure to comply with clause 9.1(a).

9.2 Consent

Each of the Scheme Shareholders consents to the Target doing all things necessary or incidental to, or to give effect to, the implementation of this Scheme, whether on behalf of the Scheme Shareholders, the Target or otherwise.

9.3 Notices

• (a) If a notice, transfer, transmission application, direction or other communication referred to in this Scheme is sent by post to the Target, 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 the Target's registered office or at the office of the Target Registry.
• (b) The accidental omission to give notice of the Scheme Meeting or the nonreceipt of such notice by a Target 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 Victoria, Australia.
• (b) The parties irrevocably submit to the non-exclusive jurisdiction of courts exercising jurisdiction in Victoria, 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

The Target must do all things and execute all documents necessary to give full effect to this Scheme and the transactions contemplated by it.

9.6 No liability when acting in good faith

Each Scheme Shareholder agrees that neither the Target, the Bidder, nor the Guarantors, nor any director, officer, secretary or employee of the Target, the Bidder or the Guarantors shall be liable for anything done or omitted to be done in the performance of this Scheme or the Deed Poll in good faith.

Attachment 2

Deed Poll

Deed

Deed poll

SR Residential Pty Ltd Simonds Family Office Pty Ltd Roche Holdings Pty Ltd

Deed poll

Date ►

This deed poll is made

By	SR Residential Pty Ltd
	ACN 614 474 949 of Level 3, 51 Stephenson Street, Cremorne VIC 3121
	(Bidder)
	Simonds Family Office Pty Ltd
	ACN 602 022 140 of Level 5, 570 St Kilda Road, Melbourne VIC 3004
	(SFO)
	Roche Holdings Pty Ltd
	ACN 007 046 040 of Level 3, 51 Stephenson Street, Cremorne VIC 3121
	(Roche)
in favour of	each person registered as a holder of fully paid ordinary shares in Simonds Group Limited ACN 143 841 801 (Target) in the Target Share Register as at the Scheme Record Date (other than the Excluded Shareholders).
Recitals	1 The Target, the Bidder, SFO and Roche entered into the Implementation Agreement.
	2 In the Implementation Agreement, each Guarantor and the Bidder agreed to make this deed poll.
	3 The Guarantors and the Bidder are making this deed poll for the purpose of covenanting in favour of the Scheme Shareholders to perform their obligations under the Implementation Agreement and the Scheme.

This deed poll provides as follows:

1 Definitions and interpretation

1.1 Definitions

(a) The meanings of the terms used in this deed poll are set out below.

Meaning
the first day of the hearing of an application made to the Court for an order pursuant to subsection 411(1) of the Corporations Act convening the Scheme Meeting or, if the hearing of such application is adjourned for any reason, the first day of the adjourned hearing.
the scheme implementation agreement entered into between the Target, the Bidder, SFO and Roche dated 30 August 2016 (as amended on [●] September 2016).
the scheme of arrangement under Part 5.1 of the Corporations Act between the Target and the Scheme Shareholders, the form of which is set out in Attachment 1 to this deed poll, subject to any alterations or conditions made or required by the Court under subsection 411(6) of the Corporations Act and agreed to by the Bidder and the Target.

(b) Unless the context otherwise requires, terms defined in the Scheme have the same meaning when used in this deed poll.

1.2 Interpretation

Sections 1.2 and 1.3 of the Scheme apply 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

Each Guarantor and the Bidder acknowledge that:

• (a) this deed poll may be relied on and enforced by any Scheme Shareholder in accordance with its terms even though the Scheme Shareholders are not party to it; and
• (b) under the Scheme, each Scheme Shareholder irrevocably appoints the Target and each of its directors, officers and secretaries (jointly and each of them severally) as its agent and attorney to enforce this deed poll against the Guarantors and the Bidder.

2 Conditions to obligations

2.1 Conditions

This deed poll and the obligations of the Guarantors and the Bidder under this deed poll are subject to the Scheme becoming Effective.

2.2 Termination

The obligations of the Guarantors and the Bidder under this deed poll to the Scheme Shareholders will automatically terminate and the terms of this deed poll will be of no force or effect if:

• (a) the Implementation Agreement is terminated in accordance with its terms; or
• (b) the Scheme is not Effective on or before the End Date,

unless the Guarantors, the Bidder and the Target otherwise agree in writing.

2.3 Consequences of termination

If this deed poll terminates under clause 2.2, in addition and without prejudice to any other rights, powers or remedies available to it:

• (a) each Guarantor and the Bidder are released from their obligations to further perform this deed poll, except those obligations under clause 7.1; and
• (b) each Scheme Shareholder retains the rights they have against the Guarantors and the Bidder in respect of any breach of this deed poll which occurred before it was terminated.

3 Scheme Consideration

Subject to clause 2, the Bidder undertakes, and the Guarantors undertake to procure the Bidder, in favour of each Scheme Shareholder to:

• (a) deposit, in cleared funds, by no later than the Business Day before the Implementation Date, an amount equal to the aggregate amount of the Scheme Consideration payable to all Scheme Shareholders under the Scheme into an Australian dollar denominated trust account operated by the Target as trustee for the Scheme Shareholders, except that any interest on the amounts deposited (less bank fees and other charges) will be credited to the Bidder's account; and
• (b) undertake all other actions attributed to it under the Scheme,

subject to and in accordance with the terms of the Scheme.

4 Warranties

Each of the Guarantors and the Bidder represent and warrant in favour of each Scheme Shareholder, in respect of itself, 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 its constitution, or any writ, order or injunction, judgment, law, rule or regulation to which it is a party or subject or by which it is bound.

5 Continuing obligations

This deed poll is irrevocable and, subject to clause 2, remains in full force and effect until:

• (a) each Guarantor and the Bidder have fully performed their 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 each Guarantor and the Bidder in accordance with the details set out below (or any alternative details nominated by the Guarantors or the Bidder by Notice).

Attention	Mr James Roche Copy to: Mr Piers O'Brien
Address	Level 3, 51 Stephenson Street, Cremorne VIC 3121 Copy to: Level 5, 570 St Kilda Road, Melbourne VIC 3004
Email address	c/- smorrissy@claytonutz.com Copy to: pobrien@simondsfamily.com.au

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 email to the nominated email address	When the email (including any attachment) comes to the attention of the recipient party or a person acting on its behalf.

6.3 Notice must not be given by electronic communication

A Notice must not be given by electronic means of communication (other than email as permitted in clause 6.2).

7 General

7.1 Stamp duty

The Guarantors and the Bidder:

• (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) indemnify each Scheme Shareholder against any liability arising from 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 Victoria, Australia.
• (b) Each Guarantor and the Bidder irrevocably submit to the non-exclusive jurisdiction of courts exercising jurisdiction in Victoria and courts of appeal from them in respect of any proceedings arising out of or in connection with this deed poll. Each Guarantor and the Bidder 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.

7.3 Waiver

• (a) Each Guarantor and the Bidder may not rely on the words or conduct of any Scheme Shareholder as a waiver of any right unless the waiver is in writing and signed by the Scheme Shareholder granting the waiver.
• (b) 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 poll 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 the variation is agreed by each Guarantor and the Bidder and:

• (a) if before the First Court Date, the variation is agreed to by the Target; or
• (b) if on or after the First Court Date, the variation is agreed to by the Target and the Court indicates that the variation would not of itself preclude approval of the Scheme,

in which event the Guarantors and the Bidder will enter into a further deed poll in favour of the Scheme Shareholders giving effect to the variation.

7.5 Cumulative rights

The rights, powers and remedies of the Guarantors, the Bidder and the Scheme Shareholders 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 each Guarantor, the Bidder and each Scheme Shareholder and must not be dealt with at law or in equity without the prior written consent of each Guarantor and the Bidder.
• (b) Any purported dealing in contravention of clause 7.6(a) is invalid.

7.7 Joint and several obligations

The obligations of each Guarantor under this deed poll are joint and several.

7.8 Further action

Each Guarantor and the Bidder must, at their own expense, do all things and execute all documents necessary to give full effect to this deed poll and the transactions contemplated by it.

Signing page

Executed as a deed poll

Bidder

Signed sealed and delivered by SR Residential Pty Ltd by

sign here ►		sign here ►
	Company Secretary/Director		Director
print name		print name
	Guarantor
	Signed sealed and delivered by Simonds Family Office Pty Ltd by
sign here ►		sign here ►
	Company Secretary/Director		Director
print name		print name
	Guarantor
	Signed sealed and delivered by Roche Holdings Pty Ltd by
sign here ►		sign here ►
	Company Secretary/Director		Director
print name		print name

Attachment 1

Scheme of arrangement