Pursuant to section 45 of the Takeovers Act 1993, the Takeovers Panel gives the following notice (to which is appended a statement of reasons of the Takeovers Panel).

1 Title 2 Application 3 Expiry 4 Interpretation 5 Retrospective exemption from rule 7(d) of Code 6 Retrospective exemption from rule 16(b) of Code 7 Condition of exemptions in clauses 5 and 6 relating to particulars of voting securities contained in notice of meeting 8 Further condition of exemptions in clauses 5 and 6 relating to particulars of voting securities contained in notice of meeting 9 Further condition relating to contents of notice of meeting 10 Further condition relating to content of annual reports 11 Further condition relating to change in effective control 12 Application of exemption in clause 5

Dated at Wellington this 9th day of March 2009.

The Common Seal of the Takeovers Panel was affixed in the presence of:

David Quigg
Member

This notice applies to acts or omissions occurring on or after 2 December 2008 and expires on 31 December 2011.

Cynotech Holdings Limited (Cynotech) is a code company. The Takeovers Panel (the Panel) has granted retrospective exemptions to—

• each person named in the Schedule (which includes Cynotech Securities Limited, Newmarket Securities Limited, 13 members of the Hawkins family, and Cathy Hutchinson (the specified persons)) from rule 7(d) of the Takeovers Code (the Code) in respect of the allotment of voting securities in Cynotech resulting from the conversion of convertible preference shares and the exercise of warrants held by the specified persons, to the extent that the notice of meeting of shareholders of Cynotech to approve the allotment of the voting securities did not comply with rule 16(b) of the Code:
• Cynotech from rule 16(b) of the Code in respect of the notice of meeting.

As at 2 December 2008, the specified persons collectively held 23.10% of the total voting securities in Cynotech on issue and each was an associate of the others for the purposes of the Code.

The specified persons also collectively held—

• 4 777 776 convertible preference shares in Cynotech (21.83% of the total preference shares on issue) and wanted to have the ability to convert all of their convertible preference shares into 4 777 776 fully paid ordinary shares between 16 December 2008 and the final conversion date of 22 December 2010; and
• 7 022 474 warrants in Cynotech (24.96% of the total warrants on issue) and wanted to have the ability to exercise their warrants on 1 or more of the exercise dates of 27 June 2009, 27 June 2010, and 27 June 2011.

As the specified persons collectively held more than 20% of the total voting rights on issue and the allotment of voting securities on the conversion of convertible preference shares or the exercise of the warrants by any of them would result in an increase in that person's holding or control above 20%, shareholder approval for the allotments had to be obtained under rule 7(d) of the Code.

A notice of meeting containing a proposed resolution in respect of an allotment of securities pursuant to rule 7(d) of the Code must contain, or be accompanied by, the information specified in rule 16 of the Code.

A notice of meeting was issued on 2 December 2008 seeking shareholder approval of the allotments under rule 7(d) of the Code.

Cynotech was unable to comply with rule 16(b) of the Code, in relation to the allotment of voting securities as a result of the conversion of convertible preference shares and the exercise of warrants held by the specified persons, because it was unable to state in the notice of meeting—

• the precise number of voting securities that would be allotted to each of the specified persons, as required by rule 16(b)(i):
• the percentage of the aggregate of all existing voting securities and all voting securities being allotted that that number represented, as required by rule 16(b)(ii):
• the percentage of all voting securities that would be held or controlled by the person to whom the voting securities were being allotted after completion of the allotment, as required by rule 16(b)(iii):
• the aggregate of the percentages of all voting securities that would be held by or controlled by the person to whom the voting securities were being allotted and by that person's associates after completion of the allotment, as required by rule 16(b)(iv).

Cynotech did not know the precise number of voting securities that might have been on issue, and therefore could not calculate the precise percentages required to be disclosed in the notice of meeting under rule 16(b) of the Code, because of the following:

• the possibility that shareholders may not have approved all of the resolutions to approve the proposed transactions:
• the lengthy periods during which the specified persons are able to convert their convertible preference shares and exercise their warrants (up to December 2010 and June 2011 respectively):
• the possibility that shareholders may have approved all the resolutions but that the specified persons might not exercise their rights to convert their convertible preference shares and exercise their warrants, or might not exercise those rights in relation to all convertible preference shares and warrants held by them:
• the possibility that other holders of convertible preference shares and warrants may exercise their rights to convert their convertible preference shares and exercise their warrants.

The Panel considers that it is appropriate to grant the exemptions to Cynotech and the specified persons and that the exemptions are consistent with the objectives of the Code because—

• it was impossible for the actual numbers of shares to be allotted and the relevant percentages required by rule 16(b) of the Code to be stated in the notice of meeting as those numbers and percentages were dependent on a number of factors outside of Cynotech's control; and
• all non-associated shareholders had an opportunity to vote on the allotments of voting securities; and
• if the non-associated shareholders approved the potential maximum allotment of voting securities, then by implication the non-associated shareholders also approved any lesser percentage of voting securities that may be allotted; and
• the issue of convertible shares and warrants are acknowledged methods of providing incentives to shareholders to participate in and contribute to a company's growth as well as providing a company with a means of raising equity capital in New Zealand. The Panel should facilitate these arrangements by granting appropriate exemptions where necessary.

Issued under the authority of the Acts and Regulations Publication Act 1989.
Date of notification in Gazette:
This notice is administered by the Takeovers Panel.