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VALENCIA, Calif. & MELBOURNE, Australia

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

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

If the Redomiciliation is implemented:

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

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

Reasons for the Redomiciliation

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

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

The Board unanimously recommends the Redomiciliation

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

Independent Expert

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

Key features of the Redomiciliation

If the Redomiciliation is implemented:

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

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

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

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

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

• If the Redomiciliation is implemented Avita US Shares will be quoted on NASDAQ and Avita US CDIs will be quoted on the ASX. Avita US Shares and Avita US CDIs will be transmutable, so that Avita US shareholders can convert their Avita US Shares (on NASDAQ) into Avita US CDIs (on the ASX) (and vice versa).

• It is not intended that the Redomiciliation will result in any changes to the operations, management or strategy of the Avita Group.

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

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

Scheme Meeting

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

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

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

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

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

Indicative timetable and next steps

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

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

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

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

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

###

ABOUT AVITA MEDICAL LIMITED

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

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

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

To learn more, visit www.avitamedical.com.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

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

SCHEME IMPLEMENTATION AGREEMENT

AVITA Medical Limited

AVITA Therapeutics, Inc.

KPMG Law

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

Liability limited by a scheme approved under Professional Standards Legislation

CONTENTS

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

DATED 20 April 2020

PARTIES

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

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

RECITALS

A.			Avita Australia is an Australian public company listed on the ASX (as its primary listing) and on NASDAQ (as its secondary listing).
B.			The Avita Australia securities quoted for trading on the ASX are Avita Australia Shares, and the Avita Australia securities quoted for trading on NASDAQ are Avita Australia ADSs.
C.			Avita US is a company incorporated in Delaware in the United States, which has been established for the purpose of effecting a redomiciliation of the Avita Group to the United States.
D.			The Avita Group wishes to effect a redomiciliation from Australia to the United States by Avita US acquiring all of the Avita Australia Shares by way of a scheme of arrangement between Avita Australia and the Avita Australia Shareholders under Part 5.1 of the Corporations Act.
E.			Avita Australia and Avita US propose to implement the Scheme on the terms and conditions of this agreement.

OPERATIVE PROVISIONS

1. DEFINITIONS AND INTERPRETATION

1.1. Definitions

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

ADS means an American Depositary Share.

ADS Depositary means The Bank of New York Mellon.

ADS Holder means a holder of Avita Australia ADSs.

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

ASIC means the Australian Securities and Investments Commission.

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

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

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

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

ATO means the Australian Taxation Office.

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

Authorisation means:

		(a)		an approval, authorisation, consent, declaration, exemption, licence, notarisation, permit or waiver (however it is described), including any amendment or renewal and any condition attaching to it by or from a Government Authority; and
		(b)		in relation to anything that could be prohibited or restricted by law if a Government Authority acts in any way within a specified period, the expiry of that period without that action being taken.

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

Avita Australia means AVITA Medical Limited ACN 058 466 523.

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

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

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

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

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

Avita US means AVITA Therapeutics, Inc..

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

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

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

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

Condition means a condition precedent set out in clause 4.1.

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

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

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

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

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

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

FIRB means the Australian Foreign Investment Review Board.

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

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

Government Authority means:

		(a)		a government, whether foreign, federal, state, territorial or local;
		(b)		a department, office or minister of a government (whether foreign, federal, state, territorial or local) acting in that capacity; or
		(c)		a commission, delegate, instrumentality, agency, board, or other government, semi-government, judicial, administrative, monetary or fiscal authority, whether statutory or not and whether foreign, federal, state, territorial or local,

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

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

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

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

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

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

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

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

NASDAQ means the NASDAQ Stock Market LLC.

Notice has the meaning given to it in clause 14.1.

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

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

Register means the register of members of Avita Australia.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Treasurer means the Treasurer of the Commonwealth of Australia.

United States or US means the United States of America.

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

1.2. Interpretation

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

		(a)		The singular includes the plural and conversely.
		(b)		A gender includes all genders.
		(c)		If a word or phrase is defined, its other grammatical forms have a corresponding meaning.
		(d)		A reference to a person, corporation, trust, partnership, unincorporated body or other entity includes any of them.
		(e)		A reference to a clause, schedule or annexure is a reference to a clause of, or schedule or annexure to, this agreement.
		(f)		A reference to an agreement or document (including a reference to this agreement) is to the agreement or document as amended, varied, supplemented, novated or replaced, except to the extent prohibited by this agreement or that other agreement or document.
		(g)		A reference to a person includes a reference to the person’s executors, administrators, successors, substitutes (including persons taking by novation) and assigns.
		(h)		A reference to legislation (including subordinate legislation) or to a provision of legislation includes a modification or re-enactment of it, a legislative provision substituted for it and a regulation or statutory instrument issued under it.
		(i)		A reference to $ is to the lawful currency of Australia.
		(j)		Words and phrases not specifically defined in this agreement have the same meanings (if any) given to them in the Corporations Act.
		(k)		A reference to time is a reference to time in Melbourne, Australia.
		(l)		The meaning of general words is not limited by specific examples introduced by including, for example, or similar expressions.

1.3. Action by the next Business Day

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

1.4. Reasonable endeavours

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

		(a)		pay money in the form of an inducement or consideration to a third party to procure something (other than the payment of immaterial expenses or costs, including costs of advisers, to procure the relevant thing) or in circumstances that are commercially onerous or unreasonable in the context of this agreement;
		(b)		provide other valuable consideration to or for the benefit of any person; or
		(c)		agree to commercially onerous or unreasonable conditions.

2. SCHEME

2.1. Agreement to propose and implement the Scheme

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

2.2. Outline of Scheme

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

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

2.3. No amendments to the Scheme without consent

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

2.4. Provision of Scheme Consideration

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

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

2.5. CDIs – registration and notices

1. On the Business Day prior to the Implementation Date, Avita Australia must procure that Avita US enters in its register of stockholders the name of the Authorised Nominee (as depositary) to hold the Avita US Shares underlying the Avita US CDIs to be issued in accordance with the Scheme.
2. After the satisfaction of the obligation of Avita Australia in clause 2.5 (a), Avita Australia must procure that Avita US:

1. on the Implementation Date procures that the Authorised Nominee records in the register of Avita US CDIs each Scheme Participant who is to receive Avita US CDIs under the Scheme and issues Avita US CDIs to the Sale Agent in accordance with clause 2.8; and
2. as soon as is reasonably practical despatches, or causes to be despatched, to each Scheme Participant who is to receive Avita US CDIs under the Scheme, a holding statement or confirmation advice in the name of that Scheme Participant representing the number of Avita US CDIs issued to that Scheme Participant.

2.6. Avita US Shares – registration and notices

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

2.7. Fractional Avita US Shares

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

2.8. Sale facility

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

3. The remittance by Avita US to each Selling Shareholder of the sale proceeds contemplated in clause 2.8 (b) is in full and final satisfaction of that Selling Shareholder’s rights and entitlements to the Scheme Consideration referable to it.

3. OPTIONS, RSUS AND WARRANTS IN AVITA AUSTRALIA

The parties acknowledge and agree that:

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

4. CONDITIONS

4.1. Conditions precedent to implementation of the Scheme

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

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

      3. if an interim order has been made by the Treasurer to prohibit Avita US from acquiring the Scheme Shares under the Scheme, the subsequent period for making a final order under the FATA has elapsed without any final order being made; and

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

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

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

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

4.2. Benefit and waiver of Conditions

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

4.3. Parties to provide certificates to Court

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

4.4. Condition not satisfied or waived

If:

1. there is a non-fulfilment of a Condition which is not waived in accordance with this agreement by the time or date specified in this agreement for the satisfaction of the Condition;
2. there is an act, failure to act or occurrence which will prevent a Condition being satisfied by the time or date specified in this agreement for the satisfaction of the Condition (and the non-fulfilment which would otherwise occur has not already been w
   
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