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Summary of

Securities Act (Zespri Group Limited) Exemption Notice 2005

2005/9

Gazetted on 10 February 2005
Expires on 31 December 2005

Effects of the exemption
Zespri Group Limited ('Zespri') is able to exclude commercially sensitive information from a material contract that will be attached to its registered prospectus.

Background
Zespri intends to offer shares to its kiwifruit growers, some of whom are already shareholders.

Zespri has an operating agreement with The Horticulture and Food Research Institute of New Zealand Limited. The agreement sets out the basis on which HortResearch will undertake kiwifruit research for Zespri, and deals with the commercialisation of any intellectual property created as a result.

The exemption
Zespri is exempt from regulation 7(1)(a) of the Securities Regulations 1983 to the extent that this requires a copy of its operating agreement with The Horticulture and Food Research Institute of New Zealand Limited to accompany every prospectus. Zespri is also exempt from clause 39(b) of the First Schedule to the extent that this clause applies to the operating agreement.

Conditions
The exemptions are subject to the conditions that the registered prospectus -

• has endorsed on it, or attached to it, or is accompanied by a copy of the operating agreement without the excluded provisions;
• contains a statement from the company's directors that the excluded provisions do not contain any material adverse information;
• states where people can inspect the operating agreement (without the excluded provisions) free of charge;
• states that the excluded provisions are not in the copy of the operating agreement delivered to the Registrar of Companies;
• states why the provisions were excluded; and
• contains a general statement of the nature of the excluded provisions.

Reasons
The exemption from regulations 7(1)(a) of the Regulations and clause 39(b) of the First Schedule of the Regulations meets the criteria stated in the Commission's Exemption Policy Note for "Applications to Exclude Commercially Sensitive Information from Material Contracts". The Exemption Policy Note can be viewed on the Commission's website at www.seccom.govt.nz/exemptions/exemption-policy.shtml.

The detriment to the commercial interests of Zespri by the disclosure of the excluded provisions would outweigh any benefit to prospective investors arising from their disclosure.

The conditions of the exemption from regulation 7(1)(a) of the Regulations and clause 39(b) of the First Schedule of the Regulations require that Zespri explains to prospective investors the general nature of the excluded provisions and why they have been excluded.

The directors of Zespri must warrant that the non-disclosure of the excluded provisions does not make the registered prospectus or the investment statement misleading in any material particular by a failure to refer, or give proper emphasis, to any adverse circumstances.