4DS MEMORY LIMITED — Capital/Financing Update 2015

Dec 14, 2015

4DS Memory Limited ABN 43 145 590 110

Suite 1, Level 1, 35 Havelock Street, West Perth WA 6005 PO Box 839, West Perth WA 6872

T +61 8 9481 7111 E info@4dsmemory.com W www.4dsmemory.com

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ASX RELEASE

Terms and conditions of Adviser Options

The rights and liabilities attaching to the Adviser Options can be summarised as follows:

• (a) Each Adviser Option ( Option ) entitles the holder to subscribe for one Share upon exercise of the Option.

• (a) The Options have an exercise price of $0.05 ( Exercise Price ) and an expiry date of 30 June 2020 ( Expiry Date ).

• (b) The Options are exercisable at any time on or prior to 5.00pm (Perth time) on the Expiry Date.

• (c) The Options may be exercised by notice in writing to the Company ( Notice of Exercise ) and payment of the Exercise Price for each Option being exercised. Any Notice of Exercise of an Option received by the Company will be deemed to be a notice of the exercise of that Option as at the date of receipt.

• (d) Shares issued on exercise of the Options will rank equally with the then shares of the Company.

• (e) Application will be made by the Company to ASX for quotation of the Shares issued upon the exercise of the Options.

• (f) After an Option is validly exercised, the Company must, within, 15 Business Days of the notice of exercise and receipt of cleared funds equal to the sum payable on the exercise of the Option:

  • i) issue the Share; and

  • ii) do all such acts, matters and things to obtain the grant of official quotation of the Share on ASX no later than 5 Business Days after issuing the Shares.

• (g) There are no participation rights or entitlements inherent in the Options and holders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Options. However, the Company will give holders of the Options notice of the proposed issue prior to the date for determining entitlements to participate in any such issue.

• (h) If the Company makes a bonus issue of Shares or other securities to existing Shareholders (other than an issue in lieu or in satisfaction of dividends or by way of dividend reinvestment):

  • i) the number of Shares which must be issued on the exercise of an Option will be increased by the number of Shares which the Optionholder would have received if the Optionholder had exercised the Option before the record date for the bonus issue; and

  • ii) no change will be made to the Exercise Price.

• (i) If the Company makes an issue of Shares pro rata to existing Shareholders (other than an issue in lieu or in satisfaction of dividends or by way of dividend reinvestment) the Exercise Price of an Option will be reduced according to the following formula:

• New exercise price = O - E[P (S+D)]

N+1

• O = the old Exercise Price of the Option.

• E = the number of underlying Shares into which one Option is exercisable.

• P = average market price per Share weighted by reference to volume of the underlying Shares during the 5 trading days ending on the day before the ex rights date or ex entitlements date.

• S = the subscription price of a Share under the pro rata issue.

• D = the dividend due but not yet paid on the existing underlying Shares (except those to be issued under the pro rata issue).

• N = the number of Shares with rights or entitlements that must be held to receive a right to one Share.

• (j) If there is any reconstruction of the issued share capital of the Company, the rights of the Optionholders may be varied to comply with the Listing Rules which apply to the reconstruction at the time of the reconstruction.

• (k) The Company will not apply to ASX for quotation of the Options.

• (l)

  • The Options are transferable.

• (m) Cheques shall be in Australian currency made payable to the Company and crossed "Not Negotiable". The application for shares on exercise of the Options with the appropriate remittance should be lodged at the Company's share registry.

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