IMUGENE LIMITED — Proxy Solicitation & Information Statement 2004

Dec 6, 2004

IMUGENE LIMITED

ABN 99 009 179 551

NOTICE OF GENERAL MEETING

A General Meeting of the Company will be held at 10.00am on 11 January 2005 (WST) at Level 6, 28 The Esplanade, Perth, Western Australia.

This Notice should be read in its entirety. If Shareholders are in doubt as to how they should vote, they should seek advice from their accountant, solicitor or other professional adviser prior to voting.

Should you wish to discuss any matter please do not hesitate to contact the Company Secretary by telephone on +61 8 9322 6322.

ABN 99 009 179 551

NOTICE OF GENERAL MEETING

Notice is hereby given that a General Meeting of Shareholders of Imugene Limited ("Company") will be held at 10.00am on 11 January 2005 (WST) at Level 6, 28 The Esplanade, Perth, Western Australia ("Meeting").

The Explanatory Memorandum to this Notice provides additional information on matters to be considered at the Meeting. The Explanatory Memorandum and the Proxy Form, form part of this Notice.

The Directors have determined pursuant to regulation 7.11.38 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the Meeting are those who are registered as Shareholders of the Company at 10.00am on 9 January 2005 (WST).

Terms and abbreviations used in this Notice are defined in section 7 of this Explanatory Memorandum.

AGENDA

Resolution 1 - Ratification of Securities Issue $\blacktriangleleft$

To consider, and if thought fit, to pass as an ordinary resolution the following:

"That, pursuant to and in accordance with Listing Rule 7.4 and for all other purposes, Shareholders approve and ratify the prior issue and allotment by the Directors of 13,475,000 Shares at an issue price of \$0.25 each together with 2,695,000 free attaching Options exercisable at \$0.50 on or before 31 January 2007 on the basis of one Option for every five Shares on the terms and conditions set out in the Explanatory Memorandum accompanying this Notice."

Voting Exclusion

The Company will disregard any votes cast on this resolution by a person who participated in the issue or their associate (except a benefit solely in their capacity as holders of ordinary securities) if the Resolution is passed, or any associate of such a person.

However, the Company will not disregard a vote if:

• it is cast by the person as proxy for a person who is entitled to vote, in accordance $(a)$ with directions on the Proxy Form; or
• it is cast by the person chairing the meeting as proxy for a person who is entitled to $(b)$ vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

Resolution 2 - Authority to Make Placement of $2.$ Securities

To consider, and if thought fit, to pass as an ordinary resolution the following:

"That, pursuant to and in accordance with Listing Rule 7.1 and for all other purposes, this Meeting approves and authorises the Directors to allot and issue up to 6,525,000 Shares in the Company at an issue price of \$0.25 each together with 1,305,000 free attaching Options exercisable at \$0.50 on or before 31 January 2007 on the basis of one Option for every five Shares issued on the terms and conditions set out in the Explanatory Memorandum accompanying this Notice."

Voting Exclusion

The Company will disregard any votes cast on this resolution by a person who may participate in the proposed issue or might obtain a benefit (except a benefit solely in their capacity as holders of ordinary securities) if the Resolution is passed, or any associate of such a person.

However, the Company will not disregard a vote if:

• $(a)$ it is cast by the person as proxy for a person who is entitled to vote, in accordance with directions on the Proxy Form; or
• $(b)$ it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

Resolution 3-Authority to Grant Performance Options $\mathbf{3}$ to Paul MacLeman

To consider, and if thought fit pass as an ordinary resolution, the following:

"That, pursuant to and in accordance with Listing Rule 7.1 and for all other purposes, the Company approves and authorises the Directors to grant up to 1,400,000 Performance Options to Dr Paul MacLeman or his nominee on the terms and conditions and in the manner set out in the Explanatory Memorandum accompanying this Notice."

Voting Exclusion

The Company will disregard any votes cast on this resolution by a person who may participate in the proposed grant of Performance Options or might obtain a benefit (except a benefit solely in their capacity as holders of ordinary securities) if the Resolution is passed, or any associate of such a person.

However, the Company will not disregard a vote if:

• $(a)$ it is cast by the person as proxy for a person who is entitled to vote, in accordance with directions on the Proxy Form; or
• $(b)$ it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

By Order of the Board

Mark Pearce Company Secretary 2 December 2004

IMUGENE LIMITED

ABN 99 009 179 551

EXPLANATORY MEMORANDUM

$\overline{1}$ Introduction

This Explanatory Memorandum has been prepared for the information of Shareholders of the Company in connection with the business to be conducted at the Meeting to be held at 10.00am on 11 January 2005 (WST) at Level 6, 28 The Esplanade, Perth, Western Australia.

This Explanatory Memorandum should be read in conjunction with the accompanying Notice.

The purpose of this Explanatory Memorandum is to provide information to Shareholders in deciding whether or not to pass the Resolutions set out in the Notice.

The Board of Imugene have no personal interest in the outcome of the Resolutions and are in favour of the Resolutions.

$2₁$ Action to be taken by Shareholders

Shareholders should read this Explanatory Memorandum carefully before deciding how to vote on the Resolutions.

A Proxy Form is attached to the Notice. This is to be used by Shareholders if they wish to appoint a representative (a "proxy") to vote in their place. All Shareholders are invited and encouraged to attend the Meeting or, if they are unable to attend in person, sign and return the Proxy Form to the Company in accordance with the instructions provided. Lodgement of a Proxy Form will not preclude a Shareholder from attending and voting at the Meeting in person.

Background to Resolutions 1 and 2 $\overline{3}$ .

On 23 November 2004, the Company announced it had entered into a placement agreement with Southern Cross Equities Limited ("SCE") to raise \$5 million before issue costs pursuant to the issue of 20 million Shares at an issue price of \$0.25 together with 4 million free attaching Options (on the basis of one free Option for every five Shares issued) exercisable at \$0.50 each on or before 31 January 2007. The funds will be used to augment working capital requirements of the Company and applied to the final commercialisation stage to progress the Company's animal health products through the regulatory approvals process.

The placement is to be settled in two parts. Following the ASX announcement, 13.475 million Shares were issued together with 2.695 million free attaching Options in accordance with the 15% annual limit permitted under Listing Rule 7.1. This first part has now been settled. Resolution 1 seeks shareholder approval for the ratification of this issue to restore the Company's ability to issue securities within that limit. Resolution 2 seeks shareholder approval for the placement of the remaining 6.525 million and 1.305 million free attaching Options.

The expected application of funds will be as follows:

Description	Amount (\$m)
Research & Development
- Receptor Mimic technology products	0.75
- Adenoviral Vector Delivery system products	0.65
- Flea vaccine	0.25
Patents	0.45
Commercialisation & regulatory	2.25
Working capital and transaction costs	0.65
Total	5.0

Resolution 1 - Ratification of Securities Issue $\Delta$

As outlined above, following the announcement on 23 November 2004, 13.475 million Shares were issued to institutional and other sophisticated investor clients of SCE at an issue price of \$0.25 per share together with 2.695 million free attaching Options (on the basis of one free Option for every five Shares issued) exercisable at \$0.50 each on or before 31 January 2007 to raise \$3,368,750 before issue costs.

These Shares and Options were issued within the 15% annual limit permitted under Listing Rule 7.1, without the need for Shareholder approval. The effect of Shareholders passing Resolution 1 by ratifying the issue of securities will be to restore the Company's ability to issue shares (or options) within that limit, to the extent of the 13.475 million Shares and 2.695 million Options issued.

Listing Rule 7.5 requires that the following information be provided to shareholders for the purpose of obtaining Shareholder approval pursuant to Listing Rule 7.4:

• $(a)$ the Shares were issued to clients of SCE (who are all unrelated parties of the Company);
• $(b)$ 13,475,000 Shares were issued at \$0.25 each to raise \$3,368,750 (before issue costs);
• $(c)$ 2,695,000 Options exercisable at \$0.50 each on or before 31 January 2007 will be granted on the basis of one free Option for every 5 Shares issued (which upon exercise each convert into one Share);
• $(d)$ no funds will be raised from the grant of the above Options;
• $(e)$ the Options are ordinary options of the Company and will be granted in accordance with the necessary disclosure requirements of the Corporations Act 2001. The Company will seek to have the Options quoted on ASX. The terms of the Options are contained in Attachment 1 to this Explanatory Memorandum;
• $(f)$ a voting exclusion statement is included in the Notice; and
• $(q)$ The expected application of funds is outlined in section 3 of this Explanatory Memorandum

Resolution 2-Authority to Make Placement of $5₁$ Securities

Resolution 2 seeks Shareholder approval for the issue of 6,525,000 Shares at \$0.25 each together with 1,305,000 free attaching Options (on the basis of one free Option for every five Shares issued) exercisable at \$0.50 each on or before 31 January 2007 to raise up to \$1,631,250 before issue costs.

LISTING RULE 7.1 - SHAREHOLDER APPROVAL FOR THE ISSUE OF $5.1$ SECURITIES

Listing Rule 7.1 requires Shareholder approval for the proposed issue of Shares and Options. Listing Rule 7.1 provides, subject to certain exceptions, that Shareholder approval is required for any issue of securities by a listed company, where the securities proposed to be issued represent more than 15% of the Company's securities then on issue.

As the 15% threshold is already used up in relation to the placement the subject of Resolution 1 and none of the exceptions contained in Listing Rule 7.2 apply. Shareholder approval is required in accordance with Listing Rule 7.3.

5.2 SPECIFIC INFORMATION REQUIRED BY ASX LISTING RULE 7.3

For the purposes of Shareholder approval of the issue of Shares and grant of Options, and the requirements of Listing Rule 7.3, information is provided as follows:

• the maximum number of Shares the Company can issue under Resolution 2 is $(a)$ 6,525,000 Shares;
• $(b)$ the maximum number of Options the Company can grant under Resolution 2 is 1,305,000 Options (which upon exercise each convert into one Share);
• No funds will be raised from the grant of the above Options: $(c)$
• $(d)$ The Company will issue and allot the Shares and grant the Options no later than 3 months after the date of the General Meeting (or such longer period of time as ASX may, in its discretion, allow pursuant to a waiver of ASX Listing Rule 7.3.2);
• $(e)$ the Shares will each be allotted at an issue price of \$0.25 each to institutional investors and sophisticated investor clients of SCE who are unrelated parties of the Company;
• $(f)$ the Shares to be issued are ordinary Shares and rank equally with the Company's existing listed Shares;
• the Options are ordinary options of the Company and will be granted in accordance $(q)$ with the necessary disclosure requirements of the Corporations Act 2001. The Company will seek to have the Options quoted on ASX. The terms of the Options are contained in Attachment 1 to this Explanatory Memorandum;
• $(h)$ a voting exclusion statement is included in the Notice: and
• $\left($ i) The expected application of funds is outlined in section 3 of this Explanatory Memorandum.

Resolution 3 - Authority to Grant Performance Options 6. to Paul MacLeman

Resolution 3 seeks Shareholder approval pursuant to Listing Rule 7.1 for the issue of up to 1,400,000 Performance Options to be granted to Dr Paul MacLeman or his nominee.

Dr Paul MacLeman has recently been appointed to the new senior position of Chief Operating Officer of Imugene.

Most recently Dr MacLeman was head of Agenix's global animal health business. During his Agenix tenure Dr MacLeman re-structured and re-focused the business by expanding the Agenix animal health team and re-structured the US & EU product channels by sourcing and implementing new multi-national distributor agreements. Results included significant sales increases with improved margins.

This appointment is vital for the rollout of Imugene's animal health products across world markets. Imugene will sell certain products direct to users and will use intermediary distributors for its other animal health products.

Dr MacLeman has over 15 years commercial experience in the animal health and biotechnology industry, having successfully taken biological products from the laboratory, through regulatory, manufacturing, marketing and launch.

Dr MacLeman is a qualified veterinarian and has completed an MBA.

Listing Rule 7.1 provides, subject to certain exceptions, that shareholder approval is required for any issue of securities by a listed company, where the shares or options proposed to be issued represent more than 15% of the Company's securities then on issue.

The Board has decided to seek Shareholder approval for Resolution 3, and thereby ensure that none of the Company's 15% threshold is utilised.

$6.1$ Specific Information Required by ASX Listing Rule 7.3

For the purposes of shareholder approval of the granting of Performance Options and the requirements of Listing Rule 7.3, information is provided as follows:

• $(a)$ the maximum number of securities the Company can issue under Resolution 3 is 1,400,000 Performance Options;
• $(b)$ The vesting dates, exercise prices and expiry dates of the Performance Options are as follows:

Performance Option	No. of Performance Options	Vesting Date	Expiry Date	Exercise Price
Tranche 1	200,000	1 February 2005	31 December 2006	\$0.30
Tranche 2	200,000	31 October 2005	31 October 2007	\$0.375
Tranche 3	1,000,000	31 October 2006	31 October 2007	\$0.50

$(c)$ the terms and conditions of the Performance Options are included in Attachment 2 to this Explanatory Memorandum;

$(d)$ The Company will grant the Performance Options no later than 3 months after the date of the Meeting (or such longer period of time as ASX may, in its discretion, allow pursuant to a waiver of ASX Listing Rule 7.3.2);

• $(e)$ the Performance Options will be issued for no consideration:
• the Performance Options will be granted to Dr Paul MacLeman or his nominee (none $(f)$ of whom will be Directors, or their related parties or associates);
• $(q)$ upon exercise of the Performance Options, the Shares issued will be on the same terms as the Company's existing Shares;
• $(h)$ a voting exclusion statement is included in the Notice; and
• no funds will initially be raised from the granting of the Performance Options, as they $\left(\mathbf{i}\right)$ are to incentivise Dr MacLeman in his position as Chief Operating Officer.

$\overline{\mathbf{z}}$ Definitions

In this Explanatory Memorandum and Notice:

"ASIC" means the Australian Securities and Investments Commission.

"ASX" means Australian Stock Exchange Limited.

"ASX Listing Rules" means the listing rules of ASX.

"Company" or "Imugene" means Imugene Limited (ABN 99 009 179 551).

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

"Director" means a director of the Company.

"Explanatory Memorandum" means the explanatory memorandum to the Notice.

"Meeting" has the meaning given in the introductory paragraph of the Notice.

"Option" means an option to acquire a fully paid share in the capital of the Company on the terms and conditions outlined in Attachment 1 to this Explanatory Memorandum.

"Performance Option" means an option to acquire a fully paid share in the capital of the Company on the terms and conditions outlined in Attachment 2 to this Explanatory Memorandum.

"Proxy Form" means the proxy form attached to the Notice.

"Resolution" means a resolution contained in this Notice.

"Share" means a fully paid share in the capital of the Company.

"Shareholder" means a shareholder of the Company.

"Southern Cross Equities" or "SCE" means Southern Cross Equities Limited (ABN 87 071 935 441).

Attachment 1

Terms and Conditions of Options

The terms and conditions of the options are as follows:

• each option entitles the holder, when exercised, to one (1) Share: $(a)$
• $(b)$ the options are exercisable at any time up to and including 31 January 2007;
• $(c)$ the exercise price of the options is \$0.50 each;
• the options are not transferable until granted Official Quotation on the Australian Stock Exchange $(d)$ Limited;
• the options are exercisable by delivering to the registered office or share register of the Company $(e)$ a notice in writing stating the intention of the option holder to exercise a specified number of options, accompanied by an option certificate, if applicable, and a cheque made payable to the Company for the subscription monies due, subject to the funds being duly cleared funds. The exercise of only a portion of the options held does not affect the holder's right to exercise the balance of any options remaining;
• $(f)$ after an option is validly exercised and the applicable funds cleared by the Company's bank, the Company must issue the relevant number of shares within 10 business days:
• all shares issued upon exercise of the options will rank pari passu in all respects with the $(q)$ Company's then issued shares:
• $(h)$ there are no participating rights or entitlements inherent in the options and holders will not be entitled to participate in new issues of options to shareholders during the currency of the options. However, the Company will ensure that, for the purpose of determining entitlements to any issue, Option holders will be notified of the proposed issue at least seven (7) business days before the record date of any proposed issue. This will give option holders the opportunity to exercise the options prior to the date for determining entitlements to participate in any such share;
• $(i)$ in the event of any reconstruction (including consolidation, subdivision, reduction or return of capital) of the issued capital of the Company prior to the expiry date of the options, all rights of the option holder will be varied in accordance with the ASX Listing Rules; and
• $(i)$ in the event the Company makes a pro rata issue of securities, the exercise price of the options will change in accordance with the formula set out in ASX Listing Rule 6.22.2.
• $(k)$ in the event the Company makes a bonus issue of securities, the number of options will change in accordance with ASX Listing Rule 6.22.3.

Attachment 2

Terms and Conditions of Performance Options

Performance Option	No. of Options	Vesting Date	Expiry Date	Exercise Price
Tranche 1	200,000	1 February 2005	31 December 2006	30 cents each
Tranche 2	200,000	31 October 2005	31 October 2007	37.5 cents each
Tranche 3	1,000,000	31 October 2006	31 October 2007	50 cents each

The material terms and conditions of the Performance Options are as follows:

• $(a)$ each option entitles the holder, when exercised, to one (1) Share;
• $(b)$ the options are exercisable at the Exercise Price from the Vesting Date to the Expiry Date.
• the options are exercisable by delivering to the registered office or share register of the Company $(c)$ a notice in writing stating the intention of the option holder to exercise a specified number of options, accompanied by an option certificate, if applicable, and a cheque made payable to the Company for the subscription monies due, subject to the funds being duly cleared funds. The exercise of only a portion of the options held does not affect the holder's right to exercise the balance of any options remaining;
• $(d)$ all shares issued upon exercise of the options will rank pari passu in all respects with the Company's then issued shares. The options will be unlisted;
• there are no participating rights or entitlements inherent in the options and holders will not be $(e)$ entitled to participate in new issues of options to shareholders during the currency of the options. However, the Company will ensure that, for the purpose of determining entitlements to any issue, option holders will be notified of the proposed issue at least seven (7) business days before the record date of any proposed issue. This will give option holders the opportunity to exercise the options prior to the date for determining entitlements to participate in any such share:
• $(f)$ in the event of any reconstruction (including consolidation, subdivision, reduction or return of capital) of the issued capital of the Company prior to the expiry date of the options, all rights of the option holder will be varied in accordance with the ASX Listing Rules;
• in the event that the Employee's employment with the Company is terminated by the Company $(q)$ as a consequence of either clause 15.1 (termination by notice for reasons not relating to conduct) or 15.2 (termination by illness) of the Employment Agreement, the Termination Date, for the purposes of determining options vesting, shall be extended for a period of six months after the date of termination of his employment and the Employee shall be entitled to exercise all vested options up until their Expiry Date, and
• $(h)$ in the event that before a Vesting Date, the Employee's employment with the Company is terminated either:
• i) by the Company as a consequence of clause 15.3 (includes termination for breach of contract, misconduct, disobedience, bankruptcy, unsound mind, criminal offence, prior written warnings) of the Employment Agreement: nr
• ii) by the Employee by giving notice to the Company,

the options that have not vested to the employee shall immediately expire.

• in the event the Company makes a pro rata issue of securities, the exercise price of the options $(i)$ will not change in accordance with the formula set out in ASX Listing Rule 6.22.2.
• $(i)$ in the event the Company makes a bonus issue of securities, the number of options will not change in accordance with ASX Listing Rule 6.22.3.

IMUGENE LIMITED ABN 99 009 179 551

PROXY FORM

The Company Secretary Imugene Limited
By delivery:	By post:	By facsimile:
Level 9, 28 The Esplanade PERTH WA 6000	PO Box Z5083 PERTH WA 6831	+61 8 9322 6558
I/We

of

being a Shareholder/Shareholders of the Company and entitled to ___________________________________

votes in the Company, hereby appoint ²

or failing such appointment the chairman of the Meeting as my/our proxy to vote for me/us on my/our behalf at the General Meeting of the Company to be held at 10am on 11 January 2005 (WST) at Level 6, 28 The Esplanade, Perth. Western Australia and at any adjournment thereof in the manner indicated below or, in the absence of indication, as he thinks fit. If 2 proxies are appointed, the proportion or number of votes of this proxy is authorised to exercise is * [ ]% of the Shareholder's votes*/ [ 1 of the Shareholder's votes. (An additional Proxy Form will be supplied by the Company, on request).

INSTRUCTIONS AS TO VOTING ON RESOLUTIONS

IMPORTANT: FOR RESOLUTIONS 1, 2 and 3

If the chairman of the Meeting is to be your proxy and you have not directed your proxy how to vote on Resolutions 1, 2 and 3, please tick this box. By marking this box you acknowledge that the chairman of the Meeting may exercise your proxy even if he has an interest in the outcome of Resolutions 1, 2 and 3 and that votes cast by him, other than as proxy holder, would be disregarded because of that interest. If you do not mark this box, and you have not directed your proxy how to vote, the chairman of the Meeting will not cast your votes on Resolutions 1, 2 and 3 and your votes will not be counted in computing the required majority if a poll is called on these Resolutions.

The chairman of the Meeting intends to vote undirected proxies in favour of the Resolutions.

The proxy is to vote for or against the Resolutions referred to in the Notice as follows:

		For	Against Abstain
Resolution 1	Ratification of Securities Issue		1111111
Resolution 2	Authority to Make Placement of Securities		$\begin{array}{ c c c c c c c c c c c c c c c c c c c$
Resolution 3	Authority to Grant Performance Options		$\begin{array}{ c c c c c c c c c c c c c c c c c c c$

Authorised signature/s This section must be signed in accordance with the instructions overleaf to enable your voting instructions to be implemented.

Individual or Shareholder 1	Shareholder 2	Shareholder 3
Sole Director and Sole Company Secretary	Director	Director/Company Secretary
Contact Name	Contact Davtime Telephone	Date
Insert name and address of shareholder	Insert name and address of proxy	*Omit if not applicable

Proxy Notes:

A Shareholder entitled to attend and vote at the Meeting may appoint a person or a corporation as the Shareholder's proxy to attend and vote for the Shareholder at that Meeting. If the Shareholder is entitled to cast 2 or more votes at the Meeting the Shareholder may appoint not more than 2 proxies. Where the Shareholder appoints more than one proxy the Shareholder may specify the proportion or number of votes each proxy is appointed to exercise. If such proportion or number of votes is not specified each proxy may exercise half of the Shareholder's votes. A proxy may, but need not be, a Shareholder of the Company.

If a Shareholder appoints a corporation as the Shareholder's proxy to attend and vote for the Shareholder at that meeting, the representative of the corporation to attend the meeting must produce the appropriate Certificate of Appointment of Representation prior to admission. A form of the certificate may be obtained from the Company's share registry.

You must sign this form as follows in the spaces provided:

• Joint Holding: where the holding is in more than one name all of the holders must sign.
• Power of Attorney: if signed under a Power of Attorney, you must have already lodged it with the registry, or alternatively, attach a certified photocopy of the Power of Attorney to this Proxy Form when you return it.
• Companies: a Director can sign jointly with another Director or a Company Secretary. A sole Director who is also a sole Company Secretary can also sign. Please indicate the office held by signing in the appropriate space.

If a representative of the corporation is to attend the Meeting the appropriate "Certificate of Appointment of Representative" should be produced prior to admission. A form of the certificate may be obtained from the Company's Share Registry.

Proxy Forms (and the power of attorney or other authority, if any, under which the Proxy Form is signed) or a copy or facsimile which appears on its face to be an authentic copy of the Proxy Form (and the power of attorney or other authority) must be deposited at or received by facsimile transmission at the Perth office of the Company (Level 9, 28 The Esplanade, Perth, WA, 6000, or by post to PO Box Z5083, Perth, WA, 6831 or Facsimile (08) 9322 6558 if faxed from within Australia or +618 9322 6558 if faxed from outside Australia) not less than 48 hours prior to the time of commencement of the Meeting (WST).