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MINBOS RESOURCES LIMITED Proxy Solicitation & Information Statement 2013

Jun 6, 2013

65355_rns_2013-06-06_51f27a47-22f2-45e8-95fd-8e0f91d17c5c.pdf

Proxy Solicitation & Information Statement

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MINBOS RESOURCES LIMITED

ACN 141 175 493

NOTICE OF GENERAL MEETING

TIME : 11.00am (WST) DATE : Monday, 8 July 2013 PLACE : The Hay Room 38 Station Street SUBIACO WA 6008

This Notice of Meeting should be read in its entirety. If Shareholders are in doubt as to how they should vote, they should seek advice from their professional advisers prior to voting.

Should you wish to discuss the matters in this Notice of Meeting please do not hesitate to contact the Joint Company Secretary, Paige Exley on (+61 8) 9476 4500.

CONTENTS PAGE

Notice of General Meeting (setting out the proposed resolutions) 4
Explanatory Statement (explaining the proposed resolutions) 6
Schedule 1 – Terms and Conditions of Commencement Options 12
Schedule 2 – Terms and Conditions of the Convertible Note Deed 14
Glossary 16
Proxy Form (enclosed)
T IME AND PLACE OF ME ET ING AND HOW TO VOT E

VENUE

The General Meeting of the Shareholders to which this Notice of Meeting relates will be held at 11.00am (WST) on Monday, 8 July 2013 at

The Hay Room, B.D.O, 38 Station Street, Subiaco, Western Australia.

YOUR VOTE IS IMPORTANT

The business of the General Meeting affects your shareholding and your vote is important.

VOTING ELIGIBILITY

The Directors have determined pursuant to Regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the General Meeting are those who are registered Shareholders at 11.00am (WST) on Saturday, 6 July 2013.

VOTING IN PERSON

To vote in person, attend the General Meeting on the date and at the place set out above.

VOTING BY PROXY

To vote by proxy, please complete and sign the enclosed Proxy Form and return by the time and in accordance with the instructions set out on the Proxy Form.

New sections 250BB and 250BC of the Corporations Act came into effect on 1 August 2011 and apply to voting by proxy on or after that date. Shareholders and their proxies should be aware of these changes to the Corporations Act, as they will apply to this General Meeting. Broadly, the changes mean that:

  • if proxy holders vote, they must cast all directed proxies as directed; and

  • any directed proxies which are not voted will automatically default to the Chair, who must vote the proxies as directed.

Further details on these changes is set out below.

Proxy vote if appointment specifies way to vote

Section 250BB(1) of the Corporations Act provides that an appointment of a proxy may specify the way the proxy is to vote on a particular resolution and, if it does :

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  • the proxy need not vote on a show of hands, but if the proxy does so, the proxy must vote that way (i.e. as directed); and

  • if the proxy has 2 or more appointments that specify different ways to vote on the resolution – the proxy must not vote on a show of hands; and

  • if the proxy is the chair of the meeting at which the resolution is voted on – the proxy must vote on a poll, and must vote that way (i.e. as directed); and

  • if the proxy is not the chair – the proxy need not vote on the poll, but if the proxy does so, the proxy must vote that way (i.e. as directed).

Transfer of non-chair proxy to chair in certain circumstances

Section 250BC of the Corporations Act provides that, if:

  • an appointment of a proxy specifies the way the proxy is to vote on a particular resolution at a meeting of the Company's members; and

  • the appointed proxy is not the chair of the meeting; and

  • at the meeting, a poll is duly demanded on the resolution; and

  • either of the following applies:

  • the proxy is not recorded as attending the meeting;

  • the proxy does not vote on the resolution,

the chair of the meeting is taken, before voting on the resolution closes, to have been appointed as the proxy for the purposes of voting on the resolution at the meeting.

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NOTICE O F GENERAL MEET ING

Notice is given that the General Meeting of Shareholders will be held at 11.00am (WST) on Monday, 8 July 2013 at The Hay Room, B.D.O, 38 Station Street, Subiaco, Western Australia.

The Explanatory Statement provides additional information on matters to be considered at the General Meeting. The Explanatory Statement and the Proxy Form are part of this Notice of Meeting.

The Directors have determined pursuant to Regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the General Meeting are those who are registered Shareholders at 11am (WST) on Saturday, 6 July 2013.

Terms and abbreviations used in this Notice of Meeting are defined in the Glossary.

AGENDA

1. RESOLUTION 1 – APPROVAL TO ISSUE CONVERTIBLE NOTES

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

“That, for the purpose of Section 208 of the Corporations Act, ASX Listing Rule 10.11 and for all other purposes, approval is given for the Company to issue 25 Convertible Notes to Eleanor Jean Reeves ATF The Elanwi Trust (and/or her nominee) on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion: The Company will disregard any votes cast on this Resolution by Mrs Eleanor Jean Reeves (and her nominee) and any of their associates. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form, or, 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.

Voting Prohibition Statement:

A person appointed as a proxy must not vote, on the basis of that appointment, on this Resolution if:

  • (a) the proxy is either:

  • (i) a member of the Key Management Personnel; or

  • (ii) a Closely Related Party of such a member; and

  • (b) the appointment does not specify the way the proxy is to vote on this Resolution.

However, the above prohibition does not apply if:

  • (a) the proxy is the Chair; and

  • (b) the appointment expressly authorises the Chair to exercise the proxy even though this Resolution is connected directly or indirectly with remuneration of a member of the Key Management Personnel.

2. RESOLUTION 2 – RATIFICATION OF PRIOR ISSUE OF COMMENCEMENT SHARES AND OPTIONS

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution:

“That, for the purpose of ASX Listing Rule 7.4 and for all other purposes, Shareholders ratify the allotment and issue on 7 March 2013 of 2,227,722 Shares and 1,150,000 Options to the Australian Special Opportunity Fund, LP, or its nominees on the terms and conditions set out the Explanatory Statement.”

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Voting Exclusion: The Company will disregard any votes cast on this Resolution by a person who participated in the issue and any associates of those persons. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form, or, 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.

3. RESOLUTION 3 – RATIFICATION OF PRIOR ISSUE OF SHARES – TRANCHE 1

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution:

“That, for the purpose of ASX Listing Rule 7.4 and for all other purposes, Shareholders ratify the issue on 12 April 2013 of 2,586,207 Shares to the Australian Special Opportunity Fund, LP, or its nominees on the terms and conditions set out the Explanatory Statement.”

Voting Exclusion: The Company will disregard any votes cast on this Resolution by a person who participated in the issue and any associates of those persons. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form, or, 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.

4. RESOLUTION 4 – RATIFICATION OF PRIOR ISSUE OF SHARES – TRANCHE 2

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution:

“That, for the purpose of ASX Listing Rule 7.4 and for all other purposes, Shareholders ratify the issue on 14 May 2013 of 5,000,000 Shares to the Australian Special Opportunity Fund, LP, or its nominees on the terms and conditions set out the Explanatory Statement.”

Voting Exclusion: The Company will disregard any votes cast on this Resolution by a person who participated in the issue and any associates of those persons. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form, or, 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.

DATED: 31 MAY 2013

BY ORDER OF THE BOARD

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PAIGE EXLEY JOINT COMPANY SECRETARY

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EXPLANATORY STATEMEN T

This Explanatory Statement has been prepared for the information of the Shareholders in connection with the business to be conducted at the General Meeting to be held at 11am (WST) on Monday, 8 July 2013 at The Hay Room, B.D.O, 38 Station Street, Subiaco, Western Australia.

The purpose of this Explanatory Statement is to provide information which the Directors believe to be material to Shareholders in deciding whether or not to pass the Resolutions in the Notice of Meeting.

1. RESOLUTION 1 – APPROVAL TO ISSUE CONVERTIBLE NOTES

1.1 General

On 2 April 2013 ( Execution Date ), the Company entered into a convertible note deed ( Deed ) with Mrs Eleanor Jean Reeves as trustee for the Elwani Trust A/C ( Related Party ) for a convertible note facility of up to $250,000 ( Convertible Notes ).

The Company has agreed, subject to obtaining Shareholder approval, to issue the Convertible Notes to the Related Party each with a face value of $10,000 and otherwise on the terms and conditions set out below.

The Conversion Price of the Convertible Notes pursuant to the Deed is $0.063, being 150% of the 20 Trading Day Volume Weighted Average Price ( VWAP ) calculated on the Execution Date of the Deed ( Conversion Price ).

For a public company, or an entity that the public company controls, to give a financial benefit to a related party of the public company, the public company or entity must:

  • (a) obtain the approval of the public company’s members in the manner set out in sections 217 to 227 of the Corporations Act; and

  • (b) give the benefit within 15 months following such approval, unless the giving of the financial benefit falls within an exception set out in sections 210 to 216 of the Corporations Act.

The grant of the Convertible Notes constitutes giving a financial benefit as the Elwani Trust is a related party of the Company by virtue of the fact that it is controlled by Mrs Eleanor Jean Reeves, who is the spouse of Mr David Reeves, a Director.

In addition, ASX Listing Rule 10.11 also requires shareholder approval to be obtained where an entity issues, or agrees to issue, securities to a related party, or a person whose relationship with the entity or a related party is, in ASX’s opinion, such that approval should be obtained unless an exception in ASX Listing Rule 10.12 applies.

It is the view of the Company that the exceptions set out in sections 210 to 216 of the Corporations Act and ASX Listing Rule 10.12 do not apply in the current circumstances. Accordingly, Shareholder approval is sought for the grant of the Convertible Notes to the Related Party.

1.2 Technical information required by Chapter 2E of the Corporations Act and ASX Listing Rule 10.11

Pursuant to and in accordance with the requirements of Sections 219 of the Corporations Act and ASX Listing Rule 10.13, the following information is provided in relation to the proposed grant of the Convertible Notes pursuant to this Resolution 1:

  • (a) The Elwani Trust is a related party of the Company by virtue of the fact that it is controlled by Mrs Eleanor Jean Reeves, who is the spouse of Mr David Reeves, a Director;

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  • (b) the maximum number of Convertible Notes (being the nature of the financial benefit) to be issued to the Related Party is 25. The Convertible Notes may convert, in accordance with their terms, into a maximum of 3,968,254 Shares;

  • (c) the Convertible Notes will be granted to the Related Party no later than 1 month after the date of the Meeting (or such later date as permitted by an ASX waiver or modification of the ASX Listing Rules);

  • (d) the issue price for the Convertible Notes is $10,000 per Convertible Note, being a total $250,000;

  • (e) the estimated value of the Convertible Notes is $290,625 calculated as shown in the tabled below. The Directors consider that this is a reasonable method of determining the value of the Convertible Notes as it represents the amount being provided to the Company for the issue of the Convertible Notes under the Deed:

Particulars $
25 Convertible Notes $10,000 each 250,000
Establishment Fee 5% 12,500
Maximum interest payable 12% for 9 months 22,500
Repayment Premium In accordance with the
formula set out in the
Deed		 5,625
Total 290,625

  • (f) each Convertible Note is convertible on its terms into Shares at the rate of $0.063 per Share, which is 150% of the 20 trading day VWAP calculated on the Execution Date of the Deed. The terms and conditions of the Convertible Notes are set out in Schedule 2;

  • (g) the total valuation of the Convertible Notes is $250,000 with each Convertible Note valued at $10,000. This valuation is based on the terms of the Deed;

  • (h) the relevant interests of the Related Party in securities of the Company are as set out below:

Related Party No. Shares held
as at date of this
Notice		 Options
Elwani Trust A/C 12,391,667 Nil

  • (i) no remuneration or emoluments have been or are proposed to be paid by the Company to the Related Party;

  • (j) if the Convertible Notes are all converted in accordance with their terms, up to 3,968,254 Shares will be issued by the Company, reducing the liability of the Company to repay the Convertible Notes. This will increase the number of Shares on issue from 154,315,605 to 158,283,859 (assuming that no Options are exercised and no other Shares are issued) with the effect that the shareholding of existing Shareholders would be diluted by 2.50%;

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(k) the trading history of Shares on ASX in the 12 months before the date of this Notice is set out below:

Price Date
Highest $0.23 16 August 2012
Lowest $0.016 24 April 2013
Last $0.0230 17 May 2013

  • (l) the primary purpose for the issue of the Convertible Notes to the Related party is to provide short term cash funding that the Company can draw on at its election on terms relatively favourable to the Company in this difficult economic environment.

  • (m) Peter Richards recommends that Shareholders vote in favour of Resolution 1 for the following reasons:

  • (a) the issue of the Convertible Notes is a method of ensuring that the Company has a facility capable of being drawn down at its election to provide short term funding in a market where it is currently difficult to raise funds;

  • (n) Domingoes Catuluchi recommends that Shareholders vote in favour of Resolution 1 for the following reasons:

  • (a) the issue of the Convertible Notes is a method of ensuring that the Company has a facility capable of being drawn down at its election to provide short term funding in a market where it is currently difficult to raise funds;

  • (o) Scott Sullivan recommends that Shareholders vote in favour of Resolution 1 for the following reasons:

  • (a) the issue of Convertible Notes is a method of ensuring that the Company has a facility capable of being drawn down at its election to provide short term funding in a market where it is currently difficult to raise funds;

  • (p) David Reeves declines to make a recommendation to Shareholders in relation to Resolution 1 due to his material personal interest in the outcome of the Resolution on the basis that the proposed Convertible Notes will be granted to the Elwani Trust A/C which is controlled by Mr Eleanor J Reeves, the spouse of Mr David Reeves. No other Directors have an interest in the outcome of Resolution 1; and

  • (q) the Board is not aware of any other information that would be reasonably required by Shareholders to allow them to make a decision whether it is in the best interests of the Company to pass Resolution 1.

Approval pursuant to ASX Listing Rule 7.1 is not required in order to issue the Convertible Notes to the Related Party as approval is being obtained under ASX Listing Rule 10.11. Accordingly, the issue of the Convertible Notes to the Related Party will not be included in the 15% calculation of the Company’s annual placement capacity pursuant to ASX Listing Rule 7.1.

2. RESOLUTION 2 – RATIFICATION OF PRIOR ISSUE OF COMMENCEMENT SHARES AND OPTIONS

2.1 General

On 7 March 2013, the Company issued to the Australian Special Opportunity Fund, LP 2,227,722 Shares at an issue price of $0.0606 per Share ( Commencement Shares ) and were issued in satisfaction of a commencement fee of $135,000 for the private placement facility pursuant to a Share Purchase and Convertible Security Agreement ( Agreement ).

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On 7 March 2013, the Company issued 1,150,000 Options at an exercise price of $0.0937 with an expiry date of 8 March 2016 ( Commencement Options ) pursuant to the Agreement. The Commencement Options have no restrictions attached and entitle the holder on exercise to acquire one Share.

2,227,722 Shares were issued pursuant to the Company’s capacity under ASX Listing Rule 7.1.

The Australian Special Opportunity Fund, LP, is a fund managed by Lind Partners, LLC, a New York-based alternative asset management company that manages a family of funds that selectively invests across a broad range of industries and economic environments.

Resolution 2 seeks Shareholder ratification pursuant to ASX Listing Rule 7.4 for the issue of the Commencement Shares and Commencement Options ( Ratification ).

ASX Listing Rule 7.1 provides that a company must not, subject to specified exceptions, issue or agree to issue more equity securities during any 12 month period than that amount which represents 15% of the number of fully paid ordinary securities on issue at the commencement of that 12 month period.

ASX Listing Rule 7.4 sets out an exception to ASX Listing Rule 7.1. It provides that where a company in general meeting ratifies the previous issue if securities made pursuant to ASX Listing Rule 7.1 (and provide that the previous issue did not breach ASX Listing Rule 7.1) those securities will be deemed to have been made with shareholder approval for the purpose of ASX Listing Rule 7.1.

By ratifying this issue, the Company will retain the flexibility to issue equity securities in the future up to the 15% annual placement capacity set out in ASX Listing Rule 7.1 without the requirement to obtain prior Shareholder approval.

2.2 Technical information required by ASX Listing Rule 7.4 – Commencement Shares Pursuant to and in accordance with ASX Listing Rule 7.5, the following information is provided in relation to the Ratification:

  • (a) 2,227,722 Commencement Shares were issued on 7 March 2013;

  • (b) the issue price was $0.0606 per Share;

  • (c) the Shares issued were fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company’s existing Shares;

  • (d) the Commencement Shares were issued to the Australian Special Opportunity Fund, LP, who is not a related party of the Company; and

  • (e) the funds raised from this issue were used in satisfaction of the commencement fee of $135,000 pursuant to the Agreement.

2.3 Technical information required by ASX Listing Rule 7.4 – Commencement Options Pursuant to and in accordance with ASX Listing Rule 7.5, the following information is provided in relation to the Ratification:

  • (a) 1,150,00 Commencement Options were issued on 7 March 2013;

  • (b) the Commencement Options were issued for nil consideration pursuant to the Agreement;

  • (c) the Commencement Options are exercisable at $0.0937 per Option on or before 8 March 2016;

  • (d) the Commencement Options will be issued on the terms and condition set out in Schedule 1;

  • (e) any Shares issued upon exercise of the Commencement Options will be fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company’s existing Shares; and

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  • (f) the Commencement Options were issued to the Australian Special Opportunity Fund, LP, who is not a related party of the Company.

2.4 Directors recommendation

The Directors recommend that Shareholders vote in favour of Resolution 2, as it allows the Company to ratify the above issue of securities and retain the flexibility to issue further securities representing up to 15% of the Company’s share capital during the next 12 months.

3. RESOLUTION 3 – RATIFICATION OF PRIOR ISSUE OF SHARES - TRANCHE 1

3.1 General

On 11 April 2013, the Company issued 2,586,207 Shares in satisfaction of an advance of working capital funds received under a share purchase agreement ( Agreement ) as announced on 8 March 2013 ( Tranche 1 ).

Settlement of Tranche 1 was announced on 11 April 2013 and the Shares began trading on that day.

2,586,207 Shares were issued pursuant to the Company’s capacity under ASX Listing Rule 7.1.

Resolution 3 seeks Shareholder ratification pursuant to ASX Listing Rule 7.4 for the issue of those Shares ( Ratification ).

A summary of ASX Listing Rules 7.1 and 7.4 is set out in section 2.1 above.

By ratifying this issue, the Company will retain the flexibility to issue equity securities in the future up to the 15% annual placement capacity set out in ASX Listing Rule 7.1 without the requirement to obtain prior Shareholder approval.

3.2 Technical information required by ASX Listing Rule 7.4

Pursuant to and in accordance with ASX Listing Rule 7.5, the following information is provided in relation to the Ratification:

  • (a) 2,586,207 Shares were issued on 11 April 2013;

  • (b) the issue price was $0.029 per Share;

  • (c) the Shares issued were fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company’s existing Shares;

  • (d) the Shares were issued to the Australian Special Opportunity Fund LP who is not a related party of the Company; and

  • (e) the funds raised from this issue were used for general working capital requirements.

3.3 Directors recommendation

The Directors recommend that Shareholders vote in favour of Resolution 3, as it allows the Company to ratify the above issue of securities and retain the flexibility to issue further securities representing up to 15% of the Company’s share capital during the next 12 months.

4. RESOLUTION 4 – RATIFICATION OF PRIOR ISSUE OF SHARES - TRANCHE 2

4.1 General

On 15 May 2013, the Company issued 5,000,000 Shares in satisfaction of an advance of working capital funds received under the Agreement referred to at 3.1 above ( Tranche 2 ).

Settlement of Tranche 2 was announced on 15 April 2013 and the Shares began trading on that day.

  • 5,000,000 Shares were issued pursuant to the Company’s capacity under ASX Listing Rule 7.1.

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Resolution 4 seeks Shareholder ratification pursuant to ASX Listing Rule 7.4 for the issue of those Shares ( Ratification ).

A summary of ASX Listing Rules 7.1 and 7.4 is set out in section 2.1 above.

By ratifying this issue, the Company will retain the flexibility to issue equity securities in the future up to the 15% annual placement capacity set out in ASX Listing Rule 7.1 without the requirement to obtain prior Shareholder approval.

4.2 Technical information required by ASX Listing Rule 7.4 Pursuant to and in accordance with ASX Listing Rule 7.5, the following information is provided in relation to the Ratification:

  • (a) 5,000,000 Shares were issued on 15 May 2013;

  • (b) the issue price was $0.015 per Share;

  • (c) the Shares issued were fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company’s existing Shares;

  • (d) the Shares were issued to the Australian Special Opportunity Fund LP who is not a related party of the Company; and

  • (e) the funds raised from this issue were used for general working capital requirements.

4.3 Directors recommendation

The Directors recommend that Shareholders vote in favour of Resolution 4, as it allows the Company to ratify the above issue of securities and retain the flexibility to issue further securities representing up to 15% of the Company’s share capital during the next 12 months.

5. ENQUIRIES

Shareholders are requested to contact the Company Secretary on (+61) 8 9476 4500 if they have any queries in respect of the matters set out in these documents.

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SCHEDULE 1: TERMS AN D CONDITIONS O F COMM ENCEMENT OPT IONS

  • (a) Nature of Options

  • (i) Each Option shall grant the holder of that Option the right but not the obligation to be issued by the Company one Share at the Option Exercise Price.

  • (ii) Each Option shall be exercisable at any time after the time of its grant and prior to the date that is thirty six (36) calendar months after the time of it grant (the Option Expiration Date ), after which time it will lapse.

  • (b) Exercise of Options

  • (i) Without limiting the generality of, and subject to, the other provisions of the Agreement, an Option holder may exercise any of its Options at any time prior to their expiration, by delivery of:

    • (A) a copy, whether facsimile or otherwise, of a duly executed Option exercise form, to the Company during normal business hours on any Business Day at the Company’s principal executive offices (or such other office or agency of the Company as it may designate by notice to the Option holder); and

    • (B) payment of an amount equal to the Option Exercise Price multiplied by the number of Shares in respect of which the Options are being exercised at the time (the Exercise Price ), by wire transfer to the account specified by the Company from time to time or by bank draft delivered to the Company during normal business hours on any Business Day at the Company’s principal executive offices (or such other office or agency of the Company as it may designate by notice to the Option holder).

  • (ii) As soon as reasonably practicable, but in any event no later than one (1) Business Day after receipt of a duly completed Exercise Form and the payment, the Company shall cause its securities registrar to:

    • (A) Issue and Electronically Deliver the Shares in respect of which the Options are so exercised by the Option holder; and

    • (B) provide to the Option holder holding statements evidencing that such Shares have been recorded on the Share register.

(c) Bonus Issues

If prior to an exercise of an Option, the Company makes an issue of Shares by way of capitalisation of profits or out of its reserves (other than pursuant to a dividend reinvestment plan), pursuant to an offer of such Shares to at least all the holders of Shares resident in Australia, then on exercise of the Option, the number of Shares over which an Option is exercisable shall be increased by the number of Shares which the holder of the Option would have received if the Option had been exercised before the date on which entitlements to the issue were calculated. No change will be made to the Exercise Price.

(d) Rights Issues

If prior to an exercise of an Option, any offer or invitation is made by the Company to at least all the holders of Shares resident in Australia for the subscription for cash with respect to Shares, options or other securities of the Company on a pro rata basis relative to those holders’ Share holding at the time of the offer, the Option Exercise Price shall be reduced as specified in the Listing Rules in relation to pro-rata issues (except bonus issues).

(e) Reconstruction of Capital

In the event of a consolidation, subdivision or similar reconstruction of the issued capital of the Company, and subject to such changes as are necessary to comply with the Listing Rules applying to a reconstruction of capital at the time of the reconstruction:

  • (i) the number of the Shares to which each Option holder is entitled on exercise of the outstanding Options shall be reduced or increased in the same proportion as, and

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the nature of the Shares shall be modified to the same extent that, the issued capital of the Company is consolidated, subdivided or reconstructed (subject to the same provisions with respect to rounding of entitlements as sanctioned by the meeting of shareholders approving the consolidation, subdivision or reconstruction); and

  • (ii) an appropriate adjustment shall be made to the Option Exercise Price of the outstanding Options, with the intent that the total amount payable on exercise of the Options shall not alter.

(f) Cumulative Adjustments

Full effect shall be given to the provisions of clauses (c) to (e) above as and when occasions of their application arise and in such manner that the effects of the successive applications of them are cumulative, the intention being that the adjustments they progressively effect will be such as to reflect, in relation to the Shares issuable on exercise of the Options outstanding, the adjustments which on the occasions in question are progressively effected in relation to Shares already on issue.

(g) Notice of Adjustments

Whenever the number of Shares over which an Option is exercisable, or the Option Exercise Price, is adjusted pursuant to this Agreement, the Company shall give notice of the adjustment to all the Option holders, within one (1) Business Day.

(h) Rights Prior to Exercise

Prior to its exercise, an Option does not confer a right on the Option holder to participate in a new issue of securities by the Company.

(i) Redemption The Options shall not be redeemable by the Company.

(j) Assignability and Transferability The Options shall be freely assignable and transferable, subject to the provisions of Chapter 6D of the Corporations Act and the applicable Law.

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SCHEDULE 2: TERMS AND CONDITIONS CONVERTIBLE NOTES

  • a) The Noteholder agreed to loan moneys to the Company, up to the facility limit of $250,000 and to earn interest upon the amounts advanced at the interest rate of 12% per annum;

  • b) The Company is able to make drawings of $50,000 increments under the Deed from the Execution Date;

  • c) Drawings made on the Facility are subject to an establishment fee of 5% of the value of the drawing and is payable by the Company within 2 business days of the funds being advanced to the Company;

  • d) The Company must issue to the Noteholder such number of $10,000 Convertible Notes ( Notes ) to the value of the drawings within 2 business days of the receipt of amounts advanced;

  • e) Nine (9) months from the date of the first drawing, the Company must repay the amount outstanding on the facility and any accrued interest to the Noteholder, excluding any amounts satisfied by the conversion of the Notes or the repurchase of the Notes by the Company.

  • f) Upon payment of all amounts owing to the Noteholder, the obligations of the Company in respect to the Notes, including the Facility will be extinguished;

  • g) Conversion of the Notes into Shares in accordance with the Deed is subject to and conditional upon the Company obtaining Shareholder Approval within 4 months of the Execution Date;

  • h) Within 10 business days of receipt of the Conversion Notice the Company will proceed to issue to the Noteholder that number of Ordinary Shares as calculated at the Conversion Price;

  • i) If and whenever there shall be an alteration to the number of issued Shares as a result of a consolidation, subdivision, bonus issue or reclassification, the Conversion Price shall be adjusted to reflect the alteration to the issued Shares;

  • j) A Note does not confer any rights to participate in new issued of Ordinary Shares without converting that Note;

  • k) The Notes may be freely transferred by an instrument in writing in common form or in such other form as the Company may approve;

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  • l) Each of the following is an Event of Default:

  • (a) Shareholder Approval: the Company fails to obtain the Shareholder Approval by a date 4 months following Execution Date;

  • (b) Strategic Partnership: the Company fails to complete the Strategic Partnership process by a date 4 months following Execution Date;

  • (c) Non-payment: the Company fails to pay any amount payable under the Deed and is not remedied within 20 business days following the receipt by the Company of a written demand thereof from the Noteholder;

  • (d) Voluntary winding up: the Company passes a resolution for its winding up;

  • (e) Receiver: a receiver, controller(within the meaning of section9 of the Corporations Act) or analogous person is appointed to, or the holder of a Security Interest takes possession of all, or any part of the assets of the Company or a subsidiary of the Company;

  • (f) Insolvency: the Company:

    • (i) suspends payment generally;

    • (ii) becomes externally-administered body corporate within the meaning of the Corporations Act;

    • (iii) becomes subject to the administration under part 5.3A of Chapter 5 of the Corporations Act, or steps are taken which could reasonably be expected to result in the Company becoming so; or

    • (iv) is or states that it is, or is deemed by applicable law to be, unable to pay its debt as and when they fall due.

  • (g) Distress or other execution: the process of any court of authority is invoked against the Company or a material part of its property to enforce any judgement or order for any amount;

  • (h) Change in Control: there is a change in control of the Company or a subsidiary of the Company without the prior written approval of the Related Party.

  • (i) Failure to comply with waiver: if any Event of Default (or occurrence which would otherwise have been or become and Event of Default) is conditionally waived by the Related Party and the Company does not comply with those conditions or those conditions are not fulfilled (whether by the Company or any other person) or are or become incapable of fulfilment; or

  • (j) Provisions void: all or any material provision of any of the Deed:

    • (i) Does not have effect or ceases to have effect in accordance with its terms;

    • (ii) Is or becomes void, voidable, illegal, invalid or unenforceable other than by reason of equitable principles or laws affecting creditor’s rights generally; or

    • (iii) Is claimed by the Company or any other person to be any of the matters referred to in paragraphs (i) or (ii) or the Company or any other person commences any court proceedings to establish any of the matters referred to in paragraphs (i) or (ii) to be the case.

  • m) If an Event of Default occurs, the Noteholder, may then or at any time by notice to the Company,

  • (a) Declare all money owing under the Deed to be immediately due and payable, and the Company must immediately pay that money; and/or

  • (b) Cancel its obligations under the Deed.

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GLOSSARY

$ means Australian dollars.

General Meeting or Meeting means the meeting convened by the Notice.

Agreement means the Share Purchase and Convertible Security Agreement with The Australian Special Opportunity Fund, LP.

ASIC means the Australian Securities and Investments Commission.

ASX means ASX Limited (ACN 008 624 691) or the Australian Securities Exchange, as the context requires .

ASX Listing Rules means the Listing Rules of ASX.

Board means the current board of directors of the Company.

Business Day means Monday to Friday inclusive, except New Year’s Day, Good Friday, Easter Monday, Christmas Day, Boxing Day, and any other day that ASX declares is not a business day.

Closely Related Party of a member of the Key Management Personnel means:

  • (a) a spouse or child of the member;

  • (b) a child of the member’s spouse;

  • (c) a dependent of the member or the member’s spouse;

  • (d) anyone else who is one of the member’s family and may be expected to influence the member, or be influenced by the member, in the member’s dealing with the entity;

  • (e) a company the member controls; or

  • (f) a person prescribed by the Corporations Regulations 2001 (Cth) for the purposes of the definition of ‘closely related party’ in the Corporations Act.

Company means Minbos Resources Limited (ACN 141 175 493).

Constitution means the Company’s constitution.

Convertible Note means the Convertible Note Deed

Corporations Act means the Corporations Act 2001 (Cth).

Directors mean the current directors of the Company.

Elwani Trust means the Elwani Trust A/C as controlled by Mrs Eleanor Jean Reeves.

Equity Securities includes a Share, a right to a Share or Option, an Option, a convertible security and any security that ASX decides to classify as an Equity Security.

Explanatory Statement means the explanatory statement accompanying the Notice.

Key Management Personnel has the same meaning as in the accounting standards issued by the Australian Accounting Standards Board and means those persons having authority and responsibility for planning, directing and controlling the activities of the Company, or if the Company is part of a consolidated entity, of the consolidated entity, directly or indirectly, including any director (whether executive or otherwise) of the Company, or if the Company is part of a consolidated entity, of an entity within the consolidated group.

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Notice or Notice of Meeting or Notice of General Meeting means this notice of general meeting including the Explanatory Statement and the Proxy Form.

Proxy Form means the proxy form accompanying the Notice.

Resolutions means the resolutions set out in the Notice of Meeting, or any one of them, as the context requires.

Share(s) means a fully paid ordinary share in the capital of the Company.

Shareholder means a holder of a Share.

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PROXY FORM

APPOINTMENT OF PROXY MINBOS RESOURCES LIMITED ACN 141 175 493 GENERAL MEETING

I/We of being a member of Minbos Resources Limited entitled to attend and vote at the General Meeting, hereby Appoint Name of proxy OR the Chair of the General Meeting as your proxy

or failing the person so named or, if no person is named, the Chair of the General Meeting, or the Chair’s nominee, to vote in accordance with the following directions, or, if no directions have been given, as the proxy sees fit, at the General Meeting to be held at 11am (WST), on Monday, 8 July 2013 at The Hay Room, BDO, 38 Station Street, Subiaco, Western Australia, and at any adjournment thereof.

If no directions are given, the Chair will vote in favour of all the Resolutions.

Important for Resolutions 1 to 4

If you have not directed your proxy how to vote as your proxy in respect of Resolutions 1 to 4 and the Chair is, or may by default be, appointed your proxy, you must mark the box below.

I/we direct the Chair to vote in accordance with his/her voting intentions (as set out above) on Resolutions 1 to 4 (except where I/we have indicated a different voting intention above) and expressly authorise that the Chair may exercise my/our proxy even though Resolution 1 is connected directly or indirectly with the remuneration of a member of Key Management Personnel and acknowledge that the Chair may exercise my/our proxy even if the Chair has an interest in the outcome of Resolutions 1 – 4 and that votes cast by the Chair for Resolutions 1 to 4, other than as proxy holder, will be disregarded because of that interest.

If the Chair is, or may by default be, appointed your proxy and you do not mark this box, and you have not directed your proxy how to vote, the Chair will not cast your votes on Resolutions 1 to 4 and your votes will not be counted in calculating the required majority if a poll is called on Resolutions 1 to 4.

OR

Voting on Business of the General Meeting

FOR AGAINST ABSTAIN Resolution 1 – Issue of Shares on Conversion of Convertible Notes to Related Party Resolution 2 – Ratification of prior issue of Commencement Shares and Options Resolution 3 – Ratification of prior issue of Shares -Tranche 1 Resolution 4 – Ratification of prior issue of Shares -Tranche 2 Please note : If you mark the abstain box for a particular Resolution, you are directing your proxy not to vote on that Resolution on a show of hands or on a poll and your votes will not to be counted in computing the required majority on a poll. If two proxies are being appointed, the proportion of voting rights this proxy represents is % Signature of Member(s): Date: ____ Individual or Member 1 Member 2 Member 3 Sole Director/Company Secretary Director Director/Company Secretary Contact Name: _____ Contact Ph (daytime): _________

Please note : If you mark the abstain box for a particular Resolution, you are directing your proxy not to vote on that Resolution on a show of hands or on a poll and your votes will not to be counted in computing the required majority on a poll.

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MINBOS RESOURCES LIMITED ACN 141 175 493

Instructions for Completing ‘Appointment of Proxy’ Form

1.

( Appointing a Proxy ): A member entitled to attend and vote at the General Meeting is entitled to appoint not more than two proxies to attend and vote on a poll on their behalf. The appointment of a second proxy must be done on a separate copy of the Proxy Form. Where more than one proxy is appointed, such proxy must be allocated a proportion of the member’s voting rights. If a member appoints two proxies and the appointment does not specify this proportion, each proxy may exercise half the votes. A duly appointed proxy need not be a member of the Company.

  1. ( Direction to Vote ): A member may direct a proxy how to vote by marking one of the boxes opposite each item of business. Where a box is not marked the proxy may vote as they choose. Where more than one box is marked on an item the vote will be invalid on that item.

( Signing Instructions ):

  • ( Individual ): Where the holding is in one name, the member must sign.

  • ( Joint Holding ): Where the holding is in more than one name, all of the members should sign.

  • ( Power of Attorney ): If you have not already provided the Power of Attorney with the registry, please attach a certified photocopy of the Power of Attorney to this form when you return it.

  • ( Companies ): Where the company has a sole director who is also the sole company secretary, that person must sign. Where the company (pursuant to Section 204A of the Corporations Act) does not have a company secretary, a sole director can also sign alone. Otherwise, a director jointly with either another director or a company secretary must sign. Please sign in the appropriate place to indicate the office held.

  • ( Attending the Meeting ): Completion of a Proxy Form will not prevent individual members from attending the General Meeting in person if they wish. Where a member completes and lodges a valid Proxy Form and attends the General Meeting in person, then the proxy’s authority to speak and vote for that member is suspended while the member is present at the General Meeting.

  • ( Return of Proxy Form ): To vote by proxy, please complete and sign the enclosed Proxy Form and return by:

  • (a) post to Minbos Resources Limited, PO Box 1346, West Perth, WA 6872; or

  • (b) facsimile to the Company on facsimile number (+61 8) 6314 1587; or

  • (c) email to the Company at [email protected]

so that it is received not later than 11am (Perth time) on Saturday, 6 July 2013.

Proxy forms received later than this time will be invalid.

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