ORTHOCELL LIMITED — AGM Information 2015

Oct 26, 2015

ORTHOCELL LIMITED A B N 5 7 1 1 8 8 9 7 1 3 5

NOTICE OF ANNUAL GENERAL MEETING

The Annual General Meeting of the Company will be held at Building 191, Murdoch University, South Street, Murdoch, Western Australia on 27 November 2015 at 3.00 PM (WST).

The Notice of Annual General Meeting 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 by telephone on (08) 9360 2888

Shareholders are urged to attend or vote by lodging the Proxy Form attached to this Notice.

ORTHOCELL LIMITED A B N 5 7 1 1 8 8 9 7 1 3 5

NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the Annual General Meeting of Shareholders of Orthocell Limited will be held at Building 191, Murdoch University, South Street, Murdoch, Western Australia on 27 November 2015 at 3.00 PM (WST).

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 regulations 7.11.37 and 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 on 25 November 2015 at 4.00 PM (WST).

Terms and abbreviations used in this Notice and the Explanatory Memorandum are defined in Schedule 1.

AGENDA

Financial, Directors' and Auditor's Report

To receive and consider the Financial Report, Directors' Report and Auditor's Report of the Company and its controlled entities for the financial year ended 30 June 2015.

1. Resolution 1 – Remuneration Report

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

"That the Remuneration Report be adopted on the terms and conditions set out in the Explanatory Memorandum."

Note: The vote on this Resolution is advisory only and does not bind the Directors or the Company. Shareholders are encouraged to read the Explanatory Memorandum for further details on the consequences of voting on this Resolution.

Voting exclusion

In accordance with section 250R of the Corporations Act, a vote on this Resolution must not be cast (in any capacity) by or on behalf of a member of the Key Management Personnel whose remuneration details are included in the Remuneration Report, or a Closely Related Party of such member.

However, a vote may be cast by such person as a proxy if the vote is not cast on behalf of a person who is excluded from voting on this Resolution, and either:

• (a) the person is appointed as proxy by writing that specifies the way the proxy is to vote on the Resolution; or

• (b) the person is the Chairman and the appointment of the Chairman as proxy does not specify the way the proxy is to vote on this Resolution and expressly authorises the Chairman to exercise the proxy even if this Resolution is connected (directly or indirectly) with the remuneration of a member of the Key Management Personnel.

1

2. Resolution 2 – Re-election of Mr Qi Xiao Zhou as a Director

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

"That Mr Qi Xiao Zhou, who retires in accordance with article 6.1(f)(i)(A) of the Constitution and, being eligible for re-election, be re-elected as a Director.”

3. Resolution 3 – Approval of 10% Placement Facility

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

"That for the purpose of Listing Rule 7.1A and for all other purposes, Shareholders approve the issue of Equity Securities of up to 10% of the issued capital of the Company (at the time of issue), calculated in accordance with the formula prescribed in Listing Rule 7.1A.2 and on the terms and conditions set out in the Explanatory Memorandum."

Voting exclusion

The Company will disregard any votes cast on this Resolution by any person who may participate in the proposed issue and any person who might obtain a benefit, except a benefit solely in the capacity of a Shareholder, if this Resolution is passed, and any associates of those persons.

However, the Company need 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 Chairman 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 20 October 2015

By Order of the Board

==> picture [98 x 32] intentionally omitted <==

Simon Robertson Company Secretary

2

How to vote

Shareholders can vote by either:

• attending the Meeting and voting in person or by attorney or, in the case of corporate Shareholders, by appointing a corporate representative to attend and vote; or

• appointing a proxy to attend and vote on their behalf using the Proxy Form accompanying this Notice and by submitting their proxy appointment and voting instructions in person, by post, by facsimile or online.

Voting in person (or by attorney)

Shareholders, or their attorneys, who plan to attend the Meeting are asked to arrive at the venue 15 minutes prior to the time designated for the Meeting, if possible, so that their holding may be checked against the Company's share register and attendance recorded. Attorneys should bring with them an original or certified copy of the Power of Attorney under which they have been authorised to attend and vote at the meeting.

Voting by a corporation

A Shareholder that is a corporation may appoint an individual to act as its representative and vote in person at the Meeting. The appointment must comply with the requirements of section 250D of the Corporations Act. The representative should bring to the Meeting evidence of his or her appointment, including any authority under which it is signed.

Voting by proxy

• A Shareholder entitled to attend and vote is entitled to appoint not more than two proxies. Each proxy will have the right to vote on a poll and also to speak at the Meeting.

• The appointment of the proxy may specify the proportion or the number of votes that the proxy may exercise. Where more than one proxy is appointed and the appointment does not specify the proportion or number of the shareholder's votes each proxy may exercise, the votes will be divided equally among the proxies (i.e. where there are two proxies, each proxy may exercise half of the votes).

• A proxy need not be a Shareholder.

• The proxy can be either an individual or a body corporate.

• If a proxy is not directed how to vote on an item of business, the proxy may generally vote, or abstain from voting, as they think fit. However, where a member of the Key Management Personnel or their Closely Related Party is appointed as a proxy, the proxy may only vote on Resolution 1 in accordance with a direction on how the proxy is to vote or, if the proxy is the Chairman and the appointment expressly authorises the Chairman to exercise the proxy even if the Resolution is connected directly or indirectly with the

remuneration of a member of the Key Management Personnel.

• Should any resolution, other than those specified in this Notice, be proposed at the Meeting, a proxy may vote on that resolution as they think fit.

• If a proxy is instructed to abstain from voting on an item of business, they are directed not to vote on the Shareholder's behalf on the poll and the shares that are the subject of the proxy appointment will not be counted in calculating the required majority.

• Shareholders who return their Proxy Forms with a direction how to vote, but do not nominate the identity of their proxy, will be taken to have appointed the Chairman as their proxy to vote on their behalf. If a Proxy Form is returned but the nominated proxy does not attend the Meeting, the Chairman will act in place of the nominated proxy and vote in accordance with any instructions. Proxy appointments in favour of the Chairman, the secretary or any Director that do not contain a direction as to how to vote will be used, where possible, to support each of the Resolutions proposed in this Notice, provided they are entitled to cast votes as a proxy under the voting exclusion rules which apply to some of the proposed Resolutions. These rules are explained in this Notice.

• To be effective, proxies must be received by 3.00 PM (WST) on 25 November 2015. Proxies received after this time will be invalid.

• Proxies may be lodged using any of the following methods:

• by returning a completed Proxy Form in person to: Automic Registry Services Suite 1A, Level 1, 7 Ventnor Avenue, West Perth, WA 6005

• by post using the pre-addressed envelope provided with this Notice to: PO Box 223, West Perth WA 6872

• by faxing a completed Proxy Form to + 61 8 9321 2337

• • online via our share registry @ https://automic.7g.com.au/loginlisted.aspx and by following the below instructions:

  • Security Code – using the dropdown box select “Orthocell Limited”;

  • SRN/HIN – enter your personal holder number;

  • Enter your postcode if your holding has a registered address in Australia or your country if it is registered overseas;

  • Click the “Login” button; and

  • Click on the “Voting” tab to commence registering your voting intention.

The Proxy Form must be signed by the Shareholder or the Shareholder's attorney. Proxies given by corporations must be executed in accordance with the Corporations Act. Where the appointment of a proxy is signed by the appointer's

3

attorney, a certified copy of the Power of Attorney, or the power itself, must be received by the Company at the above address, or by facsimile, and by 3.00 PM (WST) on 25 November 2015. If facsimile transmission is used, the Power of Attorney must be certified.

Shareholders who are entitled to vote

In accordance with regulations 7.11.37 and 7.11.38 of the Corporations Regulations 2001 (Cth), the Board has determined that a person's entitlement to vote at the Annual General Meeting will be the entitlement of that person set out in the register of Shareholders as at 4.00 PM (WST) on 25 November 2015.

4

ORTHOCELL LIMITED A B N 5 7 1 1 8 8 9 7 1 3 5

EXPLANATORY MEMORANDUM

Introduction

This Explanatory Memorandum has been prepared for the information of Shareholders in connection with the business to be conducted at the Annual General Meeting of the Shareholders of Orthocell Limited to be held at Building 191, Murdoch University, Murdoch, Western Australia on 27 November 2015 at 3.00 PM (WST).

This Explanatory Memorandum should be read in conjunction with and forms part of 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.

A Proxy Form is located at the end of the Explanatory Memorandum.

Financial, Directors' and Auditor’s Report

The first item of the Notice deals with the presentation and consideration of the Financial Report, Directors' Report and Auditor's Report for the financial year ended 30 June 2015.

No resolution is required to be moved in respect of this item.

Shareholders will be offered the opportunity to discuss the Financial Report, Directors' Report and Auditor's Report for the financial year ended 30 June 2015 at the Meeting, copies of which can be found on the Orthocell Limited website (www.orthocell.com.au) or by contacting the Company's registered office on (08) 9360 2888.

Shareholders will also be offered an opportunity to ask questions or make comments on the accounts and the management of the Company.

The Chairman will also provide Shareholders a reasonable opportunity to ask the Auditor or the Auditor’s representative questions relevant to:

• (a) the conduct of the audit;

• (b) the preparation and content of the Auditor’s Report;

• (c) the accounting policies adopted by the Company in relation to the preparation of the Company’s financial statements; and

• (d) the independence of the Auditor in relation to the conduct of the audit.

The Chairman will also allow a reasonable opportunity for the Auditor or their representative to answer any written questions submitted to the Auditor under section 250PA of the Corporations Act.

1. Resolution 1 – Remuneration Report

Pursuant to section 250R(2) of the Corporations Act, the Company is required to put the Remuneration Report to the vote of Shareholders. The Directors' Report for the year ended 30 June 2015 contains the Remuneration Report which sets out the Board’s policy for determining the nature and amount (or value) of remuneration for the Key Management Personnel of the Company and reports the remuneration arrangements in place for Key Management Personnel, including the executive Directors, specified executives and non-executive Directors. The Remuneration Report is set out in the Company’s Annual Financial Statements which is available on the Company’s website (www.orthocell.com.au).

5

Section 250R(3) of the Corporations Act provides that Resolution 1 is advisory only and does not bind the Directors or the Company. Of itself, a failure of Shareholders to pass Resolution 1 will not require the Directors to alter any of the arrangements in the Remuneration Report.

However, the Corporations Act has been amended by the Corporations Amendment (Improving Accountability on Director and Executive Remuneration) Act 2011 (Cth) ( Director and Executive Remuneration Act ), which received the royal assent on 27 June 2011 and came into effect on 1 July 2011.

The Director and Executive Remuneration Act introduced new sections 250U to 250Y, amongst others, into the Corporations Act, giving Shareholders the opportunity to remove the Board if the Remuneration Report receives a 'no' vote of 25% or more at two consecutive annual general meetings ( Two Strikes Rule ).

Under the Two Strikes Rule, where a resolution on the Remuneration Report receives a 'no' vote of 25% or more at two consecutive annual general meetings, the Company will be required to put to Shareholders at the second annual general meeting, a resolution on whether another meeting should be held (within 90 days) ( Spill Resolution ), at which all Directors (other than the Managing Director) who were in office at the date of approval of the applicable Directors' Report must stand for re-election.

The remuneration report of the Company for the financial year ended 30 June 2014 did not receive a ‘no’ vote of more than 25% against its adoption at the Company’s last annual general meeting held on 24 November 2014. Therefore, if the Remuneration Report receives a 'no' vote on Resolution 1 of 25% or more at this Meeting, Shareholders should be aware that if there is a 'no' vote of 25% or more at the next annual general meeting, the consequences are that all Directors (other than the Managing Director) may be up for re-election.

The Chairman will allow a reasonable opportunity for Shareholders to ask about, or make comments, on the Remuneration Report.

Shareholder’s should note that a voting exclusion applies to Resolution 1 in the terms set out in the Notice. In particular, the Directors and other restricted voters may not vote on this Resolution and may not cast a vote as proxy, unless the appointment gives a direction on how to vote or the proxy is given to the Chairman and expressly authorises the Chairman to exercise your proxy, even if the Resolution is connected directly or indirectly with the remuneration of a member of the Key Management Personnel. The Chairman intends to use any such proxies to vote in favour of the Resolution. In exceptional circumstances, the Chairman may change his voting intention on Resolution 1, in which case an ASX announcement will be made.

Shareholders are urged to carefully read the Proxy Form and provide a direction to the proxy on how to vote on this Resolution.

2. Resolution 2 – Re-election of Mr Qi Xiao Zhou as a Director

It is a requirement of article 6.1(f)(i)(A) of the Constitution that one third of the Directors, excluding the Managing Director (rounded down if necessary to the nearest whole number), must retire at each annual general meeting of the Company.

The Constitution provides that a Director who retires under article 6.1(f) is eligible for re-election.

Pursuant to the Constitution, Mr Qi Xiao Zhou will retire at this Meeting and, being eligible, seeks re-election.

Mr Zhou was appointed as a non-executive director of the Company on 2 November 2012. The Board does not consider Mr Zhou to be an independent director.

Mr Zhou has 15 years’ experience within China as a senior business manager and executive. Mr Zhou is the founding CEO of Shenzhen Lightning Digital Technology Co Ltd, a company focused on the manufacture and distribution of electronic semiconductor products since 2001. Mr Zhou has experience within the public markets in Hong Kong, China and Taiwan and brings a wealth of business management and development experience to the Board. In particular, Mr Zhou has broad connections and experience in the licensing of technologies into the Asian region.

6

The Board believes that Mr Zhou has performed the duties and responsibilities of a director diligently and professionally, in the best interests of all Shareholders.

The Board supports the re-election of Mr Zhou. The Board (other than Mr Zhou because of his interest in the outcome of the Resolution) recommends that Shareholders vote in favour of Resolution 2.

The Chairman intends to exercise all undirected proxies in favour of Resolution 2.

3. Resolution 3 – Approval of 10% Placement Facility

3.1 General

Listing Rule 7.1A enables eligible entities to issue Equity Securities up to 10% of its issued share capital through placements over a 12 month period after the annual general meeting at which a resolution for the purposes of Listing Rule 7.1A is passed by special resolution ( 10% Placement Facility ). The 10% Placement Facility is in addition to the Company's 15% placement capacity under Listing Rule 7.1.

An eligible entity for the purposes of Listing Rule 7.1A is an entity that is not included in the S&P/ASX 300 Index and has a market capitalisation of $300 million or less. The Company has a market capitalisation of approximately $50,000,000 as at 20 October 2015 and is an eligible entity.

While the Company has no current intention to use the 10% Placement Facility, the Company is now seeking Shareholder approval by way of a special resolution to have the ability to issue Equity Securities under the 10% Placement Facility in the 12 months following the Meeting.

The exact number of Equity Securities to be issued under the 10% Placement Facility will be determined in accordance with the formula prescribed in Listing Rule 7.1A.2 (refer to section 3.2(c) below).

The Company intends to continue to develop its existing business activities. The Company may use the 10% Placement Facility to further develop and commercialise its products.

The Directors believe that Resolution 3 is in the best interests of the Company and unanimously recommends that Shareholders vote in favour of this Resolution.

The Chairman intends to exercise all undirected proxies in favour of Resolution 3.

3.2

Description of Listing Rule 7.1A

• (a) Shareholder approval

The ability to issue Equity Securities under the 10% Placement Facility is subject to Shareholder approval by way of a special resolution at an annual general meeting.

• (b) Equity Securities

Any Equity Securities issued under the 10% Placement Facility must be in the same class as an existing quoted class of Equity Securities of the Company.

The Company, as at the date of the Notice, has on issue quoted Shares and unquoted Options.

• (c) Formula for calculating 10% Placement Facility

Listing Rule 7.1A.2 provides that eligible entities which have obtained Shareholder approval at an annual general meeting may issue or agree to issue, during the 12 month period after the date of the annual general meeting, a number of Equity Securities calculated in accordance with the following formula:

7

(A x D) – E

• A is the number of Shares on issue 12 months before the date of issue or agreement:

• (A) plus the number of Shares issued in the 12 months under an exception in Listing Rule 7.2;

• (B) plus the number of partly paid shares that became fully paid in the 12 months;

• (C) plus the number of Shares issued in the 12 months with approval of holders of Shares under Listing Rule 7.1 and 7.4. This does not include an issue of Shares under the entity's 15% placement capacity without Shareholder approval;

• (D) less the number of Shares cancelled in the 12 months.

Note that “A” has the same meaning in Listing Rule 7.1 when calculating an entity's 15% placement capacity.

• D is 10%.

• E is the number of Equity Securities issued or agreed to be issued under Listing Rule 7.1A.2 in the 12 months before the date of the issue or agreement to issue that are not issued with the approval of Shareholders under Listing Rule 7.1 or 7.4.

• (d) Listing Rule 7.1 and Listing Rule 7.1A

The ability of an entity to issue Equity Securities under Listing Rule 7.1A is in addition to the entity's 15% placement capacity under Listing Rule 7.1.

The actual number of Equity Securities that the Company will have capacity to issue under Listing Rule 7.1A will be calculated at the date of issue of the Equity Securities in accordance with the formula prescribed in Listing Rule 7.1A.2 (refer to section 3.2(c) above).

(e) Minimum issue price

The issue price of Equity Securities issued under Listing Rule 7.1A must be not less than 75% of the VWAP of Equity Securities in the same class calculated over the 15 Trading Days on which trades in that class were recorded immediately before:

• (i) the date on which the price at which the Equity Securities are to be issued is agreed; or

• (ii) if the Equity Securities are not issued within 5 Trading Days of the date in paragraph (i) above, the date on which the Equity Securities are issued.

• (f) 10% Placement Period

Shareholder approval of the 10% Placement Facility under Listing Rule 7.1A is valid from the date of the annual general meeting at which the approval is obtained and expires on the earlier to occur of:

• (i) the date that is 12 months after the date of the annual general meeting at which the approval is obtained; and

• (ii) the date of the approval by Shareholders of a transaction under Listing Rules 11.1.2 (a significant change to the nature or scale of activities) or 11.2 (disposal of main undertaking),

8

( 10% Placement Period ).

3.3

Listing Rule 7.1A

The effect of passing Resolution 3 will be to allow the Directors to issue the Equity Securities under Listing Rule 7.1A during the 10% Placement Period without using the Company’s 15% placement capacity under Listing Rule 7.1.

Resolution 3 is a special resolution and therefore requires approval of 75% of the votes cast by Shareholders present and eligible to vote (in person, by proxy, by attorney or, in the case of a corporate Shareholder, by a corporate representative) in order to be passed.

3.4 Specific information required by Listing Rule 7.3A

Pursuant to and in accordance with Listing Rule 7.3A, information is provided in relation to the approval of the 10% Placement Facility as follows:

• (a) The Equity Securities will be issued at an issue price of not less than 75% of the VWAP for the Company's Equity Securities over the 15 Trading Days on which trades in that class were recorded immediately before:

• (i) the date on which the price at which the Equity Securities are to be issued is agreed; or

• (ii) if the Equity Securities are not issued within 5 Trading Days of the date in paragraph (i) above, the date on which the Equity Securities are issued.

• (b) If Resolution 3 is approved by Shareholders and the Company issues Equity Securities under the 10% Placement Facility, the existing Shareholders' economic and voting interests in the Company will be diluted as shown in the below table. There is also a risk that:

• (i) the market price for the Company's Equity Securities may be significantly lower on the date of the issue of the Equity Securities than on the date of the Meeting; and

• (ii) the Equity Securities may be issued at a price that is at a discount to the market price for the Company's Equity Securities on the issue date or the Equity Securities are issued as part of the consideration for the acquisition of a new asset, which may have an effect on the amount of funds raised by the issue of the Equity Securities under the 10% Placement Facility.

The table below shows the potential dilution of existing Shareholders on the basis of the current market price of Shares and the current number of ordinary securities for variable "A" calculated in accordance with the formula in Listing Rule 7.1A(2) as at the date of this Notice.

The table also shows:

• (i) two examples where variable “A” has increased, by 50% and 100%. Variable “A” is based on the number of ordinary securities the Company has on issue. The number of ordinary securities on issue may increase as a result of issues of ordinary securities that do not require Shareholder approval (for example, a pro rata entitlements issue or scrip issued under a takeover offer) or future specific placements under Listing Rule 7.1 that are approved at a future Shareholders’ meeting; and

• (ii) two examples of where the issue price of ordinary securities has decreased by 50% and increased by 100% as against the current market price.

9

Variable “A” in Listing Rule 7.1A.2			Dilution
		$0.305 50% decrease in Issue Price	$0.61 Issue Price at current market price	$1.22 100% increase in Issue Price
Current Variable “A” 82,500,000 Shares	Shares issued	8,250,000 Shares	8,250,000 Shares	8,250,000 Shares
	Funds raised	2,516,250	5,032,500	10,065,000
	Dilution effect	10%	10%	10%
50% increase in current Variable “A” 123,750,000 Shares	Shares issued	12,375,000 Shares	12,375,000 Shares	12,375,000 Shares
	Funds raised	3,774,375	7,548,750	15,097,500
	Dilution effect	10%	10%	10%
100% increase in current Variable “A” 165,000,000 Shares	10% Voting Dilution	16,500,000 Shares	16,500,000 Shares	16,500,000 Shares
	Funds raised	5,032,500	10,065,000	20,130,000
	Dilution effect	10%	10%	10%

The table has been prepared on the following assumptions:

• (i) The Company issues the maximum number of Equity Securities available under the 10% Placement Facility.

• (ii) No Convertible Securities (including any Convertible Securities issued under the 10% Placement Facility) are exercised into Shares before the date of the issue of the Equity Securities.

• (iii) The 10% voting dilution reflects the aggregate percentage dilution against the issued share capital at the time of issue. This is why the voting dilution is shown in each example as 10%.

• (iv) The table does not show an example of dilution that may be caused to a particular Shareholder by reason of placements under the 10% Placement Facility, based on that Shareholder’s holding at the date of the Meeting.

• (v) The table shows only the effect of issues of Equity Securities under Listing Rule 7.1A, not under the 15% placement capacity under Listing Rule 7.1.

• (vi) The issue of Equity Securities under the 10% Placement Facility consists only of Shares.

• (vii) The issue price is $0.61 being the closing price of the Shares on ASX on 20 October 2015.

• (c) The Company will only issue the Equity Securities during the 10% Placement Period. The approval under Resolution 3 for the issue of the Equity Securities pursuant to the 10% Placement Facility will cease to be valid in the event that Shareholders approve a transaction under Listing Rule 11.1.2 (a significant change to the nature or scale of activities) or Listing Rule 11.2 (disposal of main undertaking).

10

• (d) The Company may seek to issue the Equity Securities for the following purposes:

• (i) non-cash consideration for the acquisition of the new assets, technology and investments. In such circumstances the Company will comply with the minimum issue price limitations and provide a valuation of the non-cash consideration as required by Listing Rule 7.1A.3 and will release the valuation to the market; or

• (ii) cash consideration. In such circumstances, the Company intends to use the funds raised towards existing business activities including developing and commercialising its products, acquisitions of new assets, technology and investments (including expenses associated with such acquisitions) and/or general working capital.

The Company will comply with the disclosure obligations under Listing Rules 7.1A.4 and 3.10.5A upon issue of any Equity Securities.

• (e) The Company’s allocation policy is dependent on the prevailing market conditions at the time of any proposed issue pursuant to the 10% Placement Facility. The identity of the allottees of Equity Securities will be determined on a case-by-case basis having regard to factors including, but not limited to, the following:

• (i) the methods of raising funds that are available to the Company, including but not limited to, rights issue or other issue in which existing security holders can participate;

• (ii) the effect of the issue of the Equity Securities on the control of the Company;

• (iii) the dilutionary effect of the issue of the Equity Securities on existing Shareholders at the time of the proposed issue of Equity Securities;

• (iv) the financial situation and solvency of the Company; and

• (v) advice from professional advisers, including corporate, financial and broking advisers (if applicable).

The allottees under the 10% Placement Facility have not been determined as at the date of this Notice but may include existing substantial Shareholders and/or new Shareholders who are not related parties or associates of a related party of the Company.

• (f) The Company previously obtained Shareholder approval under Listing Rule 7.1A on 24 November 2014. No Equity Securities were issued in the 12 months preceding the date of the Meeting.

• (g) A voting exclusion statement is included in the Notice. At the date of the Notice, the Company has not approached any particular existing Shareholder or security holder or an identifiable class of existing security holder to participate in the issue of the Equity Securities. No existing Shareholder's votes will therefore be excluded under the voting exclusion in the Notice.

4. Action to be taken by Shareholders

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

4.1

Proxies

A Proxy Form is attached to the Notice. This is to be used by Shareholders if they wish to appoint a representative (ie. 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.

11

4.2 Voting exclusions and restrictions

Shareholders must observe the voting exclusions and restrictions set out in the Notice in relation to Resolutions 1, and 3.

12

Schedule 1 - Definitions

In the Notice, words importing the singular include the plural and vice versa.

$ means Australian dollars.

10% Placement Facility has the meaning given to that term in section 3.1 of the Explanatory Memorandum.

10% Placement Period has the meaning given to that term in section 3.2 of the Explanatory Memorandum.

Accounting Standards means the accounting standards made by the Australian Accounting Standards Board for the purposes of the Corporations Act.

Annual Financial Statements means the Directors’ Report, the Financial Report and Auditor’s Report, in respect of the year ended 30 June 2015.

Annual General Meeting means the Meeting.

ASX means the ASX Limited ABN 98 008 624 691 and where the context permits the Australian Securities Exchange operated by ASX Limited.

Auditor means the Company’s auditor from time to time (if any).

Auditor's Report means the auditor's report on the Financial Report.

Board means the board of Directors of the Company.

Chairman means the person appointed to chair the Meeting of the Company convened by the Notice.

Closely Related Party of a member of 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 of 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 Orthocell Limited ABN 57 118 897 135.

Constitution means the constitution of the Company as at the date of the Meeting.

Convertible Security means a security of the Company which is convertible into Shares.

Corporations Act means the Corporations Act 2001 (Cth).

Director means a director of the Company.

Directors' Report means the annual directors' report prepared under Chapter 2M of the Corporations Act for the Company and its controlled entities for the year ended 30 June 2015.

Equity Security has the same meaning as in the Listing Rules.

Explanatory Memorandum means the explanatory memorandum which forms part of the Notice.

Financial Report means the annual financial report prepared under Chapter 2M of the Corporations Act for the Company and its controlled entities for the year ended 30 June 2015.

13

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.

Listing Rules means the listing rules of ASX.

Meeting means the annual general meeting of Shareholders convened by the Notice.

Notice or Notice of Annual General Meeting means this notice of annual general meeting.

Option means an option to acquire a Share.

Proxy Form means the proxy form attached to the Notice.

Remuneration Report means the remuneration report of the Company contained in the Directors’ Report.

Resolution means a resolution referred to in the Notice.

Schedule means a schedule to the Notice.

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

Shareholder means a shareholder of the Company.

Trading Day means a day determined by ASX to be a trading day in accordance with the Listing Rules. VWAP means volume weighted average price.

WST means Western Standard Time, being the time in Perth, Western Australia.

14

All registry communications to: Automic Registry Services PO Box 223 West Perth WA 6872

==> picture [138 x 52] intentionally omitted <==

ORTHOCELL LIMITED | ABN 57 118 897 135

Holder Number

Security Holder Appointment of Proxy – Annual General Meeting

I/We being a Shareholder entitled to attend and vote at the Meeting, hereby appoint

OR The Chair as my/our proxy

(Name of Proxy)

or failing the person so named or, if no person is named, the Chair, or the Chair’s nominee, to vote in accordance with the following directions, or, if no directions have been given, and subject to the relevant laws as the proxy sees fit, at the Annual General Meeting to be held at 3.00pm (WST) on 27 November 2015 at Building 191, Murdoch University, South Street, Murdoch, Western Australia and at any adjournment thereof.

AUTHORITY FOR CHAIR TO VOTE UNDIRECTED PROXIES ON REMUNERATION RELATED RESOLUTIONS

Where I/we have appointed the Chair as my/our proxy (or where the Chair becomes my/our proxy by default), I/we expressly authorise the Chair to exercise my/our proxy on Resolution 1 (except where I/we have indicated a different voting intention below) even though Resolution 1 is connected directly or indirectly with the remuneration of a member of the Key Management Personnel, which includes the Chair.

The Chair intends to vote undirected proxies in favour of all Resolutions in which the Chair is entitled to vote.

Unless indicated otherwise by ticking the “for”,” against” or “abstain” box you will be authorising the Chair to vote in accordance with the Chair’s voting intention.

VOTING ON BUSINESS OF THE MEETING

Resolutions For Against Abstain Resolutions For Against Abstain 1 Remuneration Report 3 Approval of 10% Placement Facility 2 Re-election of Mr Qi Xiao Zhou as a Director

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 be counted in computing the required majority on a poll.

SIGNATURE OF SHAREHOLDER(S):

SIGNATURE OF SHAREHOLDER(S):
Individual or Shareholder 1 Sole Director or Sole Director / Company Secretary	Shareholder 2 Director	Shareholder 3
		Director / Company Secretary

INSTRUCTIONS FOR COMPLETING ‘APPOINTMENT OF PROXY’ FORM

APPOINTING A PROXY

A Shareholder entitled to attend and cast a vote at the Meeting is entitled to appoint a proxy to attend and vote on their behalf at the Meeting. The appointed proxy may be an individual or body corporate.

If a Body Corporate is appointed to act as your proxy then a representative of that Body Corporate must be appointed to act as its representative. When attending the meeting, the representative must bring a formal notice of appointment as per section 250D of the Corporations Act. Such notice must be signed as required by section 127 of the Corporations Act or the Body Corporate’s Constitution.

If a Shareholder is entitled to cast 2 or more votes at the Meeting, the Shareholder may appoint a second proxy to attend and vote on their behalf at the Meeting. However, where both proxies attend the Meeting, voting may only be exercised on a poll.

The appointment of a second proxy must be done on a separate copy of the Proxy Form. A Shareholder who appoints 2 proxies may specify the proportion or number of votes each proxy is appointed to exercise. If a Shareholder appoints 2 proxies and the appointments do not specify the proportion or number of the Shareholder’s votes each proxy is appointed to exercise, each proxy may exercise one-half of the votes. Any fractions of votes resulting from the application of these principles will be disregarded. A duly appointed proxy need not be a Shareholder.

Note: If you wish to appoint a second proxy, you may copy this form but you must return both forms together.

VOTING ON BUSINESS OF MEETING

A Shareholder may direct a proxy how to vote by marking one of the boxes opposite each item of business. The direction may specify the number of votes that the proxy may exercise by writing the number of Shares next to the box marked for the relevant item of business.

Where a box is not marked the proxy may vote as they choose subject to the relevant laws.

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 Shareholder must sign.

• Joint holding : Where the holding is in more than one name, all of the Shareholders should sign.

• Power of attorney : If you have not already lodged the power of attorney with the registry, please attach a certified photocopy of the power of attorney to this Proxy Form when you return it.

• Companies : To be signed in accordance with your Constitution. Please sign in the appropriate box which indicates the office held by you.

ATTENDING THE MEETING

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

LODGEMENT OF VOTES

To be effective, a validly appointed proxy must be received by the Company not less than 48 hours prior to commencement of the Meeting.

Proxy appointments can be lodged by:

• a) Hand Delivery – to Automic Registry Services Suite 1a, Level 1, 7 Ventnor Avenue, West Perth WA 6005; or

• b) Post - to Automic Registry Services, PO Box 223, West Perth WA 6872; or

• c) Facsimile - to Automic on facsimile number +61 8 9321 2337; or

• d) Online – via our share registry @ https://automic.7g.com.au/loginlisted.aspx and follow the below instructions:

• Security Code – using the dropdown box select “Orthocell Limited”

• SRN/HIN – enter your personal holder number

• Enter your postcode if your holding has a registered address in Australia or your Country if it is registered overseas

• Click the “Login” button

• Click on the “Voting” tab to commence registering your voting intention

Proxy Forms received later than this time will be invalid