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

NOTICE OF ANNUAL GENERAL MEETING AND EXPLANATORY MEMORANDUM

The Annual General Meeting of the Company will be held at Building 191 Murdoch University, South Street, Murdoch, Western Australia on 15 November 2017 at 10.00 AM (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 ( "Company" ) will be held at Building 191 Murdoch University, South Street, Murdoch, Western Australia on 15 November 2017 at 10.00 AM (WST) ( "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.

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

AGENDA

Financial Statements and Reports

To receive and consider the annual financial report of the Company for the financial year ended 30 June 2017 (Annual Report) together with the declaration of the Directors, the Directors’ Report, and the Auditor’s Report.

1. Resolution 1 – Non Binding Resolution to adopt Remuneration Report

To consider, and if thought fit, to pass with or without amendment, the following resolution as a non-binding 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

The Company will disregard any votes cast on this Resolution by or on behalf of a member of the Key Management Personnel whose remuneration details are included in the Remuneration Report, or their Closely Related Parties. However, the Company need not disregard a vote if:

(a) it is cast by a person as a proxy appointed by writing that specifies how the proxy is to vote on the proposed Resolution or the proxy is the Chair of the Meeting and the appointment of the Chair as proxy does not specify the way the proxy is to vote on the resolution and expressly authorises the Chair to exercise the proxy even if the resolution is connected directly or indirectly with the remuneration of a member of the Key Management Personnel; and
(b) it is not cast on behalf of a member of the Key Management Personnel whose remuneration details are included in the Remuneration Report, or their Closely Related Parties.

Further, a Restricted Voter who is appointed as a proxy will not vote on this Resolution unless:

(a)
the appointment specifies the way the proxy is to vote on this Resolution; or
(b) the proxy is the Chair of the Meeting and the appointment expressly authorises the Chair to exercise the proxy even though the Resolution is connected directly or indirectly with the remuneration of a member of the Key Management Personnel. Shareholders should note that the Chair intends to vote any undirected proxies in favour of this Resolution.

Shareholders may also choose to direct the Chair to vote against this Resolution or to abstain from voting. If you purport to cast a vote other than as permitted above, that vote will be disregarded by the Company (as indicated above) and you may be liable for breaching the voting restrictions that apply to you under the Corporations Act.

2. Resolution 2 – Re-Election of Professor Lars Lidgren as a Director

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

"That Professor Lars Lidgren, who retires in accordance with article 6.1(f)(i) of the Constitution and, being eligible, offers himself for election, be re-elected a Director.”

3. Resolution 3 – Re-Election of Mr Matthew Callahan

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

"That Matthew Callahan, who retires in accordance with article 6.1(f)(i) of the

Constitution and, being eligible, offers himself for election, be re-elected a Director.”

4. Resolution 4 – Ratification of issue of Shares to various sophisticated and professional investors under ASX Listing Rule 7.1

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

“That, for the purpose of Listing Rule 7.4 and for all other purposes, Shareholders ratify the issue of 1,667,500 Shares at an issue price of $0.40 each on 13 December 2016 under the Company’s 15% placement capacity under ASX Listing Rule 7.1 to various to sophisticated and professional investors on the terms and conditions set out in the Explanatory Memorandum.”

Voting exclusion statement:

The Company will disregard any votes cast on Resolution 4 by any person who participated in the issue the subject of Resolution 4 and any person who is an Associate of those persons. However, the Company need not disregard a vote if the vote is cast by:

(i) a person as proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form; or
(ii) 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.

5. Resolution 5 – Ratification of issue of Shares to various sophisticated and professional investors under ASX Listing Rule 7.1A

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

“That, for the purpose of Listing Rule 7.4 and for all other purposes, Shareholders ratify the issue of 8,332,500 Shares at an issue price of $0.40 each on 13 December 2016 under the Company’s additional 10% placement capacity under ASX Listing Rule 7.1A to various sophisticated and professional investors on the terms and conditions set out in the Explanatory Memorandum.”

Voting exclusion statement:

The Company will disregard any votes cast on Resolution 5 by any person who participated in the issue the subject of Resolution 5 and any person who is an Associate of those persons. However, the Company need not disregard a vote if the vote is cast by:

(i) a person as proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form; or
(ii) 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.

6. Resolution 6 – Ratification of issue of Options to Argonaut

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

“That, for the purposes of ASX Listing Rule 7.4 and for all other purposes, Shareholders ratify the issue 600,000 Options with an exercise price of $0.55 expiring 3 years after issue to Argonaut on the terms and conditions set out in the Explanatory Memorandum.”

Voting exclusion statement:

The Company will disregard any votes cast on Resolution 6 by any person who participated in the issue the subject of Resolution 6 and any person who is an Associate of those persons. However, the Company need not disregard a vote if the vote is cast by:

(i) a person as proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form; or
(ii) 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.

7. Resolution 7 – 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 pursuant to and in accordance with 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 statement:

The Company will disregard any votes cast on this Resolution by a person who may participate in the proposed issue and a person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, 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.

8. Resolution 8 - Adoption of Orthocell Limited Employee Equity Incentive Plan

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

“That, for the purposes of Listing Rule 7.2 Exception 9(b), as an exception to Listing Rule 7.1, and for all other purposes, approval is given for the establishment of the “Orthocell Limited Employee Equity Incentive Plan” and the issue of securities thereunder, on the terms and conditions summarised in Schedule 1 and in the Explanatory Memorandum.”

Voting exclusion statement:

The Company will disregard any votes cast on this Resolution by a Director and any of their Associates (except one who is ineligible to participate in any employee incentive scheme in relation to the Company).

However, the Company will not disregard a vote if:

(a) it is cast by a person as proxy for a person who is entitled to vote, in accordance with the 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.

OTHER BUSINESS

To deal with any other business which may be brought forward in accordance with the Constitution and the Corporations Act.

______ Details of the definitions and abbreviations used in this Notice are set out in Schedule 1 to the Explanatory Memorandum.

Dated 5 October 2017

By Order of the Board

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Simon Robertson Company Secretary

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 or by facsimile.

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 Restricted Voter is appointed as a proxy, the proxy may only vote on Resolutions 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.
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, Proxy Forms must be lodged by 10.00 AM (WST) on 13 November 2017. Proxy Forms lodged after this time will be invalid.
Proxy Forms may be lodged using any of the following methods:
by post using the pre-addressed envelope provided with this Notice to: PO Box 2226, Strawberry Hills NSW 2012
by faxing a completed proxy form to +61 8 6 210 1153
by hand to: Suite 310, 50 Holt Street Surrey Hills NSW 2010.

The Proxy Form must be signed by the Shareholder or the Shareholder's attorney. Proxy Forms given by corporations must be executed in accordance with the Corporations Act. Where the appointment of a proxy is signed by the appointer's 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 10.00 AM (WST) on 13 November 2017. 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, 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 4.00PM (WST) on 13 November 2017.

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.

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, South Street, Murdoch Western Australia on 15 November 2017 at 10.00 AM (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.

Defined terms are set out in Schedule 1 to the Explanatory Memorandum.

Financial Statements and Reports

The first item of the Notice deals with the presentation of the

of the Annual Report together with the declaration of the Directors, the Directors’ report, the Remuneration Report and the Auditor’s Report of the Company for the financial year ended 30 June 2017, together with the Directors' declaration and report in relation to that financial year and the Auditor's Report on the financial report.

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

Shareholders will be offered the opportunity to discuss the Annual Report for the financial year ended 30 June 2017 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 be offered the opportunity to ask questions or make comments on 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 accounts; 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 – Non Binding Resolution to adopt 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 2017 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 at www.orthocell.com.au.

The vote on Resolution 1 is advisory only and does not bind the Directors or the Company.

However, if at least 25% of the votes cast are against adoption of the Remuneration Report at two consecutive annual general meetings, the Company will be required to put a resolution to the second Annual General Meeting ( Spill Resolution ), to approve calling a general meeting ( Spill Meeting ). If more than 50% of Shareholders vote in favour of the Spill Resolution, the Company must then convene a Spill Meeting within 90 days of the second Annual General Meeting. All of the Directors who were in office when the applicable Directors’ Report was approved, other than the Managing Director, will need to stand for re-election at the Spill Meeting if they wish to continue as Directors.

The Remuneration Report for the financial year ended 30 June 2016 did not receive a vote of more than 25% against its adoption at the Company’s last general meeting held on 28 November 2016. Accordingly, if at least 25% of the votes cast on Resolution 1 are against adoption of the Remuneration Report it will not result in the Company putting a Spill Resolution to Shareholders.

The Remuneration Report explains the Board policies in relation to the nature and level of remuneration paid to Directors, sets out remuneration details for each Director and any service agreements and sets out the details of any equity based compensation.

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

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 Chair and expressly authorises the Chair 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 Chair intends to use any such proxies to vote in favour of the Resolution. 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 Professor Lars Lidgren 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.

Further, article 6.1(f)(i)(B) of the Constitution requires any director (excluding the Managing Director) who, if he or she does not retire, will at the conclusion of the meeting have been in office for three or more years or for three or more annual general meetings since he or she was last elected to office, must retire at each annual general meeting.

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

Pursuant to the Constitution, Professor Lars Lidgren will retire at this Meeting and, being eligible, seeks election.

Professor Lars Lidgren was appointed a director of the Company on 7 April 2014.

Professor Lars Lidgren has authored and co-authored over 250 original publications, and has more than 150 patents/applications. He was spokesman for Biomaterials in the Nordic Orthopaedic Society, Chairman for the Swedish National Knee Register, Director of the National Board of Health and Welfare, Musculoskeletal Competence Centre and member of several editorial boards. Professor Lidgren initiated and has led the UN ratified Bone and Joint Decade and founded Scandimed, a global leading company in bone cements and delivery. Professor Lidgren is the inventor, founder and board member of Bone Support, an emerging leader in bone therapeutics.

The Board believes that Professor Lidgren has performed the duties and responsibilities of a Director diligently and professionally, in the best interests of all Shareholders.

The Board considers Professor Lidgren to be an independent Director.

The Board (in the absence of Professor Lars Lidgren) supports the re-election of Professor Lars Lidgren.

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

3. Resolution 3 – Re-election of Mr Matthew Callahan as a Director

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

Pursuant to the Constitution, Mr Callahan will retire at this Meeting and, being eligible, seeks election.

Mr Callahan was appointed a director of the Company on 7 April 2014.

Mr Callahan is a founding director of Orthocell. He is also the founding CEO of iCeutica, and a coinventor of technologies that comprise the SoluMatrix Fine Particle Technology™ for improving the bioavailability of pharmaceuticals. He has more than 20 years legal, licensing and investment management experience and is a director of Botanix Pharmaceuticals Ltd (ASX:BOT).

Mr Callahan has worked as investment director for two venture capital firms investing in life sciences and other sectors. He was General Manager and General Counsel with an ASX listed patent licensing company where he was responsible for licensing programs that have generated over $120 million in revenue.

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

The Board (in the absence of Mr Callahan) supports the re-election of Mr Callahan.

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

4. Resolution 4 – Ratification of issue of Shares to various sophisticated and professional investors under ASX Listing Rule 7.1

On 7 December 2016, the Company announced a placement to sophisticated investors of 10 million ordinary shares at an issue price of $0.40 per share. The purpose of the issue was to progress the Company’s portfolio of products and for working capital. The placement was completed on 13 December 2016 and raised $4 million.

Listing Rule 7.1 broadly provides that a company may issue, without shareholder approval, Equity Securities up to 15% of its issued capital in any 12 month period.

Listing Rule 7.4 permits the ratification of previous issues of securities made without prior Shareholder approval, provided the issue did not breach the 15% threshold set by Listing Rule 7.1. The effect of the ratification is to restore the Company's maximum discretionary power to issue further Shares up to 15% of the issued capital of the Company without requiring Shareholder approval.

Resolution 4 seeks ratification under Listing Rule 7.4 of the issue of 1,667,500 Shares that were made on 13 December 2016 in order to restore the ability of the Company to issue further Equity Securities within the 15% limit during the next 12 months.

The following information in relation to the Shares is provided to Shareholders for the purposes of Listing Rule 7.5:

(a) 1,667,500 Shares were issued;
(b) the Shares were issued at an issue price of $0.40 each;
(c) the Shares issued were fully paid ordinary Shares in the capital of the Company and rank equally in all respects with the existing fully paid ordinary Shares on issue;
(d) the Shares were issued to various sophisticated and professional investors, all of whom were unrelated parties of the Company; and
(e) the intended use of funds raised from the issue was to progress the Company’s portfolio of products and for working capital purposes.

The Chairman intends to exercise all undirected proxies in favour of Resolution 4.

5. Resolution 5 – Ratification of issue of Shares to various sophisticated and professional investors under ASX Listing Rule 7.1A

Listing Rule 7.1A provides that in addition to issues permitted without prior shareholder approval under Listing Rule 7.1, an entity that is eligible and obtains shareholder approval under Listing Rule 7.1A may issue or agree to issue during the period the approval is valid up to a number of equity securities which represent 10% of the number of fully paid ordinary securities on issue at the commencement of that 12 month period as adjusted in accordance with the formula in Listing Rule 7.1A.

Shareholders approved the 10% additional placement capacity under Listing Rule 7.1A at the Company’s 2016 annual general meeting held on 28 November 2016.

Listing Rule 7.4 permits the ratification of previous issues of securities made without prior Shareholder approval, provided the issue did not breach the 10% threshold set by Listing Rule 7.1A. The effect of the ratification is to restore the Company's maximum discretionary power to issue further Shares up to 10% of the issued capital of the Company without requiring Shareholder approval.

Resolution 5 seeks ratification under Listing Rule 7.4 of the issue of 8,332,500 Shares that were made on 13 December 2016 in order to restore the ability of the Company to issue further Equity Securities within the 10% limit during the relevant period.

The following information in relation to the Shares is provided to Shareholders for the purposes of Listing Rule 7.5:

(a) 8,332,500 Shares were issued;
(b) the Shares were issued at an issue price of $0.40 each;
(c) the Shares issued were fully paid ordinary Shares in the capital of the Company and rank equally in all respects with the existing fully paid ordinary Shares on issue;
(d) the Shares were issued to various sophisticated and professional investors, all of whom were unrelated parties of the Company; and
(e) the intended use of funds raised from the issue was to progress the Company’s portfolio of products and for working capital purposes.

The Chairman intends to exercise all undirected proxies in favour of Resolution 5.

6. Resolution 6 – Ratification of issue of options to Argonaut

Listing Rule 7.1 broadly provides that a company may issue without shareholder approval Equity Securities up to 15% of its issued capital in any 12 month period.

The Company and an associated entity of Argonaut entered into a lead manager mandate agreement (“ Mandate” ) under which the associated entity of Argonaut was appointed to provide lead manager services to the Company in relation to the placement.

Under the Mandate, the Company agreed to pay a 5% capital raising fee on the total amount raised in the placement.

In addition under the Mandate, the Company agreed to issue, on completion of the placement, 600,000 Options, exercisable on or before the date that is 3 years after their issue at an exercise price of $0.55 per Option, at an issue price of $0.0001 per Option. These Options were issued to Argonaut on 13 December 2016.

Resolution 6 seeks ratification under Listing Rule 7.4 of the issue of 600,000 Options that were made on 13 December 2016 in order to restore the ability of the Company to issue further Equity Securities within the 15% limit during the next 12 months.

The following information in relation to the Shares is provided to Shareholders for the purposes of Listing Rule 7.5:

(a) 600,000 Options were issued;
(b) the issue price was $0.00001 per Option;
(c) the Options were issued to Argonaut which is not a related party of the Company;
(d) the Options were issued on the terms and conditions set out in Schedule 2; and
(e) the Company used the funds raised from the Options towards working capital. The Chairman intends to exercise all undirected proxies in favour of Resolution 6.

7. Resolution 7 – Approval of 10% Placement Facility

7.1 General

Listing Rule 7.1A enables eligible entities to issue Equity Securities up to 10% of its issued share capital 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 $31.5 million as at 27 September 2017 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 7.2(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 7 is in the best interests of the Company and unanimously recommend that Shareholders vote in favour of this Resolution.

The Chairman intends to exercise all undirected proxies in favour of Resolution 7.

7.2 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, unquoted Options and unquoted Warrants.

Based on the number of shares on issue at the date of this Notice, the Company will have 101,479,437 Shares on issue and therefore, subject to Resolutions 4-6 being passed and Shareholder approval being obtained under Resolution 7, 10,147,944 of Equity Securities will be permitted to be issued in accordance with Listing Rule 7.1A.

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:

(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 fully paid 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 fully paid 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 fully paid Shares under the entity's 15% placement capacity without Shareholder approval;
(D) less the number of fully paid Shares cancelled in the 12 months.

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

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 7.2(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; or
(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),

( 10% Placement Period ).

7.3 Listing Rule 7.1A

The effect of passing Resolution 7will 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 67 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.

7.4 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 67 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.

Variable “A” in Listing Rule 7.1A.2			Dilution
		$0.155 50% decrease in Issue Price	$0.31 Issue Price	$0.62 100% increase in Issue Price
Current Variable “A” 101,479,437 Shares	Shares issued	10,147,944	10,147,944	10,147,944
	Funds raised	$1,572,931	$3,145,863	$6,291,725
	Dilution effect	10%	10%	10%
50% increase in current Variable “A”	Shares issued	15,221,916	15,221,916	15,221,916

152,219,156 Shares	Funds raised	$2,359,397	$4,718,794	$9,437,588
	Dilution effect	10%	10%	10%
100% increase in current Variable “A” 202,958,874 Shares	Shares issued	20,285,887	20,285,887	20,285,887
	Funds raised	$3,145,863	$6,291,725	$12,583,450
	Dilution effect	10%	10%	10%

The table has been prepared on the following assumptions:

(i) That Resolutions 4-6 are passed by Shareholders. There are currently 101,479,437 existing Shares on issue as at the date of this Notice. On the basis that Resolutions 4-6 are passed variable A is 101,479,437.
(ii) The Company issues the maximum number of Equity Securities available under the 10% Placement Facility.
(iii) 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.
(iv) 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%.
(v) 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.
(vi) 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.
(vii) The issue of Equity Securities under the 10% Placement Facility consists only of Shares.
(viii) The issue price is $0.31 being the closing price of the Shares on ASX on 27 September 2017.
(c) The Company will only issue the Equity Securities during the 10% Placement Period. As noted above, the approval under Resolution 7 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).
(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 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 resources assets or investments 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 dilutionary effect of the issue of the Equity Securities on existing Shareholders at the time of the proposed issue of Equity Securities;
(iii) the effect of the issue of the Equity Securities on the control of the Company;
(iv) the financial situation and solvency of the Company; and
(v) advice from 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.

Further, if the Company is successful in acquiring new resources assets or investments, it is likely that the allottees under the 10% Placement Facility will be the vendors of the new resources assets or investments.

The Company last obtained approval from its Shareholders pursuant to Listing Rule 7.1A at its 2016 annual general meeting held on 28 November 2016 ( Previous Approval ). Since the Previous Approval, the Company has issued 8,332,500 Equity Securities pursuant to the Previous Approval. During the 12 month period preceding the date of the Meeting, being on and from 15 November 2016, the Company has issued a total of 10,000,000 Shares and 1,330,000 unquoted Options (which represents approximately 9.89% of the total diluted number of Equity Securities on issue in the Company on 15 November 2016, which was 114,514,174. Further details of the issues of Equity Securities by the Company during the 12 month period preceding the date of the Meeting are set out in Schedule 4.

(f) A voting exclusion statement is included in the Notice. At the date of the Notice, the Company has not determined its allocation policy for the issue of Equity Securities under the 10% Placement Capacity (other than noting the persons to whom shares will be issued will be determined on a case by case basis, having regard to the factors outlined in paragraph (e) above), nor has it 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.

8. Resolution 8 – Adoption of Orthocell Limited Employee Equity Incentive Plan

8.1 Introduction

Resolution 8 seeks Shareholder approval for the establishment of the Orthocell Limited Employee Equity Incentive Plan (“ Equity Plan ”) for the purposes of the Corporations Act and for all other purposes.

Resolution 8 is an ordinary resolution.

The Directors considered that it was desirable to establish an employee incentive scheme pursuant to which employees and Directors may be offered the opportunity to be granted Awards in order to increase the range of potential incentives available to them and to strengthen links between the

Company and its employees and Directors. Accordingly, the Directors have adopted the Equity Plan.

The aim of the Equity Plan is to allow the Board to assist in the reward, retention and motivation of eligible Employees and to align their interests more closely with the interests of Shareholders. Eligible Employees are full-time or permanent part-time employees of the Company or a related body corporate (which includes Directors, the Company Secretary and officers), or such other persons as the Board determines.

This is the first approval sought under Listing Rule 7.2 Exception 9(b) with respect to this Equity Plan. No securities have previously been issued under this Equity Plan.

At the date of this Notice, 6,250,000 incentive options have been issued under the Company’s previous Employee Option Plan (as adopted at the Company’s 2014 annual general meeting held on 24 November 2014).

Shareholder approval is required if the issue of Awards pursuant to the Equity Plan is to fall within the exception to the calculation of the 15% limit imposed by Listing Rule 7.1 on the number of securities which may be issued without Shareholder approval. Accordingly, Shareholder approval is sought for the purposes of Listing Rule 7.2 exception 9(b) which provides that Listing Rule 7.1 does not apply to an issue of securities under an employee incentive scheme that has been approved by the holders of ordinary securities within three years of the date of issue.

Prior Shareholder approval will be required before any Director or related party of the Company can participate in the Equity Plan.

8.2 Summary of the Equity Plan

The key features of the Equity Plan are as follows:

(g) The Board will determine:
(i) the number of Awards (shares, options or performance rights) to be granted to eligible persons (or their permitted nominated party); and
(ii) the terms of the Awards including any vesting conditions, expiry date and the exercise price of the securities,

in its sole discretion.

(h) The Awards must not be dealt with unless they have vested, with the prior written approval of the Board and provided that the transfer complies with the Corporations Act.
(i) Subject to the Corporations Act and the Listing Rules, the Board will have the power to amend the Equity Plan as it sees fit.
(j) The Board may determine, in its sole and absolute discretion, how unvested Awards will be treated in circumstances where there is a change of control event.

A detailed overview of the terms of the Equity Plan is attached in Schedule 3

A voting exclusion statement has been included for the purpose of Resolution 8.

The Chairman intends to exercise all undirected proxies in favour of Resolution 8.

9. Action to be taken by Shareholders

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

10. Proxies

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.

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 in Section 7.1.

10% Placement Period has the meaning given in Section 7.2.

Accounting Standards has the meaning given to that term in the Corporations Act.

Annual Report means the annual financial report of the Company for the year ended 30 June 2017.

Argonaut means Argonaut Investments Pty Ltd (ACN 114 113 129) < Argonaut Investment Trust No 3 A/C>.

Associate has the meaning given in sections 12 and 16 of the Corporations Act. Section 12 is to be applied as if paragraph 12(1)(a) included a reference to the Listing Rules and on the basis that the Company is the “designated body” for the purposes of that section. A related party of a director or officer of the Company or of a Child Entity of the Company is to be taken to be an associate of the director or officer unless the contrary is established

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

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

Board means the board of Directors of the Company.

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

Child Entity has the meaning given to that term in the Listing Rules.

Closely Related Party has the meaning given to that term in the Corporations Act.

Company or Orthocell Limited means Orthocell Limited ACN 118 897 135.

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

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 2017.

Employee means a person who is a full-time or permanent part-time employee or officer or director or company secretary of the Company or a related body corporate, or such other person as the Board determines.

Equity Plan means the Orthocell Limited Employee Equity Incentive Plan.

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

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

Key Management Personnel has the meaning given to that term in the Accounting Standards.

Listing Rules means the listing rules of ASX.

Meeting or Annual General Meeting means the annual general meeting convened by this Notice.

Notice means this notice of annual general meeting.

Option means an option to acquire a Share.

Performance Right means a conditional right issued to a participant under the Equity Plan to receive a Share, subject to the terms of offer and the Equity Plan.

Permitted Nominee means a nominated associate (as defined section 318 of the Income Tax Assessment Act 1936) of an Employee in whose favour the Board, at its discretion, has resolved to grant securities under the Equity Plan.

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.

Restricted Voter means Key Management Personnel and their Closely Related Parties as at the date of the Meeting.

Schedule means a schedule to the Notice.

Section means a section of the Explanatory Memorandum.

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

Shareholder means a shareholder of the Company.

Spill Meeting has the meaning given in Section 1.

Spill Resolution has the meaning given in Section 1.

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.

Warrants means Warrants exercisable at $0.58 on or before 19 November 2020.

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

Schedule 2 - Terms and Conditions of the Argonaut Options

(a) Entitlement

Subject to these terms and conditions, the Options entitle the holder to subscribe for one fully paid ordinary share in the capital of Orthocell upon the exercise of each Option.

(b) Exercise Price

The exercise price of each Option is $0.55 (Exercise Price).

13 December 2019

(d) Vesting Date and Exercise Period

The Options vest immediately on issue and are exercisable at any time until the Expiry Date.

(e) Notice of Exercise

The Options may be exercised by notice in writing to the Company and payment of the Exercise Price for each Option being exercised. Any notice of exercise of an Option received by the Company will be deemed to be a notice of the exercise of that Option as at the date of receipt. Cheques shall be in Australian currency made payable to the Company and crossed "Not Negotiable".

(f) Shares Issued on Exercise
Shares issued on exercise of the Options rank equally with the fully paid ordinary Shares of the Company.
(g) Quotation of Shares on Exercise

Application will be made by the Company to ASX for official quotation of the Shares issued upon the exercise of the Options subject to escrow periods imposed by ASX.

(h) Timing of issue of Shares
After an Option is validly exercised, the Company must as soon as possible:
(i) issue the Share; and
(ii) seek quotation of the Shares on ASX, if the Company is listed on ASX at that time subject to escrow periods imposed by ASX.

(i) Participation in New Issues

There are no participation rights or entitlements inherent in the Options and the holder will not be entitled to participate in new issues of capital offered to Shareholders during the term of the Options.

However, the Company will ensure that for the purposes of determining entitlements to any such issue, the record date will be at least six business days after the issue is announced. This will give the holder of Options the opportunity to exercise their Options prior to the date for determining entitlements to participate in any such issue.

(j) Adjustment for Bonus Issues of Shares

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

(i) the number of Shares which must be issued on the exercise of an Option will be increased by the number of Shares which the Option holder would have received if the Option holder had exercised the Option before the record date for the bonus issue; and
(i) no change will be made to the Exercise Price.

(k) Adjustment for Rights Issue

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

– New exercise price = O – E [P (S+D)]

N+1

O = the old Exercise Price of the Option.
E = the number of underlying Shares into which one (1) Option is exercisable.
P = average market price per Share weighted by reference to volume of the underlying Shares during the 5 trading days ending on the day before the ex-rights date or ex entitlements date.
S = the subscription price of a Share under the pro rata issue.
D = the dividend due but not yet paid on the existing underlying Shares (except those to be issued under the pro rata issue).
N = the number of Shares with rights or entitlements that must be held to receive a right to one (1) new share.

(l) Adjustments for Reorganisation

If there is any reconstruction of the issued share capital of the Company, the rights of the Option holder may be varied to comply with the ASX Listing Rules which apply to the reconstruction at the time of the reconstruction.

(m) Quotation of Options

The Options will be unlisted Options. If listed on ASX no application for quotation of the Options will be made by the Company.

(n) Transfer of Options and Shares issued upon exercise of Options

The Option holder must not offer any of the Options, or the Shares issued on exercise of the Options, for sale to any person (Secondary Offer) within 12 months from the respective date of issue of those Options or Shares (as applicable) unless:

(i) the Secondary Offer does not require disclosure as a result of sections 707 or 708 of the Corporations Act (excluding section 708(1) of the Corporations Act);
(i) the Secondary Offer does not require disclosure as a result of section 708A or ASIC Class Order 04/671 or any variation or replacement of such Class Order;
(ii) the Secondary Offer is made pursuant to a disclosure document in accordance with the Corporations Act; or
(iii) the Secondary Offer is received by a person outside Australia.

Schedule 3 - Summary of the Employee Equity Incentive Plan

1 Awards

Under the Plan, Participants (as defined below) will be granted incentive awards ( Awards ) which may comprise:

(a) shares, issued at a price (if any) determined by the Board in their sole and absolute discretion, subject to any vesting conditions ( Shares ); and/or
(b) options, issued at a price (if any) determined by the Board in their sole and absolute discretion, each to subscribe for one Share on payment of an exercise price (if any) determined by the Board in their sole and absolute discretion, and subject to any vesting conditions ( Options ); and/or
(c) performance rights, issued at a price (if any) determined by the Board in their sole and absolute discretion, each being a conditional right to subscribe for one Share on payment of an exercise price (if any) determined by the Board in their sole and absolute discretion, and subject to the satisfaction of any vesting conditions ( Performance Rights ).

2 Eligibility

At the discretion of the Board, a person who is:

(a) a full time or part time employee or non-executive director of the Company or an associated body corporate (being a body corporate that is a related body corporate of the Company, a body corporate that has voting power in the Company of not less than 20% or a body corporate in which the Company has voting power of not less than 20%) ( Group Company );
(b) an individual who is or might reasonably be expected to be engaged to work the number of hours that are the pro rata equivalent of 40% or more of a comparable full time position with a Group Company; or
(c) an individual or company with whom a Group Company has entered into a contract for the provision of services under which the individual or a director or their spouse performs work for a Group Company where the individual who performs the work under or in relation the contract is, or might reasonably be expected to be, engaged to work the number of hours that are the pro-rata equivalent of 40% or more of a comparable full-time position with a Group Company,

is permitted to participate in the Plan.

People eligible to participate in the Plan are called “ Eligible Employees ”. The Board may permit an Award the subject of an offer to be issued to another party nominated by an Eligible Employee (for example, the Eligible Employee’s (a) immediate family member; (b) a corporate trustee of a self-managed superannuation fund (within the meaning of the Superannuation Industry (Supervision) Act 1993) where the Eligible Employee is a director of the trustee; or (c) a company whose members are no-one other than the Eligible Employee or their immediate family members) ( Nominated Party ).

A “ Participant ” is an Eligible Employee or Nominated Party to whom an Award has been granted.

3 Payment for Awards

Awards can be issued at a price (if any) determined by the Board in their sole and absolute discretion.

4 Limits on number of Awards granted

Under the Plan rules, where an offer is made under the Plan in reliance on ASIC Class Order 14/1000 (or any amendment or replacement of it) the Board must, at the time of making the offer, have reasonable grounds to believe that the total number of Shares (or, in respect of Options or Performance Rights, the total

number of Shares which would be issued if those Options or Performance Rights were exercised) will not exceed 5% of the total number of Shares on issue when aggregated with the number of Shares issued or that may be issued as a result of offers made at any time during the previous 3 year period under the Plan or any other employee incentive scheme covered by the Class Order or an ASIC exempt arrangement of a similar kind to an employee incentive scheme.

This limit is in accordance with the current ASIC Class Order which provides disclosure, licensing, advertising and hawking relief for employee incentive schemes, and which the Company may seek to rely on in connection with making offers under the Plan.

5 Entitlements of Participants

(a) Notice of meeting

Unless otherwise resolved by the Board when it makes an offer, and subject to the terms of issue, a Participant is entitled to notice of a meeting of the Shareholders of the Company and may exercise (whether in person or by proxy) any voting rights attaching to any Shares registered in the Participant's name which were the subject of the offer.

(b) Dividends

The Board may determine, at the time of an offer of Shares, whether the Participant is entitled to receive any dividends declared or paid by the Company on unvested Shares (including whether any such dividends are to be held in escrow until the Shares are fully vested).

Participants who hold Options or Performance Rights are not entitled to receive any dividends declared by the Company. No adjustment will be made to the number of Performance Rights or Options granted to a Participant under the Plan if dividends or other distributions are paid on the Shares prior to their vesting or exercise.

(c) Changes in capital

Unless otherwise resolved by the Board when it makes an offer, a Participant who holds Shares has the same entitlement as any other Shareholder to participate in a bonus issue or rights offer, provided that if the Shares are unvested and/or have any restrictions on sale imposed on them, any Shares issued to a Participant under the bonus issue or rights offer will be subject to the Plan as if those shares were Shares issued under the offer made to the Participant.

Options or Performance Rights do not confer on the Participant the right to participate in new issues of Shares by the Company.

In the event of a capital reconstruction, subject to any provision in the Listing Rules, the Board may adjust any or all of the number of Shares, Options or Performance Rights issued pursuant to the offer to a Participant as the Board deems appropriate. If there is a reorganisation of capital, the rights of a Participant will be changed to the extent necessary to comply with the Listing Rules.

If the Company makes a pro rata issue (except a bonus issue) of Shares to Shareholders the exercise price of Options and Performance Rights will be reduced in accordance with the Listing Rules.

If the Company makes a bonus issue of Shares to Shareholders the number of underlying Shares over which the Option or Performance Right is exercisable will be increased by the number of Shares that would have been received if the relevant Option or Performance Right had been exercised before the record date for the bonus issue. No adjustment will be made to the exercise price.

If a resolution for a voluntary winding up is proposed, the Board may give notice to Participants providing a period to exercise Options or Performance Rights, subject to the relevant vesting conditions.

6 Dealing, vesting and exercise

(a) Dealing

Participants must not dispose of, grant (or purport to grant) any security interest in or over, or otherwise deal with (or purport to dispose or deal with) an Award unless:

(i) it is in compliance with the terms of the Share offer and any Share vesting conditions;
(ii) in respect of Options and Performance Rights, the prior consent of the Board is obtained (which consent may impose such terms and conditions on such assignment, transfer, novation, encumbrance or disposal as the Board sees fit in its sole and absolute discretion) or such assignment or transfer occurs by force of law upon the death of a Participant to the Participant's legal personal representative.

While the Shares are subject to any restrictions, the Board may do such things it considers necessary and appropriate to enforce the restrictions, including but not limited to imposing a holding lock on the Shares during the relevant restriction period.

(b) Vesting

Awards only vest if the applicable vesting conditions are satisfied, waived by the Board or are deemed to have been satisfied under the Plan. The vesting conditions are determined prior to the granting of such Awards by the Company.

Vested Options and Performance Rights can only be exercised during the exercise period specified in the invitation to participate in the Plan.

The exercise price per Share in respect of an Option or Performance Right granted pursuant to the Plan will be determined by the Board. Upon exercise, one Share in the Company will be issued to the Participant for each exercised Option or converted Performance Right.

Options and Performance Rights will expire on the date that is two years after the date of issue, or such other period determined by the Board or the Plan.

7 Lapse of Awards

If a Participant resigns (other than in circumstances of redundancy, mental illness, total and permanent disability, terminal illness or death), is dismissed from office for cause or poor performance, or in another circumstance determined by the Board:

(a) unvested Shares will be forfeited;
(b) unvested Options and Performance Rights will lapse;
(c) vested Options and Performance Rights that have not been exercised will lapse on the date of cessation of employment or office,
unless the Board determines different treatment is warranted (subject to compliance with the Listing Rules and the Corporations Act).

If a Participant’s employment or engagement with a Group Company ceases in any other circumstances, unless the Board determines different treatment is warranted (subject to compliance with the Listing Rules and the Corporations Act):

(a) unvested Shares will be forfeited;
(b) unvested Options and Performance Rights will lapse; and

(c) vested Options and Performance Rights that have not been exercised will continue in force and remain exercisable, until the last exercise date determined by the Board or the Plan.

8 Forfeiture of Shares

Unvested Shares will be forfeited on the earlier of:

(a) the Board determining any applicable vesting condition has not been, or is not capable of being, satisfied, reached or met;
(b) the Shares being forfeited under the Plan provisions dealing with cessation of employment, change of control, breach, fraud or misconduct; or
(c) unless the Board determines otherwise, the Participant purporting to deal with the Shares in breach of the vesting conditions and the Plan or enter into an arrangement to affect their economic exposure to unvested Shares where restricted by applicable law.

The Company must:

(a) sell forfeited Shares in the ordinary course of trading on ASX;
(b) buy back and cancel the forfeited Shares; or
(c) deal with the forfeited Shares in any other manner determined by the Board from time to time.

No consideration or compensation is payable to a Participant for or in relation to the forfeiture of Shares under the Plan.

9 Breach, fraud or misconduct

If the Board determines that a Participant has:

(a) been dismissed or removed where a Group Company was entitled to do so without notice;
(b) been indicted for an offence under the Corporations Act;
(c) had civil judgement entered against them;
(d) committed fraud, defalcation or gross misconduct; or
(e) materially breaches their duties or obligations,

in connection with a Group Company, or has done an act which brings a Group Company into disrepute, the Board may determine that:

(a) unvested Shares will be forfeited;
(b) unvested Options and Performance Rights will lapse.

10 Change of control events

On the occurrence of a change of control event (as defined in the Plan, which includes an unconditional takeover offer, a court approved scheme of arrangement, a merger resulting in the current Shareholders being entitled to 50% or less of the shares of the merged entity, a Group Company agreeing to sell a majority of its business or assets or a determination of the Board that control of the Company has or is likely to change), the Board may in its sole and absolute discretion determine how unvested Awards will be treated, including but not limited to:

(a) determining that all or a portion of unvested Awards will vest; and/or
(b) reducing or waiving vesting conditions.

11 Tax Treatment

Where the Company grants Options that are fully vested but there are restrictions on the Eligible Employee’s ability to dispose of those Options, Subdivision 83A-C of the Income Tax Assessment Act 1997 (Cth) applies to such a grant, subject to the requirements of that Act.

12 Amendments to terms of exercise or the Plan

The Board may vary the terms of exercise of Options or Performance Rights, and may reduce or waive vesting conditions. However, no variation to the terms of exercise of an Option or Performance Right will be made without the consent of the Participant if it would have a material prejudicial effect on them, unless introduced primarily to comply with the law, to correct manifest error or to enable regulatory compliance.

The Board may amend the terms of the Plan, provided that rights or entitlements granted before the amendment shall not be reduced or adversely affected without the prior written approval of the affected Participant.

13 Clawback

If the Board becomes aware of a material misstatement in the Company’s financial statements (or some other event occurs), which means that the Award vesting conditions in respect of vested Awards should not have been satisfied, then the Participant will cease to be entitled to those vested Awards and the Board may:

(a) cancel those vested Awards;
(b) require the Participant to pay the Company the after tax value of those vested Awards (if vested Options or Performance Rights have been converted into Shares); or
(c) adjust the fixed remuneration, incentives or participation in the Equity Plan of the relevant Participant in the current or any future year to take account of the after tax value of the vested Awards.

Schedule 4 - Issue of Equity Securities since 15 November 2016

Date	Number of Equity Securities	Class of Equity Securities and summary of terms	Names of recipients or basis on which recipients determined	Issue price of Equity Securities and discount to market price on the trading day prior to the issue	Form of Consideration
Issue 13 December 2016	10,000,000	Shares1	Issued to sophisticated and institutional investors	$0.40 per ordinary share (Share price on day of issue $0.44)	Amount raised = $4,000,000 Amount spent =$907,000 Expended on: Costs of offer $256,000 Research and Development $651,000 Funds not yet expended $3,093,000 Forecast to be expended as following: Research and Development $2,161,000 Corporate, Administration and other working capital expenses $932,000
Issue 13 December 2016	490,000	Options exercisable at $0.648 on or before 13 December 2019	Issued under the Orthocell Limited Employee Option Acquisition Plan	Nil	Valuation at time of issue $0.164 Current value $0.065.2
Issue 13 December 2016	600,000	Options exercisable at $0.55 on or before 13 December 2019	Issued to Argonaut	$0.00001 Discount of 99.9% to value of option at time of issue	Amount Raised $60. Expended on Working Capital
Issue 22 March 2017	40,000	Options exercisable at $0.594 on or before 22 March 2020	Issued under the Orthocell Limited Employee Option Acquisition Plan	Nil	Valuation at time of issue $0.14 Current value $0.063.2
Issue 19 June 2017	200,000	Options exercisable at $0.51 on or before 19 June 2020	Issued under the Orthocell Limited Employee Option Acquisition Plan	Nil	Valuation at time of issue $0.137 Current value $0.101.2

Notes :

Shares are fully paid ordinary shares in the Company ranking equally in all respect with the existing issued Shares in the Company.
Value of options determined using the Black-Scholes methodology.

AGM Registration Card

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✓ ✓ ✓

Complete the form overleaf in accordance with the instructions set out below.

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https://automic.com.au/
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AI assistant

ORTHOCELL LIMITED — AGM Information 2017

65477_rns_2017-10-12_e713b7d7-371c-43fe-b94c-96e1106031e2.pdf

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

NOTICE OF ANNUAL GENERAL MEETING AND EXPLANATORY MEMORANDUM

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

NOTICE OF ANNUAL GENERAL MEETING

AGENDA

Financial Statements and Reports

1. Resolution 1 – Non Binding Resolution to adopt Remuneration Report

Voting Exclusion

2. Resolution 2 – Re-Election of Professor Lars Lidgren as a Director

3. Resolution 3 – Re-Election of Mr Matthew Callahan

4. Resolution 4 – Ratification of issue of Shares to various sophisticated and professional investors under ASX Listing Rule 7.1

Voting exclusion statement:

5. Resolution 5 – Ratification of issue of Shares to various sophisticated and professional investors under ASX Listing Rule 7.1A

Voting exclusion statement:

6. Resolution 6 – Ratification of issue of Options to Argonaut

Voting exclusion statement:

7. Resolution 7 – Approval of 10% Placement Facility

Voting exclusion statement:

8. Resolution 8 - Adoption of Orthocell Limited Employee Equity Incentive Plan

Voting exclusion statement:

OTHER BUSINESS

How to vote

Voting in person (or by attorney)

Voting by a corporation

Voting by proxy

Shareholders who are entitled to vote

EXPLANATORY MEMORANDUM

Introduction

Financial Statements and Reports

1. Resolution 1 – Non Binding Resolution to adopt Remuneration Report

2. Resolution 2 – Re-election of Professor Lars Lidgren as a Director

3. Resolution 3 – Re-election of Mr Matthew Callahan as a Director

4. Resolution 4 – Ratification of issue of Shares to various sophisticated and professional investors under ASX Listing Rule 7.1

5. Resolution 5 – Ratification of issue of Shares to various sophisticated and professional investors under ASX Listing Rule 7.1A

6. Resolution 6 – Ratification of issue of options to Argonaut

7. Resolution 7 – Approval of 10% Placement Facility

7.1 General

7.2 Description of Listing Rule 7.1A

(A x D) – E

( 10% Placement Period ).

7.3 Listing Rule 7.1A

7.4

Specific information required by Listing Rule 7.3A

8. Resolution 8 – Adoption of Orthocell Limited Employee Equity Incentive Plan

8.1 Introduction

8.2 Summary of the Equity Plan

9. Action to be taken by Shareholders

10. Proxies

Schedule 1 - Definitions

Schedule 2 - Terms and Conditions of the Argonaut Options

(a) Entitlement

(i) Participation in New Issues

(j) Adjustment for Bonus Issues of Shares

(k) Adjustment for Rights Issue

– New exercise price = O – E [P (S+D)]

(l) Adjustments for Reorganisation

(m) Quotation of Options

Schedule 3 - Summary of the Employee Equity Incentive Plan

1 Awards

2 Eligibility

3 Payment for Awards

4 Limits on number of Awards granted

5 Entitlements of Participants

(a) Notice of meeting

(b) Dividends

(c) Changes in capital

6 Dealing, vesting and exercise

(b) Vesting

7 Lapse of Awards

8 Forfeiture of Shares

9 Breach, fraud or misconduct

10 Change of control events

11 Tax Treatment

12 Amendments to terms of exercise or the Plan

13 Clawback

Schedule 4 - Issue of Equity Securities since 15 November 2016

Holder Number:

ORTHOCELL LIMITED AGM Information 2017