QORIA LIMITED - Proxy Solicitation & Information Statement 2016

FAMILY ZONE CYBER SAFETY LIMITED

ACN 167 509 177

NOTICE OF GENERAL MEETING

TIME : 11.00am (WST) DATE : 13 December 2016

PLACE : The Park Business Centre, 45 Ventnor Avenue, West Perth WA 6005

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

Should you wish to discuss the matters in this Notice of Meeting please do not hesitate to contact the Company Secretary, Emma Wates on (+61 8) 9322 7600.

CONTENTS PAGE

Notice of General Meeting (setting out the proposed resolutions)	4
Explanatory Statement (explaining the proposed resolutions)	6
Glossary	13
Schedule 1 – Terms and Conditions of Performance Shares	15
Proxy Form	(attached)
IMPORTANT INFORMATION

Time and place of Meeting

The General Meeting of the Shareholders to which this Notice of Meeting relates will be held at 11.00am (WST) on 13 December 2016 at The Park Business Centre, 45 Ventnor Avenue, West Perth WA 6005.

Your vote is important

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

Voting in person

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

Voting by proxy

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

In accordance with section 249L of the Corporations Act, members are advised that:

each member has a right to appoint a proxy;
the proxy need not be a member of the Company; and
a member who is entitled to cast 2 or more votes may appoint 2 proxies and may specify the proportion or number of votes each proxy is appointed to exercise. If the member appoints 2 proxies and the appointment does not specify the proportion or number of the member’s votes, then in accordance with section 249X(3) of the Corporations Act, each proxy may exercise one‐ half of the votes.

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

if proxy holders vote, they must cast all directed proxies as directed; and
any directed proxies which are not voted will automatically default to the Chair, who must vote the proxies as directed.

Further details on these changes are set out below.

Proxy vote if appointment specifies way to vote

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

the proxy need not vote on a show of hands, but if the proxy does so, the proxy must vote that way (i.e. as directed); and
if the proxy has 2 or more appointments that specify different ways to vote on the resolution – the proxy must not vote on a show of hands; and
if the proxy is the chair of the meeting at which the resolution is voted on – the proxy must vote on a poll, and must vote that way (i.e. as directed); and
if the proxy is not the chair – the proxy need not vote on the poll, but if the proxy does so, the proxy must vote that way (i.e. as directed).

Transfer of non‐chair proxy to chair in certain circumstances

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

an appointment of a proxy specifies the way the proxy is to vote on a particular resolution at a meeting of the Company's members; and
the appointed proxy is not the chair of the meeting; and
at the meeting, a poll is duly demanded on the resolution; and
either of the following applies:
the proxy is not recorded as attending the meeting;
the proxy does not vote on the resolution,

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

BUSINESS OF THE GENERAL MEETING

Notice is given that the General Meeting of Shareholders will be held at 11.00am (WST) on 13 December 2016 at The Park Business Centre, 45 Ventnor Avenue, West Perth WA 6005.

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

The Directors have determined pursuant to Regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the General Meeting are those who are registered Shareholders at 4:00pm (WST) on 11 December 2016.

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

AGENDA

ORDINARY BUSINESS:

1. RESOLUTION 1 – APPROVAL TO ISSUE CONSIDERATION SHARES

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 7.1 and for all other purposes, approval is given for the Company to issue up to 1,000,000 Shares ( Consideration Shares ) to Tesserent (or its nominee) in part consideration for the Acquisition on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion: The Company will disregard any votes cast on this Resolution by Tesserent (and its nominee), any associates of Tesserent and any person who might obtain a benefit, except a benefit solely in the capacity as a Shareholder, if this Resolution is passed. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form, or, it is cast by the person chairing the Meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

2. RESOLUTION 2 – APPROVAL TO ISSUE SMYTH PLACEMENT SHARES

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 7.1 and for all other purposes, approval is given for the Company to issue up to 3,333,333 Shares to Tracy Smyth ATF the Tracy Consulting Trust (or its nominee) at an issue price of $0.30 to raise up to $1,000,000 on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion: The Company will disregard any votes cast on this Resolution by Tracy Smyth ATF the Tracy Consulting Trust (and its nominee), Mr Robert Smyth, any associates of Tracy Smyth ATF the Tracy Consulting Trust and Mr Robert Smyth and any person who might obtain a benefit, except a benefit solely in the capacity as a Shareholder, if this Resolution is passed. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form, or, it is cast by the person chairing the Meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

3. RESOLUTION 3 – APPROVAL TO ISSUE SHARES TO TRACY SMYTH ATF THE TRACY CONSULTING TRUST

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 7.1 and for all other purposes, approval is given for the Company to issue up to 833,333 Shares to Tracy Smyth ATF the Tracy Consulting Trust in

consideration for the CASM Acquisition on the terms and conditions set out in the Explanatory Statement.”

4. RESOLUTION 4 – AUTHORITY TO ISSUE PERFORMANCE SHARES T O ROBERT SMYTH

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

“That, for the purpose of ASX Listing Rule 7.1 and for all other purposes, approval is given for the Company to issue up to 1,999,998 Performance Shares comprising 666,666 Class A Performance Shares, 666,666 Class B Performance Shares and 666,666 Class C Performance Shares to Mr Robert Smyth (or his nominee) on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion: The Company will disregard any votes cast on this Resolution by Mr Robert Smyth (and his nominee), any associates of Mr Robert Smyth and any person who might obtain a benefit, except a benefit solely in the capacity as a Shareholder, if this Resolution is passed. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form, or, it is cast by the person chairing the Meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

5. RESOLUTION 5 – AUTHORITY TO ISSUE PERFORMANCE SHARES TO NICK CONOLLY

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

“That, for the purpose of ASX Listing Rule 7.1 and for all other purposes, approval is given for the Company to issue up to 999,999 Performance Shares comprising 333,333 Class A Performance Shares, 333,333 Class B Performance Shares and 333,333 Class C Performance Shares to Mr Nick Conolly (or his nominee) on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion: The Company will disregard any votes cast on this Resolution by Mr Nick Conolly (and his nominee), any associates of Mr Nick Conolly and any person who might obtain a benefit, except a benefit solely in the capacity as a Shareholder, if this Resolution is passed. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form, or, it is cast by the person chairing the Meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

DATED: 8 NOVEMBER 2016 BY ORDER OF THE BOARD

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TIM LEVY MANAGING DIRECTOR

EXPLANATORY STATEMENT

This Explanatory Statement has been prepared for the information of the Shareholders in connection with the business to be conducted at the General Meeting to be held at 11:00am (WST) on Tuesday, 13 December 2016 at The Park Business Centre, 45 Ventnor Avenue, West Perth WA 6005.

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

1. RESOLUTION 1 – ISSUE OF CONSIDERATION SHARES

1.1 Acquisition

As announced on 8 November 2016 the Company has entered into an agreement with Tesserent to purchase all the current intellectual property ( IP ) owned and licenced by Tesserent required to operate Tesserent's "Tesserent Education" business (hereafter referred to as the Sonar/MyNet IP ) ( Acquisition Agreement ).

Refer to Section 1.2 for further details in respect to the Acquisition, the Sonar/MyNet IP technology and strategic opportunities for the Company.

1.1.1 (Consideration) In consideration for the Acquisition the Company will pay Tesserent $3,500,000 cash and 1,000,000 shares ( Consideration Shares ) as outlined below:
a) $250,000 non‐refundable cash deposit paid on execution of the Acquisition Agreement;
b) $750,000 cash paid and 1,000,000 Consideration Shares issued to Tesserent (or its nominee) following Shareholder approval at the General Meeting;
c) $500,000 cash paid on 28 February 2017; and
d) $2,000,000 cash paid on 30 May 2017 ( Final Payment ).
1.1.2 (Associated Agreements) As part of the Acquisition the Company also entered into a number of associated agreements to affect the Acquisition and the Company’s acquisition strategy. These agreements comprise:
a) A reseller and licence agreement with Tesserent pursuant to which Tesserent will act as the Company’s agent to distribute products and services associated with the Sonar/MyNet IP, which is outlined further in Section 1.3;
b) A collaboration agreement with Tesserent to collaborate in technology, marketing and promotion;
c) A sonar fork IP licence with Tesserent under which the Company will, from Completion under the Acquisition Agreement, grant Tesserent a non‐exclusive, non‐transferrable and royalty free licence in perpetuity to use the IP in the Sonar Platform to enable Tesserent to incorporate the IP contained in the Sonar Platform source code into Tesserent's other cyber security offerings;
d) Employment agreements with six current employees of Tesserent, including Nick Connolly and Robert Smyth, who will commence employment with the Company from completion of the Acquisition Agreement. Refer to Section 4.1 for further details in respect to the Shareholder approvals required under the Executive Employment Agreements;

e) Smyth Placement Agreement with Tracy Smyth ATF the Tracy Consulting Trust pursuant to which the Company has agreed, subject to Shareholder approval, to issue Tracy Smith Smyth ATF the Tracy Consulting Trust (or his nominee) up to 3,333,333 Shares at an issue price of $0.30 to raise up to $1,000,000 on or before 28 April 2017. The funds raised from the Smyth Placement are intended to be used to fund part of the Final Payment under the Acquisition Agreement. Refer to Section 2 for further details in respect to the Shareholder approvals required under the Smyth Placement Agreement;
f) A deed of guarantee and a specific security deed with PBCF Investments Pty Ltd to guarantee and secure the obligations of Tracy Smith ATF the Tracy Consulting Trust under the Smyth Placement Agreement; and
g) CASM Acquisition Agreement with Tracy Smyth ATF the Tracy Consulting Trust to acquire the CASM client software. Refer to Section 3 for further details in respect to the Shareholder approval required under the CASM Acquisition Agreement.
1.1.3 (Conditions Precedent) The Acquisition Agreement is conditional on Shareholder approval of the Acquisition.
1.1.4 (Guarantee) Tesserent's obligations under the Acquisition Agreement are guaranteed by Tesserent's parent company, Tesserent Limited.

1.2 Sonar/MyNet IP

Sonar (formally known as Blue Reef) is one of Australia’s leading cyber security platforms in use by education providers. Sonar is installed in 180 locations in some of Australia’s leading schools and is gaining traction in the United States with 47 upcoming installations.

The cyber security needs in education differ from typical businesses with complex demands around the integration of student access controls and reporting with the IC&T curriculum, pastoral care and parental reporting requirements.

In response to these demands, Tesserent has built and recently launched the innovative MyNet platform. MyNet extends the features of Sonar. It is an education focused self‐service and reporting platform.

Both Sonar and MyNet offer significant product synergies with the Company.

The acquisition of Sonar/MyNet deepens the Company’s technology to cover the full range of cyber security and safety need of schools and parents. Plans for rapid interface of these platforms with the Company are in place and deep integration over time.

The Company will be the world’s leading provider of a fully integrated “at school”, “at home” and “when mobile” cyber safety offering.

This Acquisition offers exciting short and long term product and distribution opportunities for the Company and is expected to fast‐forward sales.

The transaction immediately generates revenue for the Company through licence fees which will cover the costs taken on through the acquisition. Sales in Tesserent’s pipeline and channel activation by the Company is expected to swiftly grow the Company’s revenue.

1.3 Engagement of Tesserent as Reseller and Distributer

Tesserent is a specialist in managed cyber security. Tesserent has built its own platform for the delivery of managed cyber‐security, which it deploys for the management of its own customers

and also licenses to partners around the world to enable them to deliver effective cyber‐ security management to their customers.

Subject to completion of the Acquisiton Agreement, the Company will engage Tesserent as a global reseller and distributor of Sonar/MyNet. Under these arrangements:

(a) Tesserent offers the Sonar/MyNet platform to education clients, bundled with its managed services offerings.
(b) Tesserent will pay the Company a monthly license fee for each active installation.
(c) Tesserent appointed as the Company's exclusive agent in Australia and New Zealand, subject to performance targets.
(d) Tesserent is permitted to resell Sonar/MyNet to education clients in any market and may sign‐up sub agents.
(e) The Company's consumer offerings interfaced with and harmonised with Sonar/MyNet expected to create a compelling offer for parents of these schools.
(f) Tesserent and the Company will work together to generate consumer Family Zone Platform sign ups from schools operating Sonar/MyNet.
(g) The Company will waive license fees charged to Tesserent for Sonar/MyNet in schools where a large portion of the schools parents have a paid subscription to the Company's consumer offering.

1.4 General

Resolution 1 seeks Shareholder approval for the issue of 1,000,000 Shares for nil cash consideration as part consideration for the Acquisition.

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

The effect of Resolution 1 will be to allow the Directors to issue the Shares pursuant to the Acquisition Agreement during the period of 3 months after the Meeting (or a longer period, if allowed by ASX), without using the Company’s 15% annual placement capacity.

1.5 Technical information required by ASX Listing Rule 7.3

Pursuant to and in accordance with ASX Listing Rule 7.3, the following information is provided in relation to the Consideration Shares:

(a) the maximum number of Shares to be issued is 1,000,000 Shares;
(b) the Shares will be issued no later than 3 months after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules) and it is intended that allotment will occur on the same date;
(c) the Shares will be issued for nil cash consideration and as part consideration for the Acquisition. Accordingly, no funds will be raised as the Shares are being issued for nil cash consideration;

(d) the Shares will be issued to Tesserent (or its nominee) pursuant to the Acquisition Agreement, who will not be related parties of the Company.
(e) the Shares issued will be fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company’s existing Shares; and
(f) a voting exclusion statement is included in the Notice .

2. RESOLUTION 2 – SMYTH PLACEMENT SHARES

2.1 Background

The Company has entered into a placement agreement with Tracy Smyth ATF the Tracy Consulting Trust (a party associated with Robert Smyth) pursuant to which the Company has agreed, subject to Shareholder approval, to issue Tracy Smyth ATF the Tracy Consulting Trust (or its nominee) 3,333,333 Shares at an issue price of $0.30 to raise $1,000,000 on or before 28 April 2017 ( Smyth Placement Agreement ).

Robert Smyth is an executive of Tesserent who will commence employment with the Company as Vice President Sales following completion of the Acquisition Agreement.

The Company intends to use the $1,000,000 raised from the Smyth Placement to fund part of Final Payment under the Acquisition Agreement.

2.2 General

Resolution 2 seeks Shareholder approval for the issue of up to 3,333,333 Shares at an issue price of $0.30 to raise up to $1,000,000 ( Symth Placement ).

The effect of Resolution 2 will be to allow the Directors to issue the Shares pursuant to the Smyth Placement during the period of 3 months after the Meeting (or a longer period, if allowed by ASX), without using the Company’s 15% annual placement capacity.

2.3 Technical information required by ASX Listing Rule 7.3

Pursuant to and in accordance with ASX Listing Rule 7.3, the following information is provided in relation to the Smyth Placement:

(a) the maximum number of Shares to be issued is 3,333,333 Shares;
(b) the Company has been granted a waiver from ASX permitting it to issue the Shares pursuant to the Smyth Placement on or before 30 April 2017 (which is later than 3 months after the Meeting). It is intended that the allotment of Shares will occur on the same date, being on or before 28 April 2017 subject to the Acquisition Agreement not being terminated prior to that date. The terms of the waiver granted by ASX are outlined further in the Company's announcement of 8 November 2016;
(c) the issue price of the Shares will be $0.30 per Share;
(d) the Shares will be allotted and issued to Tracy Smyth ATF the Tracy Consulting Trust or nominee who will not be related parties of the Company;

(e) the Shares issued will be fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company’s existing Shares;
(f) the Company intends to use the funds raised from the Smyth Placement towards the Final Payment pursuant to the Acquisition Agreement; and
(g) a voting exclusion statement is included in the Notice.

3. RESOLUTION 3 – ISSUE OF S HARES TO TRACY SMYTH ATF THE TRACY CONSULTING TRUST

3.1 Background

The Company has entered into an agreement with Tracy Smyth ATF the Tracy Consulting Trust (a party associated with Robert Smyth) to acquire all the rights, titles and interests in CASM in consideration for the issue of 833,333 Shares ( CASM Acquisition Agreement ).

CASM is a client technology capable of being installed on Windows and Mac computers. CASM enables a redirection of network traffic through proxy servers.

The acquisition of CASM fills an important gap in the Company's technology stack to include client technology on windows and Apple personal computers.

Today, the Company cannot direct traffic to the Company's filters for personal computers operating on so called “un‐safe” networks. With CASM, the Company will be able extend the Company filtering to these cases.

3.2 General

Resolution 3 seeks Shareholder approval for the issue of 833,333 Shares for nil cash consideration in consideration for the acquisition of the CASM client software.

The effect of Resolution 3 will be to allow the Directors to issue the Shares pursuant to the CASM Acquisition Agreement during the period of 3 months after the Meeting (or a longer period, if allowed by ASX), without using the Company’s 15% annual placement capacity.

3.3 Technical information required by ASX Listing Rule 7.3

Pursuant to and in accordance with ASX Listing Rule 7.3, the following information is provided in relation to the proposed issue of Shares:

(a) the maximum number of Shares to be issued is 833,333 Shares;
(b) the Shares will be issued no later than 3 months after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules) and it is intended that allotment will occur on the same date;
(c) the Shares will be issued in consideration for the acquisition of the CASM client software for nil cash consideration. Accordingly no funds will be raised from the issue of Shares pursuant to Resolution 3;

(d) the Shares will be issued to Tracy Smyth ATF the Tracy Consulting Trust (or nominee), who will not be related parties of the Company.
(e) the Shares issued will be fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company’s existing Shares; and
(f) a voting exclusion statement is included in the Notice.

4. RESOLUTIONS 4 AND 5 – ISSUE OF PERFORMANCE SHARES

4.1 Background and Executive Agreements

Robert Smyth and Nick Conolly are currently employed by Tesserent and have agreed to join the Company.

My Robert Smyth is a seasoned IT sales professional, specialising in education. Mr Smyth was the founder and owner of Blue Reef (now known as Sonar) and has been the key driver of the development of MyNet.

Mr Smyth will join the Company has VP Sales taking responsibility for driving the Company's education sales through Tesserent and other resellers and the Company's consumer sales through school “activations”, retail and direct channels.

Mr Nick Conolly is a software practitioner with over 15 years of experience. Mr Conolly holds a Masters of Information Technology in Software Engineering and has been the architect of Sonar/MyNet for the last five years.

The Company has entered into executive service agreements with Robert Smyth for his role as Vice President Sales and Nick Conolly for his role as Vice President – Enterprise, Technology Development, which are conditional on, and commence from, completion of the Acquisition Agreement with Tesserent.

The Company is proposing to issue:

(a) 1,999,998 Performance Shares (comprising 666,666 Class A Performance Shares, 666,666 Class B Performance Shares and 666,666 Class C Performance Shares) to Robert Smyth; and
(b) 999,999 Performance Shares (comprising 333,333 Class A Performance Shares, 333,333 Class B Performance Shares and 333,333 Class C Performance Shares) to Nick Conolly,

as long term incentives in connection with their appointment and in part consideration for the executive services to be provided to the Company.

In addition to the above Performance Shares, under the terms of the executive service agreements between Mr Conolly and Mr Smyth the Company has agreed to issue a total of 4,000,000 Options to Mr Smyth and 2,000,000 Options to Mr Conolly under the ESOP with an exercise price of $0.30 per Option and a term of three years, which vest subject to certain revenue or customer based millstones being met associated with schools using the IP being the subject of the Acquisition Agreement. Shareholder approval for the grant of Options to Mr Conolly and Mr Smyth is not required as neither are related parties of the Company and the Options are being granted under the Company's existing ESOP.

Resolutions 4 and 5 seeks Shareholder approval pursuant to Listing Rule 7.1 for the issue of up to 1,999,998 Performance Shares to Robert Smyth and up to 999,999 Performance Shares Nick Conolly respectively.

The effect of Resolutions 4 and 5 will be to allow the Directors to issue the above Performance Shares to Mr Conolly and Mr Smyth during the period of 3 months after the Meeting (or a longer period, if allowed by ASX), without using the Company’s 15% annual placement capacity.

4.2 Technical information required by ASX Listing Rule 7.3

The following information is provided in relation to the Performance Shares for the purpose of Listing Rule 7.3:

(a) The Performance Shares will be granted to Messrs Robert Smyth and Nick Conolly (or their respective nominees). The grant of the Performance Shares to Robert Smyth and Nick Conolly is subject to their appointment as executives of the Company and completion of the Acquisition Agreement;
(b) The maximum number of securities to be issued pursuant to Resolutions 4 and 5 is 2,999,997 Performance Shares as follows:
(i) Up to 1,999,998 Performance Shares to Robert Smyth (or his nominee) comprising:
- (A) 666,666 Class A Performance Shares which are convertible into 666,666 Shares on satisfaction of Milestone A,
- (B) 666,666 Class B Performance Shares which are convertible into 4,000,000 Shares on satisfaction of Milestone B; and
- (C) 666,666 Class C Performance Shares which are convertible into 666,666 Shares on satisfaction of Milestone C.
(ii) Up to 999,999 Performance Shares to Nick Conolly (or his nominee) comprising:
- (A) 333,333 Class A Performance Shares which are convertible into 333,333 Shares on satisfaction of Milestone A,
- (B) 333,333 Class B Performance Shares which are convertible into 333,333 Shares on satisfaction of Milestone B; and
- (C) 333,333 Class C Performance Shares which are convertible into 333,333 Shares on satisfaction of Milestone C.
(c) The Performance Shares will be issued no later than 3 months after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules) and it is intended that issue of the Shares will occur on the same date;
(d) The Performance Shares will be issued for nil cash consideration and accordingly no funds will be raised from the issue;
(e) The Performance Shares have the terms and conditions outlined in Schedule 1; and
(f) A voting exclusion statement is included in the Notice.

5. ENQUIRIES

Shareholders are requested to contact Company Secretary, Emma Wates on (+ 61 8) 9322 7600 if they have any queries in respect of the matters set out in these documents.

GLOSSARY

$ means Australian dollars.

Acquisition means the proposed acquisition of the Sonar/MyNet IP from Tesserent pursuant to the Acquisition Agreement

Acquisition Agreement has the meaning set out in Section 1.1

ASIC means the Australian Securities and Investments Commission.

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

ASX Listing Rules means the Listing Rules of ASX.

Sonar/MyNet IP has the meaning set out in Section 1.2.

Board means the current board of directors of the Company.

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

CASM has the meaning set out in Section 3.1.

CASM Acquisition means the proposed acquisition of the client software known as CASM from Tracy Smyth ATF the Tracy Consulting Trust.

CASM Acquisition Agreement has the meaning set out in Section 3.1.

Company means Family Zone Cyber Safety Limited (ACN 167 509 177).

Consideration Shares means the 1,000,000 Shares to be issued as part of the consideration under the Acquisition Agreement.

Constitution means the Company’s constitution.

Corporations Act means the Corporations Act 2001 (Cth).

Directors means the current directors of the Company.

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

Explanatory Statement means the explanatory statement accompanying the Notice of Meeting.

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

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

Option means an option to acquire a Share.

Ordinary Securities has the meaning set out in the ASX Listing Rules.

Performance Shares means the Performance Shares proposed to be issued on the terms and conditions outlined in Schedule 1 and each of Class A Performance Shares, Class B Performance Shares and Class C Performance Shares has a corresponding meaning.

Proxy Form means the proxy form accompanying the Notice.

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

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

Shareholder means a holder of a Share.

Smyth Placement has the meaning set out in Section 2.2.

Smyth Placement Agreement has the meaning set out in Section 2.1.

Tesserent means Tesserent Australia Pty Ltd ACN 101 692 513.

SCHEDULE 1 – TERMS AND CONDITIONS OF PERFORMANCE SHARES

The terms and conditions of the Performance Shares are outlined below.

(a) Definitions

For the purpose of these terms and conditions:

Expiry Date means the A Expiry Date, B Expiry Date and the C Expiry Date (as relevant).

(b) Conversion and Expiry of Class A Performance Shares, Class B Performance Shares and Class C Performance Shares

(i) ( Conversion on achievement of Milestone A ) On achievement of 15,000 paying subscribers of the Company generating at least $100,000 revenue per month over 3 consecutive months (as confirmed by the Company's auditor) ( Milestone A ) within 24 months of the Company being admitted to the official list of the ASX ( Milestone A Achievement Date ), each Class A Performance Share will convert on a one for one basis into a Share.
(ii) ( A Expiry ) Confirmation that Milestone A has been achieved must occur within 2 months after the Milestone A Achievement Date ( A Expiry Date ).
(iii) ( Conversion on achievement of Milestone B ) On achievement of $10,000,000 revenue by the Company over a 12 month rolling period of which 30% is subscription income (as confirmed by the Company's auditor) ( Milestone B ) within 36 months of the Company being admitted to the official list of the ASX ( Milestone B Achievement Date ), each Class B Performance Share will convert on a one for one basis into a Share.
(iv) ( B Expiry ) Confirmation that Milestone B has been achieved must occur within 2 months after the Milestone B Achievement Date ( B Expiry Date ).
(v) ( Conversion on achievement of Milestone C ) On achievement of $20,000,000 revenue by the Company over a 12 month rolling period of which 30% is subscription income (as confirmed by the Company's auditor) ( Milestone C ) within 48 months of the Company being admitted to the official list of the ASX ( Milestone C Achievement Date ), each Class C Performance Share will convert on a one for one basis into a Share.
(vi) ( C Expiry ) Confirmation that Milestone C has been achieved must occur within 2 months after the Milestone C Achievement Date ( C Expiry Date ).
(vii) ( No conversion ) To the extent that:
(A) Class A Performance Shares have not converted into Shares on or before the A Expiry Date, then all such unconverted Class A Performance Shares held by each holder will automatically consolidate into one Class A Performance Share and will then convert into one Share;
(B) Class B Performance Shares have not converted into Shares on or before the B Expiry Date, then all such unconverted Class B Performance Shares held by each holder will automatically consolidate into one Class B Performance Share and will then convert into one Share; and
(C) Class C Performance Shares have not converted into Shares on or before the C Expiry Date, then all such unconverted Class C Performance Shares held

by each holder will automatically consolidate into one Class C Performance Share and will then convert into one Share.

(viii) ( Conversion procedure ) The Company will issue a Holder with a new holding statement for the Share or Shares as soon as practicable following the conversion of each Performance Share.
(ix) ( Ranking of shares ) Each Share into which the Performance Shares will convert will upon issue:
(A) rank equally in all respects (including, without limitation, rights relating to dividends) with other issued Shares;
(B) be issued credited as fully paid;
(C) be duly authorised and issued by all necessary corporate action; and
(D) be issued free from all liens, charges and encumbrances whether known about or not including statutory and other pre‐emption rights and any transfer restrictions.

(b) Conversion on change of control

(i) If there is a Change of Control Event in relation to the Company prior to the conversion of the Performance Shares, then:
(A) Milestone A, Milestone B and Milestone C will be deemed to have been achieved by the Milestone A Achievement Date, Milestone B Achievement Date and Milestone C Achievement Date respectively; and
(B) each Performance Share will automatically and immediately convert into Shares,

however, if the number of Shares to be issued as a result of the conversion of all Class A Performance Shares, together with the number of Shares to be issued as a result of the conversion of all Class B Performance Shares and Class C Performance Shares, due to a Change of Control Event in relation to the Company is in excess of 10% of the total issued share capital of the Company at the time of the conversion, then the number of Class A Performance Shares, Class B Performance Shares and the Class C Performance Shares to be converted will be prorated so that the aggregate number of Shares issued upon conversion of the Class A Performance Shares, Class B Performance Shares and the Class C Performance Shares is equal to 10% of the total issued share capital of the Company.

(c) Takeover provisions
(i) If the conversion of Performance Shares (or part thereof) under these terms and conditions would result in any person being in contravention of section 606(1) of the Corporations Act then the conversion of each Performance Share that would cause the contravention will be deferred until such time or times thereafter that the conversion would not result in a contravention of section 606(1) of the Corporations Act. Following a deferment under this paragraph, the Company will at all times be required to convert that number of Performance Shares that would not result in a contravention of section 606(1) of the Corporations Act.
- (A) The Holders will give notification to the Company in writing if they consider that the conversion of Performance Shares (or part thereof) under these

terms and conditions may result in the contravention of section 606(1) of the Corporations Act, failing which the Company will assume that the conversion of Performance Shares (or part thereof) under these terms and conditions will not result in any person being in contravention of section 606(1) of the Corporations Act.

(B) The Company may (but is not obliged to) by written notice request the Holders to give notification to the Company in writing within seven days if they consider that the conversion of Performance Shares (or part thereof) under these terms and conditions may result in the contravention of section 606(1) of the Corporations Act. If the Holders do not give notification to the Company within seven days that they consider the conversion of Performance Shares (or part thereof) under these terms and conditions may result in the contravention of section 606(1) of the Corporations Act then the Company will assume that the conversion of Performance Shares (or part thereof) under these terms and conditions will not result in any person being in contravention of section 606(1) of the Corporations Act.

(d) Rights attaching to Performance Shares

(i) ( Share capital ) Each Performance Share is a share in the capital of the Company.
(ii) ( General meetings ) Each Performance Share confers on a Holder the right to receive notices of general meetings and financial reports and accounts of the Company that are circulated to shareholders. A Holder has the right to attend general meetings of shareholders of the Company.
(iii) ( No Voting rights ) A Performance Share does not entitle a Holder to vote on any resolutions proposed at a general meeting of shareholders of the Company.
(iv) ( No dividend rights ) A Performance Share does not entitle a Holder to any dividends.
(v) ( Rights on winding up ) Each Performance Share entitles a Holder to participate in the surplus profits or assets of the Company upon winding up of the Company, but only to the extent of $0.0001 per Performance Share.
(vi) ( Not transferable ) A Performance Share is not transferable.
(vii) ( Reorganisation of capital ) If there is a reorganisation (including, without limitation, consolidation, sub‐division, reduction or return) of the issued capital of the Company, the rights of a Holder will be varied (as appropriate) in accordance with the Listing Rules which apply to reorganisation of capital at the time of the reorganisation.
(viii) ( Quotation of shares on conversion ) If the Shares of the Company are quoted on the ASX at the time of conversion of a Performance Share, an application will be made by the Company to ASX for official quotation of the Shares issued upon the conversion of each Performance Share within the time period required by the Listing Rules.
(ix) ( Participation in entitlements and bonus issues ) A Performance Share does not entitle a Holder to participate in new issues of capital offered to holders of Shares, such as bonus issues and entitlement issues.
(x) ( No other rights ) A Performance Share does not give a Holder any other rights other than those expressly provided by these terms and those provided at law where such rights at law cannot be excluded by these terms.

GM Registration Card

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FAMILY ZONE CYBER SAFETY LIMITED | ACN 167 509 177

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QORIA LIMITED — Proxy Solicitation & Information Statement 2016

65649_rns_2016-11-10_bd373238-3ca9-4a09-bd03-4db1d50d443b.pdf

FAMILY ZONE CYBER SAFETY LIMITED

ACN 167 509 177

NOTICE OF GENERAL MEETING

CONTENTS PAGE

Time and place of Meeting

Your vote is important

Voting in person

Voting by proxy

Proxy vote if appointment specifies way to vote

Transfer of non‐chair proxy to chair in certain circumstances

AGENDA

ORDINARY BUSINESS:

1. RESOLUTION 1 – APPROVAL TO ISSUE CONSIDERATION SHARES

2. RESOLUTION 2 – APPROVAL TO ISSUE SMYTH PLACEMENT SHARES

3. RESOLUTION 3 – APPROVAL TO ISSUE SHARES TO TRACY SMYTH ATF THE TRACY CONSULTING TRUST

4. RESOLUTION 4 – AUTHORITY TO ISSUE PERFORMANCE SHARES T O ROBERT SMYTH

5. RESOLUTION 5 – AUTHORITY TO ISSUE PERFORMANCE SHARES TO NICK CONOLLY

DATED: 8 NOVEMBER 2016 BY ORDER OF THE BOARD

1. RESOLUTION 1 – ISSUE OF CONSIDERATION SHARES

1.1 Acquisition

1.2

Sonar/MyNet IP

1.3 Engagement of Tesserent as Reseller and Distributer

1.4 General

1.5 Technical information required by ASX Listing Rule 7.3

2. RESOLUTION 2 – SMYTH PLACEMENT SHARES

2.1 Background

2.2 General

2.3 Technical information required by ASX Listing Rule 7.3

3.1 Background

3.2 General

3.3 Technical information required by ASX Listing Rule 7.3

4. RESOLUTIONS 4 AND 5 – ISSUE OF PERFORMANCE SHARES

4.1 Background and Executive Agreements

4.2 Technical information required by ASX Listing Rule 7.3

5. ENQUIRIES

GLOSSARY

SCHEDULE 1 – TERMS AND CONDITIONS OF PERFORMANCE SHARES

(b) Conversion and Expiry of Class A Performance Shares, Class B Performance Shares and Class C Performance Shares

(b) Conversion on change of control

(d) Rights attaching to Performance Shares

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QORIA LIMITED Proxy Solicitation & Information Statement 2016