QORIA LIMITED — Proxy Solicitation & Information Statement 2019

Mar 17, 2019

FAMILY ZONE CYBER SAFETY LIMITED

ACN 167 509 177

NOTICE OF GENERAL MEETING

TIME : 10.00am (WST) DATE : Wednesday, 17 April 2019

PLACE : 945 Wellington Street, West Perth WA

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.

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CONTENTS PAGE

Notice of General Meeting (setting out the proposed resolutions)	3
Explanatory Statement (explaining the proposed resolutions)	8
Glossary	17
Schedule 1 – Key Terms and Conditions of Performance Rights	18
Schedule 2 – Key Terms and Conditions of the Advisor Options	20
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 10.00am (WST) on 17 April 2019 at 945 Wellington Street, West Perth, Western Australia.

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

A Proxy Form is enclosed with 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 thereon. Lodgement of a Proxy Form will not preclude a Shareholder from attending and voting at the Meeting in person.

Please note that:

• a member of the Company entitled to attend and vote at the Meeting is entitled to appoint a proxy;

• a proxy need not be a member of the Company; and

• a member of the Company entitled to cast two or more votes may appoint two proxies and may specify the proportion or number of votes each proxy is appointed to exercise, but where the proportion or number is not specified, each proxy may exercise half of the votes.

The enclosed Proxy Form provides further details on appointing proxies and lodging Proxy Forms.

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`Voting Prohibition by Proxy Holders

In accordance with section 250BD of the Corporations Act, a person appointed as a proxy must not vote on the basis of that appointment on Resolution 5 to 9 if the person is either:

• a member of the Key Management Personnel of the Company; or

• a Closely Related Party of such a member, and

the appointment does not specify the way the proxy is to vote on Resolutions 5 to 9

However, the prohibition does not apply if the proxy is the Chair and the appointment expressly authorises the Chair to exercise the proxy even if Resolutions 5 to 9 is connected directly or indirectly with remuneration of a member of the Key Management Personnel of the Company.

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BUSINESS OF THE GENERAL MEETING

Notice is given that the General Meeting of Shareholders will be held at 10.00am (WST) on 17 April 2019 at 945 Wellington Street, West Perth.

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 7:00pm (AEDT) on 15 April 2019.

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

AGENDA

ORDINARY BUSINESS:

1. RESOLUTION 1 A – RAT IFICATION OF TRANCHE 1 OF SHARE PLACEMENT – JANUARY 2019

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 7.4 and for all other purposes, Shareholders approve and ratify the prior issue by the Company of 11,095,556 Shares each at an issue price of $0.225 on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion: The Company will disregard any votes cast in favour of this Resolution by or on behalf of any person who participated in the Placement or any of their associates. However, the Company need not disregard a vote if 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, it is cast by the person chairing the Meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

RESOLUTION 1 B – R AT IF ICAT ION O F TRANCHE 2 OF SHARE PLACEMENT – JANUARY 2019

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 7.4 and for all other purposes, Shareholders approve and ratify the prior issue by the Company of 133,333 Shares each at an issue price of $0.225 on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion: The Company will disregard any votes cast in favour of this Resolution by or on behalf of any person who participated in the Placement or any of their associates. However, the Company need not disregard a vote if 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, 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 – RATIFIC ATION O F ISSUE OF SHARES TO A CONSULTANT

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

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“That, for the purposes of Listing Rule 7.4 and for all other purposes, Shareholders approve and ratify the prior issue by the Company of 216,000 Shares ( Consultant Shares ) to a Consultant on the terms and conditions set out in the Explanatory Statement.

Voting Exclusion: The Company will disregard any votes cast in favour of this Resolution by or on behalf of the Consultant or any of their associates. However, the Company need not disregard a vote if 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, 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 – RATIFIC ATION O F ISSUE OF OPTIONS TO AN ADVISOR

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 7.4 and for all other purposes, Shareholders approve and ratify the prior issue by the Company of 250,000 Options (each exercisable at $0.25 within three years of the issue date) ( Advisor Options ) to an Advisor on the terms and conditions set out in the Explanatory Statement.

Voting Exclusion: The Company will disregard any votes cast in favour of this Resolution by or on behalf of the Advisor or any of their associates. However, the Company need not disregard a vote if 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, it is cast by the person chairing the Meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

4. RESOLUTION 4 – AUTHORITY TO ISSUE SHARES PURSUANT TO THE FIDE LIO AGENCY AGREEMENT

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 7.1 and for all other purposes, Shareholders approve and authorise the Directors to issue up to 309,889 Shares to Fidelio Partners (and/or its nominees) pursuant to the Fidelio Agency Agreement, on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion: The Company will disregard any votes cast in favour of this Resolution by or on behalf of Fidelio Partners and/or its nominees, or a person who will obtain a material benefit as a result of, the proposed issue (except a benefit solely by reason of being a holder of ordinary securities in the Company) or any associates of those persons. However, the Company need not disregard a vote if 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, 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 – AUTH ORITY TO ISSUE PERFORMANCE RIGHTS TO MR CRISPIN SWAN

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 10.14, and for all other purposes, approval is given for the Company to grant up to 213,333 Performance Rights to Mr Crispin Swan (or his nominees) under the Performance Rights Plan on the terms and conditions set out in the Explanatory Memorandum."

Voting Exclusion: The Company will disregard any votes cast in favour of this Resolution by or on behalf of any Director (other than a Director who is ineligible to participate in the Performance Rights Plan), or any

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associates of those persons. However, the Company need not disregard a vote if 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, 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.

6. RESOLUTION 6 – AUTH ORITY TO ISSUE PERFORMANCE RIGHTS TO MR T IM LEVY

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 10.14, and for all other purposes, approval is given for the Company to grant up to 977,778 Performance Rights to Mr Tim Levy (and/or his nominees) under the Performance Rights Plan on the terms and conditions set out in the Explanatory Memorandum."

Voting Exclusion: The Company will disregard any votes cast in favour of this Resolution by or on behalf of any Director (other than a Director who is ineligible to participate in the Performance Rights Plan), or any associates of those persons. However, the Company need not disregard a vote if 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, 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.

7. RESOLUTION 7 – AUTHORITY TO ISSUE SHARES TO MR PHIL WARREN

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 10.11, and for all other purposes, approval is given for the Company to issue up to 177,778 Shares to Mr Phil Warren (and/or his nominees) on the terms and conditions set out in the Explanatory Memorandum."

Voting Exclusion: The Company will disregard any votes cast in favour of this Resolution by or on behalf of Mr Phil Warren and his nominees, or any associates of those persons. However, the Company need not disregard a vote if 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, 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.

8. RESOLUTION 8 – AUTHORITY TO ISSUE SHARES TO MR JOHN SIMS

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 10.11, and for all other purposes, approval is given for the Company to issue up to 222,222 Shares to Mr John Sims (and/or his nominees) on the terms and conditions set out in the Explanatory Memorandum."

Voting Exclusion: The Company will disregard any votes cast in favour of this Resolution by or on behalf of Mr John Sims and his nominees, or any associates of those persons. However, the Company need not disregard a vote if 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, 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.

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9. RESOLUTION 9 – AUTHORITY TO ISSUE SHARES TO MR PETER WESTMACOTT

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 10.11, and for all other purposes, approval is given for the Company to issue up to 177,778 Shares to Mr Peter Westmacott (and/or his nominees) on the terms and conditions set out in the Explanatory Memorandum."

Voting Exclusion: The Company will disregard any votes cast in favour of this Resolution by or on behalf of Mr Peter Westmacott and his nominees, or any associates of those persons. However, the Company need not disregard a vote if 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, 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: 15 MARCH 2019

BY ORDER OF THE BOARD

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TIM LEVY MANAGING DIRECTOR

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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 10.00am (WST) on, 17 April 2019 at 945 Wellington Street, West Perth Western Australia.

This Explanatory Statement should be read in conjunction with and forms part of the accompanying Notice of Meeting. The purpose of this Explanatory Statement is to provide information which the Directors believe to be material to Shareholders in deciding whether or not to pass the Resolutions in the Notice of Meeting.

Proxy forms have been sent out with this Notice.

1. RESOLUTIONS 1 TO 3 – RATIFICAT ION O F PRIOR ISSUES

1.1 General

The Company has issued the following securities under its Listing Rule 7.1 capacity together with the additional 10% limit approved by Shareholders under Listing Rule 7.1A at the Company’s 2018 General Meeting, without need for shareholder approval:

(a) Placement Shares

In January 2019, the Company issued a total of 11,228,889 Shares[1] at $0.225 per Share to raise $2.52 million (before costs) ( Placement ). The Shares were issued to sophisticated and professional investors, none of who are a related party of the Company. The Placement Shares were issued in two tranches with:

• 11,095,556 Placement Shares issued on 11 January 2018 ( Tranche 1 ) within the Company’s 10% annual limit permitted under Listing Rule 7.1A, without the need for Shareholder approval ; and

• 133,333 Placement Shares issued on 17 January 2018 ( Tranche 2 ) within the Company’s 15% annual limit permitted under Listing Rule 7.1, without the need for Shareholder approval.

(b) Consultant Shares

On 25 February 2019, the Company issued 216,000 Shares to Fidelio Partners lieu of cash consultancy fees payable for the 2019 calendar year. These shares were escrowed for one year from the issue date.

All of the Consultant Shares were issued within the Company’s 15% annual limit permitted under Listing Rule 7.1, without the need for Shareholder approval.

(c) Advisor Options

On 11 March 2019, the Company issued 250,000 Options to X Partners Pte Ltd for strategic advisory services to be provided to the Company. The Options have a three year term and an exercise price of $0.25 each. The Advisor Options were issued within the Company’s 15% annual limit permitted under Listing Rule 7.1, without the need for Shareholder approval.

1 Shares issued in two tranches 11,095,556 Shares issued on 11 January 2018 and 133,333 Shares issued on 17 January 2018.

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Listing Rule 7.1 provides that a company must not (subject to specified exceptions), without the approval of shareholders, issue or agree to issue during any 12 month period any equity securities, or other securities with rights to conversion to equity (such as an option), if the number of those securities exceeds 15% of the number of fully paid ordinary securities on issue at the commencement of that 12 month period.

Listing Rule 7.1A enables eligible entities to issue equity securities up to 10% of its issued share capital through placements over a 12-month period after the annual general meeting at which the Shareholders approve the 10% placement facility. The 10% placement facility is in addition to the Company’s 15% placement capacity under Listing Rule 7.1. The Company’s Shareholders approved the 10% placement facility at the Company’s 2018 Annual General Meeting.

Listing Rule 7.4 provides that where a company in general meeting ratifies a previous issue of securities made pursuant to Listing Rule 7.1 (including the additional 10% capacity under Listing Rule 7.1A), provided that the previous issue did not breach Listing Rule 7.1, the issue of those securities will be deemed to have been with shareholder approval for the purpose of Listing Rule 7.1.

Resolution 1A seeks Shareholder approval pursuant to Listing Rule 7.4 for the ratification of the issue of the Tranche 1 Placement Shares which were issued pursuant to the additional 10% capacity under Listing Rule 7.1A.

Resolution 1B seeks Shareholder approval pursuant to Listing Rule 7.4 for the ratification of the issue of the Tranche 2 Placement Shares which were issued pursuant to the 15% capacity under Listing Rule 7.1.

Resolution 2 seeks Shareholder approval pursuant to Listing Rule 7.4 for the ratification of the issue of the Consultant Shares which were issued pursuant to the 15% capacity under Listing Rule 7.1.

Resolution 3 seeks Shareholder approval pursuant to Listing Rule 7.4 for the ratification of the issue of the Advisor Options which were issued pursuant to the 15% capacity under Listing Rule 7.1.

The effect of Shareholders passing Resolutions 1 to 3 will be to restore the Company's ability to issue securities within:

• (a) the 15% placement capacity under Listing Rule 7.1 during the next 12 months; and

• (b) the additional 10% placement capacity under Listing Rule 7.1A during the balance of the 12 months from the date of the Company's 2018 Annual General Meeting,

without obtaining prior Shareholder approval.

Resolutions 1 to 3 are ordinary resolutions.

1.2 Information required by Listing Rule 7.5

• (a) For the purposes of Listing Rule 7.5 information regarding the issue of the Placement Shares is provided as follows:

• (i) 11,095,556 Shares were issued on 11 January 2019 and 133,333 Shares were issued on 17 January 2019.

• (ii) The Placement Shares were issued at an issue price of $0.225 per Share to raise $2.526 million (before costs).

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• (iii) The Placement Shares are fully paid ordinary shares of the Company ranking equally with all other fully paid ordinary shares of the Company.

• (iv) The Placement Shares were issued to sophisticated and professional investors some of whom were existing shareholders of the Company and others identified through the Companies investor networks, none of whom are related parties of the Company. A 4% brokerage fee was payable to investors introduced through AFSL licence holders.

• (v) The funds raised from the issue of the Placement Shares are being used to support the rollout of Family Zone's newly-launched FZ ONE, a first of its kind cyber safe mobile phone. The FZ ONE is currently being promoted through Woolworths locations nationwide and online ahead of the crucial back-to-school period. The funds raised through the Placement will empower Family Zone to broaden this rollout to new retail channels and support working capital requirements.

• (vi) A voting exclusion statement is included in the Notice.

• (b) For the purposes of Listing Rule 7.5 information regarding the issue of the Consultant Shares is provided as follows:

• (i) 216,000 Shares were issued by the Company on 25 February 2019 to the Consultant for consultancy services including sales support and customer account management of the Company’s wholesale telco partners as well as continued business development within this distribution channel.

• (ii) The Consultant Shares were issued for nil cash consideration accordingly no funds were raised from the issue. The Consultant Shares were issued at a deemed issue price of $0.225 per Share in lieu of cash consultancy fees of $48,600 payable for the 2019 calendar year. .

• (iii) The Consultant Shares are fully paid ordinary shares of the Company ranking equally with all other fully paid ordinary shares of the Company.

• (iv) The Consultant Shares were issued to Fidelio Partners who is not a related party of the Company.

• (v) A voting exclusion statement is included in the Notice.

• (c) For the purposes of Listing Rule 7.5 information regarding the issue of the Advisor Options is provided as follows:

• (i) 250,000 Advisor Options were issued by the Company on 11 March 2019 for strategic advisory services including product, go to market and partnering strategies from a team of advisors including senior Facebook executive and Asia Pacific Head of WhatsApp, Ms Bharathi Ramavarjula as announced on 6 March 2019.

• (ii) The Advisor Options were issued as part payment of strategic advisory services to be provided and as such no funds were raised from the issue.

• (iii) The Advisor Options are each exercisable at $0.25 on or before the date that is three years after the date of issue. Shares issued on exercise of the Advisor Options will be fully paid ordinary shares of the Company ranking equally with all other fully paid ordinary shares of the Company. Further terms and conditions of the Advisor Options are set out in Schedule 2.

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(iv) The Advisor Options were issued to X Partners Pte Ltd who is not a related party of the Company.

(v) A voting exclusion statement is included in the Notice.

2. RESOLUTION 4 – AUTHORITY TO ISSUE SHARES PURSUANT TO THE FIDE LIO AGENCY AGREEMENT

2.1 General

The issue of share based compensation under the Fidelio Agency Agreement is subject to Shareholder approval. Fidelio Partners has been the Company’s wholesale telecommunication sales agent since it initial listing on ASX and has been integral to the development of the Company’s wholesale distribution partnerships globally.

As announced on 15 November 2018, the Company signed a letter of intent with Bharti Airtel, for the resale of Family Zone services in India. Bharti Airtel ranks within the top 3 telcos globally and operates in 16 countries. In India, Bharti Airtel is the second largest telco operator, offering pre and post paid mobile services, broadband, home telephony and payments to in excess of 400 million customers and 1.2 million retailers. The letter of intent with Bharti Airtel was introduced and facilitated by Fidelio Partners under the Company’s agency arrangements and represents the first share based commission performance milestone in respect the Company’s partnership with Bharti Airtel. Refer to the Company’s announcement dated 15 November 2018 for further details in regard to the Bharti Airtel partnership.

Subject to Shareholder approval, the Company is required to issue 309,889 Shares as share based commission to Fidelio Partners for services provided in respect to the achievement of first performance milestone in relation to the signing of the letter of intent with a major wholesale telco partner, Bharti Airtel under the Fidelio Agency Agreement. An additional 929,666 Shares may be issued to Fidelio as share based commission following the signing of a full form legally binding reseller agreement with Bharti Airtel and the achievement of paying subscribers generating A$1 million in revenues from this agreement.

Resolution 4 seeks Shareholder approval to issue these Shares to Fidelio Partners.

If Shareholders do not approve the issue of the Shares to Fidelio Partners under Resolution 4, the Company will be required to pay the share based commission to Fidelio Partners in cash, such amount being calculated by taking the number of Shares to be issued to Fidelio Partners (being 309,889 Shares) multiplied by the highest 30 day volume weighted price of the Company’s Shares on ASX between the date of the entitlement being earned and the earlier to occur of:

• (a) 2 months following Fidelio Partners earning its entitlement to Share based commission; and

(b) 7 days following a Shareholder meeting convened to approve the issue of Share based commission to Fidelio Partners.

The Company notes that the 30 day vwap of the Company’s share from 15 January 2019 (being Company shares 2 months following Fidelio earnings its entitlement to the share based commission) was $0.237 per Share.

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2.2 Information required by Listing Rule 7.3

For the purposes of Listing Rule 7.3, information regarding the issue of the Shares pursuant to the Fidelio Agency Agreement is provided as follows:

• (a) The maximum number of Shares that the Company may issue under Resolution 4 is 309,889.

• (b) The Shares may be issued no later than three months after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the Listing Rules).

• (c) The Shares will be issued for nil cash consideration and therefore no funds will be raised from this Share issue. The Shares are being issued in consideration for services provided resulting in the the achievement of a performance milestone, under the Fidelio Agency Agreement. If Shareholder approval is not obtained this commission will be paid in cash as outlined in Section 2.1 above.

• (d) The Shares will be issued to Fidelio Partners (or their nominees), none of whom is a related party of the Company.

• (e) The Shares issued will comprise fully paid ordinary shares of the Company ranking equally with all other fully paid ordinary shares of the Company.

• (f) It is expected that the Shares will be issued on one date.

• (g) A voting exclusion statement is included in the Notice.

3. RESOLUTIONS 5 AND 6 AUTHORITY TO PERFORMANCE RIGHTS TO MESSRS CRISPIN SW AN AND T IM LEVY

3.1 General

As announced on 10 January 2019, to support the Company’s cashflow and to demonstrate their confidence and commitment to Family Zone the Board and senior executives have agreed to convert cash based to security based remuneration for the 2019 calendar year at the Placement Share price of $0.225 per Share as outlined below:

• The Non-Executive Directors have agreed to receive Shares in lieu of their entire salaries with a total of 577,778 Shares proposed to be issued. Resolutions 7 to 9 seek Shareholder approval for the issue of the Shares to Messrs Warren, Sims and Westmacott (or their nominees) (refer to Section 4 for further details);

• Managing Director, Tim Levy, has agreed to receive Performance Rights in lieu of his entire salary, with a total of 977,778 Performance Rights proposed to be issued; and

• Senior executives, including Executive Director, Mr Crispin Swan have agreed to receive 20% of their salary as Performance Rights, with a total of 213,333 Performance Rights proposed to be issued to Mr Swan,

The above Performance Rights are to be issued by the Company under the Performance Rights Plan, which was approved by Shareholders on 28 November 2017.

The Company has considered the remuneration structures of several peer companies operating within the software and services sector to determine a suitable quantum and structure of a remuneration plan for management and executive and non-executive members of the Board. As a result of this review the Company believes that remuneration packages of management

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and executive and non-executive members of the Board is reasonable and accordingly the issue of the Performance Rights to Messrs Levy and Swan is fair and reasonable in lieu of a portion or all of their cash based remuneration.

Resolutions 5 and 6 seek Shareholder approval for the grant of the Performance Rights to Messrs Swan and Levy (or their nominees).The Performance Rights will be subject to the Vesting Condition of continued employment with the Company until 1 January 2020. The above Performance Rights will each convert into a Share for no consideration on exercise by the holder once vested.

If a Vesting Condition of a Performance Right is not achieved by the applicable Milestone Date, then the Performance Right will lapse. If a vested Performance Right is not exercised on or before the Expiry Date, then the Performance Right will lapse.

If a Change of Control Event (as defined in Schedule 1) occurs prior to the expiry or conversion of a Performance Right, then the Performance Right will convert.

The principle terms of the Performance Rights are summarised in Schedule 1. Further terms and conditions of the Performance Rights are set out in the Performance Rights Plan a summary of which was provided in Schedule 3 of the Company's notice of annual general meeting dated 24 October 2017.

Shareholder approval is required for the grant of the Performance Rights under the Performance Rights Plan to Mr Swan and Mr Levy under Listing Rule 10.14 because they are Directors of the Company.

As Shareholder approval is sought under Listing Rule 10.14, approval under Listing Rule 7.1 is not required. Accordingly, the issue of Performance Rights to the Directors will not reduce the Company's 15% capacity for the purposes of Listing Rule 7.1.

Resolutions 5 and 6 are ordinary resolutions.

3.2 Chapter 2E of the Corporations Act

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

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

• (b) give the benefit within 15 months following such approval,

unless the giving of the financial benefit falls within an exception set out in sections 210 to 216 of the Corporations Act.

The grant of the Performance Rights constitutes giving a financial benefit and Mr Swan and Mr Levy are related parties of the Company by virtue of being Directors.

After a review of publicly available information relating to the remuneration structures of several of its peer companies, the Directors consider that Shareholder approval pursuant to Chapter 2E of the Corporations Act is not required in respect of the grant of the Performance Rights to Mr Swan and Mr Levy because the grant of the Performance Rights is considered reasonable remuneration.

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3.3 Specific Information required by Listing Rule 10.15

Pursuant to and in accordance with Listing Rule 10.15, the following information is provided in relation to Resolutions 5 and 6:

• (a) The maximum number of securities to be issued to

• (i) Mr Swan (or his nominees) is 213,333 Performance Rights; and

• (ii) Mr Levy (or his nominee) is 977,778 Performance Rights.

• (b) The Performance Rights will be issued for nil cash consideration as they are being issued as security based remuneration. Accordingly, no funds will be raised from the issue of the Performance Rights. Upon conversion of the Performance Rights, Shares will be issued on a one for one basis on the same terms as the Company's existing Shares.

• (c) The Performance Rights will be granted with the vesting condition, milestone date and expiry date as set out in Section 3.1. The principle terms and conditions of the Performance Rights are set out in Schedule 1. Further terms and conditions of the Performance Rights are set out in the summary of the Performance Rights Plan in Schedule 3 of the Company's notice of annual general meeting dated 24 October 2017.

• (d) The Company has issued Performance Rights under the Performance Rights Plan to the following persons referred to in Listing Rule 10.14.

Name	Number of Performance Rights	Acquisition Price
Freshie Pty Ltd	1,000,000*	Nil cash consideration issued as incentive based remuneration

*The Performance Rights are subject to a number of Vesting Conditions. The Performance Rights convert into fully paid ordinary shares (on a one for one basis) on exercise by the holder once vested. Refer to the Company’s Notice of Meeting dated 24 October 2017 for full terms and conditions of these Performance Rights

• (e) Under the Performance Rights Plan, only eligible employees (including all Directors) or their nominees (subject to Board approval), are entitled to participate in the Performance Rights Plan. As Directors, Messrs. Crispin Swan, Tim Levy, Phil Warren, John Sims and Sir Peter Westmacott are eligible employees3 for the purposes of the Performance Rights Plan.

• (f) Mr Swan and Mr Levy are related parties of the Company by virtue of being Directors.

• (g) The Company has not made any loans in relation to the issue of the Performance Rights to Mr Swan and/or Mr Levy.

• (h)

• A voting exclusion statement is included in the Notice.

• (i) The Company will grant the Performance Rights no later than 12 months after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the Listing Rules).

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4. RESOLUTIONS 7 TO 9 – AUTHORITY TO ISSUE SHARES TO NON E XEC UTIVE DIRECTORS

4.1 General

As outlined in Section 3.1, the Company has agreed, subject to receiving Shareholder approval, to issue a total 577,778 Shares ( Non-Executive Director Shares ) to the Non-executive Directors (or their nominees) in lieu of their cash salaries for the 2019 financial year as follows:

Non-Executive Director	No of Shares*
John Sims	222,222
Phil Warren	177,778
Peter Westmacott	177,778
TOTAL	577,778

*Number of Shares determined using the issue price per Share under the Placement of $0.225 per Share.

Listing Rule 10.11 provides that a company must not (subject to specified exceptions) issue or agree to issue equity securities to a related party without the approval of shareholders. Messrs Sims, Warren and Westmacott are related parties of the Company by virtue of being Directors. Approval is therefore required under Listing Rule 10.11 for the issue of the Non-Executive Director Shares to them.

Resolutions 7 to 9 seeks Shareholder approval pursuant to Listing Rule 10.11 for the issue of the Non-Executive Director Shares to Messrs Sims, Warren and Westmacott (and/or their nominees). If approval is given under Listing Rule 10.11, Shareholder approval is not required under Listing Rule 7.1. Shareholder approval of the issue of the Non-Executive Director Shares means that this issue will not reduce the Company's 15% placement capacity under Listing Rule 7.1.

Resolutions 7 to 9 are ordinary resolutions.

4.2 Chapter 2E of the Corporations Act

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

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

• (b) give the benefit within 15 months following such approval,

unless the giving of the financial benefit falls within an exception set out in sections 210 to 216 of the Corporations Act.

The issue of the Non-Executive Director Shares constitutes giving a financial benefit and Messrs Sims, Warren and Westmacott are related parties of the Company by virtue of being Directors.

After a review of publicly available information relating to the remuneration structures of several of its peer companies, the Directors consider that Shareholder approval pursuant to Chapter 2E of the Corporations Act is not required in respect of the issue of the Non-Executive Director Shares to Mr Warren, Mr Sims and Mr Westmacott because the issue of the NonExecutive Shares is considered reasonable remuneration.

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4.3 Specific Information required by Listing Rule 10.13

Pursuant to and in accordance with Listing Rule 10.13, the following information is provided in relation to Resolutions 7 to 9:

• (a) The maximum number of Shares to be issued is 577,778, comprising:

  • (i) 222,222 Shares to be issued to Mr John Sims (or his nominees);

  • (ii) 177,778 Shares to be issued to Mr Phil Warren (or his nominees); and

  • (iii) 177,778 Shares to be issued to Sir Peter Westmacott (or his nominees).

• (b) The Non-Executive Director Shares will be granted no later than 1 month after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the Listing Rules).

• (c) Messrs Sims, Warren and Westmacott are each related parties of the Company by virtue of being Directors.

• (d) The Shares will be granted for nil cash consideration as they are being issued as security based remuneration. Accordingly, no funds will be raised from the issue of the Non-Executive Director Shares.

• (a) The Non-Executive Director Shares will comprise fully paid ordinary shares of the Company ranking equally with all other fully paid ordinary shares of the Company.

• (e) Voting exclusion statements are included in the Notice.

5. EN QUIR IES

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.

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GLOSSARY

$ means Australian dollars.

Advisor means X Partners Pte Ltd.

Advisor Options has the meaning set out in Resolution 3.

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

Board means the current board of directors of the Company.

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

Consultant means Fidelio Partners.

Consultant Shares has the meaning set out in Resolution 2.

Constitution means the Company’s constitution.

Corporations Act means the Corporations Act 2001 (Cth).

Director means a director of the Company.

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

Fidelio Agency Agreement means the agency agreement between the Company and Fidelio Partners dated 17 May 2016 (as varied).

Fidelio Partners means Fidelio Partners Pte Ltd (2016133211E) of 101B Telok Ayers St #03-02, 068574, Singapore

Listing Rules means the Listing Rules of ASX.

Meeting or General 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.

Performance Right means a Performance Right issued under the Plan.

Performance Rights Plan or Plan means the Family Zone Cyber Safety Limited Performance Rights Plan, an overview of the key terms of which is set out in Schedule 3 of the Company's notice of annual general meeting dated 24 October 2017.

Placement has the meaning set out in Section 1.1(a).

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.

VWAP means volume weighted average price.

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SCHEDULE 1 – KEY TERMS AND CONDITIONS OF PERFORMANCE RIGHTS

The Performance Rights will be granted with the Vesting Condition, Milestone Date ad Expiry Date as follows:

follows:
Vesting Condition	Milestone Date	Expiry Date
Continued employment with the Company in existing role from issue date until the Milestone Date	1 January 2020	3 years from issue date

The above Performance Rights will each convert into a Share for no consideration on exercise by the holder once vested.

If a Vesting Condition of a Performance Right is not achieved by the applicable Milestone Date, then the Performance Right will lapse. If a vested Performance Right is not exercised on or before the Expiry Date, then the Performance Right will lapse.

The achievement of a Vesting Condition is to be determined by the Board from time to time.

( No Voting rights ) A Performance Right does not entitle a holder to vote on any resolutions proposed at a general meeting of the Company’s Shareholders.

( No dividend rights ) A Performance Right does not entitle a holder to any dividends.

( Rights on winding up ) A Performance Right does not entitle the holder to participate in the surplus profits or assets of the Company upon winding up of the Company.

( Not transferable ) A Performance Right is not transferable.

( Reorganisation of capital ) If there is a reorganisation (including, without limitation, consolidation, subdivision, 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.

( Quotation of shares on conversion ) An application will be made by the Company to ASX for official quotation of the Shares issued upon the conversion of each Performance Right within the time period required by the Listing Rules.

( Participation in entitlements and bonus issues ) A Performance Right does not entitle a holder to participate in new issues of capital offered to holders of Shares, such as bonus issues and entitlement issues.

( Vesting on a Change of Control Event ) If there is a Change of Control Event in relation to the Company prior to the conversion or expiry of the Performance Rights, then:

• (a) all outstanding Vesting Conditions will be deemed to have been satisfied; and

• (b) each Performance Right will automatically and immediately convert into a Share.

For these purposes, Change of Control Event means

• (a) the occurrence of:

• (i) the offeror under a takeover offer in respect of all Shares announcing that it has achieved acceptances in respect of 50.1% or more of the Shares; and

• (ii) that takeover bid has become unconditional; or

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• (b) the announcement by the Company that:

• (i) shareholders of the Company have at a Court convened meeting of shareholders voted in favour, by the necessary majority, of a proposed scheme of arrangement under which all Shares are to be either:

  • (A) cancelled; or

  • (B) transferred to a third party; and

(ii) the Court, by order, approves the proposed scheme of arrangement.

( No other rights ) A Performance Right 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 term.

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SCHEDULE 2 – KEY TERMS AND CONDITIONS OF THE ADVISOR OPT IONS

The terms and conditions of the Advisor Options are outlined below.

1. Entitlement

Each Advisor Option ( Option ) entitles the holder to subscribe for one Share upon exercise of the Option.

2.

Exercise Price and Expiry Date

Exercise Price	Expiry Date
$0.25	Three years from issue date

3. Exercise Period

The Options are exercisable at any time on or prior to the Expiry Date.

4.

Notice of Exercise

The Options may be exercised by notice in writing to the Company ( Notice of Exercise ) 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 of the payment of the Exercise Price for each Option being exercised in cleared funds ( Exercise Date ).

5. Shares issued on exercise

Shares issued on exercise of the Options will rank equally with the then shares of the Company.

6.

Quotation of Shares on exercise

Application will be made by the Company to ASX for quotation of the Shares issued upon the exercise of the Options.

7.

Timing of issue of Shares

After an Option is validly exercised, the Company must, within, 15 Business Days of the notice of exercise and receipt of cleared funds equal to the sum payable on the exercise of the Option:

• (a) issue the Share; and

• (b) do all such acts, matters and things to obtain the grant of official quotation of the Share on ASX no later than 5 Business Days after issuing the Shares.

8.

Participation in new issues

There are no participation rights or entitlements inherent in the Options and holders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Options. However, the Company will give holders of the Options notice of the proposed issue prior to the date for determining entitlements to participate in any such issue.

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9. 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):

• (a) the number of Shares which must be issued on the exercise of an Option will be increased by the number of Shares which the Optionholder would have received if the Optionholder had exercised the Option before the record date for the bonus issue; and

• (b) no change will be made to the Exercise Price.

10. Adjustment for entitlement issue

If the Company makes an issue of Shares pro rata to existing Shareholders there will be no adjustment of the Exercise Price of an Option.

11. Adjustments for reorganisation

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

12. Options not quoted

The Company will not apply to ASX for quotation of the Options.

13. Options not transferable

The Options are not transferable.

14. Lodgement Instructions

Cheques shall be in Australian currency made payable to the Company and crossed "Not Negotiable". The application for shares on exercise of the Options with the appropriate remittance should be lodged at the Company's share registry.

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