WHITEHAWK LIMITED — AGM Information 2020

Apr 16, 2020

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17 April 2020

COVID-19 - VIRTUAL AGM

The Company will hold its Annual General Meeting (AGM) on Thursday 21 May 2020 at 9:00 AM (AEST). In light of the currently evolving COVID-19 situation, all resolutions at WhiteHawk AGM will be decided based on proxy votes and will require shareholders to join the AGM via webcast live rather than physically attending the AGM.

The AGM will be made accessible to all shareholders including a facility for shareholders to ask questions. Instructions to join the webcast will be published on WhiteHawk’s website and ASX announcements page.

The Directors encourage Shareholders to continue to participate in the shareholder meeting and engage with the Board in the following manner:

• (a) As all resolutions will be decided based on proxy votes which must be received by 9:00 am Tuesday 19 May 2020, shareholders are encouraged to lodge a proxy form prior to this date by following the instructions set out in the Notice;

• (b) lodging questions in advance of the meeting by emailing the questions to investors@whitehawk.com; and/or

• (c) joining the webcast of the AGM by following the instructions that will be published on WhiteHawk’s website and ASX announcement page.

The Australian government is implementing a wide range of measures to contain or delay the spread of COVID-19. As the situation is continually evolving, Shareholders are encouraged to monitor the ASX and the Company’s website for any updates in relation to the Meeting.

Ends.

This announcement was approved and authorised for release by Terry Roberts, Executive Chair and Chief Executive Officer.

WhiteHawk Limited ABN: 97 620 459 823 Level 28 140 St George Tce Perth WA 6000 Tel : +61 8 6311 4636, Fax : +61 8 6311 4661 www.whitehawk.com

WHITEHAWK LIMITED ACN 620 459 823 NOTICE OF ANNUAL GENERAL MEETING

Notice is given that the Meeting will be held at:

TIME : 09:00 AM (AEST) DATE : Thursday, 21 May 2020 PLACE : By webcast from: 515 King Street, Suite 450 ALEXANDRIA VA 22314 UNITED STATES OF AMERICA

The Meeting is being webcast from the Company’s offices in the United States, as this is where the Executive Chair resides.

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

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.

The Directors have determined pursuant to Regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the Meeting are those who are registered Shareholders at 5:00pm (WST) on Tuesday, 19 May 2020.

BUSINESS OF THE MEETING

AGENDA

1. FINANCIAL STATEMENTS AND REPORTS

To receive and consider the annual financial report of the Company for the financial year ended 31 December 2019 together with the declaration of the Directors, the Director’s report, the Remuneration Report and the auditor’s report.

2. RESOLUTION 1 – ADOPTION OF REMUNERATION REPORT

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

“That, for the purposes of section 250R(2) of the Corporations Act and for all other purposes, approval is given for the adoption of the Remuneration Report as contained in the Company’s annual financial report for the financial year ended 31 December 2019.”

Note: the vote on this Resolution is advisory only and does not bind the Directors or the Company.

Voting Prohibition Statement:

A vote on this Resolution must not be cast (in any capacity) by or on behalf of either of the following persons:

(a) a member of the Key Management Personnel, details of whose remuneration are included in the Remuneration Report; or

(b) a Closely Related Party of such a member. However, a person (the voter ) described above may cast a vote on this Resolution as a proxy if the vote is not cast on behalf of a person described above and either:

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

• (b) the voter is the Chair and the appointment of the Chair as proxy:

(i) does not specify the way the proxy is to vote on this Resolution; and (ii) expressly authorises the Chair to exercise the proxy even though this Resolution is connected directly or indirectly with the remuneration of a member of the Key Management Personnel.

3. RESOLUTION 2 – RE-ELECTION OF DIRECTOR – LOUISE MCELVOGUE

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

“That, for the purpose of clause 14.2 of the Constitution, Listing Rule 14.5 and for all other purposes, Louise McElvogue, a Director, retires by rotation, and being eligible, is re-elected as a Director.”

4. RESOLUTION 3 – APPROVAL OF 10% PLACEMENT CAPACITY

To consider and, if thought fit, to pass the following resolution as a special resolution :

“That, for the purposes of Listing Rule 7.1A and for all other purposes, approval is given for the Company to issue up to that number of Equity Securities equal to 10% of the issued capital of the Company at the time of issue, calculated in accordance with the formula prescribed in Listing Rule

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7.1A.2 and otherwise on the terms and conditions set out in the Explanatory Statement.”

5. RESOLUTION 4 – ADOPTION OF INCENTIVE PERFORMANCE RIGHTS AND OPTION 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 ASX Listing Rule 7.2 (Exception 13(b)) and for all other purposes, approval is given for the Company to adopt an employee incentive scheme titled Performance Rights and Option Plan and for the issue of securities under that Plan, on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion : The Company will disregard any votes cast in favour of the Resolution by or on behalf of any Director except one who is ineligible to participate in any employee incentive scheme in relation to the Company, or any associates of those Directors. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form, or, it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

Voting Prohibition Statement:

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

• (a) the proxy is either:

(i) a member of the Key Management Personnel; or (ii) a Closely Related Party of such a member; and

(b) the appointment does not specify the way the proxy is to vote on this Resolution. However, the above prohibition does not apply if:

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

6. RESOLUTION 5 – RATIFICATION OF PRIOR ISSUE OF 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 Listing Rule 7.4 and for all other purposes, Shareholders ratify the issue of 485,065 Shares on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion : The Company will disregard any votes cast in favour of the Resolution by or on behalf of a person who participated in the issue or is a counterparty to the agreement being approved (namely RiverFort Global Opportunities PCC Ltd ( RiverFort )) or an associate of that person or those persons.

However, this does not apply to a vote cast in favour of the Resolution by:

• (a) a person as a proxy or attorney for a person who is entitled to vote on the Resolution, in accordance with the directions given to the proxy or attorney to vote on the Resolution in that way; or

• (b) the Chair as proxy or attorney for a person who is entitled to vote on the Resolution, in accordance with a direction given to the Chair to vote on the Resolution as the Chair decides; or

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• (c) a holder acting solely in a nominee, trustee, custodial or other fiduciary capacity on behalf of a beneficiary provided the following conditions are met:

• (i) the beneficiary provides written confirmation to the holder that the beneficiary is not excluded from voting, and is not an associate of a person excluded from voting, on the Resolution; and

• (ii) the holder votes on the Resolution in accordance with directions given by the beneficiary to the holder to vote in that way.

7. RESOLUTION 6 – REPLACEMENT OF CONSTITUTION

To consider and, if thought fit, to pass the following resolution as a special resolution :

“That, for the purposes of section 136(2) of the Corporations Act and for all other purposes, approval is given for the Company to repeal its existing Constitution and adopt a new constitution in its place in the form as signed by the chairman of the Meeting for identification purposes.”

8. RESOLUTION 7 – APPROVAL TO ISSUE OPTIONS UNDER RIVERFORT LOAN 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, approval is given for the Company to issue up to such number of Options equal to $80,000 (equal to 20% of the $400,000 advance) divided by the 5-day VWAP determined over 5 days ending on the day that is five days prior to the date of the Meeting, rounded upwards to the nearest whole number and otherwise on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion :

The Company will disregard any votes cast in favour of the Resolution by or on behalf of a person who is expected to participate in, or 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 an associate of that person (or those persons). However, this does not apply to a vote cast in favour of the Resolution by:

• (a) a person as a proxy or attorney for a person who is entitled to vote on the Resolution, in accordance with the directions given to the proxy or attorney to vote on the Resolution in that way; or

• (b) the Chair as proxy or attorney for a person who is entitled to vote on the Resolution, in accordance with a direction given to the Chair to vote on the Resolution as the Chair decides; or

• (c) a holder acting solely in a nominee, trustee, custodial or other fiduciary capacity on behalf of a beneficiary provided the following conditions are met:

• (i) the beneficiary provides written confirmation to the holder that the beneficiary is not excluded from voting, and is not an associate of a person excluded from voting, on the resolution; and

• (ii) the holder votes on the resolution in accordance with directions given by the beneficiary to the holder to vote in that way.

9. RESOLUTION 8 – APPROVAL TO ISSUE SHARES UNDER SHARE PURCHASE 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, approval is given for the Company to issue up to such number of Shares equal to $1.5 million divided by the arithmetic average of the 5 daily volume weighted averages prices of the Company’s Shares over each of the 5 trading days

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prior to the date of the Annual General Meeting and otherwise on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion :

The Company will disregard any votes cast in favour of the Resolution by or on behalf of a person who is expected to participate in, or 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 an associate of that person (or those persons). However, this does not apply to a vote cast in favour of the Resolution by:

• (a) a person as a proxy or attorney for a person who is entitled to vote on the Resolution, in accordance with the directions given to the proxy or attorney to vote on the Resolution in that way; or

• (b) the Chair as proxy or attorney for a person who is entitled to vote on the Resolution, in accordance with a direction given to the Chair to vote on the Resolution as the Chair decides; or

• (c) a holder acting solely in a nominee, trustee, custodial or other fiduciary capacity on behalf of a beneficiary provided the following conditions are met:

• (i) the beneficiary provides written confirmation to the holder that the beneficiary is not excluded from voting, and is not an associate of a person excluded from voting, on the resolution; and

• (ii) the holder votes on the resolution in accordance with directions given by the beneficiary to the holder to vote in that way.

Dated: 17 April 2020

By order of the Board

Kevin Kye Company Secretary

Voting

Due to the rapidly evolving circumstances surrounding the spread of the COVID-19 virus and decisions by the Commonwealth and State Governments in Australia relating to the limitations on gatherings and group meetings, the Company intends to hold the Meeting as a virtual meeting only.

Therefore, in order to vote, Shareholders will need to vote by proxy by lodging their Proxy Form with the Company by no later than the time that is 48 hours prior to the commencement of the Meeting. The Directors strongly encourage all Shareholders to:

• appoint the Chair as their proxy; and

• direct their proxy how they wish them to vote.

Only directed proxy votes will be counted at the Meeting.

Voting in person

Unfortunately, due to the practicalities of complying with the Commonwealth and State Government restrictions to combat COVID-19, voting in person at the Meeting will not be possible at the 2020 Annual General Meeting.

Should you wish to discuss the matters in this Notice of Meeting please do not hesitate to contact the Company Secretary on +61 8 6311 4636.

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EXPLANATORY STATEMENT

This Explanatory Statement has been prepared to provide information which the Directors believe to be material to Shareholders in deciding whether or not to pass the Resolutions.

1. FINANCIAL STATEMENTS AND REPORTS

In accordance with the Constitution, the business of the Meeting will include receipt and consideration of the annual financial report of the Company for the financial year ended 31 December 2019 together with the declaration of the Directors, the Directors’ report, the Remuneration Report and the auditor’s report.

The Company will not provide a hard copy of the Company’s annual financial report to Shareholders unless specifically requested to do so. The Company’s annual financial report is available on its website at https://www.whitehawk.com/.

2. RESOLUTION 1 – ADOPTION OF REMUNERATION REPORT

2.1 General

The Corporations Act requires that at a listed company’s annual general meeting, a resolution that the remuneration report be adopted must be put to the shareholders. However, such a resolution is advisory only and does not bind the company or the directors of the company.

The remuneration report sets out the company’s remuneration arrangements for the directors and senior management of the company. The remuneration report is part of the directors’ report contained in the annual financial report of the company for a financial year.

The chair of the meeting must allow a reasonable opportunity for its shareholders to ask questions about or make comments on the remuneration report at the annual general meeting.

2.2 Voting consequences

A company is required to put to its shareholders a resolution proposing the calling of another meeting of shareholders to consider the appointment of directors of the company ( Spill Resolution ) if, at consecutive annual general meetings, at least 25% of the votes cast on a remuneration report resolution are voted against adoption of the remuneration report and at the first of those annual general meetings a Spill Resolution was not put to vote. If required, the Spill Resolution must be put to vote at the second of those annual general meetings.

If more than 50% of votes cast are in favour of the Spill Resolution, the company must convene a shareholder meeting ( Spill Meeting ) within 90 days of the second annual general meeting.

2.3

Previous voting results

At the Company’s previous annual general meeting the votes cast against the remuneration report considered at that annual general meeting were less than 25%. Accordingly, the Spill Resolution is not relevant for this Annual General Meeting.

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3. RESOLUTION 2 – RE-ELECTION OF DIRECTOR – LOUISE MCELVOGUE

3.1 General

Listing Rule 14.5 provides that an entity which has directors must hold an election of directors at each annual general meeting.

The Constitution sets out the requirements for determining which Directors are to retire by rotation at an annual general meeting.

Louise McElvogue, who has served as a Director since 19 January 2018 and was last re-elected on 21 May 2018, retires by rotation and seeks re-election.

3.2 Qualifications and other material directorships

Ms McElvogue is a non-executive director experienced in building digital businesses, leading innovation and managing risk for boards, corporates and start-ups globally. She is an Industry Professor, Data and Digital at the UTS Business School and a Fellow of the Australian Institute of Company Directors.

Current board roles include Whitehawk, Healthdirect, Australian Institute of Company Directors’ NSW Council, Humanitix Advisory Board and the Australian Physiotherapy Association. She previously served on the Australian Federal Government’s Convergence Review Committee which reviewed media and technology regulation and seven years on Sydney Living Museums for the NSW Government.

From streaming video to utilities and banking applications, Louise has led more than 30 digital products over two decades in the US, Europe and Australia, working on consumer digital applications, business change and growth strategies for companies including McDonald’s, British Gas, News Corp and the BBC.

The Board considers Ms McElvogue to be an independent director as she is free from any business or other relationship that could materially interfere with, or reasonably be perceived to materially interfere with, the independent exercise of her judgement.

3.3 Independence

If re-elected the Board considers Ms McElvogue will be an independent Director.

3.4 Board recommendation

The Board has reviewed Ms McElvogue’s performance since her appointment to the Board and considers that Ms McElvogue’s skills and experience will continue to enhance the Board’s ability to perform its role. Accordingly, the Board supports the re-election of Ms McElvogue and recommends that Shareholders vote in favour of Resolution 2.

4. RESOLUTION 3 – APPROVAL 10% PLACEMENT CAPACITY

4.1 General

Broadly speaking, and subject to a number of exceptions, Listing Rule 7.1 limits the amount of Equity Securities that a listed company can issue without the approval of its shareholders over any 12 month period to 15% of the fully paid ordinary securities it had on issue at the start of that period.

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However, under Listing Rule 7.1A, an eligible entity may seek shareholder approval by way of a special resolution passed at its annual general meeting to increase this 15% limit by an extra 10% to 25% ( 7.1A Mandate ).

An ‘eligible entity’ means an entity which is not included in the S&P/ASX 300 Index and has a market capitalisation of $300,000,000 or less. The Company is an eligible entity for these purposes.

Resolution 3 seeks Shareholder approval by way of special resolution for the Company to have the additional 10% placement capacity provided for in Listing Rule 7.1A to issue Equity Securities without Shareholder approval.

If Resolution 3 is passed, the Company will be able to issue Equity Securities up to the combined 25% limit in Listing Rules 7.1 and 7.1A without any further Shareholder approval.

If Resolution 3 is not passed, the Company will not be able to access the additional 10% capacity to issue Equity Securities without Shareholder approval under Listing Rule 7.1A, and will remain subject to the 15% limit on issuing Equity Securities without Shareholder approval set out in Listing Rule 7.1.

4.2 Technical information required by Listing Rule 7.1A

Pursuant to and in accordance with Listing Rule 7.3A, the information below is provided in relation to Resolution 3:

(a) Period for which the 7.1A Mandate is valid

The 7.1A Mandate will commence on the date of the Meeting and expiring on the first to occur of the following:

• (i) the date that is 12 months after the date of this Meeting;

• (ii) the time and date of the Company’s next annual general meeting; and

• (iii) the time and date of approval by Shareholders of any transaction under Listing Rule 11.1.2 (a significant change in the nature or scale of activities) or Listing Rule 11.2 (disposal of the main undertaking).

(b) Minimum Price

Any Equity Securities issued under the 7.1A Mandate must be in an existing quoted class of Equity Securities and be issued at a minimum price of 75% of the volume weighted average price of Equity Securities in that 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 by the entity and the recipient of the Equity Securities; or

• (ii) if the Equity Securities are not issued within 10 trading days of the date in Section (i) above, the date on which the Equity Securities are issued.

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(c) Use of funds raised under the 7.1A Mandate

The Company intends to use funds raised from issues of Equity Securities under the 7.1A Mandate for general working capital and/or business growth and development.

(d) Risk of Economic and Voting Dilution

Any issue of Equity Securities under the 7.1A Mandate will dilute the interests of Shareholders who do not receive any Shares under the issue.

If Resolution 3 is approved by Shareholders and the Company issues the maximum number of Equity Securities available under the 7.1A Mandate, the economic and voting dilution of existing Shares would be as shown in the table below.

The table below shows the dilution of existing Shareholders calculated in accordance with the formula outlined in Listing Rule 7.1A.2, on the basis of the closing market price of Shares and the number of Equity Securities on issue as at 6 April 2020.

The table also shows the voting dilution impact where the number of Shares on issue (Variable A in the formula) changes and the economic dilution where there are changes in the issue price of Shares issued under the 7.1A Mandate.

			Dilution	Dilution	Dilution
Number of Shares on Issue (Variable A in Listing Rule 7.1A.2)		Shares issued – 10% voting dilution		Issue Price
			$0.025 (50% decrease)	$0.050 (Current Price)	$0.080 (50% increase)
				Funds Raised
Current	158,995,360 Shares	15,899,536 Shares	$397,488	$794,976	$1,192,465
50% increase	238,493,040 Shares	23,849,304 Shares	$596,232	$1,192,465	$1,788,697
100% increase	317,990,720 Shares	31,799,072 Shares	$794,976	$1,589,953	$2,384,930

*The number of Shares on issue (Variable A in the formula) could increase as a result of the issue of Shares that do not require Shareholder approval (such as under a prorata rights issue or scrip issued under a takeover offer) or that are issued with Shareholder approval under Listing Rule 7.1.

The table above uses the following assumptions:

1. There are currently 158,995,360 Shares on issue plus any additional Shares issued under Resolution 8.

2. The issue price set out above is the closing market price of the Shares on the ASX on 6 April 2020.

3. The Company issues the maximum possible number of Equity Securities under the 7.1A Mandate.

4. The Company has not issued any Equity Securities in the 12 months prior to the Meeting that were not issued under an exception in Listing Rule 7.2 or with approval under Listing Rule 7.1.

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1. The issue of Equity Securities under the 7.1A Mandate consists only of Shares. It is assumed that no Options are exercised into Shares before the date of issue of the Equity Securities.

2. The calculations above do not show the dilution that any one particular Shareholder will be subject to. All Shareholders should consider the dilution caused to their own shareholding depending on their specific circumstances.

3. This table does not set out any dilution pursuant to approvals under Listing Rule 7.1 unless otherwise disclosed.

4. 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%.

5. The table does not show an example of dilution that may be caused to a particular Shareholder by reason of placements under the 7.1A mandate, based on that Shareholder’s holding at the date of the Meeting.

Shareholders should note that there is a risk that:

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

• (ii) the Shares may be issued at a price that is at a discount to the market price for those Shares on the date of issue.

(e) Allocation policy under the 7.1A Mandate

The recipients of the Equity Securities to be issued under the 7.1A Mandate have not yet been determined. However, the recipients of Equity Securities could consist of current Shareholders or new investors (or both), none of whom will be related parties of the Company.

The Company will determine the recipients at the time of the issue under the 7.1A Mandate, having regard to the following factors:

• (i) the purpose of the issue;

• (ii) alternative methods for raising funds available to the Company at that time, including, but not limited to, an entitlement issue, share purchase plan, placement or other offer where existing Shareholders may participate;

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

• (iv) the circumstances of the Company, including, but not limited to, the financial position and solvency of the Company;

• (v) prevailing market conditions; and

• (vi) advice from corporate, financial and broking advisers (if applicable).

• (f) Previous approval under Listing Rule 7.1A

The Company previously obtained approval from its Shareholders pursuant to Listing Rule 7.1A at its annual general meeting held on 8 May 2019 ( Previous Approval ).

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During the 12 month period preceding the date of the Meeting, being on and from 21 May 2019, the Company has not issued any Equity Securities pursuant to the Previous Approval.

4.3 Voting Exclusion Statement

As at the date of this Notice, the Company is not presently proposing to make an issue of Equity Securities under Listing Rule 7.1A. Accordingly, a voting exclusion statement is not included in this Notice.

5. RESOLUTION 4 – ADOPTION OF INCENTIVE PERFORMANCE RIGHTS AND OPTION PLAN

Resolution 4 seeks Shareholder approval for the adoption of the employee incentive scheme titled Incentive Performance Rights and Option Plan ( Plan ) in accordance with ASX Listing Rule 7.2 (Exception 13(b)).

ASX Listing Rule 7.1 provides that a company must not, subject to specified exceptions, issue or agree to issue more equity securities during any 12 month period than that amount which represents 15% of the number of fully paid ordinary securities on issue at the commencement of that 12 month period. ASX Listing Rule 7.2 (Exception 13(b)) sets out an exception to ASX Listing Rule 7.1 which provides that issues under an employee incentive scheme are exempt for a period of 3 years from the date on which shareholders approve the issue of securities under the scheme as an exception to ASX Listing Rule 7.1. The Company originally adopted the Plan prior to its listing on ASX in January 2018.

If Resolution 4 is passed, the Company will be able to issue Performance Rights and Options under the Plan to eligible participants over a period of 3 years without impacting on the Company’s ability to issue up to 15% of its total ordinary securities without Shareholder approval in any 12 month period.

The objective of the Plan is to attract, motivate and retain key employees and it is considered by the Company that the adoption of the Plan and the future issue of Performance Rights and Options under the Plan will provide selected employees with the opportunity to participate in the future growth of the Company.

Any future issues of Performance Rights and Options under the Plan to a related party or a person whose relationship with the company or the related party is, in ASX’s opinion, such that approval should be obtained will require additional Shareholder approval under ASX Listing Rule 10.14 at the relevant time.

A summary of the key terms and conditions of the Plan is set out in Schedule 1. In addition, a copy of the Plan is available for review by Shareholders at the registered office of the Company until the date of the Meeting. A copy of the Plan can also be sent to Shareholders upon request to the Company Secretary (+61 8 6311 4636). Shareholders are invited to contact the Company if they have any queries or concerns.

6. RESOLUTION 5 – RATIFICATION OF PRIOR ISSUE OF SHARES

6.1 General

As announced on 30 January 2020, the Company entered into an unsecured loan agreement with institutional investor RiverFort ( RiverFort Loan Agreement ). The material terms of this Agreement are set out in Schedule 2.

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On 4 February 2020, the Company issued 485,065 Shares in lieu of the cash payment of the drawdown fee under the terms of the RiverFort Loan Agreement.

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.

As the issue of the Shares has not yet been approved by Shareholders, it effectively uses up part of the Company’s 15% placement capacity under Listing Rule 7.1, reducing the Company’s capacity to issue further equity securities without Shareholder approval over the 12 month period following the date of issue of the Shares.

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

The Company wishes to retain as much flexibility as possible to issue additional equity securities in the future without having to obtain Shareholder approval for such issues under Listing Rule 7.1. Accordingly, the Company is seeking Shareholder ratification pursuant to Listing Rule 7.4 for the issue of the Shares.

Resolution 5 seeks Shareholder ratification pursuant to Listing Rule 7.4 for the issue of the Shares.

6.2 Technical information required by Listing Rule 14.1A

If Resolution 5 is not passed, the Shares will be included in calculating the Company’s 15% placement capacity under Listing Rule 7.1, effectively decreasing the number of equity securities that the Company can issue without Shareholder approval over the 12 month period following the date of issue of the Shares.

If Resolution 5 is passed, the base figure (i.e. variable “A”) in which the Company’s 15% placement capacity and 10% annual placement capacities are calculated will be a higher number which in turn will allow a proportionately higher number of securities to be issued without prior Shareholder approval. Although, it is noted that the Company’s use of the 10% annual placement capacity following this Meeting remains conditional on Resolution 3 being passed by the requisite majority.

6.3 Technical information required by Listing Rule 7.5

Pursuant to and in accordance with Listing Rule 7.5, the following information is provided in relation to Resolution 5:

• (a) the Shares were issued to RiverFort Global Opportunities PCC Ltd, who is not a related party of the Company;

• (b) 485,065 Shares were issued;

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

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• (d) the Shares were issued on 4 February 2020;

• (e) no funds were raised from this issue as the Shares were lieu of cash payment of the drawdown fee under the terms of the loan agreement; and

• (f) a summary of the Loan Agreement is set out in Schedule 2.

7. RESOLUTION 6 – REPLACEMENT OF CONSTITUTION

7.1 General

A company may modify or repeal its constitution or a provision of its constitution by special resolution of shareholders.

Resolution 6 is a special resolution which will enable the Company to repeal its existing Constitution and adopt a new constitution ( Proposed Constitution ) which is of the type required for a listed public company limited by shares updated to ensure it reflects the current provisions of the Corporations Act and Listing Rules.

This will incorporate amendments to the Corporations Act and Listing Rules since the current Constitution was adopted in 2018.

The Directors believe that it is preferable in the circumstances to replace the existing Constitution with the Proposed Constitution rather than to amend a multitude of specific provisions.

The Proposed Constitution is broadly consistent with the provisions of the existing Constitution. Many of the proposed changes are administrative or minor in nature including but not limited to expressly providing for statutory rights by mirroring these rights in provisions of the Proposed Constitution.

The Directors believe these amendments are not material nor will they have any significant impact on Shareholders. It is not practicable to list all of the changes to the Constitution in detail in this Explanatory Statement, however, a summary of the proposed material changes is set out below.

A copy of the Proposed Constitution is available for review by Shareholders at the Company’s website https://www.whitehawk.com/ and at the office of the Company. A copy of the Proposed Constitution can also be sent to Shareholders upon request to the Company Secretary (+61 8 6311 4636). Shareholders are invited to contact the Company if they have any queries or concerns.

7.2 Summary of material proposed changes

Restricted Securities (clause 2.12)

The Proposed Constitution complies with the recent changes to Listing Rule 15.12 which took effect from 1 December 2019. As a result of these changes, ASX will require certain more significant holders of restricted securities and their controllers (such as related parties, promoters, substantial holders, service providers and their associates) to execute a formal escrow agreement in the form Appendix 9A, as is currently the case. However, for less significant holdings (such as non-related parties and non-promoters), ASX will permit the Company to issue restriction notices to holders of restricted securities in the form of the new Appendix 9C advising them of the restriction rather than requiring signed restriction agreements.

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Minimum Shareholding (clause 3)

Clause 3 of the Constitution outlines how the Company can manage shareholdings which represent an “unmarketable parcel” of shares, being a shareholding that is less than $500 based on the closing price of the Company’s Shares on ASX as at the relevant time.

The Proposed Constitution is in line with the requirements for dealing with “unmarketable parcels” outlined in the Corporations Act such that where the Company elects to undertake a sale of unmarketable parcels, the Company is only required to give one notice to holders of an unmarketable parcel to elect to retain their shareholding before the unmarketable parcel can be dealt with by the Company, saving time and administrative costs incurred by otherwise having to send out additional notices.

Clause 3 of the Proposed Constitution continues to outline in detail the process that the Company must follow for dealing with unmarketable parcels.

Direct Voting (clause 13, specifically clauses 13.35 – 13.40)

The Proposed Constitution includes a new provision which allows Shareholders to exercise their voting rights through direct voting (in addition to exercising their existing rights to appoint a proxy). Direct voting is a mechanism by which Shareholders can vote directly on resolutions which are to be determined by poll. Votes cast by direct vote by a Shareholder are taken to have been cast on the poll as if the Shareholder had cast the votes on the poll at the meeting. In order for direct voting to be available, Directors must elect that votes can be cast via direct vote for all or any resolutions and determine the manner appropriate for the casting of direct votes. If such a determination is made by the Directors, the notice of meeting will include information on the application of direct voting.

Partial (proportional) takeover provisions (new clause 36)

A proportional takeover bid is a takeover bid where the offer made to each shareholder is only for a proportion of that shareholder’s shares.

Pursuant to section 648G of the Corporations Act, the Company has included in the Proposed Constitution a provision whereby a proportional takeover bid for Shares may only proceed after the bid has been approved by a meeting of Shareholders held in accordance with the terms set out in the Corporations Act.

This clause of the Proposed Constitution will cease to have effect on the third anniversary of the date of the adoption of last renewal of the clause.

Information required by section 648G of the Corporations Act

Effect of proposed proportional takeover provisions

Where offers have been made under a proportional off-market bid in respect of a class of securities in a company, the registration of a transfer giving effect to a contract resulting from the acceptance of an offer made under such a proportional off-market bid is prohibited unless and until a resolution to approve the proportional off-market bid is passed.

Reasons for proportional takeover provisions

A proportional takeover bid may result in control of the Company changing without Shareholders having the opportunity to dispose of all their Shares. By

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making a partial bid, a bidder can obtain practical control of the Company by acquiring less than a majority interest. Shareholders are exposed to the risk of being left as a minority in the Company and the risk of the bidder being able to acquire control of the Company without payment of an adequate control premium. These amended provisions allow Shareholders to decide whether a proportional takeover bid is acceptable in principle, and assist in ensuring that any partial bid is appropriately priced.

Knowledge of any acquisition proposals

As at the date of this Notice of Meeting, no Director is aware of any proposal by any person to acquire, or to increase the extent of, a substantial interest in the Company.

Potential advantages and disadvantages of proportional takeover provisions

The Directors consider that the proportional takeover provisions have no potential advantages or disadvantages for them and that they remain free to make a recommendation on whether an offer under a proportional takeover bid should be accepted.

The potential advantages of the proportional takeover provisions for Shareholders include:

• (a) the right to decide by majority vote whether an offer under a proportional takeover bid should proceed;

• (b) assisting in preventing Shareholders from being locked in as a minority;

• (c) increasing the bargaining power of Shareholders which may assist in ensuring that any proportional takeover bid is adequately priced; and

• (d) each individual Shareholder may better assess the likely outcome of the proportional takeover bid by knowing the view of the majority of Shareholders which may assist in deciding whether to accept or reject an offer under the takeover bid.

The potential disadvantages of the proportional takeover provisions for Shareholders include:

• (a) proportional takeover bids may be discouraged;

• (b) lost opportunity to sell a portion of their Shares at a premium; and

• (c) the likelihood of a proportional takeover bid succeeding may be reduced.

Recommendation of the Board

The Directors do not believe the potential disadvantages outweigh the potential advantages of adopting the proportional takeover provisions and as a result consider that the proportional takeover provision in the Proposed Constitution is in the interest of Shareholders and unanimously recommend that Shareholders vote in favour of Resolution 6.

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8. RESOLUTION 7 – APPROVAL TO ISSUE OPTIONS UNDER RIVERFORT LOAN AGREEMENT

8.1 General

As announced on 30 January 2020, the Company has entered into a loan agreement with RiverFort ( Loan Agreement ). A summary of the terms of the loan Agreement were set out in the announcement on 30 January 2020 and are included in Schedule 2.

Pursuant to the terms of the Loan Agreement, the Company is required to either pay a cash fee of $40,000 or issue such number of Options equal to 20% of the $400,000 advance (being $80,000) ( Advance ), divided by a VWAP determined over 5 days ending on the day that is five days prior to the date of the Meeting, rounded upwards to the nearest whole number. The Options will be exercisable at a price equal to a 40% premium to the volume weighted average price of the Company’s Shares trading on the trading day immediately prior to the date of the Meeting and exercisable within 30 months from the date of issue.

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 proposed issue of the Options does not fit within any of the specified exceptions to Listing Rule 7.1. While the issue does not exceed the 15% limit in Listing Rule 7.1 and can therefore be made without breaching that rule, the Company wishes to retain as much flexibility as possible to issue additional equity securities in the future without having to obtain Shareholder approval under Listing Rule 7.1. Accordingly, the Company is seeking Shareholder approval pursuant to Listing Rule 7.1 so that it does not use up any of its 15% placement capacity under Listing Rule 7.1.

If Resolution 7 is not passed, the Company will not be able to proceed with the issue of the Options and will need to pay the $40,000 fee to RiverFort.

If Resolution 7 is passed, the Company will be able to proceed with the issue of the Options. In addition, the issue of the Options will be excluded from the calculation of the number of equity securities that the Company can issue without Shareholder approval under Listing Rule 7.1.

Resolution 7 seeks Shareholder approval for the purposes of Listing Rule 7.1 for the issue of the Options.

8.2 Technical information required by Listing Rule 7.1

Pursuant to and in accordance with Listing Rule 7.3, the following information is provided in relation to Resolution 7:

• (a) the Options will be issued to RiverFort, who is not a related party of the Company;

• (b) the maximum number of Options to be issued is the number equal to $80,000 divided by the 5-day VWAP of the Company’s Shares determined over the 5 days ending on the day that is five days prior to the date of the

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Meeting. As an example of how many Options may be issued under this scenario, the following examples are provided:

Theoretical VWAP	No. of Options to be issued
$0.025	3,200,000
$0.05 (current share price)	1,600,000
$0.075	1,066,667

• (c) the Options will be issued on the terms and conditions set out in Schedule 3;

• (d) the Options 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 Listing Rules) and it is intended that issue of the Options will occur on the same date;

• (e) no funds will be raised from the issue as the Options will be under the Loan Agreement; and

• (f) a summary of the material terms of the Loan Agreement is set out in Schedule 2.

9. RESOLUTION 8 – APPROVAL TO ISSUE SHARES UNDER RIVERFORT SHARE PURCHASE AGREEMENT

9.1 General

As announced on 30 January 2020, the Company has entered into a share purchase agreement with RiverFort and is proposing to issue up to $1,500,000 in Shares pursuant to this agreement ( Share Purchase Agreement ). A summary of the terms of the Share Purchase Agreement are set out in the announcement and also in Schedule 4.

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 proposed issue of the Shares does not fit within any of the specified exceptions to Listing Rule 7.1. While the issue does not exceed the 15% limit in Listing Rule 7.1 and can therefore be made without breaching that rule, the Company wishes to retain as much flexibility as possible to issue additional equity securities in the future without having to obtain Shareholder approval under Listing Rule 7.1. Accordingly, the Company is seeking Shareholder approval pursuant to Listing Rule 7.1 so that it does not use up any of its 15% placement capacity under Listing Rule 7.1.

9.2 Share Purchase Agreement and Equity Swap Agreement

As set out in the announcement on 30 January 2020, the Company entered into a separate equity swap agreement with RiverFort on the same date as entering into the Share Purchase Agreement ( Equity Swap Agreement ). While the two agreements are separate, they are co-dependent, meaning the Company will offset RiverFort’s obligation to pay the purchase price for the Shares under the Share Purchase Agreement against the Company’s obligations under the Equity Swap Agreement.

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The Equity Swap Agreement provides that RiverFort must make monthly payments to the Company which, when aggregated, will equal $1.5 million ( Principal Amount ).

The Company will receive those monthly payments plus an amount that represents 50% of the difference between 110% of the Placement Price ( Benchmark Price ) and the market price for a month calculated as the numeric average of the 10 lowest daily VWAPs during that month ( Market Price ). Conversely, if the Market Price is below the Benchmark Price in that month, then the Company would receive that month’s portion of the Principal Amount less the difference between the Market Price and Benchmark Price.

The Share Purchase Agreement contains selling restrictions and volume limits on any Share sales by RiverFort during the term of the Equity Sharing Agreement and RiverFort may vary the timing and amount of any Share sales. Where, as a result of the difference in the Benchmark Price and the Market Price, the Company would be required to pay an amount to Riverfort for that month. However, the total amount payable by the Company under the ESA is capped at $50,000.

There is no obligation on the Company to make the Placement and it may not be made if growing revenues are sufficient for any additional working capital needs at the time.

9.3 Technical information required by Listing Rule 14.1A

If Resolution 8 is not passed, the Company will not be able to proceed with the issue of the Shares and as a consequence will not be able to utilise the Equity Swap Agreement.

If Resolution 8 is passed, the Company will be able to proceed with the issue of the Shares. In addition, the issue of the Shares will be excluded from the calculation of the number of equity securities that the Company can issue without Shareholder approval under Listing Rule 7.1.

Resolution 8 seeks Shareholder approval for the purposes of Listing Rule 7.1 for the issue of the Shares.

9.4 Technical information required by Listing Rule 7.1

Pursuant to and in accordance with Listing Rule 7.3, the following information is provided in relation to Resolution 8:

• (a) the Shares will be issued to RiverFort, who are not related parties of the Company;

• (i) the maximum number of Shares to be issued is that number of Shares equal to $1,500,000 divided by the 5-day VWAP determined over the 5 days ending on the day that is five days prior to the date of the Meeting, limited to ensure that RiverFort does not acquire an interest greater than 19.99% of the Company’s total Shares on issue.

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By way of example, the number of Shares to be issued based on a number of theoretical average VWAPs is shown below:

Theoretical issue price (VWAP)	No. of Shares to be issued
$0.025	60,000,000 (capped at approximately 39,700,000 Shares)
$0.05 (current share price)	30,000,000
$0.075	20,000,000

• (ii) 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;

• (iii) 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 Listing Rules) and it is intended that issue of the Shares will occur on the same date;

• (iv) as outlined above, no immediate funds will be received under the Share Purchase Agreement, as the obligations of RiverFort under that agreement will be offset against the Company’s obligations under the Equity Swap Agreement. However, when funds are received under the Equity Swap Agreement, they will be used to meet ongoing working capital requirements; and

• (v) a summary of the material terms of the Share Purchase Agreement is set out in Schedule 4.

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GLOSSARY

$ means Australian dollars.

Associated Body Corporate means:

• (a) a related body corporate (as defined in the Corporations Act) of the Company;

• (b) a body corporate which has an entitlement to not less than 20% of the voting Shares of the Company; and

• (c) a body corporate in which the Company has an entitlement to not less than 20% of the voting shares.

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

ASIC means the Australian Securities & Investments Commission.

ASX means ASX Limited (ACN 008 624 691) or the financial market operated by ASX Limited, as the context requires.

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.

Chair means the chair of the Meeting.

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

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

• (b) a child of the member’s spouse;

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

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

• (e) a company the member controls; or

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

Company means Whitehawk Limited (ACN 620 459 823).

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.

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

Listing Rules means the Listing Rules of ASX.

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

Option means an option to acquire a Share.

Optionholder means a holder of an Option.

Performance Right means a right to acquire a Share, subject to satisfaction of any vesting conditions, and the corresponding obligation of the Company to provide the Share.

Performance Rights Plan means the incentive performance rights plan the subject of Resolution 4 as summarised in Schedule 1

Proxy Form means the proxy form accompanying the Notice.

Remuneration Report means the remuneration report set out in the Director’s report section of the Company’s annual financial report for the year ended 31 December 2019.

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

Section means a section of the Explanatory Statement.

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

Shareholder means a registered holder of a Share.

Variable A means “A” as set out in the formula in Listing Rule 7.1A.2.

VWAP means the volume weighted average price.

WST means Western Standard Time as observed in Perth, Western Australia.

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SCHEDULE 1 – TERMS AND CONDITIONS OF INCENTIVE PERFORMANCE RIGHTS AND OPTION PLAN

The key terms of the Performance Rights and Option Plan ( Plan ) are as follows:

(a) Eligibility

Participants in the Plan may be:

• (i) a Director (whether executive or non-executive) of the Company and any associated body corporate of the Company (each a Group Company);

• (ii) a full or part time employee of any Group Company;

• (iii) a casual employee or contractor of a Group Company to the extent permitted by ASIC Class Order 14/1000 as amended or replaced (Class Order); or

• (iv) a prospective participant, being a person to whom the offer is made but who can only accept the offer if an arrangement has been entered into that will result in the person becoming a participant under subparagraphs (i), (ii), or (iii) above,

who is declared by the Board to be eligible to receive grants of Awards under the Plan (Eligible Participants).

(b) Offer

The Board may, from time to time, in its absolute discretion, make a written offer to any Eligible Participant (including an Eligible Participant who has previously received an offer) to apply for Awards, upon the terms set out in the Plan and upon such additional terms and conditions as the Board determines (Offer).

(c) Plan limit

The Company must have reasonable grounds to believe, when making an offer, that the number of Shares to be received on exercise of Awards offered under an offer, when aggregated with the number of Shares issued or that may be issued as a result of offers made in reliance on the Class Order at any time during the previous 3 year period under an employee incentive scheme covered by the Class Order or an ASIC exempt arrangement of a similar kind to an employee incentive scheme, will not exceed 5% of the total number of Shares on issue at the date of the offer.

(d) Issue price

Unless the Awards are quoted on the ASX, Awards issued under the Plan will be issued for no more than nominal cash consideration.

(e) Vesting Conditions

An Award may be made subject to vesting conditions as determined by the Board in its discretion and as specified in the offer for the Awards (Vesting Conditions).

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(f) Vesting

The Board may in its absolute discretion (except in respect of a change of control occurring where Vesting Conditions are deemed to be automatically waived) by written notice to a Participant (being an Eligible Participant to whom Awards have been granted under the Plan or their nominee where the Awards have been granted to the nominee of the Eligible Participant (Relevant Person)), resolve to waive any of the Vesting Conditions applying to Awards due to:

• (i) special circumstances arising in relation to a Relevant Person in respect of those Performance Rights, being:

• (A) a Relevant Person ceasing to be an Eligible Participant due to:

  • (I) death or total or permanent disability of a Relevant Person; or

  • (II) retirement or redundancy of a Relevant Person;

• (B) a Relevant Person suffering severe financial hardship;

• (C) any other circumstance stated to constitute “special circumstances” in the terms of the relevant Offer made to and accepted by the Participant;

• (D) any other circumstances determined by the Board at any time (whether before or after the Offer) and notified to the Relevant Participant which circumstances may relate to the Participant, a class of Participant, including the Participant or particular circumstances or class of circumstances applying to the Participant;

• (E) a change of control occurring; or

• (F) the Company passing a resolution for voluntary winding up, or an order is made for the compulsory winding up of the Company.

(g) Lapse of an Award

An Award will lapse upon the earlier to occur of:

• (i) an unauthorised dealing, or hedging of, the Award occurring;

• (ii) a Vesting Condition in relation to the Award is not satisfied by its due date, or becomes incapable of satisfaction, as determined by the Board in its absolute discretion, unless the Board exercises its discretion to waive the Vesting Condition and vest the Award;

• (iii) in respect of unvested Awards only, an Eligible Participant ceases to be an Eligible Participant, unless the Board exercises its discretion to vest the Award in the circumstances set out in paragraph (f) or the Board resolves, in its absolute discretion, to allow the unvested Awards to remain unvested after the Relevant Person ceases to be an Eligible Participant;

• (iv) in respect of vested Awards only, a relevant person ceases to be an Eligible Participant and the Award granted in respect of that person is not exercised within a one (1) month period (or such later date as the Board determines) of the date that person ceases to be an Eligible Participant;

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• (v) the Board deems that an Award lapses due to fraud, dishonesty or other improper behaviour of the Eligible Participant;

• (vi) the Company undergoes a change of control or a winding up resolution or order is made and the Board does not exercise its discretion to vest the Award; and

• (vii) the expiry date of the Award.

(h) Shares

Shares resulting from the exercise of the Awards shall, subject to any Sale Restrictions (refer paragraph (i)) from the date of issue, rank on equal terms with all other Shares on issue.

(i) Sale Restrictions

The Board may, in its discretion, determine at any time up until exercise of Awards, that a restriction period will apply to some or all of the Shares issued to an Eligible Participant (or their eligible nominee) on exercise of those Awards up to a maximum of five (5) years from the grant date of the Awards. In addition, the Board may, in its sole discretion, having regard to the circumstances at the time, waive any such restriction period determined.

(j) No Participation Rights

There are no participating rights or entitlements inherent in the Awards and holders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Awards.

(k) Change in exercise price of number of underlying securities

Unless specified in the offer of the Awards and subject to compliance with the ASX Listing Rules, an Award does not confer the right to a change in exercise price or in the number of underlying Shares over which the Award can be exercised.

(l) Reorganisation

If, at any time, the issued capital of the Company is reorganised (including consolidation, subdivision, reduction or return), all rights of a holder of an Award are to be changed in a manner consistent with the Corporations Act and the ASX Listing Rules at the time of the reorganisation.

(m) Trust

The Board may, at any time, establish a trust for the sole purpose of acquiring and holding Shares in respect of which a Participant may exercise, or has exercised, vested Awards, including for the purpose of enforcing the disposal restrictions and appoint a trustee to act as trustee of the trust. The trustee will hold the Shares as trustee for and on behalf of a Participant as beneficial owner upon the terms of the trust. The Board may at any time amend all or any of the provisions of the Plan to effect the establishment of such a trust and the appointment of such a trustee.

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SCHEDULE 2 – SUMMARY OF RIVERFORT LOAN AGREEMENT

The material terms of the Loan are as follows:

• (a) Advance: A$400,000

• (b) Interest: No interest save for any applicable default Interest.

• (c)

• Advance Date: Within 10 Business Days of 29 January 2020

• (d) Repayment Date: The later of 4 calendar months after the Advance Date or the date of the Company's Annual General Meeting (but no later than 29 May 2020). The Advance together with any interest ("Debt") may be repaid prior to the Repayment Date with no penalty.

• (e) Drawdown Fee: 9.5% of the Advance which is payable by the following means:

• (i) through the issue of that number of fully paid ordinary shares calculated by dividing the volume weighted average price of shares on the 5 trading days prior to the Advance Date by the Drawdown Fee; or

• (ii) by a combination of issuing shares (using the same calculation as set out in (a) above) and payment of cash to be deducted from the Advance; or

• (iii) in cash to be deducted from the Advance, at the election of the Company.

The Company confirms that as at the date of the Loan agreement it has sufficient placement capacity under ASX Listing Rule 7.1 to issue the Drawdown Fee as calculated in accordance with (a) and (b).

(f) Options: Subject to the Company obtaining shareholder approval at it’s AGM to be held in May 2020, the Company will issue Options to RiverFort equal to 20% of the Advance ($80,000) divided by the 5-day determined over the 5 days ending on the day that is five days prior to the date of the Meeting, rounded upwards to the nearest whole number.

In the event shareholder approval is not obtained, RiverFort is to be paid $40,000 in cash in lieu of the above options.

(g) Security: None.

• (h) Other: If, prior to the Repayment Date, the Company and RiverFort enter the SPA and ESA (each defined below) and the conditions precedent to those agreements are satisfied, the Repayment Date may be extended by 12 months from the date the conditions to those agreements are satisfied if not paid out in cash. In the event the Repayment Date is extended, a facility extension fee of 1% of the outstanding portion of the Debt for each month of the extended term will be payable.

If the Repayment Date is extended, repayment will be amortised over the 12 month period In monthly amounts equal to 50% of the monthly payments to be made by RiverFort to the Company under the ESA.

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SCHEDULE 3 – TERMS AND CONDITIONS OF RIVERFORT OPTIONS

1. Entitlement

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

2. Exercise Price

Subject to paragraph 9, the amount payable upon exercise of each Option will be 140% of the VWAP on the ASX trading day immediately prior to the date of the General Meeting ( Option Exercise Price )

3. Expiry Date

Each Option will expire at 5:00 pm (WST) on the date that is 30 months after the date of issue of the Options ( Expiry Date ). An Option not exercised before the Expiry Date will automatically lapse on the Expiry Date.

4. Exercise Period

The Options are exercisable at any time on or prior to the Expiry Date ( Exercise Period ).

5. Notice of Exercise

The Options may be exercised during the Exercise Period by notice in writing to the Company in the manner specified on the Option certificate ( Notice of Exercise ) and payment of the Option Exercise Price for each Option being exercised in Australian currency by electronic funds transfer or other means of payment acceptable to the Company.

6. Exercise Date

A Notice of Exercise is only effective on and from the later of the date of receipt of the Notice of Exercise and the date of receipt of the payment of the Option Exercise Price for each Option being exercised in cleared funds ( Exercise Date ).

7. Timing of issue of Shares on exercise

Within five Business Days after the Exercise Date, the Company will:

• (a) issue the number of Shares required under these terms and conditions in respect of the number of Options specified in the Notice of Exercise and for which cleared funds have been received by the Company;

• (b) if required, give ASX a notice that complies with section 708A(5)(e) of the Corporations Act, or, if the Company is unable to issue such a notice, lodge with ASIC a prospectus prepared in accordance with the Corporations Act and do all such things necessary to satisfy section 708A(11) of the Corporations Act to ensure that an offer for sale of the Shares does not require disclosure to investors; and

• (c) if admitted to the official list of ASX at the time, apply for official quotation on ASX of Shares issued pursuant to the exercise of the Options.

If a notice delivered under 7(b) for any reason is not effective to ensure that an offer for sale of the Shares does not require disclosure to investors, the Company

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must, no later than 20 Business Days after becoming aware of such notice being ineffective, lodge with ASIC a prospectus prepared in accordance with the Corporations Act and do all such things necessary to satisfy section 708A(11) of the Corporations Act to ensure that an offer for sale of the Shares does not require disclosure to investors.

8. Shares issued on exercise

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

9. Reconstruction of capital

If at any time the issued capital of the Company is reconstructed, all rights of an Optionholder are to be changed in a manner consistent with the Corporations Act and the ASX Listing Rules at the time of the reconstruction.

10. 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 without exercising the Options.

11. Change in exercise price

An Option does not confer the right to a change in Option Exercise Price or a change in the number of underlying securities over which the Option can be exercised.

12. Transferability

The Options are transferable subject to any restriction or escrow arrangements imposed by ASX or under applicable Australian securities laws.

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SCHEDULE 4 – MATERIAL TERMS OF SHARE PURCHASE AGREEMENT

A summary of the material terms of the Share Purchase Agreement ( SPA ) between the Company and Riverfort Global Opportunities PCC Ltd is as follows:

• (a) Transaction

The transaction between the Company and Riverfort is an agreement for the purchase of shares for a purchase price of A$1,500,000.

• (b) Purchase Price

A$1,500,000 (reduced to such extent to ensure that the Investor’s shares are less than 20% of the total number of Shares on issue).

(c) Purchase Date

Within 2 Business Days after the date of satisfaction of the specific conditions precedent to purchase (contained in clause 4.1 of the SPA).

• (d)

Conditions Precedent

• (i) The Company has delivered to the Investor:

• (A) a copy of resolutions duly passed by the Board of Directors of the Company, substantially in the form of Annexure A;

• (B) a certificate substantially in the form of Annexure B executed on behalf of the Company by its Chief Executive Officer, Managing Director or Chairman dated as of the Purchase Date; and

• (C) a Purchase Statement, substantially in the form of Annexure C.

• (ii) The Company has executed the Equity Sharing Agreement.

• (iii) The Company has obtained the approval of its shareholders to issue the Investor’s Shares for the purpose of Listing Rule 7.1 and all other relevant purposes.

• (iv) The issue of the Investor’s Shares will not cause the Company to breach the ASX Listing Rules, including, but not limited to, Listing Rule 7.1. The Parties agree that this clause cannot be waived by either of the Parties.

• (v) The Company has performed, or complied in all material respects with, all material obligations required by this Agreement to be performed or complied with by the Company as at, or prior to, the Contemplated Transaction.

• (vi) The Company is ready, willing and able to perform (in accordance with all applicable Laws) and comply in all respects with, those requirements of clause 4 which apply in respect of the issue of the Investor’s Shares.

• (vii) No Event of Default or Potential Event of Default would occur as a consequence of the Contemplated Transaction or has occurred (irrespective of whether any grace period has expired).

• (viii) No event of default (however described) has occurred under the Loan Agreement.

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• (ix) The consummation of the Contemplated Transaction would not result in the Company being in breach of any Law.

• (x) No event or circumstance that has or is likely to have a Material Adverse Effect has occurred.

• (xi) The Investor has received such documents and evidence as the Investor may reasonably require to satisfy itself that the conditions in this clause 4.1 have been satisfied.

• (e) Placement Fee

• 5% of the Purchase Price (to be deducted from the Purchase Price).

• (f) Termination

The Agreement may be terminated by agreement of the Parties at any time and otherwise:

• (i) by either Party by notice to the other, effective immediately, if the Purchase has not occurred within five Business Days of the Purchase Date or such later date as the Parties agree in writing, however this right is not available to any Party that is in material breach of or default under the Agreement; or

• (ii) by the Investor under clause 9.4 of the Agreement.

30

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WHK

• ✓

• ✓

• ✓

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