Constitution GRANGE RESOURCES LIMITED

Transcription

1 Constitution of GRANGE RESOURCES LIMITED ACN a company limited by shares (as amended pursuant to a shareholders resolution dated 28 November 2006)

2 Contents Constitution of Grange Resources Limited 1 1 Preliminary 1 Definitions 1 Interpretation 2 Replaceable rules not to apply 3 Currency 3 2 Share capital and variation of rights 4 Directors to issue shares 4 Variation of rights 4 Recognition of interests 5 Joint holders of shares 5 3 Lien 20 Lien on share 20 Sale under lien 21 Transfer on sale under lien 21 Proceeds of sale 22 4 Calls on shares 22 Directors to make calls 22 Time of call 22 Members liability 22 Interest on default 22 Fixed instalments deemed calls 23 Differentiation between shareholders as to calls 23 Prepayment of calls 23 5 Transfer of shares 23 Forms of instrument of transfer 23 Registration procedure 23 Directors powers to apply a holding lock and to decline to register 24 Company to retain instrument of transfer 24 6 Transmission of shares 25 Transmission of shares on death of holder 25 Right to registration on death or bankruptcy 25 Effect of transmission 25 7 Forfeiture of shares 26 Notice requiring payment of call 26 Forfeiture for failure to comply with notice 26 Cancellation of forfeiture 27 Effect of forfeiture on former holder s liability 27 Evidence of forfeiture 27 Transfer of forfeited share 27 Forfeiture applies to non-payment of instalment 27 8 General meetings 27 Annual general meeting 27

3 Convening general meeting 27 Notice of general meeting 28 Postponement or cancellation of meeting 28 9 Proceedings at general meetings 30 Membership at a specified time 30 Representation of Member 30 Quorum 30 Appointment and powers of chairman of general meeting 31 Conduct of general meetings 31 Adjournment of general meeting 31 Voting on a resolution 32 Questions decided by majority 32 Poll 33 Equality of votes - chairman s casting vote 33 Entitlement to vote 33 Joint shareholders vote 34 Vote of shareholder of unsound mind 34 Effect of unpaid call 34 Objection to voting qualification 34 Appointment of proxy 35 Deposit of proxy and other instruments 36 Validity of vote in certain circumstances 36 Director entitled to notice of meeting 36 Auditor entitled to notice of meeting The Directors 37 Number of Directors 37 Rotation of Directors 37 Share Qualification of Directors 38 Casual Vacancy 38 Removal of Director 38 Remuneration of Directors 38 Director s interests 39 Vacation of office of Director Powers and duties of Directors 41 Directors to manage Company 41 Appointment of attorney 41 Minutes 41 Execution of Company cheques, etc Proceedings of Directors 42 Directors meetings 42 Questions decided by majority 42 Chairman s Casting Vote 42 Alternate Directors and Proxies 42 Quorum for Directors meeting 43 Remaining Directors may act 43 Chairman of Directors 43 Directors committees 44 Written resolution by Directors 44 Use of technology 45 2

4 Validity of acts of Directors 45 Appointment of Managing and Executive Directors 45 Remuneration of Managing and Executive Directors 45 Powers of Managing and Executive Directors Secretary 46 Appointment of Secretary 46 Suspension and removal of Secretary 46 Powers, duties and authorities of Secretary Seals 46 Common and duplicate common seal 46 Use of common seal Inspection of records 47 Inspection by Members Dividends and reserves 47 Payment of dividend 47 No interest on dividends 47 Reserves and profits carried forward 47 Calculation and apportionment of dividends 47 Deductions from dividends 48 Distribution of specific assets 48 Payment by cheque and receipts from joint holders 49 Election to reinvest dividend 49 Election to accept shares in lieu of dividend 49 Unclaimed dividends Capitalisation of profits 49 Capitalisation of reserves and profits Service of documents Audit and accounts 51 Company to keep accounts 51 Company to audit accounts Winding up 51 Distribution of assets Indemnity 52 Indemnity of officers 52 Insurance Restricted Securities 53 Disposal during Escrow Period 53 Breach of Restriction Agreement or Listing Rules 53 Interpretation 53 3

5 Constitution of GRANGE RESOURCES LIMITED ACN a company limited by shares 1 Preliminary Definitions 1.1 The following words have these meanings in this Constitution unless the contrary intention appears. Alternate Director means a person appointed as an alternate director under Article Article means an Article of this Constitution. ASX means Australian Stock Exchange Limited. Auditor means the appointed auditor of the Company. CHESS means Clearing House Electronic Subregister System. CHESS Rules means the SCH Business Rules and the provisions of the Corporations Law and Listing Rules concerning the electronic share registration and transfer system as and to the extent that they apply to the Company. CHESS Approved Securities means securities of the Company which are approved by SCH in accordance with the SCH Business Rules. Company means Grange Resources Limited ACN Constitution means this Constitution as amended from time to time, and a reference to an Article has a corresponding meaning. Director means a person holding office as a director of the Company, and where appropriate includes an Alternate Director. Directors means all or some of the Directors acting as a board. Executive Director means a person appointed as an executive director under Article Listing Rules means the Listing Rules of ASX and any other rules of ASX which are applicable while the Company is admitted to the official list of ASX, each as amended or replaced from time to time, except to the extent of any express written waiver by ASX.

6 Managing Director means a person appointed as a managing director under Article Member means a person entered in the Register as a holder of shares in the capital of the Company. Part means a Part of this Constitution. Prescribed Interest Rate means the rate determined by the Directors for the purpose of this Constitution, and in the absence of a determination means 10%. Register means the register of members of the Company under the Corporations Law and if appropriate includes a branch register. Registered Office means the registered office of the Company. Representative means a person appointed to represent a corporate Member at a general meeting of the Company in accordance with the Corporations Law. Restriction Agreement means a restriction agreement within the meaning and for the purposes of the Listing Rules. SCH means ASX Settlement and Transfer Corporation Pty Limited. SCH Business Rules means the Business Rules made by SCH as approved as the Securities Clearing House under the Corporations Law. Secretary means a person appointed under Article 13.1 as secretary of the Company; and where appropriate includes an acting secretary and a person appointed by the Directors to perform all or any of the duties of a secretary of the Company. Section means a section of the Corporations Law. State means the State or Territory in which the Company is for the time being registered. Interpretation 1.2 In this Constitution unless the contrary intention appears: (d) words importing any gender include all other genders; the word person includes a firm, a body corporate, a partnership, a joint venture, an unincorporated body or association or an authority; the singular includes the plural and vice versa; a reference to a law includes regulations and instruments made under the law;

7 (e) (f) (g) 3 a reference to a law or a provision of a law includes amendments, re-enactments or replacements of that law or the provision, whether by the State or the Commonwealth of Australia or otherwise; a power, an authority or a discretion reposed in a Director, the Directors, the Company in general meeting or a Member may be exercised at any time and from time to time; and a reference to an amount paid on a share includes an amount credited as paid on that share. 1.3 Unless the contrary intention appears in this Constitution, an expression has, in a provision of this Constitution that deals with a matter dealt with by a particular provision of the Corporations Law, the same meaning as in that provision of the Corporations Law. 1.4 Headings are inserted for convenience and are not to affect the interpretation of this Constitution. 1.5 This Constitution is divided into Parts as indicated by its index. Replaceable rules not to apply 1.6 The provisions of the Corporations Law that apply as replaceable rules are displaced by this Constitution and accordingly do not apply to the Company. Currency 1.7 An amount payable to the holder of a security, whether by way of or on account of dividends, repayment of capital, participation in surplus property of the Company or otherwise, may, if provided in the terms of issue of the security or if agreed with the holder of the security, be paid in the currency of a country other than Australia. Appendix 15A of the Listing Rules 1.8 In accordance with Listing Rule , if the Company is admitted to the official list of ASX, the following clauses apply: (d) Notwithstanding anything contained in this Constitution, if the Listing Rules prohibit an act being done, the act shall not be done. Nothing contained in this Constitution prevents an act being done that the Listing Rules require to be done. If the Listing Rules require an act to be done or not to be done, authority is given for that act to be done or not to be done (as the case may be). If the Listing Rules require this Constitution to contain a provision and it does not contain such a provision, this Constitution is deemed to contain that provision.

8 (e) (f) If the Listing Rules require this Constitution not to contain a provision and it contains such a provision, this Constitution is deemed not to contain that provision. If any provision of this Constitution is or becomes inconsistent with the Listing Rules, the Constitution is deemed not to contain that provision to the extent of the inconsistency. 4 2 Share capital and variation of rights Directors to issue shares 2.1 Subject to the Corporations Law, the Listing Rules, this Constitution and any special rights conferred on the holders of any shares or class of shares: the issue of shares in the Company is under the control of the Directors and the Directors may issue or dispose of shares to such persons at such times and on such terms and conditions and having attached to them such preferred, deferred or other special rights or such restrictions, whether with regard to dividend, voting, return of capital or otherwise as the Directors think fit; the Directors may grant to any person an option over shares or pre-emptive rights during such time and for such consideration as they think fit; and the Directors have the right to settle the manner in which fractions of a share, however arising, are to be dealt with. Variation of rights 2.2 If the share capital is divided into different classes of shares, the rights attached to a class, unless otherwise provided by the terms of issue of the shares of that class, may be varied or cancelled in any way with: the consent in writing of the holders of at least threequarters of the issued shares of that class; or the sanction of a special resolution passed at a separate meeting of the holders of the shares of that class. 2.3 The rights conferred on the holders of the shares of any class are not to be taken as varied by the issue of further shares ranking equally with the first-mentioned shares unless otherwise: expressly provided by the terms of issue of the firstmentioned shares; or required by the Corporations Law or, while the Company remains on the official list of ASX, the Listing Rules. 2.4 The provisions of this Constitution relating to general meetings apply so far as they are capable of application and with any

9 5 necessary changes to every separate meeting of the holders of a class of shares except that: a quorum is constituted by at least two persons who, between them, hold or represent one-third of the issued shares of the class (unless only one person holds all of the shares of the class, in which case that person constitutes a quorum); and any holder of shares of the class, present in person or by proxy, or attorney or Representative, may demand a poll. Recognition of interests 2.5 The Company is not required to recognise a person as holding a share on any trust, except as required by law. 2.6 The Company is not required to recognise any equitable, contingent, future or partial interest in any share or unit of a share or any other right in respect of a share except an absolute right of ownership in the registered holder, whether or not it has notice of the interest or right concerned, except as required by law. Joint holders of shares 2.7 Where two or more persons are registered as the joint holders of shares then they are deemed to hold the shares as joint tenants with rights of survivorship. 2.8 The Company is not bound: to register more than three persons as joint holders of a share; or to issue more than one certificate or holding statement in respect of shares jointly held. 2A Preference Shares Each preference share has the following rights, powers and privileges: 2A.1 Definitions In this Article: First tranche preference share (Group 1) means a preference share issued with a Trigger Date of 31 October 2000 and a Trigger Price of $1.00, which must be attained within the Specified Time which for these shares is between 30 April 2000 and the date of conversion, dates included; First tranche preference share (Group 2) means a preference share issued with a Trigger Date of 30 April 2001 and a Trigger Price of $1.00, which must be attained within the Specified Time which for these shares is between 31 October 2000 and the date of conversion, dates included;

10 First tranche preference share (Group 3) means a preference share issued with a Trigger Date of 31 October 2001 and a Trigger Price of $1.00, which must be attained within the Specified Time which for these shares is between 30 April 2001 and the date of conversion, dates included; First tranche preference share (Group 4) means a preference share issued with a Trigger Date of 30 April 2002 and a Trigger Price of $1.00, which must be attained within the Specified Time which for these shares is between 31 October 2001 and the date of conversion, dates included; First tranche preference shares means all the First tranche preference shares whether classified as (Group 1), (Group 2), (Group 3) or (Group 4); Second tranche preference share (Group 1) means a preference share issued with a Trigger Date of 31 October 2000 and a Trigger Price of $1.10, which must be attained within the Specified Time which for these shares is between 30 April 2000 and the date of conversion, dates included; Second tranche preference share (Group 2) means a preference share issued with a Trigger Date of 30 April 2001 and a Trigger Price of $1.10, which must be attained within the Specified Time which for these shares is between 31 October 2000 and the date of conversion, dates included; Second tranche preference share (Group 3) means a preference share issued with a Trigger Date of 31 October 2001 and a Trigger Price of $1.10, which must be attained within the Specified Time which for these shares is between 30 April 2001 and the date of conversion, dates included; Second tranche preference share (Group 4) means a preference share issued with a Trigger Date of 30 April 2002 and a Trigger Price of $1.10, which must be attained within the Specified Time which for these shares is between 31 October 2001 and the date of conversion, dates included; Second tranche preference shares means all the Second tranche preference shares whether classified as (Group 1), (Group 2), (Group 3) or (Group 4); Third tranche preference share (Group 1) means a preference share issued with a Trigger Date of 31 October 2000 and a Trigger Price of $1.20, which must be attained within the Specified Time which for these shares is between 30 April 2000 and the date of conversion, dates included; Third tranche preference share (Group 2) means a preference share issued with a Trigger Date of 30 April 2001 and a Trigger Price of $1.20, which must be attained within the Specified Time which for these shares is between 31 October 2000 and the date of conversion, dates included; 6

11 7 Third tranche preference share (Group 3) means a preference share issued with a Trigger Date of 31 October 2001 and a Trigger Price of $1.20, which must be attained within the Specified Time which for these shares is between 30 April 2001 and the date of conversion, dates included; Third tranche preference share (Group 4) means a preference share issued with a Trigger Date of 30 April 2002 and a Trigger Price of $1.20, which must be attained within the Specified Time which for these shares is between 31 October 2001 and the date of conversion, dates included; Third tranche preference shares means all the Third tranche preference shares whether classified as (Group 1), (Group 2) (Group 3) or (Group 4); Fourth tranche preference share (Group 1) means a preference share issued with a Trigger Date of 31 October 2000 and a Trigger Price of $1.30, which must be attained within the Specified Time which for these shares is between 30 April 2000 and the date of conversion, dates included; Fourth tranche preference share (Group 2) means a preference share issued with a Trigger Date of 30 April 2001 and a Trigger Price of $1.30, which must be attained within the Specified Time which for these shares is between 31 October 2000 and the date of conversion, dates included; Fourth tranche preference share (Group 3) means a preference share issued with a Trigger Date of 31 October 2001 and a Trigger Price of $1.30, which must be attained within the Specified Time which for these shares is between 30 April 2001 and the date of conversion, dates included; Fourth tranche preference share (Group 4) means a preference share issued with a Trigger Date of 30 April 2002 and a Trigger Price of $1.30, which must be attained within the Specified Time which for these shares is between 31 October 2001 and the date of conversion, dates included; Fourth tranche preference shares means all the Fourth tranche preference shares whether classified as (Group 1), (Group 2), (Group 3) or (Group 4); Fifth tranche preference share (Group 1) means a preference share issued with a Trigger Date of 31 October 2000 and a Trigger Price of $1.50, which must be attained within the Specified Time which for these shares is between 30 April 2000 and the date of conversion, dates included; Fifth tranche preference share (Group 2) means a preference share issued with a Trigger Date of 30 April 2001 and a Trigger Price of $1.50, which must be attained within the Specified Time which for these shares is between 31 October 2000 and the date of conversion, dates included;

12 Fifth tranche preference share (Group 3) means a preference share issued with a Trigger Date of 31 October 2001 and a Trigger Price of $1.50, which must be attained within the Specified Time which for these shares is between 30 April 2001 and the date of conversion, dates included; Fifth tranche preference share (Group 4) means a preference share issued with a Trigger Date of 30 April 2002 and a Trigger Price of $1.50, which must be attained within the Specified Time which for these shares is between 31 October 2001 and the date of conversion, dates included; Fifth tranche preference shares means all the Fifth tranche preference shares whether classified as (Group 1), (Group 2), (Group 3) or (Group 4); business day has the meaning given to that term in the ASX Listing Rules; Conversion Event has the meaning given to that term in article 2A.5(2); Conversion Notice has the meaning given to that term in article 2A.5; Conversion Price in relation to a preference share means 20 cents; Conversion Period, in relation to a preference share, means the period from the relevant Trigger Date in respect of the tranche and Group to which the preference share belongs until 30 April 2003, both dates included; Entitlement Notice has the meaning given to that term in article 2A.5; first Group means, in respect of each tranche, the preference shares in the tranche that have a Trigger Date of 31 October 2000 and are designated Group 1, being 25% of the preference shares in that tranche; fourth Group means, in respect of each tranche, the preference shares in the tranche that have a Trigger Date of 30 April 2002 and are designated Group 4, being 25% of the preference shares in that tranche; Group means each group of preference shares with the same Trigger Date, being any of the first Group, second Group, third Group or fourth Group;. Holder, in respect of a preference share, means the registered holder of the preference share; Issue Price, in respect of a preference share, means of a cent, being the amount taken to have been paid on the issue of each preference share; 8

13 9 new ordinary share means an ordinary share which would come into being (in the manner outlined in article 2A.5(f) or 2A.9(g) below) on the conversion of a preference share; ordinary share means an ordinary share in the capital of the Company; preference share means a redeemable convertible preference share in the capital of the Company having the rights, powers and privileges set out in this article 2A; Redemption Amount, in respect of a preference share, means the Issue Price of the preference share; Redemption Date, in relation to a preference share which has not yet been converted to a new ordinary share, means: in relation to a Redemption Notice given by the Holder to the Company, the 14th day immediately following the day the Holder gives the Redemption Notice to the Company; in relation to a Redemption Notice given by the Company to the Holder, the 14th day immediately following the day the Company gives the Redemption Notice to the Holder; or in any case, such earlier or later date as the Holder and the Company in writing agree to be the Redemption Date; Redemption Notice means either: a written notice given by the Holder to the Company under article 2A.6 requiring the Company to redeem on the Redemption Date the Holder s preference shares specified in the notice; or a written notice given by the Company to the Holder under article 2A.6 stating that the Company intends to redeem on the Redemption Date the Holder s preference shares specified in the notice; Relevant Event has the meaning given to that term in article 2A.9(h); second Group means, in respect of each tranche, the preference shares in the tranche that have a Trigger Date of 30 April 2001 and are designated Group 2, being 25% of the preference shares in that tranche; Specified Time means: between 30 April 2000 and the date of conversion for the first Group, both dates included; between 31 October 2000 and the date of conversion for the second Group, both dates included;

14 (d) 10 between 30 April 2001 and the date of conversion for the third Group, both dates included; between 31 October 2001 and the date of conversion for the fourth Group, both dates included. third Group means, in respect of each tranche, the preference shares in the tranche that have a Trigger Date of 31 October 2001 and are designated Group 3, being 25% of the preference shares in that tranche; tranche of preference shares or tranche means a collection of preference shares that have the same Trigger Price (regardless of the Group to which they belong), and which are classified as First tranche preference shares, Second tranche preference shares, Third tranche preference shares, Fourth tranche preference shares or Fifth tranche preference shares; Trigger Date means: (d) 31 October 2000 for the first Group; 30 April 2001 for the second Group; 31 October 2001 for the third Group; 30 April 2002 for the fourth Group; Trigger Price means, subject to article 2A.9: (d) (e) $1.00 for the First tranche preference shares; $1.10 for the Second tranche preference shares; $1.20 for the Third tranche preference shares; $1.30 for the Fourth tranche preference shares; and $1.50 for the Fifth tranche preference shares; and weighted average market price means in relation to particular shares over a particular period, the total value of all trades in those shares on ASX for the relevant period divided by the total volume of all trades in those shares on ASX for the same period (excluding trades which reflect option exercises or which are for any other reason not fairly reflective of normal market activity). 2A.2 Dividend Entitlement Each preference share carries a right to receive a non-cumulative preferred dividend of 6% per annum on the Issue Price. Dividends shall be payable annually in arrears on each 31 October (or on the conversion date for the relevant share, if occurring earlier) for the period from the last 1 November (or the issue date in the case of the first dividend period) to the relevant 31 October (or the conversion date in the case of the last dividend period), dates included. Where a dividend period is less than a whole year a pro

15 11 rata proportion of the annual dividend will be paid. Each preference share ranks pari passu with all other preference shares (irrespective of their tranche or Group) for payment of such dividends but in preference to all other shares in the capital of the Company (and so that no dividend may be paid to holders of such other shares in a financial year unless and until the dividend payable on preference shares in that financial year has been paid or provided for in full). 2A.3 Issue Price The preference shares are to be issued to holders of securities in Surfboard Securities Limited in exchange for securities in Surfboard Securities Limited.. The amount paid on the issue of each preference share shall be taken to be of a cent (and no further amount shall be payable on such shares except on their conversion in accordance with the terms of this article 2A). 2A.4 Notice of meetings and voting rights Each preference share entitles the Holder thereof to: (i) (ii) (iii) (iv) receive notice of any general meeting of the Company; receive a copy of any documents to be tabled before any general meeting of the Company; attend any general meeting of the Company; and appoint proxies, attorneys or representatives in the same manner as is provided under the Company s constitution, for the holders of ordinary shares. A preference share does not entitle its Holder to vote at any general meeting of the Company except in the following circumstances: (i) on a resolution: (A) (B) (C) (D) (E) to reduce the share capital of the Company; to approve the terms of a buy-back agreement; that affects any right attaching to the preference share; to wind up the Company; or for the disposal of the whole of the property, business and undertakings of the Company; or (ii) during the winding up of the Company.

16 12 A Holder entitled to vote under article 2A.4 has one vote on a show of hands and one vote on a poll for each of its preference shares. 2A.5 Conversion The Holder of a preference share is entitled to convert that share into one ordinary share provided: (i) (ii) the election to convert is made during the Conversion Period for that preference share; and the weighted average market price of ordinary shares on the ASX over any twenty consecutive business days within the Specified Time (for the Group to which the preference share belongs) equals or is greater than the relevant Trigger Price (for the tranche to which the preference share belongs) (Conversion Event). On the occurrence of the Conversion Event applicable to any preference shares, but subject to article 2A.5, the Company must issue the Holders of those preference shares with a notice in writing (Entitlement Notice) which must state the following: (i) (ii) (iii) (iv) that the weighted average market price for ordinary shares on ASX over the relevant twenty consecutive business days within the Specified Time (for the relevant tranche and Group) has equalled or exceeded the relevant Trigger Price (for the relevant tranche and Group); that the Holder is entitled to convert its relevant tranche and Group of preference shares into ordinary shares at any time during the Conversion Period; the number of ordinary shares to which the Holder would be entitled on conversion of its holding of preference shares in the relevant tranche and Group and the total consideration payable to the Company upon conversion; and that the Holder can convert any of its preference shares in the relevant tranche and Group into ordinary shares by giving the Company written notice of conversion, specifying the number of shares to be converted and enclosing payment of the aggregate Conversion Price for those shares (by bank cheque or such other payment method as the Company may approve). The Holder can convert any preference shares which have become convertible as aforesaid into ordinary shares by giving the Company written notice of conversion,

17 specifying the number of shares to be converted (Conversion Notice) and enclosing payment of the aggregate Conversion Price for those shares (by bank cheque or such other payment method as the Company may approve). 13 (d) (e) (f) The Company must promptly after any conversion apply in writing to the ASX for the quotation on ASX of the relevant new ordinary shares and must use its best endeavours to procure such quotation. Upon receipt by the Company of the Conversion Notice referred to in article 2A.5 together with the aggregate Conversion Price payable upon conversion, the Company shall immediately convert each preference share specified in the notice into one new ordinary share. On conversion of a preference share, the rights, powers and privileges of that preference share shall immediately cease to apply and such share shall thereafter confer on the Holder the rights, powers and privileges attaching to an ordinary share and shall be called an ordinary share and further: (i) (ii) shall be deemed to be an ordinary share on and from the date of receipt by the Company of the Conversion Notice under article 2A.5; and shall rank in all respects pari passu with the then existing ordinary shares. (g) (i) If: (A) a takeover bid (as defined in section 9 of the Corporations Law) has been made (except a takeover bid made by someone other than a Holder of preference shares or an associate of such a Holder where Grange forms the view on reasonable grounds that a substantial purpose of the bidder in making the bid is to trigger accelerated conversion rights in respect of its or its associates preference shares) in relation to ordinary shares, and the offers made under the takeover bid are, or have become, or have been declared to be, unconditional and: the offeror s voting power (within the meaning of the Corporations Law) in the Company increases to more than 50%; or the Board or a majority of the Board issues a statement recommending accepting the offer; or

18 (B) (C) 14 a court approves a compromise or arrangement (except a compromise or arrangement where the proponent is a Holder of preference shares, or an associate of such a Holder, and Grange forms the view on reasonable grounds that a substantial purpose of the proponent in proposing the compromise or arrangement is to trigger accelerated conversion rights in respect of its, or its associates, preference shares) under Part 5.1 of the Corporations Law which will result in a person (other than a Holder of preference shares or an associate of such a Holder) having more than 50% of the voting power (within the meaning of the Corporations Law) in the Company; or the voting power (within the meaning of the Corporations Law) in the Company of any person (other than a Holder of preference shares or an associate of such a Holder) becomes more than 50% as a result of any other transaction or process (but excluding a transaction or process where the proponent is a Holder of preference shares, or an associate of such a Holder, and Grange forms the view on reasonable grounds that a substantial purpose of the proponent in proposing the transaction or process is to trigger accelerated conversion rights in respect of its, or its associates, preference shares), including without limitation an acquisition of shares approved under item 7 of section 611 of the Corporations Law, then: (ii) subject to article 2A.5(h), the Holder can convert: (A) (B) any preference share in relation to which a Conversion Event has already occurred; and any other preference share where the weighted average market price of ordinary shares on the ASX over any five consecutive business days, within the 30 days prior to the event referred to in article 2A.5(g)(1), is greater than or equal to the Trigger Price of the relevant preference share; and (iii) subject to article 2A.5(h), if at the time of the event referred to in article 2A.5(g)(1), less than

19 15 25% of the total number of preference shares originally issued to a Holder have either been converted or become convertible pursuant to any of the foregoing provisions of this article 2A.5 (the shortfall in number below 25% referred to below as the Top-Up Number), then the Holder may convert such number of the Holder s First tranche preference shares (pro-rata across all Groups of those preference shares) as is equal to the Top-Up Nnumber. (h) A Holder may exercise the right to convert under sub article 2A.5(g) in accordance with the procedure laid down in sub article 2A.5 (and sub articles 2A.5(d), (e) and (f) shall apply mutatis mutandis). (i) This article 2A.5 shall be read subject to article 2A.9 below. 2A.6 Redemption (d) (e) (f) If a Conversion Notice has not been received by the Company in respect of a preference share during the Conversion Period in respect of that preference share, the Company may after the expiry of such Conversion Period give the Holder a Redemption Notice. The Holder may at any time give the Company a Redemption Notice. If the Company gives or is given a Redemption Notice, the Company, on the Redemption Date, must redeem the preference shares specified in the Redemption Notice. The Redemption Amount is payable by the Company on the redemption of the preference share. Upon and by virtue of the Company paying the Redemption Amount to the Holder, the preference share is redeemed. If the Company is prohibited under the Corporations Law from paying the full Redemption Amount, the Company must: (i) (ii) pay as much as it may lawfully pay towards the Redemption Amount; and continue to pay all funds of the Company that it may lawfully apply towards the Redemption Amount until the Redemption Amount is fully paid. (g) If certificates have been issued in respect of the preference shares, the Company may require that as a

20 condition of payment of the Redemption Amount the Holder deliver the following to the Company: 16 (i) (ii) the share certificate of the preference share being redeemed; or evidence of the destruction or loss of the share certificate of the preference share together with an indemnity from the Holder. (h) If a Holder does not comply with a request by the Company under article 2A.6(g) within a reasonable time after the Redemption Date: (i) (ii) (iii) the Company may pay the Redemption Amount to the Company s bank who will pay the Holder on delivery to the bank of the item requested under article 2A.6(g); the Company must notify the Holder in writing that the Redemption Amount has been paid; and despite article 2A.6(e), upon and by virtue of such notification the preference share is redeemed. 2A.7 Rights of Holders on a winding up Subject to article 2A.7, the Holders are not entitled to participate in the profits or surplus assets of the Company in a winding up. In a winding up the preference shares confer on their Holders (pari passu with one another and irrespective of the tranches or Groups of preference shares involved), in priority to the holders of any other class of shares, the right to payment in cash of the Issue Price of each preference share held by them. 2A.8 No restrictions on transfer There are no restrictions on the right of the Holder to transfer or otherwise deal with its preference shares. 2A.9 Effect of bonus issues and splits or consolidations and rights to participate in pro-rata issues The number of ordinary shares into which the preference shares are convertible and their Trigger Prices are to be adjusted in accordance with the following provisions of this article 2A.9 should the Company make any bonus issue of shares or otherwise split, consolidate or reconstruct its capital prior to conversion. If the Company makes a bonus issue of ordinary shares to holders of its ordinary shares:

21 (i) (ii) 17 The number of ordinary shares into which each preference share is convertible shall be increased to equal (X + Y) where X = the number of ordinary shares into which it was convertible immediately before the bonus issue and Y = the number of bonus ordinary shares (expressed, if necessary, as a decimal to 6 decimal places) which a holder of X ordinary shares would have been entitled to receive in the bonus issue. The Trigger Price in respect of each preference share shall be decreased by multiplying the Trigger Price immediately before the bonus issue by X/(X + Y) (expressed, if necessary, as a decimal to 6 decimal places), where X and Y have the meanings given above. Where the Company makes any other pro rata offer of new ordinary shares or new options to acquire ordinary shares ( new shares or options ): (i) each Holder of preference shares shall be entitled to participate in that pro rata offer as though the greater of: (A) (B) the total number of the Holder s unconverted preference shares in relation to which a Conversion Event has occurred; and X minus Y where X means 25% of the total number of preference shares originally issued to the Holder and Y means the total number of preference shares that the Holder has already converted into ordinary shares, had been converted into ordinary shares immediately prior to the date at which entitlements to participate in the pro rata offer were determined; and (ii) no adjustment will be made to the Conversion Price or Trigger Price applying to any preference share or the number of ordinary shares into which any preference share is convertible. (d) If the Company subdivides its ordinary shares into a greater number of ordinary shares: (i) The number of ordinary shares into which each preference share is convertible shall be increased from the number of ordinary shares into which it was convertible immediately before the subdivision (X) to the number of ordinary shares which X ordinary shares would have been

22 18 converted into had they been on issue at the time of the subdivision and participated in the subdivision (Y) (expressed, if necessary, as a decimal to 6 decimal places). (ii) The Trigger Price in respect of each preference share shall be decreased by multiplying the Trigger Price immediately before the subdivision by X/Y (expressed, if necessary, as a decimal to 6 decimal places), where X and Y have the meanings given above. (e) If the Company consolidates its ordinary shares into a lesser number of ordinary shares: (i) (ii) The number of ordinary shares into which each preference share is convertible shall be reduced from the number of ordinary shares into which it was convertible immediately before the consolidation (X) to the number of ordinary shares which X ordinary shares would have been converted into had they been on issue at the time of the consolidation and participated in the consolidation (Y) (expressed, if necessary, as a decimal to 6 decimal places). The Trigger Price in respect of each preference share shall be increased by multiplying the Trigger Price immediately before the consolidation by X/Y (expressed, if necessary, as a decimal to 6 decimal places), where X and Y have the meanings given above. (f) (g) Where the application of any of the adjustments in this article 2A.9 leads to a situation where one preference share does not convert to exactly one ordinary share, the number of new ordinary shares which is to result from conversions the subject of a Conversion Notice is to be rounded up or down to the nearest whole number, but such rounding is to be applied to the total number of new ordinary shares which would result from all conversions the subject of the Conversion Notice and not to each conversion individually. Where preference shares are converted as a result of article 2A.5 or this article 2A.9: (i) into an equal number of new ordinary shares, the rights, powers and privileges of those preference shares shall immediately cease to apply and such shares will thereafter give the Holder the rights, powers and privileges attaching to an equal number of ordinary shares and shall rank in all respects pari passu with the then existing ordinary shares;

23 (ii) into a greater number of new ordinary shares: 19 (A) (B) the rights, powers and privileges of those preference shares shall immediately cease to apply and such shares will thereafter give the Holder the rights, powers and privileges attaching to an equal number of ordinary shares; and additional ordinary shares carrying those same rights, powers and privileges shall be issued to the Holder (so that the ordinary shares referred to in this paragraph (B) and in paragraph (A) above total the required number of new ordinary shares), and all of those shares shall rank in all respects pari passu with the then existing ordinary shares (and the total amount paid up on all of those shares shall be the total of the aggregate Issue Price for the preference shares being converted plus the aggregate Conversion Price payable upon the conversion under article 2A.5 and the amount to be taken as paid up in respect of each of those shares shall be that total divided by the total number of those shares); (iii) into a lesser number of ordinary shares: (A) (B) the rights, powers and privileges of so many of those preference shares as equals the required number of new ordinary shares shall immediately cease to apply and such shares will thereafter give the Holder the rights, powers and privileges attaching to an equal number of ordinary shares and shall rank in all respects pari passu with the then existing ordinary shares; and the balance of the preference shares shall cease to be convertible and shall be redeemed for nominal consideration as though article 2A.6 applied and the Company had given (and had been entitled to give) the Holder a Redemption Notice in respect of the relevant shares. (h) In the event that the Company: (i) reconstructs its capital in a manner not covered by any of the above adjustments (which for the avoidance of doubt does not include any bona fide non-pro-rata issues of securities made by the Company ); or

24 (ii) 20 the application in any of the above adjustments leads to a result that is manifestly inappropriate, (Relevant Event) the conversion rights of the preference shares and their Trigger Prices and Conversion Prices shall be adjusted in such manner as the Company and the Holders of at least 75% of the preference shares agree in writing eliminates but does not over-compensate for the effect (both in economic and control terms) of the Relevant Event on the Holders of the preference shares (on a proportionate and fair basis to all security holders in the Company and taking into account the terms of the Relevant Event and the potential of the Relevant Event to affect the likelihood of the Trigger Prices being achieved). If such agreement cannot be reached, the matter will be referred to an independent expert selected by the Company with the agreement of the Holders of at least 75% of the preference shares (or failing agreement on selection of an expert, to one nominated by the President for the time being of the Institute of Chartered Accountants in Australia), who shall determine the matter in accordance with the principles set out this article 2A.9 acting as an expert and not as an arbitrator and whose decision shall be final in the absence of manifest error. 2A.10 Restrictions on Company taking certain actions For so long as any of the preference shares remain on issue (and unconverted), the Company must not: make any pro-rata issue of shares or options; or dispose of all or substantially all the securities in or assets and undertaking of Surfboard Securities Limited ACN , without the consent in writing of Holders of a majority of the total number of preference shares on issue at the relevant time. For the avoidance of doubt, this does not give the Holders of preference shares the right to receive notice of such a proposal and/or attend any meeting in relation to the same and/or vote at any meeting and/or vote by other means in relation to any such proposal. 2A.11 No other rights The preference shares give the Holders no rights other than those expressly provided by the terms of this article 2A and those provided at law where such rights at law cannot be excluded by the terms of this article 2A. 3 Lien Lien on share 3.1 The Company has a first and paramount lien on every share for:

25 (d) 21 all due and unpaid calls and instalments in respect of that share; all money which the Company has been called on by law to pay, and has paid, in respect of that share; interest at the Prescribed Interest Rate on the amount due from the date it becomes due until payment; and reasonable expenses of the Company in respect of the default on payment. 3.2 A lien under Article 3.1 extends to all dividends from time to time declared paid or made in respect of that share. 3.3 The Company also has a first and paramount lien on each share registered in the name of the Member for all money payable to the Company by the Member under loans made under an employee incentive scheme and the lien extends to all dividends from time to time declared, paid or made in respect of that share. 3.4 Nothing in this Constitution prejudices or affects any right or remedy which any law may confer on the Company and as between the Company and every Member, Member s executors, administrators and estate wherever constituted or situated any right or remedy which any law confers on the Company is enforceable by the Company. 3.5 The Directors may at any time exempt a share wholly or in part from the provisions of Article The Company s lien on a share is extinguished if a transfer of the share is registered without the Company giving notice of the lien to the transferee. Sale under lien 3.7 Subject to Article 3.8, the Company may sell, in any manner the Directors think fit, any share on which the Company has a lien. 3.8 A share on which the Company has a lien may not be sold by the Company unless: a sum in respect of which the lien exists is presently payable; and the Company has, not less than 14 days before the date of sale, given to the registered holder of the share or the person entitled to the share by reason of the death or bankruptcy of the registered holder, a notice in writing setting out, and demanding payment of, such part of the amount in respect of which the lien exists as is presently payable. Transfer on sale under lien 3.9 For the purpose of giving effect to a sale under Article 3.7, the Company may receive the consideration, if any, given for the share so sold and may execute a transfer of the share sold in

26 22 favour of the purchaser of the share, or do all such other things as may be necessary or appropriate for it to do to effect the transfer The Company must register the purchaser as the holder of the share comprised in any such transfer and the purchaser is not bound to see to the application of the purchase money The title of the purchaser to the share is not affected by any irregularity or invalidity in connection with the sale of the share. Proceeds of sale 3.12 The proceeds of a sale under Article 3.7 must be applied by the Company in payment of the amount in respect of which the lien exists as is presently payable, and the residue, if any, must be paid to the person entitled to the share immediately before the sale. 4 Calls on shares Directors to make calls 4.1 The Directors may make calls on a Member in respect of any money unpaid on the shares of that Member, if the money is not by the terms of issue of those shares made payable at fixed times. 4.2 A call may be made payable by instalments. 4.3 The Directors may revoke or postpone a call. Time of call Members liability 4.4 A call is to be deemed to be made at the time when the resolution of the Directors authorising the call is passed. 4.5 Each Member must upon receiving not less than 30 business days notice specifying the time or times and place of payment, pay to the Company at the time or times and place so specified the amount called on that Member s shares. 4.6 The joint holders of a share are jointly and severally liable to pay all calls in respect of the share. 4.7 The non-receipt of a notice of any call by, or the accidental omission to give notice of a call to, a Member does not invalidate the call. Interest on default 4.8 If a sum called in respect of a share is not paid before or on the day appointed for payment of the sum, the person from whom the sum is due must pay interest on the sum to the time of actual payment at the Prescribed Interest Rate. The Directors may waive payment of that interest wholly or in part.

27 23 Fixed instalments deemed calls 4.9 Subject to any notice requirements under the Listing Rules, any sum that, by the terms of issue of a share, becomes payable on allotment or at a fixed date, is deemed for the purposes of this Constitution to be a call duly made and payable on the date on which by the terms of issue the sum becomes payable, and, in case of non-payment, all the relevant provisions of this Constitution as to payment of interest and expenses, forfeiture or otherwise apply as if the sum had become payable by virtue of a call duly made and notified. Differentiation between shareholders as to calls 4.10 The Directors may, on the issue of shares, differentiate between the holders as to the amount of calls to be paid and the times of payment. Prepayment of calls 4.11 The Directors may accept from a Member the whole or a part of the amount unpaid on a share although no part of that amount has been called The Directors may authorise payment by the Company of interest on the whole or any part of an amount so accepted, until the amount becomes payable, at such rate, not exceeding the Prescribed Interest Rate, as is agreed on between the Directors and the Member paying the sum. 5 Transfer of shares Forms of instrument of transfer 5.1 Subject to the Listing Rules and to this Constitution, shares in the Company are freely transferable and a Member may transfer all or any of the Member s shares: in the case of CHESS Approved Securities, in accordance with the CHESS Rules; by instrument in writing in any usual or common form or in any other form that the Directors approve; or by any other method of transfer of marketable securities which is recognised by the Corporations Law, SCH and ASX and is approved by the Directors. Registration procedure 5.2 If a CHESS Approved Security is to be transferred then the procedure set down by the CHESS Rules is to be observed. 5.3 If an instrument of transfer is to be used to transfer a share in accordance with Article 5.1: the instrument of transfer must be executed by or on behalf of both the transferor and the transferee unless it is a sufficient transfer of marketable securities within the meaning of the Corporations Law; and