Security Matters Limited ACN 626 192 998 of c/- K&L Gates, Level 25, 525 Collins Street, Melbourne VIC 3000 (Security Matters)

W.A. Mint Pty. Ltd. ACN 054 024 314 of 310 Hay Street, East Perth, Western Australia 6005 (WA Mint)

True Gold Consortium Pty Ltd ACN 641 483 374 of 51B Marlow Street, Wembley, Western Australia 6014 (Company).

The Company was incorporated on 4 June 2020.

The issued share capital of the Company is, or immediately after execution of this document will be, as set out in Schedule 1.

The Company’s goal is to establish an industry standard with the development of an innovative system that can mark (at a molecular level), track and trace gold bars and gold through every stage of the supply chain with blockchain technology.

Security Matters and WA Mint have reached agreement on certain matters relating to their relationship as holders of Equity Securities in the Company and the manner in which the direction, management, affairs and control of the Company and the Business will be conducted to be referred to as the “True Gold Consortium”.

Defined terms and interpretation

Defined terms

accounting standards approved under the Corporations Act and its requirements about the preparation and contents of accounts; and

generally accepted accounting principles, policies, practices and procedures in Australia.

a related body corporate of the Shareholder;

a company in which the Shareholder beneficially owns 50% or more of the issued shares;

a trust of which the Shareholder or a Shareholder or beneficiary of the Shareholder is the beneficiary and from which the Shareholder or a beneficiary of the Shareholder has received 50% or more of the distributions from that trust in the previous 3 years;

a trust of which a related body corporate of the Shareholder or other entity under common control of the Shareholder is the responsible entity, trustee, manager or investment adviser of the trust;

a limited partnership whose general partner is a related body corporate of the Shareholder;

a general partnership all of whose general partners are related bodies corporate of the Shareholder;

if the Shareholder is a limited partnership, general partnership or a trust, a custodian of an asset or assets of the limited partnership, general partnership or trust; or

if the Shareholder is an individual, the spouse, former spouse, mother, father, brother, sister or child over the age of 18 years of the Shareholder.

a business plan including the proposed or projected:

agreed activities of the Business;

marketing plans;

sales targets;

profit and loss statement, profitability, cash flow statements and balance sheet;

capital expenditure;

financing plans including proposed debt and equity funding;

staffing requirements; and

research and development plans,

a budget estimating the income and expenses of the Business during the period.

information relating to a Transaction Document or any transaction contemplated by a Transaction Document;

all databases, source codes, methodologies, manuals, artwork, advertising manuals, trade secrets and all financial, accounting, marketing and technical information, customer and supplier lists, know-how, technology, operating procedures and other information, used by or relating to the Group and its transactions and affairs;

all notes and reports incorporating or derived from the material referred to in paragraphs (a) or (b); and

all copies of the material referred to in paragraphs (a) to (c).

in relation to a company by a person:

the person determines the composition of the board of directors of the company;

the board of directors of the company is accustomed to act in accordance with the instructions, directions or wishes of the person; or

the person holds or owns (alone or with its Associates or related bodies corporate):

the majority of the issued shares of the company;

the majority of the issued shares of the ultimate holding company of the company; or

the majority of any securities or other rights granted by the company entitling holders to distributions based on the profits, earnings or net liquidation proceeds of the company; and

in relation to a trust by a person:

the person is the sole trustee of the trust;

the composition of the board of directors of any trustee company of the trust is determined by the person;

the board of directors of any trustee company of the trust is accustomed to act in accordance with the instructions, directions or wishes of the person; or

the person holds or owns (alone or with its Associates or related bodies corporate):

the majority of the issued shares of any trustee company of the trust;

the majority of the issued shares of the ultimate holding company of any trustee company of the trust; or

the majority of the units, securities or other rights granted by the trust entitling holders to distributions from the trust.

on issue; or

where the reference requires something to be apportioned between a number of Shareholders, held by those Shareholders.

Issue means:

an issue of Shares in an IPO;

an issue of Shares under a Reorganisation Event;

an issue of Equity Securities approved by Shareholders Unanimous Decision;

an issue of Shares or options exercisable into Shares pursuant to an employee share plan, employee share option scheme or employee share purchase scheme where the plan or scheme rules and each issue or grant under them is approved by the Board as a Unanimous Directors Resolution; or

an issue of Shares on conversion of convertible securities where the convertible securities were earlier issued in accordance with this agreement.

of Default means any of the events set out in clause 23.1.

Year means the 12 months from 1 July to 30 June, or other dates agreed by the Board.

means the Company and its Subsidiaries from time to time.

Business Plan means the Business Plan adopted by the Company in accordance with clause 9.1.

Event means, in relation to a person:

a receiver, receiver and manager, administrator, trustee or similar official is appointed over any of the assets or undertaking of the person;

the person suspends payment of its debts generally;

the person is or becomes unable to pay its debts when they are due or is unable to pay its debts within the meaning of the Corporations Act;

the person enters into or resolves to enter into any arrangement, competition or compromise with, or assignment for the benefit of, its creditors or any class of them;

an application or order is made for the winding up or dissolution of, or the appointment of a provisional liquidator, to the person or a resolution is passed or steps are taken to pass a resolution for the winding up or dissolution of the person otherwise than for the purpose of an amalgamation or reconstruction which has the prior consent of all Shareholders; or

an administrator is appointed under the Corporations Act.

a bonus issue of Shares;

a sub-division or consolidation of Shares; or

any other reorganisation or reconstruction of the Share Capital where the Company does not pay or receive cash.

this agreement;

the Company’s constitution;

any other agreements between Shareholders and the Company; and

any other document that the parties agree is transaction document.

in respect of a decision made by the Directors:

a resolution passed by all Directors present at the relevant meeting of Directors who may vote on the resolution; or

a written circular resolution signed by all Directors.

the Shareholders, a resolution that is passed by an affirmative vote of all of the Shareholders present and entitled to vote on the resolution.

Interpretation

a reference to this agreement or another document means this agreement or that other document and any document which varies, supplements, replaces, assigns or novates this agreement or that other document;

a reference to legislation or a legislative provision includes any statutory modification or substitution of that legislation or legislative provision and any subordinate legislation issued under that legislation or legislative provision;

a reference to a body or authority which ceases to exist is a reference to either a body or authority that the parties agree to substitute for the named body or authority or, failing agreement, to a body or authority having substantially the same objects as the named body or authority;

a reference to the introduction, a clause or schedule is a reference to the introduction, a clause or a schedule to or of this agreement;

clause headings and the table of contents are inserted for convenience only and do not form part of this agreement;

the introduction and schedules form part of this agreement;

a reference to a person includes a natural person, corporation, statutory corporation, partnership, the Crown or any other organisation or legal entity;

a reference to a natural person includes their personal representatives, successors and permitted assigns;

a reference to a corporation includes its successors and permitted assigns;

related or subsidiary in respect of a corporation has the same meaning given to that term in the Corporations Act;

a reference to a right or obligation of a party is a reference to a right or obligation of that party under this agreement;

an obligation or warranty on the part of 2 or more persons binds them jointly and severally and an obligation or warranty in favour of 2 or more persons benefits them jointly and severally;

a requirement to do anything includes a requirement to cause that thing to be done and a requirement not to do anything includes a requirement to prevent that thing being done;

including and includes are not words of limitation;

the words at any time mean at any time and from time to time;

a reference to a time is to that time in Western Australia, Australia;

a word that is derived from a defined word has a corresponding meaning;

monetary amounts are expressed in Australian dollars;

the singular includes the plural and vice-versa;

words importing one gender include all other genders;

a reference to a thing includes each part of that thing;

a reference to the Company includes any Subsidiary from time to time and the rights and obligations of the parties apply to any Subsidiary; and

fractions of Equity Securities are rounded down to the nearest whole number when calculating the number of Equity Securities issued or transferred.

Construction

Company’s objectives

carry on the Business;

develop and expand the Business in accordance with the Business Plan; and

maximise the value of the Company.

Shareholders’ relationship

Shareholder not liable for another party

Relationship between Shareholders

is liable for the acts or omissions of another Shareholder; or

must share profits.

Authority of Shareholders

must not hold itself out as a partner of, or principal or agent or trustee of another Shareholder; and

except where this agreement expressly states otherwise, does not have authority to act for, or to create or assume any responsibility or obligation on behalf of another Shareholder.

Shareholders must act in good faith

Shareholder obligations

comply with this agreement;

exercise its voting rights and other rights as a Shareholder (as far as it can by exercising those rights) to give full effect to this agreement (including the objectives in clause 2) and the rights and obligations of the parties under this agreement; and

ensure any Director appointed by it from time to time (subject to the Director’s fiduciary duties to the Company) exercises their voting rights and other powers (as far as they can by exercising those rights and powers) to give full effect to this agreement (including the objectives in clause 2) and the rights and obligations of the parties under this agreement.

Board composition and proceedings

Board composition

Directors’ fees and expenses

Company secretary

Directors and officers’ insurance

Management of the Company

management of the Company is vested in the Board;

the CEO has the power and authority to manage the Company as delegated by the Board from time to time;

subject to the discretion of the Board, the CEO is responsible for:

the day-to-day management the Company and conduct of the Business in compliance with the Business Plan;

the general administration of the Company;

the implementation of, and compliance with, the Business Plan; and

giving the Board full information about the activities of the Company,

Decisions

Directors Special Resolutions

Shareholders Special Resolutions

Other consents required

Things the Company must do

Company’s obligation

Shareholders’ obligations

Business plan

Initial Business Plan

Current Business Plan

New Business Plans

at least two months before the beginning of each Financial Year, the CEO submits to the Board a draft Business Plan for the next two Financial Years; and

the Board considers the draft Business Plan and approves a Business Plan before the star of the next Financial Year.

Previous Business Plans

if a new Business Plan is adopted, the existing Business Plan does not have effect and the new Business Plan has effect; and

if a new Business Plan is not adopted in accordance with clause 9.3, the existing Business Plan shall continue to apply to the Business on an ongoing basis until a new Business Plan is adopted in accordance with clause 9.3.

Financial and other reporting

Reports and information

Confidentiality

Accounts and records

Keeping records and accounts

kept in accordance with the Corporations Act; and

reflect the Accounting Standards consistently applied.

Access

Notice requesting access

Copying of books and records

Confidentiality

Disclosure of information by directors

Class B Shares

Dividend policy

Dividend policy

Funding

In-Kind Contributions

Initial In-Kind Contributions and working capital

they each will make an initial In-Kind Contribution in return for which they will receive the Share Capital set out in Schedule 1; and

third party equity investors will contribute the initial working capital of $1,000,000 which will fund R&D, development capital and other expenses in accordance with the Business Plan.

No obligation

Further funding

Any funds for the continuation, development or expansion of the Group’s operations are to be funded, as a first preference where available, by a bank overdraft facility or other similar and acceptable commercial borrowing facility to be obtained by the Group unless the Board otherwise determines.

The Group may grant Encumbrances to secure any finance facility or accommodation.

Issue of Equity Securities

Issue of Equity Securities

No obligation to subscribe for Equity Securities

Procedure for issue of Equity Securities

Equity Offer

Subscription Notice

the total number of Equity Securities available for subscription;

the number of Equity Securities being offered to each Shareholder;

the type of Equity Securities being offered;

the term of issue of the Equity Securities; and

the issue date for the Equity Securities.

Response to Offer

whether it accepts all or a specified number of Equity Securities contained in its Offer or rejects in full its Offer; and/or

that it offers to subscribe for a specified number of those Equity Securities not subscribed for by other Shareholders under their Offers.

Failure to respond

Disposal to other Shareholders

Transferring Equity Securities

Procedure

Transfer Notice

the number and class or classes of Equity Securities proposed to be Transferred (Sale Securities);

the number of Equity Securities being offered to each Offeree (to be calculated pro rata in accordance with the number of Shares each Offeree holds proportionate to the number of Shares held by all Offerees);

the cash price per Sale Security (Specified Price);

the name of the transferee (if known); and

any other terms of the sale of the Sale Securities.

Response to Transfer Notice

whether it accepts or rejects in full the offer made in the Transfer Notice; and

if it wants to purchase a greater number of Equity Securities than the number offered to it in the Transfer Notice and the number that it wishes to purchase.

Purchase of other Shareholders Sale Securities

If other Shareholders agree to buy Sale Securities

If other Shareholder does not agree to buy Sale Securities

within 60 Business Days after giving the Transfer Notice to the Offeree;

at a price per Sale Security not less than the Specified Price; and

on terms no more favourable than those offered to the Offeree.

Completion of sale

each buyer of Equity Securities must pay each seller of Equity Securities for the Equity Securities it has agreed to buy; and

each seller of Equity Securities must Transfer title to the Equity Securities it has agreed to sell to the buyer free from all Encumbrances.

No revocation

Permitted Transfers

a Transfer of Equity Securities by a Shareholder to an Affiliate of the Shareholder; or

a Transfer of Equity Securities from an Affiliate of a Shareholder to another Affiliate of the Shareholder.

Affiliate no longer an Affiliate

as a result of any event, the Affiliate is or will be no longer an Affiliate of the Shareholder; or

the Affiliate is a Defaulting Party under clause 23.2,

Tag Along

Tag along or last right of refusal

If Offeree gives Tag Along Notice

at the Specified Price and on the same terms that the Sale Securities are sold; and

at the same time the Sale Securities are sold.

Drag Along

Drag Along Option

notwithstanding clause 16, the Seller is entitled to dispose of its Drag Transfer Shares to the Third Party; and

the Seller will have the option to require all of the remaining Shareholders to transfer to the Third Party all of the Shares held by each of the remaining Shareholders,

Restrictions on Drag Along Option

any agreement for the sale of Drag Transfer Shares must be in writing and on arm’s length commercial terms;

the agreement must be for the sale of all of the Shares held by all of the Shareholders on the same terms and at the same price per Share, except for any variance required by virtue of preference rights attaching to any Shares;

no collateral benefit may pass to any Shareholder in connection with or as a consequence of the sale of the Shares under such agreement, except pursuant to any bona fide contract of employment that a Shareholder or a director of a Shareholder may enter into with the Third Party; and

WA Mint or Security Matters (being the founding Shareholders) must consent in writing.

Drag Along Notice

the price per Share at which the Third Party has offered to purchase the Drag Transfer Shares (Drag Price); and

the terms and conditions attached to the offer from the Third Party.

Exercise of the Drag Along Option

Completion

Encumbering Equity Securities

Deed of accession

If Equity Securities are issued

If Equity Securities are transferred

Competitors

Notwithstanding any other provision of this agreement, if an allotment, issue or transfer of Equity Securities is to be made to a party that Security Matters believes operates a competitive business to it, it may veto that allotment, issue or transfer, not to be unreasonably withheld, delayed or denied.

Notwithstanding any other provision of this agreement, if an allotment, issue or transfer of Equity Securities is to be made to a party that WA Mint believes operates a competitive business to it, it may veto that allotment, issue or transfer, not to be unreasonably withheld, delayed or denied.

Sale of share capital

Third party offer

the proposed purchase price for the Share Capital (Purchase Price);

the proposed settlement date (Settlement Date);

the name of the Offeror; and

any other terms of the offer.

Waiver of Transfer Notice Requirement

Settlement

each Shareholder must give the Offeror:

duly executed transfers for its Shares in favour of the Offeror; and

any certificates for those Shares;

all Shares must be free from Encumbrances;

the Board receives on behalf of the Shareholders the Purchase Price from the Offeror; and

the Board must account to the Shareholders for the Purchase Price on the same basis as equity ownership.

Liquidation event

Board to consider status of Consortium

three years after the date of this agreement; and

if the Shareholders decide not to proceed with an IPO and other liquidity events under clause 22.1 at any time, the next anniversary of the date of this agreement) after the decision.

Appointment of Financial Adviser

advise on the highest valuation of the Company that could be obtained;

advise on the amount of funds that could be raised through a Liquidity Decision (if relevant);

recommend to the Shareholders and the Company whether to proceed with the relevant decision; and

if the Shareholders decide to proceed with the Liquidity Decision (Liquidity Event), manage the preparation for the Liquidity Event.

Shareholders to decide

Parties to cooperate on a liquidity event

Winding up

Default

Events of default

the Shareholder breaches a material term of this agreement and:

does not remedy that breach within 30 days after receiving notice from another party requesting the breach be remedied; or

the breach is incapable of being remedied;

an Insolvency Event occurs in relation to the Shareholder;

a Change of Control occurs in relation to the Shareholder without the other Shareholders first consenting (such consent not to be unreasonably withheld);

the Shareholder is prohibited from being a Shareholder by a change in any law;

the Shareholder Transfers or purports to Transfer any of its Equity Securities in breach of the Company’s constitution or this agreement; and

where the Shareholder or its Affiliate was formerly an employee or consultant of the Company and that Shareholder or its Affiliate ceases to be an employee or consultant of the Company, dies or becomes permanently or totally incapacitated.

Consequence of default

the rights attaching to the Defaulting Party’s Equity Securities are suspended until:

the default is remedied (and, if the default is not capable of remedy, are suspended indefinitely); or

the Equity Securities are transferred to a person who is not a Defaulting Party; and

the Defaulting Party is taken to have given a Transfer Notice under clause 16.2 on the date when the Event of Default occurred, for all its Equity Securities at a cash price per Equity Security determined in accordance with clause 23.3.

Independent valuation

comply with Schedule 8 and obtain an independent valuation of the Defaulting Party’s Equity Securities within 25 Business Days after receiving notice; and

immediately give a copy of the independent valuation to the Defaulting Party and the other Shareholders when the Board receives it.

Procedure for Transfer

Notice to Sell

Each Shareholder must offer to buy other Shareholder’s Equity Securities

Non-Defaulting Party must decide to buy or sell

higher than the Default Bid Price specified by the Defaulting Party, the Non-Defaulting Party must:

buy all the Defaulting Party’s Equity Securities; or

sell all its Equity Securities to the Defaulting Party,

lower than or equal to the Default Bid Price specified by the Defaulting Party, the Non-Defaulting Party must:

buy all the Defaulting Party’s Equity Securities; or

sell all its Equity Securities to the Defaulting Party,

Notice of decision

Completion of sale of Equity Securities

the selling Shareholder must give the buying Shareholder:

duly executed transfers for the Equity Securities in favour of the buying Shareholder; and

any certificates for the Equity Securities

the Equity Securities must be free from Encumbrances; and

the buying Shareholder must pay the purchase price for the Equity Securities in cleared funds to the selling Shareholder.

Other remedies

Resolution of disputes

Procedure for Resolving Disputes

Any dispute arising out of or in connection with this agreement, including any Deadlock, question regarding its existence, validity or termination (Dispute) must be resolved in accordance with the procedure set out in this clause 24.1.

Nothing in this clause 24 will prevent a party commencing court proceedings for the purposes of seeking urgent injunctive or similar interim relief from a court.

The sequence to resolve a Dispute is as follows:

(negotiation) First, the Dispute will be resolved by negotiation in accordance with clause 24.2.

(court) Second, if the Dispute remains unresolved (in whole or part) after the expiration period for negotiation referred to in clause 24.2, then a Party will be entitled to commence court proceedings.

Unless another Party fails to comply with any of the procedures set out in clause 24.2, and without prejudice to clause 24.1(b), a Party is not entitled to commence court proceedings in relation to a dispute unless and until the procedures set out in clause 24.2 are complied with according to the sequence in clause 24.1(c) .

Until a Dispute is finally agreed, determined, adjudicated or settled in accordance with the foregoing provisions of this clause 24.1, the status quo will remain in relation to such matter.

Negotiation

(Dispute notice): A Party may give a Dispute notice to the other Party(s) in accordance with clause 24.2(b) setting out the matters the subject of the Dispute. For the avoidance of doubt, a Deadlock Notice given under clause 25.2 is deemed to be a dispute notice for the purposes of this clause 24.2.

(requirements for Notice) A notice given under clause 24.2(a) must include or be accompanied by reasonable particulars of the matters the subject of the Dispute and contain the position (including reasons for that position) of the Shareholder who delivered the notice.

(Good faith negotiation) The parties involved in the Dispute must attempt to resolve the Dispute within 10 Business Days (or such shorter period as the Shareholders may agree in writing) from the date on which the Shareholder(s) receives a Dispute notice under clause 24.2(a).

(Representatives negotiations) If the Dispute has not been resolved within the specified time period set out in clause 24.2(c), then the parties must each appoint a representative with authority to negotiate in good faith (together, the Representatives) in an attempt to resolve the Dispute as soon as practicable and, in any event, within 5 Business Days.

(Representatives) The Representative appointed by:

Security Matters, is Haggai Alon; and

WA Mint, is Richard Hayes.

(joint decision binding) The joint decision (if any) of the Representatives will be reduced to writing and will be contractually binding on the parties.

Costs

Deadlock

When a deadlock arises

Deadlock Notice

If the Shareholders are unable to reach agreement on any matter set out in clause 25.1, any Shareholder may send the other Shareholder a notice (Deadlock Notice) setting out the matter in dispute (Deadlock), its position and its reasons for adoption of such position.

The Deadlock Notice triggers the dispute resolution procedure set out in clause 24.

Actions Pending Resolution of Deadlock

Warranties regarding capacity and status

if it is a corporate entity, it is validly existing under the laws of its place of incorporation;

it has the power to enter into and perform its obligations under this agreement and to carry out the transactions contemplated by this agreement;

it has taken all necessary action to authorise its entry into and performance of this agreement and to car out the transactions contemplated by this agreement; and

its obligations under this agreement are valid and binding and enforceable against it in accordance with their terms.

Trustees

acknowledges that this agreement binds or (as the case may be) will bind it personally and in its capacity as trustee of each such trust; and

must cause any of its successors as trustee of any such trust to execute all documents which the other parties require to ensure that this Agreement binds that successor.

Confidentiality and announcements

Confidentiality obligations

use the Confidential Information only for the purposes of the Business or to make decisions regarding its investment in the Company;

keep the Confidential Information confidential and not disclose it or allow it to be disclosed to a third party except:

with the prior written approval of each other party;

to any officer, employee, consultant, adviser or related body corporate of a party to the extent to which they have a need to know and who are aware that the Confidential Information must be kept confidential;

if required by law or by any stock exchange to disclose, in which case the party must immediately notify the other parties of the requirement;

if the Confidential Information is in or enters the public domain for reasons other than a breach of this agreement; or

if the Confidential Information is disclosed to the party by a third party legally entitled to disclose that information and who is not under an obligation of confidentiality to the other parties; and

take or cause to be taken reasonable precautions necessary to maintain the confidentiality of the Confidential Information.

Announcements

Exceptions

is disclosed to a party to this agreement, but at the time of disclosure is rightfully known to or in the possession or control of the party and not subject to an obligation of confidentiality on the party;

is public knowledge (but not because of a breach of this agreement or any other obligation of confidence);

must be disclosed by law or order of any court, tribunal, authority or regulatory body or in connection with the enforcement of this agreement or by the rules of a stock exchange; or

subject to clause 28.4, a Shareholder discloses to an adviser of the Shareholder on a confidential basis.

Commercially sensitive information

Termination

Termination for all parties

all the parties agree;

the Company is wound up by court order;

if Shares offered in an IPO are allotted; or

an agreement to sell all of the issued share capital of the Company is completed.

Termination for a Shareholder

Accrued rights

Paramountcy

this agreement prevails over any inconsistent term, clause or statement in the Offer; and

this agreement prevails over any inconsistent clause in the Company’s constitution and the Shareholders must amend the Company’s constitution to remove the inconsistency as soon as they become aware of it.

GST

Interpretation

GST gross up

Reimbursements

Tax invoice

General provisions

Entire agreement

Variation

Waiver

Further assurances

Approvals and consents

Assignment

Time for doing acts

If:

the time for doing any act or thing required to be done; or

a notice period specified in this agreement,

If any act or thing required to be done is done after 5 pm on the specified day, it is taken to have been done on the following Business Day.

Governing law and jurisdiction

The laws applicable in Western Australia govern this agreement.

The parties submit to the non-exclusive jurisdiction of the courts of Western Australia and any courts competent to hear appeals from those courts.

Severance

Preservation of existing rights

No merger

Relationship of parties

nothing in this agreement creates a partnership, or the relationship of principal and agent, or employee and employer between the parties; and

no party has the authority to bind any other party by any representation, declaration or admission, or to make any contract or commitment on behalf of any other party or to pledge any other party’s credit.

Costs

Stamp Duty

Survival

Notices

hand delivered;

sent by email transmission;

sent by prepaid ordinary mail within Australia; or

sent by prepaid Express Post International airmail to the address for service of the recipient party, if the address for service of the sender and the recipient are in different countries.

hand delivered, on the date of delivery;

sent by email transmission during any Business Day, on the date that the sending party’s electronic equipment reported that the email had been delivered;

sent by prepaid ordinary mail within Australia, on the date that is 4 Business Days after the date of posting; or

sent by prepaid Express Post International airmail between countries, on the date that is 10 Business Days after the date of posting.

Counterparts

2 – Board

Board composition

During the term of this agreement, the Board of the Company will be not less than three and not more than seven. The initial board will be comprised as follows:

Security Matters may appoint up to two directors, being as at the date of this agreement Haggai Alon and Everardus Hofland (each, a Security Matters Director);

Zeren Browne;

WA Mint may appoint up to two directors, being as at the date of this agreement Richard Hayes and a further director to be nominated (each, a WA Mint Director); and

Hugh Morgan, who will be the non-executive, independent Chair.

Each of Security Matters and WA Mint have the right to remove and replace the Directors they have appointed pursuant to paragraph 1 by providing written notice to the Company.

The Board may elect to appoint persons as board observers, however they will have no right to address any resolutions or to vote, other than as permitted by the Board.

Each Shareholder must give the Company notice of appointment or removal of a Director under this paragraph 1. Any appointment or removal takes effect when the notice is given to the Company.

A Director may appoint an alternate Director to act as a Director in his or her absence.

So long as a party holds 20% of the fully paid ordinary Shares, it has the power to appoint a director.

The Chairperson shall be determined by the Directors by Directors Special Resolution from time to time.

Voting

each Director has one vote;

all decisions are decided by simple majority vote except those requiring a Directors Special Resolution; and

except for a decision requiring a Directors Special Resolution, the Chairperson will have a casting vote as well as any deliberative vote he or she may have.

Quorum

The quorum for a Board Meeting is at least one Security Matters Director and one WA Mint Director.

If a quorum of Directors is not present within 30 minutes after the time appointed for the Board Meeting, the meeting is adjourned to the same time and place five Business Days later. At the reconvened meeting, a quorum is any two Directors.

Directors do not have to be physically present in the same place and may attend Board Meetings using any technology that allows each Director to hear proceedings and be heard by the other Directors.

Frequency of Board Meetings

Time and location of Meetings

on the same day and week of each month; and

at the same location.

Notice

Board papers

an agenda for the meeting:

a report from the CEO on the previous one month’s trading, including:

comments on revenues, margins, overheads, profits, cash flow, prospects and any major commercial issues affecting the current and future trading position of the Company and proposed actions to correct any adverse variances; and

a profit and loss statement for the month and year to date relative to budget, consolidated finance report, consolidated balance sheet, major variations to budget, cash flow and forecasts; and

copies of all papers to be considered at the meeting.

Resolutions at a Board Meeting

Conflicted matters

A Director may vote on a resolution on a matter involving a personal interest where that Director has disclosed his or her personal interest.

Written resolutions

The Board may make a decision without convening a meeting or voting by all Directors sign a document or documents recording the decision.

All resolutions at a meeting of the Board must be decided by a simple majority (including one Security Matters Director and one WA Mint Director) unless a greater majority is required under the relevant Constitution or any applicable Law to which the Company is subject.

Directors Remuneration

in the case of non-executive Directors’ fees:

subject to paragraphs 1 and 2 of Schedule 4, payable at the rate determined by the Board;

payable by equal monthly instalments in arrears on the last Business Day of each month; and

in the case of the Directors appointed by WA Mint, payable directly to WA Mint or as directed by WA Mint;

reviewed annually in accordance with the Consumer Price Index published from time to time by the Australian Bureau of Statistics; and

in the case of all reasonable expenses associated with or incidental to the discharge of their obligations as Directors or otherwise in connection with any business including travelling, hotel and other expenses, reimbursed to the non-executive Directors by the Company within 20 Business Days after the Company receives a statement of account for those expenses.

Matters to go to Board

the adoption, implementation, variation or replacement of the annual Business Plan;

the incurring or agreement to incur any expenditure by the Group to expend amounts or to incur any liability (contingent or otherwise) whether on capital or expense items, and whether on one item or a series of related or interconnected or operationally inter-dependent items, where the expenditure or liability:

involves an amount in excess of the Board Threshold in a Financial Year; and

is not provided for in the Business Plan for that Financial Year;

the borrowing or acceptance of financial accommodation (in whatever form, including finance leases) by the Group where:

the total of such borrowings or financial accommodation and any other borrowings or financial accommodation approved under this clause within the previous 12 month period exceeds the Board Threshold; and

any such borrowings or financial accommodation are not provided for in the Business Plan for that Financial Year;

any issue of Shares or Equity Securities in the Company or any member of the Group;

the disposal, transfer, lease or acquisition (by any means including as a result of a Disposal by another person) of any asset of the Group which:

involves the payment (in kind or in cash) of an amount in excess of the Board Threshold; and

is not provided for in the Business Plan for that Financial Year.

the creation, acquisition, disposal or transfer of any interest in a Subsidiary;

the grant, variation or termination of any Encumbrance over any assets of the Group or the giving of a guarantee or indemnity by the Group other than in the ordinary course of business;

the establishment, variation to the responsibilities or composition of, or disbanding of any committee of the Board, the delegation of any powers of the Board to any person, or the variation in terms of, or termination of any such delegation other than in accordance with this agreement;

except as specifically contemplated by this agreement, the entry into, variation or termination of any Related Party Contract or contracts of an unusual or long term nature;

the engagement, variation of the terms of engagement, or termination of the engagement of any person as an executive or consultant of the Company where the total remuneration, fees or benefits payable to the person would be $75,000 or more per year or $75,000 or more payable to the person on or following termination;

all salaries of personnel of the Company;

the establishment, variation or termination of an employee or executive incentive scheme for the benefit of, employees or officers of the Company;

any change of the financial or tax year of the Group;

a change to the registered office of the Company; and

the commencement of litigation or arbitration proceedings by the Group.

Acting in Interests of Appointing Shareholder

have regard to and represent the interests of that Shareholder;

act on the wishes of that Shareholder; and

disclose to that Shareholder any information obtained in his or her capacity as a Director.

(Chairperson and senior management) Appoint or remove the chairperson of the Company, CEO, chief operating officer or chief financial officer or materially change their role or responsibilities.

(Power to appoint directors of other corporation) Appoint or remove a director of a corporation that the Company may appoint or remove.

(Acquisitions) Acquire securities in other entities having a value of $250,000 or less, except in accordance with the Business Plan.

(Equity Securities) Issue or allot or grant any right to issue or allot Equity Security having a value of $100,000 or less, except in accordance with the Business Plan.

(Borrowing) Borrow or accept financial accommodation of $250,000 or less, except in accordance with the Business Plan.

(Encumbrances) Mortgage, charge, pledge or encumber an asset or undertaking, except in accordance with the Business Plan.

(Auditors) Appoint or remove the Company’s auditors (if auditors are approved by the Board to be appointed).

(Acquisitions and disposals) Acquire, dispose of or Transfer any company or business (other than the Business) having a value of $250,000 or less, except in accordance with the Business Plan.

(Assets) Acquire, dispose of or Transfer an asset or assets (either tangible or intangible) having a value of $250,000 or less, except in accordance with the Business Plan.

(Capital expenditure) incur capital expenditure of $250,000 or less in a Financial Year, except in accordance with the Business Plan.

(Finance and operating leases) Enter into a finance or operating lease costing $100,000 or less per annum, except in accordance with the Business Plan.

(Contracts) Enter into, terminate, alter, assign, novate, enforce or waive a right under, a contract except in the ordinary course of business.

(Accounting Standards and principles) Materially alter the Accounting Standards or principles previously adopted by the Company for the preparation or presentation of individual or consolidated financial statements, except if required by law.

(Balance date) Change the balance date or accounting period of the Company.

(Loans) Make a loan, provide credit or other financial accommodation, having a value of $250,000 or less, to a person in the ordinary course of business.

(Disputes) Start, conduct or settle any dispute or litigation (including with a tax authority) except debt collection in the ordinary course of business.

(Employee share plan) Adopt or alter the terms of an employee share plan, employee share option scheme or employee share purchase scheme or any other arrangement giving employees of the Company the right or entitlement to acquire Equity Securities.

(Employee shares) Issue shares or grant options under any employee share plan, employee share option scheme or employee share purchase scheme or other arrangement referred to in paragraph 17.

(Transaction Documents) Terminate, alter, assign, novate, enforce or waive a right under a Transaction Document or agree to do any of those things.

(Special Resolution) Propose a special resolution of Shareholders.

(Committees of Directors) Appoint, dissolve or alter the composition of a committee of the Board.

(Dividends) Set or change the dividend or distribution policy of the Company, or declare, make or pay a dividend or other distribution.

(Partnerships and joint ventures) Enter into or alter a partnership or joint venture.

(Insurance) Alter the insurance cover over the Company or the Business or a key man insurance policy.

(Remuneration of Directors) Increase the remuneration payable to a Director, except in accordance with the Business Plan.

(Bonuses) Pay any executive, profit or other bonus to a Director, except in accordance with the Business Plan.

(Company’s constitution) Alter or amend the Company’s constitution.

(Trade Sale or disposal of Business) Sell the main operating Subsidiaries, all or a substantial part of the Business or all or substantially all of the assets of the Group.

(Winding up) Take a step to dissolve or wind up the Company.

(Change in nature of Business) Stop caring on, or materially alter the scale of operations of, the Business or start any business or operational activities (except business or operational activities of the Business).

(Listing) Apply to a stock exchange for a listing or for quotation of Shares.

(Acquisitions) Acquire securities in other entities having a value of more than $250,000.

(Equity Securities) Issue or allot or grant any right to issue or allot Equity Security having a value of more than $250,000.

(Borrowing) Borrow or accept financial accommodation of more than $250,000.

(Guarantee) Give or enter into a guarantee, letter of comfort or performance bond.

(Acquisitions and disposals) Acquire, dispose of or Transfer any company or business (other than the Business) having a value of more than $250,000.

(Assets) Acquire, dispose of or Transfer an asset or assets (either tangible or intangible) having a value of more than $250,000.

(Capital expenditure) incur capital expenditure of $250,000 or less in a Financial Year, except in accordance with the Business Plan.

(Related Party Transactions) Enter into, materially vary or terminate, an agreement or arrangement with:

a Director or an Associate of a Director; or

a Shareholder or an Affiliate of a Shareholder.

(Financial assistance) Make a loan or provide financial assistance to a Director or an Associate of a Director or vary the term of a loan or financial assistance previously provided to a Director or an Associate of a Director.

(Reorganisation Event) Undertake or undergo a Reorganisation Event.

(Finance and operating leases) Enter into a finance or operating lease costing more than $250,000 per annum, except in accordance with the Business Plan.

(Loans) Make a loan, provide credit or other financial accommodation, having a value of more than $250,000, to a person in the ordinary course of business.

(General security interest) Granting or creating any security interest over the Company’s whole undertaking.

(Intellectual property) Other than in strict accordance with the terms of this Agreement, sell, grant or otherwise dispose of an exclusive licence to the Company’s intellectual property.

Monthly

commentary on the operational and financial position for the preceding month, including any variation between the actual results and those forecast in the Business Plan;

a profit and loss account and cash flow statement for the preceding month;

a balance sheet as at the end of the preceding month; and

a forecast of the performance of the Company in the next month.

Quarterly

commentary on the financial performance for the preceding quarter;

a quarterly management report on any variations from the Business Plan;

a profit and loss statement and cash flow statement for the preceding quarter; and

a balance sheet as at the end of the preceding quarter.

Annual

Minutes

Within 10 Business Days after each Board Meeting, minutes of the Board Meetings (where reasonably practicable to do so).

Within 10 Business Days after each meeting of Shareholders, minutes of the meeting (where reasonably practicable to do so).

Offer information

Shares;

an interest in a Subsidiary;

all or a substantial part of the Business; or

all or substantially all of the assets of the Group.

Insurances

Take out and maintain insurance policies in respect of all risks that a prudent person would insure in relation to the conduct of a business similar to the Business including indemnity insurance policies in respect of the assets of the Company.

Review those policies referred to in paragraph 1(a) each year to ensure the policies are maintained to achieve the objective in paragraph 1(a).

D8tO Insurances

Comply with Business Plan

Directors’ Protection Deed

The Acceding Party confirms it has been given a copy of the Shareholders Agreement.

The Acceding Party covenants with the parties to the Shareholders Agreement (whether original or by accession) to observe, perform and be bound by the terms of the Shareholders Agreement to the intent and effect that the Acceding Party is taken from the date on which the Acceding Party is registered as a Shareholder of the Company to be a party to the Shareholders Agreement.

The address of the Acceding Party for the purposes of the Shareholders Agreement is, until substituted in accordance with the Shareholders Agreement:

This deed is governed by the laws of Western Australia, Australia.

Application of schedule

Defined terms

the dollar figure given by the Independent Valuer; or

if the Independent Valuer gives a range of figures, the mid-point of the range.

Appointment of Independent Valuer

appoint, by Directors Special Resolution, an independent chartered accountant or an investment bank of good standing; or

if the Board fails to agree on an appointment, request the Australian

Instructing Independent Valuer

there is a willing but not anxious buyer and a willing but not anxious seller;

a reasonable time in which to sell the Sale Securities being valued in the open market (and for that purpose 60 Business Days is deemed to be a reasonable time); and

there is no discount for minority shareholdings nor a premium for a shareholding that will give the buyer a controlling shareholding.

Period of determination

Independent Valuer’s role

Independent Valuer’s decision

Costs

Access to information

the Independent Valuer has access at all reasonable times to the accounting records and other records of the Company; and

officers of the Company give any information and explanations required by the Independent Valuer to value the Equity Securities.