A.C.N. 112 682 158 Ltd (Subject to Deed of Company ... · 28/03/2018 · September 2017: confidentiality Deed Polls were executed between the Deed Administrators and interested parties

ME_145893169_1

A.C.N. 112 682 158 Ltd (Subject to Deed of Company Arrangement) formerly known as Baralaba Coal Company Ltd

Report to Creditors on Proposed DOCA Variation

28 March 2018

1

Contents

Introduction ...................................................................................................................................................................................................................... 3

Varying the BCL DOCA to facilitate a sale and recapitalisation ............................................................................................................. 4

Anticipated return to creditors................................................................................................................................................................................ 7

Creditor information on remuneration ............................................................................................................................................................... 8

Receipts and payments ............................................................................................................................................................................................... 8

Resolutions ........................................................................................................................................................................................................................ 8

Creditor meeting details ............................................................................................................................................................................................. 8

Appendices ........................................................................................................................................................................................................................ 9

2

Report Glossary

Term Expanded

Administrators (including Deed Administrators)

William Harris, Shaun Fraser and Jason Preston

ASIC Australian Securities and Investments Commission

ASX Australian Stock Exchange

BCL or the Company A.C.N. 112 682 158 Ltd (Subject to Deed of Company Arrangement) formerly known as Baralaba Coal Company Limited

BCL Group All entities under the control of Baralaba Coal Company Pty Ltd

CDP Confidentiality Deed Poll

Cockatiel Coal Cockatiel Coal Pty Ltd (now known as Baralaba Coal Company Pty Ltd)

Creditors Trust Trust Fund set up for the benefit of creditors of BCL

Creditors’ Trust Deed Deed outlining the details of the creditors' trust

Deed Fund $515,000 payment by the Deed Proponent

Deed Proponent Otsana Capital

DOCA Deed of Company Arrangement dated 28 August 2017

EOI Expressions of Interest

LMM Liberty Metals & Mining Holdings, LLC

LMM Sale Transaction Acquisition of the shares in Cockatiel Coal by LMM

Members Condition Members of the Company passing the necessary resolutions to give effect to the Recapitalisation Proposal

NBIO Non-binding indicative offer

NoM Notice of Shareholder Meeting

Otsana Capital Otsana Pty Ltd

Recap Completion Completion of the recapitalisation proposal

Supplementary report Supplementary report to creditors dated 21 August 2017

the 439A Report Report to creditors pursuant to section 439A of the Act dated 9 August 2017

the Act The Corporations Act 2001 (Cth)

the Variation Meeting Meeting of creditors of BCL held pursuant to clause 13.2(o) of the DOCA and section 445A of the Act

Trustees William Harris, Shaun Fraser and Jason Preston

Variation DOCA The proposed Deed of Variation to the DOCA set out in Annexure E

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Introduction

Appointment

William Harris, Shaun Fraser and Jason Preston were appointed as Joint and Several Voluntary Administrators of BCL on

12 July 2017 by resolution of the Company’s Directors, pursuant to section 436A of the Corporations Act. They were

subsequently appointed as Joint and Several Deed Administrators of BCL on 28 August 2017 by the DOCA, approved at

the second meeting of creditors by a resolution of the creditors.

This report should be read in conjunction with the Administrators’ report to creditors pursuant to section 439A of the Act

(“the 439A Report”) dated 9 August 2017, and also the Supplementary report to creditors dated 21 August 2017.

A copy of these reports are available on our website (http://www.mcgrathnicol.com/assignments/baralaba-coal-company-

limited/#).

Background

The reconvened second statutory meeting of creditors of BCL was held on 28 August 2017.

At the meeting, creditors of the Company resolved that BCL enter into the DOCA proposed by LMM whereby:

LMM would acquire the shares in Cockatiel Coal Pty Ltd (now known as Baralaba Coal Company Pty Ltd);

other nominated subsidiaries of BCL would become subsidiaries of Cockatiel Coal, with the non-transferring

subsidiaries to be deregistered;

the Deed Administrators would commence a sale process for the recapitalisation of the ASX listed shell to provide

shareholders with an opportunity to realise value in the future; and

A Creditors Trust would be established for the benefit of all creditors of BCL (as at 12 July 2017) other than the

excluded creditors as defined in the DOCA.

The LMM Sale Transaction completed on 16 February 2018, at which stage LMM acquired all shares in Cockatiel Coal.

The Creditors Trust was also established on 16 February 2018 and a Notice of Intention to declare a first and final dividend

to participating creditors (all creditors other than the excluded creditors) was published on 15 March 2018. All

participating creditors whose claims have not already been admitted are required to prove their claims by 6 April 2018.

Also upon completion of the LMM Sale Transaction, BCL was released from the claims of all creditors other than the

Reserved Debt of LMM. By reason of the release of those claims, LMM is the only remaining creditor of BCL that still has a

claim and is entitled to vote on the Variation DOCA.

Separately, Otsana Capital was selected by the Deed Administrators as the preferred bidder to recapitalise the ASX listed

shell on 2 November 2017.

A proposal to vary the DOCA has now been received by Otsana Capital which will facilitate the recapitalisation of the ASX

listed shell. A copy of the proposed Variation DOCA is contained at Annexure E of this Report to Creditors.

http://www.mcgrathnicol.com/assignments/baralaba-coal-company-limited/

http://www.mcgrathnicol.com/assignments/baralaba-coal-company-limited/

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The diagram below shows the corporate structure of the BCL Group, identifying the entities which have now been transferred

to Cockatiel Coal under ownership of LMM and the remaining entities which are pending deregistration by ASIC.

Purpose of Report

A meeting of creditors of BCL has been convened to be held on 16 April 2018 at 11:00am pursuant to clause 13.2(o) of the

DOCA and section 445A of the Act, to be held at McGrathNicol offices, Level 7, 175 Eagle Street, Brisbane QLD 4000.

This report is issued to the creditors of BCL ahead of the Variation Meeting.

The purpose of this report is to provide creditors with an update on the work undertaken by the Deed Administrators and

the Deed Administrators’ opinion of whether it is in creditors’ best interests to approve the execution of the Variation DOCA.

Varying the BCL DOCA to facilitate a sale and recapitalisation

The DOCA entered into on 28 August 2017 provided for, among other things, the Deed Administrators to use their

reasonable endeavours to find a buyer for the ASX listed shell of the Company.

Sale process

A sale process for the listed shell began in September 2017.

Set out below is a summary of the key milestones in respect of the sale process.

15 September 2017: advertisements placed in The Australian and the Australian Financial Review seeking formal

expressions of interest

September 2017: the Deed Administrators’ staff made initial contact with potential bidders

29 September 2017: formal expressions of interest received

September 2017: confidentiality Deed Polls were executed between the Deed Administrators and interested parties

September 2017: sale presentation flyer, data pack and sale process letter were issued to interested parties who executed

the CDP

13 October 2017: Non-binding indicative offers were received

October 2017: the Deed Administrators reviewed and considered the NBIOs received, providing feedback to interested

parties giving them an opportunity to revise their offers

November 2017: entered into exclusivity arrangement with the preferred bidder

Head company

Baralaba North mine ownership

Deregistration pending

BCL

Injune Coal Pty Ltd

SE QLD Energy Pty

Ltd Corella Coal

Pty Ltd

Cockatoo Coal

(Taroom) Pty Ltd

Cockatoo Coal

Marketing Company Pty

Ltd

Dingo Coal Pty Ltd

Independent Coal Pty Ltd

Cockatiel Coal

Wonbindi TLO Holdings

Pty Ltd

SE QLD Coal Pty Ltd

Baralaba Coal Pty Ltd

Surat Coal Pty Ltd

Wonbindi Coal Pty Ltd

Baralaba Plant and Equipment Company Pty

Ltd

Cacatua Pastoral Pty

Ltd

Blackwood Corporation

Pty Limited

Matilda Coal Pty Ltd

Drill Down Resources Pty Ltd

LMM

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Otsana Capital was selected as the preferred bidder and has proposed a recapitalisation of the Company by varying the

existing DOCA.

Otsana Capital’s Recapitalisation and Variation DOCA proposals are attached at Annexure E.

High level outcomes

The Recapitalisation Proposal is intended to achieve the following outcomes:

payment of $515,000 by Otsana Capital to the Deed Administrators;

release of LMM’s rights and claims against the Company in relation to the Reserved Debt of $500,000, which was not

released at LMM Sale Completion on 16 February 2018;

transfer of all remaining property of the Company to Cockatiel Coal; and

recapitalisation of the Company under the control and direction of Otsana Capital, with a view to the eventual

restatement of the Company to trading on the ASX once a suitable business has been identified for acquisition.

Key events under the Variation DOCA

Set out below is a summary of the key events under the Variation DOCA. Please refer to Appendix E for further details.

The current Deed Administrators will remain the Deed Administrators of the Varied BCL DOCA.

The Deed Proponent will make a payment of $515,000 as consideration for the BCL listed shell. The Deed Fund comprises:

A $30,000 deposit to be paid by the Deed Proponent within 5 business days of the date the Variation

DOCA is executed. The Variation DOCA will be executed immediately after the creditors meeting to

approve the Variation DOCA. The deposit is only refundable in circumstances where the shareholders fail

to approve the recapitalisation resolution at the shareholders’ meeting.

The balance of $485,000 to be paid by the Deed Proponent within 10 business days of the shareholders

meeting approving the proposed reconstruction and recapitalisation of BCL (as described below).

With assistance from the Deed Administrators, Otsana Capital will seek to satisfy the following conditions precedent at

its own cost (but ultimately recoverable from the Company after Recap Completion):

obtaining the required waivers from the ASX to permit the Company to issues shares and options in

accordance with the Recapitalisation Proposal;

the members of the Company passing the necessary resolutions to give effect to the Recapitalisation

Proposal; and

directors nominated by Otsana Capital being appointed in place of any current directors.

The Company will transfer, assign, novate or convey any remaining property it has to Cockatiel Coal or its nominee prior

to completion of the recapitalisation.

Pre-conditions to the Variation DOCA coming into effect

The Variation DOCA will come into effect upon:

creditors of BCL voting at the Variation Meeting, in favour of the proposed variation resolution set out in paragraph 6.1

of this report (as noted above, LMM is the only remaining creditor of BCL that is entitled to vote on the Variation DOCA

as all other claims have been released and replaced with claims in the Creditors Trust); and

execution by BCL, the Deed Administrators and Deed Proponent of a Deed which will vary the existing terms of the BCL

DOCA on the terms of the Variation DOCA.

Pre-conditions to effectuation of the Variation DOCA

The completion and effectuation of the Variation DOCA will be conditional upon, and will occur after satisfaction of the

following conditions:

all approvals from ASIC and ASX necessary for the NoM to be distributed to shareholders being obtained, and the

passing of the shareholder resolutions set out in the NoM.

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LMM voting in favour of the Variation DOCA and/or releases of any remaining security interests registered against BCL

being effected.

The removal of any current Directors of the Company and the appointment of Otsana Capital Nominees as Directors of

the Company.

Payment of the entirety of the Deed Fund by the Deed Proponent to the Deed Administrators.

Proceeds from the sale and the BCL Creditors Trust

A Creditors Trust was established pursuant to the LMM Sale Transaction for the benefit of creditors of BCL other than

the excluded creditors (including LMM). Please refer to our Supplementary Report to creditors dated 21 August 2017

for information regarding the Creditors Trust.

The Deed Administrators will apply the payments received from Otsana Capital as follows:

firstly, in payment of their reasonable costs and remuneration in achieving the recapitalisation, including

all ASX and ASIC fees owing by the Company;

secondly, the sum of $300,000 to LMM; and

the balance, either to:

＞ the Creditors Trust, if the claims of creditors entitled to claim against the Creditors Trust have

not been paid in full; or

＞ LMM, if the claims of creditors entitled to claim against the Creditors Trust have been paid in

full.

LMM’s claims to the Reserved Debt will be released and extinguished at Recap Completion.

The terms of the Creditors’ Trust Deed are not affected by the Variation DOCA and the Deed Administrators (in their

capacity as Trustees) will continue to administer the Creditors Trust and adjudicate claims of beneficiaries in accordance

with its terms. On 15 March 2018, the Deed Administrators published a notice on ASIC’s Insolvency Notices website

requiring all creditors whose debts or claims had not already been admitted to prove their claims by 6 April 2018.

Termination of the DOCA

The DOCA as varied by the Variation DOCA will terminate and be wholly effectuated upon Recap Completion. At this

time control of the Company will revert to its directors who will be Otsana Capital nominees.

The DOCA can also be terminated at the Deed Administrators’ election if Recap Completion does not occur by 16 July

2018 (the Due Date), or if the Members Condition is not satisfied because the members of the Company do not pass

the required resolutions. If the DOCA is terminated for one of these reasons then the Company will be wound up.

The termination of the DOCA as varied under either mechanism will have no impact on the events which have already

occurred under the DOCA including the completion of the LMM Sale Transaction and the establishment of the Creditors

Trusts and the releases of claims which occurred at that time.

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Anticipated return to creditors

Upon completion of the recapitalisation contemplated by the Variation DOCA, the Deed Administrators will apply the

$515,000 received from Otsana Capital as follows:

firstly, in payment of their reasonable costs and remuneration in achieving the recapitalising, including all ASX fees

owing by the Company;

secondly, the sum of $300,000 to LMM; and

the balance, either to:

– the Creditors Trust, if the claims of creditors entitled to claim against the Creditors Trust have not been

paid in full;

– LMM, if the claims of creditors entitled to claim against the Creditors Trust have been paid in full.

At this stage, there are sufficient funds currently in the Creditors’ Trust bank account from the existing DOCA to pay in full

known priority and unsecured creditor claims.

In the event unknown unsecured creditors claim in the Creditors’ Trust, unsecured creditors will receive a pro-rata distribution.

We note that the Variation DOCA proposed allows the pool of funds to increase for unsecured creditors as compared to the

existing DOCA.

The anticipated returns to creditors are estimated in the table below.

In the event that the variation DOCA proposal is not accepted:

No additional funds would be available for payment to the Creditors Trust (if required);

No funds would be available to pay LMM’s Reserved Debt; and

The DOCA will automatically terminate on 17 April 2018 (being the End Date by which the DOCA was required to be

varied to facilitate any recapitalisation proposal) and given BCL’s inability to repay LMM’s Reserved Debt, liquidation is

the only likely alternative.

As advised in our previous reports to creditors, we have not identified any claims that would be available if BCL was placed

in liquidation and, in any event, LMM would be the only creditor to benefit from any such claims as the sole remaining

creditor.

The Deed Administrators therefore recommend that creditors vote in favour of varying the BCL DOCA by executing

the proposed Variation DOCA enclosed at Annexure E, in order to facilitate a sale and recapitalisation of BCL.

Estimated outcome

$'000 Low High

Asset recoveries

Deed fund from sale of the ASX listed shell 515 515 -

Total estimated recoveries 515 515 -

Costs

Appointee fees and disbursements (50) (30) (100)

Legal fees and disbursements (40) (20) (50)

Other costs (ie ASX listing fees) (20) (10) (10)

Total estimated costs (110) (60) (160)

Payment to LMM in relation of their Reserved Debt (300) (300)

Surplus funds available to creditors (via the Creditors Trust) 105 155 -

Source: McN Analysis

Variation DOCA Existing DOCA/

Liquidation

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Creditor information on remuneration

To date the following remuneration has been approved in relation to BCL:

$418,177.00 for fees in relation to the VA period which were approved for payment at the creditors meetings held on

17 August 2017 and 28 August 2017; and

$100,000 for fees in relation to the period 28 August 2017 to 2 October 2017 which were approved for payment at

the creditors meeting held on 28 August 2017.

The above fees have been drawn in full.

Annexure D of this report deals with:

remuneration incurred for the period 3 October 2017 to 23 February 2018 with respect to the DOCA;

remuneration forecast to be incurred for the period 24 February 2018 to effectuation of the Variation DOCA; and

remuneration forecast to be incurred for the period 16 January 2018 to the finalisation of the Creditors’ Trust.

Receipts and payments

Details of receipts and payments during the DOCA are detailed in the Remuneration Report, at Annexure D.

Resolutions

Variation of the current BCL DOCA

As stated above, the Deed Administrators recommend that creditors vote in favour of varying the terms of the BCL DOCA

as set out in the Variation DOCA enclosed at Annexure E, in order to facilitate a sale and recapitalisation of BCL.

The following resolution will therefore be put to creditors:

“That, pursuant to section 445A of the Corporations Act 2001, the BCL DOCA be varied by the Deed Administrators

entering into a Deed of Variation substantially in the form of the proposed Deed of Variation at Annexure E to the Report

to Creditors dated 28 March 2018”.

Fee resolutions

Refer to the Remuneration report, at Annexure D.

Creditor meeting details

The Variation Meeting of the creditors of BCL has been convened pursuant to section 445A of the Act, to be held at

11:00am on 16 April 2018, at McGrathNicol offices, Level 7, 175 Eagle Street, Brisbane QLD 4000.

A notice of the meeting is included in Annexure A.

Creditors who intend to vote at the meeting are required to lodge a formal proof of debt. Creditors who have already lodged

a proof of debt do not need to complete a new proof.

A blank proof of debt form is included in Annexure B.

Creditors may exercise their right to vote by voting at the meeting in person, by appointing a proxy or by postal vote. The

proxy forms lodged by creditors for prior meetings cannot be used for this meeting. Accordingly, creditors should ensure

that a proxy form, power of attorney or evidence of appointment of a company representative is completed and lodged

prior to the meeting. A blank proxy form is included in Annexure C.

Documents may be lodged with Georgia Wilson prior to the meeting or may be brought to the meeting. Registration for

our meeting will commence at 10:45am AEST on the day of the meeting.

Telephone conference facilities will be available at the meeting for creditors to conveniently dial in. Please contact my office

for details.

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If you have any further queries in relation to this report or the administration, please do not hesitate to contact Georgia

Wilson (07) 3333 9818 or by email at [email protected].

Dated: 28 March 2018

William Harris

Joint and Several Deed Administrator

Appendices

Annexure A: Notice of meeting

Annexure B: Proof of Debt form

Annexure C: Proxy form

Annexure D: Remuneration report

Annexure E: Draft Variation DOCA and Recapitalisation proposals

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Annexure A – Notice of Meeting

FORM 529A

Corporations Act 2001 (Cth)

NOTICE OF MEETING OF CREDITORS OF COMPANY

A.C.N. 112 682 158 (Subject to Deed of Company Arrangement)

(formerly known as Baralaba Coal Company Limited) (“BCL” or “the Company”)

1. Shaun Robert Fraser, Jason Preston and William James Harris were appointed as Joint and Several Voluntary

Administrators of BCL on 12 July 2017 by resolution of the Company’s Directors, pursuant to Section 436A the

Corporations Act 2001 (“the Act”).

2. BCL entered into a Deed of Company Arrangement (“DOCA”) on 28 August 2017, and Shaun Robert Fraser, Jason

Preston and William James Harris were appointed as Joint and Several Deed Administrators by resolution of

creditors.

3. Notice is now given that a meeting of creditors of BCL has been convened under section 445A of the Act and will be

held on Monday, 16 April 2018 at 11:00am AEST at McGrathNicol offices, Level 7, 175 Eagle Street, Brisbane QLD

4000.

4. The agenda of the meeting is set out below;

- to consider the execution of a Deed of Variation to the DOCA for the recapitalisation of the listed corporate

entity;

- to consider, and if thought fit, approve the Deed Administrators’ remuneration; and

- to discuss any other relevant business which may arise.

Dated: 28 March 2018

William Harris

Joint and Several Deed Administrator

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Annexure B – Proof of Debt form

FORM 535 Subregulation 5.6.49(2)


FORMAL PROOF OF DEBT OR CLAIM

(GENERAL FORM)

To the Deed Administrators of A.C.N. 112 682 158 (Subject to Deed of Company arrangement)(“the Company”)

1. This is to state that the Company was on 12 July 2017 and still is, justly and truly indebted to:

_________________________________________________________

(full name and address of the creditor and, if applicable, the creditor's partners. If prepared by an

employee or agent of the creditor, also insert a description of the occupation of the creditor) for

$_______________and______cents.

Date Consideration (state how the

Debt arose)

Amount

$ c

Remarks (include details of

voucher substantiating payment)

2. To my knowledge or belief the creditor has not, nor has any person by the creditor's order, had or received any

satisfaction or security for the sum or any part of it except for the following: (insert particulars of all securities held. If

the securities are on the property of the company, assess the value of those securities. If any bills or other

negotiable securities are held, show them in a schedule in the following form).

Date Drawer Acceptor Amount $c Due Date

*3. I am employed by the creditor and authorised in writing by the creditor to make this statement. I know that the

debt was incurred for the consideration stated and that the debt, to the best of my knowledge and belief, remains

unpaid and unsatisfied.

*3. I am the creditor's agent authorised in writing to make this statement in writing. I know that the debt was incurred

for the consideration stated and that the debt, to the best of my knowledge and belief, remains unpaid and

unsatisfied.

........................................... Dated

Signature

Occupation:

Address

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ME_145893169_1

Annexure C: Proxy form

FORM 532


Regulation 5.6.29

A.C.N. 112 682 158 (Subject to Deed of Company Arrangement)

(formerly known as Baralaba Coal Company Limited) (“BCL” or ‘the Company’)

APPOINTMENT OF PROXY

I/We (1) _____________________________________________________________________________ of

_________________________________________________________________________________________________

a creditor/member of the Company appoint

(2)_____________________________________________ or in his/her absence

(3) _____________________________________________as my/our general/special proxy to vote at the meeting of creditors to be

held on 16 April 2018 at 11:00 AM or at any adjournment of that meeting.

Voting Directions (if a special proxy):

No. Resolution* For Against Abstain

1

That, pursuant to section 445A of the Corporations Act 2001, the BCL

DOCA be varied by the Deed Administrators entering into a Deed of

Variation substantially in the form of the proposed Deed of Variation

at Annexure E to the Report to Creditors dated 28 March 2018.

2 That the remuneration of the Deed Administrators for the period 3

October 2017 to 23 February 2018, calculated at hourly rates as detailed

in the previous report to creditors, is approved for payment in the sum

of $221,253.00, exclusive of GST, and the Deed Administrators may pay

the remuneration immediately or as otherwise determined by the Deed

Administrators.

3 That the remuneration of the Deed Administrators from 24 February

2018 to the finalisation of the Deed Administration is determined at a

sum equal to the cost of time spent by the Deed Administrators and

their partners and staff, calculated at the hourly rates as detailed in the

previous report to creditors, up to a capped amount of $53,747.00,

exclusive of GST, and the Deed Administrators may pay the remuneration

on a monthly basis or as otherwise determined by the Deed

Administrators.

*Please only complete the above table if special proxy. Pease indicate your vote by placing a tick in the relevant box.

DATED this ___________ day of ________________________ 2018

(4) Signature ___________________________________

CERTIFICATE OF WITNESS - only complete if the person given the proxy is blind or incapable of writing.

I, ____________________________________________ of _______________________________________________

certify that the above instrument appointing a proxy was completed by me in the presence of and at the request of the person

appointing the proxy and read to him before he attached his signature or mark to the instrument.

DATED this ___________ day of ________________________ 2018

Signature of witness ___________________________________

Description ___________________________________

Place of residence ___________________________________

___________________________________

Notes:

(1) If a firm strike out "I" and set out the full name of the firm.

(2) Insert the name of the person appointed.

(3) If a special proxy, specify your voting directions in the table by placing a tick in the relevant box.

(4) If the creditor is a sole trade, sign in accordance with the following example: “A.B., proprietor”.

If the creditor is a partnership, sign in accordance with the following example: “A.B., a partner of the said firm.”

If the creditor is a company, then the form of proxy must be under its Common Seal or under the hand of some officer

duly authorised in that capacity, and the fact that the officer is so authorised must be stated in accordance with the

following example: “for the company, A.B.” (duly authorised under the Seal of the Company).

Proxy forms should have been completed and returned by no later than 5:00 PM on

the day prior to the meeting to be eligible to vote at the meeting.

RETURN TO: A.C.N. 112 682 158 (Subject to Deed of Company Arrangement)

Care of McGrathNicol

Address: Level 7, 175 Eagle Street, Brisbane

Email: [email protected]

Phone: +61 7 3333 9818

Fax: +61 7 3333 9899

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Annexure D: Remuneration report

This remuneration report provides you with information to assist you to make an informed decision regarding the approval

of our proposed remuneration for undertaking the Deed Administration of A.C.N. 112 682 158 Limited (Subject to Deed of

Company Arrangement) (BCL).

The report has the following information:

What should you do next?

Please read this report and the accompanying information we have sent you and consider whether you will attend the

meeting of creditors to vote on the resolutions that will be put to that meeting. The meeting will also give you an opportunity

to ask any questions that you have.

Alternatively, you may appoint a representative to attend the meeting on your behalf, by lodging a proxy form. Lodging a

specific proxy form allows you to specify how your proxy must vote. Lodging a general proxy form allows your representative

to choose how to exercise your vote.

If you have any queries, please contact Georgia Wilson on (07) 3333 9818 or by email at [email protected].

mailto:[email protected]

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Declaration

We, Jason Preston, Shaun Fraser and William Harris of McGrathNicol, have undertaken a proper assessment of this

remuneration claim for our appointment as Deed Administration of BCL in accordance with the law and applicable

professional standards. We are satisfied that the remuneration claimed is in respect of necessary work, properly

performed, or to be properly performed, in the conduct of this matter.

Executive Summary

The remuneration currently being claimed and previously approved is summarised below:

Period Report Reference Amount (ex GST)

Current Remuneration claim:

Deed Administration

Resolution 2 - 3 October 2017 to 23 February 2018 3.2.1 and Schedule 1 $221,253

Resolution 3 - 24 February 2018 to finalisation* 3.2.2 and Schedule 2 $53,747

Total – Deed Administration $275,000

Past remuneration approved

Voluntary Administration – 12 July 2017 4 August 2017 $254,229

Voluntary Administration – 5 July 2017 to 27 August 2017 $163,948

Deed Administration – 28 August 2017 to 2 October 2017 $100,000

Total past remuneration approved $518,177

TOTAL remuneration claimed and approved to date $793,177

* Approval for the future remuneration sought is based on an estimate of the work necessary to the

completion of the Deed Administration. Should additional work be necessary beyond what is contemplated,

further approval may be sought from creditors.

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Remuneration

Remuneration claim resolutions

We will seek approval of the following resolutions to approve my remuneration. Details to support these resolutions

are included in Section 3.2 and in the attached Schedules.

Resolution 2: 3 October 2017 to 23 February 2018

“That the remuneration of the Deed Administrators for the period 3 October 2017 to 23 February 2018, calculated

at hourly rates as detailed in the previous report to creditors, is approved for payment in the sum of $221,253.00,

exclusive of GST, and the Deed Administrators may pay the remuneration immediately or as otherwise determined

by the Deed Administrators.”

Resolution 3: 24 February 2018 to finalisation of the DOCA

“That the remuneration of the Deed Administrators from 24 February 2018 to the finalisation of the Deed

Administration is determined at a sum equal to the cost of time spent by the Deed Administrators and their partners

and staff, calculated at the hourly rates as detailed in the previous report to creditors, up to a capped amount of

$53,747.00, exclusive of GST, and the Deed Administrators may pay the remuneration on a monthly basis or as

otherwise determined by the Deed Administrators.”

Details of remuneration

The basis of calculating the remuneration claims are summarised below and the details of the major tasks performed

and the costs associated with each of those major tasks are contained in Schedules 1 to 2.

Resolution 2 from 3 October 2017 to 23 February 2018

The below table sets out time charged to each major task area by staff members working on the Deed Administration

for the period 3 October 2017 to 23 February 2018, which is the basis of the Resolution 2 claim. More detailed

descriptions of the tasks performed within each task area, matching the amounts below, are contained in

Schedule 1.

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Position

hrs $ (ex GST) hrs $ (ex GST) hrs $ (ex GST) hrs $ (ex GST) hrs $ (ex GST) hrs $ (ex GST)

Partner 24.8 15,128.00 17.3 10,553.00 2.2 1,342.00 4.2 2,562.00 1.1 671.00

Partner 0.7 427.00 0.7 427.00

Director 110.6 57,512.00 76.4 39,728.00 15.5 8,060.00 4.6 2,392.00 14.1 7,332.00

Senior Manager 0.8 384.00 0.2 96.00 0.6 288.00

Senior Accountant 1 169.2 62,604.00 120.7 44,659.00 19.6 7,252.00 13.8 5,106.00 15.1 5,587.00

Senior Accountant 1 210.2 77,774.00 60.0 22,200.00 38.9 14,393.00 29.9 11,063.00 2.4 888.00 79.0 29,230.00

Undergraduate 4.4 792.00 4.4 792.00

Undergraduate 9.2 1,656.00 6.2 1,116.00 3.0 540.00

Treasury Ops Manager 2.6 416.00 2.6 416.00

Doc Management Assistant 3.5 560.00 3.5 560.00

Personal Assistant 1.6 256.00 0.7 112.00 0.3 48.00 0.2 32.00 0.4 64.00

Team Assistant 0.5 80.00 0.5 80.00

Treasury Administrator 0.8 128.00 0.8 128.00

Treasury Administrator 18.1 2,896.00 18.1 2,896.00

Treasury And Knowledge 0.6 96.00 0.6 96.00

Treasury Coordinator 3.4 544.00 3.4 544.00

561.0 221,253.00 275.1 117,252.00 82.4 32,163.00 48.8 18,705.00 6.8 3,482.00 147.9 49,651.00

22,125.30 11,725.20 3,216.30 1,870.50 348.20 4,965.10

243,378.30 128,977.20 35,379.30 20,575.50 3,830.20 54,616.10

394 426 390 383 512 336

Summary of professional fees by category of work for the period 3 October 2017 to 23 February 2018

Activity Types

Trade On AdministrationEmployee $/hour Total Assets Creditors

(ex GST)

Jamie Harris 610.00

Employees

Sijmon Van Loon 480.00

Timothy Duncan 370.00

Shaun Fraser 610.00

Rajiv Goyal 520.00

Chloe Miller 180.00

Trent Williams 160.00

Wendy Hooijer 370.00

Jacinta Robinson 180.00

Cassandra Costello 160.00

Erin Bird 160.00

Greg Wadeson 160.00

Deborah Easton 160.00

Dira Benavides 160.00

Total

Andrea Palmer 160.00

Graciela Nolan 160.00

Average hourly rate

GST

Total Inc GST

22

Resolution 3 from 24 February 2018 to finalisation of the DOCA

The below table sets out the expected costs for the major tasks likely to be performed by the Deed Administrators

and their staff for the period 24 February 2018 to finalisation of the Deed Administration, which is the basis of the

Resolution 3 claim. More detailed descriptions of the tasks likely to be performed within each task area, matching

the amounts below, are contained in Schedule 2.

Total

($) Task area

Asse

ts

Cre

dito

r

Adm

inistra

tion

Total (est) $53,747.00 $15,249.00 $23,249.00 $15,249.00

GST $5,374.70 $1,524.90 $2,324.90 $1,524.90

Total (Incl GST) $59,121.70 $16,773.90 $25,573.90 $16,773.90

Disbursements

Disbursements are divided into three types:

Externally provided professional services - these are recovered at cost. An example of an externally provided

professional service disbursement is legal fees.

Externally provided non-professional costs - these are recovered at cost. Examples of externally provided non-

professional costs are travel, accommodation and search fees.

Internal disbursements such as photocopying, printing and postage. These disbursements, if charged to the

External Administration, would generally be charged at cost; though some expenses such as telephone calls,

photocopying, printing and data storage, may be charged at a rate which recoups both variable and fixed

costs. The recovery of these costs must be on a reasonable commercial basis. Details of the basis of recovery

of each of these costs is discussed below.

Disbursements may be paid directly from the Deed Administration bank account, in which case they are included

in summarised form in the attached Summary of Receipts and Payments.

Other disbursements are paid for by the Deed Administrators and are recovered from the Deed Administration bank

account. Creditors are not required to approve these types of disbursements but details are provided to account

to creditors, including the basis of charging for these types of disbursements. Creditors are entitled to question the

incurring of the disbursements and can challenge the disbursements in Court.

The following amounts have been paid by McGrathNicol and relate to the Deed Administration. Those amounts

will be reimbursed to McGrathNicol at cost from the Deed Administration bank account:

Disbursements for the period 3 October 2017 to 23 February 2018 Amount ($)

(GST exclusive)

Taxis 112.66

Kitchen supplies 19.06

Couriers 49.32

Searches 62.56

Total 243.60

We have undertaken a proper assessment of disbursements claimed for BCL, in accordance with the law and

applicable professional standards. We are satisfied that the disbursements claimed are necessary and proper. There

23

is no element of profit or advantage either to McGrathNicol or any related entity in relation to the disbursements

referred to in this section of the report.

Future basis of internal disbursements

Future disbursements provided by McGrathNicol will be charged to the external administration on the following

basis:

Disbursement type Rate

(Excl GST)

Externally provided professional services At cost

Externally provided non-professional services At cost

Internal disbursements

Advertising At cost

Courier At cost

Data hosting – data loading & processing fee $50-$100 per gigabyte (GB)

Data hosting – monthly hosting fee (for matters where data is required to be hosted online for more than 1 month)

Standard monthly hosting fee of $2,000

per month (for up to 500GB of

information loaded) plus $2,000 per

month for every additional 500GB block

over and above 500GB

Printing – black and white $0.09 per page

Printing – Colour $0.28 per page

Postage At cost

Stationery and other incidental disbursements At cost

Staff per diem travel allowance $89.00 per day

Staff vehicle use $0.63 per km

Telephony – mobile, fixed line and conference calls At cost

Summary of receipts and payments

A summary of the receipts and payments for the Deed Administration for the period 28 August 2017 to

2 March 2018 is included at Schedule 4 to this report. Funds in the Deed Administrators’ bank account total

$749,506.65 as at 2 March 2018.

Queries

If you have any queries regarding the information in this report, please contact Wendy Hooijer on (07) 3333 9823.

You can also access information that may assist you on the following websites:

• ARITA at www.arita.com.au/creditors

• ASIC at www.asic.gov.au (search for “insolvency information sheets”).

24

Schedule 1 – Resolution 2 Table of major tasks for DOCA remuneration

The below table provides a description of the work undertaken in each major task area for the period

3 October 2017 to 23 February 2018.

Task Area General Description Includes

Assets

275.1 hours

$117,252.00

Asset realisation Correspondence with LMM, Freehills and Minters

regarding the DOCA and completion of the sale.

Extensive correspondence with Freehills, LMM and

Minters regarding the requirements for satisfying the

conditions precedent.

Attended to satisfying conditions precent including:

executing various deeds associated with novating

agreements;

executing deeds and letters of release associated

with tax sharing agreements;

executed release documentation to facilitate the

deregistration of subsidiaries;

preparation of cash flow forecast and provided

forecast to Freehills and LMM;

liaised with the Australian Taxation Office, Freehills,

Minters, BCL staff and the former Deed

Administrators regarding the refund of monies held

on trust for possible tax liabilities;

liaised with Freehills and BCL staff regarding other

funds held on trust by the former Deed

Administrators;

considered and corresponded with Minters and

Freehills regarding FIRB and other requirements

related to the exercising of call options;

reviewed and executed loan amendment

agreements;

liaised with BCL staff and KPMG regarding tax

return;

corresponded with Minters, Freehills and BCL staff

regarding the Dexus lease assignment and executed

assignment.

transferred Creditors’ Trust funds to the Trustees

and surplus cash to LMM; and

extensive correspondence with Minters and Freehills

regarding completion.

25


Sale of the listed shell

Conducted an expressions of interest campaign for the

sale of the listed shell.

Considered offers and liaised with interested parties.

Liaised with Minters, Freehills and LMM regarding the

sale of the listed shell.

Selected a purchaser and liaised with the purchaser

regarding the sale process.

Liaised with Minters, Freehills and purchaser regarding

the DOCA variation.

Cash Day to day management of banking, account

reconciliations and processing receipts and payments.

Maintained trading forecasts and liaising with secured

creditor and subsidiaries.

Extensive correspondence with ANZ regarding

maintenance of bank accounts.

Creditors

82.4 hours

$32,163.00

Secured creditors Liaised with secured creditors regarding funding and

strategy.

PPSR Liaised with registered claimants regarding the release

of their securities.

Reviewed registered claimants responses, assessing

registered interests, and security interests.

Corresponded with Hitech and its solicitors regarding

the proposal agreed to release its security.

Shareholders and the ASX

Lodged updates on the ASX website.

Corresponded with shareholders and responding to

shareholder queries regarding the Deed Administration

and the sale of the listed shell.

Reviewed shareholder register.

Approved director resignations and lodged relevant

documents with ASIC.

Prepared and lodge an ASX announcement regarding

completion.

26


Dealing with

unsecured creditors

Corresponded with BCL staff and Freehills regarding

pre-appointment creditor claims.

Corresponded with pre-appointment creditors regarding

claim and payment of pre-appointment claim.

Prepared payment of pre-appointment creditor claims.

Maintained pre-appointment creditor register.

Liaised with the Australian Taxation Office and BCL staff

regarding outstanding pre-appointment BAS’s to

determine pre-appointment debts owed to the

Australian Taxation Office.

Corresponded with Minters regarding pre-appointment

injury claim and issued correspondence to claimant.

Meeting of Creditors Preparation of report to creditors following completion.

Preparation of Deed Administrators’ remuneration

report.

Employees

48.8 hours

$18,705.00

Employees enquiries

Receive and follow up employee enquiries

Prepared and issued letters to employees advising of

their options available.

Liaised with employees regarding the transfer of

employment and impact on entitlements.

Calculation of

entitlements

Calculated employee entitlements.

Reviewed employee files and company’s books and

records.

Reviewed awards.

Corresponded with Freehills and Minters regarding

employee entitlements payable.

Transfer/termination of

employees

Attended to the transfer of employees.

Prepared termination of non-transferring employee.

Corresponded with terminated employee regarding

process.

Liaised with BCL staff to prepare payment summaries

and final payroll lodgements.

27


Other employee

issues

Corresponded with the Office of State Revenue and BCL

staff regarding payroll tax lodgements.

Attended to the lodgement of monthly payroll tax

lodgements.

Attended to monthly superannuation reporting.

Prepared and lodged Coal LSL Levy reports.

Prepared declaration of wages for Queensland

WorkCover.

Trade On

6.8 hours

$3,482.00

Activities Liaised with BCL staff regarding trading matters.

Liaised with BCL staff and KPMG regarding the Coal LSL

audit.

Reviewed and approved the Coal LSL audit and lodged

the audit with the Coal Mining Industry (Long Service

Leave Funding) Corporation

Administration

147.9 hours

$49,651.00

Strategy and project

management

Maintained task lists and checklists.

Team meetings regarding the allocation and status of

tasks.

Ongoing file management.

Preparation of Deed Administration fee accounts.

Teleconferences with Minters, Freehills and LMM

regarding the strategy and progress of the DOCA.

Insurance Liaised with the Company’s staff regarding the

Company’s pre-appointment policies and extension of

cover.

Liaised with insurance broker and extended insurance

coverage.

McGrathNicol

website

Maintained updated information on the website for the

benefit of stakeholders.

Books and records Maintained books and records listing

Bank account administration

Requested bank statements.

Conducted bank account reconciliations.

Corresponded with the bank on various matters.

Completed various supplier payments.

Prepared and completed fortnightly wage payments

and associated payroll expense payments.

28


Taxation Liaised with Minter Ellison, Freehills and subsidiaries

regarding tax sharing agreements.

Entered tax sharing agreements with subsidiaries.

Correspondence with Minters, Freehills and subsidiaries

regarding the release of subsidiaries from the tax

sharing agreements.

Prepared and lodged monthly Business Activity

Statements with the ATO.

Liaised with the Office of State Revenue regarding

payroll tax registration and grouping of registrations.

Discussion with BCL staff regarding payroll tax

registration.

Liaised with the Australian Taxation Office regarding

GST and PAYG registrations.

29

Schedule 2 – Resolution 3 Table of major tasks for DOCA remuneration

The below table provides a description of the work to be undertaken in each major task area for the period

24 February 2018 to DOCA finalisation.


Assets

$15,249.00

Asset realisation Correspondence with LMM, Freehills and Minters

regarding the DOCA and post completion matters.

Attending to post completion matters:

executing various documents;

maintaining a cash flow of expenses;

transferring surplus funds (if any) to LMM following

the payment of all supplier and administration

invoices; and

attending to relevant reporting.

Sale of the listed shell

Liaising with purchaser of the listed shell.

Correspond with Freehills, Minters and the purchaser

regarding the variation of the DOCA.

Prepare for and hold a unitholder meeting to

recapitalise the shell, including:

preparation of report to unitholders;

issuing notice of meeting;

preparing minutes of the meeting; and

holding and attending the unitholder meeting.

Attend to relevant reporting requirements.

Cash Day to day management of banking, account

reconciliations and processing receipts and payments.

Maintain trading forecasts and liaising with secured

creditor and subsidiaries.

Correspondence with ANZ regarding maintenance and

closure of bank accounts.

Creditors Secured creditors Liaising with secured creditors regarding the finalisation

of the DOCA.

30


$23,249.00 Meeting of Creditors

Prepare creditor reports and notifications (including

circular to creditors, notice of meeting of creditors and

remuneration report.)

Prepare for and attend the meeting of creditors

including preparation of the meeting circular, notice,

proxies and advertisement.

Prepare the meeting file including; agenda, certificate of

postage, attendance registers and list of creditors.

Prepare and lodge minutes of first meeting of creditors

with ASIC.

PPSR Liaise with registered claimants regarding the release of

their securities to enable the sale of the shell.

Shareholders and the ASX

Lodge updates on the ASX website.

Correspond with shareholders and responding to

shareholder queries regarding the Deed Administration

and the sale of the listed shell.

Administration

$15,249.00

Strategy and project

management

Maintain task lists and checklists.

Team meetings regarding the allocation and status of

tasks.

Ongoing file management.

Preparation of Deed Administration fee accounts.

Attending to finalisation matters at finalisation of the

DOCA.

Insurance Arrange the cancellation of insurance policies.

McGrathNicol

website

Maintain updated information on the website for the

benefit of stakeholders.

Statutory notices Prepare and lodged all statutory notices with ASIC

including the Form 505 on cessation.

Advise other statutory authorities (e.g. the Australian

Taxation Office and the Office of State Revenue) of our

cessation.

Bank account administration

Conduct bank account reconciliations.

Correspondence with the bank regarding account

maintenance matters.

Complete various supplier payments.

Taxation Prepare and lodge monthly Business Activity Statements

with the ATO.

31

Schedule 4 – Summary of receipts and payments

A summary if the receipts and payments for the Deed Administration period, 28 August 2017 to 2 March 2018 are

presented below. Further details are available on request.

Deed Administration receipts and payments for the period 28 August 2017 to 2 March 2018

Account Amount ($ incl GST)

Receipts

Cash at bank from Voluntary Administration 4,157,895.72

Interest income 5,399.44

GST received 81,932.00

Pre-appointment debtors 721,746.37

Refunds 17,979.20

Other receipts 2,010.32

Total receipts 4,986,963.05

Payments

Advertising (8,633.54)

Appointee Disbursements (6,202.94)

Appointee Fees (569,994.70)

Bank charges (503.74)

Creditors' Trust funds (273,956.00)

Insurance expense (59,763.00)

Interest expense (140.47)

IT expenses (3,399.00)

Legal Fees (179,961.66)

Loan to Wonbindi Pty Ltd (1,100,948.17)

Loan to Cockatiel Coal Pty Ltd (618,889.00)

Motor vehicle expenses (2,433.05)

Native title fee (172,280.00)

Rent (65,979.35)

Secured creditor distributions (368,928.00)

Shareholder registry (10,175.00)

Tax agent fees (22,550.00)

Unsecured creditor distributions (21,414.04)

Utilities (27,527.16)

Wages and related expenses (721,653.33)

Other expenses (2,124.25)

Total payments (4,237,456.40)

Net receipts/(payments) 749,506.65

Source: McGrathNicol MYOB accounts

32

Annexure E: Recapitalisation and Draft Variation DOCA proposals

ANZ Tower 161 Castlereagh Street Sydney NSW 2000 Australia GPO Box 4227 Sydney NSW 2001 Australia

T +61 2 9225 5000 F +61 2 9322 4000

herbertsmithfreehills.com DX 361 Sydney

L\313360367.1

ME_146008767_2

Deed

A.C.N. 112 682 158 Limited (formerly, Baralaba Coal Company Limited)

Deed of Variation of Deed of Company Arrangement

Jason Preston, Shaun Robert Fraser and William James Harris in their capacity as joint and several deed administrators of the Company (Deed Administrators)

A.C.N. 112 682 158 Limited (Deed Administrators Appointed)

Baralaba Coal Company Pty Ltd

Liberty Metals & Mining Holdings, LLC (LMM)

Otsana Pty Ltd

69560488 Deed of Company Arrangement Contents 1 L\313360367.1

ME_146008767_2

Contents

Table of contents

1 Definitions and interpretation 3

1.1 Definitions ............................................................................................................ 3 1.2 Interpretation ........................................................................................................ 6 1.3 Inconsistency with Act or Regulations ................................................................. 7 1.4 Other inconsistencies .......................................................................................... 7 1.5 Business Days ..................................................................................................... 7

2 Execution and Commencement of this Deed of Variation. 8

2.1 Execution ............................................................................................................. 8 2.2 Commencement of this Deed .............................................................................. 8

3 Variation of clause 11 of the Original DOCA 8

3.1 Proceeds from recapitalisation ............................................................................ 8 3.2 Recapitalisation provisions .................................................................................. 8 3.3 Termination on effectuation of the DOCA .......................................................... 15 3.4 Termination on failure of the DOCA ................................................................... 15 3.5 Notice on effectuation of the DOCA ................................................................... 15 3.6 Meeting of creditors ........................................................................................... 15

4 General 16

4.1 Variation ............................................................................................................. 16 4.2 Further Assurances............................................................................................ 16 4.3 Governing Law ................................................................................................... 16 4.4 Counterparts ...................................................................................................... 16

5 Notices 16

5.1 Notice to be in writing ........................................................................................ 16 5.2 Signing of Notice ................................................................................................ 16 5.3 How notice must be given and when notice is received .................................... 16 5.4 Notice must not be given by electronic communication..................................... 17

Schedule 1

Recapitalisation Proposal 19

Schedule 2

Form of Tax Undertaking 20

Signing page 21

Herbert Smith Freehills owns the copyright in this document and using it without permission is strictly prohibited.

69560488 Deed of Company Arrangement page 1 L\313360367.1

ME_146008767_2

Deed of Variation of Deed of Company Arrangement

Date ►

Between the parties

Deed Administrators Jason Preston, Shaun Robert Fraser and William James Harris

in their capacity as joint and several deed administrators of the Company

McGrathNicol, Level 12, 20 Martin Place, Sydney NSW 2000 and Level 7, 175 Eagle Street, Brisbane QLD 4000

Telephone: (07) 3333 9800 / (02) 9338 2600

Email: [email protected] / [email protected]

Attention: Jamie Harris / Shaun Fraser

Company A.C.N. 112 682 158 Limited (Subject to Deed of Company Arrangement) ACN 112 682 158

c/- McGrathNicol, Level 12, 20 Martin Place, Sydney NSW 2000 and Level 7, 175 Eagle Street, Brisbane QLD 4000

Telephone: (07) 3333 9800 / (02) 9338 2600

Email: [email protected] / [email protected]

Attention: Jamie Harris / Shaun Fraser

Cockatiel Baralaba Coal Company Pty Ltd (formerly Cockatiel Coal Pty Ltd) ACN 096 909 634

of Level 4, 10 Eagle Street, Brisbane QLD 4000

Telephone: (07) 3640 4799

Email: n/a

Attention: Company Secretary

LMM Liberty Metals & Mining Holdings, LLC

175 Berkeley Street, Boston, Massachusetts 02116, USA

Telephone: +1 617 357 9500

Email: [email protected]

Attention: Damon Barber and Mark Tomek

Deed of Company Arrangement page 2 L\313360367.1

ME_146008767_2

Otsana Capital Otsana Pty Ltd ACN 145 168 216

108 Outram Street, West Perth, Western Australia

Telephone: 08 9486 7244

Email: [insert]

Attention: Faldi Ismail

Recitals 1 On the Appointment Date, Jason Preston, Shaun Robert Fraser and William James Harris were appointed as administrators of the Company pursuant to Part 5.3A of the Act.

2 LMM proposed a deed of company arrangement under which (among other things) the trading debts of the Company were to be paid in full and the Company released from the Secured Obligations.

3 At a meeting commenced on 17 August 2017 and adjourned to 28 August 2017, and convened pursuant to section 439A of the Corporations Act, the Creditors of the Company resolved that the Company execute the deed of company arrangement proposed by LMM under section 444B(2)(b) of the Act.

4 The Company, the Deed Administrators, Cockatiel and LMM executed the Original DOCA on 28 August 2017 to give effect to the resolution in recital 3.

5 The Deed Administrators were appointed the administrators of the Original DOCA.

6 Subject to the terms of the Original DOCA, it binds all creditors of the Company in accordance with section 444D of the Act and also binds the Company and its Officers and Members in accordance with section 444G of the Act.

7 Completion under the Original DOCA was effected on 16 February 2018. Consequently, the Company was released from all Secured Obligations and the Claims of its Creditors have been released other than in respect of the Reserved Debt.

8 On [insert date], a meeting of the creditors of the Company was held to consider a proposal from Otsana Capital to recapitalise the Company and to vary the Original DOCA.

9 At that meeting the creditors resolved that the Original DOCA be varied and that the Company execute this Deed to vary the Original DOCA.

This Deed witnesses as follows:


ME_146008767_2

1 Definitions and interpretation

1.1 Definitions

Unless defined below, capitalised terms used in this Deed of Variation have the meaning set out in the Original DOCA. The Original DOCA is varied to include the defined terms below.

Term Meaning

Act the Corporations Act 2001 (Cth).

ASX Australian Securities Exchange Limited (ABN 98 008 624 691) or the financial market conducted by it as the context requires.

ASX Condition the Company obtaining a waiver from Listing Rules 1.1 condition 11 and 2.1 condition 2 to permit the Company to issue Shares and Options in connection with the Recapitalisation Proposal at a price and exercise price of less than $0.20 per Share and Option respectively

ATEC Shares 324,324 fully paid shares held by The Trust Company (Australia) Limited on behalf of the Company.

Business Records all original and certified copies of the books, records, documents, information, accounts and data (whether machine readable or in printed form) owned by or relating to the Company or a member of Cockatiel Group or the property of a member of Cockatiel Group and any source material used to prepare them.

Consolidation the consolidation of the Company's existing Shares on a one for thirty basis, subject to compliance with applicable laws.

Creditors’ trust the creditors’ trust established under the Trust Deed.

Deposit the sum of $30,000 to be paid under clause 11.5(a) of the DOCA.

DOCA the Original DOCA as varied by the Deed of Variation.


ME_146008767_2

Term Meaning

Due Date 16 July 2018 or such later date as agreed in writing by LMM, the Deed Administrators and Otsana Capital.

Duty any stamp, transaction, or registration duty or similar charge levied, imposed, assessed or collected under any legislation or by any Government Agency and includes any interest, fine, penalty, charge, fee or other amount imposed in respect of the above.

Excluded Property the ATEC Shares, the WICET shares and the WICET GST Claim.

Excluded Property Deed

the Residual Rights Deed between the Deed Administrators, the Company, Cockatiel, and Wonbindi Coal Pty Ltd dated 16 February 2018.

Excluded Records those books and records relating to the business and assets of the Company sold to LMM and Cockatiel pursuant to the Sale Agreement, whether stored or recorded in printed, electronic or other format, that the Seller or the Administrators are required by law to retain despite the sale.

Government Agency any government or governmental, administrative, monetary, fiscal or judicial body, department, commission, authority, tribunal, agency or entity in any part of the world.

Listing Rules the official listing rules of ASX and any other rules of ASX which are applicable while the Company is admitted to the Official List, each as amended or replaced from time to time, except to the extent of any express written waiver by ASX.

Meeting Documents a notice of meeting, explanatory memorandum, proxy form and such other documents (including, if necessary, independent experts’ reports) as required by and in compliance with the requirements of the Listing Rules and the Act, to be prepared for the purpose of convening the Members’ Meeting.

Members Condition the passing by the Members at the Members’ Meeting of the Members Resolutions on or before the Due Date or such later date as agreed in writing by the Deed Administrators and Otsana Capital.


ME_146008767_2

Term Meaning

Members’ Meeting the meeting of Members of the Company to be convened for the purpose of satisfying the Members Condition.

Members’ Resolution such resolutions of the Members of the Company as are agreed by Otsana Capital and the Deed Administrators as being necessary to effectuate the Recapitalisation Proposal (which for the avoidance of doubt excludes any change in the activities of the Company, any change in the name of the Company or any change to the constitution of the Company).

Official List the official list of entities that ASX has admitted and not removed.

Original DOCA the deed of company arrangement executed by the Company, the Administrators, Cockatiel and LMM on 28 August 2017.

Otsana Capital Nominees

those persons (having consented in writing to so act) as may be nominated in writing by Otsana Capital to act as Directors of the Company.

Otsana Capital Payment

the sum of $515,000 (inclusive of any GST) to be paid pursuant to clauses 11.5 and 11.6 of the DOCA.

Option an option to acquire a Share.

Recapitalisation Proposal

A proposal to recapitalise the Company substantially in accordance with the proposal dated 27 October 2017 from Otsana Capital to the Company and the Deed Administrators and which is contained in Schedule 1 to this Deed.

Recap Completion completion of the transactions contemplated by clause 11.14 of the DOCA

Recap Completion Date

the date on which Recap Completion occurs, being 10 Business Days after the satisfaction or waiver of the Recap Conditions Precedent or such other date as agreed between the Administrators and Otsana Capital.

Recap Conditions Precedent

means the conditions listed in clause 11.8 of the DOCA.


ME_146008767_2

Term Meaning

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

Tax Undertaking the undertaking set out in schedule 2.

Trust Deed the BCCL Creditors’ Trust Deed entered into between the Company and the Deed Administrators on 27 September 2017.

Variation Date the date that this Deed is executed by the Deed Administrators and the Company.

Variation Period the period commencing on the Variation Date and ending on the Termination Date.

WICET GST Claim all rights that the Company has or may have to pursue recoveries in connection with the bank guarantees previously issued for the Wiggins Island Coal Export Terminal (including for the avoidance of doubt, in connection with the application of the proceeds from drawing on such bank guarantees), including rights relating to Goods and Services Tax.

WICET shares 2 ‘B’ class shares in WICET Holdings Pty Limited ACN 131 210 001 held by the Company.

1.2 Interpretation

In the Deed of Variation, unless the subject or context otherwise requires:

(a) headings and bold type are for convenience only and do not affect the interpretation of this Deed of Variation;

(b) the singular includes the plural and the plural includes the singular;

(c) words of any gender include all genders;

(d) other parts of speech and grammatical forms of a word or phrase defined in this Deed of Variation have a corresponding meaning;

(e) a reference to a person includes any company, partnership, joint venture, association, corporation or other body corporate and any government agency as well as an individual;

(f) a reference to a clause, party, part, schedule, attachment or exhibit is a reference to a clause or part of, and a party, schedule, attachment or exhibit to, this Deed of Variation;


ME_146008767_2

(g) a reference to any legislation includes all delegated legislation made under it and amendments, consolidations, replacements or re-enactments of any of them;

(h) a reference to a document (including this Deed of Variation) includes all amendments or supplements to, or replacements or novations of, that document;

(i) a reference to ‘$’, ‘A$’ or ‘dollar’ is to Australian currency unless denominated otherwise;

(j) a reference to any time is, unless otherwise indicated, a reference to that time in Sydney;

(k) a term defined in or for the purposes of the Act has the same meaning when used in this Deed of Variation;

(l) a reference to a party to a document includes that party’s successors and permitted assignees;

(m) no provision of this Deed of Variation will be construed adversely to a party because that party was responsible for the preparation of this Deed of Variation or that provision;

(n) any agreement, representation, warranty or indemnity by two or more parties (including where two or more persons are included in the same defined term) binds them jointly and severally;

(o) any agreement, representation, warranty or indemnity in favour of two or more parties (including where two or more persons are included in the same defined term) is for the benefit of them jointly and severally; and

(p) a reference to a body, other than a party to this Deed of Variation (including an institute, association or authority), whether statutory or not:

(1) which ceases to exist; or

(2) whose powers or functions are transferred to another body,

is a reference to the body which replaces it or which substantially succeeds to its powers or functions.

1.3 Inconsistency with Act or Regulations

If there is any inconsistency between the provisions of the DOCA and the Act or Regulations, the DOCA prevails to the extent permitted by law.

1.4 Other inconsistencies

If there is any inconsistency between the provisions of this Deed of Variation and the provisions of the Original DOCA, the constitution of the Company and any other obligation binding on the Company, the provisions of this Deed of Variation prevail to the extent of the inconsistency, and all persons bound by this Deed of Variation agree to sign all documents and do all things necessary to remove such inconsistency, the costs of which will be borne by the Company.

1.5 Business Days

Except where otherwise expressly provided, if the day on or by which any act, matter or thing is to be done as required by this Deed of Variation is a day other than a Business Day, that act, matter or thing will be done on the immediately succeeding Business Day.


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2 Execution and Commencement of this Deed of Variation.

2.1 Execution

This Deed of Variation is subject to and conditional upon the execution of this Deed of Variation by each person named as a party to it.

2.2 Commencement of this Deed

Subject to clause 2.1, this Deed of Variation and the variations to the provisions of the Original DOCA will commence and take effect on the Variation Date.

3 Variation of clause 11 of the Original DOCA

3.1 Proceeds from recapitalisation

11.4 Proceeds from Recapitalisation

(a) Clause 11.4(a) of the Original DOCA is deleted and replaced with the following sub-clause (a):

Firstly, in payment of their reasonable Costs and Remuneration in achieving the recapitalising, including all ASX fees owing by the Company to ASX and ASIC fees owing by the Company to ASIC up to and including the 2017/18 financial year.

(b) Clause 11.4(c) of the Original DOCA is deleted and replaced by:

the balance, if any, to the Trustees to comprise part of the Trust Fund unless each Trust Creditor who is entitled to receive a distribution from the Trust Fund has been paid the full amount of that Creditor’s Claim or the Creditor’s Trust has been terminated, in which case the balance must be paid to LMM.

3.2 Recapitalisation provisions

The following provisions are inserted after clause 11.4 of the Original DOCA:

11.5 Deposit

(a) Otsana Capital must pay the Deposit at the direction of the Deed Administrators within 5 Business Days of the Variation Date.

(b) Subject to clause 11.5(c) and (d), the Deposit is to be non-refundable and paid into the Deed Administrators’ solicitors trust account.

(c) If the Members Condition is not satisfied by reason of the members' resolution failing to be passed, the Company must pay the Deposit to Otsana Capital on demand.

(d) If the Recapitalisation Proposal does not proceed despite the Members Condition having been satisfied, and the Company is recapitalised under a DOCA proposal other than the Recapitalisation Proposal or the Company shell


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is sold otherwise then the Company must pay the Deposit to Otsana Capital within 5 Business Days of receipt of the proceeds of that other DOCA proposal or sale of the Company shell.

11.6 Otsana Capital Payment

(a) On the Recap Completion Date, Otsana Capital must pay the Otsana Capital Payment, less the Deposit, to the Deed Administrators on behalf of the Company (without set off, counterclaim or deduction) whereupon the Deed Administrators will pay the Otsana Capital Payment to the Trustees or LMM as the case may be in accordance with clause 11.4.

(b) Subject to clause 11.6(c), upon the termination of the DOCA pursuant to clause 17.1, the Company must pay to Otsana Capital on demand the Otsana Capital Payment. For the avoidance of doubt, the Deed Administrators do not assume or incur, by their execution of this Deed or otherwise any liability in relation to this payment.

(c) Subject to the Members Resolution (if required), Otsana Capital may, at any time after the Recap Completion, convert the whole or any part of the Otsana Capital Payment into ordinary fully paid Shares at $0.02 per Share

(d) Clause 11.6(b) survives termination of this Deed.

11.7 No issue of Shares and Options other than under Recapitalisation Proposal

Other than the carrying out of the Consolidation, and the issue of Shares and Options in accordance with the Recapitalisation Proposal (which the Deed Administrators and Directors will facilitate in accordance with this Deed), a transfer of Shares or other securities in the Company, or an alteration in the status of a Member or issue of Shares or other securities that is made before this Deed terminates is void except as far as:

(1) the prior written consent of the Deed Administrators, Otsana Capital and the owner of the Shares is obtained; or

(2) the Court orders otherwise.

11.8 Conditions to Recap Completion

(a) Recap Completion is subject to and conditional upon the following conditions being satisfied or waived (pursuant to clause 11.10) in accordance with the DOCA on or before the Due Date:

(1) satisfaction of the ASX Condition;

(2) the notice of meeting forming part of the Meeting Documents specifying that if the Members do not approve the Recapitalisation Proposal, then the Deed Administrators may elect to terminate this Deed and the Company will be placed into liquidation;

(3) satisfaction of the Members Condition;

(4) if required by Otsana Capital prior to Recap Completion, the Deed Administrators causing the current Directors of the Company to be


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removed and appointing the Otsana Capital Nominees as Directors of the Company.

11.9 Costs of Satisfying Conditions Precedent

(a) Subject to clause 11.9(b), Otsana Capital (or its nominees) will at its own cost (to be reimbursed in accordance with clause 11.9(b)) carry out the following:

(1) assist the Company and the Directors to prepare and submit the Meeting Documents to the ASX and ASIC (if legally required) for approval;

(2) do those other things as may be reasonably necessary and within Otsana Capital’s power to assist the Company and the Directors to convene and hold the Members’ Meeting and satisfy the Members Condition, including paying for the printing and despatch of the Meeting Documents;

(3) otherwise provide all such assistance to the Company and the Directors as Otsana Capital is reasonably able to do to assist in satisfying the ASX Condition and the Members Condition.

(b) After the termination of the DOCA pursuant to clause 17.1, and upon reinstatement of the Company to trading on the Official List, the Company must pay to Otsana Capital on demand all costs of the steps taken by Otsana Capital or the Company under this clause 11.9.

(c) The Company indemnifies Otsana Capital against any claim, action, damage, loss, liability, costs, charge, expense, outgoing or payment which Otsana Capital pays, suffers, incurs or is liable for in respect of any steps taken by Otsana Capital under this clause 11.9 or in discharge of its obligations therein.

(d) For the avoidance of doubt, any provision of this Deed which requires Otsana Capital to assist the Company or procure that the Company do something at Otsana Capital's own cost does not prejudice or affect Otsana Capital's right to seek reimbursement, after the termination of the DOCA pursuant to clause 17.1, from the Company of the reasonable costs, charges or expenses incurred by Otsana Capital in doing that thing where those costs, charges or expenses would, but for this Deed, have been properly payable by the Company.

(e) For the avoidance of doubt, the Deed Administrators do not assume or incur any liability by their execution of this Deed, or otherwise, in relation to clause 11.9 (a), (b) and (c).

(f) For the avoidance of doubt, Otsana is not entitled to be indemnified under clause 11.9(c) if the DOCA is terminated pursuant to clause 17.2 except to the extent Otsana is entitled to a return of the Deposit pursuant to clause 11.5.

(g) To the extent that the Deed Administrators incur costs or expenses in assisting or satisfying the Recap Conditions Precedent, those costs will form part of the Deed Administrators’ Remuneration and Costs but will not be paid by Otsana Capital.

(h) Clauses 11.9(b),(c),(e) and (f) survive termination of this Deed.

11.10 Waiver of Recap Conditions Precedent

Each of the Recap Conditions Precedent may be waived if, and only if, Otsana Capital consents to waive it by notice in writing to the Deed Administrators.


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11.11 Satisfaction of Recap Conditions Precedent

(a) Otsana Capital shall use its best endeavours to arrange for the Recap Conditions Precedent to be satisfied, including undertaking the actions set out in clause 11.9(a) after execution of this Deed.

(b) The Deed Administrators will use their reasonable endeavours (including on behalf of the Company) to assist in satisfying the Recap Conditions Precedent, to the extent that the steps necessary to satisfy those conditions are within the Deed Administrators' control provided that the Deed Administrators will not be responsible for the preparation of the Company’s outstanding statutory accounts or any Meeting Document and will not be required to sign or verify any such document.

(c) Otsana Capital must ensure that any statutory accounts prepared for the Company prior to Recap Completion are prepared on a basis which is consistent with the terms of the Tax Undertaking.

(d) The Company must pay to Otsana Capital on demand all costs of the steps taken by Otsana Capital or the Company under this clause 11.11.

(e) The Company indemnifies Otsana Capital against any claim, action, damage, loss, liability, costs, charge, expense, outgoing or payment which Otsana Capital pays, suffers, incurs or is liable for in respect of any steps taken by Otsana Capital under this clause 11.11 or in discharge of its obligations therein.

(f) For the avoidance of doubt, Otsana is not entitled to be indemnified under clause 11.11(e) if the DOCA is terminated pursuant to clause 17.2 except to the extent Otsana is entitled to a return of the Deposit pursuant to clause 11.5.

(g) For the avoidance of doubt, the Deed Administrators do not assume or incur any liability by their execution of this Deed, or otherwise, in relation to clause 11.11 (b), (d) and (e).

(h) Clauses 11.11(d),(e) and (f) survive termination of this Deed.

11.12 Failure of Recap Conditions Precedent

If the Recap Conditions Precedent are not satisfied or waived by the Due Date, the obligations imposed on Otsana Capital under clauses 11.6, 11.9 (a) and 11.11 will have no further force and effect, and the Deed Administrators may terminate this Deed pursuant to clause 17.2.

11.13 Not to act inconsistently with this Deed

Until such time as the Recap Conditions Precedent are satisfied or waived or this Deed terminates before satisfaction or waiver of those conditions, insofar as a person would be bound by the DOCA if all of the other clauses of this Deed had come into effect, the person must not do anything inconsistent with the terms of this Deed.

11.14 Recap Completion

(a) Time and Place


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Recap Completion shall occur on the Recap Completion Date at the offices of the Deed Administrators in Sydney, New South Wales, or at such other time and place as is agreed in writing by the Deed Administrators and Otsana Capital.

(b) Recap Completion Obligations

On the Recap Completion Date, the following shall occur (but only if the Recap Conditions Precedent are or have been satisfied or waived at Recap Completion):

(1) the Company must issue such securities as are required by Otsana Capital, subject to:

(A) the issue of such securities being in accordance with the Members’ Resolutions passed at the Members’ Meeting;

(B) the Company having received application forms from investors applying for the relevant securities in the Company to be issued, together with the full subscription amounts for the relevant securities; and

(C) compliance with all applicable laws and Listing Rules;

(2) Otsana Capital shall pay the Otsana Capital Payment (less the Deposit) to the Deed Administrators on behalf of the Company in accordance with clause 11.6(a), whereupon the Deed Administrators shall pay the Otsana Capital Payment (including the Deposit which is to be released from the Deed Administrators’ solicitors trust account at Recap Completion) in accordance with clause 11.4;

(3) unless previously directed by Otsana Capital pursuant to clause 11.17(c), the Deed Administrators will remove the current Directors of the Company and appoint the Otsana Capital Nominees as Directors of the Company;

(4) the Deed Administrators shall deliver each of the following items in their possession to the Company, except to the extent Otsana Capital permits otherwise:

(A) evidence that the fees referred to in clauses 11.4(a) and 11.17(a) have been paid;

(B) all Excluded Records which are in the Deed Administrators’ possession or control other than Excluded Records which the Deed Administrators are required by law to retain;

(C) unless already provided, signed resignations from each of the Directors (other than the Otsana Capital Nominees), company secretary and public officer of the Company; and

(D) a duly executed form required to change the Company's registered office to the address nominated by Otsana Capital in writing on the day of Completion.

(c) Completion obligations are interdependent

All things required by this Deed to occur or be done at Recap Completion are interdependent and Recap Completion shall not be regarded as having occurred unless all such things occur or are done. If any of the things required by this Deed to occur or be done at Recap Completion does not occur or is not done, the parties must do all things necessary to put each of the parties in the same position as if none of the things had been done or had occurred.


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(d) Tax Undertaking

On and from Recap Completion, the Company and Otsana Capital give the Tax Undertaking to Cockatiel. The obligations of the Company and Otsana Capital survive termination of this Deed.

11.15 Release of Reserved Debt at Recap Completion

Immediately upon Recap Completion having occurred under clause 11.14, all Claims by LMM in respect of the Reserved Debt are extinguished and released.

11.16 Residual property of the Company

(a) The parties agree and acknowledge that it is their understanding that as of the Variation Date the only property of the Company were shares in wholly owned subsidiaries of the Company that are to be deregistered pursuant to pending deregistration applications lodged with ASIC on 31 January 2018, and the Excluded Property.

(b) The parties to this Deed agree that if between the Variation Date and Recap Completion Date they become aware of property owned by the Company, other than the property referred to in 11.16(a), that property is to be transferred, assigned, novated or conveyed to Cockatiel or a nominee of Cockatiel by the Recap Completion Date unless they otherwise agree.

(c) The Company and Cockatiel agree that if after Recap Completion they become aware of property owned by the Company as at the day immediately preceding the Recap Completion Date, other than the property referred to in 11.16(a) and (b), that property will be deemed to have been transferred, assigned, novated or conveyed to Cockatiel on the Recap Completion Date.

(d) The parties to this Deed agree to do all things and execute all documents necessary to give full effect to clause 11.16(b) and (c) and the transactions contemplated therein.

(e) Cockatiel must pay all Duty in respect of the transactions contemplated by this clause 11.16.

(f) Cockatiel must pay to Otsana Capital or the Company (as the case may be) on demand all costs of the steps taken by Otsana Capital or the Company under this clause 11.16.

(g) Cockatiel indemnifies Otsana Capital and the Company against any claim, action, damage, loss, liability, costs, charge, expense, outgoing or payment which Otsana Capital or the Company pays, suffers, incurs or is liable for in respect of any steps taken by Otsana Capital or the Company under this clause 11.16 or in discharge of their obligations therein.

(h) The Company acknowledges that it continues to be bound, and obliged to perform the obligations imposed on it by, the Excluded Property Deed following Recap Completion.

(i) This clause 11.16 survives termination of this Deed.

11.17 Management of Company during the Variation Period

(a) Subject to this clause 11.17, during the Variation Period, the Deed Administrators shall be responsible for the day to day management, control, supervision and administration of the Company’s business and affairs up to and including the Recap Completion Date including maintaining the Company’s ASX listing and paying the Company’s annual listing fee for the 2017/18 financial


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year and any other fees owing to the ASX and ASIC for the 2017/18 financial year as at the Recap Completion Date.

(b) During the Variation Period, the Deed Administrators shall have the power to appoint and remove Directors. The power of the Deed Administrators includes removing the Otsana Capital Nominees as Directors if this Deed is terminated pursuant to clause 17.2.

(c) On receipt of a written request from Otsana Capital, the Deed Administrators will do those things necessary to appoint the Otsana Capital Nominees as the sole Directors of the Company and remove any other Directors (subject to compliance with all applicable laws).

(d) Subject to the written consent of the Deed Administrators and Otsana Capital, the Directors shall have the power to sign a Directors report and declaration in connection with the Company’s outstanding statutory accounts, and to convene a general meeting for the purposes of satisfying the Members Condition. It is acknowledged that unless otherwise authorised in writing, the powers that may be exercised by the Otsana Capital Nominees as Directors of the Company are only those in, or incidental to, the powers referred to in this clause 11.17(d).

(e) During the Variation Period, the Directors are not authorised to incur any expense on behalf of the Company or the Deed Administrators without the Deed Administrators express written authority.

(f) During the Variation Period, the Directors must only exercise the powers vested in them by this Deed or delegated to them by the Deed Administrators in writing from time to time.

(g) Managerial control of the Company and its affairs will transfer from the Deed Administrators to the Directors of the Company from the day that this Deed is terminated in accordance with clause 17.1.

11.18 Books and Records

(a) Otsana Capital acknowledges that pursuant to the Sale Agreement, LMM and/or Cockatiel is entitled to possession of all Business Records of the Company relating to the business and assets transferred to Cockatiel pursuant to the Sale Agreement other than the Excluded Records;

(b) After Recap Completion the Company must, on reasonable notice from the Deed Administrators, LMM or Cockatiel provide the Deed Administrators, LMM or Cockatiel, as the case may be, or their respective advisers with access to the Excluded Records and allow that party or its advisers to inspect and obtain copies or certified copies of any Excluded Records for the purpose of assisting the Company to prepare tax returns, accounts and other financial statements, discharge statutory obligations or comply with any other legal requirements or to conduct legal or arbitration proceedings.

(c) The Company agrees that the Deed Administrators, LMM or Cockatiel may retain copies of any Excluded Records after the Recap Completion Date.

(d) After Completion, Cockatiel must, on reasonable notice from the Company provide the Company and its advisers with access to the Business Records and allow the Company to inspect and obtain copies or certified copies of the Business Records for the purpose of assisting the Company to prepare tax returns, accounts and other financial statements, discharge statutory obligations or comply with any other legal requirements or to conduct legal or arbitration proceedings.


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(e) Cockatiel agrees that the Company may retain copies of any Business Records which it may require to enable it to comply with any applicable law after the Completion Date.

11.19: Residual interests

During the Variation Period, the Deed Administrators must use all reasonable endeavours to:

(a) procure the removal of all PPSA registrations against the Company;

(b) keep Otsana Capital informed if there is any litigation, dispute or claim made against the Company or any other event occurs that has or might reasonably be expected to have a material adverse effect on the business, operation, property or condition (financial or otherwise) of the Company.

3.3 Termination on effectuation of the DOCA

Clause 17.1 of the Original DOCA is deleted and replaced by:

Subject to this clause, this Deed shall terminate and be wholly effectuated immediately upon Recap Completion in accordance with clause 11.14 of the DOCA. Control of the Company shall return to its Directors at that time.

3.4 Termination on failure of the DOCA

Insert after sub-clause (b) of clause 17.2 of the Original DOCA as sub-clause (c):

where Recap Completion does not occur on or before 31 August 2018 or such later date as agreed in writing by the Deed Administrators and Otsana Capital (whether for non-satisfaction of a Recap Condition Precedent or otherwise) or the Members’ Condition is not satisfied because of the Members’ Resolutions not being passed at the Members’ Meeting, the Deed Administrators may elect to terminate the DOCA by giving LMM and Otsana Capital written notice to that effect.

3.5 Notice on effectuation of the DOCA

Clause 17.3 of the Original DOCA is varied by replacing the form of the notice referred to therein with the following:

‘We, [name of Deed Administrators] of [address] as administrators of the deed of company arrangement executed on 28 August 2017 (as varied), CERTIFY that the deed has been wholly effectuated in respect of A.C.N. 112 682 158 Limited (formerly Baralaba Coal Company Limited) ACN 112 682 158’.

3.6 Meeting of creditors

The following provisions are inserted after clause 17.3 of the Original DOCA:

17.4 Meeting of creditors

Notwithstanding clause 17.2, the Deed Administrators may call a meeting of Creditors to consider and if thought fit pass a resolution to vary or terminate this Deed in accordance with the Act if any of the events referred to in clause 17.2(c) occur.


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4 General

4.1 Variation

Subject to the provisions of the Corporations Act, a variation of any term of this Deed of Variation must be in writing and signed by all parties to this Deed of Variation.

4.2 Further Assurances

Each party and each person bound by this Deed of Variation must, at its own expense, do all things and execute all documents necessary to give full effect to this Deed of Variation and the transactions contemplated by it.

4.3 Governing Law

This Deed of Variation is governed by the law in force in the State of Queensland.

4.4 Counterparts

(a) This Deed of Variation may be executed in any number of counterparts.

(b) All counterparts, taken together, constitute one instrument.

(c) A party may execute this Deed of Variation by signing any counterpart.

5 Notices

5.1 Notice to be in writing

Any notice or document required to be given to or served upon any of the parties pursuant to or in connection with this Deed of Variation must be in writing.

5.2 Signing of Notice

Any notice or document may be given or signed on behalf of the party giving or serving the same by a director, secretary or other duly authorised person thereof.

5.3 How notice must be given and when notice is received

(a) Any notice or document must be given by one of the methods set out in the table below.

(b) A notice or document is regarded as given and received at the time set out in the table below.

However, if this means the notice or document would be regarded as given and received outside the period between 9.00am and 5.00pm (addressee’s time) on a Business Day (business hours period), then the notice or document will instead be regarded as given and received at the start of the following business hours period.


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Method of giving Notice When Notice is regarded as given and received

By hand to the nominated address

When delivered to the nominated address

By pre-paid post When it would have been delivered in the ordinary course of post

By email to the nominated email address (set out in the details for each party to this Deed of Variation)

When the email (including any attachment) comes to the attention of the recipient party or a person acting on its behalf.

5.4 Notice must not be given by electronic communication

A notice or document must not be given by electronic means of communication (other than email in accordance with clause 5.3).


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Schedule 1

Recapitalisation Proposal


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Schedule 2

Form of Tax Undertaking

1. The Company and Otsana Capital acknowledge and agree that, subject to clause 5 of the Excluded Property Deed, following Recap Completion the Company will not be entitled to any Tax Attribute which relates to any actual or deemed loss, expense or outgoing incurred, or deemed to be incurred, before Recap Completion by:

a. the Company; or

b. any Subsidiary Member of a Consolidated Group of which the Company was Head Company.

2. The Company and Otsana Capital undertake that, other than as set out in clause 5 of the Excluded Property Deed, or as requested in writing by LMM or Cockatiel, the Company will not seek to claim the benefit of any Tax Attribute described in clause 1 above in any income tax return lodged after Completion, except to the extent that the Tax Attribute is applied against income or gains derived on or before Recap Completion by:

a. the Company; or

b. any Subsidiary Member of a Consolidated Group of which the Company was Head Company.

3. The Company and Otsana Capital undertake that any financial statements for the Company will be prepared on a basis consistent with this undertaking.

4. In this undertaking capitalised terms which are not otherwise defined for the purposes of this undertaking have the meaning given to them in the Tax Act or the deed of company arrangement executed by the Company, the Administrators, Cockatiel and LMM on 28 August 2017 (as varied).

Tax Act means the Income Tax Assessment Act 1997 (Cth)

Tax Attribute means any capital loss, deduction or tax loss as defined in the Tax Act.


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Signing page

Executed as a Deed

Deed Administrator

Signed sealed and delivered by Jason Preston

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in the presence of

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Witness

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Deed Administrator

Signed sealed and delivered by Shaun Robert Fraser

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Witness

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Deed Administrator

Signed sealed and delivered by William James Harris

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Signed sealed and delivered by A.C.N 112 682 158 Limited (Subject to Deed of Company Arrangement) by its joint and several Deed Administrator

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Deed Administrator

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Signed sealed and delivered by Baralaba Coal Company Pty Ltd ACN 096 909 634 in accordance with section 127 of the Corporations Act 2001 (Cth)

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Director / Company Secretary

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Director

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Signed for Liberty Metals & Mining Holdings, LLC by its authorised officer

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Authorised Officer

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Signed sealed and delivered by Otsana Pty Ltd ACN 145 168 216 in accordance with section 127 of the Corporations Act 2001 (Cth)

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Director / Company Secretary

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Director

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