Deed of Company Arrangement

Transcription

1 Deed of Company Arrangement Northern Iron Limited (Administrator Appointed) Company James Gerard Thackray in his capacity as administrator of Northern Iron Limited (Administrator Appointed) Deed Administrator Otsana Pty Ltd Otsana Capital Ground Floor, 11 Ventnor Avenue West Perth WA 6005 Australia PO Box 1770 West Perth WA 6872 Phone

2 Table of Contents Clause Page No 1. Definition and Interpretation Definitions Interpretation Prescribed Provisions Preliminary matters Effective Date and Duration Interim effect Execution by all parties Deed Administrator and Trustee Deed binds all Parties Deed Fund Deposit Otsana Capital Payment Shares and Options Assistance in the sale of assets Conditions Precedent Conditions to Completion Costs of Satisfying Conditions Precedent Waiver of Conditions Precedent Satisfaction of Conditions Precedent Failure of Conditions Precedent Not to act inconsistently with Deed Scope of Arrangement and moratorium Moratorium regarding Company Release of Admitted Claims All Claims extinguished Creditors' Trust Insurance Claims Eligible employee claims Superannuation Claims Employees and Leases Claims Property available to pay Creditors Available Assets Trust Fund Creditors' Trust Deed Completion Time and Place Completion Obligations Interconnection Obligations Trust Transfer Deed Administrator Acceptance of Appointment Administer this Deed Agent of Company Role of Deed Administrator Deed of Company Arrangement - Otsana-NFE - FINAL Page i

3 Table of Contents Clause Page No 7.5 Reasonable care and diligence Limitation of liability Responsibility for management of Company Managerial control and retention of records Directors Powers of Directors Powers of Deed Administrator Applications to Court Books and Records Termination of Appointment Remuneration, Costs, Charges and Expenses of the Deed Administrator Deed Administrator's Indemnity Nature of Indemnity Continuing Indemnity Indemnity not to be Affected or Prejudiced Lien Survival of Clause Priority Termination Termination upon successful Completion Automatic termination Meeting of Creditors Report to Creditors Previous Operation Preserved Consequences of Termination of the Deed Operation of Clauses Meeting of Creditors Goods and Services Tax GST Payment Tax Invoice Obligations to Survive Termination Duty General Governing Law Jurisdiction Severability Further Acts Variation Waiver Time of the Essence Binding Obligations Counterparts Inconsistency with Act Deed Prevails Schedule 1 Recapitalisation Proposal Schedule 2 Prescribed Provisions Schedule 8A Deed of Company Arrangement - Otsana-NFE - FINAL Page ii

4 Table of Contents Clause Page No Schedule 3 Northern Iron Creditors' Trust Deed Deed of Company Arrangement - Otsana-NFE - FINAL Page ii

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6 incurred by the Administrator and/or the Deed Administrator in respect of the foregoing, plus any GST payable thereon. Administrator's Remuneration means, from the Execution Date, the remuneration for work done by the Deed Administrator, his partners and staff with respect to the following: acting in his capacity as Administrator or Deed Administrator of the Company; and acting in his capacity as Deed Administrator of this Deed, calculated in accordance with the rates of charge issued from time to time by The Headquarters Corporate Advisory plus any GST payable thereon as is determined in accordance with section 449E of the Act or by order of a Court. Administrator's Trading Expenses means, from the Execution Date, all debts incurred by the Deed Administrator, (including any contingent liabilities) in the performance or exercise, or purported performance or exercise, of any of his functions as Administrator of the Company or Deed Administrator of this Deed including, but not limited to: (d) services rendered; goods purchased; property hired, leased, used or occupied; and repayment of money borrowed, plus interest and costs on such borrowed monies, plus any GST payable thereon. Admitted Claim means a Claim in respect of an Admitted Creditor under the Creditors' Trust Deed but does not include any Insurance Claims. Admitted Creditor means any Creditor whose Claim is admitted by the Trustee under the Creditors' Trust Deed. Appointment Date means 19 November Arrangement means the arrangement constituted pursuant to Part 5.3A of the Act by this Deed as varied from time to time. Arrangement Period means the period commencing on the Execution Date and ending on the Termination Date. ASIC means the Australian Securities & Investments Commission. ASX means Australian Securities Exchange Limited (ABN ) or the financial market conducted by it as the context requires. Basic Consideration means the Consideration to be paid or provided by any party for any Taxable Supply made under this Deed other than GST payable pursuant to clause 11. Business Day means any day other than a Saturday, Sunday, public holiday or bank holiday in Perth, Western Australia. Deed of Company Arrangement - Otsana-NFE - FINAL Page 2

7 Claim means a debt payable by, or a claim against, the Company (present or future, certain or contingent, ascertained or sounding only in damages or by way of fine or penalty, or under a guarantee), being debts or claims the circumstances giving rise to which occurred on or before the Appointment Date or out of events or circumstances which occurred before the Appointment Date, irrespective of whether the debt or claim arose by virtue of contract, of laws (including by statute) in equity or otherwise, including but not limited to: (d) debts or claims against the Company arising out of a Pre-Administration Contract, including by way of a convertible note; claims arising out of, or in connection with or relating in any way to the termination of the employment of Employees; a debt by way of a Superannuation Contribution; and a debt by way of a Superannuation Guarantee Charge. Completion means settlement of the transactions contemplated by this Deed pursuant to clause 6. Completion Date means the date on which Completion occurs, being 5 Business Days after the satisfaction or waiver of the Conditions Precedent or such other date as agreed between the Deed Administrator and Otsana Capital. Conditions Precedent means the conditions listed at clause 3.1. Consideration has the meaning given by section of the GST Act. Consolidation means the consolidation of the Company's existing securities on a one hundred (100) for one (1) basis, subject to compliance with applicable laws. Corporations Regulations means the regulations enacted pursuant to the Act. Court means any court having jurisdiction to hear and determine matters under the Act. Creditor means any person having a Claim. Creditors' Meeting means the second meeting of the Company's creditors convened pursuant to section 439A of the Act on 24 March Creditors' Trust means the trust to be established under the Creditors' Trust Deed. Creditors' Trust Deed means the trust deed to be entered into by the Company and the Deed Administrator as Trustee, pursuant to the terms of this Deed, for and on behalf of the Company's Creditors, substantially in the form of Schedule 3 to this Deed under which the Trustee is to hold the Trust Fund on behalf of the Admitted Creditors. Deed means this amended and re-stated deed of company arrangement, as amended from time to time. Deed Administrator means James Gerard Thackray of The Headquarters Corporate Advisory, 5 Mitford Street, Swanbourne, Western Australia or any replacement administrator(s) appointed pursuant to the provisions of the Act, jointly and severally. Deed Fund means as at any time throughout the Arrangement Period the aggregate of the property transferred, paid into or assigned to a fund held by the Administrator under clause 2.6, less any amounts paid out of that fund under clause Deed of Company Arrangement - Otsana-NFE - FINAL Page 3

8 Deposit means the sum of $100,000 to be paid in accordance with clause 2.7. Directors means the directors of the Company from time to time and Director means any one of them. Due Date means 30 June 2016 or such later date as agreed in writing by the Deed Administrator and Otsana Capital. Employees means the persons employed by the Company from time to time up to the Execution Date. Enforcement Process has the meaning given by section 9 of the Act. Execution Date means the date on which the Company executes this Deed. GST means any tax imposed by or under the GST Act without regard to any input tax credit. GST Act means A New Tax System (Goods and Services Tax) Act 1999 (Cth). GST Law has the meaning given by section of the GST Act. GST Rate means 10% or such other percentage equal to the rate of tax imposed by the GST Law from time to time. Insurance Claim means a liability of the Company covered by insurance policies taken out prior to the Appointment Date. Listing Rules means 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 means 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 Shareholders' Meeting. Official List means the official list of entities that ASX has admitted and not removed. Otsana Capital Nominees means 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 means the sum of $325,000 (inclusive of any GST) to be paid pursuant to clause 2.8 of this Deed. PPS Security Interest means a security interest that is subject to the PPSA. PPSA means the Personal Property Securities Act 2009 (Cth). Pre-Administration Contract means a contract, agreement, lease or understanding entered into by the Company on or prior to the Appointment Date. Prescribed Provisions means such of the provisions contained in Schedule 8A of the Corporations Regulations as set out in Schedule 2. Priority Creditor means a Creditor with an Admitted Claim having priority pursuant to the provisions of section 556(1)(e)-(h) of the Act as if the Company were in liquidation. Deed of Company Arrangement - Otsana-NFE - FINAL Page 4

9 Recapitalisation Proposal means the proposal dated 16 February 2016 from Otsana Capital to the Company and the Administrator and which is contained in Schedule 1 to this Deed. Resolution means the resolution of the Company's creditors pursuant to section 439C of the Act, passed at the Creditors' Meeting approving the Company executing this Deed. Resolution Date means 24 March Security means: a PPS Security Interest; any other mortgage, charge, a general or special notarial bond, pledge, hypothec or lien; or any other interest or arrangement of any kind that in substance secures the payment of money or the performance of an obligation, or that gives a creditor priority over unsecured creditors in relation to any property. Settled Sum means the settled sum payable by the Company pursuant to the terms of this Deed and clause 2.1 of the Creditors' Trust Deed, being ten dollars ($10.00). Share means a fully paid ordinary share in the capital of the Company. Shareholder Condition means the passing by the Shareholders at the Shareholders' Meeting of the Shareholders' Resolutions necessary to give effect to the Recapitalisation Proposal on or before the Due Date or such later date as agreed in writing by the Deed Administrator and Otsana Capital. Shareholders means the shareholders of the Company as at the Appointment Date. Shareholders' Meeting means the meeting of Shareholders to be convened for the purpose of: satisfying the Shareholder Condition; and considering further resolutions, if required by Otsana Capital. Shareholders' Resolutions means such resolutions of the Shareholders of the Company as are necessary to effectuate the Recapitalisation Proposal (which for the avoidance of doubt excludes any change in the name or the constitution of the Company). Subsidiaries has the same meaning as in the Act. Subsidiary Shares means: any and all shares held by the Company in its Subsidiaries; and any minority interests held by the Company in any corporation or joint venture. Superannuation Contribution means a contribution payable by the Company to a fund for the purposes of making provision for, or obtaining, superannuation benefits for an Employee, or for dependants of such an Employee. Superannuation Guarantee Charge means a charge imposed by the Superannuation Guarantee Charge Act 1992 (Cth). Deed of Company Arrangement - Otsana-NFE - FINAL Page 5

10 Tax Invoice has the meaning given by section of the GST Act. Taxable Supply has the meaning given by section of the GST Act. Termination Date means the earlier of: the date upon which the Deed is terminated in accordance with clause 9.1; or if the Deed is terminated in accordance with clause 9.2 of this Deed, the date upon which the Deed is thereby terminated. Trust Fund means all the monies and property that the Trustee is required to hold on trust pursuant to the terms of the Creditors' Trust Deed and clause 5.2 of this Deed, as paid or transferred to the Trustee pursuant to this Deed. Trustee means James Gerard Thackray of The Headquarters Corporate Advisory, 5 Mitford Street, Swanbourne, Western Australia. Trustees' Costs and Expenses means any costs and expenses incurred by the Trustee in connection with the exercise of his powers, and the performance of his functions and duties, under the Creditors' Trust Deed, including, but not limited to, all legal costs incurred by the Trustee, plus any GST payable thereon and GST payable on or in respect of the Creditors' Trust Deed or the transaction contained in the Creditors' Trust Deed. Trustees' Remuneration means remuneration for work done by the Trustee or any partner or employee or consultant of the Trustee in connection with exercising the powers or otherwise complying with his obligations under the Creditors' Trust Deed, calculated in accordance with the rates of charge issued from time to time by The Headquarters Corporate Advisory plus any GST payable thereon provided always that the Trustee shall be entitled to call a meeting of Admitted Creditors in accordance with the clause 6 of the Creditors' Trust Deed for the purpose of having further remuneration approved. 1.2 Interpretation In this Deed: headings and bold type are for convenience only and do not affect interpretation; and unless the context indicates a contrary intention: (d) (e) the expression "person" includes an individual, the estate of an individual, a corporation, an authority, an association or a joint venture (whether incorporated or unincorporated), a partnership and a trust; a reference to any party includes that party's executors, administrators, successors, substitutes and permitted assignees, including any person taking by way of novation; a reference to this Deed or to any other deed, agreement or document, includes respectively, this Deed or that other deed, agreement or document as amended, novated, supplemented, varied or replaced from time to time; words importing the singular include the plural (and vice versa), words denoting a given sex include the other sex, and words denoting individuals include corporations (and vice versa); Deed of Company Arrangement - Otsana-NFE - FINAL Page 6

11 (f) (g) (h) (j) (k) (l) references to currency are references to the legal currency of Australia; references to any legislation, or to any section or provision of any legislation, includes any statutory modification or re-enactment or any statutory provision substituted for it, and any ordinances, by-laws, regulations and other statutory instruments issued under such legislation; references to parties, clauses, schedules or annexures are references to parties, clauses, schedules or annexures to, or of, this Deed and a reference to this Deed includes any schedule or annexure; if a word or phrase is given a defined meaning, any other part of speech or grammatical form of that word or phrase has a corresponding meaning; if any day appointed or specified by this Deed for the payment of any money or doing of anything falls on a day which is not a Business Day, the day so appointed or specified shall be deemed to be the next Business Day; references to payments to any party shall be construed to include payments to another person upon the direction of such party; and an obligation, covenant, representation or warranty on the part of more than one party shall be deemed to be an obligation, covenant, representation or warranty on the part of those parties jointly and each of them severally. 1.3 Prescribed Provisions Except as provided for in this Deed, the Prescribed Provisions, save for paragraphs 3, 10 and 11, are expressly incorporated into this Deed. If there is any inconsistency between the terms of this Deed and the Prescribed Provisions, then the provisions of this Deed shall prevail, to the extent of such inconsistency. 2. Preliminary matters 2.1 Effective Date and Duration This Deed shall take effect on the Execution Date and continues until the Termination Date. 2.2 Interim effect Insofar as a person would be bound by this Deed if it had already been executed, the person must not, at any time after the Resolution Date but before the Execution Date, do anything inconsistent with the terms of this Deed except with the leave of a Court. 2.3 Execution by all parties This Deed is subject to and conditional upon the execution of this Deed by each person named as a party to it. If as a result of clause 2.3, this Deed has not come into full force and effect on or prior to the expiration of 15 Business Days (or such further period as the Court allows) after the Resolution is passed, then this Deed will terminate automatically. Deed of Company Arrangement - Otsana-NFE - FINAL Page 7

12 2.4 Deed Administrator and Trustee The Administrator is to be: (ii) the Deed Administrator of this Deed; and the Trustee of the Creditors' Trust. Prior to Completion the Administrator will execute the Creditors' Trust Deed: (ii) on behalf of the Company; and as the Trustee of the Creditors' Trust. 2.5 Deed binds all Parties This Deed binds: all parties to this Deed; in accordance with section 444D of the Act, all persons having a Claim against the Company; and in accordance with section 444G of the Act, the Company, the Deed Administrator and the members and officers of the Company. 2.6 Deed Fund The Deed Administrator must establish the Deed Fund as soon as practicable after the Execution Date. The Deed Fund represents the property which will be available to the Admitted Creditors, and shall be comprised of: (ii) the Deposit and the Otsana Capital Payment and sums as contemplated by clauses 2.7 and 2.8; and all other assets of the Company. On the Execution Date, or as soon thereafter as they become available, the Deed Administrator shall hold in the Deed Fund: (ii) all cash on hand or at bank held by the Administrator or the Company, together with receipts from any receivables and any GST refunds (in each case, other than funds to be raised by the Company pursuant to the Recapitalisation Proposal which funds do not form part of the Deposit or Otsana Capital Payment); and any realisations of assets of the Company. (d) The Deed Administrator may apply the Deed Fund during the Arrangement Period in the manner contemplated by clause 7.15 and at the Completion Date must transfer the balances of the Deed Fund (as then comprised) to the Trustee in accordance with clause 6.4. Deed of Company Arrangement - Otsana-NFE - FINAL Page 8

13 2.7 Deposit Otsana Capital covenants to pay the Deposit to the trust account of the Deed Administrator's solicitors within five (5) Business Days of the Execution Date. Subject to: (ii) satisfaction of the Shareholder Condition; and a notice authorising release of the Deposit being provided to the Deed Administrator's solicitors signed by Otsana Capital and the Deed Administrator, the Deposit will be released to the Deed Administrator. If the Shareholder Condition is not satisfied, then subject to a notice being provided to the Deed Administrator's solicitors authorising the release of the Deposit and signed by Otsana Capital and the Deed Administrator, the Deposit will be released as follows: (ii) $10,000 to the Deed Administrator; and $90,000 to Otsana Capital. (d) If, for any reason, the Company is recapitalised under a DOCA proposal other than the Recapitalisation Proposal, or the assets of the Company are sold and the Recapitalisation Proposal does not proceed, then the Deed Administrator shall repay Otsana Capital the Deposit from the proceeds of that other DOCA proposal or asset sale, in priority to any other payments and immediately after the receipt of those proceeds. 2.8 Otsana Capital Payment On the Completion Date, Otsana Capital covenants to pay the Otsana Capital Payment to the Deed Administrator whereupon the Deed Administrator shall pay the Otsana Capital Payment to the Trustee (subject to clause 7.15). The Company will repay to Otsana Capital the Otsana Capital Payment upon reinstatement of the Company to trading on the Official List. For the avoidance of doubt, the Deed Administrator does not assume personal liability for this repayment. Clause 2.8 survives Completion of this Deed. 2.9 Shares and Options Other than the carrying out of the Consolidation, the issue of shares and options to acquire shares in the Company, in accordance with the Recapitalisation Proposal, or alteration in the status of a Shareholder (which the Deed Administrator and Directors will facilitate as required by Otsana Capital), a transfer of shares or other securities in the Company, or an alteration in the status of a Shareholder or issue of shares or other securities that is made during the Arrangement Period is void except so far as: the prior written consent of the Deed Administrator, Otsana Capital and the owner of the Shares is obtained; or the Court orders otherwise. Deed of Company Arrangement - Otsana-NFE - FINAL Page 9

14 2.10 Assistance in the sale of assets The Company shall provide all reasonable assistance requested by the Trustee for the purposes of the Trustee realising the assets transferred by the Company to the Trustee pursuant to clauses 6.2 and 6.4 for the benefit of the Admitted Creditors. 3. Conditions Precedent 3.1 Conditions to Completion Completion is subject to and conditional upon the following conditions being satisfied or waived (pursuant to clause 3.3) in accordance with this Deed on or before the Due Date: Otsana Capital paying the Deposit in accordance with clause 2.7; (d) (e) (f) (g) the notice of meeting to be sent to Shareholders of the Company specifying that if the Shareholders do not approve the Recapitalisation Proposal, then the Deed Administrator, shall, in the absence of an alternative proposal, have no other option but to recommend to the Creditors that the Company be placed into liquidation; satisfaction of the Shareholder Condition; the termination of all employment contracts by which the Company may be bound as at the Execution Date (so that all and any of the Employee Claims are dealt with in terms of this Deed and the Creditors' Trust Deed); the termination or repudiation of service contracts by which the Company may be bound as at the Execution Date (so that all and any of the contractors' claims are dealt with in terms of this Deed and the Creditors' Trust Deed); all Subsidiary Shares being transferred to the Trustee for the benefit of the Trust Fund and the statutory records of the Subsidiaries being updated to reflect the transfers, or (at Otsana Capital's sole discretion), the Subsidiaries being deregistered or liquidated at no cost to the Company or Otsana Capital; and the Creditors' Trust Deed being executed and delivered to the Company and, if legally required, stamped and the Settled Sum being received by the Trustee. 3.2 Costs of Satisfying Conditions Precedent Subject to clause 3.2 Otsana Capital (or its nominees) will at its own cost (to be reimbursed in accordance with clause 3.2) carry out the following: (ii) assist the Company to prepare and submit the Meeting Documents to the ASX and ASIC (if legally required) for approval; do those other things as may be reasonably necessary and within Otsana Capital's power to assist the Company to convene and hold the Shareholders' Meeting and satisfy the Shareholder Condition, including paying for the: (A) printing and despatch of the Meeting Documents; Deed of Company Arrangement - Otsana-NFE - FINAL Page 10

15 (B) (C) costs associated with the issue of any securities required by Otsana Capital to be issued prior to the effectuation of this Deed pursuant to clause 9.1; and costs associated with the consolidation of the Company's securities; (iii) (iv) if required by Otsana Capital, the Act or the Listing Rules, assist the Company to prepare one or more draft prospectuses for lodgement with ASIC; and assist the Company with the preparation of the Company's outstanding statutory accounts. After the effectuation of this Deed pursuant to clause 9.1, and following the reinstatement to trading of the Company's securities on ASX, the Company will reimburse Otsana Capital in respect of: (ii) all costs and expenses incurred by Otsana Capital pursuant to this Deed, including but not limited to the costs of drafting this Deed and the Creditors' Trust Deed and the costs relating to satisfying the Shareholder Condition; and the Otsana Capital Payment. For the avoidance of doubt, the Deed Administrator does not assume any personal liability for any reimbursement. (d) For the avoidance of doubt, any provision of this Deed which requires Otsana Capital to procure that the Company do something at Otsana Capital's cost and risk does not, subject to Completion occurring, as between Otsana Capital and the Company, prejudice or affect Otsana Capital's right to seek reimbursement, after the Completion Date, from the Company of reasonable costs, charges or expenses incurred in doing that thing where those costs, charges or expenses would, but for this Deed, have been properly payable by the Company. To the extent that the Deed Administrator incurs costs or expenses in assisting or satisfying the conditions in clause 3.1 or the Conditions Precedent, those costs will form part of the Deed Administrator's Remuneration and Deed Administrator's Disbursements but will not be paid by Otsana Capital. 3.3 Waiver of Conditions Precedent Other than in relation to the Condition Precedent described in clause 3.1 (which can only be waived by the Deed Administrator by notice in writing to Otsana Capital), each of the Conditions Precedent may be waived if, and only if, Otsana Capital consents to waive it by notice in writing to the Deed Administrator. 3.4 Satisfaction of Conditions Precedent Otsana Capital shall use its best endeavours to arrange for the Conditions Precedent to be satisfied, including initiating those actions set out in clause 3.2 after execution of this Deed. The Deed Administrator undertakes to use his best endeavours (including on behalf of the Company) to assist in satisfying the Conditions Precedent, to the extent that these conditions are within the Deed Administrator's control. Deed of Company Arrangement - Otsana-NFE - FINAL Page 11

16 3.5 Failure of Conditions Precedent If: the condition in clause 3.1 is not satisfied in accordance with clause 2.7; or the remaining Conditions Precedent are not satisfied or waived by the Due Date; save for this clause 3.5 and clauses 8, 9 and 10, the provisions of this Deed shall have no further force and effect, and the Deed Administrator may terminate this Deed pursuant to clause 9.2 of this Deed. 3.6 Not to act inconsistently with Deed Until such time as the Conditions Precedent are satisfied or waived or the Deed terminates before satisfaction or waiver of those conditions, insofar as a person would be bound by the Deed if all of the other clauses of this Deed had come into effect, the person must not do anything inconsistent with the other clauses of this Deed. 4. Scope of Arrangement and moratorium 4.1 Moratorium regarding Company This Deed binds: (ii) in accordance with section 444D of the Act, all persons having a Claim against the Company; and in accordance with section 444G of the Act, the Company, the Deed Administrator and the members and officers of the Company. The Creditors shall not during the Arrangement Period: (ii) (iii) (iv) (v) (vi) make an application for an order to wind up the Company; proceed with an application in connection with the winding up of the Company made before this Deed became binding on the Creditors; begin or continue any proceeding against the Company or in relation to any of its property; exercise any right of set-off or defence or cross-claim or cross action against the Company (except that rights of set off which a Creditor would have been entitled to exercise had the Company been wound up on the Appointment Date may still be exercised); begin or continue with any Enforcement Process in relation to the Company's property; or commence or proceed in an arbitration against the Company or in which the Company is a party, except, in the case of clauses 4.1(iii) and 4.1(v), with the leave of the Court and in accordance with the terms (if any) imposed by the Court. Deed of Company Arrangement - Otsana-NFE - FINAL Page 12

17 For the purposes of clause 4.1 "property" includes property used or occupied by, or in the possession of, the Company. 4.2 Release of Admitted Claims Subject to Completion, this Deed releases the Company from all Claims. Each Creditor agrees that upon this Deed terminating pursuant to clause 9.1 of this Deed, each of their Claims are extinguished and released. Each Admitted Creditor shall, if requested to do so, properly execute and deliver to the Company such forms of release in respect of its Admitted Claim as the Deed Administrator or the Company may require. Clause 4.2 shall survive termination of this Deed other than a termination pursuant to clause All Claims extinguished Upon Completion, subject to section 444D of the Act: all Claims shall be extinguished and this Deed may be pleaded by the Company as a bar to proceedings in respect of any Claim, whether or not the Claim is admitted or established under the provisions of this Deed; a Creditor shall only have a right to prove under the Creditors' Trust Deed in full satisfaction and complete discharge of any Claims which they have or claim to have against the Company as at the Appointment Date; and each Creditor who had a Claim, will be entitled to make a claim against the Trust Fund, in accordance with the Creditors' Trust Deed, which is equal in amount to their released Claim. 4.4 Creditors' Trust The Deed Administrator shall cause the Company to execute and require the Trustee to execute the Creditors' Trust Deed in time for Completion and the Company shall pay the Settled Sum to the Trustee. The Deed Administrator is expressly authorised to execute the Creditors' Trust Deed on behalf of the Company. Conditional upon Completion occurring and this Deed terminating in accordance with clause 9.1, all Admitted Creditors shall only be entitled to receive such distributions or amounts as are provided for in the Creditors' Trust Deed. 4.5 Insurance Claims Subject to clause 4.5, the Company shall be released from all Insurance Claims. On receipt by the Company from an insurer of any moneys relating to an Insurance Claim: such moneys shall (after deduction of all costs, fees and expenses of and incidental to recovering those moneys incurred by the Company) be paid by the Company to the claimant of that Insurance Claim; and Deed of Company Arrangement - Otsana-NFE - FINAL Page 13

18 (ii) (iii) in the event that there are moneys remaining after the claimant of that Insurance Claim has been paid, the Company shall pay such moneys to the Trust Fund; and any such Insurance Claims shall be limited to and satisfied by the application of the moneys in accordance with clause 4.5 and not be paid from the Trust Fund. To the extent that the Company is entitled to or receives amounts in respect of any Insurance Claim from insurers, that Insurance Claim is not released by this Deed. 4.6 Eligible employee claims For the avoidance of any doubt, and for the purposes of section 444DA(1) of the Act, any eligible employee creditors will be entitled to a priority at least equal to what they would have been entitled to if property were applied in accordance with sections 556, 560 and 561 of the Act. 4.7 Superannuation Claims For the purposes of section 444DB of the Act, the Deed Administrator (whether in his capacity as Deed Administrator or as Trustee) must determine that the whole of the debt by way of a Superannuation Contribution is not an Admitted Claim if: a debt by way of a Superannuation Guarantee Charge has been paid or is, or is to be, an Admitted Claim; and the Deed Administrator is satisfied that the Superannuation Guarantee Charge is attributable to the whole of the first mentioned debt. 4.8 Employees and Leases Prior to Completion, the Deed Administrator shall, to the extent that it has not already occurred: terminate the employment of the Employees; and unless otherwise notified in writing by Otsana Capital, use his best endeavours to terminate any leases or other contracts (of which the Deed Administrator is aware as at the Completion Date). 4.9 Claims Subject to clause 4.5, as from Completion: (ii) (iii) all persons having a Claim may lodge a proof of debt with the Trustee pursuant to the terms of the Creditors' Trust Deed; all persons having a Claim must accept their right to prove under the Creditors' Trust Deed in full satisfaction and complete discharge of all Claims which they have or claim to have against the Company as at the Appointment Date; and the Company is released from all Claims. Deed of Company Arrangement - Otsana-NFE - FINAL Page 14

19 For the avoidance of doubt, the Deed Administrator shall not be required to adjudicate upon Claims until after the Completion Date, after which the adjudication of Claims will be performed by the Trustee. 5. Property available to pay Creditors 5.1 Available Assets Subject to the provisions of this Deed, the only property available to pay the Admitted Claims are the assets of the Trust Fund. 5.2 Trust Fund The Trust Fund, under the Creditors' Trust Deed, is to be made up of: (d) (e) the Settled Sum; the Deposit; the Otsana Capital Payment; any assets transferred to the Trustee pursuant to clauses 6.2 and 6.4; and the benefits of the Company's covenants in this Deed (including any monies pursuant to clause 4.5 and in the Creditors' Trust Deed in favour of the Trustee). 5.3 Creditors' Trust Deed The Creditors' Trust Deed shall provide that the Trust Fund shall be distributed in the following order of priority: (ii) (iii) (iv) (v) first, the Administrator's Disbursements and Administrator's Trading Expenses (to the extent not paid); second, the Administrator's Remuneration (to the extent not paid); third, the Trustees' Costs and Expenses and Trustees' Remuneration; fourth, Priority Creditors pro rata according to the amount for which each such creditor shall be admitted to proof pursuant to the Creditors' Trust Deed; and the balance, if any, to be distributed in respect of the unsecured claims of the remaining Admitted Creditors in accordance with the provisions of the Act. In the event that the Deed Fund, or any part of it, is distributed by the Deed Administrator pursuant to this Deed and not pursuant to the Creditors' Trust Deed, the distribution shall be in the order of priority set out in clause 5.3 of this Deed. Deed of Company Arrangement - Otsana-NFE - FINAL Page 15

20 6. Completion 6.1 Time and Place Completion shall occur on the Completion Date at the offices of the Deed Administrator situated at The Headquarters Corporate Advisory, 5 Mitford Street, Swanbourne, Western Australia or at such other time and place as is agreed in writing by the Deed Administrator and Otsana Capital. 6.2 Completion Obligations On the Completion Date, the following shall occur (but only if the Conditions Precedent are or have been satisfied or waived at Completion): the Company, as beneficial owner, shall transfer, assign, convey and set over the assets of the Company to the Deed Administrator in his capacity as Trustee of the Creditors' Trust, to be held for and on behalf of the Creditors on the terms of the Creditors' Trust Deed; if required by Otsana Capital, the Company must issue such securities as are required by Otsana Capital, subject to: the Company having received both: (A) (B) application forms from investors applying for the relevant securities in the Company to be issued at Otsana Capital's sole discretion; and the full subscription proceeds for the relevant securities in the Company to be issued at Otsana Capital's sole discretion; and (ii) compliance with all applicable laws and Listing Rules; (d) (e) (f) (g) a noticed signed by the Deed Administrator and Otsana Capital will be issued to the Deed Administrator s solicitors authorising the release of the Deposit in accordance with clause 2.7. The Deed Administrator shall pay the Deposit amount to the Trustee (subject to clause 7.15); the Otsana Capital Payment shall be paid to the Deed Administrator (with evidence provided to the satisfaction of the Deed Administrator acting reasonably), whereupon the Deed Administrator shall pay the Otsana Capital Payment to the Trustee (subject to clause 7.15); the Company or the Deed Administrator provide to Otsana Capital evidence satisfactory to Otsana Capital (acting reasonably) of the complete irrevocable discharge and release of all Security over the Company and its assets and undertaking, unless Otsana Capital permits otherwise in writing to the Deed Administrator (in Otsana Capital's sole discretion); unless previously directed by Otsana Capital in accordance with clause 7.9, the Deed Administrator will remove the current Directors of the Company and appoint the Otsana Capital Nominees as Directors of the Company; if directed by Otsana Capital, the Deed Administrator will remove the current company secretary of the Company and appoint a company secretary nominated by Otsana Capital; Deed of Company Arrangement - Otsana-NFE - FINAL Page 16

21 (h) to the extent required by Otsana Capital, evidence that the transfer of Subsidiary Shares pursuant to clause 3.1(f) has occurred; and the Deed Administrator shall deliver each of the following items in his possession to the Company, except to the extent Otsana Capital permits otherwise: (ii) (iii) all statutory registers, minute books and other record books, financial records, including asset registers, management accounts, budgets, ledgers, journals, books of account and other records of the Company and the common seal, if any, of the Company in the Deed Administrator's possession or control; all cheque books, financial and accounting books and records, copies of tax returns and assessments, mortgages, leases, agreements, insurance policies, title documents, licences, indicia of title, contracts, passwords to computers, certificates and all other records, papers, books and documents of the Company; and 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. 6.3 Interconnection Obligations All things required by this Deed to occur or be done at Completion are interconnected and Completion shall not be regarded as having occurred unless all such things occur or are done. 6.4 Trust Transfer By this Deed, at Completion, the Company transfers, assigns and sets over all the Company's assets at Completion, to the Trustee to be held on the trust of the Creditors' Trust. By this Deed, at Completion, the Deed Administrator assigns and transfers the Deed Fund to the Trustee to be held on trust pursuant to the Creditors' Trust Deed. Notwithstanding Completion, the Company shall take those steps and do all things as may be necessary, including executing any documents that may be reasonably requested by the Trustee for the purpose of giving effect to clauses 6.4 and Deed Administrator 7.1 Acceptance of Appointment The Deed Administrator: accepts the appointment as administrator of this Deed; and agrees to act as administrator of this Deed during the Arrangement Period or until the Deed Administrator retires or is removed from office in accordance with this Deed or the Act. Deed of Company Arrangement - Otsana-NFE - FINAL Page 17

22 7.2 Administer this Deed The Deed Administrator has the powers, functions, duties and discretions conferred on the Deed Administrator by this Deed and the Act. 7.3 Agent of Company In exercising the powers conferred by this Deed and in carrying out the functions and duties arising under this Deed, the Deed Administrator shall act as agent for and on behalf of the Company. 7.4 Role of Deed Administrator This Deed shall be administered by the Deed Administrator who shall have the powers, functions and duties conferred on him by this Deed and the Act. The Deed Administrator shall be the Trustee of the Creditors' Trust and shall have the powers and obligations specified in the Creditors' Trust Deed. In fulfilling his obligations under this Deed, the Deed Administrator warrants that he will comply with his duties and obligations under the Act. 7.5 Reasonable care and diligence The Administrator shall, at all times: act honestly in the exercise of his powers and performance of his functions and duties under this Deed; and exercise the degree of care and diligence that a reasonable person in his position would exercise in the circumstances of the Company. 7.6 Limitation of liability Subject to the Act, in the performance or exercise of the Deed Administrator's powers, functions and duties under this Deed, the Deed Administrator is acting as the agent of the Company and shall not be personally liable for: (ii) any liabilities, debts, or claims or other obligations which the Deed Administrator may incur on behalf of the Company pursuant to the Deed; or any loss or damage caused by an act, default or omission by the Deed Administrator or on behalf of the Deed Administrator in the performance or exercise of the Deed Administrator powers, functions or duties under this Deed, except if the Deed Administrator, or a partner, employee or authorised agent of the Deed Administrator has acted dishonestly in breach of duty, in breach of trust or has been negligent. The Company shall not be liable to pay any liabilities, debts or claims incurred by or on behalf of it in relation to the period from the Execution Date until the Completion Date. Rather, the Deed Administrator shall pay such liabilities, debts and claims from the Execution Date until the Completion Date and shall be entitled to be indemnified only out of the assets of the Company and the Deed Fund with respect to such liabilities, debts and claims. Deed of Company Arrangement - Otsana-NFE - FINAL Page 18

23 7.7 Responsibility for management of Company Subject to clauses 7.8, 7.9 and 7.10, during the Arrangement Period, the Deed Administrator shall be responsible for the day-to-day management, control, supervision and administration of the Company's business and affairs for the period up to and including the Completion Date. For the avoidance of doubt this includes maintaining the Company s ASX listing, including the payment to ASX of the Company s annual listing fee for the year ending 30 June 2016, and any other fees owing to ASX as at the Completion Date. However, the Deed Administrator will not be responsible for any costs associated with the ASX listing relating to the period after 30 June Managerial control and retention of records Managerial control of the Company and its affairs will transfer from the Deed Administrator to the Directors of the Company from the day this Deed is terminated in accordance with clause 9.1 of this Deed. The Company must retain all required records relating to the period prior to the Appointment Date and the period between and including the Appointment Date and the Execution Date and the Arrangement Period in accordance with section 286(2) of the Act. The Deed Administrator may at any mutually agreeable time inspect the books and records of the Company and the Company authorises the Deed Administrator and his staff to enter the Company's premises for the purpose of conducting an inspection and for the purpose of doing anything necessary or desirable to give effect to this Deed. 7.9 Directors Throughout the Arrangement Period, the Directors shall: (ii) (iii) (iv) cooperate with and assist the Deed Administrator in the performance of the obligations under this Deed; use their best endeavours to ensure the satisfaction of the Conditions Precedent; only exercise the powers vested in them by this Deed or delegated to them by the Deed Administrator in writing from time to time; and subject to the Deed Administrator's and Otsana Capital's consent, have the power to convene an extraordinary general meeting for the purposes of satisfying the Shareholder Condition and, if required by Otsana Capital in its sole discretion, to issue one or more prospectuses and conducting the Company's capital raising described in the Recapitalisation Proposal in accordance with the Act and the constitution of the Company. Subject to clause 7.9, during the Arrangement Period, the Deed Administrator shall have the power to appoint and remove Directors on written notice to the Directors at the relevant time, or to replace any vacancy created as a result of the resignation of any Director. The power of the Deed Administrator includes removing the Otsana Capital Nominees as Directors if the Deed is terminated pursuant to clause 9.2 of this Deed. Deed of Company Arrangement - Otsana-NFE - FINAL Page 19

24 (d) Notwithstanding clause 6.2(f), on receipt of a written request from Otsana Capital, the Deed Administrator will do those things necessary to appoint Otsana Capital Nominees as the sole Directors of the Company and remove the incumbent Directors of the Company (subject to compliance with all applicable laws). It is acknowledged that, unless otherwise authorised in writing by the Deed Administrator, the powers that may be exercised by Otsana Capital Nominees as Directors of the Company are only those in, or incidental to, the powers referred to in clause 7.9(iv) Powers of Directors During the Arrangement Period: the Directors shall assist the Deed Administrator to take all steps that may be necessary to authorise and enable the Company to issue the Meeting Documents and, if required, one or more prospectuses in relation to the Recapitalisation Proposal; the Deed Administrator may, to the extent considered necessary for the purposes of giving effect to this Deed, delegate to the Directors some or all of his powers in relation to the day-to-day management, control, supervision and administration of the Company's business and affairs; and the Directors are not authorised to incur any expense on behalf of the Company or the Deed Administrator without the Deed Administrator's express written authority Powers of Deed Administrator During the Arrangement Period, the Deed Administrator shall: retain sole power and control over: (ii) (iii) (iv) the Administration Account; the assets of the Company; the incurring of any liabilities of the Company other than as contemplated by this Deed; and the Deed Fund; and receive all moneys on behalf of the Company Applications to Court Nothing in this Deed shall limit the rights of the Deed Administrator, at any time during the Arrangement Period, to: apply to the Court for directions or orders pursuant to section 447A(1), section 447C or section 447D of the Act; or make an application to the Court under section 444F of the Act. Deed of Company Arrangement - Otsana-NFE - FINAL Page 20

25 7.13 Books and Records To the extent that the Deed Administrator is given access to, or possession of, the books and records of the Company, the Deed Administrator shall maintain the same in accordance with the requirements of the Act Termination of Appointment The appointment of the Deed Administrator under this Deed may be terminated by: (ii) notice of resignation in writing signed by the Deed Administrator and tendered to the Creditors; or the death of the Deed Administrator. If the appointment of the Deed Administrator is terminated in accordance with clause 7.14, a replacement Deed Administrator may be appointed in accordance with the procedure set out in section 449C of the Act Remuneration, Costs, Charges and Expenses of the Deed Administrator The Deed Administrator will be remunerated by the Company for his work as Deed Administrator. The Deed Administrator will be entitled to employ staff to assist him in the performance or exercise of his duties, obligations, responsibilities and powers under this Deed and the remuneration of the Deed Administrator, his employees and staff will be calculated in accordance with the rates of charges issued from time to time by the Deed Administrator plus GST payable thereon, determined according to and as required by law. The Deed Administrator is entitled to draw amounts on account of Administrator's Remuneration, Administrator's Disbursements and Administrator's Trading Expenses from time to time from the moneys held by him pursuant to this Deed or the Creditors' Trust Deed. 8. Deed Administrator's Indemnity 8.1 Nature of Indemnity The Deed Administrator and his partners, employees and authorised agents shall be indemnified out of the assets of the Company and the Deed Fund prior to and as at Completion, or after Completion from the Trust Fund, for: the Administrator's Remuneration and the Administrator's Disbursements; the Administrator's Trading Expenses; and all actions, suits, proceedings, accounts, claims and demands arising out of the voluntary administration of the Company or this Deed which may be commenced, incurred by or made on the Administrator whether in his capacity as Administrator or Deed Administrator by any person and against all costs, charges and expenses incurred by the Administrator and/or Deed Administrator in respect thereof, provided that, the Deed Administrator shall not be entitled to an indemnity in respect of any liabilities or demands if the Deed Administrator (or any partner, employee, Deed of Company Arrangement - Otsana-NFE - FINAL Page 21

26 authorised agent or delegate of the Deed Administrator or the Trustee) have acted dishonestly, negligently, in breach of duty, or in breach of trust. 8.2 Continuing Indemnity Notwithstanding the removal of the Deed Administrator and the appointment of a new deed administrator or the termination of this Deed for any reason whatsoever, the indemnity under clause 8.1: shall take effect from the Execution Date; is without limitation as to time; and shall continue for the benefit of the Deed Administrator's respective legal personal representatives. 8.3 Indemnity not to be Affected or Prejudiced The indemnity under clauses 8.1 and 8.2 shall not: be affected, limited or prejudiced in any way by any irregularity, defect or invalidity in the appointment of the Administrator and shall extend to all actions, suits, proceedings, accounts, liabilities, claims and demands arising in any way out of any defect in the appointment of the Administrator, the approval and execution of this Deed or otherwise; or affect or prejudice all or any rights that the Deed Administrator may have against the Company or any other person to be indemnified against the costs, charges, expenses and liabilities incurred by the Deed Administrator of, or incidental to, the exercise of any of the powers conferred on the Deed Administrator by this Deed. 8.4 Lien To secure the rights or indemnity under this clause 8, the Deed Administrator has a lien over the Deed Fund and the Trust Fund at first instance and thereafter the assets of the Company. 8.5 Survival of Clause 8.6 Priority This clause shall survive termination of the Deed. Subject to clause 5.3, the Deed Administrator's right of indemnity and the Deed Administrator's lien under clause 8.4 has priority over the Claims of all Creditors. 9. Termination 9.1 Termination upon successful Completion Subject to this clause, this Deed shall terminate and be wholly effectuated immediately upon Completion, in accordance with clause 6 of this Deed. Control of the Company shall return to its Directors at that time. Upon termination in accordance with clause 9.1, the Deed Administrator must execute and lodge with ASIC a notice of performance of this Deed in Deed of Company Arrangement - Otsana-NFE - FINAL Page 22

27 accordance with that prescribed by section 445FA of the Act or clause 12 of Schedule 8A of the Corporations Regulations, in the following form: I, James Thackray of The Headquarters Corporate Advisory, of 5 Mitford Street, Swanbourne, Western Australia 6010, as administrator of the deed of company arrangement executed on [date], CERTIFY that the deed has been wholly effectuated in respect of Northern Iron Limited., and the execution of the notice terminates, in respect of the Company, this Deed and all Claims of the Creditors of the Company, will be extinguished, discharged and released if not extinguished or released earlier under this Deed. 9.2 Automatic termination Without limiting any other provision of this clause 9, this Deed shall automatically terminate upon the happening of any one of the following events: the Court so orders in accordance with section 445D of the Act; the Creditors of the Company pass a resolution terminating this Deed at a meeting convened pursuant to section 445F of the Act by notice setting out the proposed resolution; the Deed Administrator determines, after consultation with Otsana Capital, that it is no longer practicable or desirable to implement or carry out the Arrangement, and issues a notice to Otsana Capital and the Creditors that the Deed is terminated, where: (ii) (iii) (iv) (v) the condition in clause 3.1 is not satisfied in accordance with clause 2.7; any other Condition Precedent is not satisfied (or waived pursuant to clause 3.3) by the Due Date and Otsana Capital determines in its sole discretion that it is incapable of being satisfied; Otsana Capital fails to pay, or fails to provide evidence that it has paid, the full amount of the Otsana Capital Payment to the Deed Administrator in accordance with clause 2.8 of this Deed (to the satisfaction of the Deed Administrator), and the Otsana Capital Payment remains unpaid for 5 Business Days after it fell due; Completion does not occur by the Due Date; or the Shareholder Condition is not met as a result of the Shareholders' Resolutions not being passed at the Shareholder's Meeting. 9.3 Meeting of Creditors Notwithstanding clause 9.2 of this Deed, the Deed Administrator 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 described in clause 9.2 occur. 9.4 Report to Creditors Prior to any meeting convened pursuant to section 445F of the Act, the Deed Administrator must send to each Creditor an up to date report as to the state of affairs of the Company, which report shall: Deed of Company Arrangement - Otsana-NFE - FINAL Page 23

28 be accompanied by such financial statements as the Deed Administrator thinks fit; and include a statement: explaining the circumstances which have caused the Deed Administrator to convene the meeting; and (ii) that this Deed will be varied or terminated if the Creditors so resolve. 9.5 Previous Operation Preserved The termination or avoidance, in whole or in part, of this Deed shall not affect the previous operation of this Deed. 9.6 Consequences of Termination of the Deed Upon termination of this Deed under clause 9.2: the Company will be taken to have passed a special resolution pursuant to section 491 of the Act that the Company will be voluntarily wound up and that the Deed Administrator will be the Company s liquidator; Regulation 5.3A.07 of the Regulations will apply; and the Company will be wound up. 9.7 Operation of Clauses Clauses 2.8, 3.2, 4.2, 4.3, 4.5, 4.6, 4.9, 5, 7.6, 8 and 9.5 of this Deed shall survive termination of this Deed pursuant to clause 9.1 of this Deed. Clauses 3.2, 7.6, 8 and 9.5 of this Deed shall survive termination of this Deed pursuant to clause 9.2 and/or 9.3 of this Deed. 10. Meeting of Creditors The Deed Administrator may, at any time, convene a meeting of Creditors and, except to the extent they are inconsistent with the terms of this Deed and regulations to A of the Corporations Regulations, shall apply to meetings of the Creditors as if references to the liquidator, the provisional liquidator and the chairman (as the case may be) were references to the Deed Administrator and with such other modifications as are necessary to give effect to this Deed. 11. Goods and Services Tax 11.1 GST Payment If GST is payable on the Basic Consideration or any part thereof, or if any party is liable to pay GST in connection with any Taxable Supply made under this Deed, then: the party may increase the Basic Consideration (or the relevant part thereof) by an amount which is equal to the GST Rate; and the increased Basic Consideration shall be paid by the recipient. Deed of Company Arrangement - Otsana-NFE - FINAL Page 24

29 11.2 Tax Invoice Where the Basic Consideration is increased to account for GST pursuant to clause 11.1, the relevant party shall, in the month in which the Basic Consideration is to be paid, issue a Tax Invoice to the recipient Obligations to Survive Termination 11.4 Duty This clause 11 shall survive termination of this Deed other than a termination pursuant to clause 9.1. The Company must pay any duty payable on the Creditors' Trust Deed or upon the assignment of the assets to the Creditors' Trust pursuant to this Deed. 12. General 12.1 Governing Law This Deed is governed by, and shall be construed in accordance with, the laws of the State of Western Australia Jurisdiction Each party irrevocably submits to, and accepts generally and unconditionally, the non-exclusive jurisdiction of the courts of Western Australia with respect to any legal action or proceedings which may be brought at any time relating in any way to this Deed. Each party irrevocably waives any objection it may have, either now or in the future, to the venue of any action or proceedings, and any claim it may have, either now or in the future, that the action or proceedings have been brought in an inconvenient forum Severability Any provision of this Deed which is or becomes illegal, void or unenforceable in any respect shall be ineffective only to the extent of that illegality, voidness or unenforceability, and shall not affect the continued operation of the remaining provisions of this Deed Further Acts The parties shall promptly do and perform all further acts and execute and deliver all further documents required by law or reasonably requested by the other parties to carry out and effect the intent and purpose of this Deed Variation 12.6 Waiver This Deed may be varied in accordance with the Act. No waiver or indulgence by any party to this Deed shall be binding on the parties unless it is in writing. Deed of Company Arrangement - Otsana-NFE - FINAL Page 25

30 No waiver of a breach of any term or condition of this Deed shall operate as a waiver of another breach of the same or any other term or condition of this Deed Time of the Essence Time shall be of the essence of this Deed in all respects unless the parties agree in writing to any time requirement being extended, but in such event, time shall again be of the essence of this Deed in relation to such time requirement as so extended Binding Obligations The obligations imposed and the benefits conferred by the agreements contained within this Deed are to be binding on the respective executors, administrators, successors and assigns of all the parties to this Deed Counterparts This Deed may be executed in any number of counterparts (whether an original or a copy transmitted by facsimile or ), all of which taken together shall constitute one and the same document Inconsistency with Act If there is any inconsistency between the terms of this Deed and the legal requirements of the Act, then the Act shall, only to the extent of this inconsistency, prevail and this Deed shall be interpreted accordingly Deed Prevails If there is any inconsistency between the provisions of this Deed and the constitution of the Company or any other obligations binding on the Company, then the provisions of this Deed shall prevail to the extent of the inconsistency. Deed of Company Arrangement - Otsana-NFE - FINAL Page 26

31

32 Executed by Otsana Pty Ltd ACN in accordance with section 127 of the Corporations Act: Signature of Director Signature of Secretary/other Director Name of Director in full Name of Secretary/other Director in full Deed of Company Arrangement - Otsana-NFE - FINAL Page 28

33 Schedule 1 Recapitalisation Proposal Deed of Company Arrangement - Otsana-NFE - FINAL Page 29

34 ACN February 2016 Mr James Thackray Administrator Northern Iron Ltd (Administrator Appointed) c/- The Headquarters Corporate Advisory PO Box 6230 SWANBOURNE WA 6010 A: 108 Outram Street, WEST PERTH Western Australia, 6005 P: PO Box 1974 WEST PERTH WA 6872 T: +61 (08) F: +61 (08) By Dear Sir, NORTHERN IRON LIMITED (ADMINISTRATOR APPOINTED) Please find enclosed our revised offer to recapitalise Northern Iron Limited (Administrator Appointed) (the Company). The material terms of the offer are as follows: the Syndicate (or its nominees) will provide $425,000 cash to the Creditors pool (Creditor Payment). the Creditor Payment will be used in full and final satisfaction of all creditor claims (including those of an Administrator) pursuant to a deed of company arrangement entered into by the Company (DOCA); and the Creditor Payment will be loaned into the Company. If this offer is acceptable, the Syndicate will expect written notification of preferred bidder status as soon as practicable. Further, we will seek an undertaking that the Company is exclusively dealing with the Syndicate.

35 Please consider the terms of our offer (Annexure A ). If you have any queries, please do not hesitate to contact myself on (08) Regards FALDI ISMAIL For and on behalf of Otsana Capital and the Investment Syndicate 2

36 ANNEXURE A OFFER IN RELATION TO NORTHERN IRON LTD 1. TERMS OF THE RECAPITALISATION PROPOSAL 1.1 Material Terms The Company will consolidate its existing shares on a one (1) for (100) basis. The Syndicate (or nominees of the Syndicate) will provide $425,000 cash towards the creditors of the Company (Creditor Payment) The Syndicate will place $100,000 5 business days after execution of the DOCA into a lawyers trust account (Deposit), which is to be released following receipt of shareholder approval. In the event shareholder approval of the recapitalisation proposal is not achieved $10,000 of the Deposit shall be released to the Administrator with the balance to be repaid to the Syndicate. If, for any reason, the Company is recapitalised under another proponent s DOCA proposal or the assets of the Company are sold, then the Administrator shall repay the Syndicate the deposit from the proceeds of that other proponent s DOCA proposal or asset sale, in priority to any other payments and immediately after the receipt of those proceeds. (d) The Creditor Payment will loaned into the Company, following shareholder approval and shall be repaid from the below capital raisings (which will be subject to the receipt of shareholder approval). It is proposed that the capital raisings will be as follows: Up to 185,000,000 shares at not less than $0.02 to raise $3,700,000; (ii) (iii) Up to 50,000,000 shares at not less than $0.001 to raise $50,000; and Up to 50,000,000 options to acquire shares with an exercise price of not less than $0.02 each with an expiry date of 4 years from the date of issue; It should be noted that the proposed capital structure and reconstruction (including consolidation, share/option issues and share/option prices) may be varied at the Syndicate s sole discretion, but subject to both ASX and shareholder approval. (e) (f) (g) (h) The Creditor Payment will be made available to the Administrator within 5 business days after the satisfaction of the conditions set out below. Which the syndicate expects will be complete immediately following the receipt of shareholder approval for the recapitalisation proposal. All of the directors of the Company will be removed and replaced by nominees of the Syndicate. All secured creditors releasing securing over the Company and its assets contemporaneously with the effectuation of the DOCA. The Creditor Payment is offered for control of the Company and is made on the basis that immediately following shareholder approval and payment of the Creditor Payment the DOCA terminates and a creditors trust fund is established to hold the Creditor Payment and the Other Assets for creditors and claimants of the Company (Creditors Trust). For the avoidance of doubt control of the 3

37 Company is proposed to take place on effectuation of the DOCA when control of the Company is transferring from the deed administrator to the newly appointed directors of the Company. All the subsidiaries that are dormant and not required by the Syndicate are to be excised to the creditors trust. 1.2 Proposed Capital Structure No. of Shares Existing Shareholders (after consolidation) 4,844,000 Syndicate Placement 50,000,000 General Placement 185,000,000 Total Shares 239,844, Cash Allocation General Placement $3,700,000 Syndicate Share Placement $50,000 Less Cash to Creditors ($425,000) Less Reconstruction Cost ($200,000) Total Cash at Relisting (approx) $3,125, Conditions The offer under the Recapitalisation Proposal is subject to the following general conditions: (d) (e) all liabilities and long term commitments of the Company as at settlement of the Recapitalisation Proposal being released and compromised via a DOCA that reflects the terms of the offer. It shall be a term of the DOCA that it is wholly effectuated and the appointment of the Administrator terminates contemporaneously with the payment by the Company of the Creditor Payment to the Trustee of the Creditors Trust; all creditors will be required to prove debts against the Trustee of the Creditors Trust as if they were the Company and payments to creditors shall be made in accordance with the DOCA and the Creditors Trust deed; the subsidiaries of the Company being excised from the group and being dealt with by the Administrator (at no cost to the Company or the syndicate); all employees of the Company being terminated at no cost to the Company post termination of the DOCA; the Recapitalisation Proposal and the information memorandum to be sent to creditors and shareholders respectively shall specify that if the creditors do not approve the Recapitalisation Proposal and the shareholders do not approve the Recapitalisation Proposal respectively, then the Administrator or the Deed 4

38 Administrator, as the case may be, shall have no other option but to recommend to the creditors that the Company be placed immediately into liquidation; and (f) the receipt of shareholder approval with respect to the terms of the Recapitalisation Proposal. 1.5 Costs The Syndicate will: prepare first drafts of the DOCA(s) and Creditors Trust Deeds; prepare the required shareholder meeting materials and will submit these materials to ASX, the ASIC and the Deed Administrator for approval prior to dispatch to the shareholders of the Company; and bear its own costs in relation to the preparation of the above documents which sums shall be reimbursed by the Company in the event that the proposals are approved and the Company is reinstated to trading on the ASX. If the Administrator/Deed Administrator incurs costs in reviewing the above meeting materials, those costs shall be borne by the Administrator/Deed Administrator. The Syndicate estimates that the costs of the matters to be undertaken relating to convening the shareholder meeting including the materials being printed, mailed, possibly audited and the incurring of legal costs could be up to $100,000 which the Syndicate agrees to bear. 1.6 Additional Matters The Syndicate confirms that: no additional internal approvals are required in order to proceed to a binding offer; and funding for the acquisition will be sourced from members of the Syndicate as well as third parties. No issues or delays are envisaged in relation to funding the proposal. 2. About the syndicate Otsana Capital Otsana Capital is a private boutique company covering a broad range of corporate transactions with a specific emphasis in the restructure and recapitalisation of ASX-listed companies. Otsana Capital has specialist skills in mergers and acquisitions, capital raisings and has many years of investment banking experience covering a wide range of sectors. Otsana Capital has been involved in the recapitalisation, identification, facilitation and implementation of numerous acquisitions into a number of ASX listed companies. 5

39 Otsana Capital has more recently successfully recapitalised the following Companies: Ookami Ltd ASX Code OOK Cre8tek Ltd ASX Code CR8 Boulder Steel Ltd ASX Code BGD Actinogen Limited ASX Code ACW Prescient Therapeutics Limited ASX Code PTX Mareterram Ltd ASX Code MTM Kogi Iron Limited ASX Code "KFE" (formerly Brainytoys Ltd) Kangaroo Resources Limited ASX Code "KRL" (formerly Kangaroo Metals Ltd) Coventry Resources Limited ASX Code "CVY" (formerly Mobilesoft Ltd) Pan Asia Corporation Limited ASX Code "PZC" (formerly Sam s Seafood Holdings Ltd) NSL Consolidated Limited ASX Code NSL (formerly NSL Health Ltd) Environmental Clean Technologies Limited ASX Code ESI More details on our past transactions can be found at 6

40 Schedule 2 Prescribed Provisions Schedule 8A Deed Administrator Deemed Agent of Company 1. In exercising the powers conferred by this Deed and carrying out the duties arising under this Deed, the Deed Administrator is taken to act as agent for and on behalf of the Company. Powers of Administrator 2. For the purpose only of administering this Deed, the Deed Administrator has the following powers: (d) (e) (f) (g) (h) (j) (k) (l) (m) (n) (o) (p) (q) to enter upon or take possession of the property of the Company; to lease or let on hire property of the Company; to grant options over property of the Company on such conditions as the Administrator think fit; to insure property of the Company; to repair, renew or enlarge property of the Company; to call in, collect or convert into money the property of the Company; to administer the assets available for the payment of claims of Creditors in accordance with the provisions of this Deed; to purchase, hire, lease or otherwise acquire any property, or interest in property from any person or corporation; to borrow or raise money, whether secured upon any or all of the assets of the Company or unsecured, for any period on such terms as the Administrator think fit and whether in substitution for any existing security or otherwise; to bring, prosecute and defend in the name and on behalf of the Company or in the name of the Administrator any action, suits or proceedings; to refer to arbitration any question affecting the Company; to make payments to any Secured Creditor of the Company and any person who is the owner or lessor of property possessed used or occupied by the Company; to convene and hold meetings of the members or creditors of the Company for any purpose the Administrator think fit; to make interim or other distributions of the proceeds of the realisation of the assets available for the payment of claims of creditors as provided in this Deed; to appoint agents to do any business or to attend to any matter of affairs of the Company that the Administrator are unable to do, or that it is unreasonable to expect the Administrator to do in person; to engage or discharge employees on behalf of the Company; to appoint a solicitor, accountant or other professionally qualified person to assist the Administrator; Deed of Company Arrangement - Otsana-NFE - FINAL Page 30

41 (r) (s) (t) (u) (v) (w) (x) (y) (z) (aa) (bb) (cc) (dd) (ee) (ff) (gg) to permit any person authorised by the Administrator to operate any account in the name of the Company; to sell, call in or convert into money any of the property of the Company, to apply the money in accordance with this Deed and otherwise effectively and properly to carry out his or her duties as Administrator; to do all acts and execute in the name and on behalf of the Company all deeds, receipts and other documents, using the Company's common or official seal when necessary; subject to the Bankruptcy Act, 1966, to prove in the bankruptcy of any contributory or debtor of the Company or under any deed executed under that Act; subject to the Act, to prove in the winding up of any contributory or debtor of the Company or under any scheme or arrangement entered into, or deed or Company arrangement executed, under the Act; to draw, accept, make or endorse any bill of exchange or promissory note in the name and on behalf of the Company; to take out letters of administration of estate of a deceased contributory or debtor, and do any other act necessary for obtaining payment of any money due from a contributory or debtor, or the estate of a contributory or debtor, that cannot be conveniently done in the name of the Company; to bring or defend an application for the winding up of the Company; to carry on the business of the Company on such terms and conditions and for such purposes and times and in such manner as the Administrator think fit subject only to the limitations imposed by this Deed; to sell any or all of the property of the Company including the whole of the business or undertaking of the Company at any time the Administrator think fit, either by public auction or by private contract and either for a lump sum payable by instalments or for a sum on account and to obtain a mortgage or encumbrance for the balance or otherwise; to close down the whole or any part of any business of the Company; to enter into and complete any contract for the sale of shares in the Company; to compromise any debts or claims brought by or against the Company on such terms as the Administrator think fit and to take security for the discharge of any debt forming part of the property of the Company; to pay any class of creditors in full, subject to Subdivision D of Division 6 of Part 5.6 of the Act; to do anything that is incidental to exercising a power set out in this clause; and to do anything else that is necessary or convenient for the purpose of administering this Deed. Deed of Company Arrangement - Otsana-NFE - FINAL Page 31

42 Making Claims 3. Subdivisions A, B, C and E of Division 6 of Part 5.6 of the Act apply to claims made under this Deed as if the references to the Liquidator were references to the Administrator of this Deed. Committee of inspection 4. For the purpose of advising and assisting the Administrator of this Deed, there may be a committee of inspection to which the rules set out in item 11 of Schedule 8A of the Corporations Regulations apply. Deed of Company Arrangement - Otsana-NFE - FINAL Page 32

43 Schedule 3 Northern Iron Creditors' Trust Deed Deed of Company Arrangement - Otsana-NFE - FINAL Page 33

44 Northern Iron Creditors' Trust Deed Northern Iron Limited (Subject to Deed of Company Arrangement) Company James Gerard Thackray in his capacity as deed administrator of Northern Iron Limited (Subject to Deed of Company Arrangement) Trustee Ground Floor, 11 Ventnor Avenue West Perth WA 6005 Australia PO Box 1770 West Perth WA 6872 Phone