PROJECT GOVERNANCE

Projects are governed by the Project Leader and the Project Leadership Team.

The Project Leader is the person who comes up with the new and innovative idea and initiates the project. The Project Leader has a number of rights and responsibilities, including:

• They will suggest an initial value of the project that, following discussion with the Sandpit Manager, will determine the number of Type 1 Conversion Notes allocated to them. This initial value needs to be chosen carefully as it will enhance or detract from other participant’s willingness to work on the project. If the initial idea is valued very high, it will discourage others from contributing since they will need to invest many hours of their time in the project to gain sufficient Conversion Notes to give them a significant fraction of any shareholding in a spin-off company, or any share in interim project revenue.

• They have veto rights on people working on the project.

• They have veto rights on external investors buying Type 1 Conversion Notes.

If more than one person has initiated a project, it is possible to split the initial allocation of Type 1 Conversion Notes. Those involved in the development of the idea will negotiate the value and split of the initial Type 1 Conversion Notes, and will, together, comprise the initial Project Leadership Team. One person will be identified as the Project Leader at the commencement of the project and will continue to fill this role regardless of the portion of Conversion Notes they own. If they do not hold the majority of the Type 1 Conversion Notes, there is potential for them to be outvoted in decisions. However, they will still have the veto rights listed above.

If the Project Leader decides to resign from their position, a new Project Leader will be appointed by the holders of Type 1 and Type 2 Conversion Notes. The outgoing Project Leader may choose to sell their Conversion Notes in the project or can retain their Conversion Notes and continue to be a part of the Project Leadership Team. The new Project Leader may or may not already be involved in the project. If they do not currently hold any Conversion Notes, they may choose to purchase Type 1 Conversion Notes if available and will also be entitled to earn Type 2 Conversion Notes for any time they invest in the project.

The holders of Type 1 Conversion Notes comprise the Project Leadership Team and have voting rights regarding any future decisions relating to the project. Specific rights and responsibilities of the Project Leadership Team include:

• Discretionary spending on any funds held in the project. In the case of decisions on funding allocations not achieving consensus, a vote is held with one vote per Conversion Note.

• They will determine how many Type 1 Conversion Notes are made available for purchase in the first 6 months of the project (at which stage the Project Leadership Team likes includes only the Project Leader), and in each 6-month period thereafter.