RE Closing of Convertible Note Issue by she20208

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									                                        MISSION BIOFUELS LIMITED
                                                                 (ACN: 117 065 719)

                                                        Level 8, 50 St Georges Terrace,
                                                                      Perth WA 6000

                                                               Tel: +61(0)8 – 9218 9111
 ONE MISSION : ONE FUEL : BIOFUEL                             Fax: +61(0)8 – 9218 9100
                                                     e-mail: invest@missionbiofuels.com




28 May 2007


The Manager
Company Announcements Office
ASX Limited
20 Bridge Street
SYDNEY NSW 2000




Dear Sir

RE: Closing of Convertible Note Issue

Mission Biofuels Limited (“Mission”) has today settled the convertible note issue
outlined in Mission’s announcements of 2 April 2007 and 17 April 2007 and received
the gross proceeds of $65 million.

Enclosed is:

   •    an Appendix 3B; and
   •    a disclosure notice,

in respect of the issue.


Yours sincerely




Peter Williams
Finance Director & Company Secretary
                                                                                                         Appendix 3B 
                                                                                             New issue announcement 
 

 
                                                                                                   Rule 2.7, 3.10.3, 3.10.4, 3.10.5

                                                Appendix 3B
                             New issue announcement,
                  application for quotation of additional securities
                                   and agreement
 
Information or documents not available now must be given to ASX as soon as available. Information and
documents given to ASX become ASX’s property and may be made public.
Introduced 1/7/96. Origin: Appendix 5. Amended 1/7/98, 1/9/99, 1/7/2000, 30/9/2001, 11/3/2002, 1/1/2003, 24/10/2005.



Name of entity 

        MISSION BIOFUELS LIMITED (“Company”)
 
ABN 

        63 117 065 719
 
We (the entity) give ASX the following information. 


Part 1 - All issues
You must complete the relevant sections (attach sheets if there is not enough space).
 
    1     +Class of +securities issued or to Convertible Notes (“Notes”)
          be issued
           
                                                               
    2     Number of +securities issued or                     A$65 million Notes, which are convertible to
          to be issued (if known) or                          50,000,000 fully paid ordinary shares subject to
          maximum number which may be                         adjustments in accordance with the Terms &
          issued                                              Conditions of the Notes

                                                               
    3     Principal terms of the +securities                  Principal terms of the Notes are as follows:
          (eg, if options, exercise price and                 •     Final maturity date: 18 May 2012;
          expiry date; if partly paid
          +securities,       the      amount                  •     Conversion price: A$1.30;
          outstanding and due dates for                       •     Interest rate: 4.00% per annum; and
          payment;       if      +convertible                 •     Convertible into ordinary shares at the
          securities, the conversion price                          option of the Holder or the Company in the
          and dates for conversion)                                 circumstances set out in the Terms and
                                                                    Conditions of the Notes.




 
+ See chapter 19 for defined terms. 
 
          A
24/10/2005  ppendix 3B  Page 1 
Appendix 3B 
New issue announcement 
 

 
                                           
    4   Do the +securities rank equally Not applicable
        in all respects from the date of
        allotment with an existing +class
        of quoted +securities?

        If the additional securities do not
        rank equally, please state:
        • the date from which they do
        • the extent to which they
            participate for the next
            dividend, (in the case of a
            trust, distribution) or interest
            payment
        • the extent to which they do
            not rank equally, other than in
            relation to the next dividend,
            distribution      or    interest
            payment

    5   Issue price or consideration           A$1.30 per Note


    6   Purpose of the issue                   The net proceeds of the issue of the Notes will
        (If issued as consideration for the    be used by the Company to part fund the
        acquisition of assets, clearly         construction of the second biodiesel refinery in
        identify those assets)                 Malaysia (approx. A$40 million) and the
                                               balance to fund the accelerated development of
                                               the Company’s upstream activities i.e. the
                                               Jatropha Project



    7   Dates of entering +securities into The Notes were issued on 25th May 2007.
        uncertificated     holdings     or
        despatch of certificates           Any ordinary shares issued on conversion of the
                                           Notes will issued in accordance with the Terms
                                           & Conditions of the Notes.

                                            Number                      +Class
    8   Number and       +class of all 46,940,000                       Fully paid ordinary
        +securities quoted on ASX                                       shares
        (including the securities in clause
        2 if applicable)



 
 



 
+ See chapter 19 for defined terms. 
 
Appendix 3B Page 2                                                                      24/10/2005 
                                                                      Appendix 3B 
                                                          New issue announcement 
 

 
 
                                         Number              +Class 

    9    Number and        +class of all 44,060,000          Ordinary shares
         +securities not quoted on ASX                       (escrowed for 2 years
         (including the securities in                        until 4 May 2008)
         clause 2 if applicable)
                                         14,000,000          Performance shares
                                                             will automatically
                                                             convert as follows:
                                                             (a) if the Adjusted
                                                                 EBITDA for
                                                                 FY08 is equal to
                                                                 or greater than the
                                                                 Adjusted EBITDA
                                                                 Target, into 1
                                                                 ordinary share.
                                                             (b) if the Adjusted
                                                                 EBITDA for
                                                                 FY08 is less than
                                                                 the Adjusted
                                                                 EBITDA Target,
                                                                 into 1/1000th of an
                                                                 ordinary share.
                                         5,250,000           January 2009 Options
                                                             exercisable at $1.20
                                                             each on or before 31
                                                             January 2009
                                                             (escrowed for 2 years
                                                             until 4 May 2008)
                                         500,000             February 2009
                                                             Options exercisable at
                                                             $1.20 each on or
                                                             before 28 February
                                                             2009 (escrowed for 2
                                                             years until 4 May
                                                             2008)
                                         50,000,000          Convertible Notes,
                                                             which are convertible
                                                             to 50,000,000 ordinary
                                                             shares subject to
                                                             adjustments in
                                                             accordance with the
                                                             Terms & Conditions
                                                             of the Notes.
                                            
    10   Dividend policy (in the case of Not applicable
         a trust, distribution policy) on
         the increased capital (interests)



 
+ See chapter 19 for defined terms. 
 
1/1/2003                                                               Appendix 3B  Page 3 
Appendix 3B 
New issue announcement 
 

 
Part 2 - Bonus issue or pro rata issue
 
    11   Is security             holder        approval Not applicable
         required?

                                                                  
    12   Is the issue renounceable or non‐                       Not applicable 
         renounceable? 
          
                                                                  
         Ratio  in  which  the              +securities 
    13                                                           Not applicable 
         will be offered 
                                                                  
         +Class of  +securities to which the 
    14                                                           Not applicable 
         offer relates 
                                                                  
         +Record  date  to  determine 
    15                                                           Not applicable 
         entitlements                                             
                                                                  
    16   Will  holdings  on  different                           Not applicable 
         registers  (or  subregisters)  be 
         aggregated       for     calculating 
         entitlements? 
                                                                  
    17   Policy  for  deciding  entitlements                     Not applicable 
         in relation to fractions 
          
                                                                  
    18   Names of countries in which the                         Not applicable 
         entity  has  +security  holders  who 
         will  not  be  sent  new  issue 
         documents 
         Note:  Security  holders  must  be  told  how  their 
         entitlements are to be dealt with. 

         Cross reference: rule 7.7. 
                                                                  
    19   Closing  date  for  receipt  of                         Not applicable 
         acceptances or renunciations 
                                                                  
    20   Names of any underwriters                               Not applicable 
          
          
                                                                  
    21   Amount  of  any  underwriting  fee                      Not applicable 
         or commission 
                                                                  
    22   Names  of  any  brokers  to  the                        Not applicable 
         issue 
          
          
                                                                  

 
+ See chapter 19 for defined terms. 
 
Appendix 3B Page 4                                                                 1/1/2003 
                                                                                  Appendix 3B 
                                                                      New issue announcement 
 

 
    23   Fee  or  commission  payable  to           Not applicable 
         the  broker to the issue 
                                                     
    24   Amount  of  any  handling  fee             Not applicable 
         payable  to  brokers  who  lodge 
         acceptances  or  renunciations  on 
         behalf of +security holders 
                                                     
    25   If  the  issue  is  contingent  on         Not applicable 
         +security  holders’  approval,  the 

         date of the meeting 
                                                     
    26   Date entitlement and acceptance            Not applicable 
         form  and  prospectus  or  Product 
         Disclosure Statement will be sent 
         to persons entitled 
                                                     
    27   If  the  entity  has  issued  options,     Not applicable 
         and  the  terms  entitle  option 
         holders  to  participate  on 
         exercise,  the  date  on  which 
         notices  will  be  sent  to  option 
         holders 
                                                     
    28   Date  rights  trading  will  begin  (if    Not applicable 
         applicable) 
                                                     
    29   Date  rights  trading  will  end  (if      Not applicable 
         applicable) 
          
          
                                                     
    30   How  do  +security  holders  sell          Not applicable 
         their entitlements in full through 
         a broker? 
                                                     
    31   How  do  +security  holders  sell          Not applicable 
         part  of  their  entitlements 
         through  a  broker  and  accept  for 
         the balance? 
                                                     




 
+ See chapter 19 for defined terms. 
 
1/1/2003                                                                       Appendix 3B  Page 5 
Appendix 3B 
New issue announcement 
 

 
 
    32     How  do  +security  holders  Not applicable 
           dispose  of  their  entitlements 
           (except  by  sale  through  a 
           broker)? 
                                              
           +Despatch date 
    33                                       Not applicable 
            
            
 
 
Part 3 - Quotation of securities
You need only complete this section if you are applying for quotation of securities 
 
    34     Type of securities  
           (tick one) 
            
    (a)           Securities described in Part 1 
                 
                   
 
    (b)            All other securities 
                
                    Example:  restricted  securities  at  the  end  of  the  escrowed  period,  partly  paid  securities  that  become  fully  paid, 
                   employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible 
                   securities 



Entities that have ticked box 34(a)
 
Additional securities forming a new class of securities 
 
 
Tick to indicate you are providing the information or                                          
documents 
 
    35             If the +securities are +equity securities, the names of the 20 largest holders of the 
                   additional  +securities,  and  the  number  and percentage of additional  +securities 
                   held by those holders 
                    
    36             If the  +securities are  +equity securities, a distribution schedule of the additional 
                   +securities setting out the number of holders in the categories 

                   1 ‐ 1,000 
                   1,001 ‐ 5,000 
                   5,001 ‐ 10,000 
                   10,001 ‐ 100,000 
                   100,001 and over 
                    
    37             A copy of any trust deed for the additional +securities 
 




 
+ See chapter 19 for defined terms. 
 
Appendix 3B Page 6                                                                                                                      1/1/2003 
                                                                               Appendix 3B 
                                                                   New issue announcement 
 

 

Entities that have ticked box 34(b)

    38   Number of securities for which
         +quotation is sought


    39   Class of +securities for which
         quotation is sought


    40   Do the +securities rank equally
         in all respects from the date of
         allotment with an existing +class
         of quoted +securities?

         If the additional securities do not
         rank equally, please state:
         • the date from which they do
         • the extent to which they
             participate for the next
             dividend, (in the case of a
             trust, distribution) or interest
             payment
         • the extent to which they do
             not rank equally, other than in
             relation to the next dividend,
             distribution      or    interest
             payment

    41   Reason for request for quotation  
         now
         Example: In the case of restricted securities,
         end of restriction period


         (if issued upon conversion of
         another security, clearly identify
         that other security)


                                                          Number       +Class
    42   Number and +class of all
         +securities quoted on ASX
         (including the securities in clause
         38)



 
 


 
+ See chapter 19 for defined terms. 
 
1/1/2003                                                                    Appendix 3B  Page 7 
Appendix 3B 
New issue announcement 
 

 

 
Quotation agreement 
 
1     +Quotation of our additional +securities is in ASX’s absolute discretion. ASX may
      quote the +securities on any conditions it decides.

2        We warrant the following to ASX.

         •        The issue of the +securities to be quoted complies with the law and is not
                  for an illegal purpose.

         •        There is no reason why those +securities should not be granted +quotation.

         •        An offer of the +securities for sale within 12 months after their issue will
                  not require disclosure under section 707(3) or section 1012C(6) of the
                  Corporations Act.
                  Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to
                  be able to give this warranty


         •        Section 724 or section 1016E of the Corporations Act does not apply to any
                  applications received by us in relation to any +securities to be quoted and
                  that no-one has any right to return any +securities to be quoted under
                  sections 737, 738 or 1016F of the Corporations Act at the time that we
                  request that the +securities be quoted.

         •        If we are a trust, we warrant that no person has the right to return the
                  +securities to be quoted under section 1019B of the Corporations Act at the
                  time that we request that the +securities be quoted.

3        We will indemnify ASX to the fullest extent permitted by law in respect of any
         claim, action or expense arising from or connected with any breach of the warranties
         in this agreement.

4        We give ASX the information and documents required by this form. If any
         information or document not available now, will give it to ASX before +quotation
         of the +securities begins. We acknowledge that ASX is relying on the information
         and documents. We warrant that they are (will be) true and complete.




Sign here:                                                        Date:        28 May 2007
              (Director & Company secretary)


Print name:       Peter Williams

                                                == == == == ==



 
+ See chapter 19 for defined terms. 
 
Appendix 3B Page 8                                                                                                1/1/2003 
                                      MISSION BIOFUELS LIMITED

ONE MISSION : ONE FUEL : BIOFUEL




                                   Mission Biofuels Limited
                                    ("Mission Biofuels")




         Disclosure notice issued in relation to on sale of Convertible Notes and Shares
                      issued upon conversion of those Convertible Notes
1.     Introduction
1.1    Background
      At a General Meeting of Mission Biofuels held on 18 May 2007 the members of Mission
      Biofuels approved the issue of $65 million of convertible notes (Convertible Notes) and the
      issue of ordinary shares in Mission Biofuels upon conversion of the Convertible Notes
      (Shares). A copy of the Explanatory Memorandum and an independent expert report prepared
      by Bentleys MRI Perth Financial Services Pty Ltd dated 16 April 2007 is attached as part of
      Appendix A. These documents were provided to the ordinary shareholders of Mission Biofuels
      together with the notice convening the meeting held on 18 May 2007.

      By instrument issued 23 April 2007 the Australian Securities and Investments Commission
      (ASIC) declared that section 707 of the Corporations Act would be modified in a particular
      manner in relation to an offer for sale of Convertible Notes and an offer for sale of Shares
      subject to certain conditions. A copy of the ASIC instrument is attached as Appendix B.

      One of the conditions imposed by ASIC is that a document in the form of this document is given
      to ASX Limited (ASX) on the date on which the Convertible Notes are issued.

1.2    Contents of document
      This document will set out:

       (a)      the effect of the offer of the Convertible Notes and Shares on Mission Biofuels;

       (b)      the rights and liabilities attaching to the Convertible Notes;

       (c)      the rights and liabilities attaching to the Shares;

       (d)      any information that:

                (i)       has been excluded from a continuous disclosure notice in accordance with
                          the listing rules of the ASX (Listing Rules);

                (ii)      is information that investors and their professional advisers would
                          reasonably require for the purpose of making an informed assessment of:

                          (A)         the assets and liabilities, financial position and performance, profit
                                      and losses and prospects of Mission Biofuels; and

                          (B)         the rights and liabilities attaching to the Convertible Notes or
                                      Shares;

       (e)      other additional information including content relating to Mission Biofuels' status as a
                disclosing entity and where documents may be obtained and a summary of the ASIC
                instrument referred to above.

1.3    No offer or invitation
      No offer or invitation is made pursuant to this document for any person to subscribe for or apply
      to acquire any Convertible Notes or Shares.




                       Mission Biofuels Limited                                                                1
2.     Effect of the offer of the Convertible Notes and Shares on Mission
       Biofuels
2.1    Capitalisation and Indebtedness
      At pages 18 and 19 of Appendix A, Bentleys MRI Perth Financial Services Pty Ltd have set out
      the Balance Sheet of Mission Biofuels as at 31 December 2006 together with pro forma Balance
      Sheets for Mission Biofuels assuming that :

       (a)      Convertible Notes totalling $65 million are issued; and

       (b)      All Convertible Note holders convert their Convertible Notes to Shares.

      The pro forma Balance Sheets show the effect on Mission Biofuels’ capital structure of the offer
      of the Convertible Notes and their conversion to Shares.

      In summary, the immediate effect of the issue of the Convertible Notes on the capitalisation and
      indebtedness of Mission Biofuels will be to increase Current Assets (Cash Assets) by $65
      million and to increase Non-Current Liabilities by the same amount.

      The actual effect over time of the issue of the Convertible Notes on the capitalisation and
      indebtedness of Mission Biofuels will depend upon the rate of conversion of the Convertible
      Notes to Shares. If one assumes that all the Convertible Notes are converted to Shares and all
      other things remain equal the effect of the issue of the Convertible Notes and their conversion to
      Shares will be an increase in Current Assets by $65 million and an increase in issued capital of
      the same amount.

2.2    Source and application of funds raised
      The offer of Convertible Notes raised $65 million.

      Of this amount $40 million will be used to fund the construction of an additional biodiesel plant
      having a capacity of 250,000 tonnes per annum. The balance of the funds raised will be used to
      develop an alternative feedstock strategy and to meet the costs of raising the funds.

      For a more detailed explanation of the application of funds refer to Appendix A pages 3 and 4
      under the headings "Construction of Second Biodiesel Refinery" and "Alternative Feedstock
      Strategy".

2.3    Impact on interest cost
      The Convertible Notes bear interest at the rate of 4.0% per annum. Mission Biofuels does not
      have any existing debt. The issue of the Convertible Notes will incur an annual interest cost of
      approximately $2.6 million, assuming the Convertible Notes are not converted to ordinary
      shares.

2.4    Benefits of the convertible note issue
      The 250,000 tpa plant is expected to start producing biodiesel in April 2008 resulting in an
      additional 46,875 tonnes of production for the 2008 financial year.

      The substitution of Jatropha oil for crude palm oil (CPO) will also favourably impact on
      Mission Biofuels. Based on the assumptions used in the Mission Biofuels’ Prospectus, issued in
      March 2006, for every 10% of Jatropha oil used, instead of CPO, the EBITDA is expected to

                  Mission Biofuels Limited                                                                 2
      improve by approximately 3.4%. Furthermore, the cost of Jatropha oil is expected to be fairly
      stable and controllable.

      The combination of increased production capacity and the lower cost of raw materials reinforces
      Mission Biofuels’ strategy to sell biodiesel into the German market. Mission Biofuels will be
      competing with local producers over whom it expects to have a cost advantage of at least 30%.
      In addition, Mission Biofuels expects that the landed cost of its biodiesel will compare very
      favourably with the effective parity price of fossil diesel in the German market.


3.     Rights and liabilities attaching to the Convertible Notes
      The key terms of the Convertible Notes are set out on pages 10 to 12 inclusive of Appendix A.

      Attached as Appendix C is a copy of the Convertible Note Deed Poll setting out the full terms
      which define the rights and obligations attaching to the Convertible Notes.


4.     Rights and liabilities attaching to the shares
4.1    Impact of conversion
      On conversion, the registered holder of the Convertible Note (Noteholder) will be allotted,
      subject to adjustment, one fully paid ordinary share in Mission Biofuels for each Convertible
      Note that is converted. Adjustments will be made to the number of Shares issued on conversion
      if the company has a bonus issue or rights issue, conducts an off market buyback, returns capital
      to shareholders or undertakes some other form of capital reconstruction. The details of the
      adjustments which may be made are set out in clauses 8, 9, 10 and 11 of the Convertible Note
      Deed Poll attached as Appendix C.

      Conversion will have the effect of:

       (a)      replacing an unsecured obligation of Mission Biofuels with additional share capital
                which will rank, on and from its date of issue, equally with all other ordinary shares
                on issue; and

       (b)      increasing the net assets and share equity and reducing the liabilities of the company
                by the face value of the converted Convertible Notes.

      Under section 140 (1) of the Corporations Act, the Constitution of Mission Biofuels has effect
      as a contract between Mission Biofuels and each member, and between each member of Mission
      Biofuels and each other member. Accordingly, upon conversion of the Convertible Notes into
      Shares the holders of the Shares will become liable to comply with the Constitution of Mission
      Biofuels. Since the Shares will be issued as fully paid shares, they are not subject to any call for
      money by the Directors. Accordingly no monetary liability attaches to them and they will not
      become liable for forfeiture.

4.2    Summary of Mission Biofuels Constitution
      The Constitution of Mission Biofuels sets out the principal rights attaching to its Shares. This
      section provides a summary of those rights. It does not purport to be an exhaustive statement or
      constitute a definitive statement of the rights and liabilities of the shareholders of Mission
      Biofuels. Such rights and liabilities involve complex questions of law arising from the



                   Mission Biofuels Limited                                                                  3
interaction of the Constitution, statutory provisions and common law. Shareholders should seek
their own advice when seeking to establish their rights and liabilities in specific circumstances.

 (a)      Share capital: All shares in Mission Biofuels are ordinary shares unless they are
          issued upon special terms. Currently all existing issued shares are ordinary shares of
          the same class and rank equally in all respects, with the exception of 14 million
          executive performance shares which are restricted and may, subject to defined
          contingencies, convert to ordinary shares in 2008. The Shares will be ordinary
          shares.

 (b)      Voting rights: An ordinary share confers upon its holder the right to vote at
          meetings of the shareholders of Mission Biofuels: on a show of hands the shareholder
          is entitled to vote one vote; and, on a poll the shareholder is entitled to vote one vote
          for each share held.

 (c)      Dividends: An ordinary share confers upon its holder the right to participate in
          dividends (if any) declared on the class of shares held.

 (d)      Winding up: An ordinary share confers upon its holder, the right to participate in the
          division of any surplus assets or profits upon the winding up of the company, in
          proportion to the number of shares it holds.

 (e)      Transfer of shares: Subject to Mission Biofuels’ Constitution (which includes the
          right to a lien with respect to partly paid shares), the Corporations Act, the Listing
          Rules and the ASTC Settlement Rules, shares in Mission Biofuels are freely
          transferable. The Shares will be issued as fully paid shares.

 (f)      Variation of rights: The rights attaching to shares in Mission Biofuels can only be
          varied by a special resolution passed at a general meeting of the holders of those
          shares or with the written consent of the holders of at least three quarters of the shares
          in that class and otherwise in accordance with the Listing Rules.

 (g)      General meetings: Each shareholder is entitled to receive notice of, and to attend, in
          person or by proxy, and vote at, General Meetings of Mission Biofuels and to receive
          all notices, accounts and other documents required to be furnished to Shareholders
          under Mission Biofuels’ Constitution, the Corporations Act and the Listing Rules.

 (h)      Creation and issue of further shares: Subject to the provision of Mission Biofuels’
          Constitution, the Listing Rules, the Corporations Act and to any rights previously
          conferred upon the holders of any existing shares, the shares in Mission Biofuels are
          under the control of the board of Mission Biofuels and the board may issue further
          shares on such terms and conditions as the board determines.

 (i)      Conversion: Subject to the Listing Rules, Mission Biofuels may convert all or any of
          its shares into a larger or smaller number of shares by resolution passed at a general
          meeting.

 (j)      Alteration of Constitution. The Constitution of Mission Biofuels can only be
          amended by special resolution passed by at least three quarters of the shareholders
          present and voting at a general meeting. At least 28 days written notice of the general
          meeting must be given and the notice must specify the intention to propose the
          resolution as a special resolution.



            Mission Biofuels Limited                                                                   4
4.3    ASX listing of shares
      Mission Biofuels will apply for official quotation of the Shares on ASX. Quotation will not be
      automatic, but will depend upon ASX exercising its discretion. Mission Biofuels has already
      been admitted to the official list of ASX and shares in Mission Biofuels of the same class as the
      Shares are already quoted. Mission Biofuels cannot guarantee that the Shares will be quoted
      upon issue by Mission Biofuels. Mission Biofuels is not aware of any matter which would
      cause ASX to refuse official quotation of the Shares.


5.     Compliance with disclosure obligations
      As a disclosing entity under the Corporations Act, Mission Biofuels is subject to regular
      reporting and disclosure obligations.

      As a company listed on the Australian Stock Exchange, Mission Biofuels is subject to
      continuous disclosure obligations in accordance with the listing rules of the ASX.

      Other than this document and documents previously lodged by Mission Biofuels with the ASX
      pursuant to its continuous disclosure obligations there is no additional information that:

       (a)      has been excluded from a continuous disclosure notice in accordance with the listing
                rules of the ASX; and

       (b)      is information that investors and their professional advisers would reasonably require
                for the purpose of making an informed assessment of:

                (i)        the assets and liabilities, financial position and performance, profits and
                           losses and prospects of Mission Biofuels; and

                (ii)       the rights and liabilities attaching to the Convertible Notes or Shares.


6.     General
6.1    Right to Obtain Documents
      Copies of documents lodged with ASIC in relation to Mission Biofuels, including Mission
      Biofuels' Constitution may be obtained from, or inspected at, an ASIC office. In addition
      Mission Biofuels will make available to you at any time copies of its:

       (a)      Constitution;

       (b)      Annual Report 2006;

       (c)      Half Yearly Accounts and Half Yearly Report for the period ending 31 December
                2006; and

       (d)      any continuous disclosure notice given by Mission Biofuels since its listing on the
                Australian Stock Exchange.




                  Mission Biofuels Limited                                                                5
Those continuous disclosure notices up to 16 May 2007 are:

      27 Apr 2007         Commitments Test Entity – Third Quarter Report
      26 Apr 2007         Quarterly Market Update
      17 Apr 2007         Notice of Extraordinary General Meeting
      17 Apr 2007         Mission Biofuels Increases Convertible Note Raise to A$65
                          Million
      11 Apr 2007         Change of Director's Interest Notice
      02 Apr 2007         Mission Biofuels Raises $50 million via Convertible Note Issue
      29 Mar 2007         Trading Halt
      28 Mar 2007         Mission Biofuels Appoints New Director for Malaysian
                          Subsidiary
      09 Mar 2007         Indian Feedstock Deal to lock in margin for Mission Biofuels
                          Biofuels
      09 Mar 2007         Increases Efforts in Feedstock R&D
      07 Mar 2007         Mission Biofuels Strengthens its Operations in China
      05 Mar 2007         Mission Biofuels Biofuels to enter Chinese Biodiesel Market
      28 Feb 2007         Half Year Accounts
      23 Feb 2007         Half Yearly Report
      21 Feb 2007         Increases Foothold in Upstream Feedstock Business
      29 Jan 2007         Quarterly Market Update
      25 Jan 2007         Commitments Test Entity - Second Quarter Report
      19 Jan 2007         FIPB of India approves Mission Biofuels Biofuels Investment
      15 Jan 2007         Appendix 3B - Quotation of Restricted Securities
      05 Jan 2007         Release of restricted securities
      15 Dec 2006         Change of Director's Interest Notice
      04 Dec 2006         Crown commences delivery of process equipment
      01 Dec 2006         Change in substantial holding
      20 Nov 2006         Results of AGM
      17 Nov 2006         AGM - Chairman's and Managing Director's Address
      13 Nov 2006         Gains Foothold in Upstream Feedstock Supplies
      10 Nov 2006         Trading Halt
      09 Nov 2006         Compliance with ASX Listing Rule 4.10.19
      26 Oct 2006         Second Quarterly Market Update
      13 Oct 2006         Annual Report 2006
      13 Oct 2006         Notice of Annual General Meeting
      13 Oct 2006         Commitments Test Entity - First Quarter Report
      13 Oct 2006         Appendix 4C - Monthly Report: 30 September 2006
      09 Oct 2006         Handover of Process Building Site to Crown Iron Works
      29 Sep 2006         Full Year Accounts-Period 17 November 2005-30 June 2006
      28 Sep 2006         Change of Director's Interest Notice
      12 Sep 2006         Preliminary Final Report
      28 Aug 2006         First Concrete Pour - Four Weeks ahead of Schedule
      11 Aug 2006         German Government to Introduce Compulsory Blending
      31 Jul 2006         Commitments Test Entity - Fourth Quarter Report
      11 Jul 2006         Quarterly Market Update
      03 Jul 2006         100% Pioneer Tax Status for Expansion Facility Approved
      05 Jun 2006         Deputy Prime Minister of Malaysia launches project

            Mission Biofuels Limited                                                       6
             22 May 2006         Additional Biodiesel Production Capacity Approved
             17 May 2006         Becoming a substantial holder
             09 May 2006 0       Becoming a substantial holder
             05 May 2006         Becoming a substantial holder
             05 May 2006         Becoming a substantial holder
             04 May 2006         Becoming a substantial holder
             04 May 2006         Becoming a substantial holder
             04 May 2006         Initial Director's Interest Notice x6
             04 May 2006         Mission Biofuels Lists on ASX Two Weeks Early
             04 May 2006         Constitution
             04 May 2006         Appendix 1A - ASX Listing application & agreement
             03 May 2006         Employee Option Plan Rules
             03 May 2006         Notice of conversion of convertible notes
             03 May 2006         Market Release: Pre-quotation Disclosure
             03 May 2006         Updated Expenditure Budget
             03 May 2006         Notice in relation to escrowed securities
             03 May 2006         Top 20 shareholders
             03 May 2006         Distribution Schedule
             03 May 2006         AdMission Biofuels to Official List
             11 Apr 2006         Disclosure Document



      These may be obtained from the Mission Biofuels' web site
      (http://www.missionbiofuels.com.au) or by contacting the Company Secretary at:

      Mission Biofuels Limited
      Level 8
      50 St Georges Terrace
      Perth WA 6000
      Australia
      Phone: +61 (8) 9218 9111
      Fax: +61 (8) 9218 9100
      Email: invest@missionbiofuels.com


6.2    Australian Securities and Investments Commission (“ASIC”)
      Pursuant to an instrument dated 23 April 2007 (attached as Appendix B.) ASIC has modified
      sections 707(3) and (4) of the Corporations Act so that an offer within Australia for the sale of
      the Convertible Notes or Shares will not require disclosure under Chapter 6D of the
      Corporations Act if Mission Biofuels’ purpose for the issue of the Convertible Notes and the
      Shares was not for the purpose of selling or transferring them or granting, issuing or transferring
      interests in, or options or warrants over them other than pursuant to section 708 or 708A of the
      Corporations Act.

      The offer of the Convertible Notes was made solely to persons who qualify as professional or
      sophisticated investors under section 708 of the Corporations Act and solely for the purpose
      described in paragraph 2.2 above.

      The company’s sole purpose in issuing Shares will be to meet its contractual obligations on
      conversion under the terms of the Convertible Notes.

                   Mission Biofuels Limited                                                                 7
6.3     ASX
       Mission Biofuels will apply for official quotation of the Shares on ASX. Quotation will not be
       automatic, but will depend upon ASX exercising its discretion. Mission Biofuels has already
       been admitted to the official list of ASX and shares in Mission Biofuels of the same class as the
       Shares are already quoted. Mission Biofuels cannot guarantee that the Shares will be quoted
       upon issue by Mission Biofuels. Mission Biofuels is not aware of any matter which would
       cause ASX to refuse official quotation of the Shares.

       On 16 May 2007, ASX confirmed to Mission Biofuels that:

        (a)    the terms and conditions that apply to the Notes are appropriate and equitable for the
               purposes of Listing Rule 6.1; and

        (b)    ASX does not consider that Listing Rules 6.21, 6.22 and 6.23 apply to the Notes.

6.4     Consents
       The content of this document and its issue have been approved by the directors of Mission
       Biofuels. Each director has consented to the issue of this document and has not withdrawn that
       consent.

       Bentleys MRI Perth Financial Services Pty Ltd has consented to the inclusion of its letter dated
       16 April 2007 in this document and has not withdrawn that consent.

6.5     No Responsibility
       Neither ASIC nor the ASX take any responsibility for the contents of this document.

6.6     Forward-looking statements
       This document contains forward-looking statements relating to future matters, which are subject
       to known and unknown risks, uncertainties and other important factors that could cause the
       actual results, performance or achievements to be different, in some cases materially, from those
       expressed or implied by such statements.

6.7     Not investment advice
       This document is not investment advice. It does not take into account the investment objectives,
       financial situation and particular needs of any person.



By Order of the Board
21 May 2007




                   Mission Biofuels Limited                                                                8
Appendix A

The Notice of Extraordinary Meeting, Explanatory Memorandum and Independent Expert’s Report,
that was sent to shareholders on 19 April 2007, is contained in the following 26 pages.




                  Mission Biofuels Limited                                                     9
                                                                                Appendix A (Cont’d)




       MISSION BIOFUELS LIMITED
                                 ACN: 117 065 719




NOTICE OF EXTRAORDINARY GENERAL MEETING

                                          AND

             EXPLANATORY MEMORANDUM

                                          AND

          INDEPENDENT EXPERT’S REPORT



                         A PROXY FORM IS ENCLOSED




                                  Date of Meeting
                                      Friday
                                   18 May 2007

                                 Time of Meeting
                                    10.00am

                            Place of Meeting
                                Room 7
                 The Perth Convention Exhibition Centre
                          21 Mounts Bay Road
                              PERTH WA



               THIS IS AN IMPORTANT DOCUMENT AND
                     REQUIRES YOUR ATTENTION

                        If you are in doubt as to how to deal with it,
                 please consult your financial or other professional adviser.




   Mission Biofuels Limited                                                                           10
                                                                                  Appendix A (Cont’d)




                                                         MISSION BIOFUELS LIMITED
                                                                               (ACN: 117 065 719)
                                                                     Level 8, 50 St Georges Terrace,
                                                                                   Perth WA 6000
                                                                            Tel: +61(0)8 – 9218 9111
ONE MISSION : ONE FUEL : BIOFUEL                                           Fax: +61(0)8 – 9218 9100
                                                                  e-mail: invest@missionbiofuels.com



NOTICE OF EXTRAORDINARY GENERAL MEETING
Notice is hereby given that an Extraordinary General Meeting of the members of Mission
Biofuels Limited will be held at Room 7, The Perth Convention Exhibition Centre, 21 Mounts
Bay Road, Perth, Western Australia, Australia on 18th May, 2007, at 10.00 a.m.

Agenda items

The following resolutions to be considered at the Meeting are explained in the attached
Explanatory Memorandum:
To consider and, if thought fit, pass the following resolutions as ordinary resolutions:

1. Approval of the Issue of $65 million Convertible Notes and Shares
    “That for the purposes of ASX Listing Rules 7.1 and 7.3 and all other purposes, the issue of
    50,000,000 Unsecured Convertible Notes of A$1.30 each (“Convertible Notes”) and
    50,000,000 fully paid ordinary shares in the Company upon conversion of the Convertible
    Notes issued to the persons specified in the Explanatory Memorandum which accompanies
    this Notice of Meeting is hereby approved.”

2. Approval of the Issue of Convertible Notes and Shares to Tiger Global Investment
   Partners III, LP
    “That for the purposes of Item 7 of Section 611 of the Corporations Act the issue of
    11,538,461 Unsecured Convertible Notes to Tiger Global Investment Partners III, LP as part
    of the Convertible Notes and Shares issued pursuant to Resolution 1 above is hereby
    approved.”


    Resolution 2 is conditional upon Resolution 1and will only be considered if Resolution 1 is
    passed by the necessary majority.


By order of the Board,




Peter J Williams.
Finance Director and Company Secretary

April 16, 2007

                                                   -1-



                        Mission Biofuels Limited                                                        11
                                                                                                 Appendix A (Cont’d)




Information for Members

ENTITLEMENT TO VOTE

1.   The Company has determined in accordance with the Corporations Act, that members holding ordinary shares
     in the Company at 10.00 a.m. on Wednesday, 16th May, 2007 (AWST) will be entitled to attend and vote at the
     Extraordinary General Meeting.

PROXIES

2.   A member entitled to attend and vote at the meeting may appoint a proxy. The person appointed as a proxy
     may be an individual or a body corporate. If entitled to cast two or more votes, the member may appoint one or
     two proxies.
3.   Where two proxies are appointed, each proxy may be appointed to represent a specific proportion of the
     member’s voting rights. If the proportion is not specified, each proxy may exercise half of the member’s voting
     rights. Fractional votes will be disregarded.
4.   Please read carefully the instructions on the Proxy Form and consider how you wish to direct the proxy to vote
     on your behalf. You may direct the proxy to vote “for”, “against” or “abstain” from voting on each resolution
     or you may leave the decision to the appointed proxy after discussion at the meeting.
5.   A proxy need not be a member of the Company.
6.   The Proxy Form must be signed by the member or the member’s attorney. Proxies given by corporations must
     be signed in accordance with the corporation’s constituent documents, or as authorised by the Corporations Act.
7.   To be valid, Proxy Forms must be lodged at least 48 hours prior to the Extraordinary General Meeting by one of
     the following methods:
     (a) by mail
         Computershare Investor Services Pty Limited
         GPO Box D182
         Perth, WA 6840
         Australia; or
     (b) by person:
         Computershare Investor Services Pty Ltd
         Level 2,
         45 St. Georges Terrace
         Perth WA 6000
         Australia; or
     (c) by facsimile:
         +61 (08) 9323 2033
8.   If the Proxy Form is executed under a power of attorney which has not been noted by the Company, the power
     of attorney must accompany the Proxy Form.
9.   In the case of joint shareholders, the names of all joint shareholders should be shown and all joint shareholders
     should sign the Proxy Form.


Corporations
A corporation that is a member or a proxy may elect to appoint a representative in accordance with the Corporations
Act, in which case the Company will require written proof of the representative’s appointment, which must be
lodged with or presented to the Company before the meeting.



                                                         -2-


                       Mission Biofuels Limited                                                                          12
                                                                                             Appendix A (Cont’d)


Explanatory Memorandum


This Explanatory Memorandum is intended to provide shareholders in Mission Biofuels Limited with
sufficient information to assess the merits of the Resolutions contained in the Notice of Extraordinary
General Meeting of the Company.
The Directors recommend that shareholders read this Explanatory Memorandum in full before making any
decision in relation to the Resolutions.

1.     RESOLUTION 1

1.1.   Background for the Approval of Issue of Unsecured Convertible Notes and Shares
       Construction of Second Biodiesel Refinery
       As you know the Company is constructing a 100,000 tonne per annum biodiesel facility at Kuantan Port
       Malaysia. The plant is scheduled to commence commercial production in August 2007 ahead of its initial
       IPO Prospectus schedule of October 2007.
       After careful consideration and analysis the Board is of the opinion that the Company should commence
       construction of a second biodiesel refinery at Kuantan Port in Malaysia at a total cost of $50 million
       (excluding working capital requirements) as soon as possible. The capacity of this second plant will be
       250,000 tonnes per annum.
       The key reasons in support of this decision are as follows:
       •      There is strong growth in biodiesel demand in existing and new markets. The Company already
              has an off-take agreement in place for up to 250,000tpa and is currently negotiating additional off-
              take agreements.
       •      There remains an abundant supply of Crude Palm Oil available to the Company which can be
              supplemented by the alternative feedstock Jatropha.
       •      Allows the full utilisation of the existing infrastructure at Kuantan Port i.e. common infrastructure
              will be shared by the two refineries. One significant advantage being that the total capital
              expenditure for the second plant will only be approximately 1.75 times the cost of the first plant
              but will deliver 2.5 times the output.
       •      Allows for the rollover of the existing construction team, if required.
       •      The second plant has also been granted Pioneer Tax Status from the Malaysian Government.
       •      There will be no adverse impacts on the progress of the first plant.
       The second plant will be constructed in two phases. The first phase will focus on the construction of the
       transesterification facility and the balance of plant whilst the second phase will add the pre-treatment and
       glycerin purification facilities.
       The two phase approach will provide a number of benefits, such as:
       •      Reduce the initial capital required to $40 million with the balance of funding to be provided by
              cash generated from the sale of biodiesel produced by the plant.
       •      Brings forward biodiesel production and sales by 4 months.




                                                       -3-




                       Mission Biofuels Limited                                                                       13
                                                                                              Appendix A (Cont’d)


Explanatory Memorandum (cont’d)

       Alternative Feedstock Strategy
       As announced by the Company in previous releases to the ASX, the Indian subsidiary of your Company,
       Mission Biofuels India Pvt Ltd, is pursuing an alternative, cheaper, inedible feedstock development
       program (“Upstream Activities”). The key drivers for the company in pursuing this strategy are as
       follows:
       •      Feedstock represents 85% of cost of production of biodiesel.
       •      There are insufficient food crops (edible oils) to meet long term biofuel demands.
       •      Food crops prices fluctuate and are determined by the food industry.
       For Mission Biofuels to grow and prosper in this industry it is imperative:
       •      that the company use low cost sustainable feedstock e.g. Jatropha;
       •      that the company control and hedge feedstock costs; and
       •      that the company moves to an inedible energy dedicated feedstock.
       Jatropha has numerous advantages when compared with other feedstocks like rapeseed oil, Soyoil and
       crude palm oil, such as:
       •      It is inedible and therefore does not compete with food crops.
       •      It can grow in uncultivated, arid, and marginal wastelands. It therefore will not compete with food
              crops for fertile land.
       •      Like any plant, it removes carbon from the atmosphere, stores it in the woody tissues and assists in
              the build up of carbon in soil. It helps in “greening” the earth.
       •      It is a sustainable long term source of fuel and livelihood at the same time. Jatropha yields for 40-
              50 years without replanting and it provides an annuity income stream to poor farmers owning
              infertile land.
       •      It is politically and socially attractive as it generates wealth for people and in areas where none
              exists.
       •      It is a perennial high yielding crop whose oil is particularly suitable for biodiesel production.

1.2.   ASX Listing Rule 7.1
       ASX Listing Rule 7.1 prohibits a listed company from issuing or agreeing to issue equity securities if the
       result is that the amount of capital issued within the previous 12 months is greater than 15% of the total
       issued equity securities of the Company, unless member approval is obtained. The proposed issue of
       shares under the issue of the convertible notes, if all of them are converted, will exceed the 15% limit
       referred to in ASX Listing Rule 7.1
       The convertible note offer is being made to persons that do not require a disclosure document under
       Chapter 6D of the Corporations Act 2001 (Australia) and are sophisticated investors within the meaning
       of section 708(8) of the Corporations Act 2001.

1.3.   The following information is provided to members for the purpose of ASX Listing Rule 7.3
       1.3.1. Maximum number of securities to be issued
              50,000,000 Convertible Notes each of which may be converted into 1 fully paid ordinary share.
              If all 50,000,000 Convertible Notes were converted, the maximum number of securities to be
              issued would be 50,000,000 fully paid ordinary shares.


                                                        -4-




                       Mission Biofuels Limited                                                                       14
                                                                                              Appendix A (Cont’d)


Explanatory Memorandum (cont’d)

              The Company can give no firm indication of:
              (a)    The number of shares that may ultimately be issued as a result of conversion of the
                     Convertible Notes; or
              (b)    When, or if, those Convertible Notes may be converted into fully paid shares by a
                     Noteholder; or
              (c)    When, or if, those Convertible Notes may be redeemed by the Company.
       1.3.2. The date by which the Company will issue and allot the Convertible Notes
              The issue of the Convertible Notes to the Subscribers will occur no later than 3 months after the
              date of this General Meeting, or such later date as is approved by the ASX.
       1.3.3. The issue price of the securities
              The issue price of the Convertible Notes is $1.30 per convertible note.
       1.3.4. Intended Allottees
              The Company intends to issue 50,000,000 Convertible Notes which are being offered to
              sophisticated investors.
       1.3.5. The terms of the securities
              The securities are convertible notes which are to be issued as per the Conditions of Issue set out in
              Annexure A
       1.3.6. The intended use of the funds
              The funds will be used to:
              (a)    Part finance the construction of a second biodiesel refinery and ancillary plant at the
                     Kuantan site at an estimated cost of $50 million (including contingency);
              (b)    pursue an alternative, cheaper, inedible feedstock program which will be undertaken by our
                     Indian subsidiary company, Mission Biofuels India Pvt Ltd; and
              (c)    pay for the costs of raising the funds.

1.4.   Who can vote on this resolution?
       The Company will disregard any votes on this Resolution cast by any person who may participate in the
       proposed issue and a person who might obtain a benefit, except a benefit solely in the capacity of a holder
       of ordinary securities, if the resolution is passed, and any of their associates.
       However, the Company need not disregard a vote if:
       1.     it is cast by a person as proxy for a person who is entitled to vote in accordance with the directions
              on the proxy form; or
       2.     it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in
              accordance with the directions on the proxy form and vote as the proxy decides.

1.5.   Recommendation?
       To assist the Company in funding the construction of the Second Plant and its Upstream Activities,
       Mission Biofuels is seeking to place 50,000,000 unlisted and unsecured convertible notes with a face
       value of A$1.30 each per convertible note (“Convertible Notes”) to raise A$65,000,000 before costs
       (“Placement” or “Offer”).
       The Board of Directors recommends that Resolution 1 be approved.


                                                       -5-




                       Mission Biofuels Limited                                                                        15
                                                                                                Appendix A (Cont’d)




Explanatory Memorandum (cont’d)

2.     RESOLUTION 2

2.1.   Background for the Approval of the Issue of Convertible Notes and Shares to Tiger Global
       Investment Partners III, LP
       As part of the Company’s Initial Public Offering last year Tiger Global Investment Partners III, LP,
       (“Tiger”) a US based investment fund which currently manages over US$2.5 billion in several
       investment vehicles that target both publicly-traded and private investment opportunities worldwide,
       invested $13.6 million in the Company.
       Tiger would like to participate in this latest issue of Convertible Notes and have been conditionally
       allocated 11,538,461 convertible notes. The terms of the Convertible Notes to be issued to Tiger are the
       same as those to be issued to the other participants of the Note issue.

2.2.   What would Tiger’s voting interest be?
       Tiger’s current relevant interest in Mission Biofuels’ voting shares for the purposes of Chapter 6
       (Takeovers) of the Corporations Act 2001 (“Act”) is 17.58%. The conversion of all Notes issued to Tiger
       would result in its relevant interest in the voting shares of Mission Biofuels increasing above 20% (“the
       Takeover Threshold”).
       The percentage interest in the company that Tiger could have is dependent upon two factors. The first
       being when and how many Notes Tiger elect to convert. The second being when and how many Notes
       the other parties to the note Issue (i.e. all others excluding Tiger) elect to convert.
       The maximum interest in the voting shares of the Company that Tiger could have is 26.86% (assumes that
       no other party to the Note issue converts their Notes). The minimum interest in the voting shares of the
       Company that Tiger could have is 12.36% (assumes that every party to the Note issue, excluding Tiger,
       converts their Notes). If all parties to the Note issue convert their Notes then Tiger would have a 19.53%
       interest in the voting shares of the Company.
       The following table details how the above figures have been derived:

        Scenario                                      Tiger’s shareholding   Total shares on Issue   Tiger’s % interest

        Current position                                       16,000,000              91,000,000                17.58

        Tiger converts all Notes to shares no                  27,538,461             102,538,461                26.86
        other party converts

        Tiger does not convert Notes to shares                 16,000,000             129,461,539                12.36
        all other parties convert

        All parties, including Tiger convert all               27,538,461             141,000,000                19.53
        Notes to shares


2.3.   Why do the shareholders have to vote on this?
       The Corporations Act regulates any acquisition of voting power in a listed company (such as Mission
       Biofuels) above a 20% threshold.
       Under section 606 of the Corporations Act, a person must not acquire a relevant interest in voting shares
       in Mission Biofuels if, because of a transaction in relation to securities entered into by or on behalf of
       that person, any person’s voting power in Mission Biofuels (not just the voting power of the acquirer)
       increases from below 20% to more than 20% or increases from a starting position that is above 20% to a
       higher percentage.
                                                               -6–




                           Mission Biofuels Limited                                                                       16
                                                                                      Appendix A (Cont’d)


Explanatory Memorandum (cont’d)

The Corporations Act permits acquisitions above the 20% threshold with the prior approval of
shareholders for the purposes of Section 611, Item 7, of the Corporations Act, providing that the
proposed acquisition is approved in advance by a resolution passed by the company in general meeting
and:
(a) no votes are cast in favour of the resolution by the proposed acquirer or its associates; and
(b) there was full disclosure of all information that was known to the person proposing to make the
    acquisition or its associates, or known to the company, that was material to the decision on how to
    vote on the resolution
The Convertible Notes carry no voting rights until conversion into ordinary shares and accordingly
section 606 does not apply to their issue. However, on conversion of all of the Convertible Notes by
Tiger, Tiger will acquire a relevant interest in all of the ordinary shares issued on conversion. On the
assumption that Tiger converts its Notes to ordinary shares before any other party to this Note Issue then
Tiger will hold in excess of 20% of all ordinary shares on issue.
Accordingly, Resolution 2 is being proposed to ensure that, among other things, Tiger do not contravene
section 606 of the Corporations Act by being issued with ordinary shares on conversion of some or all of
the Convertible Notes (assuming it has not acquired other ordinary shares or made other acquisitions to
which the approval does not relate).
The information required to be provided to shareholders under Section 611, Item 7 of the Corporations
Act and ASIC Policy Statement 74 is set out below and in the attached Independents Expert’s Report.
(a) Subject to Resolutions 1 and 2 above being approved, the Convertible Notes will be issued to Tiger
    on or about 18 May 2007.
(b) The reasons for the issue of Convertible Notes is to raise funds to part fund the 250,000tpa
    Expansion Plant and the Jatropha Project. See section 1.1 of this Explanatory Memorandum.
(c) The Directors of Mission Biofuels have no interest in Resolution 2, as they are not associates of
    Tiger.
(d) The maximum extent of the increase in Tiger’s voting power in Mission Biofuels that would result
    from the acquisition would be 11,538,461 ordinary shares assuming Tiger converted all Notes that it
    was allocated. This would result in Tiger’s voting power increasing to 19.53% in Mission Biofuels
    assuming all other participants in the Note issue converted all their Notes.
(e) The issue of these Convertible Notes to Tiger will not result in Tiger having any right to appoint any
    directors to the Board of Mission Biofuels. There is no intention to change the Board of Directors as
    a result of Tiger’s acquisition.
(f) Mission Biofuels and Tiger do not consider themselves to be associates.
(g) Apart from the information set out in this Explanatory Memorandum and the attached Independent
    Expert’s Report, there is no additional information which is required to be disclosed pursuant to the
    ASX Listing Rules in connection with this matter.
(h) The Directors unanimously approved the proposal to put Resolution 2 to the Mission Biofuels
    shareholders and approved this Explanatory Memorandum. No Director voted against the proposal
    to put Resolution 2 to the Mission Biofuels shareholders.
(i)   The Directors unanimously recommend that shareholders vote in favour of Resolution 2 for the
      reasons set out in this Explanatory Memorandum.
(j)   In accordance with ASIC Policy Statement 74, the Directors commissioned Bentleys MRI Perth
      Financial Services Pty Ltd to prepare an Independent Experts Report on whether the Convertible
      Note Issue to Tiger is fair and reasonable to the Mission Biofuels Shareholders. The Independent
      Experts Report is attached to this Explanatory Memorandum in Annexure B. In summary the
      Independent Experts report has concluded that the issue of Convertible Notes to Tiger is fair and
      reasonable to Mission Biofuels shareholders not associated with Tiger. Mission Biofuels
      shareholders are advised to consider the Independent Experts Report carefully before deciding on
      how to vote on Resolution 2.
                                                   -7-

                Mission Biofuels Limited                                                                     17
                                                                                              Appendix A (Cont’d)




       Explanatory Memorandum (cont’d)

2.4.   Information Supplied By Tiger
       Pursuant to ASIC Policy Statement 74 the following information is supplied by Tiger for the purposes of
       Resolution 2.
       (a)    The proposed acquirer of ordinary shares (if it elects to convert the Convertible Notes) is Tiger
              Global Investment Partners III LP;
       (b)    The persons who will have a relevant interest in the ordinary shares issued to Tiger if it converts
              the Convertible Notes will be Tiger.
       (c)    The number of ordinary shares which will be acquired if Tiger elects to convert all the Convertible
              Notes is 11,538,461 ordinary shares.
       (d)    As at the date of this Explanatory Memorandum Tiger has 17.58% of the voting power of Mission
              Biofuels.
       (e)    Tiger has no intention to:
              (i)     Change the business of Mission Biofuels;
              (ii)    Inject further capital in Mission Biofuels;
              (iii)   Make any changes to the future employment of the present employees of Mission Biofuels;
              (iv)    Transfer any property to Mission Biofuels;
              (v)     Otherwise re-deploy the fixed assets of Mission Biofuels; or
              (vi)    Change significantly the financial or dividend policies of Mission Biofuels.
       (f)    There is no other information known to Tiger that is material to the decision on how to vote on
              Resolution 2 except as set out in this Explanatory Memorandum.

2.5.   Required Voting Majority
       Resolution 2 is proposed as an ordinary resolution. Accordingly, the passage of Resolution 2 requires the
       approval of more than 50% of votes cast by Mission Biofuels shareholders present and voting at the
       EGM, whether in person, by proxy or attorney or, in the case of a corporate Mission Biofuels shareholder,
       by a natural person representative
       Resolution 2 will not be considered unless Resolution 1 is passed.

2.6.   Who can vote on this resolution?
       The Company will disregard any votes on this Resolution cast by any person who may participate in the
       proposed issue and a person who might obtain a benefit, except a benefit solely in the capacity of a holder
       of ordinary securities, if the resolution is passed, and any of their associates.
       However, the Company need not disregard a vote if:
         •   it is cast by a person as proxy for a person who is entitled to vote in accordance with the directions
             on the proxy form; or
         •   it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in
             accordance with the directions on the proxy form and vote as the proxy decides.




                                                        -8-



                       Mission Biofuels Limited                                                                       18
                                                                                        Appendix A (Cont’d)


Explanatory Memorandum (cont’d)

3.   GLOSSARY
     The following terms used in the Notice of Meeting and this Explanatory Memorandum have the meanings
     given to them below, unless the context otherwise requires.
     Annexure means an Annexure to this Explanatory Memorandum

     ASIC means the Australian Securities and Investments Commission

     ASX means Australian Stock Exchange Limited (ACN 008 624 691)

     AWST means Australian Western Standard Time.

     Board means the board of directors of Mission Biofuels Limited as at the date of this Explanatory
     memorandum

     Company or Mission Biofuels means Mission Biofuels Limited (ACN 117 065 719).

     Conditions of Issue means the terms on which the Convertible Notes are issued under the
     Convertible Note Deed Poll as set out in Annexure A.

     Conversion means the redemption of a Convertible Note by the issue of a Share.

     Convertible Note means a convertible note offered for subscription on the basis of and under the
     Conditions of Issue and the Convertible Note Deed poll.

     Corporations Act means the Corporations Act 2001 (Cth)

     Dollar, A$ or $ means Australian dollars unless otherwise stated.

     Explanatory Memorandum means this Explanatory Memorandum date 16 April 2007

     Independent Expert means Bentleys MRI Perth Financial Services Pty Ltd

     Independent Expert’s Report means the report of the Independent Expert expressing an opinion on
     whether the Tiger acquisition is fair and reasonable to the Mission Biofuels shareholders not
     associated with Tiger, as set out in Annexure B

     Issue means the issue of the Convertible Notes.

     Listing Rules means the official listing rules of the ASX

     Maturity Date for all Convertible Notes means 30 April 2012.

     Noteholder means a holder of a Convertible Note.

     Share means a fully paid ordinary share in the Company.

     Shareholder means a shareholder of the Company.

     Tiger means Tiger Global Investment Partners III, LP

     VWAP means the volume weighted average sales price of shares sold on ASX

                                                    -9-



                     Mission Biofuels Limited                                                                 19
                                                                                           Appendix A (Cont’d)



Explanatory Memorandum (cont’d)


                                                     Annexure A
                                                  Conditions of Issue
Key terms of the convertible notes are as follows:

    Issuer                 Mission Biofuels Limited, Australia
    Security               Unsecured
    Issue Price            A$1.30 per Convertible Note
    Coupon Rate            4% p.a.; payable semi-annually
    Term                   from the date of issue until May 18, 2012
    Issue Size             AUD $ 65 million
    Conversion             Holders of Notes may elect to convert the Convertible Notes at any time prior to
    Process                2.00pm AWST on the last day of the term.
                           Mission Biofuels may convert the Convertible Notes at any time after the daily
                           volume weighted average share price of Mission Biofuels’ ordinary shares sold on
                           ASX during a period of 90 consecutive days is A$1.95 (one and a half times the
                           Issue Price) or greater.
    Conversion Factor      On conversion, each Convertible Note will convert into 1 fully paid ordinary share
                           that will rank equally with the existing fully paid ordinary shares in Mission
                           Biofuels except in respect of the restrictions on transferability noted below.
    Redemption             All Convertible Notes that have not been converted by 2.00pm AWST on the last
                           day of the Term will be redeemed for their Issue Price.
                           Mission Biofuels may not redeem the Convertible Notes except as requested by the
                           holder.
    Debt Covenant          The terms require that at anytime unless prior approval of at least 75% of the
                           holders of Convertible Notes is obtained, the Company shall not be able to
                           undertake indebtedness that exceeds 2.5 times the total shareholders’ funds of the
                           Company and for clarification of doubt, any outstanding Convertible Notes shall
                           form part of such indebtedness.
    Listing                Mission Biofuels will not seek official quotation of the Convertible Notes on ASX.
                           However, Mission Biofuels will seek official quotation on ASX of any ordinary
                           shares issued on conversion of the Convertible Notes.
    Participation          Before conversion, holders of Convertible Notes will not have a right to participate
                           in issues of new securities or capital reconstructions affecting holders of ordinary
                           shares. However, in circumstances where the Company considers it appropriate,
                           the conversion factor will be adjusted for rights issues, bonus issues, capital
                           reconstructions, capital distributions (including special dividends) and off-market
                           buy-backs in accordance with the ASX Listing Rules.
    Voting rights          Holders of Convertible Notes will have no right to speak or to vote at general
                           meetings of Mission Biofuels.




                                                        - 10 -

                       Mission Biofuels Limited                                                                   20
                                                                                            Appendix A (Cont’d)



Explanatory Memorandum (cont’d)


                                                  Annexure A (Cont’d)
                                                  Conditions of Issue
Key terms of the convertible notes are as follows:


    Transferability        Convertible Notes (or shares issued pursuant to the conversion of Convertible
                           Notes) may not be sold, transferred or offered for sale (and the holder must not
                           grant, issue or transfer any interest in, or options or warrants over (“Dealing”) the
                           Convertible Notes) within 12 months after the issue of the Convertible Notes (or
                           the issue of shares pursuant to the conversion of Convertible Notes) unless the
                           Dealing (and offer of the Dealing) does not need disclosure to investors under Part
                           6D.2 due to one of the exceptions under section 708 of the Corporations Act (other
                           than section 708(1)) or due to section 708A of the Corporations Act 2001.
                           Notwithstanding the above, no Convertible Notes or Shares may be transferred to a
                           person whose voting power, for the purposes of Chapter 6 of the Corporations Act
                           would increase above 20% upon the occurrence of such transfer (or upon the
                           subsequent Conversion of the Convertible Notes subject to such transfer) unless
                           Company shareholder approval is given to the transfer, pursuant to item 7 of
                           section 611 of the Corporations Act.




                                                        - 11 -



                       Mission Biofuels Limited                                                                    21
                                                                                             Appendix A (Cont’d)



Explanatory Memorandum (cont’d)

                                                   Annexure B
                                           Independent Experts Report

Bentleys MRI Perth Financial Services Pty Ltd (“Bentleys”) were requested by the Directors of Mission
Biofuels Limited to prepare an Independent Expert’s Report to determine the fairness and reasonableness of the
Convertible Note Issue to Tiger Global Investment Partners III LP (“Tiger”).

Bentleys report, which is attached, concludes that the Convertible Note Issue to Tiger is fair and reasonable.




                                                      - 12 -

                       Mission Biofuels Limited                                                                    22
                                                                                      Appendix A (Cont’d)




                                                                              Bentleys MRI Perth
                                                                              Financial Services Pty Ltd
16 April 2007                                                                 ABN 92 064 260 260
                                                                              AFS Licence 259 864
The Directors
                                                                              Level 1, 10 Kings Park Road
Mission Biofuels Ltd                                                          West Perth WA 6005
Level 8, 50 St Georges Terrace                                                Australia
PERTH WA 6000
                                                                              PO Box 570 West Perth WA 6872
                                                                              T 61 8 9480 2000
Attention: Mr Peter Williams                                                  F 61 8 9322 7787
                                                                              admin@bmrip.com.au
                                                                              www.bentleys.com.au
Dear Sirs,

MISSION BIOFUELS LIMITED (“MISSION BIOFUELS” OR “COMPANY”) (ABN 63 117 065 719)
MEETING OF SHAREHOLDERS PURSUANT TO CHAPTER 7.1 AND CHAPTER 7.3 OF THE
LISTING RULES OF THE AUSTRALIAN SECURITIES EXCHANGE LTD (“ASX”) AND SECTION
611 OF THE CORPORATIONS ACT 2001, (“TCA”), ON THE PROPOSAL TO ISSUE
CONVERTIBLE NOTES
1.    Introduction

      1.1    We have been requested by the Directors of Mission Biofuels to prepare an Independent
             Expert’s Report to determine the fairness and reasonableness relating to the proposal
             pursuant to Resolution 2 detailed in the Notice of Extraordinary General Meeting to
             Mission Biofuels Shareholders (the “Notice”).

      1.2    Resolution 1 proposes that Mission Biofuels will issue 50,000,000 Unsecured Convertible
             Notes at $1.30 each (“Convertible Notes”) and 50,000,000 fully paid ordinary shares in
             the Company upon conversion of the Convertible Notes. The issue of 50,000,000
             Convertible Notes at $1.30 each will raise $65,000,000 for the Company.

      1.3    The Company intends to issue, pursuant to Resolution 1, 50,000,000 Convertible Notes
             for the predominant purpose of funding construction of a second Biofuel refinery plant at
             Kuantan Port, Malaysia.

      1.4    Resolution 2 proposes that Mission Biofuels will issue 11,538,461 Convertible Notes to
             Tiger Global Investment Partners III LP (“Tiger”) and the issue of Shares following
             exercise of such Convertible Notes, be approved for the purposes and on the terms set
             out in the Notice and Explanatory Statement. These Convertible Notes are part of the
             50,000,000 Convertible Notes to be issued pursuant to Resolution 2.

      1.5    Resolution 2 is conditional upon Resolution 1 and will only be considered if Resolution 1
             is passed by the necessary majority.

      1.6    The terms of the conversion of the Convertible Notes provide the Company may issue up
             to 50,000,000 ordinary shares on or before 18 May 2012.

             The Convertible Notes are convertible at the option of the Convertible Note holder or at
             Mission Biofuels request. The Company may request conversion if the daily volume
             weighted average price of the shares of the Company during a period of 90 consecutive
             days exceeds 1.5 times the conversion price of the Convertible Notes, being $1.30, which
             is $1.95.

             If the Convertible Note holder does not elect to convert the Convertible Note within five
             years of its issue, then the Company will pay the Convertible Note holder the face value of
             that Convertible Note plus any accrued but unpaid interest.

             The Company will not apply for official quotation of the Convertible Notes on the ASX or
             any other stock exchange.

                                                    - 13 -
                     Mission Biofuels Limited                                                                 23
                                                                               Appendix A (Cont’d)

      Subject to the approval of Resolution 2 by shareholders, the Company will issue
      11,538,461 Convertible Notes to Tiger who will loan the Company $15,000,000. The
      material terms of the Convertible Notes include:


      •   Conversion Price is $1.30 per Convertible Note;
      •   4% Coupon Rate per annum payable semi annually in arrears;
      •   Term is 5 years;
      •   Convertible Notes are unlisted. However, shares resulting on conversion
          will be listed;
      •   Convertible Notes are unsecured;
      •   Each Convertible Note will result in one ordinary share of Mission
          Biofuels on conversion;
      •   Convertible Notes shall carry no voting rights;
      •   The holder of the Convertible Notes may redeem the Convertible Notes
          at anytime after a period of one year from issue;
      •   Mission Biofuels has no right to redeem the Convertible Notes unless
          sought by the note holders as above, but;
      •   Mission Biofuels may convert all outstanding notes at any time provided
          the volume weighted average price of Mission Biofuels shares listed on the ASX
          is $1.95 or greater during a period of not less than 90 days.

1.7   If Resolution 2 is passed then Tiger will receive 11,538,461 Convertible Notes pursuant to
      Resolution 1 being passed.

1.8   If the shareholders of the Company approve Resolution 1 and then Resolution 2 the
      Company will issue 11,538,461 Convertible Notes to Tiger for a loan to the Company of
      $15,000,000. ASX Listing Rule 7.1 prohibits a listed company from issuing or agreeing to
      issue equity securities if the result is that the amount of capital issued within the previous
      twelve months is greater than 15% of the total issued equity securities of the Company,
      unless member approval is obtained. The proposed issue of shares under the issue of
      Convertible Notes, if all are converted, will exceed the 15% limit referred to in ASX Listing
      Rule 7.1.

      Under Section 606 of the Corporations Act 2001, a person must not acquire a relevant
      interest in issued voting shares in a company if because of the transaction, that persons
      or someone else’s voting power in the company increases:

          a) from 20% or below to more than 20%; or
          b) from a starting point that is above 20% and below 90%.

      Under Section 611 (Item 7) of TCA, section 606 does not apply in relation to any
      acquisition of shares in a company approved by resolution passed at a general meeting at
      which no votes were cast in favour of the resolution by the acquirer or the disposer or
      their respective associates. An independent expert is required to report on the fairness
      and reasonableness of the transaction pursuant to a section 611 (Item 7) meeting.

1.9   At the date of this report Tiger have 17.58% of the voting power of the current issued
      capital in Mission Biofuels. As a result of Resolution 2 being put to the shareholders and if
      passed, and assuming Tiger are the only Convertible Note holders to convert their notes
      to shares than the voting power of Tiger increase by 9.28% to 26.86%.

1.10 There are no other resolutions being put to the shareholders of Mission Biofuels.

1.11 The Corporations Act our report concludes on the fairness and reasonableness of the
     issue of the 11,538,461 Convertible Notes to Tiger for consideration by the non-
     associated shareholders of the Company. Our report will be included in the Notice of
     Meeting that will be issued to shareholders.


                                           - 14 -


              Mission Biofuels Limited                                                                 24
                                                                                    Appendix A (Cont’d)


     1.12 Apart from this introduction, this report considers the following:

        •   Summary of opinion
        •   Implications of the proposal
        •   Corporate history and nature of business of Mission Biofuels
        •   Future direction of Mission Biofuels
        •   Pro-forma financials
        •   Fairness and reasonableness of the proposal
        •   Conclusion as to fairness and reasonableness
        •   Sources of information
        •   Appendix A

2.   Summary of Opinion

     2.1     In determining the fairness and reasonableness of the transactions pursuant to
             Resolution 2, we have had regard for the definitions set out by the Australian Securities
             and Investments Commission (“ASIC”) in its Policy Statements 75 and 74. Policy
             Statement 75 states that an opinion as to whether an offer is fair and/or reasonable shall
             entail a comparison between the offer price and the value that may be attributed to the
             securities under offer (fairness) and an examination to determine whether there is
             justification for the offer price on objective grounds after reference to that value
             (reasonableness).

             Policy Statement 74 states that in all cases, where an acquisition of shares by way of an
             allotment is to be approved by shareholders pursuant to section 611 (Item 7) of TCA, a
             report by an Independent Expert may be presented stating whether or not the proposal is
             fair and reasonable, having regard to the interest of shareholders other than the
             proposed allottees (in this case, Tiger).

             Accordingly, our report relating to Resolution 2, is concerned with the fairness and
             reasonableness of the proposal with respect to the existing non-associated shareholders
             of Tiger.

     2.2     In our opinion:

             The proposal as outlined in Resolution 2 that provides for the issue of 11,538,461
             Convertible Notes to Tiger is considered on balance fair and reasonable to the non-
             associated shareholders of Mission Biofuels.

             The opinion expressed above is to be read in conjunction with the more detailed analysis
             and comments made in this report.

             We are of the opinion that the proposal is fair and reasonable for the following reasons:

             •   As the Company requires additional cash resources to expand operations, the
                 passing of Resolution 1 and 2 will not only inject cash but enhance the Company’s
                 ability to attract new investors and raise capital;

             •   Compared to alternative forms of capital raising, there are several advantages as
                 detailed in the Notice;

             •   The Company is effectively raising $65 million through the issue of Convertible Notes
                 at minimal cost;

             •   Raising $65 million through the Convertible Notes issue is significantly important to
                 the Company in being able to expand operations in Malaysia.

             •   Tiger represent $15,000,000 of the proposed $65 million raised. Therefore, Tiger
                 represent a significant portion of this raising at minimal cost. Passing of Resolution
                 2 will result in additional financial strength of the Company;

                                                        - 15 -
                    Mission Biofuels Limited                                                              25
                                                                                    Appendix A (Cont’d)


           The Convertible Notes issued to Tiger are on the same terms and conditions as all other
           Convertible Notes issued pursuant to Resolution 1; and
           • There is no certainty the Company can raise the same significant amount of funding
              from alternative sources.

     2.3   This report has been prepared solely for the purpose of assisting the shareholders of
           Mission Biofuels in considering Resolution 2. We do not assume any responsibility or
           liability to any other party as a result of reliance on this report for any other purpose.

           The ultimate decision whether the shareholders of Mission Biofuels approve Resolution 2
           should be based on each shareholder’s assessment of their own circumstances,
           including their risk profile, liquidity preference, tax position and expectations as to value
           and future market conditions. If shareholders are in doubt about the action they should
           take in relation to Resolution 2 or matters dealt with in this report, shareholders should
           seek independent professional advice. For our full opinion on Resolution 2, and
           reasoning behind our opinion, we recommend that Mission Biofuels shareholders read
           our complete report.

3.   Implications of the Proposal

     3.1   As at 26 March 2007, there were 91,000,000 ordinary fully paid shares on issue in
           Mission Biofuels.

           The capital structure as at 26 March 2007 for Mission Biofuels was:

                                                      Number of
            Securities                                 Shares /
                                                       Options
            Ordinary Fully Paid                       46,940,000
            Ordinary Fully Paid – Restricted          44,060,000
            Total Shares on Issue                     91,000,000

            Performance Fully Paid – Restricted       14,000,000

            Options Expiring 31 January 2009           5,250,000
            Options Expiring 28 February 2009            500,000
                                                       5,750,000

           The above performance shares and options do not form part of Mission Biofuels current
           number of shares on issue. For the purpose of this report the conversion of performance
           shares and options to fully paid ordinary shares has not been factored into any
           calculation relating to Mission Biofuels share holding.

           The above 44,060,000 ordinary fully paid – restricted shares are restricted due to an ASX
           imposed escrow for the period of two years from the date of listing. Therefore the escrow
           will expire on 4 May 2008. Of these escrow shares, 44,000,000 of these shares relate to
           shares issued to the founders of the Company.

           The four significant shareholders as at 26 March 2007 held 60.95% of the issued capital
           and are as follows:
                                                 No. of fully paid     % of issued
                                                      shares             fully paid
                                                                          shares
            Mission Equities Sdn Bhd                 24,640,000            27.08
            Tiger Global Investment
            Partners III LP                          16,000,000            17.58
            Citicorp Nominees Pty Limited             7,784,811              8.55
            NU Equity Solutions Sdn Bhd                7,040,000             7.74
            Other investors                          35,535,189            39.05
            Total Shares on Issue                    91,000,000               100

                                                      - 16 -
                  Mission Biofuels Limited                                                                 26
                                                                            Appendix A (Cont’d)

      Of the current ordinary shares on issue to Tiger, 50% are subject to twelve months
      voluntary escrow which will expire on 4 May 2007.

3.2   Assuming the proposal pursuant to Resolution 2 to issue 11,538,461 Convertible Notes
      to Tiger is passed and consummated and Tiger convert all the Convertible Notes on
      issue resulting in 11,538,461 shares being issued to Tiger, and no other party converts
      any Convertible Notes, the new shareholding position of the Company would be:

                                           No. of fully paid       % of issued
                                               shares               fully paid
                                                                     shares
       Tiger Global Investment
       Partners III LP                         27,538,461              26.86
       Mission Equities Sdn Bhd                24,640,000              24.03
       Citicorp Nominees Pty Limited            7,784,811               7.60
       NU Equity Solutions Sdn Bhd              7,040,000               6.86
       Other investors                         35,535,189              34.65
       Total Shares on Issue                  102,538,461                100

      Tiger will increase its voting power from 17.58% to 26.86% of the expanded issued
      capital.

3.3   Assuming all other Convertible Notes holders convert their Convertible Notes to shares
      and Tiger do not convert any of their Convertible Notes to shares, the new shareholding
      position of the Company would be:

                                           No. of fully paid       % of issued
                                               shares               fully paid
                                                                     shares
       Mission Equities Sdn Bhd                 24,640,000            19.03
       Tiger Global Investment
       Partners III LP                         16,000,000              12.36
       Citicorp Nominees Pty Limited            7,784,811               6.01
       NU Equity Solutions Sdn Bhd              7,040,000               5.44
       Other investors                         73,996,728              57.16
       Total Shares on Issue                  129,461,539                100

      Tiger will decrease its voting power from 17.58% to 12.36% of the expanded issued
      capital.

3.4   Assuming all Convertible Note holders including Tiger convert their Convertible Notes to
      shares, the new shareholding position of the Company would be:

                                           No. of fully paid       % of issued
                                               shares               fully paid
                                                                     shares
       Tiger Global Investment
       Partners III LP                         27,538,461              19.53
       Mission Equities Sdn Bhd                24,640,000              17.48
       Citicorp Nominees Pty Limited            7,784,811               5.52
       NU Equity Solutions Sdn Bhd              7,040,000               4.99
       Other investors                         73,996,728              52.48
       Total Shares on Issue                  141,000,000                100

      Tiger will increase its voting power from 17.58 to 19.53% of the expanded issued capital.

      The above calculations of shares on issue assume that no options or performance shares
      on issue are exercised and result in an increase of total shares on issue.



                                                - 17 -

             Mission Biofuels Limited                                                             27
                                                                                   Appendix A (Cont’d)

4.   Recent history and Future Directions of Mission Biofuels

     4.1    Mission Biofuels was incorporated on 17 November 2005 as an Australian public
            company. Mission Biofuels listed on the ASX on 4 May 2006. After a capital rising of $43
            million, construction commenced on a 100,000 tonne Biofuel refinery at Kuantan Port in
            Malaysia. This plant was scheduled to commence commercial production in October
            2007 but this date has been revised to August 2007.

            The Company now intends to construct a second plant of 250,000 tonne capacity at
            Kuantan Site at an estimated cost of $50 million and an expected completion date of
            March 2008 for the biodiesel transesterification facility and August 2008 for the
            associated pre-treatment and glycern purification facility.

            We have been informed by Management of the Company that the intended use of the
            funds raised through the issue of the Convertible Notes will be used to;

            •   part finance the construction of a second biodiesel refinery and ancillary plant at the
                Kuantan site at an estimated cost of $50 million (including contingency);
            •   pursue an alternative, cheaper, inedible feedstock program which will be undertaken
                by Mission Biofuels Indian subsidiary company Mission Biofuels India Pvt Ltd; and
            •   pay for the costs of raising the funds.

     4.2    We have been advised by the Directors and Management of Mission Biofuels that:

           • There are no proposals currently contemplated whereby Mission Biofuels will acquire
             any property or assets from Tiger or any other party associated with them (however,
             the Company will issue 11,538,461 Convertible Notes to Tiger pursuant to Resolution
             2 which may ultimately lead to the conversion of these Convertible Notes to shares).
             Further, there are no proposals to transfer any of the Company’s property or assets to
             Tiger or any other party associated with them;
           • The composition of the Board will not change as a result of the passing of Resolutions
             1 and 2;
           • There is no intention to change the dividend or financial policy or employment
             arrangements or business direction of the Company; and
           • Tiger does not have any present intention to inject further funds into the Company,
             other than $15,000,000 for 11,538,461 Convertible Notes pursuant to Resolution 2.

5.   Pro-forma Statement of Financial Position of Mission Biofuels

      We set out below the audit reviewed Consolidated Balance Sheet of Mission Biofuels as at 31
      December 2006 and a pro-forma Consolidated Balance Sheet. The pro-forma Consolidated
      Balance Sheet represents the passing of Resolution 1, being the issue of 50,000,000
      Convertible Notes for $1.30 each, raising $65 million which includes the issue of 11,538,461
      Convertible Notes to Tiger who will loan the Company $15,000,000 pursuant to Resolution 2.

     5.1   The below Pro Forma Balance Sheet A represents the balance sheet of Mission Biofuels if
           Resolution 1 is accepted and Mission Biofuels raise $65 million cash through the issue of
           $65 million in Convertible Notes. This pro forma balance sheet is based on the
           assumption that there are no other changes to the balance sheet of Mission Biofuels,
           including no new issue of shares and no options on issue are exercised.

     5.2   The below Pro Forma Balance Sheet B represents the balance sheet of Mission Biofuels if
           all Convertible Note holders convert their Convertible Notes to shares. This pro forma
           balance sheet is based on the assumption that there are no other changes to the balance
           sheet of Mission Biofuels, including no new issue of shares and no options on issue are
           exercised.

     5.3   The below Pro Forma Balance Sheet A and Pro Forma Balance Sheet B do not reflect any
           costs of capital raising through the issue of Convertible Notes. The Company estimate
           this cost to be 3.5% of the $65 million raised which is $2,275,000.
                                                      - 18 -

                   Mission Biofuels Limited                                                               28
                                                                                         Appendix A (Cont’d)

                                                 Consolidated Balance Sheet

                                                       Review            Pro-forma               Pro-forma
                                                       opinion          31 December             31 December
                                                    31 December             2006                    2006
                                                        2006                  A                       B
           Current Assets                               $’000               $’000                   $’000
           Cash assets                                    30,579               95,579                  95,579
           Trade and Other Receivables                       186                  186                     186
           Other Assets                                       14                   14                      14
                                                          30,779               95,779                  95,779
           Non - Current Assets
           Trade and Other Receivables                         2                    2                       2
           Property, Plant & Equipment                     9,473                9,473                   9,473
           Deferred Tax Assets                               271                  271                     271
           Other Assets                                        6                    6                       6
                                                           9,752                9,752                   9,752

           Total Assets                                   40,531              105,531                 105,531

           Current Liabilities
           Trade and Other Payables                          105                 105                     105
           Current Tax Liabilities                           165                 165                     165
                                                             270                 270                     270
           Non-Current Liabilities
           Deferred Tax Liabilities                          158                  158                    158
           Convertible Notes                                   -               65,000                      -
                                                             158               65,158                    158

           Total Liabilities                                 428               65,428                     428

           Net Assets                                     40,103               40,103                 105,103

           Equity
           Issued Capital                                 40,776               40,776                 105,776
           Reserves                                          523                  523                     523
           Accumulated losses                             (1,196)              (1,196)                 (1,196)
           Net Equity                                     40,103               40,103                 105,103

6. Fairness of the Offer

     6.1    The Company proposes to issue 50,000,000 Convertible Notes valued at $65 million for
            these Convertible Notes. As part of this exchange, Tiger will receive 11,538,461
            Convertible Notes for $15,000,000. As such, the Company will effectively raise a total of
            $65 million, including $15,000,000 from Tiger through the issue of Convertible Notes as
            described at minimal cost.

            If the Company were to raise an equivalent amount of $65 million through a public
            offer share placement it is likely it will pay various expenses including broking fees,
            underwriter fees, legal fees and other consultant fees.

            In our opinion the costs of raising $65 million by way of a public share placement may be
            up to 7% of the amount raised, totalling $4,550,000 compared to the costs of a private
            placement of approximately 3.5% of the amount raised totalling $2,275,000.

            Therefore, it may be argued that the intrinsic value to the Company in relation to the issue
            of the 50,000,000 Convertible Notes, including 11,538,461 Convertible Notes to Tiger is
            the cost saving in relation to a share capital issue of $65 million. This cost saving is
            estimated to be up to $2,275,000. As such, it is reasonable to assume that the Company
            may save significant capital raising costs if the Company issue Convertible Notes.

                                                             - 19 -
                      Mission Biofuels Limited                                                                 29
                                                                                     Appendix A (Cont’d)


     6.2   The face value of $1.30 per Convertible Note was determined by using a 90 day volume
           weighted average share price of $1.07 which at the time of the offering, represents a 21%
           premium on the issue of Convertible Notes at $1.30. Therefore the Convertible Note
           holders may convert an amount above the current 90 day volume weighted average share
           price for the Convertible Notes.
     6.3   Part of the terms and conditions of the issue of the Convertible Notes is that each
           Convertible Note may convert into one ordinary share of Mission Biofuels. Therefore the
           Convertible Note holders at their discretion can obtain ordinary shares within the Company
           for $1.30.
     6.4   Further, the terms and conditions of the issue of the Convertible Notes provide that
           Mission Biofuels may request conversion all outstanding notes at any time provided the
           volume weighted average price of Mission Biofuels shares listed on the ASX is $1.95 or
           greater during the period of not less than 90 days. This allows Mission Biofuels to cap the
           price at which conversion of Convertible Notes can occur. Also, conversion of Convertible
           Notes by the Company reduces the amount the Company would be required to pay on any
           Convertible Notes not converted to shares at the end of the five year term.
     6.5   If the Company were to issue ordinary equity shares, it is usual for the shares to be placed
           at a discount to market price at the time of offering. The issue of Convertible Notes as
           proposed in Resolution 1 and Resolution 2, has allowed the Company to place a premium
           above the volume weighted average price of ordinary shares at the time of the offering.
     6.6   The current coupon rate payable to the Convertible Note holders is 4% per annum. If the
           Company were to raise funds through a financial institution or similar, the cost of interest
           payable would be significantly higher than the coupon rate of 4% and the interest rate
           could possibly be in double digits. This coupon rate as opposed to an interest rate
           payable to a financial institution represents a significant saving on the loan balance of $65
           million.
     6.7   Debt raised through financial institutions require the repayment of interest and if the loan is
           not interest only then the repayment of principle would also be required. Regular
           repayments of interest and principle would restrict cashflows of the Company over the next
           few years. The Convertible Notes require repayment of their face value plus any accrued
           but unpaid interest at the end of five years and repayment only occurs in the event that the
           Convertible Note holder has not converted the Note to shares.
     6.8   Raising funds through a financial institution would require the debt to be secured. Secured
           debt would require the assets of the Company to be secured, thereby restricting the
           Company to leverage its cashflows and assets. The Convertible Notes are unsecured.
     6.9   The issue of the Convertible Notes to Tiger would raise $15 million of the entire capital
           raising of $65 million, representing approximately 23.3% of funds raised. Given Tiger’s
           interest in this raising of $65 million is not dominate, it may be reasonable to assume the
           terms of Convertible Notes issued to Tiger as fair, as there are the same terms for all
           Convertible Notes and driven by market forces prevailing at the time.
     6.10 Based on the above facts, we are of the opinion that the issue of 11,538,461 Convertible
          Notes to be issued to Tiger that may potentially issue up to 11,538,461 shares to Tiger by
          Mission Biofuels (pursuant to Resolution 2) is, considered fair to the non-associated
          shareholders of Mission Biofuels.

7. Reasonableness of the Offer
           We set out below some of the advantages and disadvantages and other factors pertaining
           to the proposal pursuant to Resolution 2.
     Advantages
     7.1. As noted in this report, if shareholder approval is obtained the Convertible Notes issued to
          Tiger of 11,538,461 will be converted into 11,538,461 shares at $1.30 per share which is at
          a premium to the underlying volume weighted average shares price at the time of offering of
          Convertible Notes.


                                                    - 20 –

                   Mission Biofuels Limited                                                                  30
                                                                                      Appendix A (Cont’d)

     7.2 The Convertible Notes are issued on the same terms and conditions as outlined in Section
         1.6 to Tiger as to all other Convertible Note holders.

     7.3 Through the passing of Resolution 1, the Company may increase its cash resources
         available to fund its operations, which may significantly increase its ability to generate future
         profits and increase the share price of a Mission Biofuel share.

     7.4 The issue of Convertible Notes may result upon conversion of $65 million in shares and
         inject $65 million cash into the Company and may enhance the financial position of the
         Company, in our opinion, at a minimal cost to the Company.

     Disadvantages

      7.5 Tiger would increase its voting power in the Company from 17.58% to 26.86% of the
          expanded capital if Resolution 2 is passed and consummated and Tiger convert all of their
          Convertible Notes to shares and assuming no other Convertible Note holders convert their
          Convertible Notes into shares.

           The above would result in increased voting power by Tiger which could potentially increase
           Tiger’s ability to influence future decisions. However, we note that Tiger will not obtain
           absolute control of the Company and presumably all shareholders will benefit from
           decisions that are intended to increase shares prices or generate future profits.
8. Other
    Transferability

    The Convertible Notes are not transferable within twelve months of issue or in respect of the
    shares within twelve months after allotment date. No Convertible Notes or shares may be
    transferred to a person whose voting power would increase to above 20% unless shareholder
    approval is given pursuant to item 7 of Section 611 of the Corporations Act 2001.

    Redemption

    Unless otherwise agreed by the Convertible Note holder and the Company in writing, a
    Convertible Note is redeemed by the Company paying the Convertible Note holder the face value
    of that Convertible Note plus any accrued but unpaid interest.

9. Conclusion as to Fairness and Reasonableness

    After taking into account the matters referred above and elsewhere in this report, we are of the
    opinion that the proposal as outlined in Resolution 2 may, on balance, be considered fair and
    reasonable to the non-associated shareholders of Mission Biofuels.

10. Sources of Information

    10.1 In making our assessment as to whether the proposal is fair and reasonable, we have
          reviewed relevant published available information and other unpublished information of the
          Company that is relevant to the current circumstances. In addition, we have held
          discussions with the management of Mission Biofuels about the present and future
          operations of Mission Biofuels. Statements and opinions contained in this report are given
          in good faith but in the preparation of this report, we have relied in part on information
          provided by the directors and management of Mission Biofuels.

    10.2    Information we have received includes, but is not limited to:

            •   Draft Notice of General Meeting of Shareholders of Mission Biofuels and draft
                explanatory Statement prepared to 28 March 2007;
            •   Discussions with management and directors of Mission Biofuels;
            •    Details of historical market trading of Mission Biofuels ordinary fully paid shares
                recorded by the ASX to 26 March 2007;
                                                   - 21 –

                      Mission Biofuels Limited                                                               31
                                                                                      Appendix A (Cont’d)




             •     Half Year financial report for Mission Biofuels as at 31 December 2006;
             •     Audited annual financial report for Mission Biofuels as at 30 June 2006;
             •     Announcements made by Mission Biofuels to the ASX to 30 March 2007;
             •     Mission Biofuels internet website; and
             •     Draft Convertible Note Deed Poll for Mission Biofuels.

      10.3         Our report includes Appendix A attached to this report.

Yours faithfully

BENTLEYS MRI PERTH FINANCIAL SERVICES PTY LTD
(Australian Financial Services Licence No. 259864)




MAURICE L ANGHIE                                                     PATRICK W WARR
DIRECTOR                                                             DIRECTOR




                                                   - 22 -
                       Mission Biofuels Limited                                                             32
                                                                                    Appendix A (Cont’d)


                                              Appendix A

Financial Services Guide

Bentley MRI Perth Financial Services Pty Ltd

   1. Bentleys MRI Perth Financial Services Pty Ltd (ABN 92 064 260 260) (BMRIFS) is a specialist
      valuation firm which provides valuation advice, valuation reports and Independent Expert’s
      Reports in relation to takeovers and mergers, commercial litigation, tax and stamp duty
      matters, assessments of economic loss, commercial and regulatory disputes.

   2. BMRIFS holds Australian Financial Services Licence No 259864.

Financial Services Guide

   3. The Corporations Act 2001 authorises BMRIFS to provide this Financial Services Guide (FSG)
      in connection with its provision of Independent Expert’s Report (Report) to be sent to Mission
      Biofuels.

   4. This FSG is designed to assist retail clients in their use of any general financial product advice
      contained in the Report. This FSG contains information about BMRIFS generally, the financial
      services we are licensed to provide, the remuneration we may receive in connection with the
      preparation of the Report, and if complaints against us ever arise how they will be dealt with.

Financial services we are licensed to provide

   5. Our Australian financial services licence allows us to provide financial product advice for the
      following classes of financial products:

           •   securities; and
           •   superannuation

       to retail and wholesale clients.

General financial product advice

   6. The Report contains only general product advice. It was prepared without taking into account
      your personal objectives, financial situation or needs.

   7. You should consider your own objectives, financial situation and needs when assessing the
      suitability of the Report to your own situation. You may wish to obtain personal financial
      product advice from the holder of an Australia Financial Services Licence to assist you in this
      assessment.

Fees, commissions and other benefits we may receive

   8. BMRIFS charges fees to produce reports, including this Report. These fees are negotiated and
      agreed with the entity who engages BMRIFS to provide a report. Fees are charged on an
      hourly basis or as a fixed amount depending on the terms of the agreement with the person
      who engages us.

   9. Bentleys MRI Perth Pty Ltd, an associated company have an agreement with Mission Biofuels
      to source feedstock related acquisitions for Mission Biofuels. In the event that this is
      successful, a facility fee may be earned.

   10. Neither BMRIFS nor its directors and officers receive any commissions or other benefits,
       except for the fees for services referred to above.

                                                - 23 -

                   Mission Biofuels Limited                                                                33
                                                                                    Appendix A (Cont’d)


   11. All of our employees receive a salary. Our employees are eligible for bonuses based on overall
       performance and the firm’s profitability, and do not receive any commissions or other benefits
       arising directly from services provided to our clients. The remuneration paid to our directors
       reflects their individual contribution to the company and covers all aspects of performance. Our
       directors to not receive any commissions or other benefits arising directly from services
       provided to our clients.

   12. We do not pay commissions or provide other benefits to other parties for referring prospective
       clients to us.

Complaints

   13. If you have a complaint, please raise it with us first, using the contact details listed below. We
       will endeavour to satisfactorily resolve your complaint in a timely manner.

   14. If we are not able to resolve your complaint to your satisfaction within 45 days of your written
       notification, you are entitled to have your matter referred to the Financial Industry Complaints
       Service (FICS), an external complaints resolution service. You will not be charged for using the
       FICS service.

Contact details

   15. BMRIFS can be contacted by sending a letter to the following address:

        Level 1
        10 Kings Park Road
        West Perth WA 6005

Qualifications, declarations and consents

Qualifications

   1.   BMRIFS is a licensed investment adviser under the Corporations Act. BMRIFS’s authorised
        representatives have extensive experience in the field of corporate finance, particularly in
        relation to the valuation of shares and businesses and have prepared numerous valuations
        and Independent Expert’s Reports.

   2.   This report was prepared by Mr Maurice Anghie and Mr Patrick Warr who is an authorised
        representative and BMRIFS. Mr Anghie and Mr Warr have significant experience each in the
        provision of advice.

Declarations

   3.   This report has been prepared at the request of the Mission Biofuels and may be used by
        Mission Biofuels. It is not intended that this report should serve any purpose other than as an
        expression of our opinion in relation to the issue of Convertible Notes to Tiger.




                                                 - 24 -

                    Mission Biofuels Limited                                                                34
                                                                                    Appendix A (Cont’d)




Interests

   4.   At the date of this report, neither BMRIFS, Mr Anghie or Mr Warr have any interest in the
        outcome of the is of Convertible Notes to Tiger. BMRIFS is entitled to receive a fee for the
        preparation of this report based on time expended at our standard hourly professional rates.
        With the exception of the above fee, BMRIFS will not receive any other benefits, either directly
        or indirectly, for or in connection with the preparation of this report.

Indemnification

   5.   As a condition of BMRIFS’s agreement to prepare this report, Mission Biofuels agrees to
        indemnify BMRIFS in relation to any claim arising from or in connection with its reliance on
        information or documentation provided by or on behalf of Mission Biofuels which is false or
        misleading or omits material particulars or arising from any failure to supply relevant
        documents or information.

Consents

   6.   BMRIFS does not consent to the inclusion of this report in the form and context in which it is
        any publication without its express authority.




                                                - 25 -


                   Mission Biofuels Limited                                                                35
Appendix B




             Mission Biofuels Limited   36
Appendix C

The Convertible Note Deed Poll which details all the terms and conditions of the Convertible Notes
is contained in the following 22 pages.




                   Mission Biofuels Limited                                                          37
                                                                Appendix C (Cont’d)




Convertible Note Deed Poll
Mission Biofuels Limited
ACN 117 065 719




The Clayton Utz contact for this document is
Leah Chick and Kerry Matthews on +61 2 9353 4000

Clayton Utz
Lawyers
Levels 19-35 No. 1 O'Connell Street Sydney NSW 2000 Australia
PO Box H3 Australia Square Sydney NSW 1215
T +61 2 9353 4000 F +61 2 8220 6700

www.claytonutz.com

Our reference 215/15477/00003333




                  Mission Biofuels Limited                                            38
                                                                                                Appendix C (Cont’d)


Table of contents

1.    Definitions and interpretation……………………………………………………...                                                        1
1.1   Definitions……………………………………………………………………………….                                                                   1
1.2   Interpretation……………………………………………………………………………                                                                  1

2.    Nature and status of Convertible Notes…………………………………………                                                       1
2.1   Constitution of Convertible Notes…………………………………………………….                                                       1
2.2   Terms of Convertible Notes................................................................................   1
2.3   Form of Convertible Notes…………………………………………………………….                                                            1
2.4   Creation of Convertible Notes………………………………………………………...                                                        1
2.5   Effect of registration……………………………………………………………………                                                             2

3.    Enforceability………………………………………………………………………….                                                                  2
3.1   Noteholder may enforce……………………………………………………………….                                                              2
3.2   Noteholders bound………………………………………………………...…………..                                                              2
3.3   Independent enforcement…………………………………………………………….                                                              2

4.    General…………………………………………………………………………………                                                                       2
4.1   Governing Law…………………………………………………………………………                                                                    2
4.2   Jurisdiction……………………………………………………………………………...                                                                 2

Annexure - Convertible Note Conditions…………………………………………………                                                          4




                                                                                                                       i



                    Mission Biofuels Limited                                                                               39
                                                                                      Appendix C (Cont’d)


Convertible Note Deed Poll made 4 April 2007

By Mission Biofuels Limited ACN 117 065 719 ("Mission")
In favour of the Noteholders from time to time
Background

(a)     Mission proposes to issue Convertible Notes on the terms and conditions contained in the
        Convertible Note Conditions.

(b)     It is intended that the Noteholders will have the benefit of this document.

Operative provisions

1.      Definitions and interpretation
1.1     Definitions

        In this document:

        (a)        "Convertible Note Conditions" means, generally, the terms and
                   conditions contained in the annexure as amended, varied or replaced
                   from time to time; and

        (b)        words and expressions defined, or incorporated by reference into the
                   Convertible Note Conditions, have the same meanings when used in this
                   document.

1.2     Interpretation

        Condition 23(a) of the Convertible Note Conditions applies to the interpretation of this
        document as if every reference to "these Conditions" is replaced with "this document" and to
        a "Condition" is replaced with a "clause".

2.    Nature and status of Convertible Notes
2.1     Constitution of Convertible Notes

        Each Convertible Note is a debt obligation of Mission constituted by, and owing under, this
        document.

2.2     Terms of Convertible Notes

        Each Convertible Note is issued on, and subject to, the provisions of this document and the
        Convertible Note Conditions.

2.3     Form of Convertible Notes

        Each Convertible Note will be issued in registered form by entry in the Register.

2.4     Creation of Convertible Notes

        Each Convertible Note will be created and issued immediately upon the entry in the Register
        of the subscriber for that Convertible Note as its initial Noteholder.



                                                                                                       1


                  Mission Biofuels Limited                                                                  40
                                                                                Appendix C (Cont’d)


2.5   Effect of registration

      Each entry in the Register in respect of a Convertible Note constitutes an unconditional and
      irrevocable covenant by Mission in favour of the person whose name is so registered that
      Mission will:

      (a)        (Make all payments): make all payments of principal, distributions and
                 other amounts in respect of the Convertible Note in accordance with this
                 document and the Convertible Note Conditions; and

      (b)        (Perform other obligations): perform all of its other obligations in full,
                 and by the due dates, referred to in this document and the Convertible
                 Note Conditions.

3.    Enforceability
3.1   Noteholder may enforce

      This document operates as a deed poll and is enforceable against Mission in accordance with
      its terms by each Noteholder in respect of the Convertible Notes held by it, even though the
      Noteholder is not a party to, or is not in existence at the time of execution and delivery of,
      this document.

3.2   Noteholders bound

      Each Noteholder, and each person claiming through each Noteholder, is bound by, and is
      deemed to have notice of, the provisions of this document and the Convertible Note
      Conditions.

3.3   Independent enforcement

      Each Noteholder may enforce its rights under this document and the Convertible Note
      Conditions independently from each other Noteholder, subject to any limitations imposed by
      this document and the Convertible Note Conditions.

4.    General
4.1   Governing Law

      This document is governed by and must be construed according to the law applying in
      Western Australia.

4.2   Jurisdiction

      Mission and each Noteholder irrevocably:
      (a)      submits to the non-exclusive jurisdiction of the courts of Western Australia and
               the courts competent to determine appeals from those courts, with respect to any
               proceedings which may be brought at any time relating to this document, the
               Convertible Note Conditions and the Notes; and

      (b)        waives any objection it may now or in the future have to the venue of any
                 proceedings, and any claim they may now or in the future have that any
                 proceedings have been brought in an inconvenient forum, if that venue falls
                 within clause 4.1.

                                                                                                     2


                Mission Biofuels Limited                                                                 41
                                                                           Appendix C (Cont’d)


Executed as a deed.
Executed by Mission Biofuels Limited ACN
117 065 719 in accordance with section 127 of the
Corporations Act by or in the presence of:



Signature of Secretary/other Director               Signature of Director or Sole Director and
                                                    Secretary



Name of Secretary/other Director in full            Name of Director or Sole Director and
                                                    Secretary in full




                                                                                                 3




                      Mission Biofuels Limited                                                       42
                                                                           Appendix C (Cont’d)


                        Annexure - Convertible Note Conditions
     The following are the terms and conditions of each Convertible Note

1.   Interpretation and Definitions
     Unless the context otherwise requires:

     "Allotment Date" means, in respect of a Share issued on Conversion of a
     Convertible Note, the date on which the Share is allotted and issued under
     Condition 6.

     "Application Form" means an application for Convertible Notes or entitlement and
     acceptance form attached to the offer for the issue of Convertible Notes.

     "ASTC Settlement Rules" means the operating rules of the ASTC as amended or
     replaced from time to time.

     "ASX" means Australian Stock Exchange Limited.

     "AWST" means Australian Western Standard Time.

     “Board" means the Board of directors of the Company.

     "Business Day" means any day that is not a Saturday, Sunday or any other day
     which is a public holiday or a bank holiday in the place where an act is to be
     performed or a payment is to be made.

     "Cleansing Notice" means a notice given by the Company under section 708A(6) of
     the Corporations Act.

     "Company" means Mission Biofuels Limited ACN 117 065 719 of Level 8, 50 St
     Georges Terrace, Perth, Western Australia.

     "Conditions" means these terms and conditions of issue of the Convertible Notes.

     "Constitution" means the constitution of the Company.

     "Conversion" means the conversion of the Convertible Notes into Shares in
     accordance with these Conditions, and "Convert" and "Converted" will be
     interpreted accordingly.

     "Conversion Date" means, in respect of a Convertible Note, the date on which it is
     Converted.

     "Conversion Notice” means a notice in substantially the form set out in Schedule 1.

     "Conversion Number” is 1 subject to adjustment in accordance with Conditions 8 to
     11.

     "Convertible Note" means a Convertible Note having the Face Value and issued in
     accordance with and subject to these Conditions.

     "Convertible Note Certificate" means the document of that name to which these
     Conditions of issue are attached.

     "Corporations Act" means the Corporations Act 2001 (Cth).



                                                                                            4

               Mission Biofuels Limited                                                          43
                                                                       Appendix C (Cont’d)

"Event of Default" means any of the events of default set out in Condition 16.

"Face Value" means the face value of a Convertible Note as set out in Condition
2(b).

"Government Agency" means any foreign or Australian government or
governmental, semi-governmental, administrative, fiscal or judicial body, department,
commission, authority, tribunal, agency or entity, or any minister of the Crown in right
of the Commonwealth of Australia or any state.

"Insolvency Event" means in relation to a body corporate:
(a)      the body corporate being unable to pay all of its debts, as and when they
         become due and payable;
(b)      an administrator of the body corporate being appointed under the
         Corporations Act;
(c)      the body corporate or a subsidiary executing a deed of company
         arrangement otherwise than for the purpose of an amalgamation or
         reconstruction;
(d)      the entry by the body corporate into a scheme of arrangement or a
         composition with, or assignment for the benefit of, all or any class of its
         creditors, or a moratorium involving any of them, otherwise than for the
         purpose of an amalgamation or reconstruction;
(e)      the body corporate being insolvent within the meaning of section 95A(2) of
         the Corporations Act;
(f)      the body corporate being or stating that it is unable to pay its debts when
         they fall due;
(g)      the appointment of a receiver or receiver and manager in respect of the
         body corporate or any part of its property; or
(h)      the making of a winding up or dissolution order, or the passing of a
         resolution for winding up or dissolution, in respect of the body corporate
         except for the purposes of reconstruction or amalgamation.

"Issue Date" means, in respect of a Convertible Note, the date on which the
Convertible Note is issued (expected to be 16 May 2007).

"Listing Rules" means at any time the listing rules of the ASX in force at that time.

"Material Adverse Effect" means a material adverse effect on the ability of the
Company to perform its obligations under these Conditions or on the financial
condition or business of the Company.

"Maturity Date" means, in respect of a Convertible Note, 16 May, 2012.

"Note Deed Poll" means the note deed poll under which the notes are constituted.

"Noteholder" means, in relation to any Convertible Notes, the person registered in
the Register as the holder of those Convertible Notes.

"Placement Letter" means that certain letter to the Noteholders by the Company
dated as of 28 March 2007 in connection with the offering of the Convertible Notes.



                                                                                        5



          Mission Biofuels Limited                                                           44
                                                                           Appendix C (Cont’d)



     "Register" means the register of Noteholders maintained by the Company under
     Condition 19.

     "Regulatory Authority" means any of ASIC, ASX, the Takeovers Panel or any
     Government Agency, whether having jurisdiction in Australia or elsewhere.

     "Securities" means Shares or a right or option to acquire Shares in the Company.

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

     "Subsidiary" and "Related Body Corporate" have the meaning given to those
     terms by the Corporations Act.

     "Takeovers Panel" means the Panel as defined by the Corporations Act.

     "Tax" means any taxes, duties, fees, rates, charges and imposts of all kinds
     assessed, levied or imposed by the Commonwealth, a state or any other
     government, regional, municipal or local authority (Australian or overseas) and
     includes capital gains tax, fringe benefits tax, income tax, withholding tax, prescribed
     payments tax, superannuation guarantee charge, training guarantee levy,
     undistributed profits tax, payroll tax, goods and services tax, group tax, land tax,
     import duty, excise, stamp duty, municipal and water rates, interest on tax payments
     and additional tax by way of penalty.

     “VWAP” means the volume weighted average sale price of Shares sold on ASX
     calculated:

     (a)      including all on-market trades without condition codes and any trades with
              condition codes XT (Crossed Trade) and SH (Short Trade); but
     (b)      excluding any off-market trades, any trades with condition codes other than
              those condition codes referred to in paragraph (a) above or any trades that
              are subsequently cancelled.

2.   The Notes
     (a)      The Company acknowledges its indebtedness in respect of, and promises to
              pay all amounts due in relation to, each Convertible Note on the terms
              contained in the Note Deed Poll and these Conditions.
     (b)      Each Convertible Note has a face value of $1.30.
              ("Face Value") as advised by the Company in the Placement Letter.
     (c)      The Face Value must be paid in full by the Noteholder to the Company in
              cleared funds by the date specified in the Placement Letter.
     (d)      The Company may issue Convertible Notes up to a total face value of
              AU$65,000,000 or such values as advised by the Company to Noteholders
              in the Placement Letter.
     (e)      Every offer for issue, or invitation to apply for the issue, of the Convertible
              Notes within the Commonwealth of Australia must be one that does not
              need disclosure to investors under Part 6D.2 of the Corporations Act and is
              not made to a person who is a "retail client" within the meaning of section
              761G of the Corporations Act.

                                                                                                6



               Mission Biofuels Limited                                                             45
                                                                                 Appendix C (Cont’d)



3.   General Terms of Issue of Convertible Notes
     (a)        Each Convertible Note:
                (i)        is Convertible in accordance with Condition 5;
                (ii)       is redeemable in accordance with Condition 13;
                (iii)      is interest bearing in accordance with Condition 4;
                (iv)       is an unsecured obligation of the Company ranking equally with any
                           other Convertible Notes and other unsecured creditors of the
                           Company; and
                (v)        is only transferable in accordance with Condition 7.

     (b)        If a Convertible Note is redeemed by the Company or Converted then the
                Convertible Note is automatically cancelled and may not be re-issued.

     (c)        The Company will not apply for official quotation of the Convertible Notes on
                ASX or any other stock exchange.

     (d)        Except as otherwise provided for in these Conditions, a Convertible Note
                does not give its Noteholder the right to participate in issues of new
                securities or capital reconstructions affecting the holders of Shares.

4.   Interest

     An interest of 4.00% p.a. is payable semi-annually on each 6 month and 12 month
     anniversary of the Issue Date in arrears in respect of the Convertible Notes based on
     a year of 365 days.

5.   Conversion of Convertible Notes
     (a)        The Noteholder may, at any time prior to 2.00pm AWST on the Maturity
                Date, elect to Convert some or all of its Convertible Notes by giving a
                Conversion Notice to the Company on receipt of which by the Company,
                those Convertible Notes will be deemed to Convert and such Conversion
                Notice once given is irrevocable.

     (b)        The Company may elect to Convert some or all of the Convertible Notes at
                any time when the daily VWAP for a period of 90 consecutive trading days is
                1.5 times the Face Value, provided that no Event of Default has occurred
                and is continuing. The Company is required to give a Noteholder 10
                Business Days notice prior to converting all or any of the Convertible Notes
                under this Condition 5(b). and the Company must notify the Noteholder that
                the Conversion has occurred within 10 Business Days.

     (c)        On Conversion of all or any of the Convertible Notes pursuant to Conditions
                5(a) or 5(b), a Noteholder is entitled to be allotted the Conversion Number of
                Shares for each Convertible Note it holds that is Converted. Where the total
                number of Shares that a Noteholder becomes entitled to on Conversion
                includes a fraction, that number will be rounded down to the next whole
                number.

     (d)        A Convertible Note is not capable of Conversion in part.

                                                                                                  7

                  Mission Biofuels Limited                                                             46
                                                                           Appendix C (Cont’d)




6.   Allotment and Ranking of Shares
     (a)     The Company must issue the Shares that a Noteholder becomes entitled to
             under Condition 5(c) no later than 3 Business Days after the Conversion
             Date. For the avoidance of doubt, the Noteholder for the purpose of any
             record date shall be deemed to own such Shares as at the Conversion
             Date.
     (b)     The Company will procure that a holding statement for any Shares is sent to
             the relevant Noteholders in accordance with the ASTC Settlement Rules.
     (c)     The Company will apply for the Shares issued on Conversion of Convertible
             Notes to be quoted on ASX as soon as practicable, and in any event within
             2 Business Days of the Allotment Date.
     (d)     Subject to the restrictions set out in Condition 7, Shares issued on
             Conversion will rank equally in all respects with the other Shares on issue at
             the Allotment Date.

7.   Transferability
     Convertible Notes and Shares issued under Condition 6 are transferable subject to
     the following restrictions:

     (a)     Subject to Condition 7(c), Convertible Notes and Shares issued under
             Condition 6 must not be sold, transferred or offered for sale (and the holder
             must not grant, issue or transfer any interest in, or options or warrants over)
             (“Dealing”):
             (i)        in respect of Convertible Notes, within 12 months after their Issue
                        Date; and
             (ii)       in respect of Shares issued under Condition 6, within 12 months
                        after their Allotment Date.

     (b)     Condition 7(a) does not apply in respect of any Dealing where the Dealing
             (and offer of the Dealing) does not need disclosure to investors under Part
             6D.2 of the Corporations Act due to one of the exceptions under section 708
             (other than section 708(1)) of the Corporations Act or due to section 708A of
             the Corporations Act (including a Dealing in relation to Shares for which the
             Company has provided a Cleansing Notice).

     (c)     Notwithstanding Condition 7(a) and 7(b), no Convertible Notes or Shares
             may be transferred to a person whose voting power for the purposes of
             Chapter 6 of the Corporations Act would increase above 20% upon the
             occurrence of such transfer (or upon the subsequent Conversion of the
             Convertible Notes subject to such transfer) unless Company shareholder
             approval is given to the transfer pursuant to item 7 of section 611 of the
             Corporations Act.

     (d)     In the event that the Company elects to Convert the Noteholders as per
             5(b), the Company will issue a Cleansing Notice, promptly but in no event
             later than 3 Business Days of such Conversion, so that Condition 7(a) does
             not apply.

                                                                                              8




               Mission Biofuels Limited                                                           47
                                                                       Appendix C (Cont’d)


8.   Adjustments for Bonus Issues and Rights Issues
     (a)   Subject to Condition 8(b), if the Company makes a pro rata bonus issue or a
           rights issue of Securities to holders of Shares, the Conversion Number
           automatically adjusts in accordance with the following formula:



           where:

           New CN means the Conversion Number that will apply after the application
           of this formula;

           Old CN means the Conversion Number that applied immediately before the
           application of this formula;

           P means the VWAP during the period from the 1st Business Day after the
           announcement of the bonus or rights issue to ASX up to and including the
           last Business Day of trading cum rights or bonus issue;

           S means the number of Shares on issue immediately before the issue of
           new Shares pursuant to the rights or bonus issue of Securities;

           New S means the number of Shares to be issued pursuant to the rights or
           bonus issue of Securities; and

           SP means the subscription price per Share for a rights issue and 0 for a
           bonus issue.

     (b)   No adjustment will be made if:

           (i)        the component “SP” exceeds the component “P”; or

           (ii)       the issue of Shares is made pursuant to a dividend reinvestment
                      plan, bonus share plan, employee or executive share or option
                      plan, or a share top up plan.

9.   Adjustments for Off-Market Buy-Backs
     (a)   Subject to Condition 9(b), if the Company undertakes an off-market buy-
           back of Shares, the Conversion Number automatically adjusts in
           accordance with the following formula:




           where:

           New CN means the Conversion Number that will apply after the application
           of this formula;

           Old CN means the Conversion Number that applied immediately before the
           application of this formula;

                                                                                        9


             Mission Biofuels Limited                                                        48
                                                                            Appendix C (Cont’d)

               P means the VWAP during the 20 Business Days (including Business Days
               on which Shares are not traded on ASX) before the announcement of the
               buy-back;

               S means the number of Shares on issue immediately before the buy-back;

               BBS means the number of Shares bought-back under the buy-back; and

               BBP means the buy-back price per Share.


      (b)      No adjustment will be made if the component “BBP” is less than the
               component “P”.



10.   Adjustments for Returns Of Capital
      If the Company makes a return of capital to the holders of Shares (other than by way
      of a buy-back of Shares), the Conversion Number automatically adjusts in
      accordance with the following formula:

                                           New CN = Old CN x (P/(P-C))

      where:

      New CN means the Conversion Number that will apply after the application of this
      formula;

      Old CN means the Conversion Number that applied immediately before the
      application of this formula;

      P means the VWAP during the period from the first Business Day after the
      announcement of the return of capital to ASX up to and including the last Business
      Day of trading cum the return of capital;

      C means the amount of cash and value of property distributed (as reasonably
      determined by the Board) to holders of Shares per Share provided that C must not
      be less than 0.



11.   Adjustments for Capital Reconstructions
      If Shares are reconstructed, consolidated, divided or reclassified into a lesser or
      greater number of securities:


      (a)      the Convertible Notes will be reconstructed, consolidated, divided or
               reclassified on the same basis in accordance with the Listing Rules as they
               apply to the Company; and

      (b)      the Conversion Number will be adjusted as reasonably determined
               appropriate by the Board.



                                                                                            10


                Mission Biofuels Limited                                                          49
                                                                           Appendix C (Cont’d)


12.   Discretion in Adjustments
      If the Board determines in its reasonable opinion that the application of any of
      Conditions 8 to 11 would affect the relative value of Convertible Notes and Shares to
      the detriment to the Noteholders, the Board may:
      (a)     make any alterations to the Face Value of Convertible Notes or the
              Conversion Number; or

      (b)     offer Noteholders the ability to participate in any distribution that they would
              have been entitled to as holders of Shares had their Convertible Notes been
              converted immediately prior to the date that holders of Shares were entitled
              to participate in the distribution,

      where the Board reasonably considers it appropriate or necessary to do so in order
      to maintain the relative value of Convertible Notes and Shares.

13.   Redemption
      (a)     Unless otherwise Converted by the Noteholder or the Company in
              accordance with Condition 5, the Company must redeem each Convertible
              Note on its Maturity Date (such redemption by the Company may only occur
              after 2pm AWST on the Maturity Date).

      (b)     Other than pursuant to Condition 13(a) above, Condition 16 below,
              Condition 17 (a) (ix) below or as otherwise agreed by the Company and the
              Noteholder in writing, the Company may not redeem the Convertible Notes.

      (c)     Unless otherwise agreed by the Noteholder and the Company in writing, a
              Convertible Note is redeemed by the Company paying the Noteholder the
              Face Value of that Convertible Note, plus any accrued but unpaid interest, in
              Australian dollars by deposit into an account with an Australian bank or
              other financial institution nominated by the Noteholder or by cheque drawn
              in favour of the Noteholder and sent by pre-paid post to the address of the
              Noteholder recorded in the Register.

14.   Notices of, and Voting at, General Meetings
      (a)     Noteholders have the same right as holders of Shares to receive accounts,
              reports and notices of general meetings of the Company’s shareholders and
              to attend those meetings.

      (b)     Noteholders are not entitled to speak or vote at general meetings of the
              Company’s shareholders except as provided for in the Corporations Act or
              the Listing Rules.

      (c)     If a Noteholder holds Shares, nothing in this Condition 14 will prevent the
              Noteholder from speaking or voting at general meetings of the Company’s
              shareholders in its capacity as shareholder.

15.   Representations and Warranties
      The Company represents and warrants for the benefit of each Noteholder as at the
      Issue Date that other than as disclosed in writing to the Noteholders:

                                                                                            11


                Mission Biofuels Limited                                                         50
                                                                      Appendix C (Cont’d)

(a)   the Company is a corporation validly existing under the laws of the place of
      its incorporation;
(b)   the Company has full power and authority to issue Convertible Notes on
      these Conditions;
(c)   no event has occurred and is continuing which constitutes an Event of
      Default or which with lapse of time or notice of other conditions would
      become an Event of Default;
(d)   to the best of the Company’s knowledge, information and belief no litigation,
      arbitration, Tax claim, dispute or administrative or other proceeding is
      current or pending or to its knowledge, threatened, which if adversely
      determined is likely to have a Material Adverse Effect;
(e)   the Company has the corporate power to enter into and perform its
      obligations under the Note Deed Poll, these Conditions, the Convertible
      Notes, the Placement Letter and any related document (the “Transaction
      Documents”) and to carry out the transactions contemplated by the
      Transaction Documents;
(f)   the Company has taken all necessary corporate action to authorise the entry
      into and performance of the Transaction Documents and to carry out the
      transactions contemplated by the Transaction Documents;
(g)   neither the entry into nor performance by the Company of its obligations
      under the Transaction Documents nor any transaction contemplated under
      the Transaction Documents violates in any material respect any provision of
      any judgment binding on it, its constituent documents, any law or any
      document, agreement or other arrangement binding on it or its assets;
(h)   as of the date hereof , the Company has the capital structure set out in
      Schedule 2;
(i)   other than as set out in the prospectus released by the Company on March
      31, 2006 for its initial public offering, there is no obligation of the Company
      whether arising under any option or otherwise to issue any equity securities,
      shares, convertible notes, debentures or securities of any kind or nature
      whatsoever in the Company, and there are not agreements or arrangements
      that could call for the issue of, or grant to any person the right to call for the
      issue of, any shares or loan capital of the Company;
(j)   upon the execution of the Transaction Documents by the Company and
      delivery of the same, the Transaction Documents will constitute the legal,
      valid and binding obligations of the Company enforceable against them in
      accordance with their respective terms;
(k)   the issued capital of the Company was duly and validly authorized and
      issued and is fully paid, and was issued in accordance with all applicable
      securities laws, rules and regulations, or pursuant to valid exemptions
      therefrom;
(l)   the Company does not have any current or foreseeable obligation to issue
      further Shares or other such securities in the Company at this time;
(m)   the Company is not in violation or default of any provision of (i) its
      organizational documents, (ii) any judgment, order, writ, decree or material
      contract to which it is a party or by which it is bound, or (iii) any provision of
      any local or foreign statute, rule or regulation applicable to the Company.

                                                                                      12


       Mission Biofuels Limited                                                             51
                                                                          Appendix C (Cont’d)

              Neither the Company nor its Subsidiaries has received any written notice
              from any Regulatory Authority that they have committed any criminal, illegal
              or unlawful act or any violation of or default with respect to any ordinance,
              statute, regulation, order, decree or judgment of any court or government
              agency of relevant jurisdiction which, if committed by them may have an
              adverse effect on the Company or its Subsidiaries; and

      (n)     each of the Company and its Subsidiaries has all franchises, permits,
              licenses, and any similar authority necessary for the conduct of its
              respective business as now being conducted by it and the Company
              believes in good faith that the Company and its Subsidiaries can obtain any
              similar authority for the conduct of the business of each of the Company and
              its Subsidiaries as contained in releases to ASX.

16.   Events of Default and Early Repayment
      Each of the following is an Event of Default (unless the Noteholder confirms
      otherwise in writing):

      (a)     the Company fails to pay the Face Value or other amount when due
              pursuant to the terms of the Convertible Note or otherwise;

      (b)     the Company fails to carry out any provision of these Conditions and the
              Company does not remedy that failure within 10 Business Days after the
              Noteholder gives written notice to the Company requiring it to be remedied;

      (c)     any representations or warranties contained in these Conditions are found
              to have been false or misleading in any material respect when made;

      (d)     there is an Insolvency Event with respect to the Company;

      (e)     the main business undertaking of the Company is sold or the Company is
              merged or consolidated with any other entity;

      (f)     a final judgment or judgments for the payment of money aggregating in
              excess of $1,000,000 are rendered against the Company or any of its
              Subsidiaries and which judgments are not, within sixty (60) days after the
              entry thereof, bonded, discharged or stayed pending appeal, or are not
              discharged within sixty (60) days after the expiration of such stay; or

      (g)     the Company is removed from the Official List of ASX.

      If an Event of Default occurs and is continuing, then in any such event, and at any
      time thereafter, the Noteholder may by written notice to the Company require the
      Company to immediately redeem the Convertible Notes in accordance with Condition
      13(c).

      No such written notice is required from the Noteholder upon the occurrence of an
      Event of Default specified in Condition 16(d).

17.   Covenants by the Company
      (a)     For so long as the Convertible Notes are outstanding, the Company must:
              (i)        comply with these Conditions;
              (ii)       maintain its corporate existence;
                                                                                           13

                Mission Biofuels Limited                                                        52
                                                                           Appendix C (Cont’d)

            (iii)      not amend its Constitution or alter the voting or other rights
                       attached to Shares in a manner that is prejudicial to the interests of
                       Noteholders;

            (iv)       not do or omit to do anything that would preclude the issue of a
                       valid Cleansing Notice on the date such notice is required to be
                       issued under these Conditions;

            (v)        make disclosure of material information to the public as required by
                       the ASX Listing Rules and the Corporations Act;

            (vi)       not incur a total debt obligation (including any unconverted
                       Convertible Notes outstanding at any given time) of higher than
                       2.5x its net worth (being paid up equity plus any retained earnings)
                       without the prior consent of at least 75% of Noteholders (on the
                       basis of one vote for every Convertible Note held unconverted).

            (vii)      not issue more than 25% of the Company's share capital in options
                       or convertible notes, without the prior consent of at least 75% of
                       Noteholders (on the basis of one vote for every Convertible Note
                       held at such time unconverted).

            (viii)     maintain the capacity to issue sufficient Shares to enable the
                       conversion of all of the outstanding Convertible Notes into Shares
                       in accordance with the Conditions.

            (ix)       ensure that in the event of either material asset sales or
                       consolidation or merger or other business combination
                       transactions, that the Noteholders be given at least 5 Business
                       Days notice prior to the event and that the obligation on the notes
                       are assumed by the surviving entity or acquiring entity such that the
                       value of the Notes are not diminished by the event. In any case
                       given such an event the Noteholders can require the surviving or
                       acquiring company to redeemd the Outstanding Notes for their
                       Face Value plus any accrued but unpaid interest.

18.   Certificates
      (a)   Upon the Conversion of a Convertible Note or the redemption of a
            Convertible Note by the Company, the Noteholder must deliver to the
            Company the Convertible Note Certificate and the Company shall cancel the
            Convertible Note Certificate. If the Conversion or redemption relates only to
            some of the Convertible Notes described in a Convertible Note Certificate,
            the Company will issue a further Convertible Note Certificate to the
            Noteholder in respect of the Convertible Notes not Converted or redeemed.
      (b)   If a Convertible Note Certificate becomes worn out or defaced, on
            production and delivery of that Convertible Note Certificate to the Company,
            the Company will cancel it and issue a replacement Convertible Note
            Certificate.
      (c)   If a Convertible Note Certificate is lost or destroyed, then subject to the
            Noteholder providing proof of that loss or destruction and an indemnity
            satisfactory to the Company (at its expense), the Company will give a new
            Convertible Note Certificate to the person entitled to that lost or destroyed
            Convertible Note Certificate.
                                                                                           14



              Mission Biofuels Limited                                                           53
                                                                            Appendix C (Cont’d)


19.   Register
      (a)     The Company must establish and maintain (or cause to be established and
              maintained) a register of Noteholders that records:
              (i)     the names and addresses of all Noteholders;
              (ii)    the number of Convertible Notes held by the Noteholder;
              (iii)   the Face Value for each Convertible Note;
              (iv)    the date of issue or transfer of the Convertible Notes;
              (v)     details of any redemption or Conversion of the Convertible Notes; and
              (vi)    any other information the Company considers necessary or desirable.

      (b)     A Noteholder must give the Company notice in writing of any change of
              name or address or other details, provided that failure to give such notice
              shall not affect any of the Company’s obligations under the Convertible
              Notes but provided further that in this event the Company shall be entitled to
              rely on the change of name or address or other details previously provided
              in accordance with this clause . Notice of change of name or address must
              be accompanied by such evidence as the Company reasonably requires.
              On receipt of the notice, the Company must alter the register of Noteholders
              accordingly.

      (c)     The register of Noteholders maintained under this Condition, in the absence
              of manifest error, is conclusive of the details set out in Condition 19(a).

      (d)     No notice of any trust or other interest in any Convertible Note will be
              entered in the Register and the Company will not be obliged to take notice
              of any other interest or claim to a Convertible Note, other than as provided
              in the Register, except as ordered by a court of competent jurisdiction or as
              required by law.

20.   Amendment
      Subject to complying with the Corporations Act and the Listing Rules, the Company
      may without the consent or approval of Noteholders amend or add to these
      Conditions if such amendment or addition is, in the reasonable opinion of the Board:
      (a)     of a formal, minor or technical nature;
      (b)     made to correct a manifest error; or
      (c)     not likely (taken as a whole with all other amendments or additions) to be
              disadvantageous or prejudicial to any individual Noteholder (relative to each
              other Noteholder) or to the interest of Noteholders as a whole.

21.   Notices
      (a)     Any notice, demand, consent or other communication to be made or given
              under these Conditions must be in writing and signed by a person duly
              authorised by the party giving it and shall be served either by delivery, by
              facsimile, by email or by pre-paid courier to the address of the party as
              specified in Condition 21(c) or at such substituted address as may be
              advised by notice in writing from time to time.
                                                                                            15




                Mission Biofuels Limited                                                          54
                                                                              Appendix C (Cont’d)



      (b)     All notices shall be deemed to be given when sent by:
              (i)       pre-paid courier or delivered in person, when delivered;
              (ii)      pre-paid post, 2 Business Days after the date of posting (if posted
                        to an address in the same country) or 7 Business Days after the
                        date of posting (if posted to an address in another country); and
              (iii)     facsimile or email, on receipt by the recipient,
              provided that a notice deemed to be given on a day other than a Business
              Day or at a time later than 4.00pm in the place at which the notice is given,
              will be deemed to have been given at the commencement of business on
              the next Business Day in that place.

      (c)     Notice under these Conditions must be given as follows:
              (i)        Company

                          Mission Biofuels Limited
                          Attention: Mr Peter Williams Company Secretary
                          Level 8, 50 St Georges Terrace
                          PERTH WA 6000
                          Fax: +61 (08) 9218 9100
                          Email: peterwilliams@missionbiofuels.com

              (ii)       Noteholder
                         The address, fax number or email address set out in the Register.

22.   Obligations of Noteholders
      Each Convertible Note is issued on the condition that each Noteholder is bound by
      and complies with the terms and conditions of the Note Deed Poll and these
      Conditions.

23.   Miscellaneous
      (a)     In these Conditions:
              (i)        reference to money or $ is to Australian dollars, unless otherwise
                         stated;
              (ii)       the singular includes the plural and the plural includes the singular;
              (iii)      the use of one gender shall include all other genders;
              (iv)       representations, agreements, covenants, obligations or warranties,
                         by more than one person shall include those persons jointly and
                         each of them severally;
              (v)        a party includes the party’s executors, administrators, successors
                         and permitted assigns
              (vi)       a person includes a body corporate;
              (vii)      a statute, regulation or provision of a statute or regulation
                         (Statutory Provision) includes:



                                                                                              16

                Mission Biofuels Limited                                                            55
                                                                       Appendix C (Cont’d)

                 (A)         that Statutory Provision as amended or re-enacted from
                             time to time; and

                 (B)         a statute, regulation or provision enacted in replacement of
                             that Statutory Provision;

      (viii)     “including” and similar expressions are not words of limitation;

      (ix)       where a word or expression is given a particular meaning, other
                 parts of speech and grammatical forms of that word or expression
                 have a corresponding meaning; and

      (x)        headings are for convenience only and do not form part of these
                 Conditions or affect their interpretation.

(b)   The law of Western Australia governs these Conditions and the parties
      submit to the jurisdiction of the courts of Western Australia and the Federal
      Court of Australia.

(c)   If anything in these Conditions is unenforceable, illegal or void then it is
      severed and the rest of these Conditions remains in force.

(d)   If an act must be done on a specified day which is not a Business Day, it
      must be done instead on the next Business Day.

(e)   A provision of these Conditions must not be construed to the disadvantage
      of a party merely because that party was responsible for the preparation of
      these Conditions or the inclusion of the provision in these Conditions.

(f)   These Conditions incorporate the entire understanding of the parties and
      supersede all previous arrangements and understandings, written and oral,
      between the parties in relation to these Conditions and the Convertible
      Notes.

(g)   The Company shall bear the legal costs in connection with the preparation,
      registration and stamping of all documentation relating to the Convertible
      Notes. However, the Company will not be responsible for, or bear, any
      Taxes that the Noteholder becomes liable for in respect of Convertible
      Notes or these Conditions or any legal costs incurred by the Noteholder with
      respect to obtaining advice on or negotiating and entering into the
      Transaction Documents.

(h)   Notwithstanding Condition 23(g), the Company will not be responsible for
      any stamp duties or similar Taxes payable in any jurisdiction in connection
      with any transfer, assignment or other dealing by a Noteholder in respect of
      its Convertible Notes.

(i)   The Company may deduct any amount in respect of Tax it is required to
      deduct from any payment due to a Noteholder under these Conditions.

(j)   Where a calculation is required under these Conditions, the calculation will
      be performed to 4 decimal places and will be, in the absence of manifest
      error, final and binding on the Company and each Noteholder.




                                                                                       17

        Mission Biofuels Limited                                                             56
                                                                             Appendix C (Cont’d)


Schedule 1 – Conversion Notice


Notice of conversion or redemption of CRP Note


To:    Mission Biofuels Limited ACN 117 065 719
       (“Company”)


       [Insert name of Noteholder] (“Noteholder”), gives notice in accordance with
       Condition 5(a) of the Conditions of Issue of Convertible Notes to convert [insert
       number of Convertible Notes to be converted] Convertible Notes held by it into
       Shares.

       The Noteholder applies for such number of Shares in the capital of the Company as is
       equal to the number of ordinary shares that the Noteholder is entitled to upon
       conversion, as calculated in accordance with Condition 5(c) of the Conditions of Issue
       of Convertible Notes.

       The Noteholder agrees to accept the Shares issued to it subject to the Constitution
       and the restrictions on transfer set out in Condition 7 of the Conditions of Issue of
       Convertible Notes.

       Words used in this notice have the same meaning as in the Conditions of Issue of
       Convertible Notes.


Execution by individual:



Signed by [insert name] in the
presence of:


Signature of witness


Name of witness (BLOCK LETTERS)


Address of witness




                                                                                               18


                  Mission Biofuels Limited                                                          57
                                                       Appendix C (Cont’d)


Schedule 2 – Company’s Capital Structure and Options

                    Mission Biofuels Limited
                        Capital Structure

Securities
Ordinary Fully Paid                            46,940,000
Ordinary Fully Paid - Restricted               44,060,000
                                               91,000,000

Performance Fully Paid - Restricted            14,000,000

Options Expiring 31 January 2009                5,250,000
Options Expiring 28 February 2009                 500,000
                                                5,750,000




                                                                       19


             Mission Biofuels Limited                                        58

								
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