ALEXIUM INTERNATIONAL GROUP LIMITED - Proxy Solicitation & Information Statement 2009

ETW CORPORATION LIMITED

ABN 91 064 820 408

NOTICE OF GENERAL MEETING

TIME: 10.00am (WST) DATE: Friday, 29 January 2010 PLACE: Level 31, Allendale Square 77 St Georges Terrace PERTH, WESTERN AUSTRALIA

This Notice of Meeting should be read in its entirety. If Shareholders are in doubt as to how they should vote, they should seek advice from their professional advisers prior to voting.

CONTENTS PAGE
Letter to Shareholders	2
Notice of General Meeting of Shareholders	3
Explanatory Statement (explaining the proposed Resolutions)	9
Glossary	40
Schedule 1 – Terms and Conditions of Performance Shares	42
Schedule 2 – Terms and Conditions of Options (Resolutions 9, 10, 11 and 14)	46
Schedule 3 – Terms and Conditions of Options (Resolutions 12 and 13)	47
Schedule 4 – Terms and Conditions of Options (Resolutions 12 and 13)	48
Schedule 5 – Valuation of Director Options (Resolutions 9 to 11)	51
Schedule 6 – Valuation of Director Options (Resolution 12)	52
Schedule 7 – Valuation of Related Party Options (Resolution 14)	53
Proxy Form	54
Independent Expert’s Report	56
TIME AND PLACE OF MEETING AND HOW TO VOTE

VENUE

The General Meeting of the Shareholders of ETW Corporation Limited will be held at 10.00am (WST) on 29 January 2010 at Level 31, Allendale Square, 77 St Georges Terrace, Perth, Western Australia

YOUR VOTE IS IMPORTANT

You may vote by attending the meeting in person, by proxy or authorised representative.

VOTING IN PERSON

To vote in person, you must attend the meeting on the date and at the place set out above.

VOTING BY PROXY

To vote by proxy, please complete and sign the proxy form enclosed with this Notice of General Meeting as soon as possible and either:

(a) send the proxy by facsimile on facsimile number (08) 9486 8854 (International: + 61 8 9486 8854); or
(b) post the proxy to ETW Corporation Limited, PO Box Z5425, Perth WA 6831,

so that it is received not later than 10.00am (WST) on 27 January 2010.

Proxy forms received later than this time will be invalid.

LETTER TO SHAREHOLDERS

Dear Shareholder

As announced to ASX on 3 December 2009, ETW Corporation Limited (ASX:ETW) ( Company )and Alexium Group Limited ( Alexium ) have entered into a conditional Term Sheet whereby the Company has agreed to acquire 100% of the issued shares in Alexium.

The Company’s Directors unanimously recommend that Shareholders vote in favour of all resolutions to be proposed at the General Meeting in relation to the acquisition of Alexium. The Company has been working to identify an appropriate value adding transaction for the Company, and in the absence of a superior opportunity and subject to an independent expert confirming the validity of Alexium’s intellectual property, the Directors believe the Acquisition is in the best interest of the Company’s Shareholders.

The Acquisition is subject to the completion of due diligence and the Company achieving certain conditions precedent outlined herein. A summary of the key terms pursuant to the Acquisition is included in the Explanatory Statement.

The Company’s Directors will vote in favour of all resolutions, and considers the acquisition of Alexium to be in the best interest of Shareholders.

Yours faithfully

Aaron Finlay Director

NOTICE OF GENERAL MEETING

Notice is given that a General Meeting of Shareholders of ETW Corporation Limited will be held at Level 31, Allendale Square, 77 St Georges Terrace, Perth, Western Australia on 29 January 2010 at 10.00am (WST).

The Explanatory Statement to this Notice of Meeting provides additional information on the matters to be considered at the General Meeting. The Explanatory Statement and the proxy form are part of this Notice of Meeting.

The Directors have determined pursuant to Regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the General Meeting are those who are registered Shareholders of the Company on 27 January 2010 at 7.00pm (EDT).

Terms and abbreviations used in this Notice of Meeting and Explanatory Statement are defined in the Glossary.

AGENDA

SPECIAL BUSINESS

The Explanatory Statement which accompanies and forms part of this Notice describes the matters to be considered as special business.

RESOLUTION 1 – REDUCTION OF SHARE CAPITAL AND ACCUMULATED LOSSES

To consider and, if thought fit, to pass, with or without amendment, the following Resolution as an ordinary resolution:

“That, for the purposes of Section 258F of the Corporations Act, and for all other purposes, approval is given for the Company to reduce the value of its share capital and accumulated losses by $64,618,625 without cancelling any fully paid shares and otherwise as set out in the Explanatory Statement accompanying this Notice.”

RESOLUTION 2 – CHANGE TO NATURE AND SCALE OF BUSINESS

To consider and, if thought fit, to pass, with or without amendment, the following Resolution as an ordinary resolution:

“That, subject to and conditional upon the passing of Resolution 1 and Resolutions 3 to 16 (inclusive), for the purpose of Listing Rule 11.1.2 and for all other purposes, Shareholders approve a change in the nature and scale of the Company’s activities described in the Explanatory Statement accompanying this Notice.”

Voting Exclusion: The Company will disregard any votes cast on this Resolution by any person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, and any associates of those persons. However, the Company need not disregard a vote if it is cast by a person as a 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 a direction on the Proxy Form to vote as the proxy decides.

RESOLUTION 3 – ISSUE OF SHARES FOR CAPITAL RAISING

To consider and, if thought fit, to pass, with or without amendment, the following Resolution as an ordinary resolution:

“That, subject to and conditional on the passing of Resolutions 1 and 2 and Resolutions 4 to 16 (inclusive) for the purposes of Listing Rule 7.1 of the Listing Rules of ASX Limited and for all other purposes, approval is given for the Company to issue up to 171,428,571 pre-Consolidation Shares at an issue price of $0.0175 per Share to raise up to $3,000,000 on the terms and conditions set out in the Explanatory Statement accompanying this Notice.”

Voting Exclusion: The Company will disregard any votes cast on this Resolution 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. However, the Company need not disregard a vote if it is cast by a person as a 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 a direction on the Proxy Form to vote as the proxy decides.

RESOLUTION 4 – AUTHORITY FOR DIRECTORS TO PARTICIPATE IN CAPITAL RAISIING

To consider and, if thought fit, to pass, the following Resolution as an ordinary resolution:

“That, subject to and conditional on the passing of Resolutions 1 to 3 (inclusive) and Resolutions 5 to 16 (inclusive), for the purposes of Listing Rule 10.11 of the Listing Rules of ASX Limited, Section 195(4) of the Corporations Act and for all other purposes, approval is given for the Directors and Mr Gavin Rezos (or their nominees) to participate in the Capital Raising by subscribing for up to 11,428,571 preConsolidation Shares at an issue price of $0.0175 per Share to raise up to $200,000 on the terms and conditions set out in the Explanatory Statement accompanying this Notice.”

Voting Exclusion: The Company will disregard any votes cast on this Resolution by any of Mr Aaron Finlay, Mr Craig Smith-Gander and Ms Nadine Donovan (or any of their associates). However, the Company need not disregard a vote if it is cast by a person as a 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 a direction on the Proxy Form to vote as the proxy decides.

RESOLUTION 5 – APPROVAL TO ISSUE SHARES FOR CAPITAL RAISING

To consider and, if thought fit, to pass, with or without amendments, the following Resolution as an ordinary resolution:

“That, subject to and conditional on the passing of Resolutions 1 to 4 (inclusive) and Resolutions 6 to 16 (inclusive), for the purpose of Listing Rule 7.1 of the Listing Rules of ASX Limited, and for all other purposes, approval is given for the Company to issue 7,500,000 post-Consolidation Shares at an issue price of $0.20 per Share and otherwise on the terms and conditions outlined in the Explanatory Statement.”

who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

RESOLUTION 6 – CONSOLIDATION

To consider and, if thought fit, to pass, with or without amendment, the following Resolution as an ordinary resolution:

“That, subject to and conditional on the passing of Resolutions 1 to 5 (inclusive) and Resolutions 7 to 16 (inclusive), pursuant to Section 254H of the Corporations Act and for all other purposes, the issued capital of the Company be consolidated on the basis that every ten (10) Shares be consolidated into one (1) Share and where this consolidation results in a fraction of a Share being held by a Shareholder, the Directors be authorised to round that fraction up to the nearest whole Share.”

RESOLUTION 7 – APPROVAL TO ISSUE NEW CLASS OF SECURITIES

To consider and, if thought fit, to pass, the following resolution as a special resolution:

“That, subject to and conditional on the passing of Resolutions 1 to 6 (inclusive) and Resolutions 8 to 16 (inclusive) for the purposes of Section 246B of the Corporations Act and clause 2.4 of the Constitution and for all other purposes, the Company is authorised to issue Performance Shares on the terms and conditions set out in the Explanatory Statement.”

RESOLUTION 8 – ISSUE OF SHARES, PERFORMANCE SHARES AND OPTIONS TO VENDORS

To consider and, if thought fit, to pass, with or without amendment, the following Resolution as an ordinary resolution:

“That, subject to and conditional on the passing of Resolutions 1 to 7 (inclusive) and Resolutions 9 to 16 (inclusive) for the purposes of Listing Rule 7.1 of the Listing Rules of ASX Limited and Item 7 of Section 611 of the Corporations Act and for all other purposes, approval is given:

(a) for the Company to allot and issue up to 50,000,000 Shares; and
(b) for the Company to allot and issue up to 50,000,000 Performance Shares; and
(c) for the Company to allot and issue up to 5,000,000 Vendor Options,

to the Vendors (or their nominees) on the terms and conditions set out in the Explanatory Statement accompanying this Notice; and

(d) for the Vendors to acquire a relevant interest in issued voting Shares in the Company on the issue of Shares, exercise of the Option and on conversion of the Performance Shares granted in accordance with this Resolution.”

RESOLUTION 9 – APPROVAL FOR ISSUE OF OPTIONS TO PROPOSED DIRECTOR – GAVIN REZOS

To consider and, if thought fit, to pass, the following resolution as an ordinary resolution:

“That, subject to and conditional on the passing of Resolutions 1 to 8 (inclusive) and Resolutions 10 to 16 (inclusive) and subject to his appointment as a Director of the Company, for the purposes of Section 208 of the Corporations Act, ASX Listing Rule 10.11 and for all other purposes, approval is given for the Directors to allot and issue 1,500,000 Director Options to Mr Gavin Rezos (or his nominee) on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion: The Company will disregard any votes cast on this Resolution by Mr Gavin Rezos (or his nominee) or any of his associates. However, the Company need not disregard a vote if it is cast by a person as a 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 a direction on the Proxy Form to vote as the proxy decides.

RESOLUTION 10 – APPROVAL FOR ISSUE OF OPTIONS TO PROPOSED DIRECTOR – STEFAN SUSTA

To consider and, if thought fit, to pass, the following resolution as an ordinary resolution:

“That, subject to and conditional on the passing of Resolutions 1 to 9 (inclusive) and Resolutions 11 to 16 (inclusive) and subject to his appointment as a Director of the Company, for the purposes of Section 208 of the Corporations Act, ASX Listing Rule 10.11 and for all other purposes, approval is given for the Directors to allot and issue 1,500,000 Director Options to Mr Stefan Susta (or his nominee) on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion: The Company will disregard any votes cast on this Resolution by Mr Stefan Susta (or his nominee) or any of his associates. However, the Company need not disregard a vote if it is cast by a person as a 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 a direction on the Proxy Form to vote as the proxy decides.

RESOLUTION 11 – APPROVAL FOR ISSUE OF OPTIONS TO DIRECTOR – CRAIG SMITH-GANDER

To consider and, if thought fit, to pass, the following resolution as an ordinary resolution:

“That, subject to and conditional on the passing of Resolutions 1 to 10 (inclusive) and Resolutions 12 to 16 (inclusive), for the purposes of Section 208 of the Corporations Act, ASX Listing Rule 10.11 and for all other purposes, approval is given for the Directors to allot and issue 1,000,000 Director Options to Mr Craig SmithGander (or his nominee) on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion: The Company will disregard any votes cast on this Resolution by Mr Craig Smith-Gander (or his nominee) or any of his associates. However, the Company need not disregard a vote if it is cast by a person as a 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 a direction on the Proxy Form to vote as the proxy decides.

RESOLUTION 12 – APPROVAL FOR ISSUE OF SECURITIES TO PROPOSED DIRECTOR – STEPHEN RIBICH

To consider and, if thought fit, to pass, the following resolution as an ordinary resolution:

“That, subject to and conditional on the passing of Resolutions 1 to 11 (inclusive) and Resolutions 13 to 16 (inclusive) and subject to his appointment as a Director of the Company, for the purposes of Section 208 of the Corporations Act, ASX Listing Rule 10.11 and for all other purposes, approval is given for the Directors to allot and issue 5,000,000 Options to Mr Stephen Ribich (or his nominee) on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion: The Company will disregard any votes cast on this Resolution by Mr Stephen Ribich (or his nominee) or any of his associates. However, the Company need not disregard a vote if it is cast by a person as a 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 a direction on the Proxy Form to vote as the proxy decides.

RESOLUTION 13 – APPROVAL OF ISSUE OF SECURITIES TO JOHN ALMOND

To consider and, if thought fit, to pass, with or without amendment, the following Resolution as an ordinary resolution:

“That, subject to and conditional on the passing of Resolutions 1 to 12 (inclusive) and Resolutions 14 to 16 (inclusive), for the purpose of Listing Rule 7.1 of the ASX Listing Rules and for all other purposes approval is given for the Company to allot and issue 5,000,000 Options to Mr John Almond (or his nominee) on the terms and conditions outlined in the Explanatory Statement accompanying this Notice.”

Voting Exclusion: The Company will disregard any votes cast on this Resolution by Mr John Almond any of his associates. However, the Company need not disregard a vote if it is cast by a person as a 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 a direction on the Proxy Form to vote as the proxy decides.

RESOLUTION 14 – ISSUE OF SHARES AND OPTIONS AND PERFORMANCE SHARES TO VIATICUS CAPITAL PTY LTD

To consider and, if thought fit, to pass, the following Resolution as an ordinary resolution:

“That, subject to and conditional on the passing of Resolutions 1 to 13 (inclusive) and Resolutions 15 and 16, for the purposes of Section 208 of the Corporations Act, ASX Listing Rule 10.11 and for all other purposes approval is given for the Company to allot and issue:

(a) 2,500,000 Shares;

(b) 2,500,000 Performance Shares; and
(c) 2,000,000 Options,

to Viaticus Capital Pty Ltd (or its nominee) on the terms and conditions outlined in the Explanatory Statement accompanying this Notice.”

Voting Exclusion: The Company will disregard any votes cast on this Resolution by Viaticus Capital Pty Ltd or any of its associates. However, the Company need not disregard a vote if it is cast by a person as a 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 a direction on the Proxy Form to vote as the proxy decides.

RESOLUTION 15 – CHANGE OF NAME TO ALEXIUM INTERNATIONAL GROUP LIMITED

To consider and, if thought fit, to pass, the following Resolution as a special resolution:

“That, subject to and conditional on the passing of Resolutions 1 to 14 (inclusive) and Resolution 16 and completion of the Acquisition occurring, for the purposes of Section 157(1) of the Corporations Act and for all other purposes, the name of the Company be changed to “Alexium International Group Limited” and the Constitution and all other Company records be amended accordingly.”

RESOLUTION 16 – APPROVAL OF EMPLOYEE OPTION PLAN

To consider and, if through fit, to pass, with or without amendment, the following resolution as an ordinary resolution:

“That, subject to and conditional on the passing of Resolutions 1 to 15 (inclusive), for the purpose of ASX Listing Rule 7.2 (Exception 9) and for all other purposes, approval is given for the Company to adopt an employee option plan on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion: The Company will disregard any votes cast on this Resolution by any Director, other than any Directors who are ineligible to participate in any employee incentive scheme in relation to the Company, and any associates of those Directors. However, the Company need not disregard a vote if it is cast by a person as a 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 a direction on the Proxy Form to vote as the proxy decides.

DATED: 24 DECEMBER 2009

AARON FINLAY DIRECTOR

EXPLANATORY STATEMENT

This Explanatory Statement has been prepared for the information of the Shareholders in connection with the business to be conducted at the General Meeting to be held at 10.00am (WST) on 29 January 2010 at Level 31, Allendale Square, 77 St Georges Terrace, Perth, Western Australia.

This purpose of this Explanatory Statement is to provide information that the Directors believe to be material to Shareholders in deciding whether or not to pass the Resolutions in the Notice of Meeting.

1. OVERVIEW

1.1 Background on transaction

On 3 December 2009, the Company announced that, subject to the satisfaction of certain conditions, it had entered into an agreement to acquire 100% of the issued shares in Alexium, a company registered in Cyprus (Acquisition).

The passing of the resolutions the subject of this Notice of Meeting is a condition of the Acquisition.

1.2 Background on Alexium Ltd

Alexium was formed in May 2007 for the sole purpose of acquiring the global intellectual property rights to the ‘Reactive Surface Technology (RST) as it had then been developed by Dr Jeff Owens at the United States Air Force (USAF) and the United States (US) Department of Defence (DoD). Mr Ribich and Mr Almond have operated Alexium since founding it.

RAB Special Situations (Master) Fund Limited invested in Alexium in June 2007. In 2009 Dr Owens’ shares in Alexium were transferred to avoid future conflicts of interest with his USAF obligations. Dr Owens will receive an ongoing gross sales royalty of 5% for the rest of the world excluding the US. Dr Owen remains involved with Alexium through his research tenure with the US DoD and through his involvement in a research and development programme between Alexium and the US DoD, which is being formalised under a proposed Cooperative Research and Development Agreement (CRADA).

US DEFENCE APPLICATIONS

Alexium’s technology is the backbone of at least three major DoD programmes relating to providing improved personal and collective protection against chemical and biological agents. One of these programmes is the proposed adaptation of the Joint Service Lightweight Integrated Suite Technology (JSLIST) Chemical, Biological, Radiological or Nuclear (CBRN) protective ensemble and relates specifically to textiles, where RST is being used to produce unique multifunctional reactive “shell” fabrics to replace or reduce the use of expensive, thicker, heavier and more cumbersome component materials.

A second programme relates to the modification of military specification paint to produce self-decontaminating coatings for military aircraft, vehicles, and ships (CARC). The US DoD has fully funded planned field trials commencing in 2010 applying the RST to standard military specification paints for heightened durability and self-decontamination properties.

In addition, the RST is currently being appraised in various classified defence programmes.

JSLIST

The JSLIST programme, involves the development of a new CBRN ensemble that is thinner, more breathable, more flexible, and lighter than existing suit technology, but with the same (or improved) level of protection. To achieve this goal, RST has been developed to modify traditional cotton and nylon fabrics.

These fabrics have multi-functional polymers attached to provide them with new properties and functions, replacing or reducing the need for thicker, heavier, less comfortable materials in use. Currently, Alexium is in discussions with several textile and CBRN suit providers regarding the use of RST to achieve the proposed modifications. It is estimated that there are over 4 million JSLIST-type suits in service with the US DoD alone.

Given the heritage of RST within the US DoD, alongside the ongoing requirement for advanced fibres and products, it is envisaged the specialist DoD textiles will be a principal focus of Alexium’s activities over the next 18 months.

Alexium is also in negotiations with a number of US DoD textile suppliers regarding licensing of RST for non-CBRN clothing. RST is disruptive as it enables inexpensive standard textiles to offer the performance, which is currently associated only with more expensive specialist textiles.

The JSLIST programme is funded by the DoD.

CARC

RST is also at the centre of the US DoD CARC programme. RST has been utilised to modify standard paint coatings to give them new surface properties, such as a slick low surface energy comparable with Teflon®, combined with multiple reactive functions within the paint.

The objective of the CARC programme is to produce a durable military coating that has the capacity to ‘self-decontaminate’; a process whereby the coating repels, actively kills or neutralises chemical and biological threats which may come in contact with the surface.

The CARC programme is funded by the DoD.

NON-MILITARY COMMERCIAL APPLICATIONS

Flame Retardance

Considerable testing has been conducted to date on using RST to apply flame retardant (FR) chemicals onto furnishing and upholstery fabrics. Alexium is confident that successful utilisation of RST will result in textile finishing companies being able to apply the same levels of mandated FR to a broader range of products at a lower cost than is currently achievable. In addition, the RST process uses less energy to achieve the same FR result in comparison to existing technology. Alexium is currently negotiating joint venture agreements to further progress the opportunities available in this sector.

Recreational & Work Wear Performance Garments

RST can be incorporated quickly and at comparable low cost into a range of natural and synthetic fibres for the purposes of adding functionality. This sector represents a considerable market opportunity for Alexium as the providers of recreational garments are continually seeking new value added functionality to differentiate themselves from their competition.

Filters

Alexium has recently trialled its RST in conjunction with a global leader in industrial oil filters with considerable success. Industrial oil filters represent a significant portion of the USD$37 billion global filter market. Alexium is progressing commercial discussions on this application. Alexium also believes that its RST has far broader potential applications than just oil filters, and may include air and water filters and specialised filters used in the production of pharmaceuticals and cosmetics.

Paint Applications

Following discussions with paint industry representatives, Alexium believes there are a number of potential RST applications including anti-graffiti, anti-corrosion, marine anti-fouling and hygienic coatings. Alexium believes this sector has the potential to provide it with a considerable number of product application opportunities. As such, Alexium is in contact with a number of paint and coating companies and is conducting joint trials to better understand how RST can be utilised by the industry.

Outlined below is a summary of the potential applications for RST identified by Alexium to date:

Industry	Application	Driver	Tested	Comments
	� Defence	Performance	Yes	CBRN suits, tents, masks, filters, boots, etc
	� Industrial filters	Performance /cost	Yes	Oil and water filters, filter membranes
Textiles	� Furnishings / upholstery	Performance /cost	Yes	Flame retardant treatment, stain and water repellence
	� Footwear	Performance	Yes	Oil and water repellence
	� Specialist apparel	Performance	Yes	Work wear, first responders (police, fire, etc)
	� Self- decontaminatin g	Performance	Yes	Military and industrial applications
	� Regenerating antimicrobial	Performance	Yes	Multi-year testing by DoD
Paints	� Marine antifouling	Performance /cost	No	Low surface energy coatings at the centre of the next generation
				anti-fouling paints
				Low surface energy
	� Anti-graffiti	Performance	No	coating may be provided by Alexium
				technology

					Grafting of anti-
					counterfeit
					‘identification’
Packaging	�	Cellulose packaging	Performance /cost	No	technology may be applied to food
					packaging,
					pharmaceuticals,
					cosmetics, etc
					Testing underway to
Glass	�	Self-cleaning	Performance /cost	Yes	provide single and multiple functionality to
					glass
					Extensive use of silane
Tyres	�	Production	Cost	No	technology in tyre production already in
					place

1.3 Purpose of Capital Raising (Resolutions 3, 4 and 5)

The purpose of the capital raisings contained in Resolutions 3 to 5 (being $4,500,000) is to:

(a) satisfy the capital raising condition of the Acquisition;
(b) fund the Company’s ongoing operations following completion of the Acquisition; and
(c) meet the administration costs of the Company and the expenses of the recapitalisation of the Company.

Resolution 4 seeks approval for the existing Directors to participate in the Capital Raising.

1.4 Use of Funds – Expenditure Budget

The Company’s review and development plans are the best estimates available to the Company at this time. It is important to recognise that although certain of the budget allocations are committed expenditures, work programmes are subject to changes in line with emerging results, circumstances and opportunities.

It is proposed that the funds raised pursuant to Resolutions 3 to 5 (up to $4,500,000) will be applied as outlined in the following page:

Use of Funds	Year 1($)	Year 2($)
Product Commercialisation	400,000	550,000
Patent and Technology Costs	100,000	100,000
Administration Expenses	250,000	250,000
Management Costs	550,000	550,000
Costs of Transaction	415,000	Nil
Working Capital	667,500	667,500
Total	2,382,500	2,117,500

1.5 Pro-forma Capital Structure

Note Shares Current Shares on issue Shares pursuant to Resolutions 3 and 4 (@ $0.0175) Consolidation (1 for 10 basis) Shares pursuant to Resolution 5 (@ $0.20) (a) Shares to Vendors (Resolution 8) Shares to Viaticus (Resolution 14) Total Shares Options Current Options on issue (b) Consolidation (1 for 10 basis) (c) Options to Vendors (Resolution 8) (d) Options to new Directors (Resolutions 9 to 12) (d)(e)(f) Options to Almond (Resolution 13) (d)(e)(f) Options to Viaticus (Resolution 14) (d) Total Options Performance Shares Current Performance Shares on issue Performance Shares to Vendors (Resolution 8) (g) Performance Shares to Viaticus (Resolution 14) (g) Total Performance Shares	313,826,457 171,428,571
	48,525,503 7,500,000 50,000,000 2,500,000
	108,525,503
	70,000,000
	7,000,000 5,000,000 9,000,000 5,000,000 2,000,000
	28,000,000
	Nil 50,000,000 2,500,000
	52,500,000

(a) The offer of Shares will include a priority offer to existing Shareholders of the Company to subscribe collectively for up to 5,000,000 Shares, with each Shareholders being entitled to subscribe for up to 75,000 Shares. Refer to Section 4.2 for further details.

(b) The Options are exercisable at 1 cent each on or before 31 December 2012.

(c) Following the consolidation, the Options will be exercisable at 10 cents on or before 31 December 2012. (d) The Options will be exercisable at 30 cents each on or before the date that is two years from the date of issue.

(e) The Options will be exercisable at 40 cents each on or before the date that is two years from the date of issue subject to the satisfaction of certain conditions.

(f) The Options will be exercisable at 50 cents each on or before the date that is four years from the date of issue subject to the satisfaction of certain conditions.
(g) The terms and conditions of the Performance Shares are outlined in Schedule 1.

1.6 Pro forma Statement of Financial Position

Outlined below is a pro forma statement of financial position of the Company following implementation of all the Resolutions outlined in this Notice. It assumes that all of the Resolutions have been passed.

CURRENT ASSETS Cash assets Trade and other receivables TOTAL CURRENT ASSETS NONCURRENT ASSETS Property, plant & equipment Intangible Assets TOTAL NONCURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables Other Current Liabilities TOTAL CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Contributed equity Reserves Accumulated Losses TOTAL EQUITY	ETW Unaudited 30-Sep-09 $ Alexium unaudited 30-Sep-09 $ Pro-Forma Adjustments/ Eliminations $ Pro-Forma 30-Sep-09 $ 544,649 404,275 3,876,400 4,825,324 5,911 22,291 - 28,202
	550,560 426,566 3,876,400 4,853,526
	- 82,202 - 82,202 - 381,429 9,304,102 9,685,531
	- 463,631 9,304,102 9,767,733
	550,560 890,197 13,180,502 14,621,259
	8,487 117,066 - 125,553 - 11,927 - 11,927 -
	8,487 128,993 - 137,480
	8,487 128,993 137,480

	542,073 761,204 13,180,502 14,483,779
	65,222,622 315,002 (50,161,127) 15,376,497 700 1,767,886 (1,558,907) 209,679 (64,681,249) (1,321,684) 64,900,536 (1,102,397)
	542,073 761,204 13,180,502 14,483,779

1.7 Timetable

An indicative timetable of events relating to the Acquisition, Capital Raising and Re-Quotation of the Company on ASX following the Acquisition is outlined below. The timetable is indicative only and is subject to change.

Date of General Meeting	29 January 2010
Issue of Shares under Resolutions 3 and 4	1 February 2010
Consolidation	8 February 2010
Issue of Shares under Resolution 5	17 February 2010
Settlement of Acquisition	18 February 2010
Trading on ASX re-commences	19 February 2010

1.8 Summary of Sale Agreement

On 15 November 2009, the Company entered into a binding terms sheet with Korcula (BVI) SA (Korcula), Piper Buchanan Limited (Piper Buchanan), RAB Special Situations Fund (Master) Fund Limited (RAB) (together the Vendors), John Almond, Stephen Ribich, Viaticus Capital Pty Ltd (Viaticus) and Alexium Limited (Alexium) pursuant to which the Company agreed to acquire 100% of the issued shares in Alexium (Term Sheet). The Terms Sheet contemplates the parties entering into a more formal, full form, share sale agreement.

The key terms of the Term Sheet are as follows:

(a) the Term Sheet is conditional upon:
(i) the Company being reasonably satisfied with the technical due diligence on the RST;
(ii) the Company being reasonably satisfied with the legal due diligence being commissioned on the integrity and validity of the rights, title and interest of Alexium;
(iii) the approval of ASIC and ASX to the transactions, if required;
(iv) the Company obtaining approval of its Shareholders to the Transaction;
(v) the Company having approximately $3,650,000 cash (including the face value of the loan referred to in (e) below), less costs of the Acquisition as at the date of settlement;
(vi) RAB providing all consents, waivers and indications of no objection to the Acquisition;
(b) subject to the items outlined in paragraph (a) above, the Company agrees to acquire and the Vendors agree to sell 100% of the issued shares in Alexium to the Company;
(c) the Company agrees to issue to the Vendors 50,000,000 postConsolidation shares at an issue price of 20 cents each as well as two tranches of 25,000,000 post-Consolidation performance shares, which performance shares shall convert to fully paid ordinary shares upon the satisfaction of certain performance milestones;

(d) the Company agrees to issue to RAB 5,000,000 post-Consolidation Options exercisable at 30 cents each within two years from the date of issue;
(e) the Company agrees to provide to Alexium a loan of £200,000 within seven days of the execution of the Terms Sheet, repayable within 12 months from the date of advance (this loan has already been provided to Alexium);
(f) the Company agrees to issue to the Acquisition coordinator, Viaticus 2,500,000 post-Consolidation Shares at a deemed issue price of 20 cents per share and two tranches of 1,250,000 post-consolidation performance shares;
(g) the Company agrees to pay to Viaticus $50,000 to manage the Acquisition;
(h) the Company agrees to issue 2,000,000 post-consolidation Options to nominees of Viaticus as part of the Acquisition management and capital raising. These Options will be exercisable at $0.30 each within two (2) years from the date of issue; and
(i) the Company agrees to pay a capital raising fee of 6% to Viaticus, such fee to be used by Viaticus to pay in whole or part to ASIC-licensed brokers to undertake the capital raising.

In addition, the Term Sheet contains other standard provisions relating to confidentiality and warranties from the Vendors. Additional warranties will be provided by Piper Buchanan and Korcula in the formal share sale agreement.

1.9 Change to Board of Directors

The Board of Directors currently comprises:

(a) Mr Aaron Finlay;
(b) Mr Craig Smith-Gander; and
(c) Ms Nadine Donovan.

After the General Meeting, subject to the passing of all of the Resolutions contained in the Notice of Meeting and completion of the Acquisition it is intended that the Board will be restructured as set out below.

Following the completion of the Acquisition, it is intended that Mr Stephen Ribich, Mr Gavin Rezos and Mr Stefan Susta will be appointed as Directors. Mr Aaron Finlay and Ms Nadine Donovan will then resign as Directors of the Company. Mr Craig Smith-Gander will remain as a Director.

The new board of Directors is intended to comprise:

(a) Mr Stephen Ribich;
(b) Mr Gavin Rezos;
(c) Mr Stefan Susta; and
(d) Mr Craig Smith-Gander.

Details of the new persons to compose the proposed Board are outlined below.

Stephen Ribich

Mr Ribich has over 10 years experience in developing new technologies that have originated from US military labs with an emphasis on materials processing utilising microwaves. Mr Ribich also has over 10 years experience in the mining and minerals exploration industry and has acted in various capacities, from exploration geologist to Managing Director, in both listed and unlisted public companies. Mr Ribich holds a Masters in International Trade and Investment Law from Deakin University.

Gavin Rezos

Mr Rezos has extensive Australian and international investment banking experience and is a former Investment Banking Director of HSBC Group with regional roles during his HSBC career based in London, Sydney and Dubai. Mr Rezos has held Chief Executive Officer positions and executive directorships of companies in the technology sector in Australia, the United Kingdom, the US and Singapore. He is currently a Director of Iluka Resources Limited, Principal of Viaticus Capital Pty Ltd and a Director of Rowing Australia.

Stefan Susta

Mr Susta has spent over 10 years working with the US DoD on Technology Insertion, Technology Transfer and Commercialisation. Mr Susta leads Alexium’s US office operations and DoD business development efforts. Mr Susta received his B.Sc from Virginia Tech University in Chemical Engineering and Chemistry in 1996, and an MBA from Wright State University in 2001.

1.10 Recommendation of the Directors

The current Directors consider that the Sale Agreement represents an opportunity for the Company to gain exposure to and develop a new technology with multiple applications and associated opportunities for the Company.

Whilst the Directors acknowledge that the change of activities of the Company may not be consistent with the objectives of all Shareholders, the Directors consider that the benefits of the Acquisition are greater than the costs of moving away from the Company’s current activities. For these reasons, the current Directors of the Company consider that the transaction the subject of the Resolutions is in the best interests of the Company, and recommend that Shareholders vote in favour of all Resolutions.

Each of the current Directors intends to vote in favour of each of the Resolutions in relation to the Shares that they control, subject to any voting restrictions imposed in relation to any Resolution.

Shareholders are also referred to the Independent Expert’s Report in Annexure A which concludes that the transaction is not fair but reasonable for the nonassociated Shareholders of the Company. Shareholders are encouraged to read the Independent Expert’s Report.

1.11 Conditionality of Resolutions

Each of the Resolutions outlined in this Notice of Meeting (except Resolution 1) are conditional upon one another, meaning that in order for the matters the subject of each individual resolution to be passed and implemented, all of the

remaining Resolutions must also be passed by Shareholders (except Resolution 1).

1.12 Future of the Company if Resolutions are not passed

If the Resolutions the subject of the Notice of Meeting are not passed and the Sale Agreement is not completed, the Company will continue to focus on:

(a) its existing business; and

(b) continue to consider alternative business and investment opportunities which the Directors consider will be beneficial to Shareholders.

1.13 Conclusion

The Resolutions set out in the Notice are important and affect the future of the Company. Shareholders are therefore urged to give careful consideration to the Notice and the contents of this Explanatory Statement.

2. RESOLUTION 1 – REDUCTION OF SHARE CAPITAL AND ACCUMULATED LOSSES

2.1 Background

Resolution 1 seeks the approval of Shareholders for the Company to reduce the value of its share capital and accumulated losses by $64,618,625.

2.2 Corporations Act and Constitution requirements

Section 258F of the Corporations Act provides that a company may reduce its share capital by cancelling any paid up share capital that is lost or not represented by available assets, provided that the company does not cancel any shares.

Under this proposed share capital reduction, the Company will not be returning any capital to Shareholders nor cancelling any Shares. This transaction will not affect the Company’s activities or general operations, it will essentially be an accounting entry that allows the Company to remove from its books historical accumulated accounting losses that affect the ability of the Company to retain current and future earnings from which, potentially, future dividends may be paid. The reduction has no effect on the carried-forward tax losses of the Company nor does it change the number of Shares currently on issue or the net asset position of the Company.

Shareholders should note however that under Resolution 7, the Company will be undertaking a consolidation of its current Shares on issue for the purpose of undertaking the Acquisition. Resolution 1 is separate from Resolution 7 and is not related to the passing of Resolution 1.

The Directors therefore propose to reduce the value of the Company’s share capital against the accumulated losses by $64,618,625. The pro-forma balance sheet outlined in Section 1.6 shows the effect of the passing of Resolution 1.

3. RESOLUTION 2 – CHANGE TO NATURE AND SCALE OF BUSINESS

3.1 Background

Resolution 2 seeks approval for the Company to change the nature and scale of its business by completing the Acquisition.

3.2 ASX Listing Rules

ASX Listing Rules 11.1 provides that where a company proposes to make a significant change, either directly or indirectly, to the nature or scale of its activities, it must provide full details to ASX before it makes the change. Listing Rule 11.1.2 gives ASX the authority to require the company to get the approval of its shareholders before making the change to the nature or scale of its activities.

ASX has notified the Directors that, prior to changing the nature and scale of the business of the Company, it must procure the approval of Shareholders to the change in the nature of the Company that will be affected by the acquisition of Alexium.

Therefore, in order to comply with Listing Rule 11.1.2, Shareholders are being asked to approve Resolution 2 to approve the change in the nature and scale of the business of the Company.

Details of the new business to be acquired by the Company and the proposed changes to the structure and operations of the Company are set out throughout this Explanatory Statement.

4. RESOLUTIONS 3 TO 5 – ALLOTMENT AND ISSUE OF SHARES FOR CAPITAL RAISING

4.1 Background

The Shares under Resolutions 3 to 5 are being issued as part of the capital raising for the Company for the purpose of both satisfying the capital raising condition of the Acquisition and to provide the necessary working capital to develop and exploit the Alexium assets following completion of the Acquisition.

Resolution 4 is proposed to enable the existing Directors of the Company and Mr Gavin Rezos (or their nominees) to participate in the capital raising on the same terms and conditions as all other investors. If Resolution 4 is not passed, the existing Directors of the Company or Mr Gavin Rezos will be unable to participate in the capital raising. The Shares being offered to the existing Directors and Mr Gavin Rezos are being offered on the same terms and conditions as the Shares to be issued to the non-related parties under Resolution 3.

The Company seeks approval to issue the following Shares pursuant to Resolutions 3 to 5:

Resolution	No. of Shares	Issue price	Pre-Consolidation/Post- Consolidation
Resolution 3	171,428,571	$0.0175	Pre-Consolidation
Resolution 4	11,428,571	$0.0175	Pre-Consolidation
Resolution 5	7,500,000	$0.20	Post-Consolidation

For the avoidance of doubt, the total number of Shares that will be issued under Resolutions 3 and 4 is 171,428,571. Any Shares issued under Resolution 4 to the Related Parties (up to a maximum of 11,428,571 pre-Consolidation Shares) will be deducted from the number of Shares issued under Resolution 3.

4.2 Priority Offer

As announced to ASX on 3 December 2009, as part of the general capital raising for which the Company is seeking approval under Resolution 5, the Company

will make available to existing Shareholders (other than any related parties) a priority offer to acquire up to a total of 5,000,000 Shares (Priority Offer).

Under the Priority Offer, each existing Shareholder will be entitled to subscribe for up to 75,000 Shares. If the Company receives application from existing Shareholders for greater than 5,000,000 Shares, then all applications will be scaled back on a pro rata basis.

In the event that existing Shareholders do not subscribe for all Shares under the Priority Offer, any shortfall will be made available to non-Shareholders under the general capital raising offer.

4.3 ASX Listing Rules

Resolutions 3 and 5 are required to be approved in accordance with ASX Listing Rule 7.1 and Resolution 4 is required to be approved in accordance with ASX Listing Rule 10.11.

ASX Listing Rule 7.1 provides that a company must not, subject to specified exceptions, issue or agree to issue during any 12 month period, any equity securities, or other securities with rights to conversion to equity (such as an option), if the number of those securities exceeds 15% of the number of securities in the same class on issue at the commencement of that 12 month period.

ASX Listing Rule 10.11 requires a company to obtain Shareholder approval by ordinary resolution prior to the issue of securities to a related party of the Company.

Pursuant to Resolutions 3 and 5, Shares will be issued to non-related parties as part of the capital raising and for this reason, approval for the issue of Shares to non-related parties is required pursuant to ASX Listing Rule 7.1.

Pursuant to Resolution 4, it is proposed that Shares may be issued to Mr Aaron Finlay, Mr Craig Smith-Gander, Ms Nadine Donovan and Mr Gavin Rezos or their nominees (Related Parties) under the Capital Raising. The Related Parties are all related parties of the Company because they are either existing Directors of the Company, or, in the case of Mr Gavin Rezos, is proposed to become a director of the Company. For this reason, approval for the issue of the Shares to the Related Parties (or their nominees) pursuant to Resolution 4 is required pursuant to ASX Listing Rule 10.11.

The following information is provided to Shareholders for the purposes of obtaining Shareholder approval pursuant to ASX Listing Rules 7.1 and 10.11 for Resolutions 3 to 5:

(a) the maximum number of Shares to be issued by the Company pursuant to Resolutions 3, 4 and 5 is as follows:

Resolution 3	171,428,571 pre-Consolidation Shares
Resolution 4	11,428,571pre-Consolidation Shares
Resolution 5	7,500,000 post-Consolidation Shares

As outlined above, the total number of Shares to be issued under Resolutions 3 and 4 is 171,428,571 pre-Consolidation Shares. Any Shares issued under Resolution 4 will be deducted from the total number of Shares issued under Resolution 3. The total number of Shares to be issued under Resolution 5 is 7,500,000 post-Consolidation Shares;

(b) the Shares to be issued under Resolutions 3 and 4 will be issued at 1.75 cents per Share on a pre-Consolidation basis;
(c) the Shares to be issued under Resolution 5 will be issued at 20 cents per Share on a post-Consolidation basis;
(d) the Shares to be issued pursuant to Resolution 3 are proposed to be issued to various investors who may be categorised under Section 708 of the Corporations Act as being investors who may subscribe for securities without the need to issue a prospectus;
(e) the Shares to be issued pursuant to Resolution 5 are proposed to be issued to both existing Shareholders under the Priority Offer and other non-Shareholder investors who subscribe for those Shares pursuant to a prospectus to be prepared by the Company and lodged with the ASIC. The identity of those parties is not yet known. Shareholders should refer to Section 4.2 above for more information on the Priority Offer;

Resolution 4, if passed, will enable the Related Parties to subscribe for Shares up to the limit specified in Resolution 4, however there is no obligation on those Related Parties to subscribe for those Shares. The maximum number of Shares that each individual Related Party can subscribe for under Resolution 4 is 5,714,286 Shares ($100,000), however the limit that all of the Related Parties can subscribe for is set at 11,428,571 Shares ($200,000). It is possible that only some of the Related Parties may apply for Shares under Resolution 4 (assuming it is passed), however in the event that all of the Related Parties elect to subscribe for Shares under Resolution 4, the maximum number of Shares that the Related Parties can individually subscribe for will be less than the maximum specified above.

In the event that all of the 11,428,571 Shares are issued to the Related Parties under Resolution 4, up to 142,857 of those Shares will be subject to an ASX imposed escrow for a period of 24 months from the date of quotation of those Shares.

In the event that the Related Parties do not subscribe for all of the Shares for which Shareholders have given approval for them to subscribe, those Shares will be issued to other investors under Section 708 of the Corporations Act under Resolution 3 as referred to in paragraph (b) above;

(f) any party that receives Shares under Resolutions 3 or 5 must not be a related party of the Company and following the issue of those Shares under Resolutions 3 and 5 no allottee will acquire voting power greater than 20% of the Company;
(g) it is anticipated that the Shares pursuant to Resolutions 3 and 5 will be allotted on one date and will be issued not later than 3 months after the date of the Meeting or such later date as permitted by a waiver of the ASX Listing Rules;
(h) it is anticipated that the Shares pursuant to Resolution 4 will be allotted on one date and will be issued not later than 1 month after the date of the Meeting or such later date as permitted by a waiver of the ASX Listing Rules;
(i) the Shares issued pursuant to Resolutions 3 to 5 will rank equally with the existing Shares on issue; and

(j) the funds raised from the issue of the Shares will be used for the purpose of satisfying the capital raising condition of the Acquisition and otherwise in the manner set out in Section 1.4 above.

4.4 Section 195 of the Corporations Act

Section 195(1) of the Corporations Act provides a general restriction on a director who has a material personal interest in a resolution being considered at a directors’ meeting of the company being present during any discussion on the resolution or voting on the resolution at the directors’ meeting.

Section 195(4) of the Corporations Act provides that where there are insufficient directors to form a quorum at a directors’ meeting because of Section 195(1), the directors can call a general meeting of shareholders to consider the matter.

The Directors are unable to form a quorum to consider any matters relating to the issue of Shares under Resolution 4, as each of the Directors has a material interest in the outcome of the Resolution. Therefore, the Directors are seeking approval under Section 195(4) to deal with the matter.

5. RESOLUTION 6 – CONSOLIDATION

5.1 Background

Resolution 6 seeks Shareholder approval to consolidate the number of Shares on issue on a 1 for 10 basis.

Section 254H of the Corporations Act provides that a company may, by resolution passed at a general meeting, convert all or any of its shares into a larger or smaller number.

If Resolution 6 is passed, the number of Shares on issue will be reduced from 485,255,028 (assuming all of the pre-Consolidation Shares the subject of Resolutions 3 and 4 are issued) to 48,525,503. At the same time, the existing Options on issue will also be consolidated on a 1 for 10 basis from 70,000,000 to 7,000,000 exercisable at $0.10 on or before 31 December 2012.

From the date of the Consolidation all holding statements for Shares will cease to have any effect, except as evidence of entitlement to a certain number of Shares on a post-Consolidation basis. After the Consolidation becomes effective, the Company will arrange for new holding statements to be issued to Shareholders. It is the responsibility of each Shareholder to check the number of Shares held prior to disposal.

Following implementation of all Resolutions in this Notice, the capital structure of the Company will be as set out in Section 1.5 of this Explanatory Statement.

5.2 Fractional Entitlements and Taxation

Not all Shareholders will hold that number of Shares which can be evenly divided by 10. Where a fractional entitlement occurs, the Directors will round that fraction up to the nearest whole Share.

It is not considered that any taxation implications will exist for Shareholders arising from the Consolidation. However, Shareholders are advised to seek their own tax advice in respect of the Consolidation and neither the Company, nor the Directors (or the Company’s advisors) accept any responsibility for the individual taxation implications arising from the Consolidation.

6. RESOLUTION 7 – APPROVAL FOR ISSUE OF NEW CLASS OF SECURITIES

Resolution 7 seeks Shareholder approval for the Company to be authorised to issue Performance Shares.

A company with a single class of shares on issue that proposes to issue new shares not having the same rights as its existing shares, is taken to vary the rights of existing shareholders unless the Constitution already provides for such an issue.

Section 246B of the Corporations Act, and clause 2.4 of the Constitution provides that the rights attaching to a class of shares cannot be varied without:

(a) a special resolution passed at a meeting of the holders of the issued shares of the affected class; or
(b) the written consent of the holders of 75% of the votes of the affected class.

Pursuant to the Sale Agreement, the Company proposes issuing (amongst other securities) 52,500,000 Performance Shares (the terms and conditions of which are set out in Schedule 1) in part consideration for the Acquisition.

The purpose of the issue of the Performance Shares is to link part of the consideration to certain key performance criteria. If the milestones are not achieved within the prescribed timeframe, the Company will redeem the Performance Shares.

The Company currently has only one class of shares on issue being fully paid ordinary shares (Shares). The terms of the Performance Shares are not the same as the Shares. Accordingly, the Company seeks approval from Shareholders for the issue of the Performance Shares.

The terms of the Performance Shares have been approved by ASX.

7. RESOLUTION 8 – ISSUE OF SECURITIES TO VENDORS

7.1 Background

As outlined above, the Company has entered into the Sale Agreement with the shareholders of Alexium to acquire 100% of the issued shares in Alexium. A summary of the key terms of the Sale Agreement is provided in Section 1.8 above.

For clarification, the Vendors under the Sale Agreement are as follows:

(a) Korcula (BVI) SA (a company registered in the British Virgin Islands (Korcula);
(b) Piper Buchanan Limited (a company incorporated in the Cayman Islands) (Piper Buchanan); and
(c) RAB Special Situations Fund (Master) Limited (a company incorporated in the Cayman Islands) (RAB).

Resolution 8 seeks Shareholder approval under Listing Rule 7.1 and for the purpose of Item 7 of Section 611 of the Corporations Act and for all other purposes, for the allotment and issue of the following Vendor Shares, Vendor Performance Shares and Vendor Options to the Vendors in consideration for the acquisition of 100% of the issued shares in Alexium pursuant to the Sale Agreement:

Type of Security	No. of Securities
Shares	50,000,000
Performance Shares	25,000,000 Class A Performance Shares
	25,000,000 Class B Performance Shares
Options	5,000,000

7.2 ASX Listing Rule 7.1

A summary of the requirements under Listing Rule 7.1 is outlined in Section 4.3 above.

7.3 Item 7 of Section 611 of the Corporations Act

Section 606 of the Corporations Act – Statutory Prohibition

Pursuant to Section 606(1) of the Corporations Act, a person must not acquire a relevant interest in issued voting shares in a listed company if the person acquiring the interest does so through a transaction in relation to securities entered into by or on behalf of the person and because of the transaction, that person’s 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%.

Voting Power

The voting power of a person in a body corporate is determined in accordance with Section 610 of the Corporations Act. The calculation of a person’s voting power in a company involves determining the voting shares in the company in which the person and the person’s associates have a relevant interest.

A person (second person) will be an “associate” of the other person (first person) if:

(a) the first person is a body corporate and the second person is:
(i) a body corporate the first person controls;
(ii) a body corporate that controls the first person; or
(iii) a body corporate that is controlled by an entity that controls the person;
(b) the second person has entered or proposed to enter into a relevant agreement with the first person for the purpose of controlling or influencing the composition of the company’s board or the conduct of the company’s affairs; or
(c) the second person is a person with whom the first person is acting or proposed to act, in concert in relation to the company’s affairs.

Relevant Interests

Section 608(1) of the Corporations Act provides that a person has a relevant interest in securities if they:

(a) are the holder of the securities;

(b) have the power to exercise, or control the exercise of, a right to vote attached to the securities; or
(c) have power to dispose of, or control the exercise of a power to dispose of, the securities.

It does not matter how remote the relevant interest is or how it arises. If two or more people can jointly exercise one of these powers, each of them is taken to have that power.

7.4 Reason Why Section 611 Approval Required

Item 7 of Section 611 of the Corporations Act provides an exception to the prohibition described in Section 7.3 above, whereby a person may acquire a relevant interest in a company’s voting shares with shareholder approval.

For the purpose of the Corporations Act, the Vendors are deemed to be associates as at the time of completion of the Acquisition. However, there is no determination that the Vendors will continue to be associates for the purposes of the Corporations Act following completion of the Acquisition.

For the purposes of the Corporations Act, the following persons are deemed to be associates of the Vendors:

(a) Stephen Ribich; and
(b) John Almond.

(together, the Vendor Associates).

As a result of the Sale Agreement, the Vendors will acquire a relevant interest in 50,000,000 Shares, 5,000,000 Options and 50,000,000 Performance Shares.

Assuming that:

(a) a total of 171,428,571 Shares have been issued pursuant to Resolutions 3 and 4;
(b) the Consolidation has occurred, consolidating the number of Shares on issue in the Company from 485,255,028 to 48,525,503 Shares;
(c) a total of 7,500,000 Shares have been issued pursuant to Resolution 5;
(d) a total of 2,500,000 Shares have been issued to Viaticus pursuant to Resolution 13; and
(e) no Options on issue as at the date of this Notice of Meeting have been exercised,

then this relevant interest will represent 46.07% of the issued ordinary Shares of the Company.

This will result in the voting power of the Vendors and the Vendor Associates being 46.07% immediately following the issue of the Vendor Shares, on the basis of the above assumptions. The relevant interests of the Vendor Associates following the issue of Director Options to those Vendor Associates is set out below.

If the Vendor Options and the Options issued to Ribich and Almond the subject of Resolutions 12 and 13 (Associate Options) are exercised, the Vendors and the

Vendors’ Associates will acquire a relevant interest in a further 15,000,000 Shares issued upon the exercise of the Vendor Options and the Associate Options.

This will result in the Vendors and the Vendor Associated holding 47.61% of the issued ordinary capital of the Company, and the voting power of the Vendors and the Vendor Associates increasing to 47.61% (on the basis of the above assumptions and also assuming that no further Shares are issued or Options exercised).

In addition, where the performance milestones are met for all of the Performance Shares, a further 50,000,000 Shares will be issued to the Vendors, meaning (based on the assumptions outlined above) that the relevant interest of the Vendors in the Company will increase to 60.84% (assuming 2,500,000 Shares are also issued to Viaticus upon the contemporaneous conversion of its Performance Shares issued under Resolution 14).

Accordingly, Resolution 8 seeks Shareholder approval for the purpose of Section 611 Item 7 and for all other purposes to enable the Company to issue the Vendor Securities to the Vendors.

In addition, the following parties will have a relevant interest in any securities held by the Vendors as a result of being the controllers of two of the Vendors:

(a) Stephen Ribich in relation to Korkula;
(b) John Almond in relation to Piper.

7.5 Specific Information Required by Section 611 Item 7 of the Corporations Act and ASIC Regulatory Guide 74

The following information is required to be provided to Shareholders under the Corporations Act and ASIC Regulatory Guide 74 in respect of obtaining approval for Item 7 of Section 611 of the Corporations Act. Shareholders are also referred to in the Independent Expert’s Report prepared by Stantons Securities International annexed to this Explanatory Statement.

Relevant Interests and Voting Power

As at the date of this Notice, the following parties have a relevant interest in Shares as follows:

Party	Relevant Interest	Capacity
Korcula	Nil	N/A
Piper Buchanan	Nil	N/A
RAB	Nil	N/A
Stephen Ribich(1)(2)	Nil	N/A
John Almond(6)	Nil	N/A

(1) Following the Acquisition, it is proposed that Stephen Ribich will be appointed as a director of the Company.
(2) Pursuant to Resolution 12, the Company is seeking approval to issue up to 5,000,000 Options to Stephen Ribich.
(3) Pursuant to Resolution 13, the Company is seeking approval to issue up to 5,000,000 Options to John Almond.

The figures in columns 3, 4 and 5 in the following tables assume that all of the Resolutions the subject of the Notice of Meeting are passed, that all of the Securities the subject of those Resolutions are passed and that no Options on issue post-Consolidation have been exercised.

The relevant interests of the Vendors and the Vendor Associates (both current, and following the issue of Securities as contemplated by this Notice) are set out in the table below:

Party	As at the date of this Notice of Meeting	After completion of the Capital Raising	After issue of all Shares under this Notice	After issue of all Shares under this Notice and conversion of all Options issued under this Notice (not including any existing Options)	After issue of all Shares under this Notice, conversion of all Options and Performance Shares under this Notice
Korcula and Stephen Ribich	0%	0%	16.9%	17.1%	27.12%
Piper Buchanan and John Almond	0%	0%	13.37%	14.29%	22.01%
RAB	0%	0%	15.8%	16.22%	11.71%

The voting power of the Vendors and the Vendor Associates (both current, and following the issue of Securities as contemplated by this Notice) are set out in the table below:

Party	As at the date of this Notice of Meeting	After completion of the Capital Raising	After issue of all Shares under this Notice	After issue of all Shares under this Notice and conversion of all Options issued under this Notice (not including any existing Options)	After issue of all Shares under this Notice, conversion of all Options and Performance Shares under this Notice
Korcula and Stephen Ribich	0%	0%	16.9%	17.1%	27.12%
Piper Buchanan and John Almond	0%	0%	13.37%	14.29%	22.01%
RAB	0%	0%	15.8%	16.22%	11.71%

The maximum relevant interest that the Vendors and the Vendors Associates will hold after completion of the Sale Agreement (and after the exercise of all of the Vendor Options and conversion of the Vendor Performance Shares) is 115,000,000 Shares. The maximum voting power that the Vendors will hold after:

(a) the issue of all Shares under this Notice of Meeting;
(b) the conversion of all Options issued under this Notice of Meeting; and
(c) the conversion of all Performance Shares issued under this Notice of Meeting,

is 60.84%. This represents an increase from 0% to 60.84%.

None of the Vendors have any associates with relevant interests in the Company’s Shares other than as set out herein.

Vendor’s Intentions

Other than as disclosed elsewhere in this Explanatory Statement, the Company understands that the Vendors and the Vendor Associates:

(a) have no intention of making any significant changes to the business of the Company other than as set out in this Notice of Meeting,;
(b) have no intention of making changes regarding the future employment of the present employees of the Company;
(c) do not intend to redeploy any fixed assets of the Company; and
(d) have no current intention to change the Company’s existing policies in relation to financial matters (including the payment of dividends).

Please refer to Section 1 of this Explanatory Statement for details of the proposed changes to the Board upon the settlement of the Sale Agreement.

Capital Structure

The proposed capital structure of the Company following completion of all the transactions the subject of the Resolutions is set out in Section 1.5 of this Explanatory Statement.

Identity, Associations and qualifications of proposed Directors

Following settlement of the Acquisition it is proposed that Stephen Ribich, Gavin Rezos and Stephen Susta will be appointed as Directors of the Company and that Aaron Finlay and Nadine Donovan will resign. Craig Smith-Gander will remain as a Director of the Company.

Other than Mr Ribich, none of the remaining proposed Directors (Mr Rezos and Mr Susta) or Mr Smith-Gander are associates of the Vendors.

None of Mr Smith-Gander or the proposed Directors (other than Gavin Rezos) currently hold, or have a relevant interest in, any Shares or Options in the Company. Mr Rezos currently has an interest in 49,233,333 pre-Consolidation Shares and 26,000,000 pre-Consolidation Options exercisable at 1 cent on or before 31 December 2010 in the Company. Shareholder approval is being sought pursuant to Resolutions 10 to 13 to permit the Company to issue the following proposed Directors with the following Options:

Proposed Director	No. of Options
Stephen Ribich	5,000,000
Gavin Rezos	1,500,000
Stefan Susta	1,500,000
Craig Smith-Gander	1,000,000

Refer to Section 8 below for further information.

Interests and Recommendations of Directors

The existing Directors do not have an interest in Resolution 8. For the reasons outlined in Section 1.8 above, the Directors therefore recommend that Shareholders vote in favour of Resolution 8.

Independent Expert’s Report

The Independent Expert's Report prepared by Stantons International Securities assesses whether the issue of the Vendor Securities to the Vendors (or their nominee) is fair and reasonable to the non-associated Shareholders of the Company. The advantages and disadvantages of the Sale Agreement are outlined in section 9 of the Independent Expert’s Report.

The Independent Expert’s Report concludes that the issue of the Vendor Securities, on balance, is not fair but is reasonable to the non-associated Shareholders of the Company under ASX guidelines.

Shareholders are urged to carefully read the Independent Expert’s Report to understand the scope of the Report, the methodology of the valuation and the sources of information and assumptions made.

Pro-forma balance sheet

A pro-forma balance sheet of the Company post the completion of the Sale Agreement (and other transactions the subject of the Resolutions) is set out in Section 1.6 of this Explanatory Statement.

7.6 ASX Listing Rule requirements

For the purpose of ASX Listing Rule 7.3, the following information is provided in relation to Resolution 8:

(a) The maximum number of Securities to be issued pursuant to Resolution 8 is:

Securities	Number
Shares	50,000,000
Performance Shares	25,000,000 Class A Performance Shares
	25,000,000 Class B Performance Shares
Options	5,000,000

(b) the Securities will be issued no later than 3 months after the date of the General Meeting (or such later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules) and it is intended that allotment will occur on the same date;

(d) the Securities will be issued to the Vendors’ as follows:

	Shares	Options	Performance Shares
Korcula	18,344,143	Nil	27,915,000

Piper Buchanan	14,513,000	Nil	22,085,000
RAB	17,142,857	5,000,000	Nil

In relation to the Securities to be issued to the Vendors, the ASX may impose escrow restrictions on some or all of those Securities;

(e) the Shares issued will be fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company’s existing Shares. The Options and Performance Shares, when exercised or when the appropriate milestones are met, will convert into fully paid ordinary shares;
(f) the terms and conditions of the Performance Shares are outlined in Schedule 1. The terms and conditions of the Options are outlined in Schedule 2; and
(g) no funds will be raised from the issue of the Securities, as the Securities will be issued for the purpose of paying the consideration under the Acquisition.

8. RESOLUTIONS 9 TO 12 – ISSUE OF OPTIONS TO PROPOSED DIRECTORS

8.1 General

As outlined above, in the event that the Acquisition is completed successfully, it is proposed that the Company will appoint three new directors, Mr Stephen Ribich, Mr Gavin Rezos and Mr Stefan Susta, with the existing Directors, except for Mr Craig Smith-Gander to step down at the same time (Future Directors).

The Directors have agreed, subject to the approval of all of the remaining Resolutions the subject of this Notice of Meeting, and subject to each of them being appointed as a Director to seek the approval of Shareholders to the issue of Options to Mr Stephen Ribich, Mr Gavin Rezos, Mr Stefan Susta and Mr Craig Smith-Gander (Director Options).

For a public company, or an entity that the public company controls, to give a financial benefit to a related party of the public company, the public company or entity must:

(a) obtain the approval of the public company’s members in the manner set out in Sections 217 to 227 of the Corporations Act; and
(b) give the benefit within 15 months following such approval,

unless the giving of the financial benefit falls within an exception set out in Sections 210 to 216 of the Corporations Act.

In addition, ASX Listing Rule 10.11 also requires shareholder approval to be obtained where an entity issues, or agrees to issue, securities to a related party, or a person whose relationship with the entity or a related party is, in ASX’s opinion, such that approval should be obtained unless an exception in ASX Listing Rule 10.12 applies.

The grant of the Director Options to the Future Directors requires the Company to obtain Shareholder approval because the grant of Director Options constitutes giving a financial benefit and if they were a Director, each of the proposed Directors would be a related party of the Company. Section 228(6) of the

Corporations Act provides that where a person believes or has reasonable grounds to believe that it is likely to become a related party of a company at any time in the future, they will be considered to be a related party for the purposes of Section 228 of the Corporations Act.

It is the view of the Directors that the exceptions set out in Sections 210 to 216 of the Corporations Act and ASX Listing Rule 10.12 do not apply in the current circumstances. Accordingly, Shareholder approval is sought for the grant of Director Options to the Future Directors.

8.2 Shareholder Approval (Chapter 2E of the Corporations Act and Listing Rule 10.11)

Pursuant to and in accordance with the requirements of Sections 217 to 227 of the Corporations Act and ASX Listing Rule 10.13, the following information is provided in relation to the proposed grant of Director Options:

(a) the Future Directors are Mr Stephen Ribich, Mr Gavin Rezos, Mr Stefan Susta and Mr Craig Smith-Gander, and they are all related parties by virtue of being either an existing Director or a proposed Director of the Company;
(b) the maximum number of Director Options (being the nature of the financial benefit being provided) to be granted to the Future Directors under Resolutions 9 to 12 is as follows:

Resolution	Related Party	No. of Options
9	Gavin Rezos	1,500,000
10	Stefan Susta	1,500,000
11	Craig Smith-Gander	1,000,000
12	Stephen Ribich	5,000,000

(c) the Director Options will be granted to the Future Directors no later than 1 month after the date of the General Meeting (or such later date as permitted by any ASX waiver or modification of the ASX Listing Rules) and it is anticipated the Director Options will be issued on one date;
(d) the Director Options will be granted for no consideration, accordingly no funds will be raised from the issue;
(e) the Director Options the subject of Resolutions 9 to 11 (inclusive) will be granted on the terms and conditions set out in Schedule 2;
(f) the Director Options the subject of Resolution 12 will be granted on the terms and conditions set out below and otherwise on the terms and conditions outlined in Schedules 2, 3 and 4:

No. of Options	Exercise Price	Vesting Condition	Terms and Conditions	Expiry Date
2,500,000	$0.30	Nil	Refer to Schedule 2	Two years from the date of issue
1,250,000	$0.40	Refer to Schedule 3	Refer to Schedule 3	Two years from the date of issue

	1,250,000	$0.50	Refer to Schedule 4	Refer to Schedule 4	Four years from the date of issue

(g) the value of the Director Options for Resolutions 9 to11 and the pricing methodology is set out in Schedule 5;
(h) the value of the Director Options for Resolution 12 and the pricing methodology is set out in Schedule 6;

(i) the relevant interests of the Related Parties in securities of the Company are set out below:

Related Party	Shares	Options
Gavin Rezos1	49,233,333	26,000,000
Stefan Susta	Nil	Nil
Craig Smith-Gander	Nil	Nil
Stephen Ribich2	Nil	Nil

Assuming all of the Resolutions are passed, these Shares and Options will be consolidated to 4,923,334 post-Consolidation Shares and 2,600,000 post consolidation Options exercisable at 10 cents on or before 31 December 2010
Shareholders should however be aware that under the proposed Acquisition, Mr Ribich will be acquiring a relevant interest in additional Securities. The details of that relevant interest is outlined in Section 7.5 above;
(j) the Company has not paid any of the Future Directors any remuneration as at the date of the General Meeting as they have yet to be appointed as Directors. In addition, Mr Craig Smith-Gander was appointed as a Director on 11 December 2009. The Company has agreed that it shall pay Mr Smith-Gander $25,000 per year in Director’s fees, however since his appointment, Mr Smith-Gander has not been paid any Director’s fees. In addition to his Director’s fees, Mr SmithGander will also be entitled to remuneration for reasonable out of pocket expenses incurred by Mr Smith-Gander in undertaking his role as a Director;
(k) if the Director Options granted to the Future Directors are exercised, a total of 9,000,000 Shares would be allotted and issued. This will increase the number of post-Consolidation Shares on issue from 48,525,503 to 57,525,503 (assuming that all of the remaining Resolutions are passed and that no other Options are exercised, the Performance Shares not converted to Shares and no other Shares are issued other than as outlined in the Resolutions) with the effect that the shareholding of existing Shareholders would be diluted as follows:

	Related Party	Issued Shares as at the date of this Notice of Meeting*	Director Options to be issued	Issued Shares upon exercise of all Director Options	Dilutionary effect upon exercise of Director Options

Gavin Rezos	48,525,503	1,500,000	50,025,503	3%
Stefan Susta	48,525,503	1,500,000	50,025,503	3%
Craig Smith- Gander	48,525,503	1,000,000	49,525,503	2.02%
Stephen Ribich	48,525,503	5,000,000	53,525,503	9.34%
Total	48,525,503	9,000,000	57,525,503	15.64%

*Assumes that the Consolidation, the subject of Resolution 7 is passed.

Shareholders should be aware however that the Company intends to issue additional Shares, Options and Performance Shares under approvals sought at the General Meeting. The effect of the issue of those additional Shares, Options and Performance Shares will be to minimise the dilution effect of the exercise of the Director Options by any of the Future Directors.

The market price for Shares during the term of the Director Options would normally determine whether or not the Director Options are exercised. If, at any time any of the Director Options are exercised and the Shares are trading on ASX at a price that is higher than the exercise price of the Director Options, there may be a perceived cost to the Company;

(l) any funds raised through the exercise of the Director Options will be allocated towards the Company’s general working capital;

(m) the Company was suspended from trading on ASX on 1 October 2008 and only re-commenced trading on 7 December 2009. However, ASIC policy requires that the Company provide information as to the trading history of the Shares on ASX in the 12 months before the date of this Notice of General Meeting:

	Price	Date
Highest	4 cents	7 December 2009
Lowest	1.7 cents	11 December 2009
Last	2.1 cents	21 December 2009

(n) the primary purpose of the grant of Director Options to each of the Future Directors is designed to provide cost effective consideration for their commitment and contribution to the Company in his role as a Director, if they are appointed. The Board does not consider that there are any significant opportunity costs to the Company or benefits foregone by the Company in issuing the Director Options upon the terms proposed;

(o) the existing Directors (other than Mr Craig Smith-Gander), who do not have a material interest in the outcome of any of Resolutions 9 to 12, recommend that Shareholders vote in favour of Resolutions 9 to 12 on the basis that they consider that the issue of Options under Resolutions 9

to 12 will provide an appropriate incentive to the Future Directors as they develop the Company from its current position following the completion of the Acquisition. The Board (other than Mr Craig SmithGander) is not aware of any other information that would be reasonably required by Shareholders to allow them to make a decision whether it is in the best interests of the Company to pass the Resolution.

Approval pursuant to ASX Listing Rule 7.1 is not required in order to issue the Director Options to the Related Parties as approval is being obtained under ASX Listing Rule 10.11. Accordingly, the issue of Director Options to the Related Party will not be included in the 15% calculation of the Company’s annual placement capacity pursuant to ASX Listing Rule 7.1.

9. RESOLUTION 13 – APPROVAL FOR ISSUE OF OPTIONS TO JOHN ALMOND

9.1 Background

Resolution 13 seeks the approval of Shareholders for the issue of 5,000,000 Options to Mr John Almond.

As outlined in Section 1.8 above, it is a term of the Acquisition that the Company issue to Mr John Almond 5,000,000 Options as part consideration for the Acquisition. Mr Almond is not a related party of the Company.

Mr John Almond is an associate of Piper Buchanan, and has been involved in the development of the RST.

9.2 Listing Rules

A summary of the requirements of Listing Rule 7.1 is outlined in Section 4 above. For the purpose of Listing Rule 7.3, the Company provides the following information in relation to Resolution 13:

(a) the maximum number of Options to be granted is 5,000,000 Options;
(b) the Options will be issued no later than 3 months after the date of the Annual General Meeting (or such later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules) and it is intended that allotment will occur on the same date;
(c)
the Options will be issued for nil cash consideration;
(d) the Options will be allotted and issued to Mr John Almond. Mr Almond is not a related party of the Company;
(p) the Options will be granted on the terms and conditions set out below and otherwise on the terms and conditions outlined in Schedules 2, 3 and 4:

No. of Options	Exercise Price	Vesting Condition	Terms and Conditions	Expiry Date
2,500,000	$0.30	Nil	Refer to Schedule 2	Two years from the date of issue
1,250,000	$0.40	Refer to Schedule 3	Refer to Schedule 3	Two years from the date of issue

	1,250,000	$0.50	Refer to Schedule 4	Refer to Schedule 4	Four years from the date of issue

(e) no funds will be raised from the issue of the Options, as they will be issued as part consideration for the completion of the Acquisition.

10. RESOLUTION 14 – ISSUE OF SHARES AND PERFORMANCE SHARES TO VIATICUS

10.1 Background

As outlined in Section 1.8 above, it is a term of the Sale Agreement that the Company issue to Viaticus:

(a) 2,500,000 Shares;
(b) 2,000,000 Options; and
(c) 2,500,000 Performance Shares,

(Viaticus Securities).

The purpose of the issue of the Viaticus Securities is to compensate Viaticus for its role in bringing the Acquisition to the attention of the Company, negotiating the Acquisition and completing formal documentation for the Acquisition.

Viaticus is a company associated with Mr Gavin Rezos, who is a proposed Director of the Company.

Accordingly, in order to satisfy the requirements of the Listing Rules and Chapter 2E of the Corporations Act, the Company must seek approval under Listing Rule 10.11 and Section 208 of the Corporations Act for the issue of the Viaticus Securities.

A summary of the requirements of Listing Rule 10.11 and Section 208 of the Corporations Act is outlined in Section 4.3 above.

10.2 Shareholder approval (Chapter 2E of the Corporations Act and Listing Rule 10.11)

(a) the related party is Viaticus, which is related by virtue of being a company controlled by Mr Gavin Rezos, a proposed Director of the Company;
(b) the maximum number of Viaticus Securities to be granted to the Viaticus is:
(i) 2,500,000 Shares; (ii) 2,000,000 Options; and (iii) 2,500,000 Performance Shares;
(c) the Viaticus Securities will be granted to the Viaticus no later than 1 month after the date of the General Meeting (or such later date as permitted by any ASX waiver or modification of the ASX Listing Rules) and it is anticipated the Viaticus Securities will be issued on one date;

(d) the Viaticus Securities will be granted for nil cash consideration, accordingly no funds will be raised as they are being issued in consideration for bring the Acquisition to the Company;
(e) the terms and conditions of the Performance Shares are outlined in Schedule 1 and the terms and conditions of the Options are set out in Schedule 2;
(f) the Directors consider that the value of the Shares being issued to Viaticus can be determined by multiplying the number of Shares by the deemed issue price of $0.20 ($500,000). The Directors consider that this is an appropriate method for valuing the Shares as it takes into account the effect of the Acquisition on the Company and is reflective of the price at which the Company will be issuing Shares (the subject of Resolution 5) immediately prior to the issue of Shares the subject of this Resolution.

The Independent Expert states in Section 5.5 of the Independent Expert’s Report that based on the adjusted unaudited consolidated 30 September 2009 book values of the Company’s assets, ETW has net equity of approximately $468,000 that results in an asset backing of around 1.49 cents per Share on a post-Consolidation basis. The Independent Expert acknowledges however that the Shares may have a fair value of approximately up to 20 cents following the consummation of the Acquisition and the completion of the associated capital raising. Shareholders should note that none of the Shares the subject of this Resolution 14 will be issued unless the Acquisition is completed;

(g) the value of the Options and the pricing methodology for those Options is set out in Schedule 7;
(h) the Performance Shares being issued are subject to the achievement of performance milestones by the Company within the term of those Performance Shares. As at the date of this Notice of Meeting, the Directors do not consider that there is sufficient information available to project the likelihood of the achievement of those milestones. As at the date of this Notice of Meeting, the Directors do not believe there is a reasonable basis for projecting the likelihood of the milestones for the Performance Shares being achieved and therefore have given the Performance Shares no real value;
(i) the relevant interests of Viaticus in securities of the Company is 49,233,333 Shares and 26,000,000 Options. Subject to the passing of Resolution 6, these Shares and Options will be consolidated to 4,923,334 Shares and 2,600,000 Options exercisable at 10 cents on or before 31 December 2010;
(j) if the Viaticus Securities are issued to Viaticus are exercised or converted (as the case may be), a total of 7,000,000 Shares would be allotted and issued. This will increase the number of post-Consolidation Shares on issue from 48,525,503 to 55,525,503 (assuming that no other Options are exercised and no other Shares issued) with the effect that the shareholding of existing Shareholders would be diluted by 12.61%.

However, Shareholders should note that the Company is seeking approval to issue additional Shares, Options and Performance Shares under this Notice of Meeting. The issue of those Shares and issue and subsequent conversion of the Options and Performance Shares will limit the dilution effect of these Options.

The market price for Shares during the term of the Options would normally determine whether or not the Options are exercised. In addition, the Performance Shares are subject to the satisfaction of certain conversion milestones as outlined in Schedule 1.

(k) the Company was suspended from trading on ASX on 1 October 2008 and only re-commenced trading on 7 December 2009. However, ASIC policy requires that the Company provide information as to the trading history of the Shares on ASX in the 12 months before the date of this Notice of General Meeting:

	Price	Date
Highest	4 cents	7 December 2009
Lowest	1.7 cents	11 December 2009
Last	2.1 cents	21 December 2009

(l) The Directors, who do not have a material interest in the outcome of Resolution 14, recommend that Shareholders vote in favour of Resolution 14 as the issue of the Viaticus Securities is a term of the Acquisition and will be required in order to complete the Acquisition. The Board is not aware of any other information that would be reasonably required by Shareholders to allow them to make a decision whether it is in the best interests of the Company to pass the Resolution;

Approval pursuant to ASX Listing Rule 7.1 is not required in order to issue the Director Options to the Related Parties as approval is being obtained under ASX Listing Rule 10.11. Accordingly, the issue of Director Options to the Related Parties will not be included in the 15% calculation of the Company’s annual placement capacity pursuant to ASX Listing Rule 7.1.

11. RESOLUTION 15 – CHANGE OF NAME

Resolution 15 seeks Shareholder approval for the Company to change its name to ‘Alexium International Group Limited’. The Directors believe that this name change is necessary to provide a break from the past activities of the Company and at the same time, provide a new image as the Company moves into the future.

Section 157 of the Corporations Act requires the Shareholders to pass a special Resolution to change the Company’s name. Accordingly, Shareholder approval is sought pursuant to Resolution 15.

12. RESOLUTION 16 – APPROVAL OF EMPLOYEE OPTION PLAN

12.1 General

Resolution 16 seeks the approval of Shareholders for the adoption of the “Directors, Employees and Consultants Option Plan” (Plan) to allow the issue of Options under the Plan as an exception to ASX Listing Rule 7.1 in accordance with exception 9(b) of ASX Listing Rule 7.2.

If Resolution 16 is passed, the Company will have the ability to issue Options to eligible participants under the Plan over a period of 3 years without impacting on the Company’s 15% placement capacity under ASX Listing Rule 7.1.

12.2 Terms of Plan

The main terms of the Plan are summarised below and a full copy of the Plan is available for inspection at the Company’s registered office until the date of the General Meeting.

The Plan will be administered by the Directors who may grant Options to acquire Shares in the Company to any of the Company’s employees (Employees).

The key terms and conditions applying to any issue of Options under the Plan include:

Objectives

The objective of the Plan is to assist in the recruitment, reward, retention and motivation of employees of the Company.

Consideration

Each Option issued under the Plan (Employee Option) will be issued free of charge.

Exercise Price

The exercise price for Employee Options granted under the Plan will be fixed by the Board prior to the grant of the Employee Option.

Exercise Restrictions

The options granted under the Plan may be subject to such other restrictions on exercise as may be fixed by the Directors prior to grant of the Employee Options including, without limitation, length of service by the employee and threshold prices at which Shares are traded on the ASX. Any restrictions so imposed by the Directors must be set out on the Employee Option certificate.

Participation in Dividends, Rights Issues and Bonus Issues

The Employee Options granted under the Plan do not give any right to participate in dividends or rights issues until Shares are allotted pursuant to the exercise of the relevant Employee Option. The number of Shares issued on the exercise of Employee Options will be adjusted for bonus issues made prior to the exercise of the Employee Options.

Eligibility

The Directors may invite full or part time employees to participate in the Plan and receive Employee Options. An employee may receive the Employee Options or nominate a relative or associate to receive the Employee Options.

Employees do not possess any rights to participate in the Plan, as participation is solely determined by the Board. Directors are not eligible to participate in the Plan.

Term of Employee Options

The Employee Options granted under the Plan have a term specified on the face of each certificate.

Subdivision or Consolidation

If the Company, after having granted any Employee Option, reduces its issued Share capital or subdivides or consolidates its Shares, the number of the Shares issued to the option holder on exercise of an Employee Option will be reduced, subdivided or consolidated, as the case may be, in accordance with the ASX Listing Rules.

Restrictions on Transfer

Employee Options are not transferable.

Limitation on offers

If the Company makes an offer under the Plan where:

(a) the total number of Shares to be received on exercise of Options the subject of that offer exceeds the limit set out in ASIC Class Order 03/184; or
(b) the Offer does not otherwise comply with the terms and conditions set out in ASIC Class Order 03/184,

the Company must comply with Chapter 6D of the Corporations Act at the time of that Offer.

GLOSSARY

Acquisition means the acquisition by the Company of 100% of the shares in Alexium Ltd.

Alexium means Alexium Limited (a company registered in Cyprus).

ASIC means the Australian Securities and Investments Commission.

ASX means ASX Limited.

ASX Listing Rules or Listing Rules means the Listing Rules of ASX.

Board means the board of directors of the Company.

Capital Raising means the capital raising the subject of Resolutions 3 to 5 in this Notice of Meeting.

Company means ETW Corporation Limited (ABN 91 064 820 408).

Constitution means the Company’s Constitution.

Consolidation means the proposed consolidation of the Company on a 1 for 10 basis, the subject of Resolution 6.

Corporations Act means the Corporations Act 2001 (Cth).

Director Option means an option granted to a Director of the Company to acquire a Share.

Directors means the directors of the Company.

EDT means Eastern Daylight Saving Time.

Explanatory Statement means the explanatory statement to the Notice.

Independent Expert’s Report or Report means the independent expert’s report prepared by Stanton International Securities Pty Ltd which is annexed to this Memorandum.

Korcula means Korcula (BVI) SA (a company registered in the British Virgin Islands).

Meeting means the meeting convened by the Notice.

Notice of Meeting or Notice means the notice of meeting of Shareholders forming part of this Memorandum.

Option means an option to acquire a Share.

Performance Shares means performance shares convertible into fully paid ordinary shares in the Company on the terms and subject to the milestones outlined in Schedule 1.

Piper Buchanan means Piper Buchanan Limited (a company incorporated in the Cayman Islands).

Priority Offer means the priority offer to existing Shareholders of the Company as outlined in Section 4.2.

RAB means RAB Special Situations Fund (Master) Limited (a company incorporated in the Cayman Islands).

RST means Reactive Surface Technology owned by Alexium.

Sale Agreement means the Terms Sheet between the Company, Korcula, Piper Buchanan, RAB, Stephen Ribich, John Almond, Alexium and Viaticus dated 15 November 2009 pursuant to which the Company has agreed to purchase 100% of the issued shares in Alexium.

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

Shareholder means the holder of a Share.

Vendors means each of Korcula, Piper Buchanan and RAB.

Vendor Options means an option to subscribe for a Share issued to the Vendors as part consideration for the Acquisition.

Vendor Performance Shares means Performance Shares issued to the Vendors as part consideration for the Acquisition.

Vendor Shares means the 50,000,000 post-Consolidation Shares to be issued to the Vendors as part consideration for the Acquisition.

Viaticus means Viaticus Capital Pty Ltd (ACN 094 512 973).

Viaticus Securities means the Shares, Options and Performance Shares to be issued to Viaticus pursuant to Resolution 14.

WST means Western Standard Time.

SCHEDULE 1 – TERMS AND CONDITIONS OF PERFORMANCE SHARES

Class A Performance Shares

The terms and conditions of the Class A Performance Shares are as follows:

Rights attaching to the Class A Performance Shares

(a) (Class A Performance Shares) Each Class A Performance Share is a share in the capital of the Company.
(b) (General Meetings) The Class A Performance Shares shall confer on the holder (Holder) the right to receive notices of general meetings and financial reports and accounts of the Company that are circulated to shareholders. Holders have the right to attend general meetings of shareholders of the Company.
(c) (No Voting Rights) The Class A Performance Shares do not entitle the Holder to vote on any resolutions proposed at a general meeting of shareholders of the Company.
(d) (No Dividend Rights) The Class A Performance Shares do not entitle the Holder to any dividends.
(e) (Rights on Winding Up) The Class A Performance Shares participate in the surplus profits or assets of the Company upon winding up of the Company only to the extent of $0.000001 per Class A Performance Share.
(f) (Not Transferable) The Class A Performance Shares are not transferable.
(g) (Reorganisation of Capital) If at any time the issued capital of the Company is reconstructed, all rights of a Holder will be changed to the extent necessary to comply with the applicable ASX Listing Rules at the time of reorganisation.
(h) (Application to ASX) The Class A Performance Shares will not be quoted on ASX. However, upon conversion of the Class A Performance Shares into fully paid ordinary shares (Shares), the Company must within seven (7) days after the conversion, apply for the official quotation of the Shares arising from the conversion on ASX.
(i) (Participation in Entitlements and Bonus Issues) Holders of Class A Performance Shares will not be entitled to participate in new issues of capital offered to holders of Shares such as bonus issues and entitlement issues.
(j) (No Other Rights) The Class A Performance Shares give the Holders no rights other than those expressly provided by these terms and those provided at law where such rights at law cannot be excluded by these terms.

Conversion of the Class A Performance Shares

(a) (Conversion on achievement of milestone) Each Class A Performance Share will convert into one Share upon satisfaction of the following performance hurdles to the reasonable satisfaction of the Company:
(i) The Company achieving audited revenues in any financial year of not less than $3,000,000; or
(ii) The execution by the Company of unconditional sales contracts for its products in excess of $5,000,000 in aggregate;

(iii) The execution by the Company of two unconditional joint venture agreements for the development of the Company’s assets with either:
(A) significant internationally recognised companies; or
(B) companies recognised as leaders in their respective industry,
in each case with upfront licence fees and royalties payable to the Company; or
(iv) The receipt of orders from the United States Department of Defence for the Company’s products totalling in excess of $3,000,000 in aggregate,

within 3 years of the date of issue of the Class A Performance Shares (Milestone).

(b) (Redemption if Milestone not Achieved) If a Milestone is not achieved by the required date, then each Class A Performance Share held by a Holder will be automatically redeemed by the Company for the sum of $0.000001 within 10 Business Days of non satisfaction of the Milestone.
(c) (Conversion Procedure) The Company will issue the Holder with a new holding statement for the Shares as soon as practicable following the conversion of the Class A Performance Shares into Shares.
(d) (Ranking of Class A Performance Shares) The Shares into which the Class A Performance Shares will convert will rank pari passu in all respects with existing Shares.

Class B Performance Shares

The terms and conditions of the Class B Performance Shares are as follows:

Rights attaching to the Class B Performance Shares

(a) (Class B Performance Shares) Each Class B Performance Share is a share in the capital of the Company.
(b) (General Meetings) The Class B Performance Shares shall confer on the holder (Holder) the right to receive notices of general meetings and financial reports and accounts of the Company that are circulated to shareholders. Holders have the right to attend general meetings of shareholders of the Company.
(c) (No Voting Rights) The Class B Performance Shares do not entitle the Holder to vote on any resolutions proposed at a general meeting of shareholders of the Company.
(d) (No Dividend Rights) The Class B Performance Shares do not entitle the Holder to any dividends.
(e) (Rights on Winding Up) The Class B Performance Shares participate in the surplus profits or assets of the Company upon winding up of the Company only to the extent of $0.000001 per Class B Performance Share.
(f) (Not Transferable) The Class B Performance Shares are not transferable.
(g) (Reorganisation of Capital) If at any time the issued capital of the Company is reconstructed, all rights of a Holder will be changed to the extent necessary to comply with the applicable ASX Listing Rules at the time of reorganisation.
(h) (Application to ASX) The Class B Performance Shares will not be quoted on ASX. However, upon conversion of the Class B Performance Shares into fully paid ordinary shares (Shares), the Company must within seven (7) days after the conversion, apply for the official quotation of the Shares arising from the conversion on ASX.
(i) (Participation in Entitlements and Bonus Issues) Holders of Class B Performance Shares will not be entitled to participate in new issues of capital offered to holders of Shares such as bonus issues and entitlement issues.
(j) (No Other Rights) The Class B Performance Shares give the Holders no rights other than those expressly provided by these terms and those provided at law where such rights at law cannot be excluded by these terms.

Conversion of the Class B Performance Shares

(a) (Conversion not to occur until Class A Performance Share milestones achieved) No Class B Performance Share can be converted into a Share until such time as all performance hurdles for the Class A Performance Shares have been achieved.
(b) (Class A Performance Share milestones not to be considered in measuring Class B Performance Share milestones) In calculating any amounts for determining the satisfaction of the Class B Performance Share milestones in paragraph (c) below, all amounts used in determining the satisfaction of the Class A Performance Share milestones shall be disregarded.
(c) (Conversion on achievement of milestone) Each Class B Performance Share will convert into one Share upon satisfaction of the following performance hurdles to the reasonable satisfaction of the Company:

(i) The Company achieving audited revenues in any financial year of not less than $12,000,000; or
(ii) The execution by the Company of unconditional sales contracts for its products in excess of $20,000,000 in aggregate;
(iii) The execution by the Company of an additional two unconditional joint venture agreements for the development of the Company’s assets with either:
(A) significant internationally recognised companies; or
(B) companies recognised as leaders in their respective industry,
in each case with upfront licence fees and royalties payable to the Company; or
(iv) The receipt of orders from the United States Department of Defence for the Company’s products totalling in excess of $12,000,000 in aggregate,

within 5 years of the date of issue of the Class B Performance Shares (Milestone).

(d) (Redemption if Milestone not Achieved) If a Milestone is not achieved by the required date, then each Class B Performance Share held by a Holder will be automatically redeemed by the Company for the sum of $0.000001 within 10 Business Days of non satisfaction of the Milestone.
(e) (Conversion Procedure) The Company will issue the Holder with a new holding statement for the Shares as soon as practicable following the conversion of the Class B Performance Shares into Shares.
(f) (Ranking of Class B Performance Shares) The Shares into which the Class B Performance Shares will convert will rank pari passu in all respects with existing Shares.

SCHEDULE 2 – TERMS AND CONDITIONS OF OPTIONS (RESOLUTIONS 8, 9, 10, 11 AND 14)

The material terms and conditions of the Options will be as follows:

(a) the Options will be exercisable at any time prior to 5.00pm WST on the date that is two (2) years from the date of issue of the Options (Expiry Date). Options not exercised on or before the expiry date will automatically lapse;
(b) the exercise price of each Option will be $0.30 each;
(c) the Options may be exercised wholly or in part by completing an application form for Shares (Notice of Exercise) delivered to the Company's Share Registry and received by it any time prior to the Expiry Date;
(d) upon the exercise of an Option and receipt of all relevant documents and payment, the holder will be allotted and issued a Share ranking pari passu with the then issued Shares. The Company will apply to ASX to have the Shares granted official quotation;
(e) a summary of the terms and conditions of the Options, including the Notice of Exercise, will be sent to all holders of Options when the initial holding statement is sent;
(f) the Options will not be listed on ASX and are not transferable;
(g) any Notice of Exercise received by the Company’s share registry on or prior to the expiry date will be deemed to be a Notice of Exercise as at the last Business Day of the month in which such notice is received;
(h) there will be no participating entitlements inherent in the Options to participate in new issues of capital which may be offered to Shareholders during the currency of the Options. Prior to any new pro rata issue of securities to Shareholders, holders of Options will be notified by the Company and will be afforded 7 Business Days before the record date (to determine entitlements to the issue), to exercise Options;
(i) in the event the Company proceeds with a pro rata issue (except a bonus issue) of securities to the holders of Shares after the date of issue of the Options, the exercise price of the Options will be adjusted in accordance with the formula set out in ASX Listing Rule 6.22.2;
(j) in the event of any reconstruction (including consolidation, sub-division, reduction or return) of the issued capital of the Company prior to the expiry date, all rights of an optionholder are to be changed in a manner consistent with the ASX Listing Rules; and
(k) Shares issued pursuant to the exercise of an Option will be issued not more than 14 days after the date of the Notice of Exercise.

SCHEDULE 3 – TERMS AND CONDITIONS OF OPTIONS (RESOLUTIONS 12 AND 13)

The material terms and conditions of the Options will be as follows:

(a) the Options will be exercisable at any time prior to 5.00pm WST on the date that is two (2) years from the date of issue of the Options (Expiry Date). Options not exercised on or before the expiry date will automatically lapse;
(b) the exercise of the Options will be subject to the Option holder being employed, or in the service of the Company as at the time of exercise of the Options and to the satisfaction of the following conditions (Vesting Conditions) before the Options can be exercised:
(i) the Company achieving audited revenues in any financial year of not less than $3,000,000; or
(ii) the execution by the Company of unconditional sales contracts for its products in excess of $5,000,000 in aggregate; or
(iii) the execution by the Company of two unconditional joint venture agreements for the development of the Company’s assets with either:
- (A) significant internationally recognised companies; or
- (B) companies recognised as leaders in their respective industry,
- in each case with upfront licence fees and royalties payable to the Company; or
(iv) the receipt of orders from the United States Department of Defence for the Company’s products totalling in excess of $3,000,000 in aggregate,
(c) the exercise price of each Option will be $0.40 each;
(d) subject to the satisfaction of the Vesting Conditions, the Options may be exercised wholly or in part by completing an application form for Shares (Notice of Exercise) delivered to the Company's Share Registry and received by it any time prior to the Expiry Date;
(e) upon the exercise of an Option and receipt of all relevant documents and payment, the holder will be allotted and issued a Share ranking pari passu with the then issued Shares. The Company will apply to ASX to have the Shares granted official quotation;
(f) a summary of the terms and conditions of the Options, including the Notice of Exercise, will be sent to all holders of Options when the initial holding statement is sent;
(g) the Options will not be listed on ASX and are not transferable;
(h) any Notice of Exercise received by the Company’s share registry on or prior to the expiry date will be deemed to be a Notice of Exercise as at the last Business Day of the month in which such notice is received;
(i) there will be no participating entitlements inherent in the Options to participate in new issues of capital which may be offered to Shareholders during the currency of the Options. Prior to any new pro rata issue of securities to Shareholders, holders of Options will be notified by the Company and will be afforded 7 Business Days before the record date (to determine entitlements to the issue), to exercise Options;

(j) in the event the Company proceeds with a pro rata issue (except a bonus issue) of securities to the holders of Shares after the date of issue of the Options, the exercise price of the Options will be adjusted in accordance with the formula set out in ASX Listing Rule 6.22.2;
(k) in the event of any reconstruction (including consolidation, sub-division, reduction or return) of the issued capital of the Company prior to the expiry date, all rights of an optionholder are to be changed in a manner consistent with the ASX Listing Rules; and
(l) Shares issued pursuant to the exercise of an Option will be issued not more than 14 days after the date of the Notice of Exercise.

SCHEDULE 4 – TERMS AND CONDITIONS OF OPTIONS (RESOLUTIONS 12 AND 13)

The material terms and conditions of the Options will be as follows:

(a) the Options will be exercisable at any time prior to 5.00pm WST on the date that is four (4) years from the date of issue of the Options (Expiry Date). Options not exercised on or before the expiry date will automatically lapse;
(b) the exercise of the Options will be subject to the Option holder being employed, or in the service of the Company as at the time of exercise of the Options and to the satisfaction of the following conditions (Vesting Conditions) before the Options can be exercised:
(i) the Company achieving audited revenues in any financial year of not less than $12,000,000; or
(ii) the execution by the Company of unconditional sales contracts for its products in excess of $20,000,000 in aggregate; or
(iii) the execution by the Company of an additional two unconditional joint venture agreements for the development of the Company’s assets with either:
- (A) significant internationally recognised companies; or
- (B) companies recognised as leaders in their respective industry,
- in each case with upfront licence fees and royalties payable to the Company; or
(iv) the receipt of orders from the United States Department of Defence for the Company’s products totalling in excess of $12,000,000 in aggregate,
(c) the exercise price of each Option will be $0.50 each;
(d) subject to the satisfaction of the Vesting Conditions, the Options may be exercised wholly or in part by completing an application form for Shares (Notice of Exercise) delivered to the Company's Share Registry and received by it any time prior to the Expiry Date;
(e) upon the exercise of an Option and receipt of all relevant documents and payment, the holder will be allotted and issued a Share ranking pari passu with the then issued Shares. The Company will apply to ASX to have the Shares granted official quotation;
(f) a summary of the terms and conditions of the Options, including the Notice of Exercise, will be sent to all holders of Options when the initial holding statement is sent;
(g) the Options will not be listed on ASX and are not transferable;
(h) any Notice of Exercise received by the Company’s share registry on or prior to the expiry date will be deemed to be a Notice of Exercise as at the last Business Day of the month in which such notice is received;
(i) there will be no participating entitlements inherent in the Options to participate in new issues of capital which may be offered to Shareholders during the currency of the Options. Prior to any new pro rata issue of securities to Shareholders, holders of Options will be notified by the Company and will be

afforded 7 Business Days before the record date (to determine entitlements to the issue), to exercise Options;

(j) in the event the Company proceeds with a pro rata issue (except a bonus issue) of securities to the holders of Shares after the date of issue of the Options, the exercise price of the Options will be adjusted in accordance with the formula set out in ASX Listing Rule 6.22.2;
(k) in the event of any reconstruction (including consolidation, sub-division, reduction or return) of the issued capital of the Company prior to the expiry date, all rights of an optionholder are to be changed in a manner consistent with the ASX Listing Rules; and
(l) Shares issued pursuant to the exercise of an Option will be issued not more than 14 days after the date of the Notice of Exercise.

SCHEDULE 5 – VALUATION OF DIRECTOR OPTIONS (RESOLUTIONS 9 TO 11)

The Director Options to be issued to the Related Parties pursuant to Resolutions 9 to 11 have been valued by internal management.

Using the theoretical Black & Scholes option model and based on the assumptions set out below, the Director Options were ascribed a value range, as follows:

Assumptions:

Valuation date	24 November 2009

Market price of Shares	20 cents

Exercise price	30 cents

Expiry date	31 January 2012

Risk free interest rate	4.61%

Volatility	30%

Indicative value per Director Option	$0.013

Total Value of Director Options:
- Resolution 10 (Gavin Rezos)	$19,591.96
- Resolution 11 (Stefan Susta)	$19,591.96
- Resolution 12 (Craig Smith Gander)	$13,061.31
-

Note: The valuation ranges noted above are not necessarily the market prices that the Director Options could be traded at and they are not automatically the market prices for taxation purposes.

SCHEDULE 6 – VALUATION OF DIRECTOR OPTIONS (RESOLUTION 12)

The Options to be issued to Stephen Ribich pursuant to Resolutions 12 have been valued by internal management.

Using the theoretical Black & Scholes option model and based on the assumptions set out below, the Options were ascribed a value range, as follows:

Assumptions:

Valuation date	24 November 2009

Market price of Shares	20 cents

Exercise price	30 cents	40 cents	50 cents

Expiry date	31 January 2012	31 January 2012	31 January 2014

Risk free interest rate	4.61%	4.61%	4.61%

Volatility	30%	30%	30%

Indicative value per Director Option	$0.013061	$0.003968	$0.009552

Value of Director Options	$32,652.50	$4,960	$11,940

Total value of Director Options	$49,552.50

Note: The valuation noted above is not necessarily the market prices that the Options could be traded at and they are not automatically the market prices for taxation purposes.

SCHEDULE 7 – VALUATION OF OPTIONS (RESOLUTIONS 14)

The Options to be issued to Viaticus pursuant to Resolutions 14 have been valued by internal management.

Using the theoretical Black & Scholes option model and based on the assumptions set out below, the Options were ascribed a value range, as follows:

Assumptions:

Valuation date	24 November 2009

Market price of Shares	20 cents

Exercise price	30 cents

Expiry date	31 January 2012

Risk free interest rate	4.61%

Volatility	30%

Indicative value per Director Option	1.3 cents

Total Value of Director Options	$26,122.61

Note: The valuation noted above is not necessarily the market prices that the Options could be traded at and they are not automatically the market prices for taxation purposes.

PROXY FORM

APPOINTMENT OF PROXY ETW CORPORATION LIMITED ABN 91 064 820 408

GENERAL MEETING

I/We

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being a member of ETW Corporation Limited entitled to attend and vote at the General Meeting, hereby

Appoint

Name of proxy

OR the Chair of the General Meeting as your proxy

or failing the person so named or, if no person is named, the Chair of the General Meeting, or the Chair’s nominee, to vote in accordance with the following directions, or, if no directions have been given, as the proxy sees fit, at the General Meeting to be held at 10.00am (WST), on 29 January 2010 at Level 31, Allendale Square, 77 St Georges Terrace, Perth, Western Australia, and at any adjournment thereof.

If no directions are given, the Chair will vote in favour of all the Resolutions.

If the Chair of the General Meeting is appointed as your proxy, or may be appointed by default, and you do not wish to direct your proxy how to vote as your proxy in respect of Resolutions 1 to 16 please place a mark in this box.

By marking this box, you acknowledge that the Chair of the General Meeting may exercise your proxy even if he has an interest in the outcome of Resolutions 1 to 16 and that votes cast by the Chair of the General Meeting for Resolutions 1 to 16 other than as proxy holder will be disregarded because of that interest. If you do not mark this box, and you have not directed your proxy how to vote, the Chair will not cast your votes on Resolutions 1 to 16 and your votes will not be counted in calculating the required majority if a poll is called on Resolutions 1 to 16. OR

Voting on Business of the General Meeting

FOR AGAINST ABSTAIN

Resolution 1 – Reduction of Share Capital and Accumulated Losses Resolution 2 – Change to Nature and Scale of Business Resolution 3 – Issue of Shares for Capital Raising Resolution 4 – Authority for Directors to Participate in Capital Raising Resolution 5 – Approval to Issue Shares for Capital Raising Resolution 6 – Consolidation Resolution 7 – Approval to Issue New Class of Securities Resolution 8 – Issue of Shares, Performance Shares and Options to Vendors Resolution 9 – Approval for Issue of Options to Proposed Director – Gavin Rezos Resolution 10 – Approval for Issue of Options to Proposed Director – Stefan Susta Resolution 11 – Approval for Issue of Options to Director – Craig Smith-Gander Resolution 12 – Approval for Issue of Options to Proposed Director – Stephen Ribich Resolution 13 - Approval for Issue of Securities to John Almond Resolution 14 – Issue of Shares, Options and Performance Shares to Viaticus Capital Resolution 15 – Change of Name to Alexium International Group Limited Resolution 16 – Approval of Employee Option Plan

Please note : If you mark the abstain box for a particular Resolution, you are directing your proxy not to vote on that Resolution on a show of hands or on a poll and your votes will not to be counted in computing the required majority on a poll.

Signature of Member(s):

Signature of Member(s): ____ Individual or Member 1 Sole Director/Company Secretary	Member 2 Director	Date: Member 3

		Director/Company Secretary

Contact Name: _____ Contact Ph (daytime): _________

ETW CORPORATION LIMITED ABN 91 064 820 408

Instructions for Completing ‘Appointment of Proxy’ Form

(Appointing a Proxy): A member entitled to attend and vote at an General Meeting is entitled to appoint not more than two proxies to attend and vote on a poll on their behalf. The appointment of a second proxy must be done on a separate copy of the Proxy Form. Where more than one proxy is appointed, such proxy must be allocated a proportion of the member’s voting rights. If a member appoints two proxies and the appointment does not specify this proportion, each proxy may exercise half the votes. A duly appointed proxy need not be a member of the Company.
(Direction to Vote): A member may direct a proxy how to vote by marking one of the boxes opposite each item of business. Where a box is not marked the proxy may vote as they choose. Where more than one box is marked on an item the vote will be invalid on that item.

(Signing Instructions):

(Individual): Where the holding is in one name, the member must sign.
(Joint Holding): Where the holding is in more than one name, all of the members should sign.
(Power of Attorney): If you have not already provided the Power of Attorney with the registry, please attach a certified photocopy of the Power of Attorney to this form when you return it.
(Companies): Where the company has a sole director who is also the sole company secretary, that person must sign. Where the company (pursuant to Section 204A of the Corporations Act) does not have a company secretary, a sole director can also sign alone. Otherwise, a director jointly with either another director or a company secretary must sign. Please sign in the appropriate place to indicate the office held.
(Attending the Meeting): Completion of a Proxy Form will not prevent individual members from attending the General Meeting in person if they wish. Where a member completes and lodges a valid Proxy Form and attends the General Meeting in person, then the proxy’s authority to speak and vote for that member is suspended while the member is present at the General Meeting.
(Return of Proxy Form): To vote by proxy, please complete and sign the enclosed Proxy Form and return by:
(c) post to ETW Corporation Limited, PO Box Z5425, Perth, WA 6831; or
(b) facsimile to the Company on facsimile number +61 8 9486 8854,

so that it is received not later than 10.00am (WST) on 27 January 2010.

Proxy forms received later than this time will be invalid.

ANNEXURE A – INDEPENDENT EXPERT’S REPORT

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4 December 2009

The Directors ETW Corporation Limited Level 8, 256 St Georges Terrace PERTH WA 6000

Dear Sirs

RE: ETW CORPORATION LIMITED (“ETW” OR “COMPANY”) (ABN 91 064 820 408) MEETING OF SHAREHOLDERS PURSUANT TO SECTION 611(ITEM 7) OF THE CORPORATIONS ACT 2001 (“TCA”) AND LISTING RULES 10.1 AND 10.11 OF THE AUSTRALIAN SECURITIES EXCHANGE (“ASX”) ON THE PROPOSAL TO ACQUIRE 100% OF THE ISSUED SHARE CAPITAL OF ALEXIUM LIMITED AND ITS 100% OWNED SUBSIDIARIES FOR THE CONSIDERATION OF SHARES, PERFORMANCE SHARES AND SHARE OPTIONS IN ETW CORPORATION LIMITED

1. Introduction

1.1 We have been requested by the Directors of ETW to prepare an Independent Expert’s Report to determine the fairness and reasonableness relating to the proposals pursuant to resolution 8 as detailed in the Notice of Meeting to ETW shareholders (the “Notice”) and the Explanatory Statement to Shareholders (“ES”) accompanying the Notice that is to be forwarded to shareholders in December 2009. Paragraphs 1.14, 8.4 and 10.1 refer to our conclusions.
1.2 Under resolution 8 it is proposed that ETW will acquire 100% of the issued capital of Alexium Limited (“Alexium”) and its 100% owned subsidiaries Alexium Marketing Services Limited (“AMSL) and Alexium Inc. (“AI”) collectively known as the Alexium Group for a purchase consideration of 50,000,000 post consolidation ordinary shares (“Vendor Shares”), two tranches each of 25,000,000 post consolidation performance shares (“Vendor Performance Shares”) and 5,000,000 post consolidation share options (“Vendor Options”) in ETW with a total deemed valuation of $10,065,036. For the purposes of this report the proposed acquisition of Alexium and its subsidiaries will be referred to as the Acquisition.
1.3 On 3 December 2009 ETW announced it had entered into a conditional Heads of Agreement with Alexium, a Cyprus registered company to acquire a 100% interest in the Company from Korcula (BVI) SA incorporated and registered in the British Virgin Islands (“Korcula”), Piper Buchanan Limited, a company registered and incorporated in the Cayman Islands (“Piper”) and RAB Special Situations Fund (Master) Fund Limited, a company registered in the Cayman Islands (each a “Vendor”) and together

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Au:ETW4548A/ IER Re ETW acquisition of Alexium

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(the “Vendors”). Alexium holds proprietary patent applications to a process called Reactive Surface Technology and has a representative European office through its wholly owned United Kingdom subsidiary, AMSL. AI, its wholly owned US subsidiary, is dormant, has no assets or liabilities and has not traded. ETW is acquiring Alexium on a 100 per cent scrip basis, with 50 per cent of the scrip share consideration payable only upon Alexium achieving certain milestones. The operative terms of the Heads of Agreement as noted in the Term Sheet are:

ETW agrees to make a loan to Alexium of GBP £200,000 within 7 days of execution of the Term Sheet at an interest rate calculated at the HSBC Bank lending rate for like amounts for 30 day periods (the “Loan”). The Loan will be repayable within 12 months from the date of its advance (the “Advance Date”) or such longer period as the parties may agree provided that if the conditions precedent set out in clause 4 of the Term Sheet are not satisfied the Loan will be repaid earlier. Refer to the ES for further details;
ETW agrees to have approximately AUD$3,650,000 cash (including the face value of the Loan), less costs of this transaction and the associated capital raising, on completion of the Acquisition, by either undertaking a consolidation on up to a 1 for 12 basis ( as noted in Resolution 6 the consolidation of shares is now on a 1 for 10 basis) and issuing up to 15 million new shares at 20 cents each with attaching 2 year share options exercisable at 30 cents each or by issuing new shares pre consolidation such that post consolidation and capital raising there will be substantially the shares and options set out in schedule 1 on issue of the Term Sheet (subsequently ETW proposes in terms of resolutions 3 and 5 that it undertakes an issue of 171,428,571 pre consolidation shares at 1.75 cents each to raise a gross $3,000,000 and by issuing up to 7,500,000 post consolidation shares at an issue price of 20 cents each to raise a gross $1,500,000);
On completion of the Acquisition, ETW agrees to issue to the Vendors 50 million post consolidation Vendor Shares (18,344,143 to Korkula, 14,513,000 to Piper and 17,142,857 to RAB) at an issue price of 20 cents each and two tranches (Tranches A and B) of 25 million Performance Shares each subject to the following milestones and timeframe:

Tranche A

Milestone for the issue of 25 million Class A Performance Shares: The achievement of any of the following:

Actual Revenues in any financial year of not less than $3 million; or
Execution of unconditional aggregate sales contract(s) and/or licences providing revenues for in excess of $5 million;
Execution of 2 unconditional Joint Venture Agreements with either significant internationally recognized companies or companies recognized as leaders in their industry in each case with upfront licence fees and royalties; or
US Military Orders for the Company’s products for in excess of $3 million in aggregate.

Time: within 3 years of the date of issue of the Class A Performance Shares.

Tranche B

Milestone for the issue of 25 million Class B Performance Shares: The achievement of any of the following:

Au:ETW4548A/ IER Re ETW acquisition of Alexium

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Actual Revenues in any financial year of not less than $12 million; or
Execution of unconditional aggregate sales contract(s) and/or licences providing revenues for in excess of $20 million;
Execution of 2 unconditional Joint Venture Agreements with either significant internationally recognized companies or companies recognized as leaders in their industry in each case with upfront licence fees and royalties; or
US Military Orders for in excess of $12 million in aggregate.

No Class B Performance Shares can be converted into an ordinary share until such time as all Performance Hurdles for the Class A Performance Shares have been achieved. In calculating any amounts for determining the satisfaction of the Class B Performance Share milestones, all amounts used in determining the satisfaction of the Class A Performance Share milestones will be disregarded.

Time: within 5 years of the date of issue of the Class B Performance Shares.

the Performance Shares will convert to ordinary fully paid shares on the milestones being achieved;
ETW agrees to issue 5 million, 2 year post consolidation Vendor Options to RAB exercisable at 30 cents each; and
ETW agrees to issue to Viaticus Capital Pty Ltd, 2,500,000 post consolidation ordinary shares and two tranches of 1,250,000 Performance Shares subject to the same milestones and time limits as those issued to the Vendors.
1.4 On completion of the Acquisition
ETW will procure that two of its existing three directors, Mr Aaron Finlay and Ms Nadine Donovan will resign on completion to be replaced by Mr Stephen Ribich together with Mr Gavin Rezos and Mr Stefan Susta. Mr Craig Smith-Gander will remain a director.
Mr John Almond and Mr Stephen Ribich will enter into service contracts with ETW for 12 month terms (renewable) at salaries to be agreed but being no less than current salaries and which will include medical benefits provided that the current restrictive covenants in their current contracts will continue in force. In addition, Mr Stephen Ribich will be entitled to be reimbursed the costs of relocation of his family to Australia in the event his service contract with ETW is terminated without cause.
Mr John Almond and Mr Stephen Ribich (a proposed new director) will each be entitled to an award of 5,000,000 post consolidation share options subject to shareholder approval. The 5,000,000 share options to be issued to Mr Stephen Ribich comprise 2,500,000 two year share options exercisable at 30 cents each vesting immediately, 1,250,000 share options exercisable at 40 cents each within two years of date of issue but subject to certain performance conditions and 1,250,000 share options exercisable at 50 cents each within 4 years of date of issue subject to certain performance conditions. The 5,000,000 share options to be issued to Mr John Almond are exercisable under the same terms as the share options issued to Mr Stephen Ribich. The two year and four year share options are subject to similar vesting conditions as the vesting conditions attaching to the Class A Performance Shares and Class B Performance Shares respectively as noted

Au:ETW4548A/ IER Re ETW acquisition of Alexium

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above and as more fully described in Schedule 3 and 4 of the Notice. The share options are also subject to a continuing employment vesting condition.

The other proposed new directors of ETW, Mr Gavin Rezos and Mr Stefan Susta will each be eligible for 1,500,000 two year share options exercisable 30 cents each. Mr Craig Smith-Gander will be eligible for 1,000,000 two year share options exercisable at 30 cents each. These share options vest immediately on issue. It is proposed that non executive director fees of $25,000 per annum are payable to each non executive director except for the Chairman who will receive $60,000 per annum.

As disclosed in the Notice, the consummation of resolution 8 relating to the acquisition of Alexium and the issue of the 50,000,000 Vendor Shares, 50,000,000 Vendor Performance Shares and 5,000,000 Vendor Options is inter-alia subject to the passing of resolutions 1 to 7 inclusive and resolutions 9 to 16 inclusive. In terms of the conditional Heads of Agreement with Alexium, the acquisition is also subject to ETW having approximately $3,650,000 cash (including the face value of the Loan) less any transaction costs and capital raising costs. ETW intends conducting a capital raising of up to $3,000,000 via the issue of up to 171,428,571 shares at an issue price of 1.75 cents each. The offer of these shares will be made to sophisticated and professional investors only pursuant to Section 708 of the Corporations Act 2001 and as such does not require a disclosure document. Pursuant to resolution 5 ETW proposes to conduct a capital raising of up to $1,500,000 at 20 cents per share by the issue of 7,500,000 post consolidation shares. As part of this capital raising, the Company will make available to existing shareholders (other than related parties) a priority offer to acquire up to 5,000,000 post consolidation shares. For the purposes of this report, we have referred to these share issues as the Capital Raisings. Thus the number of securities to be issued pursuant to the proposed Capital Raisings will be 171,428,571 (17,142,857 on a post consolidated basis) and 7,500,000 post consolidated shares under the two Capital Raisings.

1.5 The Vendors of Alexium will, subject to the comments below, receive all of the 50,000,000 Vendor Shares and Vendor Performance Shares at a deemed issue price of 20 cents each for a total value of $10,000,000. Additionally a Vendor will receive 5,000,000 Vendor Options at a deemed value of $65,306 based on a Black Scholes share option valuation. The Vendors of Alexium currently do not have any interest in the shares or share options of ETW.
1.6 Alexium is a Cyprus registered company formed in 2007 for the sole purpose of acquiring the global intellectual property rights to the Reactive Surface Technology as it had then been developed by the US Department of Defence. The inventor of the technology, Dr Jeff Owens, together with Mr Stephen Ribich and Mr John Almond have operated Alexium since founding the company in May 2007. Dr Jeff Owens divested his shares in Alexium in 2009, as required by the US Department of Defence (DoD) to avoid conflicts of interest between Alexium and his role in the US Defence Threat Reduction Agency. Dr Owens is permitted by the DoD to retain a 5% gross sales royalty on Alexium sales outside the US. General details on Alexium are outlined elsewhere in this report and in the ES accompanying the Notice.

Au:ETW4548A/ IER Re ETW acquisition of Alexium

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1.7 Under Section 606 of TCA, 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 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 transactions noted in resolution 8 pursuant to a Section 611 (Item 7) meeting.

1.8 Under ASIC Regulatory Guideline 111 “Contents of Expert Reports” and ASX Listing Rule 10.11 an Independent Expert’s Report is required to report on the fairness and reasonableness of the transaction pursuant to resolution 8. The Directors have requested Stantons International Securities to prepare an Independent Expert’s Report to assist the shareholders in determining how to vote on resolution 8 as outlined in the Notice and the ES.
1.9 In determining the fairness and reasonableness of the Acquisition of all of Alexium Shares from the Vendors and the issue of the Vendor Shares and Vendor Options, we have had regard for the definitions set out by the Australian Securities and Investments Commission (“ASIC”) in its Regulatory Guide 111, “Content of Expert Reports”. Regulatory Guide 111 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). The concept of “fairness” is taken to be the value of the offer price, or the consideration, being equal to or greater than the value of the securities in the above mentioned offer. Furthermore, this comparison should be made assuming 100% ownership of the “target” and irrespective of whether the consideration is scrip or cash. An offer is “reasonable” if it is fair. An offer may also be reasonable, if despite not being ”fair”, there are sufficient grounds for security holders to accept the offer in the absence of any higher bid before the close of the offer.
1.10 If resolution 8 proceeds, the Vendors will acquire a relevant interest in 50,000,000 Vendor Shares, 50,000,000 Vendor Performance Shares and 5,000,000 Vendor Options. Assuming that the Company has issued 171,428,571 pre consolidation shares, the consolidation of shares on a 1 for 10 basis has occurred and that the Company has issued a further 7,500,000 shares at 20 cents each, the fully paid share capital of ETW before the issue of the various securities to the Vendors becomes 56,025,503 shares. On issue of 50,000,000 Vendor Shares to the Vendors and 2,500,000 shares to Viaticus Capital Pty Ltd, the Vendors collectively will obtain a 46.07% interest in the expanded fully paid ordinary share capital of the Company (108,525,503 shares). In addition, two of the Vendors individually may exceed 20% of the ordinary issued capital of ETW in the event that the Performance Shares were converted to ordinary shares. In the event that all Performance Shares converted to ordinary shares on meeting the relevant Performance Hurdles (all milestones), Korcula could obtain an interest of approximately 28.73% and Piper could obtain an interest of approximately 22.73%.

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1.11 There are sixteen other resolutions being put to the shareholders of ETW. The shareholders should read the other resolutions and the explanatory notes accompanying the Notice to consider the effect that the resolutions may have on the Company and the shareholders interests in the Company. Resolution 1 relates to the reduction of the Company’s share capital and accumulated losses by $64,618,625 without cancelling any fully paid shares. Resolution 2 relates to the approval for a change in the nature and scale of activities of the Company subject and conditional on the passing of resolutions 1 and resolutions 3 to 16 inclusive. Resolution 3 relates to the approval to issue 171,428,571 pre consolidation shares at an issue price of 1.75 cents per share as part of the first Capital Raising of up to $3,000,000 before capital raising costs. Resolution 4 seeks approval for the existing Directors (or their nominees) to participate in the Capital Raising by subscribing for up to 11,428,571 pre-consolidation shares at an issue price of 1.75 cents per share to raise up to $200,000. Resolution 5 relates to the approval for the Company to issue 7,500,000 post consolidation shares at an issue price of 20 cents per share to raise $1,500,000. As part of this capital raising, the Company will make available to existing shareholders (other than related parties) a priority offer to acquire up to 5,000,000 post consolidation shares. Resolution 6 relates to the consolidation of the Company’s share capital on the basis of 1 share for every 10 shares on issue. Resolution 7 relates to the authorisation for the Company to issue Performance Shares on the terms and conditions set out in the ES. Resolution 8 relates to the approval for the acquisition of Alexium and the issue of up to 50,000,000 Vendor Shares, 50,000,000 Vendor Performance Shares and 5,000,000 Vendor Options to the Vendors. Resolutions 9, 10 and 11 relates to the approval to issue 1,500,000 share options each to proposed new directors Mr Gavin Rezos, Mr Stefan Susta and to an existing director Mr Craig Smith-Gander (or their nominees). Resolution 12 seeks the approval of Shareholders to the issue of 5,000,000 share options to Mr Stephen Ribich. Resolution 13 seeks the approval of Shareholders for the issue of 5,000,000 share options to Mr John Almond. As outlined in the ES, it is a term of the Acquisition that the Company issues to Mr John Almond 5,000,000 share options as part consideration for the Acquisition. Mr John Almond is not a related party of the Company. Resolution 14 relates to the approval for the issue of 2,500,000 shares, 2,500,000 Performance Shares and 2,000,000 share options to Viaticus Capital Pty Ltd (or its nominees). Resolution 15 relates to the approval for a change of name of the Company to Alexium International Group Limited. Resolution 16 seeks the approval of Shareholders for the adoption of the “Directors, Employees and Consultants Option Plan” (Plan) to allow the issue of Options under the Plan.
1.12 We are not reporting on the merits of resolutions 1 to 7 and resolutions 9 to 16 but do note that the passing of resolution 8 is subject to and conditional on the passing of resolutions 1 to 7 inclusive and resolutions 9 to 16 inclusive. Further details on the other resolutions are outlined in the ES attached to the Notice. The Company has requested Stantons International Securities to prepare an Independent Expert’s Report to determine whether the proposals outlined in resolution 8 are fair and reasonable to the shareholders of ETW (not associated with the Vendors or Vendor Associates).
1.13 Apart from this introduction, this report considers the following:
Summary of opinion;
Implications of the proposals;
Corporate history and nature of business of ETW and Alexium;
Future directions of ETW;
Basis of valuation of ETW shares and share options as consideration;
Basis of valuation of Alexium;
Premium for Control

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Conclusion as to fairness;
Reasonableness of the proposals under resolution 8;
Conclusion as to reasonableness;
Sources of information; and
Appendix A and our Financial Services Guide.
1.14 In our opinion, the proposals as outlined in resolution 8 to issue 50,000,000 Vendor Shares, 50,000,000 Performance Shares and 5,000,000 Vendor Options to the Vendors, are on balance, reasonable to the shareholders of ETW not associated with the Vendors. Owing to the nature of the business of ETW and Alexium, valuations depend on the values placed on the technology and licence interests of the companies. The valuation of technology and licence interests and the valuation of future profitability and cash flows are extremely subjective as they involve assumptions regarding future events that are not capable of independent substantiation. Since we cannot determine a fair value for Alexium, we have concluded that we are unable to determine whether the proposals under resolution 8 are fair. Under ASX guidelines, we are required to state under such circumstances that the proposals are not fair.

The opinions expressed above must be read in conjunction with the more detailed analysis and comments made in this report.

2. Implications of the Proposals

2.1 As at 30 November 2009, there are 313,826,457 fully paid shares on issue in ETW and 70,000,000 unlisted share options exercisable at $0.01 each and with an expiry date of 31 December 2010.

The significant fully paid shareholders as at 12 November 2009 based on the top 20 shareholders list were believed to be:

Shareholder Oaktone Nominees Pty Ltd Mr G J Rezos & Mrs J E Rezos Aymon Pacific Pty Ltd Bampton Nominees Pty Ltd Grace Capital Corporation Banskin Pty Ltd Fiske Nominees Ltd Ridge Street Investments Pty Ltd Kakaruk Pty Ltd Rainwood Holdings Pty Ltd Total	No. of fully paid shares % of issued fully paid shares 42,300,000 13.48 26,951,850 8.59 21,881,483 6.97 16,000,000 5.10 10,666,667 3.40 10,000,000 3.19 8,000,000 2.55 7,800,000 2.49 6,916,000 2.20 6,065,998 1.93
	156,581,998 49.9

2.2 Prior to the completion of the Acquisition, ETW will undertake two Capital Raisings and a share consolidation on a 1 for 10 basis. It is proposed that the Company will issue 171,428,571 pre consolidation shares at 1.75 cents each to raise $3,000,000 (before capital raising costs) bringing the number of shares on issue to 485,255,028 shares in issue. The expanded securities on issue of 485,255,028 shares and 70,000,000 share options will convert to 48,525,503 post consolidation shares and 7,000,000 post consolidation share options respectively. The current share option exercise price of 1 cent per share will convert to 10 cents per post consolidated share. In addition, a further up to 7,500,000 post consolidation shares are expected to be issued at 20 cents

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each under a further proposed Capital Raising so that immediately before the issue of shares to the Vendors and Viaticus Capital Pty Ltd there will be a maximum of 56,025,503 fully paid shares on issue (assumes the combined minimum Capital Raisings of $4,500,000 before share issue costs, being the issue of 171,428,571 pre consolidation shares and 7,500,000 post consolidation shares and no options exercised). We set out below the relevant interests assuming the issue of ordinary shares, the conversion of the performance shares into fully paid shares and the exercise of share options.

		Vendors	Vendors	Viaticus and Brokers	Viaticus and Brokers	Vendor Associates Almond & Ribich	Vendor Associates Almond & Ribich	Directors Rezos, Susta, Smith- Gander	Directors Rezos, Susta, Smith- Gander	Other	Other
Shares on Issue	Number of shares in issue	Potential Number of Shares	%	Potential Number of Shares	%	Potential Number of Shares	%	Potential Number of Shares	%	Number of Shares	%

Shares on issue 30 November 2009	313,826,457	-	-	-	-	-	-	-	-	313,826,457 1	100.00
Capital Raising	171,428,571	-	-	-	-	-	-	-	-	171,428,571	-
Shares on issue after the Capital Raising	485,225,028	-	-	-	-	-	-	-	-	485,225,028	100.00
Consolidation of shares	(436,729,525)	-	-	-	-	-	-	-	-	(436,729,525)	-
Total shares on issue after the Consolidation of Shares	48,525,503	-	-	-	-	-	-	-	-	48,525,503	100.00
Capital Raising	7,500,000	-	-	-	-	-	-	-	-	7,500,000	-
Total shares on issue after the Capital Raising	56,025,503	-	-	-	-	-	-	-	-	56,025,503	100.00
Issue of Vendor Shares and shares to Viaticus	52,500,000	50,000,000	-	2,500,000	-	-	-	-	-	-	-
Total shares on issue after the Issue of Vendor Shares and shares to Viaticus	108,525,503	50,000,000	46.07	2,500,000	2.30	-	-	-	-	56,025,503	51.63
Issue of Performance shares to Vendors and Viaticus	52,500,000	50,000,000	-	2,500,000	-	-	-	-	-	-	-
Total potential shares on issue following the Issue of Performance Shares	161,025,503	100,000,000	62.10	5,000,000	3.11	-	-	-	-	56,025,503	34.79
Existing Post consolidation options on issue	7,000,000	-	-	-	-	-	-	-	-	7,000,000	-
Issue of options to Vendors and Viaticus	7,000,000	5,000,000		2,000,000
Issue of options to Mr John Almond and Mr Stephen Ribich	10,000,000	-	-	-	-	10,000,000		-	-	-	-
Issue of options to new directors	4,000,000	-	-	-	-	-	-	4,000,000	-	-	-
Total fully diluted shares on issue following the conversion of all the options	189,025,503	105,000,000	55.55	7,000,000	3.70	10,000,000	5.29	4,000,000	2.12	63,025,503	33.34

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Note 1 Mr Gavin Rezos a proposed director of ETW currently holds 49,233,333 shares out of 313,826,457 shares currently on issue.

2.3 After the issue of the Capital Raising shares and the Vendor Shares (but before the exercise of any share options), the maximum number of shares that would be on issue is 108,525,503. There will also be 7,000,000 share options on issue exercisable at 10 cents each on or before 31 December 2012 (this assumes a consolidation of the share options on a one for ten basis pursuant to resolution 6 to the Notice). After the issue of the 50,000,000 Vendor Performance Shares and the issue of 2,500,000 Performance Shares to Viaticus Capital Pty Ltd there will be a total of 52,500,000 Performance Shares on issue which are convertible into ordinary shares on the meeting of certain milestones as set out under paragraph 1.3 above. After the issue of 5,000,000 Vendor Options to a Vendor, the issue of 2,000,000 share options to Viaticus Capital Pty Ltd, the issue of 10,000,000 share options to the Vendor Associates and 4,000,000 share options to an existing and proposed directors (Messrs Rezos, Susta and Smith-Gander), the total number of share options on issue will increase from 7,000,000 to 28,000,000.
2.4 In the event that all Performance Shares convert into fully paid ordinary shares, the number of ordinary shares increases from 108,525,503 shares to 161,025,503 shares before the issue of shares on the exercise of share options. In the event that all share options are exercised, the maximum number of securities post the passing and consummation of resolutions 1 to 16, (assumes $4,500,000 Capital Raising), would be 189,025,503 shares.
2.5 The current Board of Directors comprises Mr Aaron Finlay, Mr Craig Smith-Gander and Ms Nadine Donovan. If resolutions 1 to 16 are passed and consummated, ETW will procure that Mr Aaron Finlay and Ms Nadine Donovan resign as directors on completion to be replaced by Mr Stephen Ribich together with 2 other new directors, Mr Stefan Susta and Mr Gavin Rezos. It is anticipated that Mr Stefan Susta will be based in the United States. Further directors may be appointed later as needs dictate.
2.6 The Company would own 100% of the share capital of Alexium (and its subsidiaries) and a pro-forma consolidated balance sheet is disclosed elsewhere in this report.

3. Corporate History and Nature of Business

ETW Corporation Limited

3.1 ETW (previously “Evan & Tate Limited”) was incorporated in 30 May 1994. The Company traded in the wine business as Evans & Tate Limited until 18 August 2007, when the Company was placed in external administration. At a meeting of creditors held on 14 December 2007, creditors resolved to execute the Deed of Company Arrangement contained in the Second Administrator’s report. The DOCA embodied a reconstruction and recapitalisation proposal by Delshore Nominees Pty Ltd. At a meeting of shareholders on 27 May 2008 the shareholders voted to accept the terms of a restructure that saw the Company released from external administration. This was wholly effectuated on 28 April 2008. A prospectus dated 28 April 2008 was issued and closed fully subscribed. The Company allotted 291,600,000 shares and 70,000,000 options raising $2,600,700. The Company was readmitted to the official list of the ASX on 30 June 2008. Pursuant to the DOCA the Company retained the rights to the core business of wine production, marketing and distribution. ETW through its wholly owned subsidiary, Evans & Tate Premium Wines Pty Ltd retained a number of wine brands for which it holds registered trademarks in Australia to market and distribute these brands within Australia and overseas. At the annual general meeting of shareholders held on 28 May 2008 the shareholders approved the change of name to

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ETW Corporation Limited. On 25 August 2009 ETW announced that it had entered into an agreement for the commercialisation of its Cocoparra wine label, pursuant to which the Company incorporated Cocoparra Estate Pty Ltd. ETW will hold 51% of the fully paid ordinary capital in Cocoparra Estate Pty Ltd with its joint venture partner holding the remaining 49%. On 3 December 2009 the Company announced it was entering into a Heads of Agreement with Alexium.

Alexium Limited

3.2 Alexium is a Cyprus registered company formed in 2007 for the sole purpose of acquiring the global intellectual property rights to the Reactive Surface Technology as it had then been developed by the US Department of Defence. The inventor of the technology, Dr Jeff Owens, together with Mr Stephen Ribich and Mr John Almond has operated Alexium since founding the company in May 2007. Following the establishment of Alexium, RAB Special Situations (Master) Fund Limited invested in the company in June 2007. In early 2009 Dr Owens transferred his shareholding in Alexium to meet US Air Force conflict of interest rules as the Reactive Surface Technology is now being trialled by the US Department of Defence (DoD). However, Dr Owens will receive an ongoing gross sales royalty of five (5) per cent on worldwide sales by Alexium, excluding the US. Dr Owen remains involved with Alexium through his research tenure with the DoD and the US Defence Threat Reduction Agency . The following unaudited information was provided to us on Alexium:
Alexium holds proprietary patent applications to the Reactive Surface Technology process and has a European representative office through its wholly owned United Kingdom subsidiary, Alexium Marketing Services Limited;
Alexium was awarded “World’s Best Technology 2009”, beating 90 other accepted entrants to win this important honour awarded by the WBT showcase which partners with the US National Association of Seed and Venture Funds;
The Alexium technology was originally developed by the United States DoD for the purposes of providing the US military with advanced textiles that could be utilised to protect soldiers and other military personnel from chemical and biological attack, whilst providing other additional benefits such as water proofing and flame retardant features. The focus of Alexium is currently on this market segment;
Reactive Surface Technology refers to Alexium’s patented technology whereby it utilises low energy microwave technology to bind silane and othe compounds to structures such as textiles, glass, and paint;
The US DoD holds the original patent for the technology, whilst Alexium has exclusive rights to the technology internationally, and has applied for a range of subsidiary and improve patents that build on the capacity of the technology;
Alexium has entered into an agreement with the US DoD whereby it retains the exclusive rights for the technology in the United States, in exchange for a 2.5 per cent gross sales royalty to be paid to the US DoD and a 5 per cent gross sales royalty to Dr Jeff Owens, the inventor of the technology;
The Alexium technology is being further refined and developed by Dr Owens at the United States Air Force Research Labs, with a particular focus on chemical and biological defence;

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To date, the US Air Force and DoD , through Dr Owens and his team of research scientists, has invested $30 million in the technology, with Alexium reaping the commercial benefit of the historical research spend, as well as any future spending, research and development conducted by Dr Owens;
The US Air Force have passed all historic and future rights to the technology to Alexium, and the parties are effectively operating under a Collaborative Research and Development Agreement (“CRADA”) which is yet to be finally formalized;
The Alexium technology is the backbone of at least three (3) major US DoD programmes relating to providing improved personal and collective protection against chemical and biological agents. Two of these programmes relate specifically to textiles, where the Alexium technology is being used to provide unique multi-functional textiles to replace expensive, multi-layered textiles and “activated carbon” technologies; and
The US DoD programmes are the J-FIRE (Joint Fire Incident Response Ensemble) program, the JSLIST (Joint Service Lightweight Integrated Suit Technology) program, and the CARC (Chemical Agent Resistant Coatings) program. In addition to these programmes, the Alexium technology is currently being utilised for classified military projects.

We have not undertaken any due diligence on the Reactive Surface Technology process and the veracity of the above statements. Further details on Alexium are outlined in the ES accompanying the Notice.

4. Future Directions of ETW

4.1 We have been advised by the directors and management of ETW that:

There are no proposals currently contemplated whereby ETW will acquire any further property or assets from the Vendors (however ETW will issue Vendor Shares, Vendor Performance Shares and Vendor Options to the Vendors as outlined in resolution 8 and above to acquire 100% of the share capital of Alexium) or where ETW would transfer any of its property or assets to the Vendors;
The composition of the Board will change in the immediate future as noted in paragraph 2.5 above;
As part of acquiring all of the shares in Alexium, the Company will make a placement to sophisticated investors to raise up to $3,000,000 (by issue of 171,428,571 pre consolidation shares, undertake a consolidation of capital on a 1 for 10 basis and undertake a capital raising to raise up to $1,500,000 (by the issue of 7,500,000 post consolidation shares) of which up to 5,000,000 shares at 20 cents would be made available as a priority offer to existing shareholders;
No dividend policy has been set and it is not proposed to be set until such time as the Company is profitable and has a positive cash flow;
The Company will endeavour to enhance the value of its proposed shareholding interest in Alexium and may seek new opportunities;
Mr Gavin Rezos is proposed to be the new Chairman to be appointed by the new board whose salary will be agreed by the new board;

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ETW will maintain a small office in Perth, Australia as required by ASIC and ASX regulations. The office will include the provision of company secretarial and accounting services at reasonable rates available in the market in Perth. The current company secretary will resign on or before completion of the Acquisition;
Viaticus Capital Pty Ltd agrees to provide investor relations services at its standard rates to ETW pre completion of the Acquisition or to Alexium post completion of the Acquisition should Alexium in either case so request and any equity based consideration will be subject to shareholder approval in the event Viaticus Capital Pty Ltd is a related party. ETW agrees to be bound by any decision of Alexium to engage the services of Viaticus Capital Pty Ltd; and
On completion of the acquisition, and subject to shareholder approval the Company will change its name to Alexium International Group Limited.

5. Basis of Valuation of ETW Securities

5.1 Shares
5.1.1 In considering the proposals outlined in resolution 8, we have sought to determine if the considerations payable by ETW to the Vendors is fair and reasonable to the existing non-associated shareholders of ETW.
5.1.2 The offer pursuant to resolution 8 would be fair to the existing non-associated shareholders if the value of the assets (100% investment in Alexium) being acquired by ETW is greater than the implicit value of the Vendor Shares, Vendor Performance Shares and Vendor Options being offered as consideration. Accordingly, we have sought to determine a theoretical value that could reasonably be placed on ETW ordinary shares for the purposes of this report.
5.1.3 The valuation methodologies we have considered in determining a theoretical value of an ETW ordinary share are:
Capitalised maintainable earnings/discounted cash flow;
Takeover bid—the price at which an alternative acquirer might be willing to offer;
Adjusted net backing and windup values; and
The market price of ETW shares.
5.2 Capitalised maintainable earnings and discounted cash flows.
5.2.1 Owing to ETW’s current operations, a lack of profit history arising since the Company came out of administration following the Deed Of Company Arrangement undertakings and the lack of a reliable future cash flow from an existing current business activity, we have considered these methods of valuation not to be relevant for the purpose of this report. The Company and its consolidated subsidiaries to 30 September 2009 have estimated trading losses of over $64,000,000.
5.3 Takeover Bid
5.3.1 It is possible that a potential bidder for ETW could purchase all or part of the existing shares; however, no certainty can be attached to this occurrence.
5.3.2 To our knowledge, there are no current bids in the market place and the directors of ETW have formed the view that there is unlikely to be any takeover bids made for ETW in the immediate future. As noted above, the Vendors collectively would initially obtain a 46.06% ordinary shareholding interest in the Company and this may

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increase to approximately 55.55% in the event that all Performance Shares (A and B) convert to ordinary shares if all Performance Hurdles are achieved.

5.4 Net Asset Backing
5.4.1 Set out below is the unaudited consolidated balance sheet of ETW as at 30 September 2009 adjusted for estimated operating costs of $74,600 for the 4 month period from 30 September 2009 to 31 January 2010 as supplied by the Company’s management. In addition we have set out below a pro-forma consolidated balance sheet which represents the unaudited consolidated balance sheet of ETW as at 30 September 2009 adjusted for the following transactions:
additional estimated expenditure of ETW of $74,600 for the 4 months to 31 January 2010;
a reduction of the Company’s share capital and accumulated losses by $64,618,625;
additional estimated expenditure of the Alexium Group for the 4 months to 31 January 2010 of $120,000;
the granting of a loan by ETW to Alexium of £200,000 (approximately $360,000 at an exchange rate of 1AUD=£0.555);
allowing for the issue of a further 171,428,571 pre consolidation shares at 1.75 cents each to raise $3,000,000;
consolidation of shares on a 1 for 10 basis;
the issue of 7,500,000 post consolidation shares at 20 cents each to raise a gross $1,500,000;
the issue of 50,000,000 Vendor Shares at a deemed value of $10,000,000, 50,000,000 Vendor Performance Shares at a deemed value of nil and 5,000,000 Vendor Options at a deemed value of $65,306 to the Vendors;
the creation of goodwill of $9,304,102 which has been allocated to intangible assets on the elimination of the deemed Acquisition price of $10,065,306 against the un-audited consolidated net assets of Alexium Limited totalling $761,204;
the issue of 2,500,000 ordinary shares at a deemed value of 20 cents per share ($500,000), 2,500,000 Performance Shares at a deemed value of nil and 2,000,000 2 year 30 cent share options to Viaticus Capital Limited at a deemed value of $26,122 based on a Black Scholes option valuation model and expensed;
the issue of 10,000,000 2-4 year share options to the Vendor Associates, Mr Stephen Ribich and Mr John Almond under the terms noted under paragraph 1.4 above. The 5,000,000 2 year share options exercisable at 30 cents each have an estimated value of $65,306 based on a Black Scholes share option valuation model. The remaining 5,000,000 share options have performance milestones and for the purpose of this report have a nil deemed value. Furthermore the Performance Options are estimated to vest from the date of grant to the latest of the milestone date and therefore no amounts would have in any case been expensed in the pro-forma balance sheet as at 30 September 2009;
The issue of 4,000,000 30 cent share options exercisable within 2 years to directors at an estimated value of $52,245 based on a Black Scholes share option valuation model. These share options have been expensed as they vest on the issue date which is assumed to be the date of the proposed general meeting;

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estimated capital raising costs of $227,500 which have been debited against share equity; and
estimated cash costs of the Acquisition amounting to $201,500 which have been expensed and included under accumulated losses.

	ETW Adjusted	ETW Adjusted	ETW Pro-forma	Alexium
		Unaudited	Consolidated	Unaudited
	30 September		30 September	Consolidated
		2009	2009	30 September
				2009
		$000’s	$000’s	$000’s
Current Assets
Cash and cash equivalents		470	4,825	404
Trade and other receivables		6	28	22
Total Current Assets		476	4,853	426
Non Current Assets
Loan to Alexium		-	-	-
Plant and equipment		-	82	82
Intangibles		-	9,686	382
Total Non Current Assets		-	9,768	464
Total Assets		476	14,621	890
Current Liabilities
Trade and other payables		8	125	117
Other		-	12	12
Total Current Liabilities		8	137	129
Net Assets		468	14,484	761
Equity
Issued capital		65,223	15,376	315
Reserves		1	210	1,768
Accumulated losses		(64,756)	(1,102)	(1,322)
Net Equity		468	14,484	761
Shares on issue (post consolidation)		31,382,646	108,525,023

The un-audited consolidated figures for Alexium have been converted from UK Pound Sterling to Australian dollars using an exchange rate of 1AUD = ₤0.555.

5.4.2 Based on the adjusted unaudited Balance Sheet of ETW at 30 September 2009 and 31,382,646 post consolidation shares on issue (313,826,457 pre consolidation shares), this equates to approximately 1.49 cents per post consolidated share. Based on the adjusted pro-forma consolidated book values as at 30 September 2009 of $14,484,000 and prior to the conversion of any share options, this equates to a value per fully paid ordinary share of approximately 13.3 cents (ignoring the value, if any, of non-booked tax benefits) and assuming 108,525,023 fully paid ordinary shares are on issue after the consolidation of shares on a 1 for 10 basis.
5.4.3 No detailed review was made by us on the assets and liabilities disclosed in the unaudited adjusted balance sheet as at 30 September 2009. We have been assured by the management of ETW that they believe the carrying value of all current assets and liabilities at 30 September 2009 are fair and not materially misstated.

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5.4.4 We also note it is not the present intention of the Directors of ETW to liquidate the Company and therefore any theoretical value based on wind-up value or even net book value, is just that, theoretical. The shareholders, existing and future, must acquire shares in ETW based on the market perceptions of what the market considers an ETW share to be worth. The acquisition of Alexium is subject to shareholder approval (resolution 8) and the passing of resolutions 1 to 7 (inclusive) and 9 to 16 (inclusive) that inter alia relates to a change in the nature and scale of activities. Furthermore ETW has advised that it proposes raising a total of $4,500,000 (before costs of raising) in two capital raisings. The first capital raising of $3,000,000 will be at the equivalent of 17.5 cents per share on a post consolidated basis and the additional capital raising is proposed at 20 cents per share. Since ETW proposes the Capital Raisings at an issue price of between 17.5 cents and 20 cents per share and the acquisition of Alexium is subject to those capital raisings, arguably it is fair to attribute a fair value of between 17.5 cents and 20 cents per share to the 50,000,000 Vendor Shares. For purposes of this report we have deemed the fair value of each Vendor Share to be 20 cents each. However, based on the net asset value of an ETW share prior to any of the Capital Raisings, the 50,000,000 Vendor Shares are collectively worth approximately $745,000.
5.5 Market Price of ETW fully paid Ordinary Shares and ETW Performance Shares
5.5.1 We note that prior to the announcement of the initial Heads of Agreement with Alexium on 3 December 2009, the ETW shares have not traded as the shares are currently suspended. The shares were suspended in October 2008 when they last traded at 2 cents per share.

Generally, the market is a fair indicator of what a share is worth, however the theoretical technical value based on the underlying value of assets and liabilities may be lower or higher. Over time, in the absence of a corporate deal, the shares in ETW may trade below 1 cent on a post consolidated basis. Based on the adjusted unaudited consolidated 30 September 2009 book values of ETW’s assets, ETW has net equity of approximately $468,000 that results in an asset backing of around 1.49 cents per share on a post consolidated basis (refer paragraph 5.4.2).

As discussed above, the 50,000,000 Vendor Shares are to be issued at a deemed fair value of $10,000,000 to acquire all of the shares in Alexium notwithstanding that the underlying asset backing is only 1.49 cents per share. Proposed Capital Raisings are to be undertaken at between 17.5 cents and 20 cents per share on a post consolidated basis. However these share issues are subject to the passing of all the resolutions the subject of the Notice. Under the current economic conditions it is not unusual for the market prices of shares of similar companies to trade at a significant discount to net asset or net cash backing. In effect, the shares may have a fair value (not necessary equating to the market value) of approximately 1 cent (on a 1 for 10 consolidated basis) prior to the consummation of the Acquisition and the raising of additional capital and approximately up to 20 cents assuming the consummation of the Acquisition, the passing of all the resolutions and the successful completion of the Capital Raisings. Currently the Company has no Performance Shares on issue and there is no market value for them. For the purposes of our report we have not ascribed a value to the Vendor Performance Shares as they can only be converted into fully paid shares on the achievement of certain milestones as noted in paragraph 1.3 above. It is not possible to determine whether these milestones will be achieved. If the milestones are not achieved in the specified time frames the Vendor Performance Shares are worth nothing, but potentially if the milestones are achieved the Vendor Performance Shares may have significant values.

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5.5.2 The future value of a ETW ordinary share after the Capital Raisings and acquisition of Alexium will depend on, inter-alia:
The future commercialisation of the Reactive Surface Technology;
The state of Australian and overseas stock markets;
Membership and control of the Board and quality of management;
General economic conditions in Australia and overseas but in particular the United States; and
Liquidity of shares in the Company.

Options

5.6 Part of the consideration being paid by ETW to one of the Vendors (RAB) is 5,000,000 Vendor Options exercisable at 30 cents. To place a value on such Options, we have used the Black-Scholes option valuation methodology. The key assumptions used were:
Market value of an ETW share: 20 cents (refer comment above)
Exercise price and expiry dates: 30 cents on or before 2 years from issue date
Interest free rate (2 year Bond rate): 4.61%  Volatility factor: 30%

Based on the above assumptions, the range of value of one Vendor Option may approximate 1.306 cents. Thus the technical value of the 5,000,000 Vendor Options proposed to be issued to RAB may approximate $65,306. It is noted that under current Australian Accounting Standards, there is a need to book the value of the consideration for the issue of Vendor Options. Furthermore, if all Vendor Options were exercised, ETW would receive cash funds of $1,500,000. However, the share price of an ETW share may be considerably more than the 30 cent exercise price and thus there may be an opportunity cost in that shares could be placed at a figure greater than such prices. It is unlikely that the Vendor Options will be exercised until Alexium’s rights to the Reactive Surface Technology proves successful and the share price of ETW (then called Alexium International Group Limited) exceeds the Vendor Option exercise price for a number of months.

6. Basis of Valuation of Alexium

6.1 The usual approach to the valuation of an asset is to seek to determine what an informed, willing but not anxious buyer would pay to an informed, willing but not anxious seller in an open market.

To estimate the fair market value of the shares in Alexium, we have considered valuation methodologies recommended by ASIC Regulatory Guideline 111 regarding valuation reports of independent experts and common market practice. These are discussed below.

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6.2 Market based methods

Market based methods estimate a company’s fair market value by considering the market price of transactions in its shares or market value of comparable companies. Market based methods include:

Capitalisation of maintainable earnings;
Analysis of a company’s recent share trading history; and
Industry specific methods.

The capitalisation of maintainable earnings methods estimates fair market value based on the company’s future maintainable earnings and an appropriate earnings multiple. An appropriate earnings multiple is derived from market transactions involving comparable companies. The capitalisation of maintainable earnings is appropriate where the company’s earnings are relatively stable. The most recent share trading history provides evidence on the fair market value of the shares in a company where they are publicly traded in an informed and liquid market.

Industry-specific methods estimate market value using rules of thumb for a particular industry. Generally, rules of thumb provide less persuasive evidence on market value of a company, since they may not account for company-specific factors.

6.3 Discounted cash flow method

The discounted cash flow method estimates market value by discounting a company’s future cash flows to their present value. This method is appropriate where a projection or forecast of future cash flows can be made with a reasonable degree of confidence. The discounted cash flow method is commonly used to value early stage companies or projects with a finite life.

6.4 Asset-based methods

Asset-based methods estimate the market value of a company’s shares based on the realisable value of its identifiable net assets.

Asset-based methods include:

Orderly realisation of assets method;
Liquidation of assets method; and
Net asset on a going concern basis.

The orderly realisation of assets method estimates fair market value by determining the amount that would be distributed to shareholders, after payment of all liabilities, including realisation costs and taxation charges that arise, assuming the company is wound up in an orderly manner. The liquidation method is similar to the orderly realisation of assets method except the liquidation method assumes the assets are sold in a shorter timeframe. Since winding up or liquidation of the company may not be contemplated, these methods in their strictest form may not necessarily be appropriate. The net assets on a going concern basis, estimates the market values of the net assets of the company but does not take account of realisation costs.

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These approaches ignore the possibility that the company’s value could exceed the realisable value of its assets. Asset-based methods are appropriate when companies are not profitable or a significant proportion of a company’s assets are liquid.

6.5
Selection of Valuation Methodologies

All of the valuation methodologies considered above have significant limitations or restrictions in their application to Alexium.

Capitalisation of maintainable earnings is not appropriate because Alexium is not presently profitable. Recent share trading is not applicable as it is a private company owned by the Vendors.

The discounted cash flow method has not been applied because no reliable prospective financial information is available (refer below). An asset-based method is limited by the fact that Alexium’s primary assets are various patents and global intellectual property rights to the Reactive Surface Technology as noted above.

6.6 In this section we consider the valuation of Alexium. We have considered the valuation of Alexium in assessing whether or not the proposal outlined in resolution 8 is fair and reasonable for ETW’s non-associated shareholders. In forming our opinion on the value of Alexium we have:
Considered the stage of development of Alexium and the prospective financial information available;
Considered the appropriateness of the valuation methodologies available; and
Considered the ability of Alexium to continue as a going concern without funding (ETW has made a loan to Alexium of £200,000).

6.7 Valuation of Alexium

As discussed, the capitalisation of maintainable earnings, discounted cash flow and asset-based methodologies have limitations in their application to Alexium.

It is noted that there are internal valuations prepared and no formal adoption of cash flow and profit and loss forecasts, although some preliminary forecasts have been prepared.

We do not consider it appropriate to rely on the forecasts prepared by Alexium in conjunction with ETW. For any company in a start-up phase or without commercial sales agreements in place to commercialise the technology it is notoriously difficult to be accurate with forecasted financial information.

It is noted in the preliminary budgets prepared by management that ETW and Alexium are forecasting a combined cash requirement of around US$1,375,000 (including research and development costs) in the first 12 months of operations and are then forecasting to be cash flow positive. Of the US$1,375,000 approximately US$375,000 relates to ETW’s corporate and administration costs. Alexium has indicated potential sales revenues of US$3.3 million in 2011, US$18.5 million in 2012, US$29.7 million in 2013. Net revenues/(loss) before tax for Alexium are potentially US$1 million loss in 2010, US$1.8 million net revenues in 2011, US$13.9 million net revenues in 2012, US$22.3 million net revenues in 2013. (these amounts exclude corporate and administration costs of ETW). We cannot be assured that those sales forecasts can be achieved or that Alexium can be successful and enter into licensing agreements

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with third parties that will enable it to make a profit and generate positive cash flows. Neither Alexium or ETW have warranted or represented that these potential revenue figures are achievable or realistic.

6.8 Summary of valuation methodology and conclusion

We are unable to conclude upon a meaningful valuation range for Alexium, due to the early stages of discussing licensing and test agreements with parties based in the US, Europe and Australia and the lack of readily available and reliable financial projections and information.

6.9 We have relied on ETW undertaking the necessary due diligence to satisfy themselves on:
Ownership of Alexium;
No unrecorded liabilities in the books of Alexium;
Current legal directors of Alexium;
Ownership of proprietary patent applications to the Reactive Surface Technology
Ownership and interest of Alexium in the exclusive rights for the technology in the United States in exchange for a 2.5% gross sales royalty to be paid to the US military and a 5% gross sales royalty to Dr Jeff Owens (including the ability of the Reactive Surface Technology to be commercialised) ;
Ownership and interest of Alexium in the exclusive rights for the technology internationally; and
Other factors that may affect the ultimate ownership and value of Alexium.
6.10 We have been informed that all necessary due diligence has been completed to the best ability of the ETW directors. However, no guarantee can be given as to the long-term value of Alexium (and ETW). This will depend on many factors, including inter-alia:
Future commercial success or otherwise of Alexium’s exclusive rights and patents (distribution agreements) and other interests in commercialising the Reactive Surface Technology in the countries for which it has distribution licences;
Foreign and Australian stock exchange markets;
Ability to raise capital to develop the businesses and commercialise the licences and other interests;
Relationships with future customers, and
Quality of management.

7. Premium for Control

7.1 Premium for control for the purposes of this report, has been defined as the difference between the price per share that a buyer would be prepared to pay to obtain or improve a controlling interest in the Company, and the price per share that the same person would be required to pay where that share does not carry with it control or the ability to improve control of the Company.
7.2 Under TCA, control may be deemed to occur when a shareholder or group of associated shareholders controls more than 20% of the issued capital. In this case, the Vendors collectively could hold an initial approximately 46.07% (now nil) of the issued capital of ETW and may increase their collective ordinary shareholding interest to approximately 62.10% if all Performance Shares were converted to ordinary shares in ETW as a result of all Performance Hurdles or milestones being achieved. Furthermore, if all Performance Shares were converted to ordinary shares in ETW as a

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result of all Performance Hurdles or milestones being achieved, Korcula would obtain an approximate 28.73% interest in the ordinary share capital of ETW and Piper would obtain an approximate 22.73% interest in the ordinary share capital of ETW. As noted above, we have addressed whether a premium for control will be paid for shares issued to the Vendors pursuant to resolution 8.

7.3 Since we cannot determine, with any degree of accuracy, the value of Alexium, we cannot determine whether the Vendors are to pay a premium for the potential control. However, we note that it is likely that if Alexium is commercially successful (which inter-alia requires sufficient capital and/or debt raisings), the potential for an increase in the share price of an ETW ordinary fully paid share is enhanced.

8. Conclusion as to Fairness

8.1 The proposals pursuant to resolution 8 are believed fair to ETW’s non-associated shareholders if the values of the considerations offered are equal to or less than the value of the shares in Alexium (100%) to be acquired.
8.2 Owing to the nature of the business of ETW and Alexium, valuations depend on the value placed on the technology and licence interests of the companies. The valuation of technology and licence interests and valuing future profitability and cash flows is extremely subjective because it involves assumptions regarding future events that are not capable of independent substantiation.
8.3 We have been unable to determine a fair value for Alexium. In arriving at our view that we are unable to form an opinion on the value of Alexium, we have, inter-alia, referred to the following factors:
The relative newness of the technologies developed by Dr Owens and the US Department of Defence and that Alexium has yet to commercialise its interests in the licence (distribution) agreements;
The ability to produce positive cash flow and profits over a period of time is still uncertain;
Alexium needs to obtain sufficient working capital to meet its planned objectives;
The cash flow model depends on the quality of management and the loss of such management would jeopardise the ability to meet forecasts; and
The risks associated with commercialisation.
8.4 We have concluded that we are unable to ascribe a fair value to Alexium shares and therefore cannot form an opinion as to whether the proposal under resolution 8 is fair. As ETW is listed on the ASX, under ASX Listing Rules that require us to conclude whether the proposal is fair or not fair, we conclude that the proposal pursuant to resolution 8 is not fair.

9. Reasonableness of the Proposals under Resolution 8

9.1 We set out below some of the advantages and disadvantages and other factors pertaining to the proposal pursuant to resolution 8.

Advantages

9.2 There is definite upside potential to acquiring 100% of Alexium and there is a possibility that Alexium may become profitable and cash flow positive. It is an

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opportunity for ETW to acquire a position in a company that has the potential to be cash flow positive in a few years time.

9.3 Since the Vendors are receiving 50,000,000 Vendor Shares, 50,000,000 Vendor Performance Shares and 5,000,000 Vendor Options there is every incentive to ensure the business model of Alexium is successful. In addition, it is noted that the Vendor Associates will receive 10,000,000 share options of which 5,000,000 share options vest on the achievement of certain performance milestones. The Vendor Associates will also want to ensure that Alexium will be commercially successful. The Vendor Shares may be worth far less than $10,000,000 if the Alexium business is unsuccessful because it is expected that the market will place the vast majority of value of the ETW group on its proposed 100% shareholding interest in Alexium.
9.4 Without the acquisition of a 100% interest in Alexium (or some similar potentially profitable project), the cash reserves of ETW will decline over time as investments are evaluated. It is noted that the net asset backing per share (on a post 1 for 10 consolidated basis) is estimated to be 1.49 cents. In the absence of approving the proposals under resolutions 2 to 16 (each resolution is conditional on the passing of all other resolutions, except resolution 1) the shares in ETW would remain suspended and thus shareholders would continue to have no ready market to sell any shares in ETW. The entering into the Heads of Agreement as announced to the market on 3 December 2009 has allowed recommencement of trading in ETW shares on the ASX. In the event that the resolutions are not passed and consummated, the shares in ETW would be resuspended from quotation.
9.5 The chances of having the existing outstanding 1 cent share options (10 cents on a post consolidated basis) being exercised may be enhanced if the proposal to acquire 100% of Alexium is approved. As at 30 November 2009 there are 70,000,000 share options outstanding (7,000,000 on a post consolidated basis) and these are exercisable at 1 cent each, on or before 31 December 2012. The chances of conversion to ordinary shares may be enhanced by approving the acquisition of Alexium. As stated above, without approval, the share price is unlikely to increase to any significant degree. If all the existing share options were exercised, the Company would receive a total of $700,000 and if all the existing share options and proposed share options to be issued pursuant to the Notice were exercised the Company would receive a total of $7,750,000.
9.6 The wine industry in which ETW has previously operated is extremely competitive. By approving the change of nature of business, the Company can focus on being a “technology” company specialising in the Reactive Surface Technology, a patented process which could potentially result in significant revenues being earned by the Company.
9.7 By changing focus and making this clear, there will no longer be confusion in the market as to the intentions of the Company.
9.8 A larger market capitalisation and enhanced shareholder base should provide a more liquid market for the Company’s securities.
9.9 The Board of directors will provide an experienced and balanced set of skills to guide the growth of the Company.

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Disadvantages

9.10 There is a risk that Alexium will not be commercially successful and that, in the event that losses are incurred by Alexium, the share price of an ordinary share in ETW may fall. Because ETW will need to lend funds to Alexium in the short/medium term, in the event of non-commercialisation of Alexium’s business, any funds lent may not be fully recoverable. It is noted under the Term Sheet that ETW agrees to make a loan to Alexium of £200,000 ($360,000 at the current exchange rate of 1AUD=£0.555) within 7 days of the execution of the Term Sheet. The loan, which is unsecured, will be repayable within 12 months from the date of its advance although the repayment dates may be varied.
9.11 The Company will be changing the nature of its activities to become a company focused on a new technology relating to the Reactive Surface Technology, which may not be consistent with the objectives of some shareholders.
9.12 The acquisition of Alexium will result in the issue of ordinary shares to the Vendors of Alexium which will have a dilutionary effect on the current holdings of shareholders of ETW. The interests of the Vendors rise from nil shares to a total of 50,000,000 ordinary shares representing approximately 46.07% of the expanded ordinary issued capital of ETW after the Capital Raisings of $4,500,000 (108,525,503 shares on a post consolidated basis) but before the conversion of any Performance Shares, and the exercise and assuming no further share options are exercised. Assuming the Vendor Performance Shares and the Viaticus Performance Shares are converted into ordinary shares and assuming no share options are exercised, the collective interests of the Vendors rises from 46.07% to 62.10% (refer point 2.2 above).
9.13 There are many risk factors associated with the change of nature of the Company’s activities, or rather associated with Alexium’s business and operations. Some but not necessarily all the risk factors are:
that it may not be possible for the Company to successfully commercialise the Reactive Surface Technology;
the costs of further research and development and costs to commercialise the technology may be significantly higher than anticipated;
the period until successful commercialisation could be significantly longer than expected;
the Company may lose or not have access to the necessary expertise and resources to commercialise the product; and
revenues may be substantially less than projected.

Other Factors and Information

9.14 There will be a significant non-associated shareholding in ETW after the passing of resolutions the subject of the Notice. In addition, shareholders are not required to sell or dispose of their shares but are given the opportunity to retain a shareholding in a company (ETW) that is obtaining an interest in Alexium that may have significant upside potential.
9.15 Paragraph 5.4.1 above discloses the pro-forma un-audited consolidated balance sheet of the ETW Group. In the parent company accounts of ETW, the cost of the 100% interest in Alexium may be disclosed at $10,065,306. In addition ETW will have Loan receivables owing by Alexium of approximately $360,000. The consolidated net asset backing per share (including intangibles) would be approximately 13.3 cents. There

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would be 108,525,503 ordinary shares on issue before the exercise of any further share options or the conversion of Performance Shares into ordinary shares. Ignoring the intangibles (that in effect may represent the value of the technology rights and patent interests of Alexium) the adjusted net asset backing per ordinary share would be approximately 4.42 cents (based on net tangible assets of $4,798,000 and 108,525,503 ordinary shares in issue). We cannot ascribe a fair value to the intangible interests of Alexium. It may be that in time the investment in Alexium may need to be written down in the event of non commercialisation of the Alexium technology. The value of the technology under A-IFRS may need to be amortised off over the life of the patents and if so will affect the reported results of the ETW Group by having an amortisation expense of around $538,000 per annum over say 18 years (assumed remaining life of the patents). If the life of the patents is shorter the amortisation expense will increase. In addition, in the absence of commercial success, the intangibles may need to be written down and possibly to nil. Under A-IFRS, each year the Directors of ETW will need to assess the fair market value of the intangibles and consider whether write downs are warranted.

9.16 The 50,000,000 Vendor Shares, 50,000,000 Vendor Performance Shares and 5,000,000 Vendor Options may be subject to escrow (treated as restricted securities) imposed by the ASX.
9.17 It is the view of the board of directors of ETW that the investment in Alexium will give its shareholders a great opportunity to participate in a technology business (assuming that Alexium can commercialise its distribution rights) and the investment is in the best interests of all shareholders.
9.18 The value of the Vendor Options is currently assessed at approximately $65,306. The exercise price of the Vendor Options is 30 cents and at the time of exercising the Vendor Options (if exercised), the value of an ETW share may be more than 30 cents. However, the Vendor, RAB would need to pay ETW $150,000 to exercise the Vendor Options. The other share options to be issued as noted above, also have exercise prices ranging from 30 cents each to 50 cents each and the share price of an ETW share may be trading at prices greater than the exercise prices. However, all existing shareholders benefit from a rising share price. If all new share options and the existing share options are exercised, ETW would receive $7,750,000 in new cash funds.
9.19 The value of the Vendor Performance Shares cannot be accurately assessed at this point of time. The ultimate value of the ordinary shares that arise from ant conversion of the Performance Shares may be significant but no further cash is received from conversion to ordinary shares. It is noted that there are significant Performance Hurdles or milestones to be met for the Class A and B Performance Shares to convert to ordinary shares. If convertible, there would be a realistic assumption that the share price of an ETW share trading on ASX may be in excess of 20 cents being the issue price of new shares planned as noted in paragraph 1.3 and 1.11 above, particularly if the Class B Performance Shares were able to be converted. All shareholders benefit from a rising share price.

10. Conclusion as to Reasonableness

10.1 Assuming the Company will raise up to $4,500,000 before capital raising costs via the Capital Raisings and after taking into account the factors referred to in 8 above and elsewhere in this report, we are of the opinion that the proposal as outlined in resolution 8 may, on balance, be considered reasonable to the non-associated shareholders of ETW.

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11. Sources of Information

11.1 In making our assessment as to whether the proposal pursuant to resolution 8 is fair and reasonable, we have reviewed relevant published available information and other unpublished information of the Company and Alexium that is relevant to the current circumstances. We have also held discussions with the management of ETW about the present and future operations of ETW and Alexium. 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 consultants of ETW and Alexium.
11.2 Information we have received includes, but is not limited to:
Draft Notices of General Meeting of Shareholders of ETW and draft Explanatory Statement to Shareholders prepared in November and December 2009;
- Discussions and correspondence with management, directors or consultants of ETW and Alexium;
- Shareholding details of ETW as at 30 September 2009 and 12 November 2009;
- Unaudited pro-forma balance sheet of ETW as at 30 September 2009 and a further pro-forma balance sheet to reflect the acquisition of Alexium and Capital Raisings of $4,500,000.
- Preliminary cash flow and profit and loss forecasts of Alexium to 2013;
- Details of historical market trading of ETW ordinary fully paid shares recorded by ASX prior to suspension in October 2008;
- Letter Agreement (“Term Sheet”) between Alexium and the Vendors dated October 2009;
- Preliminary Budgets of Alexium for 2010 to 2013;
- Announcements made by ETW to ASX from 1 January 2008 to 3 December 2009 including the announcement on the “Proposed Acquisition of Alexium Limited, Winner of the World’s Best Technology, Re-quotation on the Australian Securities Exchange on the 7[th] December, and Existing Shareholder Priority Offer” dated 3 December 2009;
- Draft Share Sale Agreement between ETW and the Vendors;
- Draft investor briefing note dated October 2009 prepared by Viaticus Capital Pty Ltd; and
- A document titled Acquisition of “World’s best technology 2009” prepared by Viaticus Capital Pty Ltd.

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11.3 Our report includes Appendix A and our Financial Services Guide attached to this report.

Yours faithfully STANTONS INTERNATIONAL SECURITIES

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J P Van Dieren – FCA Director

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APPENDIX A

AUTHOR INDEPENDENCE AND INDEMNITY

This annexure forms part of and should be read in conjunction with the report of Stantons International Securities dated 4 December 2009, relating to acquiring 100% of the issued capital of Alexium as outlined in paragraphs 1.2 and 1.3 of the report and resolution 8 in the Notice of Meeting to Shareholders to be distributed to shareholders in December 2009.

At the date of this report, Stantons International Securities does not have any interest in the outcome of the proposal. There are no relationships with ETW, Alexium or the Vendors other than acting as an independent expert for the purposes of this report. There are no existing relationships between Stantons International Securities and the parties participating in the transaction detailed in this report which would affect our ability to provide an independent opinion. The fee to be received for the preparation of this report is based on the time spent at normal professional rates plus out of pocket expenses and is estimated at $16,000. The fee is payable regardless of the outcome. With the exception of the fee, neither Stantons International Securities nor John P Van Dieren have received, nor will, or may they receive, any pecuniary or other benefits, whether directly or indirectly, for or in connection with the making of this report.

Stantons International Securities does not hold any securities in ETW or Alexium. There are no pecuniary or other interests of Stantons International Securities that could be reasonably argued as affecting its ability to give an unbiased and independent opinion in relation to the proposal. Stantons International Securities and Mr J Van Dieren have consented to the inclusion of this report in the form and context in which it is included as an annexure to the Notice.

QUALIFICATIONS

We advise Stantons International Securities is the holder of an Australian Financial Services Licence (no 319600) under the Corporations Act 2001 relating to advice and reporting on mergers, takeovers and acquisitions that involve securities. A number of the directors of Stantons International Pty Ltd are the directors of Stantons International Securities. Stantons International Securities and its affiliated company, Stantons International Services Pty Ltd have extensive experience in providing advice pertaining to mergers, acquisitions and strategic for both listed and unlisted companies and businesses.

Mr John P Van Dieren, FCA, the person responsible for the preparation of this report, has extensive experience in the preparation of valuations for companies and in advising corporations on takeovers generally and in particular on the valuation and financial aspects thereof, including the fairness and reasonableness of the consideration offered.

The professionals employed in the research, analysis and evaluation leading to the formulation of opinions contained in this report, have qualifications and experience appropriate to the task they have performed.

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DECLARATION

This report has been prepared at the request of the Directors of ETW in order to assist them to assess the merits of the proposals to acquire 100% of the issued capital of Alexium as outlined in resolution 8 and the Explanatory Statement to which this report relates. This report has been prepared for the benefit of ETW’s shareholders and does not provide a general expression of Stantons International Securities opinion as to the longer term value of ETW, its assets and Alexium and its assets. Stantons International Securities does not imply, and it should not be construed, that is has carried out any form of audit on the accounting or other records of ETW and Alexium. Neither the whole nor any part of this report, nor any reference thereto may be included in or with or attached to any document, circular, resolution, letter or statement, without the prior written consent of Stantons International Securities to the form and context in which it appears.

DISCLAIMER

This report has been prepared by Stantons International Securities with due care and diligence. However, except for those responsibilities, which by law cannot be excluded, no responsibility arising in any way whatsoever for errors or omission (including responsibility to any person for negligence) is assumed by Stantons International Securities, Stantons International Pty Ltd, and Stantons International Services Pty Ltd, their directors, employees or consultants for the preparation of this report.

DECLARATION AND INDEMNITY

Recognising that Stantons International Securities may rely on information provided by ETW and its officers (save whether it would not be reasonable to rely on the information having regard to Stantons International Securities experience and qualifications), ETW has agreed:

a) To make no claim by it or its officers against Stantons International Securities (and Stantons International Pty Ltd) to recover any loss or damage which ETW may suffer as a result of reasonable reliance by Stantons International Securities on the information provided by ETW; and
(b) To indemnify Stantons International Securities (and Stantons International Pty Ltd) against any claim arising (wholly or in part) from ETW or any of its officers providing Stantons International Securities any false or misleading information or in the failure of ETW or its officers in providing material information, except where the claim has arisen as a result of wilful misconduct or negligence by Stantons International Securities.

A draft of this report was presented to ETW directors for a review of factual information contained in the report. Comments received relating to factual matters were taken into account, however the valuation methodologies and conclusions did not alter.

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FINANCIAL SERVICES GUIDE FOR STANTONS INTERNATIONAL PTY LTD (Trading as Stantons International Securities) Dated 4 DECEMBER 2009

Stantons International Securities ACN 103 O88 697 (“SIS” or “we” or “us” or “ours” as appropriate) has been engaged to issue general financial product advice in the form of a report to be provided to you.
Financial Services Guide

In the above circumstances we are required to issue to you, as a retail client a Financial Services Guide (“FSG”). This FSG is designed to help retail clients make a decision as to their use of the general financial product advice and to ensure that we comply with our obligations as financial services licensees.

This FSG includes information about:

who we are and how we can be contacted;
the services we are authorised to provide under our Australian Financial Services Licence, Licence No: 319600;
remuneration that we and/or our staff and any associated receive in connection with the general financial product advice;
any relevant associations or relationships we have; and
our complaints handling procedures and how you may access them.
Financial services we are licensed to provide

We hold an Australian Financial Services Licence which authorises us to provide financial product advice in relation to:

Securities (such as shares, options and notes)

We provide financial product advice by virtue of an engagement to issue a report in connection with a financial product of another person. Our report will include a description of the circumstances of our engagement and identify the person who has engaged us. You will not have engaged us directly but will be provided with a copy of the report as a retail client because of your connection to the matters in respect of which we have been engaged to report.

Any report we provide is provided on our own behalf as a financial services licensee authorised to provide the financial product advice contained in the report.

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4. General Financial Product Advice

In our report we provide general financial product advice, not personal financial product advice, because it has been prepared without taking into account your personal objectives, financial situation or needs. You should consider the appropriateness of this general advice having regard to your own objectives, financial situation and needs before you act on the advice. Where the advice relates to the acquisition or possible acquisition of a financial product, you should also obtain a product disclosure statement relating to the product and consider that statement before making any decision about whether to acquire the product.

5. Benefits that we may receive

We charge fees for providing reports. These fees will be agreed with, and paid by, the person who engages us to provide the report. Fees will be agreed on either a fixed fee or time cost basis.

Except for the fees referred to above, neither SIS, nor any of its directors, employees or related entities, receive any pecuniary benefit or other benefit, directly or indirectly, for or in connection with the provision of the report.

6. Remuneration or other benefits received by our employees

All our employees receive a salary. Our employees are eligible for bonuses based on overall productivity but not directly in connection with any engagement for the provision of a report.

7. Referrals

We do not pay commissions or provide any other benefits to any person for referring customers to us in connection with the reports that we are licensed to provide.

8. Associations and relationships

SIS is ultimately a wholly division of Stantons International Pty Ltd a professional advisory and accounting practice. Our directors are directors in Stantons International Pty Ltd and one of the directors was a director and shareholders in the affiliated company, Stantons International Services Pty Ltd.

From time to time, SIS, Stantons International Pty Ltd and its affiliated company, Stantons International Services Pty Ltd and/or their related entities may provide professional services, including audit, tax and financial advisory services, to financial product issuers in the ordinary course of its business.

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Complaints resolution
9.1 Internal complaints resolution process

As the holder of an Australian Financial Services Licence, we are required to have a system for handling complaints from persons to whom we provide financial product advice. All complaints must be in writing, addressed to:

The Complaints Officer Stantons International Securities Level 1 1 Havelock Street WEST PERTH WA 6005

When we receive a written complaint we will record the complaint, acknowledge receipt of the complaints within 15 days and investigate the issues raised. As soon as practical, and not more than 45 days after receiving the written complaint, we will advise the complainant in writing of our determination.

9.2 Referral to External Dispute Resolution Scheme

A complainant not satisfied with the outcome of the above process, or our determination, has the right to refer the matter to the Financial Ombudsman Service Limited (“FOSL”). FOSL is an independent company that has been established to provide free advice and assistance to consumers to help in resolving complaints relating to the financial services industry.

Further details about FOSL are available at the FOSL website www.fos.org.au or by contacting them directly via the details set out below.

Financial Ombudsman Service Limited PO Box 3 MELBOURNE VIC 8007

Toll Free: 1300 78 08 08 Facsimile: (03) 9613 6399

10. Contact details

You may contact us using the details set out at the top of our letterhead on page 1 of this FSG.

Au:ETW4548A/ IER Re ETW acquisition of Alexium

AI assistant

ALEXIUM INTERNATIONAL GROUP LIMITED — Proxy Solicitation & Information Statement 2009

64351_rns_2009-12-29_0b5f5a07-89d4-4607-8137-0f8170fbb6dc.pdf

ETW CORPORATION LIMITED

ABN 91 064 820 408

NOTICE OF GENERAL MEETING

VENUE

YOUR VOTE IS IMPORTANT

VOTING IN PERSON

VOTING BY PROXY

Proxy forms received later than this time will be invalid.

LETTER TO SHAREHOLDERS

Aaron Finlay Director

AGENDA

SPECIAL BUSINESS

RESOLUTION 1 – REDUCTION OF SHARE CAPITAL AND ACCUMULATED LOSSES

RESOLUTION 2 – CHANGE TO NATURE AND SCALE OF BUSINESS

RESOLUTION 3 – ISSUE OF SHARES FOR CAPITAL RAISING

RESOLUTION 4 – AUTHORITY FOR DIRECTORS TO PARTICIPATE IN CAPITAL RAISIING

RESOLUTION 5 – APPROVAL TO ISSUE SHARES FOR CAPITAL RAISING

RESOLUTION 6 – CONSOLIDATION

RESOLUTION 7 – APPROVAL TO ISSUE NEW CLASS OF SECURITIES

RESOLUTION 8 – ISSUE OF SHARES, PERFORMANCE SHARES AND OPTIONS TO VENDORS

RESOLUTION 9 – APPROVAL FOR ISSUE OF OPTIONS TO PROPOSED DIRECTOR – GAVIN REZOS

RESOLUTION 10 – APPROVAL FOR ISSUE OF OPTIONS TO PROPOSED DIRECTOR – STEFAN SUSTA

RESOLUTION 11 – APPROVAL FOR ISSUE OF OPTIONS TO DIRECTOR – CRAIG SMITH-GANDER

RESOLUTION 12 – APPROVAL FOR ISSUE OF SECURITIES TO PROPOSED DIRECTOR – STEPHEN RIBICH

RESOLUTION 13 – APPROVAL OF ISSUE OF SECURITIES TO JOHN ALMOND

RESOLUTION 15 – CHANGE OF NAME TO ALEXIUM INTERNATIONAL GROUP LIMITED

RESOLUTION 16 – APPROVAL OF EMPLOYEE OPTION PLAN

DATED: 24 DECEMBER 2009

EXPLANATORY STATEMENT

1. OVERVIEW

1.1 Background on transaction

1.2 Background on Alexium Ltd

US DEFENCE APPLICATIONS

CARC

NON-MILITARY COMMERCIAL APPLICATIONS

Flame Retardance

Recreational & Work Wear Performance Garments

Paint Applications

1.3 Purpose of Capital Raising (Resolutions 3, 4 and 5)

1.4 Use of Funds – Expenditure Budget

1.5 Pro-forma Capital Structure

1.6 Pro forma Statement of Financial Position

1.8 Summary of Sale Agreement

1.9 Change to Board of Directors

Stephen Ribich

Gavin Rezos

Stefan Susta

1.10 Recommendation of the Directors

1.11 Conditionality of Resolutions

1.12 Future of the Company if Resolutions are not passed

1.13 Conclusion

2. RESOLUTION 1 – REDUCTION OF SHARE CAPITAL AND ACCUMULATED LOSSES

2.1 Background

2.2 Corporations Act and Constitution requirements

3. RESOLUTION 2 – CHANGE TO NATURE AND SCALE OF BUSINESS

3.1 Background

3.2 ASX Listing Rules

4. RESOLUTIONS 3 TO 5 – ALLOTMENT AND ISSUE OF SHARES FOR CAPITAL RAISING

4.1 Background

4.2 Priority Offer

4.3 ASX Listing Rules

4.4 Section 195 of the Corporations Act

5. RESOLUTION 6 – CONSOLIDATION

5.1 Background

5.2 Fractional Entitlements and Taxation

6. RESOLUTION 7 – APPROVAL FOR ISSUE OF NEW CLASS OF SECURITIES

7. RESOLUTION 8 – ISSUE OF SECURITIES TO VENDORS

7.1 Background

7.2 ASX Listing Rule 7.1

7.3 Item 7 of Section 611 of the Corporations Act

Section 606 of the Corporations Act – Statutory Prohibition

Voting Power

Relevant Interests

7.4 Reason Why Section 611 Approval Required

(together, the Vendor Associates).

7.5 Specific Information Required by Section 611 Item 7 of the Corporations Act and ASIC Regulatory Guide 74

Relevant Interests and Voting Power

ALEXIUM INTERNATIONAL GROUP LIMITED Proxy Solicitation & Information Statement 2009