BABYLON PUMP & POWER LIMITED — AGM Information 2009

Oct 27, 2009

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IM MEDICAL LIMITED ABN 47 009 436 908

Notice of Annual General Meeting

And

Explanatory Memorandum

Monday 30th November 2009

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IM MEDICAL LIMITED

ABN 47 009 436 908

Notice of 2008 Annual General Meeting

Notice is given for the 2009 Annual General Meeting of the Company to be held at Pharmacy Guild of Victoria, 2[nd] Floor, 40 Burwood Road, Hawthorn, Victoria, 3122 at 9:30am on Monday 30 November 2009.

AGENDA

Business items

1. Financial statements and reports

To receive and consider the financial report of the Company and the reports of the directors and auditors for the year ended 30 June 2009.

2. Adoption of the remuneration report

To adopt the remuneration report for the year ended 30 June 2009

3. Election of directors

Mr Craig Cook

Mr Craig Cook was appointed to the board as an independent non executive director with an effective date of 29 December 2006 and re-elected by shareholders on 1[st] May 2007.

Mr Cook retires as required by clause 13.4 of the constitution of the Company, and being eligible, offers himself for election as a director of the Company.

4. Ratification of share placement

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

"That the issue by the Company of the following equity securities in the period 26 August 2009 to 21 October 2009 be approved for all purposes, including for the purpose of Listing Rules 7.1 and 7.4:

(i) 26,225,000 Shares in the Company;

(ii) 905,000 options in the Company over 905,000 Shares, exercisable at $0.00378 per option on or before 26 August 2012

(iii) 1,540,000 options in the Company over 1,540,000 Shares, exercisable at $0.00324 per option on or before 29 September 2012."

(iv) 2,800,000 options in the Company over 2,800,000 Shares, exercisable at $0.00333 per option on or before 7 October 2012."

5. Issue of securities to Pinnacle Equities Pty Ltd

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

"That for the purpose of Listing Rule 7.1 that the issue of up to 50 million Shares and up to 50 million Options in the Company to Pinnacle Equities Pty Ltd be approved in satisfaction of advisory fees in relation to the execution of a Equipment Financing Facility and completion of Working Capital funding.”

Notice of 2009 Annual General Meeting

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Voting exclusions

In accordance with the ASX Listing Rules, the Company will disregard votes cast:

• (a) on resolution 3, by Mr Craig Cook and any associate of Mr Craig Cook;

• (b) on Resolution 4, by a person who participated in the issues set out in Resolution 4 who is named in the Explanatory Statement, and an Associate of those persons.

• (c) on Resolution 5, by a person who participates in the issue set out in Resolution 5 who is named in the Explanatory Statement, and an Associate of those persons.

However, the Company, need not disregard a vote if:

• it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or

• it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

Explanatory Memorandum

The Explanatory Memorandum accompanying this Notice is incorporated into and forms part of this Notice of Annual General Meeting.

Snapshot Date

For the purposes of voting at this meeting, the directors have determined that all shares of the Company that are quoted securities at 7:00pm (Melbourne time) on 27 November 2009 are taken to be held by the persons who are registered as holding them at that time. The entitlement of members to vote at the meeting will be determined by reference to that time.

Questions and Comments

The Chairman will give shareholders a reasonable opportunity to ask questions about or comment on the management of the Company. The Chairman will also give shareholders a reasonable opportunity to ask the Auditor questions relevant to:

• the conduct of the audit;

• the preparation and content of the audit report;

• the accounting policies adopted by the Company in relation to the preparation of the financial statements; and

• the independence of the Auditor in relation to the conduct of the audit.

Proxies

A shareholder entitled to attend and vote at the Annual General Meeting is entitled to appoint a proxy. The proxy may be an individual or a body corporate. A proxy need not be a shareholder of the Company. A shareholder who is entitled to cast 2 or more votes may appoint 2 proxies and may specify the proportion or number of votes each proxy is appointed to exercise. If a shareholder appoints 2 proxies and the appointment does not specify the proportion or number of the shareholder’s votes each proxy may exercise, each proxy may exercise half of the votes (disregarding fractions).

For an appointment of a proxy to be valid, the form appointing the proxy and, if the form is signed under a power of attorney or other authority, the authority under which the form is signed (or a certified copy of the authority) must be received at the following addresses or by fax at least 48 hours prior to the meeting at which the proxy intends to vote:

IM Medical Limited Share Transfer Registrars Pty Ltd 117 Church Street 770 Canning Highway Hawthorn VIC 3122 Applecross WA 6153 Fax: (03) 9860 0999 Fax: (08) 9315 2233

A proxy form accompanies this Notice of Annual General Meeting. Additional proxy forms are available on request from the registered office of the Company or its share registrar.

Bodies Corporate

A body corporate may appoint an individual as a representative to exercise all or any of the powers the body corporate may exercise at meetings of a company’s shareholders or in the capacity of a shareholder’s proxy. The appointment may be a standing one. Unless otherwise specified in the appointment, the representative may exercise, on the body corporate’s behalf, all of the powers that the body could exercise at a meeting or in voting on a resolution.

By order of the Board

Roman Najdecki Company Secretary 22 October 2009

Notice of 2009 Annual General Meeting

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IM MEDICAL LIMITED

ABN 47 009 436 908

Explanatory Memorandum

The following information provides an explanation of each resolution set out in the Notice of Annual General Meeting.

1. Financial statements and reports

As required by section 317 of the Corporations Act 2001, the financial statements and the reports of the directors and auditors will be laid before the meeting. Shareholders have been provided with the Company’s financial statements for the year ended 30 June 2009 in the 2009 Annual Report. There is no requirement in the Corporations Act or the Company’s Constitution for shareholders to vote on, approve or adopt these Reports. Shareholders will have a reasonable opportunity at the meeting to ask questions and make comments on these Reports and on the management of the Company.

The Auditor of the Company is required to attend the meeting and will be available to take shareholders’ questions about the conduct of the audit and the preparation and content of the Auditor’s Report. Shareholders may forward written questions to the Auditor on these matters for response at the meeting. These should be mailed to the Company Secretary, IM Medical Ltd, 117 Church Street Hawthorn 3122. Questions may be submitted up to 5 business days before the meeting.

The Auditor of the Company will also be available to take shareholders’ questions at the meeting relevant to the accounting policies adopted by the Company in relation to the preparation of the financial statements and the independence of the Auditor in relation to the conduct of the audit.

2. Adoption of remuneration report

The Directors’ Report for the year ended 30 June 2009 contains a Remuneration Report, which sets out the policy for the remuneration of the directors, company secretary and executives. The Corporations Act requires that a resolution be put to the vote that the Remuneration Report be adopted. The Corporations Act expressly provides that the vote is advisory only and does not bind the directors or the Company. However, the Board will take the outcome of the vote into consideration when reviewing the remuneration practices and policies of the Company.

The directors recommend that you vote in favour of this resolution.

3. Election of director

Mr Craig Cook

Craig has been chairman of the company’s Audit Committee since his appointment. Craig is currently a director of the Goulburn Murray Rural Water Corporation and the Rural Finance Corporation of Victoria. Mr. Cook, holds other directorships with Australian Cricket Bat Willow Plantation Management Services Limited, Goulburn Ovens Institute of TAFE and Carlton Cricket Club Limited.

The directors (with Mr Craig Cook abstaining) recommend that you vote in favour of this resolution.

4. Refreshing capacity to issue equity securities following issues of equity securities in the Company

The approval proposed in Resolution 4 is a subsequent approval of permitted issues of shares in order to refresh the Company's capacity to issue further shares pursuant to Listings Rule 7.1 and 7.4.

Listing Rule 7.1 provides that the Company can only issue up to 15% of the Company's 'equity securities' (subject to certain exclusions

and exceptions) in any 12 month period without obtaining shareholder approval.

Listing Rule 7.4 provides that an issue of equity securities made without the need for approval under Listing Rule 7.1 is treated as having been made with approval for the purpose of Listing Rule 7.1 if:

−

the issue did not breach Listing Rule 7.1 and

− members of the company subsequently approve it.

Such approval refreshes the capacity of the Company to issue additional equity securities as permitted under Listing Rule 7.1 within the 15% limit. This is the approval the Company now seeks under Resolution 5.

In the period since shareholders approved share placements at the General Meeting held on 10th September 2009, the Company has issued the following equity securities without approval under Listing Rule 7.1 (Equity Securities):

(1) 26,225,000 fully paid ordinary shares in the Company;

Notice of 2009 Annual General Meeting

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(2) 905,000 options in the Company over the ordinary shares, exercisable at $0.00378 per option on or before 26 August 2012; and

(3) 1,540,000 options in the Company over the ordinary shares, exercisable at $0.00324 per option on or before 29 September 2012; and

(4) 2,800,000 options in the Company over the ordinary shares, exercisable at $0.00333 per option on or before 7 October 2012.

All of the shares issued and the options when converted will rank equally with the fully paid ordinary shares of the Company already on issue. The issue of the 26,225,000 Equity Securities without approval did not exceed the Listing Rule 7.1 15% limit, and so did not breach Listing Rule 7.1. If members approve this resolution, the Company will have the flexibility to issue more shares in the next 12 months without requiring approval at a meeting of members should the Board believe it is in the best interests of the Company to do so. If this resolution is approved by members, the Company will thereafter be able to issue an additional 3,933,750 equity securities without member approval.

If this resolution is not passed:

(1) the Company was not required, under Listing Rule 7.1, to seek member approval prior to the issues of the equity securities described in this resolution, so the absence of approval will not invalidate the issues of the equity securities;

(2) the Company's ability to issue further equity securities in the 12 month period will be reduced, unless member approval is obtained for the said subsequent issue or that issue falls within an exception to Listing Rule 7.1.

For the purposes of Listing Rules 7.4 and 7.5, the Company notes that:

(3) On 26 August 2009, the Company issued to:

(i) Fortrend Securities Pty Ltd (Fortrend) 4,525,000 fully paid ordinary shares at a subscription price $0.00378 per share and 905,000 options over the ordinary shares, exercisable at $0.00378 per option on or before 26 August 2012 pursuant to the $5 million Standby Subscription Agreement which the Company entered into with Fortrend in August 2008; and

(4) On 29 September 2009, the Company issued to:

(i) Fortrend, 7,700,000 fully paid ordinary shares at a subscription price $0.00324 per share and 1,540,000 options over the ordinary shares, exercisable at $0.00324 per option on or before 29 September 2012, pursuant to the $5 million Standby Subscription Agreement which the Company entered into with Fortrend in August 2008; and

(5) On 7 October 2009, the Company issued to:

(ii) Fortrend, 14,000,000 fully paid ordinary shares at a subscription price $0.00333 per share and 2,800,000 options over the ordinary shares, exercisable at $0.00333 per option on or before 7 October 2012, pursuant to the $5 million Standby Subscription Agreement which the Company entered into with Fortrend in August 2008; and

The funds raised from the issues listed above were used for working capital purposes

The directors unanimously recommend that shareholders vote in favour of this resolution.

5. The issue of Company securities to Pinnacle Equities Pty Ltd

The Company engaged Pinnacle Equities Pty Ltd, a holder of Australian Financial Services License #300776, to procure investors/lenders to refinance the existing asset leasing facility of the Mark Scott Group and also to provide the company with working capital for future needs. As consideration for the services provided by Pinnacle Equities, the Company agreed to pay a fee for these services by the issue of up to 50,000,000 Shares and up to 50,000,000 Options exercisable at $0.0035 within 2 years of issuance. The Directors consider that the quantum of the fees is at the median of fees paid to persons for services of this nature, to companies like the Company and that the terms are otherwise acceptable.

The issue of the shares and options are conditional on Pinnacle Equities ensuring execution of an Equipment Financing facility for $2.8 million or any lower amount deemed acceptable by the company and upon receipt of $500,000 as Working Capital .

Approval is sought for the issue of the above Shares and Options to Pinnacle Equities Pty Ltd and approval is also sought for the exclusion of this issue of Shares and Options to Pinnacle Equities Pty Ltd from the 15% limit under Listing Rule 7.1.

If this Resolution is passed, the Shares and Options will be allotted to Pinnacle Equities (or its nominee) within three months of the date of this meeting.

The Shares and Options issued to Pinnacle Equities will rank equally with the Shares and Options of the Company already on issue.

The directors unanimously recommend that shareholders vote in favour of this resolution

Notice of 2009 Annual General Meeting

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PROXY FORM

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Shareholder’s name and address

Appointment of proxy

I/We being a member/s of IM Medical Limited and entitled to attend and vote hereby appoint

The Chairman of OR If you are not appointing the Chairman of the the meeting Meeting as your proxy, please write here the full (mark with an “X”) name of the individual or body corporate (excluding the registered securityholder) you are appointing as your proxy.

or failing the individual or body corporate named, or if no individual or body corporate is named, the Chairman of the Meeting, as my/our proxy to act generally at the meeting on my/our behalf to vote in accordance with the following directions (or if no directions have been given, as the proxy sees fit) at the Annual General Meeting of IM Medical Limited to be held at Level 2, 40 Burwood Road, Hawthorn, Victoria on Monday 30 November 2009 at 9.30am and at any adjournment of that meeting.

Important: for item 3 below

If the Chairman of the Meeting is your nominated proxy, or may be appointed by default, and you have not directed your proxy how to vote on item 3 below, please place a mark in this box. By marking this box, you acknowledge that the Chairman of the Meeting may exercise your proxy even if he has an interest in the outcome of those items and that votes cast by him, other than proxy holder, would be disregarded because of that interest. If you do not mark this box, and you have not directed your proxy bow to vote, the Chairman of the Meeting will not cast your votes on item 3 and your vote will not be counted in computing the required majority if a poll is called on these items. The Chairman of the Meeting intends to vote undirected proxies in favour of each of these items.

Voting directions to your proxy – please mark “X” to indicate your directions

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For Against Abstain
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Item	2	Adoption of remuneration report for year ended 30 June
		2009
Item	3	Election of director – Mr Craig Cook
Item	4	Refreshing capacity to issue equity securities following issues of
		equity securities in the Company
Item	5	Issue of equity securities to Pinnacle Equities Pty Ltd

In addition to the intention advised above, the Chairman of the Meeting intends to vote undirected proxies in favour of each of the other items of business. If you mark the Abstain box for a particular item, you are directing your proxy not to vote on your behalf on a show of hands or on a poll and your votes will not be counted in computing the required majority on a poll.

PLEASE SIGN HERE

This section must be signed in accordance with the instructions overleaf to enable you directions to be implemented.

	Individual or securityholder 1 Sole Director and Sole Company Secretary	Securityholder 2 Director Contact daytime telephone	Securityholder 2 Director Contact daytime telephone	Securityholder 3
				Director/Company Secretary Date
	Contact name		Contact daytime telephone

Notice of 2009 Annual General Meeting

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Instructions on how to complete the Proxy Form

Your address

Please insert your name and address as it appears on the company’s share register. Please note that you cannot change ownership of your securities using this form.

Appointment of proxy

If you wish to appoint the Chairman of the Meeting as your proxy, please mark the box. If the individual or body corporate you wish to appoint as your proxy is someone other than the Chairman of the Meeting, please write the full name of that individual or body corporate in the space provided. If you leave this section blank, or your named proxy does not attend the meeting, the Chairman of the Meeting will be your proxy. A proxy need not be a securityholder of the company.

Vote on Items of Business

You may direct your proxy how to vote by placing a mark in one of the boxes opposite each item of business. All your securities will be voted in accordance with such a direction unless you indicate only a porion of voting rights are to be voted on any item by inserting the percentage or number of securities you wish to vote in the appropriate box or boxes. If you do not mark any of the boxes on a given item, your proxy may vote as he or she chooses. If you mark more than one box on an item, your vote on that item will be invalid.

Appointment of a second proxy

You are entitled to appoint up to two proxies to attend the meeting and vote on a poll. If you wish to appoint a second proxy, an additional Proxy Form may be obtained by telephoning the company’s share registry or you may make a copy of this form.

To appoint a second proxy, you must:

• (a) on each of the first Proxy Form and the second Proxy Form, state the percentage of your voting rights or number of securities applicable to that form. If the appointments do not specify the percentage or number of votes that each proxy may exercise, each proxy may exercise half your votes. Fractions of votes will be disregarded.

• (b) Return both forms together in the same envelope.

Signing instructions

You must sign this form as follows in the spaces provided:

• (a) Individual

Where the holding is in one name, the holder must sign

• (b) Joint holding

Where the holding is in more than one name, all of the securityholders should sign

• (c) Power of Attorney

To sign under Power of Attorney, you must have already lodged this document with the registry. If you have not previously lodged this document for notation, please attach a certified photocopy of the Power of Attorney to this form when you return it.

• (d) Companies

Where the company is a sole director who is also the sole company secretary, this form must be signed by that person. If the company (pursuant to section 204A of the Corporations Act 2001) does not have a company secretary, a sole director can also sign alone. Otherwise, this form must be signed by a director jointly with either another director or the company secretary. Please indicate the office held by signing in the appropriate place.

Lodgement of Proxy Form

This Proxy Form (and any Power of Attorney under which it is signed) must be received at an address given below no later than 48 hours before the commencement of the meeting at 9:30 am on Monday, 30 November 2009. Any Proxy Form received after that time will not be valid for the scheduled meeting.

• (a) In person

• Registered office: IM Medical Limited, 117 Church Street, Hawthorn, Victoria, 3122, Australia

• Share registry: Security Transfer Registrars Pty Ltd, 770 Canning Highway, Applecross, WA, 6153, Australia

• (b) By mail

• Registered office: IM Medical Limited, 117 Church Street, Hawthorn, Victoria, 3122, Australia

• Share registry: Security Transfer Registrars Pty Ltd, PO Box 535, Applecross, WA, 6953, Australia

• (c) By fax

• Registered office: +61 3 9860 0999

• Share registry: +61 8 9315 2233

Notice of 2009 Annual General Meeting

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