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EDEN INNOVATIONS LTD Capital/Financing Update 2012

Feb 27, 2012

64820_rns_2012-02-27_6b80a0b3-d459-48d8-92c1-df97614f072d.pdf

Capital/Financing Update

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EDEN ENERGY LTD

ACN 109 200 900

NOTICE OF GENERAL MEETING

Notice is given that an General Meeting of the members of Eden Energy Limited ACN 109 200 900 (“the Company”) will be held at Level 40, Exchange Plaza, 2 The Esplanade, Perth, Western Australia on Thursday, the 29[th] day of March 2012 at 9.30am.

ORDINARY BUSINESS

The business of the meeting is to consider and (if thought fit) to pass, with or without modification, the following ordinary resolutions:

1. Ratification of Issue of 1,175,018 Shares by Directors

“That, for the purpose of ASX Listing Rules 7.1 and 7.4 and for all other purposes, shareholders ratify and approve the issue to La Jolla Cove Investors Inc. (“La Jolla”) on 16 November 2011 of 1,175,018 fully paid ordinary shares in the Company, at a price of $0.050364 per share, in satisfaction of a US $60,000.00 facility fee payable to La Jolla in connection with the issue to La Jolla of the convertible note the subject of resolution 3.”

Note: The Company will disregard any votes cast on Resolution 1 by La Jolla or a person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if this resolution is passed and by any of their associates.

However, the Company will not disregard the vote if:

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

2. Ratification of Issue of 9,789,305 Shares by Directors

“That, for the purpose of ASX Listing Rules 7.1 and 7.4 and for all other purposes, shareholders ratify and approve the issue to La Jolla Cove Investors Inc. (“La Jolla”) of 9,789,305 fully paid ordinary shares in the Company consequent upon the conversion of $319,842 of the principal amount of the convertible note issued to La Jolla on 15 November 2011, as follows:

(a) 1,388,889 shares at a price of 0.0360 per share issued on 16 December 2011;
(b) 1,524,390 shares at a price of 0.0328 per share issued on 11 January 2012;
(c) 619,195 shares at a price of 0.0323 per share issued on 31 January 2012;
(d) 793,651 shares at a price of 0.0315 per share issued on 3 February 2012;
(e) 1,677,852 shares at a price of 0.0298 per share issued on 13 February 2012;
(f) 671,141 shares at a price of 0.0298 per share issued on 16 February 2012 and
(g) 3,114,187 shares at a price of 0.0289 per share issued on 23 February 2012.”
Note: The Company will disregard any votes cast on Resolution 2 by La Jolla or a person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if this resolution is passed and by any of their associates.

However, the Company will not disregard the vote if:

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

3. Approval of Issue of Shares Consequent Upon Conversion of First Convertible Note

“That, for the purpose of ASX Listing Rule 7.1 and for all other purposes, shareholders approve the issue to La Jolla Cove Investors Inc. (“La Jolla”) of ordinary fully paid shares in the Company upon the conversion by La Jolla of the outstanding balance of the principal amount (of $776,636) of the convertible note in the Company issued to La Jolla on 15 November 2011 at a conversion price per share which is equal to the lower of 50 cents or 80% of the average of the three (3) lowest VWAP during the twenty-one (21) trading days prior to La Jolla's election to convert.”

EDEN ENERGY LTD ACN 109 200 900

Note: The Company will disregard any votes cast on Resolution 3 by La Jolla or a person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if this resolution is passed and by any of their associates.

However, the Company will not disregard the vote if:

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

4. Approval of Issue of Second Convertible Note

“That, for the purpose of ASX Listing Rule 7.1 and all others purposes, shareholders approve and authorise the issue by the Directors (in their sole and absolute discretion) to La Jolla Cove Investors Inc. (“La Jolla”) of a convertible note in the Company, with a face value of US $1,000,000.00 and convertible into ordinary fully paid shares in the Company at a conversion price per share which is equal to the lower of 50 cents or 80% of the average of the three (3) lowest VWAP during the twenty-one (21) trading days prior to La Jolla's election to convert.

Note: The Company will disregard any votes cast on Resolution 4 by La Jolla or a person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if this resolution is passed and by any of their associates.

However, the Company will not disregard the vote if:

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

5.

Approval of Issue of 1,175,018 Shares

“That, for the purpose of ASX Listing Rules 7.1 and for all other purposes, shareholders approve the issue to La Jolla Cove Investors Inc. (“La Jolla”) of 1,175,018 fully paid ordinary shares in the Company, at a price of $0.050364 per share, in satisfaction of a US $60,000.00 facility fee payable to La Jolla if the Company issues to La Jolla the convertible note the subject of Resolution 4.”

Note: The Company will disregard any votes cast on Resolution 5 by La Jolla or a person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if this resolution is passed and by any of their associates.

However, the Company will not disregard the vote if:

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

Dated this 28[th] day of February 2012.

On behalf of the Board

==> picture [184 x 33] intentionally omitted <==

Gregory H Solomon Executive Chairman

NOTES RELATING TO PROXIES:

A shareholder entitled to attend and vote at the General Meeting of the Company may appoint not more than two proxies to attend and vote in his/her place. Where more than one proxy is appointed each proxy must be appointed to represent a specified proportion of the shareholder’s voting rights, a proxy may be, but need not be a member of the Company.

Proxy forms (and the Power of Attorney or other authority, if any under which the proxy form is signed) must be deposited at the registered office of the Company at Level 40, Exchange Plaza, 2 The Esplanade, Perth, Western Australia, 6000 not less than 48 hours before the time for holding the General Meeting.

EXPLANATORY STATEMENT

This Explanatory Statement is an important document and you should read this statement carefully. If you have any queries regarding the matters set out in this Explanatory Statement or the preceding Notice please contact the Company or your professional advisor.

A. Resolution 1 - Ratification of Issue of 1,175,018 Shares by Directors

Resolution 1 seeks shareholder approval, for the purposes of ASX Listing Rules 7.1 and 7.4 and for all other purposes, to ratify the issue to La Jolla of 1,175,018 Shares in the Company. The Shares were issued by the Company under the 15% placement rule in ASX Listing Rule 7.1.

Listing Rule 7.1 prohibits a company from issuing or agreeing to issue equity securities in any 12 month period which amount to more than 15% of its ordinary securities without the approval of holders of its ordinary securities.

Listing Rule 7.4 provides that an issue of securities made without 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 holders of ordinary securities subsequently approve it.

Equity securities issued with approval of holders of a company’s ordinary securities in accordance with Listing Rule 7.1 are not then required to be included in the 15% limit imposed by Listing Rule 7.1. Shareholder approval of this resolution will therefore have the effect of restoring the Company's ability to issue further Shares within its 15% placement capacity to the extent of the Shares the subject of this resolution.

The Company issued 1,175,018 Shares to La Jolla on 16 November 2011 in satisfaction of the first tranche of the Facility Fee payable to La Jolla under the Funding Agreement in connection with the issue of the First Note. These Shares represent 0.4047% of the Company's current issued capital (of 288,320,753 Shares) (which includes the Shares issued to La Jolla the subject of this resolution 1 and resolution 2).

The Company seeks shareholder approval for the issue of these Shares pursuant to Listing Rules 7.1 and 7.4.

The following information is provided in accordance with Listing Rule 7.5:-

1,175,018 Shares were issued by the Company to La Jolla on 16 November 2011;
the Shares were issued at $0.050364 per Share;
the Shares are fully paid ordinary shares and rank equally in all respects with the existing issued Shares of the Company and are quoted on the ASX;
the Shares were all allotted and issued to La Jolla, an unrelated party of the Company;
the Shares were issued in satisfaction of a US $60,000.00 facility fee payable to La Jolla under the Funding Agreement in relation to the First Note (and accordingly no funds were raised from the issue).

B. Resolution 2 - Ratification of Issue of 9,789,305 Shares by Directors

Resolution 2 seeks shareholder approval, for the purposes of ASX Listing Rules 7.1 and 7.4 and for all other purposes, to ratify the issue to La Jolla of 9,789,305 Shares in the Company consequent upon the conversion of US $319,842 of the Principal Amount of the First Note issued to La Jolla on 15 November 2011, as follows:

(a) 1,388,889 Shares at a price of 0.0360 per Share issued on 16 December 2011;
(b) 1,524,390 Shares at a price of 0.0328 per Share issued on 11 January 2012;
(c) 619,195 Shares at a price of 0.0323 per Share issued on 31 January 2012;
(d) 793,651 Shares at a price of 0.0315 per Share issued on 3 February 2012;
(e) 1,677,852 shares at a price of 0.0298 per share issued on 13 February 2012;
(f) 671,141 shares at a price of 0.0298 per share issued on 16 February 2012; and
(g) 3,114,187 shares at a price of 0.0289 per share issued on 23 February 2012.

These Shares were issued by the Company upon the conversion by La Jolla of part of the Principal Amount of the First Note. The Company issued the First Note under the Company’s 15% placement capacity, and relied on exception 4 of ASX Listing Rule 7.2 (which provides that Listing Rule 7.1 does not apply to an issue of equity securities on the conversion of convertible securities if, inter alia, the company complied with the Listing Rules when it issued the convertible securities) to issue these Shares to La Jolla.

Listing Rule 7.1 prohibits a company from issuing or agreeing to issue equity securities in any 12 month period which amount to more than 15% of its ordinary securities without the approval of holders of its ordinary securities.

Listing Rule 7.4 provides that an issue of securities made without 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 holders of ordinary securities subsequently approve it.

Equity securities issued with approval of holders of a company’s ordinary securities in accordance with Listing Rule 7.1 are not then required to be included in the 15% limit imposed by Listing Rule 7.1. Shareholder approval of this resolution will therefore have the effect of restoring the Company's ability to issue further Shares within its 15% placement capacity to the extent of the Shares the subject of this resolution.

The Company seeks shareholder approval for the issue of these Shares pursuant to Listing Rules 7.1 and 7.4.

The following information is provided in accordance with Listing Rule 7.5:-

9,789,305 Shares have been issued by the Company to La Jolla;
the Shares were issued at the following prices;
2.1 1,388,889 Shares at a price of 0.0360 per Share issued on 16 December 2011;
2.2 1,524,390 Shares at a price of 0.0328 per Share issued on 11 January 2012;
2.3 619,195 Shares at a price of 0.0323 per Share issued on 31 January 2012;
2.4 793,651 Shares at a price of 0.0315 per Share issued on 3 February 2012;
2.5 1,677,852 shares at a price of 0.0298 per share issued on 13 February 2012;
2.6 671,141 shares at a price of 0.0298 per share issued on 16 February 2012; and
2.7 3,114,187 shares at a price of 0.0289 per share issued on 23 February 2012.
the Shares are all fully paid ordinary shares and rank equally in all respects with the existing issued Shares of the Company and are quoted on the ASX;
the Shares were all allotted and issued to La Jolla, an unrelated party of the Company;
the Shares were issued consequent upon the conversion by La Jolla of US $319,842 of the Principal Amount of the First Note (this amount was used by the Company for working capital purposes);

C. Resolution 3 - Approval of Issue of Shares Consequent Upon Conversion of the First Note

Resolution 3 seeks shareholder approval, for the purpose of ASX Listing Rule 7.1 and for all other purposes, of the issue to La Jolla of Shares consequent upon the conversion by La Jolla of the outstanding Principal Amount (of US $680,158) of the First Note.

A summary of the key terms and conditions of the First Note is set out in Appendix A. The First Note has a face value of US $1,000,000.00 and is convertible into Shares at the Conversion Price. The First Note has a Maturity Date of 14 November 2014.

The Company received from La Jolla the monthly payments of the purchase price of the First Note, of US $250,000 each, on 16 November 2011, 15 December 2011, 18 January 2012 and 22 February 2012. At the date of this notice, the Company has received Conversion Notices for a total of US $319,842, which amount has been converted into 9,789,305 Shares (these Shares are the subject of Resolution 2 above). By this resolution 3, the Company seeks approval for the issue of those Shares which will be issued to La Jolla should it convert the remainder of the Principal Amount of the First Note (in the sum of US $680,158) into Shares.

The Company agreed to issue to La Jolla 1,175,018 Shares in the Company, in satisfaction of that tranche of the facility fee payable to La Jolla under the Funding Agreement in relation to the First Note (the issue of these Shares to La Jolla is the subject of resolution 1 above).

Listing Rule 7.1 prohibits a company from issuing or agreeing to issue equity securities in any 12 month period which amount to more than 15% of its ordinary securities without the approval of holders of its ordinary securities.

Equity securities issued with approval of holders of a company’s ordinary securities in accordance with Listing Rule 7.1 are not then required to be included in the 15% limit imposed by Listing Rule 7.1. Shareholder approval of this resolution will therefore have the effect of restoring the Company's ability to issue further Shares within its 15% placement capacity to the extent of the Shares the subject of this resolution.

The Company issued the First Note under the Company's 15% placement capacity. La Jolla has, as at the date of this notice, converted US $319,842 of the Principal Amount of the First Note into 9,789,305 Shares (and the Company is seeking shareholder ratification of the issue of these Shares under resolution 2 above).

The Company’s current issued Share capital is 291,434,940 Shares. This includes:

(a) the Shares which were issued to La Jolla on 16 November 2011 and which are the subject of Resolution 1 above; and
(b) the 9,789,305 Shares which have been issued to La Jolla in response to Conversion Notices given by La Jolla under the First Note as at the date of this Notice and which are the subject of Resolution 2 above.

Assuming La Jolla converts the entire balance of the Principal Amount of the First Note (of US $680,158) into Shares, the number of Shares to be issued to La Jolla, and the dilutionary effect of the issue of these Shares on the Share capital of the Company will be (on the assumptions set out below and based on the high, low and VWAP price of the Shares in the 6 month period from 11 August 2011 to 10 February 2012) as follows:

No. of Shares No. of Shares No. of Shares

	Highest Price ($0.09 on 24 August 2011)	Lowest Price ($0.035 on 2 February 2012 and 10 February 2012)	6 month VWAP Price ($0.0546)
Current Issued Share Capital	291,434,940	291,434,940	291,434,940

Shares to be issued to La Jolla if entire balance of US $680,158 of First Note is converted into Shares	8,750,422	22,501,084	14,423,772

Percentage of Current Issued Share Capital	3.003%	7.721%	4.949 %

Issued Share Capital after Shares issued to La Jolla under First Note	300,185,362	313,936,024	305,858,712

Percentage of New Issued Share Capital	2.915%	7.167%	4.716%

Assumptions -

The Shares to be issued to La Jolla have been calculated on the assumption that the US$/AU$ exchange rate is $1.00 US for every AU 92.63 cents (which reflects the US$/AU$ exchange rate on 10 February 2012).
The above figures have been calculated on the basis that no further Shares are issued after the date of this Notice (including consequent upon the exercise of any options currently on issue by the Company) other than under the First Note. If the Second Note is issued to La Jolla and La Jolla elects to convert the Principal Sum of the Second Note (or any portion of it) into Shares after the date of this Notice, the above figures will change.

It is important to note that the figures in the above table are an illustration only of the number of Shares that could be issued to La Jolla based on full conversion of the remainder of the Principal Amount of the First Note and the example Share prices and US$/AU$ exchange rate referred to above. It is important to note that the Share price and the US$/AU$ exchange rate may vary from time. The actual outcome, if La Jolla elects to convert the remainder of the Principal Amount of the First Note in whole or in part, will depend on that election and the Conversion Price and the prevailing US$/AU$ exchange rate applicable at the time of conversion.

The Company therefore seeks shareholder approval to the issue of Shares consequent upon the conversion of the outstanding balance of the Principal Amount (of US $680,158) of the First Note pursuant to Listing Rule 7.1.

The following information is provided in accordance with Listing Rule 7.3:

the maximum number of Shares to be issued will be determined in accordance with the following formulae:

Outstanding Principal Amount of the First Note (of US $680,158) which La Jolla elects to convert into Shares

Conversion Price,

up to a limit of 19.99% of the Shares.

The Company has drawn down all of the Principal Amount (of $1,000,000) of the First Note. The Company will issue the Shares on or before 14 November 2014 (being the maturity date of the First Note).
The Shares will be issued at the Conversion Price, being:
3.1. 50 cents; or
3.2. 80% of the average of the three (3) lowest VWAP during the twenty-one (21) trading days prior to La Jolla's election to convert,
The Shares will be issued to La Jolla, an unrelated party of the Company.
The Shares will be issued on the same terms as, and rank pari passu with, the existing issued Shares of the Company and will be quoted on the ASX.
The Shares will be issued consequent upon the conversion by La Jolla of up to US $680,158 of the Principal Amount of the First Note (this amount is being used by the Company for working capital purposes).
The Shares will be allotted and issued progressively as and when La Jolla converts the First Note.

D. Resolution 4 - Approval of Issue of Second Convertible Note

Resolution 4 seeks shareholder approval, for the purposes of ASX Listing Rule 7.1 and for all other purposes, to authorise the Directors to issue (in their sole and absolute discretion) to La Jolla the Second Note, having a face value of US $1,000,000.00 and convertible into Shares in the Company at the Conversion Price, to raise working capital.

Under the Funding Agreement, the Company may issue the Second Note to La Jolla at its discretion.

The Funding Agreement provides that, to the extent that the Company requires approval under Listing Rule 7.1 to issue the Second Note, the Company’s agreement to issue the Second Note is subject to and conditional upon shareholder approval being obtained to the issue of the Second Note.

The Second Note is able to be issued in the period commencing on the date that the Company has fully drawn down all of the Purchase Price under the First Note or has obtained all necessary approvals required for the issue of the Second Note (whichever occurs last) and ending two (2) months thereafter (Subsequent Note Period). If the Company does not issue the Second Note or the further subsequent Note, either party may terminate the Funding Agreement and La Jolla may redeem the Principal Amount, and any accrued but unpaid interest, on the First Note then on issue at a cash price of 120% of the Principal Amount or to convert the Principal Amount into Shares (or do a combination of both of those things).

Under the Funding Agreement, the Company also has discretion to issue La Jolla with a further convertible note (“the Third Note”). The Third Note is to be issued on the same terms and conditions as the Second Note (save for its maturity date). To the extent that the Company requires approval under Listing Rule 7.1 to issue the Third Note, the Company’s agreement to issue the Third Note is also subject to and conditional upon shareholder approval being obtained to the issue of the Third Note. If the Company requires shareholder approval to issue the Third Note, it will seek shareholder approval to that issue at a subsequent stage.

A summary of the key terms and conditions of the Second Note is set out in Appendix A.

In addition, the Company has agreed to issue to La Jolla 1,175,018 Shares in the Company in satisfaction of that tranche of the facility fee payable to La Jolla under the Funding Agreement in relation to the Second Note (the issue of these shares is the subject of resolution 5).

Listing Rule 7.1 prohibits a company from issuing or agreeing to issue equity securities in any 12 month period which amount to more than 15% of its ordinary securities without the approval of holders of its ordinary securities. An equity security includes a convertible security (i.e. a security which is convertible by the holder or otherwise by its terms of issue into, inter alia, shares) and will therefore encompass the Second Note.

Equity securities issued with approval of holders of a company’s ordinary securities in accordance with Listing Rule 7.1 are not then required to be included in the 15% limit imposed by Listing Rule 7.1. Shareholder approval of this resolution will therefore mean that the Company's ability to issue further Shares within its 15% placement capacity will not be reduced by the issue of the Shares the subject of this resolution. Exception 4 of Listing Rule 7.2 provides that Listing Rule 7.1 does not apply to an issue of equity securities on the conversion of convertible securities if, inter alia, the company complied with the Listing Rules when it issued the convertible securities.

The Company’s current issued Share capital is 291,434,940 Shares. This includes:

(a) the Shares which were issued to La Jolla on 16 November 2011 and are the subject of Resolution 1 above; and
(b) the Shares which have been issued to La Jolla in response to Conversion Notices given by La Jolla under the First Note as at the date of this Notice and which are the subject of Resolution 2 above.

If the Company issues the Second Note to La Jolla, then assuming the Principal Amount of the Second Note is converted in its entirety, the number of Shares to be issued to La Jolla, and the dilutionary effect of the issue of these Shares on the Share capital of the Company will be (on the assumptions set out below and based on the high, low and VWAP price of the Shares in the 6 month period from 11 August 2011 to 10 February 2012) as follows:

follows:
	No. of Shares Highest Price ($0.09 on 24 August 2011)	No. of Shares Lowest Price ($0.035 on 2 February 2012 and 10 February 2012)	No. of Shares 6 month VWAP Price ($0.0546 from period 11 August 2011 to 10 February 2012)
Current Issued Share Capital	291,434,940	291,434,940	291,434,940

Shares to be issued upon issuing the Second Note (Subject of Resolution 5)	1,175,018	1,175,018	1,175,018

Adjusted Issued Share Capital	292,609,958	292,609,958	292,609,958

Shares to be issued upon conversion of the Second Note in its entirety	12,865,278	33,082,143	21,206,502

Percentage of Adjusted Issued	4.397%	11.306%	7.247%

Share Capital

Issued Share Capital after Shares issued to La Jolla under Second Note	305,475,236	325,692,101	313,816,460

Percentage of New Issued Share Capital	4.212%	10.157%	6. 758%

Assumptions -

The Shares to be issued to La Jolla have been calculated on the assumption that the US$/AU$ exchange rate is $1.00 US for every AU 92.635 cents (which reflects the US$/AU$ exchange rate on 10 February 2012).
The above figures have been calculated on the basis that no further Shares are issued after the date of this Notice (including consequent upon the exercise of any options currently on issue by the Company or upon conversion of the balance Principal Amount of the First Note) other than under the Second Note. Thus, if La Jolla elects to convert the balance Principal Amount of the First Note after the date of this Notice, the above figures will change.

It is important to note that the figures set out in the above table are an illustration only based on full conversion of the Principal Amount of the Second Note and the example Share prices and US$/AU$ exchange rate referred to above. It is important to note that the Share price and the US$/AU$ exchange rate may vary from time. The actual outcome, if La Jolla elects to convert the Principal Amount of the Second Note in whole or in part, will depend on that election and the Conversion Price and the prevailing US$/AU$ exchange rate applicable at the time of conversion.

As at close of trade on 23 February 2012, La Jolla held 4,689,338 Shares in the Company (being those Shares issued to La Jolla which are the subject of Resolutions 1 and 2 above which have not been sold by La Jolla), which represents 2.7227% of the Company’s current issued Share capital.

If the Second Note is issued, La Jolla will be issued with a further 1,175,018 Shares in the Company (these Shares are the subject of Resolution 5 below). Further, on the assumption that La Jolla converted the entirety of the Principal Amount of the Second Note into Shares (and assuming a conversion price calculated based on the lowest price of the Shares in the 6 month period ending 10 February 2012 and an exchange rate as set out above), La Jolla would hold a further 33,082,278 Shares in the Company. These further Share issues would (collectively) increase La Jolla’s shareholding in the Company to 38,919,634 Shares, representing 11.950% of the Company’s then expanded issued share capital of 326,827,119 Shares (assuming La Jolla had not given any further Conversion Notices under the First Note, had not disposed of any further Shares after 23 February 2012 and no other Shares had been issued after the date of this Notice).

If La Jolla had also, at that time, converted the entirety of the Principal Sum remaining outstanding under the First Note (again, assuming a conversion price calculated based on the lowest price of the Shares in the 6 month period ending 10 February 2012 and an exchange rate as set out above and in resolution 3), La Jolla would hold a further 22,501,084 Shares in the Company, giving it a shareholding of 61,420,718 representing 17.640% of the Company’s then expanded issued share capital of 348,270,699 (assuming that La Jolla had not disposed of any further Shares after 23 February 2012 and no other Shares had been issued after the date of this Notice).

However, La Jolla is not permitted to convert the remainder of the Principal Amount of the First Note and/or the Principal Amount of the Second Note if that would cause La Jolla’s (together with any affiliates) voting power in the Company to increase to more than 19.99%.

The Company seeks shareholder approval to the issue of the Second Note pursuant to Listing Rule 7.1.

The following information is provided in accordance with Listing Rule 7.3 in connection with the Second Note:

The Company will (at its discretion) issue one convertible note, having a face value of US $1,000,000. The maximum number of Shares which will be issued to La Jolla if it converts the full Principal Amount (of US $1,000,000) of the Second Note (if issued) will be calculated in accordance with the following formulae:

$1,000,000 Conversion Price,

An example showing the application of this formulae (based on the assumptions set out above) is set out in the table above.

the Second Note (if issued) will be issued within three months after the date of the meeting. This approval will relate to the Principal Sum drawn down by the Company under the Second Note within three months after the date of the meeting;
the Second Note (if issued) has a face value of US $1,000,000.00, which is payable in four installments of US $250,000 from La Jolla. The Second Note may be converted at the Conversion Price, which is equal to the lesser of:
3.1. $0.50 (as adjusted for any stock splits, stock dividends, combinations, subdivisions, recapitalisations or the like); or
3.2. 80% of the average of the three (3) lowest VWAP during the twenty-one (21) trading days prior to La Jolla's election to convert.

The Conversion Price will change from time to time and the Principal Amount of the Second Note is therefore likely to be converted at different prices.

the Second Note (if issued) (and all of the Shares issued upon conversion of the Principal amount of the Second Note) will be issued to La Jolla, an unrelated party of the Company;
a summary of the terms and conditions of the Second Note is set out in Appendix A;
$1,000,000 will be raised from the issue of the Second Note (if issued), which will be applied for general working capital purposes to fund the ongoing operations of the Company;
the Second Note (if issued) will be issued within three months after the date of the meeting (if and to the extent La Jolla elects to convert any portion of the Principal Amount of the Second Note into Shares, the Shares will be issued progressively upon receipt of the applicable Conversion Notice);

E. Resolution 5 - Approval of Issue of 1,175,018 Shares

Resolution 5 seeks shareholder approval, for the purposes of ASX Listing Rule 7.1 and for all other purposes, to the issue to La Jolla of 1,175,018 Shares in the Company, at a price of $0.050364 per Share, in satisfaction of a US $60,000.00 facility fee payable by the Company to La Jolla under the Funding Agreement if the Company issues the Second Note to La Jolla.

Listing Rule 7.1 prohibits a company from issuing or agreeing to issue equity securities in any 12 month period which amount to more than 15% of its ordinary securities without the approval of holders of its ordinary securities.

Equity securities issued with approval of holders of a company’s ordinary securities in accordance with Listing Rule 7.1 are not then required to be included in the 15% limit imposed by Listing Rule 7.1. Shareholder approval of this resolution will therefore mean that the Company's ability to issue further Shares within its 15% placement capacity will not be reduced by the issue of the Shares the subject of this resolution.

Under the Funding Agreement, if the Company issues La Jolla with the Second Note, the Company is required to issue 1,175,018 Shares to La Jolla, in satisfaction of that tranche of the facility fee which is payable to La Jolla under the Funding Agreement on the date of issue of the Second Note.

These Shares will represent 0.4075% of the Company's current issued capital (of 291,434,940 Shares).

The Company seeks shareholder approval for the issue of these Shares pursuant to Listing Rule 7.1.

The following information is provided in accordance with Listing Rule 7.3:-

if the Second Note is issued, 1,175,018 Shares will be issued by the Company;
the Shares (if issued) will be issued on the date of issue of the Second Note, which will occur not later than 3 months after the date of the meeting;
the Shares (if issued) will be issued in satisfaction of a US $60,000.00 facility fee payable to La Jolla under the Funding Agreement in relation to the Second Note at an issue price of $0.050364 Share;
the Shares (if issued) will be issued to La Jolla, an unrelated party of the Company;
the Shares (if issued) will be fully paid ordinary shares and will rank equally in all respects with the existing issued ordinary shares of the Company and permission will be sought for them to be quoted on the ASX;
the Shares (if issued) will be issued in satisfaction of a US $60,000.00 facility fee payable to La Jolla under the Funding Agreement in relation to the Second Note, and therefore no funds will be raised from the issue of these Shares.
the Shares (if issued) will all be allotted and issued at the same time.
F. Definitions

In this Explanatory Statement, the following words shall have the following meaning:

(a) ASX means the Australian Securities Exchange;
(b) Conversion Notice means a written notice given by La Jolla to the Company to convert the Principal Amount of a Note, either in whole or in part, into Shares;
(c) Conversion Price means the price at which new Shares are issued to La Jolla on the conversion by La Jolla of the Principal Amount specified in the relevant Conversion Notice, and being the price per Share which is equal to the lower of:
a. 50 cents; or
b. 80% of the average of the three (3) lowest VWAP during the twenty-one (21) trading days prior to La Jolla's election to convert;
(d) Share means an ordinary fully paid Share in the Company;
(e) La Jolla means La Jolla Cove Investors Inc;
(f) Funding Agreement means the funding agreement made between the Company and La Jolla on 11 November 2011;
(g) Second Note means the convertible note which may (at the Directors' discretion) be issued by the Company to La Jolla under the Funding Agreement (a summary of the terms and conditions of which are set out in Appendix A);
(h) First Note means the convertible note issued by the Company to La Jolla on 15 November 2011 under the Funding Agreement (a summary of the terms and conditions of which are set out in Appendix A);
(i) Principal Amount means, at any time, the then outstanding principal amount of a Note, but only such amount in respect of which La Jolla has actually advanced and has not furnished a Conversion Notice and which has not been repaid by the Company;
(j) Note means a convertible note issued under the Funding Agreement, and includes the First Note and Second Note as applicable;
(k) VWAP means for any date, the daily volume weighted average sale price of the Shares for such date on ASX.

APPENDIX A

Terms and conditions of each Note

The Purchase Price of the Note is US $1,000,000.00, payable by four installments of US $250,000.
Interest is payable on the Note on the Principal Amount at the rate of 4.75% per annum, and is payable monthly in arrears in cash or, at the option of the Company, in Shares issued at the then applicable Conversion Price.
The maturity date of the Note is three (3) years from the date of issue of the Note (“Maturity Date ” ).
The Note is unsecured and the Principal Amount ranks equally with all other unsecured debts owed by the Company.
La Jolla may convert the Note, either in whole or in part, by the delivery to the Company of a Conversion Notice.
If on the day La Jolla issues a Conversion Notice the VWAP is below $0.07 per Share, the Company will have the right, by no later than 3:00pm Sydney time on the date that is seven (7) Business Days after its receipt of such Conversion Notice, to prepay that portion of the Principal Amount of the Note that La Jolla has sought to convert pursuant to the Conversion Notice, plus any accrued and unpaid interest, at 105% of such amount. The Funding Agreement provides for the downward adjustment of this floor price in certain circumstances.
The number of new Shares into which the Note may be converted is equal to the Principal Amount that is to be converted (as specified in the Conversion Notice) divided by the Conversion Price. The Conversion Price is equal to the lesser of:
7.1. $0.50 (as adjusted for any stock splits, stock dividends, combinations, subdivisions, recapitalisations or the like); or
7.2. 80% of the average of the three (3) lowest VWAP during the twenty-one (21) trading days prior to La Jolla's election to convert (the Funding Agreement provides for this percentage figure to be adjusted downwards in certain circumstances).
In the event the Company is prohibited from issuing Shares for any reason, or fails to timely deliver Shares within 2 business days of receipt by the Company of a Conversion Notice ("Delivery Date"), or upon the occurrence of an event of default under the Funding Agreement, then at La Jolla's election, the Company must pay to La Jolla ten (10) Business Days after request by La Jolla or on the Delivery Date (if requested by La Jolla) a sum of money determined by multiplying the Principal Amount of the Note designated by La Jolla (but not exceeding the Principal Amount the subject of the Conversion Notice or the portion of the Principal Amount which cannot be converted into Shares, as required) by 120%, together with accrued but unpaid interest thereon in redemption of such portion of the Note.
Further to the above paragraph, if the Company commits any of the events of default specified in the Funding Agreement (including without limitation, it defaults in paying any amount due and payable by it under the Funding Agreement, it breaches any term of the Funding Agreement and fails to rectify such breach within the time specified in the Funding Agreement, an insolvency event happens to the Company, any of the representations and warranties the Company has given become false or misleading or the price of the Shares falls below $0.01) La Jolla may in its sole and absolute discretion rescind any Conversion Notice it has issued and require the immediate repayment of all amounts owing or otherwise outstanding under the Note. In these

circumstances, the Company must pay 120% of the outstanding Principal Amount, together with all accrued and unpaid interest.

In each of the five months prior to the Maturity Date, the Company may elect to force La Jolla to convert onefifth of the then remaining Principal Amount (calculated at the beginning of the first of the five months prior to the Maturity Date, so that the effect of the forced conversion over the last five successive months would be to convert the entire remaining Principal Amount) of the Note due to mature into Shares, provided however there is not currently occurring an event of default on behalf of the Company under the Funding Agreement.
Unless converted, the Principal Amount must be paid to La Jolla on the Maturity Date. The Company may not make any prepayments on the Note without the consent of La Jolla.
If a "Fundamental Corporate Change" occurs, then La Jolla will have the right to:
12.1. require the Company to prepay the Note for cash at 120% of the Principal Amount, together with all accrued and unpaid interest payable to the date of prepayment; or
12.2. receive upon conversion of the Principal Amount of the Note which was outstanding immediately prior to such Fundamental Corporate Change (or any portion thereof) the number of securities of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and certain other property as is receivable upon or as a result of such Fundamental Corporate Change by a holder of the number of Shares into which the outstanding portion of the Note so converted would have been able to be converted at the Conversion Price applicable immediately prior to such Fundamental Corporate Change.

A Fundamental Corporate Change includes a reorganisation or reclassification of capital, consolidation or merger of the Company with a third party, the sale, transfer or disposal of substantially all of the assets and business of the Company, or any transaction or series of transactions whereby more than 50% of the voting power of the Company is disposed of.

The Note is not transferable by La Jolla unless La Jolla first obtains the written consent of the Company.
If during the term of the Funding Agreement, La Jolla fails to fund any amount within ten (10) business days of the date that the delivery of funds relevant to such purchase would otherwise be due, La Jolla shall be liable for and immediately pay $200,000 to the Company by way of liquidated damages ("Liquidated Damages Amount"). If the Investor pays the Liquidated Damages Amount to the Company, the Investor shall have no further obligations under the Funding Agreement and the Note, including with respect to (i) any unpaid portion of the Note, or (ii) the Purchase Price for any subsequent Note that has not been issued by the Company.
Conversion of the Note will not be permitted if that would cause La Jolla’s (together with any affiliates) voting power in the Company to increase to more than 19.99%.
The Note will not be quoted on ASX or any other securities exchange.

The Company has given all usual representations and warranties to, and indemnities in favour of, La Jolla which one would ordinarily expect to find in a funding agreement similar to the Funding Agreement.

EDEN ENERGY LTD (ACN 109 200 900)

PROXY FORM GENERAL MEETING

The Company Secretary Eden Energy Ltd Level 40 Exchange Plaza 2 The Esplanade Perth WA 6000 Fax +(618) 9282 5866

Shareholder Name Shareholder Address

Share Registry Website: www.advancedshare.com.au

I/We being a member/members of Eden Energy Ltd entitled to attend and vote at the meeting, hereby Appoint Name of proxy

or failing the person so named or, if no person is named, the Chairman of the meeting or the Chairman’s nominee, to vote in respect of ____% of my/our voting rights in accordance with the following directions, or if no directions have been given, as the proxy sees fit at the General Meeting of the Company, to be held on Thursday the 29[th] of March 2012 and at any adjournment thereof. If no directions are given, the Chairman will vote in favour of all of the resolutions.

FOR AGAINST ABSTAIN

Ordinary Resolutions: 1. Ratification of Issue of 1,175,018 Shares 2. Ratification of Issue of 9,789,305 Shares 3. Approval of Issue of Shares upon Conversion of the First Convertible Note 4. Approval of Issue of Second Convertible Note 4. Approve of Issue of 1,175,018 Shares

If you mark the abstain box for a particular item, you are directing your proxy not to vote on that item on a show of hands or on a poll and that your shares are not intended to be counted in computing the required majority on a poll.

Signed this day of 2012 Individuals andjoint holders Signature Signature Signature	Companies(affix common seal if appropriate)
	Director

	Director/Company Secretary

Signature	Sole Director and Sole Company Secretary

The Chairman intends to vote undirected proxies in favour of each item of business. If you do not wish to direct your proxy how to vote please place a mark in the box.

By marking this box you acknowledge that the Chairman may exercise your proxy even if he has an interest in the outcome of the resolution and votes cast by him other than as proxy holder will be disregarded because of that interest.

Notes:

To be effective, this proxy and the power of attorney (if any) under which it is signed must be received at the Registered Office of the Company, Level 40, Exchange Plaza, 2 The Esplanade, Perth, WA 6000 not less than 48 hours before the time for holding the meeting, or any adjournment thereof.
If the member is a corporation, the form of proxy should be signed under seal if appropriate.

INSTRUCTIONS FOR APPOINTMENT OF PROXY

A shareholder entitled to attend and vote is entitled to appoint no more than two proxies to attend and vote at this General Meeting as the shareholder’s proxy. A proxy need not be a shareholder of the Company.
Where more than one proxy is appointed, each proxy must be appointed to represent a specific proportion of the shareholder’s voting rights. If such appointment is not made then each proxy may exercise half of the shareholder’s voting rights. Fractions shall be disregarded.
The proxy form must be signed personally by the shareholder or his attorney, duly authorised in writing. If a proxy is given by a corporation, the proxy must be executed either in accordance with the Constitution of the company or under the hand of an officer of the company or its duly authorised attorney. In the case of joint shareholders, this proxy must be signed by all of the joint shareholders, personally or by a duly authorised attorney.
If a proxy is executed by an attorney of a shareholder, then the original of the relevant power of attorney or a certified copy of the relevant power of attorney, if it has not already been noted by the Company, must accompany the proxy form.
To be effective, forms to appoint proxies must be received by the Company no later than 48 hours before the time appointed for the holding of this General Meeting, that is by 09.30am WST on 27 March 2012, by post or facsimile to the respective addresses stipulated in this proxy form.
If the proxy form specifies a way in which the proxy is to vote on any of the resolutions stated above, then the following applies:
(a) the proxy need not vote on a show of hands, but if the proxy does so, the proxy must vote that way; and
(b) if the proxy has 2 or more appointments that specify different ways to vote on the resolution, the proxy must not vote on a show of hands; and
(c) if the proxy is Chairman, the proxy must vote on a poll and must vote that way, and
(d) if the proxy is not the Chairman, the proxy need not vote on a poll, but if the proxy does so, the proxy must vote that way.

If a proxy is also a shareholder, or acts as proxy for any other shareholder, the proxy can cast any votes the proxy holds as a shareholder or as proxy for any other shareholder in any way that the proxy, or that other shareholder, sees fit.

The Chairman intends to vote in favour of all resolutions set out in the Notice of General Meeting.