ENVIRONMENTAL CLEAN TECHNOLOGIES LIMITED. — AGM Information 2011

Oct 26, 2011

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NOTICE OF ANNUAL GENERAL MEETING AND EXPLANATORY MEMORANDUM

TO BE HELD AT:

Norton Rose

Level 15, 485 Bourke Street, Melbourne, Victoria At 11:00 am on Wednesday, 30[th] November 2011

TO BE VALID, THE PROXY FORM ENCLOSED FOR USE AT THE MEETING MUST BE COMPLETED AND RETURNED NO LATER THAN 11:00 AM ON MONDAY, 28[TH] NOVEMBER 2011

IMPORTANT

This document is important and requires your immediate attention. It should be read in its entirety. If you are in doubt as to the course you should follow, you should consult your legal, financial or other professional adviser immediately.

Level 8, 530 Little Collins Street, Melbourne Vic, 3000 Australia | Phone +613 9684 0888 | www.ectltd.com.au | ABN 28 009 120 405 Listed on the Australian Stock Exchange (ASX:ESI)

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Contents

Chairman’s Letter 3 Notice of General Meeting 4 Explanatory Memorandum 7 Glossary 15 Attachment 1 16 A Proxy Form is enclosed separately

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Chairman’s Letter

24[th] October 2011

Dear Shareholder,

This year’s Annual General Meeting will be held at Norton Rose, Level 15, 485 Bourke Street, Melbourne, Victoria commencing at 11:00 am on Wednesday, 30[th] November 2011. The Directors look forward to the opportunity to provide Shareholders with an update on the Company’s progress at the Annual General Meeting.

The Meeting will consider the Remuneration Report for the Company, the re-election of myself, Mr Iain McEwin, Mr Ashley Moore and Mr Stephen Carter as directors of the Company, the approval of a proposed issue of Convertible Notes and the approval of prior issues to refresh the Company’s ability to issue up to 15% of the Company’s equity without additional Shareholder approval.

I encourage you to read the Explanatory Memorandum in full and look forward to seeing you at the Annual General Meeting on 30[th] November 2011.

Yours sincerely

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Mike Davies

Managing Director and Executive Chairman

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Notice of Annual General Meeting

The Annual General Meeting of Environmental Clean Technologies Limited (ACN 009 120 405) will be held at Norton Rose, Level 15, RACV Tower, 485 Bourke Street, Melbourne, Victoria on 30[th] November 2011 at 11:00 am, Melbourne time.

AGENDA

ORDINARY BUSINESS

1. Annual Financial Report

To receive and consider the Annual Financial Report of the Company for the year ended 30 June 2011 and the related Directors’ Report, Directors’ Declaration and Auditor’s Report.

2. Resolution 1 - Remuneration Report

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

" That, for the purposes of section 250R of the Corporations Act 2011 (Cth), the Remuneration Report for the Company for the financial year ended 30 June 2011 be adopted ."

Please note that the vote on this resolution is advisory only and does not bind the Directors or the Company. However, please refer to the Explanatory Memorandum for an explanation of the consequences of 25% or more eligible votes being cast against this advisory resolution under recent amendments to the Corporations Act.

3. Resolution 2 - Election of Mr Michael Davies

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

“ That Mr Michael Davies, who was appointed as Managing Director by the Board in accordance with clauses 13.4 and 17.1 of the Constitution, being eligible for election, be elected as a Director of the Company .”

4. Resolution 3 - Election of Mr Iain McEwin

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

“ That Mr Iain McEwin, who was appointed by the Board in accordance with clause 13.4 of the Constitution, being eligible for election, be elected as a Director of the Company .”

5. Resolution 4 - Election of Mr Ashley Moore

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

“That Mr Ashley Moore, who was appointed by the Board in accordance with clause 13.4 of the Constitution, being eligible for election, be elected as a Director of the Company.”

6. Resolution 5 – Re-election of Mr Stephen Carter

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

“ That Mr Stephen Carter, who retires in accordance with clause 13.2 of the Constitution, being eligible for reelection, be re-elected as a Director of the Company .”

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7. Resolution 6 – Approval of issue of Convertible Notes

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

“ That, for the purposes of ASX Listing Rule 7.1 and for all other purposes, Shareholders approve the issue of Convertible Notes and the issue of Shares upon conversion of all or any part of the Convertible Notes, on the terms and conditions described in the Explanatory Memorandum accompanying this Notice of Meeting .”

8. Resolution 7 - Ratification of prior issue of Shares and Options

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

“ That, for the purposes of ASX Listing Rule 7.4 and for all other purposes, Shareholders approve the prior issue of 43,750,000 Shares and 21,875,002 listed Options as described in the Explanatory Memorandum accompanying this Notice of Meeting .”

9. Resolution 8 - Ratification of prior issue of La Jolla Convertible Notes

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

“ That, for the purposes of ASX Listing Rule 7.4 and for all other purposes, Shareholders approve the prior issue of La Jolla Convertible Notes, and any Shares issued upon conversion of those La Jolla Convertible Notes, as described in the Explanatory Memorandum accompanying this Notice of Meeting .”

OTHER BUSINESS

To deal with any other business that may be brought forward in accordance with the Constitution and the Corporations Act.

Voting exclusion statement

As required by the Corporations Act and ASX Listing Rules, the Company will disregard any votes cast on:

1. Resolution 1 by a Director or other Key Management Personnel of the Company and any closely related party of such a Director or other Key Management Personnel. Closely related party is defined in the Corporations Act and includes a spouse, dependent and certain other close family members, as well as any companies controlled by the Key Management Personnel.

2. Resolution 6 by any person who may participate in the proposed issue of Convertible Notes and a person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if Resolution 6 is passed, and any associate of such a person; and

3. Resolutions 7 and 8 by any of the parties who participated in the issue of the Shares, Options or convertible notes under the applicable issues and any associate of any of those parties.

However, a Director or Key Management Personnel may cast a vote on Resolution 1 if the person does so as a proxy appointed in writing that specifies how the proxy is to vote on Resolution 1 (and the vote is not being cast on behalf of a person who would themselves be precluded from voting on Resolution 1).

The Company need not disregard votes of the above parties for Resolutions 6, 7 and 8 if:

1. it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form; or

2. it is cast by the person chairing the Meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

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Explanatory Memorandum

The accompanying Explanatory Memorandum forms part of this Notice of Annual General Meeting and should be read in conjunction with it. A Glossary of terms used in this Notice of Annual General Meeting and Explanatory Memorandum is contained in the Explanatory Memorandum.

NOTES REGARDING PROXIES AND VOTING

Voting entitlements

Pursuant to Regulation 7.11.37 of the Corporations Regulations 2001 (Cth), the Directors have determined that the shareholding of each Shareholder for the purposes of ascertaining voting entitlements for the Meeting will be as it appears in the share register at 7:00 pm on Monday, 28[th] November 2011. Accordingly, only those persons will be entitled to attend and vote at the Meeting.

Important voting information

The Company encourages all Shareholders who submit proxies to direct their proxy how to vote on the Resolutions.

The Chairman of the Meeting intends to vote all undirected proxies in favour of each Resolution (other than Resolution 1).

The Chairman of the Meeting is not permitted to vote undirected proxies on Resolution 1. In respect of Resolution 1, if your proxy is a person who is not entitled to vote in his or her own right, the person may still vote as your proxy provided you have directed your proxy on the Proxy Form how to vote and your proxy does vote as directed.

Appointing a proxy

A Proxy Form accompanies the Notice of Meeting.

The Proxy Form contains important information and other instructions which you should carefully read.

A Shareholder who is entitled to attend and vote at the Meeting has the right to appoint a proxy to attend and vote on his or her behalf. The proxy need not be a Shareholder of the Company.

A Shareholder who is entitled to cast 2 or more votes may appoint not more than 2 proxies to attend and vote at the Meeting and may specify the proportion or number of votes each proxy is appointed to exercise. If you want to appoint 2 proxies, an additional proxy form will be supplied by the Company’s share registry, Security Transfer Registrars Pty Ltd, on request by contacting them directly. Contact details for Security Transfer Registrars Pty Ltd are shown below. Where 2 proxies are appointed, both forms should be completed with the nominated proportion or number of votes each proxy may exercise. Otherwise each proxy may exercise half of the votes (disregarding fractions).

Proxy Forms must be signed by a Shareholder or the Shareholder’s attorney or, if the Shareholder is a corporation, must be signed by 2 directors or by a director and a secretary, or if it is a proprietary company that has a sole director who is also the sole secretary (or has no secretary), by that director, or under hand of its attorney or duly authorised officer. If the Proxy Form is signed by a person who is not the registered holder of Shares (e.g. an attorney), then the relevant authority (e.g. in the case of proxy forms signed by an attorney, the power of attorney or a certified copy of the power of attorney) must either have been exhibited previously to the Company or be enclosed with the Proxy Form.

Please read the instructions and other information on the Proxy Form.

For an appointment of a proxy to be effective, the proxy's appointment (and, if the appointment is signed by an attorney, the authority under which it was signed or a certified copy of the authority) must be received by Environmental Clean Technologies’ share registry by 11:00 am on Monday, 28[th] November 2011.

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A Proxy Form is included with this Notice. If you require a second proxy form, please contact Environmental Clean Technologies’ share registry or you may copy the Proxy Form.

Proxy Forms may be lodged by posting, delivery or facsimile to the Company’s share registry as follows:

Security Transfer Registrars Pty Ltd

Postal Address: PO BOX 535, Applecross, Western Australia 6953 Street Address: Alexandrea House, Suite 1, 770 Canning Highway, Applecross, Western Australia 6153 Telephone: +61 8 9315 2333 Facsimile +61 8 9315 2233 Email registrar@securitytransfer.com.au

Corporate shareholders

A Shareholder which is a body corporate and which is entitled to attend and vote at the Meeting, or a proxy which is a body corporate and which is appointed by a Shareholder entitled to attend and vote at the Meeting, may appoint a person to act as its representative in accordance with section 250D of the Corporations Act. The representative must present satisfactory evidence that they are authorised to act as the company's representative prior to admission to the Meeting. The authorisation may be effective either for this Meeting only or for all meetings of the Company.

Registration

If you are attending the Meeting, please bring your personalised Proxy Form with you . If you do not bring your form with you, you will still be able to attend the Meeting, but on registration, representatives from the Company’s share registry will need to verify your identity.

Questions from Shareholders

There are 2 ways to ask the Directors or the Auditor a question:

1. Post, fax or email your question to the Company at:

Environmental Clean Technologies Limited Level 8, 530 Little Collins Street, Melbourne Vic, 3000 Australia Email: info@ectltd.com.au Telephone: +61 (0) 3 9684 0888 Attention: Company Secretary

1. Attend the Meeting.

Questions to the Company should relate to matters that are relevant to the Meeting, including matters arising from the 2011 Annual Report and general questions regarding the Company's management or performance. Written questions to the Auditor should relate to the conduct of the audit or the content of the Auditor’s Report.

Please note that written questions to the Company must be received no later than 11:00 am (Melbourne time) on Monday, 28[th] November 2011. Questions to the auditor must be received no later than 5 business days before the Meeting, i.e. Wednesday, 21[st] November 2011.

The Company is required by law to forward all questions to the Auditor, from which the Auditor is required to prepare a list of those questions that are considered to be relevant to the conduct of the audit or the content of the Auditor's Report. The Auditor may omit questions that are the same in substance to other questions.

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The list of questions prepared by the Auditor will be available on the Company's website, www.ectltd.com.au prior to the Meeting. In addition, copies of the list of questions will be available at the Meeting.

The Chairman of the Meeting will answer as many of the frequently asked questions submitted to the Company as possible at the Meeting.

By order of the Board

Mike Davies Managing Director and Executive Chairman 24[th] October 2011

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Explanatory Memorandum

This Explanatory Memorandum (which is included in, and forms part of, the Notice of Annual General Meeting) is provided to Shareholders to explain the Resolutions to be put to Shareholders at the Annual General Meeting and to assist Shareholders to determine how they wish to vote on the Rresolutions.

The Annual General Meeting will be held at Norton Rose, Level 15, RACV Tower, 485 Bourke Street, Melbourne, Victoria on Wednesday, 30[th] November 2011 at 11:00 am, Melbourne time.

1. Annual Financial Report

The full year results for the Company are available in the 2011 Annual Report sent to those Shareholders who elected to receive the annual report or online at www.ectltd.com.au. Any relevant announcements made by the Company after the date of the 2011 Annual Report will be available on the Company's website at www.ectltd.com.au.

The Corporations Act and the Company's Constitution require the following reports in respect of the financial year of the Company ended on 30 June 2011 to be presented to the Meeting:

• the Financial Report (which includes the Financial Statements and Directors' declaration); • the Directors' Report (which includes the Remuneration Report); and • the Auditor’s Report.

Except for the non-binding advisory resolution in respect of the Remuneration Report (refer to Resolution 1 below), there is no requirement in the Corporations Act or the Constitution for Shareholders to approve the Financial Report, the Directors’ Report or the Auditor’s Report.

In accordance with the Corporations Act, Shareholders will be given a reasonable opportunity at the Meeting to ask questions about or make comments on the management or performance of the Company.

The Auditor of the Company is required to attend the Meeting and will be available to take Shareholder's questions relevant to the conduct of the audit, the preparation and content of the Auditor’s Report, the accounting policies adopted by the Company in relation to the preparation of the 2011 financial statements of the Company and the independence of the Auditor in relation to the conduct of the audit. The Auditor will also be allowed a reasonable opportunity to answer written questions submitted in accordance with the process described previously.

2. Adoption of Remuneration Report (Resolution 1)

The Remuneration Report of the Company for the financial year ended 30 June 2011 is set out in the Directors' Report (included in the 2011 Annual Report) ( Remuneration Report ).

In compliance with section 300A of the Corporations Act, the Remuneration Report sets out the Company's policy for determining the nature and amount of remuneration for the Directors and specified executive officers of the Company. The Board has a policy of ensuring that remuneration paid to Directors and management is market competitive while at the same time aligned to the achievement of strategic objectives and the creation of value for Shareholders.

Section 250R of the Corporations Act requires a resolution in relation to the Remuneration Report to be included in the business of the Meeting, so that Shareholders have opportunity to comment and ask questions on the content of the Remuneration Report and exercise a vote for its adoption. The vote on Resolution 1 is advisory only and does not bind the Directors or the Company.

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However, under changes to the Corporations Act effective from 1 July 2011, if at 2 consecutive annual general meetings of the Company, 25% or more of votes cast are against the adoption of the Remuneration Report, Shareholders will be required to vote at the second of those annual general meetings on a resolution (known as a spill resolution) that another general meeting of the Company (known as a spill meeting) is to be held within 90 days of the spill resolution at which all of the Directors at the time the Remuneration Report was approved (other than the Managing Director of the Company) must stand for re-election.

The Meeting will be the first time Shareholders will vote on the Company’s Remuneration Report under the new regime. If more than 75% of the votes cast on Resolution 1 are in favour of adopting the Remuneration Report then nothing further happens. If 25% or more of the votes cast on Resolution 1 are against adopting the Remuneration Report and at the Company’s 2012 Annual General Meeting the same result occurs, at the Company’s 2012 Annual General Meeting a spill resolution will be put to Shareholders to consider whether the Board should be put up for re-election at a subsequent general meeting (spill meeting). If more than 50% of Shareholders vote in favour of the spill resolution, the Company must convene the spill meeting within 90 days of the 2012 Annual General Meeting.

The vote on Resolution 1 will, in the first instance, be determined by a show of hands as required by clause 12.12 of the Constitution. However, if there is any doubt regarding the outcome of the voting, the Chairman of the Meeting will demand a poll for Resolution 1 so that the votes for and against the Resolution can be accurately determined. If a poll is required, it will be held towards the end of the Meeting.

Section 250R(4) of the Corporations Act provides that Key Management Personnel may not vote on a resolution adopting the Remuneration Report unless they are appointed as proxy for another person and that person directs the member of Key Management Personnel how to vote on the resolution. Key Management Personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly, including any director (whether executive or otherwise) of the Company.

If you intend to appoint the Chairman or another member of the Key Management Personnel as your proxy, you should ensure that you direct your proxy how to vote on Resolution 1. Those persons are not permitted to vote undirected proxies on Resolution 1.

3. Resolutions 2, 3 and 4 - Election of Mr Michael Davies (Managing Director/ Executive Chairman), Mr Iain McEwin (Non-executive Director) and Mr Ashley Moore (Chief Operating Officer and Executive Director).

Clause 13.4 of the Company's Constitution provides that the Board may at any time appoint a person to be a Director, either to fill a casual vacancy or as an addition to the existing Directors. Any Director so appointed holds office only until the next following general meeting and is then eligible for re-election.

Subject to Michael Davies’ election as a Director being approved by Resolution 2, for the duration of his tenure as Managing Director, he will not be subject to the requirement to seek re-election via rotation under rule 13.2 of the Constitution in accordance with rule 17.4 of the Constitution.

Mr Michael (Mike) Davies (Diploma Civil Engineering, Graduate of Macquarie University Advanced Management Program) was appointed as a Director by the Board on 5[th] July 2011 and being eligible, offers himself for election at the Meeting. Mike is an experienced senior manager having spent 14 years in General Manager and CEO/Managing Director roles. The largest part of Mike’s career was spent in the employment of Caterpillar Inc., and Caterpillar 1992 and 1997. Mike was also CEO/Managing Director of Joy Mining Machinery Australia Limited the global leader in underground coal mining equipment, between 1997 and 1999, before commencing his consulting business to the mining industry in Australasia, USA, Europe, Asia and Africa. Mike was appointed Managing Director/Executive Chairman on 17[th] August 2011.

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Mr Iain McEwin was appointed as a Director by the Board on 11[th] July 2011 and being eligible, offers himself for election at the Meeting. Iain has considerable business experience in the ownership and operation of his own business as a supplier to the building and construction industry. Iain is a major shareholder in ECT.

Mr Ashley Moore (BEng (Chem), MIEAust, CPEng) was appointed as a Director by the Board on 17[th] August 2011 and being eligible, offers himself for election at the Meeting. Ashley is a graduate of Melbourne University in chemical engineering and is a Chartered Professional Engineer. He has extensive industry experience in all facets of supply chain management, sales and marketing and major project delivery from more than 25 years in the industry. Ashley joined ECT in October 2009 as Business Manager, Coldry, during which time he displayed exemplary leadership and team building skills. Mr Moore is not and has not been a director of any other publicly listed company in the past 3 years. Ashley was appointed to be the Chief Operating Officer of the Company in August 2011.

Recommendation

The Board (other than Mr Mike Davies with respect to Resolution 2, Mr Iain McEwin with respect to Resolution 3 and Mr Ashley Moore with respect to Resolution 4) recommends that Shareholders vote in favour of Resolutions 2, 3 and 4.

4. Resolution 5 – Re-election of Mr Stephen Carter (Non-executive Director).

Clause 13.2 of the Company's Constitution and ASX Listing Rule 14.4 provide that a Director must not hold office without re-election after the third Annual General Meeting following the Director's appointment or 3 years, whichever is longer. In addition, clause 13.2 of the Constitution provides that one-third of the Directors for the time being, or if their number is not a multiple of 3, then the number nearest one-third (rounded upwards in case of doubt), shall retire from office at each Annual General Meeting of the Company.

Mr Stephen Carter (MBA, Dip. Applied Science, Advanced Dip. Company Directors, Diploma Stockbroking. FAICD, MSAA) was appointed as a non-executive director in May 2009, re-elected in November 2009 and is retiring from the Board under these rotation rules and, being eligible, offers himself for re-election at the Meeting. Stephen has extensive experience in delivering strategic projects including the commissioning of Crown Casino, the commercial preparation for the integration of Ansett/Air New Zealand, delivery of a multi-million dollar funding package for the redevelopment of the Melbourne Showgrounds, the review and transformation of Air New Zealand’s engineering division and the commercial repositioning of Spotlight Pty Ltd. Mr Carter is not and has not been a director of any other publicly listed company in the past 3 years .

Recommendation

The Board (other than Mr Stephen Carter) recommends that Shareholders vote in favour of Resolution 5.

5. Resolution 6 – Approval of issue of Convertible Notes

The Company is seeking to negotiate with La Jolla Cove Investors, Inc. ( La Jolla ) to pay out part or all of the outstanding unconverted convertible notes currently on issue to La Jolla ( La Jolla Convertible Notes ). These outstanding La Jolla Convertible Notes have a face value of US$646,055.

In order to finance the payout of La Jolla, the Company is currently negotiating the subscription of up to $400,000 worth of convertible notes from Menzies Securities or experienced and sophisticated investor clients of Menzies Securities (the Investors ) ( Convertible Notes ). The proposed Convertible Notes have a 2 year maturity. Resolution 6 seeks Shareholder approval for the issue of the Convertible Notes and the subsequent issue of Shares as a result of the Convertible Notes being converted to Shares.

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The proposed issue of the Convertible Notes are “equity securities” for the purpose of ASX Listing Rule 7.1 and the conversion mechanism proposed for the Convertible Notes means that their issue may exceed the 15% limit in ASX Listing Rule 7.1. However, this limit does not apply to an issue that is made within 3 months after receipt of approval by shareholders and, accordingly, the Company is seeking Shareholder approval for the issue of the Convertible Notes that are issued on or before 29 February 2012. Convertible Notes issued after that time will need to be subject to separate approval or counted towards the Company’s 15% limit.

ASX Listing Rule 7.1 – issue of Convertible Notes

Subject to a number of exceptions, ASX Listing Rule 7.1 limits the number of equity securities (which includes convertible notes) that a company may issue or agree to issue without shareholder approval in any 12 month period to 15% of its issued securities. Shareholder approval is required for the issue of Convertible Notes under ASX Listing Rule 7.1 if the number of Shares into which the Convertible Notes may be converted exceed this limit (which is likely to be the case).

ASX Listing Rule 7.2 – issue of Shares on conversion of Convertible Notes

ASX Listing Rule 7.2, Exception 4 provides that the 15% limit in ASX Listing Rule 7.1 does not apply to an issue of securities on conversion of a convertible security issued in accordance with the Listing Rules. As result, any Shares issued to the Investors on conversion of any Convertible Note issued within 3 months after receipt of Shareholder approval under Resolution 6 will not count towards the Company’s 15% cap.

Issue and payment

Prior to the Annual General Meeting, Investors may lend the Company up to $400,000. For such loans, immediately following Shareholder approval of the issue of Convertible Notes to the Investors, the Company intends to issue Convertible Notes with a face value of up to the amount loaned, in discharge of that loan. Following the Annual General Meeting, and until 29 February 2012. Investors may subscribe for Convertible Notes for the remaining balance of $400,000 not loaned by Investors prior to the Annual General Meeting. For such subscriptions, the Convertible Notes will be issued by the Company as soon as practicable following receipt of the relevant funds.

Conversion Arrangements

Subject to ASX Listing Rules 7.1 and 7.2, it is proposed that the Investors may convert some or all of the Convertible Notes (either in whole or in part) from 31 December 2011.

The price for determining conversion of all or part of the outstanding Convertible Notes will be, at the Investors’ election:

1. 80% of the lowest volume weighted average price ( VWAP ) during the 10 trading days prior to the election to convert; or

2. 0.6¢. If the Investor elects to convert under this mechanism, they receive 1 free listed Option for each 2 Shares issued upon conversion. This is the same issue price as under the Company’s recent rights issue.

For example, if the lowest VWAP during the 10 trading days prior to the election to convert was 0.6¢, and the Investors elected to convert $100,000 worth of Convertible Notes under the first conversion option above, the Company would issue 20,833,333 Shares [$100,000/($0.006*80%)].

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Information required for Shareholder approval

In accordance with ASX Listing Rule 7.3, the following information is provided to Shareholders:

1. The maximum number of securities that will be issued are Convertible Notes with a face value of $400,000. The maximum number of Shares into which the Convertible Notes may be converted is the number determined by applying the formula set out above to the aggregate issue price of the Convertible Notes of up to $400,000. At a trading price of 0.6¢, the Company would issue 83.3 million Shares upon conversion if the Investor elects to convert under the first conversion option above. Further, if the Investor elects to convert 0.6¢ under the second mechanism referred to above, the Investor will receive 1 free listed Option for each 2 Shares issued upon conversion.

2. The approval sought under this Resolution 6 will only relate to Convertible Notes issued by the Company to the Investors, with such Convertible Notes to be issued by no later than 29 February 2012 (ie within 3 months of the Annual General Meeting).

3. The allottees of the Convertible Notes will be the Investors or their nominees. The Shares and Options (if applicable) issued on conversion of the Convertible Note will be issued to the holder of the Convertible Notes at the time.

4. The terms of the Convertible Note will be as follows:

5. a. The Convertible Notes will be issued by no later than 29 February 2012.

6. b. The issue price of the Convertible Notes will be up to $400,000.

7. c. No interest will be charged on the Convertible Notes unless the market price of Shares is below $0.003 per Share, in which case, interest will accrue at the Australian 90 day bank bill swap rate plus a margin of 3.0%, therefore at present approximately 7.75% per annum, payable quarterly on the outstanding Convertible Notes. Interest is payable either in cash or by the issue of new Shares (at the Company's option).

8. d. The Convertible Notes may be secured by a first ranking fixed and floating charge over the assets of the Company.

9. e. The Convertible Notes can only be converted after 31 December 2011.

10. f. The maturity date of the Convertible Notes will be 2 years after the Convertible Notes are issued. On maturity the unconverted balance of the Convertible Notes must be repaid.

11. g. The number of Shares into which the Convertible Notes may be converted will be equal to the dollar amount being converted divided by the Conversion Price. The "Conversion Price" will be equal to, at the Investor’s election:

    • i. 80% of the lowest VWAP during the 10 trading days prior to the election to convert; or

    • ii. 0.6¢. If the Investor elects to convert under this mechanism, they receive 1 free listed Option for each 2 Shares issued upon conversion.

12. h. The Company may prepay part or all of any outstanding Convertible Notes by paying an amount equal to 120% of the whole or part of the face value of all outstanding Convertible Notes.

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1. The funds raised by the loan or the issue of the Convertible Notes (as applicable), will be used as follows:

2. i. For subscriptions prior to the Annual General Meeting, applied in discharging the loan by the applicable Investors (and consequently used to repay the La Jolla Convertible Notes and for the Company’s working capital requirements); and

3. j. For subscriptions following the Annual General Meeting, applied towards the repayment of the La Jolla Convertible Notes and the Company’s working capital requirements.

Recommendation

The Board unanimously recommends that shareholders vote in favour of Resolution 6.

6. Resolution 7 - Ratification of prior issue of Shares and Options

Subject to a number of exceptions, ASX Listing Rule 7.1 limits the number of securities that a company may issue or agree to issue without shareholder approval in any 12 month period to 15% of its issued securities.

ASX Listing Rule 7.4 sets out an exception to ASX Listing Rule 7.1. It provides that where a company in general meeting ratifies the previous issue of securities made pursuant to ASX Listing Rule 7.1 (and provided that the previous issue did not breach ASX Listing Rule 7.1) those securities will be deemed to have been made with shareholder approval for the purpose of ASX Listing Rule 7.1.

(a) Issue of securities in 12 months to 17[th] October 2011

In the 12 month period to 17[th] October 2011 there were a number of issues of new Shares and Options in the Company. In total 167,215,388 Shares and 21,875,002 ASX listed Options were issued.

(b) Issues of Shares not requiring ratification for the purposes ASX Listing Rule 7.4

Of the new Shares and Options issued, 123,465,388 Shares were issued upon the conversion of La Jolla Convertible Notes. Up to 25[th] February 2011 the underlying La Jolla Convertible Notes were issued with the approval of the holders of ordinary securities in the Company, pursuant to ASX Listing Rule 7.1, at the general meeting of the Company held on 26 November 2010 ( 2010 AGM ). After that date, La Jolle Convertible Notes were issued without Shareholder approval within the 15% limit permitted by ASX Listing Rule 7.1.

The issue of the new Shares are exempt from the 15% limit under ASX Listing Rule 7.1 by virtue of ASX Listing Rule 7.2, Exception 4 which allows for the conversion of convertible securities which were issued in compliance with the ASX Listing Rules.

(c) Issues requiring ratification for the purposes ASX Listing Rule 7.4

On 19[th] August 2011 the Company issued 43,750,000 new Shares at 0.6¢ per Share and 21,875,002 Options at nil consideration per Option by way of a private placement to experienced and sophisticated investor private clients of Menzies Securities. The funds raised from the placement were used for the Company’s on-going working capital requirements.

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(d) Summary

A summary of the New Shares and Options issued in the Company for the 12 month period to 17[th] October 2011 is as follows:

New securities issued in the 12 months to 17 October	Shares	Options
2011
- Conversion of La Jolla Convertible Notes	123,465,388
- Placement to be ratified at Annual General Meeting on 30th	43,750,000	21,875,002
November 2011
Total new securities issued	167,215,388	21,875,002

(e) Resolution 7

Resolution 7 requests Shareholders to ratify, for the purposes of ASX Listing Rule 7.4, the issue of 43,750,000 new Shares and 21,875,002 new listed Options to the parties detailed above.

By ratifying the above issue pursuant to ASX Listing Rule 7.4, the Company will retain the flexibility to issue new Shares and other securities in the future up to the 15% annual limit set out in ASX Listing Rule 7.1 (without the need to obtain prior Shareholder approval).

(f) Information required for shareholder ratification

Under ASX Listing Rule 7.5, the Company is required to provide the following information in relation to Resolution 7:

• a. The total number of securities allotted was 43,750,000 Shares and 21,875,002 Options as set out in item 6(c) above.

• b. The prices at which the new Shares and new Options were issued are detailed in item 6(c) above.

• c. Each of the Shares issued was issued as fully paid ordinary shares in the capital of the Company, issued on the same terms and conditions as the Company’s existing Shares.

• d. Each listed Option is exercisable at $0.02 on or before 16 January 2014 and each Option entitles the holder upon exercise to be issued with one fully paid ordinary share in the capital of the Company, issued on the same terms and conditions as the Company’s existing Shares.

• e. The parties to whom the Shares and Options were issued are detailed in item 6(c) above.

• f. The purpose for the issue of the Shares and Options is detailed in item 6(c) above. The funds received via the placement to institutional, experienced and sophisticated investors were used to strengthen the Company’s working capital.

Recommendation

The Board unanimously recommends that shareholders vote in favour of Resolution 7.

7. Resolution 8 – Ratification of issue of La Jolla Convertible Notes

Subject to a number of exceptions, ASX Listing Rule 7.1 limits the number of securities that a company may issue or agree to issue without shareholder approval in any 12 month period to 15% of its issued securities. If the security is convertible into ordinary securities, each security will generally be converted as the maximum number of ordinary securities into which it can be converted.

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ASX Listing Rule 7.4 sets out an exception to ASX Listing Rule 7.1. It provides that where a company in general meeting ratifies the previous issue of securities made pursuant to ASX Listing Rule 7.1 (and provided that the previous issue did not breach ASX Listing Rule 7.1) those securities will be deemed to have been made with shareholder approval for the purpose of ASX Listing Rule 7.1.

(a) Issue of La Jolla Convertible Notes between 25[th] February 2011 and 17[th] October 2011

Following the expiry of the 2010 AGM approval for the La Jolla Convertible Notes on 25[th] February 2011, there were a number of issues of new La Jolla Convertible Notes. In total, La Jolla Convertible Notes with a face value of US$950,000 were issued after expiry of the 2010 AGM approval on 25[th] February 2011. These La Jolla Convertible Notes were issued, without Shareholder approval under the Company’s 15% limit under ASX Listing Rule 7.1.

(b) Summary

A summary of the La Jolla Convertible Notes issued after 25[th] February 2011 is as follows:

Date Date

Date Date	Face value o value of La J
13thApril 2011 16thMay 2011 16thJune 2011	US$250,000 US$250,000 US$250,000
15thJuly 2011	US$200,000
Total	US$950,000

On 6[th] June and 16[th] and 19[th] August 2011 the Company issued 26,748,363 new Shares at an average price of 1.07¢ per share to La Jolla as a result of conversion of La Jolla Convertible Notes issued on 13[th] April and 16[th] May. The balance of outstanding La Jolla Convertible Notes not converted is US$646,055. The issue of those new Shares are exempt from the 15% limit under ASX Listing Rule 7.1 by virtue of ASX Listing Rule 7.2 Exemption 4, which allows for the converstion of convertible securities which were issued in compliance with the ASX Listing Rules.

(c) Resolution 8

Resolution 8 requests Shareholders to ratify, for the purposes of ASX Listing Rule 7.4, the issue of La Jolla Convertible Notes with a face value of US$950,000, which were issued to La Jolla without Shareholder approval under the Company’s 15% limit.

By ratifying the above issues pursuant to ASX Listing Rule 7.4, the Company will retain the flexibility to issue new convertible notes and other securities in the future up to the 15% annual limit set out in ASX Listing Rule 7.1 (without the need to obtain prior Shareholder approval).

(d) Information required for Shareholder ratification

Under ASX Listing Rule 7.5, the Company is required to provide the following information in relation to Resolution 8:

• i. The total number of securities allotted was La Jolla Convertible Notes with a face value of US$950,000. The total balance of outstanding La Jolla Convertible Notes not converted is currently US$646,055.

• ii. The prices at which the La Jolla Convertible Notes were issued are detailed in item 7(b) above.

• iii. Each of the La Jolla Convertible Notes issued are convertible into Shares on the following terms:

• a. The La Jolla Convertible Notes were issued with minimum subscriptions of US$250,000 or US$200,000 per month.

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• b. No interest will be charged on La Jolla Convertible Notes unless the market price of Shares is below $0.020 per Share. In such case, interest will accrue at 4.75% per annum, payable monthly on the outstanding funded and nonconverted principal amount payable in either cash or the issue of new Shares (at the Company's option).

• c. The maturity date of the La Jolla Convertible Notes is 3 years after their issue.

• d. The La Jolla Convertible Notes include a "floor price" of $0.020 per Share; such that if the Shares are trading on ASX at or below such level at such time as the La Jolla seeks to convert all or a portion of the outstanding principal balance of the Convertible Note, the Company may elect to refuse such conversion in exchange for the redemption of the portion of the Convertible Note that La Jolla sought to convert.

• e. The number of Shares into which the Convertible Notes may be converted will be equal to the dollar amount being converted divided by the Conversion Price. The "Conversion Price" will be equal to the lesser of:

   - i. the "ceiling price" of $0.20; or
  
   - ii. 80% of the average of the 3 lowest VWAP during the 15 trading days prior to the election to convert.
  

  • However, the aggregate number of Shares converted must not exceed any limitations imposed by the 15% limit set out in the ASX Listing Rules without the prior approval of Shareholders.

• iv. The La Jolla Convertible Notes were issued to La Jolla.

• v. The purpose for the issue of the Shares is detailed in item 7(a) above. The funds received via the issue of La Jolla Convertible Notes were used for: a. further commercialisation of the Company’s Coldry technology; and

• b. the Company’s working capital.

Recommendation

The Board unanimously recommends that Shareholders vote in favour of Resolution 8.

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Glossary

In this Notice and Explanatory Memorandum:

$ or A$ means Australian dollars (AUD).

US$ mean United States of America dollars (USD).

Annual General Meeting or Meeting mean the annual general meeting of the Company to be held at 11:00am on Wednesday, 30[th] November 2011;

ASX means ASX Limited ACN 008 624 691 or the securities exchange operated by it (as the case requires);

ASX Listing Rules means the listing rules of the ASX;

Auditor means PKF;

Board means the board of Directors of the Company;

Constitution means the constitution of the Company;

Convertible Note means the convertible notes described in the Explanatory Memorandum in respect of Resolution 6;

Corporations Act means the Corporations Act 2001 (Cth);

Directors mean the directors of the Company from to time;

Explanatory Memorandum means the explanatory memorandum which accompanies, and is incorporated as part of, the Notice of Meeting;

Environmental Clean Technologies , ECT or Company means Environmental Clean Technologies Limited ACN 009 120 405;

Investors means Menzies Securities or those clients of Menzies Securities who are subscribing for Convertible Notes (or their nominees);

Key Management Personnel means key management personnel as defined by section 9 of the Corporations Act;

La Jolla means La Jolla Cove Investors, Inc. a company registered in California, of Suite 218, 1150 Silverado Street, La Jolla, California 92032 USA;

La Jolla Convertible Notes means the convertible notes issued to La Jolla;

Menzies Securities means Menzies Securities Pty Ltd ACN 130 703 463;

Notice or Notice of Meeting means the attached Notice of Meeting;

Options means options to acquire Shares;

Proxy Form means the proxy form which accompanies this Notice;

Resolution means the resolution to be put to shareholders at the Meeting, as set out in the Notice of Annual General Meeting;

Shareholder means the registered holder of Shares; and

Shares means fully paid ordinary shares in the capital of the Company.

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THIS DOCUMENT IS IMPORTANT. IF YOU ARE IN DOUBT AS TO HOW TO DEAL WITH IT, PLEASE CONTACT YOUR STOCK BROKER OR LICENSED PROFESSIONAL ADVISOR.

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PROXY FORM

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ENVIRONMENTAL CLEAN TECHNOLOGIES LIMITED

SHARE REGISTRY: Security Transfer Registrars Pty Ltd All Correspondence to: PO BOX 535, APPLECROSS WA 6953 AUSTRALIA 770 Canning Highway, APPLECROSS WA 6153 AUSTRALIA T: +61 8 9315 2333 F: +61 8 9315 2233 E: registrar@securitytransfer.com.au W: www.securitytransfer.com.au

REGISTERED OFFICE:

ABN: 28 009 120 405

Level 8 530 Little Collins Street MELBOURNE VIC 3000

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Code: Holder Number:

ESI

SECTION A: Appointment of Proxy

I/We, the above named, being registered holders of the Company and entitled to attend and vote hereby appoint:

OR

The meeting Chairperson The name of the person you are appointing (mark with an "X") (if this person is someone other than the Chairperson of the meeting).

or failing the person named, or if no person is named, the Chairperson of the Meeting, as my/our Proxy to act generally at the meeting on my/our behalf and 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 the Company to be held at 11:00am (EST) on Wednesday, 30th November 2011 at Norton Rose, Level 15, 485 Bourke Street, Melbourne, Victoria and at any adjournment of that meeting.

SECTION B: Voting Directions to your Proxy

Please mark "X" in the box to indicate your voting directions to your Proxy.

Resolution

1. Remuneration Report

2. Election of Mr Michael Davies

3. Election of Mr Iain McEwin

4. Election of Mr Ashley Moore

5. Re-election of Mr Stephen Carter

6. Approval of issue of Convertible Notes

7. Ratification of prior issue of Shares and Options

8. Ratification of prior issue of La Jolla Convertible Notes

For Against Abstain*

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Important Notes: If you appoint a proxy, we encourage you to direct your proxy how to vote on each Resolution above. The Chairman of the Meeting is not permitted to cast any votes in respect of Resolution 1 (Remuneration Report) that arise from any undirected proxies that he holds. If the Chairman of the Meeting is your proxy, and you fail to provide a voting direction in respect of Resolution 1, your vote will not be cast.

The Chairman of the Meeting intends to vote all undirected proxies in favour of each Resolution except Resolution 1, and intends to vote all available proxies in favour of Resolution 1.

• 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.

SECTION C: Please Sign Below

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

Individual or Security Holder Security Holder 2 Sole Director and Sole Company Secretary Director

Security Holder 2 Security Holder 3 Director Director / Company Secretary

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5893059739

Reference Number:

ESI

1

1

My/Our contact details in case of enquiries are:

NAME

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TELEPHONE NUMBER ( )

NOTES

1. Name and Address

This is the name and address on the Share Register of Environmental Clean Technologies Limited. If this information is incorrect, please make corrections on this form. Shareholders sponsored by a broker should advise their broker of any changes. Please note that you cannot change ownership of your shares using this form.

2. Appointment of a Proxy

If you wish to appoint the Chairperson of the Meeting as your Proxy please mark "X" in the box in Section A. Please also refer to Section B of this proxy form and ensure you mark the box in that section if you wish to appoint the Chairperson as your Proxy.

If the person you wish to appoint as your Proxy is someone other than the Chairperson of the Meeting please write the name of that person in Section A. If you leave this section blank, or your named Proxy does not attend the meeting, the Chairperson of the Meeting will be your Proxy. A Proxy need not be a Shareholder of Environmental Clean Technologies Limited.

3. Directing your Proxy how to vote

To direct the Proxy how to vote place an "X" in the appropriate box against each item in Section B. Where more than one Proxy is to be appointed and the proxies are to vote differently, then two separate forms must be used to indicate voting intentions.

4. Appointment of a Second Proxy

You are entitled to appoint up to two (2) persons as 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 +61 8 9315 2333 or you may photocopy this form.

To appoint a second Proxy you must:

• (a) On each of the Proxy forms, 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 of your votes; and

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

5. Signing Instructions Individual: where the holding is in one name, the Shareholder must sign.

Joint Holding: where the holding is in more than one name, all of the Shareholders must sign.

Power of Attorney: to sign under Power of Attorney you must have already lodged this document with the Company's share 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.

Companies: where the Company has 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 may sign alone. Otherwise this form must be signed by a Director jointly with either another Director or Company Secretary. Please indicate the office held in the appropriate place.

If a representative of the corporation is to attend the meeting the appropriate "Certificate of Appointment of Corporate Representative" should be lodged with the Company before the meeting or at the registration desk on the day of the meeting. A form of the certificate may be obtained from the Company's share registry.

6. Lodgement of Proxy

Proxy forms (and any Power of Attorney under which it is signed) must be received by Security Transfer Registrars Pty Ltd no later than 11:00am (EST) on Monday, 28th November 2011, being 48 hours before the time for holding the meeting. Any Proxy form received after that time will not be valid for the scheduled meeting.

Security Transfer Registrars Pty Ltd PO BOX 535 Applecross, Western Australia 6953

Street Address: Alexandrea House, Suite 1 770 Canning Highway Applecross, Western Australia 6153

Telephone +61 8 9315 2333 Facsimile +61 8 9315 2233 Email registrar@securitytransfer.com.au

PRIVACY STATEMENT

Personal information is collected on this form by Security Transfer Registrars Pty Ltd as the registrar for securities issuers for the purpose of maintaining registers of securityholders, facilitating distribution payments and other corporate actions and communications. Your personal details may be disclosed to related bodies corporate, to external service providers such as mail and print providers, or as otherwise required or permitted by law. If you would like details of your personal information held by Security Transfer Registrars Pty Ltd or you would like to correct information that is inaccurate please contact them on the address on this form.

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