IONIC RARE EARTHS LIMITED — Share Issue/Capital Change 2003

Jul 3, 2003

2 July 2003

Mr John Sample & Mrs Jane Sample Unit 1 10 Sample Street SAMPLEVILLE WA 6000

Dear Optionholder

Number Of Options Held: 10.000 Amount Payable at \$0.10 per Option: \$1,000

Notice to Optionholders

We write to you as a registered holder of the above number of options as at today's date. These options entitle you to acquire ordinary fully paid shares in Ezenet Limited. Each option held is for the acquisition of one ordinary fully paid share, and the exercise price is 10 cents per share.

You are formally advised that these options will expire at 5.00pm Western Standard Time ("WST") on 31 June 2003, and official quotation on the Australian Stock Exchange will cease on 25 July 2003.

Options may be exercised wholly or in part by completing the exercise of option form and payment of 10 cents for each option exercised, by no later than 31 July 2003. If the 'Notice of Exercise of Options and Application for Shares' form and payment is not received by 5.00pm WST on 31 July 2003, the options will automatically lapse.

Pursuant to Listing Rule 6.1, Appendix 6A of the Australian Stock Exchange Limited (ASX), the Company provides the information contained in this notice.

Market Sale Price

The market sale price of ordinary fully paid shares in Ezenet Limited on the ASX was 7 cents on 1 July 2003, being the last trading day prior to the date of this notice.

During the three months preceding the date of this notice:

• the highest market price on the ASX was 10 cents on 20 May 2003; and
• the lowest market price was 5.5 cents on 2 April 2003.

A 'Notice of Exercise of Options and Application for Shares' form is enclosed for your completion.

How to Exercise your Options

Once your 'Notice of Exercise of Options and Application for Shares' is complete, please forward it together with 10 cents per option exercised, to be received prior to 5.00pm WST on 31 July 2003, to:

Ezenet Limited C/- Computershare Investor Services Limited GPO BOX D182 PERTH WA 6840

Telephone: 1300 557 010

Payments must be in Australian dollars only, and cheques should be made payable to EZENET LIMITED and crossed "Not Negotiable" and drawn on an Australian bank.

Yours Sincerely

Simon Watson Company Secretary

Ezenet Limited Notice of Exercise of Options and Application for Shares

		or everyour or operatio and application for one
			SRN/HIN:	10030123456
To the Directors, Ezenet Limited
I/WE:	Mr John Sample & Mrs Jane Sample Unit 1 10 Sample Street SAMPLEVILLE WA 6000
hereby exercise		option(s) and hand you herewith my/our cheque for
being 10 cents per share on application for ordinary shares in the capital of the Company.
	Company, and liwe authorise you to place my/our name on the register.	I/We request that you allot me that number of shares and I/we agree to accept that number of shares on the terms below and the Constitution of the
	I/We authorise you to act in accordance with my/our instructions set out above.	Sign Here - This section must be signed for your instructions to be executed
Individual or Securityholder 1		Securityholder 2	Securityholder 3
Sole Director and Sole Company Secretary		Director/Company Secretary	Director
		Note: when signed under Power of Attorney, the attorney states that they have not received a notice of revocation. Ezenet Limited needs to sight a certified copy of the Power of Attorney.
			Day/Date	Year Month

	Drawer million and ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~	Example 3 Branch / BSB Containers and the Branch / BSB Containers and the Amount
Please enter
Cheque Details:

$\int$

I

Cheques should be made payable to EZENET LIMITED and crossed "Not Negotiable" and drawn on an Australian bank, and returned to:

Ezenet Limited C/- Computershare Investor Services Limited GPO BOX D182 PERTH WA 6840

ANNEXURE A

TERMS AND CONDITIONS OF OPTIONS

• The issue price of the options is 0.1 cent each. $(a)$
• The options shall expire at 5.00pm on 31 July 2003 ("Expiry Date"). $(b)$
• $(c)$ The options may be transferred at any time prior to the Expiry Date.
• The options entitle the holder to subscribe (in respect of each option held) for a fully paid ordinary share $(d)$ in the capital of the Company for an exercise price of \$0.10 cents.
• The options can only be exercised from 17 June to 30 June 2002 and 18 December to 31 December $(e)$ 2002 and from 1 July 2003 to 31 July 2003, in whole or in part, provided that options exercised in part may not be exercised in parcels of less than one thousand (1,000) except that if the option holder holds less than one thousand (1,000) options then these options may be exercised.
• $(f)$ The exercise price of shares the subject of the options shall be payable in full on exercise of the options.
• $(g)$ Shares allotted pursuant to an exercise of options shall rank, from the date of allotment, equally with existing ordinary fully paid shares of the Company in all respects.
• $(h)$ There are no participating rights or entitlements inherent in the options to participate in any new issues of capital which may be offered to shareholders of the Company from time to time prior to the Expiry Date and the options shall not participate in any bonus issue of securities, unless and until the options are exercised. The Company will ensure that during the exercise period for the purpose of determining entitlements to any such new issues, the books closing date will be at least ten (10) days after such new issues are announced in order to afford the option holders an opportunity to exercise their options.
• In the event of a reconstruction (including consolidation, subdivision reduction or return) of the issued $(i)$ capital of the Company, the rights of the option holder will be changed to the extent necessary to comply with the Listing Rules applying to the reconstruction of capital, at the time of reconstruction.
• $\left( j\right)$ Exercise of the options is effected by completing the notice of exercise of options on the reverse side of the option statement and surrendering the statement to the Company, together with the requisite application moneys by the Expiry Date.
• $(k)$ Shares allotted and issued pursuant to the exercise of an option will be allotted and issued not more than fourteen (14) days after the receipt of a properly executed notice of exercise of the option and payment of the requisite application moneys.
• Application for official quotation of any shares allotted and issued pursuant to the exercise of the options $(1)$ will be made by the Company within three (3) Business Days after the date of allotment of such shares.
• The Company will apply for official quotation on ASX of the Options $(m)$
• $(n)$ A CHESS statement will be issued for the options. On the reverse side of the CHESS statement there will be endorsed a notice that is to be completed when exercising the options. If there is more than one option on a CHESS statement and prior to the Expiry Date those options are exercised in part, the Company will issue another certificate for the balance of the options held and not yet exercised.

L-011827

Ezenet Limited ACN 083 646 477 ABN 84 083 646 477 Ground Floor Zurich House 66 Kings Park Road WEST PERTH WA 6005

Telephone: +618 9486 8598 Facsimile: +618 9486 8597 Email: linton@ezenet.com.au

3 July, 2003

Dear Optionholders,

EZENET LIMITED

The Company has passed through a number of changes in recent months including the introduction of Dr Wolf Martinick and Mr. Neil O'Loughlin as substantial shareholders and their appointment to the Board of Directors. The energy and skills of the new Directors will be of great benefit to the Company as it develops.

The Company is constantly looking at new opportunities to both enlarge upon its existing operations and other activities that might be of benefit to the shareholders. At the General Meeting of Shareholders held on 30 May 2003 the chairman, Dr Wolf Martinick, gave a short presentation to the members present. We enclose a copy of the presentation to shareholders which has separately been released to the Australian Stock Exchange Limited.

If you have any questions in relation to the Company or the exercise of your options please contact the share registry, Computershare Investor Services Pty Ltd on (08) 9323 2000 or any of the Officers of the Company at 08 9486 8598.

Yours faithfully,

DR WOLF MARTINICK Chairman Enc

Ladies, Centlemen and Shareholders,

Thank you for having overwhelmingly supported the various resolutions that were considered at today's meeting.

Your approval and support for the resolutions considered today is greatly appreciated by your Board and the staff of Ezenet. This will provide us with the necessary means of ensuring that Ezenet's core business will continue to be developed efficiently. I wish to take this opportunity to give you a brief overview of progress achieved during the last twelve months. I also wish to take the opportunity to thank Ezenet's staff for their dedication during the past twelve months; this is greatly appreciated.

You will note from the information that I am about to present that we expect Ezenet's core business to become cash flow positive in the latter part of 2008.

1. Ezenet Isted in 1999 focussed on in home internet developments.

2. Decision made in 2001 to refocus and develop a digital entertainment system for the hospitality InduSiry

3. Rollout of Ezenet digital movie dayers commenced in mid 2002.

4. Currently 12 months into the plan and approaching cash breakeyen point.

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• 1. Established as supplier of quality entertainment systems to the hospitality industry.
• 1. Dévélopéd a fodussád (cohnical and marketing 162 M
• 1. Profitable business which will continue to grow addressively.

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• 1. Strong focus on maximising returns from existing EXISTENCES
• 1. New technical developments which complement QUITENT DUSTRESS
• 1. Evaluate opportunites for synergistic acquisitions in entertainment industry.

Ezenet will also evaluate opportunities that will offer significant shareholder value outside the entertainment field:

• Ezenet's core business has grown over the last 12 months into a significant entrant in the entertainment industry with anticipated revenues in excess of \$2M 11 63 610 61 2004
• Eunding measures being put in place will ensure: 1. Operational profitability by year end. 2, Development of synergistic technology that is anticipated to significantly increase revenue base Wilhin 12 months.
• 8. Ezenet will be in a position to capitalise on Opportunites to add significant shareholder value through growth offentated acquisitions.