NANOSONICS LIMITED — AGM Information 2007

Oct 25, 2007

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23 October 2007

Dear Shareholder

On behalf of the Board of Nanosonics, I have pleasure in providing notice of our Annual General Meeting on the 26[th] of November 2007. A copy of our annual report is available on the investor page of the Nanosonics website www.nanosonics.com.au.

At the forthcoming AGM, Shareholders will be asked to consider three items of Ordinary Business and two items of Special Business, as set out in the Notice of Meeting.

The first and second items of Special Business have been put forward to our shareholders by the Board on the advice of leading industry experts. Specifically these resolutions provide the Remuneration Committee with additional flexibility to incentivise the executives and staff of Nanosonics who continue to make an outstanding contribution to your Company’s growth.

The first resolution is to approve the Company’s Exempt Employee Share Plan (“EESP”) and the second the Deferred Employee Share Plan (“DESP”). It is important to note that these resolutions do not change any of the current conditions of the Company’s employee option programs but rather, they provide a mechanism to enhance them in the future.

In proposing the Special Business resolutions, the Board recognises that the Company must continue to attract high calibre and motivated staff and build on its existing reputation as an employer of first choice in the life sciences sector.

You are encouraged to read the enclosed Notice of Annual General Meeting carefully and to attend the meeting or return your Form of Proxy as soon as possible. When completing the Form of Proxy please vote either for or against each resolution.

You are invited to submit questions to the Company and a form for this purpose is appended to the Notice of the AGM. We welcome your attendance and look forward to meeting with our shareholders at the time of our first AGM as a publicly listed company.

I invite all shareholders to join the Directors for refreshments at the conclusion of the Annual General Meeting.

Yours sincerely

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Maurie Stang Non-Executive Chairman

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Nanosonics Limited ABN 11 095 076 896 Unit 24 566 Gardeners Road Alexandria NSW 2015 Australia Tel: +61 2 8063 1600 Fax: +61 2 9317 5010 Email: info@nanosonics.com.au w: www.nanosonics.com.au

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NOTICE OF 2007 ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the 2007 Annual General Meeting of the shareholders of Nanosonics Limited (the “ Company ”) will be held at NSW Trade & Investment Centre, Level 47, MLC Centre, 19 Martin Place, Sydney, NSW on Monday, 26 November 2007 commencing at 4:00pm.

ORDINARY BUSINESS

1. 2007 Reports

To consider:

The Company’s Reports of the Directors and Auditors, and the Financial Report for the year ended 30 June 2007.

2. Election of Director – Mr Maurie Stang

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

That Mr Maurie Stang, who retires as a Director pursuant to the Company’s Constitution and, being eligible, offers himself for re-election, be elected a Director.

3. Election of Director – Mr Bill Widin

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

That Mr Bill Widin, who was appointed a Director after the last Annual General Meeting and who retires as a Director pursuant to the Company’s Constitution and, being eligible, offers himself for re-election, be elected a Director.

4. Remuneration Report

To adopt the Remuneration Report for the financial year ended 30 June 2007.

SPECIAL BUSINESS

5. Exempt Employee Share Plan (“EESP”)

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

That the adoption of, and future issues under, the Nanosonics Exempt Employee Share Plan, tabled at the meeting, be approved for all purposes, including for the purposes of Listing Rule 7.2 exception 9 and section 260C of the Corporations Act 2001 (Cth).

6. Deferred Employee Share Plan (“DESP”)

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

That the adoption of, and future issues under, the Nanosonics Deferred Employee Share Plan, tabled at the meeting, be approved for all purposes, including for the purposes of Listing Rule 7.2 exception 9 and section 260C of the Corporations Act 2001 (Cth).

7. General business

To transact any other business brought forward in accordance with the Company's Constitution.

Further information in relation to these resolutions is set out in the Explanatory Statement.

Notice of 2007 Annual General Meeting

Nanosonics Limited

Voting Exclusions

Nanosonics will disregard any votes cast:

On Resolution 5 - Exempt Employee Share Plan and

On Resolution 6 - Deferred Employee Share Plan

by directors of the Company and associates of directors of the Company;

However, Nanosonics will not disregard a vote on resolutions 5 or 6 if:

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

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

VOTING ENTITLEMENTS

For the purpose of the Corporations Act, the Company has determined that the holders of the Company’s ordinary shares for the purpose of the annual general meeting will be the holders registered at 4.00pm on Thursday 22[nd] November 2007.

PROXIES

To be effective, completed proxy forms must be received by the Company at its registered office at least 48 hours before the time for holding the meeting.

Hand Delivery: Unit 24, 566 Gardeners Road, Alexandria NSW 2015 By Mail: PO Box 6437, Alexandria NSW 2015, Australia By Facsimile: +61 2 9317 5010 By Email: info@nanosonics.com.au

A member entitled to attend and vote is entitled to appoint not more than two persons as his/her proxy to attend and vote instead of the member. A proxy need not be a member of the Company. If more than one proxy is appointed, each proxy must be appointed to represent a specified proportion of the member’s voting rights. Unless executed under a Power of Attorney, a proxy form by a corporation should be executed in accordance with section 127(1) of the Corporations Act 2001 (Cth).

Dated at Sydney this 23rd day of October 2007.

BY ORDER OF THE BOARD

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Chris Grundy Company Secretary

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EXPLANATORY STATEMENT

This explanatory statement sets out information in connection with the business to be considered at the Nanosonics Limited (“ Company ”) Annual General Meeting to be held on 26 November 2007.

BUSINESS

The following items of business will be considered at the meeting.

First Item of Business

This item of business relates to the consideration of the Company’s Financial Report for the year ended 30 June 2007.

First Resolution – Election of Director – Mr Maurie Stang

Mr Maurie Stang was originally appointed a Director of the Company on 14 November 2000. Under the Company’s Constitution, Mr Stang retires by rotation, and being eligible, wishes to stand for election.

Second Resolution – Election of Director – Mr Bill Widin

Mr Bill Widin was appointed a Director of the Company on 8 March 2007. Under the Company’s Constitution, Mr Widin retires because he was appointed after the last Annual General Meeting, and being eligible, wishes to stand for election.

Third Resolution – Remuneration Report

The Remuneration Report is required to be considered for adoption in accordance with Section 250R of the Corporations Act 2001 (Cth). The Remuneration Report comprises a part of the Directors’ Report in the 2007 Annual Report and appears on pages 18-24 of that report.

The Remuneration Report:

• explains the Company’s policies and processes for determining the remuneration of its senior executives,

• sets out details of the remuneration of each of the Company’s Directors and Key Management Personnel having authority for the strategic direction and management of the Company.

The vote on this resolution is advisory only and non-binding on the Company or the Directors. The resolution gives the members the opportunity to ask questions or make comments concerning the Remuneration Report during the meeting.

Fourth Resolution – Exempt Employee Share Plan (“EESP”)

ASX Listing Rule 7.1 provides a formula that limits the number of equity securities the Company may issue within any 12 month period without shareholder approval. The formula allows the Company to issue a maximum number of equity securities equal to 15% of its previously issued share capital, subject to various exceptions under Listing Rule 7.2.

One exception to this rule, in ASX Listing Rule 7.2, exception 9, provides that issues under an employee incentive scheme are exempt for a period of three years if shareholders approve, as is proposed by Resolution 3, the issue of securities under the scheme as an exception to ASX Listing Rule 7.1. No Shares have been issued under this plan to date.

The operation of EESP may involve the Company providing financial assistance to participants in connection with the acquisition of shares in the Company. Accordingly, shareholder approval is also sought to enable the Company to grant financial assistance in accordance with the exception in section 260C of the Corporations Act 2001(Cth).

Section 260A of the Corporations Act 2001 (Cth) sets out certain requirements with which a company must comply in order to be able to financially assist a person to acquire shares in the company. Section 260C(4) provides that the provision of financial assistance under an employee share scheme that is approved by a resolution passed at a general meeting of the Company will be exempted from the requirements of section 260A.

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- Explanatory Statement 2007 Annual General Meeting

Nanosonics Limited

The following is a summary of the terms of the Nanosonics Exempt Employee Share Plan (“EESP”):

Summary - EESP

The EESP enables eligible Nanosonics employees to acquire up to $1,000 worth of Nanosonics shares each year on a tax exempt basis in accordance with enabling tax legislation set out in Division 13A (ITAA 36). As a contemporary company the Board of Nanosonics believes allowing employees to acquire equity in the Company on tax preferred terms should be encouraged.

The EESP will operate under a trust to regulate administrative requirements of the Plan. The participant’s ownership of the shares, and his or her right to deal with them, are governed by the rules set out in the EESP Trust Deed. The shares are held in trust until the shares vest upon satisfaction of any conditions of the offer and an application for withdrawal from the participant having been accepted by the Company.

Eligibility

The Board may invite employees (including executive Directors) who have completed three years continuous service with the Company and its related bodies corporate (or such lesser period as the Board determines) to participate in the EESP.

Invitation to participate

The Board may invite an employee to participate in the EESP. Upon an employee becoming a participant, the Company (or a related body corporate) will contribute amounts to the trustee to enable it to acquire shares for the benefit of the employee.

No employee may accept an offer to participate, or continue to participate, in the EESP if at the time of acceptance he or she would own or control 5 per cent or more of the issued capital of the Company.

Entitlement to Shares

Shares acquired under the EESP cannot be withdrawn from the EESP (either by sale or transfer) for three years after the date of acquisition while the participant remains employed by the Company or a related body corporate.

After the expiry the three year period, a participant may submit a notice of withdrawal to withdraw or sell some or all of his or her Shares. Participants must withdraw from the EESP immediately they are no longer employed by the Company or a related body corporate.

Forfeiture of shares

Shares offered under the EESP cannot be subject to forfeiture.

Shareholding Rights

Shares issued under the EESP carry full shareholder rights, including entitlements in relation to rights and bonus issues, voting rights (by direction to the trustee) and rights to receive dividends but participants cannot participate in any dividend reinvestment plan.

Limitation on Issues

The number of shares that may be issued under the EESP is set with regard to the limits prescribed by the Australian Securities and Investments Commission with respect to employee share scheme offers made without a prospectus. Currently these limits provide that the number of shares that may be issued when aggregated with the number of shares issued during the previous 5 years from share issues under all employee share schemes established by the Company (including as a result of exercise of Options to acquire shares granted during the previous 5 years under any such employee share scheme), but disregarding certain excluded offers, must not exceed five (5) percent of the total number of shares on issue.

A copy of the EESP Rules may be requested from the Company Secretary.

The Directors are eligible to participate in the EESP and, accordingly, cannot vote on this resolution.

The Directors do not make any recommendation to members on the resolution because of their personal interest in the subject of the resolution.

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- Explanatory Statement 2007 Annual General Meeting

Nanosonics Limited

Fifth Resolution – Deferred Employee Share Plan (“DESP”)

ASX Listing Rule 7.1 provides a formula that limits the number of equity securities the Company may issue within any 12 month period without shareholder approval. The formula allows the Company to issue a maximum number of equity securities equal to 15% of its previously issued share capital, subject to various exceptions under Listing Rule 7.2.

One exception to this rule, in ASX Listing Rule 7.2, exception 9, provides that issues under an employee incentive scheme are exempt for a period of three years if shareholders approve, as is proposed by Resolution 4, the issue of securities under the scheme as an exception to ASX Listing Rule 7.1. No Shares have been issued under this plan to date.

The operation of DESP may involve the Company providing financial assistance to participants in connection with the acquisition of shares in the Company. Accordingly, shareholder approval is also sought to enable the Company to grant financial assistance in accordance with the exception in section 260C of the Corporations Act (Cth).

Section 260A of the Corporations Act 2001 (Cth) sets out certain requirements with which a company must comply in order to be able to financially assist a person to acquire shares in the company. Section 260C(4) provides that the provision of financial assistance under an employee share scheme that is approved by a resolution passed at a general meeting of the Company will be exempted from the requirements of section 260A.

The following is a summary of the terms of the Nanosonics Deferred Employee Share Plan (“DESP”):

Summary - DESP

The DESP allows invited eligible employees, including Directors, to receive Nanosonics shares as a bonus/incentive or as a remuneration sacrifice and, subject to certain conditions, not pay tax for up to 10 years on the benefit in accordance with enabling tax legislation set out in Division 13A (ITAA 36). The DESP will allow the Company to meet the contemporary executive equity incentive practices of its competitors.

The DESP operates under a trust to regulate administrative requirements, including forfeitures. The participant’s ownership of the shares, and his or her right to deal with them, are governed by the rules set out in the DESP Trust Deed. The shares are held in trust until the shares vest upon satisfaction of any conditions of the offer and an application for withdrawal from the participant having been accepted by the Company.

Eligibility

The Board may invite Directors and employees of the Company and its related bodies corporate to participate in the DESP.

Invitation to participate

The Board may offer Directors and employees Shares as part of their annual bonus or remuneration arrangements or Director's fees, subject to such terms and conditions as are determined by the Board. In addition, employees may be invited to elect to sacrifice their pre-tax salary, up to an amount determined by the Board, towards the acquisition of shares by the DESP plan trustee on behalf of the employee.

The Board may also offer Shares to employees as an incentive. Ordinarily such offers will be subject to minimum service periods and performance criteria.

The invitation to Directors or employees will set out the terms of the offer including any performance or vesting conditions or other criteria for participating in the DESP.

No Director or employee may accept an offer to participate, or continue to participate, in the DESP if at the time of acceptance he or she would own or control 5 per cent or more of the issued capital of the Company.

Entitlement to Shares

Shares acquired under the DESP must not be withdrawn from the DESP by Directors or employees until any performance or vesting conditions are satisfied.

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- Explanatory Statement 2007 Annual General Meeting

Nanosonics Limited

After satisfaction of all such conditions, a participant may submit a notice of withdrawal to withdraw or sell some or all of his or her Shares. However, Participants may at any time submit a notice of withdrawal of shares held by them in the event of "Special Circumstances". Special Circumstances are defined as retirement, redundancy, death or permanent disablement of a participant, or such other circumstances determined by the Board from time to time.

Forfeiture of shares

A participant will forfeit any right or interest in Shares under the DESP if:

• the participant ceases to be an employee or officer of Nanosonics or a related body corporate when performance or vesting conditions remain outstanding; or

• a participant has been dismissed with cause or has committed any act of fraud, defalcation or gross misconduct in relation to the Company,

• unless the Board resolves otherwise.

Shareholding Rights

Shares issued under the DESP carry full shareholder rights such as entitlements in relation to rights and bonus issues, voting rights (by direction to the trustee) and rights to receive dividends but will not participate in any dividend reinvestment plan.

Change of control

The Board will notify participants to enable them to withdraw shares from the DESP where there is publicly announced any proposal in relation to the Company which the Board reasonably believes may lead to a change in control of the Company. The Board may determine whether the ability to submit a notice of withdrawal in these circumstances will be subject to the satisfaction of any performance or vesting conditions relevant to the Shares.

Limitation on Issues

The number of shares that may be issued under the DESP is set with regard to the limits prescribed by the Australian Securities and Investments Commission with respect to employee share scheme offers made without a prospectus. Currently these limits provide that the number of shares that may be issued when aggregated with the number of shares issued during the previous 5 years from share issues under all employee share schemes established by the Company (including as a result of exercise of Options to acquire shares granted during the previous 5 years under any such employee share scheme), disregarding certain excluded offers, must not exceed five (5) percent of the total number of shares on issue.

A copy of the DESP Rules may be requested from the Company Secretary.

The Directors are eligible to participate in the DESP and, accordingly, cannot vote on this resolution.

The Directors do not make any recommendation to members on this resolution because of their personal interest in the subject of the resolution.

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FORM OF PROXY

Nanosonics Limited

2007 AGM

ABN 11 095 076 896

Completed proxy forms must be received by the Company at its registered office at least 48 hours before the time for holding the meeting.

Hand Delivery: By Mail: By Facsimile: By Email:

Unit 24, 566 Gardeners Road, Alexandria NSW 2015 PO Box 6437, Alexandria NSW 2015, Australia +61 2 9317 5010 info@nanosonics.com.au

I/We

(full name in block letters)

of

(address)

being a member of Nanosonics Limited hereby appoint:

Name

Address

or failing that person:

Name

Address

or failing that person, the Chairman of the meeting as my/our proxy/proxies to vote for me/us and on my/our behalf at the Annual General Meeting of this Company to be held at NSW Trade & Investment Centre, Level 47, MLC Centre, 19 Martin Place, Sydney, NSW on Monday, 26 November 2007 commencing at 4:00pm and at any adjournment thereof.

Proxy Voting Instructions

If you do not wish to direct your proxy how to vote, please insert X in the box → �

By inserting X in 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.

If you do not insert X in this box, and you have not directed your proxy how to vote (see below), the Chairman will not cast your votes on the resolution and your votes will not be counted in calculating the required majority if a poll is called on the resolution.

If the Chairman of the meeting is voting as your proxy, he intends to vote any undirected proxies held on the item of business in favour of the resolution on that item of business.

Signature of shareholder (companies to execute under seal or director’s signature if applicable)

Dated this day of	2007
If you desire to direct your proxy/proxies how to vote, please insertXin the appropriate box below. If
you do not direct your proxy/proxies they may vote as they	think fit or may abstain from voting.
BUSINESS		For	Against	Abstain
First Resolution – Election of Director – Mr Maurie Stang		�	�	�
Second Resolution – Election of Director – Mr Bill Widin		�	�	�
Third Resolution – Adoption of the Remuneration Report		�	�	�
Fourth Resolution – Exempt Employee Share Plan (“EESP”)		�	�	�
Fifth Resolution – Deferred Employee Share Plan (“DESP”)		�	�	�

If you desire to direct your proxy/proxies how to vote, please insert X in the appropriate box below. If you do not direct your proxy/proxies they may vote as they think fit or may abstain from voting.

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QUESTIONS FROM SHAREHOLDERS

Your questions are important to us. Please use this form to submit any questions about Nanosonics that you would like the Directors to respond to at the Annual General Meeting (AGM). The addresses for submitting this form are proved below.

Questions received will be collated and we will respond to as many questions as possible at the AGM. Please note that we will not be able to reply individually.

Shareholders name: ……………………………………………………………………...

Shareholders address: ……………………………………………………………………..

.…………………………………………………………………….

Shareholders Security Reference Number (SRN) or

Holder Identification Number (HIN) …………………………………..

Questions:

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To assist in a considered response to questions at the AGM, this form should be received by the Company at its registered office by Thursday 22 November 2007.

Hand Delivery: By Mail: By Facsimile: By Email:

Unit 24, 566 Gardeners Road, Alexandria NSW 2015 PO Box 6437, Alexandria NSW 2015, Australia +61 2 9317 5010 info@nanosonics.com.au

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