SPENDA LIMITED — Proxy Solicitation & Information Statement 2003

Aug 18, 2003

19 August 2003

Information Memorandum

This Information Memorandum forms part of, and should be read in conjunction with the attached Notice of Meeting. The Information Memorandum has been prepared to assist shareholders in the consideration of the resolutions proposed in the Notice of Meeting.

Background

On 18 August 2003 the Company announced that it had reached agreement for the private placement to institutions and professional investors who are clients of Peregrine Corporate Limited ("PCL") of up to 7.35 million shares and 3.675 million free attaching options at a subscription price of 34 cents. This placement will raise up to $2.5 million before allowing for costs and these funds will be predominantly applied towards further developments of the Company's technology projects within subsidiary company, Pulmosonix Pty Ltd.

As recently announced. Premier Bionics Limited is currently engaged in a number of discussions with potential commercial partners, the outcomes of which are anticipated to result in further announcements. In parallel with these, the company is preparing for multi-centre trials of its AirwayClear technology.

Resolution 1: Approval of Proposed Issue of Shares and Options

The Company is seeking approval for the placement to institutions and eligible professional investors of up to 7.35 million new shares and 3.675 million 1-for-2 free attaching options at a subscription price of 34 cents. The placement, which will raise up to $2.5 million (before costs), is being offered to clients of PCL. The attaching 1 for 2 options are exercisable at 20 cents each on or before 24 December 2006 and will have the same terms as the Company's options currently trading on ASX, under the code PBIO. Full terms and conditions of the options are set out below.

Pursuant to Chapter 7 of the ASX Listing Rules a company may, within a 12 month period, allot up to 15% of its issued capital (whether by way of shares or options) without the need to seek shareholder approval. The allotment of 7.35 million shares and 3.675 million options when aggregated together represents approximately 35% of Premier's existing issued capital and therefore the Company requires shareholder approval for this placement to proceed.

As at 30 June 2003 the Company had cash reserves of approximately $1.8 million and seeks to undertake this placement to fund continuing research and development of its key technology projects through its 72% owned subsidiary Pulmosonix Pty Ltd.

The Company has elected to proceed by way of private placement to institutional and professional investors for the following reasons:

• The Company wishes to extend the scope of its existing technology projects to take a) advantage of the advances achieved to date. The additional funds being sought will enable the Company to achieve this objective;
• b) The Company believes it is appropriate to seek representation of institutions on its share register as such representation is generally viewed favourably by market participants;
• c) Expediting fundraising is also considered important. A placement to professional investors and institutions undertaken in accordance with Section 708 of the Corporations Act does not require the lodgement of a prospectus, saving time and associated costs, and can be undertaken more quickly than an entitlement issue which is required to follow a prescribed timetable:
• There is an inherent risk associated with entitlement issues in that the outcome is d) unknown until the issue is completed and, unless fully underwritten, a company may not be successful in raising required funds. Obtaining underwriter support is considered too costly and time consuming.

The shares and options to be allotted under the placement will rank pari passu in all respects with the Company's other issued fully paid shares and listed options. The Company will apply for Official Quotation on ASX of the new shares and attaching options. Subject to obtaining shareholder approval the securities will be issued within 3 months of the date of the meeting.

Terms of Options

Each Option entitles the holder to one ordinary fully paid Share.

• a) The Options are exercisable at any time prior to 5:00pm Melbourne time on 24 December 2006 by completing the Option Exercise Form and delivering it together with the payment for the number of shares in respect of which the Options are exercised to the registered office of the Company.
• The exercise price of the Options is 20 cents per Option. b)
• Subject to the Corporations Act, the Listing Rules and the Constitution of the Company C) Options are freely transferable and application will be made to the ASX for Official Quotation of the Options.
• d) All ordinary fully paid Shares issued upon exercise of Options will rank pari passu in all respects with the Company's then issued ordinary fully paid Shares. The Company will apply for Official Quotation by ASX of all Shares issued upon exercise of Options.
• $e)$ There are no participating rights and entitlements inherent in the Options and holders will not be entitled to participate in new issues of capital offered to shareholders during the currency of the Options. The Company will ensure that Option holders will be allowed at least 10 business days notice to allow for the conversion of Options prior to the Record Date in relation to any offer of securities made to shareholders.
• $f$ In the event of any reconstruction or reorganisation of capital (including consolidation, sub-division, reduction or return) of the issued capital of the Company prior to the Expiry Date, rights of the holders of the options, the number of Options and / or the exercise price of the Options shall be changed to the extent necessary to comply with the Listing Rules applying to the reorganisation of capital at the time of the reorganisation.

Resolution 2: Participation in Placement By Directors

Subject to resolution 1 being approved, Directors of the Company and their associates are seeking approval of shareholders to participate in the issue of up to 7.35 million shares and 1 for 2 attaching options. Pursuant to the ASX Listing Rules Directors of a company are precluded from participating in any placement of securities in a company without the prior approval of shareholders. It is the intention of Directors and their associates to subscribe for up to 300,000 new shares and 150,000 attaching options (at a cost of up to $102,000) which would represent approximately 4.1% of the proposed placement. Subject to shareholders approving participation it is the present intention of Directors to subscribe for shares on the following basis.

	Shares	Options
⊢Mr Peter Marks	75,000	37,500	25,500
l Dr Martin Soust	75,000	37,500	25,500
Mr Jeremy Cooper	75,000	37,500	25,500
l Dr Henry Pinskier	75,000	37.500	25,500
	300,000	150,000	102,000

The shares and options to be allotted will rank pari passu in all respects with the shares and options to be allotted pursuant to resolution 1 above. Subject to receiving shareholder approval the securities will be issued progressively as applications are received and in any event within 1 month of the date of the meeting.

Resolution 3: Granting of Options to Scientific Team and Key Advisers

As in any scientific endeavour one of the most important ingredients for success is the scientists who are responsible for the discoveries, ongoing product development, and for implementing the programmes that will enable these discoveries to become commercially viable and profit generating activities. In addition, those responsible for their commercialisation are also key players.

The proposed allotment of Options is designed to provide appropriate incentives to the key scientists and advisors for their efforts to reach commercial outcomes in relation to the relevant projects.

The Board recommends that 400,000 new options be created and allotted to the key scientists and advisors involved in the commercialisation process:

Dr Phillip Berger	100,000
Dr Malcolm Wilkinson	100,000
Dr Anthony Filippis	100,000
Mr Richard Revelins	100,000
	400,000

All Directors of the Company recommend that shareholders vote in favour of Resolution 3.

The options to be granted have the following terms and conditions:

Each option entitles the holder to one ordinary fully paid Share.

• a) The Options are exercisable at any time prior to 5:00pm Melbourne Time on 30 September 2006 (Expiry Date) by completing the Options Exercise Form and delivering it together with the payment for the number of shares in respect of which the Options are exercised to the registered office of the Company.
• b) The exercise price of the Options is 30 cents per Option.
• c) Subject to the Corporations Law, the Listing Rules and the Constitution of the Company Options are freely transferable. Application will not be made to the ASX for Official Quotation of the Options at this time.
• d) All ordinary fully paid Shares issued upon exercise of Options will rank pari passu in all respects with the Company's then issued ordinary fully paid Shares. The Company will apply for Official Quotation by ASX of all Shares issued upon exercise of Options.
• e) There are no participating rights and entitlements inherent in the Options and holders will not be entitled to participate in new issues of capital offered to shareholders during the currency of the Options. The Company will ensure that Option holders will be allowed at least 10 business days notice to allow for the conversion of Options prior to the Record Date in relation to any offer of securities made to shareholders.
• f) In the event of any reconstruction (including consolidation, sub-division, reduction or return) of the issued capital of the Company prior to the Expiry Date, the number of Options or the exercise price of the Options or both shall be reconstructed in accordance with the Listing Rules.

PREMIER BIONICS LIMITED ACN 67 099 084 143

NOTICE OF MEETING

Notice is given that a General Meeting of Premier Bionics Limited ("the Company") will be held at Suite 2, 1233 High Street, Armadale, Victoria, 3143, on 18 September 2003 at 10.00am.

BUSINESS

RESOLUTION 1: Approval of Proposed Issue of Shares and Options

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

"That the Company authorises and approves the proposed issue of up to 7.35 million ordinary shares deemed fully paid and up to 3.675 million attaching free options at an issue price of 34 cents per share to clients of Peregrine Corporate Limited. The options are exercisable at 20 cents each on or before 24 December 2006 and will rank equally in all respects with the listed options (ASX Code : PBIO) already on issue as described in the Information Memorandum."

RESOLUTION 2: Participation in Placement by Directors

If Resolution 1 is passed (with or without amendment), to consider and, if thought fit, pass with or without amendment the following resolution as an ordinary resolution:

"That the Company authorises the participation by directors of the Company or their associates in the proposed placement the subject of Resolution 1 by applying for and receiving up to a total of 300,000 ordinary shares and 150,000 free attaching 1 for 2 options at an issue price of 34 cents per share. The options are exercisable at 20 cents each on or before 24 December 2006 and will rank equally in all respects with the listed options (ASX Code : PBIO) already on issue as described in the Information Memorandum."

RESOLUTION 3: Approval of Proposed Issue of Options to Scientific Team and Key Advisers

"That the Company approves the issue to the persons specified below the respective number of options to acquire one ordinary share in the capital of the Company deemed fully paid at an exercise price of $0.30 (thirty cents) expiring on 30 September 2006, in accordance with and subject to the terms and conditions specified in the Information Memorandum:"

Name	Number of Options
Dr Phillip Berger	100,000 options
Dr Malcolm Wilkinson	100,000 options
Dr Anthony Filippis	100,000 options
Mr Richard Revelins	100,000 options

Dated: 19 August 2002

By Order of the Board

PHILLIP HAINS Company Secretary

The accompanying Information Memorandum and the following information for shareholders form part of this Notice of Meeting.

INFORMATION FOR SHAREHOLDERS:

VOTING EXCLUSION STATEMENT

RESOLUTION: 1

The Company will disregard any votes cast on Resolution 1 by:

• a) a person who may participate in the proposed issue and a person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if the resolution is passed; or
• b) any associate of such a person.

However, the Company need not disregard a vote if:

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

RESOLUTION: 2

The Company will disregard any votes cast on resolution 2 by:

• a) a director of the company; or
• b) any associate of such a person

RESOLUTION: 3

The Company will disregard any votes cast on resolution 3 by:

• a) any person who is to receive securities in relation to the resolution; or
• b) any associate of such a person

PREMIER BIONICS LIMITED ABN 67 099 084 143

PROXY FORM

I/We
οfbeing a member(s) of Premier Bionics Limited and entitled to	If you do not wish to direct yourProxy how to vote, please place amark in this box.By marking this box, you acknowledge thatwhere the Chairman of the Meeting is yourproxy, he may exercise your proxy even if
	he has an interest in the outcome of theresolution and votes cast by him, other
Shares appoints:	than as proxy holder, will be disregarded
Name of Proxy:	because of that interest.The Chairman intends to vote open proxiesin favour of all resolutions.
Address of Proxy: ____________________________________
or in his/her absence, the Chairperson of the meeting as my/our proxy to vote on my/our behalf at the GeneralMeeting of the Company to be held at Suite 2, 1233 High Street, Armadale, Victoria, 3143 on 18 September 2003 at10.00am and at any adjournment of that meeting.
If two proxies are appointed, complete the following sentence:
This proxy is authorised to exercise votes/ % of my/our total voting rights.
Proxy Instructions
To instruct your proxy how to vote, insert 'X' in the appropriate column against each resolution set out below. If youdo not instruct your proxy how to vote on a resolution, your proxy may vote as he/she thinks fit or abstain from voting.
I/We direct my/our proxy to vote as indicated below:
Resolution 1.Approval of Issue of Shares and Options	ForAbstainAgainst
Resolution 2.	Participation in Placement by Directors
Resolution 3.Approval of Proposed Issue of options toScientific Team and Key Advisers
If a person:	If a company:
	EXECUTED by:Name (print)
(Signature)	In accordance with theCorporations Act 2001
Name (print)
	(Signature)(Signature)
Date: $\frac{1}{\sqrt{2\pi}}$	Date: /_/__

This proxy and any power of attorney or other authority under which it is signed (or a certified copy) must be lodged at:

(a) Suite 2, 1233 High Street, Armadale, Victoria, 3143;

(b) Facsimile number (03) 9824 8161

by 10.00am on 16 September 2003 being not less than 48 hours before the time for holding the meeting or adjourned meeting as the case may be.

PROXIES

A member entitled to attend and vote at the meeting is entitled to appoint a proxy.

A proxy need not be a member.

A member entitled to attend and cast two or more votes at the meeting may appoint 2 proxies and may specify the proportion or number of votes each proxy is appointed to exercise.

Attached is a form of proxy which is in an approved form.

The written appointment of a proxy or attorney must be received at the registered office of the Company (Suite 2, 1233 High Street, Armadale, Victoria, 3143) not less than 48 hours before:

• the time for holding the meeting or adjourned meeting at which the appointee proposes to $(a)$ vote: or
• $(b)$ the taking of a poll on which the appointee proposes to vote.

If the appointment of a proxy purports to be executed under a power of attorney then the original document (power of attorney), a certified copy or other proof thereof to the satisfaction of the Directors must be received not less than 48 hours before the time referred to in (a) or (b) above.

The facsimile number for return of proxies is +61 3 9824 8161