SPENDA LIMITED — Proxy Solicitation & Information Statement 2005

Mar 23, 2005

PREMIER BIONICS LIMITED ABN 67 099 084 143

NOTICE OF GENERAL MEETING and INFORMATION MEMORANDUM

TO BE HELD ON 22 April 2005 AT 9.00AM At 1235 High Street, Armadale, Victoria

This Information Memorandum is dated 23 March 2005 and is provided to Members of Premier Bionics Limited ABN 67 099 084 143 ("PBI" or "the Company") to be considered in connection with a General Meeting of the Company

INFORMATION MEMORANDUM

INTRODUCTION $\mathbf{1}$

This Memorandum provides information about Resolutions proposed by the Directors of Premier Bionics Limited ABN 67 099 084 143 ("PBI" or "the Company") in the attached Notice of General Meeting.

Members will be asked to consider resolutions approving:

• $\mathbf{1}$ . the issue of shares and options made by the Company prior to the date of this Notice;
• $21$ the Company's proposed acquisition of Medic Vision Limited ABN 87 090 992 322 ("Medic Vision"); and
• $3.$ a Capital Raising that is to be undertaken in conjunction with the Company's proposed acquisition of Medic Vision.

Medic Vision is a technology service provider working within the medical industry that specialises in the development and commercialisation of interactive computer based surgical training products. A detailed description of Medic Vision and its business activities is set out in Sections 3-5 below.

$1.1$ Prior Option and Share Issues

Members will be asked to approve the prior grant of options by the Company to various entities in lieu of paying consultancy fees.

Members will also be asked to approve the issue of shares and grant of options made by the Company to acquire the equity held by minority shareholders in PulmoSonix Pty Ltd.

The circumstances surrounding the above issues are set out in Section 8 of this Memorandum.

$1.2$ Acquisition of Medic Vision and Capital Raising

The proposed acquisition of Medic Vision (in this Memorandum referred to as "the Proposal") involves PBI acquiring all of the issued shares in Medic Vision in accordance with the terms and conditions documented in the share acquisition agreement entered into between PBI and the shareholders in Medic Vision dated 21 March 2005 ("the Purchase Agreement").

In consideration of acquiring all of the issued securities in Medic Vision, PBI has agreed (subject to receiving shareholder approval) to issue PBI shares and PBI Options to the shareholders of Medic Vision in the manner set out in Section 6.1 below.

The Proposal is also conditional upon PBI undertaking the Capital Raising which is described in Section 6.4. While shareholder approval will be sought to raise up to five million dollars ($5,000,000), the Company must raise a minimum of three million five hundred thousand dollars ($3,500,000) for the Proposal to proceed.

$1.3$ Shareholder Approval for the Proposal and the Capital Raising

Shareholder approval in accordance with the provisions of the ASX Listing Rules is required before the Proposal and the Capital Raising can be implemented. Resolutions 3, 4 and 7 are proposed in order to obtain the consents required by the ASX Listing Rules for the Proposal and the Capital Raising to proceed.

This Memorandum provides information to assist Shareholders to evaluate the Proposal and proposed Capital Raising and decide how to cast their votes in relation to the Resolutions. In the event that Shareholder approval is not obtained for the proposed Resolutions (excluding Resolutions 1.2, 5 and 6) neither the Proposal or the Capital Raising will proceed.

$\overline{2}$ . PBI'S INVESTMENT STRATEGY

As previously disclosed to Members, PBI is focused on later stage Australian R&D projects which demonstrate strong commercial potential and which target the global medical devices and diagnostics markets. PBI pursues potential projects only after considering a range of investment criteria, including stage of development, the size of the required investment and potential returns, time and route to market, quality of technology, intellectual property protection, addressable market size and scientific management.

In selecting new investment opportunities, PBI gives greater weighting to projects that are in the later stages of their Research and Development program. PBI is also focused on investing in "next generation" products that utilise new technology to address existing medical problems. Investment opportunities that involve medical devices and diagnostics that have large global markets are of particular interest to the Board when considering potential investment opportunities.

PBI considers that the opportunity to acquire Medic Vision satisfies the aforementioned criteria and believes that the Proposal represents an opportunity to expand the Company's medical technology development and commercialisation business.

3. MEDIC VISION LTD ABN 87 090 992 322 ("Medic Vision")

$3.1$ Introduction and Business Description

Medic Vision is a technology service provider working within the medical industry specialising in the development and commercialisation of computer based surgical training products. The products utilise software and high fidelity force feedback robotics (haptics) under licence.

The high fidelity force feedback technology that is used by Medic Vision under licence simulates touch and pressure in a surgical environment. To date Medic Vision has developed its technology in conjunction with Commonwealth Scientific Industrial Research Organisation (CSIRO) and has collaboration agreements with research universities including Stanford and Colorado Universities. Medic Vision also has existing product distribution arrangements and provides consultancy services to the medical industry.

$3.2$ Technology Overview

Background

Adverse surgical outcomes have become a serious issue in the medical industry. A US based report estimated that as many as 95,000 people die in the US in any given year due to medical error. The fatality rate among patients can in some instances be as high as 13% of all admissions and medical error is recognised as the 8th most common cause of death in the US (higher than traffic accidents, breast cancer or AIDS).

Surgeons and medical practitioners who engage in ongoing training to maintain their skill levels for non-routine performed procedures may substantially reduce their rate of surgical and medical error. The advantage of ongoing training, is also evident in other industry sectors such as the airline industry, where pilots routinely engage in simulated training and skills assessment in order to maintain proficiency standards.

Surgeons and medical practitioners have traditionally trained by observation, practicing on cadavers or animals, attending lectures and by assisting in performing actual operations. All of the aforementioned forms of training are becoming increasingly difficult to undertake and are recognised as having the following deficiencies:

• 1. cadavers are expensive, difficult to source, and do not have realistic tissue properties;
• 1. the use of animals in clinical settings is becoming socially unacceptable;
• 1. lectures do not provide the necessary "hands on" experience; and
• 1. assisting in actual operations prior to developing a proficient skill base exposes patients to unacceptable risks.

Computer based surgical simulation can assist in overcoming the limitations of traditional forms of training and can provide the basis for performance benchmarking. Measurements obtained from computer based simulated operations could be used to determine and validate a trainee's performance in a patient-safe environment.

The Technology

Medic Vision uses advanced 3D computer modeling combined with haptics technology that is deployed in a multifunctional work station known as a haptic workbench. The workbench combines a computer, screen and force feedback robotic arm that simulates surgical instruments (scalpel, syringe, forceps, clamp, etc). The robotic arm allows the user to interact with a 3D image on the computer screen. As the user manipulates the robotic arm, the 3D images change in response to the action, while at the same time the robotic arm applies appropriate force and movement in response to the user's action. In concert these two technologies provide a virtual reality training environment that delivers the effect of high definition 'touch and feel' back to the haptic's user.

4. MARKET FOR COMPUTER BASED SURGICAL TRAINING PRODUCTS

4.1 Structure

At present the "virtual reality" surgical training industry consists of companies that sell computer based simulators rather than training solutions.

While the potential market for computer based simulation products is extremely broad. Medic Vision will initially focus on marketing its products to medical training schools which number approximately 1627 globally.

Ultimately, Medic Vision's objective is to promote surgical training software incorporating haptics so that virtual reality training becomes a fundamental part of education in medical schools, teaching hospitals, and medical skills training centers globally.

In the fonger term Medic Vision also recognises the opportunity to develop products that will target the following types of medical and non medical institutions both within Australia and abroad:

• Hospitals
• Nursing Colleges
• Surgical Skills Centres
• Ambulances and parademics
• Armed forces, NAVY and Air force
• Airlines
• Red Cross
• Dedicated Virtual Reality Training Centres
• Vetinary and Animal sciences
• Dental Hospitals, schools and sciences

While Medic Vision is yet to undertake a cashflow analysis on the above markets, it believes there is a potential opportunity for take-up once products have been successfully developed and introduced.

4.2 Competition

Currently there are limited surgical training packages available in Australia or internationally. An international patent search was undertaken under the direction of Medic Vision in September 2001 and this search revealed that no patent has been found which substantially overlaps the current work in the area of an anatomical trainer using computer generated haptic feedback. Medic Vision has identified 13 companies that are active in the market whether as developers of software or manufacturers of haptic hardware components.

5. MEDIC VISION'S ACTIVITIES

$5.1$ Proposed Activities

Medic Vision's objective is to become an important provider of virtual reality medical simulator training products.

Medic Vision aims to produce a variety of medical/surgical training products tied to educational/training outcomes that are endorsed by medical associations.

Medic Vision aims to achieve its objectives through its focus on:

• research and development of products; $\bullet$
• entering into collaborative agreements with third parties;
• the development of medical skills training centres; and $\bullet$
• obtaining accreditation from medical associations and like organizations.

Medic Vision utilises a variety of hardware tools sourced from different vendors which, when combined with its software will help facilitate the development of a suite of surgical training programs. It is intended that products and training programs developed by Medic Vision will be used to train future specialists, as well as being used as a basis for ongoing medical education for the existing specialist market.

Medic Vision is initially focussing on the development of virtual reality medical training software applications for medical procedures that are minimally invasive such as epidurals, cannulation, laparoscopy and endoscopy procedures.

While the technology provides a useful tool for virtual reality training, Medic Vision recognises that a more holistic approach is required to address the industry's training requirements. Medic Vision intends providing clients with complete training packages that incorporate:

• educational content: course notes, background material and instruction; $\bullet$
• multimedia: delivering instructional video and commentary from live procedures;
• haptics software: virtual reality that allows the user to improve their skills in a safe environment; and
• assessment: allows the student and teacher to access performance against measurable outcomes.

Medic Vision aims to provide an educational framework with all of its virtual reality surgical training products, and to have its products incorporated into accredited training courses.

5.2 The Products

The computer based surgical training products are being developed by Medic Vision are integrated with haptics application software (available widely in the marketplace under licence) and the necessary hardware components of the products are acquired from commercial vendors.

The software is also being developed to ensure rigid pre-determined validation criteria are met.

The initial product offering will consist of 5 software programs of simulated surgical procedures that are to be developed over a three-year period. Studies were commissioned by Medic Vision to identify the products to be developed. Criteria such as surgical error/mishap, complexity of training, frequency of litigation, indemnity claims and degree of learning difficulty were assessed against surgical procedures. The technical and clinical outcome helped identify the market needs and where the technology could be applied.

This led to Medic Vision embarking on the development of the following five products:

• 1. Epidural/Cannulation Trainer (Anaesthetic/Allied Health)
  • The Epidural Trainer simulates an epidural procedure and is targeted at senior $\circ$ registrars to training anaesthetists. The teaching of epidurals is difficult as there are limited alternatives.
• 1. Ophthalmology Eye Task Trainer
  • The Eye project is developing an Intraocular Lens Replacement trainer. The target ň. market is directed at ophthalmologists. Intraocular lens replacement is a common procedure that requires a high level of skill. Traditional terms of training do not provide adequate assessment and skills acquisition.
• 1. Hysterectomy Trainer (Gynaecology)
  • The Gynae Trainer simulates a hysterectomy procedure and is targeted at $\circ$ . gynaecologists. The teaching of hysterectomies is difficult as there are limited alternatives.
• 1. Laparoscopic Shoulder Orthopaedic Procedure Trainer (Orthopaedics)
  • The Shoulder simulator helps train the surgeon in procedures for orthopaedic surgery of the shoulder. The target market is surgeons that will specialise in orthopaedic surgery.
• 1. Temporal bone & Cochlear Ear task Trainer (ENT and Neurosurgery)
  • The ENT simulator helps train the surgeon in procedures for surgery of the ear and ó. skull base. The target market are surgeons that specialise in ENT surgery.

5.3 The Strategy

Medic Vision's business model is based around providing turnkey surgical and medical training solutions to end customers. Medic Vision is establishing relations in Australasia, the US, and in Europe.

Medic Vision distributes medical devices in the Australasia and Asia Pacific region through its relationships with manufacturers and onsellers. Acting as a product distributor both generates revenue and allows Medic Vision to work with, rather than in competition to, other companies' in the market sector. The products that Medic Vision distributes for third parties will not compete with Medic Vision's initial suite of products...

The strategy for global dealership and distribution is to develop appropriate channel partners as well as to direct sell in key territories. The decision as to which model to apply is dependant upon a number of issues such as the ability to penetrate the market without assistance, cost/benefit analysis and existing personal relationships.

It is anticipated that agreements and contracts will be put in place with selected and respected industry contacts to sell, market and promote simulation technology to selected target markets.

THE PROPOSAL AND CAPITAL RAISING 6.

If Shareholders approve the Resolutions 3, 4 and 7, PBI will, subject to the fulfilment of certain pre-conditions contained in the Purchase Agreement, acquire 100% of the shares that have been issued in Medic Vision.

Subject to the receipt of shareholder approval it is anticipated that Completion of the proposed acquisition will take place within 10 business days from the date of this meeting.

The key features of the Proposal are as follows:

Consideration 6.1

The consideration for the proposed purchase of Medic Vision will be satisfied by the issue of PBI Shares and PBI Options in 2 separate tranches ("the Purchase Consideration") having a total value equal to three million dollars ($3,000,000).

The first Tranche of the Purchase Consideration will be issued at Completion ("the Completion Tranche") and will consist of the number of PBI Shares equal to two million dollars ($2,000,000) divided by the amount which is equal to the average ASX closing price of the PBI Shares for the 10 Trading Days immediately preceding the date of Completion.

The final Tranche of the Purchase Consideration ("the Final Tranche") will only be issued if Medic Vision receives a binding sales order for the purchase of at least one (1) epidural trainer on commercial terms on or before 31 December 2005. Details of the epidural trainer are provided in Section 5.2 of this Memorandum. The Final Tranche will consist of:

• the number of PBI Shares equal to eight hundred and fifty thousand dollars ($850,000) $\bullet$ divided by the amount which is equal to the average ASX closing price of the PBI Shares for the 10 Trading Days immediately preceding the date upon which the Purchaser becomes liable to issue the Final Tranche; and
• the number of PBI Options equal to one hundred and fifty thousand dollars ($150,000) divided by the amount which is equal to the average ASX closing price of the PBI Options for the 10 Trading Days immediately preceding the date on which the Purchaser becomes liable to issue the Final Tranche.

If Medic Vision does not receive a binding sales order for the purchase of at least one (1) Epidural Trainer on commercial terms on or before 31 December 2005 the Company will have no obligation to issue the Final Tranche.

The Purchase Consideration will be issued to the shareholders of Medic Vision in proportion to their respective shareholdings in Medic Vision. It is a condition of the Proposal that the Purchase Consideration must not be subject to the mandatory restriction ("escrow") provisions under the ASX Listing Rules. If the ASX determines that the Purchase Consideration (or part thereof) is to be subject to the mandatory restrictions then the Proposal will not proceed. Notwithstanding the foregoing, as described in Section 6.2 Mr Ross Horley, the majority shareholder of Medic Vision has agreed to execute a Voluntary Escrow Agreement in relation to the PBI Shares he is to receive as a Medic Vision vendor. Furthermore, the Purchase Agreement provides that the acquisition of Medic Vision will proceed even if ASX imposes a mandatory restriction on the PBI Shares Mr Horley is to receive as Purchase Consideration.

The precise number of PBI Shares and PBI Options comprising each tranche of Purchase Consideration and their issue price is not determinable at this point in time and will only be determinable on the date of issue. Reference should be made to the table in Section 9 for an indication of how the Purchase Price is to be calculated. The table in Section 9 discloses the number of PBI Shares and PBI Options that would be issued as Purchase Consideration if the PBI Shares are issued at $0.35 and the PBI Options are issued at $0.15. The note to the table in Section 9 describes the effect that a change in the issue price of the PBI Shares and the PBI Options will have on the number of PBI Shares and PBI Options that are to be issued as Purchase Consideration.

The PBI Shares that are to be issued as Purchase Consideration will rank equally with PBI's existing shares and the PBI Options to be issued as Purchase Consideration will be issued on the same terms as the class of securities quoted on the ASX as "PBIO" (exercisable at $0.20 on or before 24 December 2006).

6.2 Voluntary Restriction

Mr Ross Horley is a director and the majority shareholder of Medic Vision. Mr Horley will have an ongoing association with PBI following Completion of the acquisition through his proposed appointment to the PBI Board and his role as a consultant to Medic Vision.

Mr Horley will receive PBI Shares and PBI Options as consideration for the acquisition of his shares in Medic Vision on the same terms and conditions as the other shareholders of Medic Vision. As a sign of his ongoing commitment to the Company Mr Horley has agreed to execute a Voluntary Escrow Agreement which will prevent him from trading or disposing of any PBI Shares or PBI Options that he receives in his capacity as a vendor of Medic Vision shares.

By executing the Voluntary Escrow Agreement, Mr Horley will be restricted from trading the PBI Shares or PBI Options that may be issued to him for a period of 12 months from the date of issue.

6.3 Restructure of Boards and Retention of Key Medic Vision Staff

Following Completion of the proposed acquisition, the Board of Medic Vision will undergo a restructure with all but 2 of the existing directors resigning to make way for nominees of the Company. Furthermore, it is proposed that subject to Completion, the Board appoint the current managing director and majority shareholder of Medic Vision, Mr Ross Horley as a director of PBI. If Mr Horley is appointed to the Board, then shareholders will be asked to ratify his appointment at the following Annual General Meeting.

The Company also proposes offering ongoing employment to Mr Billy Chan. The Board considers that Mr Horley and Mr Chan's ongoing involvement will assist Medic Vision attain its commercial objectives.

Mr Horley and Mr Chan's experience is detailed as follows:

Ross Horley

Ross was the founder of Medic Vision and instrumental in the conception of the strategy which has evolved into the company.

Ross has a consulting engineering background having been a principal of a leading Western Australian consulting engineering practice. Prior to consulting engineering Ross worked with Matthew Hall Mechanical and Electrical Engineers Pty Ltd as the design engineer and project manager of its electrical division.

Ross commenced his career as a trainee with the Public Works Department of Western Australia in the Electrical Engineering Branch, Design Section.

Ross's special area of expertise is the design and facilitation of technology services including the commercial adoption of advanced technologies. Some of these technologies cover sectors such as intelligent buildings, automation, haptic application, virtual reality, visualisation. Ross's has earned him a reputation as a leader in these fields especially in relation to virtual reality.

Billy C Chan

A naturalised Australian, Billy accomplished his matriculation level in the former British Colony, Hong Kong and received his tertiary education in Australia.

An experienced media producer, director and sales manager Billy has a varied range of skills gained from over 20 years working in media and sales. He has worked for a wide range of organisations in Hong Kong, Japan, the USA and Australia, where he has developed excellent skills in research, management, sales and marketing, videography and special project presentations.

6.4 Capital Raising

Shareholders will also be asked to approve the Capital Raising.

While approval is sought for the issue of up to sixteen million one hundred and twenty nine thousand and thirty two (16,129,032) PBI Shares at an issue price of thirty one cents ($0.31) per share to raise up to five million dollars ($5,000,000), the acquisition of Medic Vision is conditional upon PBI procuring subscriptions, applications or commitments to issue a minimum of eleven million two hundred and ninety thousand three hundred and twenty two (11,290,322) PBI shares at an issue price of thirty one cents ($0.31) per share to raise a minimum of three million five hundred thousand dollars ($3,500,000) on or before 20 May 2005 ("the Minimum Subscription").

One (1) free attaching option will be issued for every four (4) PBI Shares that are issued to participants in the Capital Raising.

If PBI does not procure subscriptions, applications or commitments to raise the Minimum Subscription on or before 20 May 2005 then the shareholders of Medic Vision may terminate the Purchase Agreement and, in such event the Proposal will not proceed.

The PBI Shares the subject of the Capital Raising will be predominantly placed with clients of Peregrine Corporate Limited. As mentioned in Section 6.5, the Purchase Agreement provides that the shareholders of Medic Vision will collectively be given priority to participate in the Capital Raising by subscribing for up to three million two hundred and twenty five thousand eight hundred and six (3,225,806) PBI Shares. Accordingly, it is likely that a number of PBI Shares the subject of the Capital Raising will be issued to existing shareholders of Medic Vision.

The Company will prepare and lodge a prospectus and copies of the prospectus will be available to members of the public and to the Company's existing shareholders.

As discussed in Section 6.5 below, the current holders of Medic Vision shares as well as the directors of the Company (subject to receiving shareholder approval) will be given the opportunity to participate in the Capital Raising.

The PBI Shares the subject of the Capital Raising will be deemed fully paid and will rank equally with PBI's existing ordinary shares. The free attaching options that are to be issued pursuant to the Capital Raising will be issued on the same terms as the class of securities quoted on the ASX as "PBIO" (exercisable at $0.20 on or before 24 December 2006).

If the Minimum Subscription is achieved, it is intended that the funds raised by the Capital Raising will be applied by the Company in the manner set out in the table below.

Medic Vision
Product development costs associated with		1,250,000
completion of 5 new products
Marketing, promotional and related expenses		300,000
associated with new products
Establishment of a new sales & marketing for		500,000
overseas offices
Salaries and fees of additional personnel		850,000
Additional IP costs		100.000
	Subtotal	3,000,000
Funds to be applied towards Pulmosonix Pty Ltd		250,000
(proportionately as set out in the table below) and
towards working capital
Capital raising costs		250,000
	Grand Total	3.500.000

APPLICATION OF FUNDS ($AUD)

If the maximum subscription is achieved, it is intended that the funds raised by the Capital Raising will be applied by the Company in the manner set out in the table below:

Pulmosonix Pty Ltd
Further product development of Airway Clear 2 & 3		1.150.000
and PulmoScreen (in-house & contract
engineering) and commercial costs
Clinical trials expenses (Aust & overseas)		350.000
Additional IP costs		100,000
	Subtotal	1.600.000

Medic Vision
Product development costs associated with		1,250,000
completion of 5 new products
Marketing, promotional and related expenses		300,000
associated with new products
Establishment of a new sales & marketing for		500,000
overseas offices
Salaries and fees of additional personnel		850,000
Additional IP costs		100,000
	Subtotal	3,000,000
Capital Raising Costs		400,000
	Grand Total	5,000,000

As indicated in previous announcements Pulmosonix Pty Ltd ("Pulmosonix") is continuing its product development program and its commercialisation activities. To date, Pulmosonix has expanded its development activities to cover 3 main areas of clinical need: Obstructive Sleep Apnea, Chronic Obstructive Pulmonary Disease and Chronic Lung Disease. Pulmosonix now has up to 8 products at the research or development stages or in the concept development stage. Ongoing expansion of Pulmosonix's intellectual property portfolio is occurring concurrent with its product development effort.

While shareholder approval will be sought for the issue of up to sixteen million one hundred and twenty nine thousand and thirty two (16,129,032) PBI Shares if the Board consider it is in the best interests of the Company to place additional securities as part of the Capital Raising it may do so at its discretion provided that the 15% threshold contained in ASX Listing Rule 7.1 is not exceeded

6.5 Participation in Capital Raising

The existing shareholders of Medic Vision will collectively be given priority in the Capital Raising to subscribe for up to three million two hundred and twenty five thousand eight hundred and six (3,225,806) PBI Shares on the same terms as other persons who may participate in the Capital Raising.

It is also proposed that the Directors of PBI be authorised to participate in the Capital Raising and Resolution 5 (described below) is proposed to seek shareholder approval for the directors to subscribe for up to one hundred and sixty one thousand two hundred and ninety (161,290) PBI Shares each on the same terms as other persons who may participate in the Capital Raising.

6.6 Future Fundraising

A further condition of the Proposal is that, following completion, PBI agrees to use its best endeavours to procure funding to support Medic Vision's growth and development for a period of 3 years. A description of Medic Vision's proposed activities is set out in Sections 3, 4 and 5 of this Memorandum.

It is not proposed to seek shareholder approval for any future funding at the meeting other than that proposed by the Capital Raising.

6.7 Issue of Options to Mr Horley

At Completion. PBI is to grant one million five hundred thousand (1,500,000) options to Mr Ross Horley in accordance with the terms of the consultancy agreement that he is to enter into with Medic Vision (effective only from Completion).

The options will be each to acquire one (1) share in the capital of PBI upon exercise of the option and payment of the option exercise price. No monies will be payable for the options.

Of the one million five hundred thousand (1,500,000) options that are to be issued to Mr Ross Horley, five hundred thousand (500,000) will be issued on the same terms as the class of securities quoted on the ASX as "PBIO" (exercisable at $0.20 on or before 24 December 2006) however these options will not be issued to Mr Horley unless and until he successfully completes 12 months of his consultancy with Medic Vision. The balance of the one million five hundred thousand (1,500,000) options (1,000,000 options) will be issued on the terms set out in the following table and otherwise on the terms set out in Section 10:

Options	Issue Date	Vestina Date	Exercise Price	Expiry Date
500,000	Completion	24 months fromIssue Date	10% discount tothe volumeweighted averagemarket price pershare on ASXover the 5Trading Daysprior to VestingDate	4 years fromDate of Issue
500,000	Completion	36 months fromIssue Date	10% discount tothe volumeweighted averagemarket price pershare on ASXover the 5Trading Daysprior to VestingDate	5 years fromDate of Issue

6.8 Issue of Options to PSP Capital Ptv Ltd

On Completion Medic Vision becomes liable to pay PSP Capital Pty Ltd a consultancy fee equal to $150,000 for introducing Medic Vision to PBI and for providing ongoing corporate advisory services. Pursuant to the Purchase Agreement, PBI has agreed to satisfy Medic Vision's liability to PSP Capital Pty Ltd at Completion. PBI has agreed to satisfy this liability by paying PSP Capital one hundred thousand dollars ($100,000) and by issuing PSP Capital Pty Ltd 161,290 PBI Shares at an issue price of thirty one cents ($0.31) per share.

7. DIRECTORS OF PBI

Current directors of PBI in office at the date of this Memorandum are as follows:

• Mr Peter Marks (Chairman)
• Dr Martin Soust
• Mr Jeremy Cooper
• Dr Henry Pinskier
• Dr John Parker

8. THE RESOLUTIONS

The acquisition of Medic Vision is conditional upon PBI obtaining requisite Shareholder approval for various aspects of the transaction as required under the ASX Listing Rules.

To satisfy the requirements under the ASX Listing Rules, PBI has prepared the Resolutions set out in the attached Notice of General Meeting.

Resolution 1: Approval of prior Option Issues to Consultants

Resolution 1 does not relate to the Proposal or the Capital Raising.

Resolution 1 is proposed to obtain shareholder approval for the following prior issues of options to consultants of the Company:

• 250,000 options that were issued to Insurance Broking Australia Pty Ltd on 30 November 2004. These options were issued in lieu of consultancy services provided to the Company totalling $30,000 in value; and
• 175,000 options that were issued to JP and Associates on 30 November 2004. These options were issued in lieu of consultancy services provided to the Company totalling $20,000 in value; and
• 225,000 options that were issued to Mr Joseph Popic on 24 December 2004. These options were issued in lieu of consultancy services provided to the Company totalling $22,500 in value.

All of the options the subject of Resolution 1 were issued on the same terms as the class of securities quoted on the ASX as "PBIO" (exercisable at $0.20 on or before 24 December 2006).

The options the subject of Resolution 1 were issued to discharge the Company's obligation to pay consulting fees, accordingly no funds were raised by the issue. Funds raised by the exercise of the options will be applied to the Company's working capital requirements at the time of exercise.

Under ASX Listing Rule 7.4 an issue of securities made without approval under ASX Listing Rule 7.1 is treated as having been made with approval for the purpose of Listing Rule 7.1 if shareholder approval is subsequently obtained. Under ASX Listing Rule 7.1 an entity must not issue, or agree to issue, more than fifteen percent (15%) of its capital without the approval of its shareholders.

By obtaining Shareholder approval for the issue of the options the subject of Resolution 1, PBI retains the ability to issue up to fifteen per cent (15%) of its capital to take advantage of any capital raising opportunities.

The passing of Resolution 1 is not a condition of the Proposal.

Resolution 2: Approval of prior Share and Option Issue for Acquisition of Subsidiary

Resolution 2 does not relate to the Proposal or the Capital Raising.

Resolution 2 is proposed to obtain shareholder approval for the shares and options that were issued as consideration by the Company to acquire the equity held by minority shareholders in Pulmosonix Pty Ltd. The acquisition resulted in the Company owning all of the issued capital in Pulmosonix Pty Ltd.

The following shares and options were issued on 24 December 2004 in consideration for the Company's acquisition of shares in Pulmosonix Pty Ltd:

Recipient	No. OrdinarySharesEscrowedUntil 3December2005	No. OrdinarySharesEscrowedUntil 3 June2006	No. Optionsescrowed until 3December 2006	No. Optionsescrowed until3 June 2006
MonashInvestmentHoldings PtyLtd	584,913	584,913	584.913	584.913
Benelle Pty Ltd	118,261	118,261	118,261	118,261
Alkon Pty Ltd	191,775	191,775	457,310	457,310
TOTAL	894,924	894.924	1.160.484	1,160,484

The shares represented in the above table rank equally with the Company's existing ordinary shares and the options were issued on the same terms as the class of securities quoted on the ASX as "PBIO" (exercisable at $0.20 on or before 24 December 2006). The shares and options the subject of this Resolution were however, issued subject to the escrow conditions set out in the above table.

The shares and options were deemed fully paid as consideration for the acquisition of shares in Pulmosonix Pty Ltd with the acquisition having a total value equal to $823,352.97 accordingly, no funds were raised by the issue of the shares or options the subject of Resolution 2. Funds raised by the exercise of the options will be applied to the Company's working capital requirements at the time of exercise.

Under ASX Listing Rule 7.4 an issue of securities made without approval under ASX Listing Rule 7.1 is treated as having been made with approval for the purpose of Listing Rule 7.1 if shareholder approval is subsequently obtained. Under ASX Listing Rule 7.1 an entity must not issue, or agree to issue, more than fifteen percent (15%) of its capital without the approval of its shareholders.

By obtaining Shareholder approval for the issue of the shares and options the subject of Resolution 2, PBI retains the ability to issue up to fifteen per cent (15%) of its capital to take advantage of any capital raising opportunities.

The passing of Resolution 2 is not a condition of the Proposal.

Resolution 3: Medic Vision Acquisition - approval to issue PBI Shares and PBI Options

Resolution 3 is proposed to obtain approval to implement issue PBI Shares and PBI Options as Purchase Consideration as part of the Proposal.

Reference to Section 6 of this Memorandum should be made for further details of the Proposal and the manner in which PBI Shares and PBI Options are to be issued as Purchase Consideration.

Under Resolution 3, the recipients of the PBI Shares and PBI Options will be the holders of Medic Vision shares (or their nominees). Based on the current holdings of Medic Vision shares and the proposed nominations as notified to the Company, the recipients specified in the following table would be issued with PBI Shares and PBI Options as part of the consideration for PBI's acquisition of Medic Vision.

						PBI Shares and PBI Options will be issued to each of the Vendors listed in the below table in
		proportion to their respective shareholdings in Medic Vision.

Ross Horley T/F Medical Technology52.36%TrustDuncraig Holdings Pty Ltd T/F Chalnay9.20%TrustSt George Custodians Pty Ltd T/F4.60%Beeliar TrustPasuremi Pty Ltd T/F Sellers Family4.60%TrustZelman Pty Ltd T/f Walter Unger2.00%Investments TrustJohn Glancy1.25%1.25%lan Morrison5.00%Patrick LaverySuzanne Cregan T/F The Cregan0.50%Family TrustCaesar Nominees Pty Ltd T/F Caesar1.00%Super FundH & J Pourzand ATF Pourzand Super1.50%FundBilly Chan0.39%Mondo Nominees Pty Ltd T/F I & E0.50%Treagus Super A/CJCK Yin Pty Ltd T/F JCK Yin Family0.10%A/CBonta (WA) Pty Ltd T/F The Siciliano5.00%Settlement TrustPristine Bay Pty Ltd T/F The MVS3.75%Super FundSovereign Investment Group Pty Ltd1.25%T/F The Sovereign Family TrustStarcat Investments Pty Ltd T/F The1.50%Mav TrustSuzannah Jane Court1.25%Manera Holdings Pty Ltd T/F The0.62%Manera Family TrustDCM Holdings Pty Ltd0.62%SV Jenkins & ZM Windsor T/F Jenkins0.25%Retirement FundAndrew J Parker & Adrienne C Parker0.25%T/F The AP Superannuation FundPSP Capital Pty Ltd1.25%	Recipient (and/or nominee)	Proportionate Shareholding in MedicVision

The issue price of the PBI Shares and PBI Options will be deemed fully paid as consideration for the acquisition of Medic Vision. The issue price and total number of PBI Shares and PBI Options to be issued will be determined in accordance with the mechanism referred to in Section 6.1 above.

The PBI Shares the subject of this Resolution will rank equally with PBI's existing shares. The PBI Options the subject of this Resolution will be issued on the same terms as the class of securities quoted on the ASX as "PBIO" (exercisable at $0.20 on or before 24 December 2006).

The PBI Shares and PBI Options the subject of this Resolution will be issued in two tranches (as described in Section 6.1) with the first tranche to be issued on Completion which shall occur on a day no later than three (3) months after the date of the meeting. The second tranche will only be issued if Medic Vision receives a binding sales order for the purchase of at least one (1) Epidural Trainer on commercial terms on or before 31 December 2005. It is not possible to determine whether the second tranche will be issued within 3 months of the date of this meeting accordingly, the Company has applied to the ASX to waive the mandatory requirement that the PBI Shares and PBI Options the subject of the second tranche be issued within 3 month's of obtaining shareholder approval. If ASX waives the mandatory requirement the PBI Shares and PBI Options will be issued on a date no later than 31 January 2006.

Given that the PBI shares and PBI Options the subject of this Resolution will be issued as consideration for the acquisition of Medic Vision, cash funds will not be raised by the issue. Funds raised by the exercise of any PBI Options the subject of this Resolution will be applied to the Company's working capital requirements at the time of exercise.

Under ASX Listing Rule 7.1 an entity must not issue, or agree to issue, more than fifteen percent (15%) of its capital without the approval of its Shareholders. By obtaining Shareholder approval for the issue of the PBI Shares and PBI Options the subject of Resolution 3, PBI retains the ability to issue up to fifteen per cent (15%) of its capital to take advantage of any capital raising opportunities.

The passing of Resolution 3 is a condition of the Proposal and is subject to Resolution 4 being passed.

Resolution 4: Proposed Capital Raising (placement of PBI Shares)

Resolution 4 is proposed to obtain authority for the Capital Raising described in Section 6.4.

The PBI Shares the subject of the Capital Raising will be deemed fully paid and will each rank equally with PBI's existing shares. The free attaching PBI Options will rank on the same terms as the class of securities quoted on the ASX as "PBIO" (exercisable at $0.20 on or before 24 December 2006).

The PBI Shares and PBI Options the subject of this Resolution will be issued to the class of investors described in Section 6.4 and the funds generated by the Capital Raising will be applied in the manner described in Section 6.4.

The PBI Shares and PBI Options the subject of Resolution 4 shall be issued by the day no later than three (3) months after the date of the meeting. It is proposed that the Directors of PBI (or their nominees) be authorised to participate in the placement and Resolution 5 (described below) is proposed for that purpose. PBI Shares that may be issued to Directors, and/or their respective nominees if Resolution 5 is passed will be issued within one (1) month of the date of the meeting.

Under ASX Listing Rule 7.1 an entity must not issue, or agree to issue, more than fifteen percent (15%) of its capital without the approval of its shareholders. The proposed allotment of PBI Shares (and free attaching PBI Options) under the Capital Raising involves an increase in the issued capital of PBI.

By obtaining Shareholder approval for the issue of the PBI Shares (and free attaching PBI Options) the subject of Resolution 4, PBI retains the ability to issue up to fifteen per cent (15%) of its capital to take advantage of any capital raising opportunities.

The passing of Resolution 4 is a condition of the Proposal and is subject to Resolution 3 being approved.

Resolution 5: Participation by Directors in Placement

Resolution 5 is proposed to obtain approval for the directors of PBI named below (or their nominees) to be authorised to participate in the Capital Raising set out in Resolution 4 of this Memorandum. Chapter 10 of the ASX Listing Rules provides that a company may not issue shares to a director without the approval of holders of ordinary shares. If approval of ordinary shareholders is given under Chapter 10 (by passing Resolution 5), further approval is not required under ASX Listing Rule 7.1.

The directors of PBI seek shareholder approval to participate in the Capital Raising (either themselves or by their nominees) to the extent set out against their respective names in the following table:

Director	MaximumtotalSubscriptionPBI	MaximumNumberof PBI Shares	MaximumNumberAttachingof Free
	Shares		Options
Mr Peter Marks	$50,000	161,290	40,322
Dr Martin Soust	$50,000	161,290	40.322
Mr Jeremy Cooper	$50,000	161,290	40.322
Dr Henry Pinskier	$50,000	161,290	40,322
Dr John Parker	$50,000	161.290	40.322

While shareholder approval is sought for the above share issues, the Directors may not participate in the Capital Raising or may participate to a lesser extent then set out in the above table.

The PBI Shares (and free attaching PBI Options) the subject of Resolution 5 are included in the PBI Shares and PBI Options which are the subject of Resolution 4, and are not additional shares and options. The terms and conditions of the PBI Shares and PBI Options are as set out in the information provided in respect of Resolution 4. The proposed use of funds raised by the issue of shares and options will be the same as for the other funds received under the Capital Raising described above in respect of Resolution 4.

The PBI Shares (and free attaching PBI Options) the subject of Resolution 5 shall be issued by the day no later than one (1) month after the date of the meeting or such later time as may be allowed by the ASX. Resolution 5 relates to, but is not a condition of, the Proposal. No other resolution is conditional upon Resolution 5 being passed.

Resolution 6: Issue of Options to Ross Horley

As described in Section 6.7 of this Memorandum, a consequence of the Proposal is that options are to be issued to Ross Horley as part of the consultancy agreement he is to enter into with Medic Vision on (and subject to) Completion. Resolution 6 is proposed to obtain approval for the allotment of 1,500,000 options on the terms set out in Section 6.7 of this Memorandum.

Given that five hundred thousand (500,000) of the options the subject of Resolution 6 will not be issued to Mr Horley within one (1) month of the date of the meeting, the Company has applied to the ASX to waive the mandatory requirement that these options be issued within one (1) month of obtaining shareholder approval. If ASX waives the mandatory requirement the Options will be issued to Mr Horley on a date not later than 31 May 2006. The remaining one million (1,000,000) options the subject of Resolution 6 shall be issued by the day no later than one (1) month after the date of the Meeting.

Chapter 10 of the ASX Listing Rules provides that a company may not issue options to a director or a person that is likely to become a director without the approval of holders of ordinary shares. It is proposed that Mr Ross Horley be appointed a director of the Company following Completion. If approval of ordinary shareholders is given under Chapter 10 (by passing Resolution 6), further approval is not required under ASX Listing Rule 7.1.

The passing of Resolution 6 relates to but is not a condition of the Proposal.

Resolution 7: Issue of Shares to PSP Capital Pty Ltd

As described in Section 6.8 of this Memorandum, on Completion PBI will issue PSP Capital Pty Ltd one hundred and sixty one thousand two hundred and ninety (161,290) PBI Shares at an issue price of thirty one cents ($0.31) per share to part satisfy the payment of a liability it has agreed to assume pursuant to the Purchase Agreement.

The PBI Shares the subject of Resolution 7 will be deemed fully paid and will each rank equally with PBI's existing shares. No funds will be raised by the issue of the PBI Shares that are the subject of Resolution 7.

The PBI Shares the subject of Resolution 7 shall be issued by the day no later than three (3) months after the date of the meeting.

Under ASX Listing Rule 7.1 an entity must not issue, or agree to issue, more than fifteen percent (15%) of its capital without the approval of its shareholders. By obtaining Shareholder approval for the issue of the options the subject of Resolution 7, PBI retains the ability to issue up to fifteen per cent (15%) of its capital to take advantage of any capital raising opportunities.

The passing of Resolution 7 is a condition of the Proposal and is subject to Resolutions 3 and 4 being passed.

9. CAPITAL STRUCTURE

The following table illustrates the existing and proposed changes to the Company's capital structure if the Proposal and the Capital Raising are approved (subject to the notations).

ISSUED CAPITAL

Ordinary Shares

Shares	Number of Securities
Existing Fully Paid Ordinary Shares	30,883.582
*Fully Paid Ordinary Shares proposed tobe issued pursuant to Resolution 3 (asconsideration for the acquisition ofMedic Vision assuming an issue price of$0.35 and assuming both tranches ofpurchase consideration are issued)	*8.142.857
**Fully Paid Ordinary Shares proposedto be issued pursuant to Resolution 4(assuming Minimum Subscription isobtained)	**11,290,322
Total Ordinary Shares	**50,316,761

Options

Options	Number of Securities
Existing Listed Options	23,567,423
Existing Unlisted Options	3,175,968
*Listed Options proposed to be issuedpursuant to Resolution 3 (asconsideration for the acquisition ofMedic Vision assuming issue price of$0.15 and assuming the second trancheof purchase consideration is issued)	*1.000.000
**Listed Options proposed to be issuedas free attaching options pursuant toResolution 4 (assuming MinimumSubscription is obtained)	**2.822.580
Total Options	**30,565,971

Note * If the issue price of the PBI Shares and PBI Options to be issued as consideration for the acquisition of all the issued securities of Medic Vision is lower, then more PBI Shares and PBI Options will be issued, if the issue price is higher, then fewer PBI Shares and PBI Options will be issued. The following table illustrates how a change in the issue price of the PBI Shares will affect the number of PBI Shares to be issued as purchase consideration pursuant to Resolution 3 (assuming both tranche of purchase consideration is issued):

Issue Price	No Shares to be issued as PurchaseConsideration
$0.41	6,951,220
$0.39	7,307,692
$0.37	7,702,702
$0.35	8,142,857
$0.33	8,636,364
$0.31	9,193,548
$0.29	9,827,586

Similarly, the following table illustrates how a change in the issue price of the PBI Options will affect the number of PBI Options to be issued as purchase consideration pursuant to Resolution 3 (assuming the second tranches of purchase consideration are issued):

Issue Price	No of Options to be issued as PurchaseConsideration
$0.18	833,333
$0.17	882.352
$0.16	937,500
$0.15	1000,000
$0.14	1,071,429
$0.13	1,153,846
$0.12	1,250,000

Note ** If the Company procures subscriptions, applications or commitments to raise more than the Minimum Subscription then additional shares will be issued pursuant to the Capital Raising. Furthermore additional free attaching options will be granted. If subscriptions, applications or commitments are obtained to raise five million dollars ($5,000,000) (the maximum amount for which shareholder approval is sought) then 16,129,032 shares will be issued under the Capital Raising together with 4,032,258 free attaching options and, subject to any adjustments required pursuant to Note 1 above, the total number of ordinary shares on issue will be 55,155,471 and the total number of options on issue will be 31,775,649.

$10.$ OPTION CONDITIONS

$10.1$ Option Terms

The options the subject of Resolution 6 (other than the 500,000 options to be issued as PBIO options) will be unlisted options each to acquire one share in the capital of PBI upon exercise of the option and payment of the option exercise price.

OPTION DETAILS

Exercise Price: As detailed in the table contained in Section 6.7. Expiry Date: As detailed in the table contained in Section 6.7. Vesting Date: As detailed in the table contained in Section 6.7. Vesting Conditions: Continued employment with the Company or officer of the Company.

OPTION CONDITIONS

• No monies will be payable for the grant of the Options. 1

• Each Option shall carry the right in favour of an Option holder to subscribe for one ordinary share in $\overline{2}$ the capital of the Company deemed fully paid (each a "Share" in these Option Conditions).

• 3 Options do not vest and cannot be exercised until and unless the Vesting Conditions set out in the above Option Details have been satisfied. If the above Vesting Conditions are not satisfied before the expiry date of the Options, the Options shall lapse and not be capable of exercise.

• 4 The Options expire at 5.00 pm (Melbourne time) on the Expiry Date set out in the above Option Details.

• 5 Options shall be exercisable (after vesting) by the delivery to the registered office of the Company of a notice in writing stating the intention of the Option holder to exercise all or a specified number of Options, accompanied by the relevant Option Certificate and a cheque made payable to the Company for the subscription price for the Shares.

• The Share issued on exercise of an Option shall be issued at the Exercise Price set out in the 6 above Option Details.

• $\overline{7}$ Subject to these Rules, the Options shall not be capable of assignment or transfer without the express prior written permission of the Company.

• 8 In the case of an approved assignment or transfer, the instrument of assignment or transfer shall be duly stamped and shall be lodged at the registered office of the Company together with such other information as the Company may require with respect to the assignment or transfer, and the Company shall enter the name of the assignee in a register of Options as the holder of the relevant Options. The instrument of assignment or transfer shall include an acknowledgement of the terms upon which the Options were issued (being these Option Conditions and the Vesting Conditions set out in the above Option Details).

• 9 The Company shall not be bound to recognise an assignment or transfer until a copy of the duly executed instrument of assignment is lodged with the Company, and then only if made in accordance with these Option Conditions.

• 10 Options shall not be listed for official quotation on the ASX or other stock exchange.

• 11 An exercise of only some Options shall not affect the rights of the Option holder under the balance of the Options held by him or her as appropriate.

• $1212$ The Company shall issue the resultant Share and deliver notification of share holdings within five business days of the valid exercise of an Option.

• $13 -$ Shares issued pursuant to an exercise of Options shall rank, from the date of issue, equally with existing Shares of the Company in all respects.

• 14 If at the relevant time the ordinary shares of the Company are admitted to quotation by the ASX or other stock exchange, the Company shall in accordance with the ASX Listing Rules make application to have Shares issued pursuant to an exercise of Options listed for official quotation by the ASX or other applicable stock exchange.

• The Options will not give any right to participate in dividends until Shares are issued pursuant to the 15 exercise of the relevant Options.

• 1. The Option holder will be permitted to participate in any new pro-rata issue of securities of the Company subject to the prior exercise of the Options (if vested), in which case the Option holder will be notified by the Company of the proposed pro-rata issue at least 9 business days before the books closing date (to determine entitlements to the issue) and afforded that period to exercise the Options.

$11.$ ACTION TO BE TAKEN

Shareholders are requested to either attend personally at the forthcoming meeting to be held at 1235 High Street, Armadale, Victoria at 9.00am on 22 April 2005 or otherwise to forward their proxy form duly completed to be received at the registered office of the Company at Suite 2, 1233 High Street, Armadale, Victoria (or by facsimile to (03) 9824 8161 at least forty-eight (48) hours before the time for holding the meeting.

$12.$ GLOSSARY

"ASIC" means the Australian Securities and Investments Commission.

"ASX" means Australian Stock Exchange Ltd.

"ASX Listing Rules" means the listing rules of the ASX from time to time.

"Capital Raising" means the proposed issue of up to sixteen million one hundred and twenty nine thousand and thirty two (16,129,032) PBI Shares to raise up to five million dollars ($5,000,000) with a minimum subscription of eleven million two hundred and ninety thousand three hundred and twenty two (11,290,322) to raise a minimum of three million five hundred thousand dollars ($3,500,000) in the manner described in this Memorandum.

"Company" means Premier Bionics Limited ABN 67 099 084 143.

"Completion" means completion of the acquisition of the shares and options of Medic Vision pursuant to the Purchase Agreement.

"Directors" means (unless the context suggests otherwise) the directors of PBI from time to time.

"Medic Vision" means Medic Vision Limited ABN 87 090 992 322.

"PBI" means the Company or Premier Bionics Limited ABN 67 099 084 143.

"PBI Options" means an option to purchase a fully paid ordinary share in the capital of PBI exercisable at twenty cents ($0.20) on or before 24 December 2006 and subject to the same terms as the class of securities quoted on the ASX as PBIO.

"PBI Shares" means an ordinary fully paid share in the capital of PBI.

"Meeting" means the general meeting of PBI at which the Resolutions will be considered.

"Memorandum" means this Information Memorandum.

"Minimum Subscription" means obtaining subscriptions, applications or commitments for a minimum of eleven million two hundred and ninety thousand three hundred and twenty two (11,290,322) PBI shares at an issue price of thirty one cents ($0.31) per share to raise a minimum of three million five hundred thousand dollars ($3,500,000).

"Proposal" means the proposal that provides for PBI's acquisition of Medic Vision, more fully described in this Memorandum.

"Purchase Agreement" means the share and option acquisition agreement entered into between the shareholders in Medic Vision and PBI dated 21 March 2005.

"Purchase Consideration" means the PBI Shares and PBI Options that are to be issued as consideration for the acquisition of Medic Vision.

"Resolutions" means the resolutions put forward in the Company's Notice of General Meeting dated 23 March 2005, of which this Information Memorandum forms part.

PREMIER BIONICS LIMITED ABN 67 099 084 143

NOTICE OF GENERAL MEETING

Notice is given that a General Meeting of Premier Bionics Limited JABN 67 099 084 1431 ("the Company") will be held at 1235 High Street. Armadale, Victoria on 22 April 2005 at 9:00 am.

PROPOSED RESOLUTIONS

Resolution 1: Subsequent Approval of an Issue of Options

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

"THAT, Members approve the previous grant of six hundred and fifty thousand (650,000) PBIO Options exercisable at $0.20 on or before 24 December 2006 as set forth in the Information Memorandum which accompanied and formed part of the Notice of Meeting."

Votina Exclusion Statement:

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

• persons who participated in the issue; or
• an associate of those persons.

However, the Company need not disregard a vote on Resolution 1 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:
• it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, $\bullet$ in accordance with a direction on the proxy form to vote as the proxy decides.

Resolution 2: Subsequent Approval of an Issue of Shares and Options

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

"THAT. Members approve the previous issue of one million seven hundred and eighty nine thousand eight hundred and forty eight (1,789,848) PBI Shares and two million three hundred and twenty thousand nine hundred and sixty eight (2,320,968) PBIO Options on the terms set forth in the Information Memorandum which accompanied and formed part of the Notice of Meeting."

Voting Exclusion Statement:

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

• persons who participated in the issue; or $\bullet$ .
• an associate of those persons.

However, the Company need not disregard a vote on Resolution 2 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:
• 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.

Resolution 3: Medic Vision Acquisition - Approval to Issue Shares and Options

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

"THAT subject to Resolution 4 being passed, Members approve the Proposal described in the Information Memorandum which accompanied and formed part of the Notice of Meeting, including the issue of PBI Shares and PBI Options as consideration for the Company's acquisition of all the issued shares in the capital of Medic Vision Limited (ABN 87 090 992 322) on the terms set forth in the Information Memorandum which accompanied and formed part of the Notice of Meeting."

Voting Exclusion Statement:

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

• persons who may participate in the proposed issue and persons who might obtain a benefit except a benefit solely in the capacity of a holder of ordinary shares, if the resolution is passed: or
• an associate of those persons.

However, the Company need not disregard a vote on Resolution 3 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:
• it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, $\bullet$ in accordance with a direction on the proxy form to vote as the proxy decides.

Resolution 4: Proposed Capital Raising

If Resolution 3 is passed (with or without amendment), to consider, and if thought fit, pass the following as an ordinary resolution:

"THAT the Members approve the Capital Raising that is described in the Information Memorandum including the issue of up to sixteen million one hundred and twenty nine thousand and thirty two (16,129,032) PBI Shares at an issue price of thirty one cents ($0.31) per share. Members also approve the issue of up to four million thirty two thousand two hundred and fifty eight (4,032,258) PBI Options being the free attaching PBI Options that may be issued pursuant to the Capital Raising."

Voting Exclusion Statement:

The Company will disregard any votes cast on Resolution 4 by:

• persons who may participate in the proposed issue and persons who might obtain a $\bullet$ benefit except a benefit solely in the capacity of a holder of ordinary shares, if the resolution is passed; or
• an associate of those persons.

However, the Company need not disregard a vote on Resolution 4 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;
• it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, $\bullet$ in accordance with a direction on the proxy form to vote as the proxy decides.

Resolution 5: Participation by Directors in Capital Raising

If Resolution 4 is passed (with or without amendment), to consider and, if thought fit, to pass the following resolution as an ordinary resolution:

"THAT the members approve participation by the directors of the Company named in the Information Memorandum (and/or their associates or nominees) in the proposed Capital Raising approved under Resolution 4 by applying for and receiving up to one hundred and sixty one thousand two hundred and ninety (161,290) PBI Shares each in the capital of the Company (deemed fully paid) at an issue price of thirty one cents ($0.31) per share together with up to forty thousand three hundred and twenty two (40,322) free attaching PBIO Options."

Voting Exclusion Statement:

The Company will disregard any votes cast on Resolution 5 by:

• persons who are to receive securities in relation to the entity; or
• an associate of those persons.

However, the Company need not disregard a vote on Resolution 5 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.

Resolution 6: Approval to Issue Options

If Resolutions 3 and 4 are passed (with or without amendment), to consider, and if thought fit, pass the following as an ordinary resolution:

"THAT Members approve the grant of the following options to Mr Ross Horley:

• five hundred thousand (500,000) PBI Options; and
• one million (1.000,000) unlisted options:

on the terms set forth in the Information Memorandum which accompanied and formed part of the Notice of Meeting."

Voting Exclusion Statement:

The Company will disregard any votes cast on Resolution 6 by:

• persons who are to receive securities in relation to the entity; or
• an associate of those persons.
• However, the Company need not disregard a vote on Resolution 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;
• it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, $\bullet$ in accordance with a direction on the proxy form to vote as the proxy decides.

Resolution 7: Approval to Issue Shares

If Resolutions 3 and 4 are passed (with or without amendment), to consider, and if thought fit, pass the following as an ordinary resolution:

"THAT Members approve the grant of one hundred and sixty one thousand two hundred and ninety (161,290) PBI Shares at an issue price of thirty one cents ($0.31) per share to PSP Capital Pty Ltd as set forth in the Information Memorandum which accompanied and formed part of the Notice of Meeting."

Voting Exclusion Statement:

The Company will disregard any votes cast on Resolution 7 by:

persons who may participate in the proposed issue and persons who might obtain a benefit except a benefit solely in the capacity of a holder of ordinary shares, if the resolution is passed; or

an associate of those persons.

• However, the Company need not disregard a vote on Resolution 7 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;
• 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.

Dated: 23 March 2005

Phillip Hains Company Secretary By the order of the Board

The accompanying Information Memorandum and the Proxy and Voting Instructions form part of this Notice of Meeting.

PROXY AND VOTING INSTRUCTIONS

Proxy Instructions

A member who is entitled to vote at a meeting may appoint:

• (a) one proxy if the member is only entitled to one vote; and
• (b) one or two proxies if the member is entitled to more than one vote.

Where more than one proxy is appointed each proxy may be appointed to represent a specific proportion of the member's voting rights. If the appointment does not specify the proportion or number of votes each proxy may exercise, each proxy may exercise half of the votes in which case any fraction of votes will be disregarded.

The proxy form (and the power of attorney or other authority, if any, under which the proxy form is signed) or a copy or facsimile which appears on its face to be an authentic copy of the proxy form (and the power of attorney or other authority) must be lodged at or sent by facsimile transmission to the registered office of the Company at Suite 2, 1233 High Street, Armadale, Victoria (or by facsimile to (03) 9824 8161 at least forty-eight (48) hours before the time for holding the meeting (ie by 12:00 pm on 20 April 2005), or adjourned meeting as the case may be, at which the individual named in the proxy form proposes to vote.

The proxy form must be signed by the member or his/her attorney duly authorised in writing or, if the member is a corporation, in a manner permitted by the Corporations Act. A proxy given by a foreign corporation must be executed in accordance with the laws of that corporation's place of incorporation.

The proxy may, but need not, be a member of the Company.

A proxy form is attached to this Notice.

The Chairman intends voting undirected proxies in favour of all resolutions.

Corporate Representatives

Any corporation which is a member of the Company may authorise (by certificate under common seal or other form of execution authorised by the laws of that corporation's place of incorporation, or in any other manner satisfactory to the chairperson of the Meeting) a natural person to act as its representative at any general meeting.

Voting Entitlement

For the purposes of the Corporations Act and Corporations Regulations shareholders entered on the Company's Register of Members as at 5:00pm, 21 April 2005 are entitled to attend and vote at the meeting.

On a poll, Members have one vote for every fully paid ordinary share held. Holders of options are not entitled to vote.

PREMIER BIONICS LIMITED ABN 67 099 084 143

PROXY FORM

If you do not wish to direct vour proxy how to vote, please place a mark in the box

I/We By marking this box you οf acknowledge that the Chairman may exercise your proxy even if being a member(s) of Premier Bionics Limited and entitled to he has an interest in the outcome of the resolution and shares appoint: votes cast by him other than as proxy holder will be disregarded because of that interest. The Name of Proxy: Chairman intends votina undirected proxies in favour of Address of Proxy: ____________________________________ the resolutions.

or in his/her absence, the Chairman of the meeting as my/our proxy to vote on my/our behalf at the General Meeting of the Company to be held at Giorgio's Function Room, 1235 High Street, Armadale, Victoria, 3143 on Friday 22 April 2005 at 9.00 am and at any adjournment of that meeting.

If two proxies are appointed, complete the following sentence:

This proxy is authorised to exercise ....................................

Proxy Instructions

To instruct your proxy how to vote, insert 'X' in the appropriate column against each resolution set out below. If you do not instruct your proxy how to vote on a resolution, your proxy may vote as he/she thinks fit or abstain from voting.

CAP1

Anninak

Administration

I/We direct my/our proxy to vote as indicated below:

			TU.	myallat	моэшн
Resolution		1. Subsequent Approval of an Issue ofOptions
Resolution	2.	Subsequent Approval of an Issue ofShares and Options
Resolution		3. Medic Vision Acquisition - Approval toIssue Shares and Options
Resolution	4.	Proposed Capital Raising
Resolution	5.	Participation by Directors in CapitalRaising
Resolution		6. Approval to Issue Options
Resolution	7.	Approval to Issue Shares

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If a person:	If a company:
(Signature)	EXECUTED by:	Name of company (print)
	In accordance with theCorporations Act
Name (print)
	(Signature)	(Signature)
Date:	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) the registered address of the Company which is located at Suite 2, 1233 High Street, Armadale Victoria, 3143; or
• (b) by facsimile to facsimile number (03) 9824 8161

by 9.00am, 20 April 2005, being not less than 48 hours before the time for holding the meeting or adjourned meeting as the case may be.