TALIUS GROUP LIMITED — AGM Information 2008

Apr 22, 2008

A C N 1 1 1 8 2 3 7 6 2

ADVANCE ENERGY LIMITED

NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the Annual General Meeting of Shareholders of the Company will be held at Advance Energy Limited, Suite 4, 16 Ord Street, West Perth WA 6005 on Wednesday, 28 May 2008 at 10:00 AM (WST) (“ Meeting ").

The Explanatory Memorandum to this Notice of Annual General Meeting (" Notice ") provides additional information on matters to be considered at the Meeting. The Explanatory Memorandum and Proxy Form comprise part of this Notice.

The Directors have determined pursuant to regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the Meeting are those who are registered as Shareholders of the Company at 10.00AM on 26 May 2007 (WST).

Terms and abbreviations used in this Notice and the Explanatory Memorandum are defined in Schedule 1.

This Notice should be read in its entirety. If Shareholders are in doubt as to how they should vote, they should seek advice from their accountant, solicitor or other professional adviser prior to voting.

Should you wish to discuss any matter please do not hesitate to contact the Company Secretary by telephone on +61 (08) 9486 1122.

AGENDA

Financial Report

To receive the financial report of the Company and its controlled entities for the year ended 31 December 2007 together with a Directors' report in relation to that financial year and the auditor's report on the financial report.

1. Resolution 1 – Adoption of Remuneration Report

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

"That the Remuneration Report be adopted by the Shareholders on the terms and conditions in the Explanatory Memorandum."

2. Resolution 2 – Re-election of Mr Alex Bajada as a Director

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

"That Mr Alex Bajada, who retires in accordance with the Constitution and, being eligible, offers himself for re-election, be re-elected as a Director."

3. Resolution 3 – Approval of Convertible Notes Issue

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

"That, in accordance with Listing Rule 7.1 and for all other purposes, the Company approves and authorises the Directors to issue up to 75,000,000 convertible notes each with a face value of not less than 80% of the average market price for Shares on the five trading days prior to the issue of the convertible notes ( "New Convertible Notes" ) to institutional and professional and sophisticated investors on the terms and conditions outlined in the Explanatory Memorandum ( "Convertible Note Issue ")."

Voting Exclusion

The Company will disregard any votes cast on this Resolution by a person who may participate in the Convertible Note Issue and who might obtain a benefit except a benefit solely in their capacity as holders of ordinary securities if the Resolution is passed, or an associate of that person.

However, the Company will not disregard a vote if:

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

• (b) 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.

4. Resolution 4 – Ratification of Prior Options Issue To consider, and if thought fit, pass with or without amendment as an ordinary resolution the following:

" That, in accordance with Listing Rule 7.4, Shareholders ratify the issue of 250,000 Options to Mr Carl Carter ( "Prior Options Issue" ) in accordance with the terms in the Explanatory Memorandum."

Voting Exclusion

The Company will disregard any votes cast on this resolution by a person who participated in the Prior Options Issue, or an associate of those persons.

However, the Company will not disregard a vote if:

• (a) It is cast by the person as proxy for a person who is entitled to vote, in accordance with directions on the Proxy Form; or

• (b) 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.

5. Resolution 5 – Ratification of Prior Share Issue To consider, and if thought fit, pass with or without amendment as an ordinary resolution the following:

"That, in accordance with Listing Rule 7.4, Shareholders ratify the issue of 1,000,000 Shares to Thie Tjie Hoa ( "Prior Share Issue" ) in accordance with the terms in the Explanatory Memorandum."

Voting Exclusion

The Company will disregard any votes cast on a resolution by a person who participated in the Prior Share Issue, or an associate of those persons.

However, the Company will not disregard a vote if:

• (a) It is cast by the person as proxy for a person who is entitled to vote, in accordance with directions on the Proxy Form; or

• (b) 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.

6. Resolution 6 – Ratification of Prior Convertible Notes Issue

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

"That, in accordance with Listing Rule 7.4, Shareholders ratify the issue of 2,300,000 Convertible Notes each with a face value of $1.00 to HSBC Nominees ( "HSBC Convertible Notes" ) in accordance with the terms in the Explanatory Memorandum (" Prior Convertible Notes Issue ")."

Voting Exclusion

The Company will disregard any votes cast on a resolution by a person who participated in the Prior Convertible Note Issue, or an associate of those persons.

However, the Company will not disregard a vote if:

• (a) It is cast by the person as proxy for a person who is entitled to vote, in accordance with directions on the Proxy Form; or

• (b) 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.

By Order of the Board

Lance Camacho Company Secretary 23 April 2008

Advance Energy Limited (ASX Code: AVD) - 1 - NOTICE OF ANNUAL GENERAL MEETING

ADVANCE ENERGY LIMITED

A C N 1 1 1 8 2 3 7 6 2

EXPLANATORY MEMORANDUM

1. Introduction

This Explanatory Memorandum has been prepared for the information of Shareholders of the Company in connection with the business to be conducted at the Annual General Meeting to be held at Advance Energy Limited, Suite 4, 16 Ord Street, West Perth WA, on Wednesday, 28 May 2008 at 10:00 AM (WST).

The purpose of this Explanatory Memorandum is to provide information the Board of Directors believes is material to Shareholders in relation to the Resolutions set out in the Notice.

2. Resolution 1 – Adoption of Remuneration Report

Pursuant to section 250R(2) of the Corporations Act, the Company is required to put the Remuneration Report to the vote of Shareholders. The Annual Report for the year ended 31 December 2007 contains a Remuneration Report which sets out the remuneration policy for the Company and reports the remuneration arrangements in place for the executive Directors, specified executives and non-executive Directors.

The provisions of the Corporations Act provide that Resolution 1 need only be an advisory vote of Shareholders.

Accordingly, Resolution 1 is advisory only and does not bind the Directors. Of itself, a failure of Shareholders to pass Resolution 1 will not require the Directors to alter any of the arrangements in the Remuneration Report, however, the Board will take the outcome of the vote into consideration when considering the remuneration policy.

The chairman of the Meeting will allow a reasonable opportunity for Shareholders as a whole to ask about, or make comments on, the Remuneration Report.

3. Resolution 2 – Re-election of Mr Alex Bajada as a Director

• The Constitution requires that one third of the Directors must retire at each annual general meeting and provides that a Director who retires is eligible for reelection.

Pursuant to the Constitution, Mr Alex Bajada will retire by rotation and seek re-election.

A brief CV of Mr Alex Bajada is included in the Annual Report.

The Board believes that Mr Alex Bajada has performed the duties and responsibilities of a director diligently and professionally, in the best interests of all Shareholders.

The Board unanimously supports the re-election of Mr Alex Bajada.

4. Resolution 3 – Approval of Convertible Notes Issue

4.1 General

• Resolution 3 seeks Shareholder approval pursuant to Listing Rule 7.1 for Directors to issue and allot up to 75,000,000 New Convertible Notes each with a face

value of not less than 80% of the average market price of the Shares (calculated per Share) on the 5 trading days on which sales were recorded prior to the issue of New Convertible Notes under the Convertible Notes Issue.

The Company has no current plans to undertake the Convertible Notes Issue. However, given the Company’s current business strategy to aggressively pursue acquisitions with existing production by a combination of equity and debt where value can quickly be added to the project by enhancing production though stimulating existing wells, undertaking step out wells and bringing behind pipe reserves to production, the Company believes that the Convertible Notes Issue will give it the ability to quickly react to opportunities. The Convertible Notes Issue will also be used to expedite the development activities at the recently acquired Palo Pinto project.

4.2 Listing Rule 7.1 – Shareholder Approval

• Listing Rule 7.1 requires that Shareholder approval be obtained for any issue of securities by a listed company, where the securities proposed to be issued represent more than 15% of the Company’s securities then on issue.

The issue of 75,000,000 New Convertible Notes will exceed the Company’s current 15% capacity for the purposes of Listing Rule 7.1.

Accordingly, Shareholder approval is sought in accordance with Listing Rule 7.1.

4.3 Terms of the New Convertible Notes

• Material terms of the New Convertible Notes are as follows:

• (a) Coupon rate of a maximum of 11% per annum with interest accruing daily and payable three months in arrears.

• (b) Unless converted by the Noteholder, the term of each New Convertible Note will have a minimum term of 18 months and maximum term of 36 months. The Company will repay the Noteholder the face value of each New Convertible Note at expiry of the term.

• (c) The New Convertible Notes are unsecured, unlisted and cannot be transferred.

• (d) The Company may pay an upfront fee of up to 5% on the amount of the New Convertible Note to the Noteholder.

• (e) The face value of a New Convertible Note may be converted by the Noteholder at any time after issue at the conversion price of the New Convertible Note (which will be at least 80% of the average market price of Shares in the 5 days on which sales were recorded prior to the Convertible Note Issue).

• (f) If all of the New Convertible Notes are repaid or converted then the New Convertible Notes are automatically cancelled and may not be re-issued.

• (g) If at any time the Company makes a bonus issue then the Company must issue the same number of bonus securities to the Noteholder that the Noteholder would have been entitled to receive if

Advance Energy Limited (ASX Code: AVD) - 2 - NOTICE OF ANNUAL GENERAL MEETING

the Noteholder had converted the New Convertible Note immediately before the issue of the bonus securities.

• (h) If the Company undertakes any capital reconstruction then, subject to the Listing Rules, the entitlement of a Noteholder to convert a New Convertible Note must be reconstructed in the same proportion and manner as the reconstruction.

• (i) The Company must give the Noteholder notice of all general meetings and the Noteholder may attend general meetings but may not vote unless permitted by the Corporations Act or the Listing Rules.

• (j) The Noteholder may by written notice to the Company declare a New Convertible Note due and payable on the occurrence of any of the following events:

• (i) the Company fails to make any payment due in accordance with the note conditions within 20 business days of the due date;

• (ii) the Company makes default in duly performing or observing any of the undertakings or agreements contained in the New Convertible Note;

• (iii) any representation or warranty contained in the New Convertible Note is found to be false or misleading in any material respect;

• (iv) a judgment is entered against the Company on a claim not covered by insurance and such judgments in the opinion of the Noteholder has a material adverse effect on the financial position of the Company;

• (v) a petition is lodged and is not withdrawn within 14 business days of lodgement or is not contested on a bona fide basis or an order is made or a resolution is passed for winding up of the Company or placing the Company under voluntary administration or any meetings convened for the purposes of considering the said resolutions;

• (vi) a receiver or a receiver and manager or administrator of the undertaking or property of the Company is appointed;

• (vii) the Company suspends payments of its debts or the Company without the consent of the New Convertible Noteholder ceases or threatens to cease to carry on a substantial part of its business;

• (viii) the Company fails to comply with any of its other obligations under the New Convertible Note conditions or without prior consent of the Noteholder, the Company undertakes a reorganisation of capital;

• (ix) any other event occurs which has a material adverse effect;

• (x) the main business undertaking of the Company is sold; or

• (xi) the Company is removed from the official list of the ASX.

• (a) the maximum number of New Convertible Notes the Company can issue under the Convertible Note Issue is 75,000,000 New Convertible Notes (and 75,000,000 Shares on conversion);

• (b) the Company will issue the New Convertible Notes no later than 3 months after the date of the Annual General Meeting (or such longer period of time as ASX may, in its discretion, allow pursuant to a waiver of ASX Listing Rule 7.3.2);

• (c) the New Convertible Notes will each be issued at a face value price of at least 80% of the average market price of Shares on the 5 trading days on which sales were recorded prior to the issue of New Convertible Notes under the Convertible Note Issue.

• (d) the New Convertible Notes under the Convertible Notes Issue will be issued to institutional, professional and sophisticated investors (none of whom will be related parties of the Company) or their associates;

• (e) the terms of the New Convertible Notes are set out in section 4.3 of the Explanatory Memorandum;

• (f) the funds raised from the Convertible Note Issue will be used as set out in section 4.1 of the Explanatory Memorandum;

• (g) the allotment of New Convertible Notes will occur progressively; and

• (h) a voting exclusion statement is included in the Notice.

5. Resolution 4 – Ratification of Prior Options Issue

5.1 General

• Resolution 4 seeks Shareholder approval for the ratification of the Prior Options Issue, under Listing Rule 7.4.

On 25 October 2007 the Company issued 250,000 Options with an exercise price of $0.40 to Mr Carl Carter for the provision of consulting services.

5.2 Listing Rule 7.4 – Shareholder Approval

The Options were issued within the 15% limit permitted under Listing Rule 7.1, without the need for Shareholder approval. The effect of Shareholders passing Resolution 4 by ratifying the Prior Options Issues will be to restore the Company’s ability to issue securities within that limit, to the extent of the 250,000 Options.

5.3 Specific information required by Listing Rule 7.5

• Listing Rule 7.5 requires that the following information be provided to Shareholders for the purpose of obtaining Shareholder approval pursuant to Listing Rule 7.4:

• (a) 250,000 Options (and 250,000 Shares upon exercise of the Options) were granted to Mr Carl Carter (who is not a related party of the Company);

• (b) The Options granted under the Prior Options Issues were for nil consideration. Accordingly, no funds were raised by the grant of the Options;

• (c) All Options have an exercise price of $0.40. The terms and conditions of the Options are contained in Schedule 2;

• (d) A voting exclusion statement is included in the Notice.

4.4 Specific information required by Listing Rule 7.3

Listing Rule 7.3 requires that information be provided to Shareholders for the purposes of obtaining Shareholder approval in accordance with Listing Rule 7.1 as follows:

Advance Energy Limited (ASX Code: AVD) - 3 - NOTICE OF ANNUAL GENERAL MEETING

6. Resolution 5 – Ratification of Prior Share Issue

6.1 General

• Resolution 5 seeks Shareholder approval for the ratification of the Prior Share Issue, under Listing Rule 7.4.

On 3 October 2007 the Company issued 1,000,000 Shares to Thie Tjie Hoa.

6.2 Listing Rule 7.4 – Shareholder Approval

The Shares were issued within the 15% limit permitted under Listing Rule 7.1, without the need for Shareholder approval. The effect of Shareholders passing Resolution 5 by ratifying the Prior Options Issue will be to restore the Company’s ability to issue securities within that limit, to the extent of the 1,000,000 Shares.

6.3 Specific information required by Listing Rule 7.5

Listing Rule 7.5 requires that the following information be provided to Shareholders for the purpose of obtaining Shareholder approval pursuant to Listing Rule 7.4:

• (a) 1,000,000 Shares were issued to Mr Thie Tjie Hoa (who is not a related party of the Company);

• (b) The Shares under the Prior Share Issue were issued for $0.35 each;

• (c) The funds were utilised for working capital purposes; and

• (d) A voting exclusion statement is included in the Notice.

7. Resolution 6 – Ratification of Prior Convertible Notes Issue

7.1 General

• Resolution 6 seeks Shareholder approval for the ratification of the Prior Convertible Notes Issue, under Listing Rule 7.4.

On 25 November 2007 the Company issued 2,300,000 HSBC Convertible Notes each with a face value of $1.00 to HSBC Nominees.

7.2 Listing Rule 7.4 – Shareholder Approval

The HSBC Convertible Notes were issued within the 15% limit permitted under Listing Rule 7.1, without the need for Shareholder approval. The effect of Shareholders passing Resolution 6 by ratifying the Prior Convertible Notes Issue will be to restore the Company’s ability to issue securities within that limit, to the extent of the 2,300,000 HSBC Convertible Notes.

7.3 Specific information required by Listing Rule 7.5

Listing Rule 7.5 requires that the following information be provided to Shareholders for the purpose of obtaining Shareholder approval pursuant to Listing Rule 7.4:

• (a) 2,300,000 HSBC Convertible Notes were issued to HSBC Nominees (which is not a related party of the Company);

• (b) The HSBC Convertible Notes granted under the Prior Convertibles Notes Issue were issued at a face value of $1.00. Accordingly, the Company raised $2,300,000 by the grant of the HSBC Convertible Notes;

• (c) The HSBC Convertible Notes have a face value of $1.00 and are subject to the terms and conditions in Schedule 3;

• (d) A voting exclusion statement is included in the Notice.

8. Action to be taken by Shareholders

Shareholders should read this Explanatory Memorandum carefully before deciding how to vote on the Resolutions.

A Proxy Form is attached to the Notice. This is to be used by Shareholders if they wish to appoint a representative (a "proxy") to vote in their place. All Shareholders are invited and encouraged to attend the Meeting or, if they are unable to attend in person, to sign and return the Proxy Form to the Company in accordance with the instructions provided. Lodgement of a Proxy Form will not preclude a Shareholder from attending and voting at the Meeting in person.

Advance Energy Limited (ASX Code: AVD) - 4 - NOTICE OF ANNUAL GENERAL MEETING

Schedule 1 - Definitions

In this Explanatory Memorandum and Notice:

"Annual General Meeting" or "Meeting" means the annual general meeting of the Shareholders of the Company to be held by the Company at Advance Energy Limited, Suite 4, 16 Ord Street, West Perth, Western Australia, on Wednesday, 28 May 2008 at 10:00AM (WST).

The listing of any Shares issued following exercise of an Option shall be subject to the Option holder complying with all requirements imposed by Australian Stock Exchange as a condition to listing (including entering into any required restriction agreement regulating the sale of Shares issued on exercise of an Option).

1. Shares issued on exercise

"Annual Report" means the 2007 Annual Report of the Company, a copy of which was lodged with the ASX.

• "ASX" means ASX Limited ACN 008 624 691 trading as the Australian Securities Exchange.

"Board" means the board of Directors of the Company.

"Company" or "Advance" means Advance Energy Limited ACN 111 823 762.

"Constitution" means the Constitution of the Company.

"Convertible Notes Issue" has the meaning in Resolution 3.

• "Corporations Act" means the Corporations Act 2001 (Cth).

"Directors" means the directors of the Company.

• "Explanatory Memorandum" means this explanatory memorandum.

• "HSBC Convertible Notes" has the meaning given in Resolution 6.

• "Listing Rules" means the official listing rules of ASX.

• "Noteholder" means a holder of a Convertible Note.

• "New Convertible Note" has the meaning given in Resolution 3.

• Shares issued on exercise of the Options rank equally with the then shares of the Company.

• Quotation of Shares on exercise

• Application will be made by the Company to ASX for official quotation of the Shares issued upon the exercise of the Options.

• Participation in new issues

• There are no participation rights or 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.

However, the Company will ensure that for the purposes of determining entitlements to any such issue, the record date will be at least ten business days after the issue is announced. This will give holders of Options the opportunity to exercise their Options prior to the date for determining entitlements to participate in any such issue.

1. Adjustment for bonus issues of Shares

If the Company makes a bonus issue of Shares or other securities to existing Shareholders (other than an issue in lieu or in satisfaction, of dividends or by way of dividend reinvestment):

• "Notice" means this Notice of Annual General Meeting.

• "Option" means an option granted by the Company to be issued a Share, subject to the terms and conditions contained in Schedule 2.

• “Placement Facility” has the meaning in Resolution 3.

"Prior Convertible Notes Issue" has the meaning given in Resolution 6.

• "Prior Options Issue" has the meaning in Resolution 4.

• "Prior Share Issue" has the meaning given in Resolution 5.

• "Proxy Form" means the proxy form attached to this Notice.

• "Remuneration Report" means the remuneration report of the Company contained in the Annual Report.

• "Resolution" means a resolution referred to in the Notice.

"Schedule" means a schedule to this Notice.

"Share" means a fully paid ordinary share in the capital of the Company.

• "Shareholder" means a shareholder of the Company.

Schedule 2 – Terms and Conditions of Options

1. Entitlement

2. The Options entitle the holder to subscribe for one Share upon exercise of each Option.

3. Exercise Price

4. The exercise price of each Option is as indicated in section 5.1 of the Explanatory Memorandum.

5. (a) the number of Shares which must be issued on the exercise of an Option will be increased by the number of Shares which the Optionholder would have received if the Optionholder had exercised the Option before the record date for the bonus issue; and

6. (b) no change will be made to the Exercise Price.

7. Adjustment for rights issue

If the Company makes an issue of Shares pro rata to existing Shareholders (other than an issue in lieu of in satisfaction of dividends or by way of dividend reinvestment) the Exercise Price of an Option will be reduced according to the following formula:

New exercise price = O - E[P-(S+D)] N+1

• O = the old Exercise Price of the Option.

• E = the number of underlying Shares into which one Option is exercisable.

• P = average market price per Share weighted by reference to volume of the underlying Shares during the 5 trading days ending on the day before the ex rights date or ex entitlements date.

• S = the subscription price of a Share under the pro rata issue.

• D = the dividend due but not yet paid on the existing underlying Shares (except those to be issued under the pro rata issue).

• N - the number of Shares with rights or entitlements that must be held to receive a right to one new share.

• Expiry Date

Each Option has an expiry date of 31 December 2009.

1. Exercise Period

2. The Options are exercisable anytime during the exercise period up to and including Expiry Date.

3. Notice of Exercise The Options may be exercised by notice in writing to the Company. Any notice of exercise of an Option received by the Company will be deemed to be a notice of the exercise of that Option as at the date of receipt.

4. Timing of issue of Shares

5. After an Option is validly exercised, the Company must as soon as possible:

6. (a) issue and allot the Share; and

7. (b) do all such acts matters and things to obtain the grant of quotation for the Share on ASX no later than 5 days from the date of exercise of the Option.

8. Adjustments for reorganisation

If there is any reconstruction of the issued share capital of the Company, the rights of the Optionholders will be varied to comply with the Listing Rules which apply to the reconstruction at the time of the reconstruction.

13. Quotation of Options

• No application for quotation of the Options will be made by the Company.

• Options non-transferable The Options are non-transferable.

• Lodgement Instructions

• Cheques shall be in Australian currency made payable to the Company and crossed "Not Negotiable". The application for shares on exercise of the options with the appropriate remittance should be lodged at the Company's Registry.

Advance Energy Limited (ASX Code: AVD) - 5 - NOTICE OF ANNUAL GENERAL MEETING

Schedule 3 – Terms and Conditions of HSBC Convertible Notes

Material terms of the HSBC Convertible Notes are as follows:

• (a) Coupon rate of a maximum of 11% per annum with interest accruing daily and payable three months in arrears.

• (b) Unless converted by the Noteholder, the term of each HSBC Convertible Note will have a maximum term of 18 months. The Company will repay the Noteholder the face value of each HSBC Convertible Note at expiry of the term.

• (c) The HSBC Convertible Notes are unsecured, unlisted and cannot be transferred.

• (d) Each HSBC Convertible Note has a face value of $1.00.

• (e) The face value of an HSBC Convertible Note may be converted by the Noteholder at any time after issue at the face value.

• (f) If all of the HSBC Convertible Notes are repaid or converted then the HSBC Convertible Notes are automatically cancelled and may not be re-issued.

• (g) If at any time the Company makes a bonus issue then the Company must issue the same number of bonus securities to the Noteholder that the Noteholder would have been entitled to receive if the Noteholder had converted the HSBC Convertible Note immediately before the issue of the bonus securities.

• (h) If the Company undertakes any capital reconstruction then, subject to the Listing Rules, the entitlement of a Noteholder to convert a HSBC Convertible Note must be reconstructed in the same proportion and manner as the reconstruction.

• (i) The Company must give the Noteholder notice of all general meetings and the Noteholder may attend general meetings but may not vote unless permitted by the Corporations Act or the Listing Rules.

• (j) The Noteholder may by written notice to the Company declare a HSBC Convertible Note due and payable on the occurrence of any of the following events:

• (i) the Company fails to make any payment due in accordance with the note conditions within 20 business days of the due date;

• (ii) the Company makes default in duly performing or observing any of the undertakings or agreements contained in the HSBC Convertible Note;

• (iii) any representation or warranty contained in the HSBC Convertible Note is found to be false or misleading in any material respect;

• (iv) a judgment is entered against the Company on a claim not covered by insurance and such judgments in the opinion of the Noteholder has a material adverse effect on the financial position of the Company;

• (v) a petition is lodged and is not withdrawn within 14 business days of lodgement or is not contested on a bona fide basis or an order is made or a resolution is passed for winding up of the Company or placing the Company under voluntary administration or any meetings convened for the purposes of considering the said resolutions;

• (vi) a receiver or a receiver and manager or administrator of the undertaking or property of the Company is appointed;

• (vii) the Company or any subsidiary or related body corporate of the Company has failed to comply with a statutory demand, within the meaning of section 459F of the Corporations Act 2001 (Cth);

• (viii) the Company suspends payments of its debts or the Company without the consent of the HSBC Convertible Noteholder ceases or threatens to cease to carry on a substantial part of its business;

• (ix) the Company fails to comply with any of its other obligations under the HSBC Convertible Note conditions or without prior consent of the Noteholder, the Company undertakes a reorganisation of capital;

• (x) any other event occurs which has a material adverse effect; or

• (xi) the Company is removed from the official list of the ASX.

Advance Energy Limited (ASX Code: AVD) - 6 - NOTICE OF ANNUAL GENERAL MEETING

ADVANCE ENERGY LIMITED

ACN 111 823 762

P R O X Y F O R M

The Company Secretary Advance Energy Limited

By delivery:	By post:	By facsimile:
Suite 4, Ground Floor	Suite 4, Ground Floor
16 Ord Street	16 Ord Street	08 9486 1011
WEST PERTH WA 6005	WEST PERTH WA 6005
I/We1________________
of ________________

being a Shareholder/Shareholders of the Company and entitled to _______

votes in the Company, hereby appoint[2 ] ___________

or failing such appointment the chairman of the Meeting as my/our proxy to vote for me/us on my/our behalf at the General Meeting of the Company to be held at Advance Energy Limited, Suite 4, 16 Ord Street, West Perth, Western Australia 6005 on Wednesday, 28 May 2008 at 10.00 AM (WST) and at any adjournment thereof in the manner indicated below or, in the absence of indication, as he thinks fit. If 2 proxies are appointed, the proportion or number of votes of this proxy is authorised to exercise is * [ ]% of the Shareholder’s votes*/ [ ] of the Shareholder’s votes. (An additional Proxy Form will be supplied by the Company, on request).

INSTRUCTIONS AS TO VOTING ON THE RESOLUTION

IMPORTANT:

The chairman of the annual general meeting intends to vote undirected proxies in favour of the Resolutions.

The proxy is to vote for or against the Resolution referred to in the Notice as follows:

For Against Abstain

Resolution	1	Adoption of Remuneration Report
Resolution	2	Re – election of Mr Alex Bajada as a Director
Resolution	3	Approval of Convertible Notes Issue
Resolution	4	Ratification of Prior Options Issue
Resolution	5	Ratification of Prior Share Issue
Resolution	6	Ratification of Prior Convertible Notes Issue

Authorised signature/s This sectionmustbe signed in accordance with the instructions overleaf to enable your voting instructions to be implemented. Individual or Shareholder 1 Shareholder 2 Shareholder 3 Sole Director and Sole Company Secretary Director Director/Company Secretary ____ ____ _____ Contact Name Contact Daytime Telephone Date 1Insert name and address of shareholder 2Insert name and address of proxy *Omit if not applicable	Authorised signature/s This sectionmustbe signed in accordance with the instructions overleaf to enable your voting instructions to be implemented. Individual or Shareholder 1 Shareholder 2 Shareholder 3 Sole Director and Sole Company Secretary Director Director/Company Secretary ____ ____ _____ Contact Name Contact Daytime Telephone Date 1Insert name and address of shareholder 2Insert name and address of proxy *Omit if not applicable	Authorised signature/s This sectionmustbe signed in accordance with the instructions overleaf to enable your voting instructions to be implemented. Individual or Shareholder 1 Shareholder 2 Shareholder 3 Sole Director and Sole Company Secretary Director Director/Company Secretary ____ ____ _____ Contact Name Contact Daytime Telephone Date 1Insert name and address of shareholder 2Insert name and address of proxy *Omit if not applicable
		Director/Company Secretary _______ Date *Omit if not applicable
1Insert name and address of shareholder	2Insert name and address of proxy

Advance Energy Limited (ASX Code: AVD) - 7 - NOTICE OF ANNUAL GENERAL MEETING

Proxy Notes:

A Shareholder entitled to attend and vote at the Meeting may appoint a person or a corporation as the Shareholder's proxy to attend and vote for the Shareholder at that Meeting. If the Shareholder is entitled to cast 2 or more votes at the Meeting the Shareholder may appoint not more than 2 proxies. Where the Shareholder appoints more than one proxy the Shareholder may specify the proportion or number of votes each proxy is appointed to exercise. If such proportion or number of votes is not specified each proxy may exercise half of the Shareholder's votes. A proxy may, but need not be, a Shareholder of the Company.

If a Shareholder appoints a corporation as the Shareholder’s proxy to attend and vote for the Shareholder at that meeting, the representative of the corporation to attend the meeting must produce the appropriate Certificate of Appointment of Representation prior to admission. A form of the certificate may be obtained from the Company’s share registry.

You must sign this form as follows in the spaces provided:

Joint Holding: where the holding is in more than one name all of the holders must sign. Power of Attorney: if signed under a Power of Attorney, you must have already lodged it with the registry, or alternatively, attach a certified photocopy of the Power of Attorney to this Proxy Form when you return it. Companies: a Director can sign jointly with another Director or a Company Secretary. A sole Director who is also a sole Company Secretary can also sign. Please indicate the office held by signing in the appropriate space.

If a representative of the corporation is to attend the Meeting the appropriate "Certificate of Appointment of Representative" should be produced prior to admission. A form of the certificate may be obtained from the Company’s Share Registry.

Proxy Forms (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 deposited at or received by facsimile transmission at the West Perth office of the Company (16 Ord Street, West Perth, WA, 6005, or Facsimile 08 9486 1011 if faxed from within Australia or +618 08 9486 1011 if faxed from outside Australia) not less than 48 hours prior to the time of commencement of the Meeting (WST).

Advance Energy Limited (ASX Code: AVD) - 8 - NOTICE OF ANNUAL GENERAL MEETING