TALIUS GROUP LIMITED - Proxy Solicitation & Information Statement 2014

ADVANCE ENERGY LTD

111 823 762 NOTICE OF GENERAL MEETING

TIME : 10am Western Standard Time DATE : 11 June 2014 PLACE : Suite 4, 16 Ord Street, West Perth, Australia

This Notice of Meeting should be read in its entirety. If Shareholders are in doubt as to how they should vote, they should seek advice from their professional advisers prior to voting.

Should you wish to discuss the matters in this Notice of Meeting please do not hesitate to contact the Company on (+61) (0)8 9429 2900.

CONTENTS PAGE

Business of the Meeting (setting out the proposed resolutions)	3
Explanatory Statement (explaining the proposed resolutions)	12
Glossary	31
Proxy Form	40

IMPORTANT INFORMATION

TIME AND PLACE OF MEETING

Notice is given that the meeting of the Shareholders to which this Notice of Meeting relates will be held at 10am Western Standard Time on 11 June 2014 at Suite 4, 16 Ord Street, West Perth, Western Australia.

YOUR VOTE IS IMPORTANT

The business of the Meeting affects your shareholding and your vote is important.

VOTING ELIGIBILITY

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 Shareholders at 5:00 pm Western Standard Time on 9 June 2014.

VOTING IN PERSON

To vote in person, attend the Meeting at the time, date and place set out above.

VOTING BY PROXY

To vote by proxy, please complete and sign the enclosed Proxy Form and return by the time and in accordance with the instructions set out on the Proxy Form.

In accordance with section 249L of the Corporations Act, members are advised that:

each member has a right to appoint a proxy;
the proxy need not be a member of the Company; and
a member who is entitled to cast 2 or more votes may appoint 2 proxies and may specify the proportion or number of votes each proxy is appointed to exercise. If the member appoints 2 proxies and the appointment does not specify the proportion or number of the member’s votes, then in accordance with section 249X(3) of the Corporations Act, each proxy may exercise one-half of the votes.

New sections 250BB and 250BC of the Corporations Act came into effect on 1 August 2011 and apply to voting by proxy on or after that date. Shareholders and their proxies should be aware of these changes to the Corporations Act, as they will apply to this Meeting. Broadly, the changes mean that:

• if proxy holders vote, they must cast all directed proxies as directed; and

any directed proxies which are not voted will automatically default to the Chair, who must vote the proxies as directed.

Further details on these changes is set out below.

Proxy vote if appointment specifies way to vote

Section 250BB(1) of the Corporations Act provides that an appointment of a proxy may specify the way the proxy is to vote on a particular resolution and, if it does :

the proxy need not vote on a show of hands, but if the proxy does so, the proxy must vote that way (i.e. as directed); and
if the proxy has 2 or more appointments that specify different ways to vote on the resolution – the proxy must not vote on a show of hands; and
if the proxy is the chair of the meeting at which the resolution is voted on – the proxy must vote on a poll, and must vote that way (i.e. as directed); and
if the proxy is not the chair – the proxy need not vote on the poll, but if the proxy does so, the proxy must vote that way (i.e. as directed).

Transfer of non-chair proxy to chair in certain circumstances

Section 250BC of the Corporations Act provides that, if:

an appointment of a proxy specifies the way the proxy is to vote on a particular resolution at a meeting of the Company's members; and
the appointed proxy is not the chair of the meeting; and
at the meeting, a poll is duly demanded on the resolution; and
either of the following applies:
the proxy is not recorded as attending the meeting;
the proxy does not vote on the resolution,

the chair of the meeting is taken, before voting on the resolution closes, to have been appointed as the proxy for the purposes of voting on the resolution at the meeting.

BUSINESS OF THE MEETING

AGENDA

1. RESOLUTION 1 – CONSOLIDATION OF CAPITAL

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

"That subject to Resolutions 2 to 17 being passed, pursuant to section 254H of the Corporations Act and for all other purposes, the issued capital of the Company be consolidated on the basis that every sixty (60) Shares be consolidated into one (1) Share and, where this Consolidation results in a fraction of a Share being held, the Company be authorised to round that fraction up to the nearest whole Share."

Interdependence of Resolutions: The Capital Restructuring will not proceed and this Resolution will not will take effect unless Resolutions 2 to 17 are all passed.

2. RESOLUTION 2 – APPROVAL FOR ISSUE OF SHARES AND OPTIONS TO LISTED CONVERTIBLE NOTEHOLDERS (AVDG)

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

“That subject to Resolution 1 and Resolutions 3 to 17 being passed, for the purposes of ASX listing Rule 7.1 and for all other purposes, approval is given for the Directors to issue up to 151,940,120 Shares and up to 151,940,120 Options (on a post-Consolidation basis) to the Listed Convertible Noteholders as detailed in and otherwise on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion: The Company will disregard any votes cast on this Resolution by any person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if the Resolution is passed. However, the Company need not disregard a vote if it is cast by a person as a 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.

Interdependence of Resolutions: The Capital Restructuring will not proceed and this Resolution will not will take effect unless Resolution 1 and Resolutions 3 to 17 are all passed.

3. RESOLUTION 3 – APPROVAL OF ISSUE OF SHARES AND OPTIONS TO AAG MANAGEMENT PTY LTD IN LIEU OF MANAGEMENT CHARGES, LOAN REPAYMENTS AND EXPENSE REIMBURSEMENTS

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

“That subject to Resolutions 1 and 2 and Resolutions 4 to 17 being passed, for the purposes of ASX Listing Rule 10.11 and for all other purposes, approval is given for the Directors to issue up to 2,598,958 Shares and up to 2,598,958 Options (on a post-Consolidation basis) to AAG Management Pty Ltd (or its nominee) in lieu of management charges, loan repayments and

expense reimbursements on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion: The Company will disregard any votes cast on this Resolution by AAG Management Pty Ltd and any Associate of it. However, the Company need not disregard a vote if the vote 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 the vote 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.

Interdependence of Resolutions: The Capital Restructuring will not proceed and this Resolution will not will take effect unless Resolutions 1 and 2 and Resolutions 4 to 17 are all passed.

4. RESOLUTION 4 – APPROVAL OF ISSUE OF SHARES AND OPTIONS TO GCP CAPITAL PTY LTD IN LIEU OF FEES

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

“That subject to Resolutions 1 to 3 and Resolutions 5 to 17 being passed, for the purposes of ASX Listing Rule 10.11 and for all other purposes, approval is given for the Directors to issue 1,151,042 Shares and up to 1,151,042 Options (on a post-Consolidation basis) to GCP Capital Pty Ltd (or its nominee) in lieu of fees on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion: The Company will disregard any votes cast on this Resolution by GCP Capital Pty Ltd and any Associate of it. However, the Company need not disregard a vote if the vote 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 the vote 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.

Interdependence of Resolutions: The Capital Restructuring will not proceed and this Resolution will not will take effect unless Resolutions 1 to 3 and Resolutions 5 to 17 are all passed.

5. RESOLUTION 5 – APPROVAL OF ISSUE OF SHARES AND OPTIONS TO CUMBERLAND INVESTMENTS PTY LTD IN LIEU OF FEES AND EXPENSE REIMBURSEMENTS

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

“That subject to Resolutions 1 to 4 and Resolutions 6 to 17 being passed, for the purposes of ASX Listing Rule 10.11 and for all other purposes, approval is given for the Directors to issue up to 2,642,354 Shares and up to 2,642,354 Options (on a post-Consolidation basis) to Cumberland Investments Pty Ltd (or its nominee) in lieu of fees and expense reimbursements on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion: The Company will disregard any votes cast on this Resolution by Cumberland Investments Pty Ltd and any Associate of it. However, the Company need not disregard a vote if the vote 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 the vote 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.

Interdependence of Resolutions: The Capital Restructuring will not proceed and this Resolution will not will take effect unless Resolutions 1 to 4 and Resolutions 6 to 17 are all passed.

6. RESOLUTION 6 – APPROVAL OF ISSUE OF SHARES AND OPTIONS TO FAY HOLDINGS PTY LTD IN LIEU OF FEES AND EXPENSE REIMBURSEMENTS

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

“That subject to Resolutions 1 to 5 and Resolutions 7 to 17 being passed, for the purposes of ASX Listing Rule 10.11 and for all other purposes, approval is given for the Directors to allot and issue 1,273,667 Shares and 1,273,667 Options (on a post-Consolidation basis) to Fay Holdings Pty Ltd (or its nominee) in lieu of fees and expense reimbursements on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion: The Company will disregard any votes cast on this Resolution by Fay Holdings Pty Ltd and any Associate of it. However, the Company need not disregard a vote if the vote 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 the vote 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.

Interdependence of Resolutions: The Capital Restructuring will not proceed and this Resolution will not will take effect unless Resolutions 1 to 5 and Resolutions 7 to 17 are all passed.

7. RESOLUTION 7 – APPROVAL OF ISSUE OF SHARES AND OPTIONS TO GONDWANA SECURITIES PTY LTD IN LIEU OF LOAN REPAYMENTS

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

“That subject to Resolutions 1 to 6 and Resolutions 8 to 17 being passed, for the purposes of ASX Listing Rule 10.11 and for all other purposes, approval is given for the Directors to allot and issue 78,125 Shares and 78,125 Options (on a post-Consolidation basis) to Gondwana Securities Pty Ltd (or its nominee) in lieu of fees and expense reimbursements on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion: The Company will disregard any votes cast on this Resolution by Gondwana Securities Pty Ltd and any Associate of it. However, the Company need not disregard a vote if the vote 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 the vote 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.

Interdependence of Resolutions: The Capital Restructuring will not proceed and this Resolution will not will take effect unless Resolutions 1 to 6 and Resolutions 8 to 17 are all passed.

8. RESOLUTION 8 – APPROVAL OF ISSUE OF SHARES AND OPTIONS TO ODIN ENERGY LIMITED IN LIEU OF LOAN REPAYMENTS AND EXPENSE REIMBURSEMENTS

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

“That subject to Resolutions 1 to 7 and Resolutions 9 to 17 being passed, for the purposes of ASX Listing Rule 10.11 and for all other purposes, approval is given for the Directors to issue 1,250,000 Shares and 1,250,000 Options (on a post-Consolidation basis) to Odin Energy Limited (or its nominee) in lieu of fees and expense reimbursements on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion: The Company will disregard any votes cast on this Resolution by Odin Energy Limited and any Associate of it. However, the Company need not disregard a vote if the vote 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 the vote 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.

Interdependence of Resolutions: The Capital Restructuring will not proceed and this Resolution will not will take effect unless Resolutions 1 to 7 and Resolutions 9 to 17 are all passed.

9. RESOLUTION 9 – APPROVAL OF ISSUE OF SHARES AND OPTIONS TO SEALBLUE INVESTMENTS PTY LTD IN LIEU OF LOAN REPAYMENTS

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

“That subject to Resolutions 1 to 8 and Resolutions 10 to 17 being passed, for the purposes of ASX Listing Rule 10.11 and for all other purposes, approval is given for the Directors to issue 156,250 Shares and 156,250 Options (on a post-Consolidation basis) to Sealblue Investments Pty Ltd (or its nominee) in lieu of fees and expense reimbursements on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion: The Company will disregard any votes cast on this Resolution by Sealblue Investments Pty Ltd and any Associate of it. However, the Company need not disregard a vote if the vote 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 the vote 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.

Interdependence of Resolutions: The Capital Restructuring will not proceed and this Resolution will not will take effect unless Resolutions 1 to 8 and Resolutions 10 to 17 are all passed.

10. RESOLUTION 10 – APPROVAL OF ISSUE OF SHARES AND OPTIONS TO GREENCODE PTY LTD IN LIEU OF FEES AND LOAN REPAYMENTS

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

“That subject to Resolutions 1 to 9 and Resolutions 11 to 17 being passed, for the purposes of ASX Listing Rule 10.11 and for all other purposes, approval is given for the Directors to issue 569,792 Shares and 569,792 Options (on a post-Consolidation basis) to Greencode Pty Ltd (or its nominee) in lieu of fees and expense reimbursements on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion: The Company will disregard any votes cast on this Resolution by Greencode Pty Ltd and any Associate of it. However, the Company need not disregard a vote if the vote 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 the vote 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.

Interdependence of Resolutions: The Capital Restructuring will not proceed and this Resolution will not will take effect unless Resolutions 1 to 9 and Resolutions 11 to 17 are all passed.

11. RESOLUTION 11 – APPROVAL OF ISSUE OF SHARES AND OPTIONS TO BLAZE ASSET PTY LTD IN LIEU OF LOAN REPAYMENTS

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

“That subject to Resolutions 1 to 10 and Resolutions 12 to 17 being passed, for the purposes of ASX Listing Rule 10.11 and for all other purposes, approval is given for the Directors to issue 304,354 Shares and 304,354 Options (on a post-Consolidation basis) to Blaze Asset Pty Ltd (or its nominee) in lieu of fees and expense reimbursements on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion: The Company will disregard any votes cast on this Resolution by Blaze Asset Pty Ltd and any Associate of it. However, the Company need not disregard a vote if the vote 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 the vote 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.

Interdependence of Resolutions: The Capital Restructuring will not proceed and this Resolution will not will take effect unless Resolutions 1 to 10 and Resolutions 12 to 17 are all passed.

12. RESOLUTION 12 - APPROVAL OF ISSUE OF SHARES AND OPTIONS IN LIEU OF FEES, LOAN REPAYMENTS AND EXPENSE REIMBURSEMENTS

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

“That subject to Resolution s 1 to 11 and Resolutions 13 to 17 being passed, for the purposes of ASX Listing Rule 7.1 and for all other purposes, approval is given for the Directors to issue 1,326,833 Shares and 1,326,833 Options (on a post-Consolidation basis) to the parties detailed in the Explanatory Statement, and otherwise on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion : The Company will disregard any votes cast on this Resolution by any person who may participate in the proposed issue and a person who might obtain a benefit and any associates of those persons, except a benefit solely in the capacity of a holder of ordinary securities, if the Resolution is passed. However, the Company need not disregard a vote if it is cast by a person as a 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.

Interdependence of Resolutions: The Capital Restructuring will not proceed and this Resolution will not will take effect unless Resolutions 1 to 11 and Resolutions 13 to 17 are all passed.

13. RESOLUTION 13 - ISSUE OF SHARES UPON CONVERSION OF TRANCHE 1 UNLISTED CONVERTIBLE NOTES

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

“That subject to Resolution s 1 to 12 and Resolutions 14 to 17 being passed, for the purposes of ASX Listing Rule 7.1 and for all other purposes, approval is given for the Company to issue up to 293,333,334 Shares upon the conversion of the Tranche 1 Convertible Notes on the terms and conditions set out in the Explanatory Statement.”

Interdependence of Resolutions: The Capital Restructuring will not proceed and this Resolution will not will take effect unless Resolutions 1 to 12 and Resolutions 14 to 17 are all passed.

14. RESOLUTION 14 – ISSUE OF SHARES UPON CONVERSION OF TRANCHE 2 UNLISTED CONVERTIBLE NOTES

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

“That subject to Resolution s 1 to 13 and Resolutions 15 to 17 being passed, for the purposes of ASX Listing Rule 7.1 and for all other purposes, approval is given for the Company to issue up to 550,000,000 Shares upon the

conversion of the Tranche 2 Convertible Notes on the terms and conditions set out in the Explanatory Statement.”

Interdependence of Resolutions: The Capital Restructuring will not proceed and this Resolution will not will take effect unless Resolutions 1 to 13 and Resolutions 15 to 17 are all passed.

15. RESOLUTION 15 – PLACEMENT OF SHARES

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

“That subject to Resolution s 1 to 14 and Resolutions 16 and 17 being passed, for the purposes of ASX Listing Rule 7.1 and for all other purposes, approval is given for the Company to raise up to $3,000,000 through the issue of Shares at an issue price of not less than $0.002 per Share (on a post Consolidation basis) on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion : The Company will disregard any votes cast on this Resolution by any person who may participate in the proposed issue and any person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if this Resolution is passed and any associate of those persons. However the Company need not disregard a vote 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.

Interdependence of Resolutions: The Capital Restructuring will not proceed and this Resolution will not will take effect unless Resolutions 1 to 14 and Resolutions 16 and 17 are all passed.

16. RESOLUTION 16 – ISSUE OF SHARES TO RELATED PARTY ON CONVERSION OF TRANCHE 2 CONVERTIBLE NOTES – MR RANKO MATIC

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

“That subject to Resolution s 1 to 15 and Resolution 17 being passed, for the purposes of ASX Listing Rule 10.11 and for all other purposes, approval is given for the Company to issue up to 25,000,000 Shares to Mr Ranko Matic (or his nominee or associates) upon the conversion of his Tranche 2 Convertible Notes on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion Statement : The Company will disregard any votes cast on this Resolution by Mr Ranko Matic (and his nominee) and any of their associates.

However, the Company need not disregard a vote if it is cast by a person as a 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.

Interdependence of Resolutions: The Capital Restructuring will not proceed and this Resolution will not will take effect unless Resolutions 1 to 15 and Resolution 17 are all passed.

17. RESOLUTION 17 – ISSUE OF SHARES TO RELATED PARTY ON CONVERSION OF TRANCHE 1 CONVERTIBLE NOTES AND TRANCHE 2 CONVERTIBLE NOTES – MR MICHAEL DAVY

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

“That subject to Resolution s 1 to 16 being passed, for the purposes of ASX Listing Rule 10.11 and for all other purposes, approval is given for the Company to issue up to 15,666,667 Shares to Mr Michael Davy (or his nominee or associates) upon the conversion of his Tranche 1 Convertible Notes and Tranche 2 Convertible Notes to on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion Statement : The Company will disregard any votes cast on this Resolution by Mr Michael Davy (and his nominee) and any of their associates. However, the Company need not disregard a vote if it is cast by a person as a 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.

Interdependence of Resolutions: The Capital Restructuring will not proceed and this Resolution will not will take effect unless Resolutions 1 to 16 are all passed.

18. RESOLUTION 18 – ELECTION OF DIRECTOR – MR RANKO MATIC

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

“That, for the purpose of clause 6.3(g) of the Constitution, Mr Ranko Matic a Director who was appointed by the Board on 7 April 2014, retires, and being eligible, is elected as a Director.”

19. RESOLUTION 19 – ELECTION OF DIRECTOR – MR MICHAEL DAVY

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

“That, for the purpose of clause 6.3(g) of the Constitution, Mr Michael Davy a Director who was appointed by the Board on 7 April 2014, retires, and being eligible, is elected as a Director.”

20. RESOLUTION 20 – CHANGE OF COMPANY STATUS – LTD TO NL

To consider and, if thought fit, to pass the following resolution as a special resolution :

“That subject to Resolution s 21 and 22 being passed, for the purposes of section 162 of the Corporations Act and for all other purposes, approval is given to change the status of the Company from a public company limited by shares to a no liability company.”

Interdependence of Resolutions: This Resolution will not will take effect unless Resolutions 21 and 22 are both passed.

21. RESOLUTION 21 – REPLACEMENT OF CONSTITUTION

To consider and, if thought fit, to pass the following resolution as a special resolution :

“That, subject to the passing of Resolutions 20 and 22 and the change of company status becoming effective in the manner set out in section 164(5) of the Corporations Act, for the purposes of section 136(2) of the Corporations Act and for all other purposes, approval is given for the Company to repeal its existing Constitution and adopt a new constitution in its place in the form as signed by the chairman of the Meeting for identification purposes.”

Interdependence of Resolutions: This Resolution will not will take effect unless Resolutions 20 and 22 are both passed.

22. RESOLUTION 22 – CHANGE OF COMPANY NAME

To consider and, if thought fit, to pass the following resolution as a special resolution :

“That subject to Resolutions 20 and 21 being passed and the change in status of the Company to a no liability company, for the purposes of section 157(1)(a) of the Corporations Act and for all other purposes, approval is given for the name of the Company to be changed to Antilles Oil and Gas NL.”

Interdependence of Resolutions: This Resolution will not will take effect unless Resolutions 20 and 21 are both passed.

DATED: 9 MAY 2014

BY ORDER OF THE BOARD

DAVID BALLANTYNE COMPANY SECRETARY

EXPLANATORY STATEMENT

This Explanatory Statement has been prepared to provide information which the Directors believe to be material to Shareholders in deciding whether or not to pass the Resolutions which are the subject of the business of the Meeting.

1. OVERVIEW OF MEETING

1.1 Capital Restructuring (Resolutions 1 to 17)

Resolutions 1 to 17 together seek approval for a significant capital restructuring of the Company ( Capital Restructuring ).

An overview of the approvals being sought in relation to the Capital Restructuring at this Meeting is set out below:

(a) Debt for equity conversions

The Company is seeking Shareholder approval for:

(i) a consolidation of the capital of the Company on a one (1) for sixty (60) basis which will result in the number of Shares on issue being reduced from 1,342,333,028 to 22,372,217 (subject to rounding) ( Consolidation );
(ii) various debt for equity conversions including:
(A) the issue of up to 151,940,120 Shares (on a postConsolidation basis) and 151,940,120 Options in respect of the conversion of all of the existing Listed Convertible Notes of the Company ( Noteholder Conversion ). Approval of the Noteholder Conversion will enable the Company to avoid the need to make a cash payment of up to approximately $6.63 million on the Maturity Date of the Listed Convertible Notes, which in the circumstances is likely to be required in order to redeem the Listed Convertible Notes;
(B) the issue up to 9,156,396 Shares (on a postConsolidation basis) and 9,156,396 Options to various related party creditors in order to satisfy $481,466 in amounts outstanding; and
(C) the issue up to 1,326,833 Shares (on a postConsolidation basis) and 1,326,833 Options to consultants and creditors to satisfy $105,647 in amounts outstanding.

(b) $1.5 million debt finance - Conversion of Unlisted Convertible Notes

The Company has entered into an agreement to secure up to $1.5 million in additional debt finance through the issue of new Unlisted Convertible Notes. Approval is being sought for the issue of up to 843,333,334 Shares (on a post-Consolidation basis) upon the conversion of these Unlisted Convertible Notes.

It is expected that the Unlisted Convertible Notes will be converted as soon as practicable following Shareholder approval for the issue.

(c) Proposed $3 million capital raising

The Company proposes to raise up to $3,000,000 through a placement of up to 1,500,000,000 Shares at an issue price of not less than $0.002 per Share (on a post-Consolidation basis) ( Placement ). Shareholder approval is being sought for the Placement.

If implemented, the Capital Restructuring should clear all existing debts of the Company and enable the Company to have sufficient working capital to pursue its oil and gas interests.

The Capital Restructuring will not proceed and will not will take effect unless each of Resolutions 1 to 17 is passed by Shareholders.

If the Capital Restructuring does not proceed, the Company does not have any realistic possibility of repaying all the Listed Convertible Noteholders as and when the Listed Convertible Notes fall due for repayment at the Maturity Date on 31 December 2014. As a consequence it is highly likely that the Company would be forced into administration.

Additionally, if the Capital Restructuring is not approved by Shareholders it will trigger an automatic default event under the terms and conditions of the Unlisted Convertible Notes (refer to section 6 of the Explanatory Statement) ( Default Event ). Upon the occurrence of a Default Event the holders of the Unlisted Convertible Notes may instruct the Unlisted Convertible Note Trustee to demand the immediate repayment by the Company of the face value of the Unlisted Convertible Notes issued ($400,000 as at the date of this Notice) or commence proceedings to wind up the Company. In the circumstances it is likely that a Default Event will result in the Company being wound up.

1.2 Election of Directors (Resolutions 18 and 19)

Resolutions 18 and 19 relate to the election of Mr Ranko Matic and Mr Michael Davy as Directors of the Company.

1.3 Change of company status and name and adoption of new constitution (Resolutions 20-22)

Shareholder approval is being sought for the Company to change its status from a public company limited by shares to a no liability company. A no liability company structure is a form of corporate vehicle traditionally used by mining enterprises.

The Directors may wish to issue partly paid shares in the capital of the Company in the future to incentivise senior management.

A no liability company structure would enable the Directors to issue partly paid shares to senior management in the future without exposing the recipients of the partly paid shares to liability for the unpaid amount. The holder of a share in a no liability company has no obligation to pay any calls in respect of the share or to make any contribution to the debts and liabilities of the company. The holder of shares cannot therefore be sued for any calls or contributions.

In connection with the proposed change of status of the Company approval is also being sought for the adoption of a new constitution suitable for a no liability company and for the Company to change its name to Antilles Oil and Gas NL .

1.4 Strategic Review and New Opportunities

The Company’s current assets comprise a 50% working interest in the Greene Prospect within the Mother Lode III project area in the Permian Basin in Texas, as well as joint ownership of extensive seismic survey data over all the Mother Lode III project area. The operator of the Greene Prospect is Endeavor Energy Resources, LLP and the Roman 27-1 well was successfully completed by them as a producer in late 2010.

The seismic data points to further possible wells on the Greene Prospect. This was backed up by a 2009 independent geological assessment of the prospect (as announced on ASX on 31 July 2009). The seismic data also covers a further seven prospects, similar to the Greene Prospect, and the Company will assess leasing opportunities over the seismic data area in the coming months as part of a strategic review.

On the completion of the Capital Restructuring, the Company has a number of options available. It can either (a) buy back into the Roman 27-1 well, with appropriate penalties, (b) propose a sole risk work programme and/or an additional well, leaving the operator with the option of either participating or allowing the Company to proceed on its own, or (c) lease additional land under the total seismic controlled area of 175 square miles with a view to developing additional drill targets.

All of the above options will be considered by the Company as part of a strategic review. However, until the Capital Restructuring is complete, the Board does not have the resources (financial or technical to complete this review). The results of the review will be announced to ASX in due course.

The Company is also actively assessing new opportunities in the oil and gas sector. As and when developments unfold on these opportunities, announcements will be made to ASX in accordance with the Company’s continuous disclosure obligations.

2. RESOLUTION 1 – CONSOLIDATION OF CAPITAL

2.1 Background

If Resolution 1 is passed and excluding any Shares issued pursuant to the other Resolutions, the number of Shares on issue will be reduced from 1,342,333,028 to 22,372,217 (subject to rounding) ( Consolidation ).

2.2 Legal requirements

Section 254H of the Corporations Act provides that a company may, by resolution passed in a general meeting, convert all or any of its Shares into a larger or smaller number.

2.3 Fractional entitlements

Not all Shareholders will hold that number of Shares which can be evenly divided by 60. Where a fractional entitlement occurs, the Company will round that fraction up to the nearest whole Share.

2.4 Taxation

It is not considered that any taxation implications will exist for Shareholders arising from the Consolidation. However, Shareholders are advised to seek their own tax advice on the effect of the Consolidation and that the Company does not accept any responsibility for the individual taxation implications arising from the Consolidation.

2.5 Holding statements

From the date of the Consolidation, all holding statements for Shares will cease to have any effect, except as evidence of entitlement to a certain number of Shares on a post-Consolidation basis.

After the Consolidation is effected, the Company will arrange for new holding statements for Shares to be issued to holders of those Shares.

It is the responsibility of each Shareholder to check the number of Shares held prior to disposal or exercise (as the case may be).

2.6 Effect on capital structure

The effect which the Consolidation will have on the Company’s capital structure is set out in the table below.

Capital Structure		Shares	Options		Convertible	Convertible	Convertible
							notes
			nil				Listed
					Convertible
					Notes*
				convertible to
Existing Shares, Options and Convertible Notes on issue					a maximum
					of
		1,342,333,028
				9,116,406,250
					Shares and
				9,116,406,250
						Options



Post 1 for 60 Consolidation of Shares(Resolution 1)			nil			nil
	22,372,217 (0.88% of share capital)****


Resolution 2- issue of Shares and Options upon conversion of all Listed Convertible Notes
			151,940,120			nil
	151,940,120 (6.01% of share capital)

Resolutions 3 to 12 – issue of Shares and Options in lieu of various amounts outstanding
	11,351,375 (0.45% of share capital)		11,351,375			nil

Resolutions 13 and 14 – Issue of Shares upon conversion of Unlisted Convertible Notes *
	843,333,333 (33.35% of share capital)	nil	nil


Resolution 15 - $3m Placement**	1,500,000,000 (59.31% of share capital)	nil	nil

Total after completion of all Resolutions	2,528,997,045
		163,291,495	nil


Total after completion of all Resolutions on a fully diluted basis***	2,692,288,540
		nil	nil

Assumes conversion of all Unlisted Convertible Notes.

** Assumes Placement is fully subscribed.

*** Assumes conversion of all Unlisted Convertible Notes and exercise of all Options.

**** Percentages assume all Resolutions are approved and completed and the Placement is fully subscribed.

* As soon as practicable following the Consolidation the Listed Convertible Notes will be converted into Shares and Options as set out in paragraph 3.1 below. If the Consolidation does not proceed, the terms of the Listed Convertible Notes will not be changed.

The Company also has 9 convertible preference shares on issue. Each convertible preference share will automatically convert into 1,000,000 Shares (on a pre-Consolidation basis) if the relevant milestones are achieved. The terms and conditions of the convertible preference shares are set out in the Company’s prospectus dated 17 May 2006. If the Consolidation is approved, the number of Shares into which the convertible preference shares will convert (if the relevant milestones are achieved), will also be consolidated on a 60 for 1 basis.

2.7 Indicative timetable

If Resolution 1 is passed, the Consolidation will take effect in accordance with the following timetable (as set out in Appendix 7A (paragraph 8) of the ASX Listing Rules):

Action	Date
Company announces Consolidation and dispatches Notice of Meeting.
	11 May 2014

Company tells ASX that Shareholders have approved the Consolidation.
	11 June 2014

Last day for pre-Consolidation trading.	12 June 2014
Post-Consolidation trading starts on a deferred settlement basis.
	13 June 2014

Last day for Company to register transfers on a pre- Consolidation basis.
	17 June 2014

First day for Company to send notice to each holder of the change in their details of holdings.
	18 June 2014
First day for the Company to register Shares on a post- Consolidation basis and first day for issue of holding statements.

Action	Date
Dispatch date. Deferred settlement market ends.
Last day for Shares to be entered into holders’ Security holdings.	24 June 2014
Last day for the Company to send notice to each holder of the change in their details of holdings.

3. RESOLUTION 2 – APPROVAL FOR ISSUE OF SHARES AND OPTIONS TO LISTED CONVERTIBLE NOTEHOLDERS (AVDG)

3.1 General

Resolution 2 seeks Shareholder approval for the issue of up to 151,940,120 Shares at an issue price of $0.048 per Share (on a post Consolidation basis) or $0.008 per Share on a pre-Consolidation basis, together with one (1) free attaching Option for every Share issued for the conversion of the Listed Convertible Notes held by existing Listed Convertible Noteholders ( Noteholder Conversion ).

Subject to the Shareholder approval for the Capital Restructuring, the existing Listed Convertible Noteholders are being asked to approve an amendment to the Terms and Conditions of the Listed Convertible Notes (set out in the Listed Convertible Noteholder notice of meeting announced on 6 May 2014) which will enable the Noteholder Conversion to be implemented.

Approval of the Noteholder Conversion will enable the Company to avoid the need to make a cash payment of up to approximately $6.63 million on the Maturity Date of the Listed Convertible Notes, which in the circumstances is likely to be required in order to redeem the Listed Convertible Notes.

The Directors have considered various alternative methods of dealing with the Listed Convertible Notes on the Maturity Date. In the circumstances, the Company does not have any realistic possibility of repaying the Listed Convertible Notes. As such, if Resolution 2 is not approved, it is highly likely that the Company would be forced into administration. The Noteholder Conversion is in the Director's view in the best interests of the Company.

It is anticipated that the Noteholder Conversion will occur at the same time that the Unlisted Convertible Notes all convert into Shares, which will be as soon as practicable following this meeting.

3.2 ASX Listing Rule 7.1

ASX Listing Rule 7.1 provides that a company must not, subject to specified exceptions, issue or agree to issue more equity securities during any 12 month period than that amount which represents 15% of the number of fully paid ordinary securities on issue at the commencement of that 12 month period.

The effect of Resolution 2 will be to allow the Company to issue the Shares and Options pursuant to the Noteholder Conversion during the period of 3 months after the Meeting (or a longer period, if allowed by ASX), without using the Company’s 15% annual placement capacity.

3.3 Technical information required by ASX Listing Rule 7.1

Pursuant to and in accordance with ASX Listing Rule 7.3, the following information is provided in relation to the Noteholder Conversion:

(a) the maximum number of Shares to be issued is 151,940,120 and the maximum number of Options to be issued is 151,940,120 (in each case, on a post Consolidation basis);
(b) the Shares and Options will be issued no later than 3 months after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules) and it is intended that issue of the Shares and Options will occur on the same date;
(c) the issue price will be $0.048 per Share and nil per Option as the Options will be issued free attaching with the Shares on the basis of one Option for each Share issued;
(d) the Shares and Options will be issued to the Listed Convertible Noteholders. None of the Listed Convertible Noteholders are related parties of the Company;
(e) the Shares issued will be fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company’s existing Shares;
(f) the Options will be issued on the terms and conditions set out in Schedule 1; and
(g) no funds will be raised from the Noteholder Conversion.

4. RESOLUTIONS 3 TO 11 – APPROVAL OF ISSUE OF SHARES AND OPTIONS TO RELATED PARTIES IN LIEU OF MANAGEMENT CHARGES, LOAN REPAYMENTS AND EXPENSE REIMBURSEMENTS

4.1 General

As at the date of this Notice, the Company has a total of $481,466 in amounts outstanding to Related Party creditors as follows:

(a) $124,750 to AAG Management Pty Ltd in respect of management charges, loan repayments and expense reimbursements;
(b) $55,250 to GCP Capital Pty Ltd in respect of fees for services rendered;
(c) $126,833 to Cumberland Investments Pty Ltd in respect of fees for services rendered and expense reimbursements;
(d) $61,136 to Fay Holdings Pty Ltd in respect of fees for services rendered and expense reimbursements;
(e)
$3,750 to Gondwana Securities Pty Ltd in lieu of loan repayments;
(f) $60,000 to Odin Energy Limited in lieu of loan repayments respect of fees and expense reimbursements;
(g) $7,500 to Sealblue Investments Pty Ltd in lieu of loan repayments;

(h) $27,350 to Greencode Pty Ltd in respect of fees for services rendered, loan repayments and expense reimbursements; and
(i) $14,609 to Blaze Asset Pty Ltd in lieu of loan repayments,
(together the above parties are referred to as the Related Party Creditors and the amounts owed by the Company to the Related Party Creditors the Related Party Debts ).

In order to discharge the Related Party Debts and maintain a greater proportion of the Company’s cash, the Company and Directors have agreed, subject to obtaining Shareholder approval, to issue Shares and Options to the Related Party Creditors.

In this regard, the Company has agreed, subject to obtaining Shareholder approval, to issue up to 9,156,396 Shares (on a post-Consolidation basis) ( Related Party Shares ) and 9,156,396 Options ( Related Party Options ) (together the Related Party Shares and the Related Party Options the Related Party Securities ) to the Related Party Creditors in order to satisfy the Related Party Debts as set out in Schedule 3.

For a public company, or an entity that the public company controls, to give a financial benefit to a related party of the public company, the public company or entity must:

(a) obtain the approval of the public company’s members in the manner set out in sections 217 to 227 of the Corporations Act; and
(b) give the benefit within 15 months following such approval,

unless the giving of the financial benefit falls within an exception set out in sections 210 to 216 of the Corporations Act.

The issue of the Related Party Securities to the Related Party Creditors constitutes giving a financial benefit.

The Directors consider that the conversion of the Related Party Debt to equity is on arm’s length terms and that Shareholder approval pursuant to Chapter 2E of the Corporations Act is not required in respect of the grant of Related Party Securities because the ratio upon which the Related Party Securities to be issued upon conversion of the debt (calculated at $0.048 per Share) reflects a significant discount to the value of the Related Party Debt.

In addition, ASX Listing Rule 10.11 also requires shareholder approval to be obtained where an entity issues, or agrees to issue, securities to a related party, or a person whose relationship with the entity or a related party is, in ASX’s opinion, such that approval should be obtained unless an exception in ASX Listing Rule 10.12 applies.

It is the view of the Company that the exceptions set out in ASX Listing Rule 10.12 do not apply in the current circumstances. Accordingly, Shareholder approval is sought for the grant of Related Party Options to the Related Parties.

4.2 Shareholder Approval (Listing Rule 10.11)

Pursuant to and in accordance with ASX Listing Rule 10.13, the following information is provided in relation to the proposed issue of Related Party Securities:

(a) the Related Parties are:
(i) AAG Management Pty Ltd which is a Related Party by virtue of being an entity controlled by Anthony Short (a Director of the Company);
(ii) GCP Capital Pty Ltd which is a Related Party of the Company by virtue of being an entity controlled by Anthony Short (a Director of the Company);
(iii) Cumberland Investments Pty Ltd which is a Related Party of the Company by virtue of being an entity controlled by Anthony Short (a Director of the Company);
(iv) Fay Holdings Pty Ltd which is a Related Party of the Company by virtue of being an entity controlled by Anthony Short (a Director of the Company);
(v) Gondwana Securities Pty Ltd which is a Related Party of the Company by virtue of being an entity controlled by Anthony Short (a Director of the Company);
(vi) Odin Energy Limited which is a Related Party of the Company by virtue of being an entity controlled by Anthony Short and Roland Berzins (Directors of the Company);
(vii) Sealblue Investments Pty Ltd which is a Related Party of the Company by virtue of being an entity controlled by Roland Berzins (a Director of the Company);
(viii) Greencode Pty Ltd which is a Related Party of the Company by virtue of being an entity controlled by Roland Berzins (a Director of the Company); and
(ix) Blaze Asset Pty Ltd which is a Related Party of the Company by virtue of being an entity controlled by Anthony Short, Igor Soshynsky and Kip Plankinton (Directors of the Company);
(b) the maximum number of Related Party Securities to be issued (being the nature of the financial benefit being provided) to the Related Parties is:

Related Party	Number of Shares to be	Number of Options to be issued
	issued
	(post-Consolidation
	basis)
AAG Management Pty Ltd
	2,598,958	2,598,958

GCP Capital Pty Ltd
	1,151,042	1,151,042

Cumberland Investments Pty Ltd
	2,642,354	2,642,354

Fay Holdings Pty Ltd
	1,273,667	1,273,667

Gondwana Securities PtyLtd
	78,125	78,125

Odin Energy Limited
	1,250,000	1,250,000

Sealblue Investments Pty Ltd
	156,250	156,250

Greencode Pty Ltd
	569,792	569,792

Blaze Asset PtyLtd	304,354	304,354
TOTAL	10,024,542	10,024,542

(c) the Related Party Securities will be Issued to the Related Party Creditors no later than 1 month after the date of the Meeting (or such later date as permitted by any ASX waiver or modification of the ASX Listing Rules) and it is anticipated the Related Party Securities will be issued on one date;
(d) the Related Party Securities will be granted for nil cash consideration, accordingly no funds will be raised; and
(e) the Shares issued will be fully paid ordinary shares in the capital of the Company issued on a post-Consolidation basis on the same terms and conditions as the Company’s existing Shares. The terms and conditions of the Options are set out in Schedule 1.

Approval pursuant to ASX Listing Rule 7.1 is not required in order to issue the Related Party Securities to the Related Parties as approval is being obtained under ASX Listing Rule 10.11. Accordingly, the issue of Related Party Securities to the Related Parties will not be included in the 15% calculation of the Company’s annual placement capacity pursuant to ASX Listing Rule 7.1.

5. RESOLUTION 12 - APPROVAL OF ISSUE OF SHARES AND OPTIONS IN LIEU OF FEES, LOAN REPAYMENTS AND EXPENSE REIMBURSEMENTS

5.1 General

The Company proposes to issue up to 1,326,833 Shares and 1,326,833 Options to consultants and creditors or their nominees, for nil consideration in lieu of $63,688 worth of outstanding debts owing to the parties below as follows:

Name	Consulting Fees, Loans & Creditors ($)	Number of Shares to be issued	Number of Options to be issued
Energy Capital Partners	$18,563	386,729	386,729
Pinewood Trust	$7,792	162,333	162,333

Spartan Nominees Pty Ltd	$37,333	777,777	777,777
TOTAL	$63,688	1,326,833	1,326,833

(the parties named in the table above together the Non-Related Party Creditors )

Each of the parties set out above are owed money by the Company in return for historical corporate consulting fees.

Resolution 12 seeks Shareholder approval pursuant to Listing Rule 7.1 for the issue of up to 1,326,833 Shares and 1,326,833 Options to the Non-Related Party Creditors.

5.2 Listing Rule 7.1

Listing Rule 7.1 provides, subject to certain exceptions, that Shareholder approval is required 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.

As the issue of the Shares to the Non-Related Party Creditors under Resolution 10 exceeds this 15% threshold and none of the exceptions in Listing Rule 7.2 apply, Shareholder approval is sought in accordance with Listing Rule 7.1.

The effect of Resolution 12 will be to allow the Company to issue up to 1,326,833 Shares and 1,326,833 Options to the Non-Related Party Creditors, without using the Company’s 15% annual placement capacity set out in ASX Listing Rule 7.1 and the additional 10% annual capacity set out in Listing Rule 7.1A.

5.3 Specific information required by Listing Rule 7.3

Pursuant to and in accordance with ASX Listing Rule 7.3, the following information is provided in relation to the issue of Shares and Options contemplated by Resolution 12:

(a) the maximum number of Shares to be issued is 1,326,833 and the maximum number of Options to be issued is 1,326,833;
(b) the Shares and Options will be issued no later than 3 months after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules) and it is intended that issue of the Shares and Options will occur on the same date;
(c) the Shares and Options will be issued for nil cash consideration in satisfaction of amounts owing by the Company to the Non-Related Party Creditors as set out in section 5.1 above;
(d) the Shares and Options will be issued to Non-Related Party Creditors who are not related parties of the Company;
(e) the Shares issued will be fully paid ordinary shares in the capital of the Company issued on a post-Consolidation basis on the same terms and conditions as the Company’s existing Shares. The terms and conditions of the Options are set out in Schedule 1; and

(f) no funds will be raised from the issue as the Shares and Options are being issued in satisfaction for amounts owing by the Company to the Non-Related party Creditors.

6. RESOLUTIONS 13 AND 14 - APPROVAL FOR ISSUE OF SHARES UPON CONVERSION OF UNLISTED CONVERTIBLE NOTES

6.1 Background

Resolutions 13 and 14 seek Shareholder approval for the issue of up to:

(a) 293,333,334 Shares upon the conversion of the Tranche 1 Convertible Notes with an aggregate face value of $400,000 plus interest of $40,000 (convertible at $0.0015 per Share on a post –Consolidation basis); and
(b) 550,000,000 Shares upon the conversion of the Tranche 2 Convertible Notes with an aggregate face value of $1,100,000 (convertible at $0.002 per Share on a post –Consolidation basis),

(the Unlisted Convertible Notes )

to Unlisted Noteholders in accordance with the terms of convertible note trust deed dated 4 April 2014 between the Company and Nordwand Investments Pty Ltd (ACN 138 073 999) ( Unlisted Convertible Note Trustee ) (the Unlisted Convertible Note Conversion ).

The terms and conditions of the Unlisted Convertible Notes are set out in Schedule 2.

The Unlisted Convertible Notes are effectively debt instruments at present and may not be converted into Shares until Resolutions 13 and 14 are approved by Shareholders.

The Tranche 1 Unlisted Notes have already been issued. It is expected that the Tranche 2 Unlisted Notes will be issued either immediately prior to the meeting or soon thereafter (subject, of course, to securing investors to subscribe for these Tranche 2 Unlisted Notes). ASX Listing Rule 7.1 provides that a company must not, subject to specified exceptions, issue or agree to issue more equity securities during any 12 month period than that amount which represents 15% of the number of fully paid ordinary securities on issue at the commencement of that 12 month period.

The effect of Resolutions 13 and 14 will be to allow the Directors to issue the Shares upon the conversion of the Unlisted Convertible Notes pursuant to the Unlisted Convertible Note Facility during the period of 3 months after the Meeting (or a longer period, if allowed by ASX), without using the Company’s 15% annual placement capacity.

6.2 Technical information required by ASX Listing Rule 7.1

Pursuant to and in accordance with ASX Listing Rule 7.3, the following information is provided in relation to the Unlisted Convertible Note Conversion:

(a) the maximum number of Shares to be issued upon conversion of the Unlisted Convertible Notes is 843,333,333 as follows:
(i) ( Tranche 1 Convertible Notes ): 293,333,33 Shares (on a postConsolidation basis) in respect of the conversion of Tranche 1

Convertible Notes with an aggregate face value of $400,000 plus $40,000 interest; and

(ii) ( Tranche 2 Convertible Notes ): 550,000,000 Shares (on a postConsolidation basis) in respect of the conversion of Tranche 2 Convertible Notes with an aggregate face value of $1,100,000;
(b) the Shares will be issued no later than 3 months after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules) and it is intended that issue will occur on the same date. However, the Company notes that the Unlisted Convertible Notes will all be converted into Shares as soon as practicable after the date of the meeting;
(c) the issue price of the Shares will be:
(i) $0.0015 per Share in respect of the conversion of the Tranche 1 Convertible Notes; and
(ii) $0.002 per Share in respect of the conversion of the Tranche 2 Convertible Notes;
(d) the Shares will be issued to holders of the Unlisted Convertible Notes who will be parties nominated by the Unlisted Convertible Note Trustee and, other than as set out in Resolutions 16 and 17, none of whom will be related parties of the Company; and

(e) the funds raised from the Unlisted Convertible Note have or will be used as follows:

	as follows:
Item	Proceeds of the Placement	Amount	%
1.	Paying out existing creditors of the Company	$450,000	30%
2.	Strategic review of the Company’s 50% interest in the Mother Lode III project in the Permian Basin in Texas, United States	$250,000	16%
3.	Seismic and/or drilling a well on the Mother Lode III project	$500,000*	33%
4.	Review of and acquisition costs associated with new opportunities	$150,000	10%
5.	Expenses of the issue of the Unlisted Convertible Notes	$30,000	2%
6.	Working capital	$270,000	18%
	Total	$1,500,000	100%

Notes:

The above table is a statement of current intentions. As with any budget, intervening events and new circumstances have the potential to affect the manner in which the funds are ultimately applied. The Board reserves the right to alter the way funds are applied on this basis.

No funds will be raised from the issue of Shares upon the conversion of the unlisted Convertible Notes.

Assumes Endeavor Energy Resources, LLP participates for their 50% interest.

7. RESOLUTION 15 – SHARE PLACEMENT

7.1 General

Resolution 15 seeks Shareholder approval for the issue of up to 1,500,000,000 Shares at an issue price of not less than $0.002 per Share (on a postConsolidation basis) to raise up to $3,000,000 ( Placement ).

The Company has not yet engaged a broker for the Placement but anticipates doing so. Any broker engaged in respect of the Placement will be engaged on standard market rates and will be fully disclosed in the prospectus for the Placement.

A summary of ASX Listing Rule 7.1 is set out in section 5.2 above.

The effect of Resolution 15 will be to allow the Company to issue the Shares pursuant to the Placement during the period of 3 months after the Meeting (or a longer period, if allowed by ASX), without using the Company’s 15% annual placement capacity.

7.2 Technical information required by ASX Listing Rule 7.1

Pursuant to and in accordance with ASX Listing Rule 7.3, the following information is provided in relation to the Placement:

(a) the maximum number of Shares to be issued is 1,500,000,000 Shares (on a post-Consolidation basis);
(b) the Shares will be issued no later than 3 months after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules);
(c) the issue price will be not less than $0.002 per Share (on a postConsolidation basis);
(d) the Directors and proposed broker of the Placement will determine to whom the Shares will be issued. Other than as set out in Resolutions 14 and 15, the persons to whom Shares will be issued will not be related parties of the Company;
(e) the Shares issued will be fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company’s existing Shares; and
(f) the Company intends to use the funds raised from the Placement as follows:

Item	Proceeds of the Placement	Amount	%
1.	Seismic and/or drilling a well on the Mother Lode III project	$1,375,000	45.8%
2.	Review of and acquisition costs	$1,375,000	45.8%

	associated with new opportunities
3.	Expenses of the raising	$180,000	6.0%
4.	Working capital	$50,000	1.6%
	Total	$3,000,000	100%

Notes:

For the avoidance of doubt, there is no guarantee that the Placement will proceed. Resolution 15 is only being included in this Notice of Meeting to enable the Company to have the flexibility to raise funds quickly should it need to in the three months following the meeting.

8. RESOLUTIONS 16 AND 17 – ISSUE OF SHARES TO RELATED PARTIES UPON CONVERSION OF UNLISTED CONVERTIBLE NOTES

8.1 General

Mr Ranko Matic (or his nominee) and Mr Michael Davy (or his nominee) wish to be issued Shares upon conversion of the Unlisted Convertible Notes they hold.

Resolutions 16 and 17 seek Shareholder approval for the in the issue of up to:

(a) 25,000,000 Shares (on a post-Consolidation basis) to Mr Ranko Matic (or his nominee) upon the conversion of his Tranche 2 Convertible Notes; and
(b) 15,666,667 Shares (on a post-Consolidation basis) to Mr Michael Davy (or his nominee) upon the conversion of his Tranche 1 Convertible Notes and Tranche 2 Convertible Notes ( Conversion ).

8.2 Chapter 2E of the Corporations Act

A summary of Chapter 2E of the Corporations Act is set out in section 4.1 above.

The Conversion will result in the issue of Shares which constitutes giving a financial benefit and Mr Ranko Matic and Mr Michael Davy who are related parties of the Company by virtue of being Directors.

The Directors consider that Shareholder approval pursuant to Chapter 2E of the Corporations Act is not required in respect of the Conversion because the Shares will be issued to Mr Ranko Matic and Mr Michael Davy on the same terms as Shares issued to non-related party holders of Tranche 2 Convertible Notes and as such the giving of the financial benefit is on arm’s length terms.

8.3 ASX Listing Rule 10.11

A summary of ASX Listing Rule 10.11 is set out in section 4.1 above.

As the Conversion involves the issue of Shares to related parties of the Company, Shareholder approval pursuant to ASX Listing Rule 10.11 is required unless an

exception applies. It is the view of the Directors that the exceptions set out in ASX Listing Rule 10.12 do not apply in the current circumstances.

8.4 ASX LISTING RULE 10.1

As Mr Ranko Matic and Mr Michael Davy are related parties of the Company, they have agreed that their Unlisted Convertible Notes are not secured.

8.5 Technical Information required by ASX Listing Rule 10.13

Pursuant to and in accordance with ASX Listing Rule 10.13, the following information is provided in relation to the Conversion:

(a) the Shares will be issued to:
(i) Mr Ranko Matic (or his nominee); and
(ii) Mr Michael Davy (or his nominee);
(b) the maximum number of Shares (on a post-Consolidation basis) to be issued is 40,666,667 as follows:
(i) 25,000,000 Shares to Mr Ranko Matic (or his nominee) upon conversion of his Tranche 2 Convertible Notes;
(ii) 15,666,667 Shares to Mr Michael Davy (or his nominee) upon conversion of his Tranche 1 Convertible Notes; and
(iii) 1,000,000 Shares to Mr Michael Davy (or his nominee) upon conversion of his Tranche 2 Convertible Notes;
(c) the Shares will be issued no later than 1 month after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules) and it is intended that issue of the Shares will occur progressively;
(d) the issue price will be:
(i) $0.0015 per Share in respect of the conversion of the Tranche 1 Convertible Notes; and
(ii) $0.002 per Share in respect of the conversion of the Tranche 2 Convertible Notes;
(e) the Shares issued will be fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company’s existing Shares; and
(f) no funds will be raised from the issue.

Approval pursuant to ASX Listing Rule 7.1 is not required for the Participation as approval is being obtained under ASX Listing Rule 10.11. Accordingly, the issue of Shares to Mr Ranko Matic (or his nominee) and Mr Michael Davy (or his nominee) will not be included in the use of the Company’s 15% annual placement capacity pursuant to ASX Listing Rule 7.1.

9. RESOLUTIONS 18 AND 19 – ELECTION OF DIRECTORS

Clause 6.2(b) of the Constitution allows the Directors to appoint at any time a person to be a Director.

Pursuant to clause 6.3(g) of the Constitution, any Director so appointed may retire at the next general meeting of the Company and is then eligible for reelection by Shareholders at that meeting.

Mr Ranko Matic and Mr Michael Davy, having been appointed on 7 April 2014 will retire in accordance with clause 6.3(g) of the Constitution and being eligible, seek re-election from Shareholders.

10. RESOLUTION 20 – CHANGE OF COMPANY STATUS – LTD TO NL

Resolution 20 seeks Shareholder approval for the Company to change its status from a public company limited by shares to a no liability company ( NL ). Section 162 of the Corporations Act specifically provides that a public company limited by shares may change its status to a NL by the members of the company passing a special resolution to that effect.

10.1 Rationale for change of status

The Directors may wish to issue partly paid shares in the capital of the Company in the future to incentivise senior management.

A no liability company structure would enable the Directors to issue partly paid shares to senior management without exposing the recipients of the partly paid shares to liability for the unpaid amount. The holder of a share in a no liability company has no obligation to pay any calls in respect of the share or to make any contribution to the debts and liabilities of the company. The holder of shares cannot therefore be sued for any calls or contributions.

A no liability company structure is a form of corporate vehicle traditionally used by mining enterprises

10.2 No Liability Companies

No liability companies are a special class of company established solely for the mining industry. The speculative nature of the mining industry has made special rules relating to the liability of members necessary in order to facilitate the raising of capital. The main feature of a no liability company is that members are not liable for any calls on the unpaid portion of shares. Instead if a call is not answered the shares are forfeited. Further a member is not liable to make any contribution to the debts and liabilities of the company in the event of its winding up.

A no liability company must be a public company and is generally treated by the Corporations Act as any other public companies. However some special provisions are provided as follows:

(a) ( public company ): A no liability company must be a public company and the same documents must generally be lodged as for the registration of a public company. However a no liability company is subject to special requirements for its constitution;
(b) ( mining purposes ): Only a company whose sole objects are mining purposes may be registered as a no liability company. As a result a no

liability must have a statement of objects specifying the “mining purposes” of the Company in its constitution;

(c) ( calls on shares ): In addition to the requirement that the objects of the company be included in the constitution, the constitution of a no liability company must not grant the company a contractual right to recover calls on shares from a shareholder who fails to pay them. The holder of a share in a no liability company has no obligation to pay any calls in respect of the share or to make any contribution to the debts and liabilities of the company. The holder of shares cannot therefore be sued for any calls or contributions.

As failure to pay a call will lead to the forfeiture of the shares, special rules are provided for the manner in which a call is to be required to be made. The Corporations Act provides that calls may be made payable on any date provided there are at least 14 days from the day on which a call is made until the day on which it is payable. The time at which a company's call is made is the date at which the resolution is passed for the call.

If 14 days after the date for payment of a call no payment is made then the share is thereby forfeited without the need for any further resolution of directors. The share will be forfeited only if the call is validly made and this requirement will be strictly construed.

The sale of shares on which calls have not been paid must take place not more than 6 weeks after the date on which the call was payable;

(d) ( naming convention ): A no liability company is to have “No Liability” or the abbreviation “NL” as part of its name. A no liability company is not however also required to have “Limited” after its name even though it is also a public company;
(e) ( balance sheet ): The balance sheet of a no liability company must show the number of shares forfeited during the period to which the accounts relate. Immediately shares in a no liability company are forfeited, ASX must be notified: ASX Listing Rule 3.12. A no liability company does not have to include a list of members in its annual return;
(f) ( dividends ): A person is not entitled to be paid a dividend from a share in a no liability company if a call has been made on the share and is due and unpaid. Dividends are payable to the members of a no liability company in accordance with the proportion of shares held by them irrespective of the amount paid up or the amount credited as paid up on the shares; and
(g) ( winding-up ): The rules for the winding up of a no liability company will be the same as for other companies except that certain of the winding up provisions will not apply. Sections 514–529 of the Corporations Act which deal with the liability of contributories do not apply as the members of a no liability company will not be liable for any amounts not called up.

Any surplus which remains following the winding up of a no liability company is to be distributed among the members according to the proportion of shares held regardless of the amounts paid up on the shares. However a member who is in arrears in the payment of a call but whose shares have not actually been forfeited is not entitled to share in

the distribution until the amount owing in respect of the call has been fully paid and satisfied.

If the no liability company ceases to carry on business within 12 months of its registration, shares issued for cash will rank, to the extent of the capital contributed by subscribing shareholders, in priority to those issued to vendors or promoters or both for consideration other than cash. The Company was registered on 16 November 2004.

11. RESOLUTION 21 – REPLACEMENT OF CONSTITUTION

A company may modify or repeal its constitution or a provision of its constitution by special resolution of Shareholders.

Resolution 21 is a special resolution which will enable the Company to repeal its existing Constitution and adopt a new constitution ( Proposed Constitution ) which is of the type required for a listed no liability Company to ensure it reflects the current provisions of the Corporations Act and ASX Listing Rules.

The Directors believe that it is preferable in the circumstances to replace the existing Constitution with the Proposed Constitution rather than to amend a multitude of specific provisions.

A copy of the Proposed Constitution is available for review by Shareholders at the Company’s website http://www.advanceenergyltd.com.au and at the office of the Company. A copy of the Proposed Constitution can also be sent to Shareholders upon request to the Company Secretary (+61 8 9429 2900). Shareholders are invited to contact the Company if they have any queries or concerns.

12. RESOLUTION 22 – CHANGE OF COMPANY NAME

Section 157(1)(a) of the Corporations Act provides that a company may change its name if the company passes a special resolution adopting a new name.

Resolution 22 seeks the approval of Shareholders for the Company to change its name to Antilles Oil and Gas NL .

If Resolution 22 is passed the change of name will take effect following completion of the conversion of the Company to a no liability Company as contemplated under Resolution 20 and when ASIC alters the details of the Company’s registration.

If Resolution 22 is passed, the Company will lodge a copy of the special resolution with ASIC in order to effect the change.

GLOSSARY

$ means Australian dollars.

ASIC means the Australian Securities and Investments Commission.

ASX means ASX Limited.

ASX Listing Rules means the Listing Rules of ASX.

Board means the current board of directors of the Company.

Business Day means Monday to Friday inclusive, except New Year’s Day, Good Friday, Easter Monday, Christmas Day, Boxing Day, and any other day that ASX declares is not a business day.

Chair means the chair of the Meeting.

Company means Advance Energy Limited (ACN 111 823 762).

Consolidation has the meaning given to that term in Section 1 of the Explanatory Statement.

Constitution means the Company’s constitution.

Corporations Act means the Corporations Act 2001 (Cth).

Directors means the current directors of the Company.

Explanatory Statement means the explanatory statement accompanying the Notice.

General Meeting or Meeting means the meeting convened by the Notice.

Listed Convertible Notes means a listed convertible note issued under the terms of the Trust Deed.

Listed Convertible Noteholders means the holders of Listed Convertible Notes.

Maturity Date means 5 years from the date of issue of the Listed Convertible Notes.

NL means a no liability company as defined in the Corporations Act.

Non-Related Party Creditors has the meaning given to it in Section 5.1.

Noteholder Conversion has the meaning given to it in Section 3.1.

Notice or Notice of Meeting means this notice of meeting including the Independent Expert’s Report, the Explanatory Statement and the Proxy Form.

Official List means the official list of ASX.

Option means an option to acquire a Share.

Placement has the meaning given to that term in Section 7.1.

Proxy Form means the proxy form accompanying the Notice.

Capital Restructuring means the capital restructuring of the Company to be implemented following the approval of Resolutions 1 to 17 (inclusive).

Related Party Creditors has the meaning given to it in Section 4.1.

Related Party Debts has the meaning given to it in Section 4.1.

Related Party Options has the meaning given to it in Section 4.1.

Related Party Securities has the meaning given to it in Section 4.1.

Related Party Shares has the meaning given to it in Section 4.1.

Resolutions means the resolutions set out in the Notice, or any one of them, as the context requires.

Section means a section of the Explanatory Statement.

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

Shareholder means a holder of a Share.

Terms and Conditions means the terms and conditions applicable to the Listed Convertible Notes, including the terms and conditions in the Trust Deed and the terms and conditions in Schedule 1 of the Trust Deed.

Tranche 1 Convertible Notes means the convertible notes the subject of Resolution 11 and issued under the Unlisted Convertible note Trust Deed.

Tranche 2 Convertible Notes means the convertible notes the subject of Resolution 12 and proposed to be issued under the Unlisted Convertible note Trust Deed.

Trust Deed means the trust deed dated 13 October 2009 between the Company and the Trustee as varied.

Trustee means The Trust Company (Australia) Limited (formerly, Trust Company Fiduciary Services Limited) ACN 000 000 993.

Unlisted Convertible Noteholders means the holders of Unlisted Convertible Notes.

Unlisted Convertible Notes means the Tranche 1 Convertible Notes and the Tranche 2 Convertible Notes.

Unlisted Convertible Note Trustee means Nordwand Investments Pty Ltd (ACN 138 073 999).

Unlisted Convertible Note Trust Deed means the trust deed to be entered into between the Company and the Unlisted Convertible Note Trust Deed.

WST means Western Standard Time as observed in Perth, Western Australia.

SCHEDULE 1 – TERMS AND CONDITIONS OF OPTIONS

(a) Entitlement

Each Option entitles the holder to subscribe for one Share upon exercise of the Option.

(b) Exercise Price

Subject to paragraph (j), the amount payable upon exercise of each Option will be $0.006 ( Exercise Price )

(c)

Expiry Date

Each Option will expire at 5:00 pm (WST) on 31 March 2015 ( Expiry Date ). An Option not exercised before the Expiry Date will automatically lapse on the Expiry Date.

(d)

Exercise Period

The Options are exercisable at any time on or prior to the Expiry Date ( Exercise Period ).

(e) Notice of Exercise

The Options may be exercised during the Exercise Period by notice in writing to the Company in the manner specified on the Option certificate ( Notice of Exercise ) and payment of the Exercise Price for each Option being exercised in Australian currency by electronic funds transfer or other means of payment acceptable to the Company.

(f)

Exercise Date

A Notice of Exercise is only effective on and from the later of the date of receipt of the Notice of Exercise and the date of receipt of the payment of the Exercise Price for each Option being exercised in cleared funds ( Exercise Date ).

(g) Timing of issue of Shares on exercise

Within 15 Business Days after the later of the following:

(i) the Exercise Date; and
(ii) when excluded information in respect to the Company (as defined in section 708A(7) of the Corporations Act) (if any) ceases to be excluded information,

but in any case no later than 20 Business Days after the Exercise Date, the Company will:

(i) allot and issue the number of Shares required under these terms and conditions in respect of the number of Options specified in the Notice of Exercise and for which cleared funds have been received by the Company;
(ii) if required, give ASX a notice that complies with section 708A(5)(e) of the Corporations Act, or, if the Company is unable to issue such a notice, lodge with ASIC a prospectus prepared in accordance with the

Corporations Act and do all such things necessary to satisfy section 708A(11) of the Corporations Act to ensure that an offer for sale of the Shares does not require disclosure to investors; and

(iii) if admitted to the official list of ASX at the time, apply for official quotation on ASX of Shares issued pursuant to the exercise of the Options.

If a notice delivered under (g)(ii) for any reason is not effective to ensure that an offer for sale of the Shares does not require disclosure to investors, the Company must, no later than 20 Business Days after becoming aware of such notice being ineffective, lodge with ASIC a prospectus prepared in accordance with the Corporations Act and do all such things necessary to satisfy section 708A(11) of the Corporations Act to ensure that an offer for sale of the Shares does not require disclosure to investors.

(h)

Shares issued on exercise

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

(i) Quotation of Shares issued on exercise

If admitted to the official list of ASX at the time, application will be made by the Company to ASX for quotation of the Shares issued upon the exercise of the Options.

(j)

Reconstruction of capital

If at any time the issued capital of the Company is reconstructed, all rights of an Optionholder are to be changed in a manner consistent with the Corporations Act and the ASX Listing Rules at the time of the reconstruction.

(k)

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 without exercising the Options.

(l)

Change in exercise price

An Option does not confer the right to a change in Exercise Price or a change in the number of underlying securities over which the Option can be exercised.

(m) Unquoted

The Company will not apply for quotation of the Options on ASX.

(n)

Transferability

The Options are transferable subject to any restriction or escrow arrangements imposed by ASX or under applicable Australian securities laws.

SCHEDULE 2 – TERMS AND CONDITIONS OF UNLISTED CONVERTIBLE NOTES

The key terms of the Convertible Notes are set out below:

(a) ( Security ): The Convertible Notes will be secured against all present and after acquired property of the Company under the terms of a general security deed to be entered into by the Company and the Trustee. The full security will be extinguished when the notes convert or are repaid in full.[1]
(b) ( Issue Size ): 816,666,667 secured Convertible Notes each with a face value as follows:
(i) 266,666,667 secured unlisted Tranche 1 Convertible Notes (each with a face value of $0.0015 per Tranche 1 Convertible Note on a post – Consolidation basis); and
(ii) 550,000,000 secured unlisted Tranche 2 Convertible Notes (each with a face value of $0.002 per Tranche 2 Convertible Note on a post – Consolidation basis);
(c) ( Pro rata Funding ): The Company may from time to time issue Convertible Notes to an amount not exceeding $1,500,000.
(d) ( Issue Date ): A date following the approval of Shareholders at a general meeting of the Company for the issue of the Convertible Notes.
(e)

( Conversion Price ):

(i) the conversion price for the Tranche 1 Convertible Notes: will be $0.0015 per Share; and
(ii) the conversion price for the Tranche 2 Convertible Notes: will be $0.002 per Share;
(f)

( Interest Rate ):

(i) at the Maturity Date the Company will pay a fee equal to 10% of the face value of the Tranche 1 Convertible Notes held by those Noteholders; and
(ii) there will be no interest payable on the Tranche 2 Convertible Notes unless an event of default (as defined below) occurs, in which case interest will be payable to the Noteholders at the rate of 15% per annum while the event of default remains outstanding.
(g) ( Maturity Date ) The maturity date is the first to occur of:
(i) the date of conversion of a Convertible Note; or
(ii) 6 months from the date the Convertible Notes are issued; and
(iii) any earlier date on which the Company repays the Convertible Note in accordance with the Convertible Note Facility.

1 Mr Ranko Matic and Mr Michael Davy are related parties of the Company and have agreed that their Unlisted Convertible Notes are not secured.

(h) ( Redemption ) The Company may not redeem the Convertible Notes before the Maturity Date, other than in accordance with:
(i) a Noteholder exercising its right to convert; or
(ii) the occurrence of a takeover, change in control or sale of the main undertaking of the Company;
(iii) the Trustee or a Noteholder exercising its rights to redemption upon an event of default (as defined in the Trust Deed).
(i) ( Ability to convert ) The Convertible Notes are not convertible into Shares until such time that the Company obtains Shareholder approval for their conversion in accordance with the ASX Listing Rules.
(j) ( Conversion by Noteholders ) Subject to the receipt of prior Shareholder approval for the conversion of the Convertible Notes into Shares, any outstanding Convertible Notes may be converted into fully paid ordinary shares of the Company at the election of Noteholders at any date until the second Business Day prior to the Maturity Date. Further, if the recapitalisation resolutions are approved by Listed Convertible Noteholders and Shareholders ( Recapitalisation Resolutions ), the Company will be entitled to compulsorily convert all of the Convertible Notes into Shares (which it intends to do as soon as practicable after the shareholder meeting).
(k) ( Listing ) The Convertible Notes will not be listed.
(l) ( Participation ) Prior to conversion, Noteholders do not have a right to participate in issues of securities effected by the Company. However, if a bonus share allotment is made by the Company any time subsequent to the issue of the Convertible Note to a Noteholder and prior to the date of conversion, and if te Noteholder elects to convert any of its Convertible Notes on that date, the Company will issue the same class and number of Shares to which the Noteholder would have been entitled to as if the conversion had occurred on the date of actual conversion.
(m) ( Voting Rights ) Noteholders may attend any general meeting of the Company but have no right to vote at a general meeting of the Company except as required by law.

An “event of default” includes:

(a) ( Recapitalisation Resolutions ) if the Recapitalisation Resolutions are not all passed by the Shareholders;
(b) ( unremedied default in payment ) if the Company fails to make payment of any outstanding moneys in respect of the Convertible Notes within five (5) business days of the relevant due date for payment and the default has not been remedied to the satisfaction of the Trustee within a further five (5) business days (provided the Trustee has given the Company at least two (2) business days written notice of the default);
(c) ( unremedied material breach ) if the Company commits a breach of a representation, covenant, condition or obligation imposed on it (other than a failure to pay any outstanding moneys) and, if that breach is capable of remedy, that breach has not been remedied to the satisfaction of the Trustee within five (5) business days of the Company receiving notice of the breach from the Trustee requiring that breach to be remedied;

(d) ( winding up ) if an order is made or a resolution is effectively passed (and is not set aside or withdrawn within fifteen (15) business days) for the winding up of the Company except for the purposes of a reconstruction or amalgamation with the prior written consent of the Trustee (such consent not to be unreasonably withheld);
(e) ( liquidation ) if the Company enters liquidation provided that the Liquidator does not retire or is not removed within ten (10) business days after the date of appointment;
(f) ( material change in Constitution ) the Company makes a material change to its Constitution without the consent of the Trustee (which consent must not be unreasonably withheld); and
(g) ( event of default ) if an event of default occurs under another finance document entered into by the Trustee.

SCHEDULE 2 – TERMS AND CONDITIONS OF UNLISTED CONVERTIBLE NOTES

Related Party Creditors	Amount Outstanding	Number of Shares	Number of Options to be issued	Nature of services	Number of shares	Percentage post
		to be issued		and/or debt	(post consol)	capital restructure
		(post-			already held	(including the issue of
		Consolidation			and/or to be issued	the new notes T1 and
		basis @ $0.048 per			on AVDG	T2 and the interest
		Share)			conversion	thereon) but
						excluding poss $3m
						future placement and
						on an undiluted basis
				Rent, back office,
AAG Management Pty Ltd
	$124,750	2,598,958	2,598,958	accounting, small	-	0.25%
				loan amount

				Corporate
GCP Capital Pty Ltd
	$55,250	1,151,042	1,151,042	advisory, small loan	-	0.11%
				amount

Cumberland Investments PtyLtd				Anthony Short
	$126,833	2,642,354	2,642,354		429,874	0.42%
				consulting/dirs’ fees

Fay Holdings Pty Ltd				Anthony Short	See Cumberland	See Cumberland
	$61,136	1,273,667	1,273,667
				expenses	above	above

Gondwana Securities PtyLtd				Loan
	$3,750	78,125	78,125		-	0.01%


Odin Energy Limited				Loan
	$60,000	1,250,000	1,250,000		38,452,096	3.86%


Sealblue Investments PtyLtd				Berzins co
	$7,500	156,250	156,250		-	0.02%
				sec/consulting

Greencode PtyLtd	$27,350	569,792	569,792	Mostlyloans	-	0.06%
Blaze Asset PtyLtd	$14,609	304,354	304,354	Loan	-	0.03%

TOTAL $481,466 10,024,542 10,024,542

The percentages in the table above assumed that all Share and Option issues as contemplated in the Notice of Meeting occur, other than the placement to raise $3 million (Resolution 15).

APPOINTMENT OF PROXY FORM

ADVANCE ENERGY LTD ACN 111 823 762

GENERAL MEETING

I/We

of: being a Shareholder entitled to attend and vote at the Meeting, hereby appoint:

Name:

OR: the Chair of the Meeting as my/our proxy.

or failing the person so named or, if no person is named, the Chair, or the Chair’s nominee, to vote in accordance with the following directions, or, if no directions have been given, and subject to the relevant laws as the proxy sees fit, at the Meeting to be held at Suite 4, 16 Ord Street, West Perth, Australia, on 11 June 2014 at 10am Western Standard Time, and at any adjournment thereof.

The Chair intends to vote undirected proxies in favour of all Resolutions in which the Chair is entitled to vote.

Voting on business of the Meeting	Voting on business of the Meeting	FOR	AGAINST	ABSTAIN
Resolution 1	Consolidation of Capital
Resolution 2	Approval for Issue of Shares and Options to Listed Convertible Noteholders (AVDG)
Resolution 3	Approval of Issue of Shares and Options to AAG
	Management Pty Ltd in Lieu of Management Charges,
	Loan Repayments and Expense Reimbursements
Resolution 4	Approval of Issue of Shares and Options to GCP Capital Pty Ltd in Lieu of Fees
Resolution 5	Approval of Issue of Shares and Options to Cumberland
	Investments Pty Ltd in Lieu of Fees and Expense
	Reimbursements
Resolution 6	Approval of Issue of Shares and Options to Fay Holdings Pty Ltd in Lieu of Fees and Expense Reimbursements
Resolution 7	Approval of Issue of Shares and Options to Gondwana Securities Pty Ltd in Lieu of Loan Repayments
Resolution 8	Approval of Issue of Shares and Options to Odin Energy
	Limited in Lieu of Loan Repayments and Expense
	Reimbursements
Resolution 9	Approval of Issue of Shares and Options to Sealblue Investments Pty Ltd in Lieu of Loan Repayments
Resolution 10	Approval of Issue of Shares and Options to Greencode Pty Ltd in Lieu of Fees and Loan Repayments
Resolution 11	Approval of Issue of Shares and Options to Blaze Asset Pty Ltd in Lieu of Loan Repayments
Resolution 12	Approval of Issue of Shares and Options in Lieu of Fees, Loan Repayments and Expense Reimbursements
Resolution 13	Issue of Shares Upon Conversion of Tranche 1 Unlisted Convertible Notes
Resolution 14	Issue of Shares Upon Conversion of Tranche 2 Unlisted Convertible Notes
Resolution 15	Placement of Shares
Resolution 16	Issue of Shares to Related Party on Conversion of Tranche 2 Convertible Notes – Mr Ranko Matic

Voting on business of the Meeting	Voting on business of the Meeting	FOR	AGAINST	ABSTAIN
Resolution 17	Issue of Shares to Related Party on Conversion of Tranche 1
	Convertible Notes and Tranche 2 Convertible Notes – Mr
	Michael Davy
Resolution 18	Election of Director – Mr Ranko Matic
Resolution 19	Election of Director – Mr Michael Davy
Resolution 20	Change of Company Status – Ltd To NL
Resolution 21	Replacement of Constitution
Resolution 22	Change of Company Name

Please note : If you mark the abstain box for a particular Resolution, you are directing your proxy not to vote on that Resolution on a show of hands or on a poll and your votes will not be counted in computing the required majority on a poll.

Important for Resolution 3-8 and 11

If you have not directed your proxy how to vote as your proxy in respect of Resolutions 3-8 and 11 and the Chair is, or may by default be, appointed your proxy, you must mark the box below.

I/we direct the Chair to vote in accordance with his/her voting intentions (as set out above) on Resolutions 3-8 and 11 (except where I/we have indicated a different voting intention above) and acknowledge that the Chair may exercise my/our proxy even if the Chair has an interest in the outcome of Resolutions 3-8 and 11 and that votes cast by the Chair for Resolutions 3-8 and 11, other than as proxy holder, will be disregarded because of that interest.

If the Chair is, or may by default be, appointed your proxy and you do not mark this box and you have not directed the Chair how to vote, the Chair will not cast your votes on Resolutions 3-8 and 11 and your votes will not be counted in calculating the required majority if a poll is called on Resolutions 3-8 and 11.

If two proxies are being appointed, the proportion of voting rights this proxy represents is:

Signature of Shareholder(s): Individual or Shareholder 1 Shareholder 2 Shareholder 3 Sole Director/Company Secretary Director Director/Company Secretary Date: Contact name: Contact ph (daytime): E-mail address: Consent for contact by e-mail: YES NO

Instructions for Completing ‘Appointment of Proxy’ Form

1.

( Appointing a proxy ): A Shareholder entitled to attend and cast a vote at the Meeting is entitled to appoint a proxy to attend and vote on their behalf at the Meeting. If a Shareholder is entitled to cast 2 or more votes at the Meeting, the Shareholder may appoint a second proxy to attend and vote on their behalf at the Meeting. However, where both proxies attend the Meeting, voting may only be exercised on a poll. The appointment of a second proxy must be done on a separate copy of the Proxy Form. A Shareholder who appoints 2 proxies may specify the proportion or number of votes each proxy is appointed to exercise. If a Shareholder appoints 2 proxies and the appointments do not specify the proportion or number of the Shareholder’s votes each proxy is appointed to exercise, each proxy may exercise one-half of the votes. Any fractions of votes resulting from the application of these principles will be disregarded. A duly appointed proxy need not be a Shareholder.

( Direction to vote ): A Shareholder may direct a proxy how to vote by marking one of the boxes opposite each item of business. The direction may specify the proportion or number of votes that the proxy may exercise by writing the percentage or number of Shares next to the box marked for the relevant item of business. Where a box is not marked the proxy may vote as they choose subject to the relevant laws. Where more than one box is marked on an item the vote will be invalid on that item.

3. ( Signing instructions ):

( Individual ): Where the holding is in one name, the Shareholder must sign.
( Joint holding ): Where the holding is in more than one name, all of the Shareholders should sign.
( Power of attorney ): If you have not already provided the power of attorney with the registry, please attach a certified photocopy of the power of attorney to this Proxy Form when you return it.
( Companies ): Where the company has a sole director who is also the sole company secretary, that person must sign. Where the company (pursuant to Section 204A of the Corporations Act) does not have a company secretary, a sole director can also sign alone. Otherwise, a director jointly with either another director or a company secretary must sign. Please sign in the appropriate place to indicate the office held. In addition, if a representative of a company is appointed pursuant to Section 250D of the Corporations Act to attend the Meeting, the documentation evidencing such appointment should be produced prior to admission to the Meeting. A form of a certificate evidencing the appointment may be obtained from the Company.
( Attending the Meeting ): Completion of a Proxy Form will not prevent individual Shareholders from attending the Meeting in person if they wish. Where a Shareholder completes and lodges a valid Proxy Form and attends the Meeting in person, then the proxy’s authority to speak and vote for that Shareholder is suspended while the Shareholder is present at the Meeting.
( Return of Proxy Form ): To vote by proxy, please complete and sign the enclosed Proxy Form and return by:
(a) post to Advance Energy Ltd, Suite 2, 16 Ord Street, West Perth, WA, 6005, Australia; or
(b) facsimile to the Company on facsimile number +61 8 9486 1011,

so that it is received not less than 48 hours prior to commencement of the Meeting.

AI assistant

TALIUS GROUP LIMITED — Proxy Solicitation & Information Statement 2014

65893_rns_2014-05-11_946ac7dc-4ff0-4ee4-8962-a8cd8f1bc8f4.pdf

ADVANCE ENERGY LTD

111 823 762 NOTICE OF GENERAL MEETING

CONTENTS PAGE

IMPORTANT INFORMATION

TIME AND PLACE OF MEETING

YOUR VOTE IS IMPORTANT

VOTING ELIGIBILITY

VOTING IN PERSON

VOTING BY PROXY

Proxy vote if appointment specifies way to vote

Transfer of non-chair proxy to chair in certain circumstances

BUSINESS OF THE MEETING

AGENDA

1. RESOLUTION 1 – CONSOLIDATION OF CAPITAL

2. RESOLUTION 2 – APPROVAL FOR ISSUE OF SHARES AND OPTIONS TO LISTED CONVERTIBLE NOTEHOLDERS (AVDG)

3. RESOLUTION 3 – APPROVAL OF ISSUE OF SHARES AND OPTIONS TO AAG MANAGEMENT PTY LTD IN LIEU OF MANAGEMENT CHARGES, LOAN REPAYMENTS AND EXPENSE REIMBURSEMENTS

4. RESOLUTION 4 – APPROVAL OF ISSUE OF SHARES AND OPTIONS TO GCP CAPITAL PTY LTD IN LIEU OF FEES

5. RESOLUTION 5 – APPROVAL OF ISSUE OF SHARES AND OPTIONS TO CUMBERLAND INVESTMENTS PTY LTD IN LIEU OF FEES AND EXPENSE REIMBURSEMENTS

6. RESOLUTION 6 – APPROVAL OF ISSUE OF SHARES AND OPTIONS TO FAY HOLDINGS PTY LTD IN LIEU OF FEES AND EXPENSE REIMBURSEMENTS

7. RESOLUTION 7 – APPROVAL OF ISSUE OF SHARES AND OPTIONS TO GONDWANA SECURITIES PTY LTD IN LIEU OF LOAN REPAYMENTS

8. RESOLUTION 8 – APPROVAL OF ISSUE OF SHARES AND OPTIONS TO ODIN ENERGY LIMITED IN LIEU OF LOAN REPAYMENTS AND EXPENSE REIMBURSEMENTS

9. RESOLUTION 9 – APPROVAL OF ISSUE OF SHARES AND OPTIONS TO SEALBLUE INVESTMENTS PTY LTD IN LIEU OF LOAN REPAYMENTS

10. RESOLUTION 10 – APPROVAL OF ISSUE OF SHARES AND OPTIONS TO GREENCODE PTY LTD IN LIEU OF FEES AND LOAN REPAYMENTS

11. RESOLUTION 11 – APPROVAL OF ISSUE OF SHARES AND OPTIONS TO BLAZE ASSET PTY LTD IN LIEU OF LOAN REPAYMENTS

12. RESOLUTION 12 - APPROVAL OF ISSUE OF SHARES AND OPTIONS IN LIEU OF FEES, LOAN REPAYMENTS AND EXPENSE REIMBURSEMENTS

13. RESOLUTION 13 - ISSUE OF SHARES UPON CONVERSION OF TRANCHE 1 UNLISTED CONVERTIBLE NOTES

14. RESOLUTION 14 – ISSUE OF SHARES UPON CONVERSION OF TRANCHE 2 UNLISTED CONVERTIBLE NOTES

15. RESOLUTION 15 – PLACEMENT OF SHARES

16. RESOLUTION 16 – ISSUE OF SHARES TO RELATED PARTY ON CONVERSION OF TRANCHE 2 CONVERTIBLE NOTES – MR RANKO MATIC

17. RESOLUTION 17 – ISSUE OF SHARES TO RELATED PARTY ON CONVERSION OF TRANCHE 1 CONVERTIBLE NOTES AND TRANCHE 2 CONVERTIBLE NOTES – MR MICHAEL DAVY

18. RESOLUTION 18 – ELECTION OF DIRECTOR – MR RANKO MATIC

19. RESOLUTION 19 – ELECTION OF DIRECTOR – MR MICHAEL DAVY

20. RESOLUTION 20 – CHANGE OF COMPANY STATUS – LTD TO NL

21. RESOLUTION 21 – REPLACEMENT OF CONSTITUTION

22. RESOLUTION 22 – CHANGE OF COMPANY NAME

DATED: 9 MAY 2014

BY ORDER OF THE BOARD

DAVID BALLANTYNE COMPANY SECRETARY

EXPLANATORY STATEMENT

1. OVERVIEW OF MEETING

1.1 Capital Restructuring (Resolutions 1 to 17)

(a) Debt for equity conversions

(b) $1.5 million debt finance - Conversion of Unlisted Convertible Notes

(c) Proposed $3 million capital raising

1.2 Election of Directors (Resolutions 18 and 19)

1.3 Change of company status and name and adoption of new constitution (Resolutions 20-22)

1.4 Strategic Review and New Opportunities

2. RESOLUTION 1 – CONSOLIDATION OF CAPITAL

2.1 Background

2.2 Legal requirements

2.3 Fractional entitlements

2.4 Taxation

2.5 Holding statements

2.6 Effect on capital structure

2.7 Indicative timetable

3. RESOLUTION 2 – APPROVAL FOR ISSUE OF SHARES AND OPTIONS TO LISTED CONVERTIBLE NOTEHOLDERS (AVDG)

3.1 General

3.2 ASX Listing Rule 7.1

3.3 Technical information required by ASX Listing Rule 7.1

4. RESOLUTIONS 3 TO 11 – APPROVAL OF ISSUE OF SHARES AND OPTIONS TO RELATED PARTIES IN LIEU OF MANAGEMENT CHARGES, LOAN REPAYMENTS AND EXPENSE REIMBURSEMENTS

4.1 General

4.2 Shareholder Approval (Listing Rule 10.11)

5. RESOLUTION 12 - APPROVAL OF ISSUE OF SHARES AND OPTIONS IN LIEU OF FEES, LOAN REPAYMENTS AND EXPENSE REIMBURSEMENTS

5.1 General

5.2

Listing Rule 7.1

5.3 Specific information required by Listing Rule 7.3

6. RESOLUTIONS 13 AND 14 - APPROVAL FOR ISSUE OF SHARES UPON CONVERSION OF UNLISTED CONVERTIBLE NOTES

6.1 Background

(the Unlisted Convertible Notes )

6.2 Technical information required by ASX Listing Rule 7.1

Notes:

7. RESOLUTION 15 – SHARE PLACEMENT

7.1 General

7.2 Technical information required by ASX Listing Rule 7.1

Notes:

8. RESOLUTIONS 16 AND 17 – ISSUE OF SHARES TO RELATED PARTIES UPON CONVERSION OF UNLISTED CONVERTIBLE NOTES

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