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VOLT GROUP LIMITED AGM Information 2009

Apr 26, 2009

66016_rns_2009-04-26_1ca771cf-853f-4c9e-b199-7ddfc7c7d998.pdf

AGM Information

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ENERJI LTD

ABN 62 009 423 189

NOTICE OF ANNUAL GENERAL MEETING

TIME: 10 am (WST) DATE: 29 May 2009 PLACE: Nissen Kestel Harford Boardroom Level 2, 100 Railway Road Subiaco WA 6008

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 Secretary on (+61 8) 9367 8133.

CONTENTS PAGE

Notice of Annual General Meeting (setting out the proposed resolutions) 3
Explanatory Statement (explaining the proposed resolutions) 8
Glossary 25
Proxy Form 35

TIME AND PLACE OF MEETING AND HOW TO VOTE

VENUE

The Annual General Meeting of the Shareholders to which this Notice of Meeting relates will be held at 10.00 am (WST) on 29 May 2009 at:

Nissen Kestel Harford Boardroom Level 2, 100 Railway Road Subiaco WA 6008

YOUR VOTE IS IMPORTANT

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

VOTING IN PERSON

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

VOTING BY PROXY

To vote by proxy, please complete and sign the enclosed Proxy Form and return by:

(a) post to Enerji Ltd, Level 2, Spectrum, 100 Railway Road Subiaco, Western Australia 6008; or

(b) facsimile to the Company on facsimile number (+61) 8 9367 8812,

so that it is received not later than 10.00 am (WST) on 27 May 2009.

Proxy Forms received later than this time will be invalid.

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NOTICE OF ANNUAL GENERAL MEETING

Notice is given that the Annual General Meeting of Shareholders will be held at 10.00 am (WST) on 29 May 2009 at Nissen Kestel Harford, Boardroom, Level 2, 100 Railway Road, Subiaco WA 6008.

The Explanatory Statement to this Notice of Meeting provides additional information on matters to be considered at the Annual General Meeting. The Explanatory Statement and the Proxy Form are part of this Notice of Meeting.

The Directors have determined pursuant to Regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the Annual General Meeting are those who are registered Shareholders of the Company at 10.00 am (WST) on 27 May 2009.

Terms and abbreviations used in this Notice of Meeting and Explanatory Statement are defined in the Glossary.

AGENDA

ORDINARY BUSINESS

Financial Statements and Reports

To receive and consider the annual financial report of the Company for the financial year ended 31 December 2008 together with the declaration of the directors, the directors’ report, the remuneration report and the auditor’s report.

1. RESOLUTION 1 – ADOPTION OF REMUNERATION REPORT

To consider and, if thought fit, to pass, with or without amendment, the following resolution as a non-binding resolution:

“That, for the purpose of Section 250R(2) of the Corporations Act and for all other purposes, approval is given for the adoption of the remuneration report as contained in the Company’s annual financial report for the financial year ended 31 December 2008.”

2. RESOLUTION 2 – RE-ELECTION OF DIRECTOR – ROSS SMITH

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 3.3 of the Constitution and for all other purposes, Ross Smith, a Director who was appointed on 20 March 2009, retires, and being eligible, is re-elected as a Director.”

3. RESOLUTION 3 – RE-ELECTION OF DIRECTOR – GUY LE PAGE

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 3.3 of the Constitution and for all other purposes, Guy Le Page, a Director who was appointed on 20 March 2009, retires, and being eligible, is re-elected as a Director.”

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4. RESOLUTION 4 – RE-ELECTION OF DIRECTOR – STEVEN BAMFORD

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 3.6 of the Constitution and for all other purposes, Steven Neill Bamford, a Director who was appointed on 8 July 2008, retires, and being eligible, is re-elected as a Director.”

5. RESOLUTION 5 – RATIFICATION OF ISSUE OF SHARES

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

“That, for the purpose of ASX Listing Rule 7.4 and for all other purposes, shareholder ratify the prior issue of 12,741,500 Shares at an issue price of $0.007 each 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 participate in the issue and any associates of those persons. 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.

6. RESOLUTION 6 – ISSUE OF OPTIONS

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

“That, for the purpose of ASX Listing Rule 7.1 and for all other purposes, approval is given for the Directors to allot and issue up to 12,741,500 Options 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 participate in the issue and any associates of those persons. 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.

7. RESOLUTION 7 – ISSUE OF CONVERTIBLE NOTES

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

“That, for the purpose of ASX Listing Rule 7.1 and for all other purposes, approval is given for the Directors to allot and issue Convertible Notes with a total face value of up to $500,000, and for the issue of Shares and Options on conversion of the Convertible Notes, 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, except a benefit solely in the capacity of a holder of ordinary securities, and any associates of those persons. 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.

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8. RESOLUTION 8 – ISSUE OF CONVERTIBLE NOTES TO A RELATED PARTY

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

“That, for the purposes of Section 208 of the Corporations Act, ASX Listing Rule 10.11 and for all other purposes, approval is given for the Directors to allot and issue Convertible Notes with a total face value of $25,000 to GT Le Page & Associates Pty Ltd (a related party by virtue of being an entity controlled by Guy Le Page, a Director of the Company), and for the issue of Shares and Options on conversion of the Convertible Notes, on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion: The Company will disregard any votes cast on this Resolution by GT Le Page & Associates Pty Ltd or any of its 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.

9. RESOLUTION 9 – ISSUE OF NEW CLASS OF SHARES

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

“That, for the purposes of Section 246B of the Corporations Act, the Constitution of the Company and for all other purposes, the Company be authorised to issue Performance Shares, the terms of which are set out in the Explanatory Statement accompanying this Notice.”

Short Explanation: The Company wishes to issue Performance Shares for the purpose set out in Resolution 10. The Performance Shares are a new class of shares and as such Shareholder approval by way of special resolution is required under section 246B of the Corporations Act to issue the Performance Shares. Please refer to the Explanatory Statement for details.

10. RESOLUTION 10– ISSUE OF PERFORMANCE SHARES TO ROSS SMITH

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

“That, for the purposes of Section 208 of the Corporations Act, ASX Listing Rule 10.11 and all other purposes, shareholders approve the allotment and issue to Ross Henry Smith (or his nominee) of:

  • (a) 5,000,000 Class A Performance Shares;

  • (b) 5,000,000 Class B Performance Shares; and

  • (c) 5,000,000 Class C Performance Shares,

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

Voting Exclusion: The Company will disregard any votes cast on this Resolution by Ross Smith (or his nominee) or any of his 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.

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11. RESOLUTION 11 – ISSUE OF OPTIONS – ROSS SMITH

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

“That, for the purposes of Section 208 of the Corporations Act, ASX Listing Rule 10.11 and for all other purposes, approval is given for the Directors to allot and issue 4,000,000 Options to Ross Smith (or his nominee) on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion: The Company will disregard any votes cast on this Resolution by Ross Smith (or his nominee) or any of his 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.

12. RESOLUTION 12 – ISSUE OF OPTIONS – GUY LE PAGE

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

“That, for the purposes of Section 208 of the Corporations Act, ASX Listing Rule 10.11 and for all other purposes, approval is given for the Directors to allot and issue 4,000,000 Options to Guy Le page (or his nominee) on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion: The Company will disregard any votes cast on this Resolution by Guy Le Page (or his nominee), or any of his 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.

13. RESOLUTION 13 – ISSUE OF SHARES AND OPTIONS TO RM CORPORATE FINANCE

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

“That, for the purpose of Section 208 of the Corporations Act, ASX Listing Rule 10.11 and for all other purposes, approval is given for the Directors to allot and issue 7,000,000 Shares and 7,000,000 Options to RM Corporate Finance Pty Ltd (or its nominee) on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion: The Company will disregard any votes cast on this Resolution by RM Corporate Finance Pty Ltd and any of its 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.

14. RESOLUTION 14 – APPOINTMENT OF AUDITOR

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

“That, for the purpose of Section 327B of the Corporations Act, and for all other purposes, approval is given for the Directors to appoint KPMG as auditor of the Company.”

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DATED: 15 APRIL 2009

BY ORDER OF THE BOARD

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ROBERT MARUSCO COMPANY SECRETARY

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EXPLANATORY STATEMENT

This Explanatory Statement has been prepared for the information of the Shareholders in connection with the business to be conducted at the Annual General Meeting to be held at:

10.00 am (WST) on 29 May 2009 at Nissen Kestel Harford, Boardroom, Level 2, 100 Railway Road, Subiaco WA 6008.

This purpose of this Explanatory Statement is to provide information which the Directors believe to be material to Shareholders in deciding whether or not to pass the Resolutions in the Notice of the Annual General Meeting.

1. FINANCIAL STATEMENTS AND REPORTS

In accordance with the Constitution, the business of the Annual General Meeting will include receipt and consideration of the annual financial report of the Company for the financial year ended 31 December 2008 together with the declaration of the directors, the directors’ report, the remuneration report and the auditor’s report.

In accordance with amendments to the Corporations Act the Company is no longer required to provide a hard copy of the Company’s annual financial report to Shareholders unless a Shareholder has specifically elected to receive a printed copy. These amendments may result in reducing the Company’s printing costs.

Whilst the Company will not provide a hard copy of the Company’s annual financial report unless specifically requested to do so, Shareholders may view the Company annual financial report on its website at http://enerji.com.au/

2. RESOLUTION 1 – ADOPTION OF REMUNERATION REPORT

The Corporations Act requires that at a listed company’s annual general meeting, a resolution that the remuneration report be adopted must be put to the shareholders. However, such a resolution is advisory only and does not bind the Directors or the Company.

The remuneration report sets out the Company’s remuneration arrangements for the Directors and senior management of the Company. The remuneration report is part of the Directors’ report contained in the annual financial report of the Company for the financial year ending 31 December 2008.

A reasonable opportunity will be provided for discussion of the remuneration report at the Annual General Meeting.

3. RESOLUTION 2 – RE-ELECTION OF DIRECTOR – ROSS SMITH

Clause 3.3 of the Constitution allows the Directors to appoint, at any time, a person to be a Director as an addition to the existing Directors, but only where the total number of Directors does not at any time exceed the maximum number specified by the Constitution.

Any Director so appointed automatically retires at the next annual general meeting and is then eligible for re-election.

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Ross Smith, who was appointed by the Directors on 20 March 2009, will retire in accordance with clause 3.3 of the Constitution and, being eligible, seeks reelection.

Ross Smith has many years experience as a corporate consultant specialising in the restructure and recapitalisation of a range of ASX-listed, public unlisted and private companies.

4. RESOLUTION 3 – RE-ELECTION OF DIRECTOR – GUY LE PAGE

Clause 3.3 of the Constitution allows the Directors to appoint, at any time, a person to be a Director as an addition to the existing Directors, but only where the total number of Directors does not at any time exceed the maximum number specified by the Constitution.

Any Director so appointed automatically retires at the next annual general meeting and is then eligible for re-election.

Guy Le Page, who was appointed by the Directors on 20 March 2009, will retire in accordance with clause 3.3 of the Constitution and, being eligible, seeks reelection.

Guy Le Page is currently a director of RM Corporate Finance specialising in resources. He is actively involved in a range of corporate initiatives from mergers and acquisitions, initial public offerings to valuations, consulting and corporate advisory roles.

5. RESOLUTION 4 – RE-ELECTION OF DIRECTOR – STEVEN BAMFORD

Clause 3.6 of the Constitution requires that one third (or the whole number nearest one-third) of the Directors who are not (relevantly):

  • (a) appointed and required to retire under Clause 3.3 of the Constitution;

  • (b) the Managing Director; or

  • (c) any Director who would, if that Director remained in office until the next annual general meeting, have held that office for more than 3 years.

must retire at each annual general meeting and are eligible for re-election.

The Company currently has three Directors, or which two (Ross Smith and Guy Le Page) are not counted for the purposes of Clause 3.6 of the Constitution. As such, Steven Bamford, the remaining Director, will retire by rotation at the annual general meeting and, being eligible, seeks re-election.

Mr Bamford is presently the Western Australian State Sales Manager for an industrial company - Doors Doors Doors. He has extensive knowledge in administrative, management, marketing, communication and franchise development.

6. RESOLUTION 5 – RATIFICATION OF ISSUE OF SHARES

6.1 General

On 20 March 2009, the Company announced it has received commitments for a placement of 13,000,000 Shares at $0.07 each. The Company has now completed the issue of 12,741,500 Shares at $0.007 each. None of the subscribers pursuant to

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this issue were related parties of the Company. Resolution 5 seeks Shareholder ratification pursuant to Listing Rule 7.4 for the issue of those Shares (Ratification).

By ratifying this issue, the Company will retain the flexibility to issue equity securities in the future up to the 15% threshold set out in Listing Rule 7.1 without the requirement to obtain prior Shareholder approval.

6.2 Technical information required by ASX Listing Rule 7.4

Pursuant to and in accordance with ASX Listing Rule 7.5, the following information is provided in relation to the Share Placement:

  • (a) the maximum number of Shares issued was 12,741,500;

  • (b) the issue price of the Shares was $0.007 each, raising a total of $89,190,50;

  • (c) the Shares were all issued on 9 April 2009;

  • (d) the Shares were issued to clients of RM Corporate Finance Pty Ltd;

  • (e) the Shares issued are 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 Share Placement towards for general working capital.

7. RESOLUTION 6 – PLACEMENT OF OPTIONS

7.1 General

Resolution 6 seeks Shareholder approval for the placement of up to 12,741,500 Options to those parties issued Shares under the Share Placement. One Option will be issued to a party for each Share issued to that party under the Share Placement.

ASX Listing Rule 7.1 provides that a company must not, subject to specified exceptions, issue or agree to issue during any 12 month period any equity securities, or other securities with rights to conversion to equity (such as an option), if the number of those securities exceeds 15% of the number of securities in the same class on issue at the commencement of that 12 month period.

The effect of Resolution 6 will be to allow the Directors to issue up to 12,741,500 Options during the period of 3 months after the Annual General 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 Options:

  • (a) the maximum number of Options to be issued is 12,741,500;

  • (b) the Options will be issued no later than 3 months after the date of the Annual General Meeting (or such later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules). It is intended that the issue will occur on the same date, being a date as soon as possible after the Annual General Meeting;

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  • (c) the Options will be issued for nil consideration;

  • (d) the Options will be issued to the parties who were allotted and issued Shares under the Share Placement, with one Option being issued to a party for every Share issued to that party under the Share Placement. None of the Options will be issued to related parties of the Company;

  • (e) the terms and conditions of the Options are set out in Schedule 2;

  • (f) the Shares issued on conversion of the Options 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

  • (g) no funds will be raised from the issue of the Options.

8. RESOLUTION 7 – ISSUE OF CONVERTIBLE NOTES

8.1 General

Resolution 7 seeks Shareholder approval for the issue of Convertible Notes with a total face value of up to $500,000 on the material terms summarised below and as set out in Schedule 1.

ASX Listing Rule 7.1 provides that a company must not, subject to specified exceptions, issue or agree to issue during any 12 month period any equity securities, or other securities with rights to conversion to equity (such as an option), if the number of those securities exceeds 15% of the number of securities in the same class on issue at the commencement of that 12 month period.

The effect of Resolution 7 will be to allow the Directors to issue Convertible Notes with a total face value of up to $500,000 during the period of 3 months after the Annual General Meeting (or a longer period, if allowed by ASX without using the Company’s 15% annual placement capacity.

8.2 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 Convertible Notes:

  • (a) the aggregated total face value of the Convertible Notes is $500,000;

  • (b) the Convertible Notes will be issued no later than 3 months after the date of the Annual General 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 allotment will occur on the same date;

  • (c) the Directors will determine to whom the Convertible Notes will be issued and these persons will not, except to the extent approved under Resolution 8, be related parties of the Company;

  • (d) up to $500,000 will be raised as a result of the issue of the Convertible Notes. The Company intends to use the funds raised from issue of the Convertible Notes towards review and due diligence on Water Un Limited, new business opportunities and general working capital;

  • (e) the material terms of the Convertible Notes are set out in Schedule 1;

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  • (f) the number of Shares to be issued on conversion of a Convertible Note will equal the face value of the Convertible Note divided by the lower of $0.03 and 85% of the VWAP of the Company’s Shares over the last 5 days on which sales in Shares were recorded before the date of conversion of the Convertible Note;

  • (g) in the event that the Convertible Notes are wholly converted on the same date, if $0.03 is lower than 85% of the VWAP of the Company’s Shares over the last 5 days on which sales in Shares were recorded before the date of conversion of the Convertible Notes, the holders will be issued with 16,666,667 Shares at a deemed issue price of $0.03 each and 8,333,333 free Options. This will increase the number of Shares on issue from 97,685,379 to 114,352,046 (assuming that no other Shares are issued other than under the Share Placement) with the effect that the shareholding of existing Shareholders would be diluted by 14.57%;

  • (h) the Shares issued on conversion of the Convertible Notes 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;

  • (i) the deemed issue price of the Shares issued on conversion of a Convertible Note is the lower of $0.03 and 85% of the VWAP of the Company’s Shares over the last 5 days on which sales in Shares were recorded before the date of conversion of the Convertible Note;

  • (j) no funds will be raised from the issue of Shares upon conversion of the Convertible Notes;

  • (k) on conversion of a Convertible Note, the holder of the Convertible Note will be issued one free Option for every two Shares issued to the holder as a result of conversion of the Convertible Note; and

  • (l) the Options will be issued on the terms and conditions set out in Schedule 2; and

  • (m) if all of the Options issued on conversion of the Convertible Notes as set out above are exercised, this will increase the number of Shares on issue from 114,352,046 to 122,685,379 (assuming that no other Shares are issued other than under the Share Placement and on conversion of the Convertible Notes by the holders) with the effect that the shareholding of existing Shareholders would be diluted by 6.79%.

9. RESOLUTION 8 – ISSUE OF CONVERTIBLE NOTES TO A RELATED PARTY

9.1 General

The Company has agreed, subject to obtaining Shareholder approval, to allot and issue Convertible Notes with a total face value of $25,000 to GT Le Page & Associates Pty Ltd (ACN 082 913 175) (Related Party) on the terms and conditions set out below.

9.2 Chapter 2E of the Corporations Act

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:

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  • (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 Convertible Notes to the Related Party constitutes the giving a financial benefit, and, as an entity controlled by Guy Le Page, a Director of the Company, the Related Party is a related party of the Company.

It is the view of the Directors that the exceptions set out in Sections 210 to 216 of the Corporations Act do not apply in the current circumstances. Accordingly, Shareholder approval is sought for the issue of Convertible Notes to the Related Party and the issue of Shares and Options to the Related Party on conversion of the Convertible Notes.

9.3 ASX Listing Rule 10.11

ASX Listing Rule 10.11 requires shareholder approval to be obtained where an entity issues, or agrees to issue, equity 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 Directors that the exceptions set out in ASX Listing Rule 10.12 do not apply.

The issue of the Convertible Notes to the Related Party involves the issue of equity securities to a related party of the Company. Accordingly, approval is sought from Shareholders for the purposes of ASX Listing Rule 10.11.

9.4 Technical Information required by Chapter 2E of the Corporations Act and ASX Listing Rule 10.13

Pursuant to and in accordance with the requirements of Sections 217 to 227 of the Corporations Act and ASX Listing Rule 10.13, the following information is provided in relation to the proposed issue of the Convertible Notes to the Related Party:

  • (a) the related party is GT Le Page & Associates Pty Ltd (ACN 082 913 175) and it is a related party by virtue of being an entity controlled by Guy Le Page, a Director of the Company;

  • (b) the Convertible Notes (being the nature of the financial benefit being provided) to be issued to the Related Party will have a total face value of $25,000;

  • (c) the Convertible Notes will be issued to the Related Party no later than one (1) month after the date of the Annual General Meeting (or such later date as permitted by any ASX waiver or modification of the ASX Listing Rules);

  • (d) the Convertible Notes will be issued in return for payment of $25,000. The funds raised will be used towards general working capital;

  • (e) the material terms of the Convertible Notes are set out in Schedule 1. Section 7.2 of this Explanatory Statement sets out additional material information in relation to the Convertible Notes and the Shares and Options to be issued on conversion of the Convertible Notes;

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  • (f) the Related Party currently directly holds 640,000 Shares;

  • (g) if the Convertible Notes to be issued to the Related Party are wholly converted on the same date, the maximum number of Shares to be issued will depend on whether $0.03 is lower than the 85% of the VWAP of the Company’s Shares over the last 5 days on which sales in Shares were recorded before the date of conversion of the Convertible Notes. If it is lower, the Related Party will be issued with 833,333 Shares at a deemed issue price of $0.03 each and 416,666 Options. This will increase the number of Shares on issue from 97,685,379 to 98,518,712(assuming that no other Shares are issued other than under the Share Placement) with the effect that the shareholding of existing Shareholders would be diluted by 0.85%;

  • (h) if all of the Options issued on conversion of the Convertible Notes as set out above are exercised, this will increase the number of Shares on issue from 98,518,712 to 98,935,379 (assuming that no other Shares are issued other than under the Share Placement and on conversion of the Convertible Notes by the Related Party) with the effect that the shareholding of existing Shareholders would be diluted by 0.42%;

  • (i) the market price for Shares during the term of the Options would normally determine whether or not the Options are exercised. If, at any time any of the Options are exercised and the Shares are trading on ASX at a price that is higher than the exercise price of the Options, there may be a perceived cost to the Company;

  • (a) the remuneration and emoluments from the Company to Guy Le Page for both the current financial year and previous financial year are set out below:

Related Party Current Financial
Year		 Previous
Financial Year
Guy Le Page $0.00 $0.00

(j) the trading history of the Shares on ASX in the 12 months before the date of this Notice of Meeting is set out below:

Price (cents) Date
Highest 2 22 August 2008
Lowest 0.4 24 March 2009
Last 0.5 15 April 2009

  • (k) the primary purpose of the issue of the Convertible Notes is to raise funds to undertake a due diligence in relation to Water Un Limited, new business opportunities and for general working capital; and

  • (l) the Board does not consider that there are any significant opportunity costs to the Company or benefits foregone by the Company in issuing the Convertible Notes to the Related Party, or to the conversion of the Convertible Notes or the exercise of the Options issued on conversion of the Convertible Notes.

The Directors (other than Guy Le Page, who has a material interest as the controller of the Related Party), recommend that Shareholders vote in favour of Resolution 8.

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The Board (other than Guy Le Page) is not aware of any other information that would be reasonably required by Shareholders to allow them to make a decision whether it is in the best interests of the Company to pass the Resolution.

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

10. RESOLUTION 9 – ISSUE OF NEW CLASS OF SHARES

Section 246B of the Corporations Act provides that if a company’s constitution does not contain a procedure for varying or cancelling rights attached to a class of shares, those rights may only be varied by:

  • (a) a special resolution of the company and by a special resolution passed at a meeting of the members holding the class of shares; or

  • (b) the written consent of the holders of three quarters of the issued shares of the affected class.

Section 246C(5) of the Corporations Act provides that a company with a single class of shares on issue that proposes to issue new shares not having the same rights as its existing shares is taken to vary the rights of existing shareholders unless the Constitution already provides for such an issue.

The Company proposes issuing Performance Shares to Ross Smith under Resolution 10.

The rights attaching to the Performance Shares are not the same as the Shares.

Accordingly, the Company seeks approval from Shareholders for the issue of the above Performance Shares on the terms set out in Schedule 4 of this Explanatory Statement.

11. RESOLUTION 10 – ISSUE OF PERFORMANCE SHARES TO ROSS SMITH

11.1 General

Resolution 10 seeks shareholder approval, in accordance with section 208 and ASX Listing Rule of the Corporations Act and ASX Listing Rule 10.11, for the allotment and issue to Ross Smith (Ross Smith) (or his nominee) of:

  • (a) 5,000,000 Class A Performance Shares;

  • (b) 5,000,000 Class B Performance Shares; and

  • (c) 5,000,000 Class C Performance Shares,

on the terms and conditions set out in this Notice of Meeting.

11.2 Performance Hurdles for Performance Shares

The performance hurdles for the Performance Shares are as follows:

  • (a) a Class A Performance Share will automatically convert into one fully paid, ordinary Share in the event the volume weighted average price of the

15

Ordinary Shares as traded on ASX over 20 consecutive trading days is at least 3 cents (as adjusted for any consolidation or split of Enerji’s shares after the date of issue of the Class A Performance Shares), provided this occurs before 31 December 2011;

  • (b) a Class B Performance Share will automatically convert into one fully paid, ordinary Share in the event the volume weighted average price of the Ordinary Shares as traded on ASX over 20 consecutive trading days is at least 6 cents (as adjusted for any consolidation or split of Enerji’s shares after the date of issue of the Class B Performance Shares), provided this occurs before 31 December 2011; and

  • (c) a Class C Performance Share will automatically convert into one fully paid, ordinary Share in the event the volume weighted average price of the Ordinary Shares as traded on ASX over 20 consecutive trading days is at least 9 cents (as adjusted for any consolidation or split of Enerji’s shares after the date of issue of the Class C Performance Shares), provided this occurs before 31 December 2011.

11.3 Chapter 2E of the Corporations Act

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 Performance Shares to Ross Smith (or his nominee) constitutes giving a financial benefit, and, as a Director, Ross Smith is a related party of the Company.

It is the view of the Directors that the exceptions set out in Sections 210 to 216 of the Corporations Act do not apply in the current circumstances. Accordingly, Shareholder approval is sought for the issue of the Performance Shares to Ross Smith (or his nominee).

11.4 ASX Listing Rule 10.11

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 Directors that the exceptions set out in ASX Listing Rule 10.12 do not apply.

The issue of the Performance Shares to Ross Smith (or his nominee) involves the issue of securities to a related party of the Company and accordingly, approval is sought from Shareholders for the purposes of ASX Listing Rule 10.11.

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  • 11.5 Technical Information required by Chapter 2E of the Corporations Act and ASX Listing Rule 10.13

Pursuant to and in accordance with the requirements of Sections 217 to 227 of the Corporations Act and ASX Listing Rule 10.13, the following information is provided in relation to the proposed issue of the Performance Shares:

  • (a) the related party is Ross Smith and he is a related party by virtue of being a Director of the Company;

  • (b) the maximum number of Performance Shares (being the nature of the financial benefit being provided) to be issued to Ross Smith (or his nominee) is 5,000,000 Class A Performance Shares, 5,000,000 Class B Performance Shares and 5,000,000 Class C Performance Shares;

  • (c) the Performance Shares will be issued to Ross Smith (or his nominee) no later than 1 month after the date of the Annual General Meeting (or such later date as permitted by any ASX waiver or modification of the ASX Listing Rules) and it is anticipated the Performance Shares will be issued on one date;

  • (d) the Performance Shares will be issued for nil cash consideration, accordingly no funds will be raised;

  • (e) the Performance Shares will be issued on the terms and conditions set out in Schedule 4;

  • (f) Ross Smith and his associates does not currently have a relevant interest in any securities of the Company;

  • (b) the remuneration and emoluments from the Company to Ross Smith for both the current financial year and previous financial year are set out below:

Related Party Current Financial
Year		 Previous
Financial Year
Ross Smith $0.00 $0.00
  • (g) the conversion of the Performance Shares will have the following dilutionary effect on Shareholders (assuming that no other Shares are issued other than the Share Placement, and the issues on conversion of the Performance Shares):
Conversion of
Performance Shares		 Total issued
Shares before
conversion		 Total issued Shares
after conversion		 Dilution
(%)
5,000,000 Class A
Performance Shares		 97,685,379 102,685,379 4.87%
5,000,000 Class B
Performance Shares		 102,685,379 107,685,379 4.64%
5,000,000 Class C
Performance Shares		 107,685,379 112,685,379 4.44%

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  • (h) the primary purpose of the issue of the Performance Shares to Ross Smith (or his nominee) is to provide a market linked incentive package in his capacity as Managing Director and for the future performance by him in this role.

The Directors (other than Ross Smith, who has a material personal interest in the outcome of Resolution 10) recommend that Shareholders vote in favour of Resolution 10. The Board (other than Ross Smith) is not aware of any other information that would be reasonably required by Shareholders to allow them to make a decision whether it is in the best interests of the Company to pass the Resolution.

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

12. RESOLUTIONS 11 AND 12 – ISSUE OF OPTIONS TO ROSS SMITH AND GUY LE PAGE

12.1 General

The Company has agreed, subject to obtaining Shareholder approval, to allot and issue:

  • (a) 4,000,000 Options to Ross Smith (or his nominee); and

  • (b) 4,000,000 Options to Guy Le Page(or his nominee),

(together, the Related Parties),

on the terms and conditions set out below.

12.2 Chapter 2E of the Corporations Act

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 Options to the Related Parties constitutes the giving a financial benefit, and, as Directors of the Company, Ross Smith and Guy Le Page are related parties of the Company.

It is the view of the Directors that the exceptions set out in Sections 210 to 216 of the Corporations Act do not apply in the current circumstances. Accordingly, Shareholder approval is sought for the issue of Options to the Related Parties.

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12.3 ASX Listing Rule 10.11

ASX Listing Rule 10.11 requires shareholder approval to be obtained where an entity issues, or agrees to issue, equity 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 Directors that the exceptions set out in ASX Listing Rule 10.12 do not apply.

The issue of the Options to the Related Parties involves the issue of equity securities to a related party of the Company. Accordingly, approval is sought from Shareholders for the purposes of ASX Listing Rule 10.11.

12.4 Shareholder Approval (Chapter 2E of the Corporations Act and Listing Rule 10.11)

Pursuant to and in accordance with the requirements of Sections 217 to 227 of the Corporations Act and ASX Listing Rule 10.13, the following information is provided in relation to the proposed issue of Options:

  • (a) the related parties are Messrs Ross Smith and Guy Le Page, and they are related parties by virtue of being Directors;

  • (b) the maximum number of Options (being the nature of the financial benefit being provided) to be issued to the Related Parties (or their nominees) is:

  • (i) 4,000,000 Options to Ross Smith; and

  • (ii) 4,000,000 Options to Guy Le Page;

  • (c) the Options will be issued to the Related Parties (or their nominees) no later than 1 month after the date of the Annual General Meeting (or such later date as permitted by any ASX waiver or modification of the ASX Listing Rules) and it is anticipated the Options will be issued on one date;

  • (d) the Options will be issued for nil cash consideration, accordingly no funds will be raised;

  • (e) the terms and conditions of the Options are set out in Schedule 2;

  • (f) the value of the Options and the pricing methodology is set out in Schedule 3;

  • (g) the relevant interests of the Related Parties in securities of the Company are set out below;

Related Party Shares Options
Ross Smith Nil Nil
Guy Le Page 640,000 Nil
  • (h) the remuneration and emoluments from the Company to the Related Parties for both the current financial year and previous financial year are set out below:
Related Party Current
Financial Year		 Previous
Financial Year

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Ross Smith $0.00 $0.00
Guy Le Page $0.00 $0.00

  • (i) if the Options issued to Ross Smith (or his nominee) are exercised, a total of 4,000,000 Shares would be allotted and issued. This will increase the number of Shares on issue from 97,685,379 to 101,685,379 (assuming that no other Options are exercised and no other Shares issued other than the Share Placement) with the effect that the shareholding of existing Shareholders would be diluted by 3.93%;

  • (j) if the Options issued to Guy Le Page (or his nominee) are exercised, a total of 4,000,000 Shares would be allotted and issued. This will increase the number of Shares on issue from 97,685,379 to 101,685,379 (assuming that no other Options are exercised and no other Shares issued other than the Share Placement) with the effect that the shareholding of existing Shareholders would be diluted by 3.93%;

  • (k) the market price for Shares during the term of the Options would normally determine whether or not the Options are exercised. If, at any time any of the Options are exercised and the Shares are trading on ASX at a price that is higher than the exercise price of the Options, there may be a perceived cost to the Company;

  • (l) the trading history of the Shares on ASX in the 12 months before the date of this Notice of Annual General Meeting is set out below:

Price Date
Highest 2 22 August 2008
Lowest 0.4 24 March 2009
Last 0.5 15 April 2009

  • (m) the primary purpose of the issue of Options to the Related Parties is to provide cost effective consideration to the Related Parties for their ongoing commitment and contribution to the Company in their respective roles as Directors. The Board does not consider that there are any significant opportunity costs to the Company or benefits foregone by the Company in issuing the Options upon the terms proposed;

  • (n) the Board acknowledges the issue of Options to Guy Le Page is contrary to Recommendation 8.2 of the ASX Corporate Governance Principles and Recommendations. However, the Board considers the issue of Options to Guy Le Page reasonable in the circumstances, given the necessity to attract the highest calibre of professionals to the Company, whilst maintaining the Company’s cash reserves;

  • (o) Ross Smith declines to make a recommendation to Shareholders in relation to Resolution 11 due to his material personal interest in the outcome of the Resolution. The other Directors, who do not have a material interest in the outcome of Resolution 11, recommend that Shareholders vote in favour of Resolution 11. The Board (other than Ross Smith) is not aware of any other information that would be reasonably required by Shareholders to allow them to make a decision whether it is in the best interests of the Company to pass the Resolution; and

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  • (p) Guy Le Page declines to make a recommendation to Shareholders in relation to Resolution 12 due to his material personal interest in the outcome of the Resolution. The other Directors, who do not have a material interest in the outcome of Resolution 12, recommend that Shareholders vote in favour of Resolution 12. The Board (other than Guy Le Page) is not aware of any other information that would be reasonably required by Shareholders to allow them to make a decision whether it is in the best interests of the Company to pass the Resolution;

Approval pursuant to ASX Listing Rule 7.1 is not required in order to issue the Options to the Related Parties as approval is being obtained under ASX Listing Rule 10.11. Accordingly, the issue of Options 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.

13. RESOLUTION 13 – ISSUE OF SHARES AND OPTIONS TO RM CORPORATE FINANCE

13.1 General

The Company has engaged RM Corporate Finance Pty Ltd (RM Corporate) as corporate advisor to the capital raisings related to the Share Placement and the Convertible Notes. In consideration for these services, the Company has agreed, subject to shareholder approval, to allot and issue 7,000,000 Shares and 7,000,000 Options to RM Corporate on the terms and conditions set out below.

13.2 Chapter 2E of the Corporations Act

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 Shares and Options to RM Corporate constitutes the giving a financial benefit. Guy Le Page, a Director of the Company, is a joint controlling director of RM Corporate. As such, RM Corporate is a related party of the Company.

It is the view of the Directors that the exceptions set out in Sections 210 to 216 of the Corporations Act do not apply in the current circumstances. Accordingly, Shareholder approval is sought for the issue of Shares and Options to RM Corporate.

13.3 ASX Listing Rule 10.11

ASX Listing Rule 10.11 requires shareholder approval to be obtained where an entity issues, or agrees to issue, equity 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 Directors that the exceptions set out in ASX Listing Rule 10.12 do not apply.

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The issue of the Shares and Options to RM Corporate involves the issue of equity securities to a related party of the Company. Accordingly, approval is sought from Shareholders for the purposes of ASX Listing Rule 10.11.

13.4 Shareholder Approval (Chapter 2E of the Corporations Act and Listing Rule 10.11)

Pursuant to and in accordance with the requirements of Sections 217 to 227 of the Corporations Act and ASX Listing Rule 10.13, the following information is provided in relation to the proposed issue of Shares and Options to RM Corporate:

  • (a) the related party is RM Corporate. Dina Le Page, the spouse of Guy Le Page, a Director of the Company, is a joint controlling shareholder of RM Corporate. As such, RM Corporate is a related party of the Company;

  • (b) the maximum number of Shares and Options (being the nature of the financial benefit being provided) to be issued to RM Corporate is:

  • (i) 7,000,000 Shares; and

  • (ii) 7,000,000 Options;

  • (c) the Shares and Options will be issued to RM Corporate no later than 1 month after the date of the Annual General Meeting (or such later date as permitted by any ASX waiver or modification of the ASX Listing Rules) and it is anticipated the Shares and Options will be issued on one date;

  • (d) the Shares and Options will be issued for nil cash consideration, accordingly no funds will be raised;

  • (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 terms and conditions of the Options are set out in Schedule 2;

  • (g) the value of the Options and the pricing methodology is set out in Schedule 3;

  • (h) the relevant interests of RM Corporate and its associates in securities of the Company are set out below;

Related Party Shares Options
RM Corporate Nil Nil
Guy Le Page & Associates Pty Ltd 640,000 Nil

(i) the Company has paid RM Corporate the following fees for both the current financial year and previous financial year are set out below:

Related Party Current
Financial Year		 Previous
Financial Year
RM Corporate $0.00 $0.00

(j) if 7,000,000 Shares are issued to RM Corporate, this will increase the number of Shares on issue from 97,685,379to 104,685,379 (assuming that no other

22

Options are exercised and no other Shares issued other than the Share Placement) with the effect that the shareholding of existing Shareholders would be diluted by 6.69%;

  • (k) if the 7,000,000 Options issued to RM Corporate are exercised, a total of 7 million Shares would be allotted and issued. This will increase the number of Shares on issue from 104,685,379 to 111,685,379 (assuming that no other Options are exercised and no other Shares issued other than the Share Placement and the issue to RM Corporate) with the effect that the shareholding of existing Shareholders would be diluted by 6.27%;

  • (l) the market price for Shares during the term of the Options would normally determine whether or not the Options are exercised. If, at any time any of the Options are exercised and the Shares are trading on ASX at a price that is higher than the exercise price of the Options, there may be a perceived cost to the Company;

  • (m) the trading history of the Shares on ASX in the 12 months before the date of this Notice of Annual General Meeting is set out below:

Price Date
Highest 2 22 August 2008
Lowest 0.4 24 March 2009
Last 0.5 15 April 2009

  • (n) the primary purpose of the issue of Shares and Options to RM Corporate is to provide cost effective consideration to RM Corporate in return for assisting with the capital raising under the Share Placement and Convertible Notes. The Board does not consider that there are any significant opportunity costs to the Company or benefits foregone by the Company in issuing the Shares and Options upon the terms proposed; and

  • (o) Guy Le Page declines to make a recommendation to Shareholders in relation to Resolution 13 due to his material personal interest in the outcome of the Resolution. The other Directors, who do not have a material interest in the outcome of Resolution 13, recommend that Shareholders vote in favour of Resolution 13. The Board (other than Guy Le Page) is not aware of any other information that would be reasonably required by Shareholders to allow them to make a decision whether it is in the best interests of the Company to pass the Resolution;

Approval pursuant to ASX Listing Rule 7.1 is not required in order to issue the Shares and Options to RM Corporate as approval is being obtained under ASX Listing Rule 10.11. Accordingly, the issue of Shares and Options 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.

14. RESOLUTION 14 – APPOINTMENT OF AUDITOR

PKF has notified the Company that it will, with the consent of the ASIC, resign as the Company’s auditor with effect from the day before the Annual General Meeting of the Company.

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A member of the Company has nominated KPMG as the auditor of the Company to replace PKF. A copy of the nomination is attached in Schedule 5 of this Notice of Meeting as required by Section 328B(3) of the Corporations Act.

KPMG has given its consent to be appointed auditor to the Company with effect from the Annual General Meeting, and has not withdrawn its consent, in accordance with Section 328A of the Corporations Act.

15. ENQUIRIES

Shareholders are required to contact the Company Secretary on (+ 61 8) 9367 8133 if they have any queries in respect of the matters set out in these documents.

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GLOSSARY

$ means Australian dollars.

Annual General Meeting means the annual general meeting convened by the Notice of Meeting.

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.

Company means Enerji Ltd (ABN 62 009 423 189).

Constitution means the Company’s constitution.

Convertible Note means a convertible note issued on the material terms and conditions set out in Schedule 1.

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 of Meeting.

Notice of Meeting or Notice of Annual General Meeting means this notice of annual general meeting including the Explanatory Statement.

Option means an option to acquire one fully paid, ordinary Share in the Company with the terms and conditions set out in Schedule 2.

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

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

Shareholder means a holder of a Share.

Share Placement means the placement of shares to be approved under Resolution 5 of this Notice of Meeting.

VWAP means the volume weighted average price of the Company’s Share on the ASX.

Water Un Limited means Water Un Limited (ACN 106 657 774).

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

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SCHEDULE 1: MATERIAL TERMS OF CONVERTIBLE NOTES

Face Value Up to $500,000 in total
Interest Rate (%) Nil
Security Unsecured
Repayment Date (if not converted) 30 June 2012
If the Directors deem that the Company has
insufficient capital to repay the Convertible
Notes on the Repayment Date, or the
repayment of the Convertible Notes would
potentially lead to an act of insolvency then
the Directors, at their absolute discretion,
have the right to convert the Convertible
Notes, in part or in whole, at the conversion
price of 85% of the VWAP of the Company’s
Shares over the last 5 days on which sales in
Shares
were
recorded
before
the
Repayment Date.
Options On conversion, the holder will receive one
Option (exercise price of $0.03, expiring 31
December 2016) for every two Shares issued
on conversion.
Converting At any time.
Conversion Price Lower of $0.03 and 85% of the VWAP of the
Company’s Shares over the last 5 days on
which sales in Shares were recorded before
the date of conversion.
Reorganisation The $0.03 deemed issue price of the Shares
and the $0.03 exercise price of the Options
to be issued on conversion of a Convertible
Note are subject to adjustment in the event
of
any
capital
re-organisation
of
the
Company
prior
to,
or
following,
the
conversion of the Convertible Note to
ensure the holder will not be disadvantaged
by or benefit from any re-organisation
relative to ordinary shareholders.

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SCHEDULE 2: TERMS AND CONDITIONS OF OPTIONS

The Options entitle the holder to subscribe for Shares on the following terms and conditions:

  • (a) Each Option gives the Optionholder the right to subscribe for one Share. To obtain the right given by each Option, the Optionholder must exercise the Options in accordance with the terms and conditions of the Options.

  • (b) The Options will expire at 5:00 pm (WST) on 31 December 2016 (Expiry Date). Any Option not exercised before the Expiry Date will automatically lapse on the Expiry Date.

  • (c) The amount payable upon exercise of each Option will be $0.03 each (Exercise Price).

  • (d) The Options held by each Optionholder may be exercised in whole or in part, and if exercised in part, multiples of 1,000 must be exercised on each occasion.

  • (e) An Optionholder may exercise their Options by lodging with the Company, before the Expiry Date:

  • (i) a written notice of exercise of Options specifying the number of Options being exercised; and

  • (ii) a cheque or electronic funds transfer for the Exercise Price for the number of Options being exercised;

(Exercise Notice).

  • (f) An Exercise Notice is only effective when the Company has received the full amount of the Exercise Price in cleared funds.

  • (g) Within 10 Business Days of receipt of the Exercise Notice accompanied by the Exercise Price, the Company will allot the number of Shares required under these terms and conditions in respect of the number of Options specified in the Exercise Notice.

  • (h)

  • The Options are not transferable.

  • (i) All Shares allotted upon the exercise of Options will upon allotment rank pari passu in all respects with other Shares.

  • (j) The Company will not apply for quotation of the Options on ASX. However, the Company will apply for quotation of all Shares allotted pursuant to the exercise of Options on ASX within 10 Business Days after the date of allotment of those Shares.

  • (k) 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.

  • (l) There are no participating rights or entitlements inherent in the Options and Optionholders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Options. However, the Company will ensure that for the purposes of determining entitlements to any such issue, the record date will be at least 6 Business Days after the issue is announced. This will give Optionholders the opportunity to exercise their Options prior to the date for determining entitlements to participate in any such issue.

27

  • (m) 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.

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SCHEDULE 3: VALUATION OF OPTIONS

The Options to be issued to holders of Convertible Notes, Ross Smith, Guy Le Page and RM Corporate Finance Pty Ltd under Resolutions in this Notice of Meeting have been valued by internal management.

Using the theoretical Black & Scholes option model and based on the assumptions set out below, the Options were ascribed a value range, as follows:

Assumptions No early exercise of options
No dividends to be paid prior to maturity
date
Impracticable to determine future volatility
on this stock in the context of these options.
A volatility of 100% is considered a
practicable presumption.
Valuation date 9 April 2009
Market price of Shares $0.005
Exercise price $0.03
Expiry date 31 December 2016
Risk free interest rate 4.36%
Volatility 100% (refer assumptions above)
Indicative value per Option (at $0.03 cents) $0.003401
Total Value of Options
Ross Smith (4,000,000 Options) $13,605
Guy Le Page (4,000,000 Options) $13,605
RM Corporate Finance Pty Ltd (7,000,000
Options)		 $23,808

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SCHEDULE 4 – PERFORMANCE SHARES

  1. RIGHTS ATTACHING TO CLASS A PERFORMANCE SHARES

  2. 1.1 (Performance Shares) Each Class A Performance Share is a share in the capital of Enerji Ltd (Enerji).

  3. 1.2 (General Meetings) Class A Performance Shares shall confer on the holder (Holder) the right to receive notices of general meetings and financial reports and accounts of Enerji that are circulated to shareholders. Holders have the right to attend general meetings of shareholders of Enerji.

  4. 1.3 (No Voting Rights) The Class A Performance Shares do not entitle the Holder to vote on any resolutions proposed at a general meeting of shareholders of Enerji.

  5. 1.4 (No Dividend Rights) The Class A Performance Shares do not entitle the Holder to any dividends.

  6. 1.5 (Rights on Winding Up) The Class A Performance Shares participate in the surplus profits or assets of Enerji upon winding up of Enerji only to the extent of $0.000001 per Class A Performance Share.

  7. 1.6 (Not Transferable) The Class A Performance Shares are not transferable, without the prior consent of Enerji.

  8. 1.7 (Reorganisation of Capital) If at any time the issued capital of Enerji is reconstructed, all rights of a Holder will be changed to the extent necessary to comply with the applicable ASX Listing Rules at the time of reorganisation.

  9. 1.8 (No Listing) The Class A Performance Shares will not be quoted on ASX. However, if the Company is listed on a securities exchange upon conversion of the Class A Performance Shares into fully paid ordinary shares (Ordinary Shares), Enerji must within seven (7) days after the conversion, apply for the official quotation of the Ordinary Shares arising from the conversion on the relevant securities exchange.

  10. 1.9 (No Other Rights) The Class A Performance Shares give the Holders no rights other than those expressly provided by these terms and those provided at law where such rights at law cannot be excluded by these terms.

  11. 1.10 (ASX Listing Rules) The terms of the Class A Performance Shares may be amended by the Company to the extent required by the ASX (or the relevant other stock exchange).

2. CONVERSION OF THE CLASS A PERFORMANCE SHARES

  • 2.1 (Conversion on achievement of milestones): Each Class A Performance Share will convert into one (1) Ordinary Share in the event the volume weighted average price of the Ordinary Shares as traded on ASX over 20 consecutive trading days (VWAP) is at least 3 cents (as adjusted for any consolidation or split of Enerji’s shares after the date of issue of the Class A Performance Shares) (Milestone), provided this occurs before 31 December 2011 (Expiry Date).

  • 2.2 (Redemption if a Milestone not Achieved) If the Milestone is not achieved by the Expiry Date, then all of the Class A Performance Shares held by a

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Holder will be redeemed by Enerji for the sum of $0.000001 per Class A Performance Share within 10 Business Days of the Expiry Date.

  • 2.3 (Conversion Procedure) Enerji will issue the Holder with a new holding statement for the Ordinary Shares as soon as practicable following the conversion of the Class A Performance Shares into Ordinary Shares in accordance with condition 2.1.

  • 2.4 (Ranking of Shares) The Ordinary Shares into which the Class A Performance Shares will convert will rank pari passu in all respects with existing Ordinary Shares.

1. RIGHTS ATTACHING TO CLASS B PERFORMANCE SHARES

  • 1.1 (Performance Shares) Each Class B Performance Share is a share in the capital of Enerji Ltd (Enerji).

  • 1.2 (General Meetings) Class B Performance Shares shall confer on the holder (Holder) the right to receive notices of general meetings and financial reports and accounts of Enerji that are circulated to shareholders. Holders have the right to attend general meetings of shareholders of Enerji.

  • 1.3 (No Voting Rights) The Class B Performance Shares do not entitle the Holder to vote on any resolutions proposed at a general meeting of shareholders of Enerji.

  • 1.4 (No Dividend Rights) The Class B Performance Shares do not entitle the Holder to any dividends.

  • 1.5 (Rights on Winding Up) The Class B Performance Shares participate in the surplus profits or assets of Enerji upon winding up of Enerji only to the extent of $0.000001 per Class B Performance Share.

  • 1.6 (Not Transferable) The Class B Performance Shares are not transferable, without the prior consent of Enerji.

  • 1.7 (Reorganisation of Capital) If at any time the issued capital of Enerji is reconstructed, all rights of a Holder will be changed to the extent necessary to comply with the applicable ASX Listing Rules at the time of reorganisation.

  • 1.8 (No Listing) The Class B Performance Shares will not be quoted on ASX. However, if the Company is listed on a securities exchange upon conversion of the Class B Performance Shares into fully paid ordinary shares (Ordinary Shares), Enerji must within seven (7) days after the conversion, apply for the official quotation of the Ordinary Shares arising from the conversion on the relevant securities exchange.

  • 1.9 (No Other Rights) The Class B Performance Shares give the Holders no rights other than those expressly provided by these terms and those provided at law where such rights at law cannot be excluded by these terms.

  • 1.10 (ASX Listing Rules) The terms of the Class B Performance Shares may be amended by the Company to the extent required by the ASX (or the relevant other stock exchange).

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2. CONVERSION OF THE CLASS B PERFORMANCE SHARES

  • 2.1 (Conversion on achievement of milestones): Each Class B Performance Share will convert into one (1) Ordinary Share in the event the volume weighted average price of the Ordinary Shares as traded on ASX over 20 consecutive trading days (VWAP) is at least 6 cents (as adjusted for any consolidation or split of Enerji’s shares after the date of issue of the Class B Performance Shares) (Milestone), provided this occurs before 31 December 2011 (Expiry Date).

  • 2.2 (Redemption if a Milestone not Achieved) If the Milestone is not achieved by the Expiry Date, then all of the Class B Performance Shares held by a Holder will be redeemed by Enerji for the sum of $0.000001 per Class B Performance Share within 10 Business Days of the Expiry Date.

  • 2.3 (Conversion Procedure) Enerji will issue the Holder with a new holding statement for the Ordinary Shares as soon as practicable following the conversion of the Class B Performance Shares into Ordinary Shares in accordance with condition 2.1.

  • 2.4 (Ranking of Shares) The Ordinary Shares into which the Class B Performance Shares will convert will rank pari passu in all respects with existing Ordinary Shares.

1. RIGHTS ATTACHING TO CLASS C PERFORMANCE SHARES

  • 1.1 (Performance Shares) Each Class C Performance Share is a share in the capital of Enerji Ltd (Enerji).

  • 1.2 (General Meetings) Class C Performance Shares shall confer on the holder (Holder) the right to receive notices of general meetings and financial reports and accounts of Enerji that are circulated to shareholders. Holders have the right to attend general meetings of shareholders of Enerji.

  • 1.3 (No Voting Rights) The Class C Performance Shares do not entitle the Holder to vote on any resolutions proposed at a general meeting of shareholders of Enerji.

  • 1.4 (No Dividend Rights) The Class C Performance Shares do not entitle the Holder to any dividends.

  • 1.5 (Rights on Winding Up) The Class C Performance Shares participate in the surplus profits or assets of Enerji upon winding up of Enerji only to the extent of $0.000001 per Class C Performance Share.

  • 1.6 (Not Transferable) The Class C Performance Shares are not transferable, without the prior consent of Enerji.

  • 1.7 (Reorganisation of Capital) If at any time the issued capital of Enerji is reconstructed, all rights of a Holder will be changed to the extent necessary to comply with the applicable ASX Listing Rules at the time of reorganisation.

  • 1.8 (No Listing) The Class C Performance Shares will not be quoted on ASX. However, if the Company is listed on a securities exchange upon conversion of the Class C Performance Shares into fully paid ordinary shares (Ordinary Shares), Enerji must within seven (7) days after the conversion,

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apply for the official quotation of the Ordinary Shares arising from the conversion on the relevant securities exchange.

  • 1.9 (No Other Rights) The Class C Performance Shares give the Holders no rights other than those expressly provided by these terms and those provided at law where such rights at law cannot be excluded by these terms.

  • 1.10 (ASX Listing Rules) The terms of the Class C Performance Shares may be amended by the Company to the extent required by the ASX (or the relevant other stock exchange).

  • CONVERSION OF THE CLASS C PERFORMANCE SHARES

  • 2.1 (Conversion on achievement of milestones): Each Class C Performance Share will convert into one (1) Ordinary Share in the event the volume weighted average price of the Ordinary Shares as traded on ASX over 20 consecutive trading days (VWAP) is at least 9 cents (as adjusted for any consolidation or split of Enerji’s shares after the date of issue of the Class C Performance Shares) (Milestone), provided this occurs before 31 December 2011 (Expiry Date).

  • 2.2 (Redemption if a Milestone not Achieved) If the Milestone is not achieved by the Expiry Date, then all of the Class C Performance Shares held by a Holder will be redeemed by Enerji for the sum of $0.000001 per Class C Performance Share within 10 Business Days of the Expiry Date.

  • 2.3 (Conversion Procedure) Enerji will issue the Holder with a new holding statement for the Ordinary Shares as soon as practicable following the conversion of the Class C Performance Shares into Ordinary Shares in accordance with condition 2.1.

  • 2.4 (Ranking of Shares) The Ordinary Shares into which the Class C Performance Shares will convert will rank pari passu in all respects with existing Ordinary Shares.

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SCHEDULE 5: NOMINATION OF AUDITOR

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PROXY FORM

APPOINTMENT OF PROXY ENERJI LTD ABN 62 009 423 189

ANNUAL GENERAL MEETING

I/We of

==> picture [420 x 54] intentionally omitted <==

being a member of Enerji Limited (ACN 009 423 189) entitled to attend and vote at the Annual General Meeting, hereby

Appoint

Name of proxy

OR the Chair of the Annual General Meeting as your proxy

or failing the person so named or, if no person is named, the Chair of the Annual General Meeting, or the Chair’s nominee, to vote in accordance with the following directions, or, if no directions have been given, as the proxy sees fit, at the Annual General Meeting to be held at 10am (WST), on 29 May 2009 at Nissen Kestel Harford, Boardroom, Level 2, 100 Railway Road, Subiaco WA 6008, and at any adjournment thereof.

If no directions are given, the Chair will vote in favour of all the Resolutions.

If the Chair of the Annual General Meeting is appointed as your proxy, or may be appointed by default, and you do not wish to direct your proxy how to vote as your proxy in respect of Resolutions 5, 6, 7, 8, 10, 11, 12 and 13 please place a mark in this box.

By marking this box, you acknowledge that the Chair of the Annual General Meeting may exercise your proxy even if he has an interest in the outcome of Resolutions 5, 6, 7, 8, 10, 11, 12 and 13 and that votes cast by the Chair of the Annual General Meeting for Resolutions 5, 6, 7, 8, 10, 11, 12 and 13 other than as proxy holder will be disregarded because of that interest. If you do not mark this box, and you have not directed your proxy how to vote, the Chair will not cast your votes on Resolutions 5, 6, 7, 8, 10, 11, 12 and 13 and and your votes will not be counted in calculating the required majority if a poll is called on Resolutions 5, 6, 7, 8, 10, 11, 12 and 13.

OR

Voting on Business of the Annual General Meeting ABSTAIN Resolution 1 – Adoption of Remuneration Report Resolution 2 - Re-election of Director – Ross Smith Resolution 3 – Re-election of Director – Guy Le Page Resolution 4 – Re-election of Director – Steve Bamford Resolution 5 – Ratification of issue of Shares Resolution 6 – Placement of Options Resolution 7 – Issue of Convertible Notes Resolution 8 – Issue of Convertible Notes to a Related Party Resolution 9 – Issue of New Class of Shares Resolution 10 – Issue of Performance Shares to Ross Smith Resolution 11 – Issue of Options – Ross Smith Resolution 12 – Issue of Options – Guy Le Page Resolution 13 – Issue of Shares and Options to RM Corporate Finance Resolution 14 – Appointment of Auditor

FOR AGAINST

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 to be counted in computing the required majority on a poll.

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Date:

Signature of Member(s):

Individual or Member 1 Member 2 Member 3 Sole Director/Company Director Director/Company Secretary Secretary

Contact Name: _____ Contact Ph (daytime)______

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ENERJI LTD ABN 62 009 423 189

Instructions for Completing ‘Appointment of Proxy’ Form

  1. (Appointing a Proxy): A member entitled to attend and vote at an Annual General Meeting is entitled to appoint not more than two proxies to attend and vote on a poll on their behalf. The appointment of a second proxy must be done on a separate copy of the Proxy Form. Where more than one proxy is appointed, such proxy must be allocated a proportion of the member’s voting rights. If a member appoints two proxies and the appointment does not specify this proportion, each proxy may exercise half the votes. A duly appointed proxy need not be a member of the Company.

  2. (Direction to Vote): A member may direct a proxy how to vote by marking one of the boxes opposite each item of business. Where a box is not marked the proxy may vote as they choose. Where more than one box is marked on an item the vote will be invalid on that item.

(Signing Instructions):

  • (Individual): Where the holding is in one name, the member must sign.

  • (Joint Holding): Where the holding is in more than one name, all of the members 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 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.

  • (Attending the Meeting): Completion of a Proxy Form will not prevent individual members from attending the Annual General Meeting in person if they wish. Where a member completes and lodges a valid Proxy Form and attends the Annual General Meeting in person, then the proxy’s authority to speak and vote for that member is suspended while the member is present at the Annual General Meeting.

  • (Return of Proxy Form): To vote by proxy, please complete and sign the enclosed Proxy Form and return by:

  • (a) post to Enerji Ltd, , Level 2, Spectrum, 100 Railway Road Subiaco, Western Australia 6008; or

  • (b) facsimile to the Company on facsimile number +61 8 9367 8812,

so that it is received not later than 10.00 am (WST) on 27 May 2009.

Proxy forms received later than this time will be invalid.

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