Ezenet LIMITED

ABN 84 083 646 477

PROSPECTUS

THIS DOCUMENT IS IMPORTANT

If you do not fully understand this prospectus, or are in any doubt how to deal with it, you should immediately consult your stockbroker, solicitor, accountant or other financial advisor.

A non-renouncable issue of up to 12,248,457 Shares to holders of Listed Options and 20¢ Options on the basis of 1 new Share in exchange for the cancellation of every 4 Options held.

THE SHARES OFFERED BY THIS PROSPECTUS SHOULD BE CONSIDERED AS SPECULATIVE.

ABN 98 006 640 553

CORPORATE DIRECTORY

Security Transfer Registrars Pty Ltd and Ernst & Young have not had any involvement in the preparation of this Prospectus and have not consented to be named. Their names are included for information purposes only.

ABN 98 006 640 553

PART I - IMPORTANT INFORMATION

CONTENTS

Page No.

TIMETABLE OF IMPORTANT DATES

These dates are subject to change by the Directors.

This prospectus is dated 11 December 2006.

A copy of this prospectus was lodged with the ASIC on 11 December 2006. The ASIC and the ASX takes no responsibility for the contents of the Prospectus.

No securities will be allotted or issued on the basis of this Prospectus later than thirteen (13) months after the date of this Prospectus.

ABN 98 006 640 553

PART II - DETAILS OF THE ISSUE

Purpose of the Issue

As at that date of this Prospectus the Company has on issue 70,843,967 Shares and 33,493,828 Listed Options and 15,500,000 unlisted 20¢ Options and 125,000 unlisted 40¢ Options.

The offer under this Prospectus to exchange Options for Shares is designed to improve the capital structure of the Company and remove an extremely large "option overhang" on the market. The Directors have been advised by a number of stockbrokers and others familiar with the capital markets that the high number of Options on issue in the Company relative to the issued Shares most probably act as a deterrent to a stronger share price. The logic is that if people are to buy Shares and those Shares improve in value, then those Shares and the overall shareholding of other shareholders would be diluted by the conversion of Options. Whilst the conversion of Options would bring capital into the Company the overhang does represent difficulties in achieving a stronger share price.

While the conversion of Options to Shares may result in a dilution to shareholders in the short term, the Directors are of the view that a more attractive capital structure would benefit Shareholders in the medium to long term and will greatly assist the Company in future partnering and capital related events.

It is unusual for a Company listed on ASX to have such high number of listed and unlisted Options relative to the number of Shares on issues.

The maximum number of Shares that could be issued if all Optionholders accepted the offer for all their Options held by them, is twelve million two hundred and forty eight thousand and four hundred and fifty seven (12,248,457).

Optionholders will have the right to accept the offer to exchange their Options for Shares in whole or in part Set out below is the number of Shares that would be issued by the Company if various percentages are accepted:-

The Issue

At the Company's General Meeting held on 24 November 2006, Shareholders approved the cancellation of up to 49,095,078 Options in consideration for the issue to Optionholders of 1 New

ABN 98 006 640 553

Share for every 4 Options cancelled. The Shareholder approval and the offer by this Prospectus relates only to listed Options and 20¢ Options.

By this Prospectus, the Company makes an offer to all holders of listed Options and 20¢ Options to subscribe for 1 New Share for every 4 Options held on the Record Date in consideration for the cancellation of those Options. Any fractional entitlement to New Shares resulting from the issue will be rounded up to the next whole number of New Shares.

The Company currently has 33,493,828 listed Options which are listed on the ASX and 15,500,000 20¢ Options which unlisted.

The New Share offered pursuant to this Prospectus are offered only to Optionholders who held Options as at the Record Date.

By way of example, if an Optionholder held 100,000 Options on the Record Date, that Optionholder would be entitled in accordance with this Prospectus to exchange all or some of those Options for Shares in Ezenet in the ratio of 1 New Share for every 4 Options. In this theoretical example if the Optionholder accepted for all of their 100,000 Options they would be entitled to 25,000 New Shares. The Optionholder would not be required to pay any money for the New Shares with the consideration being the exchange of their Options.

Ezenet will not receive any funds from the issue of new Shares pursuant to this Prospectus and the consideration for the issue of new Shares in the issue of new Shares in the cancellation of 4 Options of every 1 new Share subscribed for.

Entitlement

The number of Shares to which an Optionholder is entitled is shown on the attached Entitlement and Acceptance Form.

Acceptance

This Offer may be accepted in whole or in part. Instructions for completion and lodgement of acceptances are set out on the back of the attached Entitlement and Acceptance Form.

Action Required

If you wish to take up all or part of your entitlement - complete the attached Entitlement and Acceptance Form in accordance with the instructions set out in the Form and lodge the Form to reach to Company's share register:

Security Transfer Registrars Pty Ltd Suite 1, Alexandrea House 770 Canning Highway Applecross, Western Australia 6153

no later than 5.00 pm WST on 9 February, 2006.

Allotment

Shares under the Issue will be allotted as soon as practicable, but in any event no later than 12 February 2006. Holding Statements for the Shares will be mailed no later than seven (7) days after acceptance of applications.

No Shares will be allotted on the basis of this Prospectus later than thirteen (13) months after the date of this Prospectus.

ABN 98 006 640 553

Cancellation

The Options to be cancelled in exchange for the new Shares issued will be cancelled immediately following the allotment of the Shares.

Stock Exchange Quotation

Application for official quotation of the new Shares by the ASX will be made by the Company within three (3) Business Days after the date of issue of this Prospectus. If approval is not granted by ASX before the expiration of three (3) months after the date of issue of this Prospectus, the Company will not allot or issue any options the subject of this Prospectus.

Overseas Shareholders

Shareholders resident outside Australia should consult their professional advisors as to whether any governmental or other consents are required, or other formalities need to be observed to enable them to accept or deal with their entitlements.

This Prospectus does not constitute an offer in any place in which or to any person whom, it would not be lawful to make such an Offer.

Costs of Issue

No funds will be raised from the issue of the Shares under this Prospectus. The expenses of the issue is estimated at thirty thousand dollars (\$30,000.00).

Share and Listed Option Price

The highest and lowest trading prices for Share and Listed Options in the three (3) month period immediately preceding the date of this Prospectus were:-

The highest and lowest trading prices for Share and Listed Options in the twelve (12) month period immediately preceding the date of this Prospectus were:-

Enquiries

If you have any questions concerning your entitlement, please contact the Company on (08) 9389 9345, fax (08) 9389 9749 or contact your broker or professional advisor.

ABN 98 006 640 553

PART III - CAPITAL STRUCTURE AND EFFECT OF THE ISSUE

Notes

There are four Substantial Shareholder in the Company:-

$1.$ Existing Capital Structure

This assumes:-

• that no listed Options or unlisted options are exercised prior to the Entitlement Date; $(a)$
• $(b)$ that all of the Options on issue held by eligible Optionholders are exchanged for New Shares.

$2.$ Financial Position and Profit and Loss

No Capital will be raised from the Issue which will have no immediate effect on the Company's financial performance. With respect to those Optionholders who accept the Offer however, the Company will forego any amount which may have been paid to the Company if those Optionholders had elected to exercise their Options at fifteen (15) cents per Option expiring 30 June 2007 or twenty (20) cents per Option expiring 30 June 2010.

ABN 98 006 640 553

PART IV - ADDITIONAL INFORMATION

Continuous Disclosure

The Company is a "disclosing entity" for the purposes of section 111AC of the Corporations Act. As such, it is subject to regular reporting and disclosure obligations which require it to disclose to ASX any information of which it is, or becomes, aware concerning the Company and which a reasonable person would expect to have a material effect on the price or value of the securities of the Company.

Having taken such precautions and made such enquiries as are reasonable, the Company believes that it has complied with the general and specific requirements of ASX (as applicable from time to time throughout the twelve (12) months immediately prior to the issue of this Prospectus) which required the Company to notify ASX of information about specified events or matters as they arose for the purpose of ASX making that information available to the stock market conducted by ASX.

Copies of documents lodged with the ASIC in relation to the Company may be obtained from, or inspected at, an office of the ASIC.

The Company will provide a copy of each of the following documents, free of charge, to any person who asks for it during the currency of this Offer.

• the financial statements for the Company for the year ended 30th June, 2006 (being the last $(a)$ financial statement for the financial year to be lodged with the ASX in relation to the Company before the issue of this Prospectus)
• $(b)$ all documents used to notify the ASX of information relating to the Company under the provisions of the Listing Rules of ASX since lodgement of the annual financial statements referred to above; being the following documents;
• 30/10/2006 Annual Report; $(i)$
• 30/10/2006 Appendix 4C Quarterly Report; $(ii)$
• $(iii)$ 03/11/2006 Change of Directors Interest Notice;
• $(iv)$ 13/11/2006 Change of Directors Interest Notice;
• $(v)$ 27/11/2006 Presentation at Annual General Meeting;
• 01/12/2006 Disclosure of Proxy Votes; $(v_i)$
• $(vii)$ 01/12/2006 Disclosure of Proxy Votes - AGM;
• $(viii)$ 08/12/2006 Appendix 3B - New Issue.

Rights attaching to the new Shares

The new Shares offered by this Prospectus will rank equally in all respects with the Company's fully paid ordinary Shares already on issue.

The following is a broad summary of the rights which attach to the Shares.

$(a)$ Voting Rights

Subject to any rights or restrictions for the time being attached to any class or classes of Shares (at present there are none), at a general meeting every holder of ordinary Shares present in person or by proxy or being a corporation, by a representative duly authorised under the Corporations Law, has one vote on a show of hands and one vote per Share on a

ABN 98 006 640 553

poll. A person who holds a Share which is not fully paid is entitled to a fraction of a vote equal to the amount paid up divided by the issue price of the Share.

$(b)$ Dividend Rights

Subject to the rights of holders of Shares issued with any special or preferential rights (at present there are none), the profits of the Company which the directors may from time to time determine to distribute by way of dividend are divisible among the shareholders in the proportion to the numbers of Shares held by them respectively and are paid irrespective of the amount paid or credited as paid on those Shares.

$(c)$ Rights on Winding up

Subject to the rights of holders of Shares issued upon special terms and conditions (at present there are none), holders of ordinary Shares will share in any surplus assets on a winding-up in proportion to the numbers of Shares held by them respectively, irrespective of the amount paid up or credited as paid up on those Shares at the commencement of the winding-up.

Terms and Conditions of Options

The Options held by Optionholders to which this Offer is made are on the following terms and conditions:-

• $(a)$ each Option confers the right to acquire one ordinary fully paid Share in the capital of the Company:
• $(b)$ Options may be exercised at any time up to 5.00 pm WST on the 30 June, 2007 or 30 June,. 2010 as the case may be ("Expiry Date");
• the exercise price for the Option is fifteen cents (A\$0.15) or twenty cents (A\$0.20) as the case $(c)$ may be:
• $(d)$ Options may be transferred at any time before the Expiry Date;
• Shares arising from the exercise of Options: $(e)$
• will in all respects rank equally with the present issued Shares of the Company; and $(i)$
• $(ii)$ will (unless the options are designated as restricted securities at the time) be eligible for listing on the official list of the Australian Stock Exchange,
• $(f)$ there is no inherent right in an Option to participate in new issues of securities which may be offered to the shareholders of the Company from time to time before the exercise of the Option. Option holders will be given seven (7) business days notice prior to the date for determining the entitlement in any issue of securities in which to exercise the Option;
• $(g)$ in the event of any reorganisation of the capital of the Company the number of Options or the exercise price of the Options or both shall be reconstructed in accordance with the Listing Rules.

Risk Factors

The directors recommend to you the Offer which is the subject of this Prospectus, however the Shares offered are speculative and there are a number of risk factors involved. Following is a summary of more material matters to be considered. This summary is not exhaustive and potential investors should examine the contents of this Prospectus and consult their advisors before deciding whether to apply for the Shares offered.

$(a)$ Investment Considerations

ABN 98 006 640 553

The Shares to be issued pursuant to the Prospectus are speculative because of the nature of the business of the Company. The value of the Shares can go down as well as up and a dividend may or may not be payable in the future, depending on the Company's operating successes. As the holding of the Company's securities involves certain risks, shareholders in doubt should consult their stockbroker, solicitor, accountant or other professional advisor immediately.

$(b)$ General Economic Climate

Factors such as inflation, currency fluctuations, interest rates, the economy and stock market prices will affect the Company's future possible revenues, share price and ability to raise further capital.

$(c)$ Digital Movie Supply Industry

The Company currently holds a non-exclusive distribution rights for Video on Demand and other products in Australia and New Zealand. In addition to the general risk factors detailed above, the risk factors specific the digital movie supply industry generally also apply:-

• Market Demand: as the Company is in the early stages of operations it remains to be $(i)$ seen whether the Company will be able to establish a sufficient supply and achieve a sufficient market acceptance to generate the revenue the Directors believe could be achieved.
• $(ii)$ Competition: as the company is in the early stages of operations it remains to be seen whether the company will be capable of being able to establish a sufficient market share to generate the revenue the Directors believe could be achieved; Competition may force prices and costs up and margins down. If the decline in prices or costs or in margins occurs faster than is anticipated there could be a significant risk that impairs the growth prospects of the company.
• $(iii)$ Changes to existing cost structures: the profitability of the company's business is related to cost structures. A change in these cost structures may effect the Company's profit margins and overall business.
• Key personnel: the loss of any key management personnel may have a detrimental $(iv)$ effect on the business of the company.
• $(d)$ Sovereign Risk

The Company has an investment in Weatherly International plc which in turn has interests in the Republic of Namibia and Zambia outside Australia. There are a variety of foreign company and sovereign risks in any investment in the Republic of Namibia and Zambia.

Privacy Statement

Applicants will be asked to provide personal information to the Company (and to the share registry). If you do not wish to provide this information the Company will not be able to process your application. Personal information is collected and used in order to process your application, comply with the obligations of the Company under Part 2C of the Corporations Act and to administer your investment. In processing and administering your investment, we may disclose your personal information to related bodies corporate, our agents, contractors or third party advisers that provide financial, administrative or other services in connection with our business. Furthermore, the Corporations Act requires us to allow anyone to inspect our public registers, including our share registry, which may (if required by law) contain your personal information.

ABN 98 006 640 553

Under the Privacy Act 1988 (Cth), you may request access to your personal information that is held by, or on behalf of, the Company. You can do this by contacting the Company, or its share registry, details of which are set out elsewhere in this Prospectus.

Taxation

Holders of Options to whom this Offer is made should be aware that there may be taxation consequences of the issue of the new Shares in consideration for the cancellation of Options. It is the responsibility of all persons to satisfy themselves for the particular taxation treatment that applies to them by consulting their own professional tax advisers before accepting the allotment of the new Shares. Taxation consequences will depend on particular circumstances. Neither the Company nor any of its officers accept any liability or responsibility in respect of the taxation consequences of the matters referred to above or any other taxation consequences connected with an investment in the Shares in the Company or dealing with an entitlement in the Issue.

Consents

$(a)$ Simon Watson has consented in writing to be named in this Prospectus as solicitors to the Company in respect of the issue of new Shares and has advised on legal matters but has not authorised or caused the issue of this Prospectus. Simon Watson makes no representation regarding, and take no responsibility for, any statements or omissions from any part of this Prospectus other than that set out above and specifically disclaims any liability to any person in the event of omission from, or any false or misleading statement included in this Prospectus.

Interests of experts and advisors

Except as disclosed in this Prospectus, no person named in this Prospectus as performing a function in a professional, advisory or other capacity in connection with the preparation or distribution of this Prospectus has or had within two (2) years before lodgement of this Prospectus with the ASIC any interest in the formation or the promotion of the Company to the Issue and no amounts have been paid or agreed to be paid to any expert, or firm in which any expert is a partner, for services rendered by the expert or the firm in connection with the promotion or formation of the company.

Simon Watson is acting as solicitor to the Company in connection with the issue and will be paid approximately \$5,000 for his services to the date of this Prospectus. Further amounts will be paid in accordance with the usual charge out rates.

Director's Interests

Other than as set out below, no director or proposed director of the Company nor any firm in which such a director or proposed director is a partner, has or had within two (2) years before lodgement of this Prospectus with the ASIC, any interest in the promotion of the Company, or in any property proposed to be acquired by the Company in connection with its formation or promotion and no amounts have been paid or agreed to be paid (in cash or Shares or otherwise) to any director or proposed director or to any firm in which any such director is a partner, either to induce him to become, or to qualify him as, a director or otherwise for services rendered by him or by the firm in connection with the promotion or formation of the Company.

$(a)$ The interests of the directors in the share capital of the Company:-

ABN 98 006 640 553

$(b)$ Remuneration of Directors

Dr Wolf Martinick is the principal of Martinick Investments Pty Ltd and a Director and shareholder of Martinick Investments Pty Ltd. Martinick Investments Pty Ltd provides management and corporate advisory services to the Company at normal commercial rates. Fees paid or accrued and reimbursement of expenses since 30 June 2006 were \$15,000.00 excluding GST.

Mr. Richard Burt is an executive Managing Director and full time employee of the Company. Salary, superannuation and expenses paid or accrued since 30 June 2006 were \$77,083.45.

Consulting fees and reimbursements of expenses paid to Mr. Ross O'Dea or accrued since 30 June 2006 were \$15,000.00 excluding GST.

Mr David Ward is the Principal and Director of Blackwood Business Services Pty Ltd. Blackwood Business Services Pty Ltd provides accounting and corporate advisory services to the company at normal commercial rates. Fees paid or accrued and reimbursement of expenses since 30 June 2006 were \$15,000.00 excluding GST.

Signed this 11 December, 2006 in accordance with a resolution of the Directors.

MR GRAHAM ROSS O'DEA Director

ABN 98 006 640 553

GLOSSARY

In this Prospectus unless the context otherwise requires:

"ASIC" means the Australian Securities and Investment Commission.

"ASX" means the Australian Stock Exchange Limited.

"Business day" means those days defined by the Listing Rules of the ASX as Business Days.

"Company" means Ezenet Limited.

"Directors" means the directors of Ezenet Limited.

"Issue or Offer" means the offer of up to 12,245,457 Shares pursuant to this Prospectus.

"Listed Options" means options to acquire Shares in the Company exercisable at fifteen cents (15¢) at any time on or before 30 June 2007.

"Listing Rules" means the Official Listing Rules of the ASX.

"Offer" means the offer of Shares under this Prospectus.

"Option" means a Listed Option and Twenty cent (20¢) Option.

"Optionholder" means a person registered in the register of the Company as the holder of an Option as at the Record Date.

"Prospectus" means this Prospectus for a non-renounceable issue of up to 12,273,770 Shares to Optionholders, and includes all information contained in this document.

"Issue or Offer" means the offer of 12,273,770 Shares at an issue price of twenty cents (\$0.20) pursuant to this Prospectus.

"Shares" means fully paid ordinary Shares in the capital of the Company.

Twenty cent (20¢) Options" means options to acquire Shares in the Company exercisable at twenty cents (20¢) at any time on or before 30 June 2010.

"WST" means Australian Western Standard Time.

$-12-$

ENTITLEMENT and ACCEPTANCE APPLICATION FORM

THIS DOCUMENT IS IMPORTANT. IF YOU ARE IN DOUBT AS TO HOW TO DEAL WITH IT. PLEASE CONTACT YOUR STOCKBROKER OR LICENSED PROFESSIONAL ADVISER.

EZENET LIMITED

ABN 84 083 646 477

REGISTERED OFFICE: 2 Bulimba Road NEDLANDS WA 6009 Telephone: (08) 9389 9345 Facsimile: (08) 9389 9749

SHARE REGISTRY: Security Transfer Registrars Pty Ltd
All Corro to: PO BOX 535, APPLECROSS WA 6953 770 Canning Highway, APPLECROSS WA 6153 Telephone: (08) 9315 2333 Facsimile: (08) 9315 2233 Email: [email protected]

Holder Number: Entitlement No: «REF_NO» «HOLDER_TYPE_

A NON RENOUNCEABLE ISSUE OF UP TO APPROXIMATELY 5,500,000 ORDINARY SHARES ON THE BASIS OF 1 SHARE IN EXCHANGE FOR THE CANCELLATION OF EVERY 4 OPTIONS HELD.

To the Directors,

EZENET LIMITED

(1) I/We the abovenamed being registered on 14 December 2006 (at 5.00pm Australian W.S.T) as the holder(s) of Options in your Company hereby accept and apply for the undermentioned new Shares issued in exchange for the cancellation of Options in accordance with the terms of the Prospectus accompanying this form. If you do not complete the number of new Shares to be accepted/applied for and return this form you acknowledge that you have accepted/applied for the whole of your entitlement shown.

(2) I/We hereby authorise you to place my/our name(s) on the register of members in respect of the number of Shares allotted to me/us and

(3) I/We agree to be bound by the Constitution of the Company.

(4) If any information on this form is not completed correctly, it may still be accepted. Any decision of the directors as to whether to accept this form, and how to construe, amend or complete it, shall be final.

(5) My/Our contact numbers in case of enquiries are:

NOTE: Overseas shareholders are advised to ensure that their documents are posted to Australia by Airmail. This Entitlement and Acceptance Application Form should be sent to Security Transfer Registrars Pty Ltd in the enclosed return addressed envelope to arrive:

NO LATER THAN 5.00PM WST ON 9 FEBRUARY 2007

THIS FORM DOES NOT REQUIRE SIGNING UNLESS YOU WISH TO CHANGE YOUR ADDRESS Please complete ONLY if your ISSUER SPONSORED address is INCORRECT.

THIS ISSUE CLOSES 5.00PM WST ON 9 FEBRUARY 2007

ABN 98 006 640 553

LODGEMENT INSTRUCTION

Non-Renounceable Entitlement Issue Closing 5:00 p.m. WST on Monday, 9 February 2007.

ACCEPTANCE OF ENTITLEMENT IN FULL OR IN PART $1.$

If you are accepting your Entitlement in full please:

• Complete Form Overleaf;
• Forward it, in the envelope provided, together with your Option Certificate (if applicable) to $\bullet$ reach by 5:00 p.m. WST Friday, 9 February 2007, the Company's Share Registry Office:-

Security Transfer Registrars Pty Ltd Suite 1 Alexandrea House 770 Canning Highway Applecross WA 6153 Australia

• Where acceptance has not been received by Friday 9 February 2007 the Offer shall be $\bullet$ deemed to have been declined wholly or as to the number of shares not applied for.
• No payment is required.
• Entitlement and Acceptance forms do not require signing. $\bullet$

OVERSEAS SHAREHOLDERS ARE ADVISED TO ENSURE THAT THEIR DOCUMENTS ARE POSTED TO AUSTRALIA BY AIRMAIL

INSTRUCTIONS

Application Forms

Application must be made on the application form attached to this Prospectus. Please complete all parts of this Application Form using block letters.

Forms Of Registration

Companies

The Australian Company Number (ACN) for the company should be indicated.

Application List

The application list will open on 14 December 2006 and will remain open until 5.00 pm Western Standard Time on 9 February 2007 subject to the right of the Company to close the Application list earlier or to extend the Application closing date without prior notice.

Lodging of Application Forms

Application Forms are to be lodged Security Transfer Registrars Pty Ltd, Suite 1, Alexandrea House, 770 Canning Highway, Applecross, WA, 6153, Australia.

Completion

Before completing the Application Form the applicant should read this Prospectus to which this application relates.

Enquiries

Any enquiries should be directed to:-

Ezenet Limited 2 Bulimba Road Nedlands WA 6009

Attention: Mr. Richard Burt, Managing Director

Tel: (08) 9389 9345 Fax: (08) 9389 9749