Letter from Samuel Terry Asset Mgt re AGM

The following letter has been mailed to Acrux's top 100 shareholders:

Dear fellow shareholder of Acrux,

I am Managing Director of Samuel Terry Asset Management Pty Ltd, the largest shareholder in Acrux Ltd.

Acrux’s annual meeting on 28^th November will vote on six resolutions. Two of those resolutions were proposed by us and Lugarno Partners, the second largest shareholder. I am writing this letter to explain why we have made these proposals and why you should vote for them.

Resolution Five – Change to board member remuneration

This resolution proposes that directors’ fees for the next three years will be paid 50% in cash and 50% in shares. Share based remuneration will further align the interests of directors and shareholders and will save the company cash.

As stated in the Notice of Meeting, we were willing to issue shares to directors for 15 cents each, but the board decided that 18 cents was a more appropriate price. We commend the board for this action.

The reason that this resolution proposes that 50% of director remuneration be paid in cash is that directors have to pay tax, and tax has to be paid in cash.

Resolution Six – Appointment of new director Norman Gray

As you can see from his biography in the Notice of Meeting, Norman has had an impressive career. We believe that Acrux needs new blood in its boardroom and that Norman will add value to the board’s decision making.

We are optimistic about the company’s future and believe these changes will increase the probability of success.

If you wish to discuss these matters, feel free to contact me.

Your ssincerely,

Fred Woollard