1st one out...BRISBANE, AUSTRALIA - 31 July 2009 – Metal Storm...

1st one out...

BRISBANE, AUSTRALIA - 31 July 2009 – Metal Storm Limited (ASX trading code:

MST, OTC symbol MTSXY) announces the resolution passed at the company’s

Meeting of convertible note holders, held in Brisbane today.

EXTRAORDINARY RESOLUTION

Approval of amendments to the Existing Terms and Trust Deed and approval

of the Charge

That, subject to the satisfaction of the condition set out below, for the purposes

of:

(a) clauses 15.11©, 15.11(d), 15.11(h) and 17.1(e) of the trust deed and

for all other purposes, note holders:

(i) approve the modification of the Existing Terms, by amending the

Existing Terms in the manner generally described in the Explanatory

Statement and as detailed in the Amendment Deed produced at the

meeting;

(ii) approve the modification of the Trust Deed, by amending the Trust

Deed as in the manner generally described in the Explanatory

Statement and as detailed in the Amendment Deed produced at the

meeting; and

(iii) authorise the Trustee to effect the amendments to the Existing

Terms and the Trust Deed by executing the Amendment Deed; and

(b) the definition of Permitted Encumbrance, clauses 6.5 and 15.11(a) of the

Trust Deed and for all other purposes, Note Holders:

(i) approve the Charge as a Permitted Encumbrance; and

(ii) authorise the Trustee to execute the Charge and the Security Trust

Deed.”

Condition:

If ASX requires the Company to seek Shareholder approval of the amendment

of the Existing Terms in the manner described in the resolution, the approval of

Note Holders of the resolution is subject to the Company obtaining that

Shareholder approval.

The condition will be satisfied if ASX advises prior to the date of the Note Holder

meeting that it does not require Shareholder approval.

Proxies to vote for, 105,687,545

Proxies to vote against, 29,753

Proxies to abstain, nil

Proxies to vote at the proxy’s discretion 889,925

In accordance with section 15.7(d) of the Convertible Notes Trust Deed, this

resolution was decided by poll with 99.97% of votes present voting in favour of the

resolution.