METAL STORM LIMITED

ACN 064 270 006

ASX: MST OTC: MTSXY

Resolution Approved at Meeting of Note Holders Brisbane, Australia - 16 July 2012: Metal Storm Limited advises that Note Holders have approved the amendments to the Convertible Note Terms at the meeting of Note Holders held in Brisbane today.

As a result of this resolution and the Shareholder approval announced earlier today, the Company is permitted to proceed to complete the Luxinvest Agreement and the Umbrella Deed.

Set out below is the text of the resolution approved by Note Holders, the proxy information and the voting results.

Approval of amendment to the Note Terms

To consider and, if thought fit, pass the following as an Extraordinary Resolution:

That, subject to the satisfaction of the Condition set out below, for the purposes of clauses 15.11(c), 15.11(d) and 17.1(e) of the Trust Deed and for all other purposes, Note Holders:

(a) approve the modification of the Note Terms, by amending the Note Terms in the manner generally described in the Explanatory Statement and as detailed in the Amendment Deed produced at the meeting, and;

(b) authorise the Trustee to effect the amendments to the Note Terms by executing the Amendment Deed.

Proxy information Number of Convertible Notes

Proxies to vote for ............................................................ 911,547

Proxies to vote against .......................................................41,490

Proxies to abstain...............................................................26,794

Proxies to vote at the proxy's discretion ........................ 7,668,409

Voting results Number of Votes

Votes cast in favour............ ......................................... 13,414,795 (99.96%) Votes cast against.......... ......................................................5,597 (0.04%) Votes abstaining.............. .....................................................3,616

This resolution was decided by poll in accordance with section 15.7(d) of the Convertible

Notes Trust Deed.

ENDS

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Metal Storm Limited

ACN 064 270 006

Notes:

Metal Storm's Australian Stock Exchange trading code: MST Metal Storm's OTC Symbol: MTSXY

Company Contact: Australia & USA

Dr Lee Finniear - Chief Executive Officer, Metal Storm Limited - Ph: +61 7 3147 8600
Mr Peter Faulkner - President, Metal Storm Inc. - Ph: +1 (703) 2488218

About Metal Storm

Metal Storm Limited is a multi-national defence technology company engaged in the development of electronically initiated ballistics systems using its unique "stacked projectile" technology. The company is headquartered in Brisbane, Australia and incorporated in Australia. Metal Storm Limited technology and products are represented in the USA by Metal Storm Inc., which has offices in Arlington Virginia.
Metal Storm is working with government agencies and departments, as well as industry, to develop a variety of systems utilising the Metal Storm non-mechanical, electronically fired stacked ammunition system.
Metal Storm's weapon technology uses computer-controlled electronic ignition and a system of stacked projectiles, to achieve a completely non- mechanical gun that is very lightweight and compact, providing a very high firepower to weight ratio. The Metal Storm weapons system utilises multiple barrels mounted together on one platform which allows varying munitions types to be deployed in a single, low cost, lightweight weapon system. Firing the weapons by electronic ignition requires no moving parts, allowing reliable long term unattended weapon operation.

Safe Harbour

Certain statements made herein that use the words "estimate", "project", "intend", "expect", "believe" and similar expressions are intended to identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks and uncertainties which could cause the actual results, performance or achievements of the company to be materially different from those which may be expressed or implied by such statements, including, among others, risks or uncertainties associated with the development of the company's technology, the ability of the company to meet its financial requirements, the ability of the company to protect its proprietary technology, potential limitations on the company's technology, the market for the company's products, government regulation in Australia and the US, changes in tax and other laws, changes in competition and the loss of key personnel. For additional information regarding these and other risks and uncertainties associated with the company's business, reference is made to the company's reports filed from time to time with the Securities and Exchange Commission, including the company's Form 20-F.

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