DXN LIMITED — AGM Information 2020

Oct 19, 2020

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20 October 2020

Dear Sir/Madam

NOTICE OF ANNUAL GENERAL MEETING AND PROXY FORM

DXN Limited (“ DXN ” or “ the Company ”) (ASX:DXN) invites you to attend the Annual General Meeting of shareholders. Physical attendance by shareholders will not be permitted due to COVID-19 social distancing restrictions, travel restrictions and other requirements imposed by State and federal governments. Attendance is only available by video conference to registered shareholders, the Board, auditors and Company advisors.

You must register your interest to attend the meeting by weblink on or before 10.00 am (Melbourne time) Sunday 22 November 2020 by sending an email to the Company Secretary at george.lazarou@dxn.solutions including your Holder Name, Address and HIN or SRN details.

You must lodge your proxy in advance of the meeting by 10:00 am (Melbourne time) on Saturday 21 November 2020 .

In accordance with section 5(1)(f) of the Corporations (Coronavirus Economic Response) Determination (No. 1) 2020 made by the Commonwealth Treasurer on 5 May 2020, the Notice of Annual General Meeting, accompanying Explanatory Statement and Schedules (Meeting Materials) are being made available to shareholders electronically.

You are able to view and download the Meeting Materials online from the Company website, and specifically the announcements page https://www2.asx.com.au/markets/trade-our-cash-market/announcements.dxn.

If you have nominated an email address and have elected to receive electronic communications with the Company’s share registry, Automic Group Pty Ltd, you will receive an email to your nominated email address with a link to an electronic copy of the Meeting Materials. In order to be able to receive electronic communications from the Company in the future, please update your shareholder details online at investor.automic.com.au/#/signup and log in with your unique shareholder identification number you can find on your Personalised Proxy form.

As a valued shareholder in the Company, we look forward to your participation in the meeting.

If you have any difficulties obtaining a copy of the Notice of Meeting please contact the Company’s share registry, Automic Group Pty Ltd, on 1300 288 664 (within Australia) or +61 2 9698 5414 (overseas).

A copy of both the abovementioned Meeting Materials and Proxy form are attached herewith.

-Ends-

For more information please contact: George Lazarou Company Secretary T: +61 1300 328 239 E: george.lazarou@dxn.solutions

DXN Limited

ABN: 46 620 888 548

9 Mumford Place, Balcatta, Perth, Western Australia, 6021 W: dxn.solutions | T: 1300 328 239 | E: info@dxn.solutions

DXN LIMITED ACN 620 888 548 NOTICE OF ANNUAL GENERAL MEETING

TIME : 10:00 am (Melbourne time) DATE : Monday 23 November 2020 PLACE : Level 2 120 Collins Street MELBOURNE 3000

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.

If you wish to discuss the matters in this Notice of Meeting please contact the Company Secretary on +61 412 076 641.

CONTENTS PAGE

Business of the Meeting (setting out the proposed resolutions)	5
Explanatory Statement (explaining the proposed resolutions)	7
Glossary	17
Schedule 1 – Terms and Conditions of Lazarus Options	19
Schedule 2 – Lazarus Agreement	21
Proxy Form	Attached

IMPORTANT INFORMATION

TIME AND PLACE OF MEETING

Notice is given that the meeting of the Shareholders to which this Notice of Meeting relates will be held at 10:00am (Melbourne time) on Monday 23 November 2020 at Level 2, 120 Collins Street, Melbourne, Victoria, 3000. Due to COVID-19 requirements attendee registration by email will be available up to 10:00am (Melbourne time) Sunday 22 November 2020 by emailing the Company Secretary at george.lazarou@dxn.solutions and including your Holder Name, Address and HIN or SRN details.

ATTENDNG THE MEETING

Physical attendance by shareholders will not be permitted due to COVID-19 social distancing restrictions, travel restrictions and other requirements imposed by State and federal governments. Attendance is only available by video conference to registered shareholders the Board, auditors and Company advisors.

You must lodge your vote or proxy in advance of the meeting by 10:00 am (Melbourne time) on 21 November 2020.

If you have lodged a proxy, you are still entitled to attend the Meeting by video conference. You must register your interest to attend the meeting by weblink on or before 10.00 am (Melbourne time) Sunday 22 November 2020 by sending an email to the Company Secretary at george.lazarou@dxn.solutions including your Holder Name, Address and HIN or SRN details.

SUBMITTING QUESTIONS

It is preferred that if you have any questions of the Board that they be submitted in writing to the Company Secretary by email at george.lazarou@dxn.solutions on or before 10.00 am (Melbourne time) Friday 20 November 2020.

YOUR VOTE IS IMPORTANT

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

INTERPRETATION

Capitalised terms which are not otherwise in this Notice and Explanatory Statement have the meanings given to those terms in the Glossary section of the Explanatory Statement.

References to “$” and “A$” in this Notice and Explanatory Statement are references to Australian currency unless otherwise stated.

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References to time in this Notice and Explanatory Statement relate to the time in Melbourne, Victoria.

VOTING EXCLUSION STATEMENTS

Certain voting restrictions apply to the Resolutions as detailed beneath the applicable Resolutions in the Notice.

VOTING ELIGIBILITY

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 at 7:00pm (Melbourne time) on Saturday 21 November 2020.

VOTING BY PROXY

In accordance with clause 13.16 of the Constitution, the Chair has determined that voting on all resolutions will be conducted by poll. Voting will be by way of proxy instructions received in advance of the meeting.

To vote by proxy, please complete and sign the enclosed Proxy Form and return by the time and in accordance with the instructions set out on the Proxy Form.

In accordance with section 249L of the Corporations Act, members are advised that:

• each member has a right to appoint a proxy;

• the proxy need not be a member of the Company; and

• a member who is entitled to cast 2 or more votes may appoint 2 proxies and may specify the proportion or number of votes each proxy is appointed to exercise. If the member appoints 2 proxies and the appointment does not specify the proportion or number of the member’s votes, then in accordance with clause 13.24 of the Constitution, each proxy may exercise one-half of the votes.

Proxy vote if appointment specifies way to vote

Section 250BB(1) of the Corporations Act provides that an appointment of a proxy may specify the way the proxy is to vote on a particular resolution and, if it does :

• the proxy need not vote on a show of hands, but if the proxy does so, the proxy must vote that way (i.e. as directed); and

• if the proxy has 2 or more appointments that specify different ways to vote on the resolution – the proxy must not vote on a show of hands; and

• if the proxy is the chair of the meeting at which the resolution is voted on – the proxy must vote on a poll, and must vote that way (i.e. as directed); and

• if the proxy is not the chair – the proxy need not vote on the poll, but if the proxy does so, the proxy must vote that way (i.e. as directed).

Transfer of non-chair proxy to chair in certain circumstances

Section 250BC of the Corporations Act provides that, if:

• an appointment of a proxy specifies the way the proxy is to vote on a particular resolution at a meeting of the Company's members; and

• the appointed proxy is not the chair of the meeting; and

• at the meeting, a poll is duly demanded on the resolution; and

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• either of the following applies:

1. the proxy is not recorded as attending the meeting;

2. the proxy does not vote on the resolution,

the chair of the meeting is taken, before voting on the resolution closes, to have been appointed as the proxy for the purposes of voting on the resolution at the meeting.

Chair’s intentions in relation to undirected proxies

If the Chair is your proxy or is appointed as your proxy by default, and you do not direct the Chair how to vote on Resolution 1 on your Proxy Form, you will be expressly authorising the Chair to vote on Resolution 1 as the Chair sees fit. The Chair intends to vote undirected proxies in favour of all Resolutions (including Resolution 1).

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BUSINESS OF THE MEETING

AGENDA

ORDINARY BUSINESS

1. FINANCIAL STATEMENTS AND REPORTS

To receive and consider the annual financial report of the Company for the financial period ended 30 June 2020 together with the declaration of the Directors, the Directors’ Report, the Remuneration Report and the Auditor’s Report.

2. 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 30 June 2020.”

Note: the vote on this Resolution is advisory only and does not bind the Directors or the Company.

Voting Prohibition Statement: A vote on this Resolution must not be cast (in any capacity) by or on behalf of any of the following persons:

(a) a member of the Key Management Personnel, details of whose remuneration are included in the Remuneration Report; or (b) a Closely Related Party of such a member. However, a person (the Voter ) described above may cast a vote on this Resolution as a proxy if the vote is not cast on behalf of a person described above and either:

(a) the Voter is appointed as a proxy by writing that specifies the way the proxy is to vote on the Resolution; or (b) the Voter is the Chair and the appointment of the Chair as proxy: (i) does not specify the way the proxy is to vote on this Resolution; and (ii) expressly authorises the Chair to exercise the proxy even though this Resolution is connected directly or indirectly with the remuneration of a member of the Key Management Personnel.

3. RESOLUTION 2 – RE-ELECTION OF DIRECTOR – MR RICHARD CARDEN

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 14.2 of the Constitution, ASX Listing Rule 14.4 and for all other purposes, Mr Richard Carden, a Director, retires by rotation, and being eligible, is re-elected as a Director.”

4. RESOLUTION 3 – ELECTION OF DIRECTOR – MR MATTHEW MADDEN

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 14.4 of the Constitution, ASX Listing Rule 14.4 and for all other purposes, Mr Matthew Madden, a Director who was

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appointed as an additional director on 26 August 2020, retires, and being eligible, is elected as a Director.”

5. RESOLUTION 4 – ELECTION OF DIRECTOR – MR JOHN DIMITROPOULOS

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 14.4 of the Constitution, ASX Listing Rule 14.4 and for all other purposes, Mr John Dimitropoulos, a Director who was appointed as an additional director on 1 October 2020, retires, and being eligible, is elected as a Director.”

6. RESOLUTION 5 – RATIFICATION OF PRIOR ISSUE - OPTIONS

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

“That, for the purposes of ASX Listing Rule 7.4 and for all other purposes, Shareholders ratify the issue of 60,000,000 Options on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion : The Company will disregard any votes cast in favour of this Resolution by or on behalf of Lazarus Corporate Finance Pty Ltd or any of its associates. However, this does not apply to a vote cast in favour of this Resolution by:

• (a) a person, a proxy or attorney for a person who is entitled to vote on this Resolution, in accordance with the directions given to the proxy or attorney to vote on this Resolution in that way; or

• (b) the chair of the meeting as proxy or attorney for a person who is entitled to vote on this Resolution as the chair decides; or

• (c) a holder acting solely in a nominee, trustee, custodial or other fiduciary capacity on behalf of a beneficiary provided the following conditions are met:

• (i) the beneficiary provides written confirmation to the holder that the beneficiary is not excluded from voting, and is not an associate of Pinnacle Corporate Finance Pty Ltd excluded from voting, on this Resolution; and

• (ii) the holder votes on this Resolution in accordance with the directions given by the beneficiary to the holder to vote in that way.

7. RESOLUTION 6 – APPROVAL OF 7.1A MANDATE

To consider and, if thought fit, to pass the following resolution as a special resolution :

“That, for the purposes of ASX Listing Rule 7.1A and for all other purposes, approval is given for the issue of equity securities totalling up to 10% of the issued capital of the Company at the time of issue, calculated in accordance with the formula prescribed in ASX Listing Rule 7.1A.2 and otherwise on the terms and conditions set out in the Explanatory Statement accompanying this Notice of Meeting.”

Dated: 13 October 2020

BY ORDER OF THE BOARD

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GEORGE LAZAROU COMPANY SECRETARY DXN LIMITED

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EXPLANATORY STATEMENT

This Explanatory Statement has been prepared to provide information which the Directors believe to be material to Shareholders in deciding whether or not to pass the Resolutions which are the subject of the business of the Meeting.

1. FINANCIAL STATEMENTS AND REPORTS

In accordance with the Constitution, the business of the Meeting will include receipt and consideration of the annual financial report of the Company for the financial year ended 30 June 2020 together with the declaration of the Directors, the Directors’ Report, the Remuneration Report and the Auditor’s Report.

The Company will not provide a hard copy of the Company’s annual financial report to Shareholders unless a Shareholder has previously elected to receive one pursuant to section 314 of the Corporations Act. The Company’s annual financial report is available on its website at www.dxn.solutions.

2. RESOLUTION 1 – ADOPTION OF REMUNERATION REPORT

2.1 General

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 30 June 2020.

A reasonable opportunity will be provided for discussion of the Remuneration Report at the Annual General Meeting.

2.2 Voting consequences

Under the Corporations Act, a company is required to put to its shareholders a resolution proposing the calling of another meeting of shareholders to consider the appointment of directors of the company ( Spill Resolution ) if, at two consecutive annual general meetings, at least 25% of the votes cast on a remuneration report resolution are voted against adoption of the remuneration report. The Spill Resolution must be put to vote at the second of those annual general meetings.

If more than 50% of votes cast are in favour of the Spill Resolution, the company must convene a shareholder meeting ( Spill Meeting ) within 90 days of the second annual general meeting.

All of the directors of the company who were in office when the directors' report (as included in the company’s annual financial report for the previous financial year) was approved, other than the managing director of the company, will cease to hold office immediately before the end of the Spill Meeting but may stand for re-election at the Spill Meeting.

Following the Spill Meeting those persons whose election or re-election as directors of the company is approved will be the directors of the company.

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2.3 Previous voting results

At the Company’s previous annual general meeting the votes cast against the remuneration report considered at that annual general meeting were less than 25%. Accordingly, the Spill Resolution is not relevant for this Annual General Meeting.

2.4 Voting restrictions

Voting restrictions for this Resolution 1 are contained in the Notice of Meeting.

2.5 Directors’ recommendation

The Board unanimously recommends that Shareholders vote in favour of Resolution 1 to adopt the Remuneration Report.

The Chair intends to vote undirected proxies in favour of Resolution 1.

3. RESOLUTION 2 – RE-ELECTION OF DIRECTOR – MR RICHARD CARDEN

3.1 General

ASX Listing Rule 14.4 provides that a director of an entity must not hold office (without re-election) past the third annual general meeting following the director’s appointment or 3 years, whichever is the longer.

Clause 14.2 of the Constitution requires that at the Company's annual general meeting in every year, one-third of the Directors for the time being, or, if their number is not a multiple of 3, then the number nearest one-third (rounded upwards in case of doubt), shall retire from office, provided always that no Director (except a Managing Director) shall hold office for a period in excess of 3 years, or until the third annual general meeting following his or her appointment, whichever is the longer, without submitting himself or herself for re-election.

The Directors to retire at an annual general meeting are those who have been longest in office since their last election, but, as between persons who became Directors on the same day, those to retire shall (unless they otherwise agree among themselves) be determined by drawing lots.

A Director who retires by rotation under clause 14.2 of the Constitution is eligible for re-election.

Mr Carden retires by rotation at this Annual General Meeting and, being eligible, offers himself for re-election.

Mr Carden has been a Director since 4 August 2017.

3.2 Qualifications and other material directorships

Mr Carden is an Asia based business leader with over 25 years of experience in the telecoms, data centre and IT industry. Richard has a solid track record in driving sales productivity and revenue growth. He was previously the SVP Global Enterprise Sales for Speedcast (ASX: SDA). Mr Carden joined Speedcast in 2013 when the company had just been acquired for circa A$40M and as part of the Executive team developed the M&A plus organic growth strategy that allowed the company to list in 2014 and achieve a market cap of over A$1.5B in 2018. Prior, Mr Carden was the Global SVP for Pacnet and responsible for over 300 sales staff

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and revenues of more than A$800M. Earlier, Mr Carden spent almost 10 years in Japan in roles that included President & CEO of Verizon, Japan.

3.3 Independence

Mr Carden is not considered independent having consulted to the Company in an executive capacity during the financial year ended 30 June 2019.

If re-elected the Board considers Mr Carden will not be an independent director.

3.4 Directors’ recommendation

The Board, with Mr Carden not being present while the matter was considered and abstaining from voting, consider that Mr Carden has made and will continue to make a valuation contribution to the Board and the Company, and recommend that Shareholders vote in favour of the re-election of Mr Carden.

The Chair intends to vote undirected proxies in favour of Resolution 2.

4. RESOLUTION 3 – ELECTION OF DIRECTOR – MR MATTHEW MADDEN

4.1 General

Clause 14.4 of the Constitution allows the Directors to appoint at any time a person to be a Director either to fill a casual vacancy or 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.

Pursuant to clause 14.4 of the Constitution and ASX Listing Rule 14.4, any Director so appointed holds office only until the next following annual general meeting and is then eligible for election by Shareholders but shall not be taken into account in determining the Directors who are to retire by rotation (if any) at the meeting.

Mr Madden, having been appointed by the other Directors on 26 August 2020 in accordance with the Constitution, will retire in accordance with clause 14.4 of the Constitution and ASX Listing Rule 14.4 and being eligible, seeks election from Shareholders.

4.2 Qualifications and other material directorships

Mr Madden is a highly experienced data centre and telecommunications executive with a solid track record of building and leading high performing teams, as well as a strategic focus on world-class customer care underpinning long term partnerships. Mr Madden has broad experience in B2B telco, data centre and technology companies having held a variety of senior executive positions including General Manager Corporate and Enterprise markets at Nextgen Group, and Managing Director, Infoplex. At Nextgen, Mr Madden was responsible for significant sales into the Metronode data centres for the corporate, enterprise and reseller channels.

Through his work and his writing — which spans five books and numerous articles — Mr Adams has contributed to the foundations that underpin modern web design and has been asked to speak around the world at events such as South by Southwest, Fronteers, CeBIT, and Web Directions.

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4.3 Independence

Mr Madden is not considered independent having been employed as the Chief Executive Officer since 19 August 2019 and Managing Director since 26 August 2020.

If elected the Board considers Mr Madden will not be an independent director.

4.4 Other Material information

Prior to the appointment of Mr Madden as a Director, the Company conducted appropriate checks into Mr Madden’s background and experience, and those checks did not reveal any information of concern.

4.5 Directors’ recommendation

The Board, with Mr Madden not being present when the matter was considered and abstaining from voting, consider that Mr Madden has made and will continue to make a valuation contribution to the Board and the Company, and therefore supports the election of Mr Madden and recommends that Shareholders vote in favour of Resolution 3.

The Chair intends to vote undirected proxies in favour of Resolution 3.

5. RESOLUTION 4 – ELECTION OF DIRECTOR – MR JOHN DIMITROPOULOS

5.1 General

Clause 14.4 of the Constitution allows the Directors to appoint at any time a person to be a Director either to fill a casual vacancy or 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.

Pursuant to clause 14.4 of the Constitution and ASX Listing Rule 14.4, any Director so appointed holds office only until the next following annual general meeting and is then eligible for election by Shareholders but shall not be taken into account in determining the Directors who are to retire by rotation (if any) at the meeting.

Mr Dimitropoulos, having been appointed by the other Directors on 1 October 2020 in accordance with the Constitution, will retire in accordance with clause 14.4 of the Constitution and ASX Listing Rule 14.4 and being eligible, seeks election from Shareholders.

5.2 Qualifications and other material directorships

Mr Dimitropoulos brings over 30 years of extensive international experience in the Telecoms, Media and Technology sectors. His recent stints include assisting internet security giant McAfee in the US with both Corporate Development and Sales Channel optimization, and as a Corporate Advisor to Korea’s SK Telecom’s group company’s CEO’s within SE Asia.

Mr Dimitropoulos has been involved with, and led, many international acquisitions and divestments in Europe, Asia, and the US for many different US based tech companies.

At Real Networks, a Seattle based co, where Mr Dimitropoulos spent nearly 12 years consulting, he was responsible for assisting in the development of the

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long-term strategy for its Mobile Entertainment division as well as driving M&A activity to deliver over US$600m in deals during his tenure.

In Australia Mr Dimitropoulos assisted in the foundational work that resulted in Run Property, and in the mid-90s was CEO of the first pre-paid mobile company in Australia.

Mr Dimitropoulos has financial interests in an Australian online ecommerce company as well as small cottage manufacturing of Australian products for export. Mr Dimitropoulos has a Bachelor of Business (Accounting & Comp Science) and is currently undertaking his GAICD accreditation.

5.3

Independence

Mr Dimitropoulos has no interests, position, association or relationship that might influence, or reasonably be perceived to influence, in a material respect his capacity to bring an independent judgement to bear on issues before the Board and to act in the best interest of the Company as a whole rather than in the interests of an individual security holder or other party.

If elected the Board considers Mr Dimitropoulos will be an independent director.

5.4 Other material information

Prior to the appointment of Mr Dimitropoulos as a Director, the Company conducted appropriate checks into Mr Dimitropoulos’s background and experience, and those checks did not reveal any information of concern.

5.5 Directors’ recommendation

The Board, with Mr Dimitropoulos not being present when the matter was considered and abstaining from voting, consider that Mr Dimitropoulos has made and will continue to make a valuation contribution to the Board and the Company, and therefore supports the election of Mr Dimitropoulos and recommends that Shareholders vote in favour of Resolution 4.

The Chair intends to vote undirected proxies in favour of Resolution 4.

6. RESOLUTION 5 – RATIFICATION OF PRIOR ISSUES – OPTIONS

6.1 General

On 19 May 2020, the Company issued 60,000,000 Options to Lazarus Corporate Finance Pty Ltd ( Lazarus ) ( Lazarus Options ) in partial consideration for services provided by Lazarus as lead manager and underwriter for the entitlement issue announced on 8 April 2020 ( Lazarus Agreement ).

Resolution 5 seeks Shareholder ratification pursuant to ASX Listing Rule 7.4 for the issue of those Options.

Broadly speaking, and subject to a number of exceptions, Listing Rule 7.1 limits the amount of equity securities that a listed company can issue without the approval of its shareholders over any 12 month period to 15% of the fully paid ordinary securities it had on issue at the start of that 12 month period.

The issue of the Lazarus Options does not fit within any of the exceptions set out in Listing Rule 7.2 and, as it has not yet been approved by Shareholders, it effectively uses up part of the 15% limit in Listing Rule 7.1, reducing the Company’s capacity

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to issue further equity securities without Shareholder approval under Listing Rule 7.1 for the 12 month period following the date of issue of the Lazarus Options.

Listing Rule 7.4 allows the shareholders of a listed company to approve an issue of equity securities after it has been made or agreed to be made. If they do, the issue is taken to have been approved under Listing Rule 7.1 and so does not reduce the company’s capacity to issue further equity securities without shareholder approval under that rule.

The Company wishes to retain as much flexibility as possible to issue additional equity securities in the future without having to obtain Shareholder approval for such issues under Listing Rule 7.1. Accordingly, the Company is seeking Shareholder ratification pursuant to Listing Rule 7.4 for the issue of the Lazarus Options.

Resolution 5 seeks Shareholder ratification pursuant to Listing Rule 7.4 for the issue of the Lazarus Options.

6.2 Technical information required by ASX Listing Rule 14.1A – Resolution 5

If Resolution 5 is passed, the Lazarus Options will be excluded in calculating the Company’s combined 15% limit in Listing Rule 7.1, effectively increasing the number of equity securities the Company can issue without Shareholder approval over the 12 month period following the date of issue of the Lazarus Options.

If Resolution 5 is not passed, the Lazarus Options will be included in calculating the Company’s combined 15% limit in Listing Rule 7.1, effectively decreasing the number of equity securities that the Company can issue without Shareholder approval over the 12 month period following the date of issue of the Lazarus Options.

6.3 Technical information required by ASX Listing Rule 7.5 – Resolution 5

Pursuant to and in accordance with ASX Listing Rule 7.5, the following information is provided in relation to Resolution 5:

• (a) the Lazarus Options were issued to Lazarus;

• (b) in accordance with paragraph 7.4 of ASX Guidance Note 21, the Company confirms that Lazarus is not:

• (i) a related party of the Company, member of the Company’s Key Management Personnel, substantial holder of the Company, adviser of the Company or an associate of any of these parties; and

• (ii) issued more than 1% of the issued capital of the Company;

• (c) 60,000,000 Lazarus Options were issued and the Lazarus Options were issued on the terms and conditions set out in Schedule 1;

• (d) the Lazarus Options were issued on 19 May 2020;

• (e) the Lazarus Options were issued at a nil issue price, in consideration in satisfaction of underwriting services provided by Lazarus for the entitlement issue announced on 8 April 2020 ( Underwriting Services ). The Company has not and will not receive any other consideration for the issue of the Lazarus Options (other than in respect of funds received on

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exercise of the Lazarus Options). It is noted that, as at 13 October 2020, the Company’s Shares are trading at $0.023. As the Lazarus Options have an exercise price of $0.02, the Lazarus Options are currently “in the money”;

• (f) the Lazarus Options were issued on the terms and conditions set out in Schedule 1;

• (g) the purpose of the issue of the Lazarus Options was to satisfy the Company’s obligations under the Lazarus Agreement; and

• (h) a summary of the material terms of the Lazarus Agreement is set out in Schedule 2.

6.4 Directors’ recommendation

The Board unanimously recommends that Shareholders vote in favour of Resolution 5.

The Chair intends to vote undirected proxies in favour of Resolution 5.

7. RESOLUTION 6 – APPROVAL OF 7.1A MANDATE

7.1 General

As summarised in Section 6.1 above, Listing Rule 7.1 limits the amount of Equity Securities that a listed company can issue without the approval of its shareholders over any 12 month period to 15% of the fully paid ordinary securities it had on issue at the start of that period.

However, under Listing Rule 7.1A, an eligible entity may seek shareholder approval by way of a special resolution passed at its annual general meeting to increase this 15% limit by an extra 10% to 25% ( 7.1A Mandate ).

An ‘eligible entity’ means an entity which is not included in the S&P/ASX 300 Index and has a market capitalisation of $300,000,000 or less. The Company is an eligible entity for these purposes.

Resolution 6 seeks Shareholder approval by way of special resolution for the Company to have the additional 10% placement capacity provided for in Listing Rule 7.1A to issue Equity Securities without Shareholder approval.

If Resolution 6 is passed, the Company will be able to issue Equity Securities up to the combined 25% limit in Listing Rules 7.1 and 7.1A without any further Shareholder approval.

If Resolution 6 is not passed, the Company will not be able to access the additional 10% capacity to issue Equity Securities without Shareholder approval under Listing Rule 7.1A, and will remain subject to the 15% limit on issuing Equity Securities without Shareholder approval set out in Listing Rule 7.1.

7.2

Technical information required by ASX Listing Rule 7.1A

Pursuant to and in accordance with Listing Rule 7.3A, the information below is provided in relation to Resolution 6:

(a) Period for which the 7.1A Mandate is valid

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The 7.1A Mandate will commence on the date of the Meeting and expire on the first to occur of the following:

• (i) the date that is 12 months after the date of this Meeting;

• (ii) the time and date of the Company’s next annual general meeting; and

• (iii) the time and date of approval by Shareholders of any transaction under Listing Rule 11.1.2 (a significant change in the nature or scale of activities) or Listing Rule 11.2 (disposal of the main undertaking).

(b) Minimum Price

Any Equity Securities issued under the 7.1A Mandate must be in an existing quoted class of Equity Securities and be issued at a minimum price of 75% of the volume weighted average price of Equity Securities in that class, calculated over the 15 trading days on which trades in that class were recorded immediately before:

• (i) the date on which the price at which the Equity Securities are to be issued is agreed by the entity and the recipient of the Equity Securities; or

• (ii) if the Equity Securities are not issued within 10 trading days of the date in Section 7.2(b)(i), the date on which the Equity Securities are issued.

(c)

Use of funds raised under the 7.1A Mandate

The Company intends to use funds raised from issues of Equity Securities under the 7.1A Mandate to provide further funding, if required, for assessment of future opportunities in the data centre industry, ongoing administration and corporate costs, general working capital and/or for the acquisition of new businesses, assets or other investments.

(d) Risk of Economic and Voting Dilution

Any issue of Equity Securities under the 7.1A Mandate will dilute the interests of Shareholders who do not receive any Shares under the issue.

If Resolution 6 is approved by Shareholders and the Company issues the maximum number of Equity Securities available under the 7.1A Mandate, the economic and voting dilution of existing Shares would be as shown in the table below.

The table below shows the dilution of existing Shareholders calculated in accordance with the formula outlined in Listing Rule 7.1A.2, on the basis of the closing market price of Shares and the number of Equity Securities on issue as at 5 October 2020.

The table also shows the voting dilution impact where the number of Shares on issue (Variable A in the formula) changes and the economic dilution where there are changes in the issue price of Shares issued under the 7.1A Mandate.

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			Dilution	Dilution	Dilution
Number of Shares on Issue (Variable A in Listing Rule 7.1A.2)		Shares issued – 10% voting dilution		Issue Price
			$0.012	$0.023	$0.035
			50% decrease	Issue Price	50% increase
				Funds Raised
Current	1,060,795,612 Shares	106,079,561 Shares	$1,219,914	$2,439,829	$3,659,744
50% increase	1,591,193,418 Shares	159,119,341 Shares	$1,829,872	$3,659,744	$5,489,617
100% increase	2,121,591,224 Shares	212,159,122 Shares	$2,439,829	$4,879,659	$7,319,489

*The number of Shares on issue (Variable A in the formula) could increase as a result of the issue of Shares that do not require Shareholder approval (such as under a prorata rights issue or scrip issued under a takeover offer) or that are issued with Shareholder approval under Listing Rule 7.1.

The table above uses the following assumptions:

1. There are currently 1,060,795,612 Shares on issue.

2. The issue price set out above is the closing market price of the Shares on the ASX on 5 October 2020.

3. The Company issues the maximum possible number of Equity Securities under the 7.1A Mandate.

4. The Company has not issued any Equity Securities in the 12 months prior to the Meeting that were not issued under an exception in Listing Rule 7.2 or with approval under Listing Rule 7.1.

5. The issue of Equity Securities under the 7.1A Mandate consists only of Shares. It is assumed that no Options are exercised into Shares before the date of issue of the Equity Securities. If the issue of Equity Securities includes quoted Options, it is assumed that those quoted Options are exercised into Shares for the purpose of calculating the voting dilution effect on existing Shareholders.

6. The calculations above do not show the dilution that any one particular Shareholder will be subject to. All Shareholders should consider the dilution caused to their own shareholding depending on their specific circumstances.

7. This table does not set out any dilution pursuant to approvals under Listing Rule 7.1 unless otherwise disclosed.

8. The 10% voting dilution reflects the aggregate percentage dilution against the issued share capital at the time of issue. This is why the voting dilution is shown in each example as 10%.

9. The table does not show an example of dilution that may be caused to a particular Shareholder by reason of placements under the 7.1A mandate, based on that Shareholder’s holding at the date of the Meeting.

Shareholders should note that there is a risk that:

• (i) the market price for the Company’s Shares may be significantly lower on the issue date than on the date of the Meeting; and

• (ii) the Shares may be issued at a price that is at a discount to the market price for those Shares on the date of issue.

(e) Allocation policy under the 7.1A Mandate

The recipients of the Equity Securities to be issued under the 7.1A Mandate have not yet been determined. However, the recipients of

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Equity Securities could consist of current Shareholders or new investors (or both), none of whom will be related parties of the Company.

The Company will determine the recipients at the time of the issue under the 7.1A Mandate, having regard to the following factors:

• (i) the purpose of the issue;

• (ii) alternative methods for raising funds available to the Company at that time, including, but not limited to, an entitlement issue, share purchase plan, placement or other offer where existing Shareholders may participate;

• (iii) the effect of the issue of the Equity Securities on the control of the Company;

• (iv) the circumstances of the Company, including, but not limited to, the financial position and solvency of the Company;

• (v) prevailing market conditions; and

• (vi) advice from corporate, financial and broking advisers (if applicable).

(f) Previous approval under Listing Rule 7.1A

The Company previously obtained approval from its Shareholders pursuant to Listing Rule 7.1A at its annual general meeting held on 28 November 2019 ( Previous Approval ).

During the 12 month period preceding the date of the Meeting, being on and from 23 November 2019, the Company has not issued any Equity Securities pursuant to the Previous Approval.

7.3 Voting Exclusion Statement

As at the date of this Notice, the Company is not proposing to make an issue of Equity Securities under Listing Rule 7.1A. Accordingly, a voting exclusion statement is not included in this Notice.

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GLOSSARY

In this Explanatory Statement, the following terms have the following meaning unless the context otherwise requires. Other terms are defined within the Explanatory Statement.

$ means Australian dollars.

Annual General Meeting or Meeting means the meeting convened by the Notice.

ASIC means Australian Securities and Investments Commission.

ASX means ASX Limited (ACN 008 624 691) or the financial market operated by ASX Limited, as the context requires.

ASX Listing Rules or Listing Rules means the Listing Rules of ASX.

Board means the current board of Directors.

Chair means the chair of the Meeting.

Closely Related Party of a member of the Key Management Personnel means:

• (a) a spouse or child of the member;

• (b) a child of the member’s spouse;

• (c) a dependent of the member or the member’s spouse;

• (d) anyone else who is one of the member’s family and may be expected to influence the member, or be influenced by the member, in the member’s dealing with the entity;

• (e) a company the member controls; or

• (f) a person prescribed by the Corporations Regulations 2001 (Cth).

Company means DXN Limited (ACN 620 888 548).

Constitution means the Company’s constitution.

Corporations Act means the Corporations Act 2001 (Cth).

Director means a current director of the Company.

Equity Securities includes a Share, a right to a Share or Option, an Option, a convertible security and any security that ASX decides to classify as an Equity Security.

Explanatory Statement means this explanatory statement.

Key Management Personnel has the same meaning as in the accounting standards and broadly includes those persons having authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly, including any director (whether executive or otherwise) of the Company.

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

Option means an option to acquire a Share.

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Proxy Form means the proxy form accompanying the Notice.

Related Party has the meaning given to that term in the Corporations Act.

Remuneration Report means the remuneration report set out in the Director’s report section of the Company’s annual financial report for the year ended 30 June 2020.

Resolutions means the resolutions set out in the Notice of Annual General Meeting and Resolution means any one of them.

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

Shareholder means a holder of a Share.

Variable A means “A” as set out in the formula in Listing Rule 7.1A.2.

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SCHEDULE 1 – TERMS AND CONDITIONS OF LAZARUS OPTIONS

(a) Entitlement

Each New Option entitles the holder to subscribe for one Share upon exercise of the New Option.

(b) Exercise Price

Subject to paragraph (j), the amount payable upon exercise of each New Option will be $0.02 ( Exercise Price ).

(c) Expiry Date

Each New Option will expire at 5:00 pm (WST) on 18 May 2023 ( Expiry Date ). A New Option not exercised before the Expiry Date will automatically lapse on the Expiry Date.

(d) Exercise Period

The New Options are exercisable at any time on or prior to the Expiry Date ( Exercise Period ).

(e)

Notice of Exercise

The New Options may be exercised during the Exercise Period by notice in writing to the Company in the manner specified on the New Option certificate ( Notice of Exercise ) and payment of the Exercise Price for each Option being exercised in Australian currency by electronic funds transfer or other means of payment acceptable to the Company.

(f)

Exercise Date

A Notice of Exercise is only effective on and from the later of the date of receipt of the Notice of Exercise and the date of receipt of the payment of the Exercise Price for each New Option being exercised in cleared funds ( Exercise Date ).

(g)

Timing of issue of Shares on exercise

Within 15 Business Days after the Exercise Date, the Company will:

• (i) allot and issue the number of Shares required under these terms and conditions in respect of the number of New Options specified in the Notice of Exercise and for which cleared funds have been received by the Company;

• (ii) if required, give ASX a notice that complies with section 708A(5)(e) of the Corporations Act, or, if the Company is unable to issue such a notice, lodge with ASIC a prospectus prepared in accordance with the Corporations Act and do all such things necessary to satisfy section 708A(11) of the Corporations Act to ensure that an offer for sale of the Shares does not require disclosure to investors; and

• (iii) if admitted to the official list of ASX at the time, apply for official quotation on ASX of Shares issued pursuant to the exercise of the New Options.

If a notice delivered under (g)(ii) for any reason is not effective to ensure that an offer for sale of the Shares does not require disclosure to investors, the Company

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must, no later than 20 Business Days after becoming aware of such notice being ineffective, lodge with ASIC a prospectus prepared in accordance with the Corporations Act and do all such things necessary to satisfy section 708A(11) of the Corporations Act to ensure that an offer for sale of the Shares does not require disclosure to investors.

(h) Shares issued on exercise

Shares issued on exercise of the New Options rank equally with the then issued shares of the Company.

(i) Quotation of Shares issued on exercise

If admitted to the official list of ASX at the time, application will be made by the Company to ASX for quotation of the Shares issued upon the exercise of the New Options.

(j) Reconstruction of capital

If at any time the issued capital of the Company is reconstructed, all rights of a New Option holder are to be changed in a manner consistent with the Corporations Act and the ASX Listing Rules at the time of the reconstruction.

(k) Participation in new issues

There are no participation rights or entitlements inherent in the New Options and holders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the New Options without exercising the New Options.

(l) Change in exercise price

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 New Option can be exercised.

(m) Transferability

The New Options are transferable subject to any restriction or escrow arrangements imposed by ASX or under applicable Australian securities laws.

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SCHEDULE 2 – LAZARUS AGREEMENT

On 7 April 2020, DXN Limited ( DXN or the Company ) appointed Lazarus Corporate Finance Pty Ltd Limited ( Lazarus ) as underwriter to the proposed entitlement offer that was undertaken in April 2020 ( Underwriting Agreement ) on the material terms and conditions set out below.

Lazarus agreed to fully underwrite the proposed capital raising and the Company agreed to:

• (a) pay Pinnacle a management fee of 1.0% of the underwritten amount (approximately $59,218);

• (b) an underwriting fee of 5.0% of the underwritten amount (approximately $296,090); and

• (c) issue Pinnacle with 60,000,000 Options.

All sub-underwriting fees were paid by Lazarus from the underwriting fee.

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PROXY FORM DXN LIMITED ACN 620 888 548

ANNUAL GENERAL MEETING

I/We of

==> picture [425 x 19] intentionally omitted <==

==> picture [424 x 19] intentionally omitted <==

being a member of DXN Limited entitled to attend and vote at the Annual General Meeting, hereby

Appoint

==> picture [425 x 19] intentionally omitted <==

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, and subject to the relevant laws, as the proxy sees fit, at the Annual General Meeting to be held at 10:00am (Melbourne time) at Level 2, 120 Collins Street, Melbourne Victoria 3000, on Monday 23 November 2020 and at any postponement or adjournment thereof.

AUTHORITY FOR CHAIR TO VOTE UNDIRECTED PROXIES ON REMUNERATION RELATED RESOLUTIONS

Where I/we have appointed the Chair as my/our proxy (or where the Chair becomes my/our proxy by default), I/we expressly authorise the Chair to exercise my/our proxy on Resolution 1 (except where I/we have indicated a different voting intention below) even though Resolution 1 is connected directly or indirectly with the remuneration of a member of the Key Management Personnel, which includes the Chair.

CHAIR’S VOTING INTENTION IN RELATION TO UNDIRECTED PROXIES

The Chair intends to vote undirected proxies in favour of all Resolutions. In exceptional circumstances the Chair may change his/her voting intention on any Resolution. In the event this occurs an ASX announcement will be made immediately disclosing the reasons for the change.

Voting on Business of the Annual General Meeting Resolution 1 – Adoption of Remuneration Report Resolution 2 – Re-election of Director – Mr Richard Carden Resolution 3 – Election of Director – Mr Matthew Madden Resolution 4 – Election of Director – Mr John Dimitropoulos Resolution 5 – Ratification of Prior Issue - Options Resolution 6 – Approval of 7.1A Mandate

FOR AGAINST ABSTAIN

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.

If two proxies are being appointed, the proportion of voting rights this proxy represents is: %

Signature of Shareholder(s):

Individual or Shareholder 1 Shareholder 2 Shareholder 3 Sole Director/Company Secretary Director Director/Company Secretary Date:

Contact Name: _____ Contact Ph (daytime): _________

Consent for contact by e-mail E-mail address: in relation to this Proxy Form: YES NO

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DXN LIMITED ACN 620 888 548

Instructions for Completing ‘Appointment of Proxy’ Form

1.

( Appointing a Proxy ): A member entitled to attend and cast a vote at an Annual General Meeting is entitled to appoint a proxy to attend and vote on their behalf at the meeting. If the member is entitled to cast 2 or more votes at the meeting, the member may appoint a second proxy to attend and vote on their behalf at the meeting. However, where both proxies attend the meeting, voting may only be exercised on a poll. The appointment of a second proxy must be done on a separate copy of the Proxy Form. A member who appoints 2 proxies may specify the proportion or number of votes each proxy is appointed to exercise. If a member appoints 2 proxies and the appointments do not specify the proportion or number of the member’s votes each proxy is appointed to exercise, each proxy may exercise one-half of the votes. Any fractions of votes resulting from the application of these principles will be disregarded. 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.

1. Compliance with Listing Rule 14.11

In accordance to Listing Rule 14.11, if you hold Shares on behalf of another person(s) or entity/entities or you are a trustee, nominee, custodian or other fiduciary holder of the Shares, you are required to ensure that the person(s) or entity/entities for which you hold the Shares are not excluded from voting on resolutions where there is a voting exclusion. Listing Rule 14.11 requires you to receive written confirmation from the person or entity providing the voting instruction to you and you must vote in accordance with the instruction provided.

By lodging your proxy votes, you confirm to the Company that you are in compliance with Listing Rule 14.11.

4. ( 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.

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

• (a) post to 9 Mumford Place, Balcatta WA 6021; or

• (b) email to the Company at george.lazarou@dxn.solutions ,

so that it is received not less than 48 hours prior to commencement of the Meeting.

Proxy forms received later than this time will be invalid.

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