DXN LIMITED — Proxy Solicitation & Information Statement 2019

Jun 19, 2019

THE DATA EXCHANGE NETWORK LIMITED

ACN 620 888 548 NOTICE OF EXTRAORDINARY GENERAL MEETING

TIME: 11:30am Perth time DATE: Monday 22 July 2019 PLACE: 9 Mumford Place Balcatta WA 6021

This Notice of Meeting and the accompanying Explanatory Statement 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.

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NOTICE OF EXTRAORDINARY GENERAL MEETING

Notice is hereby given that an Extraordinary General Meeting ( Meeting ) of The Data Exchange Network Limited ACN 620 888 548 ( Company ) will be held at:

Board Room 9 Mumford Place Balcatta WA 6021 at 11:30am (Perth time) on Monday 22 July 2019

IMPORTANT INFORMATION

YOUR VOTE IS IMPORTANT

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

INTERPRETATION

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

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 each Resolution in the Business of the Meeting section of this Notice.

VOTING ELIGIBILITY

The persons eligible to vote at the Meeting are those who are registered holders of shares in the Company at 11:30am (Perth time) on 20 July 2019.

A member can vote at the meeting:

• in person;

• by proxy;

• by attorney; or

• by corporate representative (if they are a corporate Shareholder).

VOTING IN PERSON

To vote in person, members should attend the Meeting at the time, date and place set out above.

VOTING BY PROXY

A member entitled to attend and cast a vote at the Meeting is entitled to appoint a proxy to attend and vote on behalf of the member. The person appointed as proxy may, but does not need to be, a member of the Company.

A member may appoint two proxies if they are entitled to cast two or more votes. Each proxy will require a separate proxy form. The member may specify the proportion or number of votes each proxy is appointed to exercise. If the proxy appointments do not specify a proportion or number, each proxy may exercise one-half of the member’s votes.

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

Where a proxy form is executed under a power of attorney, the original or an attested copy of the power of attorney or other authority (if any) under which it is signed must also be lodged with the Company.

HOW THE CHAIRPERSON WILL VOTE UNDIRECTED PROXIES

The Chairperson will vote undirected proxies held by him in favour of all Resolutions.

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BUSINESS OF THE MEETING

1. RESOLUTION 1 – CHANGE OF COMPANY NAME

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

“That, in accordance with sections 157(1) and 136(2) of the Corporations Act, and for all other purposes, the Company change its name from ‘The Data Exchange Network Limited’ to ‘DXN Limited’, and the Constitution be amended to reflect the name change, with effect on and from the date that ASIC alters the details of the Company’s registration to reflect the name change.”

2. RESOLUTION 2 – ISSUE OF PERFORMANCE RIGHTS TO RELATED PARTY – DOUGLAS LOH

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

“That, for the purpose of ASX Listing Rule 10.11 and for all other purposes, approval is given for the Company to issue 1,800,000 Performance Rights to Douglas Loh (or his nominee) 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 2 by or on behalf of:

• Mr Douglas Loh (or his nominee) or any of their associates .

However, the Company need not disregard a vote if:

• it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or

• it is cast by the person chairing the Meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

3. RESOLUTION 3 – ISSUE OF PERFORMANCE RIGHTS TO RELATED PARTY – 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 ASX Listing Rule 10.11 and for all other purposes, approval is given for the Company to issue 900,000 Performance Rights to Richard Carden (or his nominee) 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 3 by or on behalf of:

• Mr Richard Carden (or his nominee) or any of their associates .

However, the Company need not disregard a vote if:

• it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or

• it is cast by the person chairing the Meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

DATE: 14 JUNE 2019

BY ORDER OF THE BOARD

GEORGE LAZAROU COMPANY SECRETARY THE DATA EXCHANGE NETWORK 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. RESOLUTION 1 – CHANGE OF COMPANY NAME

1.1 Background

Resolution 1 is a special resolution which seeks approval for the Company to change its name.

The Company proposes to change its name from “The Data Exchange Network Limited” to “DXN Limited”, which is more aligned with the Company’s current branding. This change will not affect the legal status of the Company or any of its assets or liabilities.

Shareholder approval is required for Resolution 1 under section 157 of the Corporations Act by special resolution. Approval is also sought under section 136 of the Corporations Act to make amendments to the Constitution to reflect the name change. The change of name will take effect on the day on which ASIC alters the details of the Company’s registration to reflect the name change.

Resolution 1 is a special resolution. Accordingly, at least 75% of votes cast by Shareholders entitled to vote on Resolution 1 must be in favour of the Resolution for it to be passed.

1.2 Directors’ recommendation

The Board unanimously recommends that Shareholders vote in favour of Resolution 1.

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

2. RESOLUTIONS 2 AND 3 – ISSUE OF PERFORMANCE RIGHTS

2.1 Background

The Company proposes to issue 1,800,000 Performance Rights to Mr Douglas Loh and 900,000 Performance Rights to Mr Richard Carden. The primary purpose of the grant of the Performance Rights is to provide a performance linked incentive component in the remuneration package to motivate and reward the performance of the holder in their respective roles as Executive Chairman and Non-Executive Director of the Company in a manner that aligns the holder’s interests with the Company and minimises cash spend.

Mr Loh was recently appointed the Executive Chairman on an interim basis, until the appointment of a new CEO. The Company is currently undertaking an extensive search for a new CEO and expects to have the position filled in the coming months. Once the new CEO has been appointed and commenced his term of employment, Mr Loh will resume his duties as Non-Executive Chairman. Mr Loh’s primary responsibilities as Executive Chairman will be to oversee the DXN Modules division of the business, as well as ensure that the Sydney Data Centre is constructed and operational by the end of August 2019 and the current search for a new CEO.

Mr Carden is a Non-executive Director and has been involved with the Company in providing services in relation to identifying and hiring our current DXN Modules and DXN Datacentre salesforce, as well as being involved in the current search for a new CEO.

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(i) The 1,800,000 Performance Rights to be issued to Mr Loh vest as follows:

• (a) 720,000 Performance Rights, on appointment of new CEO ( Tranche 1 );

• (b) 270,000 Performance Rights, on the Company achieving “Ready for Service” status for DXN-SYD01 by 19 August 2019 ( Tranche 2 );

• (c) 270,000 Performance Rights, on the Company achieving Uptime Institute Tier III accreditation by 19 September 2019 ( Tranche 3 ); and

• (d) 540,000 Performance Rights, on the Company achieving any of the following combinations within three (3) months after Uptime Institute Tier III accreditation ( Tranche 4 ).

Reportable Pre-committed # Racks (PC) or Sales of # Racks (Sales)	Reportable Pre-committed # Racks (PC) or Sales of # Racks (Sales)	Module Sales (contracted)
12 (PC)	8 (Sales)	A$2.00m
20 (PC)	13 (Sales)	A$1.75m
27 (PC)	18 (Sales)	A$1.50m
38 (PC)	25 (Sales)	A$1.20m

Any Performance Rights that do not vest and become exercisable in accordance with the Vesting Condition (unless waived) will automatically lapse.

.

The Vesting Condition may be waived at the absolute discretion of the Board.

The Vesting Date for all Performance Rights are 16 April 2020.

Any Performance Rights that have not vested, automatically lapse on cessation of employment.

• (ii) The 900,000 Performance Rights to be issued to Mr Carden vest as follows:

• (a) 900,000 Performance Rights, on appointment of new CEO.

Any Performance Rights that do not vest and become exercisable in accordance with the Vesting Condition (unless waived) will automatically lapse.

The Vesting Condition may be waived at the absolute discretion of the Board.

The Vesting Date for all Performance Rights are 16 April 2020.

Any Performance Rights that have not vested, automatically lapse on cessation of employment.

2.2 Chapter 2E of the Corporations Act

For a public company, or an entity that the public company controls, to give a financial benefit to a related party of the public company, the public company or entity must:

• (a) obtain the approval of the public company’s members in the manner set out in sections 217 to 227 of the Corporations Act; and

• (b) give the benefit within 15 months following such approval,

unless the giving of the financial benefit falls within an exception set out in sections 210 to 216 of the Corporations Act.

The grant of Performance Rights constitutes giving a financial benefit and Mr Loh and Mr Carden are related parties of the Company by virtue of being Directors.

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The Directors (other than Mr Loh who has a material personal interest in Resolution 2 and Mr Carden who has a material personal interest in Resolution 3) consider that Shareholder approval pursuant to Chapter 2E of the Corporations Act is not required in respect of the grant of Performance Rights because the agreement to grant the Related Party Performance Rights, reached as part of the remuneration package for each of Mr Loh and Mr Carden, is considered reasonable remuneration in the circumstances and was negotiated on an arm’s length basis.

2.3 ASX Listing Rule 10.11

ASX Listing Rule 10.11 also requires Shareholder approval to be obtained where an entity issues, or agrees to issue, securities to a related party, or a person whose relationship with the entity or a related party is, in ASX’s opinion, such that approval should be obtained unless an exception in ASX Listing Rule 10.12 applies.

As the grant of the Performance Rights pursuant to Resolutions 2 and 3 involves the issue of securities to related parties of the Company, Shareholder approval pursuant to ASX Listing Rule 10.11 is required unless an exception applies. It is the view of the Directors that the exceptions set out in ASX Listing Rule 10.12 do not apply in the current circumstances.

2.4 Information required by ASX Listing Rule 10.13

For the purposes of ASX Listing Rule 10.13, the following information is provided about the proposed issues the subject of Resolutions 2 and 3:

• (a) Pursuant to Resolution 2, the Performance Rights will be issued to Douglas Loh, the Executive Chairman of the Company, or his nominee.

• (b) Pursuant to Resolution 3, the Performance Rights will be issued to Richard Carden, a Non-Executive Director of the Company, or his nominee.

• (c) The maximum number of Performance Rights to be issued to the Related Parties:

• (i) under Resolution 2 is 1,800,000 Performance Rights to Douglas Loh; and

• (ii) under Resolution 3 is 900,000 Performance Rights to Richard Carden.

• (d) The Performance Rights will be issued for nil cash consideration. Accordingly, no funds will be raised from the issues the subject of Resolutions 2 and 3.

• (e) The Performance Rights the subject of Resolutions 2 and 3 will be issued no later than 1 month after the date of the meeting (or such later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules) and it is intended that issue will occur on the same date.

• (f) The terms of the Performance Rights are set out in Annexure A.

• (g) A voting exclusion statement is included in the Notice.

Approval pursuant to ASX Listing Rule 7.1 is not required for the grant of the Performance Rights as approval is being obtained under ASX Listing Rule 10.11. Accordingly, the grant of the Performance Rights to Mr Loh under Resolution 2 and Mr Carden under Resolution 3 (or their nominees) will not be included in the use of the Company’s 15% annual placement capacity pursuant to ASX Listing Rule 7.1.

2.5 Directors’ recommendation

Mr Loh and Mr Carden declines to make a recommendation to Shareholders in relation to Resolutions 2 and 3 as they have a material personal interest in the outcome of Resolutions 2 and 3. Mr Loh and Mr Carden and their Associates will not be entitled to vote on Resolutions 2 and 3. The Directors other than Mr Loh and Mr Carden recommend that Shareholders vote in favour of Resolutions 2 and 3 for the reasons set out in section 2.1.

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In forming their recommendations, each Director considered the experience of the Mr Loh and Mr Carden, the current market price of Shares, the current market practices when determining the number of Performance Rights to be granted as well as the exercise price and expiry date of those Performance Rights.

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GLOSSARY

In this Explanatory Statement, the following terms have the following meaning unless the context

otherwise requires:

Annexure means annexure to this Explanatory Statement.

ASIC means Australian Securities and Investments Commission.

Associate has the meaning set out in sections 11 to 17 of the Corporations Act, and where applicable as applied in accordance with the Note to ASX Listing Rule 14.11.

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

ASX Listing Rules means the official Listing Rules of ASX, as amended from time to time.

Board means the current board of directors of the Company.

Business Day means a day (not being a Saturday, Sunday or public holiday) in Perth, Western Australia.

Chair or Chairperson means the chair of the Meeting.

Company means The Data Exchange Network Limited (ACN 620 888 548).

Corporations Act means the Corporations Act 2001 (Cth).

Directors means the current directors of the Company.

Explanatory Statement means the explanatory statement accompanying the Notice.

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

Notice or Notice of Meeting or Notice of Extraordinary General Meeting means this notice of extraordinary general meeting including the Explanatory Statement and the Proxy Form.

Performance Rights means a right to be issued a Share on the terms set out in Annexure A of this Explanatory Statement and which vest as set out in section 2.1 of this Explanatory Statement.

Proxy Form means the proxy form accompanying the Notice.

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

Resolutions means the resolutions set out in the Notice of Meeting or any one of them, as the context requires.

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

Shareholder means a holder of a Share.

WST means Western Standard Time as observed in Perth, Western Australia.

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ANNEXURE A – PERFORMANCE RIGHTS TERMS AND CONDITIONS

The key terms of the Performance Rights are as follows:

Performance	Upon satisfaction of any vesting conditions, each Performance Right will convert
Rights	to a Share on a one-for-one basis (subject to adjustment for reconstructions of the capital of the Company).
	Performance Rights do not carry any voting rights or dividend entitlements.
Shares	Shares issued upon vesting of Performance Rights will rank equally with the
	other issued Shares. Depending on the terms of issue, the Shares may be
	subject to disposal restrictions, which means that they may not be disposed or
	dealt with for a period of time.
	Shares allocated on vesting or exercise of a Performance Right carry the same
	rights and entitlements as other issued Shares, including dividend and voting
	rights.
Quotation	Performance Rights will not be quoted on the ASX. If the Shares are officially
	quoted on the ASX at the time of Performance Rights vesting, the Company will
	apply for official quotation of such Shares, in accordance with the ASX Listing
	Rules and having regard to any disposal restrictions in place.
Cessation of	If a holder ceases to hold office of, or be employed by, the Company, all
employment	unvested Performance Rights automatically lapse. However, the Board may
	elect to accelerate the vesting of any Performance Rights if a holder has died,
	suffered total and permanent disablement or been made redundant.
Change of	The Board has the discretion to accelerate vesting of Performance Rights in the
control	event of certain types of change of control transactions involving the Company.
	Unless the Board determines to exercise that discretion, any unvested
	Performance Rights will lapse on a change of control of the Company.
Restrictions	Without the prior approval of the Board, or unless required by law, Performance
	Rights may not be sold, transferred, encumbered or otherwise dealt with.
Rights to	The Performance Rights do not entitle the holder to participate in new issues of
participate in future issues and reorganisations	Shares unless those Performance Rights have vested and the underlying Shares issued prior to any relevant record date. If a rights issue or any reorganisation of the Company’s issued capital occurs, the number of Shares to
	which a holder of Performance Rights is entitled will be adjusted as determined
	by the Board (having regard to the requirements of any applicable ASX Listing
	Rules) in order to minimise or eliminate any material advantage or disadvantage
	to that holder resulting from the corporation action.
Amendments	To the extent permitted by the ASX Listing Rules, the Board retains the
	discretion to vary the terms and conditions of Performance Rights, provided
	that no amendment may reduce the accrued rights of holders unless (1)
	consented to by holders holding no less than 75% of the total number of
	Performance Rights issued, (2) required by law or ASX Listing Rules, (3) to
	correct any manifest error or mistake or (4) for certain tax reasons.
Other terms	The Performance Rights contains customary and usual terms having regard
	to Australian law for dealing with administration, variation, suspension and
	termination of Performance Rights.

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PROXY FORM

APPOINTMENT OF PROXY THE DATA EXCHANGE NETWORK LIMITED ACN 620 888 548

EXTRAORDINARY GENERAL MEETING

I/We

of

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being a member of The Data Exchange Network Limited entitled to attend and vote at the Extraordinary General Meeting, hereby

Appoint

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Name of proxy

OR the Chair of the Extraordinary General Meeting as your proxy

or failing the person so named or, if no person is named, the Chair of the 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 Extraordinary General Meeting of The Data Exchange Network Limited to be held at Board Room, 9 Mumford Place, Balcatta WA 6021 on Monday, 22 July 2019 at 11.30am (Perth time) and at any adjournment thereof.

The Chair intends to vote undirected proxies in favour of all Resolutions in which the Chair is entitled to vote. If you have appointed the Chair as your proxy (or the Chair becomes your proxy by default), and you wish to give the Chair specific voting directions on a Resolution, you should mark the appropriate box(es) opposite those Resolutions in the panel below (directing the Chair to vote for, against or to abstain from voting).

Voting on Business of the Extraordinary General Meeting
	FOR	AGAINST	ABSTAIN
Resolution 1 – Change of Company Name
Resolution 2 – Approval of Issue of Performance Rights to Related Party
– Douglas Loh
Resolution 3 – Approval of Issue of Performance Rights to Related Party
– Richard Carden

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 Member(s): ____ Individual or Member 1 Sole Director/Company Secretary	Member 2 Director	Date: Member 3
		Director/Company Secretary

Contact Name: _____ Contact Ph (daytime): ___

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THE DATA EXCHANGE NETWORK LIMITED ACN 620 888 548

Instructions for Completing Proxy Form

1. ( Appointing a Proxy ): A member entitled to attend and cast a vote at an Extraordinary 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 Proxy Form. 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.

( 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. However, a Proxy Form signed by the member whose name appears first in the register but not by the other joint holder(s), will also be accepted as valid.

• ( Power of Attorney ): If you have not already provided the Power of Attorney with the registry, please attach the original or 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.

• ( Attending the Meeting ): Completion of a Proxy Form will not prevent individual members from attending the Extraordinary General Meeting in person if they wish. Where a member completes and lodges a valid Proxy Form and attends the Extraordinary General Meeting in person, then the proxy’s authority to speak and vote for that member is suspended while the member is present at the Extraordinary General Meeting.

• ( 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@dataexchange.io,

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

Proxy forms received later than this time will be invalid. If the Proxy Form is signed under power of attorney, evidence of the authority must also be received by this time.

1. 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 will be disregarded.

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