NORWOOD SYSTEMS LIMITED

==> picture [144 x 43] intentionally omitted <==

21 May 2020

Dear Shareholders,

IMPORTANT INFORMATION REGARDING SHAREHOLDER VOTING AT THE COMPANY’S UPCOMING GENERAL MEETING

The Company’s shareholder meeting is scheduled to be held in Perth on Friday 29 May 2020 at 4 Leura Street, Nedlands, Western Australia at 11.00am (WST) ( Meeting ). Taking into consideration the evolving COVID-19 situation the Directors confirm their previous decision that Shareholders will not be able to attend the Meeting in person, and rather the general meeting will be held via a webinar. This means that Shareholders are not invited to physically attend the Meeting but can attend via the webinar electronic platform.

Shareholders will be able to participate in the Meeting by:

voting their Shares prior to the Meeting by lodging the proxy form attached to the Notice by no later than 11:00am on Wednesday 27 May 2020 (recommended);
submitting questions in advance of the meeting by emailing the questions to [email protected] by no later than Friday 22 May 2020; and/or
by preregistering with the Company at least 48 hours prior to the Meeting to attend via the online webcast and to vote by poll during the meeting rather than by proxy.

Shareholders are encouraged to use options 1 and 2 above to vote their Shares and submit questions in advance of the Meeting. This will assist, for example, in enabling management to prepare appropriate responses to your questions. If you decide to participate in the Meeting using option 3, you are advised to contact the Company Secretary via email at [email protected] to obtain the necessary log in details. All Meeting resolutions will be voted upon by poll. Shareholders who have pre-registered to attend the Meeting via the webcast and have elected to vote by poll during the meeting rather than by proxy will, immediately prior to the Meeting, be sent a poll form to complete and email back to the Company during the meeting, while the poll is being conducted. Shareholders will be able to electronically attend the meeting and vote subject to completing the pre meeting registration procedures at least 48 hours prior to the meeting. To register please contact the Company Secretary via email to [email protected] .

Please note that if you have previously submitted a Proxy Form and you elect to vote by poll during the Meeting your proxy’s authority to vote will be revoked for any resolutions where you have cast a poll vote.

Shareholders are encouraged to participate in the Meeting via the live webcast and submit questions in the manner described above.

Shareholders unable to attend the meeting via the webcast or who do not wish to vote during the meeting are encouraged to appoint the Chair as proxy ahead of the Meeting. Shareholders can complete the proxy form attached to the Notice to provide specific instructions on how their vote is to be exercised on each item of business and the Chair must follow your instructions. Instructions on how to complete the proxy form are set out in the Notice.

The Meeting Chairperson will provide instructions as to how questions may be asked by Shareholders over the teleconference facility.

The Meeting will be accessible to all Shareholders via the webcast. To access the Meeting by videoconference, or to submit their questions prior to the Meeting Shareholders are advised to contact the Company Secretary via email at [email protected] .

The situation regarding COVID-19 is constantly evolving and the Company is following health advice of the Australian Government. Shareholders are encouraged to monitor the Company’s ASX announcements and website for any further updates in relation to the Meeting.

This announcement is authorised for market release by Norwood Systems Limited Company Secretary.

Sincerely,

==> picture [104 x 36] intentionally omitted <==

Steven Wood Company Secretary

ACN 062 959 540

NOTICE OF GENERAL MEETING

Notice is given that the Meeting will be held at:

TIME : 11.00am (WST) DATE : Friday 29 May 2020 PLACE : 4 Leura St NEDLANDS WA 6009

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

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.

The Directors have determined pursuant to Regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the Meeting are those who are registered Shareholders at 5.00pm (WST) on 27 May 2020.

BUSINESS OF THE MEETING

==> picture [144 x 43] intentionally omitted <==

AGENDA

1. RESOLUTION 1 – RATIFICATION OF PRIOR ISSUE OF SHARES AND OPTIONS – OCTOBER PLACEMENT

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

“That, for the purposes of Listing Rule 7.4 and for all other purposes, Shareholders ratify the issue of 66,666,666 Shares and 66,666,666 Options (on a pre-Consolidation basis) on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion : The Company will disregard any votes cast in favour of the Resolution by or on behalf of a person who participated in the issue or is a counterparty to the agreement being approved (namely the October Placement Participants) or an associate of that person or those persons.

However, this does not apply to a vote cast in favour of the Resolution by:

(a) a person as a proxy or attorney for a person who is entitled to vote on the Resolution, in accordance with the directions given to the proxy or attorney to vote on the Resolution in that way; or
(b) the Chair as proxy or attorney for a person who is entitled to vote on the Resolution, in accordance with a direction given to the Chair to vote on the 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 a person excluded from voting, on the Resolution; and
(ii) the holder votes on the Resolution in accordance with directions given by the beneficiary to the holder to vote in that way.

2. RESOLUTION 2 – RATIFICATION OF PRIOR ISSUE OF SHARES – DECEMBER PLACEMENT

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

“That, for the purposes of Listing Rule 7.4 and for all other purposes, Shareholders ratify the issue of 66,666,666 Shares (on a pre-Consolidation basis) on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion : The Company will disregard any votes cast in favour of the Resolution by or on behalf of a person who participated in the issue or is a counterparty to the agreement being approved (namely the December Placement Participants) or an associate of that person or those persons.

However, this does not apply to a vote cast in favour of the Resolution by:

(a) a person as a proxy or attorney for a person who is entitled to vote on the Resolution, in accordance with the directions given to the proxy or attorney to vote on the Resolution in that way; or
(b) the Chair as proxy or attorney for a person who is entitled to vote on the Resolution, in accordance with a direction given to the Chair to vote on the 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 a person excluded from voting, on the Resolution; and

NOR Revised NOM - COVID - Covering Letter - FINAL

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

3. RESOLUTION 3 – RATIFICATION OF PRIOR ISSUE OF SHARES – FEBRUARY PLACEMENT

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

“That, for the purposes of Listing Rule 7.4 and for all other purposes, Shareholders ratify the issue of 5,000,000 Shares (on a post-Consolidation basis) on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion : The Company will disregard any votes cast in favour of the Resolution by or on behalf of a person who participated in the issue or is a counterparty to the agreement being approved (namely the February Placement Participants) or an associate of that person or those persons.

However, this does not apply to a vote cast in favour of the Resolution by:

(a) a person as a proxy or attorney for a person who is entitled to vote on the Resolution, in accordance with the directions given to the proxy or attorney to vote on the Resolution in that way; or
(b) the Chair as proxy or attorney for a person who is entitled to vote on the Resolution, in accordance with a direction given to the Chair to vote on the 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 a person excluded from voting, on the Resolution; and
(ii) the holder votes on the Resolution in accordance with directions given by the beneficiary to the holder to vote in that way.

4. RESOLUTION 4 – RATIFICATION OF PRIOR ISSUE OF OPTIONS – FEBRUARY PLACEMENT

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

“That, for the purposes of Listing Rule 7.4 and for all other purposes, Shareholders ratify the issue of 5,000,000 Options (on a post-Consolidation basis) on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion : The Company will disregard any votes cast in favour of the Resolution by or on behalf of a person who participated in the issue or is a counterparty to the agreement being approved (namely the February Placement Participants) or an associate of that person or those persons.

However, this does not apply to a vote cast in favour of the Resolution by:

(a) a person as a proxy or attorney for a person who is entitled to vote on the Resolution, in accordance with the directions given to the proxy or attorney to vote on the Resolution in that way; or
(b) the Chair as proxy or attorney for a person who is entitled to vote on the Resolution, in accordance with a direction given to the Chair to vote on the 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 a person excluded from voting, on the Resolution; and
(ii) the holder votes on the Resolution in accordance with directions given by the beneficiary to the holder to vote in that way.

NOR Revised NOM - COVID - Covering Letter - FINAL

5. RESOLUTION 5 – RATIFICATION OF PRIOR ISSUE OF TRANCHE 1 SHARES AND TRANCHE 1 OPTIONS – MARCH PLACEMENT

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

“That, for the purposes of Listing Rule 7.4 and for all other purposes, Shareholders ratify the issue of 8,000,000 Shares and 4,000,000 Options (on a post-Consolidation basis) on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion : The Company will disregard any votes cast in favour of the Resolution by or on behalf of a person who participated in the issue or is a counterparty to the agreement being approved (namely the March Placement Participants) or an associate of that person or those persons.

However, this does not apply to a vote cast in favour of the Resolution by:

(a) a person as a proxy or attorney for a person who is entitled to vote on the Resolution, in accordance with the directions given to the proxy or attorney to vote on the Resolution in that way; or
(b) the Chair as proxy or attorney for a person who is entitled to vote on the Resolution, in accordance with a direction given to the Chair to vote on the 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 a person excluded from voting, on the Resolution; and
(ii) the holder votes on the Resolution in accordance with directions given by the beneficiary to the holder to vote in that way.

6. RESOLUTION 6 – APPROVAL TO ISSUE TRANCHE 2 OPTIONS – MARCH PLACEMENT

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

“That, for the purposes of Listing Rule 7.1 and for all other purposes, approval is given for the Company to issue up to 4,000,000 Options (on a postConsolidation basis) on the terms and conditions set out in the Explanatory Statement.”

Voting Exclusion :

The Company will disregard any votes cast in favour of the Resolution by or on behalf of a person who is expected to participate in, or who will obtain a material benefit as a result of, the proposed issue (except a benefit solely by reason of being a holder of ordinary securities in the Company) (namely the March Placement Participants) or an associate of that person (or those persons).

However, this does not apply to a vote cast in favour of the Resolution by:

(a) a person as a proxy or attorney for a person who is entitled to vote on the Resolution, in accordance with the directions given to the proxy or attorney to vote on the Resolution in that way; or
(b) the Chair as proxy or attorney for a person who is entitled to vote on the Resolution, in accordance with a direction given to the Chair to vote on the 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 a person excluded from voting, on the Resolution; and
(ii) the holder votes on the Resolution in accordance with directions given by the beneficiary to the holder to vote in that way.

NOR Revised NOM - COVID - Covering Letter - FINAL

Dated: 21 May 2020

By order of the Board

==> picture [104 x 36] intentionally omitted <==

Steven Wood Company Secretary

NOR Revised NOM - COVID - Covering Letter - FINAL

Voting in person

Please refer to the cover letter of this Notice in which, in light of COVID-19, the Directors provide that Shareholders will not be able to physically attend the meeting. Instead, Directors are strongly encouraging all Shareholders to submit their votes through proxy voting forms prior to the meeting and to participate in a teleconference or online meeting.

Participation in the Meeting

Shareholders will be able to participate in the meeting by:

voting their Shares prior to the Meeting by lodging the proxy form attached to the Notice by no later than 11:00am on Wednesday 27 May 2020;
submitting questions in advance of the meeting by emailing the questions to [email protected] by no later than Friday 22 May 2020; and/or
by preregistering with the Company at least 48 hours prior to the Meeting to attend the Meeting via the online webcast and to vote by poll during the meeting rather than by proxy.

All Meeting resolutions will be voted upon by poll. Shareholders who have pre-registered to attend the Meeting via the webcast and have elected to vote by poll during the meeting rather than by proxy will, immediately prior to the Meeting, be sent a poll form to complete and email back to the Company during the meeting, while the poll is being conducted. Shareholders will be able to electronically attend the meeting and vote subject to completing the pre meeting registration procedures at least 48 hours prior to the meeting. To register please contact the Company Secretary on via email to [email protected] .

Shareholders are encouraged to participate in the Meeting via the live webcast and submit questions in the manner described below and in the Notice of Meeting.

The Directors strongly encourage all shareholders to lodge a directed proxy form prior to the meeting .

Proxy Forms may be lodged as follows:

by hand: Link Market Services Limited, 1A Homebush Bay Drive, Rhodes NSW 2138 by post: Norwood Systems Limited, C/- Link Market Services Limited, Locked Bag A14, Sydney South NSW 1235 Australia by fax: +61 2 9287 0309 by email: [email protected] online: www.linkmarketservices.com.au (using the unique holder number on the Proxy Form provided to each Shareholder)

The Meeting Chairperson will provide instructions as to how questions may be asked by Shareholders over the teleconference facility. Proxy Forms (and any power of attorney or other authority, if any, under which it is signed) must be received at an address given below by 11:00am (WST) on Wednesday 27 May 2020, being not less than 48 hours before the commencement of the Meetings.

NOR Revised NOM - COVID - Covering Letter - FINAL

Any Proxy Form received after that time will not be valid (unless the Board determines otherwise).

Voting by proxy

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, Shareholders are advised that:

each Shareholder has a right to appoint a proxy;
the proxy need not be a Shareholder of the Company; and
a Shareholder 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 section 249X(3) of the Corporations Act, each proxy may exercise one-half of the votes.

Shareholders and their proxies should be aware that:

if proxy holders vote, they must cast all directed proxies as directed; and
any directed proxies which are not voted will automatically default to the Chair, who must vote the proxies as directed.

Should you wish to discuss the matters in this Notice of Meeting please do not hesitate to contact the Company Secretary on +61 8 9322 7600 .

NOR Revised NOM - COVID - Covering Letter - FINAL

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.

1. RESOLUTION 1 – RATIFICATION OF PRIOR ISSUE OF SHARES AND OPTIONS – OCTOBER PLACEMENT

1.1 General

As announced on 29 October 2019, the Company has raised $200,000 through the issue of 66,666,666 Shares (on a pre-Consolidation basis) to professional and sophisticated investors at an issue price of $0.003 per Share together with one free attaching NOROA Option for every Share subscribed for and issued ( October Placement Securities ).

The October Placement Securities were issued on 29 October 2019 pursuant to the Company’s capacity under Listing Rule 7.1.

The Company engaged the services of Pinnacle Corporate Finance Pty Limited (ACN 149 263 543) (AFSL 403 684) ( Pinnacle ), to assist with the October Placement Securities by assisting the Company to raise the $200,000. The Company has paid Pinnacle a fee of $12,000 (being a management fee of 1% of the amount raised by Pinnacle and a placement fee of 5% of the amount raised by Pinnacle).

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.

Under Listing Rule 7.1A, an eligible entity can seek approval from its members, by way of a special resolution passed at its annual general meeting, to increase this 15% limit by an extra 10% to 25%.

The Company obtained approval to increase its limit to 25% at the annual general meeting held on 28 November 2019 ( Previous AGM ).

Listing Rule 7.2 sets out a number of exceptions to Listing Rules 7.1 and 7.1A. The issue of the October Placement Securities does not fit within any of these exceptions 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 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 October Placement Securities.

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 October Placement Securities.

NOR Revised NOM - COVID - Covering Letter - FINAL

Resolution 1 seeks Shareholder ratification pursuant to Listing Rule 7.4 for the issue of the October Placement Securities.

1.2 Technical information required by Listing Rule 14.1A

If Resolution 1 is passed, the October Placement Securities will be excluded in calculating the Company’s combined 25% limit in Listing Rules 7.1 and 7.1A, effectively increasing the number of equity securities the Company can issue with Shareholder approval over the 12 month period following the date of issue of the October Placement Securities.

If Resolution 1 is not passed, the October Placement Securities will be included in calculating the Company’s combined 25% limit in Listing Rules 7.1 and 7.1A, 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 October Placement Securities.

1.3 Technical information required by Listing Rule 7.4

Pursuant to and in accordance with Listing Rule 7.5, the following information is provided in relation to Resolution 1:

(a) the October Placement Securities were issued to professional and sophisticated investors ( October Placement Participants ). Pinnacle was responsible for identifying the October Placement Participants, who were identified through a bookbuild process, which involved Pinnacle seeking expressions of interest to participate in the capital raising from nonrelated parties of the Company. None of the October Placement Participants are related parties of the Company;
(b) 66,666,666 Shares and 66,666,666 Options were issued (on a preConsolidation basis);
(c) the Shares issued to participants in the October Placement were all fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company’s existing Shares;
(d) the Options issued to participants in the October Placement were issued on the terms and conditions set out in the Schedule;
(e) the October Placement Securities were issued on 29 October 2019;
(f) the issue price per Share was $0.003 (on a pre-Consolidation basis) and the issue price of the Options was nil as they were issued free attaching with the Shares on the basis of one Option for every Share subscribed for and issued. The Company has not and will not receive any other consideration for the issue of the October Placement Securities (other than in respect of funds received on exercise of the Options);
(g) the purpose of the issue of the October Placement Securities was to raise $200,000, which was applied towards:
(i) relevant operating costs to deliver the required voicemail platform infrastructure to be operated within Spark’s internally hosted network, using Norwood’s cloud platform;
(ii) costs associated with Release 3 of Norwood’s telco-scale World Voicemail platform, including key new World Voicemail end-user

NOR Revised NOM - COVID - Covering Letter - FINAL

features of improved voicemail message transcription quality; new iOS 13 dark-mode appearance, automatic voicemail forwarding to email – “voicemail delegation”, ability to read or listen to voicemails directly from the iPhone lock-screen, and support for 16 new languages to support global distribution; and

(iii) upgrading platform capabilities to support of key features demanded by telco customers – including geographic redundancy, high-availability configurations and scalability beyond 100 million subscribers per telco;
(h) the October Placement Securities were not issued under an agreement; and
(i) a voting exclusion statement is included in Resolution 1 of the Notice.

2. RESOLUTION 2 – RATIFICATION OF PRIOR ISSUE OF SHARES – DECEMBER PLACEMENT

2.1 General

As announced on 9 December 2019, the Company has raised $200,000 through the issue of 66,666,666 Shares (on a pre-Consolidation basis) to professional and sophisticated investors at an issue price of $0.003 per Share ( December Placement Shares ).

The December Placement Shares were issued on 9 December 2019 pursuant to the Company’s capacity under Listing Rule 7.1A, which was approved by Shareholders at Previous AGM.

2.2 Listing Rules 7.1 and 7.1A

Under Listing Rule 7.1A however, an eligible entity can seek approval from its members, by way of a special resolution passed at its annual general meeting, to increase this 15% limit by an extra 10% to 25%.

The Company obtained approval to increase its limit to 25% at the Previous AGM.

Listing Rule 7.2 sets out a number of exceptions to Listing Rules 7.1 and 7.1A. The issue of the December Placement Shares does not fit within any of these exceptions and, as it has not yet been approved by Shareholders, it effectively uses up part of the 25% limit in Listing Rules 7.1 and 7.1A, reducing the Company’s capacity 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 December Placement Shares.

2.3 Listing Rule 7.4

NOR Revised NOM - COVID - Covering Letter - FINAL

Resolution 2 seeks Shareholder ratification pursuant to Listing Rule 7.4 for the issue of the December Placement Shares.

2.4 Technical information required by Listing Rule 14.1A

If Resolution 2 is passed, the December Placement Shares will be excluded in calculating the Company’s combined 25% limit in Listing Rules 7.1 and 7.1A, effectively increasing the number of equity securities the Company can issue with Shareholder approval over the 12 month period following the date of issue of the December Placement Shares.

If Resolution 2 is not passed, the December Placement Shares will be included in calculating the Company’s combined 25% limit in Listing Rules 7.1 and 7.1A, 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 December Placement Shares.

2.5 Technical information required by Listing Rule 7.5

Pursuant to and in accordance with Listing Rule 7.5, the following information is provided in relation to Resolution 2:

(a) the December Placement Shares were issued to professional and sophisticated investors ( December Placement Participants ). The December Placement Participants were referred to the Company by an existing investor in the Company as being parties who were interested in participating in a future capital raising undertaken by the Company. None of the December Placement Participants are related parties of the Company;
(b) 66,666,666 December Placement Shares were issued (on a preConsolidation basis), and the December Placement Shares issued were all fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company’s existing Shares;
(c) the December Placement Shares were issued on 9 December 2019;
(d) the issue price was $0.003 per December Placement Share (on a preConsolidation basis). The Company has not and will not receive any other consideration for the issue of the December Placement Shares;
(e) the purpose of the issue of the December Placement Shares was to raise $200,000, which was applied towards:
(i) relevant operating costs to deliver the required voicemail platform infrastructure to be operated within Spark’s internally hosted network, using Norwood’s cloud platform;
(ii) costs associated with Release 3 of Norwood’s telco-scale World Voicemail platform, including key new World Voicemail end-user features of improved voicemail message transcription quality; new iOS 13 dark-mode appearance, automatic voicemail

NOR Revised NOM - COVID - Covering Letter - FINAL

forwarding to email – “voicemail delegation”, ability to read or listen to voicemails directly from the iPhone lock-screen, and support for 16 new languages to support global distribution; and

(iii) upgrading platform capabilities to support of key features demanded by telco customers – including geographic redundancy, high-availability configurations and scalability beyond 100 million subscribers per telco;

(f) the December Placement Shares were not issued under an agreement; and

(g) a voting exclusion statement is included in Resolution 2 of the Notice.

3. RESOLUTIONS 3 AND 4 – RATIFICATION OF PRIOR ISSUE OF SHARES AND OPTIONS – FEBRUARY PLACEMENT

3.1 General

As announced on 12 February 2020, the Company has raised $200,000 through the issue of 5,000,000 Shares (on a post-Consolidation basis) at an issue price of $0.04 per Share together with one free attaching NOROA Option for every Share subscribed for and issued ( February Placement ).

On 14 February 2020, the Company issued the Shares and Options the subject of the February Placement ( February Placement Securities ) to professional and sophisticated investors who participated in the February Placement.

5,000,000 Shares were issued (on a post-Consolidation basis) pursuant to the Company’s 7.1A mandate (ratification of which is sought under Resolution 3) and 5,000,000 Options were issued (on a post-Consolidation basis) pursuant to the Company’s capacity under Listing Rule 7.1 (ratification of which is sought under Resolution 4).

The Company engaged the services of Pinnacle Corporate Finance Pty Limited (ACN 149 263 543) (AFSL 403 684) ( Pinnacle ), to assist with the February Placement by assisting the Company to raise $100,000. The Company has paid Pinnacle a fee of $6,000 (being a management fee of 1% of the amount raised by Pinnacle and a placement fee of 5% of the amount raised by Pinnacle).

3.2 Listing Rules 7.1 and 7.1A

As summarised in Section 2.2 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 12 month period.

The Company obtained approval to increase its limit to 25% at Previous AGM.

Listing Rule 7.2 sets out a number of exceptions to Listing Rules 7.1 and 7.1A. The issue of the February Placement Securities does not fit within any of these exceptions and, as it has not yet been approved by Shareholders, it effectively uses up part of the 25% limit in Listing Rules 7.1 and 7.1A, reducing the Company’s capacity to issue further equity securities without Shareholder approval under

NOR Revised NOM - COVID - Covering Letter - FINAL

Listing Rule 7.1 and 7.1A for the 12 month period following the date of issue of the February Placement Securities.

3.3 Listing Rule 7.4

Resolutions 3 and 4 seek Shareholder ratification pursuant to Listing Rule 7.4 for the issue of the February Placement Securities.

3.4 Technical information required by Listing Rule 14.1A

If Resolutions 3 and 4 are passed, the February Placement Securities will be excluded in calculating the Company’s combined 25% limit in Listing Rules 7.1 and 7.1A, effectively increasing the number of equity securities the Company can issue with Shareholder approval over the 12 month period following the date of issue of the February Placement Securities.

If Resolutions 3 and 4 are not passed, the February Placement Securities will be included in calculating the Company’s combined 25% limit in Listing Rules 7.1 and 7.1A, effectively decreasing the number of equity securities the Company can issue without Shareholder approval over the 12 month period following the date of issue of the February Placement Securities.

3.5 Technical information required by Listing Rule 7.5

Pursuant to and in accordance with Listing Rule 7.5, the following information is provided in relation to Resolutions 3 and 4:

(a) the February Placement Securities were issued to professional and sophisticated investors ( February Placement Participants ). Pinnacle was responsible for identifying half of February Placement Participants, who were identified through a bookbuild process, which involved Pinnacle seeking expressions of interest to participate in the capital raising from non-related parties of the Company. The other February Placement Participants were referred to the Company by an existing investor in the Company as being parties who were interested in participating in a future capital raising undertaken by the Company. None of the February Placement Participants are related parties of the Company;
(b) 5,000,000 Shares were issued (on a post-Consolidation basis) pursuant to Listing Rule 7.1A (ratification of which is sought under Resolution 3) and 5,000,000 Options were issued (on a post-Consolidation basis) pursuant to Listing Rule 7.1 (ratification of which is sought under Resolution 4);
(c) the Shares issued to participants in the February Placement were all fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company’s existing Shares;

NOR Revised NOM - COVID - Covering Letter - FINAL

(d) the Options issued to participants in the February Placement were issued on the terms and conditions set out in the Schedule;
(e) the February Placement Securities were issued on 14 February 2020;
(f) the issue price per Share was $0.04 and the issue price of the Options was nil as they were issued free attaching with the Shares on a one for one basis. The Company has not and will not receive any other consideration for the issue of the February Placement Securities (other than in respect of funds received on exercise of the Options);
(g) the purpose of the issue of the February Placement Securities was to raise $200,000, which was applied towards:
(i) relevant operating costs to deliver the required voicemail platform infrastructure to be operated within Spark’s internally hosted network, using Norwood’s cloud platform;
(ii) costs associated with Release 3 of Norwood’s telco-scale World Voicemail platform, including key new World Voicemail end-user features of improved voicemail message transcription quality; new iOS 13 dark-mode appearance, automatic voicemail forwarding to email – “voicemail delegation”, ability to read or listen to voicemails directly from the iPhone lock-screen, and support for 16 new languages to support global distribution; and
(iii) upgrading platform capabilities to support of key features demanded by telco customers – including geographic redundancy, high-availability configurations and scalability beyond 100 million subscribers per telco;
(h) the February Placement Securities were not issued under an agreement; and
(i) voting exclusion statements are included in Resolutions 3 and 4 of the Notice.

4. RESOLUTION 5 – RATIFICATION OF PRIOR ISSUE OF TRANCHE 1 SHARES AND TRANCHE 1 OPTIONS – MARCH PLACEMENT

4.1 General

As announced on 23 March 2020, the Company has raised $200,000 through the issue of 8,000,000 Shares (on a post-Consolidation basis) at an issue price of $0.025 per Share together with one free attaching NOROA Option for every Share subscribed for and issued ( March Placement ).

On 23 March 2020, the Company issued 8,000,000 Shares ( Tranche 1 Shares ) and 4,000,000 Options ( Tranche 1 Options ) (on a post-Consolidation basis) to professional and sophisticated investors who participated in the March Placement. Resolution 5 seeks Shareholder ratification pursuant to Listing Rule 7.4 for the issue of the Tranche 1 Shares and the Tranche 1 Options (together, the Tranche 1 Securities ).

The remaining 4,000,000 Options to be issued to participants in the March Placement ( Tranche 2 Options ) (on a post-Consolidation basis) are subject to Shareholder approval (being, the subject of Resolution 6).

NOR Revised NOM - COVID - Covering Letter - FINAL

4.2 Listing Rules 7.1 and 7.1A

Under Listing Rule 7.1A, an eligible entity can seek approval from its members, by way of a special resolution passed at its annual general meeting, to increase this 15% limit by an extra 10% to 25%.

The Company obtained approval to increase its limit to 25% at the Previous AGM.

Listing Rule 7.2 sets out a number of exceptions to Listing Rules 7.1 and 7.1A. The issue of the Tranche 1 Securities does not fit within any of these exceptions 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 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 Tranche 1 Securities.

Resolution 5 seeks Shareholder ratification pursuant to Listing Rule 7.4 for the issue of the Tranche 1 Securities.

4.3 Technical information required by Listing Rule 14.1A

If Resolution 5 is passed, the Tranche 1 Securities will be excluded in calculating the Company’s combined 25% limit in Listing Rules 7.1 and 7.1A, effectively increasing the number of equity securities the Company can issue with Shareholder approval over the 12 month period following the date of issue of the Tranche 1 Securities.

If Resolution 5 is not passed, the Tranche 1 Securities will be included in calculating the Company’s combined 25% limit in Listing Rules 7.1 and 7.1A, 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 Tranche 1 Securities.

4.4 Technical information required by Listing Rule 7.4

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

(a) the Tranche 1 Securities were issued to professional and sophisticated investors ( March Placement Participants ). The March Placement Participants were referred to the Company by an existing shareholder as being parties who were interested in participating in a future capital

NOR Revised NOM - COVID - Covering Letter - FINAL

raising undertaken by the Company. None of the March Placement Participants are related parties of the Company. In line with requirements of Guidance Note 21, the Company confirms that the March Placement Participants included APSEC Funds Management Pty Ltd, a substantial holder of the Company, who was issued 4,000,000 Shares and 2,000,000 Options (on a post-Consolidation basis) under the March Placement (ratification of which is sought under this Resolution 5) and will receive a further 2,000,000 Options (on a post-Consolidation basis) if Shareholder approval is obtained under Resolution 6;

(b) 8,000,000 Shares and 4,000,000 Options were issued (on a postConsolidation basis);
(c) the Shares issued to participants in the March Placement were all fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company’s existing Shares;
(d) the Options issued to participants in the March Placement were issued on the terms and conditions set out in the Schedule;
(e) the Tranche 1 Securities were issued on 23 March 2020;
(f) the issue price per Share was $0.025 and the issue price of the Options was nil as they were issued free attaching with the Shares issued under the March Placement. The Company has not and will not receive any other consideration for the issue of the Tranche 1 Securities (other than in respect of funds received on exercise of the Options);
(g) the purpose of the issue of Tranche 1 Securities was to raise $200,000, which have and will be applied towards the Company’s ongoing working capital requirements, including:
(i) relevant operating costs to deliver the required voicemail platform infrastructure to be operated within Spark’s internally hosted network, using Norwood’s cloud platform;
(ii) costs associated with Release 3 of Norwood’s telco-scale World Voicemail platform, including key new World Voicemail end-user features of improved voicemail message transcription quality; new iOS 13 dark-mode appearance, automatic voicemail forwarding to email – “voicemail delegation”, ability to read or listen to voicemails directly from the iPhone lock-screen, and support for 16 new languages to support global distribution;
(iii) upgrading platform capabilities to support of key features demanded by telco customers – including geographic redundancy, high-availability configurations and scalability beyond 100 million subscribers per telco; and
(iv) working capital to deploy and operate on Spark’s behalf a Spark-branded, hosted Visual Voicemail service for Spark’s business customers;
(h) the Tranche 1 Securities were not issued under an agreement; and
(i) a voting exclusion statement is included in Resolution 5 of the Notice.

NOR Revised NOM - COVID - Covering Letter - FINAL

5. RESOLUTION 6 – APPROVAL TO ISSUE TRANCHE 2 OPTIONS – MARCH PLACEMENT

5.1 General

Resolution 6 seeks Shareholder approval for the issue of the Tranche 2 Options. Further details in respect of the issue of the Tranche 2 Options is set out in Section 4.1 above.

5.2 Listing Rule 7.1

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 shares it had on issue at the start of that period.

Listing Rule 7.2 sets out a number of exceptions to Listing Rule 7.1. The proposed issue of the Tranche 2 Options does not fit within any of these exceptions. While the issue does not exceed the 15% limit in Listing Rule 7.1 and can therefore be made without breaching 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 under Listing Rule 7.1. Accordingly, the Company is seeking Shareholder approval pursuant to Listing Rule 7.1 so that it does not use up any of its 15% placement capacity under Listing Rule 7.1.

5.3 Technical information required by Listing Rule 14.1A

If Resolution 6 is passed, the Company will be able to proceed with the issue of the Tranche 2 Options. In addition, the issue of the Tranche 2 Options will be excluded from the calculation of the number of equity securities that the Company can issue without Shareholder approval under Listing Rule 7.1.

If Resolution 6 is not passed, the issue of the Tranche 2 Options can still proceed but it will reduce, to that extent, the Company’s capacity to issue equity securities without Shareholder approval under Listing Rule 7.1 for 12 months following the issue.

Resolution 6 seeks Shareholder approval for the purposes of Listing Rule 7.1 for the issue of the Tranche 2 Options.

5.4 Technical information required by Listing Rule 7.1

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

(a) the Tranche 2 Options will be issued to the March Placement Participants, who are not related parties of the Company. In line with requirements of Guidance Note 21, the Company confirms that the March Placement Participants included APSEC Funds Management Pty Ltd, a substantial holder of the Company, who was issued 4,000,000 Shares and 2,000,000 Options (on a post-Consolidation basis) under the March Placement (in respect of which ratification is sought under Resolution 5) and will receive a further 2,000,000 Options (on a post-Consolidation basis) if Shareholder approval is obtained under this Resolution 6. Additionally, 7Sundays Pty Ltd a substantial holder of the Company, will be entitled to receive 2,000,000 Options (on a post-Consolidation basis) if Shareholder approval is obtained under this Resolution 6;

NOR Revised NOM - COVID - Covering Letter - FINAL

(b) the maximum number of Tranche 2 Options to be issued is 4,000,000 (on a post-Consolidation basis). The terms and conditions of the Tranche 2 Options are set out in the Schedule;
(c) the Tranche 2 Options will be issued no later than 3 months after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the Listing Rules) and it is intended that issue of the Tranche 2 Options will occur on the same date;
(d) the Tranche 2 Options will be issued at a nil issue price. As set out in Section 4.1 above, the Tranche 2 Options will be issued free attaching with the Shares issued under the March Placement. The Company has not and will not receive any other consideration for the issue of the Tranche 2 Options (other than in respect of funds received on exercise of the Options);
(e) the purpose of the issue of the Tranche 2 Options is to complete the Company’s obligations under the March Placement;
(f) the Tranche 2 Options are not being issued under an agreement;
(g) the Tranche 2 Options are not being issued under, or to fund, a reverse takeover; and
(h) a voting exclusion statement is included in Resolution 6 of the Notice.

NOR Revised NOM - COVID - Covering Letter - FINAL

GLOSSARY

$ means Australian dollars.

ASIC means the Australian Securities & Investments Commission.

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

Board means the current board of directors of the Company.

Business Day means Monday to Friday inclusive, except New Year’s Day, Good Friday, Easter Monday, Christmas Day, Boxing Day, and any other day that ASX declares is not a business day.

Chair means the chair of the Meeting.

Company means Norwood Systems Limited (ACN 062 959 540).

Constitution means the Company’s constitution.

Consolidation means the consolidation undertaken by the Company on 18 December 2019, whereby every ten securities on issue was consolidated into one security (subject to rounding).

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.

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

Listing Rules means the Listing Rules of ASX.

NOROA Option means an Option issued on the terms and conditions set out in the Schedule.

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

Option means an option to acquire a Share.

Proxy Form means the proxy form accompanying the Notice.

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

Section means a section of the Explanatory Statement.

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

Shareholder means a registered holder of a Share.

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

NOR Revised NOM - COVID - Covering Letter - FINAL

SCHEDULE – TERMS AND CONDITIONS OF NOROA OPTIONS

(a) Entitlement

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

(b) Exercise Price

Subject to paragraph (i), the amount payable upon exercise of each Option will be $0.08 ( Exercise Price ).

(c) Expiry Date

Each Option will expire at 5:00 pm (WST) on 31 October 2020 ( Expiry Date ). An Option not exercised before the Expiry Date will automatically lapse on the Expiry Date.

(d) Exercise Period

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

(e) Notice of Exercise

The Options may be exercised during the Exercise Period by notice in writing to the Company in the manner specified on the 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 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) issue the number of Shares required under these terms and conditions in respect of the number of 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 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 must, no later than 20 Business Days after becoming aware of such notice being

NOR Revised NOM - COVID - Covering Letter - FINAL

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 Options rank equally with the then issued shares of the Company.

(i) Reconstruction of capital

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

(j) Participation in new issues

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

(k) 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 Option can be exercised.

(l) Transferability

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

(m) Quotation

The Company will seek to have the Options quoted by ASX.

NOR Revised NOM - COVID - Covering Letter - FINAL

AI assistant

NORWOOD SYSTEMS LIMITED — Proxy Solicitation & Information Statement 2020

65434_rns_2020-05-20_2eab7ace-59bc-43ce-8dde-46619ae962da.pdf

IMPORTANT INFORMATION REGARDING SHAREHOLDER VOTING AT THE COMPANY’S UPCOMING GENERAL MEETING