TZ LIMITED — Capital/Financing Update 2012

Dec 6, 2012

TZ Limited ABN 26 073 979 272

7 December 2012

Lodged by ASX Online

The Manager Company Announcements Office ASX Limited Level 4, 20 Bridge Street Sydney NSW 2000

Dear Sir/Madam

ISSUE OF SERIES IV CONVERTIBLE NOTES

TZ Limited (the " Company ") advises that it has today issued a total of 1,799 convertible notes (the " Series IV Convertible Notes "), each with a face value of $1,000, to QVT Fund LP and Quintessence Fund L.P. (" QVT Funds "), as follows:

• 1,621 Series IV Convertible Notes to QVT Fund LP; and

• 178 Series IV Convertible Notes to Quintessence Fund L.P.

The issue of the Series IV Convertible Notes was approved by the Company’s shareholders under resolution 4 passed at its recent annual general meeting held on 28 November 2012 (the " 2012 AGM ").

The key terms of the Series IV Convertible Notes were summarized in the Explanatory Statement accompanying the notice of meeting for the 2012 AGM.

An Appendix 3B is attached in respect of the Series IV Convertible Notes.

Yours faithfully, TZ LIMITED

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Kenneth Ting Executive Director and Company Secretary

TZ Limited | Level 11, 1Chifley Square, Sydney, NSW 2000 Australia Phone: +612 9222 8890 Fax: +612 8208 9937

Appendix 3B New issue announcement

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX’s property and may be made public.

Introduced 01/07/96 Origin: Appendix 5 Amended 01/07/98, 01/09/99, 01/07/00, 30/09/01, 11/03/02, 01/01/03, 24/10/05, 01/08/12

Name of entity

TZ LIMITED

ABN

26 073 979 272

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

1 +Class of +securities issued or to be issued Convertible Notes 2 Number of[+] securities issued or to be issued (if known) or 1,799 convertible notes maximum number which may be issued

3 Principal terms of the • The convertible notes bear interest at +securities (eg, if options, 10% per annum, payable on 31 December exercise price and expiry date; if partly paid +securities, the • each year. The convertible notes must be repaid on amount outstanding and due dates for payment; if the fifth anniversary of the date of their +convertible securities, the issue unless converted into ordinary conversion price and dates for shares. conversion)

• See chapter 19 for defined terms.

Appendix 3B Page 1

01/08/2012

Appendix 3B New issue announcement

• Subject to any required shareholder approval being obtained, conversion of each convertible note into ordinary shares occurs at a conversation rate per share equal to the lesser of $0.42 and the lowest price at which ordinary shares may be subsequently issued by the Company while the Series IV Convertible Notes remain on issue. • The convertible notes may be converted into ordinary shares during the period commencing on the date of issue and expiring on 7 December 2017.

4 Do the[+] securities rank equally Not applicable. in all respects from the date of allotment with an existing[+] class of quoted[+] securities? If the additional securities do not rank equally, please state: • the date from which they do • the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment • the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 5 Issue price or consideration $1,000 per convertible note 6 Purpose of the issue Issued in repayment of $1,798,900 of interest (If issued as consideration for due on convertible notes held by QVT Fund the acquisition of assets, clearly LP and Quintessence Fund L.P. in respect of identify those assets) the year ended 31 December 2011. 6a Is the entity an[+] eligible entity No that has obtained security holder approval under rule 7.1A? If Yes, complete sections 6b – 6h in relation to the[+] securities the subject of this Appendix 3B, and comply with section 6i

• See chapter 19 for defined terms.

Appendix 3B Page 2

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Appendix 3B New issue announcement

6b The date the security holder resolution under rule 7.1A was passed 6c Number of+securities issued without security holder approval under rule 7.1 6d Number of+securities issued with security holder approval under rule 7.1A 6e Number of+securities issued with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting) 6f Number of securities issued under an exception in rule 7.2 6g If securities issued under rule 7.1A, was issue price at least 75% of 15 day VWAP as calculated under rule 7.1A.3? Include the issue date and both values. Include the source of the VWAP calculation. 6h If securities were issued under rule 7.1A for non-cash consideration, state date on which valuation of consideration was released to ASX Market Announcements 6i Calculate the entity’s remaining issue capacity under rule 7.1 and rule 7.1A – complete Annexure 1 and release to ASX Market Announcements 7 Dates of entering +securities into uncertificated holdings or despatch of certificates
	7 December 2012

• See chapter 19 for defined terms.

Appendix 3B Page 3

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Appendix 3B New issue announcement

8 Number and +class of all +securities quoted on ASX (including the securities in section 2 if applicable) 9 Number and +class of all +securities not quoted on ASX (including the securities in section 2 if applicable) 10 Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests)	Number	+Class
	184,475,203 38,432,245	Ordinary fully paid shares Options exercisable at $0.14 and expiring on 31 October 2013
	Number	+Class
	3,000,000 3,000,000 15,513 4,275 1,750,000 1,750,000 1,750,000	CB Options exercisable at $4.00 and expiring on 19 February 2013 Options exercisable at $0.42 and expiring on 19 February 2013 Convertible notes at an issue price of $1,000 per convertible note Secured convertible notes at an issue price of $1,000 per convertible note Directors options exercisable at $1.00 and expiring on 30 June 2016 Directors options exercisable at $2.00 and expiring on 30 June 2017 Directors options exercisable at $3.00 and expiring on 30 June 2018
	Not applicable

• See chapter 19 for defined terms.

Appendix 3B Page 4

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Appendix 3B New issue announcement

Part 2 - Bonus issue or pro rata issue – Not applicable

11	Is security holder approval
	required?
12	Is the issue renounceable or non-
	renounceable?
13	Ratio in which the+securities
	will be offered
14	+Class of+securities to which the
	offer relates
15	+Record date to determine
	entitlements
16	Will holdings on different
	registers (or subregisters) be
	aggregated for calculating
	entitlements?
17	Policy for deciding entitlements
	in relation to fractions
18	Names of countries in which the
	entity has+security holders who
	will not be sent new issue
	documents
	Note: Security holders must be told how their
	entitlements are to be dealt with.
	Cross reference: rule 7.7.
19	Closing date for receipt of
	acceptances or renunciations
20	Names of any underwriters
21	Amount of any underwriting fee
	or commission
22	Names of any brokers to the
	issue

• See chapter 19 for defined terms.

Appendix 3B Page 5

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Appendix 3B New issue announcement

23	Fee or commission payable to the
	broker to the issue
24	Amount of any handling fee
	payable to brokers who lodge
	acceptances or renunciations on
	behalf of+security holders
25	If the issue is contingent on
	+security holders’ approval, the
	date of the meeting
26	Date entitlement and acceptance
	form and prospectus or Product
	Disclosure Statement will be sent
	to persons entitled
27	If the entity has issued options,
	and the terms entitle option
	holders to participate on
	exercise, the date on which
	notices will be sent to option
	holders
28	Date rights trading will begin (if
	applicable)
29	Date rights trading will end (if
	applicable)
30	How do+security holders sell
	their entitlements in full through
	a broker?
31	How do+security holders sell
	part of their entitlements
	through a broker and accept for
	the balance?
32	How do+security holders dispose
	of their entitlements (except by
	sale through a broker)?
33	+Despatch date

• See chapter 19 for defined terms.

Appendix 3B Page 6

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Appendix 3B New issue announcement

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

• 34 Type of securities (tick one)

• (a) Securities described in Part 1

• (b) All other securities

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

• 35 If the[+] securities are[+] equity securities, the names of the 20 largest holders of the additional[+] securities, and the number and percentage of additional[+] securities held by those holders

• 36 If the[+] securities are[+] equity securities, a distribution schedule of the additional +securities setting out the number of holders in the categories 1 - 1,000

• 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over

• 37 A copy of any trust deed for the additional[+] securities

Entities that have ticked box 34(b)

• 38 Number of securities for which +quotation is sought

• 39 Class of +securities for which quotation is sought

• See chapter 19 for defined terms.

Appendix 3B Page 7

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Appendix 3B New issue announcement

40 Do the[+] securities rank equally in all respects from the date of allotment with an existing[+] class of quoted[+] securities? If the additional securities do not rank equally, please state:

• the date from which they do

• • the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment

• • the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment

41 Reason for request for quotation now Example: In the case of restricted securities, end of restriction period (if issued upon conversion of another security, clearly identify that other security)

Number +Class 42 Number and +class of all +securities quoted on ASX (including the securities in clause 38)

Quotation agreement

• 1 +Quotation of our additional +securities is in ASX’s absolute discretion. ASX may quote the[+] securities on any conditions it decides.

• 2 We warrant the following to ASX.

• The issue of the[+] securities to be quoted complies with the law and is not for an illegal purpose.

• There is no reason why those[+] securities should not be granted +quotation.

• See chapter 19 for defined terms.

Appendix 3B Page 8

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Appendix 3B New issue announcement

• An offer of the[+] securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any[+] securities to be quoted and that no-one has any right to return any[+] securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the[+] securities be quoted.

• If we are a trust, we warrant that no person has the right to return the +securities to be quoted under section 1019B of the Corporations Act at the time that we request that the[+] securities be quoted.

• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.

• 4 We give ASX the information and documents required by this form. If any information or document not available now, will give it to ASX before +quotation of the +securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

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Sign here: ............................................................ (Director)

Date: 7 December 2012

Print name: Kenneth Ting

• See chapter 19 for defined terms.

Appendix 3B Page 9

01/08/2012