TZ LIMITED — Capital/Financing Update 2012

Dec 3, 2012

TZ Limited ABN 26 073 979 272

4 December 2012

Lodged by ASX Online

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

Dear Sir/Madam

APPENDIX 3B

TZ Limited (the " Company ") announces that, as approved at the Company’s recent annual general meeting, the Company will issue an additional 4,060,725 options (the " Options ") on Tuesday, 4 December 2012.

The Options are each exercisable at 14 cents on or before 31 October 2013 and are issued on the same terms and conditions as the 23,059,311 options issued to applicants under the Company’s recent 1 for 3 renounceable rights issue (“ Rights Issue ”) and the 11,312,209 options issued on 25 October 2012. These terms and conditions are set out in the annexure to this letter.

The Options are required to be issued by the Company to the underwriter of the Rights Issue (or as directed by the underwriter). The Company has now received written direction from the underwriter as to whom the Options are to be issued.

An Appendix 3B application for quotation of the 4,060,725 Options is attached to this letter.

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

ANNEXURE

OPTION TERMS AND CONDITIONS

The Options are subject to the following terms and conditions:

1. Subject to and conditional upon any adjustment in accordance with the terms and conditions set out below, each Option entitles the holder, when validly exercised, to one fully paid ordinary share (" Share ") in the issued share capital of TZ Limited ACN 073 979 272 (" Company ") upon payment of the exercise price prior to the expiry date.

3. The exercise price of each Option shall be $0.14 (" Exercise Price ").

4. The Options may be exercised at any time on or before 5.00 pm (Sydney time) on 31 October 2013 (" Expiry Date ") by lodging with the Company before the Expiry Date a written notice of exercise specifying the number of Options being exercised (" Exercise Notice "), accompanied by a bank cheque for payment of the Exercise Price for that number of Options being exercised, at the address below:

The Directors TZ Limited Level 11 1 Chifley Square SYDNEY NSW 2000

An Exercise Notice is only effective when the Company has received the full amount of the Exercise Price in cleared funds.

Options not exercised by the Expiry Date lapse.

1. The Company will apply for quotation of the Options on the Australian Securities Exchange (" ASX ").

2. Options which have not been exercised are freely transferable in whole or in part at any time prior to the Expiry Date.

3. All Shares to be issued pursuant to the exercise of the Options will rank equally in all respects with the Company's then existing fully paid ordinary shares and will be issued within 10 business days following receipt of the Exercise Notice and the Exercise Price (in cleared funds). The Company will apply for quotation of all Shares issued upon exercise of the Options within 10 business days after the date of allotment of those Shares.

4. There are no participation rights or entitlements inherent in the Options and holders of the Options will not be entitled to participate in any new issues of securities which may be offered to shareholders of the Company from time to time prior to the Expiry Date. However, before the record date to determine entitlements to any such new issue of securities, the Company will notify the holders of the Options of the proposed

new issue in accordance with the requirements of the Listing Rules of the ASX (" Listing Rules ").

1. The Options confer on their holders a right to a change in the Exercise Price where there is a pro rata issue (except a bonus issue) to the holders of Shares. In such circumstances, the Exercise Price of the Options may be reduced according to the formula set out in Listing Rule 6.22.

2. The Options do not confer on their holders any right to participate in dividends until Shares are allotted pursuant to the exercise of the Options, after which, such Shares will qualify for any dividend paid on the fully paid ordinary shares in the Company with a record date after the date of allotment of the Shares.

3. In the event of a reconstruction (including consolidation, sub-division, return or reduction of the issued capital of the Company), the rights of the holders of Options shall be changed to the extent necessary to comply with the ASX Listing Rules.

4. If, from time to time, before the expiry of the Options, the Company makes a pro rata issue of Shares to the holders of Shares for no consideration (a " Bonus Issue "), the number of Shares over which an Option is exercisable will be increased by the number of Shares which the holder would have received if the Option had been exercised prior to the record date for calculating entitlements to the Bonus Issue. The exercise price of the Options shall not change as a result of any such Bonus Issue.

5. Any calculations of a change in the Exercise Price or a change to the number of Shares to be issued on exercise of the Options required under these terms and conditions will be made by the Company, notified to the holders of the Options in writing and will be binding on the holders of the Options.

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 2 Number of+securities issued or to be issued (if known) or maximum number which may be issued 3 Principal terms of the +securities (eg, if options, exercise price and expiry date; if partly paid +securities, the amount outstanding and due dates for payment; if +convertible securities, the conversion price and dates for conversion)	Options
	4,060,725 options
	• The exercise price is $0.14 • The options expire on 31 October 2013 and may be exercised at any time from the date of issue to the date of expiry

• See chapter 19 for defined terms.

Appendix 3B Page 1

01/08/2012

Appendix 3B New issue announcement

4 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 5 Issue price or consideration 6 Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets) 6a Is the entity an+eligible entity 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 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	Yes, the options rank equally with the existing quoted options. Any shares issued as a result of exercise of the options will, from the date of their allotment, rank equally with the then existing fully paid shares.
	Options to be issued for no cash consideration.
	In payment of additional consideration owing to the underwriter of the Company's recent rights issue which completed on 25 October 2012
	No

• See chapter 19 for defined terms.

Appendix 3B Page 2

01/08/2012

Appendix 3B New issue announcement

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 8 Number and +class of all +securities quoted on ASX (including the securities in section 2 if applicable)
	4 December 2012
	Number	+Class
	184,475,203 38,432,245	Ordinary fully paid shares Options exercisable at $0.14 and expiring on 31 October 2013

• See chapter 19 for defined terms.

Appendix 3B Page 3

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Appendix 3B New issue announcement

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
	3,000,000 3,000,000 13,714 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

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

11 Is security holder approval No required?

• See chapter 19 for defined terms.

Appendix 3B Page 4

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Appendix 3B New issue announcement

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
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

• See chapter 19 for defined terms.

Appendix 3B Page 5

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Appendix 3B New issue announcement

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

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

• See chapter 19 for defined terms.

Appendix 3B Page 6

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Appendix 3B New issue announcement

(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: 3 December 2012

Print name: Kenneth Ting

• See chapter 19 for defined terms.

Appendix 3B Page 9

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