TZ LIMITED - Capital/Financing Update 2012

TZ Limited ACN 073 979 272

PROSPECTUS

1 for 3 renounceable rights issue offer of approximately 46,118,801 New Shares

at 10 cents per New Share (together with 1 attaching New Option exercisable at 14 cents on or before 31 October 2013 for every 2 New Shares subscribed for and issued) to raise approximately $ 4.6 million

An offer of Underwriter Options to the Underwriter (or its nominees) of 1 Underwriter Option for every 3 New Shares underwritten, subject to Shareholder approval

This document is important and requires your immediate attention. It should be read in its entirety. If you are in doubt as to the action you should take, consult your stockbroker, accountant, financial or other professional adviser immediately. (This document is a replacement prospectus which replaces a prospectus dated 19 September 2012, relating to shares and options to acquire shares of TZ Limited.)

An investment in the New Shares and New Options offered by this Prospectus should be considered speculative.

Underwriter to the Rights Issue Patersons Securities Limited ACN 008 896 311

Page IMPORTANT NOTICE ............................................................................................................ 1 LETTER TO SHAREHOLDERS ........................................................................................... 5 1. DETAILS OF THE OFFER ............................................................................................. 6 2. ACTION REQUIRED BY ELIGIBLE SHAREHOLDERS ......................................... 11 3. PURPOSE AND EFFECT OF THE OFFER .............................................................. 15 4. RISK FACTORS ............................................................................................................. 21 5. SUMMARY OF MATERIAL CONTRACTS ................................................................ 26 6. ADDITIONAL INFORMATION ..................................................................................... 32 7. GLOSSARY..................................................................................................................... 43 DIRECTORS' AUTHORISATION ....................................................................................... 46 CORPORATE DIRECTORY ................................................................................................ 47

Accompanying this Prospectus is a personalised Entitlement and Acceptance Form.

SUMMARY OF KEY DATES

Lodgement of Prospectus with ASIC and ASX 20 September 2012 Existing Shares quoted ex-rights & rights trading commences 24 September 2012 Record Date to determine Entitlements under the Rights Issue 28 September 2012 Prospectus and Entitlement and Acceptance Forms despatched and opening date of the Rights Issue 3 October 2012 Last day of rights trading 10 October 2012 Closing Date - final day for receipt of Entitlements and Acceptance Forms and Acceptance Moneys 17 October 2012 Company notifies ASX of under subscriptions 22 October 2012 Allotment of New Shares and New Options 24 October 2012 Despatch of holding statements for New Shares and New Options 25 October 2012

Subject to the Listing Rules, the Company reserves the right to vary the timetable without notice, in consultation with the Underwriter, including by extending the Closing Date or closing the Rights Issue early.

IMPORTANT NOTICE

This Prospectus is dated 20 September 2012 and is a replacement prospectus which replaces a prospectus dated 19 September 2012 relating to shares and options to acquire shares of the Company. A copy of the Prospectus was lodged with ASIC on 20 September 2012. Neither ASIC nor ASX takes responsibility for the contents of this Prospectus or for the merits of the investment to which this Prospectus relates. This Prospectus expires on 19 October 2013. No Securities will be issued or allotted on the basis of this Prospectus after 19 October 2013.

The difference between this Prospectus and the prospectus dated 19 September 2012 which it replaces are that under this Prospectus the Record Date is changed from 27 September 2012 to 28 September 2012 and the date specified on which Shares are quoted ex-rights and trading in Entitlements commences is changed from 21 September 2012 to 24 September 2012. Some immaterial amendments have also been included as a consequence of these date changes.

Application for admission of the New Shares and New Options to quotation on ASX has been made to ASX.

Eligible Shareholders should read this Prospectus in its entirety and seek professional advice where necessary. The Securities the subject of this Prospectus should be considered speculative.

Continuous Disclosure

This is a Prospectus for an offer of continuously quoted securities (as defined in the Corporations Act) of the Company and has been prepared in accordance with section 713 of the Corporations Act. It does not contain the same level of disclosure as an initial public offering prospectus. In making representations in this Prospectus regard has been had to the fact that the Company is a disclosing entity for the purposes of the Corporations Act and certain matters may reasonably be expected to be known to investors and professional advisers whom potential investors may consult.

Restrictions on the distribution of this Prospectus

The Securities being offered under this Prospectus pursuant to the Rights Issue are being offered to Eligible Shareholders, being Shareholders with a registered address in Australia, New Zealand or the United Kingdom at 7.00 pm on the Record Date.

The distribution of this Prospectus in jurisdictions outside Australia, New Zealand and the United Kingdom

may be restricted by law and therefore persons who come into possession of this document should seek advice on and observe any such restrictions. A failure to comply with these restrictions may constitute a violation of applicable securities laws.

This Prospectus does not constitute an offer in any place in which, or to any person to whom, it would not be lawful to make such an offer.

No action has been taken to register or qualify the Securities or to otherwise permit a public offering of the Securities, outside Australia, New Zealand and the United Kingdom. The Securities may not be offered in a jurisdiction outside Australia, New Zealand and the United Kingdom where such an offer is not made in accordance with the laws of that place.

More detail regarding restrictions on the distribution of this Prospectus, and limitations upon the jurisdictions in which the offers under the Prospectus are made, is set out in section 1.12.

New Zealand Notice

The Offer to New Zealand investors pursuant to this Prospectus are regulated offers made under Australian and New Zealand law. In Australia, this is Chapter 8 of the Corporations Act and the Corporations Regulations 2001 (Cth). In New Zealand, this is Part 5 of the Securities Act 1978, Securities Regulations 2009 and the Securities (Mutual Recognition of Securities Offerings – Australia) Regulations 2008.

The Offer and the content of this Prospectus are principally governed by Australian rather than New Zealand law. The Australian Corporations Act and Corporations Regulations 2001 (Cth) set out how the Offer must be made. There are differences in how securities are regulated under Australian law. For example, the disclosure of fees for collective investment schemes is different under the Australian regime. The rights, remedies, and compensation arrangements available to New Zealand investors in Australian securities may differ from the rights, remedies, and compensation arrangements for New Zealand securities.

Both the Australian and New Zealand securities regulators have enforcement responsibilities in relation to the Offer. If you need to make a complaint about the Offer, please contact the Financial Markets Authority, Wellington, New Zealand. The Australian and New Zealand regulators will work together to settle your complaint.

The taxation treatment of Australian securities is not the same as for New Zealand securities.

If you are uncertain about whether this investment is appropriate for you, you should seek the advice of an appropriately qualified financial adviser.

The Offer may involve a currency exchange risk. The currency for the Securities is not New Zealand dollars. The value of the Securities will go up or down according to changes in the exchange rate between that currency and New Zealand dollars. These changes may be significant. If you expect the Securities to pay any amounts in a currency that is not New Zealand dollars, you may incur significant fees in having the funds credited to a bank account in New Zealand in New Zealand dollars.

The Company will apply to the ASX for quotation of the Securities offered under this Prospectus. If quotation is granted, the Securities offered under this Prospectus will be able to be traded on the ASX. If you wish to trade the Securities through that market, you will have to make arrangements for a participant in that market to sell the Securities on your behalf. As the ASX does not operate in New Zealand, the way in which the market operates, the regulation of participants in that market, and the information available to you about the Securities and trading may differ from securities markets that operate in New Zealand.

The Company is required under Part 1 of the Securities (Mutual Recognition of Securities Offerings – Australia) Regulations 2008 to provide an Eligible Shareholder with copies of the Company's Constitution on request and free of charge.

United Kingdom

The New Shares and New Options will be offered in the United Kingdom in reliance on exemptions to the Financial Services and Markets Act 2000 (United Kingdom) (" FSMA ") and the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (" Financial Promotion Order ").

The total amount raised under the Offer is less than €5,000,000 or its equivalent in Australian dollars, which means that this Prospectus does not constitute an 'approved prospectus' for the purposes of section 85 and schedule 11A of the FSMA or the United Kingdom's Prospectus Rules. Accordingly, the Prospectus has not been registered, approved or examined by the United Kingdom Financial Services Authority and therefore may not contain all of the information that a disclosure document or prospectus is required to contain under English law.

The offer of New Shares and New Options under this Prospectus is only being made in the United Kingdom to persons who are of a kind described in Article 43(2) (members and creditors of certain bodies corporate) of the Financial Promotion Order as at the Record Date. Any investment to which this document relates is available to only those persons described above and persons who do not fall into that category should not rely on this document nor take any action in relation to it.

The amount raised under the Offer in the European Economic Area (in which area the Offer is only being made to Eligible Shareholders who have registered addresses in the United Kingdom) in the twelve month period preceding the Closing Date will be less than €5,000,000 or its equivalent in Australian dollars. Any applications for Additional Shares or Shortfall Shares by Eligible Shareholders who have registered addresses in the United Kingdom may only be made on the condition that the Directors have complete discretion to scale-back any such applications to ensure that the total sum for which Eligible Shareholders may subscribe for when aggregated with the total sum for which other such Eligible Shareholders have already subscribed for under the Offer does not exceed a threshold of €5,000,000 or its equivalent in Australian dollars.

Risk factors

This Prospectus does not take into account your investment objectives, financial situation and particular needs. In particular, you should consider the risk factors that could affect the performance of the Company. You should carefully consider these factors in light of your personal circumstances (including financial and taxation issues) and seek professional guidance before deciding whether to invest. A number of key risk factors that you should consider are outlined in section 4.

Disclaimer

No person is authorised to give any information or to make any representation in connection with the Rights Issue which is not contained in this Prospectus. Any information or representation not contained in this Prospectus may not be relied on as having been authorised by the Company, the Directors, the Underwriter or any other person in connection with the Rights Issue.

Forward looking statements

Some of the information contained in this Prospectus constitutes forward-looking statements that are subject to various risks and uncertainties. Forward-looking statements include those containing such words as "anticipate", "estimate", "should", "will", "expects", "plans" or similar expressions. These statements discuss future objectives or expectations concerning results of operations or financial conditions or provide other forward-looking information,. The Company's actual results, performance or achievements could be significantly different from the results or objectives expressed in, or implied by, those forward-looking statements. This Prospectus details some important factors that could cause the Company's actual results to differ from the forward-looking statements made in this Prospectus.

Definitions

Some capitalised words or terms in this Prospectus have defined meanings which appear in the Glossary in section 7.

A reference to time in this Prospectus is to Australian Eastern Daylight Savings Time.

A reference to $ and cents is to Australian currency, unless otherwise stated.

Electronic copy of the Prospectus

This Prospectus is issued in paper form only.

Eligible Shareholders will be mailed a copy of this Prospectus, accompanied by a personalised Entitlement and Acceptance Form. If you wish to apply for New Shares and New Options, you may only do so by completing and returning an Entitlement and Acceptance Form that accompanies a paper version of this Prospectus.

This Prospectus has been placed on the Company's website at www.tz.net for information purposes only. Eligible Shareholders cannot apply for New Shares and New Options pursuant to the electronic version of this Prospectus.

Privacy

The Entitlement and Acceptance Form requires you to provide information that may be personal information for the purposes of the Privacy Act. The Company (and the Share Registry on its behalf) collects, holds and uses that personal information in order to assess your Application, service your needs as an investor, provide facilities and services you request and carry out appropriate administration. If you do not provide the information requested, your Application may not be processed efficiently, or at all.

Your personal information may also be disclosed to the Company's agents and service providers on the basis that they deal with such information in accordance with the Company's privacy policy. Your information may also be used or disclosed from time to time to inform you about the Company's products or services that the Company thinks may be of interest to you. If you do not want your personal information used for this purpose, you should contact the Company through the Share Registry at the telephone number or address listed below.

Under the Privacy Act, you may request access to your personal information held by, or on behalf of, the Company or the Share Registry. You can request access to your personal information by telephoning or writing to the Share Registry as follows:

Computershare Investor Services Pty Limited GPO Box 505 Melbourne VIC 3001 Australia

Telephone: 1300 850 505 (within Australia) or + 61 3 9415 4000 (outside Australia)

A copy of the Company's privacy policy is available on the Company's website (www.tz.net).

THIS PROSPECTUS IS IMPORTANT AND SHOULD BE READ IN ITS ENTIRETY.

LETTER TO SHAREHOLDERS

TZ Limited ABN 26 073 979 272

20 September 2012

Dear Shareholder

On behalf of the board of TZ Limited, I invite you, as an Eligible Shareholder, to participate in a renounceable Rights Issue.

The Rights Issue provides all Eligible Shareholders the opportunity to invest in one New Share for every three Existing Shares held at 7.00 pm on the Record Date with 1 attaching New Option for every 2 New Shares subscribed for and issued. The New Shares will be issued at 10.0 cents per New Share. In addition, Eligible Shareholders may apply for Additional Shares (and attaching Additional Options) over and above their Entitlement at the same price of 10.0 cents per Additional Share, if and to the extent there is any Shortfall. Further details are included in sections 1.2 and 2 of the Prospectus for the Rights Issue.

The Prospectus was lodged with ASIC on 20 September 2012 and a copy will be sent to all Shareholders of the Company who are on the register of members as at 7.00 pm on 28 September 2012 and who have registered addresses in Australia, New Zealand or the United Kingdom.

The Rights Issue will raise approximately $4.6 million (before the costs of the Rights Issue). This will be used to meet ongoing working capital requirements of the Company and to pay the costs of the Rights Issue. Further details on the proposed use of funds are set out in section 3.1 of the Prospectus for the Rights Issue.

Patersons Securities Limited has agreed to fully underwrite the Rights Issue, subject to the terms of the Underwriting Agreement. Sections 1.3 and 5.1 of the Prospectus contain further information on the underwriting.

To find out what you need to do to participate in the Rights Issue, please refer to section 2 of this Prospectus. I urge you to read the Prospectus thoroughly. The Prospectus is intended to be read in conjunction with publicly available information relating to the Company. This information regarding the Company can be accessed via links on the Company website, www.tz.net.

I believe that the Company will be able to take advantage of a number of sales opportunities with the funds to be raised from the Rights Issue and help give the Company the opportunity to build a sustainable and profitable business. For these reasons I strongly support this capital raising initiative and intend to take up my Entitlement in full under the Rights Issue. I also confirm that my fellow Directors, Kenneth Ting and Dickory Rudduck, also intend to take up all or at least one half of their Entitlement under the Rights Issue.

On behalf of the Board, I take this opportunity to thank each of our Shareholders and look forward to your support of the Rights Issue.

Yours sincerely,

==> picture [149 x 43] intentionally omitted <==

Mark Bouris Executive Chairman

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

DETAILS OF THE OFFER

1.1 General

This Prospectus invites Eligible Shareholders to participate in a pro-rata renounceable Rights Issue of approximately 46,118,801 New Shares. The Rights Issue will be conducted on the basis of one New Share for every three Existing Shares held by Eligible Shareholders at 7.00 pm on the Record Date, at an issue price of 10.0 cents per New Share payable in full on application. Fractional entitlements will be rounded up to the nearest whole number.

The Company will also grant 1 attaching New Option for every 2 New Shares subscribed for and issued. The New Options will have an exercise price of 14 cents and will expire on 31 October 2013.

The Company will also issue up to 15,372,934 Underwriter Options to the Underwriter (or its nominees) under the Underwriter Offer.

A summary of the rights and liabilities attaching to New Shares, New Options and Underwriter Options is set out in sections 6.1 and 6.2. New Shares will be issued on the same terms and rank equally in all respects with Existing Shares.

1.2 Additional Shares and Additional Options

Eligible Shareholders who take up their full Entitlement may also apply for Additional Shares (and attaching Additional Options). Applications for Additional Shares may be considered if not all of the Offer Securities are taken up by the Eligible Shareholders under the Offer. Applications for Additional Shares will be satisfied prior to the Shortfall Offer referred to in Section 1.13. Additional Shares will be issued at the discretion of the Underwriter after consultation with the Company and, as a result, there is no guarantee that you will receive Additional Shares. See section 2.3 for further details.

In the event that Entitlements are not taken up in full, Eligible Shareholders who have taken up all of their Entitlement and have made an application for Additional Shares (and attaching Additional Options) may be allocated Additional Shares and Additional Options as follows:

(a) the number of Additional Shares allocated to an Eligible Shareholder who has applied for Additional Shares will be at the discretion of the Underwriter;
(b) an Eligible Shareholder will be allocated one Additional Option for every two Additional Shares allocated to them (if any);
(c) the Underwriter reserves the right to allocate Additional Shares to Eligible Shareholders in part or not at all;
(d) an Eligible Shareholder will not receive more Additional Shares than they have applied for;
(e) allocations to Eligible Shareholders with a registered address in the United Kingdom will be subject to the condition that the maximum amount of the Offer being made to Shareholders with a registered address in the European Economic Area is less than the €5,000,000 or its equivalent in Australian dollars for the preceding 12 month period from the date of this Prospectus; and
(f) allocations will be made in a way such that all laws, in particular the takeovers prohibitions in Chapter 6 of the Corporations Act, are complied with.

There is no guarantee that Eligible Shareholders will be successful in being allocated any of the Additional Shares and Additional Options that they may apply for. If an application for Additional Shares is scaled back or the Underwriter decides not to issue Additional Shares to an Eligible

Shareholder, the Application Moneys for those Additional Shares which are not issued to the applicant will be returned to the applicant without any payment of interest.

1.3 Underwriting

The Rights Issue, subject to the terms of the Underwriting Agreement, will be fully underwritten by the Underwriter, Patersons Securities Limited. A summary of the Underwriting Agreement is set out in section 5.1.

1.4 Use of funds

The net proceeds of the Rights Issue of approximately $4,191,880 (after estimated costs of $420,000) are intended to be used for the purposes and in the amounts as set out in the table in section 3.1 of this Prospectus.

1.5 Record Date and Entitlements

The Record Date for participation in the Rights Issue is 7.00 pm (Sydney time) on 28 September 2012.

Fractional entitlements to New Shares will be rounded up to the nearest whole New Share. The Entitlement of an Eligible Shareholder to subscribe for New Shares is shown on the personalised Entitlement and Acceptance Form accompanying this Prospectus.

1.6 Minimum subscription

There is no minimum subscription under the Rights Issue.

1.7 Opening and Closing Date for Applications

The Rights Issue opens for acceptances on 3 October 2012 and all Entitlement and Acceptance Forms and Acceptance Moneys must be received by no later than 5pm (Sydney time) on 17 October 2012, subject to the Directors reserving the right to vary the Closing Date in consultation with the Underwriter and in accordance with the Listing Rules.

1.8 Trading of Entitlements

The Entitlements to New Shares are renounceable. This means that Eligible Shareholders can offer to sell their Entitlements on ASX or otherwise transfer them if they do not wish to take up some or all of the New Shares to which they are entitled. Refer to section 2 for instructions on how to deal with your Entitlement.

Trading of Entitlements on ASX will commence on 24 September 2012 and will end on 10 October 2012. Eligible Shareholders may also sell some or all of their Entitlements off-market if they decide not to accept their full Entitlement to the New Shares.

The Company has appointed the Nominee to sell the Entitlements of Ineligible Shareholders (see section 1.12 for further information).

1.9 ASX quotation

The Company has applied to ASX for the quotation of the New Shares and New Options. If the New Shares and New Options are not granted quotation within three months after the date of the Prospectus, all Acceptance Moneys received will be returned (without interest) in accordance with the Corporations Act.

1.10 Market prices of Shares on ASX

The lowest and highest market prices of Shares on ASX during the 3 months immediately preceding the date of this Prospectus were 6.4 cents on 25 July 2012 and 17 cents on 14 August 2012 and 17 September 2012 respectively.

The last price of Shares on ASX on the trading day prior to the date of this Prospectus was 13.5 cents.

1.11 Allotment of New Shares and New Options

The allotment of the New Shares and New Options will take place as soon as practicable after the Closing Date (expected to be 24 October 2012). It is expected that holding statements for the New Shares and New Options will be posted to you no later than 25 October 2012. However, if the Closing Date is extended, the dates for allotment and posting may also be extended.

No allotment of New Shares or New Options will be made until permission is granted for their quotation by ASX.

All Acceptance Moneys will be held in trust by the Company in a designated account until allotment or payment of refunds in accordance with the Corporations Act. Any interest earned on the Acceptance Moneys will be retained by the Company, irrespective of whether allotment takes place.

1.12 Shareholders outside Australia, New Zealand and the United Kingdom

General Restrictions

This Prospectus and accompanying Entitlement and Acceptance Form do not constitute an offer in any place in which, or to any person to whom, it would not be lawful to make such an offer.

No action has been taken to register or qualify the Entitlements or Securities, or to otherwise permit an offering of the Entitlements or Securities, outside Australia, New Zealand and the United Kingdom.

The distribution of this Prospectus in jurisdictions outside Australia, New Zealand and the United Kingdom may be restricted by law and therefore persons who come into possession of this document should seek advice on and observe any such restrictions. A failure to comply with these restrictions may constitute a violation of applicable securities laws.

The Company reserves the right to treat as invalid any Entitlement and Acceptance Form that appears to have been submitted by an Ineligible Shareholder.

It is the responsibility of any applicant to ensure compliance with any laws of the country relevant to their Application. Return of a duly completed Entitlement and Acceptance Form and/or payment of the Acceptance Moneys will be taken by the Company to constitute a representation that there has been no breach of such laws and that the applicant is physically present in Australia, New Zealand or the United Kingdom.

Ineligible Shareholders

The Company is not extending the Rights Issue to Ineligible Shareholders having regard to:

(a) the cost of complying with legal and regulatory requirements outside Australia, New Zealand and the United Kingdom;
(b) the number of Ineligible Shareholders; and
(c) the number and value of New Shares which would otherwise be offered to Ineligible Shareholders.

Where the Prospectus has been despatched to Ineligible Shareholders, the Prospectus is provided for information purposes only.

In limited circumstances the Company may elect to treat as Eligible Shareholders certain Shareholders who would otherwise be Ineligible Shareholders, provided the Company is satisfied that it is not precluded from lawfully issuing Securities to such Shareholders either unconditionally or after compliance with conditions which the Board in its sole discretion regards as acceptable and not unduly onerous.

The Company has appointed the Nominee to sell the Entitlements of Ineligible Shareholders on ASX if there is a viable market in the Entitlements and a premium over the expenses of sale can be obtained.

The Nominee, in its absolute discretion, may determine the price or manner in which any sale is made.

Any interest earned on the proceeds of the sale of these Entitlements will firstly be applied against expenses of such a sale, including brokerage, and any balance will accrue to the Company.

The proceeds of sale (if any) will be distributed to the Ineligible Shareholders for whose benefit the Entitlement have been sold in proportion to their shareholdings (after deducting brokerage commission and other expenses).

Neither the Company nor the Nominee will be liable for a failure to sell Entitlements or to sell Entitlements at any particular price. If there is no viable market for the Entitlements of Ineligible Shareholders, their Entitlements will be allowed to lapse and the relevant Securities that may have been issued on exercise of the Entitlements will form part of the Shortfall.

1.13 Shortfall Offer

New Shares not taken up by Eligible Shareholders (including pursuant to applications for Additional Shares) will form part of the Shortfall Offer. The issue price of any Shares offered pursuant to the Shortfall Offer will be 10 cents each, being the same price as the New Shares offered to Eligible Shareholders pursuant to the Offer. As the Offer is fully Underwritten (and subunderwritten), it is anticipated that any Shortfall will be taken up by the Underwriter (and subunderwriters). Accordingly, Shortfall Shares will only be issued if the Offer is undersubscribed and sub-underwriters terminate their underwriting arrangements prior to the Closing Date. In such circumstances, the Directors, in consultation with the Underwriter, reserve the right to place the Shortfall at their discretion within 3 months after the close of the Offer, subject to the ASX Listing Rules and any other applicable law.

1 New Option with an exercise price of 14 cents and an expiry date of 31 October 2013 will be issued for every 2 New Shares subscribed for and issued under the Shortfall Offer.

Allotment of Shortfall Shares under the Shortfall Offer may occur on a progressive basis at any time on or after the date of allotment of New Shares under the Offer.

1.14 Unquoted Options

As at the date of this Prospectus, the Company had 11,250,000 unquoted Options on issue. These Options have exercise periods ranging between 19 February 2013 to 30 June 2018.

None of the 11,250,000 Options carry Entitlements to participate in the Rights Issue.

1.15 Taxation considerations

Shareholders should be aware that there are taxation implications for subscribing for New Shares and for the selling of the Entitlements acquired pursuant to this Prospectus.

The taxation consequences will depend upon your particular circumstances.

Potential investors must make their own enquiries concerning the taxation consequences of an investment in the Company. Applicants should consult their tax adviser for advice applicable to their individual needs and circumstances.

Neither the Company, the Underwriter nor any of their officers, employees, agents and advisers accept any liability or responsibility in respect of the taxation consequences connected with your participation in the Rights Issue.

2. ACTION REQUIRED BY ELIGIBLE SHAREHOLDERS

2.1 What you may do – choices available

The number of New Shares to which an Eligible Shareholder is entitled is shown on the Entitlement and Acceptance Form that accompanies this Prospectus. If you are an Eligible Shareholder you may either:

take up your Entitlement in full or in part (see section 2.2); or
take up your Entitlement in full and apply for Additional Shares (see section 2.3); or
sell all or part of your Entitlement on ASX (see section 2.4); or
transfer all or part of your Entitlement to another person other than on ASX (see section 2.5); or
take no action and allow your Entitlement to lapse (see section 2.6).

2.2 Accepting your Entitlement in full or in part

Complete the Entitlement and Acceptance Form by inserting the number of New Shares you wish to apply for. Complete the balance of the form in accordance with the instructions set out on it.

Payment may be made by cheque or BPay[®] . The Issue Price of 10.0 cents per New Share is payable in full on acceptance of your Entitlement.

(a) Payment by cheque

Forward your completed Entitlement and Acceptance Form, together with your cheque for the Acceptance Moneys, to the Share Registry at the address set out in section 2.7. Completed Entitlement and Acceptance Forms and cheques must be received by no later than 5pm (Sydney time) on 17 October 2012.

Cheques must be drawn on and payable at any Australian bank, and made payable to "TZ Limited – Rights Issue Account" and crossed "Not Negotiable".

(b) Payment by BPay[®]

Payment by BPay[®] should be made according to the instructions set out on the Entitlement and Acceptance Form. Acceptance Moneys paid by BPay[® ] must be received by 5 pm (Sydney time) on 17 October 2012. If the BPay[® ] payment is for any reason not received or not received in full, you will be deemed to have applied for the number of New Shares that the cleared moneys will pay for.

Shareholders should be aware of the timing for the processing of payment by cheque and

BPay[® ] in choosing the appropriate payment method.

Lodgement of the Entitlement and Acceptance Form constitutes an irrevocable offer made in accordance with the provisions of the form.

Applicants are asked not to forward cash. Receipts for payments will not be issued.

Acceptance Moneys will be held in trust by the Company in a designated account until allotment. Any interest earned on the Acceptance Moneys will be for the benefit of the Company and will be retained by the Company irrespective of whether allotment takes place.

2.3 Apply for Additional Shares and Additional Options

If you are an Eligible Shareholder and wish to take up your Entitlement in full, you may also apply for Additional Shares (and Additional Options) in excess of your Entitlement.

Any such Application for Additional Shares will be dealt with as follows:

(a) An Eligible Shareholder, to apply for any Additional Shares (and Additional Options), must first have taken up all of their Entitlement.
(b) An Eligible Shareholder will not be entitled to any Additional Shares (and attaching Additional Options) to the extent the issue and allotment of those Additional Shares will result in a breach of any law or an Eligible Shareholder obtaining voting power in Shares of greater than 20%.
(c) As to whether all or any Additional Shares (and Additional Options) are allocated to Eligible Shareholders who have applied for Additional Shares (and Additional Options) is at the discretion of the Underwriter in consultation with the Directors and in accordance with the provisions of the Underwriting Agreement.

Neither the Company nor the Underwriter guarantees that you will receive any of the Additional Shares (and Additional Options) that you may apply for.

The application price for Additional Shares is 10.0 cents per Additional Share, the same price as New Shares are offered under the Rights Issue.

If you wish to apply for Additional Shares (and attaching Additional Options), insert the number of Additional Shares you wish to apply for in the Acceptance Payment Details section on the accompanying Entitlement and Acceptance Form. You must also provide payment with your Entitlement and Acceptance Form to cover all of the Additional Shares for which you are applying.

Payment should be made, and the completed Entitlement and Acceptance Form should be forwarded to the Share Registry, in accordance with the instructions for the payment for New Shares in section 2.2.

If you are not allocated all or any of the Additional Shares (and attaching Additional Options) that you have applied for, you will be provided with a refund of the balance of the Acceptance Moneys as well as your allocated Additional Shares (and attaching Additional Options).

The number of Additional Shares (and attaching Additional Options) available to Eligible Shareholders applying for Additional Shares (and attaching Additional Options) will be determined within 3 Business Days of the Closing Date. Additional Shares (and attaching Additional Options) will be issued at the same time as all the other Securities under the Rights Issue. If you have applied for Additional Shares, you will be notified of the number of Additional Shares (and attaching Additional Options) to be issued to you at the time of despatch of holding statements for Securities under the Rights Issue.

Securities (including Additional Shares (and attaching Additional Options)) are expected to be issued and allotted on 24 October 2012 and holding statements despatched by 25 October 2012. It is the responsibility of Shareholders to confirm the number of Securities allotted to them prior to trading on ASX. Shareholders who sell their Securities before they receive their holding statements do so at their own risk.

2.4 Selling all or part of your Entitlement on ASX

If you wish to sell your Entitlements on ASX then you should liaise with your stockbroker as soon as possible.

Trading of Entitlements on ASX will commence on 24 September 2012 and sale of your Entitlements must be completed on or before 10 October 2012, when Entitlements trading ceases. Brokerage may be payable to your stockbroker in connection with the sale of Entitlements on ASX.

In selling your Entitlements, your stockbroker will act on your behalf. The Company accepts no responsibility for any failure by your stockbroker to carry out your instructions.

Persons who buy Entitlements on ASX and apply for New Shares (and attaching New Options) will need to pay the Issue Price of the New Shares to take them up and should follow the directions of their stockbroker. The Company reserves the right to reject an Application by a person who has purchased an Entitlement for New Shares to the extent that the issue and allotment of those New Shares would result in a breach of any law or a person obtaining voting power in Shares of greater than 20% in breach of section 606 of the Corporations Act.

2.5 Transferring all or part of your Entitlement to another person other than on ASX

If your Entitlement is held on the issuer sponsored subregister, send a completed standard renunciation form (which can be obtained from your stockbroker or the Share Registry) and your Entitlement and Acceptance Form to the Share Registry at the address set out in section 2.7 by no later than 5 pm (Sydney time) on 10 October 2012. Renunciations must be signed by both buyer and seller before being lodged with the Share Registry.

If your Entitlement is held on the CHESS subregister, you will need to contact your stockbroker for further instructions.

Persons who buy Entitlements and apply for New Shares (and attaching New Options) will need to pay the Issue Price of the New Shares to take them up. The completed Entitlement and Acceptance Form together with your cheque for the Acceptance Moneys will need to be lodged with the Share Registry at the address set out in section 2.7 by no later than 5.00 pm (Sydney time) on 17 October 2012.

Please note, if the Share Registry receives both a completed renunciation form and a completed Entitlement and Acceptance Form in respect of the same rights, the renunciation will be given priority over the acceptance.

2.6 Not accepting any part of your Entitlement

The Entitlements you are entitled to may be valuable. If you decide not to take up all or part of your Entitlements, you should consider selling your Entitlements rather than allow them to lapse. You will receive no benefit for Entitlements which lapse. Accordingly it is important that you consider taking action either to accept or sell your Entitlements.

To the extent that you do not accept or sell your Entitlement, then New Shares and New Options representing your Entitlement may be sold to an Eligible Shareholder who applies for Additional Shares or to the Underwriter (or its clients pursuant to the Shortfall Offer).

You should also note that, if you do not take up your Entitlement, then although you will continue to own the same number of Shares, your percentage shareholding in the Company will fall.

2.7 Address details and enquiries

When paying by cheque, please forward the completed Entitlement and Acceptance Form and cheque for the Acceptance Moneys to the Share Registry by mail in the enclosed prepaid envelope or deliver to the following address:

By mail:

Computershare Investor Services Pty Limited GPO Box 505 Melbourne VIC 3001 Australia

For further information on your Entitlement or how to accept your Entitlement, please contact the Share Registry as follows:

Computershare Investor Services Pty Limited Telephone: 1300 805 505 (within Australia) or + 61 3 9415 4000 (outside Australia)

PURPOSE AND EFFECT OF THE OFFER

3.1 Purpose of the Offer

The purpose of the Offer is to raise approximately $4.6 million before expenses. Expenses related to the Offer are expected to be approximately $420,000. No funds will be raised from the issue of the New Options.

The proceeds to be raised from the Offer are planned to be used in accordance with the table set out below:

Use of proceeds	$	%
Capital required to meet locker bank supply, commissioning and servicing contract obligations with Singapore Post	1,600,000	34.7%
Capital required to support funding and deployment of the Company's parcel lockers in Australia as part of the Company's community locker network initiative	800,000	17.4%
Development of new modular swing handle to support launch of new low cost upgradable IXP device underpinned by OEM supply contracts	200,000	4.3%
General working capital purposes to support the Company's business plans and to support growth into Asia	1,591,880	34.5%
Expenses related to the Offer	420,000	9.1%
Total	$4,611,880	100%

The above table is a statement of current intentions as at the date of this Prospectus. As with any budget, intervening events and new circumstances have the potential to affect the manner in which the proceeds are ultimately applied. The Board reserves the right to alter the way proceeds are applied on this basis.

3.2 Capital structure

As at the date of this Prospectus:

(a) The Company has 138,356,402 Shares on issue.
(b) The Company has 17,989 unquoted Convertible Notes on issue, each having a face value of $1,000 (totalling $17,989,000). The conversion prices and maturity dates applying to the Convertible Notes are as follows:

Number of Convertible Notes	Total principal outstanding	Conversion price as at date of Prospectus	Maturity Date*
12,000	$12,000,000	$0.35	19 February 2013
1,714	$1,714,000	$0.35	23 April 2015
4,275	$4,275,000	$0.42	24 December 2015

The Company is proposing to seek the approval of Shareholders to extend the maturity date applying to the abovementioned 12,000 Convertible Notes from 19 February 2013 to 19 February 2014 at the Company's next annual general meeting which is expected to be held on 28 November 2012.
(c) The Company has the following unquoted Options on issue, and each Option is exercisable into one Share for the following respective exercise prices (and each Option, if not exercised, expires on the following respective expiry dates):

Number of Options	Exercise price per Option	Expiry Date
3,000,000	$4.00	19 February 2013
3,000,000	$0.42	19 February 2013
1,750,000	$1.00	30 June 2016
1,750,000	$1.00	30 June 2017
1,750,000	$1.00	30 June 2018

The holders of the Options will not be eligible to participate in the Rights Issue unless they exercise their Options under the terms of their issue and they do so prior to the Record Date. It is unlikely any of the Options will be exercised before the Record Date, as the exercise price of the Options exceeds the closing Share price on the last trading day prior to the date of this Prospectus.

The holders of the Convertible Notes will not be eligible to participate in the Rights Issue unless they convert their Convertible Notes into Shares prior to the Record Date. All of the Convertible Notes are held by the QVT Funds and the QVT Funds have advised the Company that they will not be converting any of the Convertible Notes into Shares before the Record Date.

A total of approximately 46,118,801 New Shares and 23,059,401 New Options will be issued under this Prospectus as a result of the Rights Issue, assuming that no Shares are issued pursuant to either the conversion of the Convertible Notes or the exercise of the Options on or before the Record Date. A total of approximately 15,372,934 Underwriter Options will be issued to the Underwriter (or its nominees) as part of the consideration for underwriting the Offer, although the issue of part of the Underwriter Options will be subject to Shareholder approval. Further details of the issue of the Underwriter Options are set out in section 5.1.

The following table shows the proposed capital structure of the Company on Completion of the Offer:

Security	Number at date of this	Number following
	Prospectus	Completion of Offer
Shares	138,356,402	184,475,203*
Convertible Notes	17,989	17,989
Options	11,250,000	49,682,335**

The above table assumes that no Shares are issued pursuant to conversion of any of the Convertible Notes or exercise of any of the Options on or before Completion of the Rights Issue. The above table also assumes that the Underwriting Agreement has not been terminated as a result of any termination event (which termination events are detailed in section 5.1 of this Prospectus).

** This number includes 15,372,934 Underwriter Options as well as 23,059,401 New Options.

3.3 Details of substantial holders

Based on publicly available information as at the date of this Prospectus, those persons which (together with their associates) have a relevant interest in 5% or more of the shares on issue are as set out below:

Shareholder	Shares	%
QVT Funds	27,355,488	19.77%

In the event all Entitlements are accepted there will be no change to the substantial holders on Completion of the Offer.

3.4 Effect on control of Company

The Offer and the underwriting of the Offer are not expected to have any material impact on control of the Company.

3.5 Financial effect of Offer on Company - Pro Forma Statement of Financial Position

Introduction

The effect of the Offer on the Company's financial position will be to increase consolidated net assets and consolidated total equity by $4,191,880 after payment of the cash expenses of the Rights Issue which are estimated at $420,000. It is intended that these funds will be applied as set out in section 3.1 of this Prospectus.

To illustrate the effect of the Offer on the Company, the following unaudited pro forma consolidated statement of financial position of the Company has been prepared based on the Company’s unaudited consolidated statement of financial position as at 30 June 2012 (which was released to ASX on 31 August 2012).

This section should be read in conjunction with the risk factors as set out in section 4, when considering the financial information and assessing the future performance of the Company.

Basis of preparation and presentation

The unaudited pro forma consolidated statement of financial position is presented in an abbreviated form and does not comply with all the presentation and disclosure requirements of Australian Accounting Standards applicable to annual reports prepared in accordance with the Corporations Act.

The accounting policies adopted in the preparation of the unaudited pro forma consolidated statement of financial position are consistent with the accounting policies adopted and described in the Company's full consolidated financial report for the year ended 30 June 2011.

For the purposes of the unaudited pro forma consolidated statement of financial position, which has been prepared for illustrative purposes to show the impact of the Offer on the unaudited consolidated statement of financial position as at 30 June 2012, it is assumed that the proceeds of the Offer will be applied to pay the costs of the Offer in the sum of $420,000 and the balance (of $4,192,000, which has been rounded up to the nearest thousand dollars) to increase cash, consistent with the proposed use of funds set out in section 3.1. The unaudited pro forma statement of financial position is not represented as being indicative of the Company's views on its future financial condition and/or performance.

Transaction Adjustments

The unaudited pro forma column in the following consolidated statement of financial position has been adjusted to reflect the following transactions relating to the Offer:

the issue of 46,118,801 New Shares under the Offer and no Shares being issued pursuant to the exercise of Options or the conversion of Convertible Notes on or before the Record Date.
receipt of $4,611,880 under the Offer from the issue of 46,118,801 New Shares.
fees and costs of the Offer having been paid, estimated at $420,000.

	CONSOLIDATED	CONSOLIDATED	CONSOLIDATED	CONSOLIDATED	CONSOLIDATED	CONSOLIDATED
TZ LIMITED Pro forma Statement of Financial Position as at 30 June 2012	Unaudited 30 June 2012 $'000		Unaudited adjustments $'000		Pro forma unaudited 30 June 2012 $'000

Current assets Cash and cash equivalents Trade and other receivables Inventories Total current assets Non-current assets Property, plant and equipment Intangible assets Deferred tax asset Other Total non-current assets Total assets Current liabilities Trade and other payables Borrowings Derivative financial instruments Provisions Other financial liabilities Total current liabilities Non-current liabilities Borrowings Derivative financial instruments Deferred tax liabilities Provisions Other financial liabilities Total non-current liabilities Total liabilities Net assets Equity Issued capital Reserves Accumulated losses Total equity		904 4,898 342 6,144 1,575 19,553 942 186 22,256 28,400 5,629 10,266 48 92 437 16,472 3,835 759 1,144 16 462 6,216 22,688 5,712 153,443 (6,124) (141,607) 5,712		4,192 - - 4,192 - - - - - 4,192 - - - - - - - - - - - - - 4,192 4,192 - - 4,192		5,096 4,898 342 10,336 1,575 19,553 942 186 22,256 32,592 5,629 10,266 48 92 437 16,472 3,835 759 1,144 16 462 6,216 22,688 9,904 157,635 (6,124) (141,607) 9,904

The above pro forma unaudited consolidated statement of financial position is included for illustrative purposes. The actual assets and liabilities of the consolidated entity at 30 June 2012 at the Company's final reporting date may vary subject to any subsequent events prior to the final reporting date. The actual assets and liabilities of the consolidated entity after the issue of the New Shares and New Options are likely to vary according to the on-going operating activities of the Company over the period.

The Directors are in the process of finalising their review of the carrying value of intangible assets. If as a result of that review, it is concluded that an impairment charge should be made against the carrying value of the Company's intangible assets after the date of this Prospectus and prior to lodgement with ASIC of the Company's audited annual financial report for the year ended 30 June 2012, then the financial effect will be to reduce, in both the above unaudited consolidated statement of financial position and the above pro forma unaudited consolidated statement of financial position, the value of the Company's intangible assets, total non-current assets, total

assets, net assets and total equity as at 30 June 2012, in each case by the amount of the impairment charge against intangible assets. Accumulated losses as at 30 June 2012 in both the above unaudited consolidated statement of financial position and the above pro forma unaudited consolidated statement of financial position would increase by the amount of the impairment charge against intangible assets.

The risk of such an impairment charge occurring is highlighted and explained in section 4.3 of the Prospectus under the heading "Asset Value Impairment".

RISK FACTORS

4.1 Introduction

An investment in the Company involves a high degree of risk and should be considered speculative, particularly having regard to the stage of the Company’s business development and the significant uncertainty surrounding the nature and extent of the growth of the remote fastening markets. There are a number of factors that may have a material adverse effect on the Company’s future operating and financial performance.

There are specific risks which relate directly to the Company's business. In addition, there are general risks. While some of these risks can be mitigated by the use of appropriate safeguards and systems, many are outside the control of the Company and cannot be mitigated. Whilst the Company intends to continue to adopt prudent management techniques to minimise these risks to Shareholders, they should still be carefully considered by potential investors when evaluating an investment in the Company.

Intending investors should read the whole of this Prospectus and the risks identified in this section should be considered carefully and in detail. The following summary, which is not exhaustive, represents some of the major risk factors which potential investors need to be aware of.

4.2 Risks specific to the Offer

Potential for significant dilution

Upon completion of the Offer, assuming all Entitlements are accepted and no Options are exercised prior to the Record Date and no Convertible Notes are converted prior to the Record Date, the number of Shares in the Company will increase from 138,356,402 to 184,475,203. This increase equates to approximately 25.0% of all the issued Shares in the Company following completion of the Offer.

This means that each Share will represent a significantly lower proportion of the ownership of the Company. It is not possible to predict what the value of the Company or a Share (or a New Option) will be following the completion of the Offer and the Directors do not make any representation to such matters.

The closing trading price of Shares on ASX on the day prior to the date of this Prospectus of 13.5 cents on 19 September 2012 is not a reliable indicator as to the potential trading price of Shares following completion of the Offer.

Shareholders should note that if they do not participate in the Offer, their holdings are likely to be diluted by approximately 25.0% (as compared to their holdings and number of Shares on issue as at the date of the Prospectus).

Termination of Underwriting Agreement

The Underwriting Agreement may be terminated by the Underwriter if any one or more termination events occurs (please refer to the summary of the terms of the Underwriting Agreement at section 5.1 for further detail of the termination events). If any of the termination events occur:

(a) the Rights Issue will not be underwritten;
(b) it is unlikely that all Entitlements will be taken up by Shareholders; and
(c) it is likely that the Company will not have access to the full amount of capital sought to be raised by this Rights Issue.

If less than the full amount of capital being sought under this Rights Issue is raised, this could have a materially adverse impact on the Company's financial position and its ability to meet its capital requirements.

4.3 Risks specific to the Company

Commercialisation of Key Technologies

The Company’s failure to achieve commercialisation of key technologies is likely to adversely affect the Company’s business.

The Company’s long-term revenue objectives are largely predicated on full implementation of its technology innovation program. To date, many of the Company’s core technologies have yet to be transitioned from proof-of-concept to proof-of-commercial viability.

There is no assurance that the Company’s technology concepts and patent applications will achieve commercial viability and the failure to achieve such commercial viability would have a material effect on the Company’s business, financial condition and results of operations.

Intellectual Property Protection

A program of patent and other safeguards has been implemented by the Company to protect TZI’s intellectual property. It is not certain that pending patent applications will be granted within the scope of the claims sought or at all.

Whilst the Directors consider that all appropriate measures have been taken to protect TZI’s intellectual property, it is possible that the protection implemented will be circumvented or challenged. Policing unauthorised use of the technology or infringements of the Company’s intellectual property is difficult and expensive. It is also possible that the Company will be subject to a third party’s claim of intellectual property infringement. Any such claim, with or without merit, could be time consuming to defend.

Further, the life of a patent is a limited one, generally twenty (20) years from the earliest filing date. Once a patent expires, it becomes part of the public domain and can be freely used by anyone, including competitors. To protect against this, TZI continually innovates new intellectual property to try to stay ahead of possible competitors and new entrants.

Management of Growth

The Company expects additional growth and expansion into new markets. This has the potential to extend management and operations. The Company’s ability to generate revenue will depend on its ability to manage the efficient expansion of its operational and technological capabilities, and relationships with various third parties across jurisdictions.

Regulatory Factors

As the Company expands into different markets, it is likely that it will be subject to a wide array of codes and regulations governing the reliability and safety of its various enabling technologies. The Board believes that the Company is currently compliant with all regulations and codes governing the manufacturing and commercial use of its technology in the various jurisdictions in which it is currently doing business.

Government regulations are, however, subject to change and in such an event, there can be no assurance that the Company may not be subject to additional unforeseen regulations that may impede the commercial use of its technology or restrict the manner in which the Company does business. In addition, any new laws or regulations relating to the TZI technology could have a material effect on the Company’s business, financial condition and results of operations.

Market for the Company’s technology

The Company intends to seek new markets for the TZI technology in Asia and Europe, whilst expanding on current markets. There can be no assurance that these markets will be established or expanded successfully and such failure may have a material adverse effect on the Company’s expected revenues.

Risk of Product Liability

The Company’s business exposes it to potential product liability risks as more of the TZI technology is commercialised. The Company intends to continue to seek adequate product liability insurance where prudent. However, there can be no assurance that adequate or

necessary insurance coverage will be available at an acceptable cost or in sufficient amounts, or that a product liability claim would not adversely affect the Company.

Material Contracts

The Directors anticipate that the Company will derive significant benefits from its material contracts and consider that the Company has good working relationships with its contractual partners. However, a number of these contracts may be terminated by notice in writing from the other party and the revenues to be derived by the Company under the contracts are uncertain.

PDT’s revenues are derived through PDT providing development services to its clients. The contractual relationship relating to the provision of these services allows PDT’s clients to terminate the relevant contract or project on short notice under termination for convenience provisions. The early termination of those contracts or projects may have an adverse impact on PDT’s financial performance. The quantum of this adverse impact will vary based on a number of factors, including the value to be derived from the particular contract or work order.

Competition

Direct competition in industry segments could have a material effect on the Company’s business, financial condition and results of operations. The Board believes that the principal competitive factors are:

ability to identify and respond to customer needs
technical expertise
quality of the services provided
cost of the technology and related licences.

In addition, the Company may face competitive pressures from existing market participants, who may have significantly greater financial, marketing, technical, sales and customer support as well as longer relationships with customers than the Company does.

The Company may also be unable to devote the necessary resources to the development, promotion and sale of the Company’s technology as fast or as effectively or in the same or greater amounts as some of the Company’s potential competitors.

Any competition may result in reduced operating margins, loss of market share, inability to materially increase the number of end-users and manufacturers to adopt and utilise the Company’s technology, and diminish the value of the Company’s technology and intellectual property.

In addition, the Company’s current fixed overhead projections include paced allocations for professional services including the various activities relating to a global patenting strategy. Unforeseen competitive activities may require the Company to accelerate its intellectual property strategies, placing new burdens on the Company’s management and fiscal resources.

The Company may not be able to compete successfully against current and future competitors, and the competitive pressures that the Company faces could have an effect on the Company’s business, financial condition and results of operations.

Reliance on Key Personnel

The Company’s businesses are reliant on a number of key personnel and the loss of the services of one or more of these individuals could adversely affect the Company. In addition, the Company’s plans for expansion will require it to recruit and train new employees. Although the Company expects to be able to attract and retain skilled and experienced personnel, there can be no assurance that it will be able to do so. The Company intends to mitigate these risks by entering into service contracts with any new employees and will in due course establish employee share plans to encourage employees’ loyalty to the Company.

In particular, it is possible that the contracts under which the services of Mark Bouris and Kenneth Ting are provided to the Group could be terminated at any time by the respective companies providing their services, without cause. As the period of notice required for termination of these contracts has not yet been quantified in written contracts, the period of notice would have to be considered reasonable in the circumstances which in some circumstances may allow those contracts to be terminated without cause on less than 30 days’ notice to the Company. At present, the ongoing viability of the Company is very dependent upon the services of Messrs Bouris and Ting continuing to be provided to the Company. It is an event of default under the terms of the Convertible Notes if there is a change in the majority of the Directors without the consent of the QVT Funds. Therefore if Messrs Bouris and Ting were to cease to be Directors without the consent of the QVT Funds then this would entitle the QVT Funds to demand immediate repayment of all amounts owing under the Convertible Notes.

As at the date of this Prospectus, the amount of outstanding principal owed by the Company to the QVT Funds is $17,989,000 in respect of outstanding Convertible Notes. In those circumstances, under the Company’s present financial position, the Company would become insolvent and would not be able to continue trading as a going concern.

Business Relationships

The Company has numerous business relationships that are essential to the successful and profitable ongoing routine of the Company’s business. These relationships are via both formal and informal agreements. Should there be any material change in the nature of these relationships, or should for any reason contracts not be renewed despite it being reasonable to expect them to be renewed, there could be a material adverse effect on the Company’s ability to achieve expected growth.

Currency Risk

The majority of the Company’s target market is domiciled in the USA and it is expected that the Company’s revenue will be predominantly US dollar denominated. This exposure to foreign currency may adversely affect the Company’s business, however, equally, a revaluation of the US dollar could be of substantial benefit to the Company’s Shareholders. The Company intends to implement a currency hedging strategy going forward in order to mitigate its exposure to fluctuating currency exchange rates.

Refinancing loan facilities

Historically, the Company has successfully refinanced its borrowing facilities. However, there is a refinancing risk that replacement debt facilities will not be available or will not be available on terms as favourable to the Company as its previous borrowing facilities. If the Company is not able to refinance its corporate debt facilities when they fall due (including the Convertible Notes held by the QVT Funds), it could have a materially adverse impact on the Company's financial position and its ability to continue trading as a going concern.

Asset Value Impairment

The Company has a significant amount of intangible assets recorded on its balance sheet. The Company annually tests the carrying value of these intangible assets for impairment. The estimates and assumptions about results of operations and cash flows made in connection with impairment testing could differ from future actual results of operations and cash flows. In addition, future events could cause the Company to conclude that the asset values associated with a given operation have become impaired. Any resulting impairment loss could have a material impact on the Company's financial position.

4.4 General risk factors

Market conditions

The stock markets in general, and particularly the market for technology companies, have experienced price and volume volatility over a number of years. There can be no assurance that trading prices, volumes and valuations will be sustained. These broad market and industry factors may materially and adversely affect the market value of the Company’s Shares, regardless of the Company’s financial performance.

Market fluctuations, as well as general political and economic conditions such as recession, interest rate or currency rate fluctuations, may also adversely affect the price at which the Company’s Shares may be traded in the future.

Economic conditions

Factors such as general economic conditions, exchange rates, interest rates, regulatory environments, barriers to entry, competitive pressures, investor attitudes, stock market fluctuations around the world, changes in inflation and variations in general market conditions can all have an adverse effect on the perceived value of the Company’s Shares.

Additional Capital Requirements

The Company’s continued ability to effectively implement its business plan over time may depend upon in part on an ability to raise additional funds. If adequate funds are not available on acceptable terms, the Company may not be able to complete acquisitions, take advantage of opportunities, develop new ideas or otherwise respond to competitive pressures. There is no assurance that additional funding over and above that secured by existing borrowing facilities will be available to the Company in the future or be secured on acceptable terms.

Unforseen expenses

The Company may be subject to significant unforseen expenses or actions.

This may include unplanned operating expenses, future legal actions or expenses in relation to future unforseen events. The Directors expect that the Company will have adequate working capital to carry out its stated objectives however there is the risk that additional funds may be required to fund the Company's future objectives.

Litigation risk

The Company is subject to litigation risks. All industries, including the technology industry, are subject to legal claims, with and without merit. Defence and settlement costs of legal claims can be substantial, even with respect to claims that have no merit.

Due to the inherent uncertainty of the litigation process, the resolution of any particular legal proceeding to which the Company is or may become subject could have a material effect on its financial position, results of operations or the Company's activities.

4.5 Speculative Nature of Investment

The above risk factors are not intended to provide an exhaustive list of all the risks faced by the Company or by investors in the Company. The above factors, and others not specifically referred to above, may materially affect the future financial performance of the Company and the value of the Securities offered under this Prospectus.

The Securities issued pursuant to this Prospectus carry no guarantee with respect to payment of dividends, return of capital or market value. Potential investors should consult their professional advisers before deciding whether to take up or otherwise deal with their Entitlements.

SUMMARY OF MATERIAL CONTRACTS

5.1 Underwriting Agreement

The Company has entered into an Underwriting Agreement with Patersons Securities Limited as Underwriter.

The Underwriting Agreement requires that the Underwriter, subject to the terms of the Underwriting Agreement, underwrites subscriptions for 46,118,801 New Shares (and 23,059,401 attaching New Options) to be issued under this Prospectus at the Issue Price. Consequently, but subject to the Underwriter's right to terminate explained below, in the event that the Company does not receive valid Applications for 46,118,801 New Shares (including Applications for Additional Shares), the Underwriter will subscribe for that number of New Shares equal to 46,118,801 less the number of New Shares and, to the extent the Underwriter agrees to allocate them to the Eligible Shareholders, Additional Shares which have been validly applied for under this Prospectus.

The total amount underwritten pursuant to the Offer is $4,611,880.10

Unless otherwise defined in the Prospectus, capitalised terms in this section 5.1 have the meaning as defined in the Underwriting Agreement.

Underwriting fees, expenses and indemnities

The Company has agreed to pay to the Underwriter the following upon Completion:

(a) Underwriting Fee – an underwriting fee of 6% of the Underwritten Amount;
(b) Corporate Fee – upon completion the Company must pay to the Underwriter a corporate advisory fee of $50,000 (plus GST) for its services in managing the Offer;
(c) Underwriter Options – The Company must grant 15,372,934 Underwriter Options to the Underwriter, on the basis of 1 Underwriter Option for every 3 New Shares underwritten. The grant of some of these Underwriter Options will be subject to obtaining Shareholder approval at the Company's next annual general meeting to be held on or about 28 November 2012, to the extent the Company needs Shareholder approval under ASX Listing Rule 7.1 to issue the Underwriter Options;
(d) Termination Fee – should the Company terminate the Underwriting Agreement without cause or the Underwriter terminate the Underwriting Agreement for cause, the Company will pay the Underwriter the sum of $15,000 (plus GST); and
(e) all reasonable costs and expenses of and incidental to the Offer.

The Underwriter will pay all sub-underwriting fees to third parties out of its fees.

To the extent the Company needs Shareholder approval to issue Underwriter Options and is unable to obtain that Shareholder approval at its next annual general meeting, the Company must pay to the Company 1 cent for each Underwriter Option it is not able to issue to the Underwriter.

The Company estimates that immediately following completion of the Rights Issue, it will be able to issue 11,312, 209 Underwriter Options without Shareholder approval. If this estimate is correct, the Shareholder approval will be required to issue the balance of 4,060,725 Underwriter Options. Should Shareholders not approve the issue of those 4,060,725 Underwriter Options then the Company will have to pay $40,607.25 to the Underwriter, based on an amount of 1 cent per Underwriter Option.

The Underwriting Agreement also imposes various obligations on the Company, including that the Company will lodge the Prospectus with ASIC, comply with all applicable laws in respect of the Prospectus and apply for quotation of the New Shares and New Options on ASX.

The Company must also ensure that during the 6 months from the Closing Date, no current or proposed director of the Company or any Subsidiary (or their respective associates) will sell, dispose or transfer any securities in the Company held by them as at the date of the Prospectus without the prior written consent of the Underwriter.

The Underwriting Agreement also contains a number of indemnities, representations and warranties from the Company to the Underwriter that are considered standard for an agreement of this type.

Sub-Underwriting

The Underwriter may at any time appoint sub-underwriters to sub-underwrite subscriptions for the New Shares.

Right to Terminate

The Underwriter may terminate its obligations under the Underwriting Agreement at any time prior to the allotment of the Securities offered under the Rights Issue (by notice in writing to the Company) if:

(a) any of the termination events listed below at Part 1 occurs; or
(b) any of the termination events listed below at Part 2 occurs and the Underwriter has, in good faith, and in its reasonable opinion determined that the occurrence of the termination event:
(i) has, or is likely to have, a material adverse effect on:
- (A) the tax position of either the Company and its subsidiaries either individually or taken as a whole or on an Australian resident Shareholder;
- (B) the outcome of the Offer or on the subsequent market for the New Shares (including, without limitation, matters likely to have a material adverse effect on a decision of an investor to invest in New Shares); or
- (C) the assets, condition, trading or financial position, performance, profits and losses, results, prospects, business or operations of the Company and its subsidiaries either individually or taken as a whole; or
(ii) has given or could give rise to a liability to the Underwriter under the Corporations Act or otherwise; or
(iii) has caused or is likely to cause the Underwriter’s obligations under the Underwriting Agreement to become materially more onerous than those which exist at the date of the Underwriting Agreement.

If the Underwriter terminates its obligations under the Underwriting Agreement, it is possible that all Entitlements may not be taken up and as such the Company will not have access to the full amount of capital sought to be raised by this Rights Issue. Please refer to section 4.2 for further details regarding the risks associated with the underwriting.

Termination Events

Part 1:

(a) The All Ordinaries Index or the Small Ordinaries Index as published by ASX is at any time after the date of the Underwriting Agreement 10% or more below its level as at the close of business on the day prior to the date of signing the Underwriting Agreement.
(b) The closing price of the Shares on the ASX is at any time after the date of the Underwriting Agreement less than the Issue Price for any 3 consecutive Business Days.

(c) The Prospectus or Offer is withdrawn by the Company.
(d) Official Quotation has not been granted by 19 October 2012 (the “ Shortfall Notice Deadline Date ”) or, having been granted, is subsequently withdrawn, withheld or qualified.
(e) Either:
(i) the Underwriter, having elected not to exercise its right to terminate its obligations under the Underwriting Agreement as a result of an occurrence as described in paragraph (f) in part 2 below, forms the view on reasonable grounds that a supplementary or replacement prospectus should be lodged with ASIC for any of the reasons referred to in section 719 of the Corporations Act and the Company fails to lodge a supplementary or replacement prospectus in such form and content and within such time as the Underwriter may reasonably require; or
(ii) the Company lodges a supplementary or replacement prospectus without the prior written agreement of the Underwriter, which agreement cannot be withheld because of any amendment to the Accounts required by the Company's auditors for any impairment charge that may be required against the Company's intangible assets in the audited financial accounts for the financial year ended 30 June 2012.
(f) It transpires that the Prospectus does not contain all the information that investors and their professional advisers would reasonably require to make an informed assessment of:
(i) the effect of the Offer on the Company; and
(ii) the rights and liabilities attaching to the New Shares.
(g) It transpires that there is a statement in the Prospectus that is misleading or deceptive or likely to mislead or deceive, or that there is an omission from the Prospectus (having regard to the provisions of sections 711, 713 and 716 of the Corporations Act) or if any statement in the Prospectus becomes misleading or deceptive or likely to mislead or deceive or if the issue of the Prospectus is or becomes misleading or deceptive or likely to mislead or deceive.
(h) The Company is prevented from allotting the Securities within the time required by the Underwriting Agreement, the Corporations Act, the Listing Rules, any statute, regulation or order of a court of competent jurisdiction by ASIC, ASX or any court of competent jurisdiction or any governmental or semi governmental agency or authority.
(i) Any person (other than the Underwriter) who has previously consented to the inclusion of its, his or her name in the Prospectus or to be named in the Prospectus, withdraws that consent.
(j) An application is made by ASIC for an order under section 1324B or any other provision of the Corporations Act in relation to the Prospectus, the Shortfall Notice Deadline Date has arrived, and that application has not been dismissed or withdrawn.
(k) ASIC gives notice of its intention to hold a hearing under section 739 of the Corporations Act in relation to the Prospectus to determine if it should make a stop order in relation to the Prospectus or the ASIC makes an interim or final stop order in relation to the Prospectus under section 739 of the Corporations Act.
(l) The Takeovers Panel makes a declaration that circumstances in relation to the affairs of the Company are unacceptable circumstances under Pt 6.10 of the Corporations Act, or an application for such a declaration is made to the Takeovers Panel.

(m) Any authorisation which is material to anything referred to in the Prospectus is repealed, revoked or terminated or expires, or is modified or amended in a manner unacceptable to the Underwriter.
(n) A director or senior manager of the Company or of any of its subsidiaries is charged with an indictable offence.

Part 2:

(a) Default or breach by the Company under the Underwriting Agreement of any terms, condition, covenant or undertaking.
(b) Any representation, warranty or undertaking given by the Company in the Underwriting Agreement is or becomes untrue or incorrect.
(c) A contravention by the Company or any of its subsidiaries of any provision of its constitution, the Corporations Act, the Listing Rules or any other applicable legislation or any policy or requirement of ASIC or ASX.
(d) An event occurs which gives rise to a Material Adverse Effect or any adverse change or any development including a prospective adverse change after the date of the Underwriting Agreement in the assets, liabilities, financial position, trading results, profits, forecasts, losses, prospects, business or operations of the Company or any of its subsidiaries including, without limitation, if any forecast in the Prospectus becomes incapable of being met or in the Underwriter's reasonable opinion, unlikely to be met in the projected time.
(e) It transpires that any of the due diligence results carried out by or on behalf of the Company or any part of the verification material of the Company created from verifying this Prospectus was false, misleading or deceptive or that there was an omission from them.
(f) A "new circumstance" as referred to in section 719(1) of the Corporations Act arises that is materially adverse from the point of view of an investor other than any amendment to the Accounts required by the Company's auditors for any impairment charge that may be required against the Company's intangible assets in the audited financial accounts for the financial year ended 30 June 2012.
(g) Without the prior approval of the Underwriter a public statement is made by the Company in relation to the Offer, the Rights Issue or the Prospectus except as required by law or the Listing Rules.
(h) Any information supplied at any time by the Company or any person on its behalf to the Underwriter in respect of any aspect of the Offer or the Rights Issue or the affairs of the Company or any of its subsidiaries is or becomes misleading or deceptive or likely to mislead or deceive.
(i) The Official Quotation of the Securities by the ASX is qualified or conditional other than as set out in the definition of "Official Quotation" in the Listing Rules.
(j) There is introduced, or there is a public announcement of a proposal to introduce, into the Parliament of Australia or any of its States or Territories any Act or prospective Act or budget or the Reserve Bank of Australia or any Commonwealth or State authority adopts or announces a proposal to adopt any new, or any major change in existing, monetary, taxation, exchange or fiscal policy.
(k) A Prescribed Occurrence occurs, other than as disclosed in the Prospectus.
(l) The Company suspends payment of its debts generally.

(m) An Event of Insolvency occurs in respect of a Relevant Company.
(n) A judgment in an amount exceeding $250,000 is obtained against the Company or any subsidiary and is not set aside or satisfied within 7 days.
(o) Litigation, arbitration, administrative or industrial proceedings are after the date of the Underwriting Agreement commenced or threatened against the Company or any subsidiary.
(p) There is a change in the composition of the board or a change in the senior management of the Company before the issue of the Securities without the prior written consent of the Underwriter which consent is not to be unreasonably withheld.
(q) There is a material change in the major or controlling shareholdings of the Company or any subsidiary or a takeover offer or scheme of arrangement pursuant to Chapter 5 or 6 of the Corporations Act is publicly announced in relation to such company.
(r) There is a delay in any specified date in the timetable for the Rights Issue which is greater than 10 Business Days.
(s) A Force Majeure affecting the Company's business or any obligation under the Underwriting Agreement lasting in excess of 7 days occurs.
(t) The Company or any subsidiary passes or takes any steps to pass a resolution under section 254N, section 257A or section 260B of the Corporations Act or a resolution to amend its constitution without the prior written consent of the Underwriter.
(u) The Company or any subsidiary alters its capital structure in any manner not contemplated by the Prospectus.
(v) Any person is appointed under any legislation in respect of companies to investigate the affairs of the Company or any subsidiary.
(w) A suspension or material limitation in trading generally on ASX occurs or any material adverse change or disruption occurs in the existing financial markets, political or economic conditions of Australia, Japan, the United Kingdom, the United States of America or other international financial markets.
(x) There is an outbreak of hostilities or a material escalation of hostilities (whether or not war has been declared) after the date of the Underwriting Agreement involving one or more of Australia, New Zealand, Indonesia, Japan, Russia, the United Kingdom, the United States of America, India, Pakistan, the Peoples Republic of China, Israel, Kazakhstan, Namibia or any member of the European Union, or a terrorist act is perpetrated on any of those countries or any diplomatic, military, commercial or political establishment of any of those countries anywhere in the world.

5.2 Potential voting power in the Company of the Underwriter

As at the date of this Prospectus, the Underwriter holds a relevant interest in 700,000 Shares giving it approximately 0.51% voting power in the Company.

The Underwriter has agreed to fully underwrite the Offer pursuant to the terms of the Underwriting Agreement. The Underwriter's obligations under the Underwriting Agreement have been fully subunderwritten.

In the event that the Offer is not fully subscribed by Eligible Shareholders (including through applications for Additional Shares), a Shortfall will result and the Underwriter will be entitled to procure subscription for some or all of that Shortfall from third parties (such as sub-underwriters) or will subscribe for some or all of that Shortfall on its own account. At the date of this Prospectus it is not possible to confirm whether there will be any Shortfall Shares.

As the Underwriter's obligations are fully sub-underwritten, unless any of the sub-underwriting agreements are terminated, the Underwriter does not intend to hold any additional voting power in the Company following the Offer as a result of its underwriting obligations.

ADDITIONAL INFORMATION

6.1 Rights and liabilities attaching to New Shares

The Company will apply to ASX for quotation of the New Shares.

The New Shares will have the same rights and liabilities as the Existing Shares. The following is a summary of the rights and liabilities attaching to the Existing Shares (and the New Shares to be issued under the Rights Issue). It is not intended to be exhaustive or to constitute a definitive statement of the rights and liabilities of Shareholders, which can involve complex questions of law arising from an interaction of the Constitution with statutory and common law requirements. Applicants who wish to obtain a definitive assessment of the rights and liabilities that attach to the New Shares in any specific circumstance should seek their own professional advice.

Voting

At a general meeting of the Company, each shareholder present in person or by proxy or attorney has one vote on a show of hands and on a poll has one vote per Share they hold.

Where there are two or more joint holders of a Share, the holder whose name appears first in the Company’s register of members is entitled to vote as holder of that Share to the exclusion of other joint holders.

Dividend rights

The Directors may in accordance with the Corporations Act, declare a dividend. The dividend is payable as soon as it is declared unless the Directors specify a later time for payment. The Directors may authorise such interim dividends as appear to the Directors to be justified.

(The Company has yet to declare and pay any dividends, and the Board is not able to indicate when and if dividends will be paid in the future, as payment of any dividend will depend on future profitability, financial position and cash requirements of the Company.)

Winding-up

If the Company is wound up, the liquidator may, with the sanction of a special resolution, divide the Company’s property among the shareholders and may for that purpose set such a value as the liquidator considers fair and may determine how the division is to be carried out as between the shareholders according to their rights and interests in the Company.

Transfer of Shares

A Shareholder may transfer Shares by a market transfer in accordance with any computerised or electronic system established or recognised by the Listing Rules or the Corporations Act for the purpose of facilitating transfers in Shares or by an instrument in writing in a form approved by ASX or in any other usual form or in any form approved by the Directors.

The Directors of the Company may refuse to register any transfer of Shares, (other than a market transfer) where the Company is permitted or required to do so by the Listing Rules or the ASX Settlement Operating Rules. The Company must not prevent, delay or interfere with the registration of a proper market transfer in a manner which is contrary to the provisions of any of the Listing Rules or the ASX Settlement Operating Rules.

Variation of rights

The rights attached to a class of shares in the Company may be varied or abrogated in any way with the consent in writing of three quarters of the holders of shares of that class or by a special resolution passed at a separate meeting of holders of the shares of that class. This does not apply if the terms of shares in a class state otherwise.

Beneficial ownership of Shares

Except as required by law, the Company must not recognise a person as holding a Share upon any trust.

The Company, unless otherwise provided by the Constitution or by law, is not bound by or compelled in any way, to recognise any equitable, future or partial interest in any Share or unit of a Share, or any other rights in respect to the Share, except an absolute right of ownership in the registered holder.

Meetings of the Company’s members

In accordance with the Corporations Act, the Company must hold an annual general meeting at least once each year.

Any Director may, whenever he or she thinks fit, call a meeting of the Company’s members. The Directors must convene a meeting of the Company’s members on request of members in accordance with section 249D of the Corporations Act.

No business will be transacted at any meeting of the Company’s members unless a quorum is present. Three members constitute a quorum.

Alteration to the constitution

The Constitution can only be amended by a special resolution passed by at least three quarters of the votes of the Shareholders present and voting at a general meeting. At least 28 days written notice must be given of the intention to propose the resolution as a special resolution.

ASX Listing Rules

Because the Company is listed on the ASX, notwithstanding anything in the Constitution, if the ASX Listing Rules prohibit an act being done, the act must not be done. If the ASX Listing Rules require an act to be done or not to be done, authority is given for that act to be done or not to be done, and if a provision is required in the Constitution by the ASX Listing Rules, the Constitution will be treated as containing that provision. If any provision of the Constitution becomes inconsistent with the ASX Listing Rules, the Constitution will be treated as not containing that provision to the extent of the inconsistency.

6.2 Rights and liabilities of the New Options and Underwriter Options

The New Options and Underwriter Options will be issued on the following terms and conditions.

Entitlement to Shares

Subject to and conditional upon any adjustment in accordance with the conditions set out below, each New Option and Underwriter Option entitles the holder to subscribe for one Share upon payment of the exercise price prior to the expiry date.

Exercise period and expiry date

The New Options and Underwriter Options may be exercised at any time on or before 5.00 pm (Sydney time) on 31 October 2013 (" Expiry Date "). New Options and Underwriter Options not exercised by the Expiry Date lapse.

Exercise price

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

Notice of exercise of New Options and Underwriter Options

The New Options and Underwriter Options may be exercised by lodging with the Company, before the Expiry Date:

(a) a written notice of exercise specifying the number of New Options or Underwriter Options being exercised (" Exercise Notice "); and
(b) a bank cheque in favour of the Company or electronic funds transfer for the Exercise Price for the number of New Options or Underwriter Options being exercised.

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

Shares issued on exercise of New Options and Underwriter Options

Shares to be issued pursuant to the exercise of New Options and Underwriter Options will be issued within 10 Business Days following receipt of the Exercise Notice and the Exercise Price (in cleared funds) and will rank equally with the then issued Shares.

Quotation of New Options, Underwriter Options and Shares on exercise

The Company will make an application to ASX for quotation of the New Options and Underwriter Options. If the ASX does not grant the Underwriter Options admission to official quotation, they will remain unlisted. Application will be made for quotation of the Shares issued upon exercise of New Options within 10 Business Days after the date of allotment of those Shares. The New Options and Underwriter Options are transferable.

Participation rights

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

Bonus issues

If, from time to time, before the expiry of the New Options and Underwriter Options, the Company makes a pro rata issue of Shares to the Shareholders for no consideration, the number of Shares over which a New Option or Underwriter Option is exercisable will be increased by the number of Shares which the holder would have received if the New Option or Underwriter Option had been exercised before the date for calculating entitlements to the pro rata issue.

Participation in new issues

There are no participation rights or entitlements inherent in the New Options and Underwriter Options and holders will not be entitled to participate in new issues of securities offered to Shareholders during the currency of the New Options or Underwriter Options. However, before the record date to determine entitlements to any such new issue of securities, the Company will notify the holders of the New Options and Underwriter Options of the proposed new issue in accordance with the requirements of the Listing Rules.

Reconstruction of capital

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

6.3 Litigation

As at the date of this Prospectus, the Company is not involved in any legal proceedings and the Directors are not aware of any legal proceedings pending or threatened against the Company.

6.4 Expenses of the Rights Issue

The estimated cash expenses of the Rights Issue are approximately $420,000 (exclusive of GST).

6.5 Interests of Directors, promoters and persons named in this Prospectus

Except as set out in this Prospectus, no:

(a) Director or proposed director; or
(b) person named in this Prospectus as performing a function in a professional, advisory or other capacity in connection with the preparation or distribution of this Prospectus; or
(c) promoter of the Company; or

(d) underwriter to the Rights Issue or financial services licensee named in this Prospectus as a financial services licensee involved in the Rights Issue,

holds, or has held during the last two years before lodgement of this Prospectus, any interest in:

(e) the formation or promotion of the Company; or
(f) property acquired or proposed to be acquired by the Company in connection with its formation or promotion or the Offer; or
(g) the Offer,

and no amounts have been paid or agreed to be paid, and no benefits have been given or agreed to be given:

(h) to a Director or proposed director, to induce him to become or to qualify him as a director of the Company; or
(i) for services provided by any or the persons referred to in (a) – (d) above in connection with the formation or promotion of the Company or the Offer.

Directors' holdings

The direct and indirect interests of the Directors in the securities of the Company at the date of this Prospectus are as follows:

Director	Shares	Options
Mark Bouris	1,887,967	3,000,000
Kenneth Ting	1,600,975	2,250,000
Dickory Rudduck	992,498	-

It is the current intention of the Directors (and their Associates) to subscribe for at least one half of their respective Entitlements offered to them under this Prospectus and, as a consequence, the Directors will acquire New Shares (and attaching New Options) in the Company in addition to those interests in Shares and Options set out above.

Remuneration of Directors

Each of the Directors is an executive director.

The details of the annual remuneration provided to the Directors and their associated entities during the financial years ended 30 June 2011 and 30 June 2012 and the proposed annual remuneration to be provided to the Directors and their associated entities during the financial year ending 30 June 2013 are as follows:

Director	Financial year end	Cash salary and fees1 $	Other2 $	Options3 $	Rights4 $	Total $
Mark Bouris	2013	US$350,000	-	-	-	US$350,000
	2012	440,917	10,200	439,641	-	890,758
	2011	368,647	10,200	843,175	472,601	1,694,623
Kenneth Ting	2013	US$275,000	-	-	-	US$275,000
	2012	346,435	6,000	329,730	-	682,165
	2011	289,651	6,000	632,381	354,451	1,282,483
Dickory Rudduck	2013	US$230,000	-	-	-	US$230,000
	2012	202,328	8,008	-	-	210,336
	2011	218,764	-	-	-	218,764

Notes:

Neither Mr Bouris nor Mr Ting is paid salary or fees personally. They each control a company that is paid consultancy fees by the Company – an annual fee of US$350,000 in the case of Mr Bouris and an annual fee of US$275,000 in the case of Mr Ting. The amounts in the table are expressed in Australian dollars, other than the proposed consultancy fees for 2013, which are expressed in US dollars.
Telephone allowances paid to Mr Bouris and Mr Ting and a medical insurance policy premium paid for Mr Rudduck.
Fair value of options calculated at the date of grant using the Black-Scholes model and allocated to each reporting period over the period from grant date to vesting date.
Fair value of rights to acquire Shares calculated at the date of grant and allocated to each reporting period over the period from grant date to 30 June 2011.
It may be possible that other remuneration amounts, in addition to cash salary and fees, will be received by the Directors during the financial year ending 30 June 2013.

Related party transactions

(a) The Company's premises at Level 11, 1 Chifley Square, Sydney, New South Wales are leased from State Capital Property Pty Limited at market rates of rent. State Capital Property Pty Limited is controlled by Mr Bouris. During the financial years ended 30 June 2011 and 30 June 2012 the Company paid the following amounts (exclusive of GST) in rent and serviced office expenditure to State Capital Property Pty Limited:

Financial year	$
1 July 2010 to 30 June 2011	127,408
1 July 2011 to 30 June 2012	141,111

$24,505 (exclusive of GST) has been paid in the period 1 July 2012 to the date of this Prospectus.
(b) The Company engages Yellow Brick Road Accounting & Wealth Management Pty Limited (" YBR Accounting ") to provide accounting services to the Company at YBR Accounting's time based charge out rates. YBR Accounting is associated with Mr Bouris. During the

financial years ended 30 June 2011 and 30 June 2012 the Company paid the following amounts (exclusive of GST) to YBR Accounting for these accounting services:

Financial year	$
1 July 2010 to 30 June 2011	431,699
1 July 2011 to 30 June 2012	386,417

$85,250 (exclusive of GST) has been paid in the period 1 July 2012 to the date of this Prospectus.

(c) The Company engages Yellow Brick Road Wealth Management Pty Limited (“ YBR Wealth Management ”) to arrange directors and officers insurance on usual market terms. YBR Wealth Management is associated with Mr Bouris. During the financial years ended 30 June 2011 and 30 June 2012 the Company paid the following amounts as a brokerage fee (exclusive of GST) to YBR Wealth Management for arranging the insurance:

Financial year	$
1 July 2010 to 30 June 2011	7,500
1 July 2011 to 30 June 2012	100

$125 (exclusive of GST) has been paid in the period 1 July 2012 to the date of this Prospectus.

(d) During the financial years ended 30 June 2011 and 30 June 2012 the Company paid the following amounts (exclusive of GST) to Yellow Brick Road Group Pty Limited (a company associated with Mr Bouris) for marketing expenses:

Financial year	$
1 July 2010 to 30 June 2011	100,000
1 July 2011 to 30 June 2012	120,000

(e) During the financial years ended 30 June 2011 and 30 June 2012 the Company paid the following amounts (exclusive of GST) to YBR Services Pty Limited (a company associated with Mr Bouris) for administration fees and storage costs:

Financial year	$
1 July 2010 to 30 June 2011	39,670
1 July 2011 to 30 June 2012	43,372

$10,843 (exclusive of GST) has been paid in the period 1 July 2012 to the date of this Prospectus.

Each of the abovementioned related party arrangements are on arm's length terms and as such no Shareholder approval has been sought by the Company for the approval of any of those related party arrangements.

Directors' and Executive Officers' Indemnity

Under clause 26 of the Company's Constitution, the Directors, secretary, executive officers and employees of the Company are indemnified by the Company in the terms summarised below.

In accordance with the Constitution and to the extent permitted by law, the Company indemnifies each person who is a Director, secretary or executive officer of the Company and employees of the Company against liability (including liability for costs and expenses) for an act or omission in the capacity of director, secretary, executive officer or employee of the Company.

6.6 Interest of advisers

Patersons Securities Limited has acted as Lead Manager and Underwriter to the Rights Issue and is entitled to receive $276,713 (exclusive of GST) in underwriting fees for agreeing to underwrite the Rights Issue plus $50,000 (exclusive of GST) in corporate advisory fees. In addition, the Company is obliged to issue 15,372,934 Underwriter Options to Patersons Securities Limited (or its nominees). Patersons Securities Limited also received approximately $491,195.35 (exclusive of GST) for the provision of other corporate and underwriting services in the last 2 years.

Landerer & Company has acted as Australian legal advisers to the Company in connection with the Offer and assisting in the preparation of this Prospectus and is entitled to receive approximately $40,000 (exclusive of GST) for these services. Landerer & Company has also provided other legal services in relation to ongoing legal work and, in the last 2 years, has been entitled to receive costs of approximately $695,670 (exclusive of GST) for these services and Landerer & Company was also entitled to reimbursement of disbursements of $82,302.69 (exclusive of GST), the majority of which was the reimbursement of barristers’ fees and expert witness expenses incurred on behalf of the Company. Further amounts may be paid to Landerer & Company in accordance with its time-based charge out rates.

6.7 Consents

Each of the following persons has given their written consent to be named in this Prospectus in the form and context in which they are named and, where appropriate, to the inclusion in this Prospectus of the statement(s) by that person in the form and context in which they appear in this Prospectus, and has not withdrawn such consent before lodgement of this Prospectus with ASIC:

(a) Patersons Securities Limited has consented to being named as Lead Manager and Underwriter to the Rights Issue;
(b) Computershare Investor Services Pty Limited has consented to being named as the Share Registry for the Company;
(c) Patersons Securities Limited has consented to being named as the Nominee;
(d) Landerer & Company has consented to being named as lawyers to the Rights Issue; and
(e) Grant Thornton Audit Pty Ltd has consented to being named as the auditor of the Company in this Prospectus.

Landerer & Company:

(a) did not authorise or cause the issue of this Prospectus;
(b) do not make or purport to make any statement in this Prospectus nor is any statement in this Prospectus based on any statement by any of those parties, other than as specified, and
(c) to the maximum extent permitted by law, expressly disclaims any responsibility or liability for any part of this Prospectus other than the references to its name and the statement expressly attributed to it in this Prospectus (as set out above) and included in this Prospectus with the consent of that party.

Computershare Investor Services Pty Limited has had no involvement in the preparation of any part of this Prospectus other than being named as the Share Registry for the Company. Computershare Investor Services Pty Limited has not authorised or caused the issue of, and expressly disclaims and takes no responsibility for, any part of this Prospectus.

Grant Thornton Audit Pty Limited has had no involvement in the preparation of any part of this Prospectus other than being named as the auditor of the Company. Grant Thornton Audit Pty Limited has not authorised or caused the issue of, and expressly disclaims and takes no responsibility for, any part of this Prospectus.

Patersons Securities Limited was not involved in the preparation of any part of this Prospectus and did not authorise or cause the issue of this Prospectus. Patersons Securities Limited makes no express or implied representation or warranty in relation to the Company, this Prospectus or the Offer and does not make any statement in this Prospectus, nor is any statement in it based on any statement made by Patersons Securities Limited. To the maximum extent permitted by law, Patersons Securities Limited expressly disclaims and takes no responsibility for any material in, or omission from, this Prospectus other than the reference to its name.

There are a number of persons referred to elsewhere in this Prospectus who are not experts and who have not made statements included in this Prospectus nor are there any statements made in this Prospectus on the basis of any statements made by those persons. These persons did not consent to being named in the Prospectus and did not authorise or cause the issue of this Prospectus.

6.8 Continuous disclosure obligations

The Company is a disclosing entity under the Corporations Act. It is subject to regular reporting and disclosure obligations under both the Corporations Act and Listing Rules. Copies of the documents lodged with ASIC in relation to the Company may be obtained from, or inspected at, an ASIC office.

These reporting and disclosure obligations require the Company to notify ASX of information about specified events and matters as they arise for the purposes of ASX making that information available to the market. In particular, the Company has an obligation under the Listing Rules (subject to certain limited exceptions) to notify ASX immediately of any information of which it becomes aware concerning the Company that a reasonable person would expect to have a material effect on the price or value of securities in the Company. All announcements made by the Company are available on the Company's website www.tz.net or on the ASX’s website www.asx.com.au.

The board of Directors have adopted a policy on compliance with the Listing Rules which sets out the obligations of the Directors, officers and employees to ensure the Company satisfies the continuous disclosure obligations imposed by the Listing Rules and the Corporations Act. The policy provides information as to what a person should do when they become aware of information which could have material effect on the Company's securities and the consequences of non compliance.

6.9 Legal framework of this Prospectus

This Prospectus is a "transaction specific prospectus" and is issued in accordance with section 713 of the Corporations Act. In general terms, a transaction specific prospectus is only required to contain information in relation to the effect of the issue of securities on a company and the rights attaching to the securities. It is not necessary to include general information in relation to all of the assets and liabilities, financial position, profits and losses or prospects of the issuing company.

This Prospectus is intended to be read in conjunction with the publicly available information in relation to the Company which has been notified to ASX and does not include all of the information that would be included in a prospectus for an initial public offering of securities in an entity that is not already listed on a stock exchange. Investors should therefore have regard to the other

publicly available information in relation to the Company before making a decision whether or not to invest.

Having taken such precautions and having made such enquiries as are reasonable, the Company believes that it has complied with the requirements of ASX as applicable to disclosing entities from time to time, and which require the Company to notify ASIC of information available to the stock market conducted by ASX, throughout the 3 months before the issue of this Prospectus.

Information that is already in the public domain has not been reported in this Prospectus other than that which is considered necessary to make this Prospectus complete.

The ASX maintains files containing publicly disclosed information for all listed companies. The Company's file is available for inspection at ASX during normal working hours. In addition, copies of documents lodged by, or in relation to, the Company with ASIC may be obtained from, or inspected at, any regional office of ASIC.

6.10 Documents available to investors

The Company is also required to prepare and lodge with ASIC both yearly and half yearly financial statements accompanied by a Directors' statement and report and an auditor's report. These reports are released to ASX and published on the Company and ASX websites.

During the period that the Rights Issue remains open, the Company will provide on request from any person, a copy of the following documents (without charge):

(a) the Company’s audited annual financial report for the year ended 30 June 2011;
(b) the Company's half-year financial report for the 6 months ended 31 December 2011; and
(c) any continuous disclosure notices (including those listed below) given by the Company to ASX after the lodgement of the annual financial report for the year ended 30 June 2011 and before the date of this Prospectus.

The following documents were lodged with ASX after the date of lodgement of the Company's financial report for the year ended 30 June 2011 with ASIC before the lodgement of a copy of this Prospectus with ASIC:

Document name	Date released to ASX
Change to Timetable – Renounceable Rights Issue	20 September 2012
Letter to Overseas Shareholders	20 September 2012
Letter to Option Holders	19 September 2012
Letter to Eligible Shareholders	19 September 2012
Appendix 3B	19 September 2012
Sample Entitlement and Acceptance Form	19 September 2012
Renounceable Rights Issue Prospectus	19 September 2012
Letter-Prospectus and Appendix 3B	19 September 2012
ASX Announcement Underwriting Agreement	18 September 2012
Tender Award – Singapore Post Rights Issue Capital Raising	14 September 2012
Trading Halt	12 September 2012
Shareholder Update – 2012 Year End Review	31 August 2012
Appendix 4E – Preliminary Final Report 30 June 2012	31 August 2012
Broadcast on Boardroom Radio 15 August 2012	15 August 2012
Announcement on Temando and ParcelPoint	14 August 2012
Shareholder Update and Appendix 4C for the June Quarter 2012	31 July 2012
ASX Announcement – Restructuring and Cost Reductions	18 July 2012
Announcement of Redwood Systems Partnership	4 July 2012
TZ and UCIT MOU Announcement	22 June 2012
Boardroom Radio	7 June 2012
ControlCentre Data Centre Announcement	6 June 2012
ASX Announcement – Parcel Locker Tender/Resignation of	30 May 2012
CEO
Trading Halt	28 May 2012
ASX Announcement – Release of Shares from Escrow	10 May 2012
Extension of Maturity Date of Series I Convertible Notes	30 April 2012
Shareholder Update and Appendix 4C for March Quarter 2012	30 April 2012
TZI IXP Certified Integrator Program	4 April 2012
ASX Announcement – Escrow	29 March 2012
Broadcast on Boardroom Radio 5 March 2012	5 March 2012
Strategic Relationship with Macquarie Telecom Supply	2 March 2012
Dexion Supply Agreement	1 March 2012
Financial Report for the Half Year Ended 31 December 2011	29 February 2012
Change in substantial holding	23 February 2012
Notice Under Section 708A(5) of the Corporations Act 2001	22 February 2012
TZ Capital Raising Announcement and Appendix 3B	20 February 2012
Trading Halt	16 February 2012
Announcement for LOI for PAD Shopping Centre Deployment	1 February 2012

Shareholder Update and Appendix 4C for December Quarter	31 January 2012
2011
ASX Announcement – USD$3 Million Stand-by Loan Facility	31 January 2012
ASX Announcement – SIV Notes	23 December 2011
Broadcast on Boardroom Radio 23 November 2011	23 November2011
ASX Announcement – AGM Results	22 November 2011
TZ Limited Launches our PAD Automated Post Boxes	22 November 2011
Announcement of Coles Locker Trial 22 November 2011	22 November 2011
Announcement of Incubator Investment Fund 14 November	14 November 2011
2011
Shareholder Update – November 2011	7 November 2011
Appendix 3Ys – Change of Director's Interest Notice	4 November 2011
Notice Under s.708A(5)(e) of the Corporations Act 2011 (Cth)	4 November 2011
Appendix 3B	28 October 2011
Appendix 4C – September Quarter 2011	28 October 2011
ASX Announcement – 2011 Annual Report	21 October 2011
ASX Announcement – Notice of AGM	21 October 2011
Broadcast on Boardroom Radio 11 October 2011	11 October 2011
Broadcast on Boardroom Radio 6 October 2011	6 October 2011
Announcement TZ Relationship with Bear River	5 October 2011
Date of Annual General Meeting	4 October 2011

7. GLOSSARY

Acceptance Moneys	The moneys payable in connection with an Application (being the
	Issue Price multiplied by the number of New Shares represented by
	the aggregate of the Entitlement taken up under the Application and
	the number of Additional Shares (if any) applied for on the
	Application)
Additional Options	New Options applied for in addition to the number shown on a
	Shareholder's Entitlement and Acceptance Form
Additional Shares	New Shares for which an applicant applies on an Entitlement and
	Acceptance Form in addition to the Entitlement of that applicant
Application	An application to subscribe for a specified number of New Shares
	and New Options under this Prospectus (made in an Entitlement
	and Acceptance Form included in, or accompanying, a copy of this
	Prospectus)
ASIC	Australian Securities and Investments Commission
Associate	Has the same meaning given to it by Division 2 of Part 1.2 of the
	Corporations Act
ASX	ASX Limited ACN 008 624 691
ASX Settlement	ASX Settlement Pty Ltd ACN 008 504 532
ASX Settlement Operating	The operating rules of the settlement facility provided by ASX
Rules	Settlement as amended from time to time
Board	The board of Directors of the Company
Business Day	Has the same meaning as in the Listing Rules
Chairman	Chairman of the Board
Closing Date	The date on which the Offer closes, being 17 October 2012 unless
	extended
Company	TZ Limited ACN 073 979 272
Completion	Means when all of the Offer Securities have been allotted in
	accordance with the Offer or under the Underwriting Agreement
Constitution	The Company's constitution
Convertible Note	Means a convertible note issued by the Company to the QVT
	Funds, each convertible note having a face value of $1,000
Corporations Act	Corporations Act 2001(Cth) (as amended)
Director	A director of the Company
Eligible Shareholder	A Shareholder who holds Shares at 7.00 pm on the Record Date
	who is not an Ineligible Shareholder
Entitlement	A renounceable right of an Eligible Shareholder to subscribe for one
	New Share for every three Existing Shares held at 7.00 pm on the
	Record Date, with one attaching New Option for every two New

	Shares subscribed for and issued.
Entitlement and	An entitlement and acceptance form accompanying this Prospectus
Acceptance Form
Existing Shares	Shares on issue as at 7.00 pm on the Record Date
Group	The Company and each Related Body Corporate of the Company
Ineligible Shareholder	A Shareholder with an address in the Company register of
	Shareholders outside Australia, New Zealand and the United
	Kingdom, unless the Company is satisfied that it is not precluded
	from lawfully issuing Securities to that Shareholder either
	unconditionally or after compliance with conditions which the Board
	in its sole discretion regards as acceptable and not unduly onerous
Issue Date	The date New Shares are issued by the Company
Issue Price	10.0 cents per New Share
Listing Rules or ASX	The official listing rules of ASX from time to time
Listing Rules
New Option	An Option offered and issued under this Prospectus, the terms of
	which are set out in Section 6.2 of this Prospectus
New Share	A Share offered and issued under this Prospectus, the terms and
	conditions of which are set out in this Prospectus
Nominee	Patersons Securities Limited ACN 008 896 311
Offer	A pro rata renounceable rights issue offer by theCompanyto
	Eligible Shareholders to subscribe for 1 New Share for every 3
	Shares held on the Record Date at an issue price of 10 cents per
	New Share with 1 attaching New Option for every 2 New Shares
	subscribed for and issued, to raise a total amount of approximately
	$4.6 million.
Offer Securities	Means approximately 46,118,801 New Shares and 23,059,401
	attaching New Options proposed to be issued by theCompany
	under the Offer at 10.0 cents per New Share
Options	Options to subscribe for Shares in the Company
PDT	Product Development Technology, Inc, a subsidiary of the Company
Privacy Act	Privacy Act 1998(Cth) (as amended)
Prospectus	This prospectus
QVT Funds	Means QVT Fund LP and Quintessence Fund L.P. both c/- QVT
	Financial LP, 1177 Avenue of the Americas, 9thFloor, New York, NY
	10036, United States of America
Record Date	7.00 pm (Sydney time) on 28 September 2012
Related Body Corporate	Has the meaning given by section 50 of the Corporations Act
Rights Issue	The renounceable pro rata rights issue conducted pursuant to this
	Prospectus under which approximately 46,118,801 New Shares and
	23,059,401 attaching New Options will be offered to Eligible

	Shareholders on the basis of one New Share for every three
	Existing Shares held by Shareholders at an issue price of 10.0 cents
	per New Share, with one attaching New Option for every two New
	Shares subscribed for and issued
Securities	New Shares and/or New Options offered pursuant to the Entitlement
Share	A fully paid ordinary share in the capital of the Company
Share Registry	Computershare Investor Services Pty Limited ABN 48 078 279 277
Shareholder	A holder of Existing Shares
Shortfall	The difference between the total number of New Shares and New
	Options offered under the Offer and the number of New Shares and
	New Options actually applied for by Eligible Shareholders, including
	applications for Additional Shares and Additional Options
Shortfall Offer	The offer of any Shortfall on the terms and conditions set out in
	section 1.13 of this Prospectus
Shortfall Shares	Those New Shares and attaching New Options (including any
	Additional Shares and Additional Options) for which valid
	Applications have not been received by 5.00 pm on the Closing
	Date under the Rights Issue
Subsidiary	Has the meaning given by Division 6 of Part 1.2 of the Corporations
	Act
TZ Inc or TZI	Telezygology, Inc, a subsidiary of the Company
TZL	The Company, or a Subsidiary of the Company, as the context
	requires
Underwriter	Patersons Securities Limited ACN 008 896 311
Underwriter Offer	The offer, subject to the extent Shareholder approval is needed, to
	grant up to 15,372,934 Underwriter Options to the Underwriter or its
	nominees, in accordance with the terms of the Underwriting
	Agreement
Underwriter Options	The options offered pursuant to the Underwriter Offer under this
	Prospectus, the terms of which are summarised in section 6.2
Underwriting Agreement	The underwriting agreement between the Company and the
	Underwriter, a summary of which is contained in section 5.1
Underwritten Amount	$4,611,880.10
US$	Means dollars of the United States of America

DIRECTORS' AUTHORISATION

This Prospectus is issued by the Company and its issue has been authorised by a resolution of the Directors.

Each Director has consented to the lodgement of this Prospectus with ASIC as required by section 720 of the Corporations Act and has not withdrawn their consent prior to lodgement of this Prospectus with ASIC.

Signature

This Prospectus is signed for TZ Limited by:

==> picture [149 x 43] intentionally omitted <==

Mark Bouris Director

Dated: 20 September 2012

CORPORATE DIRECTORY

Directors

Mark Bouris Chairman and Executive Director Kenneth Ting Executive Director Dickory Rudduck Executive Director

Company Secretary

Underwriter

Patersons Securities Limited

Solicitor

Landerer & Company Level 31 133 Castlereagh Street SYDNEY NSW 2000

Kenneth Ting

Share Registry

Registered Office and Contact Details

Level 11 1 Chifley Square SYDNEY NSW 2000 Website: www.tz.net Telephone: (02) 9222 8890 Facsimile: (02) 8208 9937

Computershare Investor Services Pty Limited GPO Box 505 MELBOURNE VIC 3001 Telephone: (within Australia) 1300 850 505 (outside Australia) +61 3 9415 4000 Website: www.computershare.com

Auditors

Grant Thornton Audit Pty Ltd Level 19 2 Market Street SYDNEY NSW 2000

Telephone: +61 2 9286 5555 Facsimile: +61 2 9286 5599

ASX Code

TZL

AI assistant

TZ LIMITED — Capital/Financing Update 2012

65975_rns_2012-09-19_24551288-782a-4e98-adcb-fb77ad8c908f.pdf

TZ Limited ACN 073 979 272

PROSPECTUS

TABLE OF CONTENTS

SUMMARY OF KEY DATES

IMPORTANT NOTICE

Continuous Disclosure

Restrictions on the distribution of this Prospectus

New Zealand Notice

United Kingdom

Risk factors

Disclaimer

Forward looking statements

Definitions

Electronic copy of the Prospectus

Privacy

THIS PROSPECTUS IS IMPORTANT AND SHOULD BE READ IN ITS ENTIRETY.

20 September 2012

Dear Shareholder

1.1 General

1.2 Additional Shares and Additional Options

1.3 Underwriting

1.4 Use of funds

1.5 Record Date and Entitlements

1.6 Minimum subscription

1.7 Opening and Closing Date for Applications

1.8 Trading of Entitlements

1.9 ASX quotation

1.10 Market prices of Shares on ASX

1.11 Allotment of New Shares and New Options

1.12 Shareholders outside Australia, New Zealand and the United Kingdom

General Restrictions

Ineligible Shareholders

1.13 Shortfall Offer

1.14 Unquoted Options

1.15 Taxation considerations

2. ACTION REQUIRED BY ELIGIBLE SHAREHOLDERS

2.1 What you may do – choices available

2.2 Accepting your Entitlement in full or in part

(a) Payment by cheque

(b) Payment by BPay[®]

Shareholders should be aware of the timing for the processing of payment by cheque and

BPay[® ] in choosing the appropriate payment method.

2.3 Apply for Additional Shares and Additional Options

2.4 Selling all or part of your Entitlement on ASX

2.5 Transferring all or part of your Entitlement to another person other than on ASX

2.6 Not accepting any part of your Entitlement

2.7 Address details and enquiries

By mail:

3.1 Purpose of the Offer

3.2 Capital structure

3.3 Details of substantial holders

3.4 Effect on control of Company

3.5 Financial effect of Offer on Company - Pro Forma Statement of Financial Position

Basis of preparation and presentation

Transaction Adjustments

4.1 Introduction

4.2 Risks specific to the Offer

Potential for significant dilution

Termination of Underwriting Agreement

4.3 Risks specific to the Company

Commercialisation of Key Technologies

Intellectual Property Protection

Management of Growth

Regulatory Factors

Market for the Company’s technology

Risk of Product Liability

Material Contracts

Competition

Reliance on Key Personnel

Business Relationships

Currency Risk

Refinancing loan facilities

Asset Value Impairment

4.4 General risk factors

Market conditions

Economic conditions

Additional Capital Requirements

TZ LIMITED Capital/Financing Update 2012