TZ LIMITED — Capital/Financing Update 2012

Feb 19, 2012

TZ Limited ABN 26 073 979 272

20 February 2012

Lodged by ASX Online

The Manager Company Announcements Offic e ASX Ltd Level 4, 20 Bridge Street Sydney, NSW 2000

Dear Sir / Madam

SUCCESSFUL A$4.5 MILLION PLACEMENT POSITIONS TZL FOR GROWTH

TZ Limited (the “ Company ”) is p leased to announce that the Company has recei v ed acceptances from various institutional and so p histicated investors for a placement of 14,225,2 7 9 ordinary shares at 32 cents per share, to raise $ 4 ,552,089 in working capital to position the Com p any for anticipated supply contracts and new busin e ss (the “ Placement ”).

Veritas Securities Limited acted as the Lead Manager in securing the placement f or the Company.

It is anticipated that the settlement of shares under the Placement will occur on W ednesday the 22[nd] of February 2012, and that t he shares will be available to trade on Thursday the 23[rd] of February 2012, although these d ates are indicative only and may change.

In addition, the Company is plea s ed to advise that it has agreed with QVT Fund L P and Quintessence Fund L.P. (the " QVT Funds ") that the conversion price per ordinar y share applying to all the outstanding convertible n o tes issued by the Company to the QVT Funds ( a nd any Series IV convertible notes that may be is s ued in accordance with the Company's announcement on 23 December 2011) will not be affe c ted as a result of this Placement.

For purposes of clarity, the conv e rsion price of 42 cents per share applying to the 4,275 Series IIIB Convertible Notes and to any S e ries IV Convertible Notes to be issued, and the c o nversion price of 35 cents per share applying to t h e 12,000 Series I Convertible Notes and the 1,7 1 4 Series III Convertible Notes will not be aff e cted by the Placement.

John Wilson, CEO of wholly ow n ed subsidiary, Telezygology, Inc. stated, “The C o mpany is anticipating a number of signific a nt supply contracts which will require investmen t in inventory, supply chain establishment and p roduction readiness programs. This capital raising positions the Company well to build the enabling conditions to support such initiatives.”

An appendix 3B in respect of th e Placement is enclosed.

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For further information please contact

Kenneth Ting Executive Director and Compan y Secretary, TZ Limited Email: info@tz.net

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

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

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

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

Introduced 1/7/96. Origin: Appendix 5. Amended 1/7/98, 1/9/99, 1/7/2000, 30/9/2001, 11/3/2002, 1/1/2003, 24/10/2005.

Name of entity

TZ LIMITED

ABN

26 073 979 272

We (the entity) give ASX the following information.

Part 1 - All issues

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

1 +Class of+securities issued or to be issued 2 Number of+securities issued or to be issued (if known) or maximum number which may be issued 3 Principal terms of the+securities (eg, if options, exercise price and expiry date; if partly paid +securities, the amount outstanding and due dates for payment; if +convertible securities, the conversion price and dates for conversion)	Ordinary shares
	14,225,279
	Same terms as existing ordinary shares

4 Do the+securities rank equally in all respects from the date of allotment with an existing+class of quoted +securities? If the additional securities do not rank equally, please state: • the date from which they do • the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment • the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 5 Issue price or consideration 6 Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets) 7 Dates of entering+securities into uncertificated holdings or despatch of certificates 8 Number and +class of all +securities quoted on ASX (_including_the securities in clause 2 if applicable) 9 Number and +class of all +securities not quoted on ASX (_including_the securities in clause 2 if applicable)	Yes Not applicable	Yes Not applicable
	$0.32 per share
	To raise working capital to position the Company for anticipated supply contracts and new business
	22 February 2012
	Number	+Class
	138,356,402	Ordinary fully paid shares
	Number	+Class
	3,000,000	CB Options exercisable at $4.00 and expiring on 19 February 2013

• See chapter 19 for defined terms.

Appendix 3B Page 2

1/1/2003

Number

+Class

3,000,000 13,714 4,275 1,750,000 1,750,000 1,750,000

Options exercisable at $0.42 and expiring on 19 February 2013. Convertible notes at an issue price of $1,000 per convertible note Secured convertible notes at an issue price of $1,000 per convertible note Directors options exercisable at $1.00 and expiring on 30 June 2016. Directors options exercisable at $2.00 and expiring on 30 June 2017. Directors options exercisable at $3.00 and expiring on 30 June 2018.

• 10 Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests)

Shares rank pari passu with all existing fully paid ordinary shares.

Part 2 - Bonus issue or pro rata issue

11 Is security holder approval required? Not applicable 12 Is the issue renounceable or nonNot applicable renounceable? 13 Ratio in which the[+] securities will be Not applicable offered 14 +Class of +securities to which the Not applicable offer relates 15 +Record date to determine Not applicable entitlements

16 Will holdings on different registers (or subregisters) be aggregated for calculating entitlements? 17 Policy for deciding entitlements in relation to fractions 18 Names of countries in which the entity has+security holders who will not be sent new issue documents Note: Security holders must be told how their entitlements are to be dealt with. Cross reference: rule 7.7. 19 Closing date for receipt of acceptances or renunciations 20 Names of any underwriters 21 Amount of any underwriting fee or commission 22 Names of any brokers to the issue 23 Fee or commission payable to the broker to the issue 24 Amount of any handling fee payable to brokers who lodge acceptances or renunciations on behalf of+security holders 25 If the issue is contingent on+security holders’ approval, the date of the meeting 26 Date entitlement and acceptance form and prospectus or Product Disclosure Statement will be sent to persons entitled 27 If the entity has issued options, and the terms entitle option holders to participate on exercise, the date on which notices will be sent to option holders 28 Date rights trading will begin (if applicable)	Not applicable
	Not applicable
	Not applicable
	Not applicable
	Not applicable
	Not applicable.
	Not applicable
	Not applicable
	Not applicable
	Not applicable
	Not applicable
	Not applicable
	Not applicable

• See chapter 19 for defined terms.

Appendix 3B Page 4

1/1/2003

29 Date rights trading will end (if applicable) 30 How do+security holders sell their entitlements_in full_through a broker? 31 How do+security holders sell_part_of their entitlements through a broker and accept for the balance? 32 How do+security holders dispose of their entitlements (except by sale through a broker)? 33 +Despatch date	Not applicable
	Not applicable
	Not applicable
	Not applicable
	Not applicable

Part 3 - Quotation of securities

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

• 34 Type of securities ( tick one )

• (a) Securities described in Part 1

• (b) All other securities

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

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

35 If the[+] securities are[+] equity securities, the names of the 20 largest holders of the additional[+] securities, and the number and percentage of additional[+] securities held by those holders 36 If the[+] securities are[+] equity securities, a distribution schedule of the additional +securities setting out the number of holders in the categories 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over

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

Entities that have ticked box 34(b)

38 Number of securities for which +quotation is sought 39 Class of +securities for which quotation is sought 40 Do the+securities rank equally in all respects from the date of allotment with an existing+class of quoted +securities? If the additional securities do not rank equally, please state: • the date from which they do • the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment • the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 41 Reason for request for quotation now Example: In the case of restricted securities, end of restriction period (if issued upon conversion of another security, clearly identify that other security) 42 Number and+class of all+securities quoted on ASX (_including_the securities in clause 38)	Not applicable
	Not applicable
	Not applicable
	Not applicable
	Number	+Class
	Not applicable

• See chapter 19 for defined terms.

Appendix 3B Page 6

1/1/2003

Quotation agreement

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

• 2 We warrant the following to ASX.

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

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

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

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

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

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

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

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

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Sign here: ............................................................ Date: 20 February 2012 Director/Company secretary

Print name: Kenneth Ting

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• See chapter 19 for defined terms.

24/10/2005 Appendix 3B Page 7