TZ LIMITED — Capital/Financing Update 2017

Oct 5, 2017

TZ Limited ABN 26 073 979 272

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6 October 2017

The Manager Company Announcements Office Australian Securities Exchange 4[th] Floor, 20 Bridge Street SYDNEY NSW 2000

ASX RELEASE

Issuer: TZ Limited (ASX Code: TZL)

RIGHTS ISSUE CLEANSING NOTICE UNDER SECTION 708AA(2)(F) OF THE CORPORATIONS ACT

TZ Limited (" TZL " or the " Company ") announced on 6 October 2017 that it will undertake a fully underwritten non-renounceable rights issue of up to approximately 201,593,341 fully paid ordinary shares in TZL (" Rights Issue "). Eligible shareholders will be entitled to subscribe for 2 ordinary fully paid shares in TZL (" New Shares ") for every 5 ordinary shares in TZL held at the Record Date, being 7.00 pm (Sydney time) on 11 October 2017, with each such New Share being issued at an issue price of $0.0275 (2.75 cents) to raise up to approximately $5,543,817 (" Offer ").

The Offer provides for equal treatment of all eligible shareholders and a top-up facility (" Top Up Facility ") is open to all eligible shareholders who take up their full entitlement. Additional New Shares will only be available under the Top Up Facility where there is a shortfall between applications for New Shares received from eligible shareholders and the number of New Shares proposed to be issued under the Rights Issue.

TZL will offer the New Shares for issue without disclosure to investors under section 708AA(2)(f) of the Corporations Act 2001 (" Corporations Act ") as notionally modified by ASIC Corporations (NonTraditional Rights Issue) Instrument 2016/84 (" ASIC Instrument ").

Further details regarding the Offer are set out in the offer document (the " Offer Document ") that will be dispatched to shareholders.

Details of the securities to be issued

Class of securities:	Ordinary shares
ASX Code of the securities:	TZL
Date of the issue or expected issue of the securities:	1 November 2017
Maximum number of securities to be issued:	201,593,341

For the purposes of section 708AA(7) of the Corporations Act, TZL advises:

1. the New Shares will be issued without disclosure under Part 6D.2 of the Corporations Act as notionally modified by the ASIC Instrument;

2. this notice is given under section 708AA(2)(f) of the Corporations Act as notionally modified by the ASIC Instrument;

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

2. as at the date of this notice, TZL has complied with:

3. (a) the provisions of Chapter 2M of the Corporations Act as they apply to TZL; and

4. (b) section 674 of the Corporations Act;

5. as at the date of this notice, there is no excluded information of the type referred to in sections 708AA(8) and 708AA(9) of the Corporations Act as notionally modified by the ASIC Instrument; and

6. the effect the issue of the New Shares under the Rights Issue will have on the control of TZL, and the consequences of that effect, will depend on a number of factors, including the level of support for the Rights Issue, as further explained below.

Effect of the Rights Issue on control of the Company

If all eligible shareholders each subscribe for their full Entitlement, then each eligible shareholder's percentage ownership interest (and voting power) in the Company will remain the same, subject only to changes resulting from ineligible foreign shareholders being unable to participate in the Offer, and there will be no effect on control of the Company.

To the extent that an eligible shareholder does not take up its Entitlement, the proportionate shareholding interest of that eligible shareholder in the Company will be diluted. The proportionate shareholding interest of the ineligible foreign shareholders will be diluted because those ineligible foreign shareholders are not entitled to participate in the Offer.

As at the date of this notice, the following three shareholders are the only Shareholders who have notified the Company that they are substantial shareholders (" Existing Substantial Shareholders "):

Existing Substantial Shareholder	Number of Shares	Voting power in Company
QVT Fund LP and Quintessence Fund L.P. ("QVT Funds")	163,892,256	32.52%
First Samuel Limited	54,250,428	10.76%
SG Hiscock & Company Limited	25,517,035	5.06%

As at the date of this notice:

• (a) the QVT Funds have verbally advised the Company, without making any binding commitment, that they intend to take up their Entitlement in full, representing 65,556,903 New Shares;

• (b) SG Hiscock & Company Limited has verbally advised the Company, without making any binding commitment, that it will most likely take up its Entitlement in full, representing 10,206,814 New Shares; and

• (c) First Samuel Limited has verbally advised that it will take up its Entitlement in full, representing 21,700,172 New Shares.

First Samuel Limited has agreed to fully underwrite the Rights Issue under an agreement with the Company (the " Underwriting Agreement ").

If all of the Existing Substantial Shareholders take up their Entitlements in full and do not elect to take up any Additional Shares under the Top Up Facility and none of the other shareholders subscribe for any of their Entitlements nor take up any Additional Shares under the Top Up Facility, then the

resulting shortfall would be 51.65% of the New Shares being offered under the Rights Issue. In those circumstances, by subscribing for the shortfall under the Underwriting Agreement, First Samuel Limited would be required to subscribe for 104,129,452 New Shares under the Underwriting Agreement, giving First Samuel Limited voting power in the Company immediately after completion of the Offer of 25.52%.

The following table demonstrates the maximum possible increase in the voting power of First Samuel Limited as a result of the Rights Issue, assuming that First Samuel Limited subscribes for its full Entitlement under the Rights Issue on the basis of 100%, 75%, 50%, 25% and nil subscription by shareholders other than First Samuel Limited and assuming no shareholders elect to take up Additional Shares under the Top Up Facility and assuming First Samuel Limited takes up the full shortfall under the Underwriting Agreement.

% participati on by other holders	Number of New Shares issued to shareholders other than First Samuel Limited under the Offer	Number of New Shares issued to First Samuel Limited under the Offer	Number of New Shares issued to First Samuel Limited under the Underwriting Agreement	Voting power of First Samuel Limited
100%	179,893,169	21,700,172	-	10.76%
75%	134,919,876	21,700,172	44,973,293	17.14%
50%	89,946,584	21,700,172	89,946,585	23.51%
25%	44,973,292	21,700,172	134,919,877	29.88%
0%	0	21,700,172	179,893,169	36.26%

The board of directors of the Company does not believe the Top Up Facility will have any effect on the control of the Company as no Additional Shares will be issued to any eligible shareholders if, in the view of the Directors to do so, would increase that eligible shareholder's voting power above 19.9% or to any eligible shareholder whose voting power is already above 19.9%. In addition, First Samuel Limited is not permitted to participate in the Top Up Facility.

In summary, the Company states the following about the effect of the Offer on the control of the Company:

• (a) as stated above, if every shareholder was to take up their full Entitlement, there would be no effect on the control of the Company immediately following the Offer;

• (b) if the Existing Substantial Shareholders take up their full Entitlement and no other shareholder takes up any New Shares under the Offer or the Top Up Facility, then the voting power of First Samuel Limited would increase from 10.76% to 25.52%; and

• (c) the maximum that the voting power of First Samuel Limited in the Company could increase to as a result of the Offer is 36.26%.

The Company believes it is unlikely that the voting power of First Samuel Limited will increase to 36.26% as a result of the Offer, given that the other two Existing Substantial Shareholders have verbally indicated that they intend to take up their full Entitlement and given it is likely that at least some of the other shareholders will elect to take up their Entitlements and Additional Shares under the Top Up Facility.

First Samuel Limited has advised the Company in writing that if it did obtain control of the Company as a result of the Offer, it does not intend to change the current business plans of the Company and believes the Company has the right mix of operational employees. The Underwriter does not intend to make any change to the Company's business other than those that become necessary in the usual course of operations.

Further details regarding the Rights Issue are set out in the Offer Document.

Signed for and on behalf of TZ Limited:

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Mark Bouris Chairman TZ Limited