CNX Notice of Annual Meeting
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Connexionz Limited (CNX) | 2:54 pm, Tuesday 16 September 2008 | CNX | 0.150 |
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Letter from the Chairman
Dear Fellow Shareholder
I am pleased to invite you to attend the 2008 Annual General Meeting (AGM) of
Connexionz Limited to be held on Tuesday 30 September at 5:30pm at the
Company's offices, Level 1 Building 2, 1 Show Place, Addington, Christchurch.
Connexionz's Managing Director, Richard Riley and I will comment briefly on
Connexionz's performance during the year to 31 March 2008 and forecasts and
previews of the year ahead at the meeting.
Shareholders will be asked to consider and vote on a number of matters at the
AGM as set out in the attached Notice of Annual General Meeting ("Notice").
The matters include:
The issue of shares to Craig Boyce and Bruce Sheppard as directors of
Connexionz in consideration for their services as non-executive directors,
The issue of shares to Richard Riley and Tony Kan for up to 50% of their
remuneration as executive directors, The re-election of Robert Burke who
retires by rotation, and The approval of a proposed new issue of preference
shares.
The board unanimously supports the re-election of Robert Burke; details of
his background are in the accompanying Explanatory Notes to the Notice.
If you are unable to attend the AGM I encourage you to complete and lodge the
Proxy Form (either by post or fax) to reach Link Market Services Ltd, our
share registrar, no later than 5:30pm (New Zealand time) on Sunday 28
September 2008 (although proxies delivered by post will in effect need to be
provided by 5.30 pm (New Zealand time) Friday 26 September 2008).
At the conclusion of the AGM you are invited to join the board and senior
management for light refreshments.
I look forward to seeing you.
Yours faithfully
?
Craig Boyce, Chairman
CONNEXIONZ LIMITED
NOTICE OF ANNUAL GENERAL MEETING NOTICE
Notice is hereby given this 16th day of September 2008 that the Annual
General Meeting ("AGM") of the shareholders of Connexionz Limited (the
"Company") will be held at the Company's offices being Level 1, Building 2, 1
Show Place, Addington, Christchurch, New Zealand on Tuesday 30 September 2008
at 5:30 pm.
AGENDA AND BUSINESS
Ordinary Business
Financial Statements and Reports
To receive the Company's financial statements and reports for the year ended
31 March 2008.
Auditors
To appoint Deloitte as the Company's auditors and to authorise the directors
of Connexionz Limited to fix, for the financial year ended 31 March 2009, the
fees and expenses of Deloitte as auditors of Connexionz Limited.
Re-election of Robert Burke as a Director
In accordance with the Company constitution and the Listing Rules of NZAX,
Sales Director Robert Burke is retiring by rotation. Being eligible, Robert
Burke has offered himself for re-election.
Special Business
Directors' Remuneration
To authorise and approve the issue of ordinary shares to Craig Boyce
(150,000) and Bruce Sheppard (100,000) for services as directors of the
Company for the financial year ended 31 March 2009.
Issue Shares to Managing Director and Finance Director
To authorise and approve the issue of up to (900,000) ordinary shares to
Richard Riley (Managing Director) and up to (750,000) ordinary shares to Tony
Kan (Finance Director) being 50% of their remuneration for those roles.
Approval for Offer of Preference Shares to Eligible Persons
Following the success of the company in winning additional sales, to approve
the proposal to make an offer of Preference Shares to "eligible persons" (as
defined in the Securities Act 1978) to fund the increased working capital
requirements.
The specific terms of the Offer and Preference Shares are set out in the
Explanatory Note.
Right to require purchase of shares
If the special resolution approving the offer of Preference Shares is passed
but a shareholder votes against the resolution, that shareholder has a right
to require Connexionz Limited to purchase that shareholder's shares. To
exercise the right the shareholder must have cast all the votes attached to
the shares registered in the shareholder's name and having the same
beneficial owner against the resolution. The right of a shareholder to
require Connexionz to repurchase shares must be exercised in accordance with
section 111 of the Companies Act 1993. In particular the shareholder must
give written notice exercising the right to Connexionz within 10 working days
of the passing of the special resolution.
Approval for Related Parties to participate in Offer of Preference Shares to
Eligible Persons To approve Related Parties' (including directors (and their
associated persons) participation in the offer of Preference Shares to
eligible persons.
General Business
To deal with any other business that may properly be brought before the
meeting.
The full text of the proposed resolutions is set out in the OPENING BUSINESS
AND NOTICES OF MOTION FOR ORDINARY AND SPECIAL RESOLUTIONS attached to this
Notice. As required by the NZAX Listing Rules, an explanation of the proposed
resolutions 3, 4, 5, 6 and 7 is also attached for your information.
NZX has approved this Notice of Meeting.
Please note: All shareholders have the right to attend the Annual General
Meeting and vote, or any shareholder may appoint a proxy to attend the Annual
General Meeting and vote on his, her or their behalf. A proxy does not need
to be a shareholder of the Company, and may be the Chairman of the Annual
General Meeting should the shareholder wish to appoint the same. Any
shareholder wishing to appoint a proxy will need to complete, sign and return
the enclosed proxy form by fax or post to:
Connexionz AGM,
c/- Link Market Services Limited,
Box 384
Ashburton,
New Zealand,
Fax number + 643 308 1311
prior to 5:30 pm on Sunday 28 September 2008 (although proxies delivered by
post will in effect need to be provided by 5.30 pm (New Zealand time) Friday
26 September 2008).
By order of the board.
?
Chairman
OPENING BUSINESS AND NOTICES OF MOTION FOR ORDINARY AND SPECIAL RESOLUTIONS
Resolution 1: Financial Statements and Reports
The proposed ordinary resolution for approval by a 50% majority of those
shareholders entitled to vote and voting on the resolution is:
"The financial statements and reports of Connexionz Limited presented to the
meeting are hereby received."
Resolution 2: Appointment of Auditor
The proposed ordinary resolution requiring approval by a 50% majority of
those shareholders entitled to vote and voting on the resolution is:
(a) "The shareholders hereby resolve as an ordinary resolution of
shareholders that Deloitte be appointed the auditor of Connexionz Limited."
(b) "The shareholders hereby resolve as an ordinary resolution of
shareholders that the board of Connexionz Limited be authorised to fix, for
the financial year ended 31 March 2009, the fees and expenses of Deloitte as
auditors of Connexionz Limited."
Resolution 3: Re-election of Robert Burke as a Director
The proposed ordinary resolution requiring approval by a 50% majority of
those shareholders entitled to vote and voting on this resolution is:
"That Mr Robert Burke be re-elected as a director of Connexionz Limited."
Explanatory Note
Robert formed Connexionz Limited, a company registered in September 1996. He
has been working full-time on RTPI solutions since 1998, before which he was
the Sales Manager for the Mobile Data Unit at Tait Electronics.
Robert's career has included a number of sales and marketing and management
roles in technology companies over a period of 15 years. In this time he has
had considerable experience in successfully establishing new businesses and
marketing new technology products. He has a track record of building a
clientele of major customers and of increasing corporate growth.
Companies he has worked for in senior management roles include Walker
Datavision Limited (1987-1989), Hewitt Rand Corporation Limited (1989-1992),
Solstat Industries Limited (1992-1996), Portent Technologies Limited
(1996-1997), and Tait Electronics Limited (1997- 1998).
Resolution 4: Directors' Remuneration
The proposed ordinary resolution requiring approval by a 50% majority of
those shareholders entitled to vote and voting on the resolution is:
(a) "The shareholders of Connexionz Limited hereby authorise and approve an
amount of $25,000, to be paid by the issue of ordinary shares as set out in
resolution 4(b), to be available for payment of all directors taken together
for the year ending 30 September 2009, and the board to have discretion as to
how that payment is allocated."
(b) "The shareholders acknowledge that the board has determined how the
director remuneration in resolution 4(a) is to be distributed, and the
shareholders approve the issue of ordinary shares in lieu of the cash
remuneration set out in resolution 4(a) according to the table set out below,
being shares having an issue price of $0.10 each, credited as fully paid and
ranking equally in all respects with other ordinary shares on issue:
Director No. of Shares to be Issued
Craig David Boyce 150000
Bruce Raymond Sheppard 100000
Such shares to be issued at a time the board considers appropriate after 31
March 2009, but no later than twelve months after the passing of this
resolution. The shares shall be issued for services as directors of
Connexionz Limited for the financial year ended 31 March 2009. If Craig David
Boyce or Bruce Raymond Sheppard are not directors of Connexionz Limited for
the full period ending on 31 March 2009, the number of shares they
respectively receive in accordance with this resolution shall abate pro rata
according to the relevant period of time that the relevant person is a
director during the financial year ended 31 March 2009."
Craig Boyce and Bruce Sheppard and their Associated Persons (as defined in
the NZAX Listing Rules) are not entitled to vote on this resolution. The
Associated Persons are Southern Hills Imperial Timber (1932) Pty Limited and
Islay Investments Limited.
Explanatory Note
Craig, Richard, Robert, Tony and Bruce offer a number of invaluable services
to the growth and direction of the Company as directors. The Company does not
offer any cash remuneration to them for their services as non-executive
directors. Connexionz does remunerate the executive directors, being Richard,
Robert and Tony for their executive services, but does not remunerate them
for their services as directors.
As Craig and Bruce do not receive any cash remuneration, it is proposed that
Connexionz issue ordinary shares in the Company to Craig to the value of
$15,000 (150,000 shares at $0.10 per share) and to Bruce to the value of
$10,000 (100,000 shares at $0.10 per share) in consideration for the
provision of their services for the financial year ended 31 March 2009.
The issue price for the ordinary shares is recorded as being credited as
fully paid to $0.10 each.
The ordinary shares will rank equally in all respects with other ordinary
shares on issue.
The price of $0.10 per ordinary share proposed to be issued to the directors
under Resolution 4 is the price the directors consider is the fair value of
each ordinary share. The value has been assessed by them on the basis of the
prevailing market price of the shares in the last six months. There were
three share trades totalling 28,273 shares in the last month. The highest
price was 16 cents a share and the lowest was at 15 cents a share. The value
of those trades totalled $4,500.95.
The directors note that the certificate of the independent accountant
referred to in the section on the issue of Preference Shares to related
parties is on the basis of an ordinary share value of 10 cents per share.
The ordinary shares to be issued to Craig under this resolution represent
0.63% of the ordinary shares currently on issue. If all were issued, and
added to his holding at the date of this Notice (with his Associated
Persons), he would hold 1.30% of ordinary shares on issue (taking into
account the issue of shares under resolution 4 and resolution 5). Please note
that a further holding may be added if he converts any Preference Shares
issued to him into ordinary shares, as set out in the Explanatory Note to
resolution 7.
The ordinary shares to be issued to Bruce under this resolution represent
0.42% of the ordinary shares currently on issue. If all were issued, and
added to his holding at the date of this Notice (with his Associated
Persons), he would hold 19% of ordinary shares on issue (taking into account
the issue of shares under resolution 4 and resolution 5). Please note that a
further holding may be added if he converts any Preference Shares issued to
him into ordinary shares, as set out in the Explanatory Note to resolution 7.
Bruce is aware that if he receives Preference Shares, he will need to
consider the Takeovers Code before converting them to ordinary shares.
Resolution 5: Issue Shares to Managing Director and Finance Director The
proposed ordinary resolution requiring approval by a 50% majority of those
shareholders entitled to vote and voting on the resolution is:
"The shareholders of Connexionz Limited hereby authorise and approve the
issue of up to 900,000 ordinary shares to Richard Arnold Riley and up to
750,000 ordinary shares to Anthony Norman Len Joe Kan, being shares having an
issue price of $0.10 each, credited as fully paid, and ranking equally in all
respects with other ordinary shares on issue. Such shares are to be issued at
a time the board considers appropriate after 31 March 2009, but no later than
twelve months after the passing of this resolution. The shares shall be
issued for services as Executives of Connexionz Limited for the financial
year ended 31 March 2009. If Richard Arnold Riley and Anthony Norman Len Joe
Kan are not Executives of Connexionz Limited for the full period ending on 31
March 2009, the number of shares they respectively receive in accordance with
this resolution shall abate pro rata according to the relevant period of time
that the relevant person is an Executive during the financial year ended 31
March 2009."
Richard Riley and Tony Kan and their respective Associated Persons (as
defined in the NZAX Listing Rules) are not entitled to vote on this
resolution. The Associated Persons are Islay Investments Limited and
Resolutionz 101 Limited.
Explanatory Note
The Company's investment in a UK based Joint Venture Company late in 2006,
has put considerable pressure on Robert Burke.
Connexionz holds a contract to manage the joint venture with its UK partners.
The offset in time zones between New Zealand and the UK has meant that the
combined operation has resulted in a heavy time commitment for Robert and a
workload to match. On top of that, Connexionz also has systems deployed in
New Zealand, Australia, China, Brazil, USA and Europe.
To spread this workload, current directors Richard Riley and Tony Kan were
appointed Managing Director and Finance Director respectively, in 2006. With
increasing numbers of enquiries to service, Robert Burke has continued to
champion the sales and marketing functions of the group as Sales Director.
Richard and Tony have agreed to accept up to 50% of their remuneration as
Managing Director and Finance Director in ordinary shares, being 900,000
ordinary shares for Richard Riley with an issue price of $0.10 each (or
$90,000 worth of shares) and 750,000 ordinary shares for Tony Kan with an
issue price of $0.10 each (or $75,000 worth of shares). The balance of their
remuneration is paid in cash based on an hourly rate agreed with the Company,
with the number of hours they spend capped at a level agreed with the
Company. These amounts are a cap rather than a defined salary, and the actual
number of shares issued and amounts paid will depend on the number of hours
worked as approved by the board.
The issue price for the ordinary shares is recorded as being credited as
fully paid to $0.10 each. The ordinary shares will rank equally in all
respects with other ordinary shares on issue.
The price of $0.10 per ordinary share proposed to be issued to Richard,
Robert and Tony under Resolution 5 is the price the directors consider is the
fair value of each ordinary share. The value has been assessed by them on the
basis of the prevailing market price of the shares in the last six months.
There were three share trades totalling 28,273 shares in the last month. The
highest price was 16 cents a share and the lowest was at 15 cents a share.
The value of those trades totalled $4,500.95.
The directors note that the certificate of the independent accountant
referred to in the section on the issue of Preference Shares to related
parties is on the basis of an ordinary share value of 10 cents per share.
The ordinary shares to be issued to Richard under this resolution represent
3.8% of the ordinary shares currently on issue. If all were issued, and added
to his holding at the date of this Notice (with his Associated Persons), he
would hold 11% of ordinary shares on issue (taking into account the issue of
shares under resolution 4 and resolution 5). Please note that a further
holding may be added if he converts any Preference Shares issued to him into
ordinary shares, as set out in the Explanatory Note to resolution 7.
The ordinary shares to be issued to Tony under this resolution represent
3.17% of the ordinary shares currently on issue. If all were issued, and
added to his holding at the date of this Notice (with his Associated
Persons), he would hold 5.11% of ordinary shares on issue (taking into
account the issue of shares under resolution 4 and resolution 5). Please note
that a further holding may be added if he converts any Preference Shares
issued to him into ordinary shares, as set out in the Explanatory Note to
resolution 7.
Resolution 6: Approval for Offer of Preference Shares to Eligible Persons
The proposed resolution requiring 75% majority of those shareholders entitled
to vote and voting on this resolution is:
"That the company be authorised to issue up to 1 million Preference Shares on
the terms set out in the Terms of Preference Shares attached to the Notice of
Meeting dated 16 September 2008."
All directors and persons who may be offered Preference Shares, and their
Associated Persons (as defined in the NZAX Listing Rules) are excluded from
voting on this resolution. The board advises that this excludes all of those
shareholders holding the 20 largest shareholdings in Connexionz as at the
date of this Notice. The board will identify all such persons excluded from
voting on this resolution no later than 23 September 2008 in accordance with
the NZAX Listing Rules.
Explanatory Note
Connexionz has NZD5.2 m of new orders on its books as at the date of this
Notice.
Confirmed order Order value
The City of Santa Clarita USD 2,772,000 NZD 3,600,000
University of Virginia USD 450,000 NZD 584,400
Reading GBP 370,000 NZD 997,300
Total NZD 5,181,700
It has reached the second stage in a tender process for a contract worth
approximately NZD 2 million, and is one of three remaining tenderers. This
contract is expected to be awarded in the next six months, although it must
be kept in mind that it is a local authority contract and subject to
political processes that could delay this process, or even terminate the
tender.
Connexionz's success has created a need for further working capital as it
seeks to fulfil these new orders, build on its existing sales resource and
increase its capacity to deploy systems simultaneously.
The directors have given a great deal of consideration as to how Connexionz
should raise the funds it requires at the moment and have been developing a
capital raising programme in confidence over some time, including by
researching different funding options, considering what would be a product
that will be attractive in the current economic climate, considering who to
seek funds from, and informal prospecting to test the attractiveness of
various options.
In particular it was considered whether Connexionz should raise funds through
another rights issue. The board has decided that the offer of Preference
Shares should not be conducted as a rights issue because the board is of the
view that, having conducted a rights issue with limited uptake in 2007, there
is not likely to be the level of further investment achieved to justify the
expense and time involved in preparing a prospectus (even the limited
prospectus under various exemptions), and the board wishes to seek investment
from persons outside of the current shareholding that have expressed interest
in the company as well as from some shareholders who meet the definition of
"eligible persons" in the Securities Act 1978 and are able to assess an
investment in Connexionz in the current economic environment.
Connexionz has new contracts and thus needs to obtain working capital in a
timely and cost effective manner. The offer of Preference Shares to eligible
persons is, in the board's view, the most appropriate way for Connexionz to
raise funds having regard to its circumstances and the current economic
climate.
The board decided that Preference Shares would be the most appropriate form
of security, after taking into consideration current securities market and
economic conditions as well as Connexionz's business plan and the certificate
provided by an independent chartered accountant. Preference Shares give
holders a fixed dividend rate and the benefit of an increase in the price of
ordinary shares, because of the ability to convert to ordinary shares. The
board considered both of these aspects to be vital to securing an adequate
uptake of Preference Shares to justify the issue costs, and fulfil the
funding needs of the company.
The Company proposes to issue up to 1 million preference shares to "eligible
persons" as defined in section 5(2CC) to section 5(2CF) of the Securities Act
1978. "Eligible persons" include:
Persons who are wealthy, in that an independent chartered accountant
certifies, no more than six months before the offer is made, that the person
has net assets of at least $2 million or had an annual gross income of at
least $200,000 for each of the last two financial years;
Persons who are experienced in investing money or experienced in the industry
or business to which the security relates, to the satisfaction of an
independent financial service provider, who must take into account certain
factors specified in the Securities Act 1978.
The Preference Shares are likely to be offered to top 20 shareholders (by
holding size), directors and certain Associated Persons of them (as defined
in the NZAX Listing Rules), and other persons who have expressed an interest
in investing in Connexionz, who are "eligible persons". People who have
expressed an interest in investing in Connexionz include private investment
funds and business contacts of Connexionz.
In summary, the terms of the Preference Shares are to be as follows:
Issue price: $1 per share
Dividend yield: 12% pa (gross, including imputation credits, if any)
Dividends to be paid: twice yearly
Dividends are non-cumulative
If a dividend on Preference Shares has not been paid in full for any reason
within 20 Business Days after the relevant dividend payment date, Connexionz
is restricted from making any distribution (including to holders of ordinary
shares) without approval of a special resolution, unless: The next four
consecutive Preference Share dividends scheduled have been paid in full; or
an optional Preference Share dividend has been paid to all holders of
Preference Shares equal to the aggregate unpaid amount of any unpaid
Preference Share dividends which were scheduled to be paid in the 12 months
prior to the date of payment of the optional dividend; or all Preference
Shares have been redeemed or converted to ordinary shares.
At any dividend payment date holders may convert their Preference Shares to
ordinary shares ranking equally with all other ordinary shares on issue, at a
ratio of 10 ordinary shares for every Preference Share held - and this could
result in a maximum total of up to 10,000,000 ordinary shares being issued by
conversion of Preference Shares The Company may redeem the Preference Shares
at their issue price no earlier than 1 October 2011, and thereafter on
dividend payment dates Offer opens: 1 October 2008 (subject to directors'
discretion to amend opening date) Offer closes: 31 October 2008 (subject to
directors' discretion to amend closing date) Allotment will be no later than
five business days of the closing date, provided that the issue of Preference
Shares must be completed within 12 months of the resolution approving the
issue of Preference Shares In the event of a liquidation, preference share
holders would rank behind creditors but ahead of ordinary share holders, for
the issue price of the Preference Shares Preference Shares are non-voting
shares (subject to the rights in section 117 of the Companies Act 1993)
Preference Shares are not intended to be quoted on the NZX at this stage
The board would reserve the right to amend the timing of the offer depending
on market conditions prevailing at the time, but in any case the offer will
be open for no longer than 12 months after the date of the resolution of
shareholders approving the offer The offer, issue, conversion, redemption and
payment of dividends in respect of the Preference Shares is subject to and
must be in compliance with the requirements of the Companies Act 1993,
Securities Act 1978, Securities Markets Act 1988, Takeovers Act 1993 and
Takeovers Code, NZAX Listing Rules, the Terms of the Preference Shares and
the Constitution of Connexionz Limited
The full terms of the Preference Shares are in the attached "Terms of
Preference Shares"
Connexionz has not previously made any distributions to holders of ordinary
shares. The board does not see any immediate prospect of paying dividends on
ordinary shares, given the need for Connexionz to reinvest in its growth, and
the obligation to pay dividends on Preference Shares. Holders of ordinary
shares should bear in mind that if Connexionz borrowed money from a lender,
there would be a financial commitment similar to the commitment to dividends
on the Preference Shares. Connexionz already has loan facilities with Westpac
New Zealand Limited. The board assessed other lending facilities that might
be available to it, and determined that the issue of Preference Shares was a
better option for Connexionz.
Resolution 7: Approval for Related Parties to participate in the issue of
Preference Shares to Eligible Persons The proposed resolution requiring 50%
majority of those shareholders entitled to vote and voting on this resolution
is:
"Subject to Resolution 6 being approved by Shareholders, that the persons
named below, being Related Parties (as defined in NZAX Listing Rule 9.2.3),
be allowed to participate in the issue of Preference Shares to eligible
persons set out in Resolution 6 of this Notice by subscribing for Preference
Shares in cash or by the conversion of amounts owing to them by the Company
at the rate of one Preference Share for every $1 in debt reduction. The
relevant Related Parties are:
Craig Boyce
Extra Strength No. 164 Limited
Richard Riley
Resolutionz 101 Limited
Bruce Sheppard
Southern Hills Imperial Timber (1932) Pty Limited
Robert Burke
Lorraine Gray
Allan Coull
Tony Kan
Kan & Co. Limited
Islay Investments Limited"
All the related parties named in the resolution above and their Associated
Persons are excluded from voting on this resolution.
Explanatory Note
Some of the persons that may subscribe for Preference Shares are Related
Parties under the NZAX Listing Rules, and shareholder approval is required
for them to participate in the issue of Preference Shares.
The directors and persons associated with them (as set out below) are owed
money by Connexionz in the form of unpaid fees or remuneration and bridging
finance provided until the Offer of Preference Shares could be approved
("Loans").
The directors are seeking to convert these Loans into Preference Shares
according to the following schedule of commitments:
Director Participation amount (NZD)
(Maximum) Director and Associated Person interest in ordinary shares if
Preference Shares subscribed for and converted to ordinary shares* (%)
Craig Boyce (Extra Strength No. 164 Ltd) 10000 0.93
Richard Riley (Resolutionz 101 Ltd) 40000 7.90
Bruce Sheppard (Southern Hills Imperial Timber (1932) Pty Ltd) 100000 16.34
Robert Burke (& related parties) 19000 15.01
Tony Kan (Kan & Co. Ltd) 20000 4.23
Total 189000 40.83
Assumes shares under resolutions 4 and 5 have been issued and all Preference
Shares held by all holders are converted to ordinary shares, adding
10,000,000 ordinary shares to the existing 23,634,385 on issue. There may be
less Preference Shares converted at any time, resulting in less ordinary
shares on issue than assumed, and a higher potential percentage holding by
the director (directly or by association through the companies named). There
may also be further ordinary shares issued, for example as director shares
and executive director remuneration for future years, which will change the
percentages. Director and Associated Person interests are as at the date of
this notice and associations may change over time.
The Preference Shares have not yet been offered, but the directors have
indicated to the Company that if they were offered, the above would be their
commitment to Preference Shares.
Each $1 of a director Loan would convert to one Preference Share.
The details of the Loans that are to be converted to Preference Shares are as
follows:
Director Debts owed for services rendered Directors' loans (cash advances)
Material Terms of Loan
Craig Boyce (Extra Strength No. 164 Ltd) $10000 Interest free, repayable on
demand
Richard Riley (Resolutionz 101 Ltd) $40000 12.5% per annum, repayable on
demand
Bruce Sheppard (Southern Hills Imperial Timber (1932) Pty Ltd) $100000
Interest free, repayable on demand
Robert Burke $19000 Interest free, repayable on demand
Tony Kan (Kan & Co. Ltd) $20000 Interest free, repayable on demand
Loans were taken from directors rather than commercial lenders because this
was expedient rather than arranging loan facilities when the capital raising
programme was under development. Clearly the Loans are on terms that are
advantageous to the Company. None of the Loans were Material Transactions
with Related Parties (as defined in the NZAX Listing Rules) when entered
into.
All of the directors are included in the offer and therefore there is no
independent director who can give a certificate under NZAX Listing Rule
9.2.5(b) that the terms of the transaction are fair and reasonable to the
shareholders and in the best interests of the Company. However a similar
certificate is required of the directors in accordance with the Companies Act
1993 and will be given under that Act before any Preference Shares are
issued.
Connexionz has been granted a waiver of NZAX Listing Rule 9.2.5(b) on the
condition that a certificate from an independent accountant is given that the
terms of the transaction are fair and reasonable to the shareholders and in
the best interests of Connexionz. A copy of this certificate is included with
this Notice.
Disqualified Voters
Connexionz Limited will take steps to identify any disqualified voters no
later than five Business Days (as defined in the NZAX Listing Rules) before
the Meeting. Currently the persons disqualified from voting are as identified
in the section on each resolution. Connexionz Limited will supply a list of
any other disqualified voters that are determined to security holders on
request. Any objections to such a list will be disregarded unless notified to
Connexionz Limited at least one full Business Day (as defined in the NZAX
Listing Rules) before the time fixed for the commencement of the Meeting.
VOTING BY PROXY
A shareholder may exercise the right to vote either by being present in
person or by proxy.
A proxy for a shareholder is entitled to attend and be heard at a meeting of
shareholders as if the proxy were the shareholder.
A proxy need not be a shareholder.
A proxy must be appointed by notice in writing signed by the shareholder
which must state whether the appointment is for a particular meeting or a
specified term not exceeding 12 months and a copy of which must be produced
to the Company before the start of the meeting.
No proxy is effective in relation to a meeting unless it is produced to the
Company not later than 48 hours before the start of the meeting.
Proxies may be faxed or posted to Connexionz AGM, c/- Link Market Services
Limited, Box 384, Ashburton, New Zealand; Fax number +64 3 308 1311 to be
received by 5:30pm Sunday 28 September 2008 (although proxies delivered by
post will in effect need to be provided by 5.30 pm (New Zealand time) Friday
26 September 2008).
