Ann: MEETING: SPY: Special Meeting of Shareholder

• Release Date: 14/01/13 14:14
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SPY
14/01/2013 12:14
MEETING

REL: 1214 HRS Smartpay Holdings Limited

MEETING: SPY: Special Meeting of Shareholders

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
SMARTPAY HOLDINGS LIMITED

Notice is hereby given that a Special Meeting of Shareholders of SmartPay
Holdings Limited ("SmartPay" or "the Company") will be held at The Spencer on
Byron Hotel, 9-17 Byron Avenue, Takapuna, Auckland on Wednesday 30th January
2013 commencing at 10am.

ITEMS OF BUSINESS

A. Chairman's welcome and introduction.

B. Ordinary resolutions.

 To consider and, if thought fit, to pass the following ordinary resolutions:

Ratification of Issue of Shares - Pakihi

1. That the issue of 8,695,652 shares in the Company at $0.115 per share to
the trustees of the Pakihi Pension Scheme be approved and ratified.

 (See Explanatory Note 1)

Ratification of Issue of Shares - Pengana

2. That the issue of 13,043,478 shares in the Company at $0.115 per share to
the Pengana Australian Equities Fund be approved and ratified.

 (See Explanatory Note 2)

Ratification of Issue of Shares - Far Corporate Services

3. That the issue of 600,000 shares in the Company at $0.115 per share to Far
Corporate Services Limited be approved and ratified.

 (See Explanatory Note 3)

Ratification of Issue of Shares - Viaduct Limited

4. That the issue of 15,400,000 shares in the Company at $0.15 per share to
Viaduct Limited be approved and ratified.

 (See Explanatory Note 4)

Issue of Options - Mark Unwin

5. That the Company be authorised to issue to Mark Unwin:

(a) 2 million options to acquire ordinary shares in the Company, exercisable
at $0.20 per share at any time after vesting but on or before 31 December
2017; and

(b) 2 million options to acquire ordinary shares in the Company, exercisable
at $0.30 per share at any time after vesting but on or before 31 December
2019.

  (See Explanatory Note 5)
Issue of Options - Martyn Pomeroy

6. That the Company be authorised to issue to Martyn Pomeroy:

(a) 2 million options to acquire ordinary shares in the Company, exercisable
at $0.20 per share at any time after vesting but on or before 31 December
2017; and

(b) 2 million options to acquire ordinary shares in the Company, exercisable
at $0.30 per share at any time after vesting but on or before 31 December
2019.

 (See Explanatory Note 6)

Approval of Issue of Shares - Persons Subscribing in NZD

7. That the Company be authorised to issue 9,966,667 shares in the Company at
$0.15 per share to certain institutional investors in New Zealand and certain
institutional and private investors in Australia.

 (See Explanatory Note 7)

Approval of Issue of Shares - Persons Subscribing in AUD

8. That the Company be authorised to issue shares in the Company at $0.15 per
share to certain institutional and private investors in Australia for
aggregate consideration proceeds of AUD$1,780,000.

 (See Explanatory Note 8)

By Order of the Board

Ivan Jeremy Hammerschlag, Chairman
11 January 2013

ORDINARY RESOLUTIONS

An ordinary resolution is a resolution passed by a simple majority of more
than 50% of votes of shareholders who are entitled to vote on the resolution
and who exercise their right to vote.

SHAREHOLDERS ENTITLED TO ATTEND AND VOTE

Pursuant to section 125 of the Companies Act 1993, the Board has determined
that, for the purposes of voting at the Special Meeting, only those persons
whose names are recorded in the share register of the Company as at 5pm (New
Zealand time) on Friday 25th January 2013 being a day which is not more than
20 working days before the Special Meeting will be entitled to exercise the
right to vote at the meeting.

VOTING RESTRICTIONS

Certain persons who will or may benefit from certain resolutions are
disqualified from voting by the NZSX Listing Rules.

Resolution 1
The subscribers for the issue of the shares, being the Trustees of the Pakihi
Pension Scheme and their associated persons may not vote on resolution 1.

Resolution 2
The subscribers for the issue of the shares, being the Pengana Australian
Equities Fund and its directors, shareholders and associated persons may not
vote on resolution 2.

Resolution 3
The subscribers for the issue of the shares, being Far Corporate Services
Limited and its directors, shareholders and associated persons may not vote
on resolution 3.

Resolution 4
The subscribers for the issue of the shares, being Viaduct Limited and its
directors, shareholders and associated persons may not vote on resolution 4.

Resolution 5
Neither Mark Unwin, nor any associated person of his may vote on resolution
5.

Resolution 6
Neither Martyn Pomeroy, nor any associated person of his may vote on
resolution 6.

Resolution 7
The subscribers for the issue of the shares, being those persons listed in
Part A of the Schedule to this notice of meeting, and their respective
directors, shareholders and associated persons may not vote on resolution 7.

Resolution 8
The subscribers for the issue of the shares, being those persons listed in
Part B of the Schedule to this notice of meeting, and their respective
directors, shareholders and associated persons may not vote on resolution 8.

PROXIES

Any person who is entitled to attend and vote at the Special Meeting may
appoint another person as his or her proxy to attend and vote instead of him
or her. A proxy need not be a shareholder of the Company. You may appoint the
"Chairman of the Meeting" as your proxy if you wish. A proxy form accompanies
this Notice of Meeting.

The Chairman of the Meeting intends to vote any discretionary proxies given
to them in favour of resolutions 1 to 8 which are the subject of this Notice
of Meeting.

Any discretionary proxies given to a person who is disqualified from voting
on a resolution will not be valid. However, votes cast by a disqualified
person as proxy in accordance with express instructions as to how to vote
will be valid and accepted in accordance with NZSX Listing Rule 9.3.3
provided that the person who appointed the proxy is not themselves
disqualified from voting on the applicable resolution.

Proxy Forms must be lodged at the offices of the Company's share registry,
Computershare Investor Services Limited, Level 2, 159 Hurstmere Road,
Takapuna, Auckland (Private Bag 92-119, Auckland 1142), not less than 48
hours before the commencement of the Meeting, being no later than 10am (New
Zealand time) on Monday 28th January 2013.

EXPLANATORY NOTES

Explanatory Note 1:
Ratification of Issue of Shares - Pakihi Pension Scheme NZSX Listing Rule
7.3.5 permits companies listed on the NZSX to issue equity securities without
obtaining shareholder approval where the total number of equity securities
issued and all other equity securities of the same class issued pursuant to
that Rule during the 12 month period preceding the date of issue (or the
period from the date of issue if shorter) does not exceed 20% of the total
number of equity securities on issue at the commencement of that period.
NZSX Listing Rule 7.3.5 also allows companies listed on the NZSX to renew
this capacity to issue securities within the 20% limit, when it has been
used, by obtaining subsequent shareholder ratification of issues which have
already been made.
The company wishes to ratify the issue of certain shares by the Company so
that it may issue further equity securities under NZSX Listing Rule 7.3.5 in
the future.
Pursuant to certain Convertible Note Subscription Agreements between the
Company (as issuer) and the Trustees of the Pakihi Pension Scheme ("Pakihi")
dated 15 December 2010 and 30 November 2011 (as amended) (the "Convertible
Note Agreements"), the Company issued to Pakihi:
(a) 3,000,000 notes convertible into shares in the Company at 15 cents per
share; and
(b) 1,000,000 notes convertible into shares in the Company at 10 cents per
share.
Under a subscription agreement between the Company (as issuer) and Pakihi
dated 10 July 2012, Pakihi agreed to convert the 1,000,000 10 cent
convertible notes into 10,000,000 ordinary shares in the company and to
subscribe for an additional 8,695,652 fully paid ordinary shares in the
capital of the Company at 11.5 cents per share for an aggregate consideration
of $1,000,000. In conjunction with this subscription the 3,000,000 of 15 cent
convertible notes were redeemed in full by the Company. The ordinary shares
issued to Pakihi, both upon the conversion and pursuant to the subscription,
rank equally with all other issued ordinary shares in the capital of the
Company.
The issue price of 11.5 cents per share represented a premium of
approximately 7.9% to the 20 day VWAP of the Company's ordinary shares as at
10 July 2012 (being the trading day immediately prior to the announcement of
the issue).
The $1,000,000 subscription proceeds received from Pakihi for the 8,695,652
shares were applied by the Company towards the redemption of the 3,000,000 of
15 cent convertible notes held by Pakihi.
The 8,695,652 shares in respect of which ratification is sought represent
approximately 2.504% of the total equity securities (both ordinary shares and
options) in the Company in issue as at the date of this notice of meeting.
If this resolution is not approved by shareholders, the Company will not be
able to issue more equity securities than it is currently permitted to under
the NZSX Listing Rules.

Explanatory Note 2:
Ratification of Issue of shares - Pengana Australian Equities Fund
Ratification is sought under NZSX Listing Rule 7.3.5 (described above in
Explanatory Note 1) which imposes restrictions on the issue of equity
securities without shareholder approval in any 12 month period. The Company
wishes to ratify the issue of certain shares by the Company so that it may
issue further equity securities under NZSX Listing Rule 7.3.5 in the future.
Under a subscription agreement entered into between the Company and Pengana
Australian Equities Fund ("Pengana") dated 2 July 2012 (the "Subscription
Agreement"), Pengana agreed to subscribe for 13,043,478 fully paid ordinary
shares in the capital of the Company at 11.5 cents per share for an aggregate
consideration of $1,500,000. The ordinary shares issued to Pengana pursuant
to this subscription rank equally with all other issued ordinary shares in
the capital of the Company.
The issue price of 11.5 cents per share represented a premium of
approximately 7.6% to the 20 day VWAP of the Company's ordinary shares as at
6 July 2012 (being the trading day immediately prior to the announcement of
the issue).
The $1,500,000 subscription proceeds received from Pengana for the 13,043,478
shares were applied by the Company in repayment of indebtedness as part of
the refinance of the debt facilities of the Smartpay group which took place
in July 2012.
The 13,043,478 shares in respect of which ratification is sought represent
approximately 3.755% of the total equity securities (both ordinary shares and
options) in the Company in issue as at the date of this notice of meeting.
If this resolution is not approved by shareholders, the Company will not be
able to issue more equity securities than it is currently permitted to under
the NZSX Listing Rules.

Explanatory Note 3:
Ratification of Issue of shares - Far Corporate Services Ratification is
sought under NZSX Listing Rule 7.3.5 (described above in Explanatory Note 1)
which imposes restrictions on the issue of equity securities without
shareholder approval in any 12 month period. The company wishes to ratify the
issue of certain shares by the Company so that it may issue further equity
securities under NZSX Listing Rule 7.3.5 in the future.
On 6 July 2012 the Company issued 600,000 ordinary shares in the capital of
the Company to Far Corporate Services Limited ("Far") in payment for services
provided by Far under a mandate entered into between the Company and Far
dated 7 April 2011 ("Mandate"). The ordinary shares issued to Far rank
equally with all other issued ordinary shares in the capital of the Company.
Under the terms of the Mandate, Far provided corporate advisory services to
the Company in connection with financial strategy, capital raising and
acquisitions.
The terms and conditions of issue of the 600,000 shares issued to Far on 6
July 2012 were that the shares:
o Were issued and credited as fully-paid to $0.115 per share; and
o Were issued in payment for the services provided under the Mandate (as
described above).
The issue price of 11.5 cents per share represented a premium of
approximately 7.6% to the 20 day VWAP of the Company's ordinary shares as at
6 July 2012 (being the trading day immediately prior to the announcement of
the issue).
The 600,000 shares in respect of which ratification is sought represent
approximately 0.173% of the total equity securities (both ordinary shares and
options) in the Company in issue as at the date of this notice of meeting.
If this resolution is not approved by shareholders, the Company will not be
able to issue more equity securities than it is currently permitted to under
the NZSX Listing Rules.

Explanatory Note 4:
Ratification of Issue of shares - Viaduct Limited Ratification is sought
under NZSX Listing Rule 7.3.5 (described above in Explanatory Note 1) which
imposes restrictions on the issue of equity securities without shareholder
approval in any 12 month period. The company wishes to ratify the issue of
certain shares by the Company so that it may issue further equity securities
under NZSX Listing Rule 7.3.5 in the future.
On 11 December 2012 the Company entered into an agreement for sale and
purchase of the assets and business of Viaduct Limited by Smartpay Cadmus
Limited (a wholly-owned subsidiary of the Company) (the "Sale and Purchase
Agreement"). Details of the transaction were announced to the market on 12
December 2012. The purchase is due to settle on or about 23 January 2013,
being prior to the date of the Special Meeting of the Company's shareholders
which is the subject of this notice of meeting.  The purchase price for the
business and assets of Viaduct Limited is $16,310,000 (sixteen million, three
hundred and ten thousand dollars) plus GST.  The purchase price is payable as
to $14,000,000 (fourteen million dollars) by way of a cash payment and as to
$2,310,000 (two million, three hundred and ten thousand dollars) by way of
the issue of 15,400,000 fully paid ordinary shares in the Company to Viaduct
Limited at $0.15 per share.
The shareholders in Viaduct Limited are Martyn Pomeroy (and interests
associated with him), Mark Unwin (and interests associated with him), Shane
Rangihaeta and Colin Kilkolly. Marty Pomeroy and his interests own 43.75% of
the issued shares in Viaduct Limited, Mark Unwin and his interests own 43.75%
of the issued shares and Shane Rangihaeta and Colin Kilkolly own the balance
of the issued shares in Viaduct Limited. Mark Unwin and Marty Pomeroy are
both directors of Viaduct Limited.
The ordinary shares to be issued to Viaduct Limited on settlement will be
issued under the Company's existing headroom under NZSX Listing Rule 7.3.5.
As the shares will be issued after the date of this notice of meeting but
prior to the date of the Special Meeting the subject of this notice of
meeting, the Company is seeking ratification of the issue of these shares
under NZSX Listing Rule 7.3.5. The ordinary shares to be issued to Viaduct
Limited on settlement will rank equally with all other issued ordinary shares
in the capital of the Company from the date of issue.
The issue price of 15 cents per share represents a discount of 14.77% to the
20 day VWAP of the Company's ordinary shares as at 11 December 2012 (being
the trading day immediately prior to the announcement of the purchase of the
business and assets of Viaduct Limited).
The 15,400,000 shares in respect of which ratification is sought represents
approximately 4.434% of the total equity securities (both ordinary shares and
options) in the Company in issue as at the date of this notice of meeting
(and will represent approximately 4.245% of the total equity securities on
issue immediately following the issue of the 15,400,000 ordinary shares to
Viaduct on or about 23 January 2013).
If this resolution is not approved by shareholders, the Company will not be
able to issue more equity securities than it is currently permitted to under
the NZSX Listing Rules.

Explanatory Note 5:
Issue of options to Mark Unwin In accordance with NZSX Listing Rule 7.3.1(a),
a listed company may not issue any equity securities unless either the
precise terms and conditions of the issue of those equity securities have
been approved by an ordinary resolution of shareholders who hold the class of
equity securities to be issued, or the issue is made in accordance with one
of the modes of issue provided in NZSX Listing Rules 7.3.4 to 7.3.11.
Under resolution 5, the shareholders of the Company are being asked to
approve the issue of 4,000,000 options to Mark Unwin, with each such option
entitling the holder to subscribe for one fully paid ordinary share in the
Company. 2,000,000 of the options are exercisable at $0.20 per share after
vesting but on or before 5.00pm on 31 December 2017 (the "2017 Incentive
Options") and 2,000,000 are exercisable at $0.30 per share after vesting but
on or before 5.00pm on 31 December 2019 (the "2019 Incentive Options"). The
options to be issued to Mark Unwin will be equity securities for the purposes
of the NZSX Listing Rules and as such the issue of the options is subject to
approval by shareholders of the Company by ordinary resolution.
Mark Unwin is one of the founding owners and majority shareholders of Viaduct
Limited and will be employed full time by Smartpay Cadmus Limited as a
General Manager from completion of the purchase of the business and assets of
Viaduct Limited (refer to explanatory note 4 above). The 4,000,000 share
options are to be issued to Mark Unwin as part of his employment package and
are intended to incentivise him to further improve the performance of the
Company for the benefit of all shareholders. The Board of the Company
considers that the total remuneration payable to Mark Unwin under his
employment agreement (including the issue of the 2017 Options and the 2019
Options) is in line with the market rate, and that the employment agreement
is negotiated on an arm's length, commercial basis.
The material terms of the 2017 Incentive Options and the 2019 Incentive
Options (together, the "Options") will be as follows:
(a) the 2017 Incentive Options will vest automatically on 31 December 2015
and the 2019 Incentive Options will vest automatically on 31 December 2017,
subject to Mark Unwin remaining an employee of the Smartpay group at the
applicable date;
(b) the Options will vest earlier in certain limited circumstances, including
in the event of a takeover, amalgamation, scheme of arrangement or change of
control of the Company or if Mark Unwin ceases to be an employee of the
Smartpay group by reason of death, total / permanent disablement or if his
employment is terminated other than for cause;
(c) the Options will be exercisable immediately following the date of
vesting;
(d) the Options will automatically lapse:
(i) if they are not exercised before the relevant expiry date;
(ii) on the date falling three months after the date on which Mark Unwin
ceases to be an employee of the Smartpay group;
(e) the exercise price (being $0.20 in respect of each 2017 Incentive Option
and $0.30 in respect of each 2019 Incentive Option) will be payable in full
at the time of exercise;
(f) the Options will be non-transferrable other than to (i) a spouse of Mark
Unwin or (ii) the trustee(s) of a trust in which Mark Unwin is a beneficiary;

(g) the shares issued upon exercise of the Options will rank equally with
existing ordinary shares in the Company from the date of issue;
(h) if the Company makes a bonus issue of shares prior to the expiry of the
exercise of the Options, the number of securities over which an Option may be
exercised will be increased by the number of securities which the holder of
the Option would have received if that Option had been exercised before the
record date for the bonus issue;
(i) if there is a pro rata issue (other than a bonus issue) to the holders of
shares, the exercise price of each Option will be adjusted in accordance with
the formula set out in NZSX Listing Rule 8.1.7;
(j) if, prior to the expiry or exercise of the relevant options, there is a
reconstruction (including consolidation, subdivision, reduction or return) of
the issued capital of the Company, other than a bonus issue or a pro-rata
issue of the kind referred to in (i) or (h), then the number of shares over
which an option is exercisable or the exercise price of those options or both
shall be recalculated (as appropriate) by the board of the Company, having
regard to the Listing Rules, in a manner which will not result in any benefit
being conferred on the holders of the options which are not conferred on
shareholders as a whole and which will not result in the optionholder being
adversely affected; and
(k) if, prior to the expiry of the options, a resolution for a shareholders'
voluntary winding up of the Company is proposed (other than for the purpose
of a reconstruction or amalgamation) the Board shall give written notice to
the optionholder of the proposed resolution. The optionholder may, during the
period referred to in the notice, exercise the options to the extent that
they have then vested.
The 2 million 2017 Incentive Options and 2 million 2019 Incentive Options to
be issued under Resolution 5 (if approved) represent approximately 1.152% of
the total equity securities (both ordinary and options) in the Company in
issue as at the date of this notice of meeting. If all of the Options are
exercised in due course, the Company will receive an additional $1 million of
paid up share capital. The Options will be issued to Mark Unwin within 30
days of the commencement of Mark Unwin's employment with Smartpay Cadmus
Limited which employment is expected to commence on 24 January 2013.
The Company is seeking approval of shareholders to issue the 2 million 2017
Incentive Options and 2 million 2019 Incentive Options to Mark Unwin.
The board considers the proposed grant of options to Mark Unwin to be
reasonable in the circumstances, given the necessity to ensure the
integration of the Viaduct Limited business into the Smartpay group and to
drive the combined New Zealand operations going forward.
If this resolution is not approved by shareholders, the Company will likely
proceed to issue the Options under available headroom under NZSX Listing Rule
7.3.5 in accordance with its obligations under the employment agreement to be
entered into with Mark Unwin on settlement of the purchase of the business
and assets of Viaduct Limited.

Explanatory Note 6:
Issue of options to Martyn Pomeroy In accordance with NZSX Listing Rule
7.3.1(a), a listed company may not issue any equity securities unless either
the precise terms and conditions of the issue of those equity securities have
been approved by an ordinary resolution of shareholders who hold the class of
equity securities to be issued, or the issue is made in accordance with one
of the modes of issue provided in NZSX Listing Rules 7.3.4 to 7.3.11.
Under resolution 6, the shareholders of the Company are being asked to
approve the issue of 4,000,000 options to Martyn Pomeroy, with each such
option entitling the option holder to subscribe for one fully paid ordinary
share in the Company. 2,000,000 of the options are exercisable at $0.20 per
share after vesting but on or before 5.00pm on 31 December 2017 (the "2017
Incentive Options") and 2,000,000 are exercisable at $0.30 per share after
vesting but on or before 5.00pm on 31 December 2019 (the "2019 Incentive
Options"). The options to be issued to Martyn Pomeroy will be equity
securities for the purposes of the NZSX Listing Rules and as such the issue
of the options is subject to approval by shareholders of the Company by
ordinary resolution.
As with Mark Unwin, Martyn Pomeroy is one of the founding owners and majority
shareholders of Viaduct Limited and will be employed full time by Smartpay
Cadmus Limited as a General Manager from completion of the purchase of the
business and assets of Viaduct Limited (refer to explanatory note 4 above).
The 4,000,000 share options are to be issued to Martyn Pomeroy as part of his
employment package and are intended to incentivise him to further improve the
performance of the Company for the benefit of all shareholders. The Board of
the Company considers that the total remuneration payable to Martyn Pomeroy
under his employment agreement (including the issue of the 2017 Options and
the 2019 Options) is in line with the market rate, and that the employment
agreement is negotiated on an arm's length, commercial basis.
The material terms of the 2017 Incentive Options and the 2019 Incentive
Options are, in all material respects, identical to those applying to the
options to be issued to Mark Unwin as referred to in explanatory note 5
above.
The 2 million 2017 Incentive Options and 2 million 2019 Incentive Options to
be issued under Resolution 6 (if approved) represent approximately 1.152% of
the total equity securities (both ordinary and options) in the Company in
issue as at the date of this notice of meeting. If all of the Options are
exercised in due course, the Company will receive an additional $1 million of
paid up share capital. The Options will be issued to Martyn Pomeroy within 30
days of the commencement of Martyn Pomeroy's employment with Smartpay Cadmus
Limited which employment is expected to commence on 24 January 2013.
The Company is seeking approval of shareholders to issue the 2 million 2017
Incentive Options and 2 million 2019 Incentive Options to Martyn Pomeroy.
The board considers the proposed grant of options to Martyn Pomeroy to be
reasonable in the circumstances, given the necessity to ensure the
integration of the Viaduct Limited business into the Smartpay group and to
drive the combined New Zealand operations going forward.
If this resolution is not approved by shareholders, the Company will likely
proceed to issue the Options under available headroom under NZSX Listing Rule
7.3.5 in accordance with its obligations under the employment agreement to be
entered into with Martyn Pomeroy on settlement of the sale and purchase of
the business and assets of Viaduct Limited.

Explanatory Note 7:
Approval of Issue of Shares to Persons Subscribing in NZD This resolution is
being put before shareholders under NZSX Listing Rule 7.3.1, which Rule
entitles the Company to issue securities if the terms and conditions of the
issue are approved by an ordinary resolution of the Company's shareholders.
The Company has entered into subscription agreements with certain
institutional investors in New Zealand and has secured commitments from
certain institutional and private investors in Australia to subscribe for a
total of 9,966,667 shares in the Company at 15 cents per share to raise
aggregate subscription proceeds of NZD$1,495,000. The ordinary shares
proposed to be issued to the relevant investors will, if issued, rank equally
with all other issued ordinary shares in the capital of the Company from the
date of issue.
The subscription and issue of the shares to these investors subscribing in
NZD is conditional on the issue of the shares being approved by the Company's
shareholders by ordinary resolution or on the Company's headroom under
Listing Rule 7.3.5 being refreshed (by virtue of the approval of one or more
of the resolutions referred to in explanatory notes 1 to 4 above) to a
sufficient degree to enable the shares to be issued under Listing Rule 7.3.5.
It is anticipated that the relevant shares will be issued within 7 business
days of such approval being obtained or the Company's headroom being
refreshed, as applicable.
It is intended that the subscription proceeds from the issue of the shares
will be applied to reduce the additional bank debt to be drawn down by the
Smartpay group to fund the $14,000,000 cash component of the purchase of the
business and assets of Viaduct Limited.
If this resolution is not approved by shareholders but one or more of the
resolutions referred to in explanatory notes 1 to 4 above are passed so that
the shares can be issued by the Company under Listing Rule 7.3.5, the Company
will proceed to issue the shares under Listing Rule 7.3.5. If this resolution
is not approved by shareholders and the Company does not have sufficient
headroom under Listing Rule 7.3.5 to issue the shares the subscription
agreements/commitments will be terminated and the shares will not be issued.
In this instance the Company will not be able to reduce the bank debt
incurred in connection with the purchase of the business and assets of
Viaduct Limited and the full $14 million of bank borrowings will be repayable
in the normal course in accordance with the terms of the facility agreements
entered into between the Smartpay group and ASB Bank Limited. The Company is
not required to raise additional equity and apply the funds raised in
repayment of a portion of the bank borrowings to be drawn down to complete
the purchase of the business and assets of Viaduct Limited. The board of
directors of the Company simply considered it prudent to raise additional
equity in conjunction with the acquisition. If the additional equity is not
raised and the bank borrowings are not reduced accordingly there will be no
impact on the Company's business other than that the annual interest costs on
borrowings will be higher than they would otherwise be.

Explanatory Note 8:
Approval of Issue of Shares to Persons Subscribing in AUD  This resolution is
being put before shareholders under NZSX Listing Rule 7.3.1, which Rule
entitles the Company to issue securities if the terms and conditions of the
issue are approved by an ordinary resolution of the Company's shareholders.
Smartpay has secured commitments from certain institutional and private
investors in Australia for a total of AUD$1,780,000 of new capital at $0.15
per share. The ordinary shares proposed to be issued to the relevant
investors will, if issued, rank equally with all other issued ordinary shares
in the capital of the Company from the date of issue.
As the subscription proceeds are dominated in Australian dollars, the exact
number of shares to be issued to the relevant subscribers is not known. In
order to calculate the number of subscription shares to be issued to such
subscribers, the subscription amount shall be converted into New Zealand
dollars at the average of the AUD/NZD exchange rate published on the Reserve
Bank of Australia website at 4.00pm (AEDT) on each of the three consecutive
business days ending on the day on which the conditions precedent to the
issue of shares is satisfied.
The subscription and issue of the shares to the persons who have subscribed
in AUD is conditional on the issue of the shares being approved by the
Company's shareholders by ordinary resolution or on the Company's headroom
under Listing Rule 7.3.5 being refreshed (by virtue of the approval of one or
more of the resolutions referred to in explanatory notes 1 to 4 above) to a
sufficient degree to enable the shares to be issued under Listing Rule 7.3.5.
It is anticipated that the relevant shares will be issued within 7 business
days of such approval being obtained or the Company's headroom being
refreshed, as applicable.
It is intended that the subscription proceeds from the issue of the shares
will be applied to reduce the additional bank debt to be drawn down by the
Smartpay group to fund the $14,000,000 cash component of the purchase of the
business and assets of Viaduct Limited.
If this resolution is not approved by shareholders but one or more of the
resolutions referred to in explanatory notes 1 to 4 above are passed so that
the shares can be issued by the Company under Listing Rule 7.3.5, the Company
will proceed to issue the shares under Listing Rule 7.3.5. If this resolution
is not approved by shareholders and the Company does not have sufficient
headroom under Listing Rule 7.3.5 to issue the shares the subscription
agreements will be terminated and the shares will not be issued. In this
instance the Company will not be able to reduce the bank debt incurred in
connection with the purchase of the business and assets of Viaduct Limited
and the full $14 million of bank borrowings will be repayable in the normal
course in accordance with the terms of the facility agreements entered into
between the Smartpay group and ASB Bank Limited. The Company is not required
to raise additional equity and apply the funds raised in repayment of a
portion of the bank borrowings to be drawn down to complete the purchase of
the business and assets of Viaduct Limited. The board of directors of the
Company simply considered it prudent to raise additional equity in
conjunction with the acquisition. If the additional equity is not raised and
the bank borrowings are not reduced accordingly there will be no impact on
the Company's business other than that the annual interest costs on
borrowings will be higher than they would otherwise be.

Explanatory Note 9:
General (a)  The total number of equity securities in respect of which
approval or ratification is sought under resolutions 1 to 8 is 70,546,250,
being approximately 19.478% of the total equity securities (both ordinary
shares and options) currently on issue.
(b) By way of summary, the shares and options to be ratified or issued
pursuant to the resolutions the subject of this Notice of Meeting are as
follows:

Resolution Recipient Number of shares/options Dilutionary impact(1)
Resolution 1 Pakihi Pension Scheme 8,695,652 shares 2.504%
Resolution 2 Pengana Australian Equities Fund 13,043,478 shares 3.755%
Resolution 3 Far Corporate Services Limited 600,000 shares 0.173%
Resolution 4 Viaduct Limited 15,400,000 shares 4.434%
Resolution 5 Mark Unwin 4,000,000 options 1.152%
Resolution 6 Martyn Pomeroy 4,000,000 options 1.152%
Resolution 7 Subscribers listed in Part A of the Schedule to this notice of
meeting 9,966,667 shares 1.727%
Resolution 8 Subscribers listed in Part B of the Schedule to this notice of
meeting 14,840,453 (2) 4.098% (2)
(1) The dilutionary impact is the percentage that the equity securities to be
issued represent of all equity securities in the Company currently on issue
as at the date of this notice of meeting. By way of example, a holding of
1,000,000 ordinary shares in the Company immediately prior to the various
issues of equity securities the subject of resolutions 1 to 8 would have
represented approximately 0.3077% of the total issued equity securities (both
ordinary shares and options) then in issue. After the issue of all of the
equity securities the subject of resolutions 1 to 8 a holding of 1,000,000
ordinary shares in the Company will represent approximately 0.253% of the
total equity securities in issue.
(2) The number of shares and dilutionary impact as stated are based on an
AUD/NZD exchange rate of 1.2506, being the average of the AUD/NZD exchange
rates as published on the Reserve Bank of Australia website over the three
working days ending on 14 December 2012. The actual number of shares to be
issued (and resultant dilutionary impact) will be calculated by reference to
the average of the AUD/NZD exchange rates as published on the Reserve Bank of
Australia website over the three working days prior to the date of the
shareholders meeting.
(c) This Notice of Meeting has been reviewed and approved by NZX Limited. NZX
Limited accepts no liability and takes no responsibility for any statement in
this Notice of Meeting.

SCHEDULE OF SUBSCRIBERS FOR THE SHARE ISSUES THE SUBJECT OF RESOLUTIONS 7 AND
8

Part A - Resolution 7

Winpar Holdings Limited, Stephen Charles Bentley, Natal Nominees Pty Ltd,
Boomgrove Pty Ltd <Taylor Super Fund A/C>, Alice Jeanette McCormick, Mildory
Pty Ltd, Unaval Nominees Pty Ltd <Unaval Retirement Fund A/C>, JBBM P/L
<Julian Ludowici Superfund A/C>, Haydalex Pty Ltd as trustee for Haydalex
Super, Pengana Australian Equities Fund, Mint Asset Management, Milford Funds
Limited, Devon Funds Management Limited, the Aspiring Fund, Gregory L.T.
Baker and Josephine A Baker ATF Family 4 Superannuation and Michael Donald
Anderson.

Part B - Resolution 8

Malcolm Deall & Associates Pty Ltd <EVBC Employees S/F A/C>, Avron Newstadt,
Lead Super P/L as trustee for J.Bloch Staff Retirement Fund, Tracksup Pty
Ltd, Apinto Pty Ltd  <Deven Billimoria Family Trust>, Spinite Pty Ltd, Alan
Meskin, Inge & George Gertler, Kassa Corporation Pty Ltd, P. Kampfner Pty Ltd
as trustee for P.Kampfner Superannuation Fund, Mr Martin James Reed, FM Wolf
Pty Ltd as trustee for Frank Wolf Super Fund, Suburban Holdings Pty Ltd as
trustee for Suburban Superfund Account, Bay  House Investments P/L as trustee
for The Manic Super Fund, Melville Investment Holdings Limited, Errol and
Melanie Bome as trustee for the Bome Superannuation Fund, Shirmic Pty Ltd as
trustee for the Shirmic Superannuation Fund, Savannah Group Pty Ltd as
trustee for Savannah Trust, Rastana Holdings Pty Ltd as trustee for Viviens
Share Trust and River Capital Pty Ltd <River Capital Growth Fund>.
End CA:00232009 For:SPY    Type:MEETING    Time:2013-01-14 12:14:26