CommSoft

Fax transmission

From: Mark Godfrey Pages: Date: CC.

24 January 2002

COMMSOFT GROUP

Please find attached a copy of the EGM Notice and the Explanatory Memorandum

Thanks Mark Godfrey

CFO CommSoft Group DDI 374 3555

NOTICE OF GENERAL MEETING AND EXPLANATORY MEMORANDUM

OF

CommSoft Group Limited $(ACN 091 744 884)$

To be held on:

Friday 24 January 2003 at Unit 19, 7 Roseberry Place, Balmain, New South Wales at 12:00 noon

THIS IS AN IMPORTANT DOCUMENT IF YOU ARE IN DOUBT AS TO WHAT TO DO IN RELATION TO THIS DOCUMENT PLEASE CONTACT YOUR PROFESSIONAL ADVISER

u: vny documents cro documents secretarial 2002 egm final forms.doc

COMMSOFT GROUP LIMITED NOTICE OF GENERAL MEETING

NOTICE IS GIVEN that a General Meeting of Shareholders of the Company, will be held at Unit 19, 7 Roseberry Place, Balmain, New South Wales on Friday 24^th January 2003 at $12$ noon.

Special Business

Approval to Sale of Company Assets $\mathbf{1}$ .

To consider, and if thought fit, pass the following resolution -

"That, for the purposes of ASX Listing Rule 11.2, approval be given to the Company selling its right title and interest in the intellectual property held by the Company in the Brains, CellMaster, CallMaster and NetMaster products to Beacon IT Australia Pty Ltd, as more particularly specified in the Explanatory Memorandum accompanying the Notice of General Meeting in which this resolution is set out."

By Order of the Board

Jeff Zulman Company Secretary 23rd December 2002

Material accompanying this notice 1.

• Explanatory Memorandum setting out details relevant to the business set out in this $\left( 1\right)$ Notice. Terms used in this Notice, including the resolution set out in this Notice, have, unless otherwise defined, the same meanings set out in the Explanatory Memorandum.
• Proxy Form. $(2)$
• Appointment of Corporate Representative. $(3)$

Voting and required majority $\overline{2}$ .

Subject to paragraph 3 below, in accordance with Section 249HA of the Corporations $(1)$ Act, for this resolution to be effective -

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للمستشمة بالرزاز

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• the resolution must be passed at a meeting of which not less than 28 days $(a)$ written notice specifying the intention to propose the resolution has been given (unless consent to short notice has been received); and
• the resolution must be passed by not less than 51% of all the votes cast by $(b)$ Shareholders entitled to vote on the resolution (whether in person or by proxy, attorney or representative).

On a show of hands, subject to paragraph 3 below, every Shareholder has one vote and, on a poll, every Shareholder has one vote for each fully paid Ordinary Share held.

3. Voting Exclusion Statement

• In accordance with ASX Listing Rules 11.2 and 14.11, any votes cast on the resolution $(1)$ set out in this notice by a person who might obtain a benefit if the resolution is passed, unless that benefit is obtained solely in the capacity of a holder of ordinary securities, will be disregarded except as provided in paragraph (2) below.
• The Company will not disregard a vote if it is cast by a person as proxy for a person who $(2)$ is entitled to vote, in accordance with the specific directions on the proxy form indicated by some positive action by the person entitled to vote.

$\boldsymbol{4}$ . Notes

• Pursuant to regulation 7.11.37 of the Corporations Regulations the Company has $(1)$ determined that, for the purposes of this Meeting, all Ordinary Shares in the Company shall be taken to be held by the persons who held Ordinary Shares as registered shareholders at 9:00 a.m. (Australian Eastern Summer Time) on Friday 20^th December 2002 ("Effective Time").
• All holders of Ordinary Shares in the Company as at the Effective Time are entitled to $(2)$ attend and, subject to paragraph 3 above, vote at this Meeting and may appoint a proxy to attend this Meeting and vote in that Shareholder's stead.
• A proxy need not be a Shareholder of the Company. $(3)$
• The proxy form sent to you with this Notice should be used for this Meeting. $(4)$
• Each Shareholder who is entitled to cast 2 or more votes at this Meeting may appoint 2 $(5)$ persons to act as proxies and may specify the proportion or number of votes that each proxy is entitled to exercise. If a Shareholder does not specify the proportion or number of that Shareholder's votes each proxy may exercise, then each proxy will be entitled to exercise half of the votes. An additional proxy form will be supplied by the Company on request.
• In the case of an individual, a proxy must be under the hand of the individual or his or $(6)$ her attorney duly authorised in writing and, in the case of a corporation, a proxy must be executed by the corporation under common seal or under the hand of its duly authorised officer/s or attorney.
• Any Shareholder may, by power of attorney, appoint an attorney to act on his or her $(7)$ behalf and such power of attorney or certified copy must be received by the Company as specified in paragraph $(9)$ .

بأناء المسأعد

$-10$

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• Any corporation which is a Shareholder of the Company may appoint a representative to $(8)$ attend and vote for that corporation at this Meeting. Appointments of representatives by corporations must be received by the Company as specified in paragraph (9) at any time before the time for holding this Meeting, or adjourned meeting, or handed in at the Meeting.
• Proxies and powers of attorneys granted by Shareholders must be received by the $(9)$ Company by no later than 12 noon (Australian Eastern Summer Time) on 22 January $2003$ at $-$
• (a) the Company's Share Registry-Computershare Investor Services Pty. Limited, Level 3, 60 Carrington Street, Sydney, New South Wales, 2000;
• $\mathbf{or}$

(b) by fax at the Company's Share Registry - fax number +61 2 8234 5435.

COMMSOFT GROUP LIMITED EXPLANATORY MEMORANDUM

$\blacksquare$ General

• This Explanatory Memorandum contains information relevant to the business $1.1$ referred to in the Notice of General Meeting of CommSoft Group Limited (ACN 091 744 884) (the "Company") which it accompanies and should be read carefully by Shareholders prior to the General Meeting.
• $1.2$ Further details relating to the resolution are set out below.

$\mathbf{z}$ Special Business

Previous Reference to Sale in AGM $2.1$

At the 2002 AGM, Mr Anthony Howard, the Chairman of the Company, indicated that, based upon a rigorous evaluation of the Company's business in the month preceding the AGM, the Directors had decided to pursue opportunities to exit the Group's main trading operations. It was explained that the state of the market in which the Company operates remains very difficult, and through holding only passive stakes in other trading companies, it was intended the Company would have a more stable platform for the future.

$2.2$ Sale of Company Assets

$2.2.1$ Background

As foreshadowed by Mr Anthony Howard at the AGM, an opportunity has arisen for the Company to sell the intellectual property derived from the Company's Customer Relationship Management and Communications Management Solutions Software.

The Resolution set out in the Notice of General Meeting seeks approval for the purpose of ASX Listing Rule 11.2 to the sale of this intellectual property to Beacon IT Australia Pty Ltd ("Beacon").

$2.2.2$ Details of sale of Company Assets

• (a) The assets owned by the Company and to be sold to Beacon will include:
• The intellectual property held by the Company in the ì. Brains, CellMaster, CallMaster and NetMaster products ("the Software")
• All the software code and the new software code ii. relating to the Software
• Version control material and equipment iii.
• The "Smartnav" customer database system iv. developed by the Company

ه∎شید به این بی

All relevant customer data relating to the Software $\boldsymbol{V}$

سعاقت حسائس بوجريس

EXPLANATORY MEMORANDUM

• Road maps for development of Software vi.
• All other documents relating to the Software vii. including manuals and marketing material (including web based materials)

Collectively, the above are referred to as the "IP".

The IP represents the main undertaking of the Company.

(b) The cash consideration to be paid by Beacon for the IP will be AUD\$400,000, with the first AUD\$100,000 payable within 48 hours of obtaining approval from shareholders of both the Company and Beacon to the sale. The balance of the cash consideration is payable as follows:

\$50,000 on or before $1^st$ April 2003 \$100,000 on or before 30 June 2003 $$50,000$ on or before $1^st$ October 2003 \$100,000 on or before $4^{\text{th}}$ December 2003

• (c) In addition, the Company will receive 20% of the share capital in a new joint venture company ("Newco") to be established with Beacon. This joint venture company will be established to maximise revenues from the sale of products relating to the IP sold to Beacon. One of Newco's three board positions will be allocated to the Company.
• (d) The Company will hold a charge over the IP and a corporate guarantee from Beacon until all payments which are due have been received. In return for the payments and shares, the Company will transfer exclusive ownership rights in the IP to Beacon in perpetuity. This includes the right to modify, develop and sell the products globally without any payments to the Company except as specified in paragraphs (b) and (c) above.
• (e) In addition Beacon has to pay an additional \$90,000 in respect of certain disputed debts owed to the Company by Techtel Group Ltd, the Company's UK distributor. This sum will be paid in two instalments: \$45,000 no later than 48 hours from the time a final agreement is entered into and \$45,000 no later than 30^th June 2003.
• (f) The Company, in recognition of the value of the name CommSoft, will grant Beacon a six-month licence to use the CommSoft trademark. This is to assist in Beacon's sales and marketing of the Software during the transition period.
• (g) During January 2003, or until Beacon takes full control of the IP, the Company will make certain developers available to assist in the orderly transfer of the Software and training of Beacon personnel.

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EXPLANATORY MEMORANDUM

Consequences of sale $2.2.3$

If the proposed sale is completed, the Company's business will be limited to a passive investment in the shares in Newco referred to in paragraph 2.2.2(c). The ASX has informed the Company that if the approval of shareholders is obtained to the proposed sale of the Company's main undertaking, the ASX may consider suspending the quotation of the Company's shares under Listing Rule 12.1.

The need for Shareholder approval $2.2.4$

Chapter 11 of the ASX Listing Rules sets out the requirements a company must satisfy if it proposes a significant change to its activities. Particularly, ASX Listing Rule 11.2 requires that if a company is intending to dispose of its main undertaking, the company must obtain the approval of holders of its ordinary securities. The Company must not enter into an agreement to dispose of this undertaking unless the agreement is conditional on the entity getting that approval.

Recommendation $2.2.5$

The Directors have considered all relevant information relating to the Resolution set out in the Notice of General Meeting, including the matters put to Shareholders at the AGM, and recommend that you vote in favour of the Resolution.

The Directors believe that, if the Company does not proceed with the sale, the ongoing viability of the Company's business will be at risk.

As stated in the Notice of General Meeting, any votes cast by any Shareholders who may benefit if this Resolution is passed, or any of their respective associates, will (except as provided in the Notice of General Meeting) be disregarded.

GLOSSARY OF TERMS

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