Exhibit 10.46

This Mortgage is made on the  

21st   

day of  

December

2007.

BETWEEN:

FRONTIER MORTGAGES PTY LTD ACN 126 509 322 of Level 1, 2 Corporate Court,

 

Bundall QLD

4217.

“Mortgagee”

AND:

IA GLOBAL, INC of Suite 2450, 101 California Street, San Francisco CA 94111 USA.

“Mortgagor”

RECITALS:

A.

The Mortgagor is the legal and beneficial owner of the Shares.

B.

At the request of the Mortgagor, the Mortgagee has agreed to provide financial
accommodation to the Mortgagor in accordance with the Transaction Documents.

C.

The Mortgagor considers that by providing this Mortgage there will be a
commercial benefit flowing to the Mortgagor.

THE PARTIES COVENANT AND DECLARE AS FOLLOWS:

1.

DEFINITIONS AND INTERPRETATION

1.1

Definitions

In this Mortgage, unless the subject matter or context otherwise require:

“Agreement Date” means the date specified as such in the Reference Schedule, or
if not specified in the Reference Schedule, the date specified above the parties
names on page 1 of this Mortgage, or if not specified in that place, the date of
execution or signature (as the case may be) by the last party to execute or sign
(as the case may be) this Agreement;

“Australian Dollars” or “$” means the lawful currency of Australia;

“Authorised Representative” means:

(a)

in respect of a party which is a corporation:

 

(i)

a company secretary or director or any officer of the corporation whose title or
office includes the words “manager” or “director”; or

 

(ii)

a person acting with the title or in the office of manager or director; and

(b)

in respect of each party, a solicitor of that party or a person nominated by
Notice to the other party as an authorised representative;

“Business Day” means a day, not being a Saturday, Sunday or gazetted public
holiday, on which banks are open for commercial business at the Business Day
place specified as such in the Reference Schedule and in the place or places
where performance of a relevant Obligation is or is required to take place;

“Certificate” means any certificate which evidences a shareholder’s title to the
Shares or any portion of the Shares;

“Claim” means, in relation to a person, a claim, demand, remedy, suit, injury,
damage, loss, cost, liability, action, proceeding, right of action, claim for
compensation or reimbursement or liability incurred by or to be made or
recovered by or against the person, however arising and whether present,
unascertained, immediate, future or contingent;

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“Collateral Security” means those Securities which are specified in the
Reference Schedule, and any other deed or instrument supplemental or collateral
to this Mortgage which is intended to provide collateral security (including,
without limitation, by means of assignment) for the payment of the Secured
Moneys, whether executed before, on or after the Agreement Date;

“Company” means the company named as such in the Reference Schedule;

“Event of Default” means any of the events or circumstances defined as such in
this Mortgage;

“Facility Letter” means the relevant letter from the Mortgagee to the Mortgagor
offering certain money and/or financial accommodation to the Mortgagor,
including without limitation, the terms and conditions specified in or
incorporated into the facility the subject of the Facility Letter;

“Financial Indebtedness” of a person means any Obligation of that person,
whether present or future, actual or contingent, to pay or deliver any money,
currency or commodity under or in respect of any financial accommodation or
arrangement including, without limitation, under or in respect of any:

(a)

money borrowed or raised by that person;

(b)

Guarantee;

(c)

bond, debenture, note, certificate, redeemable or repurchasable share or stock,
bill of exchange or any similar instrument (whether or not transferable or
negotiable);

(d)

put option or buy back or discounting arrangement in relation to any property;

(e)

lease, licence or other arrangement in respect of any property (real or
personal, tangible or intangible) entered into primarily for the purpose of
raising finance or of financing the acquisition of the property leased, licensed
or subject to the relevant arrangement (other than a lease, licence or
arrangement which may be accounted for as an operating lease under an applicable
approved accounting standard in Australia);

(f)

hire purchase or deferred payment Obligation for property acquired or a service
employed;

(g)

liability to meet calls in respect of the unpaid amount of any shares;

(h)

interest or currency swap or hedge arrangement, financial option, future
contract or analogous transaction; or

(i)

arrangement which achieves the same commercial effect as any of the above;

“Government Authority” means any local, State or Federal government, or a
Minister or government department of each of those governments, a corporation or
authority constituted for a public purpose, a holder of an office for a public
purpose, a local authority and any agent or employee of any such body;

“Guarantee” means a guarantee, indemnity, letter of credit, performance bond,
acceptance or endorsement, or legally enforceable Obligation:

(a)

to pay or to provide funds (including by the purchase of any property) in, or to
enable payment or discharge of;

(b)

to indemnify against the consequences of default in the payment of; or

(c)

to otherwise to be responsible for,

any Obligation (whether or not it involves the payment of money) or
indebtedness, or otherwise to be responsible for the solvency or financial
condition, of any other person;

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“Loan Agreement” means a written deed or agreement (past, present or future)
between the Mortgagee and the Mortgagor (whether or not there are other parties
to such agreement), including without limitation, a Facility Letter, Notice or
written offer by or on behalf of the Mortgagee accepted by the Mortgagor where
“accepted by” includes signing or execution of a copy of a Facility Letter,
Notice or written offer, any other written form of acceptance, or acceptance by
conduct of all or part of a Facility Letter, Notice or written offer (including
acceptance of accommodation under an offer);

“Material Adverse Effect” means, in respect of a person, a material adverse
effect in the opinion of the Mortgagee on:

(a)

its business, assets or financial condition; or

(b)

its ability to perform its Obligations under this Mortgage, the Transaction
Documents or any Collateral Security;

“Mortgage” means as the context requires this Mortgage or the security
constituted by this Mortgage and includes:

(a)

words intended to form part of it; and

(b)

any equitable or common law mortgage evidenced by this Mortgage;

“Mortgaged Property” means the Shares (including without limitation the
beneficial interest of the Mortgagor in them);

“New Rights” means:

(a)

all money or Rights, that may be payable, allottable or transferable to or
exercisable by the Mortgagor as the beneficial owner of the Shares or any
shares, or other securities which may become subject to this Mortgage;

(b)

if the Shares shall by virtue of any amalgamation, re-construction or
re-arrangement of capital or liabilities of the Company or sale of the Company’s
business be represented by a different capital holding or different classes of
liabilities, whether in the Company or in any other company, the capital holding
or classes of liabilities of the company which as the result of amalgamation,
re-construction or re-arrangement of the capital or liabilities or sale took the
place of the Shares in the Company;

“Notice” means a written notice, consent, approval, direction, order or other
communication;

“Notice Address” means, in respect of a party:

(a)

the address or facsimile number specified as such in the Reference Schedule; or

(b)

where a party gives Notice to all other parties of another address or facsimile
number, the last address or facsimile number so notified;

“Obligation” means any legal, equitable, contractual, statutory or other
obligation, agreement, covenant, commitment, duty, undertaking or liability;

“Potential Event of Default” means any event or circumstance which, with the
passage of time or the giving of Notice or both, would become an Event of
Default;

“Reference Schedule” means the details and descriptions contained in the
schedule, described as such, and immediately before the execution page of this
Mortgage;

“Relative” includes spouse, child, grandchild or remoter issue, brother, sister
and ancestor;

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“Right” includes any legal, equitable, contractual, statutory or other right,
power, authority, benefit, privilege, remedy, discretion or cause of action;

“Secured Moneys” means:

(a)

all money already lent or advanced or which the Mortgagee now or in the future
lends or advances or is or becomes in any way liable to lend or advance to, for
or for the use or accommodation of or on behalf of any other person upon the
order, direction or request, express or implied or under the authority of the
Mortgagor whether the Mortgagor is acting alone or jointly with any person;

(b)

all money which the Mortgagor either alone or jointly with any person whether
directly or indirectly or contingently or prospectively and whether by way of
debt, Guarantee, indemnity, restitution, contract, damages, order of a court or
otherwise presently is or in the future becomes or may become liable to pay to
the Mortgagee under this Mortgage or under or on any Obligation or by reason of
any other matter or thing whatsoever or as a result of or pursuant to any
transaction or event or circumstances;

(c)

all money which the Mortgagee is liable to lend, pay or advance or now or in the
future pays or becomes liable to pay to, for or for the use or accommodation of
or on behalf of the Mortgagor either alone or jointly with any person either by
advances or by reason of the Mortgagee having already entered or in the future
entering into any Guarantee or by accepting, endorsing, drawing, paying or
discounting or otherwise becoming liable on any bill of exchange or negotiable
instrument by which liabilities may be incurred on behalf of or at the request
express or implied of the Mortgagor, either alone or jointly with any person,
whether such Guarantee or negotiable instruments shall have matured or not or
whether the liability of the Mortgagee under it is contingent or actual;

(d)

all money which the Mortgagee is from time to time and at any time at liberty to
debit and charge the Mortgagor either alone or jointly with any person or any
account or under any present or future judgment, order, agreement,
understanding, arrangement, custom, practice of the Mortgagee or Right of the
Mortgagee or for any other reason, whether under the terms of this Mortgage or
of any agreement or otherwise;

(e)

all money now or hereafter owed by the Mortgagor either alone or jointly with
any person to the Mortgagee because of the assignment to or acquisition by the
Mortgagee from any person of any secured or unsecured, present or future,
actual, contingent, prospective or other debt or other Obligation of the
Mortgagor;

(f)

all loss or damage suffered by the Mortgagee which is caused or contributed to
by any breach by the Mortgagor of any of the terms of this Mortgage or any
agreement;

(g)

all moneys and liabilities elsewhere in this Mortgage defined as being included
in the Secured Moneys;

(h)

interest upon all such money or on so much of it as shall from time to time be
owing or payable or remain unpaid to the Mortgagee; and

(i)

all other moneys owing from time to time or intended to be secured under the
terms of this Mortgage, irrespective of:

 

(i)

whether the charge created by this Mortgage shall be or remain valid or shall
have been released or discharged;

 

(ii)

whether such debts and liabilities are present or future or actual or
prospective or contingent or otherwise;

 

(iii)

whether the amount of any such debts or liabilities are at any time ascertained
or unascertained,

and references to the “Secured Moneys” include the whole or any part or parts of
such money;

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“Security” means:

(a)

a mortgage, charge, debenture, encumbrance, assignment by way of security,
pledge, deposit of title, lien, security, option to acquire, lease, licence,
caveat, preferential interest, title retention, preferential Right, trust
arrangement or other estate, interest, Claim or arrangement (including, without
limitation, any set-off or “flawed-asset” arrangement) having the same or
equivalent commercial effect as a grant of security relating to property
(whether real or personal); or

(b)

an agreement to create or give any arrangement referred to in paragraph (a) of
this definition;

“Shares” means each and every one of the shares in the Company, which Shares are
described in the Reference Schedule (including, without limitation, the
beneficial interest of the Mortgagor in those Shares) together with the New
Rights;

“Transaction Documents” means each of the documents listed and described as such
in the Reference Schedule; and

“Transfer” means any transfer or transfers with respect to any of the Shares
executed by the Mortgagor and delivered to the Mortgagee.

1.2

Interpretation

In the interpretation of this Mortgage, unless the context or subject matter
otherwise require:

(a)

singular includes plural and vice versa;

(b)

any gender includes every gender;

(c)

a reference to a person includes corporations, trusts, associations,
partnerships, a Government Authority, and other legal entities, and where
necessary, includes successor bodies;

(d)

references to writing include printing, typing, facsimile and other means of
representing or reproducing words, figures, drawings or symbols in a visible and
tangible form, in English;

(e)

references to signature and signing include due execution of a document by a
corporation or other relevant entity;

(f)

references to months mean calendar months;

(g)

references to statutes include statutes amending, consolidating or replacing the
statutes referred to and all regulations, orders-in-council, rules, by-laws and
ordinances made under those statutes;

(h)

references to sections of statutes or terms defined in statutes refer to
corresponding sections or defined terms in amended, consolidated or replacement
statutes;

(i)

headings and the table of contents are used for convenience only and are to be
disregarded in the interpretation of this Mortgage;

(j)

where any word or phrase is given a defined meaning, another grammatical form of
that word or phrase has a corresponding meaning;

(k)

each paragraph or sub-paragraph in a list is to be read independently from the
others in the list;

(l)

a reference to an agreement or document is to that agreement or document as
amended, novated, supplemented or replaced from time to time; and

(m)

a reference to a party includes that party’s executors, administrators,
substitutes, successors and permitted assigns.

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2.

MORTGAGE

2.1

Grant of Mortgage

The Mortgagor mortgages to the Mortgagee all the Mortgagor’s estate and interest
in the Mortgaged Property to secure to the Mortgagee the due and punctual
payment of the Secured Moneys and the due and punctual performance of all other
Obligations of the Mortgagor under this Mortgage, a Collateral Security, the
Transaction Documents and any Loan Agreement.

2.2

Priority

The Mortgage shall rank as a mortgage having the priority specified in the
Reference Schedule adjacent to the heading “Priority Ranking”.

2.3

Continuing nature

This Mortgage is a continuing security. It shall not be fully or partially
released merely by the payment at any time of any of the Secured Moneys or by
any settlement of account. This Mortgage shall continue to apply to the present
and future balance of the Secured Moneys until a final release of this Mortgage
has been given to the Mortgagor. The Mortgagor shall not be entitled to a final
release of this Mortgage whilst:

(a)

Secured Moneys remain unpaid or other Obligations of the Mortgagor, either alone
or with any other person, to the Mortgagee remain unfulfilled or unperformed;

(b)

there is a Claim by the Mortgagee or Obligation on the part of the Mortgagor
outstanding; or

(c)

the Mortgagee may apprehend a liability on the part of the Mortgagor in
circumstances (amongst others) where litigation has been threatened or commenced
or a dispute exists which, if resolved or settled in a particular way, would or
may result in a Claim against the Mortgagee or a Claim by the Mortgagee, which
would be recoverable in whole or in part from the Mortgagor.

2.4

Premature discharge of Mortgage

If the Mortgagee, due to error or a preferential payment subsequently repaid,
receives an amount less than it would have otherwise required in exchange for a
release or partial release of this Mortgage, then the Rights of the Mortgagee
against the Mortgagor in respect of the Mortgaged Property shall be the same as
if this Mortgage had not been released or partially released and as if the
Mortgagor had no Right of release. In that case, the Mortgagor shall do all
things required by the Mortgagee (including, if necessary, signing a further
mortgage over the Mortgaged Property released or any property nominated by the
Mortgagee of approximately equal value) to restore the Mortgagee’s Rights to the
same status as if this Mortgage had not been released or partially released.

2.5

Form of discharge

A release of this Mortgage when given may be in such form as the Mortgagee
requires (including a specific provision), so that the release of this Mortgage
operates only as a release of the charge created over the Mortgaged Property,
but reserving all Rights against the Mortgagor on personal covenants contained
or implied in this Mortgage. In the absence of provisions to the contrary in a
release or partial release of this Mortgage, a release only has effect as a
release of the charge over the Mortgaged Property and not so as to release the
Mortgagor from Obligations under the personal covenants in this Mortgage.

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3.

PAYMENT OF MONEY

3.1

Repayment of Secured Moneys and interest

The Mortgagor shall repay the Secured Moneys to the Mortgagee and pay interest
to the Mortgagee on the Secured Moneys during the term of this Mortgage:

(a)

as specified in the Reference Schedule;

(b)

if there is no provision in the Reference Schedule or elsewhere in this Mortgage
in relation to the whole or part of the Secured Moneys, in accordance with the
Transaction Documents or Loan Agreement which relates to each respective part of
the Secured Moneys; or

(c)

if there is no such provision elsewhere in this Mortgage, the Transaction
Documents nor any other Loan Agreement in relation to the whole or part of the
Secured Moneys, the Secured Moneys shall be repaid on demand and interest shall
accrue and be calculated at monthly balances on the last day of each month and
be payable by the Mortgagor on the whole or part of the Secured Moneys on demand
by the Mortgagee and shall otherwise be payable in accordance with the
provisions for payment of interest commonly required by the Mortgagee and at the
rate or rates of interest from time to time commonly charged by the Mortgagee
for accommodation similar to the whole or part of the Secured Moneys.

3.2

Capitalisation of interest

If any payment of interest required to be paid under this Mortgage or any part
of it is not paid on the due date, the interest in arrears may, at the election
of the Mortgagee (without prejudice to other Rights of the Mortgagee) be
capitalised and be immediately added to the Secured Moneys and shall bear
interest accordingly from the day when the interest is capitalised.

3.3

No set off

The Right to receive amounts under this Mortgage shall be free from any equity,
set off, or cross Claim which (except for this provision) the Mortgagor would be
entitled to Claim against the Mortgagee or any intermediate mortgagee or an
assignee.

3.4

No withholding

If any statute or regulation requires the deduction or withholding of an amount
from a payment which is required to be made to the Mortgagee, the Mortgagor
shall pay such further amount as is necessary to ensure that, after all required
deductions and withholdings have been made, the amount specified in this
Mortgage, the Transaction Documents or the relevant Loan Agreement is received
by or as directed by the Mortgagee.

4.

MANNER OF PAYMENT

4.1

Free of exchange

The Secured Moneys shall be paid to the Mortgagee free of exchange and without
any other deduction at the address of the Mortgagee in Queensland from time to
time or at such other place or to such other person as the Mortgagee may from
time to time by Notice direct.

4.2

Legal tender

Any remittance or tender other than in Australian Dollars despite the issue of
any receipt shall only constitute payment to the Mortgagee, to the extent of and
on the date when the payment shall have been actually received by the Mortgagee,
in Australian Dollars.

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4.3

Order or direction

The Mortgagor shall (if and when required by the Mortgagee) sign orders
directing their bankers in Queensland or another State or Territory of Australia
to make payment of Secured Moneys by debiting the drawer’s account and crediting
the amount to the Mortgagee’s account at a bank nominated by the Mortgagee.

4.4

Bank cheque

Any tender of money due under this Mortgage, the Transaction Documents or under
a Collateral Security shall not be invalid by reason only that it is made by
bank cheque rather than in cash.

4.5

Certificate

A certificate signed by an Authorised Representative of the Mortgagee shall be
prima facie evidence of the amount of the Secured Moneys and other matters
stated in the certificate.

5.

PAY MORTGAGEE’S COSTS

The Mortgagor shall pay to the Mortgagee on demand all costs, charges and
expenses incurred by the Mortgagee in connection with the Secured Moneys, this
Mortgage, the Transaction Documents or any Loan Agreement, including without
limitation:

(a)

all costs, charges, expenses, disbursements and payments which may be incurred
or made by the Mortgagee for the protection or preservation of the Mortgaged
Property or this Mortgage or which in the Mortgagee’s opinion may be necessary,
desirable or called for to protect or safeguard or in any way to aid, assist or
advantage the Rights and interest of the Mortgagee under this Mortgage, the
Transaction Documents, a Loan Agreement or a Collateral Security;

(b)

all costs, charges, expenses and outlays, where relevant, on a solicitor and own
client basis:

 

(i)

of preparing, completing, stamping and discharging or partially discharging this
Mortgage, the Transaction Documents and all Collateral Securities;

 

(ii)

in connection with any documentation, advice, requests for consent, enquiries
and other dealings of any nature affecting the Mortgaged Property, the
Mortgagor, any co-surety or the transactions secured or contemplated by this
Mortgage;

 

(iii)

involved with the exercise or enforcement or attempted exercise or enforcement
of Rights of the Mortgagee or in consequence of default in payment of the
Secured Moneys or the breach of any covenant condition or stipulation contained
in this Mortgage including without limitation costs charges and expenses which
may be incurred by the Mortgagee in respect of any application whether
successful or not made by the Mortgagee or the Mortgagor for relief under any
moratorium which has already been proclaimed or which may be proclaimed; or

 

(iv)

in connection with any advice in respect of this Mortgage or the transactions
and agreements secured by it; and

(c)

all stamp duty, financial institutions duty, taxes, registration fees, fees,
fines, penalties and charges payable or arising out of or in connection with
this Mortgage, Collateral Securities, the Transaction Documents and Loan
Agreements secured or contemplated by this Mortgage.

6.

PRIOR OR SUBSEQUENT SECURITIES

6.1

Application of clause

This clause applies where the Mortgaged Property is or becomes subject to a
prior or subsequent Security.

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6.2

Mortgagor to comply with other Securities

The Mortgagor shall duly and punctually carry out, observe and perform all the
covenants, conditions and provisions contained or implied in any prior or
subsequent Security on the part of the Mortgagor to be carried out, observed and
performed (including any variation to the Security to which the Mortgagee has
first consented in writing).

6.3

Mortgagee may pay debt

The Mortgagee may at any time after default has been made by the Mortgagor in
duly and punctually carrying out and observing any one or more of the
agreements, conditions and provisions in this Mortgage or contained or implied
in a prior or subsequent Security, pay (and notwithstanding any dissent by the
Mortgagor) to the holder of the Securities under the prior or subsequent
Security the whole of the indebtedness of the Mortgagor under the prior or
subsequent Security. The Mortgagee may accept as sufficient evidence of the
indebtedness of the Mortgagor under such Security the certificate of the
mortgagee under such Security and obtain and accept a release or transfer by
such mortgagee (together with any documents of title, declarations and other
paper writings as may be applicable).

6.4

Mortgagor to repay debt to Mortgagee

Notwithstanding the covenants, conditions and provisions contained in the prior
or subsequent Security, the Mortgagor shall pay to the Mortgagee on demand the
amount of indebtedness so paid and also the amount of the Mortgagee’s costs (on
a solicitor and own client basis, where relevant) and disbursements of and
incidental to the preparation and stamping of such release or transfer together
with interest on all such amounts from the date or dates of payment by the
Mortgagee and all such moneys shall form part of the Secured Moneys.

6.5

Subsequent mortgages

On redemption of this Mortgage, the Mortgagee may hand to any subsequent
mortgagee all documents of title and a release of this Mortgage, and any other
declarations and documents as may be applicable.

6.6

Disclosures by Mortgagee

The Mortgagor authorises the Mortgagee at the Mortgagee’s discretion to disclose
to any person claiming to be a mortgagee under any prior or subsequent Security
details of the outstanding and accruing indebtedness, security held or other
particulars relating to the Secured Moneys.

6.7

Variations to other Securities

The Mortgagor shall not vary any prior or subsequent Security without the prior
written consent of the Mortgagee.

6.8

Priority agreements

The Mortgagee may enter into any agreement with the mortgagee under another
Security concerning their respective priorities or otherwise and shall not be
obliged to inform the Mortgagor. Upon receipt of Notice of the terms of any such
agreement, the Mortgagor shall observe and be bound by such agreement as if the
Mortgagor has been a party to and consented to such agreement.

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7.

GENERAL COVENANTS

7.1

Requests for consent

If the Mortgagor creates a subsequent Security or charge over the Mortgaged
Property then either before or immediately after the creation of the subsequent
Security:

(a)

before a request is made to the Mortgagee to produce the relevant Certificate or
consent to the subsequent Security; or

(b)

before moneys are secured (actually or contingently) by the Security,

the Mortgagor shall cause the person entitled to the Security to enter into a
priority and subordination agreement with the Mortgagee, so as to preserve
and/or confirm the Mortgagee’s position to rank in priority to the mortgagee
under the subsequent Security for an amount and on terms wholly satisfactory to
the Mortgagee.

7.2

No assignment of Mortgaged Property

The Mortgagor shall not for the duration of this Mortgage, without the prior
written consent of the Mortgagee:

(a)

assign or transfer the Mortgaged Property;

(b)

attempt or purport to assign or transfer  the Mortgaged Property;

(c)

cause or permit any other person to have (whether by way of mortgage or
otherwise) any Right to receive present or future income or other legal or
beneficial Rights in the income from time to time from the Mortgaged Property;
or

(d)

grant or attempt or purport to grant any other Security over the Mortgaged
Property.

7.3

Transfer

If the Mortgaged Property is sold, transferred or assigned, then any settlement
to take place shall be carried out at the address of the Mortgagee or otherwise
as directed by the Mortgagee.

7.4

Calls made by Company

The Mortgagor shall pay all calls made by the Company on the unpaid capital of
the Shares in the manner and within the time limits requested by the Company.

7.5

Notices from the Company

The Mortgagor shall deliver copies of all Notices received by it from the
Company as soon as possible after being received.

7.6

Voting at Company meetings

The Mortgagor shall not exercise any voting Rights at general meetings of the
Company without the previous consent of the Mortgagee or otherwise in accordance
with the direction in writing of the Mortgagee.

7.7

Further assurances

The Mortgagor shall at all times at the cost and expense of the Mortgagor
execute all documents and assurances and do all acts for further or more
effectually securing the Rights or interests of the Mortgagee over the Mortgaged
Property, and to receive dividends and bonus issues in respect of the Shares,
from the Company as shall be necessary or may be required by the Mortgagee in
its discretion.

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8.

WARRANTIES AND ACKNOWLEDGEMENTS

8.1

Indefeasible title

The Mortgagor warrants that:

(a)

the Mortgagor has (or is immediately entitled to and able to obtain) an
indefeasible title to the Mortgaged Property and that the Mortgaged Property is
not subject to:

 

(i)

Securities granted in favour of another person;

 

(ii)

litigation, arbitration, administrative proceeding or threatened litigation,
arbitration or administrative proceeding;

 

(iii)

transfer or cancellation under any share buy back agreement approved under the
Corporations Law;

 

(iv)

other Claim or interest having priority over or competing with or likely to
affect this Mortgage,

except as is specifically described in this Mortgage or has been unequivocally
accepted in writing by the Mortgagee; and

(b)

to the best of the Mortgagor’s knowledge, no person alleges or makes or will
allege or make a Claim to any interest referred to in clause 8.1(a) or intends
or has threatened to commence any proceedings in respect of a Claim.

8.2

Enforceability, capacity and disclosure

The Mortgagor warrants that:

(a)

the Mortgagor has full power to sign and deliver this Mortgage and perform its
Obligations under this Mortgage and to receive accommodation from the Mortgagee
in the manner contemplated in this Mortgage, the Transaction Documents and in
each Loan Agreement;

(b)

all Obligations of the Mortgagor under this Mortgage are legally binding and
enforceable in accordance with their terms;

(c)

the signing and delivery of and the performance of its Obligations under this
Mortgage by the Mortgagor shall not:

 

(i)

contravene any existing applicable law, statute, rule or regulation or any
judgment, decree or permit to which the Mortgagor is subject;

 

(ii)

conflict with or constitute a default under the Transaction Documents or a Loan
Agreement or arrangement to which the Mortgagor is a party or is subject or by
which it or any of its property is bound;

 

(iii)

result in the creation or imposition of or Obligation to create any Encumbrance;

(d)

no litigation, arbitration, administrative proceeding or taxation investigation
or assessment is taking place, pending or to the knowledge of the Mortgagor is
threatened against the Mortgagor which could have a Material Adverse Effect on
the business, assets or financial condition of the Mortgagor;

(e)

all financial statements of the Mortgagor in the past, now and in the future
given to the Mortgagee present and shall present fairly and accurately the
financial position of the Mortgagor as at the date of such statements and the
date of their delivery to the Mortgagee, in accordance with generally accepted
accounting practices in Australia;

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(f)

no event or circumstance which constitutes an Event of Default or a Potential
Event of Default has occurred and is continuing;

(g)

the Obligations of the Mortgagor under this Mortgage are direct, general and
unconditional Obligations of the Mortgagor, and rank before and will continue to
rank before all other present and future secured and unsecured Obligations
(including contingent Obligations) of the Mortgagor;

(h)

this Mortgage is made in good faith without any intention to delay or defraud
any existing or future creditor of the Mortgagor, and the Mortgagor is presently
able to pay its debts from its own money as such debts fall due;

(i)

this Mortgage is not signed or accommodation obtained relying on any
representation, promise or statement by the Mortgagee or any person on behalf of
the Mortgagee (including representations, promises or statements as to
availability of future accommodation, accommodation charges, financial
conditions, currency fluctuations, business prospects or the like) other than as
is specifically contained in this Mortgage, the Transaction Documents or any
relevant Loan Agreement; and

(j)

all representations made and to be made to the Mortgagee and to the Federal
Treasurer in respect of any relevant approval under the Foreign Acquisitions and
Takeovers Act 1975 (C’th) have been and shall be accurate and not misleading,
all approvals already required to be obtained by the Mortgagor under the Act in
respect of the acquisition of the Mortgaged Property have been duly obtained,
and any conditions imposed in respect of those approvals have been fully
disclosed to the Mortgagee and duly complied with to date.

8.3

Continuing warranties

Each of the warranties by the Mortgagor in this Mortgage shall be deemed to have
been re-affirmed to the Mortgagee immediately before each provision of
accommodation comprising part of the Secured Moneys being made available by the
Mortgagee, except to the extent that the Mortgagee shall have been specifically
disclosed in a Notice to the Mortgagee by the Mortgagor to the contrary.

9.

EVENTS OF DEFAULT

9.1

Events occurring

Each of the following, unless waived by Notice from the Mortgagee, is an Event
of Default:

(a)

(non-payment) if the Mortgagor fails to pay or repay on time Secured Moneys
which are due and payable to the Mortgagee under this Mortgage, a Collateral
Security, the Transaction Documents or a Loan Agreement;

(b)

(non-performance) if the Mortgagor or any other person (other than the
Mortgagee) defaults in the performance of an Obligation on that person’s part
under the Mortgage, the Collateral Security, the Transaction Documents or a Loan
Agreement;

(c)

(share issue by Company) if the Company, without the Mortgagee’s consent, issues
shares in the Company, which has a Material Adverse Effect on the value of this
Mortgage to the Mortgagee;

(d)

(Receiver) if a Receiver, provisional liquidator, trustee for creditors or in
bankruptcy, administrator or an analogous person is appointed over the assets of
the Mortgagor or a Security holder takes or attempts to take possession of any
such assets;

(e)

(Securities become fixed) if a floating Security given in favour of any Security
holder becomes fixed in respect of the whole or part of the Mortgagor’s assets;

(f)

(insolvency) if the Mortgagor or the Company:

 

(i)

is or states that it is unable to pay debts as they fall due;

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(ii)

suspends payments of its debts; or

 

(iii)

ceases or threatens to cease to carry on all or a material part of its business;

(g)

(incapacity) the Mortgagor dies or becomes mentally ill or suffers any other
demise or incapacity (other than bankruptcy);

(h)

(involuntary winding up) if the Mortgagor is a company, an application is made
for the winding up of the Mortgagor or the Company and the application is not
dismissed or withdrawn within five days from it being made, or an order is made
for the winding up of the Mortgagor , except for the purposes of a
reconstruction, amalgamation, merger or consolidation on terms approved by the
Mortgagee before the application or order is made where the reconstruction,
amalgamation, merger or consolidation is implemented in accordance with the
terms of the approval;

(i)

(voluntary winding up) if the Mortgagor or the Company passes a resolution for
its winding up, except for the purposes of a reconstruction, amalgamation,
merger or consolidation on terms approved by the Mortgagee before the resolution
is passed where the reconstruction, amalgamation, merger or consolidation is
implemented in accordance with the terms of the approval;

(j)

(compromise or arrangement) if the Mortgagor enters into or takes steps for the
purpose of entering into an arrangement or composition with its unsecured
creditors generally or any of them;

(k)

(judgments) if a judgment equal to more than 10% of the Secured Moneys or
$100,000 (whichever is less) is awarded against the Mortgagor and remains
unsatisfied for 14 days, or any execution or other process of Court or
Government Authority or any distress is issued against or levied upon any
property of the Mortgagor, or any person obtains a garnishee order in respect of
a debt due by the Mortgagor;

(l)

(seizure) if the Mortgagor does or omits to do any act as a result of which
property of the Mortgagor may become liable to seizure, forfeiture or
sequestration;

(m)

(material adverse change) if in the opinion of the Mortgagee or an Authorised
Representative of the Mortgagee, there has been a material adverse change in the
financial position of the Mortgagor or the Company, or the Mortgagee’s Security
for the Secured Moneys has materially diminished in value or is in jeopardy;

(n)

(ranking of Security) if an Obligation is incurred in the future (whether
involving actual, contingent or prospective liabilities) and is secured under a
Security over the Mortgaged Property in priority to or ranking equally with the
Secured Moneys;

(o)

(misrepresentation) if a statement, representation or warranty made or
reaffirmed by the Mortgagor in connection with this Mortgage, a Collateral
Security, the Transaction Documents or a Loan Agreement, shall prove to have
been incorrect or misleading in any material respect when made or deemed to have
been reaffirmed;

(p)

(undertakings) if an undertaking given in connection with this Mortgage or the
Secured Moneys is not duly and punctually complied with; or

(q)

(default under other Loan Agreements) if an Event of Default or a Potential
Event of Default (by whatever name called) occurs under a Collateral Security,
the Transaction Documents or a Loan Agreement.

9.2

Consequences of an Event of Default

Upon an Event of Default occurring, the Secured Moneys shall at the Mortgagee’s
election become immediately payable to the Mortgagee as if the time for payment
of the same had arrived (irrespective of anything to the contrary elsewhere in
this Mortgage, a Collateral Security, the Transaction Documents or a Loan
Agreement). The Mortgagee need not notify the Mortgagor of that election. If
there is any outstanding Obligation of the Mortgagee to the Mortgagor (including
any commitment to advance accommodation) the Mortgagee may also decline to
perform or meet that Obligation.

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10.

MORTGAGEE MAY REMEDY DEFAULT

If an Event of Default occurs, the Mortgagee may, without prejudice to any other
Right, do all acts and things and pay all moneys necessary or expedient in the
opinion of the Mortgagee to make good the default. All moneys paid by the
Mortgagee shall form part of the Further Moneys and shall be payable on demand
and the Mortgagor indemnify and shall keep the Mortgagee indemnified against
Claims arising against or incurred by the Mortgagee by reason of any breach
failure or default of the Mortgagor in respect of any matter whatsoever.

11.

POWERS OF MORTGAGEE

After the occurrence of an Event of Default, the Mortgagee may (at any time and
from time to time without giving Notice to the Mortgagor) do all or any one or
more of the following (and all moneys which the Mortgagee pays or becomes liable
to pay by reason of any of the following to any third party or otherwise shall
be included in the Secured Moneys):

(a)

(income) enter into receipt of the income from the Mortgaged Property;

(b)

(options to purchase) grant an option to purchase the Mortgaged Property upon
terms and conditions as the Mortgagee thinks fit;

(c)

(proceedings) institute and prosecute and defend any proceedings either in the
name of the Mortgagor or the Mortgagee in any court or tribunal in respect of
any act or transaction contemplated by this Mortgage;

(d)

(conditions of sale) upon any sale of the Mortgaged Property allow a purchaser
any time for payment of the whole or any part of the purchase moneys either with
interest at any rate or without interest and either upon Security of the
property sold or any part of it or upon any other Security or without any
Security and the conditions of sale may include any special conditions as the
Mortgagee may in its absolute discretion think fit; or

(e)

(exercise of Rights) exercise all other Rights then vested in it by this
Mortgage, any statute, common law or the rules of equity.

12.

POWER OF SALE

12.1

Statutory powers on occurrence of Event of Default

All the Rights of the Mortgagee under any statute, at law or in equity may be
exercised by the Mortgagee in respect of the Mortgaged Property after an Event
of Default occurs, despite any subsequent acceptance of payment of any part of
the Secured Moneys, omission or waiver.

12.2

Power of sale

After an Event of Default occurs the Mortgagee may sell, transfer and assign the
Mortgaged Property free from any equity of redemption or other interest on the
part of the Mortgagor:

(a)

by public auction, tender, private contract, transfer without contract or any
combination of the above;

(b)

as one parcel or (if applicable) separately or in lots;

(c)

subject to any special stipulations, for cash, on credit, by way of set-off or
exchange, at a discount or otherwise, or in any combination of the above; or

(d)

in the case of credit, the sale may be made with or without charging interest
(and if with interest, at such rate as the Mortgagee determines) and with or
without taking Security for the purchase money,

and the Mortgagee may buy in at any auction, refuse any tenders and terminate or
vary any contract of sale and resell the property, without being liable for any
loss.

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12.3

Discretion

The Mortgagee may in its discretion use any conditions of auction, tender or
sale and exercise all the powers of a beneficial owner in the same manner, as if
this Mortgage had vested the absolute ownership of the Mortgaged Property in the
Mortgagee.

12.4

Public auction

Unless prohibited by statute, the Mortgaged Property need not in the first
instance be submitted for sale at public auction.

12.5

Option to purchase

At any time after the power of sale has become exercisable by the Mortgagee, the
Mortgagee may grant to any person an option to purchase the Mortgaged Property
on any terms. If the Mortgagor subsequently redeems this Mortgage, the Mortgagor
shall be bound by the option as if the Mortgagor had granted it. The Mortgagor
indemnifies the Mortgagee for any liability incurred by the Mortgagee as a
result of any failure by the Mortgagor to strictly observe the terms of any
option.

12.6

Additional powers

The preceding provisions of this clause are in addition to Rights conferred by
statute, but are subject to the giving of any Notices required by statute before
or after the exercise of any power of sale.

13.

PROCEEDS FROM SALE

Subject to any contrary statutory or other Obligation, the Mortgagee shall apply
the proceeds received in respect of the Mortgaged Property:

(a)

firstly, to pay all costs, charges and expenses incurred in or incidental to the
exercise or attempted exercise or performance of a Right under this Mortgage, a
Collateral Security, the Transaction Documents or Loan Agreement;

(b)

secondly, to pay or repay all or part of the Secured Moneys as the Mortgagee
determines (without prejudice to the Mortgagee’s Right to place moneys received
in a suspense account indefinitely);

(c)

thirdly, to pay any surplus to subsequent mortgagees or holders of any Security
over the Mortgaged Property in order of priority; and

(d)

fourthly, to pay any surplus (but without interest) to the person entitled to
give receipts for those amounts or to the Mortgagor, upon obtaining a full and
final discharge to the satisfaction of the Mortgagee. The Mortgagee may pay the
surplus to the Mortgagor or to an account of the Mortgagor in the books of the
Mortgagee or to the credit of a bank account in the name of the Mortgagor. Upon
payment, the Mortgagee shall be under no further liability in respect of those
amounts.

14.

LIABILITY FOR LOSS

14.1

Mortgagee not responsible

Subject to the provisions of any statute to the contrary, the Mortgagee is not
responsible for any loss which happens or for any outstanding moneys following
upon the exercise or attempted exercise or in consequence of the non-exercise of
any Rights contained in or incidental to this Mortgage nor for more money than
actually comes into its hands nor for the acts, neglect, default or dishonesty
of any Authorised Representative. All losses shall be deemed to be inevitable
and unavoidable unless positive and wilful default can be proved to have been
made by the Mortgagee.

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14.2

Indemnities

The Mortgagor indemnifies the Mortgagee and its Authorised Representatives and
their respective agents and employees against all Claims arising out of or
against the Mortgagee or any such person from:

(a)

any act or omission of the Mortgagee or such person concerning this Mortgage, a
Collateral Security, the Transaction Documents or a Loan Agreement;

(b)

the exercise, attempted exercise or non-exercise of Rights in or incidental to
this Mortgage, a Collateral Security, the Transaction Documents or a Loan
Agreement; or

(c)

any disclosure of information concerning the Mortgagor or any Related Body
Corporate or associated person considered by the Mortgagee to be in its
interest.

14.3

Release

The Mortgagor releases the Mortgagee and its Authorised Representatives from all
Claims arising out of or against the Mortgagee from:

(a)

any act or omission of the Mortgagee and its Authorised Representatives
concerning this Mortgage, a Collateral Security, the Transaction Documents or a
Loan Agreement;

(b)

the exercise, attempted exercise or non-exercise of Rights in or incidental to
this Mortgage, a Collateral Security, the Transaction Documents or a Loan
Agreement; or

(c)

any disclosure of information concerning the Mortgagor or associated person
considered by the Mortgagee to be in its interest.

14.4

Continuing indemnity

Each indemnity (whether given under this clause or elsewhere in this Mortgage)
and release in this Mortgage is:

(a)

a continuing Obligation of the Mortgagor and remains in force and effect even if
this Mortgage is released or discharged; and

(b)

a separate and independent Obligation of the Mortgagor.

15.

POSSESSION OF CERTIFICATE AND TRANSFER

15.1

First mortgage

Where the Mortgagee is or becomes first mortgagee, the Mortgagor shall deposit
with the Mortgagee the Certificate (if issued) and the Transfer. The Mortgagee
may keep the Certificate and the Transfer at any location within Australia.
Unless expressly obliged by statute, the Mortgagee may refuse to produce the
Certificate and Transfer to any person for any reason.

15.2

Mortgagee not liable

The Mortgagor shall obtain any Rights or have any Claim, whether to reduction of
interest, damages or otherwise, by reason of any failure or delay on the part of
the Mortgagee in production (for any purpose) of the Certificate or the
Transfer, a consent or a release of mortgage or any other documents relating to
this Mortgage.

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15.3

Indemnity

The Mortgagor indemnifies and shall keep the Mortgagee indemnified in respect of
loss to the Mortgagee and Claims against the Mortgagee by the Mortgagor or any
other person in respect of any failure on the part of the Mortgagee to produce
(for any purpose) the Certificate, the Transfer, a release of this Mortgage, or
other documents relating to this Mortgage, or any delay in producing them.

16.

ATTORNEY OF THE MORTGAGOR

16.1

Power of attorney

All acts and things which are required expressly or impliedly to be done under
the provisions of this Mortgage, the Transaction Documents or of any Loan
Agreement implied by the Mortgagor or which the Mortgagee is empowered to do may
be done by an attorney of the Mortgagor appointed under this Mortgage either in
the name of the Mortgagee, the Mortgagor or of the attorney.

16.2

Appointment

The Mortgagor appoints:

(a)

the Mortgagee; and

(b)

each Authorised Representative of the Mortgagee,

and their substitutes, jointly and severally, to be the attorney of the
Mortgagor for the use and benefit of the Mortgagee to do and suffer all such
acts and things and also to do all such acts and things and sign and execute all
such documents and instruments under any statute or otherwise as the attorney
thinks necessary or advisable for the purpose of exercising the Rights granted
to the Mortgagee by this Mortgage or for any other purpose and without
limitation, an attorney may:

(c)

in any case where there is a prior or subsequent mortgage, exercise the
Mortgagor’s Rights in accordance with al relevant statutes; and

(d)

appoint a substitute or substitutes for all or any of such purposes.

16.3

Ratify and confirm

The Mortgagor covenants to ratify and confirm all acts the attorneys shall
lawfully do or cause to be done in or about the Mortgaged Property by virtue of
the power of attorney in this clause or this Mortgage.

16.4

Authority

The Mortgagor authorises the Mortgagee to register this power of attorney under
any statute and to do whatever the Mortgagee considers necessary to give
validity and effect to it and declares that each attorney shall not be
responsible for any Claim which may arise against or occurring in relation to
the exercise of the Rights of an attorney.

16.5

Costs

The Mortgagor is liable to pay for or reimburse an attorney for costs (where
relevant, on a solicitor and own client basis) incurred by an attorney in the
exercise of Rights given under this power of attorney. If the Mortgagor fails to
pay to the Mortgagee or an attorney such money, such money shall form part of
the Further Moneys.

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16.6

Irrevocable

This power of attorney is:

(a)

given for valuable consideration;

(b)

given by way of security; and

(c)

is irrevocable.

17.

MISCELLANEOUS

17.1

Mortgage not affected by intervening circumstances

This Mortgage, the Obligations of the Mortgagor under this Mortgage, a
Collateral Security, the Transaction Documents or Loan Agreement or other
arrangement, and the Mortgagee’s Rights against the Mortgagor shall not be
discharged terminated, reduced, modified or otherwise affected by any of the
following:

(a)

(Collateral Security) the giving by any person of the terms of any Collateral
Security from time to time;

(b)

(delay) any delay, failure, neglect or refusal by the Mortgagee to exercise
Rights or to recover any of the Secured Moneys under this Mortgage, Collateral
Security, the Transaction Documents, Loan Agreement, judgment or specialty;

(c)

(failure to obtain Collateral Security) the failure to obtain, register or
perfect, inadequacy, invalidity or unenforceability of any Collateral Security
or other Obligation, whether given at the time of this Mortgage or otherwise;

(d)

(granting of time) the granting to the Mortgagor or any co-surety of any time,
waiver, credit, forbearance, indulgence, or other concession (either for or
without consideration or by operation of law);

(e)

(release of Rights) any partial or absolute release, discharge, abandonment,
surrender, waiver, variation, transfer, exchange, relinquishment or renewal
(either for or without consideration) of Rights against the Mortgagor or any
co-surety or any other person;

(f)

(compromises) the Mortgagee becoming party to or bound by any compromise,
assignment of property, scheme of arrangement, composition of debts, scheme of
reconstruction or other arrangement relating to the Mortgagor or any co-surety
or any other person;

(g)

(variations) any variation of this Mortgage, a Collateral Security or the
Transaction Documents, or any variation of, termination of or additional Loan
Agreement, arrangement or understanding between the Mortgagee, the Mortgagor or
any co-surety or any one or more of them (with or without others), except to the
extent that the same is unequivocally expressed to amend or overrule this
Mortgage;

(h)

(payment of money) any payment to the Mortgagor of, or any Obligation to pay,
the Secured Moneys becoming void, voidable or otherwise unenforceable;

(i)

(unenforceable Rights) this Mortgagee or any Collateral Security becoming void,
voidable or otherwise unenforceable in whole or in part;

(j)

(Events of Default) an Event of Default occurring which is beyond the control of
the Mortgagor;

(k)

(non-authorisation) the Mortgagor or any co-surety not being or ceasing to be
authorised or empowered to enter into this Mortgage, the Transaction Documents,
a Loan Agreement, a Collateral Security or any relevant transaction;

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(l)

(assignment) the transfer or assignment by the Mortgagee of this Mortgage or any
Collateral Security;

(m)

(judgment) the Mortgagee obtaining judgment against the Mortgagor or any
co-surety;

(n)

(negotiable instruments) any negotiable or other instrument or document for the
time being outstanding; or

(o)

(changes to Mortgagee) any variation in or alteration to the status, nature or
composition (including takeover, merger, amalgamation and reconstruction) of the
Mortgagee, the Mortgagor or any co-surety or any other person or the memorandum
of association, articles of association, constitution, rules, trusts or other
documents relating to the Mortgagee or any co-surety or any other person.

17.2

Mortgagee may assign

The Mortgagee may assign to any person this Mortgage, the Secured Moneys, the
Rights, title and interest of the Mortgagee to the Mortgaged Property, the
benefit of any term of this Mortgage (irrespective of whether it touches or
concerns the Mortgaged Property), the benefit of any surety provisions contained
in or relating to this Mortgage or the benefit of any indemnity under this
Mortgage, irrespective of whether all or any of them would not otherwise be
assignable. The Mortgagor shall (at the expense of any assignee requiring the
same) enter into any further mortgages, deeds or other agreements for Security
or re-affirming to the satisfaction of such assignee the benefit of this
Mortgage and the benefit of and entitlement to all Rights of the Mortgagee and
Obligations of the Mortgagor under this Mortgage.

17.3

Authority to date and complete

The Mortgagor irrevocably authorises the Mortgagee and its Authorised
Representatives:

(a)

to date this Mortgage, the Reference Schedule and any other blanks left
uncompleted in this Mortgage pending advancing of any money by the Mortgagee;
and

(b)

as irrevocable attorney of the Mortgagor respectively to rectify any manifest
error, and to make and initial any alterations, deletions or additions to this
Mortgage in order to procure its registration.

17.4

Disclosure of confidential information

The Mortgagee, its Authorised Representatives or any employee or agent of any of
them may disclose information concerning the Mortgagor whenever it is thought
expedient to do so, even though that information would otherwise be confidential
or privileged.

18.

NOTICES

18.1

Form of Notices

Notices given under this Mortgage shall be:

(a)

in writing;

(b)

signed by the party giving the Notice or its Authorised Representative; and

(c)

addressed to the Notice Address of the person to whom it is to be given.

18.2

Method and address for giving Notices

Notices must be either:

(a)

delivered by hand;

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(b)

posted by pre-paid security or certified mail; or

(c)

transmitted by facsimile,

to the Notice Address of the person receiving the Notice.

18.3

Time of receipt

A Notice given to a person in accordance with this Mortgage is deemed to have
been given and received if:

(a)

delivered, on the day of delivery if delivered before 5:00pm on a Business Day,
otherwise on the next Business Day;

(b)

posted by pre-paid security mail or certified mail, on the second day after the
day on which the Notice was accepted by the post office from the party sending
the Notice; or

(c)

transmitted by facsimile:

 

(i)

the transmission report states that it was sent in full and without error; and

 

(ii)

no objection is received from the recipient,

on the day of transmission if that report states that the transmission was
completed before 5:00pm on a Business Day, otherwise on the next Business Day.

18.4

Objection to facsimile

A party receiving a facsimile transmission may object to the facsimile
transmission as not being fully intelligible. If a valid objection is made to a
facsimile transmission and that party requests re-transmission before 5:00pm on
the next Business Day after completion of the facsimile transmission, the party
sending the facsimile transmission shall re-transmit it, but any re-transmission
is deemed to have been made at the time of completion of the original facsimile
transmission.

19.

PROPER LAW, JURISDICTION

19.1

Choice of law

This Mortgage is governed by and construed in accordance with the laws of
Queensland.

19.2

Jurisdiction

Actions, suits or proceedings relating in any way to this Mortgage or documents
or dealings contemplated by it, may be instituted, heard and determined in a
court of competent jurisdiction in Queensland.

19.3

Submission to jurisdiction

Each party irrevocably submits to the non-exclusive jurisdiction of such court
for the purpose of any such action, suit or proceeding.

19.4

Service of process

A party may by Notice appoint another person at a specified address in
Queensland to receive service of process in connection with proceedings and
process served on that person is taken to be served on the party making the
appointment.

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20.

GENERAL

20.1

Set-off

If an Event of Default occurs, the Mortgagee may, without Notice to the
Mortgagor, combine, consolidate, merge or apply all or any part of any credit
balance standing to any account of the Mortgagor with any office or branch of
the Mortgagee or any amount available to the Mortgagee by way of set-off, lien
or counterclaim in or towards satisfaction of the Secured Moneys. The Mortgagee
may for this purpose:

(a)

redeem, vary the terms and conditions of, or appropriate all or any part of any
account, deposit of funds or other arrangement between the Mortgagor and the
Mortgagee on or under which the Mortgagee may be indebted to the Mortgagor,
notwithstanding any prior agreement to the contrary or the fact that the
respective liabilities may not be expressed in the same currency;

(b)

effect any currency conversion the Mortgagee considers necessary or desirable;
and

(c)

in the name of the Mortgagor, do all such acts and execute and deliver all such
documents as may be required to effect any combination, consolidation, merger or
application under this subclause.

20.2

Waiver

The non-exercise of or delay in exercising a Right of a party shall not operate
as a waiver of that Right, nor does a single exercise of a Right preclude
another exercise of it or the exercise of other Rights. A Right may only be
waived by Notice, signed by the party (or its Authorised Representative) to be
bound by the waiver.

20.3

Rights cumulative

The Rights and remedies provided in this Mortgage are cumulative and do not
exclude any Rights or remedies provided by law.

20.4

Amendment

Except to the extent expressly provided elsewhere in this Mortgage, this
Mortgage may only be amended or supplemented in writing signed by the parties.

20.5

Assignment

The Mortgagor may not assign or transfer all or any part of its Rights or
Obligations under this Mortgage or any Collateral Security without the prior
consent of the Mortgagee.

20.6

Mortgagee’s statement conclusive

A statement, signed on behalf of the Mortgagee by any of its Authorised
Representatives, as to any matter or of any amount (including without
limitation, the amount of the Secured Moneys) at the date specified in the
statement is conclusive in the absence of manifest error.

20.7

Time of the essence

Time shall be of the essence of the performance and observation of the
Obligations of the Mortgagor and the Debtor under this Mortgage and the
Collateral Securities.

20.8

Warranty of authority

Each person signing this Mortgage:

(a)

as attorney, by so doing, warrants to the other parties that, as at the date of
signing, the signatory has not received notice or information of the revocation
of the power of attorney appointing that person; and

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(b)

as an Authorised Representative, agent or trustee of a party, warrants to the
other parties that, as at the date of signing, the signatory has full authority
to execute this Mortgage on behalf of that party.

20.9

Severability

This Mortgage shall, so far as possible, be interpreted and construed so as not
to be invalid, illegal or unenforceable in any respect, but if a provision, on
its true interpretation or construction is held to be illegal, invalid or
unenforceable:

(a)

that provision shall, so far as possible, be read down to the extent that it may
be necessary to ensure that it is not illegal, invalid or unenforceable and as
may be reasonable in all the circumstances so as to give it a valid operation;
or

(b)

if the provision or part of it cannot effectively be read down, that provision
or part of it shall be deemed to be void and severable and the remaining
provisions of this Mortgage shall not in any way be affected or impaired and
shall continue notwithstanding that illegality, invalidity or unenforceability.

20.10

Delivery as a deed

Subject to express provisions in this Mortgage to the contrary, each party by
signing or executing this Mortgage is deemed to unconditionally sign, seal and
deliver this Mortgage as a deed, with the intention of being immediately legally
bound by this Mortgage.

20.11

Parties bound

This Mortgage binds each of the parties to the full extent provided in this
Mortgage even though:

(a)

one or more persons named in this Mortgage has not or does not sign or execute
this Mortgage; or

(b)

the signature or execution of this Mortgage by any of the parties (other than
the party sought to be made liable) is or may become void or voidable.

20.12

Liability of parties

If a party consists of more than one person:

(a)

an Obligation of those parties is a joint Obligation of all of them and a
several Obligation of each of them;

(b)

a Right given to those parties is a Right given jointly and severally to each of
them, and if exercised by one of them, is deemed to be exercised jointly; and

(c)

a representation, warranty or undertaking made by those parties is made by each
of them.

21.

SPECIAL CONDITIONS

The Mortgagor acknowledges that the special conditions listed in the Loan
Agreement apply in addition to the rights of the Lender under this Mortgage.

22

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REFERENCE SCHEDULE

Agreement Date:

 

21 December 2007

Company:

 

Australian Secured Financial Limited ACN 120 340 507

Share details:

Name of shareholder on Share certificate:

IA Global, Inc

 

Number of Shares:

All shares owned by the Mortgagor in the Company.

 

Class:

Ordinary

 

Amount to which Shares paid:

Fully paid

 

Initial loan amount:

 

The amount specified as such in a Loan Agreement dated or intended to be dated
the same date as this Mortgage, to be entered by the Mortgagor and the
Mortgagee.

Interest rate:

 

As specified as such in the Loan Agreement.

Repayment method:

 

As specified as such in the Loan Agreement.

Term of Mortgage:

 

As specified as such in the Loan Agreement.

Mortgagee’s Notice Address:

Address:

Level 1, 2 Corporate Court
Bundall QLD 4217

 

Facsimile number:

0011 61 7 5556 7901

 

Attention:

The Lending Manager

Mortgagor’s Notice Address:

Address:

Suite 2450, 101 California Street
San Francisco CA 94111 USA

 

Facsimile number:

0011 1 415 946 8801

 

Attention:

The President

Transaction Documents:

 

Loan agreement executed contemporaneously with this Mortgage.

Priority ranking:

 

First.

Collateral Securities:

 

Nil

Business Day place:

 

Business day place

23

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Executed

 

EXECUTED by IA GLOBAL, INC by:

 

 

Signature /s/ Derek Schneideman

 

Signature

Full name: Derek Schneideman

 

Full name:

Position: CEO

 

Position:

Date: 21st day of December, 2007

 

Date:

24

--------------------------------------------------------------------------------

 

 

 

DATED:  21 December 2007

 

 

 

BETWEEN:

IA GLOBAL, INC

“Mortgagor”

 

 

 

AND:

FRONTIER MORTGAGES PTY LTD CAN

126 509 322

“Mortgagee”

 

 

 

 

 

 

SHARE MORTGAGE

 

 

 

 

 

 

 

 

Davis Lawyers

Level 9

231 North Quay

BRISBANE QLD 4000

Telephone: (07) 3211 3433

Facsimile: (07) 3319 6088

5/4/08

 

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TABLE OF CONTENTS

1

DEFINITIONS AND INTERPRETATION

1

 

1.1

Definitions

1

 

1.2

Interpretation

5

2

MORTGAGE

6

 

2.1

Grant of Mortgage

6

 

2.2

Priority

6

 

2.3

Continuing nature

6

 

2.4

Premature discharge of Mortgage

6

 

2.5

Form of discharge

6

3

PAYMENT OF MONEY

7

 

3.1

Repayment of Secured Moneys and interest

7

 

3.2

Capitalisation of interest

7

 

3.3

No set off

7

 

3.4

No withholding

7

4

MANNER OF PAYMENT

7

 

4.1

Free of exchange

7

 

4.2

Legal tender

7

 

4.3

Order or direction

8

 

4.4

Bank cheque

8

 

4.5

Certificate

8

5

PAY MORTGAGEE’S COSTS

8

6

PRIOR OR SUBSEQUENT SECURITIES

8

 

6.1

Application of clause

8

 

6.2

Mortgagor to comply with other Securities

9

 

6.3

Mortgagee may pay debt

9

 

6.4

Mortgagor to repay debt to Mortgagee

9

 

6.5

Subsequent mortgages

9

 

6.6

Disclosures by Mortgagee

9

 

6.7

Variations to other Securities

9

 

6.8

Priority agreements

9

7

GENERAL COVENANTS

10

 

7.1

Requests for consent

10

 

7.2

No assignment of Mortgaged Property

10

 

7.3

Transfer

10

 

7.4

Calls made by Company

10

 

7.5

Notices from the Company

10

 

7.6

Voting at Company meetings

10

 

7.7

Further assurances

10

8

WARRANTIES AND ACKNOWLEDGEMENTS

11

 

8.1

Indefeasible title

11

 

8.2

Enforceability, capacity and disclosure

11

 

8.3

Continuing warranties

12

9

EVENTS OF DEFAULT

12

 

9.1

Events occurring

12

 

9.2

Consequences of an Event of Default

13

10

MORTGAGEE MAY REMEDY DEFAULT

14

11

POWERS OF MORTGAGEE

14

12

POWER OF SALE

14

 

12.1

Statutory powers on occurrence of Event of Default

14

 

12.2

Power of sale

14

 

12.3

Discretion

15

 

12.4

Public auction

15

 

12.5

Option to purchase

15

 

12.6

Additional powers

15

 

--------------------------------------------------------------------------------

13

PROCEEDS FROM SALE

15

14

LIABILITY FOR LOSS

15

 

14.1

Mortgagee not responsible

15

 

14.2

Indemnities

16

 

14.3

Release

16

 

14.4

Continuing indemnity

16

15

POSSESSION OF CERTIFICATE AND TRANSFER

16

 

15.1

First mortgage

16

 

15.2

Mortgagee not liable

16

 

15.3

Indemnity

17

16

ATTORNEY OF THE MORTGAGOR

17

 

16.1

Power of attorney

17

 

16.2

Appointment

17

 

16.3

Ratify and confirm

17

 

16.4

Authority

17

 

16.5

Costs

17

 

16.6

Irrevocable

18

17

MISCELLANEOUS

18

 

17.1

Mortgage not affected by intervening circumstances

18

 

17.2

Mortgagee may assign

19

 

17.3

Authority to date and complete

19

 

17.4

Disclosure of confidential information

19

18

NOTICES

19

 

18.1

Form of Notices

19

 

18.2

Method and address for giving Notices

19

 

18.3

Time of receipt

20

 

18.4

Objection to facsimile

20

19

PROPER LAW, JURISDICTION

20

 

19.1

Choice of law

20

 

19.2

Jurisdiction

20

 

19.3

Submission to jurisdiction

20

 

19.4

Service of process

20

20

GENERAL

21

 

20.1

Set-off

21

 

20.2

Waiver

21

 

20.3

Rights cumulative

21

 

20.4

Amendment

21

 

20.5

Assignment

21

 

20.6

Mortgagee’s statement conclusive

21

 

20.7

Time of the essence

21

 

20.8

Warranty of authority

21

 

20.9

Severability

22

 

20.1

Delivery as a deed

22

 

20.11

Parties bound

22

 

20.12

Liability of parties

22

REFERENCE SCHEDULE

23

 

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