**Exhibit 10.3.4**

** **

**Investment and Shareholders’ Agreement**

** **

between

 

**Channell Bushman Pty Limited**

(ACN 109 821 614)

 

and

 

**Channell Commercial Corporation**

** **

and

 

**Australia and New Zealand Banking Group Limited**

(ABN 11 005 357 522)

 

**BAKER   29 07 2004**Solicitors

 

 
| Level 26,  AMP Centre | Level 39,  Rialto         |
|-----------------------|---------------------------|
| 50 Bridge  Street     | 525 Collins  Street       |
| SYDNEY NSW  2000      | MELBOURNE  VIC  3000 |
| Tel: (02)  9225-0200  | Tel:  (03) 9617-4200 |
| Fax: (02)  9225-1595  | Fax:  (03) 9614-2103 |

 

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**Contents**

** **
| **Clause  number** | ** ** | **Heading**                             |       |
|--------------------|------------|-----------------------------------------|------------|
| ** **         | ** ** | ** **                              | ** ** |
| **1.**             | ** ** | **Definitions and  interpretation**     | ** ** |
| 1.1                |       | Definitions                             |       |
| 1.2                |       | Interpretation                          |       |
| 1.3                |       | Payments                                |       |
|               |       |                                    |       |
| **2.**             | ** ** | **Conditions**                          | ** ** |
| 2.1                |       | Conditions                              |       |
| 2.2                |       | Best endeavours to fulfil               |       |
| 2.3                |       | Waiver of certain  Conditions           |       |
| 2.4                |       | Termination  for failure of Conditions  |       |
|               |       |                                    |       |
| **3.**             | ** ** | **Completion**                          | ** ** |
| 3.1                |       | Time and place of  Completion           |       |
| 3.2                |       | Investment and  other obligations       |       |
| 3.3                |       | Consent to investments                  |       |
| 3.4                |       | Use of investment funds                 |       |
| 3.5                |       | Parties bound by  the Constitution      |       |
| 3.6                |       | Post-Completion                         |       |
|               |       |                                    |       |
| **4.**             | ** ** | **Warranties**                          | ** ** |
| 4.1                |       | Warranties                              |       |
| 4.2                |       | Reliance                                |       |
| 4.3                |       | Disclosures                             |       |
| 4.4                |       | Assignment of Warranties                |       |
|               |       |                                    |       |
| **5.**             | ** ** | **Non-compete**                         | ** ** |
| 5.1                |       | Channell  obligations                   |       |
| 5.2                |       | ANZ  obligations                        |       |
| 5.3                |       | Restraints fair and  reasonable         |       |
| 5.4                |       | Acknowledgments                         |       |
|               |       |                                    |       |
| **6.**             | ** ** | **Financial  information**              | ** ** |
| 6.1                |       | Annual  business plan                   |       |
| 6.2                |       | Management  accounts                    |       |
| 6.3                |       | Audited  accounts                       |       |
| 6.4                |       | Other information and  access           |       |
| 6.5                |       | Confidentiality                         |       |
| 6.6                |       | D&O Policy                          |       |
| 6.7                |       | Other  insurance                        |       |
|               |       |                                    |       |
| **7.**             | ** ** | **Future conduct of the  Company**      | ** ** |
| 7.1                |       | Management of the  Business             |       |
| 7.2                |       | Board                                   |       |
| 7.3                |       | Conduct of  the Board and Director fees |       |
| 7.4                |       | Matters  requiring unanimous approval   |       |

 

i

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| 7.5        |       | The Chairman                                |       |
|------------|------------|---------------------------------------------|------------|
| 7.6        |       | Day-to-day management                       |       |
| 7.7        |       | Senior Executives                           |       |
| 7.8        |       | Observer at Board  meetings                 |       |
| 7.9        |       | Guarantees for financiers                   |       |
| 7.10       |       | Quorum for Member  meetings                 |       |
| 7.11       |       | Buyer’s representative                 |       |
|       |       |                                        |       |
| **8.**     | ** ** | **Disposal of Shares**                      | ** ** |
| 8.1        |       | Requirements  for Disposal of Shares        |       |
| 8.2        |       | Permitted transfers                         |       |
| 8.3        |       | Pre-emptive right                           |       |
| 8.4        |       | Tag along rights                            |       |
| 8.5        |       | Sale of Shares by  Channell Member          |       |
| 8.6        |       | Perfection of Transfers                     |       |
| 8.7        |       | Miscellaneous                               |       |
|       |       |                                        |       |
| **9.**     | ** ** | **Issue of  Shares**                        | ** ** |
| ** ** | ** ** | ** **                                  | ** ** |
| **10.**    | ** ** | **Exit**                                    | ** ** |
| 10.1       |       | Intention  to exit                          |       |
| 10.2       |       | Sale or  Listing                            |       |
| 10.3       |       | Call Option                                 |       |
|       |       |                                        |       |
| **11.**    | ** ** | **New  Shareholders**                       | ** ** |
| 11.1       |       | Deed  of Adherence                          |       |
| 11.2       |       | Assignment                                  |       |
|       |       |                                        |       |
| **12.**    | ** ** | **Fees and  costs**                         | ** ** |
| 12.1       |       | Capital  raising fee                        |       |
| 12.2       |       | Investors’  costs                      |       |
|       |       |                                        |       |
| **13.**    | ** ** | **Duration**                                | ** ** |
| 13.1       |       | Termination                                 |       |
| 13.2       |       | Continuing  rights and obligations          |       |
|       |       |                                        |       |
| **14.**    | ** ** | **Confidentiality  and announcements**      | ** ** |
| 14.1       |       | Provisions to  remain confidential          |       |
| 14.2       |       | Permitted disclosures                       |       |
| 14.3       |       | Public Announcements                        |       |
|       |       |                                        |       |
| **15.**    | ** ** | **Investors’  obligations and rights** | ** ** |
| 15.1       |       | Several and not Joint                       |       |
| 15.2       |       | Separate  Warranties and undertakings       |       |
| 15.3       |       | Exercise of  Investors’ rights         |       |
| 15.4       |       | Waiver of Investors’  rights           |       |
|       |       |                                        |       |
| **16.**    | ** ** | **Notices**                                 | ** ** |
| 16.1       |       | Requirements                                |       |
| 16.2       |       | Receipt                                     |       |

 

ii

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| **17.**    | ** ** | **General  provisions**              | ** ** |
|------------|------------|--------------------------------------|------------|
| 17.1       |       | Entire  agreement                    |       |
| 17.2       |       | Further  assurances                  |       |
| 17.3       |       | Conflict with the  Constitution      |       |
| 17.4       |       | Invalid or  unenforceable provisions |       |
| 17.5       |       | No merger                            |       |
| 17.6       |       | Waiver and exercise  of rights       |       |
| 17.7       |       | Rights  Cumulative                   |       |
| 17.8       |       | Acknowledgment                       |       |
| 17.9       |       | Amendment                            |       |
| 17.10      |       | Counterparts                         |       |
| 17.11      |       | Governing  law                       |       |
| 17.12      |       | Jurisdiction                         |       |
| 17.13      |       | Consents or approvals                |       |
| 17.14      |       | GST                                  |       |
| 17.15      |       | Constitution                         |       |
|       |       |                                 |       |
| ** ** | ** ** | **Annexure 1**                       | ** ** |
|       |       | The Company                          |       |
|       |       |                                 |       |
| ** ** | ** ** | **Annexure 2**                       | ** ** |
|       |       | Warranties                           |       |
|       |       |                                 |       |
| ** ** | ** ** | **Annexure 3**                       | ** ** |
|       |       | Deed of Adherence                    |       |
|       |       |                                 |       |
| ** ** | ** ** | **Annexure 4**                       | ** ** |
|       |       | Agreed Form Documents                |       |

 

iii

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**Investment and Shareholders’ Agreement**

** **

**ThisAgreement** is made on the second day of August,2004.

 

**Between**

 

Channell Bushman Pty Limited(ACN 109 821 614) of 391 Park Road, Unit Q3, Regents Park, New South Wales 2143(the “Company”)

 

**and**

 

Channell Commercial Corporationof 26040 Ynez Road, Temecula CA USA (“Channell”)

 

**and**

 

Australia and NewZealand Banking Group Limited (ABN 11 005 357 522) of 100 Queen Street, Melbourne,Victoria 3000 (“ANZ”)

 

**Recitals**

 

A.                                                     TheCompany has been incorporated to acquire the shares of the Target Companiesand, indirectly through the Target Companies, the Purchased Assets.

 

B.                                                       ThisAgreement sets out the terms on which the Investors are willing to invest inthe Company and certain matters regarding the operation of the Companyfollowing the acquisition of the Target Companies.

 

**Operativeprovisions**

 

**1.****                                      Definitionsand interpretation**

 

**1.1****                               Definitions**

 

In this Agreement, unless thecontext requires another meaning:

 

**“A Class Ordinary Shares”** means the A class ordinary shares in the capital of the Companyhaving the rights set out in the Constitution from time to time;

 

**“Accounting Standards”** means:

 

(a)                                                    the accounting standards applicable for the purposes of the Act;

 

(b)                                                   the requirements of the Act for the preparation and content offinancial statements, directors’ reports and auditors reports; and

 

4

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(c)                                                    generally accepted and consistently applied accounting principlesand practices in Australia, except those inconsistent with the standards orrequirements referred to in paragraphs (a) or (b);

 

**“Acquisition Agreement”** means the agreement between Channell, the Company, Australia’sBushman Tanks Pty Ltd ACN 010 928 168 and others relating to, among othermatters, the acquisition by the Company of the shares in the Target Companies;

 

**“Act”**means the *Corporations Act*2001and its associated regulations;

 

**“Agreed Form”** means in the form previously agreed by or on behalf of theInvestors and signed for the purposes of identification by or on behalf of eachof them;

 

**“Agreement”** means this investment and shareholders’ agreement;

 

**“Alternative Purchaser”** has the meaning given to that term in clause 8.3(h);

 

**“ANZ”** means Australia and New Zealand Banking Group Limited ABN 11 005357 522;

 

**“ANZ Director”** means the Director appointed by ANZ, who shall be Kevin Cooney oranother ANZ employee agreed by the Investors;

 

**“ANZGroup”** means ANZ and its Related Bodies Corporate;

 

**“ANZMember”** means:

 

(a)                                                    any person to whom B Class Ordinary Shares are transferred underclause 8.2; and

 

(b)                                                   where ANZ holds Shares, ANZ;

 

**“ANZPE Investment Committee”** means the investment committee of ANZ Private Equity;

 

**“ANZ Private Equity”** means ANZ Private Equity, a division of ANZ;

 

**“B Class Ordinary Shares”** means the B class ordinary shares in the capital of the Companyhaving the rights set out in the Constitution from time to time;

 

**“Board”**means the board of Directors as constituted from time to time;

 

**“Business”** means the business carried on by the Target Companies ofmanufacturing and selling products, including products containing polyethylenerotomoulded plastic;

 

**“Business Day”**means a day that is not a Saturday, Sunday or a public holiday orbank holiday in Sydney;

 

**“Business Plan”**has the meaning given to that term in clause 6.1(a);

 

**“Call Option”** has the meaning given to that term in clause 10.3(a);

 

**“Call Option Notice”** has the meaning given to that term in clause 10.3(b);

 

5

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**“Change of Control”** means the acquisition by any person (excluding the Investors andthe Investor Members) of any interest in the Shares****if,upon completion of that acquisition, such person, together with persons actingin concert with the first mentioned person, would have an interest in not lessthan 75% of the Shares;

 

**“Channell Directors”** means any Directors appointed by Channell;

 

**“ChannellMember”** means:

 

(a)                                                    any person to whom A Class Ordinary Shares are transferred underclause 8.2; and

 

(b)                                                   where Channell holds Shares, Channell;

 

**“Completion”** means completion under clause3.2;

 

**“Completion Date”** means the date upon which Completion takes place;

 

**“Completion Notice”** has the meaning given to that term in clause 8.3(e);

 

**“Conditions”** means the conditions set out in clause 2.1;

 

**“Constitution”** means:

 

(a)                                                    at Completion, the constitution of the Company in the Agreed Form;and

 

(b)                                                   thereafter, the constitution of the Company from time to time;

 

**“D&O Policy”** has the meaning given to that term in clause 6.6(a);

 

**“Deed of Access andIndemnity”** means the deed of accessand indemnity in the Agreed Form between the Company and each of the Directors;

 

**“Deed of Adherence”** means a deed poll in the form set out in Annexure 3;

 

**“Directors”**means the directors of the Company from time to time;

 

**“Disposal**” has the meaning given to that term in clause 8.1(f), and **“Dispose”** has a corresponding meaning;

 

**“Dollars” **and **“****$**” ****meansthe lawful currency of Australia;

 

**“Fair Market Value”** means the fair market value of all Shares as determined by theIndependent Valuer and, in making any determination of fair market value forthe proposed transfer of Shares under this Agreement, the Independent Valuermust:

 

#### (a)                                                    not take account of whether the Shares to be transferred comprise amajority or minority interest in the Company;

####  

#### (b)                                                   ignore the fact that the transferability of the Shares to betransferred is restricted by this Agreement or the Constitution; and

####  

#### (c)                                                    assume that the Shares to be transferred are being sold by a willing(but not anxious) vendor and are being purchased by a willing (but not anxious)purchaser.

 

6

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#### TheCompany will bear the costs of the Independent Valuer in making thedetermination;

 

**“Financing Documents”** means the letter of offer from the National Australia Bank Limitedaddressed to the Company and dated 13 July, 2004, together with the Guaranteesand Debtor Finance Agreement, Registered Mortgage Debentures and Guarantees andIndemnities between National Australia Bank Limited and the Company and TargetCompanies, all as set out in the Annexure “E” Schedule to the letter of offer;

 

**“Government Agency”** means:

 

**(a)****                                                   ****a government, whetherforeign, federal, state, territorial or local;**

 

**(b)****                                                  ****a department, officeor minister of a government acting in that capacity; or**

 

**(c)****                                                   ****a commission,delegate, instrumentality, agency, board or other governmental,semi-governmental, judicial, administrative, monetary or fiscal authority,whether statutory or not;**

 

**“Group Companies “****means the Company,the Target Companies and the Subsidiaries of the Company and the TargetCompanies;**

 

**“GST”****has the meaning givenin section 195-1 of the *A New Tax System(Goods and Services Tax) Act* 1999 (Cth);**

 

**“Independent Adviser”** means:

 

(a)                                                    any national accounting firm or investment bank mutually agreed bythe parties; or

 

(b)                                                   if the parties cannot agree under paragraph (a) within 5 BusinessDays, Deloitte Touche Tohmatsu; or

 

**(c)****                                                   ** if ANZ advises the other parties that it considers Deloitte ToucheTohmatsu is not independent, any one of PriceWaterhouseCoopers, Ernst and Youngor KPMG, as determined by Channell in its sole discretion;

 

**“Independent Valuer”** means:

 

(a)                                                    any national accounting firm or investment bank mutually agreed bythe parties; or

 

(b)                                                   if the parties cannot agree under paragraph (a) within 5 BusinessDays, Deloitte Touche Tohmatsu; or

 

(c)                                                    if ANZ advises the other parties that it considers Deloitte ToucheTohmatsu is not independent, any one of PriceWaterhouseCoopers, Ernst and Youngor KPMG, as determined by Channell in its sole discretion;

 

**“InvestorMembers”** means the ANZ Member and the Channell Member;

 

**“Investors”** means ANZ and Channell;

 

7

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**“Listing”**means the admission of the Company or any Related Body Corporate ofthe Company to the official list of Australian Stock Exchange Limited or anyother recognised stock exchange approved by the Investors;

 

**“Listing Rules”** means the official listing rules from time to time of AustralianStock Exchange Limited or any other recognised stock exchange approved by theInvestors;

 

**“Member”**means a person who is entered in the Members’ Register from time totime as the holder of Shares;

 

**“Members’ Register”**means the register of Members of the Company;

 

**“New Shareholder”** means a person who is not already a party to this Agreement and towhom it is proposed to issue or transfer Shares;

 

**“OrdinaryShares”** means ordinary shares in the capital of theCompany from time to time;

 

**“Pre-emptionNotice”** has the meaning given to that term in clause8.3(b);

 

**“Pre-emptionPrice”** has the meaning given to that term in clause8.3(b)(iii);

 

**“Pre-emptionPurchaser”** has the meaning given to that term inclause 8.3(a);

 

**“Pre-emptionTerms”** has the meaning given to that term in clause8.3(b)(iii);

 

**“Pre-emptionVendor”** has the meaning given to that term in clause8.3(a);

 

**“PurchasedAssets”**has the meaning as defined in the AcquisitionAgreement;

 

**“Related BodyCorporate”** has the same meaning as inthe Act;

 

**“Related Party”** has the meaning given to that term under section 228 of the Act asif a reference to a public company in that section were a reference to anyGroup Company;

 

**“RetentionPeriod”** means 18 months from the Completion Date;

 

**“Sale”** means:

 

(a) the entering into of one or moreagreements (whether conditional or not) for the sale of Shares giving rise to aChange of Control; or

 

(b) the entering into of one or moreagreements (whether conditional or not) for the sale of all (or substantiallyall) of the assets or business undertaking of the Group Companies; or

 

(c) any other transaction or series oftransactions (including without limitation a scheme of arrangement, sharebuy-back, dividend or other distribution) which directly or indirectly has theeffect of a sale of Shares giving rise to a Change of Control or for the saleof all (or substantially all) of the assets or business undertaking of theGroup Companies.

 

**“Sale Shares”** has the meaning given to that term in clause 8.3(b)(ii);

 

8

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**“Security Interest”****means an interest inan asset which provides** security for,or protects against default by, a person for the payment or satisfaction of adebt, obligation or liability including a mortgage, charge, bill of sale,pledge, deposit, lien, encumbrance, hypothecation, first right of refusal,voting right or arrangement for the retention of title or any agreement, optionor other arrangement to grant such an interest or right;

 

**“Senior Executives”** means any senior executive employee of any Group Company whosetotal remuneration is to be or is in excess of $200,000 per annum or who isnamed as a “Key Employee” in the Acquisition Agreement;

 

**“Shares”**means shares of any class in the capital of the Company from time totime;

 

**“Subscribers”** has the meaning given to that term under clause 9(b)(i);

 

**“Subscription Notice”** has the meaning given to that term under clause 9(b);

 

**“Subscription Shares”** has the meaning given to that term under clause 9(a);

 

**“Subscription Terms”** has the meaning given to that term under clause 9(b)(iii);

 

**“Subsidiaries”** has the meaning given to it in the Act;

 

**“Tag Along Offer”** has the meaning given to that term in clause 8.4(d);

 

**“Target Companies”** means Bushmans Group Pty Ltd ACN 090 744 022, Hold-on IndustriesAustralia Pty Ltd ACN 074 185 461, Polyrib Tanks Pty Ltd ACN 062 942 661 andAustralian Bushman Tanks Pty Ltd ACN 058 504 108;

 

**“Tax”**means a tax, levy, charge, impost, deduction, withholding or duty of any nature(including stamp and transaction duty and GST, value added or similar tax) atany time:

 

(a)                                                    imposed or levied by any Government Agency; or

 

(b)                                                   required to be remitted to, or collected, withheld or assessed by,any Government Agency; and

 

(c)                                                    any related interest, expense, fine, penalty or other charge onthose amounts;

 

**“Taxable Supply”****has the meaning givento that expression under********the *A New Tax System (Goods and Services Tax) Act*1999 (Cth);**

 

**“Transfer Shares”**has the meaning given to it in clause 8.4;

 

**“Transfer Terms”** has the meaning given to that term in clause8.4(c);

 

**“Transferee”** has the meaning given to that term in clause 8.4;

 

**“Transferor”** has the meaning given to that term in clause 8.6(a);

 

**“Transferring Member”** has the meaning given to that term in clause 8.4; and

 

**“Warranties”** means the representations, warranties and covenants made by theCompany under clause 4 and **“Warranty”** means anyone of them.

 

9

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**1.2****                                                 Interpretation**

 

#### (a)                                                    In this Agreement, unless the context requires another meaning, areference:

####  

##### (i)                                                         to the singular includes the plural and vice versa;

#####  

##### (ii)                                                      to a gender includes all genders;

#####  

##### (iii)                                                   to a document (including this Agreement) is a reference to thatdocument (including any Schedules and Annexures) as amended, consolidated,supplemented, assigned, novated or replaced;

#####  

##### (iv)                                                  to an agreement includes any undertaking, representation, deed,agreement or legally enforceable arrangement or understanding whether writtenor not;

#####  

##### (v)                                                     to a party means a party to this Agreement;

#####  

##### (vi)                                                  to an item, Recital, clause, Schedule or Annexure is to an item,Recital, clause, Schedule or Annexure of or to this Agreement;

#####  

##### (vii)                                               to a notice means a notice, approval, demand, request, nomination orother communication given by one party to another under or in connection withthis Agreement;

#####  

##### (viii)                                            to a person (including a party) includes:

#####  

###### (A)                                                    an individual, company, other body corporate, association,partnership, firm, joint venture, trust, fund or Government Agency;

######  

###### (B)                                                      the person’s successors, permitted assigns, substitutes, executorsand administrators; and

######  

###### (C)                                                      a reference to the representative member of the GST group to whichthe person belongs to the extent that the representative member has assumedrights, entitlements, benefits, obligations and liabilities which would remainwith the person if the person were not a member of a GST group;

######  

##### (ix)                                                    to a law includes any legislation, judgment, rule of common law orequity or rule of any applicable stock exchange, and is a reference to that lawas amended, consolidated, supplemented or replaced, and includes a reference toany regulation, by-law or other subordinate legislation;

#####  

##### (x)                                                       to proceedings includes litigation, arbitration and investigation;

#####  

##### (xi)                                                    to a judgement includes an order, injunction, decree, determinationor award of any court or tribunal;

#####  

##### (xii)                                                 to time is to Sydney time;

 

10

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##### (xiii)                                              to an accounting term is to be interpreted according to theAccounting Standards;

#####  

##### (xiv)                                             the word “including” or “includes” means “including, but not limitedto,” or “includes, without limitation, respectively”.

#####  

#### (b)                                                   Where a word or phrase is defined, its other grammatical forms havea corresponding meaning.

####  

#### (c)                                                    Headings are for convenience only and do not affect theinterpretation of this Agreement.

####  

#### (d)                                                   If a payment or other act must (but for this clause) be made or doneon a day that is not a Business Day, then it must be made or done on the nextBusiness Day.

####  

#### (e)                                                    If a period starts from, after or before a day or the day of an actor event, it excludes that day.

####  

#### (f)                                                      This Agreement must not be construed adversely to a party onlybecause that party was responsible for preparing it.

####  

**1.3****                                                 Payments**

 

#### (a)                                                    All payments required to be made under this Agreement must betendered, as agreed by the recipient in respect of each payment, by:

####  

##### (i)                                                         a draft or cheque drawn by a bank as defined in the *Banking Act* 19*59* (Cth); or

#####  

##### (ii)                                                      by way of a direct transfer of immediately available funds to thebank account nominated prior to the due date for payment by the party to whomthe payment is due; or

#####  

##### (iii)                                                   to the extent that the Company’s lawyers hold funds to the order ofa party (or its representative), the Company’s lawyers receiving a signedirrevocable authorisation from the party to whose order the funds are held (ina form acceptable to the Company’s lawyers) unconditionally authorising theCompany’s lawyers to immediately hold those funds to the order of the Company.

#####  

#### (b)                                                   If clause 1.3(a)(ii)applies, unless otherwise agreed by the recipient, payment will be deemed tohave been made only when the receipt of the relevant funds is confirmed orallyor in writing by the bank operating the nominated account.

 

11

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**2.****                                                        Conditions**

 

**2.1****                                                 Conditions**

 

Except for clauses 1, 2, 14, 16and 17, Completion is conditional upon the following matters having beensatisfied (in each case on terms reasonably acceptable to the party entitled tothe benefit of the condition) or waived:

 

#### (a)                                                    ANZ having completed its due diligence investigations in respect ofthe Target Companies, the Purchased Assets and the Business and beingreasonably satisfied with those due diligence investigations, including beingreasonably satisfied with its ability to rely on any due diligence reportprepared in respect of the Target Companies, the Purchased Assets or theBusiness which is addressed to ANZ;

####  

#### (b)                                                   ANZ having obtained the approval of the ANZPE Investment Committeeto the investments it proposes to make under this Agreement;

####  

#### (c)                                                    the approval by the board of directors of each party of theexecution and delivery of this Agreement;

####  

#### (d)                                                   the approval by the Board of the transactions contemplated underthis Agreement (including the issue and allotment of Shares under clause 3.2);

####  

#### (e)                                                    the passing of a Board resolution confirming the matters referred toin section 260A(1)(a) of the Act in relation to the costs to be paid by theCompany under clause 12 or Member approval of the payment of those costs inaccordance with section 260A(1)(b) of the Act;

####  

#### (f)                                                      all conditions precedent to drawdown under the Financing Documentshaving been satisfied or waived (save for any condition relating to thecompletion of this Agreement or the Acquisition Agreement);

####  

#### (g)                                                   the terms of the Acquisition Agreement having been approved by allparties and the Acquisition Agreement having been exchanged in accordance withits terms and having become unconditional (save for any condition relating tocompletion of this Agreement or the Financing Documents) and all completionobligations under the Acquisition Agreement having been satisfied or waived;and

####  

#### (h)                                                   the Company having adopted the Constitution and no amendment to theConstitution having been effected since the Company’s incorporation unless inaccordance with the Act.

####  

**2.2****                                                 Bestendeavours to fulfil**

 

The parties, so far as they arereasonably able, must use their respective best endeavours to fulfil theConditions.

 

12

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**2.3****                                                 Waiverof certain Conditions**

 

(a)                                                    Subject to paragraph (b), the Conditions are for the sole benefit ofthe Investors and the Investors may in their absolute discretion jointly waiveall or any of those Conditions (in whole or in part) by notice to the Companyon or before Completion.

 

(b)                                                   The Conditions in clauses 2.1(a) and 2.1(b) are for the sole benefitof ANZ and ANZ may in its absolute discretion waive all or any of thoseConditions (in whole or in part) by notice to the Company and Channell on orbefore Completion.

 

**2.4****                                                 Terminationfor failure of Conditions**

 

If any of the Conditions arenot satisfied in full or waived on or before 31 July 2004, or such later dateagreed by the Investors, then either Investor may terminate this Agreement(without liability) by notice to the other parties.

 

**3.****                                                        Completion**

 

**3.1****                                                 Timeand place of Completion**

 

Completion must take place atthe offices of Macrossans Lawyers at Level 23, AMP Place, 10 Eagle Street,Brisbane, Queensland, immediately following waiver or fulfilment of theConditions (to the satisfaction of the Investors) or on any other date as theInvestors agree in writing.

 

**3.2****                                                 Investmentand other obligations**

 

At Completion:

 

#### (a)                                                    Channell must, subject to the Company fulfilling its obligationspursuant to clause 3.2(c)(i):

####  

##### (i)                                                         subscribe for 11,249,998 A Class Ordinary Shares at $1.00 per Share;and

#####  

##### (ii)                                                      at its option either:

#####  

###### (A)                                                    pay to the Company $11,249,998 for the A Class Ordinary Sharessubscribed for pursuant to clause 3.2(a)(i); or

######  

###### (B)                                                      pay to the Company $10,249,998 and issue to the Company (or itsnominee) that number of ordinary shares in Channell calculated by dividing$1,000,000 by the average closing price of Channell’s ordinary shares on TheNasdaq Stock Market Inc’s National Market for the trading days included withinthe thirty day calendar period ending on the Business Day immediately prior tothe closing date under the Acquisition Agreement, for the A Class OrdinaryShares subscribed for pursuant to clause 3.2(a)(i);

 

13

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#### (b)                                                   ANZ must, subject to the Company fulfilling its obligations pursuantto clause 3.2(c)(ii):

####  

##### (i)                                                         subscribe in cash for 3,750,000 B Class Ordinary Shares at $1.00 perShare; and

#####  

##### (ii)                                                      pay to the Company $3,750,000 for the B Class Ordinary Sharessubscribed for pursuant to clause 3.2(b)(i);

#####  

#### (c)                                                    the Company must issue:

####  

##### (i)                                                         11,249,998 A Class Ordinary Shares (and a certificate for thoseShares) to Channell free of Security Interests (except those set out in theConstitution and/or this Agreement) and credited as fully paid and willregister Channel in the Members Register as the holder of those Shares;

#####  

##### (ii)                                                      3,750,000 B Class Ordinary Shares (and a certificate for thoseShares) to ANZ free of Security Interests (except those set out in theConstitution and/or this Agreement) and credited as fully paid and willregister ANZ in the Members Register as the holder of those Shares;

#####  

#### (d)                                                   the Company must take all steps necessary to drawdown funds underthe Financing Documents and to complete the Acquisition Agreement; and

####  

#### (e)                                                    the Company must pay the fees and costs described in clause 12 tothe extent payable at Completion and otherwise arrange for payment of any feespayable under clause 12 which can only be paid after the period described insection 260B(6) of the Act has expired.

####  

**3.3****                                                 Consentto investments**

 

The parties consent to theinvestments referred to in clause 3.2 and so far as they are able, waive oragree to procure the waiver of any rights or restrictions which may exist inthe Constitution or otherwise which might prevent the investments referred toin clause 3.2.

 

**3.4****                                                 Useof investment funds**

 

The proceeds of the investmentsmade under clause 3.2 will be used by the Company for the purpose of:

 

#### (a)                                                    paying the consideration due by the Company under the AcquisitionAgreement;

####  

#### (b)                                                   paying the fees and costs described in clause 12 to the extentpayable at Completion; and

####  

#### (c)                                                    in respect of the balance, providing working capital for the GroupCompanies or otherwise in accordance with a budget approved by the Board.

####  

**3.5****                                                 Partiesbound by the Constitution**

 

Each party acknowledges andagrees to observe the provisions of this Agreement and the Constitution.

 

14

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**3.6****                                                 Post-Completion**

 

#### (a)                                                    Following Completion, the Company must:

####  

##### (i)                                                         if requested by the ANZ Member, procure the appointment of KevinCooney or another ANZ employee agreed by the Investors (acting reasonably) as aDirector of the Company; and

#####  

##### (ii)                                                      enter into and deliver to each Director a Deed of Access andIndemnity in favour of the Director and effective from the time of hisappointment.

#####  

#### (b)                                                   As soon as practicable following Completion, and in any event withinapplicable time limits, the Company must lodge with the Australian Securitiesand Investments Commission and any other appropriate regulatory authorities allappropriate documents and forms.

####  

**4.****                                                        Warranties**

 

**4.1****                                                 Warranties**

 

#### (a)                                                    The Company represents, warrants and covenants to and with theInvestors that each of the statements contained in Annexure 2 (each a“Warranty”) is now and will be true, accurate and not misleading at Completion(except that where any statement is expressed to be made only at a particulardate it is given only at that date).

####  

#### (b)                                                   Each Warranty is separate and independent and unless expresslyprovided is not limited by any other Warranty or provision of this Agreement.

####  

#### (c)                                                    Each Investor represents and warrants to each of the other partiesthat each of the following statements is true and accurate and not misleadingat:

####  

##### (i)                                                         Completion:

#####  

###### (A)                                                    it is validly existing under the laws of its place of incorporation;

######  

###### (B)                                                      it has the power to enter into and perform its obligations underthis Agreement and to carry out the transactions contemplated by thisAgreement; and

######  

###### (C)                                                      it has taken all necessary action to authorise its entry into andperformance of this Agreement and to carry out the transactions contemplated bythis Agreement; and

######  

##### (ii)                                                      the date of this Agreement: it is up to date with all NASDAQ and SECcontinuous disclosure requirements.

 

15

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#### (d)                                                   Channell represents and warrants to ANZ that each of the followingstatements is true and accurate and not misleading at:

####  

##### (i)                                                         Completion:

#####  

###### (A)                                                    it is not aware of any current, threatened or potential breach ofthe warranties by the vendors under the Acquisition Agreement; and

######  

###### (B)                                                      it is not insolvent or subject to any current, threatened or pendingbankruptcy proceedings, winding up applications, administration, receivershipor liquidation;

######  

#### (e)                                                    the date of this Agreement: there is no current, threatened orpending material litigation involving Channell which may adversely impact onthe operations of the Company. If between the date of this Agreement andCompletion Channell becomes aware of any matter or circumstance which would bea breach of the warranties given under clauses 4.1(c)(ii) or 4.1(d)(ii) if theywere given at Completion, Channell must promptly disclose the matter orcircumstance to ANZ.

####  

**4.2****                                                 Reliance**

 

#### (a)                                                    The Company acknowledges that the Investors have been induced toenter into this Agreement by the Warranties and have relied on the truth andaccuracy of the Warranties.

####  

#### (b)                                                   Channell acknowledges that ANZ has been induced to enter into thisAgreement by the warranties given by Channell in clauses 4.1(c) and 4.1(d) andhas relied on the truth and accuracy of those warranties.

####  

#### (c)                                                    ANZ acknowledges that Channell has been induced to enter into thisAgreement by the warranties given by ANZ in clause 4.1(c) and has relied on thetruth and accuracy of those warranties.

####  

**4.3****                                                 Disclosures**

 

Each of the Warranties is givensubject to the matters expressly provided in this Agreement and the FinancingDocuments.

 

**4.4****                                                 Assignmentof Warranties**

 

The benefit of the Warrantiesmay not be assigned in whole or in part, without the prior written approval ofthe other parties in their absolute discretion.

 

**5.****                                                        Non-compete**

 

**5.1****                                                 Channellobligations**

 

Channell undertakes to theCompany (for itself and as trustee for each member of the Group Companies) andto ANZ that it will not, so long as it (or the Channell Member) holds Shares

 

16

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in the Company, directly orindirectly, whether as principal, agent, director, executive officer,shareholder, partner, joint venturer, adviser, consultant or otherwise:

 

#### (a)                                                    carry on or be engaged or involved in within Australia any businessor activity that competes with the Business (or any part of it); or

####  

#### (b)                                                   attempt, counsel, procure or otherwise assist any person to carry onor be engaged or involved in within Australia any business or activity thatcompetes with the Business (or any part of it).

 

**5.2****                                                 ANZobligations**

 

ANZ undertakes to the Company(for itself and as trustee for each member of the Group Companies) and toChannell that so long as ANZ (or the ANZ Member) holds Shares in the CompanyANZ will procure that ANZ Private Equity does not, and no person operatingwithin ANZ Private Equity, directly or indirectly, invests equity in anyperson, business or activity that competes with the Business (or any part ofit) in Australia.

 

**5.3****                                                 Restraintsfair and reasonable**

 

The Investors acknowledge andagree that:

 

#### (a)                                                    the covenants in clauses 5.1 and 5.2 are material to the Company’sdecision to enter into this Agreement;

####  

#### (b)                                                   the restraints contained in clauses 5.1 and 5.2 are:

####  

##### (i)                                                         fair and reasonable regarding the subject matter, area and duration;and

#####  

##### (ii)                                                      reasonably required by the Company to protect the business,financial and proprietary interests of the Group Companies; and

#####  

#### (c)                                                    each of the obligations in clauses 5.1 and 5.2 is severable andindependent so that if clause 5.1 or clause 5.2 or any part of them is heldinvalid or unenforceable by a court of law then clause 5.1, clause 5.2 and/orsuch part as the case may be will be considered to be automatically deletedfrom this Agreement.  Any such deletionshall apply only to that part of clause 5.1 and/or clause 5.2 so adjudicated,and the operation of such part will only be deemed inapplicable in theparticular jurisdiction in which the adjudication is made.

####  

**5.4****                                                 Acknowledgments**

 

Notwithstanding any otherprovision of this Agreement, the parties acknowledge and agree that the ANZGroup:

 

#### (a)                                                    provides a range of banking, funds management and advisory servicesinternationally;

####  

#### (b)                                                   is the responsible entity and/or manager of a number of managedfunds and trusts and has obligations and duties in relation to each of thosemanaged funds and trusts;

 

17

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#### (c)                                                    may, subject to clause 5.2, invest funds in companies or otherentities that may compete directly or indirectly with the Company;

####  

#### (d)                                                   cannot foster and promote the Business where such conduct wouldbreach its obligations to, or adversely impact on, the shareholdings of the ANZGroup in any such competing company or entity referred to in clause 5.4(c) inwhich funds managed by the ANZ Group have been invested, provided that:

####  

##### (i)                                                         ANZ to the best of its knowledge warrants that at the CompletionDate it is not aware of any such directly conflicting and/or competing businessinterest in relation to which a member of the ANZ Group has a shareholding; and

#####  

##### (ii)                                                      without limiting clause 5.2, after the Completion Date, if a memberof the ANZ Group proposes to enter into a transaction which will have, or whichis likely have, the effect of creating a conflicting and/or competing businessinterest then ANZ will notify Channell and the Company prior to that memberentering into the transaction; and

#####  

#### (e)                                                    may hold marketable securities quoted at the time of acquisition ona recognised stock exchange representing collectively not more than 10% of theissued capital of the listed entity.

####  

**6.****                                                        Financialinformation**

 

**6.1****                                                 Annualbusiness plan**

 

#### (a)                                                    Subject to clause 6.1(b), the Company must procure that before thestart of each financial accounting period of the Company a business planincorporating an annual projected statement of financial position, statement offinancial performance and statement of cash flows for the Group Companies(“Business Plan”) is prepared and delivered to the Board and theInvestors.  The Business Plan must beapproved (in form and content) by the Board before being delivered to theInvestors.

####  

#### (b)                                                   The initial business plan for the Group Companies for the periodfrom the Completion Date to 30 June 2005 is attached at Annexure 4.

####  

**6.2****                                                 Managementaccounts**

 

The Company must procure thatmanagement accounts are prepared for the Group Companies each month.  The management accounts must include astatement of financial position, a statement of financial performance and astatement of cash flows together with a commentary on the trading and prospectsof the Group Companies including a comparison to the annual Business Planprepared for the relevant period.  Themanagement accounts must be delivered to the Board and the Investors within 20Business Days of the end of each month.

 

18

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**6.3****                                                 Auditedaccounts**

 

Within 60 Business Days of theend of each financial accounting period of the Company, the Company mustprovide a copy of the audited consolidated accounts of the Group Companies forthat period to the Board and the Investors.

 

**6.4****                                                 Otherinformation and access**

 

The Company must:

 

#### (a)                                                    procure that the Directors are kept fully informed of all materialdevelopments regarding the Group Companies;

####  

#### (b)                                                   provide any information reasonably requested by an Investor tosatisfy any reporting or auditing requirements of the Investor; and

####  

#### (c)                                                    upon reasonable notice being served on the Company, provide theInvestors and their respective officers, employees, agents and representatives,with such access to the books and records, officers, employees and premises ofthe Group Companies as they may reasonably require.

####  

#### The format,timing and regularity of the reporting set out in clauses 6.1 to 6.4 may bevaried by mutual agreement of ANZ and Channell.

####  

**6.5****                                                 Confidentiality**

 

#### (a)                                                    Subject to clauses 6.5(b), 6.5(c) and 6.5(d), the Investors mustkeep, and the Company must procure that the Directors keep, the informationreferred to in clauses 6.1 to 6.4 strictly confidential.

####  

#### (b)                                                   Subject to clause 6.5(e), any:

####  

##### (i)                                                         Channell Director may pass any information concerning the Company orany other Group Company received by him to Channell, the Channell Member and/orany employee or officer of Channell or the Channell Member; and

#####  

##### (ii)                                                      ANZ Director may pass any information concerning the Company or anyother Group Company received by him to relevant employees and officers of theANZ Group.

#####  

#### (c)                                                    Subject to clause 6.5(e), the Investors and the Investor Members maypass any information received from the Company or a Director to:

####  

##### (i)                                                         any of their respective Related Bodies Corporate;

#####  

##### (ii)                                                      in the case of an Investor which is a fund or which holds Shares onbehalf of a fund, any adviser to, nominee, custodian, trustee, manager orgeneral partner of, or investor or prospective investor in, the fund;

#####  

##### (iii)                                                   its investment adviser or any other professional adviser;

 

19

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##### (iv)                                                  any potential purchaser of, or potential investor in, a GroupCompany, provided that a confidentiality undertaking is first obtained from therecipient on terms satisfactory to the Company and the other Investor andInvestor Member; and

#####  

##### (v)                                                     any Government Agency where the disclosure to the Government Agencyis required by law provided that the form and terms of that disclosure havebeen notified to the other parties and the other parties have had a reasonableopportunity to comment on the form and terms and all reasonable requestscontained in such comments have been complied with.

#####  

#### (d)                                                   Channell may disclose any information received from the Company or aDirector in quarterly press releases and analyst conference calls which in theordinary course is appropriate for disclosure.

####  

#### (e)                                                    The parties acknowledge that the recipients may use the informationreceived under clauses 6.5(b) and 6.5(c) to inform their investment and lendingdecisions but may not:

####  

##### (i)                                                         use that information in any way that may cause detriment to a GroupCompany or the Business;

#####  

##### (ii)                                                      use that information to inform any decision regarding investing inor lending to a person or business that competes with the Business (or any partof it); or

#####  

##### (iii)                                                   provide that information to any person or business that competeswith the Business (or any part of it).

#####  

**6.6****                                                 D&OPolicy**

 

#### (a)                                                    Subject to clause 6.6(b), Channell agrees to take out and maintain,or procure the Company to take out and maintain, a Directors and OfficersInsurance Policy (“D&O Policy”) in respect of each Director and to pay thepremiums in respect of that D&O Policy during the Director’s term in office.

####  

#### (b)                                                   Nothing in clause 6.6(a) constitutes an agreement by the Company topay a premium which it is prohibited from paying under the Act**or otherwise.

####  

#### (c)                                                    The insurer under the D&O Policy and the amount and terms of theD&O Policy will be subject to approval by the Board.

####  

#### (d)                                                   If Channell takes out and maintains the D&O Policy, Channell maycharge the entire cost, or any pro rated portion of the cost, of the premiumspaid or payable in respect of the D&O Policy to the Company.

####  

**6.7****                                                 Otherinsurance**

 

#### TheCompany must take out and maintain such other insurances as are required by theBoard.  The Company will maintain validand adequate insurance in respect of all risks which are

 

20

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#### normallyinsured against by companies carrying on similar businesses to the Company forsuch amounts as determined by the Board.

####  

**7.****                                                        Future conduct of the Company**

 

**7.1****                                                 Managementof the Business**

 

#### TheCompany undertakes to the Investors that it will (and the Investors confirmthat they will procure the Company to), unless the Investors otherwise consentin writing, procure that the Business will be properly managed in accordancewith usual good commercial practice and will comply with all applicable lawsand the Group Companies will maintain all licences, consents and authorisationswhatsoever which are required or necessary to carry on the Business from timeto time.

####  

**7.2****                                                 Board**

 

#### (a)                                                    Unless otherwise agreed in writing by the Investors, and subject tothe relevant positions being occupied, the Board will comprise no more than 4Directors, consisting of:

####  

##### (i)                                                         three Channell Directors; and

#####  

##### (ii)                                                      one ANZPE Director.

#####  

#### (b)                                                   For so long as Channell or the Channell Member continues to hold anyA Class Ordinary Shares, Channell is solely entitled to appoint, substitute andremove the Channell Directors.

####  

#### (c)                                                    For so long as ANZ or the ANZ Member continues to hold any B ClassOrdinary Shares, ANZ is solely entitled to appoint, substitute and remove theone ANZ Director.

####  

#### (d)                                                   Each appointment, substitution and removal of a Director will becarried out by depositing at the Company’s registered office or at a Boardmeeting a written notice, signed by or on behalf of the party or Directorsentitled to appoint, substitute or remove the Director confirming that appointment,substitution or removal.

####  

#### (e)                                                    The parties must take all steps reasonably within their powerpromptly to procure any such appointments, removals and substitutions inaccordance with this clause 7.

####  

#### (f)                                                      As soon as practicable after the appointment of a Director, theCompany must enter into and deliver to such Director a Deed of Access andIndemnity in favour of the Director and effective from the time of hisappointment.

####  

#### (g)                                                   A failure by a Member or class of Members to appoint a Director doesnot constitute a waiver of the rights of that Member or class of Members toappoint a Director under this clause.

 

21

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**7.3****                                                 Conductof the Board and Director fees**

 

#### (a)                                                    The Company undertakes to:

####  

##### (i)                                                         send to the Directors (with a copy to the Investors):

#####  

###### (A)                                                    at least 5 Business Days’ advance notice of each meeting of theBoard or of the board of any Group Company and an agenda of the business to betransacted at the meeting (together with all papers to be circulated orpresented); and

######  

###### (B)                                                      as soon as practicable after each meeting of the Board or of theboard of any Group Company, a copy of the minutes of the meeting; and

######  

##### (ii)                                                      procure that the Board meets at least once every quarter at theCompany’s registered office (or other venue approved by the Directors);

#####  

##### (iii)                                                   pay for or reimburse any expenses reasonably and properly incurredby each non-executive Director on the business of a Group Company; and

#####  

##### (iv)                                                  procure that, if a Director requests to participate in any meetingof the Board or the board of any Group Company using telephone or othertechnology in accordance with clause 18.2 of the Constitution, any such meetingbe held using technology that will allow that participation.

#####  

#### (b)                                                   Subject to clause 7.4, at each Board meeting resolutions must bepassed by simple majority vote.  EachDirector has one vote for each resolution.

####  

#### (c)                                                    No meeting of the Board may proceed to business or transact anybusiness unless a quorum is present at the start of and throughout themeeting.  A quorum of the Board is twoDirectors, at least one of which must be a Channell Director and one of whichmust be the ANZ Director.

####  

#### (d)                                                   If a quorum of Directors is not present at the start of a dulyconvened Board meeting, that meeting is adjourned to the same time and place onthe same day in the next week and the Directors then present will be a quorumat the adjourned meeting.

####  

#### (e)                                                    Each Director may in accordance with and subject to theConstitution, appoint an alternate to represent him at Board meetings that heis unable to attend.  An alternate isentitled to receive notice of and attend Board meetings (regardless of whetherthe Director who appointed the alternate is present).  However, an alternate can only be countedtowards a quorum and vote at meetings where the Director who appointed thealternate is not present.

####  

#### (f)                                                      Subject to clause 7.4, a Board resolution will be validly passed ifthe written text of the resolution has been given to all Directors and signedor approved by a majority of the Directors.

####  

#### (g)                                                   The Company shall pay the reasonable cost of:

 

22

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##### (i)                                                         domestic travel and other expenses properly incurred by thenon-executive Directors resident in Australia (and in accordance with theCompany’s policy concerning travel) in relation to their travel to, attendanceat, and return from each Board Meeting;

#####  

##### (ii)                                                      overseas travel up to a maximum of two business class return faresper year, unless each Investor otherwise gives their prior written approval,and other expenses properly incurred by the non-executive Directors residentoverseas (and in accordance with the Company’s policy concerning travel) inrelation to their travel to, attendance at, and return from each Board Meeting;and

#####  

##### (iii)                                                   expenses incurred by the non-executive Directors in respect of othertravel related to the Business of the Company as determined by the Board fromtime to time.

#####  

**7.4****                                                 Mattersrequiring unanimous approval**

 

#### (a)  Theparties agree that the following acts, unless required or provided for by thisAgreement, must not be carried out unless approved by all Directors (whichapproval must not be unreasonably withheld) and each party must use itsrespective rights and powers to procure that no such act is carried out unlesssuch unanimous approval has been given:

####  

##### (i)                                                     subject to clause 7.4(b), the disposal or acquisition by any GroupCompany in any financial year of an asset where the disposal or acquisition isnot contemplated in a business plan referred to in clause 6.1 for thatfinancial year and the asset (when aggregated with all other disposals, in thecase of a disposal, or acquisitions, in the case of an acquisition, for thatfinancial year not contemplated in the business plan referred to in clause 6.1 forthat financial year) exceeds the amount of any asset whose disposal oracquisition is contemplated in the business plan referred to in clause 6.1 forthat financial year by more than $150,000;

#####  

##### (ii)                                                  any proposal to sell all (or substantially all) of the assets orbusiness undertaking of the Group Companies;

#####  

##### (iii)                                               any proposal to limit the Company’s right to carry on the Businessor a substantial part of the Business or to wind-up or dissolve the Company orto take advantage of any law providing for the relief of debtors in adversefinancial circumstances, and this paragraph will be deemed to include making anapplication or commencing any proceedings or taking any other steps for thewinding-up, dissolution, or appointment of an administrator of the Company orany Subsidiary or the entering into by the Company or any Subsidiary of anarrangement, compromise or composition with or assignment for the benefit ofits creditors, a class of them or any of them;

#####  

##### (iv)                                              the issue of any securities in any Group Company to a person otherthan the Company;

 

23

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##### (v)                                                 any restructure of the capital of any Group Company, including anybuy-back, reduction, consolidation or split of the capital of any GroupCompany;

#####  

##### (vi)                                              any transaction between a Group Company and a Related Party otherthan a transaction that falls within the exception under clause 210 of the Actas if a reference to a public company in that section were a reference to anyGroup Company; and

#####  

##### (vii)                                           the grant of any mortgage, charge or other security interest over ornegative pledge in respect of any assets of the Company in excess of $500,000or the issue of any guarantee for debts of third parties except under theFinancing Documents.

#####  

#### (b)                                                   The ANZ Member grants to the Company, Channell and the ChannellMember an option to acquire all (but not some) of the Shares held by the ANZMember if the ANZ Directors do not approve any acquisition of an asset underclause 7.4(a)(i) at any time on or before the second anniversary of theCompletion Date.  The call option grantedunder this clause 7.4(b) may be exercised in accordance with the procedure setout in clause 10.3 and the price per Share to be paid to the ANZ Member for thetransfer of its Shares pursuant to the call option is the same price per Sharereferred to in clause 10.3(c)(iii).

####  

**7.5****                                                 The Chairman**

 

#### (a)                                                    The initial Chairman of the Board will be William H. ChannellJr.  Thereafter, the Chairman of theBoard from time to time will be the Chairman of Channell, or if the ChannellMember no longer holds Shares or no person occupies that position, a personappointed by the Board.

####  

#### (b)                                                   The Chairman is not entitled to any casting vote in addition to anyvote to which he is entitled as a Director.

####  

**7.6****                                                 Day-to-day management**

 

#### (a)                                                    Executive management of the day-to-dayaffairs and business of the Group Companies will be managed by the managing director of the Companyunder the guidance of the Board.

####  

#### (b)                                                   The Board may delegate authority (on suchterms as it considers appropriate) to members of the executive management teamof the Group Companies as the Board decides from time to time.  A delegated authority may be revoked by theBoard at any time.

####  

**7.7****                                                 Senior Executives**

 

#### (a)                                                    Within 12 months of the Completion Date and prior to the expiry ofthe Retention Period, the Board must adopt a plan for incentivising the SeniorExecutives in the performance of their duties and obligations in respect of theGroup Companies.

 

24

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#### (b)                                                   The ANZ Director must be notified before the Board appoints,substitutes or removes any chief executive officer or chief financial officerof the Company and the ANZ Director must be provided with a reasonableopportunity to comment on the appointment, substitution or removal.

####  

**7.8****                                                 Observerat Board meetings**

 

#### (a)                                                    If ANZ has not appointed a Director in accordance with clause 7.2 orno person occupies the position of ANZ Director, Kevin Cooney or another ANZemployee acceptable to the Investors (acting reasonably) may attend Boardmeetings as an observer.  The Company hasno obligation to pay the costs and expenses of the observer.

####  

#### (b)                                                   The observer:

####  

##### (i)                                                         will be entitled to receive all information that a Director isentitled to receive and will be subject to the same obligations ofconfidentiality as a Director;

#####  

##### (ii)                                                      must be given the same notice of board meetings as a Director;

#####  

##### (iii)                                                   will be entitled to convey all information obtained by it in itscapacity as an observer to the appointor or its nominee without restriction,provided that any person to whom such information is conveyed will be subjectto the same obligations of confidentiality as the observer; and

#####  

##### (iv)                                                  will be entitled to participate in any Board meeting but is notentitled to vote.

#####  

**7.9****                                                 Guaranteesfor financiers**

 

Subject to the guarantees inthe Financing Documents given at the time of signing the Financing Documents,the parties acknowledge and agree that no Member will be required to provideany guarantee, charges or other security to any third party financier of aGroup Company.

 

**7.10****                                          Quorumfor Member meetings**

 

The quorum for Member meetingswill be two Members present in person or by attorney or proxy, at least one ofwhich must be the Channell Member and one of which must be the ANZ Member.

 

**7.11****                                          Buyer’srepresentative**

 

The parties acknowledge andagree that the buyer’s representative (as that term is used in the AcquisitionAgreement) may only act for all purposes in relation to the AcquisitionAgreement in accordance with the directions of the Board.

 

25

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**8.****                                                        Disposalof Shares and assets**

 

**8.1****                                                 Requirementsfor Disposal of Shares**

 

#### (a)                                                    A Member must not Dispose of any Shareregistered in the Member’s name, unless the Disposal is permitted under thisAgreement and the Constitution.

####  

#### (b)                                                   Before a transfer of any Share iseffective or can be registered:

####  

##### (i)                                                         the transfer must comply with therequirements of this Agreement and the Constitution; and

#####  

##### (ii)                                                      the transferee must, if it is not alreadya party to this Agreement, enter into a Deed of Adherence and deliver it to theCompany.

#####  

#### (c)                                                    The Board must sanction any transfer madewhich is permitted under this Agreement and the Constitution unless:

####  

##### (i)                                                         the registration of the transfer wouldpermit the registration of a transfer of Shares on which the Company has alien; or

#####  

##### (ii)                                                      the Board is otherwise entitled to refuseto register the transfer pursuant to this Agreement or the Constitution.

#####  

#### (d)                                                   Notwithstanding any other provision ofthis Agreement but subject to clause 8.2:

####  

##### (i)                                                         no Member may Dispose of its Shares on orprior to the first anniversary of the Completion Date withoutthe prior written consent (such consent not to be withheld unreasonably) of theInvestors to the transfer; and

#####  

##### (ii)                                                      so long as an ANZ Member holds Shares, the Channell Member may notDispose of any Shares without the prior written consent of ANZ to the Disposal,

#####  

##### and the Boardmay refuse to register any such Disposal which is a transfer of Shares withoutobtaining such consent.

#####  

#### (e)                                                    Any Member wishing to transfer Shares toanother person may only transfer all, not some only, of its Shares.

####  

#### (f)                                                      For the purposes of this clause, thefollowing is deemed to be a Disposal by a Member:

####  

##### (i)                                                         any direction (by way of renunciation orotherwise) by a Member entitled to an issue or transfer of Shares that a Sharebe issued or transferred to some person other than that Member;

#####  

##### (ii)                                                      any transfer, sale or other disposal ofany right or interest in a Share (including any voting or dividend rightattached to it):

#####  

###### (A)                                                    whether or not by the relevant Member;

 

26

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###### (B)                                                      whether or not for consideration; and

######  

###### (C)                                                      whether or not effected by an instrumentin writing;

######  

##### (iii)                                                   the creation of any Security Interest over the Share;

#####  

##### (iv)                                                  any person becoming entitled to appoint a director of the Company;or

#####  

##### (v)                                                     any person acquiring a legal or equitable right against the Memberwhich has the effect of placing that person in the same position as if thatperson had acquired a legal or equitable interest in the Share.

#####  

**8.2****                                                 Permitted transfers**

 

#### (a)                                                    Notwithstanding any other provision of this Agreement but subject toclauses 8.1(b) and 8.2(b), any Member is entitled to transfer all (but notsome) of its Shares to:

####  

##### (i)                                                         a Related Body Corporate of the Investor;

#####  

##### (ii)                                                      in the case of an ANZ Member:

#####  

###### (A)                                                    a trustee, custodian or nominee of ANZ provided that the ANZ Memberretains the beneficial interest in the Shares; or

######  

###### (B)                                                      a company, trust, fund or other entity (including a pooleddevelopment fund) which is owned, managed or controlled by an ANZ Member or ANZPrivate Equity; or

######  

###### (C)                                                      a company, trust, fund or other entity (including a pooleddevelopment fund) which is owned, managed or controlled by an entity formed aspart of a management buyout of ANZ Private Equity from ANZ.

######  

#### (b)                                                   If the transferee under clause 8.2(a)(i) ceases to be a Related BodyCorporate of the Investor, the ANZ Member ceases at any time to retain itsbeneficial interest or if the ANZ Member or ANZ Private Equity ceases to own,manage or control any entity referred to in clause 8.2(a)(ii), it must, within15 Business Days of so ceasing, transfer the Shares held by it to that Investoror a Related Body Corporate of that Investor.

####  

#### (c)                                                    Clauses 8.3 and 8.4 do not apply to transfers pursuant to thisclause 8.2.

####  

**8.3****                                                 Pre-emptive right**

 

#### (a)                                                    A Member (“Pre-emption Vendor”) who wishesto transfer its Shares to a third party (“Pre-emption Purchaser”) must firstcomply with the procedure in this clause 8.3.

####  

#### (b)                                                   The Pre-emption Vendor must give a notice(“Pre-emption Notice”) to the other Member (the “Pre-emption Member”) and theCompany specifying:

####  

##### (i)                                                         the name of the Pre-emption Purchaser;

 

27

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##### (ii)                                                      the number of Shares (“Sale Shares”)proposed to be transferred by the Pre-Emption Vendor, which must be all theShares held by the Pre-emption Vendor;

#####  

##### (iii)                                                   the price (“Pre-emption Price”) at whichthe Pre-emption Vendor wishes to transfer the Sale Shares and any othermaterial terms of the proposed transaction (which, together with the Pre-emption Price, are the“Pre-emption Terms”);

#####  

##### (iv)                                                  that the Sale Shares are offered to thePre-emption Member on the Pre-emption Terms; and

#####  

##### (v)                                                     that the Pre-emption Member has 15 BusinessDays following receipt of the Pre-emption Notice to notify the Pre-emptionVendor and the Company in writing whether it or an Alternative Purchaser iswilling to purchase the Sale Shares.

#####  

#### (c)                                                    No Pre-emption Notice once given inaccordance with this Agreement may be withdrawn or revoked without the approvalof the Board.

####  

#### (d)                                                   The Pre-emption Notice constitutes theCompany as the agent of the Pre-emption Vendor for the sale of the Sale Shareson the Pre-emption Terms.

####  

#### (e)                                                    If the Pre-emption Member notifies thePre-emption Vendor and the Company in accordance with clause 8.3(b)(v) that itor an Alternative Purchaser is willing to purchase the Sale Shares, the Company must promptly give a notice (“Completion Notice”) tothe Pre-emption Vendor and the Pre-emption Member specifying the place and time(being not less than 10 Business Days and not more than 20 Business Days afterthe date of the Completion Notice) at which the transfer of the Sale Shares isto be completed.

####  

#### (f)                                                      Upon receipt of a Completion Noticecomplying with clause 8.3(e), the Pre-emption Vendor is obliged, subject toreceipt of the cash consideration offered under the Pre-emption Terms, totransfer all of its Shares to the Pre-emption Member.

####  

#### (g)                                                   If all the Sale Shares have not been soldunder the preceding paragraphs of this clause, the Pre-emption Vendor may, atany time within three months after receiving confirmation from the Company thatthe pre-emption procedure under this clause 8.3 has been exhausted, transferthe remaining Sale Shares to any person or persons on terms that are no morefavourable (to those persons) than the Pre-emption Terms.

####  

#### (h)                                                   A Pre-emption Member may, during the 15Business Day period referred to in clause 8.3(b)(v), find an alternativepurchaser (“Alternative Purchaser”) for the Sale Shares provided that theAlternative Purchaser offers to buy those Sale Shares on the same or betterterms (to the Pre-emption Vendor) than the Pre-emption Terms.  In the event that a Pre-emption Membernotifies the Pre-emption Vendor under clause 8.3(b)(v) that an AlternativePurchaser is willing to buy the Sale Shares, references to a Pre-emption Memberin clauses 8.3(e) and 8.3(f) above will be deemed to be references to theAlternative Purchaser.

 

28

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#### (i)                                                       This clause 8.3 above does not apply to a transfer of Shares:

####  

##### (i)                                                         permitted under clause 8.2;

#####  

##### (ii)                                                      pursuant to clause 8.4 if the pre-emption procedure under this clause 8.3 above has already beenobserved in respect of the proposed transfer under that clause; or

#####  

##### (iii)                                                   required under clauses 8.5 or 10.3; or

#####  

##### (iv)                                                  under any Sale or Listing unless a Memberhas made a notification under clause 10.2(g).

#####  

**8.4****                                                 Tag along rights**

 

If a Member(a “Transferring Member”) receives an offer to acquire all of its Shares(“Transfer Shares”) from a bona fide third party (the “Transferee”), theTransferring Member may transfer those Transfer Shares if and only if:

 

#### (a)                                                    the pre-emption procedure under clause 8.3has first been observed;

####  

#### (b)                                                   if the Transferring Member is the ChannellMember, the Transferring Member complies with its obligation under clause 8.5;

####  

#### (c)                                                    the Transferring Member confirms inwriting to the Company and the other Member the price at which and all of theother material terms on which the Transferee proposes to acquire the TransferShares (the “Transfer Terms”); and

####  

#### (d)                                                   the Transferring Member procures theTransferee to make a binding unconditional offer (a “Tag Along Offer”) to theother Member:

####  

##### (i)                                                         for all of that Member’s Shares; and

#####  

##### (ii)                                                      on the same terms as the Transfer Terms;and

#####  

#### (e)                                                    the Tag Along Offer is reasonably capableof acceptance and completion by the other Member prior to or contemporaneouslywith the transfer of the Transfer Shares to the Transferee.

####  

**8.5****                                                 Sale of Shares by Channell Member**

 

#### If the Channell Member receives an offer to acquire all ofits Shares from a bona fide third party, the Channell Member must, beforetransferring its Shares to that third party, exercise the Call Option on thebasis that:

####  

#### (a)                                                    the limitation on the time for exercise ofthe Call Option under clause 10.3(b) does not apply to any exercise of the CallOption required under this clause 8.5; and

####  

#### (b)                                                   the price per Share which the issuer of the Call Option Notice proposes to pay to theANZ Member for the transfer of its Shares pursuant to the Call Option must beequal to the higher of the Fair Market Value divided by the total number ofShares

 

29

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#### and theprice per Share offered by the bona fide third party to the Channell Member.

 

**8.6****                                                 Perfection of Transfers**

 

#### (a)                                                    If a Member (the “Transferor”) becomesbound to transfer any Shares under this Agreement or the Constitution, theTransferor must promptly deliver to the transferee executed transfers for thoseShares in favour of the transferee together with the relevant sharecertificate(s) against payment by the transferee of the price due for them.

####  

#### (b)                                                   The Company is not bound to earn or payinterest on any money held and will not pay any money to the Transferor untilthe Transferor has delivered the Transferor’s share certificates (or anappropriate indemnity for, and any other document required under Law in respectof any lost certificates) to the Company.

####  

#### (c)                                                    The receipt by the Company of the purchasemoney for the Shares will release the other Members who will not be bound tosee to the application of that money, and after the name of the transferee hasbeen entered in the Members Register the validity of the proceedings may not bequestioned or disputed by any person.

####  

**8.7****                                                 Miscellaneous**

 

Upon atransfer of any Shares:

 

#### (a)                                                    the transferor Member is entitled to alldividends and interest accrued on those Shares up to and including the date oftransfer;

####  

#### (b)                                                   the transferee Member is entitled to alldividends and interest accrued on those Shares after the date of transfer; and

####  

#### (c)                                                    any amount paid to either the transferorMember or the transferee Member in excess of their entitlement is held by thatparty on trust for the other party.

####  

**8.8****                                                 Disposal of assets**

 

#### (a)                                                    The parties agree that if all (orsubstantially all) of the assets or business undertaking of the Group Companiesare disposed of (**Asset Sale**), theproceeds of the sale must be distributed so that the ANZ Member is entitled tothe first $3,750,000 (after payment of all costs and expenses of the sale) (**Preferred Distribution**).

####  

#### (b)                                                   The Preferred Distribution in paragraph (a) shall be distributed insuch a manner as the Members agree (acting reasonably), provided that if within60 Business Days of completion of the AssetSale the Members have not agreed the method of distribution, then the Companyshall be wound-up and the available assets shall be distributed in accordancewith clause 34 of the Constitution.

####  

#### (c)                                                    The Company shall not (and the Members shall procure that the Company does not) make anydistributions after an Asset Sale other than in accordance with this clause8.8.

 

30

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#### (d)                                                   Any amendment to clause 34 of theConstitution must have the prior written approval of the ANZ Member.

####  

**9.****                                                        Issueof Shares**

 

#### (a)                                                    If the Company wishes to issue any Shares, other than the Sharesunder clause 3.2, (“Subscription Shares”), it must first comply with theprocedure in this clause 9.

####  

#### (b)                                                   The Company must give a notice (“Subscription Notice”) to eachMember specifying:

####  

##### (i)                                                         the name of the person(s) to whom it proposes to issue theSubscription Shares (the “Subscribers”);

#####  

##### (ii)                                                      the number of Subscription Shares proposed to be issued to eachSubscriber;

#####  

##### (iii)                                                   the price at which the Company wishes to issue the SubscriptionShares to each Subscriber and any other material terms of the proposedtransaction (the “Subscription Terms”);

#####  

##### (iv)                                                  that the Subscription Shares are offered to the Member on the SubscriptionTerms in proportion to the amount of Shares held by that Member relative to thetotal number of Shares; and

#####  

##### (v)                                                     that the Member has 10 Business Days following receipt of theSubscription Notice to notify the Company in writing whether it is willing tosubscribe for the Subscription Shares.

#####  

#### (c)                                                    If the Member notifies the Company inaccordance with clause 9(b)(v) that it is willing to subscribe for theSubscription Shares offered under clause 9(b)(iv), the Company isobliged, subject to receipt of the cash consideration offered under theSubscription Terms, to issue the Subscription Shares offered to the Memberunder clause 9(a)(iv) to the Member.

####  

#### (d)                                                   If all the Subscription Shares have notbeen issued under the preceding paragraphs of this clause, the Company mustoffer in writing (**Second Notice**)the shortfall to the Member which subscribed under paragraph (c) the right tosubscribe for the balance of the Subscription Shares and that Member has 10 Business Days following receipt of the Second Noticeto notify the Company in writing whether it is willing to subscribe for theSubscription Shares.

####  

#### (e)                                                    If all the Subscription Shares have notbeen issued under paragraph (d), the Company may, at any time within 25Business Days after the pre-emption procedure under this clause 9 has beenexhausted, issue the Subscription Shares to any person or persons on terms thatare no more favourable (to those persons) than the Subscription Terms.

 

31

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**10.****                                                 Exit**

 

**10.1****                                          Intentionto exit**

 

#### (a)                                                    It is ANZ’s intention that it exit its investment in the GroupCompanies within 5 years of Completion.

####  

#### (b)                                                   The parties will use their respective best endeavours to facilitateANZ exiting its investment in the Group Companies within 5 years of Completionin accordance with the mechanisms provided for in this clause 10, howevernothing in this clause 10.1(b) requires Channell, the Channell Member or theCompany to exercise the Call Option.

####  

**10.2****                                          Saleor Listing**

 

#### (a)                                                    At any time on or after the fifth anniversary of the CompletionDate, either the ANZ Member or the Channell Member (the “Exit Member”) maynotify the other parties in writing that it wishes the Company to undertake aSale or Listing (an “Exit Notice”).

####  

#### (b)                                                   Within 40 Business Days of receipt of an Exit Notice, any partyreceiving the Exit Notice (“Receiver”) may issue a notice in writing to theExit Member that it wishes to buy all (but not some) of the Exit Member’sShares, specifying:

####  

##### (i)                                                         the date for completion of the transfer of the Exit Member’s Shares,which must not be less than 15 Business Days and not more than 2 months afterthe date of the notice; and

#####  

##### (ii)                                                      the price per Share which the Receiver proposes to pay to the ExitMember for the transfer of its Shares.

#####  

#### (c)                                                    Within 10 Business Days of the receipt ofthe notice under paragraph (b), the Exit Member must:

####  

##### (i)                                                         notify the Receiver that it accepts theprice per Share offered by the Receiver for the transfer of its Shares underclause 10.2(b)(ii); or

#####  

##### (ii)                                                      appoint an Independent Valuer to determinethe Fair Market Value.

#####  

#### (d)                                                   The Exit Member is obliged, subject toreceipt of the cash consideration offered under the notice, to transfer all ofits Shares to the issuer of the notice at either:

####  

##### (i)                                                         the price per Share offered by theReceiver for the transfer of its Shares under clause 10.2(b)(ii), if that pricewas accepted by the Exit Member under clause 10.2(c)(i); or

#####  

##### (ii)                                                      the price per Share equal to the FairMarket Value divided by the total number of Shares on issue if the Exit Member appointed an IndependentValuer under clause 10.2(c)(ii),

 

32

----

 

##### and the date for completion of the transfer of theExit Member’s Shares willl be the date set out in clause 10.2(b)(i) (if clause10.2(d)(i) applies) or 5 Business Days after the date the Independent Valuernotifies the Members of the Fair Market Value (if clause 10.2(d)(ii) applies).

#####  

#### (e)                                                    Without limiting clause 8.6, if theCompany wishes to buy back the Exit Member’s Shares under this clause 10.2:

####  

##### (i)                                                         the Company must comply with therequirements of Part 2J.1 of the Act; and

#####  

##### (ii)                                                      each party must do and perform all suchacts and enter into such instruments as are within its power (in any capacity),and use its best endeavours to procure others to do and perform such acts andenter into such instruments, as are necessary or desirable to give effect tothe buy back including:

#####  

###### (A)                                                    voting in favour of the buy back at anyshareholder meetings that may be required;

######  

###### (B)                                                      entering into any buy back agreement thatmay be required to effect the buy back; and

######  

###### (C)                                                      lodging all necessary documents and givingall necessary notifications of the buy back to any regulatory authorities.

######  

#### (f)                                                      If no notice is issued within the period referred to in clause10.2(b), then:

####  

##### (i)                                                         the Company must appoint an Independent Adviser to advise on andimplement a Sale or Listing; and

#####  

##### (ii)                                                      the parties must, subject to clause 10.2(g) and their respectivefiduciary and statutory obligations, do all things reasonably required of themto facilitate a Sale or Listing.

#####  

#### (g)                                                   Prior to completion of the Sale or Listing, a Member may notify theother Member and the Company in writing that it requires that Member to followthe pre-emption procedure under clause 8.3 in respect of the Shares held bythat Member, in which case references in clause 8.3 to:

####  

##### (i)                                                         the “Pre-emption Member” will be deemed to be a reference to theMember issuing the notice under this clause10.2(g);

#####  

##### (ii)                                                      the “Pre-emption Vendor” will be deemed to be a reference to theMember receiving the notice under this clause 10.2(g); and

#####  

##### (iii)                                                   the “Pre-emption Price” will be to:

#####  

###### (A)                                                    in respect of a Sale, the Directors’ bona fide estimation of theprice per Share expressed as a cash price (whether the consideration under theSale is to be satisfied in cash, shares or otherwise) due to be paid oncompletion of the Sale (or, where

 

33

----

 

###### theSale is for only part of the Shares, the amount which would have been paid ifall of the Shares had been acquired at the same price per Share as the Sharescomprised in the Sale), provided that if any shares that are offered asconsideration under the Sale are quoted on a recognised stock exchange, theprice per share of those shares will be deemed to be the closing price pershare of the shares on that stock exchange on the trading day immediately priorto completion of the Sale; or

######  

###### (B)                                                      in respect of a Listing, the price per Share at which OrdinaryShares are proposed to be issued or sold in connection with the proposedListing, being:

######  

###### (1)                                               in the case of an offer for issue or sale, the underwritten priceor, if applicable, the minimum price at which Ordinary Shares are to be issuedor sold in connection with the Listing; and

######  

###### (2)                                               in the case of a placing, the placing price.

######  

#### (h)                                                   In the event of a Sale or a Listing within 6 months of the date ofthe notice referred to in clause 10.2(f) which values the Shares at a price perShare higher than the price per Share paid to the ANZ Member pursuant to clause10.2(f), Channell must pay to the ANZ Member an amount equal to the differenceper Share multiplied by the number of Shares transferred pursuant to clause10.2(f).  If any shares that are offeredas consideration under the Sale are quoted on a recognised stock exchange, theprice per share of those shares will be deemed to be the closing price pershare of the shares on that stock exchange on the trading day immediately priorto completion of the Sale.  If any sharesthat are offered as consideration under the Sale are not quoted on a recognisedstock exchange, then Channell shall, acting reasonably and in good faith,determine the value of those shares.

####  

#### (i)                                                       If the Independent Valuer is appointedpursuant to this agreement to determine Fair Market Value then the followingprovisions apply: (i) the Independent Valuer has 15 Business Days from theirappointment to determine the Fair Market Value; (ii) the Members and Companymust provide reasonable assistance to the Independent Valuer (includingreasonably full access during business hours to the books and records of theGroup Companies and to the Group companies personnel and accountants); (iii)the Members may make submissions to the Independent Valuer (a copy of whichmust be provided to the other Member); (iv) the Independent Valuer acts as anexpert and not an arbitrator; and (v) the Expert’s determination is final andbinding on the parties, in the absence of manifest error or fraud.

####  

**10.3****                                          CallOption**

 

#### (a)                                                    The ANZ Member grants to the Company, Channell and the ChannellMember an option to acquire all of the Shares held by the ANZ Member (“CallOption”) on the terms of this clause 10.3.

 

34

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#### (b)                                                   The Call Option may be exercised by the Company, Channell or theChannell Member at any time on or after the second anniversary of theCompletion Date by giving a notice (“Call Option Notice”) to the ANZ Member.

####  

#### (c)                                                    The Call Option Notice must specify:

####  

##### (i)                                                         the date for completion of the transfer of the ANZ Member’s Sharesto the issuer of the Call Option Notice, which must not be less than 15Business Days and not more than 2 months after the date of the Call OptionNotice;

#####  

##### (ii)                                                      the price per Share which the issuer of the Call Option Notice proposesto pay to the ANZ Member for the transfer of its Shares pursuant to the CallOption.

#####  

#### (d)                                                   Within 10 Business Days of the receipt ofthe notice under paragraph (b), the ANZ Member must:

####  

##### (i)                                                         notify the issuer of the Call OptionNotice that it accepts the price per Share nominated by the issuer of the CallOption Notice for the transfer of its Shares under clause 10.3(c)(ii); or

#####  

##### (ii)                                                      appoint an Independent Valuer to determinethe Fair Market Value.

#####  

#### (e)                                                    The ANZ Member is obliged, subject toreceipt of the cash consideration offered under the Call Option, to transferall of its Shares to the issuer of the Call Option Notice at either:

####  

##### (i)                                                         the price per Share offered by the issuerof the Call Option Notice for the transfer of its Shares under clause 10.3(c)(ii),if that price was accepted by the ANZ Member under clause 10.3(d)(i); or

#####  

##### (ii)                                                      the price per Share equal to the FairMarket Value divided by the total number of Shares, if the ANZ Member appointed an Independent Valuerunder clause 10.3(d)(ii),

#####  

##### and the date for completion of the transfer of theANZ Member’s Shares to the issuer of the Call Option Notice will be the datespecified in clause 10.3(c)(i) (if clause 10.3(e)(i) applies) or 5 BusinessDays after the date the Independent Valuer notifies the Members of the FairMarket Value (if clause 10.3(e)(ii) applies).

#####  

#### (f)                                                      Without limiting clause 8.6, if theCompany wishes to buy back the ANZ Member’s Shares under this clause 10.3:

####  

##### (i)                                                         the Company must comply with therequirements of Part 2J.1 of the Act; and

#####  

##### (ii)                                                      each party must do and perform all suchacts and enter into such instruments as are within its power (in any capacity),and use its best endeavours to procure others to do and perform such acts andenter into such instruments, as are necessary or desirable to give effect tothe buy back including:

 

35

----

 

###### (A)                                                    voting in favour of the buy back at anyshareholder meetings that may be required;

######  

###### (B)                                                      entering into any buy back agreement thatmay be required to effect the buy back; and

######  

###### (C)                                                      lodging all necessary documents and givingall necessary notifications of the buy back to any regulatory authorities.

######  

#### (g)                                                   In the event of a Sale or a Listing within 6 months of the date ofthe Call Option Notice which values (in Channell’s reasonable opinion) theShares at a price per Share higher than the price per Share paid to the ANZMember pursuant the Call Option, Channell must pay to the ANZ Member an amountequal to the difference per Share multiplied by the number of Sharestransferred pursuant to the Call Option. If any shares that are offered as consideration under the Sale arequoted on a recognised stock exchange, the price per share of those shares willbe deemed to be the closing price per share of the shares on that stockexchange on the trading day immediately prior to completion of the Sale.  If any shares that are offered asconsideration under the Sale are not quoted on a recognised stock exchange,then Channell shall, acting reasonably and in good faith, determine the valueof those shares.

####  

**11.****                                                 NewShareholders**

 

**11.1****                                          Deedof Adherence**

 

Shares in the capital of the Company must not beissued or transferred to a New Shareholder unless:

 

#### (a)                                                    at the time of or prior to any allotment or transfer the New Shareholderenters into a Deed of Adherence in the form set out in Annexure 4; and

####  

#### (b)                                                   if the New Shareholder is to be bound by this Agreement in thecapacity of an Investor, the Investors have approved in writing the NewShareholder being treated as an Investor under this Agreement.

####  

**11.2****                                          Assignment**

 

#### (a)                                                    An Investor may assign the benefit of this Agreement (including thebenefit of the Warranties and the covenants given to the Investor) to a personto whom it transfers Shares in accordance with this Agreement and theConstitution.

####  

#### (b)                                                   Subject to clause 11.2(a), no party may assign or in any other waydispose of any of its rights or obligations under this Agreement withoutobtaining the prior written consent of the other parties, such consent not tobe unreasonably withheld.

 

36

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**12.****                                                 Feesand costs**

 

**12.1****                                          Capitalraising fee**

 

Within 10 days of Completionor, to the extent that any payment requires the approval of the Company’sshareholders, after the expiry of the period described in section 260B(6) ofthe Act, the Company must pay to ANZ (or as ANZ directs) a capital raising feeof $300,000.

 

**12.2****                                          Investors’costs**

 

On Completion or, to the extentthat any payment requires the approval of the Company’s shareholders, after theexpiry of the period described in section 260B(6) of the Act, the Company mustpay the reasonable costs and expenses of the Investors in connection with thenegotiation, preparation, execution and completion of this Agreement, theAcquisition Agreement and the Financing Documents and all documents referred toin them up to a maximum amount of $60,000.

 

**13.****                                                 Duration**

 

**13.1****                                          Termination**

 

#### (a)                                                    This Agreement will terminate:

####  

##### (i)                                                         in respect of all parties, on a Sale or Listing;

#####  

##### (ii)                                                      with respect to a Member, upon that Member ceasing to be ashareholder in the Company (except for clauses1, 5, 14, 16 and 17);

#####  

##### (iii)                                                   when all the parties so agree in writing.

#####  

#### (b)                                                   If either Investor materially breaches this Agreement and fails toremedy the breach within 1 month of being given written notice by the otherInvestor to do so, the Investor not in breach may purchase all of the Sharesheld by the other Investor (and/or all Shares held by a permitted transferee ofthat Investor under clause 8.2) at a price per Share calculated in accordancewith the following formula:

 

| 95%    | x      | A |
|--------|--------|---|
|   |   | B |

####  

#### where:

 

#### A = the FairMarket Value; and

####  

#### B = the totalnumber of Shares.

 

37

----

 

#### in which case,the Investor in breach and/or its permitted transferees, as the case may be,must transfer all of their Shares to the Investor not in breach.

####  

**13.2****                                          Continuingrights and obligations**

 

Termination of this Agreement under clause 13.1 doesnot prejudice the rights, obligations or liabilities of any party which haveaccrued or arisen prior to termination.

 

**14.****                                                 Confidentialityand announcements**

 

**14.1****                                          Provisionsto remain confidential**

 

Except as permitted under clause 14.2, each party willnot (and will procure that its, and its Related Bodies’ Corporate, employees,officers, agents, consultants, professional advisers and Related BodiesCorporate will not) disclose the content or effect of this Agreement or theidentity of the Investors or any Related Bodies Corporate of the Investors.

 

**14.2****                                          Permitteddisclosures**

 

A party may make disclosures:

 

#### (a)                                                    to the extent permitted by the Acquisition Agreement;

####  

#### (b)                                                   to those of its employees and officers as the party reasonablythinks necessary to give effect to this Agreement but only on a confidentialbasis;

####  

#### (c)                                                    to those of its professional or financial advisers, insurancebrokers and bankers for the purpose of obtaining advice or assistance inconnection with its obligations or rights or the rights of any other partyunder this Agreement provided that such person is subject to obligations ofconfidentiality substantially similar to or greater than those contained inthis clause 14;

####  

#### (d)                                                   if required by law, after the form and terms of that disclosure havebeen notified to the other parties and the other parties have had a reasonableopportunity to comment on the form and terms and all reasonable requestscontained in such comments have been complied with;

####  

#### (e)                                                    if by an Investor, to the extent permitted by clause 6.5; and/or

####  

#### (f)                                                      to the extent that the information disclosed is or becomes availableto the public other than by reason of a breach of this Agreement or otherlegally binding obligation.

####  

**14.3****                                          PublicAnnouncements**

 

Either party may, aftercompletion, publish a tombstone advertisement or issue an Australian VentureCapital Journal press release which discloses their investment in the Companyor the purchase under the Acquisition Agreement, including the amount of theirinvestment and the name of the Company, without obtaining approval from theCompany or any of the other parties to this Agreement provided that the partywishing to publish the advertisement or issue

 

38

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the press release has firstconsulted with the other parties as to, and has given them a reasonableopportunity to comment on, the form and content of the advertisement and/orpress release.

 

**15.****                                                 Investors’obligations and rights**

 

**15.1****                                          Severaland not Joint**

 

The obligations of the Investors in this Agreement areseveral and not joint.

 

**15.2****                                          SeparateWarranties and undertakings**

 

Every Warranty or undertaking in this Agreement whichis expressed to be given to the Investors is given to each Investor separately.

 

**15.3****                                          Exerciseof Investors’ rights**

 

In relation to the enforcement of any of theobligations owed to the Investors (other than obligations owed to a singleInvestor) by the Company under this Agreement, the Investors agree that noclaim will be brought by any one of the Investors without the prior writtenconsent of the other Investor (such consent not to be unreasonably withheld).

 

**15.4****                                          Waiverof Investors’ rights**

 

Any liability owed to theInvestors (other than obligations owed to a single Investor) by the Companyunder this Agreement may only be released, compounded or compromised (in wholeor in part) with the prior written consent of the other Investor (such consentnot to be unreasonably withheld).

 

**16.****                                                 Notices**

 

**16.1****                                          Requirements**

 

All notices must be:

 

#### (a)                                                    in legible writing and in English;

####  

#### (b)                                                   addressed to the recipient at the address or facsimile number setout below or to such other address or facsimile number as that party may notifyto the other parties:

####  

to the **Company**:

Address: 391 Park Road, Unit Q5, Regents Park NSW 2143;

Attention: Chairman;

Facsimile no: +61 2 9738 9763;

 

to **Channell**

Address: 26040 Ynez Road, Temecula CA USA

Attention: William H Channell, Jr;

 

39

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Facsimile no: +1 909 296 3965;

 

to **ANZ**

Address: Level 17, 20 Martin Place, Sydney NSW 2000

Attention: Kevin Cooney;

Facsimile no: +61 2 9232 7469;

 

#### (c)                                                    signed by the party or where the sender is a company by anauthorised officer of that company; and

####  

#### (d)                                                   sent to the recipient by hand, prepaid post (airmail if to or from aplace outside Australia) or facsimile.

####  

**16.2****                                          Receipt**

 

Without limiting any other means by which a party maybe able to prove that a notice has been received by another party, a noticewill be deemed to be duly received:

 

#### (a)                                                    if sent by hand when left at the address of the recipient;

####  

#### (b)                                                   if sent by pre-paid post, 3 days****(if postedwithin Australia to an address in Australia) or 10 days (if posted from onecountry to another) after the date of posting; or

####  

#### (c)                                                    if sent by facsimile, upon receipt by the sender of anacknowledgment or transmission report generated by the machine from which thefacsimile was sent indicating that the whole facsimile was sent to therecipient’s facsimile number;

####  

but if a notice is served by hand, or is received bythe recipient’s facsimile on a day which is not a Business Day, or after 5.00pm on a Business Day, recipient’s local time, the notice is deemed to be dulyreceived by the recipient at 9.00 am on the first Business Day after that day.

 

**17.****                                                 Generalprovisions**

 

**17.1****                                          Entireagreement**

 

This Agreement and any documents referred to in thisAgreement or executed in connection with this Agreement is the entire agreementof the parties about the subject matter of this Agreement and supersedes allother representations, negotiations, arrangements, understandings, agreementsand communications.  Noparty has entered into this Agreement relying on any representations made by oron behalf of another, other than those expressly made in this Agreement.

 

**17.2****                                          Furtherassurances**

 

Each party must, at its ownexpense, whenever reasonably requested by another party, promptly do or arrangefor others to do (so far as it is able), everything reasonably necessary thatis lawful and within its power to give full effect to this Agreement and thetransactions contemplated by this Agreement.

 

40

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**17.3****                                          Conflictwith the Constitution**

 

To the extent permitted by law:

 

#### (a)                                                    if there is any conflict or inconsistency between the provisions ofthis Agreement and the Constitution, this Agreement prevails; and

####  

#### (b)                                                   the Members will take such steps as are necessary and within theirpower to amend the Constitution (including passing all shareholder resolutionsproposed by the Board) to rectify any such inconsistency from time to time.

####  

**17.4****                                          Invalidor unenforceable provisions**

 

If a provision of this Agreement is invalid orunenforceable in a jurisdiction:

 

#### (a)                                                    it is to be read down or severed in that jurisdiction to the extentof the invalidity or unenforceability; and

####  

#### (b)                                                   that fact does not affect the validity or enforceability of:

####  

##### (i)                                                         that provision in another jurisdiction; or

#####  

##### (ii)                                                      the remaining provisions.

#####  

**17.5****                                          Nomerger**

 

The warranties, representations, covenants,undertakings and promises made by the parties under this Agreement arecontinuing and will not merge or be extinguished on Completion.

 

**17.6****                                          Waiverand exercise of rights**

 

#### (a)                                                    A waiver of a provision of or of a right under this Agreement isbinding on the party granting the waiver only if it is given in writing and issigned by the party or an authorised officer of the party granting the waiver.

####  

#### (b)                                                   A waiver is effective only in the specific instance and for thespecific purpose for which it is given and may be given on such terms andconditions as the waiving party considers appropriate.

####  

#### (c)                                                    A single or partial exercise of a right by a party does not precludeanother exercise or attempted exercise of that right or the exercise of anotherright.

####  

#### (d)                                                   Failure by a party to exercise or delay in exercising a right doesnot prevent its exercise or operate as a waiver.

####  

**17.7****                                          RightsCumulative**

 

The rights, remedies and powers of the parties underthis Agreement are cumulative and not exclusive of any rights, remedies orpowers provided to the parties by law.

 

41

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**17.8****                                          Acknowledgment**

 

Each party agrees that for the purpose of enteringinto the transactions contemplated under this Agreement:

 

#### (a)                                                    it has entered into the transactions entirely on the basis of itsown assessment of the risks and the effect of the transactions after takingappropriate professional advice in relation to such matters;

####  

#### (b)                                                   except as set out expressly in this Agreement, it owes no duty ofcare or other fiduciary obligation to any other party;

####  

#### (c)                                                    to the extent that it owes any duty or obligation as referred to inclause 17.8(b) (whether in contract, tort or otherwise) (except as set outexpressly in this Agreement) to any other party, the party waives, to thefullest extent permitted by law, any rights which the party may have in respectof such duty of care or fiduciary obligation.

####  

**17.9****                                          Amendment**

 

This Agreement may be amendedonly by a document signed by all parties provided that if an Investor ceases tohold Shares, then as from that time it will cease to be a party to thisAgreement and this Agreement may be varied without reference to, or the needfor, the signature of that Investor.

 

**17.10****                                   Counterparts**

 

This Agreement may be signed in counterparts and allcounterparts taken together constitute one document.

 

**17.11****                                   Governinglaw**

 

This Agreement is governed by the laws of New SouthWales.

 

**17.12****                                   Jurisdiction**

 

Each party irrevocably andunconditionally:

 

#### (a)                                                    submits to the non-exclusive jurisdiction of the courts of New SouthWales; and

####  

#### (b)                                                   waives, without limitation, any claim or objection based on absenceof jurisdiction or inconvenient forum.

####  

**17.13****                                   Consents or approvals**

 

Unless a contrary intention isexpressly stated, if the doing of any act, matter or thing under this Agreementis dependent on the consent or approval of a party or is within the discretionof a party, the consent or approval may be given or the discretion may beexercised conditionally or unconditionally or withheld by the party in itsabsolute discretion.

 

42

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**17.14****                                   GST**

 

Unless otherwise expressly stated, all amounts payableunder this Agreement are expressed to be exclusive of GST.  If GST is payable on a Taxable Supply, theamount payable for that Taxable Supply will be the amount expressed in thisAgreement plus GST.

 

**17.15****                                   Constitution**

 

In the event of anyinconsistency between this Agreement and the Constitution, the provisions ofthis Agreement prevail.

 

Executed as an agreement

 

 
| **Signed**by                               |       | )          |       |       |                             |
|--------------------------------------------|------------|------------|------------|------------|----------------------------------|
| **Channell  Bushman Pty Limited**          |       | )          |       |       |                             |
| by a  director and secretary/director:     |       | )          |       |       |                             |
|                                       |       |       |       |       |                             |
|                                       |       |       |       |       |                             |
| **/s/  Thomas Liguori**                    | ** ** | ** ** | ** ** | ** ** | ** **                       |
| Signature of  secretary/director           |       |       |       |       | Signature of  director           |
|                                       |       |       |       |       |                             |
|                                       |       |       |       |       |                             |
| **Thomas Liguori**                         | ** ** | ** ** | ** ** | ** ** | ** **                       |
| Name of  secretary/director (please print) |       |       |       |       | Name of  director (please print) |

 

 
| **Signed**for  and on behalf of        |       | )          |       |       |                                    |
|----------------------------------------|------------|------------|------------|------------|-----------------------------------------|
| **Channell  Commercial Corporation**   |       | )          |       |       |                                    |
| by its duly  authorised representative |       | )          |       |       |                                    |
| in the  presence of:                   |       | )          |       |       |                                    |
| ** **                             | ** ** | ** ** | ** ** | ** ** | ** **                              |
|                                   |       |       |       |       |                                    |
| **/s/ Ron  Glatley**                   | ** ** | ** ** | ** ** | ** ** | **/s/  Thomas Liguori**                 |
| Signature of  witness                  |       |       |       |       | Signature of  authorised representative |
|                                   |       |       |       |       |                                    |
|                                   |       |       |       |       |                                    |
| **Ron Glatley**                        | ** ** | ** ** | ** ** | ** ** | **Thomas Liguori**                      |
| Name of  witness (please print)        |       |       |       |       | Name of  authorised representative      |
|                                   |       |       |       |       | (please  print)                         |

 

43

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| **Signed**for  and on behalf of |       | )          |       |       |                                                                                                               |
|---------------------------------|------------|------------|------------|------------|--------------------------------------------------------------------------------------------------------------------|
| **Australia  and New Zealand**  |       | )          |       |       |                                                                                                               |
| **Banking  Group Limited**      |       | )          |       |       |                                                                                                               |
| by a duly  appointed attorney   |       | )          |       |       |                                                                                                               |
| in the  presence of:            |       | )          |       |       |                                                                                                               |
|                            |       |       |       |       |                                                                                                               |
|                            |       |       |       |       |                                                                                                               |
| ** **                      | ** ** | ** ** | ** ** | ** ** | ** **                                                                                                         |
| Signature of  witness           |       |       |       |       | Signature of  attorney (I have no notice of revocation of the power of attorney under which  I sign this document) |
|                            |       |       |       |       |                                                                                                               |
|                            |       |       |       |       |                                                                                                               |
| ** **                      | ** ** | ** ** | ** ** | ** ** | ** **                                                                                                         |
| Name of  witness (please print) |       |       |       |       | Name of  attorney (please print)                                                                                   |

 

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