<PAGE>   1
                                                                    EXHIBIT 10.5

                               DEED OF EMPLOYMENT


DEED dated


BETWEEN        Chip Application Technologies Limited, ACN 057 883 333 of
               152-162 Riley Street, East Sydney, New South Wales (EMPLOYER)


AND            THE EMPLOYEE (AS DEFINED IN SCHEDULE 1).


RECITALS

A.      The Employee is currently employed by the Employer

B.      The Employer and Employee wish to record the terms on which the Employee
        will continue to be employed by the Employer in the capacity set out in
        Schedule 1 of this Deed, which from the Effective Date will replace the
        terms of the Employee's current employment.

AGREEMENT

1.      DEFINITIONS

        Effective Date means the 1st April, 1999

        Intellectual Property Rights means all intellectual property rights
        including without limitation:

        a)      patents, copyright, rights in circuit layouts, registered
                designs, trademarks and the right to have confidential
                information kept confidential, and

        b)      any application or right to apply for registration of any of
                those rights.


        Options means options over unissued shares in the capital of the
        Employer to be granted on the terms set out in Schedule 2 and Schedule
        3.

        Total Remuneration means the salary and benefits due under Clause 4.1
        from time to time.


2.      APPOINTMENT

2.1     The Employee has been employed by the Employer since September 1994 and
        Employee benefits have accrued since that date.


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2.2     The Employer hereby confirms that the Employee is currently employed as
        Vice President Technology for the Company and that this Employment
        Contract will commence on the Effective Date and, unless terminated
        sooner under clause 11, or extended under Clause 9, will conclude on
        30th June, 2001.

3.      DUTIES AND RESPONSIBILITIES

3.1     The Employee shall have the duties and responsibilities specified in
        Schedule 1.

3.2     Any alteration or modification to the duties and responsibilities of the
        Employee specified in Schedule 1 after the Effective Date shall be by
        mutual agreement of the parties hereto.

3.3     The Employee must discharge faithfully and to the best of his knowledge,
        skill and ability the duties and responsibilities referred to herein in
        the best interests of the Employer, within normal and reasonable
        business hours.

3.4     The Employee may engage in other business or accept other employment or
        directorships provided that:

        a)      the Employee informs the Employer of the business or employment
                immediately upon the engagement in the business, or commencement
                of employment.

        b)      the business or employment in the reasonable opinion of the
                Managing Director is not related to the mandate of the Employer
                or any member of the Employer unless the Managing Director has
                given his prior approval, and

        c)      the business or employment in the reasonable opinion of the
                Managing Director does not interfere with the discharge of the
                Employees duties and responsibilities under this agreement

3.5     The Employee may hold shares in other public and private companies.

3.6     The parties agree that, in order to better represent the interests of
        the Employer and its members, the Employee shall be an active member of
        selected service, commercial, governmental, and advocacy organisations
        approved by the Managing Director, in which case(s) the Employer will
        provide release time and will cover expenses for membership and other
        participation fees and for costs associated with attendance, according
        to such terms as it may decide.

3.7     The Employee agrees that it may be necessary for the Employee to travel
        overseas for the purpose of the Employers business and the Employee
        agrees to such travel subject to any qualifications specified in
        Schedule 1.

4.      SALARY

4.1     The Employer must remunerate the Employee in accordance with Schedule 1.


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4.2     On each anniversary of the Effective Date, the Employee's Total
        Remuneration will be reviewed and increased by a percentage amount not
        less than the percentage increase in the All Groups Consumer Price Index
        for Sydney (CPI) as published by the Australian Bureau of Statistics for
        the 12-month period preceding the anniversary of the Effective Date.

4.3     In addition to the Employee's Total Remuneration, the Employer will
        grant to the Employee options in accordance with and subject to the
        conditions in Schedule 2 and 3.

4.4     An increase in salary, once confirmed by the Managing Director, may not
        be rescinded or revoked in whole or in part.

4.5     The Employee's Total Remuneration includes contributions made by the
        Employer for the Employee into a superannuation fund agreed between the
        parties or, if there is no agreement, into a superannuation fund
        nominated by the employer, on account of the minimum level of
        superannuation contributions which the Employer must make for the
        Employee for the purposes of the Superannuation Guarantee
        (Administration) Act 1992 and the Superannuation Guarantee Charge Act
        1992 (collectively SGC Legislation) as amended from time to time
        (contributions). If there is any increase in the minimum level of
        superannuation contributions which the employer must make for the
        purposes of the SGC Legislation, the Employee's Total Remuneration will
        be increased by the amount of the additional superannuation levy payment
        up to a maximum of 9% contribution in accordance with the Law. Upon the
        commencement of this Contract, the Employee must do everything necessary
        for the Employer to make the contributions.

4.6     Within the Employee's Total Remuneration, the Employee has the option to
        contribute further amounts to superannuation and/or term life cover.

4.7     The parties agree that any further salary increases shall be on the
        basis of merit as measured by the Managing Directors periodic
        performance appraisal of the Employee, and the Managing Directors
        decision shall be at his sole discretion and shall be within the
        percentage range offered to other employees of the company.

5.      BENEFITS AND COMPLEMENTARY ACTIVITIES

5.1     The Employer must pay the Employee's membership and subscription fees in
        professional and commercial organisations relevant to the Employers
        business approved by the Managing Director.

5.2     The Employer, recognising the value to the Employer of the Employee's
        participation in professional and commercial organisations, courses,
        conferences and meetings, encourages his participation in the same, and
        will pay fees, including membership and subscription fees, and other
        costs associated with membership and attendance. The Employer expects
        the Employee to attend national and/or international conferences and
        will provide funding in its annual budget for this activity.

6.      LEAVE


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        The Employer must grant the Employee an annual paid vacation of twenty
        work days, with such leave to be taken at a time mutually agreed that
        does not inconvenience the Employer or restrict the Employee in
        discharge of the Employee's duties and responsibilities. In addition the
        employer will grant the Employee any special leave entitlements referred
        to in Schedule 1.

7.      EXPENSES AND ALLOWANCES

7.1     The Employer must reimburse the Employee for travel, entertainment and
        any other necessarily incurred and reasonable expenses, including the
        cost of transportation, parking, tolls and taxes, food and lodging
        incurred in performing any of the duties and responsibilities expected
        of the Employee.

7.2     Where the Employee uses his own car for company business, costs will be
        reimbursed on a kilometre allowance basis in accordance with the
        recommended scale published from time to time by the Australian Tax
        Office.

7.3     The Employer must pay for the costs of telephone calls relevant to the
        Employers business or reimburse the Employee for the amount expended on
        telephones.

8.      ILLNESS OR INJURY

8.1     Subject to Clause 8.2:

        a)      the Employer must grant the Employee up to 6 days paid sick
                leave each year if the Employee is unable to perform the
                Employee's duties due to illness or injury, and

        b)      untaken sick leave will accumulate from year to year to a
                maximum of 12 days.

8.2     Before granting paid sick leave, where the leave exceeds three days, the
        Employer may require the Employee to provide the Employer with a
        certificate signed by a medical practitioner confirming the illness or
        injury.

9.      RENEWAL

9.1     This Agreement terminates on the Expiry Date specified in Schedule 1,
        unless: it is terminated sooner in accordance with the terms of this
        Agreement

10.     ASSIGNMENT OF INTELLECTUAL PROPERTY

10.1    The Employee:

a)      presently assigns to the Employer all existing and future Intellectual
        Property Rights in all inventions, models, designs, drawings, plans,
        software, reports, proposals and other materials created or generated by
        the Employee (whether alone or with the Employer, its other employees or
        contractors) for use by the Employer, and

b)      acknowledges that by virtue of this clause all such existing rights are
        vested in the


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        Employer and, on their creation, all such future rights will vest in the
        Employer

10.2    The Employee must do all things reasonably requested by the Employer to
        enable the Employer to assure further the rights assigned under Clause
        10.1.

11.     TERMINATION

11.1    The Employer may terminate this agreement at any time for just cause
        without notice to the Employee, or upon thirty days written notice by
        the Managing Director to the Employee, if the Employee:

        a)      is charged with a criminal offence, excluding a traffic offence,
                or

        b)      breaches the Confidentiality Agreement, or

        c)      the Employee has committed an act of serious misconduct of a
                dishonest or fraudulent nature, or

        d)      breaches any material provision of this Agreement and fails to
                rectify such breach within 30 days of being required to do so in
                writing, or

        e)      becomes unable to pay his debts as they became due, or

        f)      through illness is unable to return to duties within three (3)
                months, or

        g)      is an "injured employee" as defined in Section 91(1) of the
                Industrial Relations Act 1996 (NSW) and is not fit to perform
                the Employee's duties for three months from the time the
                Employee first became unfit for employment

11.2    The Employer may terminate this agreement at any time without just cause
        upon expiry of the Employer Notice Period (specified in Schedule 1) by
        providing written notice from the Managing Director to the Employee.

11.3    The Employee may terminate this agreement with two months notice if the
        Employer breaches any of its material obligations under this contract,
        and has not rectified the breach within 30 days of notice of such
        breach, and shall be entitled to an amount equal to the balance of the
        salary and benefits due under the full term of the contract or six
        months salary and benefits, whichever is the lesser.

11.4    The Employee may terminate this agreement for significant and serious
        personal or family reasons by providing the Managing Director with prior
        notice in writing of a minimum period specified in Schedule 1 as the
        Employee notice Period.

11.5    The Employer agrees that the rules of natural justice shall apply in any
        termination of the Employee's contract by the Employer.

11.6    This agreement may be terminated at any time by mutual agreement of the
        parties.


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11.7    During any period of notice referred to in this Clause 11, the Employee
        must perform his duties and responsibilities under this Agreement unless
        the Employer and Employee mutually agree to an alternative arrangement.

12.     WHAT HAPPENS AFTER TERMINATION OF EMPLOYMENT

12.1    The Employer must set off any amounts the Employee owes the Employer
        against any amounts the Employer owes the Employee at the date of
        termination except for amounts the Employer is not entitled by law to
        set off.

12.2    The Employee must return all the Employer's property (including property
        leased by the Employer) to the Employer on termination including all
        written or machine readable material, software, computers, credit cards,
        keys and vehicles.

12.3    The Employee's obligations under the Confidentiality Agreement continue
        after termination except in respect of information that is part of the
        Employee's general skill and knowledge.

12.4    The Employee must not record any Confidential Information in any form
        after termination.

13.     RESTRAINT ON THE EMPLOYEE'S CONDUCT

13.1    During the restraint period of 9 months after termination of the
        Employee's employment, the Employee must not

        a)      solicit, canvass, approach or accept any approach from any
                person who was at any time during the Employee's last 12 months
                with the Employer a client of the Employer in that part or parts
                of the business carried on by the Employer in which the Employee
                was employed with a view to obtaining the custom of that person
                in a business that is the same or similar to the business
                conducted by the Employer, or

        b)      interfere with the relationship between the Employer and its
                customers, employees or suppliers, or

        c)      induce or assist in the inducement of any employee, consultant,
                customer, supplier or any other contractor of the employer to
                leave their employment or terminate any contract.

13.2    The Employee acknowledges that each restriction specified in clause 13.1
        is in the circumstances reasonable and necessary to protect the
        Employer's legitimate interests.

13.3    For the purpose of this Clause 13, the Employee acknowledges that the
        definition of Employer will include any subsidiary of Chip Application
        Technologies Limited.

14.     INDEMNITY AND INSURANCE

        14.1 The Employer agrees to defend, save harmless and indemnify the
        Employee from any demands, claims, suits, actions or other proceedings
        which may be brought against him


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        arising from the performance of his duties and for any cost, loss,
        damage or liability arising therefrom, including all legal fees and
        disbursements incurred in connection therewith.

14.2    During the term of this Agreement, and any subsequent renewal of this
        Agreement, the Employer will provide the Employee appropriate insurance
        cover including where applicable cover under a Directors and Officers
        Liability Insurance Policy.

15.     GOVERNING LAW AND ARBITRATION

        This Agreement is governed by the law applicable in New South Wales. Any
        dispute may be decided by the Australian Commercial Disputes Centre or
        equivalent body.

16.     CANCELLATION OF PREVIOUS AGREEMENTS

        From the Effective Date, this Agreement supersedes and takes the place
        of all prior oral or written agreements made between the parties, other
        than where relevant for the purposes of accruing long service leave and
        other employee benefits and confidentiality, and any prior condition,
        warranty, indemnity or representation imposed, given or made by a party.

17.     WAIVER

        The failure of either party at any time to insist on performance of any
        provision of this Agreement is not a waiver of its right at any later
        time to insist on performance of that or any other provision of this
        Agreement, provided that the lack of notice does not prejudice the other
        party's ability to rectify its or his performance.

18.     NOTICES

        Any notice which may be or is required to be given pursuant to this
        Agreement shall be sufficiently given if served personally upon the
        party for whom it is intended or if mailed by Certified Mail, in the
        case of the Employer, to it at its head office for the time being and in
        the case of the Employee, to him at his address as last shown on the
        books of the Employer. The date of receipt of such notice shall be
        deemed to be the date of delivery, if such notice is served personally,
        and five (5) days after the date of posting if sent by prepaid Certified
        Mail, except in the event of an actual or threatened postal disruption
        in which case all notices shall be delivered.

19.     ALTERATION

        This Agreement (including its schedule) may only be altered by agreement
        in writing signed by each party.

20.     THIS AGREEMENT IS CONFIDENTIAL

        The terms of this Agreement and any subsequent amendments are
        confidential and may not be disclosed by the Employee or the Employer
        other than in a non-personalised form to any other person or company,
        other than for the purpose of obtaining professional legal or


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        accounting advice, or as may be required by law or Australian Stock
        Exchange listing or reporting requirements, without the written approval
        of both parties.

21.     GENERAL

21.1    Headings are for each of reference only and do not affect the meaning of
        this Agreement.

21.2    In the event that any term of this agreement is inconsistent with or in
        violation of any provision of any law of NSW or Australia, it is hereby
        deemed to be amended to the extent required to avoid such inconsistency
        or illegality and, if any term of this agreement is thereby annulled,
        the remainder of this agreement shall remain in full force and effect.

21.3    Time shall be the essence of this Agreement.

21.4    This agreement shall ensure to the benefit of and be binding upon the
        parties hereto and their respective successors and assigns of the
        Employer.

21.5    Schedules 1, 2 and 3 annexed to this Agreement are for all purposes an
        integral part of this Agreement.


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IN WITNESS WHEREOF the party of the first part has affixed its corporate seal,
duly attested to by the signature of its proper signing officers in that behalf
and the party of the second part has affixed his signature the day and year
first above written.



Signed for and on behalf of CHIP  TECHNOLOGIES
AUSTRALIA LIMITED in the presence of


/S/ illegible
----------------------------------------
        Signature of Witness


----------------------------------------
Name of Witness (print)




SIGNED SEALED AND DELIVERED by
___________________ in the presence of


/s/ illegible                                /s/ BEN GARTON
----------------------------------------     -------------------------------
Signature of Witness                         Ben Garton


----------------------------------------
Name of Witness (print)


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                          DEED OF EMPLOYMENT SCHEDULES

       TO BE READ IN CONJUNCTION WITH AND PART OF THE STANDARD EMPLOYMENT
                              CONTRACT APRIL 1999

                         SCHEDULE 1 - TOTAL REMUNERATION

Employee means Ben Garton of 65 Wilson Street, Newtown, New South Wales 2042

The Employee is currently employed in the capacity as Manager Technology

Under this agreement, the Employee will be employed in the following capacity:-

        The Employee shall be employed as Vice President Product Management and
        Development or other position of equal or like status to be performed
        from the Sydney office and the Employee will be provided with the
        appropriate office, support staff and facilities to enable his
        responsibilities to be performed and the Employee shall be and agrees to
        be responsible and accountable to the Managing Director or such other
        person nominated by the Managing Director from time to time.

The Effective Date is 1 April 1999

The Initial Employment Date was September 1994

Travel under Clause 3.7 will be limited such that the time frame of any one trip
is not more than 1 month and the total period of such travel in any one calendar
year does not exceed 3 months.

A remuneration package (inclusive of fringe benefits tax) to the value of $165,
000 gross per annum


        Base Salary                                $159,600

        Superannuation                               $5,400

The Employee's salary will be paid by equal fortnightly instalments by
electronic funds transfer commencing on 1 April 1999.

The Employee's first and last instalments will be proportionate if necessary.

As a special leave entitlement and in addition to any other leave entitlements,
the Employee will be entitled to take 1 days per month leave (on full pay) but
if this entitlement at any time exceeds 2 days, then the balance will be
forfeited.

The Expiry Date of this agreement is 30 June 2001 unless prior to 31 March 2001,
the Employee elects to renew for a further period of one year on the same terms,

The Employer Notice Period for termination without cause by the Employer
referred to in Clause 11.2 is 9 months.

The Employee Notice Period for termination referred to in Clause 11.4 is 6
months.


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                     SCHEDULE 2 - BASIS FOR GRANT OF OPTIONS

The Employee is exclusively and solely responsible for all and any tax that may
be payable as a result of the issue and or exercise of the Options and or the
sales of shares resulting from the exercise of the Options. The Employer makes
no warranty or representation in respect of any taxation that may be applicable
to the issue and or exercise of the Options and or the sales of shares resulting
from the exercise of the Options.

Subject to clause 11 in Schedule 3, options are exercisable at any time prior to
the Option Expiry Date which is the earlier of 5.00 PM Eastern Australian
Standard Time on the day 90 days after the effective termination of the Option
holder's employment with the Company or the date referred to in Column 3 below.

<TABLE>
<CAPTION>
                                                                                          COLUMN 3.
                                                                       COLUMN 2.           OPTION
                                                                    OPTION EXERCISE      EXPIRY DATE
                                                    COLUMN 1.            PRICE          (SEE ABOVE &
                                                      NO. OF          (CLAUSE 3 OF     CLAUSE 11 & 12
                    DETAILS                          OPTIONS          SCHEDULE 3)      OF SCHEDULE 3)
                    -------                         --------        ---------------    --------------
<S>                                                 <C>             <C>                <C>
Options to be conditionally issued by the           500,000
Employer to the Employee on 1 July 1999

OTHER TERMS AND CONDITIONS OF
OPTIONS VESTING AND EXERCISE (in
addition to Schedule 3)

Options are conditional upon and will not           150,000            $A0.95         30 June 2001
vest unless the Employee is an Employee of
the Employer on 1 July 1999 (`vesting date')

Options are conditional upon and will not            75,000            $A0.95         30 June 2002
vest unless the Employee is an Employee of
the Employer on 1 July 2000 (`vesting date')

Options are conditional upon and will not            75,000            $A0.95         30 June 2003
vest unless the Employee is an Employee of
the Employer on 30 June 2001 (`vesting date')

Options are conditional upon and will not           200,000            $A0.95         30 June 2004
vest unless the Employee is an Employee of
the Employer on 30 June 2002 (`vesting date')
</TABLE>


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               SCHEDULE 3 - OTHER TERMS AND CONDITIONS OF OPTIONS

The terms and conditions of the options are as follows:

1.      ENTITLEMENT

        The Option holder is entitled to subscribe for one fully paid ordinary
        share in the capital of the Company for each Option held.

2.      ISSUE PRICE

        No amount is payable on issue of the Options.

3.      EXERCISE PRICE

        The exercise price of each Option is the exercise price referred to in
        Schedule 2.

4.      OPTION PERIOD

        Each Option may be exercised in whole or in part at any time prior to
        the Option Expiry Date set out below. Any Option that is not exercised
        will automatically expire on the Option Expiry Date.

5.      TRANSFERABILITY

        The Options may not be transferred without the prior consent of the
        Company (which consent will not be unreasonably withheld) and only in
        accordance with the Articles of Association of the Company.

6.      PARTICIPATION IN BONUS ISSUES AND CASH ISSUES

6.1     If the Company makes a bonus issue of shares or other securities
        convertible into ordinary shares pro rata to holders of ordinary shares
        (other than an issue in lieu of dividends or by way of dividend
        reinvestment pursuant to any shareholder election), the Option holder
        will be entitled to participate in such issue, upon exercise of all or
        part of the Options on or before the books closing date for that issue,
        on the same basis as the holders of ordinary shares in the capital of
        the Company.

6.2     If the Company makes an offer to subscribe for cash of ordinary shares
        pro rata to the holders of ordinary shares the Option holder will be
        entitled to participate in such offer, upon exercise of all or part of
        the Options on or before the books closing date for that offer, on the
        same basis as the holders of ordinary shares in the capital of the
        Company.

6.3     The Company must notify the Option holder at least 12 business days
        before the books closing date for determining entitlements to an offer
        referred to in Clauses 6.1 or 6.2 of:

        a)      the proposed terms of the issue of the offer, and

        b)      the right to exercise his Options under Clause 6,1 or 6.2 (as
                the case may be).


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7.      ADJUSTMENTS FOR BONUS ISSUES AND CASH ISSUES

7.1     If the Company is listed on the Australian Stock Exchange and makes an
        offer for cash of ordinary shares pro rata to the holders of ordinary
        shares, the exercise price of each Option shall be reduced by the value
        of the theoretical rights entitlement per cum rights share (E) provided
        that the exercise price of each Option shall not be reduced to less than
        the nominal value of the Company" ordinary shares, where E is calculated
        in accordance with the following formula:

               E = P - (S + D)
                   -----------
                      N + 1

        Where:

        E = theoretical value of the rights entitlement attached to each share
        (quoted cum rights).

        P = the weighted average market price of fully paid ordinary shares of
        the Company sold in the ordinary course of trading on the Australian
        Stock Exchange Limited during the five trading days after the
        announcement of the rights issue

        S = subscription price (application money plus calls) for new shares

        D = any dividends due but not yet paid on existing shares which will not
        be payable in respect of new shares issued under the rights issue

        N = number of cum rights shares required to be held to receive a right
        to one new share

        No change will be made to the number of shares to which the Option
        holder is entitled.

7.2     If the Company makes a bonus issue of shares or other securities
        convertible into ordinary shares pro rata to holders of ordinary shares
        (other than an issue in lieu of dividends or by way of dividend
        reinvestment pursuant to any shareholder election), the number of shares
        issued on exercise of each Option will include the number of bonus
        shares that would have been issued if the Option had been exercised
        prior to the books closing date for bonus shares. No change will be made
        to the exercise price.

8.      RECONSTRUCTION

        In the event of a reconstruction (including consolidation, sub-division,
        reduction or return) of the issued capital of the Company, the number of
        Options or the exercise price of Options or both shall be reconstructed
        (as appropriate) in a manner which would not result in any benefits
        being conferred on the Option holders which are not conferred on
        shareholders (subject to the provisions with respect to rounding of
        entitlements as sanctioned by the meeting of shareholders approving the
        reconstruction of capital) but in all respects the terms for the
        exercise of Options shall remain unchanged.

9)      RANKING OF SHARES ALLOTTED ON EXERCISE OF OPTIONS

        All share allotted pursuant to the exercise of Options will, subject to
        the Memorandum and Articles of Association of the Company, rank in all
        respects (including rights relating to


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        dividends) pari passu with the existing ordinary shares of the Company
        on issue at date of allotment.

10.     METHOD OF EXERCISE OF OPTIONS

10.1    Options may be exercised by written notice to the Secretary of the
        Company. The exercise notice must specify the number of shares required
        to be allotted, which number must be a multiple of 1,000 if only part of
        the Options are exercised, or if the total number of Options held is
        less than 1,000, then the total of all Options held must be exercised.
        Options will be deemed to have been exercised on the date that the
        application is lodged with the Secretary of the Company.

10.2    The Option holder must pay the exercise price in full to the Company on
        the date of the exercise of the Options.

10.3    The exercise of less than all of the Option holder's Options will not
        prevent the Option holder from exercising an Option in respect of the
        whole or any part of the balance of the entitlement under his remaining
        Options.

10.4    On exercise of the Options the Option holder must surrender his Option
        certificate to the Company in respect of those Options being exercised.

10.5    If the Option holder exercises less than the total number of Options
        then registered in his name:

        a)      The Option holder must surrender his Option certificate to the
                Company, and

        b)      the Company must cancel that Option certificate and issue to the
                holder a new Option certificate in respect of the Option
                holder's unexercised Options.

10.6    Within 10 days of receipt of the application for the exercise of Options
        and payment by the Option holder of the exercise price of such Options,
        the Company must issue and allot to the Option holder the number of
        fully paid ordinary shares in the capital of the Company specified in
        the application.

10.7    If the Company is listed on the Australian Stock Exchange then it will
        as soon as practicable after issue make application for the shares
        issued upon exercise of Options by the Option holder to be granted
        official quotation on the Australian Stock Exchange. The Options are not
        to be listed on the ASX.

11.     COMPULSORY ACQUISITION

        If an entity ("Offeror") serves a notice on the option holder in
        accordance with section 703(4) of the Corporations Law, all options,
        which have not yet vested, become vested on the date that notice is
        served on the option holder.

        All options (including all existing options and all options that have
        been vested by virtue of the preceding paragraph) will lapse on the date
        3 months after delivery of that notice.

        Unless waived by written notice from the Company, the option holder must
        accept an offer to acquire all options which remain unexercised which is
        delivered in accordance with section 703(4) of the Corporations Law.
        This obligation is conditional on the terms offered by the Offeror being
        no less favourable than the offer price paid or payable by the Offeror
        in


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<PAGE>   15

        connection with the acquisition of ordinary shares in the Company under
        the Offeror's take-over scheme or take-over announcement, adjusted to
        reflect the offer for options rather than ordinary share's or on terms
        determined by a Court as contemplated by section 703(8) of the
        Corporations Law".

12.     OPTION EXPIRY DATE

        Subject to clause 11, the Option Expiry Date is the option expiry date
        referred to in Schedule 2.

13.     TAXATION

        The Employee is exclusively and solely responsible for all and any tax
        that may be payable as a result of the issue and or exercise of the
        Options and or the sale of shares resulting from the exercise of the
        Options. The Employer makes no warranty or representation in respect of
        any taxation that may be applicable to the issue and or exercise of the
        Options and or the sale of shares resulting from the exercise of the
        Options.

14.     UNEXERCISED OPTIONS

(a)     This clause 14 applies to all Unexercised Options. If there is any
        inconsistency between this clause and the other provisions of these
        Terms and Conditions in respect of the exercise of Unexercised Options,
        this clause prevails to the extent of this inconsistency.

(b)     If, at the time an Unexercised Option is exercised:

        i)      the Company is not listed on ASX; and

        ii)     the Company is a subsidiary of another company (the "Parent
                Company") and

        iii)    the Parent Company is listed on ASX or any Approved Exchange

        the Company may, instead of issuing shares in the capital of the
        Company, elect to have the Parent Company issue one fully paid share of
        common stock in the Parent Company for each Unexercised Option held.

(c)     If the Company makes the election referred to in paragraph (b):

        i)      in lieu of the Option holder's entitlement under clause 1 to
                subscribe for one fully paid ordinary share in the capital of
                the Company for each Option held, the Option holder will be
                issued one fully paid share of common stock of the Parent
                Company for each Unexercised Option held;

        ii)     in lieu of paying the exercise price to the Company in
                accordance with Clause 10.2, the Option holder must pay the full
                exercise price (which would have otherwise been payable to the
                Company) to the Parent Company on the date of exercise of the
                Unexercised Options and the Company is authorised to pay over
                any such moneys received by it to the Parent Company without
                further act or authority of the Option holder; and

        iii)    within 10 days of receipt of the application for the exercise of
                the Unexercised Options and payment by the Option holder of the
                exercise price of such Options, the Parent Company must issue to
                the Option holder the number of fully paid shares of common
                stock of the Parent


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                Company specified in the application; and

        iv)     to avoid doubt, the Option holder has no entitlement to be
                issued or allotted any shares in the capital of the Company upon
                exercise of the Unexercised Options.

(d)     In this Clause 14:

        "Unexercised Options" means all Options that have been granted but are
        unexercised


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