Document:

Exhibit 10.1

 

 

Corporate Letter of Offer

 

 

“Channell Bushman Group”

8 November 2006

 

National Australia Bank Limited ABN 12 004 044 937

 

Relationship Management

The banking needs of “Channell
Bushman Group” will be met by a specialist team located at the NAB’s Sydney
location.

Through our strong focus
on actively managing our relationship with the group we will be able to offer a
number of benefits through our Sydney location:

·                       A dedicated Relationship Manager
who your team will be able to deal directly with at times and who will be
working hard to add value to your business and respond quickly to your needs.

·                       Your dedicated Relationship
Manager will be a central point of contact to access the complete suite of NAB’s
specialised services including Interest Rate Risk Management, Trade Solutions,
Leasing and Fleet Services and Wealth Creation.

The dedicated team
at the Sydney location is led by:

	
  ·              Director

  	
   

  	
  Patrick Ying

  
	
  Direct Telephone Number

  	
   

  	
  (02) 9237 9756

  
	
  Facsimile Number

  	
   

  	
  (02) 9237 9752

  
	
  Email

  	
   

  	
  Patrick.Ying@nab.com.au

  
	
   

  	
   

  	
   

  
	
  ·              Associate Director

  	
   

  	
  Graeme Johnson

  
	
  Direct Telephone Number

  	
   

  	
  (02) 9237 9731

  
	
  Facsimile Number

  	
   

  	
  (02) 9237 9752

  
	
  Email

  	
   

  	
  Graeme.L.Johnson@nab.com.au

  
	
   

  	
   

  	
   

  
	
  ·              Account Manager

  	
   

  	
  Christine Tsang

  
	
  Direct Telephone Number

  	
   

  	
  (02) 9237 1917

  
	
  Facsimile Number

  	
   

  	
  (02) 9237 9752

  
	
  Email

  	
   

  	
  Christine.Tsang@nab.com.au

  
	
   

  	
   

  	
   

  
	
  Other important members of the team will include:

  
	
   

  	
   

  	
   

  
	
  ·              Credit Analyst

  	
   

  	
  Joseph Ritchie

  
	
  Direct Telephone Number

  	
   

  	
  (02) 9237 9735

  
	
  Facsimile Number

  	
   

  	
  (02) 9237 9752

  
	
  Email

  	
   

  	
  Joseph.H.Ritchie@nab.com.au

  
	
   

  	
   

  	
   

  
	
  ·              Business Banking Assistant

  	
   

  	
  Steven Wu

  
	
  Direct Telephone Number

  	
   

  	
  (02) 9237 9253

  
	
  Facsimile Number

  	
   

  	
  (02) 9237 9752

  
	
  Email

  	
   

  	
  Steven.Wu@nab.com.au

  

 

 

 

Offer Period

This Letter of Offer remains available for acceptance until 30th November 2006.

We may withdraw our offer
at any time before it is accepted by each Borrower
if we become aware of anything which, in our opinion, adversely
alters the basis on which we made our offer.

Thank you for the
opportunity to provide the enclosed Letter of Offer to the group for its consideration.

Yours sincerely,

	
  /s/ Graeme Johnson

  	
   

  
	
  Graeme Johnson

  	
   

  
	
  Associate Director

  	
   

  

 

 

Table of Contents

	
  Part 1

  	
  Details of Facilities

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1

  	
  Facility Summary

  	
   

  	
  7

  
	
   

  	
  2

  	
  New facilities in this Letter of Offer

  	
   

  	
  9

  
	
   

  	
  3

  	
  Other facilities

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Part 2

  	
  Security

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
  Part 3

  	
  Establishment Fees and Charges

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
  Part 4

  	
  Conditions Precedent and other information

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
  Part 5

  	
  Covenants and Undertakings

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  
	
  Part 6

  	
  Property Conditions

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  
	
  Part 7

  	
  General Conditions

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1

  	
  Conditions precedent

  	
   

  	
  26

  
	
   

  	
  2

  	
  Review

  	
   

  	
  27

  
	
   

  	
   

  	
  2.1

  	
  Scope and frequency

  	
   

  	
  27

  
	
   

  	
   

  	
  2.2

  	
  Assistance

  	
   

  	
  27

  
	
   

  	
  3

  	
  Payment obligations

  	
   

  	
  27

  
	
   

  	
   

  	
  3.1

  	
  General repayment obligations

  	
   

  	
  27

  
	
   

  	
   

  	
  3.2

  	
  Fees charges and other premiums

  	
   

  	
  27

  
	
   

  	
   

  	
  3.3

  	
  Calculation and payment of interest

  	
   

  	
  28

  
	
   

  	
   

  	
  3.4

  	
  Setting of interest rates

  	
   

  	
  28

  
	
   

  	
   

  	
  3.5

  	
  Pricing Review

  	
   

  	
  28

  
	
   

  	
   

  	
  3.6

  	
  Accounting for transactions

  	
   

  	
  28

  
	
   

  	
   

  	
  3.7

  	
  Payment in Australian Dollars

  	
   

  	
  29

  
	
   

  	
   

  	
  3.8

  	
  Payment in cleared funds

  	
   

  	
  29

  
	
   

  	
   

  	
  3.9

  	
  Payments due on non-banking days

  	
   

  	
  29

  
	
   

  	
   

  	
  3.10

  	
  No set off or deduction

  	
   

  	
  29

  
	
   

  	
  4

  	
  Economic costs

  	
   

  	
  29

  
	
   

  	
   

  	
  4.1

  	
  Payment of economic costs

  	
   

  	
  29

  
	
   

  	
   

  	
  4.2

  	
  Economic events

  	
   

  	
  30

  
	
   

  	
   

  	
  4.3

  	
  Calculation of economic costs

  	
   

  	
  30

  
	
   

  	
  5

  	
  Representations and warranties

  	
   

  	
  30

  
	
   

  	
   

  	
  5.1

  	
  Representations and Warranties

  	
   

  	
  30

  
	
   

  	
   

  	
  5.2

  	
  Additional representations and warranties from a
  trustee

  	
   

  	
  32

  
	
   

  	
  6

  	
  General undertakings and covenants

  	
   

  	
  32

  
	
   

  	
   

  	
  6.1

  	
  Negative Pledge

  	
   

  	
  32

  
	
   

  	
   

  	
  6.2

  	
  General covenants

  	
   

  	
  33

  
	
   

  	
   

  	
  6.3

  	
  Additional covenants from a trustee

  	
   

  	
  33

  
	
   

  	
   

  	
  6.4

  	
  Change of Shareholding

  	
   

  	
  33

  
	
   

  	
   

  	
  6.5

  	
  Partnerships

  	
   

  	
  34

  
	
   

  	
   

  	
  6.6

  	
  Co-operation

  	
   

  	
  34

  
	
   

  	
   

  	
  6.7

  	
  Class Order

  	
   

  	
  34

  
	
   

  	
   

  	
  6.8

  	
  Changes to Accounting Standards

  	
   

  	
  35

  
	
   

  	
   

  	
  6.9

  	
  Appointment of Consultants

  	
   

  	
  35

  
	
   

  	
  7

  	
  Default

  	
   

  	
  35

  
	
   

  	
   

  	
  7.1

  	
  General Events of Default

  	
   

  	
  37

  
	
   

  	
   

  	
  7.2

  	
  Additional Events of Default

  	
   

  	
  37

  
	
   

  	
   

  	
  7.3

  	
  Consequences of default

  	
   

  	
  37

  
	
   

  	
   

  	
  7.4

  	
  Default Interest

  	
   

  	
  38

  
	
   

  	
   

  	
  7.5

  	
  Capitalising default interest

  	
   

  	
  38

  
	
   

  	
   

  	
  7.6

  	
  Fees

  	
   

  	
  38

  
	
   

  	
   

  	
  7.7

  	
  Additional review rights

  	
   

  	
  38

  
	
   

  	
   

  	
  7.8

  	
  Obligations not affected

  	
   

  	
  38

  
	
   

  	
  8

  	
  Change of Circumstances

  	
   

  	
  38

  
	
   

  	
   

  	
  8.1

  	
  Illegality

  	
   

  	
  38

  
	
   

  	
   

  	
  8.2

  	
  Increased Costs

  	
   

  	
  39

  
	
   

  	
  9

  	
  Liability for regulatory events

  	
   

  	
  39

  
							

 

 5
 

 

 

	
  

  	
  10

  	
  Confidentiality

  	
   

  	
  40

  
	
   

  	
  11

  	
  Setting off money

  	
   

  	
  40

  
	
   

  	
  12

  	
  Holding Over

  	
   

  	
  41

  
	
   

  	
  13

  	
  Telephone recording

  	
   

  	
  41

  
	
   

  	
  14

  	
  Code of Banking Practice

  	
   

  	
  41

  
	
   

  	
  15

  	
  Notices, other communications and service of
  documents

  	
   

  	
  41

  
	
   

  	
   

  	
  15.1

  	
  Service

  	
   

  	
  41

  
	
   

  	
   

  	
  15.2

  	
  Effective on receipt

  	
   

  	
  42

  
	
   

  	
   

  	
  15.3

  	
  Validity

  	
   

  	
  42

  
	
   

  	
   

  	
  15.4

  	
  Other methods

  	
   

  	
  42

  
	
   

  	
  16

  	
  General

  	
   

  	
  42

  
	
   

  	
   

  	
  16.1

  	
  Statements of Account

  	
   

  	
  42

  
	
   

  	
   

  	
  16.2

  	
  The Bank’s certificates

  	
   

  	
  42

  
	
   

  	
   

  	
  16.3

  	
  How the Bank
  may exercise its rights

  	
   

  	
  42

  
	
   

  	
   

  	
  16.4

  	
  Preservation of the Borrowers’ liability

  	
   

  	
  43

  
	
   

  	
   

  	
  16.5

  	
  Consents and Conditions

  	
   

  	
  43

  
	
   

  	
   

  	
  16.6

  	
  Variation

  	
   

  	
  43

  
	
   

  	
   

  	
  16.7

  	
  GST

  	
   

  	
  43

  
	
   

  	
   

  	
  16.8

  	
  Valuations are for the Bank benefit

  	
   

  	
  44

  
	
   

  	
   

  	
  16.9

  	
  Time for repayment

  	
   

  	
  44

  
	
   

  	
   

  	
  16.10

  	
  Indemnities

  	
   

  	
  44

  
	
   

  	
   

  	
  16.11

  	
  Severability

  	
   

  	
  44

  
	
   

  	
  17

  	
  Assignment

  	
   

  	
  44

  
	
   

  	
  18

  	
  Governing Law and Jurisdiction

  	
   

  	
  44

  
	
   

  	
  19

  	
  Definitions and interpretation

  	
   

  	
  44

  
	
   

  	
  20

  	
  Inconsistency

  	
   

  	
  53

  
	
   

  	
   

  	
  20.1

  	
  Precedence of this clause

  	
   

  	
  53

  
	
   

  	
   

  	
  20.2

  	
  Transaction documents

  	
   

  	
  53

  
	
   

  	
   

  	
  20.3

  	
  Facilities

  	
   

  	
  53

  
	
  Part 8

  	
  Bill Facility Specific Conditions

  	
   

  	
  54

  
	
   

  	
   

  	
   

  	
   

  
	
  Part 9

  	
  Bank Guarantee Facility Specific Conditions

  	
   

  	
  63

  

 

 6

 

Part 1              Details
of Facilities

1          Facility
Summary

The Bank offers to provide the facilities detailed within this Letter of Offer
to “Channell Bushman Group”. A summary of these facilities is set out below. Facilities marked with a + (if any) are part of a Multi Option
Facility.

FACILITY
SUMMARY

	
  Borrower:

  	
   

  	
  Channell Bushmans Pty Ltd

  
	
  ABN:

  	
   

  	
  99 109 821 614

  
	
   

  	
   

  	
   

  
	
  Facility Type:

  	
   

  	
  Bill - Floating/Fixed/Capped/RangeRate

  
	
  Facility Limit:

  	
   

  	
  $4,800,000.00

  
	
   

  	
   

  	
   

  
	
  Facility Type:

  	
   

  	
  Bill - Floating/Fixed/Capped/RangeRate

  
	
  Facility Limit:

  	
   

  	
  $574,000.00

  
	
   

  	
   

  	
   

  
	
  Facility Type:

  	
   

  	
  Bill - Floating/Fixed/Capped/RangeRate

  
	
  Facility Limit:

  	
   

  	
  $2,480,000.00

  
	
   

  	
   

  	
   

  
	
  Borrower Total:

  	
   

  	
  $7,854,000.00

  
	
   

  	
   

  	
   

  
	
  Borrower:

  	
   

  	
  Bushmans Group Pty Ltd

  
	
  ABN:

  	
   

  	
  90 090 744 022

  
	
   

  	
   

  	
   

  
	
  Facility Type:

  	
   

  	
  Bill - Floating/Fixed/Capped/RangeRate

  
	
  Facility Limit:

  	
   

  	
  $3,200,000.00

  
	
   

  	
   

  	
   

  
	
  Facility Type:

  	
   

  	
  Master Asset Finance Facility

  
	
  Facility Limit:

  	
   

  	
  $1,000,000.00

  
	
   

  	
   

  	
   

  
	
  Facility Type:

  	
   

  	
  Business Credit Cards

  
	
  Facility Limit:

  	
   

  	
  $300,000.00

  
	
   

  	
   

  	
   

  
	
  Facility Type:

  	
   

  	
  Bank Guarantee

  
	
  Facility Limit:

  	
   

  	
  $50,000.00

  
	
   

  	
   

  	
   

  
	
  Facility Type:

  	
   

  	
  Documentary Letter of Credit

  
	
  Facility Limit:

  	
   

  	
  $50,000.00

  

 

 7
 

 

 

	
  Borrower Total:

  	
   

  	
  $4,600,000.00

  
	
   

  	
   

  	
   

  
	
  Borrower:

  	
   

  	
  Channell Pty Limited

  
	
  ABN:

  	
   

  	
  29 002 735 622

  
	
   

  	
   

  	
   

  
	
  Facility Type:

  	
   

  	
  Bank Guarantee

  
	
  Facility Limit:

  	
   

  	
  $375,000.00

  
	
   

  	
   

  	
   

  
	
  Facility Type:

  	
   

  	
  Master Asset Finance Facility

  
	
  Facility Limit:

  	
   

  	
  $250,000.00

  
	
   

  	
   

  	
   

  
	
  Facility Type:

  	
   

  	
  Business Credit Card

  
	
  Facility Limit:

  	
   

  	
  $100,000.00

  
	
   

  	
   

  	
   

  
	
  Borrower Total:

  	
   

  	
  $725,000.00

  
	
   

  	
   

  	
   

  
	
  Group Total:

  	
   

  	
  $13,179,000.00 (Australian dollar facilities only)

  

 

This Facility Summary
is provided for information purposes only and does not form part of, or vary, the
terms of any of the facilities referred
to in it.

 8
 

 

2          New
facilities in this Letter of Offer

New facilities are detailed below.

Borrower:  Channell Bushman Pty Limited

Bill
Acceptance/Discount Facility – Floating Rate

	
  Purpose/Utilisation:

  	
   

  	
  Acquisition Finance

  
	
   

  	
   

  	
   

  
	
  Facility limit:

  	
   

  	
  $4,800,000 (four million eight hundred thousand dollars)

  
	
   

  	
   

  	
   

  
	
  Expiry Date:

  	
   

  	
  31st July 2009

  
	
   

  	
   

  	
   

  
	
  The Facility is:

  	
   

  	
  an amortising facility

  
	
   

  	
   

  	
   

  
	
  Amortisation Details of Facilities if the Facility is
  an Amortising Facility:

  	
   

  	
  $200,000 per quarter, then increasing to $400,000 per
  quarter from 30/06/2007 until expiry

  
	
   

  	
   

  	
   

  
	
  Drawdown Periods:

  	
   

  	
  Approximate period between each drawdown date:  90 days

  
	
   

  	
   

  	
   

  
	
  Floating Rate:

  	
   

  	
  the rate (expressed as a percentage yield to maturity
  and rounded upwards to the nearest two decimal places) which is the bid rate shown
  at approximately 10.10 am (Sydney time) on page BBSY on the Reuters Monitor System
  on the day the bills are to be discounted
  for bills of like amounts and tenors.
  If such rate is not available or if, in the Bank’s reasonable opinion, the rate becomes
  inappropriate, the floating rate
  will be the rate reasonably determined by the Bank to be the appropriate equivalent rate, having regard to prevailing
  market conditions.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The rate as a percentage per annum will be advised following
  a drawing under the facility.

  
	
   

  	
   

  	
   

  
	
  Facility Fee:

  	
   

  	
  0.50% per annum of the facility limit, payable by the Borrower on
  a half yearly basis in advance from the date of acceptance of the facility.

  
	
   

  	
   

  	
   

  
	
  Activation Fee:

  	
   

  	
  1.40% per annum of the face value of each bill, calculated from and including the date
  the Bank accepts the bill to the maturity date of the bill,
  payable by the Borrower upon acceptance of each bill.

  
	
   

  	
   

  	
   

  
	
  Bill Drawdown Fee:

  	
   

  	
  $150 payable by the Borrower
  each time the Bank accepts bills on a drawdown date.

  
	
   

  	
   

  	
   

  
	
  Late Presentation Fee:

  	
   

  	
  Not ascertainable - see the Bill Facility Special Conditions

  
	
   

  	
   

  	
   

  
	
  Default Interest Rate:

  	
   

  	
  The total of the Bank’s [Base] Indicator Rate, currently 10.35%, plus a customer
  margin of 1.90% plus a default margin of 6.50%. Currently 18.75% per annum

  
	
   

  	
   

  	
   

  
	
  Nominated Account:

  	
   

  	
  Channell Bushman Pty Limit

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  082-057  57-189-3025

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  for the purposes of debiting and crediting amounts in
  relation to this facility under
  this Letter of Offer.

  
	
   

  	
   

  	
   

  
	
  Securities:

  	
   

  	
  All securities detailed
  in Part 2 with the exception of the securities numbered 8, 9 and 10

  
	
   

  	
   

  	
   

  
	
  Specific Conditions:

  	
   

  	
  Bill Facility Specific Conditions 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The Borrower must nominate, no later than the time the Borrower gives to the Bank its initial drawdown notice, whether the facility
  will be a Floating Rate, Fixed Rate, Cap Rate or Range Rate.

  

 

 9
 

 

Borrower: 
Channell Bushman Pty Limited

Bill
Acceptance/Discount Facility – Floating Rate

	
  Purpose/Utilisation:

  	
   

  	
  Fund ‘ Earn Out’ associated with the acquisition

  
	
   

  	
   

  	
   

  
	
  Facility limit:

  	
   

  	
  $574,000 (five hundred and seventy four thousand dollars)

  
	
   

  	
   

  	
   

  
	
  Expiry Date:

  	
   

  	
  31st July 2008

  
	
   

  	
   

  	
   

  
	
  The Facility is:

  	
   

  	
  an amortising facility

  
	
   

  	
   

  	
   

  
	
  Amortisation Details of Facilities if the Facility is
  an Amortising Facility:

  	
   

  	
  $63,000 per quarter

  
	
   

  	
   

  	
   

  
	
  Drawdown Periods:

  	
   

  	
  Approximate period between each drawdown date:  90 days

  
	
   

  	
   

  	
   

  
	
  Floating Rate:

  	
   

  	
  the rate (expressed as a percentage yield to maturity
  and rounded upwards to the nearest two decimal places) which is the bid rate shown
  at approximately 10.10 am (Sydney time) on page BBSY on the Reuters Monitor System
  on the day the bills are to be discounted
  for bills of like amounts and tenors.
  If such rate is not available or if, in the Bank’s
  reasonable opinion, the rate becomes inappropriate, the floating rate will be the rate reasonably
  determined by the Bank to be
  the appropriate equivalent rate, having regard to prevailing market conditions.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The rate as a percentage per annum will be advised following
  a drawing under the facility.

  
	
   

  	
   

  	
   

  
	
  Facility Fee:

  	
   

  	
  0.50% per annum of the facility limit, payable by the Borrower on a half yearly basis
  in advance from the date of acceptance of the facility.

  
	
   

  	
   

  	
   

  
	
  Activation Fee:

  	
   

  	
  1.40% per annum of the face value of each bill, calculated from and including the date
  the Bank accepts the bill to the maturity date of
  the bill,
  payable by the Borrower upon acceptance
  of each bill.

  
	
   

  	
   

  	
   

  
	
  Bill Drawdown Fee:

  	
   

  	
  $150 payable by the Borrower
  each time the Bank accepts bills on a drawdown date.

  
	
   

  	
   

  	
   

  
	
  Late Presentation Fee:

  	
   

  	
  Not ascertainable - see the Bill Facility Special Conditions

  
	
   

  	
   

  	
   

  
	
  Default Interest Rate:

  	
   

  	
  The total of the Bank’s [Base] Indicator Rate, currently 10.35%, plus a customer
  margin of 1.90% plus a default margin of 6.50%.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Currently 18.75% per annum

  
	
   

  	
   

  	
   

  
	
  Nominated Account:

  	
   

  	
  Channell Bushman Pty Limited

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  082-057 57-189-3025 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  for the purposes of debiting and crediting amounts in
  relation to this facility under
  this Letter of Offer.

  
	
   

  	
   

  	
   

  
	
  Securities:

  	
   

  	
  All securities
  detailed in Part 2 with the exception of the securities
  numbered 8, 9 and 10

  
	
   

  	
   

  	
   

  
	
  Specific Conditions:

  	
   

  	
  Bill Facility Specific Conditions 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The Borrower must
  nominate, no later than the time the Borrower
  gives to the Bank its initial drawdown notice, whether the facility will
  be a Floating Rate, Fixed Rate, Cap Rate or Range Rate.

  

 

 10
 

 

Borrower:  Channell Bushman Pty Limited

Bill Acceptance/Discount
Facility – Floating Rate 

 

	
  Purpose/Utilisation:

  	
   

  	
  Capital Expenditure for the Group

  
	
   

  	
   

  	
   

  
	
  Facility limit:

  	
   

  	
  $2,480,000 (two million
  four hundred and eighty thousand dollars)

  
	
   

  	
   

  	
   

  
	
  Expiry Date:

  	
   

  	
  31st July 2008

  
	
   

  	
   

  	
   

  
	
  The Facility is:

  	
   

  	
  an amortising facility

  
	
   

  	
   

  	
   

  
	
  Amortisation Details of
  Facilities if the Facility is an Amortising Facility:

  	
   

  	
  Subject to cash flows, but
  with the view of amortising each drawing over a maximum term of four years.

  
	
   

  	
   

  	
   

  
	
  Drawdown Periods:

  	
   

  	
  Approximate period between
  each drawdown date:  90 days

  
	
   

  	
   

  	
   

  
	
  Floating Rate:

  	
   

  	
  the rate (expressed as a
  percentage yield to maturity and rounded upwards to the nearest two decimal places)
  which is the bid rate shown at approximately 10.10 am (Sydney time) on page BBSY
  on the Reuters Monitor System on the day the bills
  are to be discounted for bills of
  like amounts and tenors. If such rate is not available or if, in the Bank’s reasonable opinion, the rate becomes
  inappropriate, the floating rate
  will be the rate reasonably determined by the Bank to be the appropriate equivalent rate, having regard to
  prevailing market conditions. 

   

  The rate as a percentage
  per annum will be advised following a drawing
  under the facility.

  
	
   

  	
   

  	
   

  
	
  Facility Fee:

  	
   

  	
  0.50% per annum of the facility limit, payable by the Borrower on a half yearly basis in advance
  from the date of acceptance of the facility.

  
	
   

  	
   

  	
   

  
	
  Activation Fee:

  	
   

  	
  1.40% per annum of the face
  value of each bill, calculated from
  and including the date the Bank accepts
  the bill to the maturity date of the bill, payable by the Borrower upon acceptance of each bill.

  
	
   

  	
   

  	
   

  
	
  Bill Drawdown Fee:

  	
   

  	
  $150 payable by the Borrower each time the Bank accepts bills on a drawdown date.

  
	
   

  	
   

  	
   

  
	
  Late Presentation Fee:

  	
   

  	
  Not ascertainable - see
  the Bill Facility Special Conditions

  
	
   

  	
   

  	
   

  
	
  Default Interest Rate:

  	
   

  	
  The total of the Bank’s [Base] Indicator Rate, currently 10.35%,
  plus a customer margin of 1.90% plus a default margin of 6.50%. Currently 18.75%
  per annum

  
	
   

  	
   

  	
   

  
	
  Nominated Account:

  	
   

  	
  Channell Bushman Pty Limited
  082-057 57-189-3025 for the purposes of debiting and crediting amounts in relation
  to this facility under this Letter
  of Offer.

  
	
   

  	
   

  	
   

  
	
  Securities:

  	
   

  	
  All securities detailed in Part 2 with the exception
  of the securities numbered 8, 9
  and 10

  
	
   

  	
   

  	
   

  
	
  Specific Conditions:

  	
   

  	
  Bill Facility Specific Conditions
  The Borrower must nominate, no later
  than the time the Borrower gives
  to the Bank its initial drawdown notice, whether the facility will
  be a Floating Rate, Fixed Rate, Cap Rate or Range Rate.

  

 11
 

 

Borrower: 
Bushmans Group Pty Limited

Bill
Acceptance/Discount Facility – Floating Rate

	
  Purpose/Utilisation:

  	
   

  	
  Working Capital

  
	
   

  	
   

  	
   

  
	
  Facility limit:

  	
   

  	
  $3,200,000 (three million
  two hundred thousand dollars)

  
	
   

  	
   

  	
   

  
	
  Expiry Date:

  	
   

  	
  31st January 2007

  
	
   

  	
   

  	
   

  
	
  The Facility is:

  	
   

  	
  an non-amortising facility

  
	
   

  	
   

  	
   

  
	
  Drawdown Periods:

  	
   

  	
  Approximate period between
  each drawdown date:  30 days

  
	
   

  	
   

  	
   

  
	
  Floating Rate:

  	
   

  	
  the rate (expressed as a
  percentage yield to maturity and rounded upwards to the nearest two decimal places)
  which is the bid rate shown at approximately 10.10 am (Sydney time) on page BBSY
  on the Reuters Monitor System on the day the bills
  are to be discounted for bills of
  like amounts and tenors. If such rate is not available or if, in the Bank’s reasonable opinion, the rate becomes
  inappropriate, the floating rate
  will be the rate reasonably determined by the Bank to be the appropriate equivalent rate, having regard to
  prevailing market conditions. 

   

  The rate as a percentage
  per annum will be advised following a drawing
  under the facility.

  
	
   

  	
   

  	
   

  
	
  Facility Fee:

  	
   

  	
  0.50% per annum of the facility limit, payable by the Borrower on a half yearly basis in advance
  from the date of acceptance of the facility.

  
	
   

  	
   

  	
   

  
	
  Activation Fee:

  	
   

  	
  1.40% per annum of the face
  value of each bill, calculated from
  and including the date the Bank accepts
  the bill to the maturity date of the bill, payable by the Borrower upon acceptance of each bill.

  
	
   

  	
   

  	
   

  
	
  Bill Drawdown Fee:

  	
   

  	
  $150 payable by the Borrower each time the Bank accepts bills on a drawdown date.

  
	
   

  	
   

  	
   

  
	
  Late Presentation Fee:

  	
   

  	
  Not ascertainable - see
  the Bill Facility Special Conditions

  
	
   

  	
   

  	
   

  
	
  Default Interest Rate:

  	
   

  	
  The total of the Bank’s [Base] Indicator Rate, currently 10.35%,
  plus a customer margin of 1.90% plus a default margin of 6.50%. Currently 18.75%
  per annum

  
	
   

  	
   

  	
   

  
	
  Nominated Account:

  	
   

  	
  Bushmans Group Pty Limited
  082-057 57-132-0868 for the purposes of debiting and crediting amounts in relation
  to this facility under this Letter
  of Offer.

  
	
   

  	
   

  	
   

  
	
  Securities:

  	
   

  	
  All securities detailed in Part 2 with the exception
  of the securities numbered 7, 9
  and 10

  
	
   

  	
   

  	
   

  
	
  Specific Conditions:

  	
   

  	
  Bill Facility Specific Conditions
  The Borrower must nominate, no later
  than the time the Borrower gives
  to the Bank its initial drawdown notice, whether the facility will
  be a Floating Rate, Fixed Rate, Cap Rate or Range Rate.

  

 12
 

 

Borrower: Bushmans Group Pty Limited

Bank
Guarantee Facility

	
  Purpose/Utilisation:

  	
   

  	
  Performance Guarantee

  
	
   

  	
   

  	
   

  
	
  Facility limit:

  	
   

  	
  $50,000 (fifty thousand
  dollars)

  
	
   

  	
   

  	
   

  
	
  Expiry Date:

  	
   

  	
  31st January 2007

  
	
   

  	
   

  	
   

  
	
  Issuing Fee:

  	
   

  	
  1.80% of the face value
  of each bank guarantee payable on
  issue, subject to a minimum fee of $500 for each bank guarantee.

  
	
   

  	
   

  	
   

  
	
  Half Yearly Fee:

  	
   

  	
  3.60% of the face value
  of each bank guarantee per year.
  

   

  Payable in arrears, on a
  pro-rata basis, half yearly from the issue date and on cancellation of the Bank guarantee. 

   

  Minimum (total) fee of $500
  for each bank guarantee.

  
	
   

  	
   

  	
   

  
	
  Securities:

  	
   

  	
  All securities detailed in Part 2 with the exception
  of the securities numbered 1,3,4,5,6,7,8,9
  and 10

  
	
   

  	
   

  	
   

  
	
  Specific Conditions:

  	
   

  	
  Bank Guarantee Facility
  Specific Conditions

  

 

Borrower: Channell
Pty Limited

Bank
Guarantee Facility

	
  Purpose/Utilisation:

  	
   

  	
  Performance Guarantee

  
	
   

  	
   

  	
   

  
	
  Facility limit:

  	
   

  	
  $375,000 (three hundred
  and seventy five thousand dollars)

  
	
   

  	
   

  	
   

  
	
  Expiry Date:

  	
   

  	
  31st January 2007

  
	
   

  	
   

  	
   

  
	
  Issuing Fee:

  	
   

  	
  1.80% of the face value
  of each bank guarantee payable on
  issue, subject to a minimum fee of $500 for each bank guarantee.

  
	
   

  	
   

  	
   

  
	
  Half Yearly Fee:

  	
   

  	
  3.60% of the face value
  of each bank guarantee per year.
  

   

  Payable in arrears, on a
  pro-rata basis, half yearly from the issue date and on cancellation of the Bank guarantee. 

   

  Minimum (total) fee of $500
  for each bank guarantee.

  
	
   

  	
   

  	
   

  
	
  Securities:

  	
   

  	
  All securities detailed in Part 2 with the exception
  of the securities numbered 1,2,4,5,6,7,8,9
  and 10

  
	
   

  	
   

  	
   

  
	
  Specific Conditions:

  	
   

  	
  Bank Guarantee Facility
  Specific Conditions

  

 

 13
 

 

3          Other
facilities

Any existing facilities
held by a Borrower, and any new facilities
provided to a Borrower that are not
documented in this Letter of Offer, are listed out below.

This Facility Summary
is provided for information purposes only and does not form part of, or vary, the
terms of any of the facilities referred
to in it.

 

Important:
Variation to certain other facilities

Variation

By signing this Letter
of Offer:

·           the
terms and conditions of other facilities
listed below are varied to include the Letter
of Offer Terms. The Letter of Offer
Terms will then form part of the terms and conditions of those other facilities in addition to the terms and
conditions that already apply to those other
facilities (‘Existing  Terms’); and

·           other
than as described above, the terms and conditions of the other facilities listed below are not affected
by this Letter of Offer and remain in full force and effect.

Letter of Offer Terms

The following sections
of this Letter of Offer are the ‘Letter of Offer
Terms’ referred to above:

·           Establishment
Costs – Part 3 (Establishment Fees and Charges), but only in relation
to other facilities that are shown
below as being new facilities (if any).

·           Conditions
Precedent – Part 4 (Conditions Precedent and other information) and clause
1 of the General Conditions (Conditions precedent).

·           Covenants
and Undertakings – Part 5 (Covenants and Undertakings) and clause 6 of
the General Conditions (General undertakings and covenants).

·           Representations
and Warranties – clause 5 of the General Conditions (Representations
and warranties).

·           Default
– clause 7 of the General
Conditions (Default).

·           Securities
– Part 2 (Securities), except as set out below.

Definitions

Defined terms used
in the Letter of Offer Terms have
the meanings set out below in relation to each other
facility to which the Letter of Offer
Terms apply:

·           Agreement means the separate contract documents applicable to the other facility as amended by this Letter of
Offer; and

·           otherwise, defined terms used in the Letter of Offer Terms have the meaning given
to those terms in the General Conditions.

Inconsistency

If there is any inconsistency
between the Existing Terms and the
Letter of Offer Terms, to the extent
it is not possible to comply with those inconsistent terms, the Letter
of Offer Terms prevail.

In there is any inconsistency
between different provisions within the Letter
of Offer Terms, to the extent it is not possible to comply with those
inconsistent terms, that inconsistency
will be resolved in accordance with clause 20.3 of the General Conditions.

 14
 

 

Customer:
Bushmans Group Pty Limited

Master
Asset Finance Facility

	
  Purpose/Utilisation:

  	
   

  	
  Capital Expenditure – Motor
  Vehicles

  
	
   

  	
   

  	
   

  
	
  Facility limit: 

  	
   

  	
  $1,000,000 (one million
  dollars) 

  
	
   

  	
   

  	
   

  
	
  Expiry :

  	
   

  	
  31st January 2007

  
	
   

  	
   

  	
   

  
	
  Securities:

  	
   

  	
  All securities detailed in Part 2 with the exception
  of securities numbered 1,3,4,5,6,7,8
  and 10

  
	
   

  	
   

  	
   

  
	
  Specific Conditions:

  	
   

  	
  The Bank may decline any request to utilise the
  facility at its discretion.

  

 

Customer:
Channell Pty Limited

Master
Asset Finance Facility

	
  Purpose/Utilisation:

  	
   

  	
  Capital Expenditure

  
	
   

  	
   

  	
   

  
	
  Facility limit: 

  	
   

  	
  $250,000 (two hundred and
  fifty thousand dollars) 

  
	
   

  	
   

  	
   

  
	
  Expiry:

  	
   

  	
  31st January 2007

  
	
   

  	
   

  	
   

  
	
  Securities:

  	
   

  	
  All securities detailed in Part 2 with the exception
  of securities numbered 1,2,4,5,6,7,8
  and 9

  
	
   

  	
   

  	
   

  
	
  Specific Conditions:

  	
   

  	
  The Bank may decline any request to utilise the
  facility at its discretion.

  

 

Customer:
Bushmans Group Pty Limited

Business
Credit Card Facility

 

	
  Purpose/Utilisation:

  	
   

  	
  Purchasing

  
	
   

  	
   

  	
   

  
	
  Facility limit: 

  	
   

  	
  $300,000 (three hundred
  thousand dollars) 

  
	
   

  	
   

  	
   

  
	
  Expiry:

  	
   

  	
  31st January 2007

  
	
   

  	
   

  	
   

  
	
  Securities:

  	
   

  	
  All securities detailed in Part 2 with the exception
  of securities numbered 1,3,4,5,6,7,8,9
  and 10

  
	
   

  	
   

  	
   

  
	
  Specific Conditions:

  	
   

  	
  The Bank may decline any request to utilise the
  facility at its discretion.

  

 

 15
 

 

Customer:
Channell Pty Limited

Business
Credit Card Facility

 

	
  Purpose/Utilisation:

  	
   

  	
  Purchasing

  
	
   

  	
   

  	
   

  
	
  Facility
  limit: 

  	
   

  	
  $100,000
  (one hundred thousand dollars) 

  
	
   

  	
   

  	
   

  
	
  Expiry:

  	
   

  	
  31st January 2007

  
	
   

  	
   

  	
   

  
	
  Securities:

  	
   

  	
  All
  securities detailed in Part 2 with
  the exception of securities numbered
  1,2,4,5,6,7,8,9 and 10

  
	
   

  	
   

  	
   

  
	
  Specific
  Conditions:

  	
   

  	
  The
  Bank may decline any request to
  utilise the facility at its discretion.

  

 

Customer:
Bushmans Group Pty Limited

Documentary
Letter of Credit

 

	
  Purpose/Utilisation:

  	
   

  	
  Importation of goods

  
	
   

  	
   

  	
   

  
	
  Facility limit: 

  	
   

  	
  $50,000 (fifty thousand
  dollars) 

  
	
   

  	
   

  	
   

  
	
  Expiry:

  	
   

  	
  31st January 2007

  
	
   

  	
   

  	
   

  
	
  Securities:

  	
   

  	
  All securities detailed in Part 2 with the exception
  of securities numbered 1,3,4,5,6,7,8,9
  and 10

  
	
   

  	
   

  	
   

  
	
  Specific Conditions:

  	
   

  	
  The Bank may decline any request to utilise the
  facility at its discretion.

  

 

 

 16

 

Part 2                   Security

Unless the Bank specifies in writing to the contrary, the securities listed below, together with any additional or
replacement securities provided by
a Borrower or a security
provider, secure all facilities.

Each Borrower
must provide, and must ensure that each security provider
provides, all the following securities in a
form and substance satisfactory to the Bank (if the Borrower or the security provider
has not already done so).

The grant of any new securities detailed below does not prejudice or waive the Bank’s right to rely upon, and enforce, earlier securities, unless otherwise specified.

Registered Mortgage
Debentures

Over the whole of the
company assets including goodwill and uncalled capital and called but unpaid
capital together with relative insurance policy assigned to the National
Australia Bank Limited given by

1.               Channell Bushman Pty Limited ABN 99 109 821 614

2.               Bushmans Group Pty Limited ABN 90 090 744 022

3.               Channell Pty Limited ABN 29 002 735 622

4.               Bushmans Engineering Pty Limited ABN 49 074 185 461

5.               Polyrib Tanks Pty Limited ABN 49 062 942 661

6.               Australian Bushman Tanks Pty Limited ABN 21 058 504 108

Guarantees and
Indemnities

7.               In support of Channell Bushman Pty Limited for $8,850,000.00 and other
liabilities given by:- Bushmans Group Pty Limited, Channell Pty Limited,
Bushmans Engineering Pty Limited, Polyrib Tanks Pty Limited and Bushman Tanks
Pty Limited

8.               In support of Bushmans Group Pty Limited 
for $3,200,000.00 and other liabilities given by:- Channell Bushmans Pty
Limited, Channell Pty Limited, Bushmans Engineering Pty Limited, Polyrib Tanks
Pty Limited and Bushman Tanks Pty Limited

9.               Master Asset Finance Agreement for $1,000,000 on account of Bushmans
Group Pty Limited

10.         Master Asset Finance Agreement for $250,000 on account of Channell Pty
Limited

 17
 

 

Part 3                   Establishment
Fees and Charges

The Borrower agrees
to pay the following fees and charges immediately on acceptance of this Letter
of Offer or as otherwise agreed in writing:

Not
Applicable

Any additional cost
incurred for the use of the Banks’ internal
legal department, external solicitors and
consultants will be borne by the Borrower. (or
if there is more than one Borrower,
jointly and severally by all Borrowers).

These fees and charges
are in addition to any fees set out in the Details, the Specific Conditions,
and in A Guide to Fees and Charges as amended
from time to time.

Other fees and charges
may be payable as set out in each Agreement.

 18
 

 

Part 4                   Conditions
Precedent and other information

1                 General

In addition to the conditions precedent in clause 1
(Conditions precedent) of the General Conditions and any other conditions
precedent that may be set out in the Specific Conditions for a facility or the Property Conditions (if any), the Bank does not need to provide any financial
accommodation under any facility unless
the Bank has received the following
documents, satisfactory to it:

Authorisations

A certified copy of an extract of the resolutions of
directors of each Borrower resolving:

·                  to approve the terms of this Letter of Offer, any other documents that
include the terms of any facility and
each security to which it is a party,

·                  that the entry into, and performance of its obligations under, this
Letter of Offer, any other documents that include the terms of any facility and each security to
which it is a party is in its best interests and for its benefit;

·                  to authorise the Borrower to
enter into, sign, deliver and perform this Letter of Offer, any other documents
that include the terms of any facility and
each security to which it is a party;

·                  to appoint the authorised representative(s) of the Borrower;

·                  authorise either (where the Borrower is a
company), two directors or a director and a secretary or (if the Borrower is not a company) a person or persons named or
identified therein to execute and deliver this Letter of Offer, any other
documents that include the terms of any facility and
each security to which it is a party.

A certified copy of an extract of the resolutions of
directors of each security provider resolving:

·                  to approve the terms of this Letter of Offer, any other documents that
include the terms of any facility and
each security to which it is a party,

·                  that the entry into, and performance of its obligations under, each security to which it is a party is in its best interests and
for its benefit;

·                  to authorise the security provider to
enter into, sign, deliver and perform each security to
which it is a party;

·                  to appoint the authorised representative(s) of the security
provider;

 19
 

 

·                  authorise either (where the security provider is
a company), two directors or a director and a secretary or (if the security provider is not a company) a person or persons
named or identified therein to execute and deliver each security to
which it is a party.

A certified specimen signature of each authorised
representative of each Borrower and
each security provider.

Should further deterioration occur the Bank will seek from Channell Commercial Corporation
Incorporated either A) Corporate Guarantee to support borrowings or B) Provide
additional paid up capital support to cover trading losses

 20
 

 

Part 5                   Covenants
and Undertakings

Additional Covenants and
Undertakings

Each Borrower undertakes to comply with the following covenants
and undertakings at all times.

These covenants and undertakings are to be assessed
and reported as detailed below.

Specific Undertakings

Monthly Management Accounts (Channell Pty Ltd and
Channell Bushman’s Group) incorporating balance sheet, profit and loss and cash
flow are to be provided within 30 days of month end. Any negative variance of
greater than 10% on sales, gross profit and operating profit will trigger a
full right to review and event of default.

Reporting Covenants

Each Borrower undertakes to comply with the following reporting
covenants at all times.

These reporting covenants are to be assessed and
reported as detailed below.

Annual Accounts (Audited
- Excluding Cashflow)

Within 120 days of the close of each financial year, a
copy of the audited annual report or balance sheet and profit & loss
account for Channell Bushman Pty Ltd (consolidated) and Channell Pty Ltd.

Interim Accounts
(Including Cashflow)

Within 30 days of the close of each quarter, a copy of
the Borrower’s quarterly
management accounts including balance sheet, profit & loss account and
cashflow statement for Channell Bushman Pty Ltd (consolidated) and Channell Pty
Ltd.

Interim Compliance
Certificate

Within 30 days of the close of each quarter a
compliance certificate for Channell Bushman Pty Ltd (consolidated) and Channell
Pty Ltd signed by one or two of the Borrower’s directors or
authorised representatives as appropriate, detailing as at the end of each
quarter compliance with the covenants and undertakings detailed in this Agreement for
Channell Bushman Pty Ltd (consolidated) and Channell Pty Ltd.

 21
 

 

Actual to projected cash
flow variance

Within 30 days of the close of each quarter, a copy of
the Borrowers quarterly
actual to projected cashflow reports to be provided with commentary on all
variances greater than 10% for Channell Bushman Pty Ltd (consolidated) and
Channell Pty Ltd.

Specific Reporting
Covenants

Annual three-way forecast (incorporating balanace
sheet, profit and loss and cash flow) are to be provided prior to commencement
of each financial year on account of Channell Bushman Pty Ltd (consolidated)
and Channell Pty Ltd.

Definitions

For the purposes
of these Covenants and Undertakings:

capital adequacy means tangible net worth divided
by total tangible assets.

current ratio means Current Assets divided by Current
Liabilities.

dividend payout amount  means the amount of
dividend payments plus increased loans to shareholders, expressed as a
percentage of Net Profit after Tax.

finance charges means
operating lease rental expense.

financial charges cover means
Earnings Before Interest and Tax plus finance charges
divided by interest plus finance
charges.

gearing / leverage ratio means
Total Liabilities divided by tangible net worth.

intangible assets means
deferred development expenses, deferred foreign exchange gains, organisational
or experimental expenses, research and development expenses, intellectual
property, future income tax benefits, goodwill, patents, trademarks, service
marks, design rights, franchises, copyrights, licences, underwriting and formation
expenses and other items of a like nature which, according to current
accounting practice, are regarded as intangible assets.

interest for
the purpose of financial reporting covenants means gross interest expense
(including finance lease, other external debt and subordinated debt interest).

interest cover means
Earnings Before Interest and Tax divided by interest (including finance lease,
other external debt and subordinated debt interest).

inventory and debtors to working capital debt ratio  means
inventory and debtors divided by working capital debt.

net property income means,
in respect of the relevant period:

(i)                                     the
aggregate income actually received by the Borrower during
that relevant period from any valid and binding lease or
agreement to lease, licence or other
agreement entered into by the Borrower;

(ii)                                  if
approved by the Bank, any other income actually
received from the ownership or use of the assets that relate to the project received by the Borrower during
that relevant period; and

 22
 

 

(iii)                               outgoing recoveries received by the Borrower during
that relevant period,

less

(iv) the aggregate amount of outgoings incurred or paid by the Borrower during
that relevant period

occupancy (Accommodation) means
actual level of rooms occupied of the motel/hotel divided by the total number
of rooms.

occupancy (Commercial) means total occupied
space, at any given time, divided by the total lettable space as determined by
the Bank at the Bank’s
discretion.

outgoing recoveries means amounts that the Borrower actually recovers or is reimbursed for under any lease or agreement for lease in
relation to outgoings incurred or paid by the Borrower.

outgoings means in relation to so much of the
project which is the subject of a lease or agreement to lease:

(i)                                    municipal
rates;

(ii)                                 water
& sewerage rates;

(iii)                              land
tax;

(iv)                             all
insurance expenses;

(v)                                electricity;

(vi)                             common
area cleaning;

(vii)                          property/centre
management including salaries and all office administration expenses;

(viii)                       advertising
& promotion costs;

(ix)                               air
conditioning & ventilation maintenance;

(x)                                  building
cleaning & maintenance;

(xi)                               lift
& escalator operation & maintenance;

(xii)                            general
repairs & maintenance;

(xiii)                         fire
protection expenses;

(xiv)                        public
address expenses;

(xv)                           gas
& oil expenses;

(xvi)                        pest
control;

(xvii)                     security;

(xviii)                  building
management system expenses;

(xix)                          energy
management systems;

(xx)                             sewage
disposal;

(xxi)                          telephones;

(xxii)                       gardening/landscaping;

(xxiii)                    signage
expenses;

(xxiv)                   lease
commissions; and

(xxv)                      other sundry
expenses incurred in relation to ownership of the funded property.

presales/debt cover ratio means the ratio of acceptable presales (as
advised by the Bank), less GST and all selling
and legal costs, to the facility limit
(or total facility limits) for the relevant facility or facilities.

 23
 

 

property finance interest cover ratio means the
ratio of net property income received during the
testing period to the aggregate amount of interest payable during the same
testing period.

property finance loan to value ratio  means the
ratio of debt outstanding divided by the current market value as reported in
the most recent valuation, expressed as a percentage.

tangible net worth means
total tangible assets minus total
liabilities.

total tangible assets means
all assets other than intangible assets.

 24
 

 

Part 6                   Property
Conditions

 25

 

Part 7                   General Conditions

1                               Conditions precedent

(a)                        The Bank does not need to provide the initial
utilisation of any financial accommodation under
a facility unless all of the
following conditions precedent are met to the Bank’s
satisfaction:

(i)                                     the
Bank has received every valuation
the Bank requires;

(ii)                                  the
Bank has received originals of
each transaction document,
related acknowledgment or acceptance and title documents, duly executed by all
parties to them where relevant and where applicable:

(i)                                         in
registrable form, together with all executed documents necessary to register
them in each relevant jurisdiction; and

(ii)                                      having
had all taxes paid on it or, if
not already paid, sufficient same day funds to enable the payment of any taxes chargeable on it, together with all
executed documents necessary to effect payment of those taxes;

(iii)                               in
respect of all insurance policies that the Bank
requires, the Bank has
received evidence that each insurance policy:

(i)                                         has
been obtained, remains current, and the Bank’s
interest is noted; and

(ii)                                      is
with an insurer, for an amount, and otherwise on terms acceptable to the Bank;

(iv)                              all
conditions precedent set out in Part 4 of this Letter of Offer; and

(v)                                 evidence
that each security remains
enforceable, free from all prior security
interests and third party rights and interests.

(b)                       In addition
to paragraph (a), the Bank does
not need to provide any financial
accommodation under a facility
if:

(i)                                     the
Borrower’s request for the financial accommodation is not made in
accordance with any requirements set out in this Agreement;

(ii)                                  the
amount of financial accommodation
requested, if provided, would result in the facility
limit (or the adjusted facility
limit in relation to a bank
guarantee facility or a facility
pursuant to which a letter of credit
is or will be issued) being exceeded;

(iii)                               at
the time of the Borrower’s
request for the financial accommodation, something has happened which, in the Bank’s reasonable opinion has led, or could lead, to a material
adverse change in the financial circumstances of any of the Borrowers or the security providers;

(iv)                              the
results of any of the Bank’s inquiries
or searches are not to the Bank’s satisfaction;

(v)                                 the
Bank is not satisfied that each
representation and warranty by each Borrower
and security provider in the transaction documents are true and not
misleading as at the date of the utilisation of the financial accommodation with reference to the facts and
circumstances then existing;

(vi)                              an event of default or a potential  event
of default exists at the date of the relevant drawdown notice or the date of drawing or will result from utilisation of
the facility; or

(vii)                           any
other conditions the Bank
requires as a pre-requisite on making facilities,
or the particular facility,
available are not, or have not been, complied with.

 26
 

 

2                               Review

2.1                     Scope and frequency

The Bank may
review each Borrower’s compliance
with this Agreement, each security
provider’s compliance with the security
granted by it and the financial position of any of the Borrowers or security providers:

(a)                                            at
least annually; or

(b)                                           if
the Bank has a reasonable opinion
that something has happened which has led, or could lead, to the occurrence of
a potential event of default or event of default.

2.2                     Assistance

Each Borrower must
provide, and must procure that each security
provider provides, the Bank with
all information, documents, consents and assistance the Bank requires in connection with a review,
within any time period the Bank specifies,
including by:

(a)                        providing
financial information (such as accountant’s reports, tax returns, balance
sheets, profit and loss statements, business forecasts and cash flow
projections) and other requested information and documentation (such as
evidence of currency of insurances); and

(b)                       ensuring
that any valuer the Bank nominates
is granted access to any property or assets the subject of any security to enable them to conduct any
valuation of the property or assets the Bank
requires. Any such valuation will be at the Borrowers’ cost.

3                               Payment obligations

 

3.1                     General repayment obligations

The Borrower
must pay:

(a)                        any amount
drawn on a facility in excess of
its facility limit immediately
upon the excess occurring; and

(b)                       the facility amount owing on the earlier of
the expiry date (if any) and the
date the facility is cancelled,
terminated or otherwise ends.

3.2                     Fees charges and other premiums

(a)                        All Borrowers are liable, jointly and
severally, to pay to the Bank and
indemnify the Bank for:

(i)                                     all
fees, charges and premiums set out or provided for in this Agreement in accordance with this Agreement (including the Guide to Fees and Charges);

(ii)                                  an
amount equal to any costs or taxes the Bank
reasonably incurs in connection
with the transaction documents, the
facilities or any transactions
under or in relation to them, including:

(A)                         the
negotiation, review, preparation, execution, delivery, variation, stamping,
registration or discharge of a transaction
document; and

(B)                           arranging,
conducting, administering or processing a transaction, or giving a consent or
approval or waiving any requirement, under any transaction
document or a facility;

(iii)                               an
amount equal to any costs or taxes the Bank
incurs in connection with the Bank
exercising, enforcing or preserving rights, powers or remedies (or considering
or attempting to do so) in connection with any transaction
document, facility or any transactions under or in relation to any
of them; and

(iv)                              any external administrator’s  costs and remuneration.

(b)                       Fees and
charges, unless otherwise agreed, are not charged on a pro-rata basis and, once
incurred, charged or paid (as the case may be), are not refundable in whole or
in part.

 27
 

 

3.3                     Calculation and payment of
interest

(a)                        Interest
for each interest period or pricing period accrues and is calculated
daily by applying the daily interest rate to
the balance owing at the end of
that day (unless otherwise stated in the Specific Conditions for a facility).

(b)                       Interest
charges are capitalised, or otherwise due and payable, in accordance with the
Specific Conditions. Where interest charges are debited to the relevant account, they will be deemed to be part of
the balance owing from the date
they are debited.

3.4                     Setting of interest rates

(a)                        If a facility has a variable interest rate or a variable default interest rate, each Borrower acknowledges that:

(i)                                     those
rates include an indicator rate and may include one or more margins;

(ii)                                  the
indicator rates that apply to a facility are
set out in the Details;

(iii)                               the
amount of an indicator rate on any day will be that last published or otherwise
advised by the Bank on
www.national.com.au and/or in the local or national press; and

(iv)                              if
the Details state that a variable
interest rate applies, the
variable interest rate stated in the Details
is the rate applying at or about the date of this Letter of Offer and is indicative only.

(b)                       During a fixed rate period or pricing period, the relevant interest rate remains fixed. The Specific
Conditions for a facility set out
any applicable rules regarding the quotation and acceptance of fixed rates, and
how fixed rates are set.

3.5                     Pricing Review

(a)                        Other than
pricing changes which occur automatically under this Agreement, on or about each anniversary of this Agreement, or such other dates as are
agreed, the Bank may review the
pricing applicable to a facility and
may, on written notice to the relevant Borrower:

(i)                                     introduce
a new fee, charge or premium or change an existing fee, charge or premium
(including its amount, the way in which it is calculated and when it is
charged); and

(ii)                                  change
the interest rate or yield rate applicable to a facility including by changing or
introducing a margin (including by making the margin positive or negative), or
substituting a different indicator rate for the relevant indicator rate (except
where the rate is a fixed rate).

(b)                       In
addition, unless specifically stated otherwise, the Bank may, at any time, change the pricing applicable to a facility to the extent necessary to
reflect changes to prevailing market conditions or the Bank’s general pricing for facilities of
that type. Except in relation to
pricing changes which occur automatically under this Agreement, the Bank will
give the Borrower notice of any
such change in writing and/or by way of advertisement in the local or national
press. Where the Bank gives the Borrower notice under this clause by way
of advertisement in the local or national press, the Bank will also endeavour to directly notify the Borrower of the change, however should the
Bank not do so for any reason,
this will not preclude the Bank from
charging the new or adjusted pricing.

3.6                     Accounting for transactions

(a)                        Each Borrower irrevocably authorises the Bank to open such accounts as the Bank requires in connection with a facility and to debit and credit amounts to those accounts in accordance with this Agreement.

(b)                       If the Bank is authorised to debit an amount to a
nominated account, the relevant Borrower authorises the Bank to debit that amount to the nominated account even if it causes the account
to become overdrawn. If a nominated account
has insufficient 

 28
 

 

cleared funds, or if a valid account is not nominated
when the debit is to be made, the relevant Borrower
irrevocably authorises the Bank to
debit that amount to any account
of the Borrower the Bank decides at its discretion.

(c)                        If this Agreement does not specify where an amount
payable may be debited, each Borrower
irrevocably authorises the Bank to
debit that amount to any account
of the Borrower the Bank may decide in its discretion, or to
apply any payment in connection with this Agreement
towards satisfying the Borrower’s
obligations under this Agreement
as the Bank sees fit.

(d)                       Where the Bank debits amounts pursuant to this Agreement to an account (including a nominated
account), opened by:

(i)                                     a
Borrower, then the Borrower must pay the Bank interest (including default interest
if applicable) on any debit balance  in
accordance with the terms of that account;

(ii)                                  the
Bank, then the Borrower for which the account has been opened must pay the Bank interest charges on the overdrawn
balance of that account at the default interest rate applying to the
relevant facility or, if there is
none, in accordance with the terms normally applied by the Bank to accounts of that type; or

(iii)                               either
a Borrower or the Bank, the overdrawn balance of the account
in excess of the applicable facility limit
is immediately payable without further notice.

(e)                        The
relevant Borrower must ensure
that there are sufficient cleared funds in the nominated
account (including any available
credit limit applicable to that account) to meet all amounts the Bank is authorised to debit to that
account.

3.7                     Payment in Australian Dollars

All amounts payable by a Borrower under this Agreement
are payable in Australian dollars except to the extent that this Agreement states that the amount is
payable in another currency.

3.8                     Payment in cleared funds

All amounts payable by a Borrower under this Agreement
are payable in immediately available cleared funds.

3.9                     Payments due on non-banking days

Subject to the Specific Conditions for a facility, if a payment is due under the facility on a day that is not a banking day, that payment may be made on
the next banking day.

3.10              No set off or deduction

All payments by a Borrower
under any transaction document,
whether of principal, interest or other amounts due under this Agreement, will be:

(a)                        free of
any set-off (whether at law or in equity) or counterclaim or condition;
and

(b)                       without
deduction or withholding for any present or future taxes, unless the Borrower
is required by law to deduct or withhold an amount or the Bank is required to pay any taxes on the payments it receives from the
Borrower, in which case the Borrower must pay to the Bank any additional amount necessary to
enable the Bank to receive and
retain, after all required deductions and withholdings  and after payment of any taxes in respect of the additional amount,
a net amount equal to the full amount which would otherwise have been payable
had no such deduction or withholding or payment of taxes been required to be made.

4                               Economic costs

4.1                     Payment of economic costs

Economic costs are
payable whenever an economic event occurs
in relation to a facility. The Borrower must pay the Bank the amount of any economic costs on demand.

 29
 

 

4.2                     Economic events

Unless otherwise agreed by the Bank in writing, an economic event is taken to have occurred
if, at any time while a fixed rate (whether a fixed interest rate or a yield
rate) applies to a facility,
a bill facility component, an account or a drawing:

(a)                        all or
part of that facility,  bill facility component, account or drawing is repaid early (even if the Bank agrees to the early repayment being
made);

(b)                       that facility, bill
facility component, account or drawing,
is re-priced by agreement from one fixed rate to another fixed rate or to
another type of rate (such as a variable rate);

(c)                        that facility, facility limit or bill facility component is cancelled,
reduced or not fully drawn for any reason at any time before the expiry date;

(d)                       the Bank is for any reason no longer obliged
to accept, discount or endorse bills
under the facility or a bill is cancelled before its maturity date; or

(e)                        if an event of default has occurred, or the facility amount owing becomes repayable,
and the Bank elects to treat it
as an economic event;

except to the extent that this occurs:

(f)                          in
relation to a market rate facility, term
loan facility or global trade
finance facility on the repricing
date applicable to the facility or
account (as the case may be), or
if that day is not a banking day, on
the next banking day;

(g)                       in relation
to a bill facility, at the end of
a fixed rate period or where a fixed rate period does not apply, on the
applicable maturity date;

(h)                       on the expiry date; or

(i)                           in order
to comply with the amortisation schedule (if
any).

4.3                     Calculation of economic costs

(a)                        The Bank determines any economic costs arising under a facility by determining the Bank’s reasonable estimate of the costs and losses incurred by it
(including, without limitation, loss of profits, fees, charges and premiums) in
connection with an economic event
including, without limitation, any amount determined by the Bank to have been paid, suffered or
incurred by it or for which it is liable by reason of:

(i)                          in relation
to a facility other than a bill  facility,
a loss or reduction of profits or return or other costs, (representing the difference between the Bank’s cost of funds at the start of the
relevant fixed rate period and
the Bank’s cost of funds at the
date of the economic event over
the remainder of that period). This is then discounted back to the net present
value at the rate equivalent to the Bank’s
cost of funds at the date of the economic
event;

(ii)                       in
relation to a bill  facility, a loss or reduction of profits
or return or other costs
representing the difference between the yield
rate applicable to the bills
when they are drawn and the interest rate the Bank
is able to receive in the interest rate market by reference to the Interbank Swap Curve at the date of the economic event for the remaining term to
maturity of the facility.  This is then discounted back to the net
present value at the rate equivalent to the Bank’s
cost of funds at that date; or

(iii)                    the
liquidation or re-employment of deposits or other funds acquired or contracted
by the Bank to fund or maintain
the facility or the termination
or reversing of any swap or option agreement or other agreement or arrangement
entered into by the Bank (either
generally in the course of its business or specifically in connection with this
Agreement) to fund or maintain
the facility or to hedge, fix or
limit the Bank’s effective cost
of funding or maintaining the facility.

5                               Representations and warranties

 

5.1                     Representations and Warranties

(a)                        Each
Borrower represents and warrants
to the Bank that, at the date of
this Agreement and at all times
thereafter:

 30
 

 

(i)                          if
it is a company, it is duly incorporated and validly existing under the laws of
its place of incorporation;

(ii)                       it
has full capacity and power to enter into and comply with, and has taken all
necessary action to authorise it to enter into and comply with, each facility, the transaction documents, and to make a drawing under, or otherwise utilise, a facility;

(iii)                    it has full power and authority and
legal right to own its assets and to carry on its business as presently
conducted;

(iv)                   neither
it nor any of its assets are immune from the jurisdiction of a court or from
legal process;

(v)                      the
transaction documents to which it
is expressed to be a party constitute its legal, valid and binding obligations
and, subject to any necessary stamping and registration, are enforceable in
accordance with their terms subject to law generally affecting creditors’
rights and to principles of equity;

(vi)                   the
most recent financial accounts, reports and factual information provided to the
Bank by it at any time:

(A)                    are
true and accurate and not misleading in any material respect;

(B)                      are
(unless the Bank agrees
otherwise) prepared in accordance with applicable law and any accounting
standards generally applicable in Australia at the time of preparation; and

(C)                      give
a true and fair view of its state of affairs and the result of its operations
at the date, and for the period ending on the date, to which those statements
are prepared,

and no material change has taken place in respect to
any of them since the date they were provided to the Bank;

(vii)                it is not in breach of any law or any
agreement, deed, security or instrument binding on it or its assets, and it is
not in default in respect of any material monetary obligation contracted by or
imposed upon it;

(viii)             no material litigation, arbitration or
administrative proceedings are current or pending or, to its knowledge,
threatened against it before any
court or governmental agency;

(ix)                     complying
with the transaction documents to
which it is expressed to be a party is for its commercial benefit and is in its
commercial interests;

(x)                        it
is not insolvent;

(xi)                     no
potential event of default or event of default has occurred under or in
respect of any transaction document
and remains unremedied;

(xii)                  except as disclosed to and agreed to
by the Bank in writing, it is not
a trustee of any trust;

(xiii)               it has obtained and maintained in full
force and effect all material authorisations, consents, filings, registrations
and permits applicable to it or its business;

(xiv)              the execution, delivery and performance
of the transaction documents to
which it is expressed to be a party will not:

(A)             breach
or contravene any law or regulation or a judgment, order, ruling or decree of a
governmental agency;

(B)               conflict
with its constituent documents or any agreement binding on it or any obligation
to any person;

(C)               create,
impose or crystallise any security interest
on any of its assets (other than contemplated under any transaction document); or

 31
 

 

(D)            cause
or result in the acceleration of the date of payment of any obligation under an
agreement that is binding on it;

(xv)                 the
security is in full force and
effect and has the priority contemplated in it.

(b)                       These
representations and warranties (and the representations and warranties in
clause 5.2) are deemed to be repeated with reference to the facts and
circumstances then existing at each date of utilisation of any financial accommodation, rollover of any bills or notes, each day on which interest
is capitalised or otherwise due and payable and at the date of execution of
each new document under which credit or financial
accommodation is granted by the Bank.

5.2                     Additional representations and
warranties from a trustee

(a)                        This
clause applies where a Borrower enters
into a transaction document as
the trustee of a trust.

(b)                       The
Borrower enters into each transaction document in its personal
capacity and as trustee of the trust
and for the benefit of the beneficiaries of the trust.

(c)                        The Borrower makes the following
representations and give the following warranties to the Bank:

(i)                          it
is the only trustee of the trust;

(ii)                       the
trust documents disclose all the
terms of the trust;

(iii)                    it has the power under the trust deed to enter into and observe the
trustee’s obligations under each transaction
document;

(iv)                   it
has the authorisation necessary to enter into the transaction documents, to perform the trustee’s obligations under the transaction documents and to allow them to
be enforced (including, without limitation, under the trust deed and the trustee’s constitution
(if any));

(v)                      it
has a right to be fully indemnified out of the assets of the trust (“trust
fund”) in respect of obligations incurred by it and it has no
liability which may be set off against that right of indemnity;

(vi)                   the
trust fund is sufficient to
satisfy that right of indemnity and all other obligations in respect of which
it has a right to be indemnified out of the trust
fund;

(vii)                it is not in default under the trust deed;

(xiii)               no action has been taken or proposed to
terminate the trust;

(ix)                     the
Borrower, and its directors and
other officers (if any) have complied with their obligations in connection with
the trust; and

(x)                        the
Bank’s rights under the transaction documents to which the Borrower is expressed to be a party rank
in priority to the interests of the beneficiaries of the trust.

6                               General undertakings and
covenants

 

6.1                     Negative Pledge

Each Borrower undertakes
to the Bank that it will not,
without the Bank’s prior written
consent:

(a)                        raise
any financial accommodation from
any other party;

(b)                       engage
in any other business other than that in which it is presently operating;

(c)                        merge
with or acquire another company or entity;

(d)                       dispose
of any of its subsidiaries;

(e)                        dispose
or part with possession any of its assets (or attempt to do so) except:

(i)                                     in
the ordinary course of its business, on arm’s length terms and for market
consideration;

(ii)                                  where
the asset is no longer required for its business, on arm’s length terms; or

 32
 

 

(iii)                               in
exchange for other assets of comparable type and value; or

(f)                          create
or allow to exist any security  interest over its assets other than:

(i)                                     under
the transaction documents; or

(ii)                                  a
lien arising by operation of law in the ordinary course of day-to-day trading
that does not secure financial accommodation
provided to it.

6.2                     General covenants

Each Borrower undertakes
to the Bank that it will:

(a)                        promptly
advise the Bank of any event of default,  potential event of default or other event
of default (however defined) under any transaction
document;

(b)                       take
out and keep in full force and effect insurance over all of its physical assets
and premises for such amounts and against such risks as a reasonably prudent
person in its position would take out, and promptly comply with any request by
the Bank to take out such further
insurance cover as the Bank may
reasonably require;

(c)                        provide
the Bank with evidence of the
currency of all insurances referred to in paragraph (b) above at each annual
review, or upon the Bank’s
request, whichever is the earlier;

(d)                       not
do or omit to do, or suffer or permit to be done or not done, anything which
may materially prejudice any insurance policy or vary, rescind, terminate or
cancel any insurance policy without the Bank’s
written consent;

(e)                        comply
with all applicable laws and pay all obligations that if unpaid might result in
a lien or claim against any of its assets;
and

(f)                          maintain
its plant and machinery in a state of good repair, fair wear and tear excepted.

6.3                     Additional covenants from a
trustee

(a)                        This
clause applies where a Borrower enters
into a transaction document as
the trustee of a trust.

(b)                       The
Borrower undertakes:

(i)                                     to
provide to the Bank on request
certified copies of the trust documents;

(i)                                     to
ensure that it has a right to be indemnified out of the assets of the trust for all liabilities incurred by it
under the transaction documents;

(ii)                                  to
ensure that there is no restriction or limitation on or derogation from its
right of subrogation or indemnity, other than on the grounds of fraud or gross
negligence (whether or not arising under the trust
documents); and

(iii)                               its
lien over the assets of the trust
at all times for liabilities incurred has priority over the rights of the
beneficiaries of the trust.

(c)                        The
Borrower undertakes that, except
with the Bank’s prior written
consent, none of the following will occur:

(i)                                     re-settlement,
vesting or distribution of capital of the trust;

(ii)                                  retirement
or replacement of the trustee, or the appointment of a new trustee;

(iii)                               amendment,
or revocation of any terms, of the trust
deed;

(iv)                              a security interest arises over any asset of
the trust;

(v)                                 if
a unit trust, not issue any
further units in the trust to any
person other than a unitholder as at the date of this Letter of Offer; or

(vi)                              breach
of any provision of the trust deed.

6.4                     Change of Shareholding

(a)                         If
a Borrower is listed on a stock
exchange it will:

 33
 

 

(i)                          promptly
notify the Bank if a majority of
its shares become held by a person who did not hold a majority of the shares as
at the date of this Letter of Offer. For this purpose, associates (as defined
by the Corporations Act) shall be
treated as the one person; and

(ii)                       deliver
to the Bank a copy of all
material notices issued by the Borrower
to the exchange, promptly after that notice is given to the exchange.

(b)                       If
a Borrower is a company which is
not listed on a stock exchange, it must ensure that no transfer of shares (or
issue of shares) in it will be effected without the Bank’s prior written consent. If the Borrower consists of more than one entity,
the Bank’s consent will not be
required for a transfer or issue of shares in any one of those entities to
another of those entities.

6.5                     Partnerships

If a Borrower is
a partnership:

(a)                         each
person who is a member of the partnership or a partner (however described) is
liable separately, and together with other members or partners, are liable
jointly, for the obligations of the Borrower
under the transaction documents
to which the Borrower is
expressed to be a party;

(b)                        it agrees
to promptly notify the Bank if a
person becomes, or ceases to be, a partner at any time whilst any transaction document remains in full force
and effect.

(c)                         each transaction document will continue to bind
each person who is a partner of that partnership at the date of this Letter of
Offer and each person who becomes a partner whilst a transaction document remains in force and effect:

(i)                           despite
any changes which may from time to time take place in the partners, or any
reconstitution of the partnership, whether by the death, incapacity, or
retirement of any partner or the admission of any new partner or otherwise;

(ii)                        despite
the fact that the partnership no longer carries on business; and

(iii)                    despite the fact that the person or
any of his or her partners are no longer members of the partnership,

and the Borrower agrees
to procure the execution of any documents the Bank
reasonably requires to give full effect to this provision.

6.6                     Co-operation

Each Borrower must:

(a)                        promptly
give the Bank any information or
documents the Bank reasonably
asks for in connection with this Agreement
(including about its financial position) in any form the Bank specifies;

(b)                       do anything
(such as producing and signing documents) the Bank
reasonably requires to give full effect to the transaction documents; and

(c)                        promptly
notify the Bank if the Borrower changes its address.

6.7                     Class Order

(a)                        In this
clause 6.7, “Deed of Cross Guarantee”
refers to a deed substantially in the form of a pro-forma deed issued or
otherwise approved by the ASIC in
order to satisfy ASIC class order
eligibility requirements for relief from certain Corporations Act financial reporting obligations.

(b)                       Each Borrower must notify the Bank in writing:

(i)                                     before
it seeks the approval of ASIC in
respect of, or executes, any Deed of Cross
Guarantee; or

(ii)                                  amends
or terminates a Deed of Cross Guarantee.

(c)                        It
will be an event of default if
the Bank does not receive the
notice referred to in paragraph (b).

 34

 

6.8                     Changes to Accounting Standards

(a)                        If as a
result of a change in the accounting standards generally applicable in
Australia:

(i)                                     a
Borrower is of the reasonable
opinion that it is no longer able to comply with the financial covenants,
reporting covenants or other covenants and undertakings set out in this Agreement, and it gives the Bank written notice advising the Bank of this; or

(ii)                                  the
Bank is of the reasonable opinion
that the financial covenants, reporting covenants or other covenants and undertakings
set out in this Agreement no
longer satisfy the Bank’s requirements,

the Bank will
review the affected covenants or undertakings in consultation with the Borrower, to determine whether any
amendment of this Agreement is
required to take into account the change in accounting standards. The Borrower acknowledges that the Bank may determine, in the Bank’s discretion, that the relevant
covenants or undertakings remain applicable without amendment despite the
change in accounting standards.

(b)                       Paragraph (a)
above shall not be construed as a waiver of any event of default, or waiver of any of the Bank’s rights under this Agreement.

6.9                     Appointment of Consultants

(a)                        On the
occurrence of an event of default or
a potential event of default, the
Bank may, or at the Bank’s request each Borrower will, engage , such accountancy,
financial management and other consultants as the Bank may nominate to investigate the Borrower’s and the security providers’ business affairs and
whether the Borrowers and the security providers have complied with the transaction documents, and to make
recommendations relating to the manner in which the Borrowers and security
providers carry on their business. Any such engagement (whether by
the Bank or a Borrower) will be at the Borrowers’ cost.

(b)                       Each Borrower agrees to provide, and to ensure
each security provider provides,
all assistance and information required by the consultants (including making
all financial records available and giving access to all premises and records)
to enable the consultants to conduct their examination promptly, completely and
accurately.

(c)                        No Borrower or security provider is obliged to accept the recommendations
of any consultant, and the Bank will
assume no liability with respect to any actions a Borrower or security
provider takes, or does not take, as a result of those
recommendations.

(d)                       The costs
of the consultants shall be debited by the Bank
to any account of the Borrower as
the Bank may nominate.

7                               Default

 

7.1                     General Events of Default

It is an event of
default  (whether or not
within a Borrower’s control) if:

(a)                        in the
case of:

(i)                                     the
total amount owing, any Borrower or any security provider does not pay all or any part of the total amount owing when due and payable by
it; or

(ii)                                  any
other financial accommodation
agreement it has with the Bank:

(A)                    any Borrower or any security provider does not pay on time any amount due and
payable by it; or

(B)                      any actual
or contingent indebtedness in respect of the financial
accommodation becomes due and payable, or becomes capable of being
declared due and payable, before
its stated maturity or expiry;

(b)                       any Borrower or security provider fails to comply with or perform any
undertaking, covenant or obligation of it under a transaction document to which it is expressed to be a party
or, in the case of the Borrower,
another agreement it has with the Bank
where:

(i)                                     that
failure is not in the opinion of the Bank
remediable; or

 35
 

 

(ii)                                  that
failure is, in the opinion of the Bank
remediable, and the Borrower or,
as the case may be, the security provider
does not remedy the failure within the period in the notice from the Bank specifying the failure or, if there
is no such period, within 5 banking days;

(c)                        an event
occurs which would allow the Bank to
terminate any other agreement, or terminate a transaction under any other
agreement, any Borrower has with
the Bank;

(d)                       any actual
or contingent indebtedness in respect of money borrowed or raised or other financial accommodation of the Borrower or a security provider (other than financial accommodation with the Bank) totalling at least the threshold debt amount or its equivalent:

(i)                                     is
not paid when due or within any applicable grace period; or

(ii)                              becomes
due and payable, or becomes capable of being declared due and payable, before
its stated maturity or expiry;

(e)                        any Borrower or security provider gives the Bank
information, or makes a representation or warranty, which the Bank reasonably believes to be untrue or
incorrect, or misleading in a material respect when made, or deemed to be
repeated, in connection with the transaction
document to which it is expressed to be a party or, in the case of
the Borrower, another agreement
it has with the Bank;

(f)                          any security interest is enforced, or becomes
capable of being enforced, or  the value
of any security, as assessed by
the Bank, materially decreases;

(g)                       the Bank reasonably believes any Borrower has acted fraudulently in
connection with this Agreement, a
transaction document or another
agreement with the Bank;

(h)                       an insolvency event occurs;

(i)                           any Borrower or security provider that is an individual no longer has legal
capacity or becomes a person protected by the state;

(j)                           all or
part of a transaction document is
or becomes illegal, void, voidable, unenforceable or otherwise of limited
force, priority or effect or claimed to be so, or a person seeks to or becomes
entitled to terminate, rescind or avoid all or a material part or material
provision of a transaction document;

(k)                        any Borrower or security provider takes any action to:

(i)                                     reduce
or attempt to reduce its capital other than by redemption of redeemable
preference shares; or

(ii)                                  pass
a resolution referred to in section 254N of the Corporations Act,

in either case without the prior written consent of the Bank;

(l)                           distress,
attachment or other execution for at least the threshold
litigation amount or its equivalent, is levied upon or issued
against any asset or undertaking of a Borrower
or a security provider and it is
not satisfied or stayed within 5 banking
days;

(m)                     any Borrower or security provider breaches any law or obligation by entering
transactions or performing obligations under a transaction
document to which it is expressed to be a party or, in the case of a
Borrower, another agreement it
has with the Bank;

(n)                       an
investigation by any regulatory authority into all or part of the affairs of a Borrower or a security provider commences in circumstances material to its
financial condition;

(o)                       a change in
any Borrower’s or security provider’s financial
circumstances occurs which, in the Bank’s opinion,
may have a material adverse effect on a Borrower’s
or, as the case may be, a security provider’s
ability to meet its obligations under any agreement it has with the Bank;

(p)                       an order
for payment is made, or a judgment is entered or signed, against any Borrower or any security provider for at least the threshold litigation amount or its
equivalent, and it is not satisfied or stayed within 5 banking days after that event (unless the
order or

 36
 

 

judgment is the subject of an appeal by the Borrower within such period and the Bank is satisfied that there is reasonable
likelihood of success);

(q)                       any other
event occurs that is described in this Letter of Offer as an event of default;

(r)                          any Borrower or security provider is a trustee of a trust and:

(i)                                     a
new trustee is appointed or the trust vests or terminates or any part of the
trust fund is resettled or set aside, in any of these cases without the Bank’s prior written consent; or

(ii)                                  the
Borrower’s or, as the case may
be, the security provider’s right
to be indemnified out of the trust assets is restricted in any way; or

(s)                        any Borrower or security provider is a partnership and any of the events in
paragraphs (a) to (r) above occurs in relation to one or more of the partners,
in which case, the event is deemed to have occurred in relation to the Borrower or, as the case may be, the security provider.

7.2                     Additional Events of Default

In addition to clause 7.1, it will also be an event of default if, in relation to any facility to which the Property Conditions
apply, during the property development
period:

(a)                        the
builder is, in the Bank’s opinion,
unable to complete the project;

(b)                       the contracts of sale or agreements to lease become void or
voidable;

(c)                        the building works do not proceed according to
the development and construction  budget or the development and construction program provided to the Bank;

(d)                       there are
unfunded cost overruns in respect
to a project;

(e)                        a design
variation is made otherwise than in accordance with this Agreement; or

(f)                          any
change, which in the opinion of the Bank is
material, is made to the project,
including to any plans or specifications in relation to it, without the Bank’s consent.

7.3                     Consequences of default

(a)                        Upon the
occurrence of an event of default,
the Bank may at its option
exercisable without the need to give any notice to the Borrower other than that required by law,
treat the total amount owing as
payable immediately and may immediately or at any later time enforce any security.

(b)                       If the Bank gives the Borrower a notice stating that an event of default has occurred and the Borrower does not, or cannot,  rectify the event
of default:

(i)                                     if
a grace period is given in the default notice or required by law, within that
period, or

(ii)                                  if
no grace period is given in the default notice or required by law, immediately,

then subject to any applicable law and in addition to any other rights,
powers and remedies the Bank may
have (including under a security)
the Bank may:

(iii)                               cancel
all or any part of the facility limit
for all or any facilities with
immediate effect; and

(iv)                              declare
that all or part of the total amount owing
are immediately due and payable (to the extent it is not already due for
payment), and if the Borrower does
not pay it immediately, the Bank may
terminate the facilities and/or
sue the Borrower for the total amount owing and/or enforce any security.

(c)                        If the Bank terminates a facility following the occurrence of an event of default, and at that time there
are any treasury related transactions in existence between the Bank and the Borrower (which include, but are not limited to, borrowings
and financial accommodation,
foreign exchange, money market and derivative transactions or general banking
facilities) (“open positions”)
then:

 37
 

 

(i)                                     the
Bank may close out the open positions, by entering into opposite
positions for the balance of the unexpired term, or by such other means as may
be usual in the relevant market and any such close out shall be at the then
current market rates;

(ii)                                  any
costs incurred by the Bank in closing out open positions under paragraph (i) above
will be paid by the Borrower on
demand, and any gain derived from the closing out of the open positions will be credited to the Borrower and set off against the total amount owing; and

(iii)                               the
Bank will give the Borrower reasonable particulars of the
manner of close out of the open positions, and
the basis of calculation of any amounts payable by or to the Borrower arising from that close out.

7.4                     Default Interest

(a)                        For a facility other than a bill facility, if a default interest rate applies to that facility, the Borrower must pay the Bank
interest charges on any part of the balance
owing which is overdue, or in excess of the facility limit. Interest charges payable
under this paragraph are calculated daily by applying the daily default interest rate to the overdue
amount or the amount in excess of the facility
limit.

(b)                       For a bill facility, if the Borrower fails to pay the face value of any
bill on its maturity date or any other amount is
overdue for payment, the Bank may
debit an account in the Borrower’s name
(whether opened by the Borrower or
the Bank) with the face value of
any such bill and with any
overdue costs, taxes, expenses, fees, charges, premiums
and outgoings. Clause 3.6(d) applies to any such debits.

7.5                     Capitalising default interest

Default interest charges are:

(a)                        for facilities where interest charges are
ordinarily debited to an account
or accounts under the facility, added to the relevant balance owing for the facility on each date on which interest is
next debited for that facility;
or

(b)                       for other facilities, at the Bank’s discretion, added to the overdue
amount monthly and when the overdue amount is paid, or debited to the nominated account for that facility (or, if permitted by this Agreement, any other account held by the Borrower) on each date on which interest
is next debited for that facility,
unless the Bank otherwise
specifies.

 The Borrower will then be liable for interest
under this clause on that increased amount.

7.6                     Fees

If the Borrower does
not pay on time any amount due under this Agreement,
or if it exceeds a facility limit,
a fee may apply as detailed in the relevant Guide
to Fees and Charges.  If the
fee applies, it is payable immediately and the fee shall be debited by the Bank to any account of the Borrower as the Bank may nominate.

7.7                     Additional review rights

If an event of
default has occurred, irrespective of whether or not the Bank has exercised, or waived, any other
rights that arise upon the occurrence of that event
of default, the Bank may review
the pricing applicable to each of the facilities
held by the Borrower and
shall have the right, on written notice, to vary that pricing as set out in clause
3.5(a).

7.8                     Obligations not affected

A Borrower’s obligation
to pay on time is not cancelled by this clause.

8                               Change of Circumstances

 

8.1                     Illegality

If, as a result of a change
in relevant regulation, the Bank determines
that it is, or has become apparent that it will become, contrary to that relevant regulation for:

 38
 

 

(a)                        the Bank to fund, provide or maintain a facility or otherwise observe or give
effect to the Bank’s obligations
under a facility; or

(b)                       a person
from whom the Bank has raised or
propose to raise money in connection with a facility
to fund, provide or maintain that money,

then:

(c)                        the Bank is no longer obliged to provide any drawing or other financial accommodation under a facility;

(d)                       all amounts
payable under each facility,
including an amount equal to the total face value of all bills accepted, discounted or endorsed by
the Bank and the face value of
each bank guarantee and letter of credit issued by the Bank which remain outstanding, are due and
payable by the Borrower on demand;
and

(e)                        the Bank may debit any of the Borrower’s accounts (including in the case
of a bill  facility the nominated account) with the facility
amount owing under a facility.

8.2                     Increased Costs

(a)                        This
clause 8.2 applies if the Bank determines
that in its opinion any order of any court or change
in relevant regulation will:

(i)                                     subject
the Bank to any taxes or duties
with respect to any facility or
any part thereof or change the basis of taxation of the Bank for payments hereunder (except for
taxes or a change in the rate of tax on the Bank’s
overall net income imposed by any taxing authority having the power
to levy taxes on the Bank);

(ii)                                  impose,
modify or deem applicable any reserve, capital adequacy and/or liquidity
adequacy requirements against any of the Bank’s
assets, deposits with the Bank or
the Bank’s account, or loans by
the Bank; or

(iii)                               impose
on the Bank any other condition
with respect to this Agreement or
the obligations assumed by the Bank under
it,

and as a result there is:

(iv)                              an
increase in the cost to the Bank of
making available or maintaining any facility;
or

(v)                                 a
reduction in the amounts receivable or permitted to be received in respect of
any facility or any other payment
due to the Bank in connection
with any facility,

by an amount which the Bank considers
to be material.

(b)                       If this
clause applies:

(i)                                     the
Bank will use its best efforts to
promptly notify the Borrower in
writing of the happening of such event;

(ii)                                  the
Bank will use reasonable
endeavours to eliminate or at least mitigate the foregoing adverse consequences
in a manner which does not give rise to costs or other adverse consequences for
the Borrower or the Bank; and

(iii)                               the
Borrower will indemnify the Bank for any loss suffered by the Bank as a result of the increase in cost
or reduction in the amounts received or permitted to be received, and will pay
to the Bank on demand such amount
as the Bank requires to
compensate the Bank in respect of
such additional cost or reduced receipts.

(c)                        Nothing in
this clause 8.2 adversely affects the Borrower’s
right to cancel the affected facility
and to repay the facility amount
owing in accordance with this Agreement.

9                               Liability for regulatory events

 

(a)                        Each Borrower acknowledges that the services may be interrupted, prevented,
delayed or otherwise adversely affected by a regulatory
event.

(b)                       Each Borrower agrees that, to the extent
permitted by law:

 39
 

 

(i)                                     the
Bank is not liable for any loss
incurred by the Borrower or any
other person if an event described in clause 9(a) occurs, irrespective of the
nature or cause of that loss, and the Bank has
no obligation to contest any regulatory
event or to mitigate its impact on a Borrower or the Bank.
Each Borrower releases the Bank from all liability accordingly; and

(ii)                                  to
the extent that the Bank’s liability
cannot be excluded, the Bank’s
liability is limited to the cost of having the service
supplied again.

(c)                        Each Borrower agrees that the Bank may use and disclose to an other financial institution or regulatory authority, any information
about the Borrower, the services or any person connected with the Borrower or the services, for any purpose which the Bank, or an other financial institution, considers appropriate or
necessary in connection with any regulatory
event or the services.  This may result in information being
transmitted overseas. Each Borrower agrees
to provide information to the Bank about
the Borrower, the services or any person connected with the Borrower or the services on request, and to promptly
procure any consents the Bank requires
to give effect to this clause.

10                        Confidentiality

 

(a)                        Each Borrower and the Bank agrees, subject to clause10(b), to
keep the terms of the transaction documents,
and any information which either may provide to the other under or in relation
to the transaction documents,
confidential.

(b)                       Clause
10(a) does not prevent disclosure:

(i)                                     if
allowed or required by law, or if required by a stock exchange;

(ii)                                  in
connection with legal proceedings relating to the transaction documents;

(iii)                               as
described in clause 9(c);

(iv)                              if
the information is generally and publicly available;

(v)                                 of
the terms of the transaction documents to
any Borrower or security provider;

(vi)                              by
the Bank to the Bank’s subsidiaries, in which case this
clause 10 will apply to the subsidiary;
or

(vii)                           pursuant
to clause 17;

(viii)                        by the Bank to any of the Bank’s agents, consultant or adviser
engaged by the Bank for the
purposes of this Agreement;

(ix)                                to
any guarantor or proposed guarantor; or

(x)                                   by
any Borrower to any consultant
engaged by the Borrower for the
purposes of complying with the Bank’s
requirements under the facility
to the extent that the disclosure is necessary to enable the consultant to
comply with those requirements.

11                        Setting off money

 

(a)                        The Bank may at any time without notice to the
Borrower:

(i)                                     debit
and charge an account of the Borrower
(or an account conducted by the Bank
in the name of the Borrower) with
any amounts a Borrower owes to
the Bank or with any amounts that
the Bank is contingently or prospectively
liable to pay in respect of a facility;
and

(ii)                                  combine
and amalgamate any two or more accounts of the Borrower
with the Bank; and

(iii)                               set
off or transfer any credit balance on any account of the Borrower with the Bank in or towards satisfaction of  any amounts a Borrower owes to the Bank;
and

(iv)                              make
any currency conversion the Bank
considers necessary or desirable to enable a set-off using the spot rate of
exchange quoted by it on the day of conversion.

 40
 

 

(b)                       The Bank’s rights under paragraph (a) above
exist and are exercisable:

(i)                                     whether
or not the Bank has agreed to
permit any set-off for the purpose of calculation of interest between any two
or more accounts; and

(ii)                                  even
though:

(A)                        the
amounts a Borrower owes to the Bank may be or may be expressed to be
advanced on any specified account or on two or more accounts, or

(B)                          the
accounts are with any other person as well as the Borrower or are conducted by the Bank in the name of the Borrower
or are with different places of business of the Bank, or

(C)                          any one
or more accounts stand in credit.

12                        Holding Over

 

If the Bank
continues to make a facility
available to the Borrower after
its expiry date or the end of its
term, and the Agreement has not
been extended, amended or replaced, then the terms of the Agreement will continue to apply to the facility unless otherwise advised by the Bank. The continuation of a facility under this clause shall not be
construed as a waiver of any event of
default, nor as a waiver of any of the Bank’s rights under any transaction
document, nor as any agreement or undertaking (implied or otherwise)
to grant any extension.

13                        Telephone recording

 

Each Borrower consents
to the Bank recording any
telephone conversations between the Bank
and the Borrower in relation to
the facilities that are
customarily recorded in the finance industry or where the Borrower is notified prior to the
commencement of the telephone conversation and such recordings being used in
any arbitral or legal proceedings. Telephone recordings remain the Bank’s sole property at all times.

14                        Code of Banking Practice

 

The Bank
has adopted the Code of Banking Practice (“Code”)
and relevant provisions of the Code apply
to these facilities if the Borrower is an individual or a small
business customer (as defined by the Code).
The Borrower can obtain from the Bank upon request:

(a)                        information
on the Bank’s current interest
rates and standard fees and charges relating to these facilities (if any);

(b)                       general
descriptive information concerning the Bank’s
banking services including:

(i)                                     bank
cheques, and for accounts with cheque access, about cheques;

(ii)                                  account
opening and complaint handling procedures;

(iii)                               the
Bank’s obligations regarding the
confidentiality of customer information; and

(iv)                              the
advisability of the Borrower reading
the terms and conditions applying to each banking service the Bank provides to it, and informing the Bank promptly when the Borrower is in financial difficulty;

(c)                        general
descriptive information about the identification requirements of the Financial
Transactions Reports Act 1988 (Cth) and the options available under the tax
file number legislation; and

(d)                       a copy of
the Code.

15                        Notices, other communications and
service of documents

 

15.1              Service

A notice, demand, consent, approval or communication (‘notice’) given by a party in connection
with this Agreement must be:

(a)                        in writing
or in any other form permitted by it, in English and signed on behalf of the
party;

(b)                       hand
delivered, sent by prepaid post (or airmail if applicable) to the recipient’s address, sent by facsimile or
other form of electronic communication to the recipient’s
address, or, where the following methods of the Bank giving notice to the Borrower are expressly contemplated in
this Letter of Offer, by placing the notice on
www.national.com.au or by 

 41
 

 

publishing the notice
in a newspaper circulating throughout the Borrower’s country, state or territory.

15.2              Effective on receipt

A notice
given in accordance with clause 15.1 takes effect when received (or at a
later time specified in it), and is taken to be received:

(a)                        if hand
delivered, on delivery;

(b)                       if sent by
prepaid post, on the second business day after
the date of posting (or on the seventh business
day after the date of posting if posted to or from a place outside
Australia); or

(c)                        if sent by
facsimile or other form of electronic communication, when the sender’s system
generates a message confirming successful transmission of the entire notice unless, within eight hours after
the transmission (being counted as hours from 9.00am to 5.00pm on a banking day), the recipient informs the
sender that it has not received the entire notice,

but if the delivery, receipt or transmission is not on a business day or is after 5.00pm (addressee’s
time) on a business day, the notice is taken to be received at 9.00am
(addressee’s time) on the next business day.

A notice given by way of
newspaper advertisement or by placing information on www.national.com.au takes
effect when received (or at a later time specified in it) and is taken to be
received on the date it is first published.

15.3              Validity

A notice
is validly given by the Bank even
if returned unclaimed or if the recipient has been wound up or is absent from
the place the notice is delivered
or sent to.

15.4              Other methods

This clause does not limit any provision for giving notice in another transaction document, or limit any other
method for giving notice or
serving demands provided for by law.

16                        General

 

16.1              Statements of Account

The Bank
will generally give the Borrower
statements for any overdraft facility, nab
business plus facility, or foreign
currency overdraft  facility at
least every three months, and for term loan facilities
at least every six months. If the Bank
is not required by law or under the Code of Banking Practice to give a
statement, it may choose not to.

16.2              The Bank’s certificates

(a)                        The Bank may give a Borrower a certificate or formal statement about a matter or
about an amount (including economic costs,
where applicable) which is payable in connection with this Agreement. This is conclusive evidence of
the matter or amount, unless it is proved to be incorrect.

(b)                       The Bank may rely on certificates provided by
any other person with a security
as to the amount owed to them.

16.3              How the Bank may exercise its rights

(a)                        The Bank may exercise a right or remedy, or
give or refuse its consent or agreement to any request a Borrower makes, in any way the Bank considers appropriate including by
imposing conditions.

(b)                       The Bank may defer or waive any right or
remedy (including the implementation of any fee or charge) without varying this
Agreement or creating a new
contract.

(c)                        If the Bank does not exercise a right or remedy
fully or at a given time, it can still exercise it later.

(d)                       The Bank’s rights and remedies under this Agreement are in addition to other rights
and remedies provided by law independently of it.

 42
 

 

(e)                        The Bank’s rights and remedies may be
exercised by any of its employees or any other person it authorises.

(f)                          The Bank is not liable for loss caused by the
exercise or attempted exercise of, failure to exercise, or delay in exercising,
a right or remedy.

16.4              Preservation of the Borrowers’ liability

The Borrower’s
liabilities and the Bank’s rights
under in or relation to a transaction
document, a facility or
a transaction under them are not
affected by anything which might otherwise have that effect at law or in equity
including, without limitation, one or more of the following (whether occurring
with or without the consent of a person):

(a)                        any
inaccuracy, insufficiency or forgery or in any certificate or other instrument
which purports to be made, issued or delivered under a transaction document, a facility or a transaction under them; or

(b)                       the Bank or another person granting time or
other indulgence (with or without the imposition of an additional burden) to,
compounding or compromising with or wholly or partially releasing the Borrower or another person in any way; or

(c)                        laches,
acquiescence, delay, acts, omissions or mistakes on the part of the Bank or another person; or

(d)                       any
variation or novation of a right of the Bank
or another person, or alteration of a document, in respect of the Borrower or another person including,
without limitation, an increase in the maximum liability of or other variation
in connection with a drawing; or

(e)                        the
invalidity or unenforceability of an obligation or liability of a person other
than the Borrower; or

(f)                          invalidity
or irregularity in the execution of a transaction
document by the Borrower
or any deficiency in the Borrower’s
powers to enter into or observe its obligations under a transaction document, a facility or a transaction under them.

16.5              Consents and Conditions

A Borrower
must comply with all conditions and requirements in any consent the Bank gives, or agreement to any request a Borrower makes.

16.6              Variation

(a)                        The Bank may vary the terms of this Agreement by giving written notice to the relevant Borrower at any time to the extent the Bank considers necessary to ensure compliance
with relevant regulation or to
reflect the Bank’s systems
capabilities, provided such
variation does not, in the reasonable opinion of the Bank, result in a material change to the nature of the facilities.

(b)                       Except to
the extent that this Agreement expressly
contemplates or permits the terms of this Agreement
to be varied unilaterally, the terms of this Agreement
may only be varied by the written agreement of the parties.

16.7              GST

(a)                        Unless
otherwise specified, all amounts referred to in this Agreement are exclusive of GST.

(b)                       If GST is imposed on any supply made by one
party (“supplier”) under or in
connection with this Agreement to
the other party (“recipient”),
where any amount or consideration (“consideration”)
payable or to be provided by the recipient
under this Agreement in relation
to that supply is exclusive of GST (“GST-exclusive
consideration”), the supplier
may, in addition to and at the same time as that GST-exclusive consideration is due, recover from the recipient an additional amount on account
of GST. This additional amount is
to be calculated by multiplying the GST-exclusive
consideration for the relevant taxable supply by the GST rate prevailing at the time of the
taxable supply.

 43
 

 

16.8              Valuations are for the Bank benefit

Any property valuation obtained by or for the Bank is for the Bank’s use only. The Bank
accepts no responsibility for any reliance on a property valuation by any other
person.

16.9              Time for repayment

For the purposes of payments under this Agreement, a day ends at 4 pm in the state
or territory where the relationship
management team is located, as set out in the Relationship Management section
preceding the Letter of Offer.

16.10       Indemnities

The indemnities in this Agreement are non-revocable and continuing obligations,
independent of a Borrower’s other
obligations under this Agreement.
It is not necessary for the Bank
to incur expense or make payment before enforcing a right of indemnity
conferred by this Agreement.

16.11       Severability

If the whole or any part of a provision of this Agreement is void, unenforceable or
illegal in a jurisdiction, it is severed for that jurisdiction. The remainder
of this Agreement has full force
and effect and the validity or enforceability of that provision in any other
jurisdiction is not affected. This clause has no effect if the severance alters
the basic nature of this Agreement
or is contrary to public policy.

17                        Assignment

(a)                        The Bank may assign or otherwise deal with its
rights under this Agreement in
any way it considers appropriate. If the Bank
does this, no Borrower may claim
against any assignee (or any other person who has an interest in a facility) any right of set-off or other
rights the Borrower may have
against the Bank. The Borrower agrees that the Bank may disclose any information or
documents the Bank considers
desirable to help the Bank
exercise this right. The Borrower
also agrees that the Bank may
disclose information or documents at any time to a person to whom the Bank assigns or proposes to assign the Bank’s rights under this Agreement.

(b)                       Each Borrower’s rights are specific to it and
may not be assigned without the Bank’s prior
written consent.

18                        Governing Law and Jurisdiction

This Agreement
is governed by the laws of the state or territory where the relationship management
team is located, as set out in the Relationship Management section preceding
the Letter of Offer. Each party submits to the non-exclusive jurisdiction of
the laws of that state or territory, including appeal courts.

19                        Definitions and interpretation

(a)                        Where a
term is defined or otherwise described in:

(i)                                     the
Details in relation to a facility (for example, expiry date, customer margin or facility limit); or

(ii)                                  a
Part, these General Conditions, any Specific Conditions or any Property
Conditions,

a reference in this Letter of Offer to that term is a reference to that
term as so defined or described (as amended from time to time in accordance
with this Letter of Offer).

(b)                       These
meanings apply to this Agreement,
unless otherwise stated:

account
means an account the Bank establishes
or has already established in the name of one or more Borrowers for recording transactions, but
does not include any internal suspense account maintained by the Bank for the purposes of any facility.

adjusted facility limit
means the facility limit less
the facility limit deduction.

Agreement:

(i)                                     in
relation to each facility that is
described as a ‘New Facility in this Letter of Offer’, means the terms of that facility as set out in this Letter of
Offer, the Guide

 44
 

 

to Fees and Charges and
any other contract documents described in the Details
or the Specific Conditions for that facility;
and

(ii)                                  in
relation to the other facilities,
has the meaning given to it in Part 1 of this Letter of Offer.

agreement to lease
means an agreement between the Borrower
and a prospective tenant to lease space in the project
following practical completion on
terms and conditions detailed in a lease document
attached to the agreement to lease.

amortisation
schedule means, for a facility,
the Amortisation Details or Amortisation Schedule specified in the Details or any Amortisation Schedule
provided to the Borrower by the Bank as a replacement, in accordance with
this Agreement.

ASIC
means the Australian Securities and Investments Commission.

attachment notice
means a notice pursuant to Section 218 of the Income Tax Assessment Act 1936
(Cth) or any analogous notice, procedure or process under any Statute in
respect of unpaid taxes of any Borrower or any security provider.

available funds
means, in relation to a facility to
which the Property Conditions apply, the funds not drawn under the facility at the time the drawdown notice, calculated as the facility limit less the balance owing less the unallocated project contingency for that facility.

balance owing
means:

(i)                                     for
an account, at any time, the
difference between all amounts credited and all amounts debited to that account at that time;

(ii)                                  for
a bill facility, at any time, the
difference between the facility limit and
the aggregate face value of the outstanding bills
under that facility;
and

(iii)                               for
any other facility, at any time,
the difference between all amounts credited and all amounts debited to that facility (including to any accounts maintained solely for the
purposes of recording transactions on the facility).

When this amount is to be calculated for the end of a day, it includes
all debits and credits assigned to that day.

Bank
means National Australia Bank Limited ABN 12 004 044 937 and its successors and
assigns.

bank guarantee
means a bank guarantee provided or to be provided by the Bank to a beneficiary
on the date issued in the Bank’s standard form of bank guarantee
from time to time.

bank guarantee facility means a facility
described as such in the Details.

banking day
means a day other than a Saturday or Sunday, or a day gazetted as a public
holiday throughout Australia.

beneficiary
means, in relation to a bank guarantee or
a letter of credit, a person to
whom the bank guarantee or letter of credit is to be, or already has been,
issued.

bill
means a bill of exchange in accordance with the Bills of Exchange Act 1909
(Cth) (including any bill accepted or drawn by means of facsimile signature or
by electronic or other means and any equivalent obligation which is a
dematerialised security as this term is defined in the Austraclear System
Regulations (as determined by Austraclear Limited (or its successor or
assignee) from time to time) or anything the Bank
deems to be a “bill” for the purposes of this Agreement.

bill facility
means a facility described as
such in the Details.

bill facility
component, in relation to a bill facility, has the same meaning as set out in the Bill
Facility Specific Conditions.

Borrower
means, in relation to a facility,
the person or persons named as ‘Borrower’ in the Details. If there is more than one person named as, or if
more than one person comprises, a ‘Borrower’, Borrower  means each of them separately
and every two or

 45
 

 

more of them jointly. “All Borrowers” means
all persons named as ‘Borrower’ in the Details
for all facilities.

building
means, in relation to a property,
the building described in relation to that property
in the Property Conditions.

building
contract means
the agreement/s (including subcontracts) that relate to the development, construction
and completion of the building and
which are in a form acceptable to the Bank.

building cost means
the total consideration under the building
contract/s and, where not included in those building contracts, any on-site holding
costs, including for plant and equipment and site amenities.

building
works means
all of the works to be undertaken under the building
contract.

business day means
a day that is not a Saturday, Sunday or gazetted public holiday in the state or
territory in which the recipient’s address is
located.

business plus
facility  means a facility
described as such in the Details.

change in relevant
regulation means any change in any relevant regulation (including the
introduction of a new relevant regulation),
or any change in the interpretation or administration of any relevant regulation after the date of this
Letter of Offer.

Certificate of
Classification/Occupancy means a document issued by the
relevant regulatory authority giving approval for occupancy of the completed project.

Certificate of
Practical Completion  means an unconditional and
unqualified certificate from the Quantity
Surveyor or another person acceptable to the Bank confirming that, subject only to the
delivery of the certificate, practical
completion has occurred.

contract of sale means,
in relation to a project, a
contract between the Borrower and
a purchaser for all or part of the property.

Corporations Act
means the Corporations Act 2001 (Cth).

cost to complete
means, in relation to a project,
the amount which will be required to be expended by the Borrower at any time in relation to the project in accordance with the development
and construction budget and the development and construction program provided to the Bank under the relevant Property
Conditions to achieve practical completion including,
but not limited to:

(i)                          the
cost to complete construction;

(ii)                       all
other costs relevant to the development and construction of the project; and

(iii)                    all interest and other financing
costs to be paid during the period to the practical
completion date having regard to the proposed schedule of drawings to be made.

cost overrun
means, in relation to a project,
at any time, and from time to time, the amount by which the cost to complete exceeds the available funds.

costs
means any costs, charges, expenses and other outgoings (including legal
costs and expenses on a full indemnity basis, any advisers or professional
consultant fees and the costs calculated on a time employed basis or otherwise
of the Bank’s employees and
in-house legal counsel) and, in the case of securities
such as a mortgage, where applicable, in preserving and maintaining the assets
and property the subject of the securities
(such as by paying insurance, rates and taxes for the asset or property),
interest, penalties and fines.

daily default
interest rate  means, for any day, the default interest rate applying to the facility for that day divided by 365.

daily interest rate
means, for any day:

(i)                                     in
relation to a global trade finance facility,
the interest rate applying to the
facility or drawing (as the case may be) for that day
divided by 365 where the

 46
 

 

currency is Australian Dollars (AUD), Fiji Dollars
(FJD), Pounds Sterling (GBP) or Hong Kong Dollars (HKD) and 360 in all other
cases.

(ii)                                  otherwise,
the interest rate applying to the
facility for that day divided by
365.

date issued
means, in relation to a bank guarantee
facility, the date specified in the Details
or otherwise agreed as the date on or before which a bank guarantee is to be, or has already been, issued by the Bank to the beneficiary.

Details
means, in relation to a facility,
the Details in relation to that facility in
Part 1 of this Letter of Offer.

development
approval means, in relation to a project, all regulatory approvals,
permits, authorisations and any other form of unconditional documentation as
required to be issued by the necessary approval authorities prior to the project commencing.

development and
construction budget means an estimate of all costs
necessary to complete the project as
agreed in writing between the Borrower and
the Bank, including, but not
limited to:

(i)                                     land
acquisition costs and associated expenses;

(ii)                                  building cost with provisional cost items
clearly identified;

(iii)                               finance
costs and interest expenses;

(iv)                              rates,
taxes and all site holding costs;

(v)                                 projected
allowance for escalation of costs both within the overall development and construction budget and
within the building contract;

(vi)                              provision
of contingency sums in respect of potential construction delays, variations and
budget increases;

(vii)                           design
consultancy, professional and supervisory fees;

(viii)                        any other
development costs including, but not limited to, legal fees, holding costs,
marketing costs and selling costs; and

(ix)                                cash
flow analysis outlining the proposed drawings
required to complete the project
based upon the development and construction
program.

development and
construction program means a document comprised of all
critical activities under each stage of the project,
their duration and relationship necessary to establish a critical path and
target completion date for the project including
an adequate provision of a delay allowance.

drawdown
date  means:

(i)                                     for
a facility other than a bill  facility,
each date on which a facility (or
part thereof) is drawn; and

(ii)                                  for
a bill  facility, the date on which a bill is accepted, discounted or endorsed under a facility, as specified in the Details.

drawdown notice
means:

(i)                                     where
the facility is a bill facility, a notice requesting the Bank to accept a bill in accordance with this Agreement in the form required by the Bank; and

(ii)                                  where
the facility is not a bill facility, a notice in a form
acceptable to the Bank requesting
a drawing under the facility.

drawing
means each financial accommodation
actually provided under a facility.

economic costs
and economic
event  each has the meaning described in clause 4.

event of default
means an event so described in clause 7.1 or clause 7.2.

expiry date
means for a facility, either
the date specified as such in the Details
or the last day of the term of
the facility (as the case may
be), or otherwise agreed from time to time.

 47
 

 

external
administrator  includes any receiver, receiver and
manager, controller, liquidator, provisional liquidator, mortgagee, administrator
or other like official.

external
administrator’s costs means any costs, charges, expenses
and other outgoings (including legal costs and expenses on a full indemnity
basis) incurred by any external
administrator appointed by the Bank.

facility
means financial accommodation
(including the acceptance, discounting and endorsement of bills and the issue of bank guarantees or a letter of credit or any drawing which refinances an existing letter of credit) provided to the Borrower under this Agreement or as otherwise agreed.

facility amount
owing means at any time in relation to a facility, the total of all amounts which
are then due for payment, or which will or may become due for payment to the Bank under the Agreement and which has not then been fully and finally
paid, and includes, without limitation, the face value of any bill drawn by the Borrower under
a bill facility, the guaranteed amount of any bank guarantee issued by the Bank and the total face value of any letter of credit.

facility limit
deduction  means the guaranteed
amount of any bank guarantee
or the total face value of any letter of
credit or similar instrument issued by the Bank under any other agreement with the Borrower which has not been cancelled to
the Bank’s satisfaction.

financial accommodation
means any financial accommodation and includes the
acceptance, discounting and endorsement of bills
and the issue of bank guarantees
and letters of credit.

fixed rate period
means, in relation to a facility
or drawing, the period during
which a specific interest rate or yield rate
will apply and will not change.

foreign currency
overdraft facility  means a facility described as such in the Details.

funded property means
in relation to a facility, each
property identified in the
Property Conditions applicable to that facility.

funding table
means, in relation to a project,
the Funding Table (if any) in the relevant Property Conditions.

global trade
finance facility  means any facility to which the Global Trade Finance Specific
Conditions apply, as stated in the Details.

gross realisations
means the aggregate of all sales contracts in relation to the project, or, in the Bank’s discretion, an estimate of the
aggregate of all sales contracts in relation to the project.

GST
means goods and services tax or any similar tax.

guaranteed amount
means, in relation to a bank guarantee,
the amount specified as the Amount or the Guaranteed Amount in the bank guarantee.

Guide to Fees and
Charges  means, at any time and from time to time, the
then most current version of the Bank’s “A
Guide to Fees and Charges (Business)” booklet and/or “A Guide to Fees and
Charges (International Trade Services)” booklet, as the case may be.

insolvency event
means:

(i)                                     if
an application is lodged or made, or an order is made, for the appointment of a
liquidator or provisional liquidator to any Borrower
or security provider;

(ii)                                  if
an effective resolution is passed for the winding up of any Borrower or security provider or if a meeting is convened for the
purpose of considering any such resolution;

(iii)                               if
a notice is published for the dissolution without winding up of any Borrower or security provider, or any Borrower
or security provider
is dissolved;

 48
 

 

(iv)                              if
the any Borrower or security provider is placed under any
formal or informal kind of insolvency administration or if a meeting is
convened for the purpose of considering the appointment of an insolvency
administrator to any Borrower or security provider;

(v)                                 if
a receiver or receiver and manager is appointed to the whole or any property
assets or undertaking of any Borrower or
security provider or if any step
is taken for the appointment of such a receiver or receiver and manager or if
execution or distress or any other process is
levied or attempted or imposed against or over any undertaking, property or
assets of any Borrower or security provider;

(vi)                              if
any Borrower or any security provider stops payment or in the
opinion of the Bank stops payment
of its debts generally or ceases to carry on the whole or any material part of
the business of the Borrower or
any security provider, or
threatens to do so;

(vii)                           if any Borrower or any security provider becomes, or states that it is, insolvent
or unable to pay its debts or (if the Corporations Act applied to determine the
matter) would be deemed to be unable to pay its debts, or action is taken which
could result in any of the same occurring or events occur which lead the Bank to form the opinion that it is likely
that the Borrower or any security provider will become insolvent at some future time;

(viii)                        except to
reconstruct or amalgamate while solvent on terms approved by the Bank, any Borrower
or any security provider
enters into, or resolves to enter into, a scheme of arrangement, deed of
company arrangement or composition with, or assignment for the benefit of, all
or any class of its creditors, or it proposes a reorganisation, moratorium or
other administration involving any of them;

(ix)                                if
a person is appointed under any statute to investigate or manage any of the
affairs of any Borrower or any security provider;

(x)                                   as
a result of the operation of section 459F(1) of the Corporations Act, any Borrower or any security provider is taken to have failed to comply with a
statutory demand;

(xi)                                any
Borrower or any security provider is, or makes a
statement from which it may be reasonably deduced by the Bank that the body corporate is, the
subject of an event described in section 459C(2)(b) of the Corporations Act;

(xii)                             any Borrower or any security provider takes any step to obtain protection or is
granted protection from its creditors, under any applicable legislation or an
administrator is appointed to a body corporate;

(xiii)                          if a security provider who is a natural person
becomes a bankrupt as defined in the Bankruptcy Act 1966 (Cth) or dies or
commits an act of bankruptcy within the meaning of the Bankruptcy Act 1966
(Cth);

(xiv)                         action is
taken which could result in the any Borrower
or any security provider
becoming an insolvent; or

(xv)                            anything
analogous or having a substantially similar effect to any of the events
specified above happens under the law of any applicable jurisdiction.

insolvent has the meaning given to it in the Corporations Act.

Interbank Swap
Curve  means the benchmark interest rates used by banks to
swap their types of borrowings (that is, fixed rate for floating rate) with no
exchange of principal amounts for terms greater than 12 months.

interest debit date
means, in relation to a facility,
the date on which interest charges are to be debited as set out in the Specific
Conditions for that facility.

interest period means,
in relation to a facility, the
period for which interest is calculated and charged as stated, or selected if
provided for, in this Letter of Offer or as otherwise agreed.

 49
 

 

letter of credit means
a documentary letter of credit or a standby letter of credit issued by the Bank pursuant to a facility.

market rate
facility means a facility
described as such in the Details.

maturity date
means the date on which a bill is
due to mature.

nominated account
means in relation to a facility,
the account described in the Details
as such, or such other account acceptable
to the Bank as the Borrower nominates for the purposes of
debiting and crediting amounts in relation to this Agreement.

other facility
that are described as ‘Other Facilities’ in Part 1 of this Letter of Offer.

other financial
institution  means such other financial institutions, or
other offices of the Bank,
locally and overseas, that are involved in providing a service to a Borrower under or in relation to a facility (whether appointed by the Bank or not, and whether their involvement
is known to the Borrower or not).

overdraft facility
means a facility described as
such in the Details other than a foreign currency overdraft facility.

potential event of default
means an event which, with the giving of notice (whether or not notice is
actually given), lapse of time, fulfilment or non-fulfilment of any condition
or any combination of the above, would, in the Bank’s
opinion, be likely to become an event
of default.

practical
completion, in relation to a project, has
the same meaning as in the relevant building contract, and any agreement to
lease or lease, or as advised by the relevant architect, as determined by the Bank in its absolute discretion.

practical
completion date, in relation to a project, means the date on which the Bank receives the Certificate of Practical Completion.

process
means any process issued by a court or other tribunal or authority by which a
person is empowered or required to take possession of or to hold, sell or
otherwise deal with any property, asset or undertaking of any Borrower or any security provider, including but not limited to an attachment notice.

pricing period
has the meaning given to that term in the Market Rate Facility Specific
Conditions.

project means the development of the site and the construction, development,
commissioning, operation and maintenance of the building(s).

project consultants means all development and construction
consultants appointed to the project including,
but not limited to, the architect, structural engineer, mechanical and
electrical engineer and any other such consultants as the Bank deems necessary in its discretion.

project
documentation means all documentation, whether in
written, electronic or other form, that relates to the construction and
development of project, including
all plans, designs, specifications and drawings.

property
development and investment facility means a facility which has property development
and investment as its purpose, as stated in the Details.

property
development period means, in relation to a facility to which the Property Conditions
apply, the period described as such in those Property Conditions.

property investment
period means, in relation to a facility to which the Property Conditions apply, the period
described as such in those Property Conditions.

Quantity Surveyor,
in relation to a property, means
a quantity surveyor, appointed on terms acceptable to the Bank, in respect of the project.

recipient’s address
means:

(i)                                     where
the recipient is the Bank, the Bank’s address stated in this Letter of
Offer, any other address the Bank advises
in writing for the purpose of receiving notices
in relation to this Letter of Offer or the Bank’s registered office; and

 50
 

 

(ii)                                  where
the recipient is the Borrower,
the address nominated by the Borrower in
writing for the purposes of receiving notices
in relation to this Letter of Offer or, if no such address is
nominated, the Borrower’s address
last known to the Bank.

regulatory
authority  means any local or foreign government or their
instrumentalities.

regulatory event means
any:

(i)                                     law
or other form of regulation;

(ii)                                  practices
or policies of regulatory authority;

(iii)                               investigation
into the Borrower or any related
entity of the Borrower by a regulatory authority;

(iv)                              application
for or grant of an injunction or order in respect of any security, facility
or account held with the Bank made
by a regulatory authority, or

(v)                                 code
of practice or custom relating to the provision of those services which a
reasonable and prudent banker would comply with,

whether in Australia or elsewhere, that, in the Bank’s good faith opinion, or that of another financial institution, applies in
any way to a Borrower or a security provider, or the service.

related entity
means any entity that is related to the first within the meaning of section
50 of the Corporations Act or any
economic entity (as defined in any approved accounting standard) which
describes the first.

relevant regulation
means any law, regulation or an official policy, directive or guideline, which
has the force of law, or compliance with which is in accordance with normal
banking practice in the jurisdiction concerned.

repricing date
means:

(i)                          for a market rate facility, the first day of any
pricing period under that facility; and

(ii)                       for a term loan facility, the first day after
the end of a fixed rate period;
and

(iii)                    in relation to
a drawing under a global trade finance facility, the last
day of the term of that drawing.

security
means each security interest
described in Part 2 of this Letter of Offer and any substitute or additional security interest applicable to the facilities provided under this Agreement. Security also includes any priority agreement relating to
any security.

security interest
means any security for the
payment of money or performance of obligations including a mortgage, charge,
lien, pledge, trust or power. Security
interest also includes a
guarantee, indemnity or a guarantee and indemnity.

security provider
means, in relation to a facility,
each person (other than the Borrower
for that facility) who gives a security.

service
means any service the Bank
provides to a Borrower under or
in relation to a facility
including making or processing any payment or issuing any document.

site,
in relation to a property, means
the land described by reference to the property address in the relevant
Property Conditions.

Specific Conditions
means, in relation to a facility,
the particular set of provisions referred to in the Details as applicable to the facility and contained in this Letter of Offer after these
General Conditions.

subsidiary
has the same meaning as under the Corporations
Act.

taxes
means taxes, levies, imposts, rates, charges and duties (including GST, stamp and transaction duties) imposed
by any authority together with any related interest, penalties, fees, fines and
expenses in connection with them, except if imposed on, or calculated having
regard to, the Bank’s net income.

 51
 

 

threshold debt
amount means the amount advised by the Bank in writing as the ‘threshold debt
amount’. If no such figure is advised in writing, the ‘threshold debt amount’
is $zero.

threshold
litigation amount means the amount advised by the Bank in writing as the ‘threshold litigation
amount’. If no such figure is advised in writing, the ‘threshold litigation
amount’ is $zero.

transaction
documents  means this Letter of Offer, the Agreement for each facility, the security, any other documents that include (by variation or
novation or otherwise) the terms of any facility
or transaction under them and any other document that the Bank and a Borrower agree is a transaction
document.

term loan facility means
any facility to which the Term
Loan Facility Specific Conditions apply, as stated in the Details.

total amount owing
means, at any time, the total of every facility
amount owing and any other amounts which are then due for payment,
or which will or may become due for payment, in connection with the transaction documents.

trust
means a trust or a settlement.

trust deed
means, in relation to a trust,
the trust deed creating or constituting the trust.

trust documents
means, in relation to a trust,
the trust deed and all other
documents relating to the trust.

unallocated project
contingency means the amount of the ‘project contingency’
as detailed in the development and
construction budget (as amended from time to time with the Bank’s approval) which remains unallocated
at the time of the relevant drawdown notice.

yield rate
has the meaning set out in the Bill Facility Specific Conditions.

(c)                        Terms used
in this Agreement have the
meaning given to them in generally accepted accounting principles and standards
in Australia unless otherwise expressly defined.

(d)                       A
reference:

(i)                                     to
a month means a calendar month, and a reference to a quarter means a calendar
quarter, unless otherwise stated;

(ii)                                  to
any thing includes the whole and each part of it;

(iii)                               to
a document includes any variation or replacement of it;

(iv)                              to
law means common law, principles of equity, and laws made by parliament (and
laws made by parliament include regulations and other instruments under them,
and consolidations, amendments, re-enactments or replacements of them);

(v)                                 to
the words ‘including’, ‘such as’ or ‘for example’ when introducing an example
do not limit the meaning of the words to which the example relates to that
example or examples of a similar kind;

(vi)                              to
the word person includes an individual, a partnership, a joint venture, a body
corporate, a corporation, an association or an authority;

(vii)                           to a
party includes that person’s successors and permitted substitutes or assigns;

(viii)                        to an
asset includes all property of any nature, present or future, tangible or
intangible, such as intellectual property rights, a business and all rights,
revenues and benefits in, under or derived from it;

(ix)                                to
an interest rate means a rate per cent per annum;

 52
 

 

(x)                                   to
an amount is a reference to an amount in Australian Dollars unless another
currency is specified, in which case it is a reference to an amount in that
specified currency;

(xi)                                in
the General Conditions, Property Conditions or any Specific Conditions to a
clause is a reference to a clause in those General Conditions, Property
Conditions or Specific Conditions (as the case may be) unless otherwise stated.

(e)                        If
something is to be “to the Bank’s satisfaction”,
it must be satisfactory in both form and substance to the Bank, and, if the Bank requires, to the Bank’s legal and financial advisers.

(f)                          The
singular includes the plural and vice versa.

(g)                       Nothing in
the Agreement is to be
interpreted against a party solely on the ground that the party put it forward.

(h)                       Headings
are for convenience only and do not affect the interpretation of this Agreement.

(i)                           A director
or other person acceptable to the Bank must
certify a document that is given to the Bank
to satisfy a condition precedent to be a true and complete copy of
the original document.

20                        Inconsistency

20.1              Precedence of this clause

For the avoidance of doubt, this clause takes
precedence over all transaction documents
in relation to resolving any inconsistencies provided for in the sub-clauses
below.

20.2              Transaction documents

Unless expressly stated, if there is any inconsistency
between any term in this Letter of Offer (in this case, as amended) and a
provision in:

(a)                        a security; or

(b)                       any other transaction document,

the term in this Letter of Offer takes precedence to
the extent of the inconsistency.

20.3              Facilities

Any inconsistency as between the terms of a facility will be resolved, to the extent that it is impossible to
comply with those inconsistent terms, as follows:

(a)                        the Details take precedence over all of the
following;

(b)                       the
Property Conditions take precedence over all of the following;

(c)                        the
Specific Conditions take precedence over all of the following;

(d)                       any
additional documentation referred to in the Special Conditions section of the Details takes precedence over all of the
following;

(e)                        Parts 2 to
5 (inclusive) of this Letter of Offer take precedence over all of the
following;

(f)                          these
General Conditions take precedence over all of the following; and

(g)                       the Guide
to Fees and Charges.

 53

 

Part 8                   Bill Facility Specific
Conditions

1                               Facility
operation

Subject to all conditions precedent being met, the Borrower may use the facility by obtaining a drawing on each drawdown date.

2                               Procedure
for drawdown

(a)                        Each
time that the Borrower wishes to request
a drawing, the Borrower must give to the Bank, at least 5 banking days prior, a duly completed drawdown notice.  A drawdown
notice, once it is given under this clause, cannot be revoked
without the Bank’s consent.

(b)                       If
a drawdown notice provides that
the Bank is to draw bills under a power of attorney, then the Borrower agrees that the drawdown notice is the instruction to the Bank to draw the bills and clause 5 of these Specific
Conditions will apply for replacement
bills.

(c)                        If
the Borrower is to draw bills prepared by the Bank, then the Borrower must include with each drawdown notice the bills
referred to in it and clause 4 of these Specific Conditions will apply for replacement  bills.

(d)                       Each
bill must be drawn:

(i)                          in
accordance with this Agreement;
and

(ii)                       in
accordance with the Bills of Exchange Act 1909 (Cth) so that it is valid and
attracts the benefit of any provision of that Act in relation to that bill.

(e)                        A
bill drawn under the facility must:

(i)                          be
drawn no earlier than the commencement date;

(ii)                       have
a maturity date which is no later
than the expiry date for the facility; and

(iii)                    have a face value and maturity date which is such that if the bill were drawn, accepted or discounted:

(A)                    the
facility amount owing would not
exceed the facility limit at any
time; and

(B)                      in
relation to a Bill Facility - Acceptance and Discount — National Flexible Rate
facility, the aggregate face value of the bills
allocated to a bill facility component,
when taking into account the maturity date
of any other bills allocated to
that bill facility component,
would not be greater than the amount of the bill
facility component at any time; and

(C)                      in
relation to a Bill Facility - Acceptance and Discount - Flexible Drawdown Fixed
Rate facility, the facility amount owing would be at least
equal to the facility floor.

(f)                          The
Bank may, in its discretion,
require that any bills drawn
under the facility have a face
value of no less than a minimum amount.

3                               Replacement bills

During the term of the facility, provided the Borrower
is not in default and otherwise subject to this Agreement, on the maturity
date of each bill
accepted, discounted or endorsed under the facility
the Borrower may draw a replacement bill having a face value
specified in accordance with clause 6 of these Specific Conditions.

4                               Replacement  bills - not automatic

If the Borrower is to
draw a replacement  bill prepared by the Bank (that is, bills are not drawn by the Bank
under power of attorney), then the Borrower
must deliver to the Bank,
unless otherwise agreed, the drawdown notice
for the replacement bill (and the
replacement bill) at least 5 banking days prior to the drawdown date.

 54
 

 

5                               Replacement bills - automatic

If the Bank is to
draw bills under power of
attorney then, subject to clause 6 of these Specific Conditions, on the maturity date of each bill accepted, discounted or endorsed
under the facility, the Borrower will be taken to have delivered a
drawdown notice to the Bank for a replacement bill on the same terms as the maturing bill (including, if relevant,
that the replacement bill be
allocated to the same bill facility
component as the maturing bill),
except that:

(a)                        the
face value of the replacement bill
will be determined in accordance with clause 7 of these Specific Conditions;

(b)                       the
maturity date of the replacement  bill will be the date that occurs at the end of a period of
the same length as the period between the drawdown
date and the maturity date of
the maturing bill. However:

(i)                          if
this means that a replacement bill
would have a maturity date that
is not a banking day, then the replacement bill will be drawn so that its
maturity date is extended to the
next banking day. Any adjustment
to the term of a replacement bill under
this clause will be disregarded for the purpose of calculating the maturity date of subsequent bills; and

(ii)                       if
this means that the maturity date of
the replacement bill would occur
after the expiry date, then
paragraph (i) above does not apply and the maturity
date of the replacement bill
will be:

(A)                    the
expiry date, if the expiry date is a banking day; or

(B)                      the
last banking day before the expiry date, if the expiry date is not a banking day;

(c)                        if
the maturity date of the replacement bill determined in accordance
with paragraph (b) above may result in the facility
amount owing exceeding the facility
limit at any time, then paragraph (b) above does not apply and the maturity date of the replacement bill will be determined by the
Bank in its discretion to ensure
that the facility limit is not so
exceeded;

(d)                       in
relation to a Bill Facility - Acceptance and Discount — National Flexible Rate
facility, where the maturity date of the replacement bill determined in accordance
with paragraph (b) above may result in the aggregate face value of the
outstanding bills allocated to a bill facility component being greater than
the relevant bill facility component
at any time, then paragraph (b) above does not apply and the maturity date of the replacement bill will be determined by the
Bank in its discretion to ensure
that the relevant bill facility component
is not so exceeded; and

(e)                        if
this clause applies, for the avoidance of doubt, the Borrower acknowledges that any action the Bank takes pursuant to the Borrower’s instructions under this clause
is not intended to be, and should not be, taken to be a waiver of any right or
remedy that the Bank has in
connection with this Agreement.

6                               Replacement  bills - stopping automatic replacement

If clause 5 of these Specific Conditions applies, the Borrower may subsequently notify the Bank that it does not want the procedure
in that clause to apply to the facility
for a specified period or until the expiry
date of the facility,
by providing the Bank with
written notice to this effect, in a form acceptable to the Bank. If such notice is received by the Bank at least 5 banking days before the maturity
date of a bill, then
clause 5 of these Specific Conditions will not apply to the bill on that maturity date.

7                               Face
value of replacement  bills

(a)                        The
Borrower may draw replacement bills on a maturity date in accordance with clauses 3
to 6 of these Specific Conditions, which have an aggregate face value:

(i)                          up
to the facility limit prevailing
at the time of the maturity date (after
such maturing bills mature); and

 55
 

 

(ii)                       in
relation to a Bill Facility - Acceptance and Discount - Flexible Drawdown Fixed
Rate facility, such that the facility amount
owing would be at least equal to the facility floor.

However, if clause 5 of these Specific Conditions
applies:

(iii)                    the replacement bills will have an aggregate face value equal to
the lower of the aggregate face value of the maturing
bills and the amount up to the facility
limit prevailing at the time of the maturity
date (after such maturing bills mature);
and

(iv)                   in
relation to a Bill Facility - Acceptance and Discount – National Flexible Rate
facility, the Bank will allocate
any replacement bills to the same
bill facility component as the
corresponding maturing bill. Any replacement  bills allocated to a bill
facility component under this clause will have an aggregate face
value equal to the lower of the aggregate face value of the maturing bills allocated to that bill facility component and the amount up
to the bill facility component
amount prevailing at the time of the maturity
date (after such maturing bills mature).

(b)                       If
the Borrower does not draw replacement bills on the maturity date in accordance with clauses 3
to 6 of these Specific Conditions, subject to this Agreement, the Borrower may
subsequently re-draw bills under
the facility which have an
aggregate face value equal to the maximum amount possible such that the facility limit prevailing at the time of
the re-draw is not exceeded (taking into account any other bills drawn under the facility that do not have a maturity date on the day that the relevant
bills are re-drawn).

(c)                        If
the Borrower draws replacement bills on the maturity date and the Bank does not accept, discount or endorse
the replacement bills pursuant to
clause 1 of these Specific Conditions, the Bank
is no longer obliged to accept any bill
under the facility and the Bank may reduce the facility limit to zero.

8                               Amortising
facilities

If the facility is an amortising facility then:

(a)                        the facility limit reduces:

(i)                          on
the dates or per the periods, and by the amounts, specified in the amortisation schedule; and

(ii)                       in
accordance with clauses 7(b) and (c) of these Specific Conditions; and

(b)                       in
relation to a Bill Facility - Acceptance and Discount – National Flexible Rate
facility, the fixed amount, the floor/cap amount and the floating amount reduce in accordance with
the Details or as otherwise
provided under this Agreement;

(c)                        in
relation to a Bill Facility - Acceptance and Discount - Flexible Drawdown Fixed
Rate facility, the facility floor
reduces in accordance with the Details
or as otherwise provided under this Agreement.

9                               Non-amortising
facilities

If the facility
is a non amortising facility then
the facility limit reduces in
accordance with clauses 7(b) and (c) of these Specific Conditions.

10                        Discounting
of bills

(a)                        Where
bills are drawn for discounting:

(i)                          the
face value of each bill must be
acceptable to the Bank; and

(ii)                       the
aggregate face value of all bills in
a single drawdown must be in accordance with the Details or otherwise acceptable to the Bank; and

(iii)                    the term of each bill must be acceptable to the Bank and except as otherwise agreed by the
Bank must not be less than 30
days nor more than 180 days and must not have a maturity date later than the expiry date; and

(iv)                   each
bill must be payable on such
days, to such persons and at such places in Australia as the Bank agrees.

 56
 

 

(b)                       The
Bank agrees to purchase bills referred to in paragraph (a) above
on the relevant drawdown date at
the yield rate prevailing on that
drawdown date and to pay the proceeds of discount of such bills to the nominated account.

(c)                        Proceeds of discount in relation to a bill discounted by the Bank are the amount derived by application
of the formula:

Proceeds of discount
=

(FV x 36,500) / ((DM x R) + 36,500)

where:

FV is the face value of the bill;

DM is the number of days to maturity of the bill (from and including the issue date of
the bill but excluding the maturity date of the bill); and

R is:

(a)                       for
a bill facility other than a Bill
Facility - Acceptance and Discount – National Flexible Rate facility, the yield rate expressed as a percentage per
annum; or

(b)                      for
a Bill Facility - Acceptance and Discount – National Flexible Rate facility,
the yield rate for the bill facility component to which the bill is allocated.

11                        Discounting
and replacement of bills

(a)                        If
the Bank has agreed in accordance
with this Agreement to accept a replacement bill, the Borrower’s obligation to pay the Bank the face value of the maturing bill may be satisfied by the Bank:

(i)                          debiting
the face value of the maturing bill
to the nominated account; and

(ii)                       accepting
the replacement bill; and

(iii)                    crediting the proceeds of discount of the replacement bill to the nominated account; and

(iv)                   debiting
any applicable fees, charges or premiums payable in respect of the replacement  bill to the nominated
account.

(b)                       As
an alternative to the procedure outlined in paragraph (a) above, at the Bank’s discretion, if the Bank has agreed to accept a replacement  bill, the Borrower’s
obligation to pay the Bank the
face value of the maturing  bill may be satisfied by the Bank:

(i)                          debiting
the face value of the maturing  bill to an internal suspense account
created or maintained by the Bank;
and

(ii)                       accepting
the replacement  bill; and

(iii)                    crediting the proceeds of discount of the replacement  bill to an internal suspense account created or maintained
by the Bank;

(iv)                   debiting
the nominated account with the
amount of the remaining balance of the suspense account created or maintained
by the Bank; and

(v)                      debiting
any applicable fees, charges or premiums payable in respect of that replacement  bill to the nominated
account.

12                        Payment of
bills

(a)                        The
Borrower must pay to the Bank the face value of a bill accepted, discounted or endorsed by
the Bank on its maturity date.

(b)                       The
Borrower’s obligations in
relation to a bill so drawn and
accepted, discounted or endorsed continue despite the fact that the Bank is or becomes the holder of the bill in its own right on or after the bill’s maturity date.

(c)                        The
Bank may pay a bill on its maturity date without enquiring as to the title of the
person presenting the bill for
payment.

 57
 

 

(d)                       The
Borrower may not prepay any bill accepted, discounted or endorsed by
the Bank under the facility without the prior written
agreement of the Bank.

13                        Power of
attorney

(a)                        If
a drawdown notice in relation to
the facility provides that the Bank is to draw bills under a power of attorney, the Borrower irrevocably appoints the Bank to be its attorney on its behalf and
in its name to draw, make, deliver, sign, endorse or negotiate any bill drawn or which may be drawn under the
facility in accordance with this
clause.

(b)                       The Borrower agrees that:

(i)                          the
Bank may act on instructions oral
or in writing (including by facsimile) received from the Borrower concerning whether or not to draw
bills and the aggregate face
value and term of bills to be
drawn, but the Bank is not
obliged to act on those instructions, and may require the Borrower’s instructions to be in writing;
and

(ii)                       this
power of attorney may be exercised under hand or by facsimile signature of any
two of the Bank’s officers acting
jointly who, at the time of exercise of power under this power of attorney, are
authorised by the Bank to sign,
accept or endorse bills on the Bank’s behalf; and

(iii)                    this power of attorney is granted
to secure the performance of the Borrower’s obligations
under the facility, is
irrevocable and remains in full force and effect until the Borrower’s obligations under the facility and any bills are discharged; and

(iv)                   the
Borrower indemnifies the Bank and the Bank’s officers against any liability, loss or costs (including consequential or economic
loss) the Bank may incur out of
the exercise of any of the powers and authorities contained in this power of attorney;
and

(v)                      no
person dealing with the Bank need
be concerned to see or enquire as to the propriety or expediency of anything
which the Bank may do, purport to
do or perform in the Borrower’s name
by virtue of this power of attorney; and

(vi)                   the
Borrower will ratify and confirm
all that the Bank lawfully does
or causes to be done by virtue of this power of attorney.

14                        Cancellation
by the Borrower

(a)                        The
Borrower may cancel the facility, with effect on the last maturity date of the bills outstanding under the facility, by giving the Bank at least 30 banking days’ notice before the maturity date of each of those bills. The Borrower cannot revoke a notice once it is given under this
clause unless the Bank agrees.

(b)                       If
the Borrower gives notice under
this clause then:

(i)                          the
Bank is no longer obliged to
accept, discount or endorse bills under
the facility; and

(ii)                       on
the maturity date the Borrower must pay the Bank the face value of the maturing bills accepted, discounted or
endorsed under the facility.

15                        Economic
costs and economic benefits

(a)                        Economic costs or economic benefits may arise under the facility if an economic event occurs.

(b)                       The
Bank will determine the amount of
any economic benefits and notify
the Borrower of that amount (if
any) and will pay the Borrower the
amount of any economic benefits
so notified within 7 banking days
of such notification.

(c)                        The
Bank determines any “economic benefits” arising under the facility by determining the net amount of
returns and gains obtained by the Bank in
connection with an economic event
including, without limitation, any amount determined by the Bank to have been gained by it by reason
of:

 58
 

 

(i)                          increases
of profits or returns or other gains associated with an early termination of a bill under the bill facility, calculated by reference to the date of the economic event and the remainder of the
term to maturity of the bill; or

(ii)                       the
liquidation of deposits or other funds, or the termination or reversing of any
swap or option agreement or other agreement or arrangement entered into by the Bank (either generally in the course of
the Bank’s business or
specifically in connection with this
Agreement) to fund or maintain the facility
or to hedge, fix or limit the Bank’s
effective cost of funding in relation to the facility.

(d)                       Economic costs will be determined and
become payable under clause 4 of the General Conditions.

16                        Additional
consequences on default

If the Borrower is
in default under this Agreement
then, in addition to any other rights and obligations under the General
Conditions:

(a)                        the
Bank can immediately cancel or
otherwise terminate the facility;

(b)                       if
on the day when the Borrower makes
a payment required under clause 7 of the General Conditions there are any bills which have not been presented for
payment, and a portion of that payment is not yet required to meet payment of
those bills, then the Bank agrees to deposit that portion in an
interest bearing deposit account on terms which the Bank thinks fit. The deposit may be made with any person the
Bank decides (including, without
limitation, the Bank);

(c)                        when a bill is subsequently presented for
payment, the Bank agrees to apply
the portion referred to in paragraph (b) above towards paying the holder of
that bill; and

(d)                     after
all of the Borrower’s and the Bank’s obligations (contingent or
otherwise) under any bill have
been satisfied, the Bank will pay
to the Borrower the amount which
the Bank certifies is that part
of the deposited amount which remains and the interest earned on it (net of the
Bank’s income tax liability in
connection with those earnings).

17                        Rate
advice

(a)                        The yield rate applying on a drawdown date under the facility will be confirmed in writing
within 7 banking days after the drawdown date, except as set out in paragraph
(b) below.

(b)                       For
a Bill Facility – Acceptance and Discount – National Flexible Rate facility,
the weighted average of all yield rates
applying to the bill components
on a drawdown date under the facility will be confirmed in writing
within 7 banking days after the drawdown date. Details of individual yield
rates are available on request.

(c)                        If
these Specific Conditions provide that the Bank
is to advise the Borrower of
a rate, the Borrower may contact
the Bank before the first drawing is made under the facility to ascertain the rate that will
apply. The rate quoted by the Bank
will apply if the Borrower makes
its first drawing by 4.30pm on
the day of the quote. If this condition is not satisfied, the quote lapses and
the quoted rate does not apply.

(d)                       If
a rate for a bill facility is
stated in the Details to be ‘indicative
only’, that rate is an indication of the rate which may apply and is only a
guide - the actual rate may have changed by the time a rate is quoted or
otherwise calculated in accordance with the
Agreement.

18                        Confirmations
/ Drawdown Schedules

 If this Agreement specifies that certain Details are to be confirmed in writing or
set out in a Drawdown Schedule
and the Borrower believes that
the relevant confirmation or Drawdown
Schedule contains any error, then the Borrower must tell the Bank
within 5 banking days of the Borrower receiving it.

19                        Debiting
and crediting amounts

Except as otherwise provided in these Specific
Conditions, and subject to this Agreement,
the Bank may:

 59
 

 

(a)                        credit any
amount payable to the Borrower in
relation to the facility; and

(b)                       debit all
amounts payable by the Borrower in
relation to the facility,
including fees, charges or premiums, taxes, enforcement expenses and any amount
payable under an indemnity,

to the nominated
account.

20                        Bill
Facility - Option - Acceptance and Discount - Fixed Rate

(a)                        The
Borrower has the option to enter
into a fixed rate bill  facility having the characteristics set
out in the Details.

(b)                       To
exercise the option, the Borrower must
send the Bank, before 3.00 pm
(Melbourne time) on the exercise date,
a notice in a form acceptable to the Bank in
the Bank’s discretion. Once
given, this notice is irrevocable unless the Bank
otherwise agrees in its discretion.

(c)                        The
Bank is not obliged to act in
accordance with a notice given by the Borrower
under paragraph (b) above if the Bank
considers that any of the conditions precedent set out in this Agreement are not satisfied.

(d)                       The
Bank is not obliged to enter into
a fixed rate bill  facility with the Borrower on any date other than the exercise date. If the Borrower does not exercise the option on
or before 3.00 pm (Melbourne time) on the exercise
date, the option lapses. The Bank
is not obliged to remind or warn the Borrower that this time is approaching or has arrived.

(e)                        The
Borrower may give the Bank notice offering to surrender all or
part of the option. Unless otherwise confirmed by the Borrower, an offer to surrender will be
taken as an offer to surrender the whole of the option. The Bank may reject an offer to surrender in
its discretion. A surrender of the option will be effective only when the terms
of the surrender are agreed or, if an amount is payable to the Borrower in respect of the surrender, when
such amount is paid. The Borrower will
then be taken to have surrendered its rights in respect of the option (or, if a
partial surrender, the agreed part) and to have released the Bank from any further obligation in
respect of the option (or, if a partial surrender, the agreed part). Any notice
given by the Bank confirming a
surrender of the option will constitute conclusive evidence of the terms of the
surrender unless it is proved to be incorrect.

21                        Bill
Facility - Acceptance and Discount – National Flexible Rate

(a)                        Each
bill drawn under the facility must be allocated to a bill facility component either:

(i)                          by
the Borrower in accordance with
paragraphs (b)-(c) below at the time the Borrower
provides the Bank with
a drawdown notice for that bill; or

(ii)                       by
the Bank in accordance with
clause 7 of these Specific Conditions.

(b)                       If
the Bank agrees that bills may be allocated to a bill facility component progressively
then, subject to this Agreement:

(i)                          the
Borrower must allocate bills in accordance with that agreement
until the aggregate face value of the bills
allocated to the relevant bill facility
component is equivalent to the amount of the bill facility component; and

(ii)                       the
Borrower must thereafter ensure
that, until the expiry date, bills are allocated to the relevant bill facility component having an
aggregate face value equivalent to the amount of the bill facility component.

(c)                        If
paragraph (b) above does not apply, subject to this Agreement, on the first drawdown
date the Borrower must
allocate bills to each of the fixed amount and the floor/cap amount having an aggregate face
value equivalent to the amount of the relevant bill
facility component, and must ensure that, until the expiry date, bills are allocated to the relevant bill facility component having an
aggregate face value equivalent to the amount of the bill facility component.

 60
 

 

22                        Bill
Facility - Acceptance / Endorsement

(a)                        Where
bills are not to be discounted by
the Bank, the Bank agrees to make available to the Borrower bills accepted or endorsed under
the facility by the time and in
the place specified in the Details.

(b)                       If
the Bank is specified as a paying
agent in the Details, the Borrower authorises the Bank to pay the face value of a bill drawn under the facility in accordance with its terms and
conditions on the Borrower’s behalf
to the person presenting the bill for
payment.

23                        Late
Presentation Fee

A Late Presentation Fee is payable by the Borrower when a drawdown notice (together with any accompanying bills as may be required under this Agreement) is not received by the date, or
in the form, required under this Agreement.
The Late Presentation Fee is an amount the Bank
determines by reference to any agreed rates in relation to the facility, the aggregate face value of bills to be drawn on the drawdown date, the number of days between
the relevant drawdown date and
the next drawdown date and the
market rates for bank accepted bills
previously on the relevant drawdown date.

24                        Definitions

(a)                        For the
purposes of these Specific Conditions:

amortising facility
means a bill facility described
in the Details as an Amortising
Facility.

bill facility component
means each of the fixed amount,
the floating amount and the floor/cap amount.

cap rate means the
rate specified as such in the Details,
or if the rate is not specified in the Details
or if it is specified as being indicative only, the rate advised to
the Borrower as such before the
first drawing under the facility and later confirmed in writing.

commencement date means,
for a bill facility, the date
specified as such in the Details.

conversion rate
means the rate specified as such in the Details,
or if the rate is not specified in the Details
or if it is specified as being indicative only, the rate advised to the Borrower as such before the first drawing under the facility and later confirmed in writing.

down and out rate means
the rate specified as such in the Details,
or if the rate is not specified in the Details
or if it is specified as being indicative only, the rate advised to the Borrower as such before the first drawing under the facility and later confirmed in writing.

Drawdown Schedule
means a document by that name issued by the Bank.

economic benefits
is the amount determined in accordance with clause 15 of these Specific
Conditions.

exercise date means
the date, if any, specified as such in the Details.

fixed rate means
the rate specified as such in the Details,
or if the rate is not specified in the Details
or if it is specified as being indicative only, the rate advised to the Borrower as such before the first drawing under the facility and later confirmed in writing.

floating amount means
the amount specified as such in the Details
as reduced or increased in accordance with this Agreement.

floating rate means
on a drawdown date the rate at
which the Bank is prepared to
purchase bills accepted,
discounted or endorsed by the Bank for
persons of similar creditworthiness for a similar amount and duration on that drawdown date. The floating rate is a rate (expressed as a
per centum per annum yield to maturity) that varies from time to time, but
which is fixed during the term of the bills to
which it applies.

floor rate means
the rate specified as such in the Details,
or if the rate is not specified in the Details
or if it is specified as being indicative only, the rate advised to the Borrower as such before the first drawing under the facility and later confirmed in writing.

floor/cap rate means
on a drawdown date:

 61
 

 

(a)                       the
floor rate, if the floating rate on that drawdown date is less than or equal to the
floor rate;

(b)                      the
cap rate, if the floating rate on that drawdown date is greater than or equal to
the cap rate; or

(c)                       the
floating rate on that drawdown date, in any other case.

maturing bill means
a bill maturing on a maturity date.

non amortising facility means
a bill facility described as such
in the Details.

participation rate
means the rate specified as such in the Details,
or if the rate is not specified in the Details
or if it is specified as being indicative only, the rate advised to the Borrower as such before the first drawing under the facility and later confirmed in writing.

proceeds of discount has
the meaning given to it in clause 10 of these Specific Conditions.

rebate rate means
the rate specified as such in the Details,
or if a rate is not specified in the Details
or if it is specified as being indicative only, the rate advised to the Borrower as such before the first drawing under the facility and later confirmed in writing.

replacement bill means
a bill replacing a maturing  bill.

trigger rate means
the rate specified as such in the Details,
or if the rate is not specified in the Details
or if it is specified as being indicative only, the rate advised to the Borrower as such before the first drawing under the facility and later confirmed in writing.

yield rate, in
relation to a facility, has the
meaning described in the Details.

(b)                       The
definitions of other terms used in these Specific Conditions are in the General
Conditions.

 62

 

 

Part 9                                          Bank Guarantee Facility
Specific Conditions

1                               Issue
of Bank Guarantees

(a)                        Subject to
all conditions precedent being met, the Borrower
may apply for the Bank to
issue a bank guarantee to a beneficiary on or before the date issued, but only if the Borrower has submitted a complete and
properly authorised bank guarantee
request in the form required by the Bank from
time to time.

(b)                       The Bank may accept or reject an application
for a bank guarantee in its
discretion.

2                               Nominated
account

The Bank may
debit the nominated account with
any amounts payable by the Borrower in
relation to the facility including
any amounts paid by the Bank under
a bank guarantee, interest, fees
and charges, taxes, enforcement expenses, economic costs and amounts payable by
the Borrower under an indemnity.

3                               Indemnity

(a)                        In
addition to any other indemnity obligations in this Agreement, the Borrower indemnifies
the Bank in respect of any amount
the Bank pays to a beneficiary under a bank guarantee. Any amount the Borrower must pay the Bank under this clause is payable in
Australian dollars and becomes due and payable upon the earlier of:

(i)                          the Bank making payment under a bank guarantee; or

(ii)                       the Bank incurring an obligation to make
payment under a bank guarantee,
or

(iii)                    an event of default occurring under this
Letter of Offer.

(b)                       If the Bank pays any amount to a beneficiary in a foreign currency, for the
purposes of calculating the amount the Borrower
must pay the Bank under
this clause, the foreign currency amount will be converted to Australian
Dollars at the spot rate of exchange quoted by the Bank on the day the Bank makes
the payment to the beneficiary.

4                               Payment
of Bank Guarantee without demand

The Bank may,
at any time, end its obligations under a bank
guarantee by paying to the beneficiary
the guaranteed amount (or the
balance of the guaranteed amount
remaining after any part payment of the guaranteed
amount) the Bank is,
or may be, liable to pay to that beneficiary
under the bank guarantee (or such
lesser amount as the beneficiary
requires), even though no demand is made on the Bank by that beneficiary.

5                               Partial
payments

The Borrower agrees
that if a demand is made by a beneficiary
for a partial payment of the guaranteed
amount, the Bank may
at its discretion and without further reference to the Borrower, pay the amount demanded and
issue to the beneficiary a
replacement bank guarantee for
the balance of the guaranteed amount.
This procedure may be repeated at the Bank’s
discretion. The Borrower agrees
that this Agreement applies to
any replacement bank guarantee
issued under this clause.

6                               No
obligation to enquire

The Borrower irrevocably
authorises the Bank to
immediately pay any amount demanded at any time under a bank guarantee.  The Borrower
agrees that the Bank:

(a)                        need not
first refer to the Borrower or
obtain the Borrower’s authority
for the payment;

(b)                       need not
enquire into the correctness or validity of any demand made on the Bank under a bank guarantee; and

(c)                        may meet
any demand even though the Borrower disputes
the validity of the demand.

7                               Return
of Bank Guarantees

The Borrower must
return to the Bank a bank guarantee if it is given to the Borrower by the beneficiary on production of a bill of lading or otherwise.

 63
 

 

8                               Amounts
paid on default

(a)                        If, on a
day when the Borrower makes a
payment required under clause 7 of the General Conditions, there are any bank guarantees in respect of which
payment of the whole or part of the guaranteed
amount has not yet been demanded by the beneficiary, and a portion of that payment represents those
undemanded guaranteed amounts,
then the Bank agrees to deposit
that portion in an interest bearing deposit account on terms which the Bank considers appropriate (which may
include making the deposit with the Bank).

(b)                       The Bank agrees:

(i)                                     to
use the amount deposited under paragraph (b) above towards paying a beneficiary of a bank guarantee when the beneficiary demands payment of moneys the Bank is liable to pay under the bank guarantee; and

(ii)                                  after
all of the Borrower’s and the Bank’s obligations (contingent or
otherwise) under any bank guarantee
have been satisfied, to pay to the Borrower the
amount which the Bank certifies
is that part of the deposited amount which remains and the interest earned on
it (net of the Bank’s income tax
liability in connection with those earnings).

 64
 

 

Acceptance of Letter of Offer

To accept this
Letter of Offer, each Borrower must
sign the duplicate and return it to the Bank
before the deadline for acceptance set out in the section titled “Offer
Period” at the beginning of this Letter of Offer.

If
provision is made for security provider/s
to sign this letter of offer, then each security
provider must also sign the duplicate and return it to the Bank before the deadline for acceptance
set out in the section titled “Offer Period” at the beginning of this Letter of
Offer.

In accepting this
Letter of Offer by executing this document, the Borrower:

1.                                      accepts
the Bank’s offer set out in this
Letter of Offer; and

2.                                      acknowledges
and confirms that before indicating that the Borrower
intends to be bound, the Borrower
has;

(i)                                     read
this Letter of Offer; and

(ii)                                  received
and read a copy of each document that forms part of each Agreement; and

3.                                      acknowledges
and agrees that the other facilities
are varied as contemplated in Part 1 of this Letter of Offer; and

4.                                      acknowledges
and agrees that each security provided
by the Borrower to support any of
the facilities provided by the Bank is, and remains in full force and
effect, and continues to secure all present and future obligations of the Borrowers, and the security providers to the Bank including obligations in respect of those facilities
and the other facilities as
amended by this Letter of Offer; and

5.                                      declares
that it understands and agrees that any mortgaged or secured property will be
at risk if any Borrower or any security provider defaults; and

6.                                      declares
that all information given by it to the Bank
is accurate and not misleading (by omission or otherwise), and the Borrower acknowledges that the Bank is relying on that information; and

7.                                      nominates
the following address for service of notices for the purposes of each Agreement

3 Healey Circuit, Huntingwood NSW 2148; and

8.                                      acknowledges
that the Bank may pay a
commission for the introduction of credit business where the Borrower has been introduced to the Bank by a third party.

Yours sincerely,

	
  /s/ Graeme Johnson

  	
   

  

 

Graeme
Johnson

Associate
Director

 65
 

 

Incorporated Borrowers
sign the duplicate copy of this Letter of Offer where indicated as
an acceptance of these arrangements and return to the Bank. The original may be retained for the
Borrower’s records.

Companies Executing without using a
Common Seal

Executed By

Channell Bushman Pty Limited

By being signed by:

	
  /s/ N. J. Morganti

  	
   

  	
  William H. Channell, Jr.

  	
   

  
	
  Signature of
  Director

  	
   

  	
  Signature of Director/Secretary

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Nickie J.
  Morganti

  	
   

  	
  William H. Channell, Jr.

  	
   

  
	
  Name of Director

  	
   

  	
  Name of Director/Secretary

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  14/Nov/2006

  	
   

  	
  15/Nov/2006

  	
   

  
	
  Date

  	
   

  	
  Date

  	
   

  

 

Executed By

Bushmans Group Pty Limited

By being signed by:

	
  /s/ N. J. Morganti

  	
   

  	
  William H. Channell, Jr.

  	
   

  
	
  Signature of
  Director

  	
   

  	
  Signature of Director/Secretary

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Nickie J.
  Morganti

  	
   

  	
  William H. Channell, Jr.

  	
   

  
	
  Name of Director

  	
   

  	
  Name of Director/Secretary

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  14/Nov/2006

  	
   

  	
  15/Nov/2006

  	
   

  
	
  Date

  	
   

  	
  Date

  	
   

  

 

 66
 

 

 

Executed By

Channell Pty Limited

By being signed by:

	
  /s/ N. J. Morganti

  	
   

  	
  William H. Channell, Jr.

  	
   

  
	
  Signature of
  Director

  	
   

  	
  Signature of Director/Secretary

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Nickie J.
  Morganti

  	
   

  	
  William H. Channell, Jr.

  	
   

  
	
  Name of Director

  	
   

  	
  Name of Director/Secretary

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  14/Nov/2006

  	
   

  	
  15/Nov/2006

  	
   

  
	
  Date

  	
   

  	
  Date

  	
   

  

 

Executed By

 

Bushmans
Engineering Pty Limited

 

By being signed
by:

 

 

	
  /s/ N. J. Morganti

  	
   

  	
  William H. Channell, Jr.

  	
   

  
	
  Signature of
  Director

  	
   

  	
  Signature of Director/Secretary

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Nickie J.
  Morganti

  	
   

  	
  William H. Channell, Jr.

  	
   

  
	
  Name of Director

  	
   

  	
  Name of Director/Secretary

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  14/Nov/2006

  	
   

  	
  15/Nov/2006

  	
   

  
	
  Date

  	
   

  	
  Date

  	
   

  

 

 67
 

 

 

Executed By

 

Polyrib Tanks Pty
Limited

 

By being signed
by:

 

 

	
  /s/ N. J. Morganti

  	
   

  	
  William H. Channell, Jr.

  	
   

  
	
  Signature of
  Director

  	
   

  	
  Signature of Director/Secretary

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Nickie J.
  Morganti

  	
   

  	
  William H. Channell, Jr.

  	
   

  
	
  Name of Director

  	
   

  	
  Name of Director/Secretary

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  14/Nov/2006

  	
   

  	
  15/Nov/2006

  	
   

  
	
  Date

  	
   

  	
  Date

  	
   

  

 

Executed By

 

Australian Bushman
Tanks Pty Limited

 

By being signed
by:

 

 

	
  /s/ N. J. Morganti

  	
   

  	
  William H. Channell, Jr.

  	
   

  
	
  Signature of
  Director

  	
   

  	
  Signature of Director/Secretary

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Nickie J.
  Morganti

  	
   

  	
  William H. Channell, Jr.

  	
   

  
	
  Name of Director

  	
   

  	
  Name of Director/Secretary

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  14/Nov/2006

  	
   

  	
  15/Nov/2006

  	
   

  
	
  Date

  	
   

  	
  Date

  	
   

  

 

 68Exhibit 10.1

 

EBERLINE SERVICES, INC.

 

Promissory Note

 

	
  $[1,000,000]

  	
   

  	
  January 1, 2005

  

 

FOR VALUE RECEIVED, the undersigned, Eberline
Services, Inc., a Delaware corporation (“Maker”), hereby promises to pay
to Mr. Arvin Smith (the “Lender”) the principal sum of One Million U.S.
Dollars ($1,000,000), together with interest on the unpaid balance of such
principal amount from the date hereof until maturity at the rate of Bank Prime
Rate as quoted from time to time in the Wall Street Journal plus one percent (1.0%)
per annum.

 

The Maker shall repay the principal amount of
this Note in sixteen (16) equal quarterly installments commencing March 31,
2005 and on the last day of each calendar quarter thereafter until this Note is
paid in full. The Maker shall pay accrued interest on such principal amount at
the time of each quarterly payment of principal.  Notwithstanding the foregoing, the full
amount of principal and interest shall be paid no later than September 30,
2008 (the “Maturity Date”).

 

This Note
incorporates the following additional terms.

 

This Note evidences a loan made by the Lender
to Maker.  This Note is intended to
replace the Demand Promissory Note dated September 27, 2004 issued by
Eberline Services, Inc. to the Lender, which note is hereby cancelled.

 

Payments of principal of and interest on this
Note shall be made in lawful money of the United States of America to the
Lender at the Lender’s address set forth below, or at such other place as the
Lender shall have designated to the Maker in writing.  The Maker may prepay this Note without any
penalty or premium, in whole or from time to time in part, upon written notice
given at least ten (10) business days prior to the date fixed for such
prepayment.  All payments received by the
Lender with respect to this Note shall be applied first to the accrued interest
and then to principal.  All computations
of interest shall be calculated on the basis of actual number of days elapsed
over a year of 360 days.

 

This Note will be treated as Senior to any
other notes issued to Dr. Rick Chapman, Dr. Phillip Frost, Mr. Arvin
Smith and Mr. John Hatsopoulos (the “Other Lenders”).

 

The Lender, by his payment for and acceptance
of this Note, (1) represents and warrants that he is an “accredited
investor” as such term is defined in Rule 501 of Regulation D promulgated
under the Untied States Securities Act of 1933, as amended (the “Act”), and
that this Note is being purchased for his own account and not for distribution
within the meaning of the Act, and (2) agrees that he will not sell or
otherwise transfer or assign this Note unless it is registered under the Act or
unless an exemption from such registration is available.

 

The obligations of the Maker under this Note
shall automatically become due and payable immediately without notice or demand
in the event that (1) the Maker shall commence any case, proceeding or
other action under any law relating to bankruptcy, insolvency, reorganization
or relief of debtors, seeking to have an order for relief entered with respect
to the Maker, or seeking to adjudicate the

 

 

Maker a bankrupt or
insolvent or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to the Maker
or any of its debts, or seeking appointment of a receiver, trustee, custodian
or other similar official for the Maker for all or any substantial part of the
assets of the Maker, or Maker shall make a general assignment for the benefit
of its creditors, or part of the assets of the Maker, or there shall be
commenced against the Maker any case, proceeding or other action of a nature
referred to in this subparagraph (1), or there shall be commenced against the
Maker any case, proceeding or other action seeking issuance of a warrant of
attachment, execution, distraint or similar process against all or any
substantial part of the assets of the Maker which results in the entry of an
order for any such relief, or the Maker shall take any action in furtherance
of, or indicating its consent to, approval of, acquiescence in, any of the acts
set forth in this subparagraph (1), or the Maker shall generally not, or shall
be unable to, or shall admit in writing its inability to, pay its debts as they
become due; or (2) the Maker shall commence proceedings for the
dissolution or liquidation of the business of the Maker or shall suspend the
usual business of the Maker for a period of thirty (30) consecutive days.

 

Nothing in the Note shall affect or impair
the right, which is absolute and unconditional, of the Lender to receive
payment of or to institute suit to enforce this Note at and after the maturity
hereof (including maturity by declaration pursuant to this Note or otherwise)
or the obligation of the Maker, which is also absolute and unconditional, to
pay the principal of or interest on this Note to the Lender at the time and
place expressed herein.

 

In any case where the date of maturity on, or
principal of, this Note shall be a Sunday or a legal holiday in the
Commonwealth of Massachusetts or a day on which banking institutions doing
business in the Commonwealth of Massachusetts are authorized by law to close,
then payment of such interest may be made on the next succeeding business day
with the same force and effect as if made on the nominal date of maturity (and
no interest shall accrue for the period after such nominal date).

 

Except as herein otherwise expressly
provided, all notices, requests, demands, consents and other communications
required or permitted under this Note shall be in writing and shall be
considered to have been duly given when (1) delivered by hand, (2) sent
by facsimile (with receipt confirmed), provided that a copy is mailed (on the
same date) by certified or registered mail, return receipt requested, postage
prepaid, or (3) received by the addressee, if sent by Express Mail,
Federal Express or other reputable express delivery service (receipt
requested), or by first class certified or registered mail, return receipt
requested, postage prepaid, in each case to the appropriate addresses and
facsimile numbers set forth below (or to such other addresses and telecopier
numbers as a person whose address is herein specified may from time to time
designate as to himself by notice similarly given to the other such designees
in accordance herewith). A notice of change of address shall not be deemed
given until received by the addressee. Notices shall be addressed:

 

	
  To the Lender at:

  	
   

  	
  Mr. Arvin Smith

  
	
   

  	
   

  	
  1300 Alexandra Court

  
	
   

  	
   

  	
  Colleyville, TX 76034

  
	
   

  	
   

  	
  Phone: (817) 788-1815

  
	
   

  	
   

  	
  Fax: (817) 788-1815

  
	
   

  	
   

  	
   

  
	
  To the Maker at:

  	
   

  	
  Eberline Services, Inc.

  
	
   

  	
   

  	
  7021 Pan American Freeway N.E.

  
	
   

  	
   

  	
  Albuquerque, NM
  87109-4338

  
	
   

  	
   

  	
  Attn: President

  
	
   

  	
   

  	
  Phone: (505) 262-2694

  
	
   

  	
   

  	
  Fax: (505) 262-2698

  

 

2

 

In the case of the occurrence of an Event of
Default, the Maker shall be liable for all costs of enforcement and collection
of this Note incurred by the Lender or any other holder of this Note, including
but not limited to reasonable attorneys’ fees, disbursements and court costs.

 

The Maker hereby waives presentment, demand
for payment, notice of dishonor, protest and notice of protest, and any or all
other notices of demands in connection with the delivery, acceptance,
performance, default, endorsement or guarantee of this Note.  The liability of the Maker hereunder shall be
unconditional and shall not be in any manner affected by any indulgence
whatsoever granted or consented to by the holder hereof, including but not
limited to any extension of time, renewal, waiver or other modification.

 

This Note shall be governed by and construed
in accordance with the laws of the Commonwealth of Massachusetts (without
regard to the conflict of laws principles thereof).

 

	
   

  	
  EBERLINE SERVICES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Dr. Shelton Clark

  	
   

  
	
   

  	
  Name: Dr. Shelton
  Clark

  
	
   

  	
  Title: President,
  Eberline Services, Inc.

  

 

3

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00113-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00113-of-00352.parquet"}]]