Document:

Exhibit
4.1.4

	
  24 August 2001

  	
   

  	
  Private and Confidential

  

 

Mr Warren Saxelby

110 Prices Circuit

Woronora NSW 2232

 

Dear Warren

 

APPOINTMENT - CHIEF FINANCIAL OFFICER

 

I am pleased to confirm our
offer of employment with CSR Limited, as Chief Financial Officer. You will be
located at Chatswood and report to me. Your commencement date will be Monday 29
October 2001. This offer will remain open for 3 days from today.

 

The terms and conditions of
employment are attached. If you have any questions regarding them please do not
hesitate to contact me. Otherwise, would you please sign the duplicate copy of
this letter where indicated and initial each page of the attached terms and
conditions and return these to me.

 

I take this opportunity to
welcome you to CSR and hope that you will find your time with the company both
challenging and rewarding.

 

Yours sincerely,

 

 

 

Peter Kirby

Managing Director

 

I accept the offer as
outlined in this letter and the attached terms and conditions of employment
dated (date).

 

	
  My commencement date will
  be  

  	
  29/10/01

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signed

  	
  

  	
   

  	
   

  	
  Date

  	
  26/8/01

  	
   

  
									

 

CSR Limited, ABN
90 000 001 276. Human Resources. Level 3, 9 Help Street, Chatswood, NSW 2067,
Australia

Locked Bag 6,
Chatswood, NSW 2057 Telephone +61 2 9235 8031. Facsimile +61 2 9235 8019

 

 

TERMS AND CONDITIONS OF EMPLOYMENT

of WARREN SAXELBY by CSR LIMITED on 29 OCTOBER 2001

for CHIEF FINANCIAL OFFICER at CHATSWOOD reporting to

PETER KIRBY, MANAGING DIRECTOR

 

Sign-on Payment

 

You will be paid an amount of $100,000, less tax, within one month of
taking up the appointment which is the subject of this offer.

 

Remuneration

 

The pre-tax value of your
Fixed Remuneration Package will be $550,000 per annum.

 

Your Package will be
reviewed annually effective 1 July. Reviews will have regard to relevant
factors such as market data, individual performance, current duties and
economic circumstances.

 

Your Base Remuneration is
set at 75% of your Fixed Remuneration. This is a notional figure on which
entitlements for incentives, leave and severance (if applicable) are
calculated.

 

Your Fixed Remuneration
Package will comprise the items agreed by you and CSR. Your monthly payment
(dependent on your election of options) will be paid to your nominated account
by the 15th of the month.

 

Current Package Options

 

The options currently
available, which are subject to applicable policies and guidelines, include:

 

First vehicle

•                  Novated
Lease arrangement - a new
vehicle or second hand vehicle.  The
charge to be deducted from your Fixed Remuneration will be:

•                  a monthly lease payment, and

•                  a monthly payment for operating and Fringe
Benefits Tax costs which will be calculated by a CSR formula.  The formula is applied to the amount
financed under the lease.

 

•                  Second
vehicle on novated lease - this
vehicle can be new or second-hand, or an existing vehicle may be sold into a
lease.

 

(CSR
Motor Vehicle Policy for Employees in Job Grades 11 and above is attached.)

 

•                  Laptop
Computer - one laptop
computer (and some associated equipment/software) is available each FBT year (1
April to 31 March) either as a lease or a one off purchase.

 

•                  Superannuation
contributions - there
is some flexibility as to the amount of your Fixed Remuneration which is
directed to superannuation.

 

Warren Saxelby

24/8/01

 

2

 

Superannuation

 

You
will be required to join the CSR Australian Superannuation Fund (CSR Super) -
Division Two. Employer contributions are made in accordance with superannuation
legislation - currently a minimum of 8% of Base Remuneration or 8% of $110,040,
whichever is the lesser, deducted from your Fixed Remuneration.

 

Further contributions may be
made by CSR from your pre-tax remuneration, or by you from your after tax
remuneration. The total of employer and pre-tax contributions cannot normally
exceed the maximum age-based contribution limits specified by law.

 

CSR Super contributions must
be made in whole percentages of your Base Remuneration. The amount can be
changed at 1 July each year.

 

CSR Super currently has four
investment portfolios which differ in investment strategy. You can select an
investment option to suit your personal circumstances. Basic death and
disablement insurance is provided at no cost. You may also take out extra death
and disablement cover subject to certain conditions.

 

Subject to certain
conditions, contributions can also be made to CSR Super by or on behalf of the
spouses of CSR Super members. 

 

Further information about
CSR Super and the choices that need to be made will be available on commencement
of employment or earlier if required.

 

Leave Entitlements

 

You are entitled to leave as
provided in the CSR Staff (Consolidated) Award 2000 which includes personal
leave (comprising sick, carer’s and bereavement leave) and unpaid parental
leave.

 

Financial Planning

 

You will be entitled to
reimbursement of up to $5,000 pa for financial planning advice. This benefit
(or part of it) is not convertible into cash.

 

Short Term Incentive

 

You will be invited to join
the Senior Executive Short Term Incentive (STI) Plan. This provides opportunity
for a cash incentive equivalent to 25% of Base Remuneration for “on target”
performance, rising to 100% cash incentive for performance at 30% above target.
Performance measures are both company financial and personal
financial/non-financial goals. Although you will not have a full years’ service
by March 02 your potential STI will not be reduced.

 

You may elect to invest any
STI cash incentive earned on a pre-tax basis in CSR shares under the Employee
Share Acquisition Plan (ESAP). The CSR Board requires that executives at your
level accumulate CSR shares equivalent in value to your annual Base
Remuneration and until this is achieved you will be required to contribute 50%
of your STI each year.

 

3

 

Details of ESAP and how it operates will be
available shortly.

 

You may also elect to invest
any STI cash incentive earned on a pre-tax basis in superannuation.

 

Long Term Incentive

 

You will be invited into the
Executive Share Option Plan (ESOP) and will be offered 300,000 options over CSR
shares. Details of ESOP and how it operates are attached.

 

Additional Long Term Incentive

 

You will be offered
additional cash long term incentive bonuses, which we agree you will forego and
CSR will contribute under ESAP to the ESAP trustee to acquire CSR shares on
your behalf, subject in respect of each issue to the company performance hurdle
being met and your personal performance being assessed as satisfactory by the
Managing Director and the Board. This incentive will operate as follows:

 

(a)          Within one month following 21 November 2001
and as from the date the Company lodges with the ASX its end of year results
for each of YEM03 and YEM04, respectively and, subject to the performance criterion
set out below being met, you will become eligible to receive a cash amount
(Additional LTI Bonus) equal to 25,000 multiplied by the Qualifying CSR Share
Price (as defined below).

 

(b)         Your entitlement to each Additional LTI Bonus
will be conditional on total returns to CSR shareholders (share price growth
and dividends reinvested) exceeding the bespoke ASX All Industrials
Accumulation Index approved by shareholders at the 2000 Annual Meeting,
measured over the period from 25 July 2000 through to the date the relevant end
of year results are announced, or between that announcement date and 25 July
2004.

 

(c)          The “Qualifying CSR Share Price” for an
Additional LTI Bonus will be the average price, inclusive of transaction costs,
of all CSR shares next purchased on the ASX by the ESAP trustee on behalf of
employees participating in ESAP immediately after the Additional LTI Bonus is
payable, such purchase to include the shares purchased on your behalf.

 

Employee Share Plans

 

You will be eligible to
participate in the Employee Share Acquisition Plan (ESAP). The plan enables CSR
employees to purchase CSR shares tax effectively, by allocating part of your
monthly pre-tax remuneration or foregoing all or part of any performance-based
cash incentive to which you may become entitled.

 

Policies and Guidelines

 

CSR has a number of policies
and guidelines, which are varied from time to time. They will apply to your
employment and you are obliged to comply with them.

 

4

 

The current terms of two
important policies (in outline) are:

 

•                  Code of
Business Conduct - You
must not accept any payment or other benefit from any other person or company
for anything that you do or do not do in connection with the business of CSR
except as permitted by this policy. 
(This restriction does not apply to Frequent Flyer programs.)  You must not involve yourself in any public
or private undertaking which may interfere with the performance of your job or
adversely reflect on CSR.

 

•                  No Smoking
Policy - CSR has a No
Smoking Policy.  This means that smoking
is not allowed on CSR premises nor during your working hours.

 

Property / Confidential Information

 

During the course of your
employment, you will learn of CSR trade secrets and confidential information.
You must only use such information in the proper carrying out of your duties,
and in the interests of CSR. You must not, either during or subsequent to your
employment, without written approval from authorised CSR officers, reveal such
information to persons not employed by CSR, except where to do so is required
in order to properly carry out your duties as a CSR employee or where you are
required to do so by law. You must also use your best endeavours to prevent the
unauthorised use or disclosure of such information by third parties.

 

Upon
termination of your employment, you must return all CSR property, including all
drawings, data, manuals and so forth in your possession, to your immediate CSR
manager at the time of your termination.

 

Inventions

 

You are required to
immediately inform CSR of any invention or innovation developed either by
yourself or with others, in connection with your employment. You will assist
CSR, at its expense but without payment to you, to obtain ownership and
protection of such invention or innovation to the extent of your rights to it.

 

Hours of work

 

You will be required to
devote all your normal working hours (and other time, as reasonably required to
satisfactorily complete your duties) to the business of CSR.

 

Termination of Employment

 

Should you wish to terminate
your employment the company will require that you give it no less than three
months’ notice in writing, or forfeit pay in lieu of notice.

 

The company may terminate
your employment by giving you eighteen months’ notice in writing, or pay in
lieu of notice.

 

For this purpose “pay” means
“total package value” as that term is defined in the CSR Limited Senior Staff
Packaging Arrangements Certified Agreement. Also included is that portion of
your short term incentive (STI) which would have been earned during the notice
period. The

 

5

 

STI payment will be based on a projected
assessment of your performance, but will be no less than for target
performance, ie, 25% of base remuneration. A pro rata payment of your STI for
the period up to the date notice is given would also be included, based on your
performance up to that date.

 

In the event that you have
an entitlement to severance pay under the Redundancy and Retrenchment
Agreement, August 2000 between CSR Limited and the CSR Limited Officers’
Association (the Agreement), the Company reserves the right to reduce the
amount of payment in lieu of notice it would otherwise make to you to terminate
your employment. If the company exercises the right to reduce the amount of
payment in lieu of notice, it will ensure that you receive at least the greater
of your entitlement to severance pay plus notice under the Agreement or payment
in lieu of eighteen months’ notice.

 

The Company may terminate
your employment without notice and without payment in lieu of notice for
misconduct.

 

The termination of your
employment by the Company, other than a summary termination for misconduct,
will be deemed to be a termination arising from retrenchment for the purposes
of the ESOP rules. This will not affect the characterisation of the termination
for any other purpose.

 

These Termination of
Employment terms are subject to the provisions of the benefits being in
accordance with the Corporations Law, which imposes restrictions on payments to
executives in limited circumstances.

 

Awards/Agreements

 

The following award and
agreements, which will vary over time, apply to your employment by CSR:

 

•            CSR Staff (Consolidated) Award, 2000

•            Agreement on Over Award Conditions of
Employment between CSR Limited and the CSR Limited Officers’ Association, 1992

•            Redundancy and Retrenchment Agreement, 2000
between CSR Limited and the CSR Limited Officers’ Association,

•            CSR Limited Senior Staff Remuneration
Packaging Arrangements Certified Agreement, 1998.

 

Whilst you are covered by
the documents referred to above, they only form part of your individual
contract of employment where expressly stated in this letter/attachment.

 

CSR Limited Officers’ Association

 

You will be eligible to join
the CSR Limited Officers’ Association.

 

6

 

27 June 2003

 

Manager Companies

Company Announcements Office

Australian Stock Exchange Ltd

Level 4, Stock Exchange Centre

20 Bridge Street

Sydney  NSW 
2000

 

Dear Sir,

 

Revised Employment Contract, Mr. Alec Brennan

 

In accordance with the
continuous disclosure provisions of the ASX Corporate Governance Council’s
“Principles of Good Corporate Governance and Best Practice Recommendations”, I
wish to advise that on 26 June 2003 CSR entered into a revised employment
contract with Mr Alec Brennan following his appointment as the Managing
Director and Chief Executive Officer of the Company. The contract is annexed.

 

Yours sincerely,

G J Hughes

Company Secretary

 

 

Dr I D Blackburne

Chairman

 

STRICTLY CONFIDENTIAL

 

26 June 2003

 

Mr Alec Brennan

18 Glenview Street

GREENWICH  NSW  2065

 

Dear Alec,

 

Employment arrangements

 

I refer to our discussions
regarding your employment arrangements, and I am very pleased to set out what
is proposed as the terms governing your continued appointment by CSR Limited
(the “Company”) as the Managing
Director and Chief Executive Officer of the Company.

 

Position and responsibilities

 

1.                                                                                       Your
appointment as Managing Director and Chief Executive Officer commenced as of 1
April 2003. You will continue to serve in Sydney or in such other location as
agreed between the Company and yourself.

 

2.                                                                                       You are responsible to the Board of Directors
of the Company (the “Board”) for
the general control and management of the Company and related bodies corporate
(the “Group”), and its profitability, operation and strategic development.

 

Term and renewal

 

3.                                                                                       Your appointment from 1 April 2003 will,
subject to earlier termination or renewal as provided below, terminate on 31
March 2007 (the “Term”).

 

4.                                                                                       Within the 12 months prior to 31 March 2007,
you will meet with me, or my successor as Chairman of the Board (the “Chairman”), to discuss a renewal of your
appointment. If by 30 September 2006 the terms of any renewal are not agreed
and

 

CSR Limited, ABN
90 000 001 276.        9 Help Street,
Chatswood, NSW 2067, Australia

Locked Bag 6,
Chatswood, NSW 2057 Australia. 
Telephone +61 2 9235 8000. Facsimile +61 2 9235 8130

 

 

the
Company states its intention to continue the discussion on the terms of a
renewal your appointment will continue until terminated by either party on six
months’ notice.

 

General duties

 

5.                                                                                       Your appointment is full-time, and you will,
unless prevented by ill-health or other incapacity, devote your whole time and
attention during normal working hours (and other times if reasonably required)
to the business of the Group. You will at all times in the performance of your
duties comply with all directions properly given by the Board and conduct
yourself in accordance with the highest standards of professionalism and the
CSR Code of Business Conduct. It is essential that you avoid conflicts of
interest, or the appearance of a conflict of interest, and maintain the
reputation and integrity of the Group.

 

6.                                                                                       You will undertake travel within or outside
Australia on the business of the Company as may reasonably be required of you
by the Board.

 

7.                                                                                       You will not without the Board’s prior
written approval be involved in any other business activities except for
passive investments in securities quoted on a recognised stock exchange (in
Australia or elsewhere), personal and family companies and trusts, and
non-profit organisations.

 

8.                                                                                       You will, at the Company’s expense, undergo
an annual medical examination.

 

Salary and benefits

 

9.                                                                                       Your remuneration will comprise the following
elements:

 

(a)                                                                                  Total fixed remuneration (“TFR”) as at 1 April 2003 is $ 1,100,000
per annum. The TFR may be taken in such form as you may decide (with the
Board’s approval), but on the basis that the TFR includes any FBT payable by
the Company on any benefit subject to that tax. You will retain membership of
the CSR Staff Superannuation Fund (the “Fund”),
with contributions determined by the rules of the Fund, except that
the 12% employee contribution will not be deducted from your TFR. For the
purpose of the Fund your annual salary is 75% of TFR.

 

The
salary component is payable on a monthly basis (less applicable tax) by direct
deposit to a financial institution nominated by you. The TFR includes all
remuneration otherwise payable in relation to any other office you hold in
relation to a Group company.

 

(b)                                                                                 Entitlements under the short-term incentive (“STI”), as set out in Schedule A to this
letter.

 

(c)                                                                                  Entitlements under the long-term incentive as
set out in Schedule A to this letter.

 

AN Brennan

 

2

 

10.                                                                                 The TFR and the STI will be reviewed as at 1
July 2004 and each subsequent July while your appointment continues. The review
will be conducted by the Board Remuneration and Nominations Committee having
regard to, market movements, your personal performance and your contribution to
corporate goals and performance as agreed with the Chairman during the previous
year. Your TFR may not be decreased on a review.

 

11.                                                                                 The Company will also:

 

(a)                                                                                  provide for your benefit payment or
reimbursement of up to $5,000 annually to fund personal and financial planning
advice;

 

(b)                                                                                 provide standard benefits and conditions
generally available to Company staff;

 

(c)                                                                                  reimburse all reasonable Company expenses
such as mobile phone and appropriate client entertainment in accordance with
the Company’s policy from time to time; and

 

(d)                                                                                 reimburse all business travel and
accommodation expenses within Australia or overseas (at first class standard)
reasonably incurred for yourself and, with the Chairman’s prior approval, your
wife. (You will not be required to reimburse the Company for any FBT payable by
the Company under this paragraph.)

 

12.                                                                                 You will verify all reimbursable expenses in
such manner as the Company may reasonably require.

 

13.                                                                                 You authorise the Company to deduct from the cash component of your TFR
any expense you owe to the Company.

 

14.                                                                                 The Company will maintain in your favour the
Deed of Indemnity, Insurance and Access on the terms currently applicable to
you.

 

Leave entitlements

 

15.                                                                                 You will be entitled to annual leave, long
service leave and other leave in accordance with the CSR Staff (Consolidated)
Award 2000 (the “Award”). Annual
and long service leave is to be taken at a time or times agreed with the
Chairman.

 

16.                                                                                 You will be entitled to your remuneration and benefits during any period
of sick leave in accordance with the Award. 

 

Intellectual property, moral rights and confidentiality

 

17.                                                                                 Any invention, process, concept, technology,
design, knowhow, copyrightable work or other intellectual property (whether or
not registrable) relating to the

 

3

 

Company’s
business which you make, discover, develop or improve during your employment (“IP”) is by virtue of these terms the
Company’s property. You will at the Company’s request and cost assign to the
Company without further consideration all your right and interest in the IP and
execute any document requested by the Company to complete the assignment. If
you fail to execute a document requested by the Company you appoint the then
Chairman as your attorney to execute the document.

 

18.                                                                                 You unconditionally and irrevocably consent
to any act or omission of the Company (whether occurring before or after the
consent is given) which would otherwise infringe your moral rights, within the
meaning of the Copyright Act 1968 (Cth), as
amended from time to time in any work made or to be made by you in the course
of your employment.

 

19.                                                                                 The maintenance of confidentiality is
fundamental to the operations and success of the Company, and accordingly you
will not, either during (except in the proper course of your duties) or after
your employment, divulge to any person any trade secret or private or
confidential information concerning the business or finances, or clients of the
Group. You will provide all assistance reasonably requested by the Company in
connection with any proceedings the Company may take against any person for
unauthorised use, copying or disclosure of confidential information.

 

Termination

 

20.                                                                                 You may terminate your appointment by giving
at least six months’ written notice to the Company. The Company may, however,
at any time on or after receiving notice under this paragraph terminate your
employment on payment of your remuneration and other entitlements up to the end
of the period of notice. If you fail to give the required period of notice you
agree to pay (and authorises the Company to withhold from any amounts owing to
you) an amount equivalent to the TFR for
the balance of the ungiven period of notice.

 

21.                                                                                 You may also terminate your appointment by
giving written notice to the Company:

 

(a)                                                                                  where the Company commits a serious or
persistent breach of any provision of these terms which is not remediable, or,
if remediable, is not remedied within a reasonable period after you give the
Company notice specifying the breach; or

 

(b)                                                                                 if you cease to hold the position of managing
director or chief executive officer of the Company, or where your status,
duties or authority are materially diminished.

 

22.                                                                                 The Company may by written notice to you
terminate your appointment with immediate effect if:

 

4

 

(a)                                                                                  you commit gross negligence, gross
incompetence, or any fraud, misappropriation, dishonesty, serious criminal
conduct or other serious wilful misconduct;

 

(b)                                                                                 you are guilty of a serious or persistent
breach of your employment obligations which is not remediable, or if
remediable, is not remedied promptly after the Company gives you notice
specifying the breach;

 

(c)                                                                                  you become bankrupt or insolvent or a person
whose estate is liable to be dealt with under any law for the protection of
insolvents or their creditors; or

 

(d)                                                                                 you become incapacitated by reason of illness
or accident (other than an accident or illness to which workers’ compensation
legislation applies) which prevents you from performing your duties for a
period in excess of three months or an aggregate period of three months in any
period of 12 consecutive months, where the applicable period is not a period of
paid sick leave.

 

23.                                                                                 If the Company wishes to terminate your
appointment under paragraph 22(b) above, then the Company must first provide
you with written notice of its intention to do so, and the Company must give
you a reasonable opportunity to show cause to the Board why your appointment
should not be terminated. The Company may until this has been done suspend you
from the performance of your duties, but without loss of remuneration or
benefits.

 

24.                                                                                 The Company may also by written notice to you
terminate your appointment with immediate effect, without cause, by paying you
the amounts referred to in paragraphs 27(a) and 28 below.

 

25.                                                                                 A termination of your employment by the
Company is only to be taken following a resolution of the Board authorising
that action.

 

26.                                                                                 If at the end of the Term there has been no
renewal of your appointment and you have accrued annual leave or long service
leave, you may commence leave and stay employed by the Company until the
expiration of the leave, or an earlier date chosen by you, but from 1 April
2007 your appointment as Managing Director and Chief Executive Officer will
cease, you will cease to be a director of the Company and any other company in
the Group, you will hold no other office or position within the Group, your TFR
will remain unchanged and not subject to further review and you will not be
entitled to an STI for the period of leave.

 

27.                                                                                 On cessation of your appointment for any
reason:

 

(a)                                                                                  the Company will on the date your employment
ceases pay you all your entitlements accrued to the date of termination;

 

(b)                                                                                 you will immediately deliver to the Company
all property of the Company in your possession (including documents and records
and any copies, notes and extracts); and

 

5

 

(c)                                                                                  you will resign all directorships,
trusteeships and other offices with the Group, and you appoint the then
Chairman as your attorney to execute resignations and do all else required to
give effect to the resignations.

 

Payment for past services and as compensation for loss of
office

 

28.                                                                                 If cessation of your appointment is for any
reason (whether or not set out above) other than your resignation under
paragraph 20 above or termination under paragraph 22 above, the Company will in
addition to your entitlements under paragraph 27(a) and at the time of cessation
pay you by way of payment for past services to the Group or compensation for
loss of office:

 

(a)                                  an amount which is equal to 1.5 times the
value of your then-current TFR or, if cessation occurs later than 30 September
2005, the value of that part of your then-current TFR for the remainder of the
Term;

 

(b)                                 an amount which is equal to your eligible pro
rata STI for the then current year. The amount is to be fairly assessed by the
Board in consultation with you based on the achievement of financial and
balanced individual goals to the date of cessation of your appointment; and

 

(c)                                  an amount which is equal to half of your
maximum STI for the then-current year, being 45% of your then-current TFR, or,
if cessation occurs between 1st April 2006 and 31st March
2007, a proportionate part of that amount.

 

29.                                                                                 Subject to the required CSR Share Performance
occurring within 12 months of the cessation of your employment, if cessation of
your employment is for a reason within:

 

(a)                                  paragraphs 20, 22(a), (b) and (c), and 24,
you will be entitled to retain all shares then held through ESAP on your behalf
and to receive the LTI which you have become eligible to receive in accordance
with Schedule A item 4 as at the date of termination;

 

(b)                                 paragraphs 21 or 22(d) or because of the
expiration of the Term with no renewal, you will be entitled to retain all
shares then held through ESAP on your behalf and be eligible to receive the
balance of the LTI in accordance with Schedule A item 4 regardless of whether
the date for eligibility has been reached;

 

If
at the time the LTI is payable you are not an employee of the Company you will
be paid the LTI in cash.

 

30.                                                                                 The total payment made to you on the
termination of your employment will not exceed the maximum payment permitted to
be paid under the Corporations Act 2001 (Cth)
as amended from time to time. If any benefit provided for under these terms
requires shareholder or other approval for its implementation or payment, then
the Company may at its discretion and expense at the next scheduled meeting of
shareholders do all on its part required to secure approval.

 

6

 

Miscellaneous

 

31.                                                                                 The parties will consult and agree the extent
and manner of disclosure of these terms.

 

32.                                                                                 No amendment or waiver of any of these terms
is valid unless in writing and signed by the parties or by the party granting
the waiver (as applicable).

 

33.                                                                                 The agreement formed on acceptance of this
letter is to be governed by and construed in accordance with New South Wales
law, and the parties unconditionally agree to submit to the non-exclusive
jurisdiction of New South Wales courts and provides all terms and conditions of
your employment and supersedes all prior understandings or agreements between yourself
and CSR and any prior condition, warranty, indemnity or representation imposed,
given or made by yourself or CSR in connection your employment.

 

If the above terms are
acceptable to you, would you please signify your agreement by signing and dating
the enclosed copy of this letter and returning it to me. Your so doing will
constitute the agreement between the Company and yourself. I confirm to you
that I am authorised by the Board to make the above offer and to commit the
Company to the above terms.

 

Alec, on behalf of the Board
and on my own behalf, I look forward to continuing to work with you to help the
Company achieve great success.

 

Chairman

 

 

1 have read and accept the
terms contained in this letter of offer.

 

	
  SIGNED by Alexander Norman Brennan

  	
   

  	
  

  
	
   

  	
   

  	
  Signature

  
	
  27 June 2003

  	
   

  	
   

  	
   

  
	
  Date

  	
   

  	
   

  
				

 

7

 

Schedule A

 

Short Term Incentive (“STI”)

 

1.                    You will hold in aggregate, or have held for
you through CSR share schemes, a minimum of the equivalent value of your annual
TFR in CSR shares, or more typically as a guideline 2 year’s TFR. If at the
time of determination of your STI you do not hold sufficient shares to meet the
minimum criteria you elect to receive your STI in the form of shares through
ESAP.

 

2.                    You will be entitled to an annual STI of up
to 90% of TFR . Targets for the STI will be agreed annually with the Chairman
according to the following principles:

 

(a)               40% will be based on the Group financial
performance; 30% will be based on the performance of the sugar, building
products and aluminium businesses financial performance; 20% will be based on a
balanced set of individual goals.

 

(b)              The financial goals will include a threshold
for payment and be set in such a way that for overall performance meeting
market expectations the payment should be around half of the STI and for
performance reaching top quartile the payment should be able to reach the full
STI.

 

3.                    The previous years STI payment will be determined in conjunction with the release of the
annual results.

 

Long Term Incentive (“LTI”)

 

4.                   Employee Share Acquisition
Plan (ESAP) – New LTI

 

You
are eligible to be granted a LTI sufficient to purchase CSR Shares in the
following tranches:

 

	
  31 May 2004

  	
   

  	
  550,000

  
	
   

  	
   

  	
   

  
	
  31 May 2005

  	
   

  	
  550,000

  
	
   

  	
   

  	
   

  
	
  31 May 2006

  	
   

  	
  750,000

  
	
   

  	
   

  	
   

  
	
  31 May 2007

  	
   

  	
  750,000

  

 

and
you elect to receive any LTI as shares through ESAP.  Receipt of the LTI is subject to the following conditions:

 

(a)               The reference date is 1 April 2003 and the
reference price is the volume average weighted price for the first week of
April 2003;

 

8

 

(b)              eligibility for the first 50% of each tranche
is dependent on the total return to CSR Shareholders, (share price growth and
dividends re-invested) (“CSR Share
Performance”), exceeding the median of the ASX 200 Accumulation
Index;

 

(c)               eligibility for the second 50% of each
tranche arises proportionally as the CSR Share Performance exceeds between the
median and the 75 percentile of the ASX 200 Accumulation Index;

 

(d)              the tranches granted in May 2004, May 2005
and May 2006 will be capable of assessment against conditions (a), (b) and (c)
immediately , and then on more than one occasion until completed, between the
date of eligibility and 31 May 2007;

 

(e)               the tranche granted in May 2007 will be
capable of assessment against the conditions in (a), (b) and (c) immediately
and then on more than one occasion until completed, between the 31 May 2007 and
31 May 2008, though if at the time of assessment you are not an employee of CSR
the value of the shares will be paid to you in cash:

 

(f)                 shares once purchased with your LTI must
remain in ESAP for the duration of your appointment

 

5.                   Employee Share Acquisition
Plan (ESAP) - Existing LTI

 

You
have an existing entitlement to a long term incentive which prior to 1 April
2003 was for the potential issue of 50,000 CSR shares in each of May 2003, May
2004 and May 2005 under the Employee Share Acquisition Plan (“ESAP”). This long term incentive is to
continue but subject to a conversion to reflect the changed value as a result
of the demerger and a change to the appropriate performance hurdle index.

 

The
comparable number of post demerger CSR shares on each reference date is
200,000.

 

Your
entitlement to receive the incentive is conditional upon the CSR Share
Performance exceeding the ASX 200 Accumulation Index through to the date of the
relevant end of year results are announced or between that announcement and 25
July 2005.

 

As
result of the demerger, there is a change to the comparative index and
allowance must be made for the comparative index performance achieved between
25 July 2000 and the demerger. To accommodate that change, the comparative
position of the pre-demerger share to the Bespoke ASX All Industries Accumulation
Index on 28 March 2003 is to be replicated for the post demerger CSR share in
respect of the ASX 200 Accumulation Index (i.e. if pre-demerger the share was
10% above the index, the post demerger share is to be plotted at 10% above the
index).

 

If
your employment terminates on or prior to 25 July 2005 then:

 

9

 

(a)               your entitlement to any outstanding LTI will
depend on CSR satisfying the performance criteria on the date of termination of
employment; and

 

(b)              if you become entitled to an LTI on the
termination of your employment then the LTI will be paid in cash and not
contributed to the ESAP trustee to acquire CSR shares on your behalf.

 

10<PAGE>

                                                                    Exhibit 10.1

           SYSTRAN FINANCIAL SERVICES CORPORATION FACTORING AGREEMENT

This Factoring Agreement dated July 1, 2003 (the "Agreement") is between SYSTRAN
Financial Services Corporation ("SYSTRAN") and its successor or assigns and
(jointly and severally the "Customer"), whose addresses are set forth on the
last page hereof.

1.       DEFINITIONS

         (a)      "Bill(s)" means any right to payment for services rendered or
                  goods sold by Customer to a Debtor evidenced by a writing
                  which complies with the general requirements of SYSTRAN as
                  those may be set forth in the Customer Information Manual, as
                  described in Paragraph 2.5.

         (b)      "Chargeback" the debit of a Bill or a "Special Purchase
                  Bill(s)" to a Customer's account.

         (c)      "Commencement Date" means the date that the Customer first
                  receives funds from SYSTRAN pursuant to the terms of the
                  Agreement.

         (d)      "Commercial Account" means any non "Transportation Account".

         (e)      "Debtor" means a person or entity obligated to pay a Bill.

         (f)      "Maximum Approved Credit Line" means the amount of credit that
                  is approved for Customer by SYSTRAN inclusive of deposit and
                  advances against purchases of Bills that Customer's total
                  account is not to exceed.

         (g)      "Maximum Debtor Credit Limit" means the maximum outstanding
                  dollar amount and/or percentage concentration of Customer's
                  unpaid Bills open with SYSTRAN owing by an individual Debtor
                  and/or its affiliates at any given time under the term of the
                  Agreement.

         (h)      "Minimum Anticipated Volume" means the dollar amount of Bills
                  funded by SYSTRAN that Customer presents each month during the
                  term of the Factoring Agreement for purchase by SYSTRAN that
                  meet the Maximum Approved Credit Line criteria and Maximum
                  Debtor Credit Limit(s) established from time to time at the
                  sole discretion of Systran in connection with Customer's
                  account.

         (i)      "Obligation" means all indebtedness, liabilities and
                  obligations whatsoever and of whatever nature owed by Customer
                  to SYSTRAN, or any of its affiliates, whether direct or
                  indirect, absolute or contingent, due or to become due, now
                  existing or hereafter arising and how ever evidenced or
                  acquired, whether joint or several or joint and several.

         (j)      "Recourse" means the right to Chargeback a Bill(s) or "Special
                  Purchase Bill(s)" to Customer.

         (k)      "Special Purchase Bill(s)" means the purchase by SYSTRAN of
                  Customer's outstanding and unpaid Bills that have either been
                  previously billed by Customer, financed by a lender, or sold
                  and assigned to another company who buys Bills. Special
                  Purchase Bills shall be subject to all provisions of this
                  Agreement.

         (l)      "Transportation Account" means any Debtor doing business
                  primarily with any aspect of the transportation industry such
                  as freight carriers, brokers, forwarders, consolidators, and
                  rail agents with the exception of steamship companies.

2.       PURCHASE OF BILLS

         2.1 Customer agrees to present on a monthly basis, a Minimum
Anticipated Volume of Bills for SYSTRAN to purchase which shall be equal to $.
SYSTRAN, at its sole discretion, may purchase such Bills. Bill(s) and or Special
Purchase Bill(s) shall herein collectively be referred to as "The Bill(s)".
Customer shall submit to SYSTRAN an original and one (1) copy, along with any
document which SYSTRAN deems necessary, of each Bill which shall be attached to
a schedule form provided by SYSTRAN. Should any Debtor require any additional
documentation as a prerequisite to payment, Customer will also provide such
documentation with each Bill. For a Transportation Account, Customer shall also
submit one (1) copy of the respective bill of lading. The bill of lading must be
signed by the Customer, the shipper, and the consignee if the consignee's
signature is necessary for payment.

         2.2 SYSTRAN will settle with the Customer by providing to Customer by
U.S. Mail, electronic mail, or via facsimile a settlement statement setting
forth The Bill(s) and/or Special Bills purchased, the amount paid, and any
deductions made for fees, charges or the "Deposit" and deposit funds as follows:
[Customer shall choose one option] . |_| Deliver overnight funds due Customer
via Federal Express next day service air. |_| Wire transfer funds due Customer
into bank account specified by Customer on wire authorization form. |_| Deposit
funds due Customer. _________ (initials)

         2.3 Any payment to Customer may be reduced by SYSTRAN by any amount due
from Customer to SYSTRAN, including but not limited to the security deposit,
Chargebacks, fees and costs.

         2.4 SYSTRAN may give notice to the Debtors of the assignment of The
Bill(s) by placing a legend on The Bill(s) stating The Bill(s) have been sold
and assigned to SYSTRAN and are payable to SYSTRAN at an address designated by
SYSTRAN. Customer will not attempt to direct payment to any place other than to
the SYSTRAN designated address. Customer agrees to pay all costs and expenses
incurred by SYSTRAN in giving such notice. All proceeds of The Bill(s) received
by Customer shall be delivered immediately to SYSTRAN in the identical form of
payment received by Customer. In the event that Customer collects directly from
the Debtor, The Bill(s) which have been sold to SYSTRAN and Customer does not
deliver immediately to SYSTRAN the identical form of payment received by
Customer, Customer will be charged an administrative fee equal to fifteen
percent (15%) of the face amount of The Bill(s) collected directly. Customer
agrees that any collection directly from the Debtor by Customer of The Bill(s)
which have been sold to SYSTRAN will be considered a default under the terms of
this Agreement.

         2.5 SYSTRAN has or will provide to Customer a Customer Information
Manual, which is a guide to policy and procedures concerning daily submission of
The Bill(s), collection efforts, and other matters. The Customer Information
Manual (the "Manual") is not part of this Agreement. The procedures set forth in
the Manual are only guidelines to ensure the efficient operation of SYSTRAN's
purchase of The Bill(s). SYSTRAN may change any procedure in the Manual at any
time, and may choose not to follow procedures in the Manual at its discretion.

<PAGE>

3.       FEE(S)

         3.1 SERVICE FEE(S). Customer shall pay a fee of the face amount of all
of The Bill(s) purchased by SYSTRAN as reflected on Exhibit A attached hereto
(the "Service Fee(s)"). The Service Fee(s) shall be payable upon the purchase of
any of The Bill(s) by SYSTRAN, and SYSTRAN may collect Service Fee(s) either
from payments owed to Customer or may bill the Customer periodically. SYSTRAN
may, upon prior notice to Customer, change any fee and such change shall be
effective upon receipt of the notice to Customer; provided, that SYSTRAN may
change the amount of any fee caused by a change in SYSTRAN's cost of funds
without prior notice to Customer, but must notify Customer of such change on
Customer's next settlement statement. A fee change due to a change in cost of
funds will be effective upon the date of the change which will be reflected on
Customer's settlement statement. If, at any time during the term of this
Agreement, there is an event of default by Customer including, but not limited
to, a Federal Tax Lien filed against and attaching to the property of Customer
or any of its principals, and the tax lien is satisfied to allow continued
funding pursuant to this Agreement, SYSTRAN shall increase all of Customer's
Service Fee(s) by no less than one-half of one percent (0.5%) discount fee on
the face of The Bill(s).

         3.2 MINIMUM FEE. In the event that Customer fails to sell to SYSTRAN
the Minimum Anticipated Volume in any month, Customer shall pay a minimum fee to
SYSTRAN which shall be equal to the amount obtained when the Minimum Anticipated
Volume is multiplied by the current Service Fees reflected on Exhibit "A"
attached hereto and as referenced in section 3.1 above, or as amended by SYSTRAN
from time to time as reflected in Customer's daily settlement statement (the
"Minimum Fee"). The Minimum Fee owing by Customer pursuant to this paragraph may
be deducted from Customer's funding. In the event that Customer fails to sell
the Minimum Anticipated Volume per month for each of any two consecutive months
(the "Low Volume Period"), Customer's Service fee will be increased at the
beginning of the month immediately following the Low Volume Period at SYSTRAN's
discretion. At SYSTRAN's discretion, the Service Fee will be returned to the
last fee in effect should Customer's monthly purchase volume exceed the Minimum
Anticipated Volume per month for each of two consecutive months.

         3.3 ADDITIONAL SERVICES and VALUE FEES. From time to time during the
term of this Agreement, Customer may request SYSTRAN to provide additional
services and/or incur additional risk. Such additional services and/or
additional risk shall include but not be limited to advances to the Customer by
SYSTRAN which are not in conformity with the terms of the Agreement, extension
of Customer's contractual recourse under the Agreement, purchases by SYSTRAN of
bills which are outside of the formulas and calculations defined in the
Agreement (hereinafter such services shall be collectively referred to as the
"Additional Services"). Customer shall pay SYSTRAN the cost for added value for
such Additional Services (hereinafter referred to as the "Value Fee (s)"). The
Values Fee(s) will be reflected on Customer's daily settlement statement.

4.       DEPOSIT

         4.1 In order to secure Customer's Obligations hereunder, Customer shall
deliver to SYSTRAN a deposit equal to percent (%) of Customer's Bills that are
ninety (90) days old or less computed from date of purchase ("Deposit").

         4.2 ADJUSTMENT OF DEPOSIT. The amount of Customer's Deposit will be
reviewed and, if necessary, adjusted each day. Increases in the amount of
Customer's Deposit will be withheld by SYSTRAN from payments to Customer. If
sufficient Bills are not purchased to fund the increase, Customer will pay the
amount of the increase upon demand. Decreases will be repaid to Customer from
Customer's Deposit amount.

         4.3 REPAYMENT OF DEPOSIT. Upon termination of the Agreement, (a)
SYSTRAN may increase the Deposit percentage to 100%, in its sole discretion, and
(b) all other sums that may become due to Customer by SYSTRAN will be included
in the Deposit. Any shortfall in the Deposit shall bear interest at the rate of
four percent (4%) per month.

5.       SECURITY INTEREST

         5.1 The purchase of The Bill(s) of Customer by SYSTRAN is absolute,
subject to the right to Chargeback. In no event shall the purchase of Bills
hereunder be construed as a loan. In addition to the outright ownership of The
Bill(s) purchased by SYSTRAN, to secure the payment and performance of
Customer's Obligations to SYSTRAN, Customer grants SYSTRAN a security interest
in, and lien on, any and all now owned or hereafter acquired or created assets
of Customer, including without limitation all Customer's present and future
Bill(s) and Special Purchase Bill(s), accounts, inventory, deposit accounts,
chattel paper, contract rights, insurance contracts and proceeds, general
intangibles, choses in action, equipment, instruments, real estate and fixtures,
and documents, and the proceeds of the foregoing, including proceeds in the form
of inventory and/or equipment, whether tangible or intangible, wherever located
together with any and all cash and non-cash proceeds and products and accessions
of the forgoing (the "Collateral").

         5.2 FINANCING STATEMENTS. Customer shall not execute or file any
financing statement, supplements or amendments thereto, or any other instruments
or security agreement covering the Collateral described above in favor of anyone
other than SYSTRAN. Customer shall execute and deliver to SYSTRAN any financing
statements, title documents, supplements hereunder or the priority of such
security interest. CUSTOMER AUTHORIZES SYSTRAN TO SIGN ITS NAME TO ANY SUCH
FINANCING STATEMENT AND FILE SAME IN CUSTOMER'S NAME COVERING THE COLLATERAL.
Customer shall pay all costs of filing such statements or instruments with
appropriate governmental authorities together with the costs of all lien
searches. Customer agrees that either a carbon, photocopy, or other reproduction
of this Agreement is sufficient as a financing statement under this Agreement.

         5.3 SYSTRAN may, in its sole discretion, elect to discharge any
security interest, lien or other encumbrance upon any of The Bill(s) for
services rendered or goods sold purchased by SYSTRAN. Any such payments and all
expenses incurred in connection therewith shall be treated as a Chargeback.
Notwithstanding the foregoing, SYSTRAN shall have no obligation to discharge any
such security interest, lien or encumbrance.

6.       RECOURSE, DISPUTES AND CHARGEBACKS

         6.1 All of The Bill(s) are purchased by SYSTRAN from Customer with
Recourse. All of The Bill(s) may be Chargedback to Customer at any time after ()
days for a Commercial Account and steamship companies, and ninety (90) for
Transportation Account(s) after the purchase date of The Bill(s) if not
collected from Debtor within such period or at any time, if SYSTRAN determines,
in its sole discretion, that The Bill(s) is not collectible. All of The Bill(s)
owing by Canadian Debtors or logistics companies are subject to Chargeback sixty
(60) days from the date of purchase by SYSTRAN. All Special Purchase Bills are
subject to Chargeback sixty (60) days from the date of purchase by SYSTRAN.
SYSTRAN shall not deem a disputed Bill or Special Purchase Bill uncollectable
without allowing Customer a reasonable time to settle the dispute not to exceed
fourteen (14) days from notice of dispute. It is within SYSTRAN's discretion as
to when The Bill(s) over such time periods may be Chargedback to Customer.

         6.2 SYSTRAN reserves the right, however, from time to time and at its
absolute discretion, to Chargeback to Customer any of The Bill(s) which do not
conform to the representations and warranties set forth in the Agreement or are
discovered not to conform with the reasonable standards which SYSTRAN may set
for The Bill(s). SYSTRAN shall have a continuing security interest in any and
all of The Bill(s) which are Chargedback to the Customer. Chargeback of any of
The Bill(s) does not authorize Customer to collect any outstanding sum owing on
The Bill(s) from a Debtor.

         6.3 COLLECTION OF BILLS. SYSTRAN may, but is not required to, commence
any action, including legal action, to collect The Bill(s). All costs of
collection, including attorney fees, court fees, and costs of investigation,
will be charged to the Customer. Prior to any event of default by a Debtor,
SYSTRAN will commence litigation only with Customer's authorization. Subsequent
to an event of default, SYSTRAN may file suit as it deems necessary without
Customer's authorization. In the event of default, Customer hereby grants
authorization to SYSTRAN to settle or compromise any freight bill dispute,
including litigation, with any uncollected amount being subject to Chargeback,
together with all other amounts for which Customer is obligated to SYSTRAN.

                                       2
<PAGE>

         6.4 CLEARANCE DAYS. Clearance Days shall mean (i) () business days for
checks drawn on banks located within the United States and for all electronic
funds transfers, and (ii) () business days for all other payments. For all
purposes and computations under this Agreement, Clearance Days will be added to
the date on which any payment is received by SYSTRAN.

7.       WARRANTIES AND REPRESENTATIONS

         7.1 Customer warrants and represents with respect to all of The Bill(s)
sold to SYSTRAN that (a) The Bill(s) are genuine and in all respects what they
purport to be; (b) Customer has good title to The Bill(s) and The Bill(s) are
free and clear of all encumbrances, liens and prior claims, and that the
Customer has the legal right to sell The Bill(s); (c) Customer has no knowledge
of any fact which may impair the validity of The Bill(s) or make them
uncollectible in accordance with its terms and face amount; (d) for
transportation Customers, The Bill(s) were made in accordance with the laws and
the regulations of the Federal Highway Administration or other federal
regulatory agency, and the appropriate state regulatory commission or made
according to lawful and valid contracts which Customer has executed; (e) for
transportation Customers, The Bill(s) are supported by lawful, effective and
complete bills of lading or other contract of carriage together with bona fide,
genuine, valid and signed delivery receipts, and Customer will not modify or
delete any of the terms of the original Bills or Special Purchase Bills or bill
of lading with respect to same; (f) there are no counterclaims or setoffs or
defenses existing in favor of the Debtor, whether arising from the services
provided or goods sold which are the subject of The Bill(s) or otherwise and
there has been no agreement as to the issuance or granting of any discount on
The Bill(s); (g) The Bill(s) are not a duplicate of and do not cover the same
services provided or goods sold as a Bill or Special Purchase Bill previously
purchased by SYSTRAN from the Customer or billed directly by the Customer to the
Debtor; (h) Customer does not own, control, or exercise dominion over the
business of any Debtor whose Bills or Special Purchase Bills are factored by
Customer to SYSTRAN, Customer is not a subsidiary of any Debtor and no Debtors
control or exercise dominion over the business of Customer; (i) Customer will
not under any circumstances or in any manner whatsoever interfere with any of
SYSTRAN's rights under this Agreement in connection with SYSTRAN's factoring of
The Bill(s); (j) Customer has not and will not pledge the credit of SYSTRAN to
any person or business for any purpose whatsoever; (k) for non-transportation
Customers, until the sale by Customer to Debtor of the goods described in The
Bill(s), Customer had good title to the goods sold, the goods were free of all
encumbrances, liens and prior claims, and Customer had the legal right to sell
the goods.

         7.2 If the Customer is a corporation, partnership or limited liability
company, it is duly organized, existing, and in good standing under the laws of
.. If Customer represents him or herself to be a sole proprietorship or a
partnership, such representation shall be deemed conclusive and binding upon
Customer. Customer is duly qualified to do business and is in good standing in
every other state in which such qualification is required. If Customer is a
corporation, partnership or limited liability company, execution, delivery and
performance hereof are within its corporate or entity powers, have been duly
authorized, and are not in contradiction of law or the terms of its charter,
by-laws, partnership agreement, operating agreement or other entity papers, or
any indenture, agreement or undertaking to which it is a party or by which it is
bound. In addition, the Customer has all licenses and certificates necessary for
the operation of its business and the issuance of The Bill(s).

8.       AUTHORITY

         Customer irrevocably authorizes SYSTRAN or any person designated by
SYSTRAN to: bill, receive and collect all amounts which may be due or become due
to Customer from Debtors and to use Customer's name for purposes of billing and
collection of amounts due; delete Customer's address on all invoices mailed to
Debtor and substitute SYSTRAN's address; receive, open and dispose of all mail
addressed to Customer or Customer's trade name at SYSTRAN's address; negotiate
checks received in payment whether payable to Customer or to SYSTRAN, endorse
the name of Customer or Customer's trade name on any checks or other evidences
of payment that may come into the possession of SYSTRAN on The Bill(s) purchased
by SYSTRAN and on any invoices or other document relating to any of The Bill(s);
in Customer's name, or otherwise, demand, sue for, collect and get or give
releases for any and all monies due or to become due on The Bill(s); compromise,
prosecute, or defend any action, claim or proceeding as to The Bill(s) purchased
by SYSTRAN; take all steps necessary to ensure payment of such amounts due and
do any and all things in Customer's name necessary and proper to carry out the
purpose intended by this Agreement.

9.       ADDITIONAL DOCUMENTS

         The Customer shall execute and deliver all such additional and further
instruments as may be reasonably requested by SYSTRAN in order to more
completely vest in and assure to SYSTRAN and make available to it, the property
and rights herewith or hereafter granted or assigned and transferred to SYSTRAN
as Collateral and to evidence the sale of The Bill(s) to SYSTRAN and to carry
into effect the provisions and intent of this Agreement.

10.      LOCATION OF BOOKS AND RECORDS, PLACE OF BUSINESS

         Customer's place of business is the one set forth in this Agreement and
all of its books, accounts, correspondence, papers and records pertaining to the
services performed or sales of products are located there, and all such books,
accounts, correspondence, papers and records will be opened for SYSTRAN's
inspection at all reasonable times.

11.      INDEMNIFICATION OF SYSTRAN; SALES AND EXCISE TAXES

         Customer will indemnify and hold SYSTRAN harmless against any and all
liability, loss or expense, including attorney's fees and costs, caused by or
arising out of any claims or alleged claims asserted relating in any manner to
The Bill(s) purchased by SYSTRAN hereunder or subject to SYSTRAN's security
interest, including, but not limited to, claims asserted against SYSTRAN
pursuant to Chapter 5, Title 11 of the United States Code. In the event any
sales or excise taxes are imposed by any state, federal or local authorities
with respect to any of The Bill(s) sold and assigned hereunder, where such taxes
are required to be withheld or paid by SYSTRAN, Customer shall also indemnify
SYSTRAN and hold it harmless with respect to all such taxes and hereby
authorizes SYSTRAN to charge to Customer's account any such tax that is paid or
withheld by SYSTRAN. SYSTRAN may charge the Deposit or initiate legal
proceedings to collect any amount due under this paragraph. This paragraph shall
survive and remain effective following the termination of the Factoring
Agreement.

                                       3
<PAGE>

12.      FINANCIAL INFORMATION

         So long as Customer factors or has any absolute or contingent
obligation of any kind owing to SYSTRAN, the Customer will provide information
regarding the business, affairs and financial condition of Customer and its
subsidiaries as SYSTRAN may reasonably request, including financial statements.

13.      BANKRUPTCY

         Customer agrees to notify SYSTRAN of any voluntary or involuntary
bankruptcy petition filed by or against it or any guarantor within twenty-four
(24) hours of such filing.

14.      REORGANIZATION, ACQUISITIONS, CHANGE OF NAME OR LOCATION

         Customer will not, and will not permit any subsidiary to merge or
consolidate with or into any corporation or other entity, or sell, lease,
transfer, or otherwise dispose of all or any substantial part of its assets,
whether now owned or hereafter acquired. Customer shall notify SYSTRAN in
writing not less than thirty (30) days prior to (a) any change of its name or
use of any trade names; or (b) any change in the address of the chief executive
office and/or chief place of business of Customer or the location of any records
pertaining to The Bill(s).

15.      LITIGATION

         Except as disclosed in writing, Customer represents and warrants to
SYSTRAN as follows: There are no suits or proceedings pending or to the
knowledge of Customer, threatened against or affecting Customer or any of its
subsidiaries which, if adversely determined, would have a material adverse
effect on the financial condition or business of Customer and its subsidiaries
and there are no proceedings by or before any governmental commission, board,
bureau, or other administrative agency pending or, to the knowledge of Customer,
threatened, against Customer or any of its subsidiaries. Further, Customer
represents and warrants there is no claim, loss contingency, or proceeding,
whether or not pending, threatened or imminent, against or otherwise affecting
Customer that involves the possibility of any judgment or liability not fully
covered by insurance or that may result in a material adverse change in the
business, properties, or condition, financial or otherwise, of Customer.

16.      TRADE NAMES

         Customer represents and warrants to SYSTRAN that it utilizes no trade
names or assumed business names in the conduct of its business except .

17.      TAXES

         Customer represents and warrants to SYSTRAN that: Customer has filed
all federal, state, and local tax returns and other reports it is required to
file and has paid or made adequate provision for payment of all such taxes,
assessments, and other governmental charges.

18.      TERM AND TERMINATION

         18.1 This Agreement is for a term of () full months to begin on the
Commencement Date as defined in paragraph 1(c) herein. The term of this
Agreement shall renew automatically for consecutive ()month terms unless sooner
terminated in accordance with the terms of the Agreement. Customer may terminate
this Agreement effective at the end of any term by giving thirty (30) days prior
written notice to SYSTRAN at the address set forth in this Agreement. Customer
may continue to offer any of The Bill(s) to SYSTRAN during such thirty (30) day
period. SYSTRAN may terminate this Agreement at any time and for any reason by
notifying Customer in writing of such termination.

         18.2 All of Customer's representations, warranties, and other
provisions of this Agreement shall survive such termination until SYSTRAN has
been paid in full and Customer has fully performed all of its obligations. In
addition, should any transfer of money or property to SYSTRAN hereunder be
avoided in a bankruptcy proceeding involving Customer, any Debtor of Customer,
or otherwise, then Customer's Obligations hereunder shall be reinstated and/or
supplemented to the extent of the avoided transfer, whether or not this
Agreement has otherwise been terminated.

         18.3 Notwithstanding the foregoing, Customer has the option to
terminate this Agreement prior to the end of any term by giving SYSTRAN thirty
(30) days prior written notice. Customer may continue to offer any of The
Bill(s) to SYSTRAN during such thirty (30) day period. Customer shall be deemed
to have terminated this Agreement prior to the end of any term on the date that
Customer shall have ceased presenting The Bill(s) to SYSTRAN in the normal
course for an uninterrupted period of thirty (30) days ("Deemed Termination").
Upon notice of early termination, or the date of a Deemed Termination by
Customer, prior to the end of any term, whether or not Customer continues to
offer The Bill(s) to SYSTRAN during the thirty (30) day notice period applicable
to Customer, Customer shall be obligated to pay to SYSTRAN, and Customer's
Deposit may be charged, an early termination premium ("Early Termination
Premium") as noted in the Addendum.

         18.4 Any partial month remaining in the current term shall constitute a
full month for the purpose of calculating the Early Termination Premium. In
addition, if SYSTRAN buys Bills from Customer as part of a Special Purchase
Bill, and should Customer terminate this Agreement within the first four (4)
months of the term of this Agreement, Customer's Deposit shall be charged an
Early Termination Premium in the amount of the balance of the Deposit on the
termination date. The termination date shall be thirty (30) days after SYSTRAN's
receipt of the termination notice or on the Deemed Termination date, unless a
termination notice specifies a date that is more than thirty (30) days but less
than sixty (60) days after SYSTRAN's receipt of the termination notice.

         18.5 If SYSTRAN terminates this Agreement prior to the end of any term
upon any default in the performance of Customer under this Agreement, in view of
the impracticality and extreme difficulty in ascertaining actual damages and by
mutual agreement of the parties as to the reasonable calculation of SYSTRAN's
lost profits as a result thereof, Customer shall be obligated to pay SYSTRAN
upon the effective date of such termination, and Customer's Deposit may be
charged, a premium in an amount equal to the Early Termination Premium as set
forth above. If Customer terminates this Agreement pursuant to the terms
thereof, Customer shall immediately remit and pay to SYSTRAN, at the time of
termination, all Obligations due and owing to SYSTRAN and/or its affiliates by
Customer, under this and any other Agreement.

                                       4
<PAGE>

19.      EVENTS OF DEFAULT

         19.1 The following shall be events of default under the terms of this
Agreement: (a) default by Customer in the performance of any Obligation to
SYSTRAN or any other financial institution or bank; (b) Customer agrees to the
appointment of a receiver for its assets, makes general assignment for the
benefit of creditors or declares that it is unable to pay its debts as they
mature; (c) Customer files a proceeding under any law for the relief of Debtors,
including but not limited to, Title 11 of the United States Code, referred to as
"The Bankruptcy Code" or any other similar law which may exist; (d) any
involuntary petition under the Bankruptcy Code or similar statute has been filed
against the Customer and not dismissed within sixty (60) days after filing
without the entry of an order for relief; (e) the issuance of an attachment,
execution, tax assessment or similar process against the Customer or its
property which is not released within ten (10) days of its attachment; (f) any
change in the conditions, financial or otherwise, of the Customer which
reasonably causes SYSTRAN to deem itself insecure.

         19.2 In addition to all other remedies provided by law, upon the
occurrence of an event of default, SYSTRAN may immediately, and without notice
to the Customer, increase the amount of the Deposit required under Section 4 of
this Agreement to one hundred percent (100%) of the outstanding amount of Bills
purchased from the Customer ("100% Deposit"), and the Customer shall immediately
deliver to SYSTRAN funds sufficient to create this 100% Deposit.

         19.3 SYSTRAN may, upon default under the Agreement or any of the
agreements, collect any Obligation owing to SYSTRAN or any of its affiliates by
debiting Customer's account, attach any funds owing to Customer by SYSTRAN or
its affiliates, and exercise any other remedy available to SYSTRAN under the
Agreements or at law. Any deficiency arising under this Agreement shall accrue
interest at the annual rate of twelve percent (12%) or the highest amount
allowed by law, whichever is higher, from the date the deficiency is incurred.

20.      EXPENSES

         20.1 Customer shall reimburse SYSTRAN for all fees, costs and expenses
incurred by SYSTRAN in relation to this Agreement. SYSTRAN may, at any time, and
without regard to any remedy listed above, demand from Customer payment of the
outstanding fees, costs and expenses.

         20.2 ATTORNEYS' FEES. With respect to any default under this Agreement,
Customer shall reimburse SYSTRAN for all costs and expenses incurred by
attorneys, including both SYSTRAN's in-house attorneys and outside attorneys'
and paralegals' whether or not a lawsuit or other court action is actually filed
in connection with the event of default. In the event that a suit, action,
arbitration, or other proceeding of any nature, including, without limitation,
any proceeding under The Bankruptcy Code, any action seeking a declaration of
rights or an action for rescission is instituted to interpret or enforce this
Agreement, including, but not limited to such fees and costs associated with
trial and appeals, Customer agrees to pay the reasonable attorneys' fees
incurred in connection with any such proceeding as awarded by the court.

         20.3 OTHER PROFESSIONALS AND EXPERTS. With respect to any event of
default under this Agreement, SYSTRAN in its sole discretion may retain
accountants, auditors, appraisers and other experts and the Customer agrees to
pay the professional fees, expert fees and all other fees and costs reasonably
and actually incurred in connection with the services provided.

         20.4 No Lien Termination without Release. In recognition of SYSTRAN's
right to have its attorneys' fees and other expenses incurred in connection with
this Agreement secured by the Collateral, notwithstanding payment in full of all
Obligations by Customer, SYSTRAN shall not be required to record any
terminations or satisfactions of any of SYSTRAN's liens on the Collateral unless
and until Customer has executed and delivered to SYSTRAN a general release in a
form reasonably satisfactory to SYSTRAN. Customer understands that this
provision constitutes a waiver of its rights under ss.9-404 of the UCC.

         20.5 JURY TRIAL WAIVER. IN RECOGNITION OF THE HIGHER COSTS AND DELAY
WHICH MAY RESULT FROM A JURY TRIAL, THE PARTIES WAIVE ANY RIGHT TO TRIAL BY JURY
OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (A) ARISING HEREUNDER, OR (B) IN
ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES
HERETO OR ANY OF THEM WITH RESPECT HERETO, IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND
EACH PARTY FURTHER WAIVES ANY RIGHT TO CONSOLIDATE ANY SUCH ACTION IN WHICH A
JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE
OR HAS NOT BEEN WAIVED; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF
THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES
HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

21.      JURISDICTION AND VENUE

         This Agreement shall be deemed to be a contract under the laws of the
State of Oregon and for all purposes shall be governed by and construed in
accordance with the laws of that state. Customer irrevocably agrees that any
legal action or proceeding brought by or against Customer with respect to the
Agreement shall be brought in the courts of the State of Oregon or in the U.S.
District Court for the District of Oregon. Customer consents to the jurisdiction
of such courts and that the venue for any such action shall be the County of
Clackamas. This provision shall not limit the right of SYSTRAN to bring such
actions or proceedings against Customer in the court of such other states or
jurisdictions where Customer may be subject to jurisdiction. Customer expressly
authorizes service of process in any such suit or action on its behalf upon
Registered Agent: See Addendum         , at (address) See Addendum           or
upon such other agent as SYSTRAN may approve in writing, as its agent for such
purposes and that service may be deemed complete upon delivery via expedited
national overnight delivery service.

22.      WAIVER, NOTICE

         The waiver by SYSTRAN of the breach of any term of this Agreement or of
the compliance therewith shall not be construed as a waiver of any other breach
or compliance. Notices from either party to the other shall be given in writing
and mailed postage prepaid, registered or certified mail, or placed in the hands
of a national overnight delivery service, addressed to the addresses set forth
opposite each party's name below, or at such other address as either party may
hereafter advise the other in writing.

23.      ASSIGNMENT

         Customer may not assign any of its rights or obligations hereunder.
SYSTRAN may assign or grant a security interest in this Agreement or in any of
The Bill(s) purchased by SYSTRAN. SYSTRAN may assign any of its rights and
remedies with respect to The Bill(s) including the right to notify Debtors to
make payment to SYSTRAN's assignee.

24.      SEVERABILITY

         The provisions of this Agreement are severable and if any of these
provisions shall be held by any court of competent jurisdiction to be
unenforceable such holding shall not affect or impair any other provisions
hereof.

                                       5
<PAGE>

25.      COMPLETE UNDERSTANDING

         This Agreement comprises the complete understanding among the parties
and may only be varied by a writing executed by the parties hereto. Paragraph
headings are for convenience only.

26.      THIRD PARTY CONSULTATION

         Customer hereby agrees and acknowledges that it has had the opportunity
to seek out and consult with legal counsel and/or independent business advisors
of its own choosing in connection with the negotiation, execution and delivery
of this Agreement. This Agreement shall be construed without regard to any
presumption or rule requiring that it be construed against the party causing
this Agreement, or any part hereof to be drafted.

27.      NO OFFER/COMMITMENT

         The presentation of this Agreement to Customer does not constitute
either an offer or commitment to purchase The Bill(s) or to extend credit to
Customer.

28.      JOINT AND SEVERAL LIABILITY

         If more than one Customer executes this Agreement, their Obligations
  under this Agreement are joint and several.

29.      CREDIT INFORMATION

         Customer authorizes SYSTRAN or any of its affiliates to obtain credit
bureau reports, and make other credit inquiries that it determines are
necessary. On Customer's written request, SYSTRAN will inform Customer whether
SYSTRAN has requested a consumer credit report and the name and address of any
consumer credit reporting agency that published a report. Customer acknowledges
that without further notice SYSTRAN may use or request additional credit bureau
reports to update its information so long as Customer obligations to SYSTRAN are
outstanding.

30.      GUARANTORS

         The parties acknowledge that TEKINSIGHT RESEARCH, INC., and
Bugsolver.com, Inc., and Newport Acquisition Corp, and TEKINSIGHT E-GOVERNMENT
SERVICE, INC., and James A. Linesch, and Wade R. Stevenson, and Steven J. Ross
have executed Continuing Guaranties and/or Collateralized Guaranties and/or
Validity Guaranties for the Obligations of Customer arising hereunder, and that
Systran would not enter into this Factoring Agreement without said guaranties.

SYSTRAN FINANCIAL SERVICES CORPORATION

By:
   -----------------------------------------
Title:
      --------------------------------------
Date:
      --------------------------------------
Address: 4949 SW Meadows Drive
         Suite 500
         Lake Oswego, Oregon 97035

<TABLE>
<S>                                                           <C>
DynTek, Inc.
                                                              WITNESS:
By:                                                           By:
   -----------------------------------------                     -----------------------------------------
Print Name:                                                   Print Name:
           ---------------------------------                             ---------------------------------
Title:                                                        Address:
      --------------------------------------                           -----------------------------------
Date:
      ------------------------------                                   -----------------------------------
                                                              Phone:
                                                                    --------------------------------------
Address: 18881 Von Karman Ave. # 250
         Irvine,  CA  92612

DynTek Services, Inc.
                                                              WITNESS:
By:                                                           By:
   -----------------------------------------                     -----------------------------------------
Print Name:                                                   Print Name:
           ---------------------------------                             ---------------------------------
Title:                                                        Address:
      --------------------------------------                           -----------------------------------
Date:
      ------------------------------                                   -----------------------------------
                                                              Phone:
                                                                    --------------------------------------
Address: 18881 Von Karman Ave. # 250
         Irvine,  CA  92612
</TABLE>

                                       6

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