Document:

exv10w14

Exhibit 10.14

Construction Agreement

(Summary English Translation)

Employer: Chongqing Foguang Tourism Development (Group) Co., Ltd.

Contractor: Chongqing Hongxing Construction Co., Ltd.

The parties enter into the following agreement in accordance with the Contract Law of the People’s
Republic of China, the Construction Law of the People’s Republic of China and other relevant laws
and regulations.

	I.	 	Project Overview

Name of Project: Gui Yuan Cemetery, Liyi Garden

Project Location: QianFo Village, Changshou District, Chongqing

Project: See construction design drawings and reports

Method of Financing: Self-financed
	 
	II.	 	Scope of Project

See construction design drawings and reports
	 
	III.	 	Term of Contract

Constructional work will commence on November 4, 2009 and complete on May 24, 2010. Term
of contract is 200 days.
	 
	IV.	 	Quality

Standard quality control applies.
	 
	V.	 	Contract Price

RMB 1,136,000,000
	 
	VI.	 	Exhibits:

	 	1.	 	Notice of Tender Award
	 
	 	2.	 	Book of Tender
	 
	 	3.	 	Special Agreement Terms
	 
	 	4.	 	Common Agreement Terms
	 
	 	5.	 	Technical Standards and Guidance
	 
	 	6.	 	Design Drawings
	 
	 	7.	 	List of Projects
	 
	 	8.	 	Quotes and Budget

	VII.	 	The terms in this Agreement will apply the definitions in the Common Agreement Terms.

 

 

	VIII.	 	The Contractor shall agree to start and complete the project under the terms and
conditions of this Agreement and shall be liable for any quality issues occurred within the
quality guarantee period.
	 
	IX.	 	The Employer shall pay Contractor the agreed price under the terms and conditions of
this Agreement.
	 
	X.	 	Effect of Agreement
	 
	 	 	This Agreement is entered into on November 4, 2009 and effective upon signing with stamp
of both parties.

Employer: /s/ Chongqing Foguang Tourism Development (Group) Co., Ltd.

Contractor: /s/ Chongqing Hongxing Construction Co., Ltd.

Memo:

Chongqing Foguang Tourism Development (Group) Co., Ltd. (the “Company”) has been a party of
construction agreements with several contractors since 2006. The Company believes that Chongqing
Hongxing Construction Co., Ltd. (“Chongqing Hongxing”) is superior to other contractors in terms of
credibility, services and product quality. Therefore, the Company has chosen Chongqing Hongxing as
its long-term contractor.exv4w1

Exhibit 4.1

Metal Storm Limited

ANZ Trustees Limited

Convertible Notes Trust Deed

 

 

	 	 	 	 	 	 	 	 	 

	Contents	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	1	 	Definitions and Interpretation	 	 	1	 
	 
	 	1.1	 	Definitions	 	 	1	 
	 
	 	1.2	 	Construction	 	 	8	 
	 
	 	1.3	 	Headings	 	 	9	 
	 
	 	 	 	 	 	 	 	 
	2	 	Duration and appointment of trustee	 	 	9	 
	 
	 	2.1	 	Duration	 	 	9	 
	 
	 	2.2	 	Appointment of Trustee	 	 	9	 
	 
	 	2.3	 	Binding on Note Holders	 	 	10	 
	 
	 	 	 	 	 	 	 	 
	3	 	Acknowledgment of debt	 	 	10	 
	 
	 	3.1	 	Debt	 	 	10	 
	 
	 	3.2	 	Release of Indebtedness	 	 	10	 
	 
	 	 	 	 	 	 	 	 
	4	 	Types of notes and terms	 	 	10	 
	 
	 	4.1	 	Types of Notes	 	 	10	 
	 
	 	 	 	 	 	 	 	 
	5	 	Issuance and repayment of Notes	 	 	10	 
	 
	 	5.1	 	Power to refuse to issue	 	 	10	 
	 
	 	5.2	 	Issue of Notes	 	 	10	 
	 
	 	5.3	 	Notes deemed to be validly issued	 	 	11	 
	 
	 	5.4	 	Rectification of invalid issues	 	 	11	 
	 
	 	5.5	 	Company not to be relieved from compliance	 	 	11	 
	 
	 	 	 	 	 	 	 	 
	6	 	Obligations of the Company	 	 	11	 
	 
	 	6.1	 	Company to provide financial reports	 	 	11	 
	 
	 	6.2	 	Other obligations of the Company	 	 	11	 
	 
	 	6.3	 	Undertakings	 	 	13	 
	 
	 	6.4	 	Insurance	 	 	13	 
	 
	 	6.5	 	Borrowing conditions	 	 	14	 
	 
	 	 	 	 	 	 	 	 
	7	 	Powers and obligations of the Trustee	 	 	14	 
	 
	 	7.1	 	Obligations of the Trustee	 	 	14	 
	 
	 	7.2	 	Power to invest	 	 	15	 
	 
	 	7.3	 	General powers of Trustee	 	 	15	 
	 
	 	7.4	 	Discretion of Trustee as to exercise of powers	 	 	16	 
	 
	 	7.5	 	Trustee not responsible for monitoring	 	 	16	 
	 
	 	7.6	 	Discretion of Trustee upon default	 	 	16	 
	 
	 	7.7	 	Directions, rights and protections	 	 	17	 
	 
	 	7.8	 	Trustee’s costs on enforcement	 	 	17	 
	 
	 	7.9	 	Indemnity of Trustee	 	 	17	 
	 
	 	7.10	 	Trustee’s duty	 	 	18	 
	 
	 	7.11	 	Limitation on liability	 	 	18	 
	 
	 	7.12	 	Determination of matters of doubt	 	 	19	 
	 
	 	7.13	 	Act on opinion of experts	 	 	20	 
	 
	 	7.14	 	Acceptance of certificates	 	 	20	 
	 
	 	7.15	 	Other capacities of Trustee	 	 	20	 

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	 	7.16	 	Other activities of Trustee	 	 	21	 
	 
	 	 	 	 	 	 	 	 
	8	 	Remuneration of Trustee	 	 	21	 
	 
	 	8.1	 	Fees	 	 	21	 
	 
	 	8.2	 	Trustee’s disbursements	 	 	21	 
	 
	 	8.3	 	Priority of fees and disbursements	 	 	22	 
	 
	 	 	 	 	 	 	 	 
	9	 	Representations and Warranties	 	 	22	 
	 
	 	 	 	 	 	 	 	 
	10	 	Default	 	 	23	 
	 
	 	10.1	 	Default Events	 	 	23	 
	 
	 	10.2	 	Issue of Default Notice	 	 	25	 
	 
	 	10.3	 	Enforcement	 	 	26	 
	 
	 	10.4	 	Compliance with Laws	 	 	26	 
	 
	 	 	 	 	 	 	 	 
	11	 	Preservation of Trustee’s rights	 	 	26	 
	 
	 	11.1	 	Primary obligations	 	 	26	 
	 
	 	11.2	 	Preservation of Company’s obligations	 	 	27	 
	 
	 	11.3	 	Reinstatement of rights of Trustee	 	 	27	 
	 
	 	11.4	 	No merger	 	 	27	 
	 
	 	 	 	 	 	 	 	 
	12	 	Goods and services tax	 	 	27	 
	 
	 	12.1	 	Taxable supply	 	 	27	 
	 
	 	12.2	 	Adjustment events	 	 	27	 
	 
	 	12.3	 	Payments	 	 	27	 
	 
	 	 	 	 	 	 	 	 
	13	 	Change of trustee	 	 	28	 
	 
	 	13.1	 	Retirement of Trustee	 	 	28	 
	 
	 	13.2	 	Removal of Trustee	 	 	28	 
	 
	 	13.3	 	Appointment of New Trustee	 	 	29	 
	 
	 	 	 	 	 	 	 	 
	14	 	Register of Note Holders	 	 	29	 
	 
	 	14.1	 	Register	 	 	29	 
	 
	 	14.2	 	Inspection of Register	 	 	29	 
	 
	 	14.3	 	Delegation of powers	 	 	29	 
	 
	 	 	 	 	 	 	 	 
	15	 	Meetings of Note Holders	 	 	30	 
	 
	 	15.1	 	Convening of Meetings by the Company or the Trustee	 	 	30	 
	 
	 	15.2	 	Convening of Meetings by requisition	 	 	30	 
	 
	 	15.3	 	Manner of convening Meetings	 	 	30	 
	 
	 	15.4	 	Chairman	 	 	30	 
	 
	 	15.5	 	Quorum and adjournments	 	 	30	 
	 
	 	15.6	 	Reference by Trustee	 	 	31	 
	 
	 	15.7	 	Voting	 	 	31	 
	 
	 	15.8	 	Polls	 	 	32	 
	 
	 	15.9	 	Recognition of person registered	 	 	32	 
	 
	 	15.10	 	Proxies, attorneys and Representatives	 	 	32	 
	 
	 	15.11	 	Powers of Meeting	 	 	33	 
	 
	 	15.12	 	Passing of resolutions	 	 	34	 
	 
	 	15.13	 	Resolutions binding	 	 	35	 

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	 	15.14	 	Minutes	 	 	35	 
	 
	 	15.15	 	Limitation on Company’s responsibility	 	 	35	 
	 
	 	 	 	 	 	 	 	 
	16	 	Discharge and Release	 	 	36	 
	 
	 	 	 	 	 	 	 	 
	17	 	Amendments to this document	 	 	36	 
	 
	 	17.1	 	General amending power with Trustee’s concurrence	 	 	36	 
	 
	 	17.2	 	Amendment by circulation of terms and offer to repay	 	 	37	 
	 
	 	17.3	 	Other modes of amendment	 	 	38	 
	 
	 	 	 	 	 	 	 	 
	18	 	Notices	 	 	38	 
	 
	 	18.1	 	General	 	 	38	 
	 
	 	18.2	 	How to give a communication	 	 	39	 
	 
	 	18.3	 	Particulars for delivery of notices	 	 	39	 
	 
	 	18.4	 	Communications by post	 	 	39	 
	 
	 	18.5	 	Communications by fax	 	 	39	 
	 
	 	18.6	 	Communications by e-mail	 	 	40	 
	 
	 	18.7	 	After hours communications	 	 	40	 
	 
	 	18.8	 	Proving giving of a notice	 	 	40	 
	 
	 	18.9	 	Process service	 	 	40	 
	 
	 	 	 	 	 	 	 	 
	19	 	General	 	 	40	 
	 
	 	19.1	 	Note Holder’s right to sue	 	 	40	 
	 
	 	19.2	 	Documents and notices by Note Holders	 	 	41	 
	 
	 	19.3	 	Governing law	 	 	41	 
	 
	 	19.4	 	Inconsistencies and severance	 	 	41	 
	 
	 	19.5	 	Stamp duty	 	 	43	 
	 
	 	19.6	 	Supervening legislation	 	 	43	 
	 
	 	19.7	 	Confidentiality	 	 	44	 
	 
	 	19.8	 	Further assurances	 	 	44	 
	 
	 	19.9	 	Waiver and exercise of rights	 	 	44	 
	 
	 	19.10	 	Rights cumulative	 	 	45	 
	 
	 	19.11	 	Approval and consent	 	 	45	 
	 
	 	19.12	 	Assignment	 	 	45	 
	 
	 	19.13	 	Counterparts	 	 	45	 
	 
	 	 	 	 	 	 	 	 
	Schedule 1 — Minimum Cash Levels	 	 	46	 

page iii

 

	 	 	Date 30 July 2009
	 
	 	 	Parties
	 
	 	 	Metal Storm Limited ABN 99 064 270 006 of Building 4, 848 Boundary Road, Richlands
QLD 4077 (Company)
	 
	 	 	ANZ Trustees Limited ABN 33 006 132 332 of Level 4, 100 Queen Street, Melbourne VIC
3000 (Trustee)
	 
	 	 	Background
	 
	A 	 	The Company may issue convertible notes in such manner and on
such terms as the Directors of the Company determine.
	 
	B 	 	It is proposed that the Company will issue Notes from time to
time on the terms of this document and on the Terms.
	 
	C 	 	The Trustee has agreed to act as trustee under this document for
the Note Holders on the terms of this document.
	 
	 	 	Agreed terms
	 
	1	 	Definitions and Interpretation
	 
	1.1	 	Definitions
	 
	 	 	In this document:
	 
	 	 	Acceleration Event means each of the following while there are any Notes (whether or not
caused by anything outside the control of the Company):

	 	(a)	 	if the Company, without the prior approval of Note Holders by way of
Ordinary Resolution, pays a dividend or distribution to its shareholders;
	 
	 	(b)	 	if, without the prior approval of Note Holders by way of Ordinary
Resolution, a Takeover Event which negatively affects the Company’s ability to meet
its obligations under the Terms or the Harmony Loan Agreement, occurs;

page 1

 

	 	(c)	 	if, without the prior approval of Note Holders by way of Ordinary
Resolution, the total amount of cash held in the Group’s bank accounts and in
marketable securities falls below the Minimum Cash Levels;
	 
	 	(d)	 	if any Material Contract is breached, terminated or found to be void or
voidable;
	 
	 	(e)	 	if the process of commercialisation of the key technology of the Company
fails to achieve the following milestones to the satisfaction of Note Holders
(resolved by way of Ordinary Resolution) or an independent expert appointed by the
Trustee:

	 	(i)	 	two fully functional prototypes of stabilised remotely
operable weapons systems including an Electro Optic Systems electronic fire
control system and a Metal Storm Ballistic Weapon, as defined in the Teaming
Agreement between Electro Optic Systems Pty Limited and the Company dated 2
August 2005 (subsequently named the Redback System) are assembled and ready
for inspection by representatives of Harmony and customers before 30 June
2007;
	 
	 	(ii)	 	two fully functional prototype units of the Three Shot
Grenade Launcher (known as “3GL”) are assembled and ready for inspection by
representatives of Harmony and customers before 30 June 2007; and
	 
	 	(iii)	 	a successful live test firing of low velocity air burst
rounds and low velocity high explosive rounds suitable for Metal Storm
Ballistic Weapons in conjunction with Singapore Technologies Kinectics Ltd
(as defined in the Teaming Agreement between the Company and Singapore
Technologies Kinetics Ltd dated 28 September 2005) before 30 June 2007;

	 	(f)	 	if any member of the Group fails to obtain or preserve any and all
Authorisations, Licences, Leases or Intellectual Property which are material to the
Group’s business operations;
	 
	 	(g)	 	if any member of the Group engages in or otherwise becomes a party to or
the subject of any litigation, dispute or challenge in relation to any Intellectual
Property, Licenses or Leases which is, or potentially is, materially adverse to the
Group’s business operations; or
	 
	 	(h)	 	if, without the prior written consent of the Trustee, such consent not to
be unreasonably withheld or delayed, the Company assigns, transfers or parts with
possession of a substantial part of its undertaking or assets representing by value
50% or more of:

	 	(i)	 	consolidated equity interests as defined in the Listing
Rules;
	 
	 	(ii)	 	consolidated assets; or
	 
	 	(iii)	 	consolidated operating revenue,

	 	 	 	otherwise than in the ordinary course of its business or as permitted under the
Listing Rules.

page 2

 

	 	 	ASIC means the Australian Securities and Investments Commission and any duly appointed
delegate of ASIC or any such successor.
	 
	 	 	Assets means any legal or equitable estate or interest of the Company in any present and
future assets, undertaking and property (including its uncalled capital and called but
unpaid capital from time to time).
	 
	 	 	ASX means ASX Limited ACN 008 624 691 or any successor body and, where the context
requires, the securities exchange it operates.
	 
	 	 	Auditor means a “registered company auditor” (as defined in the Corporations Act)
appointed by the Company in accordance with the Corporations Act as its auditor for the
time being.
	 
	 	 	Authorisation includes:

	 	(a)	 	any consent, authorisation, registration, filing, lodgement, agreement,
notarisation, certificate, permission, licence, approval, authority or exemption
from, by or with a Governmental Agency; or
	 
	 	(b)	 	in relation to anything which will be fully or partly prohibited or
restricted by law if a Governmental Agency intervenes or acts in any way within a
specified period after lodgement, filing, registration or notification, the expiry
of that period without intervention or action.

	 	 	Bank means a corporation authorised under the Banking Act 1959 or any other relevant
legislation to carry on the general business of banking in Australia.
	 
	 	 	Business Day means a Trading Day as defined in the Listing Rules.
	 
	 	 	Chairman means a person nominated or appointed to chair a Meeting in accordance with
clause 15.4.
	 
	 	 	Corporations Act means the Corporations Act 2001 (Commonwealth).
	 
	 	 	Court has the meaning given to that term by the Corporations Act.
	 
	 	 	Default Event means any event or circumstance described in clause 10.1.
	 
	 	 	Default Notice means a notice issued by the Trustee to the Company under clause 10.2.
	 
	 	 	Directors means the directors of the Company holding office from time to time.
	 
	 	 	Directors’ Certificate means a certificate signed by two Directors or a Director and the
company secretary on behalf of all Directors.
	 
	 	 	Encumbrance includes any mortgage, pledge, lien or charge or any security or preferential
interest or arrangement of any kind or any other right of, or arrangement with, any
creditor to have its claims satisfied in priority to other creditors with, or from the
proceeds of, any asset. Without limitation, it includes security by way of deposit of
moneys or other property and title retention other than in the ordinary course of
day-to-day trading. It does not include:

	 	(a)	 	any lien arising by operation of law in the ordinary course of business;
	 
	 	(b)	 	any charge or lien in favour of a governmental agency arising by
operation of law; or

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	 	(c)	 	deposits of money or property in the ordinary course of business by way
of security for the performance of statutory obligations, where there is no default
in respect of the secured obligations.

	 	 	Encumbrancer means the holder for the time being of an Encumbrance.
	 
	 	 	Extraordinary Resolution means a resolution, not being an Ordinary Resolution, passed in
accordance with clause 15.12.
	 
	 	 	Financial Indebtedness means any indebtedness for moneys borrowed or raised by the
Company.
	 
	 	 	Governmental Agency means the Crown, a government, a government department, or a
governmental, semi-governmental, statutory, administrative, parliamentary, provincial,
public, municipal, local, judicial or quasi-judicial body of either Australia or
Singapore.
	 
	 	 	Group means the Company and its Subsidiaries and member of the Group means any one of
those entities.
	 
	 	 	GST means GST within the meaning of the GST Act and includes penalties and interest.
	 
	 	 	GST Act means the A New Tax System (Goods and Services Tax) Act 1999 (Commonwealth).
	 
	 	 	Harmony means Harmony Investment Fund Limited a company incorporated in the Cayman
Islands with Company Registration No. CB-150702.
	 
	 	 	Harmony Loan Agreement means the working capital facility agreement between Harmony and
the Company dated 16 June 2006.
	 
	 	 	Intellectual Property means any intellectual or industrial property including:

	 	(a)	 	a patent, trade mark, service mark, copyright, registered design, trade
secret, domain name or confidential information; or
	 
	 	(b)	 	a licence or other right to use or to grant the use of any of the
foregoing or to be the registered proprietor or user of any of the foregoing.

	 	 	Issue Date means the date Notes are first issued in accordance with the terms of this
Deed.
	 
	 	 	Lease means:

	 	(a)	 	a lease, charter, bailment, hire purchase or hiring arrangement of any
property;
	 
	 	(b)	 	a right to use Intellectual Property or a franchise; or
	 
	 	(c)	 	an agreement under which property is or may be used or operated by a
person other than the owner.

	 	 	Legal Personal Representative includes:

	 	(a)	 	in respect of a person who is not a natural person, any Receiver,
liquidator, administrator or controller of that person; and

page 4

 

	 	(b)	 	in respect of a natural person, any executor or administrator of that
person’s estate.

	 	 	Liability means any and all liabilities of any nature, absolute, accrued, actual,
contingent, present or future, liquidated or unliquidated, matured or unmatured
including, without limitation, any Taxes, imposts, duties (howsoever called or imposed)
of any nature whatsoever provided that such liabilities are recognised by generally
accepted accounting principles and practice.
	 
	 	 	Licence means a consent, permit or licence under any statute or any other law held or
required to be held by or on behalf of the Company in connection with the Assets or an
activity or business conducted in connection with the Assets.
	 
	 	 	Listing Rules means the official listing rules of ASX and any other rules of ASX which
are applicable while any Notes are quoted on ASX, each as amended or replaced from time
to time, except to the extent of any express written waiver by ASX.
	 
	 	 	Material Adverse Effect in relation to an event, means a material adverse effect on the
ability of the Group (taken as a whole) to meet its obligations to the Note Holders.
	 
	 	 	Material Contract means the teaming agreements between the Company and the following
parties:

	 	(a)	 	Singapore Technologies Kinetic Ltd dated 28 September 2005; and
	 
	 	(b)	 	Electro Optic Systems Pty Limited dated 2 August 2005.

	 	 	Meeting means a meeting of Note Holders.
	 
	 	 	Minimum Cash Levels means the amounts specified in schedule 1.
	 
	 	 	Note means a convertible note issued by the Company pursuant to this document, an Offer
Document and the Terms.
	 
	 	 	Note Holder means a person who has been entered in the Register as the holder of a Note
and includes joint Note Holders.
	 
	 	 	Offer Document means a document issued by the Company which contains an offer by the
Company for the issue of Notes and includes any disclosure document or supplementary or
replacement disclosure document issued under the Corporations Act.
	 
	 	 	Ordinary Resolution means a resolution passed by at least 50% of the votes cast by Note
Holders entitled to vote on the resolution.
	 
	 	 	Outstanding Moneys means the aggregate of:

	 	(a)	 	the principal, any interest and any other moneys in respect of the Notes
from time to time payable to, or at the direction of, the Trustee or Note
Holders pursuant to this document and the Terms applicable to those Notes; and
	 
	 	(b)	 	all other moneys from time to time payable to the Trustee pursuant to
this document.

page 5

 

	 	 	Permitted Encumbrance means:

	 	(a)	 	the fixed and floating charge over the Assets of the Company in favour of
the Trustee on behalf of certain Note Holders approved by Note Holders on 31 July
2009; or
	 
	 	(b)	 	any Encumbrance approved by Note Holders by way of Ordinary Resolution.

	 	 	Permitted Financial Indebtedness means:

	 	(a)	 	Financial Indebtedness in accordance with borrowing facilities of the
Group existing at the date of this document;
	 
	 	(b)	 	Financial Indebtedness under the Harmony Loan Agreement;
	 
	 	(c)	 	the Outstanding Moneys;
	 
	 	(d)	 	Financial Indebtedness incurred for the purposes of repaying part or all
of the Outstanding Moneys;
	 
	 	(e)	 	Financial Indebtedness which is subordinated in priority to the
Outstanding Moneys;
	 
	 	(f)	 	Financial Indebtedness incurred in connection with premium funding for
any insurance policies maintained by the Group, including Directors’ and officers
liability insurance and public and products liability insurance;
	 
	 	(g)	 	Financial Indebtedness owing by any member of the Group to another;
	 
	 	(h)	 	Financial Indebtedness approved by Note Holders by way of Ordinary
Resolution; or
	 
	 	(i)	 	any other Financial Indebtedness not exceeding $1,000,000 in aggregate at
any time.

	 	 	Receiver includes a receiver and manager.
	 
	 	 	Register means the register of Note Holders established and maintained by, or on behalf
of, the Company pursuant to clause 14.1 and the Corporations Act.
	 
	 	 	Related Corporation has the meaning given to the term “related body corporate” by the
Corporations Act.
	 
	 	 	Representative means a person authorised in accordance with section 250D of the
Corporations Act to act as a representative of a Note Holder which is a corporation at a
Meeting.
	 
	 	 	Share means a fully paid ordinary share in the capital of the Company.
	 
	 	 	Subsidiary has the meaning given to that term in the Corporations Act.
	 
	 	 	Takeover Event means:

	 	(a)	 	a takeover bid (as defined in the Corporations Act) is made to acquire
all or some of the Shares; and:

	 	(i)	 	the offer is or becomes, unconditional; and

page 6

 

	 	(ii)	 	the bidder has a relevant interest in more than 50% of the
Shares on issue; or

	 	(b)	 	the Company lodges with ASIC a draft explanatory statement for a scheme
of arrangement that the Company proposes to enter into under Part 5.1 of the
Corporations Act, which, if approved and implemented, will result in a person having
a relevant interest in more than 50% of the Shares that will be on issue after the
scheme is implemented, and the scheme is approved by the Court.

	 	 	Taxes includes any:

	 	(a)	 	present or future stamp or documentary taxes, or any other excise or
property taxes, charges or similar levies, interest, penalties, charges, fees or
other amounts (if any) imposed, levied, collected, withheld or assessed which arise
from any payment made to, or by, the Trustee or the Company under this document or
any other instrument delivered under this document or which are imposed on the
Trustee or the Company in respect of the Notes;
	 
	 	(b)	 	taxes, levies, imposts, duties, deductions or withholdings (howsoever
called), interest, penalties, charges, fees or other amounts (if any) imposed,
levied, collected, withheld or assessed of any nature whatsoever, whensoever and
howsoever imposed, and all Liabilities with respect thereto which arise from any
payment made to, or by, the Trustee or the Company under this document or any other
instrument delivered under this document; or
	 
	 	(c)	 	taxes, interests, penalties, charges, fees or other amounts (if any)
imposed, levied, collected, withheld or assessed upon:

	 	(i)	 	the Notes; or
	 
	 	(ii)	 	the Trustee, the Company or both of them in their capacity
as trustee or issuer of the Notes (respectively),

	 	 	all such taxes and imposts to include, without limitation, all imposts made pursuant to
the Income Tax Assessment Act 1936 (Commonwealth), the Income Tax Assessment Act 1997
(Commonwealth), financial institutions duty, debits tax, withholding tax, goods and
services tax, stamp or documentary taxes, or any other excise or property taxes, charges
or similar levies (howsoever called) imposed, levied, collected, withheld or assessed by
Australia or any political sub-division in, or of, Australia or any other jurisdiction
from, or to, which a payment is made by, or on behalf of, a Note Holder or pursuant to
any legislation enacted, proclaimed or otherwise brought into operation by any of the
foregoing.
	 
	 	 	Terms means the terms on which Notes are issued from time to time under this document, as
amended from time to time.
	 
	 	 	Threshold Amount means $150,000.
	 
	 	 	Trust means the Metal Storm Convertible Notes Trust established under this document.

page 7

 

	 	 	Trustee means the trustee for the time being whether original, additional or substituted.
	 
	 	 	Trustee Company means a corporation which, pursuant to section 283AC of the Corporations
Act, is able to act as a trustee for the holders of “debentures” (as defined in the
Corporations Act).

	1.2	 	Construction

	 	 	Unless expressed to the contrary, in this document:

	 	(a)	 	no rule of construction will apply to a clause to the disadvantage of a
party merely because that party put forward the clause or would otherwise benefit
from it;
	 
	 	(b)	 	words importing:

	 	(i)	 	the singular include the plural and vice versa; and
	 
	 	(ii)	 	any gender includes the other genders;

	 	(c)	 	if a word or phrase is defined its other grammatical forms have
corresponding meanings;
	 
	 	(d)	 	“includes” means includes without limitation;
	 
	 	(e)	 	a reference to:

	 	(i)	 	a person includes a partnership, joint venture, a firm,
unincorporated association, corporation and a government or statutory body or
authority;
	 
	 	(ii)	 	a person includes its Legal Personal Representative,
successors and assigns and persons substituted by novation;
	 
	 	(iii)	 	any legislation includes subordinate legislation under it
and includes that legislation and subordinate legislation as modified or
replaced;
	 
	 	(iv)	 	a right includes a benefit, remedy, discretion, or power;
	 
	 	(v)	 	an obligation includes a warranty or representation and a
reference to a failure to observe or perform an obligation includes a breach
of warranty or representation;
	 
	 	(vi)	 	provisions or parts of this document or another document,
agreement understanding or arrangement include a reference to both express
and implied provisions and terms;
	 
	 	(vii)	 	time is to local time in Brisbane;
	 
	 	(viii)	 	“$” or “dollars” is a reference to the lawful currency of Australia;
	 
	 	(ix)	 	this document or any other document includes the document
as novated, varied or replaced and despite any change in the identity of the
parties;

page 8

 

	 	(x)	 	writing includes any mode of representing or reproducing
words in tangible and permanently visible form, and includes facsimile
transmission;
	 
	 	(xi)	 	this document includes all schedules and annexures to it;
and
	 
	 	(xii)	 	a clause, schedule or annexure is a reference to a clause,
schedule or annexure, as the case may be, of this document;

	 	(f)	 	if the date on or by which any act must be done under this document is
not a Business Day, the act must be done on or by the next Business Day; and
	 
	 	(g)	 	where time is to be calculated by reference to a day or event, that day
or the day of that event is excluded;
	 
	 	(h)	 	all references to a covenant by either party to this document includes an
intention by the party making it that such covenant will be for the benefit of the
other party and the Note Holders jointly and to each of them severally;
	 
	 	(i)	 	where applicable, “corporation”, “marketable security”, “securities”,
“control” and “share” each has the meaning given to it in the Corporations Act; and
	 
	 	(j)	 	in clause 12, “adjustment event”, “consideration”, “GST”, “input tax
credit”, “supply”, “taxable supply” and “tax invoice” each has the meaning which it
is defined to have in the GST Act.

	1.3	 	Headings
	 
	 	 	Headings do not affect the interpretation of this document.
	 
	2	 	Duration and appointment of trustee
	 
	2.1	 	Duration
	 
	 	 	The Trust:

	 	(a)	 	commences on the date of this document and ends on the first to occur of:

	 	(i)	 	termination under clause 16; and
	 
	 	(ii)	 	80 years less one day after the date of this document; and

	 	(b)	 	will be known as the “Metal Storm Convertible Notes Trust”.

	2.2	 	Appointment of Trustee
	 
	 	 	The Trustee is appointed as the trustee for the Note Holders and agrees to hold on
trust the benefit of this document for the Note Holders. Without limiting the foregoing,
the benefit of this document includes the right to enforce:

	 	(a)	 	the Company’s obligation to repay the principal and interest (if
applicable) on the Notes to the Note Holders in accordance with the Terms; and

page 9

 

	 	(b)	 	any of the other obligations of the Company to the Note Holders under the
Terms, this document or Chapter 2L of the Corporations Act.

	2.3	 	Binding on Note Holders
	 
	 	 	Any action taken by the Trustee under this document is binding on all Note
Holders.
	 
	3	 	Acknowledgment of debt
	 
	3.1	 	Debt
	 
	 	 	The Company acknowledges that it is indebted to the Trustee in respect of the
Outstanding Moneys.
	 
	3.2	 	Release of Indebtedness
	 
	 	 	Payment to the Note Holders of the principal and interest moneys (if applicable)
in respect of the Notes in accordance with the Terms or pursuant to clause 10, or the
issue of Shares to the Note Holders on conversion of the Notes will operate so as to
reduce the indebtedness acknowledged by clause 3.1 by the amount of such payment or by
the nominal value of the Notes converted (as the case may be).
	 
	4	 	Types of notes and terms
	 
	4.1	 	Types of Notes
	 
	 	 	The Company may from time to time issue Notes on the terms resolved by the
Directors. Without limiting the generality of this clause, the Company may issue Notes:

	 	(a)	 	in Australian dollars or for other consideration; and/or
	 
	 	(b)	 	at par, at a discount, or at a premium.

	5	 	Issuance and repayment of Notes
	 
	5.1	 	Power to refuse to issue
	 
	 	 	Subject to the terms of any Offer Document, the Company may, at its sole
discretion, refuse to issue in whole or in part any application or request (howsoever
made) to issue a Note and will not be required to provide any reason or ground for such
refusal.
	 
	5.2	 	Issue of Notes
	 
	 	 	The Company may issue Notes at such places and during such times as the Company
may determine from time to time.

page 10

 

	5.3	 	Notes deemed to be validly issued
	 
	 	 	Subject to clause 5.4, all Notes in respect of which a person has been entered in
the Register as a Note Holder will, as between the relevant Note Holder, the Company and
the Trustee be deemed to have been validly issued under this document, notwithstanding
any breach of, or non-compliance with, the provisions of this document.
	 
	5.4	 	Rectification of invalid issues
	 
	 	 	Notwithstanding any express or implied provision of this document, any Note which
the Company purports to issue pursuant to this document and which, but for this clause
5.4, would not be validly issued as a Note pursuant to this document because the issue
constituted a breach by the Company of an obligation under this document will, as between
the Company and the Trustee, be deemed to be validly issued as a Note as from the date of
issue if:

	 	(a)	 	the breach has been rectified to the Trustee’s satisfaction; or
	 
	 	(b)	 	the Trustee has stated that:

	 	(i)	 	in the particular circumstances, the Trustee does not
require the breach to be rectified;
	 
	 	(ii)	 	the Trustee waives such breach on the basis that it is
satisfied that the breach will not materially prejudice the interests of the
Note Holders; or
	 
	 	(iii)	 	the Note will continue to be regarded by the Trustee as
validly issued pursuant to this document.

	5.5	 	Company not to be relieved from compliance
	 
	 	 	Nothing in clauses 5.3 and 5.4 exonerates or relieves the Company from its
obligations under this document.
	 
	6	 	Obligations of the Company
	 
	6.1	 	Company to provide financial reports
	 
	 	 	The Company must give to the Trustee in respect of each:

	 	(a)	 	financial year, as required by and in accordance with, Division 1 of Part
2M.3 of the Corporations Act; and
	 
	 	(b)	 	half-year, as required by and in accordance with, Division 2 of Part 2M.3
of the Corporations Act,

	 	 	the financial report and a Directors’ report together with the Auditor’s report on the
financial report of the Company within the time required by section 318 of the
Corporations Act.
	 
	6.2	 	Other obligations of the Company
	 
	 	 	The Company covenants that, so long as any Note is outstanding, it will:

	 	(a)	 	carry on and conduct its business in a proper and efficient manner;

page 11

 

	 	(b)	 	keep proper books of account;
	 
	 	(c)	 	take all reasonable steps to replace the Trustee if required by the
Corporations Act to do so;
	 
	 	(d)	 	if requested by a Note Holder or the Trustee, provide a copy of this
document to that Note Holder or the Trustee;
	 
	 	(e)	 	make all payments of principal and interest in respect of the Notes, as
and when due, in accordance with their respective Terms, to the persons who are
entitled to receive such payments under this document and the Terms;
	 
	 	(f)	 	issue Shares on conversion of the Notes in accordance with the Terms;
	 
	 	(g)	 	within 1 month after the end of each quarter, give to the Trustee a
Directors’ Certificate:

	 	(i)	 	at any time of giving each report to the Trustee under
section 283BF of the Corporations Act which shows the total amount of the
Notes at the end of the quarter for the purpose of the reports to be given
under section 283BF of the Corporations Act;
	 
	 	(ii)	 	where there exists any recurring obligation on the Company
or the Trustee or both to furnish certain information on the basis of which
stamp duty will be payable in any State or Territory or other place, setting
out such information as is required by the Trustee to properly complete any
return required to be lodged under the provisions of any stamp duty
legislation which are applicable to this document or any of the Notes or
otherwise to enable the Trustee to comply with its obligations with respect
to any undertaking given pursuant to any such legislation, such information
to be furnished to the Trustee not less than 14 days prior to the time when
such information is required to be lodged;
	 
	 	(iii)	 	either confirming that there has been no material change
to the nature of the Company’s business since the date of the last Directors’
Certificate provided under this clause or providing details of the change;

	 	(h)	 	provide all information and explanations reasonably requested by the
Trustee to enable the Trustee and any auditor appointed by the Trustee to discharge
their duties under this document;
	 
	 	(i)	 	promptly give the Trustee notice of any appointment, retirement,
resignation or removal of an Auditor;
	 
	 	(j)	 	if the Trustee believes on reasonable grounds that the Company has not
complied with this clause 6, the Company must provide the Trustee with confirmation
that the Company has complied within 7 days after receipt of a written request from
the Trustee specifying the nature of the suspected non-compliance;

page 12

 

	 	(k)	 	at reasonable times and upon reasonable notice, make all of its financial
and other records available for inspection by:

	 	(i)	 	the Trustee;
	 
	 	(ii)	 	any registered company auditor appointed by the Trustee for
that purpose; and
	 
	 	(iii)	 	any officer, employee or auditor of the Trustee authorised
by the Trustee to carry out the inspection,

	 	 	 	and give them any information, explanations or other assistance that they require
about matters relating to those records; and
	 
	 	(l)	 	comply with all other material obligations imposed on it under the
Corporations Act including, without limitation, all legal requirements relating to
the filing of reports and statements, the registration of encumbrances and the
keeping open of registers for inspection.

	6.3	 	Undertakings
	 
	 	 	Unless the Trustee otherwise agrees in writing while any Note is outstanding, the
Company must, at its own cost:

	 	(a)	 	promptly furnish to the Trustee or any person authorised by the Trustee
to receive it, such documents, reports or other information as the Trustee
reasonably considers necessary in relation to all matters necessary for the purposes
of the discharge of the duties, trusts and powers vested in the Trustee under this
document or imposed upon it by law;
	 
	 	(b)	 	give notice to the Trustee as soon as it becomes aware of any Default
Event occurring;
	 
	 	(c)	 	at all times fully comply with, observe and perform all its obligations
under this document and any document supplemental or collateral to this document;
	 
	 	(d)	 	do everything necessary to preserve the corporate existence of itself,
including:

	 	(i)	 	not transferring the jurisdiction of registration;
	 
	 	(ii)	 	not making any application or passing any resolution for
winding up; and
	 
	 	(iii)	 	not entering into or effecting any other scheme under
which it ceases to exist or under which the assets and liabilities of itself
are vested in or assumed by any other person.

	6.4	 	Insurance

	 	(a)	 	The Company must, while there are any Outstanding Moneys:

	 	(i)	 	insure all of its property and assets against fire and any
other risks against which a prudent company in a similar business would
insure;

page 13

 

	 	(ii)	 	take out any other insurance against which a prudent
company in a similar business would insure including but not limited to
workers’ compensation and public risk insurance; and
	 
	 	(iii)	 	pay or cause to be paid the premiums and other sums of
money payable for all the purposes in this clause 6.4.

	 	(b)	 	The Company must take out any insurance under clause 6.4:

	 	(i)	 	with a reputable insurer; and
	 
	 	(ii)	 	in relation to property, on a replacement basis.

	 	(c)	 	With respect to insurance under clause 6.4, the Company:

	 	(i)	 	must provide, or cause the provision of, to the Trustee
within 21 days of execution of this document and thereafter annually within
21 days of the renewal of each insurance policy a certificate by an insurance
broker certifying that the Company has complied with clause 6.4; and
	 
	 	(ii)	 	must not do or permit or suffer to be done any act or thing
which may vitiate any insurance.

	6.5	 	Borrowing conditions

	 	(a)	 	While there are any Notes on issue, the Company must ensure that no
Encumbrances exist on its Assets except Permitted Encumbrances.
	 
	 	(b)	 	While there are any Notes on issue, the Company must procure that the
Group does not incur any Financial Indebtedness except Permitted Financial
Indebtedness.

	7	 	Powers and obligations of the Trustee
	 
	7.1	 	Obligations of the Trustee
	 
	 	 	The Trustee covenants that:

	 	(a)	 	it will exercise reasonable diligence to ascertain whether the Company
has committed any breach of the Terms applicable to Notes, this document or Chapter
2L of the Corporations Act;
	 
	 	(b)	 	except where it is satisfied that the breach will not materially
prejudice the interests of Note Holders, it will do everything in its power to
ensure the Company remedies any breach of the provisions of this document, the Terms
or Chapter 2L of the Corporations Act and, if the Company fails when so required by
the Trustee to remedy such a breach, the Trustee may:

	 	(i)	 	place the matter of the failure to remedy the breach before
a Meeting;
	 
	 	(ii)	 	submit such proposals for the protection of the Notes as
the Trustee considers necessary or appropriate; and

page 14

 

	 	(iii)	 	obtain the directions of the Note Holders in relation to
the matter;

	 	(c)	 	it will give to the Note Holders a statement explaining the effect of any
proposal the Company submits to the Note Holders before any Meeting called by the
Trustee under this document, or before any Meeting called by the Court in relation
to a scheme under subsection 411(1) or (1A) of the Corporations Act; and
	 
	 	(d)	 	it will comply with any other obligations imposed on it in its capacity
as Trustee under the Corporations Act.

	7.2	 	Power to invest
	 
	 	 	Unless expressly prohibited by this document, all moneys received by the Trustee
which are not required to be immediately applied under any of the discretions or powers
contained in this document may be:

	 	(a)	 	placed by the Trustee in its name in any Bank on a deposit account either
for a fixed term not exceeding three months or at call; or
	 
	 	(b)	 	invested in Australia in its name in any of the stocks, funds,
debentures, bonds, governmental securities or other investments which are authorised
for the investment of trust moneys by the law of the place where the investment is
proposed to be made,

	 	 	and the Trustee may vary and deal with or dispose of such investments.
	 
	7.3	 	General powers of Trustee
	 
	 	 	The Trustee (subject to any provision to the contrary in this document) has all
the powers in relation to the trusts constituted by this document that it is legally
possible for a natural person or a corporation to have. Without limiting the foregoing,
the Trustee may, in its absolute discretion, whenever it is in the interests of the Note
Holders, or advantageous to the Company and not prejudicial to the interests of the Note
Holders:

	 	(a)	 	waive at any time and on any terms any breach or non-compliance by the
Company under this document provided always and notwithstanding anything contained
or implied in this document, or in any rule of law to the contrary, that the Trustee
will not be deemed to have waived such breach unless such waiver is in writing
addressed to the Company;
	 
	 	(b)	 	delegate at any time and to any person any of the trusts, powers or
discretions vested by this document in the Trustee which cannot conveniently be
exercised by it or through its employees upon such terms (including the giving of
power to sub-delegate) as the Trustee may think fit provided always that such terms
are not inconsistent with the provisions of this document;
	 
	 	(c)	 	delegate at any time to its officers, employees, or agents any trusts,
powers and discretions vested by this document in the Trustee which under the law or
practice of the country or place in which such trusts, powers and discretions are or
may be required to be, exercised cannot
be conveniently exercised by the Trustee provided always that such terms are not
inconsistent with the provisions of this document;

page 15

 

	 	(d)	 	apply to any court for directions in relation to any matter or question
of law or fact arising, in connection with the performance of its functions or the
Notes and assent to, approve of, or oppose any application to any court made by, or
at the instance of, any Note Holder or the Company; and
	 
	 	(e)	 	at any time after the Trustee serves a Default Notice on the Company,
apply to any court for an order that the trusts be carried into execution under the
direction of such court and for any other order or direction in relation to such
trusts as the Trustee may deem expedient.

	7.4	 	Discretion of Trustee as to exercise of powers
	 
	 	 	Subject to clause 7.1, the Trustee will, as regards all the powers, authorities
and discretions vested in it by this document, have absolute and uncontrolled discretion
as to the exercise or the non-exercise, thereof in all respects, and, in the absence of
fraud, negligence or breach of trust, the Trustee will not be responsible in any way for
any loss, costs, damages, claims, obligations or inconvenience that may result from the
exercise or non-exercise of those powers, authorities and discretions.
	 
	7.5	 	Trustee not responsible for monitoring
	 
	 	 	Except where otherwise expressly provided in this document or by the Corporations
Act, the Trustee is not required to:

	 	(a)	 	provide to any person any information concerning the business, financial
condition, status or affairs of the Company;
	 
	 	(b)	 	investigate the adequacy, accuracy or completeness of any information
provided by the Company; and
	 
	 	(c)	 	access, investigate or keep under review the business, financial
condition, status or affairs of the Company.

	7.6	 	Discretion of Trustee upon default
	 
	 	 	In addition to any protections under any applicable statute or contained in this
document, and notwithstanding any actual or constructive notice which the Trustee has of
the occurrence of a Default Event, the Trustee has absolute discretion to:

	 	(a)	 	exercise or refrain from exercising its powers in relation to a Default
Event;
	 
	 	(b)	 	enforce the observance or performance of any provision of this document;
or
	 
	 	(c)	 	enforce any other right of the Note Holders under this document,

	 	 	unless the Trustee is requested to enforce such observance or performance, right or
exercise such option (either in writing or by means of a resolution of Note Holders
passed at a Meeting convened and conducted in accordance
with clause 15) by the Note Holders holding not less than 50% in nominal value of the
Notes as at the date of such request, in which case, and for so long as the Trustee is
indemnified to its satisfaction against all actions,

page 16

 

	 	 	proceedings, claims, demands, costs,
charges, damages and expenses which the Trustee may render itself liable to or thereby
incur, the Trustee will act in compliance with such request. Except where expressly
provided in this document or required by Corporations Act, the Trustee has no obligation
to inform Note Holders of the occurrence of any breach of this document or any Default
Event.
	 
	7.7	 	Directions, rights and protections
	 
	 	 	The Trustee:

	 	(a)	 	may apply to a court for directions in relation to any question relating
to any of its rights, powers, authorities, discretions, remedies and obligations
under this document or any applicable law, and may comply with any such direction;
and
	 
	 	(b)	 	is not deemed to be aware of the occurrence of any Default Event unless
it has been advised of it by notice, stating the nature of the Default Event and
prescribing it, from the Company or a Note Holder.

	7.8	 	Trustee’s costs on enforcement
	 
	 	 	Subject to clause 7.1, the Trustee will not be obliged to take any action or
commence any proceedings to enforce the rights of the Note Holders under this document or
the Terms unless it is of the reasonable opinion that it has been provided with
sufficient funds to meet all the Trustee’s likely costs and expenses in so doing or the
Trustee is satisfied that adequate provision has been made for ensuring that the Trustee
will be adequately reimbursed for such costs and expenses.
	 
	7.9	 	Indemnity of Trustee

	 	(a)	 	Without prejudice to any right of indemnity given to trustees by any
applicable law, the Trustee and every attorney, manager, agent or other person
appointed by it pursuant to this document will be entitled to be indemnified by the
Company in respect of all Liabilities and expenses reasonably incurred by them in
the execution of the trusts or powers constituted or conferred by this document and
against all fees, actions, proceedings, costs, claims and demands in respect of any
matter or thing done or omitted or in any way relating to this document other than a
claim arising out of their fraud, negligence or breach of trust, and the Trustee may
retain and pay out of any moneys in its hands arising therefrom (in priority to any
claim by any Note Holder) all sums necessary to effect and satisfy such indemnity;
	 
	 	(b)	 	The indemnity contained in clause 7.9(a) is a continuing additional,
separate and independent obligation of the Company and survives:

	 	(i)	 	termination or expiration of this document;
	 
	 	(ii)	 	the winding up of the trusts under this document; and
	 
	 	(iii)	 	the retirement or removal of the Trustee as trustee.

page 17

 

	7.10	 	Trustee’s duty

	 	(a)	 	Subject only to clause 7.10(b), nothing in this clause 7 or elsewhere in this
document:

	 	(i)	 	has the effect of exempting the Trustee from, or
indemnifying the Trustee against, Liability for breach of trust or negligence
where the Trustee fails to show the degree of care and diligence required of
a trustee having regard to the powers, authorities or discretions conferred
on the Trustee by this document and the Corporations Act; or
	 
	 	(ii)	 	affects the exclusive operation of the provisions of any
statute prescribing the circumstances under which the Trustee may obtain
relief from breach of trust.

	 	(b)	 	Clause 7.10(a) does not invalidate a release given by Note Holders under
the Corporations Act which is:

	 	(i)	 	otherwise validly given in respect of anything done or
omitted to be done by the Trustee before the release was given; or
	 
	 	(ii)	 	given by the approval of Note Holders who hold not less
than 75% of the nominal value of the Notes held by all the Note Holders who
attend the Meeting (whether in person or by proxy) at a Meeting convened for
that purpose and vote on the resolution.

	7.11	 	Limitation on liability

	 	(a)	 	Except as arising from the fraud, negligence or breach of trust or wilful act,
omission or default of the Trustee:

	 	(i)	 	the Trustee has no liability to any Note Holder in respect
of Outstanding Moneys, except to the extent that Outstanding Moneys are
actually received by the Trustee from the Company;
	 
	 	(ii)	 	if the Company or any Note Holder does not recover all
money owing to it in connection with the breach or the non-observance of the
obligation of the Trustee by enforcing the rights referred to in this
document, it may not seek to recover the shortfall by:

	 	(A)	 	bringing proceedings against the Trustee; or
	 
	 	(B)	 	applying to have the Trustee wound up; or
	 
	 	(C)	 	proving in the winding up of the Trustee.

	 	(b)	 	For the avoidance of doubt, and subject to clause 7.11(a), the Trustee
will not be liable to the Company or any Note Holder or any future Trustee or any
other person or otherwise be responsible for loss to the extent it is caused by:

	 	(i)	 	acting upon any resolution purporting to have been passed
at any meeting of Note Holders or of any class of Note Holders, in
respect of which minutes have been made and signed, even though it may
subsequently be found that:

page 18

 

	 	(A)	 	there was some defect in the constitution of
the meeting or the passing of the resolution; or
	 
	 	(B)	 	for any reason the resolution was not valid
or binding upon any of those Note Holders whom it purports to bind or
upon the Trustee:

	 	(ii)	 	the Trustee’s acts, mistakes or omissions, whether or not
in accordance with the terms of this document in reliance on:

	 	(A)	 	the Register;
	 
	 	(B)	 	information or deeds supplied by the Company;
	 
	 	(C)	 	the authenticity of any deed or any
Directors’ Certificate; or
	 
	 	(D)	 	opinion, advice or information of any
delegate of the Trustee, barrister, solicitor, accountant, valuer,
surveyor, broker, auctioneer or other expert instructed by the Trustee
or the Company concerned with the issue of any Notes or otherwise;

	 	(iii)	 	any act, omission, neglect or default of the Company under
or in connection with this document or a Note;
	 
	 	(iv)	 	any act or omission required by law or by any court of
competent jurisdiction;
	 
	 	(v)	 	the Trustee validly exercising any right, power, authority
or discretion under or in accordance with the terms of this document;
	 
	 	(vi)	 	any payment having been made to any fiscal authority;
	 
	 	(vii)	 	the authorisation, legality, validity, enforceability,
effectiveness, genuineness, admissibility in evidence or sufficiency of this
document;
	 
	 	(viii)	 	the accuracy or completeness of any information supplied by any person
(other than the Trustee);
	 
	 	(ix)	 	any absence of, or defect in, the title of the Company to
any asset; or
	 
	 	(x)	 	the due application of moneys subscribed by any holder of
or applicant for Notes.

	7.12	 	Determination of matters of doubt
	 
	 	 	The Trustee may, as between itself and the Note Holders, determine all questions
and matters of doubt arising in relation to any of the covenants, provisions and
obligations of this document and as to the construction, meaning, operation or effect
thereof and every such determination, whether made upon a question actually raised or
implied in the acts or proceedings of the Trustee, will be conclusive.

page 19

 

	7.13	 	Act on opinion of experts
	 
	 	 	Subject to clause 7.1, the Trustee may, in relation to this document or the rights
or powers conferred thereby, act on the written advice or opinion received from any
adviser of a kind appropriate to the particular case including any barrister, solicitor,
accountant, auditor, actuary, surveyor, engineer, architect, stockbroker or valuer having
at least 10 years experience in the relevant area and the Trustee will not be liable for
any loss occasioned by acting thereon notwithstanding that the same is incorrect.
	 
	7.14	 	Acceptance of certificates
	 
	 	 	Subject to clause 7.1, the Trustee will for any purpose and at any time be
entitled to rely on, issue and regard as conclusive and sufficient any of the following:

	 	(a)	 	a Directors’ Certificate as to any fact or matter or to the effect that
any particular contract, dealing, transaction or proposal is commercially desirable
and not prejudicial to the interests of the Note Holders;
	 
	 	(b)	 	any information, report, statement of financial position, statement of
financial performance, or Directors’ Certificate supplied by the Company or by any
officer of the Company;
	 
	 	(c)	 	all statements (including statements made or given to the best of the
maker’s knowledge and belief or similarly qualified) contained in any information,
report, statement of financial position, statement of financial performance, or
certificate or statement given pursuant to or in relation to this document; and
	 
	 	(d)	 	all accounts supplied to the Trustee pursuant to this document and all
reports of the Auditor or any other auditor supplied to the Trustee pursuant to this
document.

	7.15	 	Other capacities of Trustee

	 	(a)	 	Subject to any provision of any law to the contrary in any place where any of
the Notes for the time being have been issued, nothing in this document will be
deemed to prohibit the Trustee or any Related Corporation of the Trustee (in clauses
7.15 and 7.16 being included in the expression the “Trustee”) or its officers from
being a Note Holder or a holder of shares in the capital of the Company or any
Related Corporation of the Company (in clauses 7.15 and 7.16 being included in the
expression the “Company”) or from being a director or officer of the Company or from
acting in any representative capacity including as executor, administrator, trustee,
receiver, guardian, attorney or agent or in any other fiduciary or professional
capacity.
	 
	 	(b)	 	Acting in any capacity as set out in clause 7.15(a) will not be deemed a
breach of any of the obligations arising out of the fiduciary relationship between
the Trustee and the Company, between the Trustee and the Note Holders, established
by this document or otherwise imposed or implied by law.

page 20

 

	7.16	 	Other activities of Trustee

	 	(a)	 	The “Trustee” (as that expression is defined in clause 7.15(a)) will not in
any way by reason of its fiduciary capacity be precluded from:

	 	(i)	 	making contracts or entering into transactions with the
“Company” (as that expression is defined in clause 7.15(a)) or with itself as
trustee in the ordinary course of business of the Trustee; or
	 
	 	(ii)	 	undertaking any insurance, financial or agency services for
the Company or for itself as trustee,

	 	 	 	including any contract or transaction in relation to insurance or the
subscription, placing of an order for, or other dealing with, any stocks, shares,
debenture stock, debentures or other security of the Company or in which the
Company is interested and the acceptance of any office of profit from the Company
or any contract of loan or deposit, unsecured notes or other contract or
transaction which any person not being the Trustee could or might have entered
into with the Company, or with itself as trustee, or the acceptance and retention
for its own benefit of any customary share of brokerage and the acceptance or
holding of office of trustee for the holder of any debentures, debenture stock,
unsecured notes or other securities (whether secured or unsecured) issued by the
Company or by any other corporation.
	 
	 	(b)	 	The Trustee will not be accountable to the Company or the Note Holders
for any profit arising from any contracts, transactions or offices referred to in
clause 7.16(a).

	8	 	Remuneration of Trustee
	 
	8.1	 	Fees
	 
	 	 	The remuneration of the Trustee will be that as determined in writing between the
Company and the Trustee from time to time. The fee will accrue from day to day and
commence on execution of this document. The fee is due and payable annually in advance.
	 
	8.2	 	Trustee’s disbursements
	 
	 	 	Subject to the provision by the Trustee to the Company of satisfactory documentary
evidence as to the costs, charges and expenses incurred, including tax invoices, the
Company must pay the Trustee within 30 days of demand all costs, charges and expenses
whatsoever (including legal fees on a solicitor and own client basis) reasonably incurred
by or on behalf of the Trustee and any stamp duty, financial impost, tax or other duty or
tax whatsoever (including any goods and services tax) which may be payable from time to
time in connection with:

	 	(a)	 	the preparation, execution, registration, stamping and administration of
this document or of any Offer Document;

page 21

 

	 	(b)	 	any breach or default in the observance or performance of this document by
the Company notwithstanding that such breach may also constitute non-compliance
with any law;
	 
	 	(c)	 	preparations for the convening and holding of any meeting of Note Holders
and the carrying out of any directions or resolutions of Note Holders;
	 
	 	(d)	 	any amendment or proposed amendment of this document or any question
relating to the construction of this document; and
	 
	 	(e)	 	any costs necessarily incurred by the Trustee in carrying out its duties
and obligations under this document.

	8.3	 	Priority of fees and disbursements
	 
	 	 	The Company agrees that:

	 	(a)	 	all remuneration, fees, payments, costs, charges and expenses referred to
in this clause 8 will be part of the Outstanding Moneys and will remain payable
until the Trust is finally wound up and whether or not a Receiver or liquidator has
been appointed to the Company or the Trust is in the course of administration by or
under the order of any court; and
	 
	 	(b)	 	the Trustee may retain and pay to itself (in priority to any claim by any
Note Holder, subject to the terms of this document), all such remuneration, fees,
payments, costs, and charges and expenses out of any moneys for the time being in
its hands upon the Trust or in the hands of any liquidator appointed by the Trustee
in accordance with this document.

	9	 	Representations and Warranties
	 
	 	 	The Company and the Trustee each represents and warrants to the other that, as at
the date of this document:

	 	(a)	 	status: it is a company limited by shares under the Corporations Act;
	 
	 	(b)	 	power: it has full legal capacity and power to:

	 	(i)	 	own its property and to carry on its business; and
	 
	 	(ii)	 	enter into this document and to carry out the transactions
that it contemplates;

	 	(c)	 	corporate authority: it has taken all corporate action that is necessary
or desirable to authorise its entry into this document and its carrying out the
transactions that it contemplates;
	 
	 	(d)	 	authorisations: it holds each authorisation, consent, declaration,
exemption, notarisation or waiver, that is necessary or desirable to:

	 	(i)	 	enable it to properly execute this document and to carry
out the transactions that it contemplates;

page 22

 

	 	(ii)	 	ensure that this document is legal, valid, binding and
admissible in evidence; or
	 
	 	(iii)	 	enable it to properly carry on its business,

	 	 	 	and it is complying with any terms to which any of those authorisations, consents,
declarations, exemptions, notarisations or waivers is subject;
	 
	 	(e)	 	documents effective: this document constitutes its legal, valid and
binding obligations, enforceable against it in accordance with its terms (except to
the extent limited by equitable principles and laws affecting creditors’ rights
generally);
	 
	 	(f)	 	no contravention: neither its execution of this document, nor the
carrying out by it of the transactions that they contemplate, does or will:

	 	(i)	 	contravene any law to which it or its property is subject
or any order of any government agency that is binding on it or its property;
	 
	 	(ii)	 	contravene any authorisation, consent, declaration,
exemption, notarisation or waiver;
	 
	 	(iii)	 	contravene any undertaking or instrument binding on it or
its property;
	 
	 	(iv)	 	contravene its constitution; or
	 
	 	(v)	 	require it to make any payment or delivery in respect of
any financial indebtedness before it would otherwise be obliged to do so.

	10	 	Default
	 
	10.1	 	Default Events
	 
	 	 	Each of the following is an Default Event (whether or not caused by anything
outside the control of the Company):

	 	(a)	 	if the Company fails to pay:

	 	(i)	 	principal in respect of any Note within 5 Business Days
after it becomes due and payable in accordance with the applicable Terms; or
	 
	 	(ii)	 	interest or any other amount in respect of any Note within
5 Business Days after such interest becomes due and payable in accordance
with the Terms;

	 	(b)	 	any other monetary obligation of the Company in an amount equal to or
greater than the Threshold Amount to any person, whether actual, contingent or
otherwise:

	 	(i)	 	is not satisfied on time; or
	 
	 	(ii)	 	becomes due and payable or can be rendered due and payable
before its stated date of maturity other than due to a voluntary prepayment;

page 23

 

	 	(c)	 	an Acceleration Event occurs;
	 
	 	(d)	 	if an application is made to a court for the appointment of a liquidator
(other than in relation to an amalgamation, reconstruction or similar purpose
affecting the Company) or official manager or administrator of the Company and is
not withdrawn within 14 days after the date on which it is made;
	 
	 	(e)	 	if the Group ceases to carry on business;
	 
	 	(f)	 	if either:

	 	(i)	 	a receiver or a receiver and manager, is appointed in
respect of; or
	 
	 	(ii)	 	any Encumbrancer:

	 	(A)	 	takes possession of; or
	 
	 	(B)	 	enforces its Encumbrance against,

	 	 	 	the Assets or any part thereof the value of which exceeds the Threshold
Amount;

	 	(g)	 	if any distress or execution in excess of the Threshold Amount is levied
or enforced upon or against the Assets and is not satisfied within 30 days or such
longer period as the Trustee may allow;
	 
	 	(h)	 	if any member of the Group becomes unable to pay its debts as they fall
due or, without the prior consent of the Trustee, enters into any arrangement or
composition with its creditors or any class thereof;
	 
	 	(i)	 	a meeting is called by any member of the Group to consider a winding up
resolution without the consent of the Trustee;
	 
	 	(j)	 	any member of the Group suspends payments of its debts generally;
	 
	 	(k)	 	if any member of the Group enters into or resolves to enter into any
arrangement, composition or compromise with, or assignment for the benefit of, its
creditors or any class of them;
	 
	 	(l)	 	an application (which is not vexatious or frivolous) or order is made for
the winding up or dissolution of any member of the Group or a resolution is passed
or any steps are taken to pass a resolution (which is not vexatious or frivolous)
for the winding up or dissolution of any member of the Group other than for the
purpose of an amalgamation or reconstruction which has the prior written consent of
the Trustee;
	 
	 	(m)	 	if:

	 	(i)	 	the Company has contravened its obligations to the Trustee
or Note Holders under this document or the Terms or fails or neglects to
carry out its duties;
	 
	 	(ii)	 	the Trustee is of the reasonable opinion that such
contravention, failure or neglect is prejudicial to, or adversely affects,
those Note Holders; and

page 24

 

	 	(iii)	 	within such period as is specified by the Trustee in a
notice to the Company, such contravention, failure or neglect has not been
remedied;

	 	(n)	 	if the Company, within 30 days of a demand being made by the Trustee,
fails to carry out or comply in a material respect with:

	 	(i)	 	any material undertaking given to; or
	 
	 	(ii)	 	any material condition (except a condition contained in
this document) imposed in respect of any consent given, or the exercise of
any power or discretion, by,

	 	 	 	the Trustee in its capacity as Trustee under this document;
	 
	 	(o)	 	if a judgment in excess of the Threshold Amount is entered against the
Company and the amount is not paid within 20 Business Days of the date for payment
of the judgment or such other time as a court allows, or in the event of an
unsuccessful appeal against the judgment, the amount is not paid within 20 Business
Days of the conclusion of the appeal or such other time as a court allows;
	 
	 	(p)	 	if the Company fails to cause the conversion of any Note in accordance
with the Terms and fails to remedy that failure within 15 Business Days of the
obligation to convert arising;
	 
	 	(q)	 	a material provision of this document is or becomes wholly or partly
void, voidable or unenforceable or is claimed to be so by a person other than the
Note Holders;
	 
	 	(r)	 	an event, circumstance or omission or series of events circumstances or
omissions (whether related or not) occurs or takes place which, in the opinion of
Note Holders (by way of Ordinary Resolution and acting reasonably) has or will have
a Material Adverse Effect;
	 
	 	(s)	 	if the Company without the prior consent in writing of the Trustee, such
consent not to be unreasonably withheld or delayed:

	 	(i)	 	reduces or attempts to reduce capital, other than by way of
a buy-back of the Company’s shares made in accordance with the Corporations
Act and as permitted by the Company’s constitution; or
	 
	 	(ii)	 	passes or attempts to pass a resolution pursuant to the
Corporations Act that any proportion of its share capital which has not
already been called up shall not be capable of being called up or calls a
meeting of members to consider the passing of such resolution;

	 	(t)	 	if the Company is delisted or its securities are suspended for a period
of at least 15 consecutive Business Days by ASX.

	10.2	 	Issue of Default Notice
	 
	 	 	The Trustee must issue a Default Notice to the Company, declaring that the
Outstanding Moneys are immediately due and payable, if:

page 25

 

	 	(a)	 	the Default Event is in respect of a matter stated in clause 10.1(a) or
(b) and the Company has not remedied the default within 5 Business Days after
notice from the Trustee requiring it to do so; or
	 
	 	(b)	 	where the Default Event is in respect of a matter stated in clauses
10.1(c) to (t) inclusive:

	 	(i)	 	the Trustee, acting reasonably, considers it appropriate to
issue a Default Notice; or
	 
	 	(ii)	 	the Trustee has been directed to issue a Default Notice by
an Ordinary Resolution of Note Holders; or
	 
	 	(iii)	 	the Trustee has been directed to issue a Default Notice by
Note Holders, acting reasonably, holding 20% or greater (by value) of the
Notes; and

	 	(c)	 	at the time of issue of the Default Notice, the Default Event is
subsisting and has not been remedied.

	 	 	Notwithstanding the above, the Trustee is not obliged to take any action under this
clause 10.2 unless the Trustee has knowledge of a Default Event.
	 
	10.3	 	Enforcement
	 
	 	 	Subject to this document, at any time after issuing a Default Notice, the Trustee
may:

	 	(a)	 	revoke the Default Notice if the Default Event is remedied or waived; or
	 
	 	(b)	 	institute proceedings to enforce payment of the Notes and recover any
other Outstanding Moneys.

	10.4	 	Compliance with Laws
	 
	 	 	Where the Default Event is in respect of a matter stated in clause 10.1(a), the
Trustee must not issue a Default Notice during such period as the Company is able to
satisfy the Trustee that its failure or refusal to make any payment is:

	 	(a)	 	to comply with any fiscal or other law or regulation;
	 
	 	(b)	 	to comply with the order of any court; or
	 
	 	(c)	 	caused by the failure or a technical or administrative difficulty in the
banking or computer system being used by the Company,

	 	 	applicable to the payment.
	 
	11	 	Preservation of Trustee’s rights
	 
	11.1	 	Primary obligations
	 
	 	 	The Company’s obligation to pay the Outstanding Moneys is a primary obligation and
the Trustee is not obliged to proceed against or enforce any other right against any
person or property or demand payment from any other person before making a demand for
payment by the Company of the Outstanding Moneys.

page 26

 

	11.2	 	Preservation of Company’s obligations
	 
	 	 	The Company’s obligations and the Trustee’s rights under this document will not be
affected by anything which but for this clause 11 might abrogate, prejudice or limit them
or the effectiveness of this document.
	 
	11.3	 	Reinstatement of rights of Trustee
	 
	 	 	If any transaction or payment relating to the Outstanding Moneys is void, voidable
or otherwise unenforceable or refundable:

	 	(a)	 	the Trustee will be entitled against the Company to all rights under this
document that it would have had if the transaction or payment was not void, voidable
or unenforceable or refundable; and
	 
	 	(b)	 	the Company must do all things and sign such documents necessary or
convenient to restore to the Trustee its rights under this document immediately
before that transaction or payment.

	11.4	 	No merger
	 
	 	 	This document is in addition to and is not in any way prejudiced by any judgment,
order or other thing and the Trustee’s rights under this document will not be merged with
any judgment, order or other thing.
	 
	12	 	Goods and services tax
	 
	12.1	 	Taxable supply
	 
	 	 	If GST is payable by the supplier on any supply made under this document the
recipient must pay to the supplier an amount equal to the GST payable on the supply.
That amount must be paid at the same time that the consideration for the supply is to be
provided under this document and must be paid in addition to the consideration expressed
elsewhere in this document. The supplier upon receiving that amount from the recipient
must provide the recipient with a tax invoice for the supply.
	 
	12.2	 	Adjustment events
	 
	 	 	If at any time an adjustment event arises in respect of any supply made by the
supplier under this document, a corresponding adjustment must be made between the
supplier and the recipient in respect of any amount paid to the supplier by the recipient
under clause 12.1 and payments to give effect to the adjustment must be made.
	 
	12.3	 	Payments
	 
	 	 	Where the recipient is required under this document to pay for or reimburse an
expense or outgoing of the supplier or is required to make a payment under an indemnity
in respect of an expense or outgoing of the supplier, the amount to be paid by the
recipient is the sum of:

	 	(a)	 	the amount of the expense or outgoing less any input tax credit in
respect of that expense or outgoing that the supplier is entitled to; and

page 27

 

	 	(b)	 	if the supplier’s recovery from the recipient is in respect of a taxable
supply, an amount equal to the GST payable by the supplier in respect of that
recovery.

	13	 	Change of trustee
	 
	13.1	 	Retirement of Trustee
	 
	 	 	Subject to compliance with any relevant statutory requirements, the Trustee may
retire at any time upon giving not less than 90 days’ notice to the Company (with or
without specifying any reasons therefore) of its intention so to do.
	 
	13.2	 	Removal of Trustee

	 	(a)	 	The Company may immediately remove the Trustee from office by notice in
writing addressed to the Trustee if:

	 	(i)	 	the Trustee ceases to be a Trustee Company;
	 
	 	(ii)	 	the Trustee ceases to exist;
	 
	 	(iii)	 	an Ordinary Resolution of Note Holders, determines that
the Trustee should be removed;
	 
	 	(iv)	 	the Trustee ceases to carry on business (other than its
capacity as trustee of another trust);
	 
	 	(v)	 	the Trustee enters into a scheme of arrangement (other than
for the purposes of or in connection with a solvent reconstruction or
amalgamation);
	 
	 	(vi)	 	the Trustee goes into liquidation, provisional liquidation,
official management or administration or has a Receiver or an administrator
appointed over any part of the assets or undertakings of the Trustee (not
being assets or undertakings of the Trustee held in its capacity as trustee
of another trust), which is not removed or withdrawn within 30 days after the
date of the appointment;
	 
	 	(vii)	 	the Trustee defaults in performing or observing any of its
obligations under this document or the Terms and:

	 	(A)	 	if that default is incapable of remedy and
has had or is likely to have a material adverse effect on the ability
of the Company to perform or observe its obligations to Note Holders;
or
	 
	 	(B)	 	if that default is a material default and is
capable of remedy, that default has not been remedied within two
Business Days of receiving written notice of the default from the
Company requiring that default to be remedied; or

	 	(viii)	 	the Trustee has repeatedly defaulted in the performance or observance of
any of its obligations under this document or the

page 28

 

	 	 	 	Terms and the Company has given notice in writing in respect of those
defaults.

	 	(b)	 	The removal of the Trustee from office pursuant to this clause 13.2 shall
not take effect until the appointment of a new Trustee is made and approved as
provided in this clause 13.

	13.3	 	Appointment of New Trustee

	 	(a)	 	The Company has the power to appoint a Trustee Company as a new trustee under
this document.
	 
	 	(b)	 	The Company shall exercise its power of appointment promptly upon
receiving notice of the resignation of the Trustee or upon removing the Trustee.
	 
	 	(c)	 	If, within 90 days after the Trustee has given notice to the Company of
its desire to retire pursuant to clause 13.1, a new trustee has not been appointed
by the Company, the Trustee may appoint a Trustee Company as trustee under this
document by memorandum under its seal. The Company will, within 14 days of the
appointment, lodge or cause to be lodged with ASIC a notice of the appointment in
the prescribed form.

	14	 	Register of Note Holders
	 
	14.1	 	Register
	 
	 	 	The Company will establish and maintain, or cause to be established and
maintained, a Register at its registered office or at such other place in Australia
permitted by the Corporations Act.
	 
	14.2	 	Inspection of Register
	 
	 	 	Unless the Company obtains an exemption under the Corporations Act from its
obligations to permit inspection or provide copies:

	 	(a)	 	the Register will be available for inspection, during normal business
hours of the state in which the Register is located, by:

	 	(i)	 	the Trustee, an auditor appointed by the Trustee, any Note
Holder and any member of the Company — free of charge; and
	 
	 	(ii)	 	any other person — on payment (if required by the Company)
of the maximum amount prescribed by the Corporations Act;

	 	(b)	 	the Company must upon request by any person accompanied by payment of an
amount not exceeding the amount prescribed pursuant to the Corporations Act required
by the Company, provide a copy of the Register (or part of the Register) to that
person.

	14.3	 	Delegation of powers
	 
	 	 	The Company may delegate to attorneys or agents such powers, authorities and
discretions in relation to a Register as it may lawfully delegate.

page 29

 

	15	 	Meetings of Note Holders
	 
	15.1	 	Convening of Meetings by the Company or the Trustee
	 
	 	 	The Company or the Trustee may at any time convene a Meeting to consider such
matters as the convenor considers.
	 
	15.2	 	Convening of Meetings by requisition
	 
	 	 	The Company must, after an application by Note Holders representing not less than
10% in nominal value of the Notes is delivered to its registered office, convene a
Meeting:

	 	(a)	 	to consider the financial statements that were laid before the last
preceding annual general meeting of the Company; or
	 
	 	(b)	 	to give to the Trustee directions in relation to the exercise of any the
Trustee’s powers.

	15.3	 	Manner of convening Meetings

	 	(a)	 	If the Company convenes a Meeting, it must do so in accordance with the
Corporations Act, and must give notice of the time and place of the meeting to the
Trustee.
	 
	 	(b)	 	If the Trustee convenes a Meeting, it must give notice of the time and
place of the Meeting to the Company.
	 
	 	(c)	 	The non-receipt of the notice by, or the accidental omission to give
notice to, any Note Holder of any Meeting will not invalidate any resolution passed
at that Meeting.

	15.4	 	Chairman

	 	(a)	 	At any Meeting convened by the Trustee or pursuant to clause 15.2, a person
nominated by the Trustee will be entitled to be Chairman of the Meeting. At any
other Meeting, a person nominated by the Company will be entitled to be Chairman of
that Meeting unless the Corporations Act provides otherwise.
	 
	 	(b)	 	In the event that no person is nominated, or if the person nominated is
not present and willing to take the chair within 15 minutes after the time appointed
for holding the Meeting, the Note Holders present at the Meeting may appoint a
person to be the Chairman.

	15.5	 	Quorum and adjournments

	 	(a)	 	No business will be transacted at any Meeting unless the requisite quorum is
present at the commencement of business.
	 
	 	(b)	 	A quorum will be constituted by three Note Holders, present in person or
whose proxy has been received in accordance with clause 15.10(d), and holding 10% in
nominal value of the Notes, as recorded in the Register 48 hours before the time
appointed for the Meeting.
	 
	 	(c)	 	If, within 15 minutes of the time appointed for any Meeting, a quorum is
not present, the Meeting will:

page 30

 

	 	(i)	 	if convened upon the requisition of Note Holders, be
dissolved; or
	 
	 	(ii)	 	if convened by the Trustee or the Company, stand adjourned
to the same day in the next week at the same time and place.

	 	(d)	 	The Chairman may, and must if directed by the Meeting, adjourn the
Meeting from time to time and from place to place, but no business will be
transacted at an adjourned Meeting except business which could have been transacted
at the Meeting from which the adjournment took place.
	 
	 	(e)	 	At an adjourned Meeting, any three Note Holders will constitute a quorum
for the transaction of business, irrespective of the nominal value of the Notes held
by them.

	15.6	 	Reference by Trustee
	 
	 	 	The Trustee may, at its discretion, refer any question arising under this document
to a Meeting of the Note Holders, or of a class of Note Holders, and may, if it thinks
fit, act in accordance with any resolution passed in relation thereto but this clause
15.6 will not curtail or limit in any way any power of the Trustee under this document.
	 
	15.7	 	Voting

	 	(a)	 	At any Meeting, a resolution (other than an Extraordinary Resolution) put to
the vote of the Meeting is to be decided on a show of hands unless a poll is
demanded by the Chairman or by Note Holders being present and holding or
representing 5% of the nominal value of the Notes, as recorded in the Register 48
hours before the time appointed for the holding of the Meeting.
	 
	 	(b)	 	Unless a poll is so demanded, a declaration by the Chairman that a
resolution has been carried, carried unanimously, by a particular majority or lost
and the recording of that declaration in the minutes of the Meeting is to be
conclusive evidence of the fact without proof of the number or proportion of the
votes recorded in favour of or against such resolution.
	 
	 	(c)	 	Except where clause 15.7(d) applies, on a show of hands every Note Holder
present will have one vote. On a poll (howsoever conducted), every Note Holder
present in person or by proxy, attorney or Representative has voting rights
determined as set out in clause 15.7(d)(ii). In relation to a resolution signed in
accordance with clause 15.12, every Note Holder will have voting rights determined
as set out in clause 15.7(d)(ii).
	 
	 	(d)	 	At any Meeting at which an Extraordinary Resolution is or will be
proposed, the Extraordinary Resolution put to the vote of the Meeting will be
determined by a poll. On the declaration of the poll:

	 	(i)	 	a record will be made of the number of Note Holders voting
in favour of such resolution and the total nominal value of the Notes held by
them; and

page 31

 

	 	(ii)	 	votes may be given either personally, by proxy, attorney or
Representative and every Note Holder present will have one vote for every
complete $1.00 in nominal value of Notes standing in their name in the
Register.

	 	(e)	 	On a poll or in relation to a resolution signed in accordance with clause
15.12, a Note Holder entitled to more than one vote need not use all their votes or
cast all the votes they use in the same way.

	15.8	 	Polls

	 	(a)	 	A poll will be taken in such manner as the Chairman may direct and the result
of such a poll will be deemed to be a resolution of the Meeting at which the poll
was demanded.
	 
	 	(b)	 	A poll demanded on the election of a Chairman or on a question of
adjournment will be taken forthwith.
	 
	 	(c)	 	A poll demanded on any other question will be taken either immediately or
at such time (not being more than 30 days from the date of the Meeting) and place as
the Chairman may direct.
	 
	 	(d)	 	No notice need be given of a poll not taken immediately.
	 
	 	(e)	 	The demand for a poll will not prevent the continuance of a Meeting for
the transaction of any business other than the question on which the poll has been
demanded.

	15.9	 	Recognition of person registered
	 
	 	 	At any Meeting and upon the taking of any poll (howsoever conducted) or for the
purpose of signing a resolution in accordance with clause 15.12, the persons registered
as Note Holders in the relevant Register will be exclusively entitled to vote provided
that any one of joint Note Holders (to the exclusion of the other or others of them) will
be entitled to vote in respect of their joint Notes but, if more than one of such joint
Note Holders purports or attempts to vote, then only the vote given by that one whose
name stands first in the Register will be counted.
	 
	15.10	 	Proxies, attorneys and Representatives

	 	(a)	 	A Note Holder is entitled to appoint another person (whether a Note Holder or
not) as their proxy to attend and vote in their stead at any Meeting.
	 
	 	(b)	 	A proxy has the same right as the Note Holder to speak at the Meeting,
including the right to demand or join in demanding a poll.
	 
	 	(c)	 	An instrument appointing a proxy must be in writing and signed by the
appointor or his attorney, or if the appointor is a corporation, under its common
seal or the hand of its sole director and secretary, two Directors, or a director
and secretary, or of its attorney.

page 32

 

	 	(d)	 	Every such instrument appointing a proxy, power of attorney or
certificate of the appointment of a Representative must be delivered not less than
48 hours before the time fixed for the Meeting to:

	 	(i)	 	the place stated for that purpose in the notice convening
the Meeting; or
	 
	 	(ii)	 	if no such place is specified, then:

	 	(A)	 	in the case of a Meeting convened by the
Trustee, to the Trustee in accordance with clause 18; or
	 
	 	(B)	 	in the case of a Meeting convened by the
Company, to the Company in accordance with clause 18.

	 	(e)	 	The Company and the Trustee are entitled to issue, and are not bound or
required to make any enquiries regarding the authenticity, validity and
non-revocation of, any instrument appointing a proxy, power of attorney or
certificate of the appointment of a Representative and are not responsible for any
loss that may be occasioned by such acceptance.
	 
	 	(f)	 	An instrument of proxy must be in a form acceptable to the Company.
	 
	 	(g)	 	Unless it states the contrary, a proxy will be valid for any adjournment
of the Meeting.
	 
	 	(h)	 	A vote cast by a proxy, attorney or Representative will be valid
notwithstanding the previous death or unsoundness of mind or (in the case of a
corporation) the winding up of the appointor, the revocation of the proxy or of the
authority under which the proxy was executed provided that no intimation in writing
of such death, unsoundness of mind, winding-up or revocation has been received by
the Company or by the Trustee at the place where that proxy is required to be
delivered has been lodged before the commencement of the Meeting or adjourned
Meeting at which the proxy is used or, in the case of a resolution signed in
accordance with clause 15.12, before the resolution has been duly passed.

	15.11	 	Powers of Meeting
	 
	 	 	Without derogating from the powers conferred on the Trustee by this document (save
to the extent to which any Extraordinary Resolution under this clause 15.11 directs the
Trustee to take, or to refrain from taking, any action under those powers), a Meeting of
the Note Holders will have the following powers exercisable by Extraordinary Resolution,
namely, power to:

	 	(a)	 	authorise the Trustee to take, or to refrain from taking, any action
which may be taken by the Trustee under any express or implied power or authority
howsoever conferred;
	 
	 	(b)	 	sanction the release by the Trustee from any obligation under this
document either unconditionally or upon such terms as the Trustee may arrange with
the Company;

page 33

 

	 	(c)	 	sanction the agreement by the Trustee to any modification or compromise
permitted by law of any of the rights (however arising) of all the Note Holders, or
any class of Note Holders, against the Company;
	 
	 	(d)	 	authorise the Trustee to agree to the postponement of the repayment of
the principal in respect of any part of the Notes beyond the repayment date and to
the suspension or postponement for a time of the payment of interest on any part of
the Notes;
	 
	 	(e)	 	authorise the Trustee to sanction on behalf of all the Note Holders or
any class of Note Holders any scheme for reconstruction or the amalgamation with any
other corporation of the Company;
	 
	 	(f)	 	approve the appointment of a new trustee in accordance with this
document;
	 
	 	(g)	 	subject to clause 7.10, give any release or waiver in respect of anything
done or omitted by the Trustee or any breach by the Company;
	 
	 	(h)	 	approve or sanction the agreement by the Trustee to any alteration,
modification or variation whatsoever of, or addition to, the provisions contained in
this document; and
	 
	 	(i)	 	remove the Trustee from its office as trustee under this document,

	 	 	provided that if, in the opinion of the Trustee, any such Extraordinary Resolution
directly or indirectly especially prejudices or affects any class of Note Holders, that
Extraordinary Resolution will not become effective in respect of that class of Note
Holders unless it has been approved or confirmed by an Extraordinary Resolution of that
class of Note Holders.
	 
	15.12	 	Passing of resolutions
	 
	 	 	A resolution of Note Holders will be duly passed as an Extraordinary Resolution or
Ordinary Resolution (as the case may be) for the purpose of this clause 15 and any other
provision of this document if it is approved in any of the following ways:

	 	(a)	 	by a resolution in writing signed personally or by attorney, within 90
days from the date stated in the copies of the resolution sent for that purpose by
the Company to Note Holders on the Register at that date, by Note Holders which on
that date would have been entitled to cast not less than:

	 	(i)	 	in the case of an Extraordinary Resolution — 75%; and
	 
	 	(ii)	 	in the case of an Ordinary Resolution — 50%,

	 	 	 	of the votes of all Note Holders at a Meeting held on that date, which resolution
may be contained in one document or in several documents in like form each signed
by one or more Note Holders; or
	 
	 	(b)	 	at a Meeting, by Note Holders which are entitled to cast not less than:

	 	(i)	 	in the case of Extraordinary Resolution — 75%; and
	 
	 	(ii)	 	in the case of an Ordinary Resolution — 50%,

page 34

 

	 	 	 	of the votes of all Note Holders present or represented and voting at the Meeting,

	 	 	and for the purpose of clause 15.12(b), the Note Holders as recorded in the Register 48
hours before the time appointed for the holding of the Meeting will be the only Note
Holders entitled to vote and the Notes so recorded at such time will be the only Notes
taken into account in determining whether the requisite majority has been obtained.
	 
	15.13	 	Resolutions binding
	 
	 	 	Any resolution passed or approved in accordance with this clause 15 will be
binding upon all the Note Holders, or upon all members of the relevant class of Note
Holders, and each such Note Holder will be bound to give effect thereto accordingly and
the passing of any such resolution will be conclusive evidence that the circumstances
justified the passing thereof without right of appeal to any court or tribunal.
	 
	15.14	 	Minutes

	 	(a)	 	Minutes of all resolutions and of the proceedings at every Meeting will be
made and duly entered in books to be from time to time provided for that purpose by
the Company at the expense of the Company.
	 
	 	(b)	 	Any minutes of a Meeting will, if purporting to be signed by either the
Chairman of that Meeting or of the next succeeding Meeting or, in the case of a
minute of a resolution approved in accordance with clause 15.12, by or on behalf of
the Trustee:

	 	(i)	 	be conclusive evidence of the matters therein contained;
and
	 
	 	(ii)	 	until the contrary is proved, where such minutes have been
made in respect of the proceedings of a Meeting:

	 	(A)	 	that Meeting will be deemed to have been duly
held and convened; and
	 
	 	(B)	 	all resolutions passed at that Meeting, all
proceedings taken at that Meeting and all resolutions approved in
accordance with clause 15.12 at that Meeting, will be taken to have
been duly passed, taken or approved.

	 	(c)	 	Copies of such minutes will be supplied by the Company to the Trustee as
early as practicable after the holding of the Meeting in respect of which they were
made or the obtaining of approval of a resolution in accordance with clause 15.12.
	 
	 	(d)	 	The Trustee will be entitled to inspect at any time the minute book and
any other records relating to the passing or approval of any resolution of Note
Holders or of any class of Note Holders.

	15.15	 	Limitation on Company’s responsibility
	 
	 	 	The Company will not incur any Liability for giving effect to any resolution
purporting to have been passed at a Meeting convened pursuant to this document at which
minutes were made and signed and in particular, without

page 35

 

	 	 	limiting the generality of the foregoing, the Company will not incur Liability where it
is subsequently found that there was some defect in the constitution of the Meeting or
the passing of the resolution or that for any other reason, the resolution was not valid
or binding upon any of those Note Holders whom it purports to bind, the Trustee or the
Company.

	16	 	Discharge and Release
	 
	 	 	Upon the Outstanding Moneys being paid in full or otherwise redeemed or satisfied
(as to which the Trustee may accept as conclusive a Directors’ Certificate), the Trustee
must, if required by the Company:

	 	(a)	 	execute a confirmation of release in favour of the Company; and/or
	 
	 	(b)	 	terminate the Trust.

	17	 	Amendments to this document
	 
	17.1	 	General amending power with Trustee’s concurrence
	 
	 	 	Without prejudice to the scope of the powers conferred by clause 17.2, the Trustee
may concur with the Company in making any alteration, modification, addition to, or
cancellation from, this document and/or the Terms (including to this clause 17) if such
alteration, modification, addition or cancellation is, in the opinion of the Trustee:

	 	(a)	 	made to correct a manifest error or is of a formal, technical or
administrative nature only;
	 
	 	(b)	 	or of a barrister or solicitor instructed by the Trustee, necessary or
expedient to comply with the provisions of any statute, ordinance or any law made
under the authority of any statute or ordinance or with the requirement of any
statutory authority;
	 
	 	(c)	 	required by, in consequence of or consistently with any amendment to the
Corporations Act;
	 
	 	(d)	 	not prejudicial to the interests of any of the following:

	 	(i)	 	the Note Holders as a whole; or
	 
	 	(ii)	 	any class of Note Holders as a whole,
	 
	 	
other than the interests of:
	 
	 	(iii)	 	Note Holders of a class which has by Extraordinary Resolution; or
	 
	 	(iv)	 	Note Holders who have in writing,

	 	 	 	approved or sanctioned the alteration, modification or addition; or
	 
	 	(e)	 	approved or sanctioned by an Extraordinary Resolution of the Note Holders
in accordance with the provisions of clause 15.

page 36

 

	17.2	 	Amendment by circulation of terms and offer to repay
	 
	 	 	Without prejudice to the scope of the powers conferred by clause 17.1, the Trustee
may concur with the Company in making any alteration, modification, addition to, or
cancellation from, this document and/or the Terms, if:

	 	(a)	 	before the document effecting such alteration, modification, addition or
cancellation (Amending Trust Deed) is executed, the Company sends to all Note
Holders a circular which is approved by the Trustee and which:

	 	(i)	 	explains the terms and effect of the Amending Trust Deed
and states that the Amending Trust Deed is available for inspection by Note
Holders at the registered office of the Company or another place specified
for that purpose;
	 
	 	(ii)	 	contains an offer by the Company to the effect that, if the
Amending Trust Deed is executed by the Company and the Trustee, the Company
will repay in cash (whether or not repayment in this manner was contemplated
by the applicable Terms) the:

	 	(A)	 	Notes of every Note Holder;
	 
	 	(B)	 	who, within 21 days of the date of such
service, notifies the Company in writing that repayment of their Notes
is required in the manner stated in the circular;

	 	(iii)	 	contains a statement as to the date when, and the manner
in which, the Company will make a public announcement in each State and
Territory in which a Register is maintained as to whether the Amending Trust
Deed has or has not been executed by the Company and the Trustee, such date
to be not later than 90 days after the date of such circular;

	 	(b)	 	the Company, as soon as practicable after such circular has been served
on all Note Holders, delivers to the Trustee a certificate signed by an officer of
the Company stating that such circular has been so sent and specifying the date of
sending it to the last Note Holder entitled to receive the circular;
	 
	 	(c)	 	the Company, within 28 days after delivery of the certificate referred to
in clause 17.2(b), notifies the Trustee of the amount required to be paid by the
Company to repay the Notes of the Note Holders who have required repayment thereof
pursuant to such circular and the Company’s proposals for providing the
consideration required to repay such moneys;
	 
	 	(d)	 	within 21 days after the execution by the Company and the Trustee of the
Amending Trust Deed, the Company sends to such Note Holders as have required
repayment of their Notes pursuant to such circular a notice to the effect that the
Amending Trust Deed has been executed and that the relevant moneys will, upon such
Note Holders observing and complying with the terms of this document and the
applicable Terms relating to the repayment of Notes, forthwith be repaid by the
Company

page 37

 

	 	 	 	together with (unless such Notes do not carry interest) interest accrued thereon
up to the date of repayment at the rate payable in accordance with the applicable
Terms; and

	 	(e)	 	the Company makes a public announcement, or otherwise informs each Note
Holder by notice, on the date and in the manner specified in such circular as to
whether the Amending Trust Deed has or has not been executed by the Company and the
Trustee.

	17.3	 	Other modes of amendment
	 
	 	 	The Company may amend this document and/or the Terms with the prior written
consent of the Trustee (which consent must not be unreasonably withheld) where:

	 	(a)	 	the amendment takes effect only after repayment of all Notes accepted on
the terms of this document prior to the date of operation of such amendment;
	 
	 	(b)	 	all Notes outstanding as at the date the proposed amendment comes into
force were accepted subject to the terms of this document as so amended; and
	 
	 	(c)	 	the amendment does not, in the reasonable opinion of the Trustee,
materially prejudice the Trustee.

	18	 	Notices
	 
	18.1	 	General

	 	(a)	 	A notice, demand, certification, process or other communication relating to
this document must be in writing in English and may be given by an agent of the
sender.
	 
	 	(b)	 	Any notice to a Note Holder for any purpose may be:

	 	(i)	 	signed by, or on behalf of, the Company or the Trustee by
an officer of either of them respectively; and
	 
	 	(ii)	 	given by the Company or the Trustee to the Note Holder by
sending it in a manner set out in clause 18.2 to such Note Holder at the
address specified in the Register in respect of that Note or, in the case of
joint Note Holders, by sending a single notice to the Note Holder whose name
stands first in the Register to the registered address of that Note Holder.

	 	(c)	 	Any instructions, requests, approvals, consents and notices required to
be given pursuant to this document by the Company to the Trustee or by the Trustee
to the Company will be given in writing and signed by a duly authorised officer of
the party giving the same.

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	18.2	 	How to give a communication
	 
	 	 	In addition to any other lawful means, a communication may be given by being:

	 	(a)	 	personally delivered;
	 
	 	(b)	 	left at the party’s current address for notices;
	 
	 	(c)	 	sent to the party’s current address for notices by pre-paid ordinary mail
or, if the address is outside Australia, by pre-paid airmail;
	 
	 	(d)	 	sent by fax to the party’s current fax number for notices; or
	 
	 	(e)	 	emailed to the email address last notified by the party.

	18.3	 	Particulars for delivery of notices

	 	(a)	 	The particulars for delivery of notices are initially:

	 	 	 

	Company
	 	 
	 
	 	 
	Address:

	 	Building 4, 848 Boundary Road, Richlands QLD 4077
	 
	 	 
	Fax:

	 	(07) 3217 0811
	 
	 	 
	Attention:

	 	Company Secretary
	 
	 	 
	Trustee
	 	 
	 
	 	 
	Address:

	 	Level 4, 100 Queen Street, Melbourne VIC 3000
	 
	 	 
	Fax:

	 	(03) 9273 6634
	 
	 	 
	Attention:

	 	Anne Gauci

	 	(b)	 	The Company and the Trustee may change their address for receipt of
instructions, notices, approvals, requests, consents and other documents at any time
by giving notice of that change of address to the other and to all Note Holders.

	18.4	 	Communications by post
	 
	 	 	Subject to clause 18.7, a communication is given if posted:

	 	(a)	 	within Australia to an Australian address, three Business Days after
posting; or
	 
	 	(b)	 	in any other case, ten Business Days after posting.

	18.5	 	Communications by fax
	 
	 	 	Subject to clause 18.7, a communication is given if sent by fax, when the sender’s
fax machine produces a report that the fax was sent in full to the addressee. That
report is conclusive evidence that the addressee received the fax in full at the time indicated on that report.

page 39

 

	18.6	 	Communications by e-mail
	 
	 	 	Subject to clause 18.7, a communication is given if emailed to an email address,
when the e-mail enters the computer system of the addressee. A record of that time in
the e-mail transmission message contained in the computer system is conclusive evidence
that the addressee received the e-mail in full at the time indicated on e-mail
transmission message.
	 
	18.7	 	After hours communications
	 
	 	 	If a communication is given:

	 	(a)	 	after 5.00 pm in the place of receipt; or
	 
	 	(b)	 	on a day which is a Saturday, Sunday or bank or public holiday in the
place of receipt,

it is taken as having been given at 9.00 am on the next day which is not a Saturday,
Sunday or bank or public holiday in that place.

	18.8	 	Proving giving of a notice
	 
	 	 	In proving the giving of a notice to a Note Holder pursuant to clause 18.2(a) to
(c), it will be sufficient to prove that the person signing has signed for and on behalf
of the Company or the Trustee and that the notice properly addressed was placed in an
envelope and was:

	 	(a)	 	put in a Post Office or Post Office letter box in Australia;
	 
	 	(b)	 	given to a courier for delivery to that address.

	18.9	 	Process service
	 
	 	 	Any process or other document relating to litigation, administrative or arbitral
proceedings relating to this document may be served by any method contemplated by this
clause 18 or in accordance with any applicable law.

	19	 	General
	 
	19.1	 	Note Holder’s right to sue
	 
	 	 	Each Note Holder will be entitled to sue the Company in respect of any default in
the repayment of principal or interest (if applicable) on any Note made by the Note
Holder if such default continues for 30 days after such repayment has become due, except:

	 	(a)	 	where an Extraordinary Resolution passed by a Meeting determines
otherwise;
	 
	 	(b)	 	where the Trustee has determined or become bound to enforce the rights of
the Note Holders; or
	 
	 	(c)	 	if the Trustee has waived the default at the request or direction of the
Note Holder in relation to whom the Company has committed or suffered to subsist
such default.

page 40

 

	19.2	 	Documents and notices by Note Holders

	 	(a)	 	Where in this document provision is made for, or reference is made to the
production, surrender, lodgement, delivery, giving or providing of:

	 	(i)	 	instruments of transmission of Notes or other documents; or
	 
	 	(ii)	 	any notice, approval, consent, release or request,

	 	(b)	 	by Note Holders, the same will be deemed not to have been produced,
surrendered, lodged, delivered, given or provided:

	 	(i)	 	unless it is in writing; and
	 
	 	(ii)	 	unless and until it is received by both the Company at the
address described in clause 18.3 and the Trustee at the address described in
clause 18.3.

	19.3	 	Governing law

	 	(a)	 	This document will be construed and governed in accordance with the laws of
the State of Queensland.
	 
	 	(b)	 	Each party irrevocably and unconditionally submits to the non-exclusive
jurisdiction of the courts of Queensland and any courts which have jurisdiction to
hear appeals from any of those courts and waives any right to object to any
proceedings being brought in those courts.

	19.4	 	Inconsistencies and severance

	 	(a)	 	Without in any way affecting the operation of clause 17, and subject to clause
19.4(b), if:

	 	(i)	 	a covenant binding the Company and the Trustee, or either
of them, is prescribed by the Corporations Act (in this clause the Prescribed
Covenant);
	 
	 	(ii)	 	this document contains a covenant which, either in whole or
in part, is similar to, or to the same effect as, the Prescribed Covenant (in
this clause the Deed Covenant); and
	 
	 	(iii)	 	there is any inconsistency between the Prescribed Covenant
and the Deed Covenant,

	 	(A)	 	then solely for the purpose of determining
the manner in which the Company or the Trustee (as the case may be)
are to perform, carry out or discharge its or their obligations,
responsibilities or duties (as the case may be) pursuant to this
document and the Corporations Act and only during such period as this
document is not altered, modified or added to pursuant to clause 17 to
overcome such inconsistency, the Company or the Trustee (as the case
may be) will:

	 	(1)	 	if the Deed Covenant and the
Prescribed Covenant conflict so that they cannot both be
complied with — comply with the Prescribed Covenant;

page 41

 

	 	(2)	 	if the Deed Covenant and the
Prescribed Covenant both impose or relate to the same
obligations, responsibilities or duties, or require the same
action, but some or all of the provisions of one covenant are
stricter than the other — comply with the stricter provisions
of each covenant; or
	 
	 	(3)	 	if the Deed Covenant or the
Prescribed Covenant contain or impose obligations,
responsibilities or duties additional to the obligations,
responsibilities or duties required or imposed by the
Prescribed Covenant or the Deed Covenant, respectively — comply
with any such additional obligations, responsibilities or
duties within the time limits (if any) prescribed by the
relevant covenant.

	 	(b)	 	Without in any way limiting clauses 19.4(c) and (d), if:

	 	(i)	 	this document contains any provision giving effect to an
exemption granted, or declaration made, by ASIC modifying the operation of
the Corporations Act in any respect; and
	 
	 	(ii)	 	such exemption or declaration is further amended in any way
or subsequently revoked with the result that an inconsistency arises between
a provision of this document and the Corporations Act as modified by the
amendment or revocation of an exemption or declaration previously granted or
made,

then solely for the purpose of determining the manner in which the Company or the
Trustee (as the case may be) are to perform, carry out or discharge its or their
responsibilities or duties pursuant to this document and the Corporations Act and
only during such period as this document is not altered, modified or added to
pursuant to clause 17 to overcome such inconsistency, the Company or the Trustee
(as the case may be) will, if:

	 	(iii)	 	the provision in this document and the Corporations Act as
altered by the amendment or revocation of the exemption or declaration
previously granted or made conflict so that they cannot both be complied with
 — comply with the Corporations Act;
	 
	 	(iv)	 	the provision in this document and the Corporations Act as
altered by the amendment or revocation of the exemption or declaration
previously granted or made both impose or relate to the same responsibilities
or duties, or require the same action, but some or all of the provisions of
either this document or the Corporations Act are stricter than the other -
comply with the stricter provision; or
	 
	 	(v)	 	the Corporations Act as altered by the amendment or
revocation of the exemption or declaration previously granted or made
contains or imposes responsibilities or duties additional to the
responsibilities or duties required or imposed by the provision in
this document — comply with any such additional responsibilities or

page 42

 

	 	 	 	duties
within the time limits (if any) prescribed by the Corporations Act.

	 	(c)	 	In the event that any provision of this document is, or becomes at any
time at law, or under any law, unenforceable, invalid or void (save where the
operation of such law is to effectively prohibit the issuance and maintenance of
Notes in accordance with this document) no other provision will be affected thereby
and the remaining provisions will continue in force and effect as if such
unenforceable, invalid or void provision had not been included in this document.
	 
	 	(d)	 	If an unenforceable, invalid or illegal provision in this document would
be enforceable and valid if some part thereof was deleted, such provision will apply
with such deletion as may be necessary to render it enforceable and valid.
	 
	 	(e)	 	Without in any way limiting clauses 19.4(c) and (d):

	 	(i)	 	if the Listing Rules prohibit an act being done, the act
must not be done;
	 
	 	(ii)	 	nothing in this document prevents an act being done that
the Listing Rules requires to be done;
	 
	 	(iii)	 	if the Listing Rules require this document to contain a
provision and it does not contain such a provision, this document is deemed
to contain that provision;
	 
	 	(iv)	 	if the Listing Rules require this document not to contain a
provision and it contains such a provision, this document is deemed not to
contain that provision;
	 
	 	(v)	 	if any provision of this document is or becomes
inconsistent with the Listing Rules, this provision is deemed to be amended
to the extent necessary so that it is consistent with the Listing Rules.

	19.5	 	Stamp duty

	 	(a)	 	As between the parties, the Company is liable for and must pay all stamp duty
(including any fine or penalty except where it arises from default by the other
party) on or relating to this document, any document executed under it or any
dutiable transaction evidenced or effected by it.
	 
	 	(b)	 	If a party other than the Company pays any stamp duty (including any fine
or penalty) on or relating to this document, any document executed under it or any
dutiable transaction evidenced or effected by it, the Company must pay that amount
to the paying party on demand.

	19.6	 	Supervening legislation
	 
	 	 	Any present or future legislation which operates:

	 	(a)	 	to lessen or vary in favour of a party any of its obligations in
connection with this document; or

page 43

 

	 	(b)	 	to postpone, stay, suspend or curtail any of its rights under this
document;

is excluded except to the extent that its exclusion is prohibited or rendered ineffective
by law.

	19.7	 	Confidentiality

	 	(a)	 	The Trustee must not disclose to any person other than its professional
advisers under an obligation of confidence on similar terms to this clause 19.7 and
the Company any information or document relating to the Company except:

	 	(i)	 	with the consent of the Company (which must not be
unreasonably withheld or delayed);
	 
	 	(ii)	 	where permitted in this document;
	 
	 	(iii)	 	to a Related Corporation of the Trustee, or to a employee,
banker, lawyer or auditor of the Trustee;
	 
	 	(iv)	 	if required by law;
	 
	 	(v)	 	if required by any legal proceedings relating to this
document or a document delivered under or in relation to this document;
	 
	 	(vi)	 	if the information or document is in the public domain; or
	 
	 	(vii)	 	if the Trustee has been removed or has retired from
office, to any replacement Trustee.

	 	(b)	 	The operation of this clause survives the retirement or removal of the
Trustee as trustee for a period of five years.

	19.8	 	Further assurances
	 
	 	 	Each party must promptly execute all documents and do all things that the other
party from time to time reasonably requires to:

	 	(a)	 	effect, perfect or complete the provisions of this document or any
transaction contemplated by it; and
	 
	 	(b)	 	stamp and register this document or any document contemplated by this
document in any relevant jurisdiction and by any person that the other thinks fit.

	19.9	 	Waiver and exercise of rights

	 	(a)	 	Rights under this document and Default Events can only be waived by an
instrument duly executed by the party having the benefit of that right or Default
Events.
	 
	 	(b)	 	A single or partial exercise or waiver of a right relating to this
document will not prevent any other exercise of that right or the exercise of any
other right.

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	19.10	 	Rights cumulative
	 
	 	 	Rights under this document are cumulative and are in addition to any other rights.
	 
	19.11	 	Approval and consent
	 
	 	 	Subject to express provisions in this document, either party may conditionally or
unconditionally give or withhold any consent to be given under this document and is not
obliged to give its reasons for doing so.
	 
	19.12	 	Assignment
	 
	 	 	Neither party may dispose of or Encumber any right under this document without the
consent of the other.
	 
	19.13	 	Counterparts
	 
	 	 	This document may consist of a number of counterparts and, if so, the counterparts
taken together constitute one and the same instrument.

page 45

 

Schedule 1

Minimum Cash Levels

	 	 	 
	Period	 	Minimum Cash Balance
	Issue Date to 31 December 2006

	 	$22.5 million
	1 January 2007 to 30 June 2007

	 	$19.5 million
	1 July 2007 to 31 December 2007

	 	$15 million
	1 January 2008 to 30 June 2008

	 	$12.5 million
	1 July 2008 to 31 December 2008

	 	$7.5 million

page 46

 

Executed as a deed.

	 	 	 	 	 	 	 

	Executed by Metal Storm Limited:

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	 
	 	 	 	 	 	 
	/s/ Peter Ronald Wetzig

	 	 	 	 	 	/s/ Terence James O’Dwyer
	 

	 	 	 	 	 	 
	Company Secretary/Director

	 	 	 	 	 	Director
	 
	 	 	 	 	 	 
	Peter Ronald Wetzig

	 	 	 	 	 	Terence James O’Dwyer
	 

	 	 	 	 	 	 
	Name of Company Secretary/Director
(print)

	 	 	 	 	 	Name of Director (print)
	 
	 	 	 	 	 	 
	Executed by ANZ Executors & Trustee

	 	 	)	 	 	 
	Company Limited ABN 33 006 132 332

	 	 	)	 	 	 
	by its Attorneys under Power of

	 	 	)	 	 	 
	Attorney dated 8 December 1993, a

	 	 	)	 	 	/s/ Naomi Breen
	 

	 	 	 	 	 	 
	certified copy of which is filed in Dealing

	 	 	)	 	 	Attorney
	Number L798556E in the presence of:
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	Naomi Breen
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Full name of Attorney
	 
	 	 	 	 	 	 
	/s/ Ben Hiller

	 	 	 	 	 	/s/ Julie Annette Joop
	 

	 	 	 	 	 	 
	Witness

	 	 	 	 	 	Attorney
	 
	 	 	 	 	 	 
	Ben Hiller

	 	 	 	 	 	Julie Annette Joop
	 

	 	 	 	 	 	 
	Full name of witness

	 	 	 	 	 	Full name of Attorney

page 47

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