Document:

Unassociated Document

    

    AGREEMENT
TO TERMINATE DGWS OPTION

    

    This Agreement (this “Agreement”) is
made and entered into as of the 20th day of
December, 2008 (the “Effective Date”), by and between Eternal Energy Corp.
(“EERG”) and Heritage Natural Gas, Inc. (“HNG”).  EERG and HNG may be
referred to herein individually as “Party” or collectively as
“Parties.”

    

    IN CONSIDERATION OF the mutual
covenants and agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which the Parties hereby
acknowledge, the Parties agree as follows:

    

    1.           Nature
and Purpose of Agreement.  EERG and HNG entered into an
agreement on the 1st day of December, 2007, under which EERG acquired the option
to merge with HNG and thereby acquire ownership of HNG’s down-hole gas/water
separation (“DGWS”) opportunity (the “Option Agreement”).  In
consideration of HNG’s grant of the option under the Option Agreement, EERG
agreed (i) to pay Westport Petroleum Company (“Westport”) One Hundred
Twenty-Five Thousand US Dollars (US$125,000.00) in exchange for all of
Westport’s right, title and interest in and to the rights Westport held in the
Atlas Joint Venture, (ii) to drill and equip a well in Section 9-20-10W4,
Alberta, Canada for purposes of natural gas production from the Bow Island
reservoir with water disposal in the neighboring 10-9 well, and (iii) during the
period ending on April 30th, 2009,
to make all payments and to perform all covenants necessary to maintain the
exclusivity under all of HNG’s DGWS contracts.  Under the terms of the
Option Agreement, EERG was required to pay HNG Two Hundred Fifty Thousand US
Dollars (US$250,000.00) on each of December 31, 2008 and December 31, 2009 in
order to maintain the option to merge with HNG until the merger was
completed.  Following the grant of the option under the Option
Agreement, EERG tendered payments (net of inventory acquired by EERG) totaling
Two Hundred Thirty-Five Thousand US Dollars (US$235,000) as required by the
Option Agreement.  However, following HNG’s grant of the option under
the Option Agreement, Zavanna, LLC, Zavanna Canada Corporation and various other
plaintiffs commenced litigation against EERG, which rendered EERG unable to
drill and equip a well in Section 9-20-10W4 and unable to make the payments and
to perform the covenants necessary to maintain the exclusivity under HNG’s DGWS
contracts.  Consequently, HNG has lost exclusive rights under its DGWS
contracts.  HNG desires to terminate the Option Agreement and release
all claims it may have against EERG for failing to perform its obligations under
the Option Agreement.  EERG is willing to terminate the Option
Agreement upon the terms and conditions set forth below.

    

    2.           Termination
of Option Agreement.  The Parties (i)
hereby terminate the Option Agreement and release and discharge each other from
any and all duties, rights, liabilities and obligations arising under the Option
Agreement, and (ii) release and forever discharge each other and each other's
stockholders, directors, officers, employees, agents, successors and assigns
from any and all claims, rights, demands and damages of any kind or nature
arising out of the execution, delivery, performance under and/or termination of
the Option Agreement.  Accordingly, EERG acknowledges and agrees that,
following its execution and delivery of this Agreement, HNG shall have the sole
and exclusive right to pursue exploitation of HNG’s DGWS
opportunities.

    

    3.           Other
Covenants and Agreements.

    

    A.           Capitalized
terms not otherwise defined in this Paragraph shall have the meanings given such
terms in that certain License Agreement entered into by and between Down Hole
Water Management, Inc. and Westport on April 1, 2005 (the “License
Agreement”).  If, within six months following the date of this
Agreement, a net five percent working interest “carried to the tanks” is granted
in the Exclusive Territory to Down Hole Water Management, Inc. pursuant to the
terms of the License Agreement, then thereafter HNG shall also require each
working interest owner(s) granting such a working interest to Down Hole Water
Management, Inc. in the Exclusive Territory pursuant to the terms of the License
Agreement to grant EERG a net one percent over-riding royalty interest in the
same well.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    B.           If,
within twelve months from the Effective Date, (i) HNG secures an investor
(whether equity or debt) to enable it to pursue its DGWS opportunity in the
Exclusive Territory, (ii) HNG engages in a business combination transaction with
another entity, or (iii) HNG sells its interest in its DGWS opportunity, HNG
then agrees to use good faith efforts to induce the other party to the
transaction to remit to EERG all or some portion of the amount EERG has invested
in the DGWS opportunity, net of inventory acquired by EERG.  The
Parties agree that, as of the Effective Date, this amount is Two Hundred
Thirty-Five Thousand US Dollars (US$235,000).  HNG also agrees to use
good faith efforts to induce the other party in the transaction to grant to EERG
a one percent over-riding royalty interest in each well in which the entity
and/or EERG employs a DGWS tool.

    

    C.           Contemporaneously
with its execution and delivery of this Agreement, EERG agrees to transfer to
HNG all of EERG’s right, title and interest in and to the rights EERG holds in
the Atlas Joint Venture.

    

    D.           EERG
agrees, for itself and for its subsidiaries and affiliates, that it will not,
for a period of three years from the Effective Date, for its or their own
account or as an agent or otherwise pursuant to any contractual agreement for
the account of any party other than HNG, create, organize, establish, engage in,
operate, purchase or otherwise acquire an interest in, capitalize, facilitate
the capitalization of, act as investment banker to, lend to, or in any manner
acquire, either directly or indirectly and however structured, any business
which uses or intends to use down-hole gas-water separation and disposal
technologies and know how related thereto to produce natural gas within the
Exclusive Territory.  Notwithstanding the foregoing, however, EERG
shall have the right to sell all items of the DGWS equipment which, as of the
Effective Date, it maintains in its inventory.  EERG acknowledges that
the covenants made in this Subparagraph are reasonable in scope, duration and
geographical area.  EERG further agree that the covenants made in this
Subparagraph shall be construed as agreements independent of any other provision
of this Agreement.  Hence, the covenants made in this Subparagraph
shall survive the termination or expiration of this
Agreement.  Moreover, the existence of any claim, right or cause of
action of any kind or nature of EERG asserted or which may be asserted against
HNG, whether or not predicated upon the terms of this Agreement, shall not
constitute a defense to the enforcement of the covenants set forth in this
Subparagraph.  In the event of the actual or threatened breach of the
provisions of this Subparagraph, HNG shall have the right to obtain injunctive
relief and/or specific performance and to seek any other available remedy
available to it.  EERG further agrees to waive any requirement that
HNG secure or post a bond in connection with such remedy.

    

    4.           Execution
of Additional Documents.  The Parties will at any time and from
time to time after the Effective Date, upon request of the other Party, execute,
acknowledge and deliver all such further acts, deeds, assignments, transfers,
conveyances, powers of attorney and assurances as may be required to carry out
the intent of this Agreement.

    

    
      	
               
      

            	
              5.

            	
              Miscellaneous.

            

    

    

    A.           Agreement
Binding.  This Agreement shall be binding upon the Parties,
their legal representatives, successors and assigns.  This Agreement
contains the entire understanding of the Parties with respect to the subject
matter of this Agreement and supersedes all previous verbal and written
agreements.  There are no other agreements, representations, or
warranties other than as set forth herein.  This Agreement may be
amended only by a written instrument executed by the Parties.  No
delay or failure by either Party to exercise any right under this Agreement, and
no partial or single exercise of that right, shall constitute a waiver of that
or any other right, unless otherwise expressly provided herein.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    B.           Law, Jurisdiction and
Venue.  This Agreement and all matters and issues collateral
thereto shall be construed according to the laws of the State of
Colorado.  The Parties agree that the District Court of the County of
Arapahoe, Colorado, shall have exclusive jurisdiction, and shall be the
exclusive venue for any and all controversies and claims arising out of or
relating to this Agreement or a breach thereof, except as otherwise unanimously
agreed upon by the Parties.  If any Party shall commence any action or
proceeding against another Party in order to enforce the provisions hereof, or
to recover damages as the result of the alleged breach of any of the provisions
hereof, the prevailing Party therein shall be entitled to recover all reasonable
costs incurred in connection therewith, including, but not limited to,
reasonable attorneys' fees.

    

    C.           Severability.  If
any provision of this Agreement becomes or is found to be illegal or
unenforceable for any reason, such clause or provision must first be modified to
the extent necessary to make this Agreement legal and enforceable and then if
necessary, second, severed from the remainder of the Agreement to allow the
remainder of the Agreement to remain in full force and effect.

    

    D.           Captions and
Gender.  All captions, titles, headings and divisions hereof
are for purposes of convenience and reference only, and shall not be construed
to limit or affect the interpretation of this Agreement.  As used
herein, the masculine gender shall include the feminine and neuter genders, and
the singular shall include the plural, and vice versa, where the context
requires.

    

    6.           Counterparts;
Electronic Signatures.  For the convenience of the Parties, any
number of counterparts of this Agreement may be executed by any one or more
Parties hereto, and each such executed counterpart shall be, and shall be deemed
to be, an original, but all of which shall constitute, and shall be deemed to
constitute, in the aggregate but one and the same instrument.  This
Agreement may be circulated for signature through electronic transmission,
including, without limitation, facsimile and email, and all signatures so
obtained and transmitted shall be deemed for all purposes under this Agreement
to be original signatures until such time, if ever, as original counterparts are
exchanged by the Parties.

    

    In Witness Whereof, the Parties hereto
have entered into this Agreement as of the Effective Date.

     

    
      
        	 	
                Eternal
      Energy Corp.

              	 
	 	 	 	 
	
              	
                By:
      

              	/s/ John
      Anderson  	 
	 	 	Name:
      John Anderson, authorized signatory	 

      

    
      	 	
              

                Heritage
      Natural Gas, Inc.

              

            	 
	 	 	 	 
	
            	
              By:
      

            	/s/ Bradley M.
      Colby  	 
	 	 	Name:
      Bradley M. Colby, PresidentUnassociated Document

    

    
      	
              The
      Secretary

              AMI
      Australia Holdings Pty Limited

              Level
      1

              204-218
      Botany Road

              Alexandria  NSW  2015

            	 
      	
              St.George
      Bank Limited

              ABN
      92 055 513 070

               

              Level
      9

              65
      Berry St

              North
      Sydney NSW 2060

               

              Please
      reply to:

              Ross
      Fairjones

              P 0
      Box 6049 Shoppingworld

              North
      Sydney NSW 2060 Telephone 02 8923 2743

              Facsimile
      02 8923 2746

              Email
      fairjonesr(&stdeorge.com.au

            
	 
      	 
      	 
      

    

    

    Dear
Jacov,

     

    Re
: FACILITY OFFER

     

    Following
our recent discussions, we are pleased to offer the following
facilities:

    
      	
               

              Borrower:

            	
               

              AMI
      Australia Holdings Pty Limited

              ABN
      56 095 238 645

            

    

    

    
      	 
      	
               

              • Commercial
      Overdraft                         
                 
       $   500,000

            
	
               

              New
      Facilities

            	
               

              •
      Commercial Bill
      Acceptance/Discount        
        $1,900,000

            
	
               

              Total
      of all Limits

            	
               

              The
      total of all limits (excluding sublimits) is:
    $2,400,000

            
	
               

              Preconditions
      to Using the Facilities

            	
               

              Before
      any person named as a Borrower can use the facilities:

               

              1.      they
      must comply with drawdown requirements we specify from time to time and
      any other drawdown requirements in this offer.

            
	 
      	
               

              2.      the
      following things must be provided to us

               

              2.1      the
      securities (as
      detailed below)

            
	 
      	
               

              2.2      Copy
      of loan statements from Astarra Capital Limited As Trustee For The
      Professional Pension PST - Pension for the previous twelve (12)
      months.

            
	 
      	
               

              2.3      Full
      and completed Audited Financial Statements as at 30th June 2008 for AMI
      Australia Holdings Pty Limited to be received prior to any facility
      availability and to be to the Bank’s
  satisfaction.

            

    

    

    
      
        
           

        

        
          Page
1 of 17

          
            

          

        

        
           

        

      

    

    

    

    
      	 
      	
               

              2.4      Confirmation
      from your external accountants that all taxation obligations are paid and
      up to date.

            
	 
      	
               

              Each
      item must be in form and substance satisfactory to us, our solicitors and
      our consultants (including evidence of satisfactory stamping, and each
      item which is not an original document must be certified by the relevant
      entity (or in the case of annual financial statements, the relevant
      entity’s accountant or auditor) to be true and up to
  date).

            
	
               

              Other
      Conditions

            	
               

              Before
      any person named as a Borrower can use the facilities:

               

              1.      Quarterly
      Interim Management Accounts (Balance Sheet and Profit & Loss
      Statements) to be forwarded to the Bank within 45 days of each quarters
      end (ie: end of March, June, September and December) with the
      following:

            
	 
      	
               

              a.      Quarterly
      Asset Certificate with Aged Receivable summary;

            
	 
      	
               

              b.      Confirmation
      from your external accountants that all taxation obligations are up to
      date;

            
	 
      	
               

              c.      Certification
      by Directors that:

              -      Interest
      Times Cover is no less than 20 Times;

              -      Average
      Aged Debtors are less than 75 days.

            
	 
      	
               

              d.      A
      Debenture Certificate providing details of Inventory,
      Inventory-in-Transit, Aged Debtors, Employee numbers and other Statutory
      Declarations.

            
	 
      	
               

              2.      St
      George Limited is to be satisfied with the value of AMI Australia Holdings
      Pty Limited’s security on an ongoing basis. At all times, the minimum
      value of AMI Australia Holdings Pty Limited securities is to be greater
      than the total amount owing under the facilities.

            
	 
      	
               

              3.      Cash
      to be received from the sale of Whygo Video Conferencing Pty Limited is to
      be placed toward principal reductions on the Commercial Bill Facility as
      follows:

            
	 
      	
               

              a.      $100,000-00
      on 15th December 2008;

              b.      $100,000-00
      on 30th June 2009.

               

              Please
      note, these principal reductions are in addition to the monthly Principal
      & Interest repayment of $50,000-00

            
	 
      	
               

              4.      The
      borrower will not, without the Bank’s prior written consent, repay any
      moneys owed by it to Advanced Medical Institute Inc, prior to the
      repayment of the Bank’s facility.

            

    

    

    
      
        
           

        

        
          Page
2 of 17

          
            

          

        

        
           

        

      

    

    

    

    
      	 
      	
               

              5.      The
      client undertakes to restrict any dividend payment to 50% of any net
      profit after tax less principal debt reductions.

            
	 
      	
               

              6.      Unless
      the Bank otherwise consents in writing, during the term of the facility
      the borrower must:

            
	 
      	
               

              i.      Not
      make any material changes to its business or dispose of any of its core
      assets or undertakings;

            
	 
      	
               

              ii.      Not
      dispose of its Australian premature ejaculation or impotence business or
      its interest in PE Patent Holdco Pty Limited, Worldwide PE Patent Holdco
      Pty Limited or Intelligent Medical Technologies Pty Limited and not permit
      those entities to dispose of their assets;

            
	 
      	
               

              iii.      Not
      make changes to the Board or managing director of the
    company;

            
	 
      	
               

              iv.      Not
      permit any group company to issue, agree to issue or grant any option to
      issue any equity or any security convertible into any such
      equity;

            
	 
      	
               

              v.      Not
      subscribe or agree to subscribe for any equity interest in any
      party;

            
	 
      	
               

              vi.      Not
      repay any loan in priority to payment of this loan;

            
	 
      	
               

              vii.      Not
      enter into any joint venture agreement or other arrangement which gives
      any party an interest in the profits of its business;
or

            
	 
      	
               

              viii.      Not
      grant any encumbrance to any party.

            
	 
      	
               

              7.      The
      Bank will release Whygo Videoing Conferencing Pty Limited as guarantor on
      the following basis:

            
	 
      	
               

              a.      Principal
      reductions on the Commercial Bills facility from the sale of the business
      as follows:

            
	 
      	
               

              i.      $100,000-00
      on the 15th December 2008;

            
	 
      	
               

              ii.      $100,000-00
      on the 30th June 2009.

            
	 
      	
               

              b.      The
      sale is completed with transfer of full ownership (directors/
      shareholders) to the new owners.

            
	
               

              Security

            	
               

              The
      security for each
      facility is:

            
	 
      	
               

              1.      First
      registered fixed and floating charge over all the assets and undertaking
      of AMI Australia Holdings Pty Limited
  (Proposed).

            

    

    

    
      
        
           

        

        
          Page
3 of 17

          
            

          

        

        
           

        

      

    

    

    

    
      	 
      	
               

              2.      Deed
      of Subordination with payables due to the parent entity of AMI Australia
      Holdings Pty Ltd being subordinated to lending facilities held with
      St.George Bank Limited given by AMI Australia Holdings Pty Limited
      (Proposed).

            
	 
      	
               

              3.      First
      registered fixed and floating charge over the all assets and undertaking
      of AMI International Pty Limited and AMI Management Services Pty Limited
      and PE Patent Holdco Pty Limited and Advanced Medical Institute Pty
      Limited and Intelligent Medical Technologies Pty Limited and Whygo Video
      Conferencing Pty Limited and Worldwide PE Patent Holdco Pty Limited
      (Proposed).

            
	 
      	
               

              4.      Cross
      Guarantee & Indemnity Limited to the amount of $2,400,000, given by
      AMI International Pty Limited and AMI Management Services Pty Limited and
      PE Patent Holdco Pty Limited and Advanced Medical Institute Pty Limited
      and Intelligent Medical Technologies Pty Limited and Whygo Video
      Conferencing Pty Limited and Worldwide PE Patent Holdco Pty Limited
      (Proposed).

            
	 
      	
               

              5.      Letter
      of Comfort given by Advanced Medical Institute Inc
(Proposed).

                

              Unless
      indicated otherwise in this facility offer:

            
	 
      	
               

              a)      the
      amounts secured by the securities include the
      sum of the total amount
      owing for all facilities listed in this facility offer and other
      amounts; and

            
	 
      	
               

              b)      there
      are no limits on the amounts secured.

            
	 
      	
               

              St
      George Limited is to be satisfied with the value of AMI Australia Holdings
      Pty Limited’s security on an ongoing basis. At all times, the minimum
      value of AMI Australia Holdings Pty Limited securities is to be greater
      than the total amount owing under the facilities.

            
	
               

              Fees

            	
               

              ·      An
      Establishment fee of $15,000 is now due and payable.

              ·      Legal
      fees and other costs for preparing the security documents and
      this agreement and reviewing documents presented to us under this
      agreement. In addition, all other statutory charges such as stamp duty,
      ASIC fees and title office charges are for your
account.

            
	 
      	
               

              These
      fees are payable in respect of the total facilities detailed in this
      facility offer (i.e. they do not apply to each facility). The General
      Standard Terms and the details for particular facilities in this offer set
      out other fees we can require you to pay. Also, other normal banking fees
      and charges which may become payable under this facility are set out in
      the following fees and charges
booklets:

            

    

    

    
      
        
           

        

        
          Page
4 of 17

          
            

          

        

        
           

        

      

    

    

    

    
      	 
      	
              ·      “Business
      Lending and Finance Facilities, Fees and Charges for specific services and
      loan accounts” booklet,

              ·      “Corporate
      and Business Accounts and Payment Services, Fees and Charges and how to
      minimise them” booklet,

              ·      “Business
      Accounts and Payment Services, Fees and Charges and how to minimise them”
      booklet.

            
	 
      	
               

              Once
      paid, fees and charges are not refundable.

            
	
               

              Financial
      Information

            	
               

              The
      following financial information in respect of you and each guarantor must be
      provided to us within 4 months of the end of each financial year, or more
      often if we ask:

            
	 
      	
               

              a)      annual
      accountant prepared financial statements and taxation returns if you are a
      company

            
	 
      	
               

              b)      consolidated
      financial statements if you are a member of a group of
      companies

            
	 
      	
               

              c)      for
      each non-company, an annual asset and liability statement and taxation
      returns

            
	 
      	
               

              d)      a
      budget and cash flow forecast for your business and for the business of
      your group if you are a member of a group of companies, for the next 12
      month period.

            
	
               

              Financial
      Undertakings

            	
               

              You
      must ensure that, for each quarter:

                

              Interest cover ratio -
      EBIT for that period equals or exceeds 20.00 times the aggregate
      amount of your finance costs for that period (including payments in the
      nature of interest and capitalised interest, the interest component of
      finance lease and hire purchase payments and all other financial expenses
      which are allowable as a deduction before determining the taxable amount
      of your profit).

            
	
               

              Cancellation

            	
               

              If
      you give us three business days’ notice,
      you may cancel the whole or part of any unused portion of a facility limit. You may
      not revoke this notice.

            

    

    

    
      
        
           

        

        
          Page
5 of 17

          
            

          

        

        
           

        

      

    

    

    

    
      	
               

              1.
      Commercial Overdraft

            
	
               

              Facility
      Limit

            	
               

              $500,000-00
      (Five Hundred Thousand Australian Dollars)

            
	
               

              Purpose

            	
               

              General
      working capital for day to day needs.

            
	
               

              Term

            	
               

              6
      months from the first day the facility is made
  available.

            
	
               

              Using
      the Overdraft

            	
               

              We
      make funds available to you for your overdraft facility through an account
      we agree to in accordance with our usual practice from time to time. We
      anticipate that the amount drawn will fluctuate in accordance with the
      working needs of your business.

            
	 
      	
               

              You
      may not allow the facility limit to be
      exceeded without our approval. If the facility limit is
      exceeded without our approval, you must repay the excess
      immediately.

            
	 
      	
               

              Also,
      you must comply with the conditions that apply to the use of your account
      or any card connected to it. Those conditions (including any applicable
      fees) form part of this facility agreement.

            
	
               

              Interest

            	
               

              We
      charge interest on that part of the balance owing which is within the
      facility limit at our commercial base rate plus a margin of 1.65% per
      annum.

            
	 
      	
               

              The
      interest rate may vary at any time.

            
	 
      	
               

              As
      an indication, our commercial base rate is currently 12.6% per
      annum.

            
	 
      	
               

              If
      the balance owing exceeds the facility limit with or without our approval,
      we charge interest on that excess at the default rate.

            
	 
      	
               

              Interest
      is debited to your account on the last day of each
  month.

            
	 
      	
               

              The
      “Interest” and “Default Interest” clauses in the General Standard Terms
      explain how we calculate interest.

            
	
               

              Fees

            	
               

              You
      must pay us the following fee(s):

              A
      line fee of 1.O% per annum of the peak facility limit for the
      month applies. This is calculated daily. It is debited to your account in
      arrears and is payable by you on the last day of each
    month.

            
	 
      	
               

              The
      ‘Corporate and Business Accounts and Payment Services, Fees and Charges
      and how to minimise them” booklet under the heading “Business Cheque Account”
      sets out other normal banking fees and charges which may become
      payable under this facility.

            

    

    
 

    
      
        
          
             

          

          
            Page
6 of 17

            
              

            

          

          
             

          

        

      

      

    

     

    
      	
               

              Repayment

            	
               

              We
      may demand at any time that you repay the whole or part of the total amount owing. You
      must repay in full the amount we demand at the time we specify in the
      demand.

            

    

     

     

     

    
      
         

      

      
        Page
7 of 17

        
          

        

      

      
         

      

    

     

     

    
      	
               

              2.
      Commercial Bill Acceptance/Discount

            
	
               

              Facility
      Limit Purpose

            	
               

              $1,900,000-00
      (One Million, Nine Hundred Thousand Australian Dollars)

            
	
               

              Term
      Acceptance

            	
               

              Refinancing
      Facilities from ANZ Nominees (Astarra Capital Limited As Trustee For The
      Professional Pension PST - Pension)

            
	
               

              Drawdown

            	
               

              3
      years from the first drawdown
      date.

            
	
               

              Acceptance

            	
               

              We
      agree to accept bills of exchange drawn by you when you request us in
      writing to do so.

            
	
               

              Drawdowns

            	
               

              Drawdowns
      as follows:

              1.      an
      initial drawdown of $1,900,000.00 no later than 30 days from the date you
      accept this offer

            
	 
      	
               

              You
      must provide us with details of the requested drawings by close of the
      business day
      before the requested drawdown
      date.

            
	 
      	
               

              The
      aggregate face value of all bills outstanding at any time must not exceed
      the facility
      limit.

            
	
               

              Term
      to Maturity of Bills

            	
               

              One
      to six months.

            
	
               

              Form
      of bills

            	
               

              Face
      value of $100,000.00 each, or such other value we approve and otherwise in
      the form we require.

            
	
               

              Floating
      Rate Bills

            	
               

              If
      you ask, we agree to discount bills accepted by us under this facility at
      a variable rate. Before doing so we agree with you on the term to maturity
      of the bills. All bills are discounted once only for that maturity. We
      discount bills at the SGB Rate, which is the rate we are prepared to buy
      bills of an equivalent term to maturity and face value accepted by an
      Australian trading bank on the day of acceptance.

            
	
               

              Fixed
      Rate Bills

            	
               

              If
      you ask, we agree to discount bills accepted by us under this facility at
      a fixed rate for an agreed term and aggregate face value. You may request
      this in respect of the first drawing or at the completion of a term to
      maturity (or expiry of a period in which the discount rate has been
      previously fixed). We agree to discount bills for an additional period
      provided the term does not end after the overall term of the
      facility.

            
	 
      	
               

              You
      may request us to give you an indicative quotation as to the discount rate
      likely to apply (at any time). However, any indicative quotation given is
      not binding on us. If we agree, you can also request us to fix a rate for
      a specific term and aggregate face value, to apply at a future date
      (called a “forward start
      bill arrangement”).

            

    

    

    
      
        
           

        

        
          Page
8 of 17

          
            

          

        

        
           

        

      

    

    

    

    
      	 
      	
               

              Following
      the end of any period in which the discount rate has been fixed, if you do
      not ask us to fix it for a further period, the discount rate will be
      calculated on a variable basis (see “Floating Rate Bills”
      above).

            
	
               

              Capped
      Rate Bills

            	
               

              If
      you ask, we agree to discount bills accepted by us under this facility at
      a capped rate for an agreed term and aggregate face value. You may request
      this in respect of the first drawing or at the completion of a term to
      maturity (or expiry of a period in which the discount rate has been
      previously capped). We agree to discount bills for an additional period
      provided the term does not end after the overall term of the
      facility.

            
	 
      	
               

              We
      discount Capped Bills at either the cap rate or the reference rate (the
      reference rate we use is the rate set out in “Floating Rate Bills” above).
      If, on the acceptance date of any bills during the agreed capped rate
      term,

            
	 
      	
              ·      the
      reference rate is greater than the cap rate, then the bills are discounted
      at the cap rate;

              ·      the
      reference rate is less than or equal to the cap rate, the bills are
      discounted at the reference rate.

            
	 
      	
               

              You
      may request us to give you an indicative quotation as to the cap rate
      likely to apply (at any time). However, any indicative quotation given is
      not binding on us. If we agree, you can also request us to cap a rate for
      a specific term and aggregate face value, to apply at a future date
      (called a “forward start
      bill arrangement”).

            
	 
      	
               

              Following
      the end of any period in which the discount rate has been capped, if you
      do not ask us to cap it for a further period, the discount rate will be
      calculated on a variable basis (see “Floating Rate Bills”
      above).

            
	
               

              Collared
      Rate Bills

            	
               

              If
      you ask, we agree to discount bills accepted by us under this facility at
      a rate equal to or between a cap rate and a floor rate for an agreed term
      and aggregate face value. These are known as Collared Rate Bills. You may
      request this in respect of the first drawing or at the completion of a
      term to maturity (or expiry of a period in which the discount rate has
      been set for Collared Rate Bills). We agree to discount bills for an
      additional period provided the term does not end after the overall term of the
      facility.

            
	 
      	
               

              We
      discount Collared Rate Bills at either a cap rate, a floor rate or the
      reference rate (the reference rate we use is the rate set out in “Floating
      Rate Bills” above).

            
	 
      	
               

              If,
      on the acceptance date of any bills during the agreed capped rate term,
      the reference rate is:

            

    

    

    
      
        
           

        

        
          Page
9 of 17

          
            

          

        

        
           

        

      

    

    

    

    
      	 
      	
              ·      greater
      than the cap rate, then the bills are discounted at the cap
      rate;

              ·      equal
      to or less than the cap rate and equal to or greater than the floor rate,
      then the bills are discounted at the reference rate;

              ·      less
      than the floor rate, then the bills are discounted at the floor
      rate.

            
	 
      	
               

              You
      may request us to give you an indicative quotation as to the cap and floor
      rates likely to apply (at any time). However, any indicative quotation
      given is not binding on us. If we agree, you can also request us to agree
      to cap and floor rates for a specific term and aggregate face value, to
      apply at a future date (called a “forward start bill
      arrangement”).

            
	 
      	
               

              Following
      the end of any period in which the discount rate has been set for collared
      rate bills, if you do not ask us to enter into collared rate bills for a
      further period, the discount rate will be calculated on a variable basis
      (see “Floating Rate Bills” above).

            
	
               

              Customised
      Bill Solutions

            	
               

              We
      have a range of interest rate exposure management products which we bundle
      together under our Customised Bill Solutions package. The following
      combinations can be arranged to suit your requirements:

               

            
	 
      	
              ·      Floating
      Rate Bill + Capped Rate Bill

              ·      Floating
      Rate Bill + Collared Rate Bill

              ·      Fixed
      Rate Bill + Floating Rate Bill

              ·      Fixed
      Rate Bill + Capped Rate Bill

              ·      Fixed
      Rate Bill + Collared Rate Bill

              ·      Fixed
      Rate Bill + Capped Rate Bill + Floating Rate Bill

              ·      Fixed
      Rate Bill + Collared Rate Bill + Floating Rate Bill.

            
	 
      	
               

              Please
      contact your Relationship Manager to discuss our Customised Bill Solutions
      packages.

            
	
               

              Interest
      Rate Exposure Management

            	
               

              We
      have a further range of interest rate exposure management products. If you
      are interested in entering into a specific type of interest rate exposure
      management transaction, we invite you to contact your Relationship Manager
      to discuss your requirements (see “Entering financial markets
      transactions” in the General Standard Terms).

            
	
               

              Fees

            	
               

              You
      must pay us the following fee(s):

                

              An
      acceptance fee of 1.65% per annum on the face value of each bill we
      accept. It is calculated from and including the date we accept a bill
      until but excluding the date of maturity of the bill. It is payable by you
      on the day we accept a bill and is deducted from any discounted
      proceeds

            

    

    

    
      
        
           

        

        
          Page
10 of 17

          
            

          

        

        
           

        

      

    

    

    

    
      	 
      	
               

              A
      preparation/rollover fee of $120 is payable by you at drawdown and on each
      rollover.

            
	
               

              Premiums

            	
               

              A
      premium is payable for entering into Capped Rate Bills and Collared Rate
      Bills. Its amount and the date you must pay it is set out in the
      confirmation we issue to you when we discount the Capped Rate Bill or the
      Collared Rate Bill. (If the confirmation specifies more than one premium,
      but does not specify which is payable on which premium payment date, the
      first premium specified is payable on the first premium payment date
      specified, and so on.)

            
	 
      	
               

              However,
      a confirmation for Collared Rate Bills may specify a net premium to be
      paid by the net premium payer. If the confirmation does this, then only
      the net premium is payable on the net premium payment date set out in the
      confirmation. (If the confirmation specifies more than one net premium,
      but does not specify which is payable on which net premium payment date,
      the first net premium specified is payable on the first net premium
      payment date specified, and so on.)

            
	
               

              Indemnity

            	
               

              You
      must pay us an amount equal to the face value of each bill we accept under
      this facility not later than 10.00 am on the day the bill falls due for
      payment at the completion of the term to maturity. You also indemnify us
      against, and therefore you must pay us on demand for, any other liability,
      loss or costs we
      incur or suffer in connection with our acceptance of bills under this
      facility.

            
	 
      	
               

              If
      you elect not to rollover any bills discounted during a period in which
      the discount rate has been fixed, (or if you and we enter into a forward start bill arrangement
      and, for any reason, any bill is not drawn on the agreed future
      date) you must, in addition to your indemnification obligations, pay us
      any break costs
      (see the “Break costs” clause in the General Standard
      Terms).

            
	 
      	
               

              If
      you do not pay any amount you owe us when it is due (including any amount
      payable under this “Indemnity”) you must pay interest on that overdue
      amount at the default
      rate. The “Default Interest” clause in the General Standard Terms
      explains how we calculate default interest.

            
	
               

              Rollover

            	
               

              If
      you are not in default we agree to rollover maturing bills, in which case
      the procedures set out above apply equally. Unless you tell us otherwise
      by close of the business
      day before the relevant rollover date, we will rollover maturing
      bills for bills of an equivalent face value and an equivalent term to
      maturity or to the end of the term (whichever is
      shorter).

            

    

    

    
      
        
           

        

        
          Page
11 of 17

          
            

          

        

        
           

        

      

    

    

    

    
      	 
      	
               

              However,
      if we discount the replacement bills, your obligation to pay us the face
      value of maturing bills is reduced by the discounted proceeds of the
      replacement bills.

            
	
               

              Confirmations

            	
               

              Usually
      we will send you a confirmation of the commercial details of Fixed Rate
      Bills, Capped Rate Bills, Collared Rate Bills and Customised Bill
      Solution. The confirmation is to be read in conjunction with this facility
      agreement. Within one business day of
      receiving the confirmation you must sign and return a copy of it to us or
      tell us if you think there is an error in it (you are bound by the terms
      and conditions unless you tell us of a possible error within that time).
      However, the transaction described in the confirmation is still valid if
      these procedures are not followed.

            
	
               

              Authority
      to Sign and Complete Bills

            	
               

              You
      authorise each of our employees whose job title includes the word
      “manager” or “solicitor”, individually to:

              ·      sign
      on your behalf as drawer and indorser in blank any bill to be drawn and
      indorsed by you under this facility; and

            
	 
      	
              ·      deliver
      and issue the bill for you; and

            
	 
      	
              ·      complete
      the bill (including the tenor) in accordance with your request;
      and

            
	 
      	
              ·      complete
      the face value of the bill, insert the drawdown date or
      rollover date as the issue date and complete any other incomplete aspect
      of the bill.

            

    

     

    Should
you have any questions, or if you would like to discuss these or any other
issues, please do not hesitate to contact me.

     

    Yours
sincerely

     

    

     

    Ross
Fairjones

    Relationship
Manager

    

    

    
      
        
           

        

        
          Page
12 of 17

          
            

          

        

        
           

        

      

    

    

    

    
      
        	
                 

                      
                  Acceptance
      by you:

                

              

      

       

    

    By
signing this document, you:

     

    
      	
               
      

            	
              1.

            	
              accept
      the facilities on the terms set out in this facility offer and the General
      Standard Terms

            

    

     

    
      	
               
      

            	
              2.

            	
              acknowledge
      that:

            

    

     

    
      	
               
      

            	
              a.

            	
              a
      legally binding contract is created between you and
  us

            

    

     

    
      	
               
      

            	
              b.

            	
              you
      have made your own independent judgment and decision to enter this
      facility agreement and are not relying on any information given or
      representations made by us to you

            

    

     

    
      	
               
      

            	
              3.

            	
              make
      the declarations in the General Standard
Terms.

            

    

     

    We
recommend that you obtain independent legal and financial advice before entering
into this facility agreement.

    

    
      	
              EXECUTED by AMI AUSTRALIA PTY
      LIMITED  ABN 56 095 238 645 in
      accordance with section 127(1) of the Corporations Act 2001 (Cwlth) by
      authority of its directors:

            	
              )

              )

              )

              )

            	 
      
	 	)
      
              )

              )

              )

              )

            	 
	      
              Signature
      of Director

            	
              )
      

              )
      

            	      
              Signature
      of director/company secretary*

                *delete whichever is not
      applicable

            
	 	)
                    
              )

              )

            	 
	Name
      of director (block letters)
      
               

            	      
              )

              )

              )

            	      
              Name
      of director/company secretary*

              (block
      letters)

              *delete
      whichever is not applicable

            
	 	      
              )

              )

              )

              )

              )

              )

            	 
	      
              Dated:

            	 	      
              Dated:

            
	
               

            	
               

            	
            
	 
      	 
      	 
      

    

     

    

    

    
      
        
           

        

        
          Page
13 of 17

          
            

          

        

        
           

        

      

    

    

     

    
      
        

        
          
            	
                     

                          
                            
                        Acknowledgement
      by
guarantor(s):

                      

                    

                  

          

            

        

      

    

    The terms
of this facility agreement are acknowledged by each guarantor

    
      

      
        	
                EXECUTED by AMI INTERNATIONAL PTY
      LIMITED  ABN 14 120 970 461 in
      accordance with section 127(1) of the Corporations Act 2001 (Cwlth) by
      authority of its directors:

              	
                )

                )

                )

                )

              	 
      
	 	)
      
                )

                )

                )

                )

              	 
	      
                Signature
      of Director

              	
                )
      

                )
      

              	      
                Signature
      of director/company secretary*

                  *delete whichever is not
      applicable

              
	 	)
                      
                )

                )

              	 
	Name
      of director (block letters)
      
                 

              	      
                )

                )

                )

              	      
                Name
      of director/company secretary*

                (block
      letters)

                *delete
      whichever is not applicable

              
	 	      
                )

                )

                )

                )

                )

                )

              	 
	      
                Dated:

              	 	      
                Dated:

              
	
                 

              	
                 

              	
              
	 
      	 
      	 
      

      

      

      
        	
                EXECUTED by AMI MANAGEMENT PTY
      LIMITED  ABN 56 116 456 136 in
      accordance with section 127(1) of the Corporations Act 2001 (Cwlth) by
      authority of its directors:

              	
                )

                )

                )

                )

              	 
      
	 	)
      
                )

                )

                )

                )

              	 
	      
                Signature
      of Director

              	
                )
      

                )
      

              	      
                Signature
      of director/company secretary*

                  *delete whichever is not
      applicable

              
	 	)
                      
                )

                )

              	 
	Name
      of director (block letters)
      
                 

              	      
                )

                )

                )

              	      
                Name
      of director/company secretary*

                (block
      letters)

                *delete
      whichever is not applicable

              
	 	      
                )

                )

                )

                )

                )

                )

              	 
	      
                Dated:

              	 	      
                Dated:

              
	
                 

              	
                 

              	
              
	 
      	 
      	 
      

      

       

       

    

    

    
      
        
           

        

        
          Page
14 of 17

          
            

          

        

        
           

        

      

    

    

    
      
        
 

        
          	
                  EXECUTED by PE PATENT HOLDCO PTY
      LIMITED  ABN 65 116 786 737 in
      accordance with section 127(1) of the Corporations Act 2001 (Cwlth) by
      authority of its directors:

                	
                  )

                  )

                  )

                  )

                	 
      
	 	)
      
                  )

                  )

                  )

                  )

                	 
	      
                  Signature
      of Director

                	
                  )
      

                  )
      

                	      
                  Signature
      of director/company secretary*

                    *delete whichever is not
      applicable

                
	 	)
                        
                  )

                  )

                	 
	Name
      of director (block letters)
      
                   

                	      
                  )

                  )

                  )

                	      
                  Name
      of director/company secretary*

                  (block
      letters)

                  *delete
      whichever is not applicable

                
	 	      
                  )

                  )

                  )

                  )

                  )

                  )

                	 
	      
                  Dated:

                	 	      
                  Dated:

                
	 
      	 
      	 
      

        

        

        
          	
                        
                    EXECUTED by ADVANCED MEDICAL INSTITUTE PTY
      LIMITED  ABN 21 117 372 915 in
      accordance with section 127(1) of the Corporations Act 2001 (Cwlth) by
      authority of its directors:

                  

                	
                  )

                  )

                  )

                  )

                	 
      
	 	)
      
                  )

                  )

                  )

                  )

                	 
	      
                  Signature
      of Director

                	
                  )
      

                  )
      

                	      
                  Signature
      of director/company secretary*

                    *delete whichever is not
      applicable

                
	 	)
                        
                  )

                  )

                	 
	Name
      of director (block letters)
      
                   

                	      
                  )

                  )

                  )

                	      
                  Name
      of director/company secretary*

                  (block
      letters)

                  *delete
      whichever is not applicable

                
	 	      
                  )

                  )

                  )

                  )

                  )

                  )

                	 
	      
                  Dated:

                	 	      
                  Dated:

                
	 
      	 
      	 
      

        

      

    

     

    

    
      
        
           

        

        
          Page
15 of 17

          
            

          

        

        
           

        

      

    

    

    
      
        
          
 

          
            	
                    EXECUTED by INTELLIGENT MEDICAL
      TECHNOLOGIES PTY LIMITED  ABN 30 107 047 496 in
      accordance with section 127(1) of the Corporations Act 2001 (Cwlth) by
      authority of its directors:

                  	
                    )

                    )

                    )

                    )

                  	 
      
	 	)
      
                    )

                    )

                    )

                    )

                  	 
	      
                    Signature
      of Director

                  	
                    )
      

                    )
      

                  	      
                    Signature
      of director/company secretary*

                      *delete whichever is not
      applicable

                  
	 	)
                          
                    )

                    )

                  	 
	Name
      of director (block letters)
      
                     

                  	      
                    )

                    )

                    )

                  	      
                    Name
      of director/company secretary*

                    (block
      letters)

                    *delete
      whichever is not applicable

                  
	 	      
                    )

                    )

                    )

                    )

                    )

                    )

                  	 
	      
                    Dated:

                  	 	      
                    Dated:

                  
	 
      	 
      	 
      

          

          

          
            	
                    
                      EXECUTED by WHYGO VIDEO CONFERENCING PTY
      LIMITED  ABN 44 105 732 492 in
      accordance with section 127(1) of the Corporations Act 2001 (Cwlth) by
      authority of its directors:

                    

                  	
                    )

                    )

                    )

                    )

                  	 
      
	 	)
      
                    )

                    )

                    )

                    )

                  	 
	      
                    Signature
      of Director

                  	
                    )
      

                    )
      

                  	      
                    Signature
      of director/company secretary*

                      *delete whichever is not
      applicable

                  
	 	)
                          
                    )

                    )

                  	 
	Name
      of director (block letters)
      
                     

                  	      
                    )

                    )

                    )

                  	      
                    Name
      of director/company secretary*

                    (block
      letters)

                    *delete
      whichever is not applicable

                  
	 	      
                    )

                    )

                    )

                    )

                    )

                    )

                  	 
	      
                    Dated:

                  	 	      
                    Dated:

                  
	 
      	 
      	 
      

          

        

      

    

     

    

    
      
        
           

        

        
          Page
16 of 17

          
            

          

        

        
           

        

      

    

    

    
      

      
        	
                
                  EXECUTED by WORLDWIDE PE PATENT PTY
      LIMITED (ABN 16 117 157 427) in accordance with section 127(1) of
      the Corporations Act 2001 (Cwlth) by authority of its
      directors:

                

              	
                )

                )

                )

                )

              	 
      
	 	)
      
                )

                )

                )

                )

              	 
	      
                Signature
      of Director

              	
                )
      

                )
      

              	      
                Signature
      of director/company secretary*

                  *delete whichever is not
      applicable

              
	 	)
                      
                )

                )

              	 
	Name
      of director (block letters)
      
                 

              	      
                )

                )

                )

              	      
                Name
      of director/company secretary*

                (block
      letters)

                *delete
      whichever is not applicable

              
	 	      
                )

                )

                )

                )

                )

                )

              	 
	      
                Dated:

              	 	      
                Dated:

              
	 
      	 
      	 
      

      

       

    

     

    

    
      
        
           

        

        
          Page
17 of 17

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