Document:

Exhibit
10.1

Corporate
Letter of Offer

“Channell
Bushman Group”

2
February 2007

Relationship
Management

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

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

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

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

The dedicated team at the Sydney location is led by:

	
  ·

  	
  Director

  	
  Patrick Ying

  
	
   

  	
   

  	
   

  
	
   

  	
  Direct Telephone Number

  	
  (02) 9237 9756

  
	
   

  	
   

  	
   

  
	
   

  	
  Facsimile Number

  	
  (02) 9237 9752

  
	
   

  	
   

  	
   

  
	
   

  	
  Email

  	
  Patrick.Ying@nab.com.au

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ·

  	
  Associate Director

  	
  Graeme Johnson

  
	
   

  	
   

  	
   

  
	
   

  	
  Direct Telephone Number

  	
  (02) 9237 9731

  
	
   

  	
   

  	
   

  
	
   

  	
  Facsimile Number

  	
  (02) 9237 9752

  
	
   

  	
   

  	
   

  
	
   

  	
  Email

  	
  Graeme.L.Johnson@nab.com.au

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ·

  	
  Account Manager

  	
  Christine Tsang

  
	
   

  	
   

  	
   

  
	
   

  	
  Direct Telephone Number

  	
  (02) 9237 1917

  
	
   

  	
   

  	
   

  
	
   

  	
  Facsimile Number

  	
  (02) 9237 9752

  
	
   

  	
   

  	
   

  
	
   

  	
  Email

  	
  Christine.Tsang@nab.com.au

  

 

Other important members of the team will include:

	
  ·

  	
  Credit Analyst

  	
  Joseph Ritchie

  
	
   

  	
   

  	
   

  
	
   

  	
  Direct Telephone Number

  	
  (02) 9237 9735

  
	
   

  	
   

  	
   

  
	
   

  	
  Facsimile Number

  	
  (02) 9237 9752

  
	
   

  	
   

  	
   

  
	
   

  	
  Email

  	
  Joseph.H.Ritchie@nab.com.au

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ·

  	
  Business Banking Assistant

  	
  Steven Wu

  
	
   

  	
   

  	
   

  
	
   

  	
  Direct Telephone Number

  	
  (02) 9237 9253

  
	
   

  	
   

  	
   

  
	
   

  	
  Facsimile Number

  	
  (02) 9237 9752

  
	
   

  	
   

  	
   

  
	
   

  	
  Email

  	
  Steven.Wu@nab.com.au

  

 

Offer Period

This Letter of Offer remains
available for acceptance until 12th February 2007.

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

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

	
  Yours sincerely,

  
	
   

  
	
   

  
	
  /s/ Graeme Johnson

  	
   

  
	
   

  
	
   

  
	
  Graeme Johnson

  
	
   

  
	
  Associate Director

  

 

Table of
Contents

	
  Part 1

  	
  Details of Facilities

  	
  7

  
	
   

  	
  1

  	
  Facility Summary

  	
  7

  
	
   

  	
  2

  	
  New facilities in this Letter of Offer

  	
  9

  
	
   

  	
  3

  	
  Other facilities

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
  Part 2

  	
  Security

  	
  18

  
	
   

  	
   

  	
   

  
	
  Part 3

  	
  Establishment Fees and Charges

  	
  19

  
	
   

  	
   

  	
   

  
	
  Part 4

  	
  Conditions Precedent and other information

  	
  20

  
	
   

  	
   

  	
   

  
	
  Part 5

  	
  Covenants and Undertakings

  	
  22

  
	
   

  	
   

  	
   

  
	
  Part 6

  	
  Property Conditions

  	
  26

  
	
   

  	
   

  	
   

  
	
  Part 7

  	
  General Conditions

  	
  27

  
	
   

  	
   

  	
   

  
	
   

  	
  1

  	
  Conditions precedent

  	
  27

  
	
   

  	
  2

  	
  Review

  	
   

  	
  28

  
	
   

  	
   

  	
  2.1

  	
  Scope and frequency

  	
  28

  
	
   

  	
   

  	
  2.2

  	
  Assistance

  	
  28

  
	
   

  	
  3

  	
  Payment obligations

  	
  28

  
	
   

  	
   

  	
  3.1

  	
  General repayment obligations

  	
  28

  
	
   

  	
   

  	
  3.2

  	
  Fees charges and other premiums

  	
  28

  
	
   

  	
   

  	
  3.3

  	
  Calculation and payment of interest

  	
  29

  
	
   

  	
   

  	
  3.4

  	
  Setting of interest rates

  	
  29

  
	
   

  	
   

  	
  3.5

  	
  Pricing Review

  	
  29

  
	
   

  	
   

  	
  3.6

  	
  Accounting for transactions

  	
  29

  
	
   

  	
   

  	
  3.7

  	
  Payment in Australian Dollars

  	
  30

  
	
   

  	
   

  	
  3.8

  	
  Payment in cleared funds

  	
  30

  
	
   

  	
   

  	
  3.9

  	
  Payments due on non-banking days

  	
  30

  
	
   

  	
   

  	
  3.10

  	
  No set off or deduction

  	
  30

  
	
   

  	
  4

  	
  Economic costs

  	
  30

  
	
   

  	
   

  	
  4.1

  	
  Payment of economic costs

  	
  30

  
	
   

  	
   

  	
  4.2

  	
  Economic events

  	
  31

  
	
   

  	
   

  	
  4.3

  	
  Calculation of economic costs

  	
  31

  
	
   

  	
  5

  	
  Representations and warranties

  	
  31

  
	
   

  	
   

  	
  5.1

  	
  Representations and Warranties

  	
  31

  
	
   

  	
   

  	
  5.2

  	
  Additional representations and warranties from a
  trustee

  	
  33

  
	
   

  	
  6

  	
  General undertakings and covenants

  	
  33

  
	
   

  	
   

  	
  6.1

  	
  Negative Pledge

  	
  33

  
	
   

  	
   

  	
  6.2

  	
  General covenants

  	
  34

  
	
   

  	
   

  	
  6.3

  	
  Additional covenants from a trustee

  	
  34

  
	
   

  	
   

  	
  6.4

  	
  Change of Shareholding

  	
  35

  
	
   

  	
   

  	
  6.5

  	
  Partnerships

  	
  35

  
	
   

  	
   

  	
  6.6

  	
  Co-operation

  	
  35

  
	
   

  	
   

  	
  6.7

  	
  Class Order

  	
  35

  
	
   

  	
   

  	
  6.8

  	
  Changes to Accounting Standards

  	
  36

  
	
   

  	
   

  	
  6.9

  	
  Appointment of Consultants

  	
  36

  
	
   

  	
  7

  	
  Default

  	
  36

  
	
   

  	
   

  	
  7.1

  	
  General Events of Default

  	
  36

  
	
   

  	
   

  	
  7.2

  	
  Additional Events of Default

  	
  38

  
	
   

  	
   

  	
  7.3

  	
  Consequences of default

  	
  38

  
	
   

  	
   

  	
  7.4

  	
  Default Interest

  	
  39

  
	
   

  	
   

  	
  7.5

  	
  Capitalising default interest

  	
  39

  
	
   

  	
   

  	
  7.6

  	
  Fees

  	
  39

  
	
   

  	
   

  	
  7.7

  	
  Additional review rights

  	
  39

  
	
   

  	
   

  	
  7.8

  	
  Obligations not affected

  	
  39

  
	
   

  	
  8

  	
  Change of Circumstances

  	
  39

  
	
   

  	
   

  	
  8.1

  	
  Illegality

  	
  39

  
	
   

  	
   

  	
  8.2

  	
  Increased Costs

  	
  40

  
	
   

  	
  9

  	
  Liability for regulatory events

  	
  40

  

 

 5
 

 

	
  

  	
  10

  	
  Confidentiality

  	
  41

  
	
   

  	
  11

  	
  Setting off money

  	
  41

  
	
   

  	
  12

  	
  Holding Over

  	
  42

  
	
   

  	
  13

  	
  Telephone recording

  	
  42

  
	
   

  	
  14

  	
  Code of Banking Practice

  	
  42

  
	
   

  	
  15

  	
  Notices, other communications and service of
  documents

  	
  42

  
	
   

  	
   

  	
  15.1

  	
  Service

  	
  42

  
	
   

  	
   

  	
  15.2

  	
  Effective on receipt

  	
  43

  
	
   

  	
   

  	
  15.3

  	
  Validity

  	
  43

  
	
   

  	
   

  	
  15.4

  	
  Other methods

  	
  43

  
	
   

  	
  16

  	
  General

  	
  43

  
	
   

  	
   

  	
  16.1

  	
  Statements of Account

  	
  43

  
	
   

  	
   

  	
  16.2

  	
  The Bank’s certificates

  	
  43

  
	
   

  	
   

  	
  16.3

  	
  How the Bank may
  exercise its rights

  	
  43

  
	
   

  	
   

  	
  16.4

  	
  Preservation of the
  Borrowers’ liability

  	
  44

  
	
   

  	
   

  	
  16.5

  	
  Consents and Conditions

  	
  44

  
	
   

  	
   

  	
  16.6

  	
  Variation

  	
  44

  
	
   

  	
   

  	
  16.7

  	
  GST

  	
  44

  
	
   

  	
   

  	
  16.8

  	
  Valuations are for the Bank benefit

  	
  45

  
	
   

  	
   

  	
  16.9

  	
  Time for repayment

  	
  45

  
	
   

  	
   

  	
  16.10

  	
  Indemnities

  	
  45

  
	
   

  	
   

  	
  16.11

  	
  Severability

  	
  45

  
	
   

  	
  17

  	
  Assignment

  	
  45

  
	
   

  	
  18

  	
  Governing Law and Jurisdiction

  	
  45

  
	
   

  	
  19

  	
  Definitions and interpretation

  	
  45

  
	
   

  	
  20

  	
  Inconsistency

  	
  54

  
	
   

  	
   

  	
  20.1

  	
  Precedence of this clause

  	
  54

  
	
   

  	
   

  	
  20.2

  	
  Transaction documents

  	
  54

  
	
   

  	
   

  	
  20.3

  	
  Facilities

  	
  54

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Part 8

  	
  Bill Facility Specific Conditions

  	
  55

  
	
   

  	
   

  	
   

  
	
  Part 9

  	
  Bank Guarantee Facility Specific Conditions

  	
  64

  

 

 6
 

Part 1                                          Details
of Facilities

1              Facility Summary

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

FACILITY
SUMMARY

	
  Borrower:

  	
  Channell Bushmans Pty Ltd

  
	
   

  	
   

  
	
  ABN:

  	
  99 109 821 614

  
	
   

  	
   

  
	
  Facility Type:

  	
  Bill - Floating/Fixed/Capped/RangeRate

  
	
  Facility Limit:

  	
  $4,600,000.00

  
	
   

  	
   

  
	
  Facility Type:

  	
  Bill - Floating/Fixed/Capped/RangeRate

  
	
  Facility Limit:

  	
  $511,000.00

  
	
   

  	
   

  
	
  Facility Type:

  	
  Bill - Floating/Fixed/Capped/RangeRate

  
	
  Facility Limit:

  	
  $2,460,000.00

  
	
   

  	
   

  
	
  Borrower Total:

  	
  $7,571,000.00

  
	
   

  	
   

  
	
  Borrower:

  	
  Bushmans Group Pty Ltd

  
	
   

  	
   

  
	
  ABN:

  	
  90 090 744 022

  
	
   

  	
   

  
	
  Facility Type:

  	
  Bill - Floating/Fixed/Capped/RangeRate

  
	
  Facility Limit:

  	
  $3,200,000.00

  
	
   

  	
   

  
	
  Facility Type:

  	
  Master Asset Finance Facility

  
	
  Facility Limit:

  	
  $1,000,000.00

  
	
   

  	
   

  
	
  Facility Type:

  	
  Business Credit Cards

  
	
  Facility Limit:

  	
  $300,000.00

  
	
   

  	
   

  
	
  Facility Type:

  	
  Bank Guarantee

  
	
  Facility Limit:

  	
  $50,000.00

  
	
   

  	
   

  
	
  Facility Type:

  	
  Documentary Letter of Credit

  
	
  Facility Limit:

  	
  $50,000.00

  
	
   

  	
   

  
	
  Facility Type:

  	
  Transaction Negotiation Authority

  
	
  Facility Limit:

  	
  $275,000.00

  

 

 7
 

 

	
  Borrower Total:

  	
  $4,875,000.00

  
	
   

  	
   

  
	
  Borrower:

  	
  Channell Pty Limited

  
	
   

  	
   

  
	
  ABN:

  	
  29 002 735 622

  
	
   

  	
   

  
	
  Facility Type:

  	
  Bank Guarantee

  
	
  Facility Limit:

  	
  $375,000.00

  
	
   

  	
   

  
	
  Facility Type:

  	
  Master Asset Finance Facility

  
	
  Facility Limit:

  	
  $250,000.00

  
	
   

  	
   

  
	
  Facility Type:

  	
  Business Credit Card

  
	
  Facility Limit:

  	
  $100,000.00

  
	
   

  	
   

  
	
  Facility Type:

  	
  Transaction Negotiation Authority

  
	
  Facility Limit:

  	
  $200,000.00

  
	
   

  	
   

  
	
  Borrower Total:

  	
  $925,000.00

  
	
   

  	
   

  
	
  Group Total:

  	
  $13,371,000.00 (Australian dollar facilities
  only)

  

 

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

 8
 

2              New facilities in
this Letter of Offer

New facilities are detailed below.

Borrower: 
Channell Bushman Pty Limited

	
  Bill Acceptance/Discount
  Facility – Floating Rate 

  
	
   

  
	
  Purpose/Utilisation:

  	
  Acquisition Finance

  
	
   

  	
   

  
	
  Facility limit:

  	
  $4,600,000 (four
  million six hundred thousand dollars)

  
	
   

  	
   

  
	
  Expiry Date:

  	
  31st July 2009

  
	
   

  	
   

  
	
  The Facility is:

  	
  an amortising
  facility

  
	
   

  	
   

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

  	
   

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

  
	
   

  	
   

  
	
  Drawdown Periods:

  	
  Approximate period
  between each drawdown date:

   

  90days

  
	
   

  	
   

  
	
  Floating Rate:

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

   

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

  
	
   

  	
   

  
	
  Facility Fee:

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

  
	
   

  	
   

  
	
  Activation Fee:

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

  
	
   

  	
   

  
	
  Bill Drawdown Fee:

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

  
	
   

  	
   

  
	
  Late Presentation Fee:

  	
  Not ascertainable - see
  the Bill Facility Special Conditions 

  
	
   

  	
   

  
	
  Default Interest Rate:

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

   

  Currently 18.75% per
  annum

  
	
   

  	
   

  
	
  Nominated Account: :

  	
  Channell Bushman Pty
  Limited

   

  082-057 57-189-3025

   

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

  
	
   

  	
   

  
	
  Securities:

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

  
	
   

  	
   

  
	
  Specific Conditions:

  	
  Bill Facility Specific
  Conditions

   

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

  
			

 

 9
 

 

Borrower: 
Channell Bushman Pty Limited

	
  Bill Acceptance/Discount
  Facility – Floating Rate 

  
	
   

  
	
  Purpose/Utilisation:

  	
  Fund ‘ Earn Out’
  associated with the acquisition

  
	
   

  	
   

  
	
  Facility limit:

  	
  $511,000 (five hundred
  and eleven thousand dollars)

  
	
   

  	
   

  
	
  Expiry Date:

  	
  31st July 2008 

  
	
   

  	
   

  
	
  The Facility is:

  	
  an amortising
  facility

  
	
   

  	
   

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

  	
   

  	
  $63,000 per quarter

  
	
   

  	
   

  
	
  Drawdown Periods:

  	
  Approximate period
  between each drawdown date:

   

  90days

  
	
   

  	
   

  
	
  Floating Rate:

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

   

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

  
	
   

  	
   

  
	
  Facility Fee:

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

  
	
   

  	
   

  
	
  Activation Fee:

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

  
	
   

  	
   

  
	
  Bill Drawdown Fee:

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

  
	
   

  	
   

  
	
  Late Presentation Fee:

  	
  Not ascertainable - see
  the Bill Facility Special Conditions 

  
	
   

  	
   

  
	
  Default Interest Rate:

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

   

  Currently 18.75% per
  annum

  
	
   

  	
   

  
	
  Nominated Account: :

  	
  Channell Bushman Pty
  Limited

   

  082-057 57-189-3025

   

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

  
	
   

  	
   

  
	
  Securities:

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

  
	
   

  	
   

  
	
  Specific Conditions:

  	
  Bill Facility Specific
  Conditions

   

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

  
			

 

 10
 

Borrower: 
Channell Bushman Pty Limited

	
  Bill Acceptance/Discount
  Facility – Floating Rate 

  
	
   

  
	
  Purpose/Utilisation:

  	
  Capital Expenditure for
  the Group

  
	
   

  	
   

  
	
  Facility limit:

  	
  $2,460,000 (two million
  four hundred and sixty thousand dollars)

  
	
   

  	
   

  
	
  Expiry Date:

  	
  31st July 2008

  
	
   

  	
   

  
	
  The Facility is:

  	
  an amortising
  facility

  
	
   

  	
   

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

  	
   

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

  
	
   

  	
   

  
	
  Drawdown Periods:

  	
  Approximate period
  between each drawdown date:

   

  90days

  
	
   

  	
   

  
	
  Floating Rate:

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

   

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

  
	
   

  	
   

  
	
  Facility Fee:

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

  
	
   

  	
   

  
	
  Activation Fee:

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

  
	
   

  	
   

  
	
  Bill Drawdown Fee:

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

  
	
   

  	
   

  
	
  Late Presentation Fee:

  	
  Not ascertainable - see
  the Bill Facility Special Conditions 

  
	
   

  	
   

  
	
  Default Interest Rate:

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

   

  Currently 18.75% per
  annum

  
	
   

  	
   

  
	
  Nominated Account: :

  	
  Channell Bushman Pty
  Limited

   

  082-057 57-189-3025

   

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

  
	
   

  	
   

  
	
  Securities:

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

  
	
   

  	
   

  
	
  Specific Conditions:

  	
  Bill Facility Specific
  Conditions

   

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

  
			

 

 11
 

Borrower: 
Bushmans Group Pty Limited

	
  Bill Acceptance/Discount
  Facility – Floating Rate 

  
	
   

  
	
  Purpose/Utilisation:

  	
  Working Capital

  
	
   

  	
   

  
	
  Facility limit:

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

  
	
   

  	
   

  
	
  Expiry Date:

  	
  30th April 2007 

  
	
   

  	
   

  
	
  The Facility is:

  	
  an non-amortising
  facility

  
	
   

  	
   

  
	
  Drawdown Periods:

  	
  Approximate period
  between each drawdown date:

   

  30days

  
	
   

  	
   

  
	
  Floating Rate:

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

   

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

  
	
   

  	
   

  
	
  Facility Fee:

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

  
	
   

  	
   

  
	
  Activation Fee:

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

  
	
   

  	
   

  
	
  Bill Drawdown Fee:

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

  
	
   

  	
   

  
	
  Late Presentation Fee:

  	
  Not ascertainable - see
  the Bill Facility Special Conditions 

  
	
   

  	
   

  
	
  Default Interest Rate:

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

   

  Currently 18.75% per
  annum

  
	
   

  	
   

  
	
  Nominated Account: :

  	
  Bushmans Group Pty
  Limited

   

  082-057 57-132-0868

   

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

  
	
   

  	
   

  
	
  Securities:

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

  
	
   

  	
   

  
	
  Specific Conditions:

  	
  Bill Facility Specific
  Conditions

   

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

  

 

 12
 

Borrower: Bushmans Group Pty Limited

	
  Bank Guarantee Facility

  
	
   

  
	
  Purpose/Utilisation:

  	
  Performance
  Guarantee

  
	
   

  	
   

  
	
  Facility limit:

  	
  $50,000 (fifty thousand
  dollars)

  
	
   

  	
   

  
	
  Expiry Date:

  	
  30th April 2007

  
	
   

  	
   

  
	
  Issuing Fee:

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

  
	
   

  	
   

  
	
  Half Yearly Fee:

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

   

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

   

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

  
	
   

  	
   

  
	
  Securities:

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

  
	
   

  	
   

  
	
  Specific Conditions:

  	
  Bank Guarantee Facility
  Specific Conditions 

  

 

Borrower: Channell Pty Limited

	
  Bank
  Guarantee Facility

  
	
   

  
	
  Purpose/Utilisation:

  	
  Performance
  Guarantee

  
	
   

  	
   

  
	
  Facility limit:

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

  
	
   

  	
   

  
	
  Expiry Date:

  	
  30th April 2007

  
	
   

  	
   

  
	
  Issuing Fee:

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

  
	
   

  	
   

  
	
  Half Yearly Fee:

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

   

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

   

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

  
	
   

  	
   

  
	
  Securities:

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

  
	
   

  	
   

  
	
  Specific Conditions:

  	
  Bank Guarantee Facility
  Specific Conditions 

  

 

Borrower: Channell Pty Limited

	
  Transaction Negotiation
  Authorities Facility 

  
	
   

  
	
  Purpose/Utilisation:

  	
  Automation of Payroll

  
	
   

  	
   

  
	
  Facility limit:

  	
  $200,000 (two hundred
  thousand dollars)

  
	
   

  	
   

  
	
  Expiry Date:

  	
  30th April 2007

  
	
   

  	
   

  
	
  Securities: 

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

  
	
   

  	
   

  
	
  Specific Conditions:

  	
  Those contained in
  original facility documentation.

  

 

 13
 

Borrower: Bushmans Group Pty Limited

	
  Transaction Negotiation
  Authorities Facility 

  
	
   

  
	
  Purpose/Utilisation:

  	
  Automation of Payroll

  
	
   

  	
   

  
	
  Facility limit:

  	
  $275,000 (two hundred
  and seventy five thousand dollars)

  
	
   

  	
   

  
	
  Expiry Date:

  	
  30th April 2007

  
	
   

  	
   

  
	
  Securities: 

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

  
	
   

  	
   

  
	
  Specific Conditions:

  	
  Those contained in
  original facility documentation.

  

 

 14
 

3              Other facilities

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

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

Important: Variation to certain other facilities

Variation

By signing
this Letter of Offer:

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

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

Letter
of Offer Terms

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

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

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

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

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

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

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

Definitions

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

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

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

Inconsistency

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

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

 15
 

Customer: Bushmans Group Pty Limited

	
  Master Asset Finance Facility

  
	
   

  
	
  Purpose/Utilisation:

  	
  Capital Expenditure –
  Motor Vehicles

  
	
   

  	
   

  
	
  Facility limit:

  	
  $1,000,000 (one million
  dollars)

  
	
   

  	
   

  
	
  Expiry :

  	
  30th April 2007

  
	
   

  	
   

  
	
  Securities: 

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

  
	
   

  	
   

  
	
  Specific Conditions:

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

  

 

Customer: Channell Pty Limited

	
  Master Asset Finance Facility

  
	
   

  
	
  Purpose/Utilisation:

  	
  Capital Expenditure 

  
	
   

  	
   

  
	
  Facility limit:

   

  Expiry:

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

   

  30th April 2007

  
	
   

  	
   

  
	
  Securities: 

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

  
	
   

  	
   

  
	
  Specific Conditions:

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

  

 

Customer: Bushmans Group Pty Limited

	
  Business Credit Card Facility

  
	
   

  
	
  Purpose/Utilisation:

  	
  Purchasing

  
	
   

  	
   

  
	
  Facility limit:

   

  Expiry:

  	
  $300,000 (three hundred
  thousand dollars)

   

  30th April 2007

  
	
   

  	
   

  
	
  Securities: 

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

  
	
   

  	
   

  
	
  Specific Conditions:

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

  

 

 16

Customer: Channell Pty Limited

	
  Business Credit Card Facility

  
	
   

  
	
  Purpose/Utilisation:

  	
  Purchasing

  
	
   

  	
   

  
	
  Facility limit:

   

  Expiry:

  	
  $100,000 (one hundred
  thousand dollars)

   

  30th April 2007

  
	
   

  	
   

  
	
  Securities: 

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

  
	
   

  	
   

  
	
  Specific Conditions:

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

  

 

Customer: Bushmans Group Pty Limited

	
  Documentary Letter of Credit

  
	
   

  
	
  Purpose/Utilisation:

  	
  Importation of goods

  
	
   

  	
   

  
	
  Facility limit:

   

  Expiry:

  	
  $50,000 (fifty thousand
  dollars)

   

  30th April 2007

  
	
   

  	
   

  
	
  Securities: 

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

  
	
   

  	
   

  
	
  Specific Conditions:

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

  

 

 17
 

Part 2                                          Security

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

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

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

Registered
Mortgage Debentures

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

1. Channell Bushman Pty Limited ABN 99 109 821 614

2. Bushmans Group Pty Limited ABN 90 090 744 022

3. Channell Pty Limited ABN 29 002 735 622

4. Bushmans Engineering Pty Limited ABN 49 074 185 461

5. Polyrib Tanks Pty Limited ABN 49 062 942 661

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

Guarantees
and Indemnities

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

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

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

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

 18
 

Part 3                                          Establishment
Fees and Charges

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

Not Applicable

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

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

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

 19
 

Part 4                                          Conditions
Precedent and other information

1                 General

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

Authorisations

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

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

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

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

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

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

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

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

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

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

 20
 

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

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

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

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

 21
 

Part 5                                          Covenants
and Undertakings

Additional
Covenants and Undertakings

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

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

Specific
Undertakings

Monthly review in performance of Channell Bushman
Consolidated and Channell Pty Limited to be achieved within 30 days of month end.
Should either entity have a negative variance in Sales, Gross Profit or
Operating Profit of greater than 10% to the forecasts dated 30th January 2007 the Bank at its discretion may
require Channell Bushman to seek refinance elsewhere.

Reporting
Covenants

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

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

Annual
Accounts (Audited - Excluding Cashflow)

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

Interims
Accounts (Including Cashflow)

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

Interim
Compliance Certificate

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

 22
 

Actual
to projected cash flow variance

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

Specific
Reporting Covenants

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

Definitions

For the purposes
of these Covenants and Undertakings:

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

current ratio means Current Assets divided by Current
Liabilities.

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

finance charges means operating lease rental expense.

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

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

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

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

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

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

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

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

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

 23
 

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

less

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

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

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

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

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

(i)                                    municipal
rates;

(ii)                                 water
& sewerage rates;

(iii)                              land
tax;

(iv)                             all
insurance expenses;

(v)                                electricity;

(vi)                             common
area cleaning;

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

(viii)                       advertising
& promotion costs;

(ix)                               air
conditioning & ventilation maintenance;

(x)                                  building
cleaning & maintenance;

(xi)                               lift
& escalator operation & maintenance;

(xii)                            general
repairs & maintenance;

(xiii)                         fire
protection expenses;

(xiv)                        public
address expenses;

(xv)                           gas
& oil expenses;

(xvi)                        pest
control;

(xvii)                     security;

(xviii)                  building
management system expenses;

(xix)                          energy
management systems;

(xx)                             sewage
disposal;

(xxi)                          telephones;

(xxii)                       gardening/landscaping;

(xxiii)                    signage expenses;

(xxiv)                   lease
commissions; and

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

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

 24
 

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

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

tangible net worth means total tangible assets minus
total liabilities.

total tangible assets means all assets other than intangible
assets.

 25

Part 6              Property
Conditions

 26
 

Part 7              General Conditions

1              Conditions precedent

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 27
 

2              Review

2.1          Scope and frequency

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

(a)           at least annually; or

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

2.2          Assistance

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

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

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

3              Payment obligations

3.1          General repayment
obligations

The Borrower must pay:

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

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

3.2          Fees charges and other
premiums

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

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

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

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

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

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

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

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

 28
 

3.3          Calculation and payment
of interest

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

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

3.4          Setting of interest
rates

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

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

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

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

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

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

3.5          Pricing Review

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

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

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

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

3.6          Accounting for
transactions

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

(b)           If the Bank is authorised to debit an amount to a
nominated account, the relevant Borrower authorises the Bank to debit that amount to the nominated account even if it causes the
account to become overdrawn. If a nominated
account has insufficient cleared funds, or if a valid account is not
nominated when the debit is to be made, the relevant Borrower irrevocably authorises the Bank to debit that amount to any account of the Borrower the Bank decides
at its discretion.

 29
 

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

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

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

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

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

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

3.7          Payment in Australian
Dollars

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

3.8          Payment in cleared funds

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

3.9          Payments due on
non-banking days

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

3.10        No set off or deduction

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

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

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

4              Economic costs

4.1          Payment of economic
costs

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

 30
 

4.2          Economic events

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

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

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

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

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

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

except
to the extent that this occurs:

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

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

(h)           on the expiry date; or

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

4.3          Calculation of economic
costs

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

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

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

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

5              Representations and
warranties

5.1          Representations and Warranties

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

 31
 

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

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

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

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

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

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

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

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

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

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

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

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

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

(x)            it is not insolvent;

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

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

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

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

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

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

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

 32
 

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

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

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

5.2          Additional
representations and warranties from a trustee

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

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

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

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

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

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

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

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

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

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

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

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

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

6              General undertakings
and covenants

6.1          Negative Pledge

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

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

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

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

(d)           dispose of any of its subsidiaries;

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

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

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

 33
 

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

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

(i)            under the transaction documents; or

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

6.2          General covenants

Each Borrower undertakes to the Bank that it will:

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

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

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

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

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

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

6.3          Additional covenants
from a trustee

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

(b)           The Borrower undertakes:

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

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

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

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

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

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

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

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

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

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

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

 34
 

6.4          Change of Shareholding

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

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

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

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

6.5          Partnerships

If a Borrower is a partnership:

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

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

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

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

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

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

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

6.6          Co-operation

Each Borrower must:

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

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

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

6.7          Class Order

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

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

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

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

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

 35
 

6.8          Changes to Accounting
Standards

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

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

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

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

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

6.9          Appointment of
Consultants

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

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

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

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

7              Default

7.1          General Events of
Default

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

(a)           in the case of:

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

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

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

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

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

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

 36
 

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

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

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

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

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

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

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

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

(h)           an insolvency event occurs;

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

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

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

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

(ii)           pass a resolution
referred to in section 254N of the Corporations Act, in either case without the
prior written consent of the Bank;

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

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

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

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

(p)           an order for payment is
made, or a judgment is entered or signed, against any Borrower or any security provider for at least the threshold litigation amount or its
equivalent, and it is not satisfied or stayed within 5 banking days after that event (unless the
order or judgment is the subject of an appeal by the Borrower within such period and the Bank is satisfied that there is reasonable
likelihood of success);

 37
 

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

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

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

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

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

7.2          Additional Events of
Default

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

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

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

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

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

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

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

7.3          Consequences of default

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

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

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

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

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

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

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

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

 38
 

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

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

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

7.4          Default Interest

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

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

7.5          Capitalising default
interest

Default interest
charges are:

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

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

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

7.6          Fees

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

7.7          Additional review rights

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

7.8          Obligations not affected

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

8              Change of
Circumstances

8.1          Illegality

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

 39
 

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

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

then:

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

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

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

8.2          Increased Costs

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

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

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

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

and as
a result there is:

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

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

by an
amount which the Bank considers
to be material.

(b)           If this clause applies:

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

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

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

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

9              Liability for
regulatory events

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

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

 40
 

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

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

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

10           Confidentiality

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

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

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

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

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

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

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

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

(vii)         pursuant to clause 17;

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

(ix)           to any guarantor or
proposed guarantor; or

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

11           Setting off money

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

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

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

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

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

 41

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

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

(ii)           even though:

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

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

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

12           Holding Over

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

13           Telephone recording

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

14           Code of Banking
Practice

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

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

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

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

(ii)           account opening and
complaint handling procedures;

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

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

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

(d)           a copy of the Code.

15           Notices, other
communications and service of documents

15.1        Service

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

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

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

 42
 

15.2        Effective on receipt

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

(a)           if hand delivered, on
delivery;

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

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

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

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

15.3        Validity

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

15.4        Other methods

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

16           General

16.1        Statements of Account

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

16.2        The Bank’s certificates

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

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

16.3        How the Bank may exercise its rights

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

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

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

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

 43
 

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

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

16.4        Preservation of the Borrowers’ liability

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

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

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

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

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

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

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

16.5        Consents and Conditions

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

16.6        Variation

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

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

16.7        GST

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

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

 44
 

16.8        Valuations are for the Bank benefit

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

16.9        Time for repayment

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

16.10      Indemnities

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

16.11      Severability

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

17           Assignment

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

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

18           Governing Law and
Jurisdiction

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

19           Definitions and
interpretation

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

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

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

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

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

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

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

Agreement:

(i)            in relation to each facility that is described as a ‘New
Facility in this Letter of Offer’, means the terms of that facility as set out in this Letter of
Offer, the Guide to Fees and Charges and any other contract
documents described in the Details or
the Specific Conditions for that facility; and

 45
 

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

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

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

ASIC means the Australian Securities and
Investments Commission.

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

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

balance owing means:

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

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

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

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

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

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

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

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

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

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

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

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

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

 46
 

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

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

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

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

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

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

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

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

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

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

Corporations Act means the
Corporations Act 2001 (Cth).

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

(i)            the
cost to complete construction;

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

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

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

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

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

daily interest rate means, for any
day:

(i)            in relation to a global trade finance facility, the interest rate applying to the facility or drawing (as the case may be) for that day divided by 365
where the currency is Australian Dollars (AUD), Fiji Dollars (FJD), Pounds
Sterling (GBP) or Hong Kong Dollars (HKD) and 360 in all other cases.

 47
 

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

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

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

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

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

(i)            land acquisition costs
and associated expenses;

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

(iii)          finance costs and interest
expenses;

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

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

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

(vii)         design consultancy,
professional and supervisory fees;

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

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

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

drawdown date means:

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

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

drawdown notice means:

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

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

drawing means each financial accommodation actually provided
under a facility.

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

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

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

 48
 

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

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

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

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

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

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

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

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

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

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

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

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

GST means goods and services tax or
any similar tax.

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

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

insolvency event means:

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

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

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

 49
 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 50
 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

recipient’s address means:

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

 51
 

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

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

regulatory event means any:

(i)            law or other form of
regulation;

(ii)           practices or policies
of regulatory authority;

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

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

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

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

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

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

repricing date means:

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

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

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

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

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

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

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

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

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

subsidiary has the same meaning as
under the Corporations Act.

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

 52
 

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

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

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

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

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

trust means a trust or a settlement.

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

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

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

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

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

(d)           A reference:

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

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

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

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

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

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

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

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

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

 53
 

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

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

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

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

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

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

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

20           Inconsistency

20.1        Precedence of this clause

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

20.2        Transaction documents

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

(a)           a security; or

(b)           any other transaction document,

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

20.3        Facilities

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

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

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

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

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

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

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

(g)           the Guide to Fees and
Charges.

 54

Part 8              Bill Facility Specific
Conditions

1              Facility operation

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

2              Procedure for
drawdown

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

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

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

(d)           Each bill must be drawn:

(i)            in accordance with
this Agreement; and

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

(e)           A bill drawn under the facility must:

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

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

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

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

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

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

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

3              Replacement bills

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

4              Replacement bills - not automatic

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

 55
 

5              Replacement bills - automatic

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

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

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

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

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

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

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

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

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

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

6              Replacement bills - stopping automatic
replacement

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

7              Face value of replacement bills

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

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

 56
 

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

However, if clause
5 of these Specific Conditions applies:

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

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

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

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

8              Amortising
facilities

If the facility is
an amortising facility then:

(a)           the facility limit reduces:

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

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

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

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

9              Non-amortising
facilities

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

10           Discounting of bills

(a)           Where bills are drawn for discounting:

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

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

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

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

 57
 

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

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

Proceeds
of discount =

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

where:

FV is the face
value of the bill;

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

R is:

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

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

11           Discounting and
replacement of bills

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

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

(ii)           accepting the replacement bill; and

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

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

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

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

(ii)           accepting the replacement bill; and

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

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

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

12           Payment of bills

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

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

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

 58
 

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

13           Power of attorney

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

(b)           The Borrower agrees that:

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

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

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

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

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

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

14           Cancellation by the
Borrower

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

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

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

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

15           Economic costs and
economic benefits

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

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

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

 59
 

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

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

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

16           Additional consequences
on default

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

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

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

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

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

17           Rate advice

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

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

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

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

18           Confirmations /
Drawdown Schedules

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

19           Debiting and crediting
amounts

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

 60
 

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

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

to the
nominated account.

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

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

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

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

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

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

21           Bill Facility -
Acceptance and Discount – National Flexible Rate

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

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

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

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

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

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

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

 61
 

22           Bill Facility -
Acceptance / Endorsement

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

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

23           Late Presentation Fee

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

24           Definitions

(a)           For the purposes of
these Specific Conditions:

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

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

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

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

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

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

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

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

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

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

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

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

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

floor/cap
rate means on a drawdown
date:

 62
 

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

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

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

maturing
bill means a bill maturing
on a maturity date.

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

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

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

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

replacement
bill means a bill replacing
a maturing bill.

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

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

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

 63
 

Part 9              Bank Guarantee Facility
Specific Conditions

1              Issue of Bank
Guarantees

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

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

2              Nominated account

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

3              Indemnity

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

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

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

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

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

4              Payment of Bank
Guarantee without demand

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

5              Partial payments

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

6              No obligation to
enquire

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

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

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

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

7              Return of Bank
Guarantees

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

 64
 

8              Amounts paid on default

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

(b)           The
Bank agrees:

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

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

 65
 

Acceptance
of Letter of Offer

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

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

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

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

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

(i)            read this Letter of
Offer; and

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

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

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

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

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

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

3 Healey Circuit, Huntingwood NSW 2148; and

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

 

	
  Yours sincerely,

  
	
   

  
	
   

  
	
  /s/ Graeme
  Johnson

  	
   

  
	
   

  
	
  Graeme
  Johnson

  
	
   

  
	
  Associate
  Director

  

 

 66
 

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

Companies Executing without using a Common Seal

 

	
  Executed By

  	
   

  
	
   

  	
   

  
	
  Channell Bushman
  Pty Limited

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By being signed
  by:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Nickie J.
  Morganti

  	
   

  	
  /s/ Amar Kulkarni

  	
   

  
	
  Signature of
  Director

  	
  Signature of Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
  Nickie J.
  Morganti

  	
   

  	
  Amar Kulkarni

  	
   

  
	
  Name of Director

  	
  Name of Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
  February 5, 2007

  	
   

  	
  February 7, 2007

  	
   

  
	
  Date

  	
  Date

  
								

 

 

	
  Executed By

  	
   

  
	
   

  	
   

  
	
  Bushmans Group
  Pty Limited

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By being signed
  by:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Nickie J.
  Morganti

  	
   

  	
  /s/ Amar Kulkarni

  	
   

  
	
  Signature of
  Director

  	
  Signature of Secretary

  
	
   

  	
   

  
	
  Nickie J.
  Morganti

  	
   

  	
  Amar Kulkarni

  	
   

  
	
  Name of Director

  	
  Name of Secretary

  
	
   

  	
   

  
	
  February 5, 2007

  	
   

  	
  February 7, 2007

  	
   

  
	
  Date

  	
  Date

  
								

 

 67
 

 

	
  Executed By

  	
   

  
	
   

  	
   

  
	
  Channell Pty
  Limited

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By being signed
  by:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Nickie J.
  Morganti

  	
   

  	
  /s/ Amar Kulkarni

  	
   

  
	
  Signature of
  Director

  	
  Signature of Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
  Nickie J.
  Morganti

  	
   

  	
  Amar Kulkarni

  	
   

  
	
  Name of Director

  	
  Name of Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
  February 5, 2007

  	
   

  	
  February 7, 2007

  	
   

  
	
  Date

  	
  Date

  
	
   

  	
   

  
	
   

  	
   

  
	
  Executed By

  	
   

  
	
   

  	
   

  
	
  Bushmans
  Engineering Pty Limited

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By being signed
  by:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Nickie J.
  Morganti

  	
   

  	
  /s/ Amar Kulkarni

  	
   

  
	
  Signature of
  Director

  	
  Signature of Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
  Nickie J.
  Morganti

  	
   

  	
  Amar Kulkarni

  	
   

  
	
  Name of Director

  	
  Name of Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
  February 5, 2007

  	
   

  	
  February 7, 2007

  	
   

  
	
  Date

  	
  Date

  
									

 

 68
 

 

	
  Executed By

  	
   

  
	
   

  	
   

  
	
  Polyrib Tanks
  Pty Limited

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By being signed
  by:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Nickie J.
  Morganti

  	
   

  	
  /s/ Amar Kulkarni

  	
   

  
	
  Signature of
  Director

  	
  Signature of Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
  Nickie J.
  Morganti

  	
   

  	
  Amar Kulkarni

  	
   

  
	
  Name of Director

  	
  Name of Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
  February 5, 2007

  	
   

  	
  February 7, 2007

  	
   

  
	
  Date

  	
  Date

  
	
   

  	
   

  
	
   

  	
   

  
	
  Executed By

  	
   

  
	
   

  	
   

  
	
  Australian
  Bushman Tanks Pty Limited

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By being signed
  by:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Nickie J.
  Morganti

  	
   

  	
  /s/ Amar Kulkarni

  	
   

  
	
  Signature of
  Director

  	
  Signature of Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
  Nickie J.
  Morganti

  	
   

  	
  Amar Kulkarni

  	
   

  
	
  Name of Director

  	
  Name of Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
  February 5, 2007

  	
   

  	
  February 7, 2007

  	
   

  
	
  Date

  	
  Date

  
												

 

 69Exhibit
10.1

MWI VETERINARY SUPPLY, INC.

2005
STOCK-BASED INCENTIVE COMPENSATION PLAN

Adopted July 28, 2005

 

AS AMENDED AND RESTATED,
EFFECTIVE JULY 24, 2006

 

 

MWI VETERINARY SUPPLY,
INC.

2005 STOCK-BASED
INCENTIVE COMPENSATION PLAN

1.             Purpose of the Plan

The purpose of
this Amended and Restated Plan is to assist the Company, its Subsidiaries and
Affiliates in attracting and retaining valued Employees and Directors by
offering them a greater stake in the Company’s success and a closer identity
with it, and to encourage ownership of the Company’s stock by such Employees
and Directors.

2.             Definitions

2.1             “Affiliate” means any entity other
than the Subsidiaries in which the Company has a substantial direct or indirect
equity interest, as determined by the Board.

2.2             “Award” means an award of Deferred
Stock, Restricted Stock, or Options under the Plan.

2.3             “Board” means the Board of
Directors of the Company.

2.4             “Cause” means: (i) the Holder’s
willful misconduct or gross negligence in connection with the performance of
the Holder’s duties for the Company, its Subsidiaries or Affiliates; (ii) the
Holder’s conviction of, or a plea of nolo contendere to, a felony or a
crime involving fraud or moral turpitude; (iii) the Holder’s engaging in any
business that directly or indirectly competes with the Company, its
Subsidiaries or Affiliates; or (iv) disclosure of trade secrets, customer lists
or confidential information of the Company, its Subsidiaries or Affiliates to a
competitor or unauthorized person.

2.5             “Change in Control” means:

 

(a)           the acquisition in
one or more transactions by any “Person” (as such term is used for purposes of
Section 13(d) or Section 14(d) of the 1934 Act) but excluding, for this
purpose, the Company or its Subsidiaries, any Stockholder of the Company
immediately prior to the consummation of the Company’s Initial Public Offering
or any employee benefit plan of the Company or its Subsidiaries, of “Beneficial
Ownership” (within the meaning of Rule 13d-3 under the 1934 Act) of twenty
percent (20%) or more of the combined voting power of the Company’s then
outstanding voting securities (the “Voting Securities”);

(b)           the individuals who,
as of the effective date of the Plan, constitute the Board (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board;
provided, however, that if the election, or nomination for election by the
Company’s stockholders, of any new director was approved by a vote of at least
a majority of the Incumbent Board, such new director shall be considered as a
member of the Incumbent Board, and provided further that any reductions in the
size of the Board that are instituted voluntarily by the Incumbent Board shall
not constitute a Change in Control, and after any such reduction the “Incumbent
Board” shall mean the Board as so reduced;

(c)           a merger or
consolidation involving the Company if the stockholders of the Company,
immediately before such merger or consolidation, do not own, directly or
indirectly, immediately following such merger or consolidation, more than
seventy percent (70%)of the
combined voting power of the outstanding Voting Securities of the corporation
resulting from such merger or consolidation;

 2
 

(d)           a complete
liquidation or dissolution of the Company or a sale or other disposition of all
or substantially all of the assets of the Company; or

(e)           acceptance by
stockholders of the Company of shares in a share exchange if the stockholders of
the Company immediately before such share exchange, do not own, directly or
indirectly, immediately following such share exchange, more than seventy
percent (70%) of the combined voting power of the outstanding Voting Securities
of the corporation resulting from such share exchange.

2.6             “Code” means the Internal Revenue
Code of 1986, as amended.

2.7             “Committee” means the Board or such
committee designated by the Board to administer the Plan under Section 4.

2.8             “Common Stock” means the common
stock of the Company, par value $0.01 per share, or such other class or kind of
shares or other securities resulting from the application of Section 9.

2.9             “Company” means MWI Veterinary
Supply, Inc., a Delaware corporation, or any successor corporation.

2.10           “Company Stock” means the Common
Stock or Preferred Stock of the Company.

2.11           “Deferred Stock” means an Award made
under Section 6 of the Plan to receive Company Stock at the end of a specified
Deferral Period.

2.12           “Deferral Period” means the period
during which the receipt of a Deferred Stock Award under Section 6 of the Plan
will be deferred.

 3
 

2.13           “Director” means a member of either
(i) the Company’s Board or (ii) the Board of Directors of one of the Company’s
Subsidiaries or Affiliates, who is not an Employee of the Company or any
Subsidiary.

2.14           “Disability” means, as determined by
the Committee in its sole discretion, that an Employee or Director:

(a)           is unable to engage
in any substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or can
be expected to last for a continuous period of not less than 12 months, or

(b)           is, by reason of any
medically determinable physical or mental impairment which can be expected to
result in death or can be expected to last for a continuous period of not less
than 12 months, receiving income replacement benefits for a period of not less
than 3 months under an accident and health plan covering Employees or
Directors, as applicable, of the Company, its Subsidiaries or Affiliates.

2.15           “Employee” means an officer or other
key employee of the Company, a Subsidiary or an Affiliate including a director
who is such an employee.

2.16           “Fair Market Value” means, on any
given date, the closing price of a share of Company Stock on the principal
national securities exchange on which the Company Stock is listed on such date
or, if Company Stock was not traded on such date, on the last preceding day on
which the Company Stock was traded.

2.17           “Holder” means an Employee or
Director to whom an Award is made.

 4
 

2.18           “Incentive Stock Option” means an
Option intended to meet the requirements of an incentive stock option as
defined in section 422 of the Code and designated as an Incentive Stock Option.

2.19           “Initial Public Offering” means the
first underwritten public offering of the Company’s Common Stock pursuant to a
Registration Statement filed with the United States Securities and Exchange
Commission on Form S-1, or its then equivalent.

2.20           “1934 Act” means the Securities
Exchange Act of 1934, as amended.

2.21           “Non-Qualified Option” means an
Option not intended to be an Incentive Stock Option, and designated as a
Non-Qualified Option.

2.22           “Option” means any stock option
granted from time to time under Section 8 of the Plan.

2.23           “Plan” means the MWI Veterinary
Supply, Inc. 2005 Stock-Based Incentive Compensation Plan herein set forth, as
amended from time to time.

2.24           “Preferred Stock” means the preferred
stock of the Company, par value $1.00 per share, or such other class or kind of
shares or other securities resulting from the application of Section 9

2.25           “Restricted Stock” means Company
Stock awarded by the Committee under Section 7 of the Plan.

2.26           “Restriction Period” means the period
during which Restricted Stock awarded under Section 7 of the Plan is subject to
forfeiture.

 5
 

2.27           “Retirement” means, in the case of an
Employee, retirement from the active employment of the Company, a Subsidiary or
an Affiliate pursuant to the relevant provisions of the applicable pension plan
of such entity or as otherwise determined by the Board.  In the case of a Director, “Retirement” means
good-faith and complete termination of the Director’s service for the Company,
its Subsidiaries and Affiliates.

2.28           “Securities Act” means the Securities
Act of 1933, as amended.

2.29           “Subsidiary” means any corporation
(other than the Company) in an unbroken chain of corporations beginning with
the Company (or any subsequent parent of the Company) if each of the
corporations other than the last corporation in the unbroken chain owns stock
possession 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.

2.30           “Ten Percent Stockholder” means a
person who on any given date owns, either directly or indirectly (taking into
account the attribution rules contained in section 424(d) of the Code), stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company or a Subsidiary.

3.             Eligibility

Any Employee or
Director is eligible to receive an Award.

4.             Administration and
Implementation of Plan

4.1             The Plan shall be administered by
the Committee, which shall have full power to interpret and administer the Plan
and full authority to act in selecting the Employees and Directors to whom
Awards will be granted, in determining the type and amount 

 6
 

of Awards to
be granted to each such Holder, the terms and conditions of Awards granted
under the Plan and the terms of agreements which will be entered into with
Holders.

4.2             The Committee’s powers shall
include, but not be limited to, the power to determine whether, to what extent
and under what circumstances an Option may be exchanged for cash, Company Stock
or some combination thereof; to determine whether, to what extent and under
what circumstances an Award is made hereunder; to determine whether, to what
extent and under what circumstances Company Stock or cash payable with respect
to an Award shall be deferred, either automatically or at the election of the
Holder (including the power to add deemed earnings to any such deferral); to
grant Awards (other than Incentive Stock Options) that are transferable by the
Holder; and to determine the effect, if any, of a Change in Control of the
Company upon outstanding Awards.  Upon a
Change in Control, the Committee may, at its discretion, (i) fully vest all
Awards made under the Plan, (ii) cancel any outstanding Awards in exchange for
a cash payment of an amount equal to the difference between the then Fair
Market Value of the stock underlying the Award less the option or base price of
the Award, (iii) after having given the Award Holder a chance to exercise any
outstanding Options, terminate any or all of the Award Holder’s unexercised
Options, or (iv) if the Company is not the surviving corporation, cause the
surviving corporation to assume or replace all outstanding Awards with
comparable awards.

4.3             The Committee shall have the power
to adopt regulations for carrying out the Plan and to make changes in such
regulations as it shall, from time to time, deem advisable.  The Committee shall endeavor, in good faith,
to avoid the application of section 409A 

 7
 

of the Code to
any Award by taking such action, including suspending the operation of any
provision of this Plan or any Award, as it reasonably determines to be
necessary or appropriate to that result. 
No such action shall be deemed to be an amendment adverse to the Holder
within the meaning of Section 12.6.  Any
interpretation by the Committee of the terms and provisions of the Plan and the
administration thereof, and all action taken by the Committee, shall be final
and binding on Holders.

4.4             The Committee may condition the
grant of any Award or the lapse of any Deferral or Restriction Period (or any
combination thereof) upon the Holder’s achievement of a Performance Goal that
is established by the Committee before the grant of the Award.  For this purpose, a “Performance Goal” shall
mean a goal that must be met by the end of a period specified by the Committee
(but that is substantially uncertain to be met before the grant of the Award)
based upon: (i) the price of Common Stock, (ii) the market share of the
Company, its Subsidiaries or Affiliates (or any business unit thereof), (iii)
sales by the Company, its Subsidiaries or Affiliates (or any business unit
thereof), (iv) earnings per share of Common Stock, (v) return on shareholder
equity of the Company, (vi) costs of the Company, its Subsidiaries or
Affiliates (or any business unit thereof), (vii) cash flow of the Company, its
Subsidiaries or Affiliates (or any business unit thereof), (viii) return on
total assets of the Company, its Subsidiaries or Affiliates (or any business
unit thereof), (ix) return on invested capital of the Company, its Subsidiaries
or Affiliates (or any business unit thereof), (x) return on net assets of the
Company, its Subsidiaries or Affiliates (or any business unit thereof), (xi)
operating income of the Company, its Subsidiaries or Affiliates (or any
business unit thereof), or 

 8
 

(xii) net
income of the Company, its Subsidiaries or Affiliates (or any business unit
thereof).  The Committee shall have
discretion to determine the specific targets with respect to each of these
categories of Performance Goals.  Before
granting an Award or permitting the lapse of any Deferral or Restriction Period
subject to this Section, the Committee shall certify that an individual has
satisfied the applicable Performance Goal.

5.             Shares of Stock Subject to the
Plan

5.1             Subject to adjustment as provided
in Section 9, the total number of shares of Common Stock available for Awards
under the Plan shall be the number of shares equal to twelve percent (12%) of
the total number of shares of the Company’s Common Stock outstanding after the
consummation of the Company’s Initial Public Offering, including after the
exercise, if any, of the underwriters’ option to cover over-allotments.  The final number of shares of Common Stock
available for Awards under the Plan shall be determined by resolution of the
Committee or the Board subsequent to the consummation of the Company’s Initial
Public Offering.

5.2             The maximum number of shares of
Company Stock subject to Awards that may be granted to any Holder shall not
exceed 200,000 shares during any calendar year (the “Individual Limit”).  Subject to Section 5.3, Section 9 and Section
12.6, any Award that is canceled or amended by the Committee shall count
against the Individual Limit. 
Notwithstanding the foregoing, the Individual Limit may be adjusted to
reflect the effect on Awards of any transaction or event described in Section
9.

 9
 

5.3             Any shares issued by the Company
through the assumption or substitution of outstanding grants from an acquired
company shall not (i) reduce the shares available for Awards under the Plan, or
(ii) be counted against the Individual Limit. 
Any shares issued hereunder may consist, in whole or in part, of
authorized and unissued shares or treasury shares.  If any shares subject to any Award granted
hereunder are forfeited or such Award otherwise terminates without the issuance
of such shares or the payment of other consideration in lieu of such shares,
the shares subject to such Award, to the extent of any such forfeiture or
termination, shall again be available for Awards under the Plan.

6.             Deferred Stock

An Award of
Deferred Stock is an agreement by the Company to deliver to the recipient a
specified number of shares of Company Stock at the end of a specified deferral
period or periods.  Such an Award shall
be subject to the following terms and conditions:

6.1             Deferred Stock Awards shall be
evidenced by Deferred Stock agreements. 
Such agreements shall conform to the requirements of the Plan and may
contain such other provisions as the Committee shall deem advisable.

6.2             Upon determination of the number of
shares of Deferred Stock to be awarded to a Holder, the Committee shall direct
that the same be credited to the Holder’s account on the books of the Company
but that issuance and delivery of the same shall be deferred until the date or
dates provided in Section 6.5 hereof. 
Prior to issuance and delivery hereunder the Holder shall have no rights
as a stockholder with respect to any shares of Deferred Stock credited to the
Holder’s account.

 10
 

6.3             No dividends shall be paid with
respect to Deferred Stock.  In lieu
thereof, at the end of the Deferral Period the Holder will be credited with
that number of additional whole shares of Company Stock that can be purchased
(based on their Fair Market Value at the end of the Deferral Period) with the
sum of the dividends that would have been paid with respect to an equal number
of shares of Company Stock between the grant date of such Deferred Stock and
the end of the Deferral Period.

6.4             The Committee may condition the
grant of an Award of Deferred Stock or the expiration of the Deferral Period
upon the Holder’s achievement of one or more Performance Goal(s) specified in
the Deferred Stock agreement.  If the
Holder fails to achieve the specified Performance Goal(s), the Committee shall
not grant the Deferred Stock Award to the Holder, or the Holder shall forfeit
the Award and no Company Stock shall be transferred to him pursuant to the
Deferred Stock Award.

6.5             The Deferred Stock agreement shall
specify the duration of the Deferral Period taking into account termination of
employment or service as a Director on account of death, Disability, Retirement
or other cause.  The Deferral Period may
consist of one or more installments.  At
the end of the Deferral Period or any installment thereof the shares of
Deferred Stock applicable to such installment credited to the account of a
Holder shall be issued and delivered to the Holder (or, where appropriate, the
Holder’s legal representative) in accordance with the terms of the Deferred
Stock agreement.  The Committee may, in its
sole discretion, amend a Deferred Stock Award pursuant to Section 4.3 hereof.

 

 11

7.             Restricted Stock

An Award of
Restricted Stock is a grant by the Company of a specified number of shares of
Company Stock to the Holder, which shares are subject to forfeiture upon the
happening of specified events.  Such an
Award shall be subject to the following terms and conditions:

7.1             Restricted Stock shall be evidenced
by Restricted Stock agreements.  Such
agreements shall conform to the requirements of the Plan and may contain such
other provisions as the Committee shall deem advisable.

7.2             Upon determination of the number of
shares of Restricted Stock to be granted to the Holder, the Committee shall
direct that a certificate or certificates representing the number of shares of
Company Stock be issued to the Holder with the Holder designated as the registered
owner.  The certificate(s) representing
such shares shall be legended as to sale, transfer, assignment, pledge or other
encumbrances during the Restriction Period and deposited by the Holder,
together with a stock power endorsed in blank, with the Company, to be held in
escrow during the Restriction Period.

7.3             During the Restriction Period the
Holder shall have the right to receive dividends from and to vote the shares of
Restricted Stock.

7.4             The Committee may condition the
grant of an Award of Restricted Stock or the expiration of the Restriction
Period upon the Holder’s achievement of one or more Performance Goal(s)
specified in the Restricted Stock Agreement. 
If the Holder fails to achieve the specified Performance Goal(s), the
Committee shall not grant the Restricted Stock to the 

 12
 

Holder, or the
Holder shall forfeit the Award of Restricted Stock and the Company Stock shall
be forfeited to the Company.

7.5             The Restricted Stock agreement
shall specify the duration of the Restriction Period and the performance,
employment, service as a Director, or other conditions (including termination
of employment or service as a Director on account of death, Disability,
Retirement or other cause) under which the Restricted Stock may be forfeited to
the Company.  At the end of the
Restriction Period the restrictions imposed hereunder shall lapse with respect
to the number of shares of Restricted Stock as determined by the Committee, and
the legend shall be removed and such number of shares delivered to the Holder
(or, where appropriate, the Holder’s legal representative).  The Committee may, in its sole discretion,
amend a Restricted Stock Award pursuant to Section 4.3 hereof.

8.             Options

Options give a
Holder the right to purchase a specified number of shares of Company Stock from
the Company for a specified time period at a fixed price. Options may be either
Incentive Stock Options or Non-Qualified Stock Options.  The grant of Options shall be subject to the
following terms and conditions:

8.1             Option Grants:  Options shall be evidenced by Option
agreements.  Such agreements shall
conform to the requirements of the Plan, and may contain such other provisions
as the Committee shall deem advisable.

8.2             Option Price:  The price per share at which Company Stock
may be purchased upon exercise of an Option shall be determined by the
Committee, but shall be not 

 13
 

less than the
Fair Market Value of a share of Company Stock on the date of grant.  In the case of any Incentive Stock Option
granted to a Ten Percent Stockholder, the option price per share shall not be
less than 110% of the Fair Market Value of a share of Company Stock on the date
of grant.

8.3             Term of Options:  The Option agreements shall specify when an
Option may be exercisable and the terms and conditions applicable thereto.  The term of an Option shall in no event be
greater than ten years (five years in the case of an Incentive Stock Option
granted to a Ten Percent Stockholder and ten years in the case of all other Incentive
Stock Options).

8.4             Incentive Stock Options:  Each provision of the Plan and each Option
agreement relating to an Incentive Stock Option shall be construed so that each
Incentive Stock Option shall be an incentive stock option as defined in section
422 of the Code, and any provisions of the Option agreement thereof that cannot
be so construed shall be disregarded.  In
no event may a Holder be granted an Incentive Stock Option which does not
comply with such grant and vesting limitations as may be prescribed by section
422(b) of the Code.  Incentive Stock
Options may not be granted to Directors or employees of Affiliates.

8.5             Restrictions on
Transferability:  No Incentive Stock
Option shall be transferable otherwise than by will or the laws of descent and
distribution and, during the lifetime of the Holder, shall be exercisable only
by the Holder.  Upon the death of a
Holder, the person to whom the rights have passed by will or by the laws of
descent and distribution may exercise an Incentive Stock Option only in
accordance with this Section 8.

 14
 

8.6             Payment of Option Price:  The option price of the shares of Company
Stock upon the exercise of an Option shall be paid: (i) in full in cash at the
time of the exercise or, (ii) with the consent of the Committee, in whole or in
part in Company Stock held by the Holder for at least six months valued at Fair
Market Value on the date of exercise. 
With the consent of the Committee, payment upon the exercise of a
Non-Qualified Option may be made in whole or in part by Restricted Stock which
has been held by the Holder for at least six months (based on the fair market
value of the Restricted Stock on the date the Option is exercised, as
determined by the Committee).  In such
case the Company Stock to which the Option relates shall be subject to the same
forfeiture restrictions originally imposed on the Restricted Stock exchanged
therefor.

8.7             Termination by Death:  If a Holder’s employment by or service as a
Director of the Company, a Subsidiary or Affiliate terminates by reason of
death, any Option granted to such Holder may thereafter be exercised (to the
extent such Option was exercisable at the time of death or on such accelerated
basis as the Committee may determine at or after grant) by, where appropriate,
the Holder’s transferee or by the Holder’s legal representative, for a period
of 12 months from the date of death or until the expiration of the stated term
of the Option, whichever period is shorter.

8.8             Termination by Reason of
Disability:  If a Holder’s employment by
or service as a Director of the Company, a Subsidiary or Affiliate terminates
by reason of Disability, any unexercised Option granted to the Holder may
thereafter be exercised by the Holder (or, where appropriate, the Holder’s
transferee or legal representative), to the extent it was 

 15
 

exercisable at
the time of termination, for a period of 24 months or such shorter term as
determined by the Committee (12 months in the case of an Incentive Stock
Option) from the date of such termination of employment or until the expiration
of the stated term of the Option, whichever period is shorter.

8.9             Termination by Reason of  Retirement: 
If a Holder’s employment by or service as a Director of the Company, a
Subsidiary or Affiliate terminates by reason of Retirement, any unexercised
Option granted to the Holder may thereafter be exercised by the Holder (or,
where appropriate, the Holder’s transferee or legal representative), to the
extent it was exercisable at the time of termination, for a period of 5 years
or such shorter term as determined by the Committee (12 months in the case of
an Incentive Stock Option) from the date of such termination of employment or
service as a Director or until the expiration of the stated term of the Option,
whichever period is shorter. 
Notwithstanding the foregoing, if, and to the extent, required by
section 409A of the Code in the case of a Specified Employee, as defined in
section 409A(a)(2)(B) of the Code, any unexercised Option shall not be
exercised earlier than six months after the date of retirement.

8.10           Termination Not for Cause:  If a Holder’s employment by or service as a
Director of the Company, a Subsidiary or Affiliate is terminated by the
Company, the Subsidiary or Affiliate not for Cause, any unexercised Option
granted to the Holder may thereafter be exercised by the Holder (or, where
appropriate, the Holder’s transferee or legal representative), to the extent it
was exercisable at the time of termination, for a period of 60 days or such
shorter term as determined by the Committee from the date of such termination
of 

 16
 

employment or
service as a Director or until the expiration of the stated term of the Option,
whichever period is shorter. 
Notwithstanding the foregoing, and to the extent required by section
409A of the Code in the case of a Specified Employee, as defined in section
409A(a)(2)(B) of the Code, any unexercised Option shall not be exercised
earlier than six months after the date of termination not for cause.

8.11           Termination for Cause or Other
Reason:  If a Holder’s employment by or
service as a Director of the Company, a Subsidiary or Affiliate is terminated
by the Company, the Subsidiary or Affiliate for Cause, or otherwise terminates
for any reason not specified in this Section 8 (including a voluntary
termination), all unexercised Options awarded to the Holder shall terminate on
the date of such termination.

9.             Adjustments upon Changes in
Capitalization

 In the event of a reorganization,
recapitalization, stock split, spin-off, split-off, split-up, stock dividend,
issuance of stock rights, combination of shares, merger, consolidation or any
other change in the corporate structure of the Company affecting Company Stock,
or any distribution to stockholders other than a cash dividend, the Board shall
make appropriate adjustment in the number and kind of shares authorized by the
Plan and any other adjustments to outstanding Awards as it determines
appropriate.  No fractional shares of
Company Stock shall be issued pursuant to such an adjustment. The Fair Market
Value of any fractional shares resulting from adjustments pursuant to this
Section shall, where appropriate, be paid in cash to the Holder.

 17
 

10.          Effective Date, Termination and
Amendment

The Plan
originally became effective on August 3, 2005, the date the Company’s Common
Stock was first listed on the Nasdaq Stock Market.  The changes made by this Amendment and
Restatement are effective on July 24, 2006, the date this Amendment and
Restatement was approved by the Board, provided that any Awards granted under
the Plan to Directors shall not vest and any restrictions applicable thereto
shall not expire or lapse until this Amendment and Restatement shall have been
approved by the Company’s stockholders in accordance with the rules of the
NASDAQ Stock Market and applicable law. 
The Plan shall remain in full force and effect until the earlier of ten
years from the date of its adoption by the Board, or the date it is terminated
by the Board.  The Board shall have the
power to amend, suspend or terminate the Plan at any time, provided that no
such amendment shall be made without stockholder approval which shall (i)
increase (except as provided in Section 9) the total number of shares available
for issuance pursuant to the Plan; (ii) change the class of Employees or
Directors eligible to be Holders; (iii) modify the Individual Limit (except as
provided Section 9) or the categories of Performance Goals set forth in Section
4.4; or (iv) change the provisions of this Section 10.  Termination of the Plan pursuant to this
Section 10 shall not affect Awards outstanding under the Plan at the time of
termination.

11.          Transferability

Except as provided
below, Awards may not be pledged, assigned or transferred for any reason during
the Holder’s lifetime, and any attempt to do so shall be void and the relevant
Award shall be forfeited.  The Committee
may grant Awards (except Incentive Stock 

 18
 

Options)
that are transferable by the Holder during his lifetime, but such Awards shall
be transferable only to the extent specifically provided in the agreement
entered into with the Holder.  The
transferee of the Holder shall, in all cases, be subject to the provisions of
the agreement between the Company and the Holder.

12.          General Provisions

12.1           Nothing contained in the Plan, or any
Award granted pursuant to the Plan, shall confer upon any Employee or Director
any right to continued employment by or service as a Director of the Company, a
Subsidiary or Affiliate, nor interfere in any way with the right of the
Company, a Subsidiary or Affiliate to terminate the employment or service as a
Director of any Holder at any time.

12.2           For purposes of this Plan, transfer
of employment or service as a Director between the company and its Subsidiaries
and Affiliates shall not be deemed termination of employment or service as a
Director.

12.3           Holders shall be responsible to make
appropriate provision for all taxes required to be withheld in connection with
any Award, the exercise thereof and the transfer of shares of Company Stock
pursuant to this Plan.  Such
responsibility shall extend to all applicable Federal, state, local or foreign
withholding taxes.  In the case of the
payment of Awards in the form of Company Stock, or the exercise of Options, the
Company shall, at the election of the Holder, have the right to retain the
number of shares of Company Stock whose Fair Market Value equals the amount
legally required to be withheld in satisfaction of the 

 19
 

applicable
withholding taxes.  Agreements evidencing
such Awards shall contain appropriate provisions to effect withholding in this manner.

12.4           Without amending the Plan, Awards may
be granted to Employees or Directors who are foreign nationals or employed
outside the United States or both, on such terms and conditions different from
those specified in the Plan as may, in the judgment of the committee, be
necessary or desirable to further the purpose of the Plan.

12.5           To the extent that Federal laws (such
as the 1934 Act, the Code or the Employee Retirement Income Security Act of
1974) do not otherwise control, the Plan and all determinations made and
actions taken pursuant hereto shall be governed by the law of Delaware and
construed accordingly.

12.6           The Committee may amend any
outstanding Awards to the extent it deems appropriate; provided, however,
except as provided in Section 9, no Award
may be repriced, replaced, regranted through cancellation, or modified without
stockholder approval.  The
Committee may amend Awards without the consent of the Holder, except in the
case of amendments adverse to the Holder, in which case the Holder’s consent is
required to any such amendment.

 

 20

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00116-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00116-of-00352.parquet"}]]