Document:

Exhibit 10.1

 

VIASYS HEALTHCARE INC.

 

EQUITY INCENTIVE PLAN

(As Amended and
Restated on January 25, 2006)

1.               PURPOSE

The purpose of this
Equity Incentive Plan (the “Plan”) is to secure for VIASYS Healthcare Inc. (the
“Company”) and its stockholders (the “Stockholders”) the benefits arising from
capital stock ownership by employees, officers and directors of, and
consultants to, the Company and its subsidiaries or other persons who are
expected to make significant contributions to the future growth and success of
the Company and its subsidiaries. The Plan is intended to accomplish these
goals by enabling the Company to offer such persons equity-based interests,
equity-based incentives or performance-based stock incentives in the Company,
or any combination thereof (collectively, “Awards”).

2.               ADMINISTRATION

The Plan will be
administered by the Board of Directors of the Company (the “Board”). Subject to
Section 6.1.8, the Board shall have full power to interpret and administer the
Plan, to prescribe, amend and rescind rules and regulations relating to the
Plan and Awards, and full authority to select the persons to whom Awards will
be granted (“Participants”), determine the type and amount of Awards to be
granted to Participants (including, without limitation, any combination of
Awards), determine the terms and conditions of Awards granted under the Plan
(including, without limitation, terms and conditions relating to events of
merger, consolidation, dissolution and liquidation, change of control, vesting,
forfeiture, restrictions, dividends and interest, if any, on deferred amounts),
waive compliance by a participant with any obligation to be performed by him or
her under an Award, waive any term or condition of an Award, cancel an existing
Award in whole or in part with the consent of a Participant, grant replacement
Awards, accelerate the vesting or lapse of any restrictions of any Award,
correct any defect, supply any omission or reconcile any inconsistency in the
Plan or in any Award and adopt the form of instruments evidencing Awards under
the Plan and change such forms from time to time.  Any interpretation by the Board of the terms
and provisions of the Plan or any Award thereunder and the administration
thereof, and all action taken by the Board, shall be final, binding and
conclusive on all parties and any person claiming under or through any party.
No Director shall be liable for any action or determination made in good faith.
The Board may, to the full extent permitted by law, delegate any or all of its
responsibilities under the Plan to a committee (the “Committee”) appointed by
the Board and consisting of members of the Board, and such Committee may
delegate any or all of its responsibilities to one or more officers of the
Company to the extent authorized by the Board (a “Delegated Officer”).  All reference in the Plan to the “Board”
shall mean the Board, a Committee of the Board, or a Delegated Officer to the
extent that the Board’s powers or authority under the Plan have been validly
delegated to such person.

3.               EFFECTIVE DATE

The Plan was approved by
the Board and the Stockholders on September 24, 2001 and was subsequently
amended on February 14, 2002 and May 5, 2004. 
The Plan was amended and restated by the Board on December 7, 2005 and
January 25, 2006 to (i) increase the share reserve by 2,000,000 shares, (ii) establish
a limit on the number of such shares with respect to which Awards other than
options may be granted, (iii) require that the exercise price of an option must
be equal to at least the fair market value per share of common stock on the
option grant date, and (iv) effect certain other changes to facilitate Plan
administration.  The share increase is
subject to stockholder approval at the 2006 Annual Stockholders Meeting.

4.               SHARES SUBJECT TO THE PLAN

Subject to adjustment as
provided in Section 10.6, the total number of shares of common stock of the
Company, par value $.01 per share (“Common Stock”), reserved and available for
distribution under the Plan is 8,680,000 shares including the 2 million share
increase approved by the Board on December 7, 2005, subject to stockholder
approval.  If the stockholders approve
the 2 million share increase, a maximum of 1,900,000 shares may be issued under
Awards other than option grants.  Shares issued
under the Plan may consist, in whole or in part, of authorized and unissued
shares or treasury shares.

If any Award of shares of
Common Stock requiring exercise by the Participant for delivery of such shares
expires or terminates without having been exercised in full, or if any Award is
forfeited or is otherwise terminated without a payment being made to the
Participant in the form of Common Stock, or if any shares of Common Stock
subject to restrictions are repurchased by the Company pursuant to the terms of
any Award, such shares shall be available for distribution in connection with
future Awards under the Plan.

5.               ELIGIBILITY

Employees, officers and
Directors of, and consultants to, the Company and its subsidiaries, or other
persons who are expected to make significant contributions to the future growth
and success of the Company and its subsidiaries shall be eligible to receive
Awards under the Plan. The Board, or other appropriate committee or person to
the extent permitted pursuant to the last sentence of Section 2, shall from
time to time select from among such eligible persons those who will receive
Awards under the Plan.

6.               TYPES OF AWARDS

The Board may offer
Awards under the Plan in any form of equity-based interest, equity-based
incentive or performance-based stock incentive in Common Stock of the Company
or any combination thereof. The type, terms and conditions and restrictions of
an Award shall be determined by the Board at the time such Award is made to a
Participant; provided however that the maximum number of shares permitted to be
subject to Awards or combination of Awards to any Participant during any one
calendar year may not exceed 1,800,000 shares of Common Stock, subject to
adjustment as provided under Section 10.6.

 

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An Award shall be made at
the time specified by the Board and shall be subject to such conditions or
restrictions as may be imposed by the Board and shall conform to the general
rules applicable under the Plan as well as any special rules then applicable
under United States or foreign tax laws, securities laws, other applicable law
or relevant rules of any stock exchange or quotation system on what the Common
Stock is traded.

Without limiting the
foregoing, Awards may take the following forms and shall be subject to the
following rules and conditions:

6.1  OPTIONS. 
An option is an Award that entitles the holder on exercise thereof to
purchase Common Stock at a specified exercise price. Options granted under the
Plan may be either incentive stock options (“incentive stock options”) that
meet the requirements of Section 422 of the Internal Revenue Code of 1986, as
amended (the “Code”), or options that are not intended to meet the requirements
of Section 422 (“non-statutory options”).

6.1.1 OPTION PRICE.  The price at which Common Stock may be
purchased upon exercise of an option shall be determined by the Board, provided
however, the exercise price shall not be less than the fair market value per
share of Common Stock on the option grant date. 
The fair market value of Common Stock on the option grant date means the
value of Common Stock determined as follows:

 (i)           If
the Common Stock is listed on any established stock exchange or a national
market system, including without limitation the Nasdaq National Market or The
Nasdaq SmallCap Market of The Nasdaq Stock 
Market, its Fair Market Value shall be the closing sales price for such
stock (or the closing bid, if no sales were reported) as quoted on such
exchange or system as of the date of grant, as reported in The Wall Street
Journal or such other source as the Board deems reliable;

 (ii)          If
the Common Stock is regularly quoted by a recognized securities dealer but
selling prices are not reported as of the date of grant, the Fair Market Value
of a Share of Common Stock shall be the mean between the high bid and low asked
prices for the Common Stock on the last market trading day prior to the day of
determination, as reported in The Wall Street Journal or such other source as
the Board deems reliable;

 (iii)         In
the absence of an established market for the Common Stock, the Fair Market
Value shall be determined in good faith by the Board.

6.1.2 OPTION GRANTS.  The granting of an option shall take place at
the time specified by the Board. Options shall be evidenced by option
agreements. Such agreements shall conform to the requirements of the Plan, and
may contain such other provisions (including, without limitation, to vesting
and forfeiture provisions, acceleration, change of control, protection in the
event of merger, consolidations, dissolutions and liquidations) as the Board
shall deem advisable. Option agreements shall expressly state whether an option
grant is intended to qualify as an incentive stock option or non-statutory option.

6.1.3 OPTION PERIOD.  An option will become exercisable at such
time or times (which may be immediately or in such installments as the Board
shall determine) and on such terms and conditions as the Board shall specify.
The option agreements shall specify the 

 

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terms and conditions
applicable in the event of an option holder’s termination of employment during
the option’s term.  The option term shall
be determined by the Board and may extend as long as ten (10) years.

Any exercise of an option
must be in writing, signed by the proper person and delivered or mailed to the
Company, accompanied by (1) any additional documents required by the Board and
(2) payment in full in accordance with Section 6.1.4 for the number of shares
for which the option is exercised.

6.1.4 PAYMENT OF EXERCISE
PRICE. Stock purchased on exercise of an option shall be paid for as follows:
(1) in cash or by check (subject to such guidelines as the Company may
establish for this purpose), bank draft or money order payable to the order of
the Company or (2) if so permitted by the instrument evidencing the option (or
in the case of a non-statutory option, by the Board at or after grant of the
option), (i) through the delivery of shares of Common Stock that have been
outstanding for at least six months (unless the Board expressly approves a
shorter period) and that have a fair market value (determined in accordance
with procedures prescribed by the Board) equal to the exercise price, (ii) by
delivery of a promissory note of the option holder to the Company, payable on
such terms as are specified by the Board, (iii) in cash, on the T+3 settlement
date that occurs after the exercise date specified in the notice of exercise,
provided that the Participant exercises the option through an irrevocable
agreement with a registered broker and the payment is made in accordance with
procedures permitted by Regulation T of the Federal Reserve Board and such
procedures do not violate applicable law, or (iv) by any combination of the
foregoing permissible forms of payment.

6.1.5 BUYOUT PROVISION. Subject
to Section 6.1.8, the Board may at any time offer to buy out for a payment in
cash, shares of Common Stock, deferred stock or restricted stock, an option previously
granted, based on such terms and conditions as the Board shall establish and
communicate to the option holder at the time that such offer is made.

6.1.6 SPECIAL RULES FOR
INCENTIVE STOCK OPTIONS. Each provision of the Plan and each option agreement
evidencing 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 or any statutory provision that may replace such Section, and any
provisions thereof that cannot be so construed shall be disregarded.
Instruments evidencing incentive stock options shall contain such provisions as
are required under applicable provisions of the Code.

Incentive stock options
may be granted only to employees of the Company and its subsidiaries.  The exercise price of an incentive stock option
granted to a more than ten percent Stockholder of the Company shall not be less
than 110% of the fair market value of the Common Stock on the date of grant, as
determined by the Board.  An incentive
stock option may not be granted after the tenth anniversary of the date on
which the Plan was adopted by the Board and the latest date on which an
incentive stock option may be exercised shall be the tenth anniversary (fifth
anniversary, in the case of any incentive stock option granted to a more than
ten percent Stockholder of the Company) of the date of grant, as determined by
the Board.  In the event that an
incentive stock options loses its status as such, the option shall be treated
as a non-statutory option.

 

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6.1.7 RELOAD OPTIONS. In
the event that shares of Common Stock are used to exercise an option, the terms
of such option may provide for a grant of additional options, or the Committee
may grant additional options, to purchase a number of shares of Common Stock
equal to the number of whole shares used to exercise the option and the number
of whole shares, if any, withheld in payment of any taxes.  Such options shall be granted with an exercise
price not less than the Fair Market Value of the Common Stock at the date of
grant of such additional options for a term not longer than the unexpired term
of the exercised option and on such other terms as the Board shall determine.

6.1.8 RESTRICTION ON
REPRICING PROGRAMS. The Board shall not (i) implement any cancellation/regrant
program pursuant to which outstanding options under the Plan are cancelled and
new options are granted in replacement with a lower exercise price per share,
(ii) cancel outstanding options under the Plan with exercise prices per share
in excess of the then current fair market value per share of common stock for
consideration payable in cash or equity securities of the Company or (iii)
otherwise directly reduce the exercise price in effect for outstanding options
under the Plan, without in each such instance obtaining Stockholder approval.

6.2   RESTRICTED AND UNRESTRICTED STOCK

An Award of restricted
stock entitles the recipient thereof to acquire shares of Common Stock upon payment
of the purchase price subject to restrictions specified in the instrument
evidencing the Award.

6.2.1 RESTRICTED STOCK
AWARDS. Awards of 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 (including, without limitation, restriction
and forfeiture provisions, change of control, protection in the event of
mergers, consolidations, dissolutions and liquidations) as the Board shall deem
advisable.

6.2.2 RESTRICTIONS. Until
the restrictions specified in a restricted stock agreement shall lapse,
restricted stock may not be sold, assigned, transferred, pledged or otherwise
encumbered or disposed of, and upon certain conditions specified in the restricted
stock agreement, must be resold to the Company for the price, if any, specified
in such agreement. The restrictions shall lapse at such time or times, and on
such conditions, as the Board may specify. The Board may at any time accelerate
the time at which the restrictions on all or any part of the shares shall
lapse.

6.2.3 RIGHTS AS A
STOCKHOLDER. A Participant who acquires shares of restricted stock will have
all of the rights of a Stockholder with respect to such shares including,
without limitation, the right to receive dividends and to vote such
shares.  Unless the Board otherwise
determines, certificates evidencing shares of restricted stock will remain in
the possession of the Company until such shares are free of all restrictions
under the Plan.

6.2.4 PURCHASE PRICE. The
purchase price of shares of restricted stock shall be determined by the Board,
in its sole discretion, but such price may not be less than the par value of
such shares.

 

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6.2.5 OTHER AWARDS
SETTLED WITH RESTRICTED STOCK. The Board may provide that any or all the Common
Stock delivered pursuant to an Award will be restricted stock.

                6.2.6 UNRESTRICTED STOCK. The Board may, in its sole
discretion, sell to any Participant shares of Common Stock free of restrictions
under the Plan for a price determined by the Board, but which may not be less
than the par value per share of the Common Stock.

6.3           STOCK UNIT AWARDS

                6.3.1  STOCK
UNIT AWARDS.  A Stock Unit Award shall
represent the right of the recipient to receive a share of Common Stock subject
to restrictions specified in the instrument evidencing the Award.  All Stock Unit Awards shall be credited to
accounts on the Company’s records for purposes of the Plan.

                6.3.2  TERMS OF
STOCK UNIT AWARDS.  The Board may grant
Stock Unit Awards that are deliverable if specified performance goals or other
conditions are met, or under other circumstances, including, without
limitation, those terms and conditions described in Section 6.2 above.  Stock Unit Awards may be delivered at the end
of a specified period, or delivery may be deferred to a date authorized by the
Board.  The Board shall determine the
number of Stock Unit Awards to be granted and the requirements applicable to
such Stock Unit Awards.  The Board shall
establish rules and procedures for any deferrals, consistent with applicable
requirements of Section 409A of the Code.

                6.3.3  DELIVERY
WITH RESPECT TO STOCK UNIT AWARDS. 
Delivery with respect to Stock Unit Awards shall be made in Common
Stock.

                6.3.4 
REQUIREMENT OF EMPLOYMENT, SERVICE OR OTHER ACTION.  If a recipient ceases to provide Service to
the Company, or if other conditions established by the Board are not met, the
recipient’s unvested or contingent Stock Unit Awards shall be forfeited.  The Board may grant Stock Unit Awards
contingent upon the recipient’s taking certain specified actions as the Board
sees fit.  The Board may provide for
complete or partial exceptions to this requirement as it deems appropriate.

6.4   DEFERRED STOCK

                6.4.1 DEFERRED STOCK AWARD. A deferred stock Award
entitles the recipient to receive shares of deferred stock, which is Common
Stock to be delivered in the future. Delivery of the Common Stock will take
place at such time or times, and on such conditions, as the Board may specify.
The Board may at any time accelerate the time at which delivery of all or any
part of the Common Stock will take place.

6.4.2 OTHER AWARDS
SETTLED WITH DEFERRED STOCK. The Board may, at the time any Award described in
this Section 6 is granted, provide that, at the time Common Stock would
otherwise be delivered pursuant to the Award, the Participant will instead
receive an instrument evidencing the right to future delivery of deferred
stock.

 

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6.4.3 SECTION 409A.  The Board shall establish rules and
procedures for any deferrals, consistent with applicable requirements of
Section 409A of the Code.

6.5           PERFORMANCE AWARDS

6.5.1 PERFORMANCE AWARDS.
A performance Award entitles the recipient to receive, without payment, an
amount, in cash or Common Stock or a combination thereof (such form to be
determined by the Board), following the attainment of performance goals.
Performance goals may be related to personal performance, corporate
performance, departmental performance or any other category of performance
deemed by the Board to be important to the success of the Company.  The Board will determine the performance
goals, the period or periods during which performance is to be measured and all
other terms and conditions applicable to the Award.

6.5.2 OTHER AWARDS
SUBJECT TO PERFORMANCE CONDITIONS. The Board may, at the time any Award
described in this Section 6 is granted, impose a condition or conditions (in
addition to any conditions specified or authorized in this Section 6 of the
Plan) that performance goals be met prior to the Participant’s realization of
any payment or benefit under the Award.

7.               PURCHASE PRICE AND PAYMENT

Except as otherwise
provided in the Plan, the purchase price of Common Stock to be acquired
pursuant to an Award shall be the price determined by the Board, provided that
such price shall not be less than the par value of the Common Stock. Except as
otherwise provided in the Plan, the Board may determine the method of payment
of the exercise price or purchase price of an Award granted under the Plan and
the form of payment. The Board may determine that all or any part of the
purchase price of Common Stock pursuant to an Award other than an option has
been satisfied by past services rendered by the Participant. The Board may
agree at any time, upon request of the Participant, to defer the date on which
any payment under an Award will be made.

8.               LOANS

The Company may make a
loan to a Participant, either on or after the grant to the Participant of any
Award, in connection with the purchase of Common Stock under the Award or with
the payment of any obligation incurred or recognized as a result of the Award.
The Board will have full authority to decide whether the loan is to be secured
or unsecured or with or without recourse against the borrower, the terms on
which the loan is to be repaid and the conditions, if any, under which it may
be forgiven.

9.               CHANGE IN CONTROL

                9.1           IMPACT OF EVENT.  Subject to Section 9.3 below, in the event of
a “Change in Control” as defined in Section 9.2, the following provisions shall
apply, unless the agreement evidencing the Award otherwise provides (by
specific explicit reference to Section 9.2 below).  If a Change in Control occurs while any
Awards are outstanding, then, upon termination by the Company of the
Participant’s employment without cause within one-year after the Change in
Control:  (i) each outstanding stock
option or other stock-based Award awarded under the Plan 

 

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that was not previously exercisable and vested shall become immediately
exercisable in full and will no longer be subject to a right of repurchase by
the Company, (ii) each outstanding restricted stock award or other stock-based
Award subject to restrictions and to the extent not fully vested, shall be
deemed to be fully vested, free of restrictions and conditions and no longer
subject to a right of repurchase by the Company, and (iii) deferral limitations
and conditions that relate solely to the passage of time, continued employment
or affiliation will be waived and removed as to deferred stock Awards and
performance Awards; provided, however, that performance of other conditions
(other than conditions relating solely to the passage of time, continued
employment or affiliation) will continue to apply unless otherwise provided in
the agreement evidencing the Award or in any other agreement between the
Participant and the Company or unless otherwise agreed by the Board.

 

9.2   DEFINITION OF “CHANGE IN CONTROL” means an
event or occurrence set forth in any one or more of subsections (a) through (d)
below (including an event or occurrence that constitutes a Change in Control
under one of such subsections but is specifically exempted from another such
subsection):

 (a)          the
acquisition by an individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) (a “Person”) of beneficial ownership of any capital stock of the Company
if, after such acquisition, such Person beneficially owns (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) forty percent (40%) or more
of either (i) the then-outstanding shares of common stock of the Company (the “Outstanding
Company Common Stock”), or (ii) the combined voting power of the
then-outstanding securities of the Company entitled to vote generally in the
election of directors (the “Outstanding Company Voting Securities”); provided,
however, that for purposes of this subsection (a), the following acquisitions
shall not constitute a Change in Control:

 (i)           any
acquisition by the Company,

 (ii)          any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company, or

 (iii)         any
acquisition by any corporation pursuant to a transaction that complies with
clauses (i) and (ii) of subsection (c) of this Section 9.2;

 (b)          the
Continuing Directors (as defined below) do not constitute a majority of the
Board (or, if applicable, the Board of Directors of a successor corporation to
the Company), where the term “Continuing Director” means at any date a member
of the Board (i) who was a member of the Board on the date of the amendment of
this Plan by the Board or (ii) who was nominated or elected subsequent to such
date by at least a majority of the directors who were Continuing Directors at
the time of such nomination or election or whose election to the Board was
recommended or endorsed by at least a majority of the directors who were
Continuing Directors at the time of such nomination or election; provided,
however, that there shall be excluded from this clause (ii) any individual
whose initial assumption of office occurred as a result of an actual or
threatened election contest with respect to the election or removal of 

 

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directors or other actual
or threatened solicitation of proxies or consents, by or on behalf of a person
other than the Board;

 (c)          the
consummation of a merger, consolidation, reorganization, recapitalization or
statutory share exchange involving the Company or a sale or other disposition
of all or substantially all of the assets of the Company in one or a series of
transactions (a “Business Combination”), unless, immediately following such
Business Combination, each of the following two conditions is satisfied: (i)
all or substantially all of the individuals and entities who were the
beneficial owners of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than fifty percent (50%) of the
then-outstanding shares of common stock and the combined voting power of the
then-outstanding securities entitled to vote generally in the election of
directors, respectively, of the resulting or acquiring corporation in such
Business Combination (which shall include, without limitation, a corporation
which as a result of such transaction owns the Company or substantially all of
the Company’s assets either directly or through one or more subsidiaries) (such
resulting or acquiring corporation is referred to herein as the “Acquiring
Corporation”) in substantially the same proportions as their ownership,
immediately prior to such Business Combination, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, respectively; and (ii)
no Person (excluding the Acquiring Corporation or any employee benefit plan (or
related trust) maintained or sponsored by the Company or by the Acquiring
Corporation) beneficially owns, directly or indirectly, forty percent (40%) or
more of the then outstanding shares of common stock of the Acquiring Corporation,
or of the combined voting power of the then-outstanding securities of such
corporation entitled to vote generally in the election of directors; or

 (d)          approval
by the stockholders of the Company of a complete liquidation or dissolution of
the Company.

                9.3  BOARD ACTION. 
Notwithstanding Section 9.1 above, in the event of a Change in Control,
the Board may take any one or more of the following actions with respect to any
or all outstanding Awards, without the consent of any Participant: (i) the Board
may determine that outstanding stock options or other stock-based Awards shall
be fully exercisable, and restrictions on outstanding restricted stock Awards
or other stock-based Awards shall lapse, as of the date of the Change in
Control or at such other time as the Board determines, (ii) the Board may
require that Participants surrender their outstanding stock options or stock
appreciation rights in exchange for one or more payments by the Company, in
cash or Common Stock as determined by the Board, in an amount equal to the
amount by which the then Fair Market Value of the shares of Common Stock
subject to the Participant’s unexercised stock options or stock appreciation
rights exceeds the exercise price, if any, and on such terms as the Board
determines, (iii) after giving Participants an opportunity to exercise their
outstanding stock options or stock appreciation rights, the Board may terminate
any or all unexercised stock options or stock appreciation rights at such time
as the Board deems appropriate, (iv) with respect to Participants holding Stock
Unit Awards or other stock-based Awards, the Board may determine that such
Participants shall receive one or more payments in settlement of such Stock
Unit Awards or other stock-based Awards in such amount and form and on such
terms as may be determined by the Board, or (v) the Board may determine that Awards
that remain outstanding after the Change in Control shall be converted to
similar grants of the surviving corporation (or a parent or 

 

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subsidiary of the surviving corporation).  Such acceleration, surrender, termination,
settlement or conversion shall take place as of the date of the Change in
Control or such other date as the Board may specify.

 

10.         GENERAL PROVISIONS

10.1  DOCUMENTATION OF AWARDS

Awards will be evidenced
by written instruments (an “Award Agreement”), which may differ among
Participants, prescribed by the Board from time to time. Such Award Agreements
may be in the form of agreements to be executed by both the Participant and the
Company or certificates, letters or similar instruments which need not be
executed by the participant but acceptance of which will evidence agreement to
the terms thereof.  Such Award Agreements
shall conform to the requirements of the Plan and may contain such other
provisions (including, without limitation, provisions relating to events of
merger, consolidation, dissolution and liquidations, change of control and
restrictions affecting either the agreement or the Common Stock issued
thereunder), as the Board deems advisable.

10.2  RIGHTS AS A STOCKHOLDER

Except as specifically
provided by the Plan or the Award Agreement, the receipt of an Award will not
give a Participant rights as a Stockholder with respect to any shares covered
by an Award until the date of issue of a stock certificate to the participant
for such shares.

10.3  CONDITIONS ON DELIVERY OF STOCK

The Company will not be
obligated to deliver any shares of Common Stock pursuant to the Plan or to
remove any restriction from shares previously delivered under the Plan (a)
until all conditions of the Award have been satisfied or removed, (b) until, in
the opinion of the Company’s counsel, all applicable laws and regulations have
been complied with, (c) if the outstanding Common Stock is at the time listed
on any stock exchange, until the shares have been listed or authorized to be
listed on such exchange upon official notice of issuance, and (d) until all
other legal matters in connection with the issuance and delivery of such shares
have been approved by the Company’s counsel. If the sale of Common Stock has
not been registered under the Securities Act of 1933, as amended, the Company
may require, as a condition to exercise of the Award, such representations or agreements
as counsel for the Company may consider appropriate to avoid violation of such
act and may require that the certificates evidencing such Common Stock bear an
appropriate legend restricting transfer.

If an Award is exercised
by the participant’s legal representative, the Company will be under no
obligation to deliver Common Stock pursuant to such exercise until the Company
is satisfied as to the authority of such representative.

10.4  TAX WITHHOLDING

The Company will withhold
from any cash payment made pursuant to an Award the minimum amount sufficient
to satisfy all federal, state, local and other applicable withholding
requirements (the “withholding requirements”).

 

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In the case of an Award
pursuant to which Common Stock may be delivered, the Board will have the right
to require that the participant or other appropriate person remit to the
Company an amount sufficient to satisfy the withholding requirements, or make
other arrangements satisfactory to the Board with regard to such requirements,
prior to the delivery of any Common Stock.  If and to the extent that such withholding is
required, the Board may hold back (or permit the participant or such other
person to elect at such time and in such manner as the Board provides to have
the Company hold back) from the shares to be delivered Common Stock having a
value calculated to satisfy the withholding requirement.

10.5  TRANSFERABILITY OF AWARDS

Except as may be
authorized by the Board, in its sole discretion, no Award (other than an Award
in the form of an outright transfer of cash or Common Stock not subject to any
restrictions) may be sold, assigned, transferred, pledged or otherwise
encumbered other than by will or the laws of descent and distribution, and
during a Participant’s lifetime an Award requiring exercise may be exercised
only by him or her (or in the event of incapacity, the person or persons
properly appointed to act on his or her behalf).  The Board may, in its discretion, determine
the extent to which Awards granted to a Participant shall be transferable to a
Participant’s family members or to a trust or other entities established for or
owned by such family members without receipt of any consideration by the
Participant, and such provisions permitting or acknowledging transfer shall be
set forth in the written agreement evidencing the Award executed and delivered
by or on behalf of the Company and the Participant.

10.6  ADJUSTMENTS IN THE EVENT OF CERTAIN
TRANSACTIONS

  If
there is any change in the number or kind of shares of Common Stock outstanding
(i) by reason of a stock dividend, spinoff, recapitalization, stock split, or
combination or exchange of shares, (ii) by reason of a merger, reorganization
or consolidation, (iii) by reason of a reclassification or change in par value,
or (iv) by reason of any other extraordinary or unusual event affecting the
outstanding Common Stock as a class without the Company’s receipt of
consideration, or if the value of outstanding shares of Common Stock is
substantially reduced as a result of a spinoff or the Company’s payment of an
extraordinary dividend or distribution, the maximum number of shares of Common
Stock available for issuance under the Plan, the maximum number of shares of Common
Stock for which any individual may receive Awards in any year, the number of
shares covered by outstanding Awards, the kind of shares issued and to be
issued under the Plan, and the price per share or the applicable market value
of such Awards may be appropriately adjusted by the Board to reflect any
increase or decrease in the number of, or change in the kind or value of,
issued shares of Common Stock to preclude, to the extent practicable, the
enlargement or dilution of rights and benefits under such Awards; provided,
however, that any fractional shares resulting from such adjustment shall be
eliminated.  Any adjustments determined
by the Board shall be final, binding and conclusive.

10.7  EMPLOYMENT RIGHTS

Neither the adoption of
the Plan nor the grant of Awards will confer upon any person any right to
continued employment with the Company or any subsidiary or interfere in any way
with the right of the Company or subsidiary to terminate any employment
relationship at any time or 

 

11

 

to increase or decrease
the compensation of such person. Except as specifically provided by the Board
in any particular case, the loss of existing or potential profit in Awards
granted under the Plan will not constitute an element of damages in the event
of termination of an employment relationship even if the termination is in
violation of an obligation of the Company to the employee.

Whether an authorized
leave of absence, or absence in military or government service, shall
constitute termination of employment shall be determined by the Board at the
time. For purposes of this Plan, transfer of employment between the Company and
its subsidiaries shall not be deemed termination of employment.

10.8  OTHER EMPLOYEE BENEFITS

The value of an Award
granted to a Participant who is an employee, and the amount of any compensation
deemed to be received by an employee as a result of any exercise or purchase of
Common Stock pursuant to an Award or sale of shares received under the Plan,
will not constitute “earnings” or “compensation” with respect to which any
other employee benefits of such employee are determined, including without
limitation benefits under any pension, stock ownership, stock purchase, life
insurance, medical, health, disability or salary continuation plan.

10.9  LEGAL HOLIDAYS

If any day on or
before which action under the Plan must be taken falls on a Saturday, Sunday or
legal holiday, such action may be taken on the next succeeding day not a
Saturday, Sunday or legal holiday.

10.10  FOREIGN NATIONALS

Without amending the
Plan, Awards may be granted to persons 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 Board, be necessary
or desirable to further the purpose of the Plan.

10.11  GOVERNING LAW

The provisions of the
Plan and all Awards made hereunder shall be governed by and interpreted in
accordance with the laws of the State of Delaware, without regard to any
applicable conflicts of law.

11.         TERMINATION AND AMENDMENT

The Plan shall terminate
upon the earlier of (i) the close of business on the day next preceding the
tenth anniversary of the date of its adoption by the Board (or approval by the
Corporation’s Stockholders if earlier), or (ii) the date on which all shares
available for issuance under the Plan shall have been issued pursuant to the
exercise or cancellation of options granted under the Plan. If the date of
termination is determined under (i) above, then the options outstanding on such
date shall continue to have full force and effect in accordance with the
provisions of the option agreements evidencing such options.  Subject to the last sentence of this Section
11, the Board 

 

12

 

may at any time or times
amend the Plan or any outstanding Award for any purpose that may at the time be
permitted by law, or may at any time terminate the Plan as to any further
grants of Awards. No amendment of the Plan or any agreement evidencing Awards
under the Plan may adversely affect the rights of any participant under any
Award previously granted without such participant’s consent.

12.         CANCELLATION AND RESCISSION OF AWARDS

 (a) Unless the Award Agreement specifies otherwise,
the Board may cancel, rescind, suspend, withhold or otherwise limit or restrict
any unexpired, unpaid, or deferred Awards at any time if the Participant is not
in compliance with all applicable provisions of the Award Agreement and the
Plan, or if the Participant engages in any “Detrimental Activity.” For purposes
of this Section 12, “Detrimental Activity” shall include: (i) the rendering of
services for any organization or engaging directly or indirectly in any
business which is or becomes competitive with the Company, or which
organization or business, or the rendering of services to such organization or
business, is or becomes otherwise prejudicial to or in conflict with the
interests of the Company; (ii) the disclosure to anyone outside the Company, or
the use in other than the Company’s business, without prior written
authorization from the Company, of any confidential information or material, as
defined in the Company’s applicable agreements or policies relating to
Confidentiality and nondisclosure, relating to the business of the Company,
acquired by the Participant either during or after employment with the Company;
(iii) the failure or refusal to disclose promptly and to assign to the Company,
pursuant to the Company’s applicable agreements or policies relating to
ownership of intellectual property, all right, title and interest in any
invention or idea, patentable or not, made or conceived by the Participant
during employment by the Company, relating in any manner to the actual or
anticipated business, research or development work of the Company or the
failure or refusal to do anything reasonably necessary to enable the Company to
secure a patent where appropriate in the United States and in other countries;
(iv) activity that results or, had such activity been discovered prior to the
Participant’s termination, would have constituted grounds for termination of
the Participant’s employment for cause; (v) a violation of any rules, policies,
procedures or guidelines of the Company, including, without limitation, the
Company’s business conduct guidelines; (vi) any attempt directly or indirectly
to induce any employee of the Company to be employed or perform services
elsewhere or any attempt directly or indirectly to solicit the trade or
business of any current or prospective customer, supplier or partner of the
Company; (vii) the Participant being convicted of, or entering a guilty plea
with respect to, a crime, whether or not connected with the Company; or (viii)
any other conduct or act determined by the Board to be injurious, detrimental
or prejudicial to any interest of the Company.

 (b) Upon exercise, payment or delivery
pursuant to an Award, the Participant shall certify in a manner acceptable to
the Company that he or she is in compliance with the terms and conditions of
the Plan.  In the event a Participant engages
in any Detrimental Activity prior to, or during the six months after, any
exercise, payment or delivery pursuant to an Award, such exercise, payment or
delivery may be rescinded within two years thereafter.  In the event of any such rescission, the
Participant shall return to the Company any shares of Common Stock or other
payment received under such rescinded exercise, payment or delivery or, in the
event the Participant has sold or otherwise transferred the shares, pay to the
Company the fair market value of the shares on the date of such sale or
transfer, in such manner and on such terms and 

 

13

 

conditions as may be
required by the Company.  The Company
shall be entitled to set-off against any such shares or payment any amount owed
to the Participant by the Company.

 

14Exhibit 10.30

 

Corporate Letter of Offer

 

 

“CHANNELL BUSHMAN GROUP”

 

1 December 2005

 

 

	
  National
  Australia Bank Limited ABN 12 004 044 937

  	
   

  	
  

  

 

 

Customers and Facility
Summary

 

We
offer 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 subject to the
relevant Multi Option Facility set out in Part 1 of the Letter of Offer.

 

FACILITY
SUMMARY

 

	
  Customer:

  	
   

  	
  Channell Bushman
  Pty Limited

  
	
  ABN:

  	
   

  	
  99 109 821 614

  
	
   

  	
   

  	
   

  
	
  Facility Type:

  	
   

  	
  Bill - Floating Rate = Acquisition Funding

  
	
  Facility Limit:

  	
   

  	
  $6,000,000

  
	
   

  	
   

  	
   

  
	
  Facility Type:

  	
   

  	
  Bill - Floating Rate = Earn-Out Funding

  
	
  Facility Limit:

  	
   

  	
  $1,750,000

  
	
   

  	
   

  	
   

  
	
  Facility Type:

  	
   

  	
  Bill - Floating Rate = Capital Expenditure

  
	
  Facility Limit:

  	
   

  	
  $4,500,000

  
	
   

  	
   

  	
   

  
	
  Customer Total:

  	
   

  	
  $12,250,000

  
	
   

  	
   

  	
   

  
	
  Customer:

  	
   

  	
  Bushmans Group
  Pty Limited

  
	
  ABN:

  	
   

  	
  90 090 744 022

  
	
   

  	
   

  	
   

  
	
  Facility Type:

  	
   

  	
  Bill - Floating Rate = Working Capital

  
	
  Facility Limit:

  	
   

  	
  $2,000,000

  
	
   

  	
   

  	
   

  
	
  Facility Type:

  	
   

  	
  Master Lease/Lease Purchase Facility

  
	
  Facility Limit:

  	
   

  	
  $500,000

  
	
   

  	
   

  	
   

  
	
  Facility Type:

  	
   

  	
  Business Credit Card Facility

  
	
  Facility Limit:

  	
   

  	
  $300,000

  
	
   

  	
   

  	
   

  
	
  Facility Type:

  	
   

  	
  Bank Guarantee

  
	
  Facility Limit:

  	
   

  	
  $100,000

  
	
   

  	
   

  	
   

  
	
  Customer Total:

  	
   

  	
  $2,900,000

  
	
   

  	
   

  	
   

  
	
  Customer:

  	
   

  	
  Channell Pty
  Limited

  
	
  ABN:

  	
   

  	
  29 002 735 622

  
	
   

  	
   

  	
   

  
	
  Facility Type:

  	
   

  	
  Bank Guarantee

  
	
  Facility Limit:

  	
   

  	
  $342,048

  
	
   

  	
   

  	
   

  
	
  Facility Type:

  	
   

  	
  Master Lease/Lease Purchase Facility

  
	
  Facility Limit:

  	
   

  	
  $250,000

  
	
   

  	
   

  	
   

  
	
  Facility Type:

  	
   

  	
  Standby Letter of Credit

  
	
  Facility Limit:

  	
   

  	
  $65,217

  
	
   

  	
   

  	
   

  
	
  Customer Total:

  	
   

  	
  $657,265

  
	
   

  	
   

  	
   

  
	
  Group Total:

  	
   

  	
  $15,807,265

  

 

If there is any
inconsistency between the information set out here and that set out in the
Details of Facilities sections of this Letter
of Offer, then unless specifically provided the Details of
Facilities sections prevail to the extent of that inconsistency.

 

 

Relationship Management

 

The banking needs of “CHANNELL BUSHMAN GROUP” will be met by a
specialist team located at the National’s NAB House 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 NAB House
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
the National’s specialised services including Interest Rate Risk Management, Trade
Solutions, Leasing and Fleet Services and Wealth Creation.

 

The dedicated team at the NAB House Sydney location is
led by:

 

	
  •

  	
  Senior
  Relationship Manager

  	
  Graeme L Johnson

  
	
   

  	
  Direct Telephone Number

  	
  02 9237-9731

  
	
   

  	
  Facsimile Number

  	
  02 9237-9773

  
	
   

  	
  Email

  	
  graeme_l_johnson@national.com.au

  
	
   

  	
   

  	
   

  
	
  •

  	
  Relationship
  Manager

  	
  Sam Mandoukos

  
	
   

  	
  Direct Telephone Number

  	
  02 9237-9735

  
	
   

  	
  Facsimile Number

  	
  02 9237-9773

  
	
   

  	
  Email

  	
  sam_mandoukos@national.com.au

  

 

This Letter of Offer remains available for
acceptance until 31st December 2005 after which time it will,
at our option, lapse.

 

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

 

	
  Yours
  sincerely,

  
	
   

  
	
   

  
	
  /s/
  Graeme Johnson

  	
   

  
	
  Graeme
  L Johnson

  
	
  Senior
  Relationship Manager

  

 

 

Table of Contents

 

	
  1

  	
  DETAILS OF
  FACILITIES – NEW FACILITIES GENERALLY SUBJECT TO THIS LETTER OF OFFER

  	
  2

  
	
   

  	
   

  	
   

  
	
  2

  	
  DETAILS OF
  FACILITIES – NEW FACILITIES GENERALLY SUBJECT TO OTHER CONTRACTUAL
  DOCUMENTATION

  	
  7

  
	
   

  	
   

  	
   

  
	
  3

  	
  DETAILS OF
  FACILITIES – EXISTING FACILITIES GENERALLY SUBJECT TO OTHER CONTRACTUAL
  DOCUMENTATION

  	
  8

  
	
   

  	
   

  	
   

  
	
  4

  	
  SECURITY

  	
  9

  
	
   

  	
   

  	
   

  
	
  5

  	
  ESTABLISHMENT
  FEES AND CHARGES

  	
  10

  
	
   

  	
   

  	
   

  
	
  6

  	
  CONDITIONS
  PRECEDENT AND OTHER INFORMATION

  	
  11

  
	
   

  	
   

  	
   

  
	
  7

  	
  COVENANTS AND
  UNDERTAKINGS

  	
  12

  
	
   

  	
   

  	
   

  
	
  8

  	
  GENERAL TERMS
  AND CONDITIONS

  	
  13

  
	
   

  	
   

  	
   

  
	
  9

  	
  SPECIFIC
  CONDITIONS - BILL FACILITY

  	
  33

  
	
   

  	
   

  	
   

  
	
  10

  	
  SPECIFIC
  CONDITIONS – BANK GUARANTEE FACILITY

  	
  41

  
	
   

  	
   

  	
   

  
	
  ACCEPTANCE OF
  LETTER OF OFFER

  	
  43

  

 

1

 

1                                         Details of Facilities – New facilities generally
subject to this Letter of Offer

 

New
facilities are detailed below.

 

Customer: 
Channell Bushman Pty Limited

 

Bill
Acceptance/Discount Facility – Floating Rate = Acquisition Funding

 

	
  Purpose/Utilisation:

  	
  Assist with business acquisition.

  
	
   

  	
   

  
	
  Facility limit:

  	
  $6,000,000 (six
  million dollars)

  
	
   

  	
   

  
	
  Expiry Date:

  	
  31st July 2009

  
	
   

  	
   

  
	
  The Facility is:

  	
  an amortising facility

  
	
   

  	
   

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

  	
  $400,000 per
  quarter

  
	
   

  	
   

  
	
  Drawdown Periods:

  	
  Approximate
  period between each drawdown date:

  

  90 days

  
	
   

  	
   

  
	
  Yield Rate:

  	
  Floating
  rate.

  
	
   

  	
   

  
	
  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 our reasonable opinion, the rate becomes
  inappropriate, the floating rate
  will be the rate reasonably determined by us
  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 you 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 we
  accept the bill to the maturity date of the bill, payable by you upon acceptance of each bill.

  
	
   

  	
   

  
	
  Bill Drawdown
  Fee:

  	
  $150 payable by you each time we accept bills
  on a drawdown date.

  
	
   

  	
   

  
	
  Late
  Presentation Fee:

  	
  Not
  ascertainable - see Special Conditions - Bill Facility

  
	
   

  	
   

  
	
  Default
  Interest Rate:

  	
  The
  total of the National’s Base
  Lending Indicator Rate, currently 9.85%, plus a customer margin of 1.90% %
  plus a default margin of 4.00%.

  

  Currently
  15.75% per annum

  
	
   

  	
   

  
	
  Nominated
  Account:

  	
  Channell Bushman
  Pty Ltd

  

  082-057 #57189-3025

  

  for the purposes of debiting amounts under this Agreement (including the amount of each matured bill, interest, fees, charges, taxes,
  premiums, economic costs and
  enforcement expenses.)

  
	
   

  	
   

  
	
  Securities:

  	
  All securities detailed in Part 4 with
  the exception of the securities numbered
  8,9&10.

  
	
   

  	
   

  
	
  Specific
  Conditions:

  	
  Specific
  Conditions – Bill Facility

  

 

2

 

Customer: Channell Bushman Pty Limited

 

Bill
Acceptance/Discount Facility – Floating Rate = Earn-Out Funding

 

	
  Purpose/Utilisation:

  	
  Fund “Earn-Out” associated with the
  acquisition.

  
	
   

  	
   

  
	
  Facility limit:

  	
  $1,750,000 (one
  million seven hundred and fifty thousand dollars)

  
	
   

  	
   

  
	
  Expiry Date:

  	
  31st July 2009

  
	
   

  	
   

  
	
  The Facility is:

  	
  an amortising facility

  
	
   

  	
   

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

  	
  Based on initial
  drawing of $1,000,000 a repayment of $63,000 each March, June, September &
  December will be required until fully cleared. Should the second drawing
  be made, repayments are to increase to $146,000 per quarter.

  
	
   

  	
   

  
	
  Yield Rate:

  	
  Floating
  rate.

  
	
   

  	
   

  
	
  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 our reasonable opinion, the rate becomes
  inappropriate, the floating rate
  will be the rate reasonably determined by us
  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 you 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 we
  accept the bill to the maturity date of the bill, payable by you upon acceptance of each bill.

  
	
   

  	
   

  
	
  Bill Drawdown
  Fee:

  	
  $150 payable by you each time we accept bills
  on a drawdown date.

  
	
   

  	
   

  
	
  Default Interest
  Rate:

  	
  The
  total of the National’s Base
  Lending Indicator Rate, currently 9.85%, plus a customer margin of 1.90%%
  plus a default margin of 4.00%.

  

  Currently 15.75% per annum

  
	
   

  	
   

  
	
  Nominated
  Account: 

  	
  Channell Bushman
  Pty Ltd

  

  082-057 #57189-3025

  

  for the purposes of debiting amounts under this Agreement (including the amount of each matured bill, interest, fees, charges, taxes,
  premiums, economic costs and
  enforcement expenses.)

  
	
   

  	
   

  
	
  Securities:

  	
  All securities detailed in Part 4 with
  the exception of the securities numbered
  8,9&10.

  
	
   

  	
   

  
	
  Specific
  Conditions:

  	
  Specific
  Conditions – Bill Facility

  

 

3

 

Customer: Channell Bushman Pty Limited

 

Bill
Acceptance/Discount Facility – Floating Rate = Capital Expenditure

 

	
  Purpose/Utilisation:

  	
  Capital Expenditure for the group.

  
	
   

  	
   

  
	
  Facility limit:

  	
  $4,500,000 (four
  million five 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:

  	
  Subject to
  forecast cash flows and negotiation, with the view of fully amortising any
  drawing over a term of four years.

  
	
   

  	
   

  
	
  Yield Rate:

  	
  Floating
  rate.

  
	
   

  	
   

  
	
  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 our reasonable opinion, the rate becomes
  inappropriate, the floating rate
  will be the rate reasonably determined by us
  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 you 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 we
  accept the bill to the maturity date of the bill, payable by you upon acceptance of each bill.

  
	
   

  	
   

  
	
  Bill Drawdown
  Fee:

  	
  $150 payable by you each time we accept bills
  on a drawdown date.

  
	
   

  	
   

  
	
  Default Interest
  Rate:

  	
  The
  total of the National’s Base
  Lending Indicator Rate, currently 9.85%, plus a customer margin of 1.90%% plus
  a default margin of 4.00%.

  

  Currently
  15.75% per annum

  
	
   

  	
   

  
	
  Nominated
  Account: 

  	
  Channell Bushman
  Pty Ltd

  

  082-057 #57189-3025

  

  for the purposes of debiting amounts under this Agreement (including the amount of each matured bill, interest, fees, charges, taxes,
  premiums, economic costs and
  enforcement expenses.)

  
	
   

  	
   

  
	
  Securities:

  	
  All securities detailed in Part 4 with
  the exception of the securities numbered
  8,9&10.

  
	
   

  	
   

  
	
  Specific
  Conditions:

  	
  Specific
  Conditions – Bill Facility

  

 

4

 

Customer: 
Bushmans Group Pty Limited

 

Bill
Acceptance/Discount Facility – Floating Rate

 

	
  Purpose/Utilisation:

  	
  Working Capital

  
	
   

  	
   

  
	
  Facility limit:

  	
  $2,000,000 (two
  million dollars)

  
	
   

  	
   

  
	
  Expiry Date:

  	
  30th November 2006,
  subject to annual review.

  
	
   

  	
   

  
	
  The Facility is:

  	
  a non-amortising  facility

  
	
   

  	
   

  
	
  Drawdown Periods:

  	
  Approximate
  period between each drawdown date:

  

  Any term between 7 and 180 days, provided maturity date does not exceed the
  expiry date.

  
	
   

  	
   

  
	
  Yield Rate:

  	
  Floating
  rate.

  
	
   

  	
   

  
	
  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 our reasonable opinion, the rate becomes
  inappropriate, the floating rate
  will be the rate reasonably determined by us
  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 you 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 we
  accept the bill to the maturity date of the bill, payable by you upon acceptance of each bill.

  
	
   

  	
   

  
	
  Bill Drawdown
  Fee:

  	
  $150 payable by you each time we accept bills
  on a drawdown date.

  
	
   

  	
   

  
	
  Default Interest
  Rate:

  	
  The
  total of the National’s Base
  Lending Indicator Rate, currently 9.85%, plus a customer margin of 1.90%%
  plus a default margin of 4.00%.

  

  Currently 15.75% per annum

  
	
   

  	
   

  
	
  Nominated
  Account: 

  	
  Bushmans Group
  Pty Ltd

  

  082-057 #57132-0868

  

  for the purposes of debiting amounts under this Agreement (including the amount of each matured bill, interest, fees, charges, taxes,
  premiums, economic costs and
  enforcement expenses.)

  
	
   

  	
   

  
	
  Securities:

  	
  All securities detailed in Part 4 with
  the exception of the securities numbered
  6,7,9&10.

  
	
   

  	
   

  
	
  Specific
  Conditions:

  	
  Specific
  Conditions – Bill Facility

  

 

5

 

Customer: Bushmans Group Pty Limited

 

Bank
Guarantee Facility

 

	
  Purpose/Utilisation:

  	
  Performance
  Guarantee

  
	
   

  	
   

  
	
  Facility
  limit:

  	
  $100,000 (one
  hundred thousand dollars)

  
	
   

  	
   

  
	
  Expiry Date:

  	
  30th November 2006

  
	
   

  	
   

  
	
  Issuing Fee:

  	
  1.80% of the
  face value of each bank guarantee
  payable on issue 

  
	
   

  	
   

  
	
  Half
  Yearly Fee:

  	
  3.60% of the
  face value of each bank guarantee,
  payable half yearly in arrears from issue

  
	
   

  	
   

  
	
  Securities:

  	
  All securities detailed in Part 4 with
  the exception of the securities numbered
  1,3-10. 

  
	
   

  	
   

  
	
  Specific
  Conditions:

  	
  Specific
  Conditions – Bank Guarantee Facility

  

 

Customer: 
Channell Pty Limited

 

Bank
Guarantee Facility

 

	
  Purpose/Utilisation:

  	
  Performance
  Guarantee

  
	
   

  	
   

  
	
  Facility
  limit:

  	
  $342,048 (three
  hundred and forty two thousand and forty eight dollars)

  
	
   

  	
   

  
	
  Expiry Date:

  	
  30th November 2006

  
	
   

  	
   

  
	
  Issuing Fee:

  	
  1.80% of the
  face value of each bank guarantee
  payable on issue 

  
	
   

  	
   

  
	
  Half
  Yearly Fee:

  	
  3.60% of the
  face value of each bank guarantee,
  payable half yearly in arrears from issue

  
	
   

  	
   

  
	
  Securities:

  	
  All securities detailed in Part 4 with
  the exception of the securities numbered
  1-5 & 7-10. 

  
	
   

  	
   

  
	
  Specific
  Conditions:

  	
  Specific
  Conditions – Bank Guarantee Facility

  

 

6

 

2                                         Details of Facilities – New facilities generally
subject to other contractual documentation

 

New
facilities generally subject to
other contractual documentation are summarised below. Refer to Section B1
of the General Terms and Conditions for how this Letter of Offer applies to them.

 

Customer: Bushmans
Group Pty Limited

 

Master
Lease/Lease Purchase Facility

 

	
  Purpose/Utilisation:

  	
  Capital
  Expenditure

  
	
   

  	
   

  
	
  Facility limit:

  	
  $500,000 (five
  hundred thousand dollars) 

  
	
   

  	
   

  
	
  Expiry Date
  Term:

  	
  30th November 2006

  
	
   

  	
   

  
	
  Term:

  	
  Up to five
  years, subject to annual review

  
	
   

  	
   

  
	
  Repayments:

  	
  Subject to
  negotiation at time of drawing.

  
	
   

  	
   

  
	
  Residual:

  	
  Subject to
  negotiation at time of drawing

  
	
   

  	
   

  
	
  Securities: 

  	
  All securities detailed in Part 4 with
  the exception of securities
  numbered 1, 3-8 & 10.

  

 

Customer: Bushmans
Group Pty Limited

 

Business
Credit Card Facility

 

	
  Purpose/Utilisation:

  	
  Business Credit
  Cards

  
	
   

  	
   

  
	
  Facility limit:

  	
  $300,000 (three
  hundred thousand dollars)

  
	
   

  	
   

  
	
  Expiry Date:

  	
  30th November 2006

  
	
   

  	
   

  
	
  Repayments:

  	
  Cleared to
  working account each month.

  
	
   

  	
   

  
	
  Securities: 

  	
  All securities detailed in Part 4 with
  the exception of securities
  numbered 1, 3-10.

  

 

Customer: Channell
Pty Ltd

 

Master
Lease/Lease Purchase Facility

 

	
  Purpose/Utilisation:

  	
  Capital
  Expenditure

  
	
   

  	
   

  
	
  Facility limit:

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

  
	
   

  	
   

  
	
  Expiry Date
  Term:

  	
  30th November 2006

  
	
   

  	
   

  
	
  Term:

  	
  Up to five
  years, subject to annual review

  
	
   

  	
   

  
	
  Repayments:

  	
  Subject to
  negotiation at time of drawing.

  
	
   

  	
   

  
	
  Residual:

  	
  Subject to
  negotiation at time of drawing

  
	
   

  	
   

  
	
  Securities: 

  	
  All securities detailed in Part 4 with
  the exception of securities
  numbered 1-5 & 7-10.

  

 

Customer: Channell
Pty Ltd

 

Standby
Letter of Credit Facility

 

	
  Purpose/Utilisation:

  	
  Contract
  Performance

  
	
   

  	
   

  
	
  Facility limit:

  	
  USD45,000 (forty
  five thousand United States Dollars) 

  
	
   

  	
   

  
	
  Expiry Date:

  	
  30th November 2006
  – subject to annual review.

  
	
   

  	
   

  
	
  Securities: 

  	
  All securities detailed in Part 4 with
  the exception of securities
  numbered 1-5 & 7-10.

  

 

7

 

3                                         Details of Facilities – Existing facilities generally
subject to other contractual documentation

 

Existing facilities generally subject to other
contractual documentation are summarised below. Refer to Section B1 of the General Terms and Conditions for how
this Letter of Offer applies to
them.

 

Not Applicable

 

8

 

4                                         Security

 

The Customer must provide, and must ensure
that each security provider
provides, all the following securities
in a form and substance satisfactory to us
(if the Customer or the security provider has not already done so).
The taking of any new securities
detailed below does not prejudice or waive our right to rely upon, and enforce,
earlier securities.

 

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.               Bushmans
Engineering Pty Limited ABN 49 074 185 461

4.               Polyrib
Tanks Pty Limited ABN 49 062 942 661

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

6.               Channell
Pty Limited ABN 29 002 735 622

 

Guarantees and Indemnities

 

7.               In
support of Channell Bushman Pty Limited for $15,750,000 and other liabilities
given by:- Bushmans Group Pty Limited, Bushmans Engineering Pty Limited, Polyrib
Tanks Pty Limited, Australian Bushman Tanks Pty Limited, and Channell Pty
Limited

 

8.               In
support of Bushmans Group Pty Limited for $2,000,000 and other liabilities given
by:- Channell Bushman Pty Limited, Bushmans Engineering Pty Limited, Polyrib
Tanks Pty Limited, and Australian Bushman Tanks Pty Limited.

 

9.               Master
Lease/Lease Purchase Agreement on account of Bushmans Group Pty Limited.

 

10.         Master
Lease/Lease Purchase Agreement on account of Channell Pty Limited.

 

9

 

5                                         Establishment Fees and Charges

 

The
Customer 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 external solicitors and consultants will be borne by
the Customer.

 

These fees and charges
are in addition to any fees set out in the Details of Facilities or Specific
Conditions, and any fees listed in the National’s
“A Guide to Fees and Charges” (Business) book and the National’s “A Guide to Fees and Charges
for International Trade Services” as amended from time to time.

 

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

 

10

 

6                                         Conditions Precedent and other information

 

11

 

7                                         Covenants and Undertakings

 

Financial Covenants

 

You undertake
to comply with the following financial covenants at all times. These financial
covenants are to be assessed and reported as detailed below.

 

Interest Cover

 

Minimum interest cover of
2.5 times as measured for the three month period ending on 31/12/2005 and
thereafter quarterly for Channell Bushman Pty Ltd - Consolidated and Channell
Pty Ltd.

 

Capital Adequacy

 

Minimum capital adequacy of
45% as measured on a daily basis and reported in relation to the December month
period ending on 31/12/2005 and thereafter quarterly for Channell bushman Pty
Ltd - Consolidated and Channell Pty Ltd.

 

Gearing
Ratio

 

Gross Debt (being
outstanding balances of all Bill Facilities, but excluding subordinated and
related party debt) is not to exceed 3.5 times EBIT. Calculated on a four quarter
rolling average on account of Channell bushman Pty Ltd - Consolidated and
Channell Pty Ltd. .

 

Debt
Service Cover

 

EBITDA must not at
any time fall below a ratio of 1.25 times the total interest and scheduled
principal repayments. To be calculated on a four quarter rolling average on
account of Channell Bushman Pty Ltd - consolidated and Channell Pty Ltd..

 

Reporting Covenants

 

You undertake
to comply with the following reporting covenants at all times. These reporting
covenants are to be assessed and reported as detailed below.

 

Annual Accounts (Audited - Excluding Cashflow)

 

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

 

Interim Accounts (Including Cashflow)

 

Within 45 days of
the close of each quarter, a copy of your quarterly management
accounts including balance sheet, profit & loss account and cashflow
statement for Channell Bushman Pty Ltd - Consolidated and Channell Pty Ltd.
Comments are to be provided on any negative variance to budget of greater than
10% in relation to sales, gross profit, operational expenses & EBIT.
Any negative variance of greater than 15% will constitute a right of review.

 

Interim Compliance Certificate

 

Within 45 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 your 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.

 

Actual to projected cash flow variance

 

Within 45 days of
the close of each quarter, a copy of your quarterly actual to
projected cashflow reports to be provided with commentary on all variances
greater than 10% for Channell Bushman Pty Ltd - Consolidated and Channell Pty
Ltd.

 

Specific Reporting Covenants

 

Annual 3 way
forecast (including balance sheet, profit & loss and cash flow)
projected monthly are to be provided prior to the commencement of each
financial year on account of Channell bushman Pty Ltd - Consolidated..

 

12

 

8                                         General Terms and Conditions

 

Section A: New Facilities

 

The following General
Terms and Conditions apply to facilities detailed
in Part 1 of this Letter of Offer.

 

A1                      Using a
facility

 

A1.1            General

 

We agree to make each facility available to you in accordance with this Agreement.

 

A1.2            Conditions of use of a
facility

 

(a)                        You do not need to use any facility but if you wish to do so, unless we
otherwise agree, you may only
use a facility if you comply with:

 

(i)                          the
conditions precedent and financial, reporting and other covenants in this Agreement which apply generally or in
relation to that facility (if
any); and

 

(ii)                       any
conditions we impose on making facilities or the particular facility available.

 

(b)                       In
addition, if the Specific Conditions say so, we
may approve or reject each drawing
or other use of a facility in
our discretion.

 

A2                      Payment
obligations

 

A2.1            Your Repayments

 

Without limiting clause A2.2, you must pay to us the facility
amount owing for each facility,
including, without limitation, all drawings and
any other amounts you receive
from us under a facility, and any interest charges as set out in this Agreement, including, without limitation:

 

(a)                        any
amount drawn on a facility in
excess of its facility limit,
immediately, unless we otherwise
agree in writing; and

 

(b)                       the facility amount owing on
the expiry date of that facility, unless we otherwise agree in writing; and

 

(ci)                     the facility amount owing for
that facility, if a facility is cancelled by you or by us
pursuant to this Agreement,
subject to the Specific Conditions for that facility.

 

A2.2            What the Customer must pay

 

Without limiting clause A2.1, the Customer must pay the total amount owing as provided in this Agreement.

 

A2.3            Fees charges and other
premiums

 

(a)                        The
Customer agrees to pay to us (unless we otherwise agree in writing) and in relation to third
parties, the Customer agrees to
indemnify us against, all fees
and charges and premiums, set out or provided for in this Agreement in accordance with this Agreement.

 

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

 

(c)                        Without
limiting clause A2.3(a) of these General Terms and Conditions, the Customer must (when we specify) pay us and, in relation to payments to third parties, the Customer agrees to indemnify us against:

 

(i)                          an
amount equal to any Taxes and
fees (including registration fees) which becomes payable, or that we reasonably believe are payable, in
connection with, this Agreement,
(including, without limitation, on any document issued under or in connection
with this Agreement such as a bank guarantee and any securities), calculated in accordance with
the relevant legislation. These are payable whether or not the Customer is primarily liable for such Taxes and fees; and

 

(ii)                       if
we are liable to pay GST on a supply (as defined in relevant
legislation) (“the supply”) made in connection with this Agreement, an additional amount equal to
the consideration payable for the supply multiplied by the prevailing GST rate; and

 

(iii)                    when we ask, our  costs and remuneration or any receiver’s costs and remuneration; and

 

(iv)                   any
reasonable costs  we reasonably incur in connection with or
arising out of or contemplated by this Agreement,
such as:

 

(A)                    preparing,
negotiating, executing, accepting, arranging, administering, enforcing or
terminating a facility or this Agreement including all costs incurred;

 

13

 

(B)                      exercising,
enforcing or preserving rights (or considering or attempting to do so) in
connection with this Agreement or
a security.

 

(d)                       For
the avoidance of doubt, references to costs in
clause A2.3 of these General Terms and Conditions includes a reference to all costs incurred:

 

(i)                          in
respect of all transactions (including, without limitation all payments,
receipts and the banking thereof); or

 

(ii)                       in
connection with any finance under a facility
which the Customer requested not
being provided in accordance with the Customer’s
request for any reason (other than our
default); or

 

(iii)                    in connection with any bank guarantee, letter of credit or bill or any claim by a beneficiary under a bank guarantee or letter of credit or in connection with a bill; or

 

(iv)                   if
the Customer is insolvent (including the amount of all
moneys we are liable to pay under
a bank guarantee or letter of credit); or

 

(v)                      if
the Customer or a security provider is in default under a facility;

 

(vi)                   in
connection with any person (such as any receiver
or attorney) exercising or not exercising rights under this Agreement; or

 

(vii)                under any indemnity we give a receiver
appointed under any security in
relation to this Agreement; or

 

(viii)             as a result of anything that the Customer has agreed to do or that we require the Customer to do in relation to a facility.

 

A2.4            Default Interest and
Irregular Account Fees

 

If any amount is not paid to us
when it is due (including if you
overdraw a facility, with or
without our prior agreement, and you do not immediately repay the amount
overdrawn, or if the Customer is
in default and the total amount owing
is immediately due and payable and the Customer
does not immediately pay that amount):

 

(a)                                  we may in our absolute discretion charge the Customer and the Customer will be liable to pay default
interest on that amount until it is paid or the amount is otherwise no longer
outstanding.

 

Default
interest is calculated daily at the default
interest rate (if any) and is due and payable monthly, on closure of
any account relating to the facility, when the facility amount owing is paid or otherwise
on demand.

 

The default interest rate for a facility is a variable rate and may change
during the term of the facility.
The current default interest rate
for a facility is detailed in
Details of Facilities sections of this Agreement,
or is as notified by us to the Customer from time to time. If no such
rate is detailed or notified, the Customer
agrees to pay whichever is the higher of the interest rate payable under the facility on that amount or the interest rate
or the default interest rate on
the account to which that overdue
amount is debited under this Agreement.

 

The Customer will be notified of any changes
to the default interest rate in
accordance with clause A5.2 of these General Terms and Conditions.

 

(b)                                 The
Customer authorises us to, and we may either;

 

(i)                                     debit
any default interest payable by you or
the Customer as and when it is
due and payable to (in our
discretion) the nominated account,
or another account in the name of
the Customer whether opened by you or us;
or

 

(ii)                                  otherwise
capitalize any default interest payable by you
or the Customer as and
when it is due and payable (in our
discretion).

 

You will then be
liable for interest under this clause on that debited or capitalized amount.

 

(c)                                  An
Irregular Account Fee may be payable as detailed in the National’s “A Guide to Fees and Charges”
(Business) book (as amended from time to time). If the fee applies, it is
payable immediately.

 

Nothing
in this clause A2.4 relieves the Customer
of its obligation to make payments as and when due.

 

A2.5            Establishing accounts
and accounting for transactions

 

(a)                        You authorise us to open any accounts as
required in connection with a facility and
debit amounts to them in accordance with this Agreement.

 

14

 

(b)                       Unless
otherwise specifically provided we
may debit any amounts payable in connection with this Agreement or the facilities to any account of yours  we
decide or apply any payment in connection with this Agreement towards satisfying obligations under this Agreement as we see fit.

 

(c)                        If
the Agreement states that amounts
will be debited to a nominated account
or any account  you have with us, then you
irrevocably authorise us to debit
these amounts to the relevant account
even if it causes the account to become overdrawn. Alternatively, if a nominated account has insufficient cleared
funds, we may debit those
amounts to any account of yours  we
decide.

 

(d)                       Where
we debit amounts pursuant to this
clause to an account (including a
nominated account) you have with us, opened by:

 

(i)                          you, then, to the extent that account is or becomes overdrawn because of
amounts debited under this clause, you
must pay us interest (including
default interest if applicable) on the overdrawn amount in accordance with the
terms of that account; or

 

(ii)                       us, you
must pay us interest charges on
the overdrawn balance of that account
at the default interest rate or,
if there is none, the interest rate on that account.

 

(e)                        We generally give you statements for each account under a facility which is an overdraft, at least every three months unless otherwise agreed. If we are not required by law or under the
Code of Banking Practice to give you
a statement, we may choose
not to.

 

A2.6            How to pay amounts

 

(a)                        The
Customer authorises us to debit to the nominated account, or if no such account is nominated or if there are
insufficient cleared funds in the nominated
account, to debit to any other account
the Customer has with us:

 

(i)                          any
fees, charges or premiums payable under this Agreement
and any other standard service fees (the amount and nature of which are
detailed in the National’s “A
Guide to Fees and Charges” (Business) book and in the National’s “A Guide to Fees and Charges
for International Trade Services” (as amended from time to time)) on or after
the date they become due; and

 

(ii)                       any
amounts payable under clause A2.3(c) of these General Terms and Conditions
on or after the date we pay them
or the date they become due or payable by the Customer
or us (whichever is earlier).

 

(b)                       The Customer undertakes that it will pay us
all amounts payable under this Agreement
in Australian dollars and in immediately available funds unless otherwise
agreed.

 

(c)                        If
a payment is due on a day which is not a banking
day, the Customer may make
the payment on the next banking day,
unless the payment is due in advance in which case the Customer must make the payment on the
preceding banking day.

 

(d)                       The
Customer must make all payments
without set-off or counter-claim, and be free and clear of any withholding or
deduction for taxes, levies, imposts or government charges of any kind unless
prohibited by law. You agree that
if a law requires you to withhold
or deduct any withholding tax from a payment relating to a facility so that we would not actually receive for our own benefit on the due date the full
amount provided for under the facility,
then:

 

(i)                          the
amount payable by you is
increased so that, after making that deduction and deductions applicable to
additional amounts payable under this clause, we
are entitled to receive the amount we
would have received if no deductions had been required; and

 

(ii)                       you must make the deductions; and

 

(iii)                    you
must pay the full amount deducted to the relevant authority in accordance with
applicable law and deliver the original receipts to us.

 

A3                      Economic
costs

 

Warning: economic
costs can be high and will increase the amount you owe us.
You can obtain an estimate of
applicable economic costs at any
time by contacting us.

 

A3.1            When economic costs
are payable

 

(a)                        You must pay to us economic costs whenever an economic event occurs in relation to a facility.

 

(b)                       You must pay us the amount of any economic
costs notified to you when
we specify.

 

15

 

A3.2            Economic events

 

(a)                        An
economic event is taken to have
occurred in relation to a facility if:

 

(i)                          the
facility is cancelled for any
reason, or the facility limit is
reduced for any reason other than on its expiry
date (if any); or

 

(ii)                       you change the facility from a fixed interest
rate or to a variable interest
rate before the end of a fixed
rate period; or

 

(iii)                    you
are in default, or the total
amount owing becomes repayable and we
elect to treat it as an economic event;
or

 

(iv)                   the
aggregate face value of bills
outstanding under the facility at
any time for any reason is less than the facility
limit prevailing at the time; or

 

(v)                      we are for any reason no longer obliged to
accept, discount or endorse bills
under the facility;

 

(vi)                   any
payment is made or required to be made under the facility in respect of any bill
for any reason other than on its maturity
date.

 

A3.3            Calculation of
economic costs

 

(a)                        We determine any economic costs arising under the facility by determining our reasonable estimate of the costs and losses incurred by us (including, without limitation, loss of
profits, fees, charges and premiums) in connection with an economic event including, without
limitation, any amount determined by us
to have been suffered or incurred by us
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 our cost of funds at the
start of the relevant fixed rate
period) and our 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 our
cost of funds at that date; or

 

(ii)                       in
relation to a bill  facility, a loss or reduction of profits
or return or other costs
associated with the difference between the rates applicable to bills under the facility and the rates applicable to bills  we
would offer to enter into a specified new transaction when the economic event occurs. The new specified
transaction is a transaction:

 

(A)                    with
a customer equivalent to you;

 

(B)                      for
an amount of approximately the same amount as you
pay, fail to pay or draw or are required to pay and;

 

(C)                      for
a term approximately equal to the period from when the economic event occurs to the date we assumed that amount would otherwise be
due for payment,

 

(assuming, where appropriate, that replacement
bills are drawn and accepted,
discounted or endorsed by us in
respect of that amount); or

 

(iii)                    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 us
(either generally in the course of our
business or specifically in connection with this Agreement) to fund or maintain the facility or to hedge, fix or limit our effective cost of funding in relation
to the facility.

 

A4                      Top up
security and other co-operation

 

The Customer must:

 

(a)                        provide
us with any additional security  interest
we reasonably request (including
without limitation a guarantee and indemnity or a mortgage of additional
property) if we determine that
the value of the security
materially decreases (as determined by us):

 

(b)                       give
us promptly any information or
documents we reasonably ask for
in connection with this Agreement
(including about the Customer’s or
any security provider’s financial
position) in any form we
specify;

 

(c)                        do
anything (such as producing and signing documents) we reasonably require to give full effect to this Agreement and the securities; and

 

(d)                       notify
us promptly if the Customer changes its address.

 

16

 

A5                      Variations

 

A5.1            What we can change

 

We can, at any time:

 

(a)                        introduce
a new fee, charge or premium;

 

(b)                       vary
the amount of a fee, charge or premium, the way in which it is calculated or
when it is charged;

 

(c)                        vary
the interest rate or the default interest
rate (except a fixed interest rate during a fixed rate period) including by changing
the relevant indicator rate, Customer Margin or Default Margin (including by
making the margin positive or negative) or by substituting a different
indicator rate for the relevant indicator rate, or by introducing or varying
any conditions to which the application of the interest
rate or the default interest rate
or any margin included in any of them is or may become subject or
suspending, withdrawing or re-introducing its application to the interest rate;

 

(d)                       change
the way in which interest, or default interest, is calculated and when it is
debited; and

 

(e)                        change
any of the other provisions of this Agreement
as a result of a change to any law affecting this Agreement.

 

A5.2            How we will notify you
of changes

 

We will notify the Customer of any changes we make under clause A5.1 of these General
Terms and Conditions as follows:

 

(a)                        we will give the Customer at least 30 days’ prior written
notice if we introduce a fee,
charge (other than a government charge) or premium, vary the method by which
interest is calculated or vary the frequency with which interest is debited,
unless we cannot reasonably
locate the Customer;

 

(b)                       we will notify the Customer of the introduction of, or any
change to, a government charge payable by writing to the Customer or by advertisement in the
national or local media, unless the government has publicised the introduction
or change;

 

(c)                        rates
for bills and trade finance facilities are notified as a
set out in the Details of Facilities for that facility.

 

(d)                       we will notify the Customer of any change that relates to a
change in an interest rate that is not set by us
(such as a money market rate or some other external reference rate) by the Customer by writing to the Customer or by advertisement in the
national or local media within a reasonable period of the change being made,
unless another entity has publicised the change; and

 

(e)                        we will notify the Customer of any other variation, by
writing to the Customer or by
advertisement in the national or local media no later than the date the
variation takes effect.

 

A6                      Change of
Circumstances - Illegality

 

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

 

(a)                        us to fund, provide or maintain a facility or otherwise observe or give
effect to our obligations under a
facility; or

 

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

 

then:

 

(c)                        we are 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 us and the face value of each letter of credit issued by us which remain outstanding, are due and
payable by you to us on demand; and

 

(e)                        we may debit any of your  accounts
(including in the case of a bill  facility the nominated account) with the facility
amount owing under a facility.

 

A7                      Change of
Circumstances – Increased Costs

 

(a)                        This
clause applies if we determine
that in our opinion any order of
any court or change in relevant regulation
will:

 

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

 

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

 

17

 

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

 

as a result
there is:

 

(iv)                   an
increase in the cost to us of
making available or maintaining the 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 us in connection with any facility,

 

by an amount
which we consider to be material.

 

(b)                       If
this clause applies:

 

(i)                          we will use our best efforts to promptly notify you in writing of the happening of such
event;

 

(ii)                       we 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 you or us;
and

 

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

 

A8                      Events of
Default

 

A8.1            When are you in default?

 

The Customer is in default if:

 

(a)                        the
Customer does not pay on time any
amount due under this Agreement
or another financial accommodation
agreement it has with us or any
other person who provides financial accommodation to it; or

 

(b)                       the
Customer does something it agrees
not to do, or does not do something it agrees to do under this Agreement or another agreement it has with
us (including if an amount is or
is to be debited under this Agreement
to an account nominated for any
purpose under this Agreement and
there are insufficient cleared funds in that nominated
account to meet that debit); or

 

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

 

(d)                       the
Customer is in breach of a
covenant or undertaking set out in this Agreement;
or

 

(e)                        the
Customer or another person gives us information, or makes a representation
or warranty, which we reasonably
believe to be incorrect or misleading in a material respect when made or deemed
to be repeated in connection with this Agreement
or another agreement it has with us, or
any of the Customer’s
representations and warranties in Part B5 of the General Terms and
Conditions are not true and correct; or

 

(f)                          we reasonably believe the Customer has acted fraudulently in connection with this Agreement or another agreement with us; or

 

(g)                       the
Customer becomes insolvent or steps are taken to make it
so; or

 

(h)                       (being
an individual), the Customer no
longer has legal capacity or becomes a person protected by the State; or

 

(i)                           the
Customer is in default under a security or withdraws from it or breaches
its terms, or a security is or may be
unenforceable; or

 

(j)                           the
Customer stops payment or ceases
to carry on its business or threatens to cease to carry on its business; or

 

(k)                        the
Customer breaches any law or
obligation by entering transactions or performing obligations under this Agreement or another agreement it has with
us; or

 

(l)                           this
Agreement is, becomes, or is
claimed to be, void or unenforceable; or

 

(m)                     a
change in your financial
circumstances occurs which, in our
opinion, may have a material adverse effect on the Customer’s ability to meet its obligations
under any agreement it has with us;
or

 

(n)                       an
order for payment is made, or a judgment is entered or signed, against the Customer, and it is not satisfied within 5
banking days after that event
unless the order or judgment is the subject of an appeal by the Customer within such period and we are satisfied that there is reasonable
likelihood of success; or

 

(o)                       the
Customer is a trustee of a trust
and:

 

18

 

(i)                          a
new trustee is appointed or any of the trust fund is resettled or set aside, in
either case without our prior
consent; or

 

(ii)                       the
Customer’s right to be
indemnified out of the trust assets is restricted in any way; or

 

(q)                       the
Customer is a partnership and any
of the things in paragraphs (a) to (o) above occurs in relation to one or
more of the partners, in which case, the thing is deemed to have occurred in
relation to the Customer; or

 

(r)                          any
of the things referred to in paragraphs (b) to (o) above occurs in
connection with a security provider
(where each of those paragraphs is to be interpreted as if the Customer meant the security provider and “the Customer’s” applied to the security provider).

 

A8.2            What can happen then?

 

(a)                        If
the Customer is in default, we may give the Customer a notice stating that the Customer is in default.

 

(b)                       If
the Customer does not, or cannot,
correct the 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, without further notice to the Customer the total amount owing becomes immediately due for payment (to
the extent it is not already due for payment), and if the Customer does not pay it immediately, we may sue the Customer for that amount, or enforce any security, or do both.

 

A8.3            How we may exercise our rights

 

(a)                        We may exercise a right or remedy, or
give or refuse our consent or
agreement to any request the Customer
makes, in any way we consider
appropriate including by imposing conditions.

 

(b)                       We 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
we do not exercise a right or
remedy fully or at a given time, we
can still exercise it later.

 

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

 

(e)                        Our rights and remedies may be
exercised by any of our employees
or any other person we authorise.

 

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

 

A9                      Partnerships

 

If the
Customer is a partnership, the Agreement will continue to bind each
person who is a partner of that partnership at the date of this Agreement and each person who becomes a
partner whilst this Agreement (as
amended from time to time) remains in force and effect:

 

(a)                        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;

 

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

 

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

 

and
the Customer agrees to procure
the execution of any documents we
reasonably require to give full effect to this provision.

 

A10               Appointment of
Consultants

 

(a)                        We may at any reasonable time appoint
accounting, legal, financial management and other consultants to examine the
affairs of the Customer and any security provider and to make
recommendations relating to the manner in which it carries on its business.

 

(b)                       The
Customer will provide (and ensure
each security provider provides)
all assistance considered necessary or desirable by the consultant to enable
the consultant to conduct a proper examination of the Customer’s and any security provider’s affairs. This
includes, without limitation, making the relevant financial records available
to the consultant.

 

(c)                        The
Customer will pay the fees of the
consultant.

 

19

 

A11               Class Order

 

(a)                        The
Customer must notify us in writing before you seek approval by the Australian
Securities and Investments Commission (“ASIC”) of, or execute any, Deed of
Cross Guarantee.

 

(b)                       We may, at our complete discretion, amend or terminate any or all of
the facilities if the Customer enters into a Deed of Cross
Guarantee or amends or terminates an existing Deed of Cross Guarantee.

 

(c)                        In
this clause “Deed of Cross Guarantee” refers to a deed substantially in the form of
a pro-forma deed issued or otherwise approved by ASIC in order to satisfy ASIC class order
eligibility requirements for relief from certain Corporations Act 2001
financial reporting obligations.

 

A12               Confidentiality

 

(a)                        The
Customer and we agree, subject to clause A12(b) of
these General Terms and Conditions, to keep the terms of the Agreement and the securities, and any information which
either may provide to the other in relation to the Agreement or the securities, confidential.

 

(b)                       Clause
A12(a) of these General Terms and Conditions does not prevent disclosure:

 

(i)                          if
allowed or required by law, or if required by the Australian Stock Exchange
Limited; or

 

(ii)                       in
connection with legal proceedings relating to the Agreement or the securities;
or

 

(iii)                    if the information is generally and
publicly available; or

 

(iv)                   to
any Customer of the terms of the Agreement or the securities (as amended from time to time)
as they relate to a facility
provided to you; or

 

(v)                      by
us to our  subsidiaries,
in which case this clause A12 of these General Terms and Conditions, will apply
to the subsidiary; or

 

(vi)                   by
us to an assignee of our rights under this Agreement pursuant to clause A16(a) of
these General Terms and Conditions; or

 

(vii)                by us
to any of our agents,
consultant or adviser engaged by us for
the purposes of this Agreement;
or

 

(viii)             to any guarantor or proposed guarantor; or

 

(ix)                     by
the Customer to any consultant
engaged for the purposes of complying with our
requirements under the facility
necessary to enable the consultant to comply with those requirements.

 

A13               Setting off money

 

We may set off against amounts the Customer owes us any money we
owe the Customer.

 

A14               Code of Banking
Practice

 

We have adopted the Code of Banking Practice and relevant provisions
of the Code apply to these facilities,
if the Customer is an individual
or a small business customer (as defined by the Code). The Customer can obtain from us upon request:

 

(a)                        information
on our current interest rates and
standard fees and charges relating to these facilities
if any;

 

(b)                       general
descriptive information concerning our
banking services including:

 

(i)                          for
accounts with cheque access, general descriptive information about cheques;

 

(ii)                       account
opening procedures;

 

(iii)                    our
obligations regarding the confidentiality of the Customer’s information;

 

(iv)                   complaint
handling procedures;

 

(v)                      bank
cheques;

 

(vi)                   the
advisability of you informing us promptly when the Customer is in financial difficulty; and

 

(vii)                the advisability of the Customer reading the terms and conditions
applying to each banking service we
provide to the Customer ;

 

(c)                        general
descriptive information about:

 

(i)                          the
identification requirements of the Financial Transactions Reports Act 1988
(Cth);

 

(ii)                       the
options available to you under
the tax file number legislation; and

 

(d)                       a
copy of the Code of Banking Practice.

 

20

 

A15               Our certificates

 

(a)                        We may give the Customer 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 sufficient evidence of
the matter or amount, unless it is proved to be incorrect.

 

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

 

A16               Assignment

 

(a)                        We may assign or otherwise deal with our rights under this Agreement in any way we consider appropriate. If we do this, the Customer may not claim against any assignee (or any
other person who has an interest in a facility)
any right of set-off or other rights the Customer
may have against us. The Customer agrees that we may disclose any information or
documents we consider desirable
to help us exercise this right.
The Customer also agrees that we may disclose information or
documents at any time to a person to whom we
assign or propose to assign our
rights under this Agreement.

 

(b)                       The
Customer’s rights are specific to
you and may not be assigned.

 

A17               Holding Over

 

If we
continue to make a facility
available to you after its expiry date or the end of its term, and
this Agreement has not been
extended, amended or replaced, then the terms of this Agreement will continue to apply to the facility unless and until we otherwise notify you. The previous sentence if applied
shall not be construed as a waiver of any event
of default, or a waiver of any of our
rights under this Agreement or as
any agreement or undertaking (implied or otherwise) to grant any extension.

 

A18               Notices, other
communications and service of documents

 

A18.1     Form

 

(a)                        Notices,
certificates, consents, approvals and other communications in connection with
this Agreement must be in writing
or in any other form permitted by it. When they are for us, they must be in a form satisfactory
to us.

 

(b)                       Communications
from us may be signed by any
employee of ours. If the Customer is a company, communications from
the Customer must be signed by a
director or secretary or an authorised representative.

 

A18.2     Delivery

 

Communications to the Customer
may be:

 

(a)                        given
personally (if the Customer is a
company, to one of your
directors); or

 

(b)                       left
at, or sent by post or fax to, an address notified by the Customer to us in writing; or

 

(c)                        if
the Customer does not nominate an
address to us in writing, left at
or sent by post or fax to the Customer’s
address last known to us; or

 

(d)                       sent
by any other electronic means of which the Customer
has given us
particulars; or

 

(e)                        given
by advertising the notice in a newspaper circulating throughout the Customer’s country, state or territory; or

 

(f)                          given
in any other way permitted by law.

 

If
there is more than one Customer, we may provide any communication
under this Agreement jointly to
the Customer at the address for
service set out in the acceptance clause of this Letter of Offer.

 

A18.3     Communications for us

 

(a)                        Communications
for us must be:

 

(i)                          given
personally to one of our
employees at:

 

(A)                our address stated in this Agreement; or

 

(B)                  any
other address we tell you; or

 

(C)               our registered office; or

 

(ii)                       sent
by prepaid post or electronically (such as by fax or telex) to any of those
places; or

 

(iii)                    given in any other way permitted by
law.

 

(b)                       We may specify from time to time how
and in what form any notice under this Agreement
must be given to us.

 

21

 

A18.4     Dating

 

A communication is
taken to be given:

 

(a)                        in the case of a communication given
personally - on the date it bears or the date it is received by the person to
whom it is addressed, whichever is the later; or

 

(b)                       in the case of a communication sent
by post - on the date it bears or the date when it would have been delivered in
the ordinary course of post, whichever is the later; or

 

(c)                        in the case of a communication sent
by fax or some other form of electronic transmission - on the date it bears
or the date on which the machine from which it was sent produces a report
indicating that the communication was sent to the fax (or other) number or
other electronic address of the person to whom it is addressed, whichever is
the later; or

 

(d)                       in the case of a communication given
by newspaper advertisement - the date it is first published.

 

A18.5     Service

 

We may serve any document in a court
action (including a writ of summons, other originating process or third or
other party notice) on the Customer by
delivering it to the Customer’s address
last notified to us or by leaving
it there. This does not prevent any other method of service.

 

A19               Governing Law and
Jurisdiction

 

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

 

A20               Consents and
Conditions

 

The Customer must
comply with all conditions and requirements in any consent we give, or agreement to any request the Customer makes.

 

A21               Telephone recording

 

The Customer consents
to us recording our telephone conversations with the Customer in relation to the facility and such recordings being used in
any arbitral or legal proceedings between us.
Telephone recordings remain our sole
property at all times.

 

A22               Valuations are for our benefit

 

Any
property valuation is for our use only. We accept no responsibility for any reliance on a property valuation by any other person.

 

A23               Time for repayment

 

For
the purposes of payments under this Agreement,
a day ends at 4 pm in the State where the relationship
management team is located.

 

A24               Indemnities

 

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

 

A25               Total Amount Owing

 

In
this Section A, total amount owing
means, at any time, the total of every facility
amount owing in respect of the facilities
detailed in Part 1 of this Letter of
Offer and any other amounts which are then due for payment, or which
will or may become due for payment, in connection with this Agreement.

 

A26               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.

 

A27               Exclusion of
liability in relation to trade finance
facilities and bank guarantee
facilities

 

The Customer agrees that in connection with
our provision of services to the Customer in relation to bank guarantee  facilities and trade
finance  facilities
(including, without limitation, the making or receiving of a payment on behalf
of the Customer) (“Services”), one or more of our branches and
other financial services providers (“Other
Banks”) may be involved. Those branches and Other Banks may in each case be local
or overseas and the Other Banks may or
may not be appointed by us. The Customer
agrees that, to the maximum extent permitted by applicable law, the involvement
of those branches or Other Banks
in

 

22

 

connection
with the Services is entirely at
risk of the Customer and that we
are not liable for loss of any kind arising in connection with the involvement
of any branch or Other Bank or
their acts or omissions, whether or not the Other
Bank is appointed by us.

 

Any Service we provide to the Customer may be affected directly or
indirectly by laws including, without limitation, any subordinate instrument
and the acts, practices and policies of local or foreign governments and their
instrumentalities (a “Regulatory Authority”)
whether or not having the force of law (“Regulations”).
Regulations may be those of
any place where we or any Other Bank
operates, or with which the Services
have some direct or indirect connection, or to which or from which a payment or
instruction is made or received or in which some other thing is done, or may be
the Regulations of or applicable
to the currency of any payment. Regulations
include, but are not limited to, those which affect, restrict, prohibit or
otherwise render unlawful transactions, payments or dealings with assets, any
person, group or entity which may or may not include those having a
connection with certain countries, areas, individuals, groups, bodies,
entities, materials, items, substances, political or religious systems, beliefs
or convictions. The Services may be
interrupted, prevented, delayed or otherwise adversely affected, either in
whole or in part, by reason of a Regulation
including, but not limited to, where we consider, or any Other Bank considers, or a Regulatory Authority asserts, that a Regulation may apply (each an “Adverse Effect”). It is entirely the Customer’s risk if any Adverse Effect occurs and we have no
obligation to contest any act of any Regulatory
Authority.

 

To the
maximum extent permitted by applicable law, we, and any Other Banks, are not liable for any loss
of any kind arising directly or indirectly from or in connection with any Service including, without limitation, any
Adverse Effect, whether or not we
are, or any Other Bank is, negligent
or in breach of any duty to the Customer
or to any other person.

 

To the
maximum extent permitted by applicable law, our liability for loss of any kind
which cannot be excluded by reason of applicable law is limited to the cost of
having the services supplied again.

 

The Customer agrees that we may use or
disclose any information about the Customer
or the Services or any person
connected in any way with the Services
to any Other Bank or Regulatory Authority for any purpose which
we consider, or any Other Bank
considers, necessary or desirable in connection with any Regulation or the Services. The Customer agrees to provide any such information to us if we
ask the Customer to.

 

23

 

Section B: All Facilities

 

This section B
applies to all the facilities detailed
in this Letter of Offer.

 

B1                      How this Letter of Offer applies to facilities

 

B1.1            Applicable provisions

 

The
applicable terms and conditions in relation to the facilities are set out in the following contract documents
as amended from time to time:

 

(a)                        for
new facilities detailed in Part 1
of this Letter of Offer:

 

(i)                          the
applicable Details of Facilities in this Letter
of Offer;

 

(ii)                       the
Specific Conditions (if any) referred to in the Details of Facilities in this Letter of Offer;

 

(iii)                    any additional documentation
referred to in the Details of Facilities in this Letter of Offer;

 

(iv)                   Parts
4 to 7 (inclusive) of this Letter of Offer;

 

(v)                      the
General Terms and Conditions in this Letter
of Offer; and

 

(vi)                   the
National’s “A Guide to Fees and
Charges” (Business) book and the National’s
“A Guide to Fees and Charges for International Trade Services” as amended from
time to time (“the Guides”),

 

(b)                       for
new facilities detailed in Part 2
of this Letter of Offer:

 

(i)                          the
separate contractual documentation between us
and the Customer
relating to those facilities;

 

(ii)                       the
applicable Details of Facilities in this Letter
of Offer;

 

(iii)                    the Specific Conditions (if any)
referred to in the Details of Facilities in this Letter of Offer;

 

(iv)                   any
additional documentation referred to in the Details of Facilities in this Letter of Offer;

 

(v)                      Parts
4 to 7 (inclusive) of this Letter of Offer;

 

(vi)                   Section B
of the General Terms and Conditions in this Letter
of Offer; and

 

(vii)                the Guides,

 

(c)                        for
existing facilities detailed in Part 3
of this Letter of Offer:

 

(i)                          the
separate contractual documentation between us
and the Customer relating
to those facilities (the “existing contracts”);

 

(ii)                       the
applicable Details of Facilities in this Letter
of Offer;

 

(iii)                    the Specific Conditions (if any)
referred to in the Details of Facilities in this Letter of Offer;

 

(iv)                   any
additional documentation referred to in the Details of Facilities;

 

(v)                      Parts
4, 6 and 7 of this Letter of Offer;

 

(vi)                   Section B
of the General Terms and Conditions in this Letter
of Offer; and

 

(vii)                the Guides.

 

By
signing this Letter of Offer  you agree that the existing contracts are varied accordingly
and now comprise the applicable provisions.

 

B1.2                      Applicable
provisions

 

If
there is any inconsistency between any applicable term or condition in
different contract documents relating to a facility
(to the extent that it is impossible to comply with both), the term or
condition prevails to the extent of that inconsistency in the order of priority
set out above. “Applicable provisions”
means for a facility the terms
and conditions applicable to each facility
after resolving any inconsistency as set out in this clause.

 

B1.3                      Meaning of
Agreement and applicable provisions

 

For
the purposes of the applicable provisions,
the “Agreement” means the agreement of the parties constituted by the applicable provisions for each of the facilities detailed in Parts 1, 2 and 3 of
this Letter of Offer.

 

24

 

B2.                             Multi
Option Facility

 

This
clause B2 applies while you have
a multi option facility. At any
time while you have a multi
option facility:

 

(a)                                  you may request a switch between
funding options. If your request
is approved, the switch will take effect on the date and on the terms agreed by
you and us. Switching between the facilities to which the multi option facility applies may result in fees,
charges, premiums and costs being incurred in accordance with the specific
terms and conditions of the relevant facility;

 

(b)                                 the
total of all facility limits must
not, at any time, exceed the multi option facility
limit set out in the Details of Facilities or as varied from time to
time; and

 

(c)                                  the
aggregate amount of drawings
under the multi option facility
must not exceed the multi option facility
limit set out in the Details of Facilities or as varied from time to
time, and the total amount of drawings
under a facility which is part of
a multi option facility must not
exceed the facility limit for
that facility as set out in the
Details of Facilities or as varied from time to time.

 

B3                                Conditions
precedent

 

(a)                                  We do not need to provide any drawing under any facility unless:

 

(i)                          the
Customer has accepted this Letter of Offer or has indicated that the Customer intends to be bound by it in a
manner satisfactory to us;

 

(ii)                       you have accepted facilities which are subject to separate
contractual documentation as referred to in Part 2 of this Agreement (if any) in relation to which you are the Customer or have indicated that you intend to be bound by those documents in a manner
satisfactory to us;

 

(iii)                    the amount of financial
accommodation complies with any minimum, maximum or multiple requirements
determined by us and advised to you from time to time in relation to that facility;

 

(iv)                   we have received any valuation  we
require, satisfactory to us;

 

(v)                      the
results of all our inquiries and
searches are satisfactory to us;

 

(vi)                   we have received each security, related acknowledgment or
acceptance and title documents, which are satisfactory to us;

 

(vii)                any insurance we require to be obtained by you has been obtained, by the Customer or the relevant security provider and we have received evidence satisfactory to us (which may include receiving the
policy document) that any such insurance is current, that the insurer, the
amount insured and the policy terms are satisfactory to us, and that our interest is noted;

 

(viii)             we
have received all the documents set out in Part 6 of this Letter of Offer and any other document we reasonably require by written notice to
you (including corporate or
trustee authorisations), satisfactory to us;

 

(ix)                     each
security remains enforceable and
no-one who provides a security is
in default under or has withdrawn from or terminated that security (unless this occurs with our consent);

 

(x)                        the
Customer complies, or in our opinion will be able to comply, with
all other reasonable requirements we
set, including any additional conditions, conditions precedent, and financial,
reporting or other covenants set out in Part 7 of this Letter of Offer, the Details of
Facilities, the General Terms and Conditions or any relevant Specific
Conditions, or otherwise agreed.

 

(b)                       In
addition to paragraph (a), we are
not obliged to provide any financial accommodation under any facility if:

 

(i)                          something
has happened since the Customer
applied for a facility which has
led to a material adverse change in the financial circumstances of the Customer or any security provider or which we
reasonably believe could lead to this; or

 

(ii)                       any
insurer has refused to insure a facility
for us; or

 

(iii)                    the Customer is, or in our
opinion is likely to become, in default under a facility (for example, the Customer
has not paid all relevant fees and interest charges or the Customer has given us misleading financial or other
information).

 

25

 

B4                      General
undertakings and covenants

 

B4.1            Negative Pledge and
other covenants

 

(a)                        The
Customer undertakes to us that it will, and will ensure that each
security provider will, except
with our prior written consent:

 

(i)                          promptly
advise us of any event of default or potential event of default or any event of default under any applicable provision however defined;

 

(ii)                       maintain
all risks insurance over all its physical assets;

 

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

 

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

 

(v)                      not
raise any financial accommodation from any other party, or give any security  interest
in relation to it;

 

(vi)                   not
engage in any other business other than that in which it is presently
operating;

 

(vii)                not merge with or acquire another
company or entity;

 

(viii)             not dispose of any of its subsidiaries; and

 

(ix)                     not
give any security  interest over its assets.

 

B4.2            Change of Shareholding

 

(a)                         If
the Customer or any security provider is listed on a stock
exchange the Customer will, and
will ensure that the relevant security
provider will:

 

(i)                          promptly
notify us 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 Agreement. For
this purpose, associates shall be treated as the one person.

 

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

 

(b)                       If
the Customer or any security provider is a company which is not
listed on a stock exchange, the Customer
will ensure that no transfer of shares (or issue of shares) in the Customer or the relevant security provider is made, without our prior written consent. If the Customer consists of more than one entity,
that consent will not apply to a transfer or issue of shares in any one of
those entities or any security provider
to another of those entities or security
providers.

 

B4.3            Breach of Covenants

 

(a)                        For
the avoidance of doubt, a breach of any covenant or undertaking in this Agreement is an event of default, howsoever worded, for the purposes of this
Agreement, including without
limitation clause A8 of these General Terms and Conditions.

 

(b)                       We may conduct a review of the facilities and the financial position of the Customer if any of the covenants or
undertakings set out in this Agreement
are not complied with to our satisfaction.

 

B4.4            Review of Customer and
security providers

 

(a)                        We may at any reasonable time appoint
accounting, legal, financial management and other consultants to examine the
affairs of the Customer and any security provider and to make
recommendations relating to the manner in which it carries on its business.

 

(b)                       The
Customer will provide (and ensure
each security provider provides)
all assistance considered necessary or desirable by the consultant to enable
the consultant to conduct a proper examination of the Customer’s and any security provider’s affairs. This
includes, without limitation, making the relevant financial records available
to the consultant.

 

(c)                        The
Customer will pay the fees of the
consultant.

 

B5                      Representations
and warranties

 

B5.1            Representations and
Warranties

 

(a)                        The
Customer represents and warrants
to us that as at the date of this
Agreement and at all times
thereafter:

 

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

 

26

 

(ii)                       the
Customer has full capacity and
power to enter into and comply with, and has taken all necessary action to
authorise the entry into and compliance with, each facility, this Agreement and
any other documentation detailing the terms of each facility, and to make a drawing
under a facility;

 

(iii)                    the Customer has full power and authority and legal right to
carry on its business as presently conducted;

 

(iv)                   all
financial accounts, reports and factual information furnished to us at any time by the Customer or a security provider:

 

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

 

(B)                      are
(unless we agree otherwise)
prepared in accordance with applicable law and generally applicable Australian
Accounting Standards current at the time of preparation, and

 

(C)                      give
a true and fair view of your
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 presented to us;

 

(v)                      the
Customer is not in material
default of any law or any agreement, security
or instrument with us or any
other financial institution, and it is not in default in respect of any
material monetary obligation contracted by or imposed upon it;

 

(vi)                   no
litigation, arbitration or administrative proceedings are current or pending
or, to the Customer’s knowledge,
threatened against it before any
court or governmental agency;

 

(vii)                the Customer
is not insolvent;

 

(viii)             no potential
event of default has occurred which by the giving of notice, lapse
of time or both would constitute a default under or in respect of this Agreement, a security or instrument and the Customer is not in default in respect to any material
monetary obligation contracted by or imposed upon it;

 

(ix)                     except
as disclosed to and agreed to by us
in writing, the Customer is not
trustee of any trust;

 

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

 

(xi)                     the
Customer will not breach any law
or obligation to any person by the execution and performance of this Agreement or of a drawdown notice (including a drawdown
under a facility or other use of
a facility) and the payment of
any amount due under a facility or
in respect of any bill under a bill facility or in respect of any bank guarantee or letter of credit;

 

(xii)                  the security
is in full force and effect; and

 

(xiii)               a legal, valid and binding obligation on
the Customer enforceable in
accordance with its terms and conditions arises when the Customer enters into this Agreement or delivers a drawdown notice and whenever a drawing is made, or a bill is accepted, discounted or endorsed
by us or a bank guarantee or a letter of credit is issued.

 

(b)                       The
Customer also gives the above
representations and warranties in respect of any security provider which is not the Customer.

 

(c)                        These
representations and warranties 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, and at the date of execution of each new document under which credit
or financial accommodation is granted by us.

 

B5.2            Additional
representations and warranties from a trustee

 

(a)                        This
clause applies if the Customer or
a security provider enters into
this Agreement or any security as the trustee of a trust or
settlement (the relevant party is called “the trustee” and the relevant trust
is called “the trust” in this clause).

 

(b)                       If
this clause applies, the trustee (or, the Customer
where the trustee is a security provider
who is not a Customer) makes the
following representations and gives the following warranties:

 

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

 

(ii)                       the
trustee will provide to us on
request with a certified copy of the deed of trust creating the trust (“the
trust deed”) and all other documents relating to the trust; and

 

27

 

(iii)                    the trust deed and the documents
referred to in paragraph (b)(ii) disclose all the terms of the trust; and

 

(iv)                   the
trustee has the power under the trust deed to enter into and observe the
trustee’s obligations under this Letter of
Offer, this Agreement
(and any document or notice under or in connection with them (including,
without limitation, any security);
and

 

(v)                      the
trustee has in full force and effect the authorisation necessary to enter the
relevant documents, to perform the trustee’s obligations under the
relevant documents and allow them to be enforced (including, without
limitation, under the trust deed and the trustee’s memorandum and articles of
association or constitution (if any)); and

 

(vi)                   the
trustee has a right to be fully indemnified out of the property held on trust
by the trustee under the trust deed (“the trust fund”) in respect of
obligations incurred by the trustee and has a right to be indemnified out of
the trust fund; and

 

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

 

(viii)             the trustee is not in default under the
trust deed; and

 

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

 

(x)                        the
trustee and the trustee’s directors and other officers (if any) have complied
with their obligations in connection with the trust; and

 

(xi)                     our rights under this Agreement rank in priority to the
interests of the beneficiaries of the trust.

 

(c)                        If
this clause applies, the trustee (or, the Customer
where the trustee is a security provider
who is not a Customer) undertakes
that, except with our prior
written consent, none of the following will occur:

 

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

 

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

 

(iii)                    amendment of the deed establishing
the trust; or

 

(iv)                   encumbrance
of the assets of the trust; or

 

(v)                      breach
of the provisions of the deed establishing the trust.

 

(d)                       In
this clause B5.2, “relevant documents” means:

 

(i)                          this
Agreement;

 

(ii)                       this
Letter of Offer;

 

(iii)                    any security; and

 

(iv)                   any
document or notice required under this Agreement.

 

(e)                        The trustee enters (or, where the
trustee is a security provider
who is not a Customer the Customer will ensure that the trustee
enters) into this Agreement and
any security (and provides any
document or notice under this Agreement)
in the trustee’s personal capacity and as trustee of the trust and for the
benefit of the beneficiaries of the trust.

 

B6                      Definitions
and interpretation

 

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

 

account means where relevant an account we establish or have already established
in your name for recording
transactions, but does not include an internal suspense account maintained by us for the purposes of any facility.

 

Agreement has the meaning described in
clause B1.3 of these General Terms and Conditions.

 

applicable provisions has the meaning
described in clause B1.2 of these General Terms and Conditions.

 

Australian Trade Refinance rate means the
rate advised by us as such at the
commencement of the relevant term, details of which can be obtained from us.

 

balance owing means, for an account, at any time, the difference
between all amounts credited and all amounts debited to it at that time. When
this amount is to be calculated for the end of a day, it includes all debits
and credits assigned to that day.

 

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

 

28

 

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 (Cwlth) (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 we deem to be a “bill” for the purposes of
this Agreement.

 

bill facility means a facility which is described in the Details
of Facilities as a Bill Facility.

 

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

 

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.

 

costs means any costs, charges, expenses
and other outgoings (including in connection with legal and other advisers on a
full indemnity basis), and by the use of our
employees and facilities and, in
the case of a mortgage, where applicable, in preserving and maintaining the
property the subject of the mortgage (such as by paying insurance, rates and
taxes for the property), interest, penalties and fines.

 

current ratio means Current Assets divided by Current
Liabilities.

 

Customer means each customer named in the
Details of Facilities sections of this Letter
of Offer. If there is more than one person named as Customer, Customer
means each of them separately and every two or more of them jointly.
Customer includes the customer’s
successors.

 

date issued means, in relation to a bank guarantee, the date specified in the
Details of Facilities section of this Letter
of Offer or otherwise
agreed as the date on or before which a bank
guarantee is to be, or
has already been, issued by us to
the beneficiary.

 

default interest rate has the meaning
described in clause A2.4(a) of these General Terms and Conditions.

 

Details of Facilities means, in relation to a facility, the facility details in relation
to that facility in Part 1,
2 or 3 of this Letter of Offer.

 

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

 

drawdown date means:

 

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

 

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

 

drawdown notice means:

 

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

 

(b)                      where
the facility is a facility other than a bill facility, a notice in a form acceptable
to us requesting a drawing under the facility.

 

drawing means each financial accommodation
actually provided under a facility
(including our acceptance,
discount or endorsement of a bill
drawn by you under a bill  facility
and the issue of bank guarantees or
letters of credit).

 

economic costs and economic event each has the meaning
described in clause A3 of these General Terms and Conditions.

 

29

 

Effective
Interest Rate means a
per annum rate of interest, calculated as at the date of this Agreement, using the following formula:

 

e = [(1 + r)n
- 1] x 100

 

where:

 

•                               e is the Effective Interest Rate;

 

•                               r is the relevant interest rate divided by
n, divided by 100;

 

•                               n is the number of interest compounding
periods per annum (eg if interest is compounded monthly, n = 12)

 

In
calculating the Effective Interest Rate we
have assumed that the interest compounding periods are of equal length.

 

event of default means an event so
described in clause A8.1 of these General Terms and Conditions.

 

expiry date means for a facility, the date specified as such in
the Details of Facilities, or otherwise agreed between us from time to time.

 

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

 

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

 

the facility limit for a facility is at any time the amount
described as such in the Details of Facilities for that facility as reduced or increased in
accordance with this Agreement.

 

facility limit deduction means the total
face value of any bank guarantee
or letter of credit or similar instrument issued by us under any other agreement with you which have not been cancelled to our satisfaction.

 

finance charges means operating lease rental expense.

 

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

 

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.

 

General Terms and Conditions, when used in other Parts of this Letter of Offer, means this Part 8 of
this Letter of Offer.

 

Group Member or Group means
the Customer and each corporation
which is a related entity as that term is defined the Corporations Act 2001
(Cth).

 

GST means goods and services tax or any
similar tax.

 

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

 

insolvent means being an insolvent under
administration, being insolvent, having a controller appointed (each as defined
in the Corporations Act 2001 (Cth)), being in receivership, receivership and
management, liquidation, provisional liquidation, under administration, wound
up, subject to any arrangement, assignment or composition, protected from
creditors under any statute, dissolved (other than to carry out a
reconstruction while solvent) or otherwise unable to pay debts when they fall
due, if a person is appointed under legislation to investigate or manage any part of
the Customer’s or any security provider’s affairs.

 

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).

 

30

 

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

 

Interest
Rate per Interest Period means a per annum rate of interest, calculated as at the date of
this Agreement, using the
following formula:

 

interest rate

n

 

where n is the number of interest compounding
periods per annum (eg if interest compounds monthly, n = 12)

 

In
calculating the Interest Rate per Interest Period we have assumed
that the interest compounding periods are
of equal length.

 

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

 

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

 

letter of credit drawing means the issue of
a letter of credit provided to you under this Agreement as described in Part 1 of this Agreement or as otherwise agreed.

 

letter of credit documentation means any
application, schedule, letter, advice or invoice setting out or amending the
terms on which any letter of credit
or proposed letter of credit is
to be or has been issued or any drawing
is to be or has been made under any trade
finance facility.

 

Letter of Offer means this Letter of Offer
executed by us.

 

maturing bill means a bill maturing on a maturity date.

 

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

 

nominated account means:

 

(a)                       for
a facility other than a bill facility, an account for debiting amounts agreed to be
debited to the nominated account;
or

 

(b)                      for
a bill facility, an account for debiting and crediting any
amounts under this Agreement,
being the account specified as
such in the Details of Facilities for that facility,
or any other account which:

 

(i)                           we agree is the nominated account for that facility
from time to time; or

 

(ii)                        you advise us in a drawdown notice
issued either after the date of this Agreement
is to be the nominated account.

 

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 us at our
discretion.

 

potential  event
of default means an event which, with the giving of notice, lapse of
time or fulfilment of any condition, would be likely to become an event of default.

 

presales/debt cover  ratio means net acceptable presales (pre
GST and selling and legal costs), as determined by us at our
discretion, divided by total level of property finance debt limits.

 

property finance interest cover ratio means
net rental (total passing rental income stream (exclusive of GST) after
deduction of all outgoings and other property related non-recoverable costs, as
determined by us at our discretion) divided by interest
expense as assessed against the tenancy schedule provided by you to us.
We reserve the right to verify,
amend and/or test the tenancy information provided.

 

property finance loan to value ratio means
total property finance debt limits divided by the current value we ascribe at our discretion of the freehold security.

 

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

 

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.

 

replacement bill means a bill replacing a maturing  bill.

 

31

 

security means each security interest described in Part 4
of this Letter of Offer and any
substitute or additional security interest
applicable to 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 Customer for that facility) who gives a security.

 

subsidiary has the same meaning as under
the Corporations Act 2001 (Cth).

 

tangible net worth means total
tangible assets minus Total Liabilities.

 

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

 

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 this Agreement.

 

total tangible assets means all assets other than intangible assets.

 

trade finance facility means a documents
surrendered facility, a trade refinance facility or an overseas documents
surrendered facility.

 

we, us,
ourselves or the National
means National Australia Bank Limited ABN 12 004 044 937 and its successors and
assigns.

 

working capital debt means current finance
facilities including an overdraft facility, trade finance facility or bill
facility.

 

you or your
means, in relation to a facility,
the person or persons named as Customer
in the Details of Facilities for that facility.
If there is more than one person named as Customer,
you  means
each of them separately and every two or more of them jointly. You or your includes your successors.

 

(b)                       Where
a term is defined or otherwise described in the Details of Facilities in
relation to a facility (for
example, expiry date or facility limit), a reference in the
General Terms and Conditions or Specific Conditions or other parts of this Letter of Offer to that term is a
reference to that term as so defined or described.

 

(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 to:

 

(i)                          a
month means a calendar month unless otherwise stated;

 

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

 

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

 

(iv)                   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)                      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)                   the
word person includes an individual, a partnership, a body corporate, an
unincorporated association or an authority; and

 

(vii)                interest rate means a rate per cent per
annum.

 

(e)                        If
something is to be “satisfactory to us”,
it must be satisfactory in both form and substance to us, and, if we require, to our legal
advisers.

 

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

 

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

 

32

 

9                                                                     Specific Conditions - Bill Facility

 

1                               Application of Part

 

Clauses
1 to 23 (inclusive) of these Specific Conditions - Bill Facility apply to any facility which is a bill facility.

 

2                               Facility operation

 

(a)                        Provided
you have met all the conditions
precedent and all financial, reporting or other covenants applicable to the facility  you
may use a facility by
obtaining a drawing under the facility on each drawdown date.

 

(b)                       If
the Details of Facilities or these Specific Conditions specify that certain
details are to be confirmed in a Bill
Facility Record or Drawdown Schedule and
you think that a Bill Facility Record or Drawdown Schedule contains any error,
then you must tell us within 5 banking days of you
receiving it.

 

3                               Procedure for drawdown

 

(a)                        Each
time that you wish to request a drawing, you
must give to us, at least 5 banking days prior, a duly completed drawdown notice. You cannot revoke a drawdown notice once it is given under
this clause unless we agree.

 

(b)                       If
a drawdown notice provides that we are to draw bills under a power of attorney, then you agree that the drawdown notice is the instruction to us to draw the bills and clause 6 of these Specific Conditions – Bill
Facility will apply for replacement
bills.

 

(c)                        If
you are to draw bills prepared by us, then you
must include with each drawdown notice
the bills referred to in it and
clause 5 of these Specific Conditions – Bill Facility 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 (Cwlth) 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
total facility amount owing would
not exceed the facility limit at
any time until the maturity date
of the bill; and

 

(B)                      if
the facility is described as a
Bill Facility - Acceptance and Discount – National Flexible Rate in the Details
of Facilities, 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 until the maturity date of the bill;
and

 

(C)                      if
the facility is described as a
Bill Facility - Acceptance and Discount - Flexible Drawdown Fixed Rate in the
Details of Facilities, the facility amount
owing would be at least equal to the facility floor.

 

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

 

4                               Replacement bills

 

During
the term of the facility and
subject to this Agreement, on the
maturity date of each bill accepted, discounted or endorsed
under the facility  you may draw a replacement bill having a face value
specified in accordance with clause 8 of these Specific Conditions – Bill Facility.

 

5                               Replacement bills - not automatic

 

If you are to draw a replacement  bill prepared by us
(that is, bills are not drawn
under a power of attorney given by you
to us), then you must deliver, except with our consent, the drawdown notice for the replacement bill (and the replacement bill) to us at least 5 banking days prior to the drawdown
date.

 

6                               Replacement bills - automatic

 

If we are to draw bills under a power of attorney given to us by you
then, subject to clause 7 of these Specific Conditions – Bill Facility, on the maturity date of each bill accepted, discounted or endorsed
under the

 

33

 

facility, you
will be taken to have delivered a drawdown
notice to us for a replacement bill on the same terms as the maturing bill (including, if the facility is described as a Bill Facility -
Acceptance and Discount – National Flexible Rate in the Details of Facilities,
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 8 of these Specific Conditions –
Bill Facility;

 

(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 to have a maturity date that is the next banking day after that day. Any days that
are added to such a period because the day at the end of the period is not a banking day, will be disregarded for the
purpose of calculating the next subsequent maturity
date (For example, if a 90 day bill
would mature on a Saturday, then the maturity
date for the purposes of this clause will be the next banking day. However, a replacement  bill subsequently drawn to replace that bill will be for 90 days, again unless the
maturity date for that bill would not be a banking day, in which case it matures on
the next banking day); 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 (b) above may result in the facility
amount owing exceeding the facility
limit at any time until the maturity
date of the bill, then
(b) above does not apply and the maturity
date of the replacement bill will
be determined by us in our discretion to ensure that the facility limit is not so exceeded;

 

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

 

(e)                        if
this clause applies, for the avoidance of doubt you acknowledge that any action we take pursuant to your
instructions under this clause is not intended to be and should not be taken to
be a waiver of any right or remedy that we
have in connection with this Agreement.

 

7                               Replacement bills - stopping automatic replacement

 

If clause
6 of these Specific Conditions – Bill Facility applies, you may subsequently notify us that you
do 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 us with written notice to this effect, in
a form acceptable to us. If
such notice is received by us at
least 5 banking days before the maturity date of a bill, then clause 6 of these Specific
Conditions – Bill Facility will not apply to the bill on that maturity
date.

 

8                               Face value of replacement
bills

 

(a)                        You may draw replacement bills on a maturity date in accordance with clauses 4
to 7 of these Specific Conditions – Bill Facility, 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

 

(ii)                       if
the facility is described as a
Bill Facility - Acceptance and Discount - Flexible Drawdown Fixed Rate in the
Details of Facilities, such that the facility
amount owing would be at least equal to the facility floor.

 

However, if clause 6 of these Specific Conditions -
Bill Facility 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)                   if
the facility is described as a
Bill Facility - Acceptance and Discount – National Flexible Rate in the Details
of Facilities we 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 

 

34

 

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
you do not draw replacement bills on the maturity date in accordance with clauses 4
to 7 of these Specific Conditions – Bill Facility, subject to this Agreement  you
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); or

 

(c)                        If
you draw replacement bills on the maturity date and we do not accept, discount or endorse the replacement bills pursuant to clause 2 of
these Specific Conditions – Bill Facility, we
are no longer obliged to accept any bill
under the facility and we may reduce the facility limit to zero.

 

9                               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 8(b) and (c) of these Specific Conditions –
Bill Facility; and

 

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

 

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

 

10                        Non-amortising facilities

 

If the facility is a non amortising facility then the facility limit reduces in accordance with
clauses 8(b) and (c) of these Specific Conditions – Bill Facility.

 

11                        Discounting of bills

 

(a)                        Where
bills are drawn for discounting:

 

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

 

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

 

(iii)                    the term of each bill must be acceptable to us and except as otherwise agreed by us 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 we agree.

 

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

 

(c)                        Proceeds of discount in relation to a bill discounted by us under a bill  facility
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 (being the number of days from and
including the issue date of the bill
to but excluding the maturity date of
the bill); and

 

R is:

 

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

 

35

 

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

 

12                        Discounting and replacement of bills

 

(a)                        If
we have agreed in accordance with
this Agreement to accept a replacement bill, your obligation to pay us the face value of the maturing bill may be satisfied by us:

 

(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 under clause A2.3 of the General Terms and Conditions
to the nominated account.

 

(b)                       As
an alternative to the procedure outlined in paragraph (a) above, at our discretion, if we have agreed to accept a replacement  bill  your
obligation to pay us the face
value of the maturing  bill may be satisfied by us:

 

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

 

(ii)                       accepting
the replacement  bill; and

 

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

 

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

 

(v)                      debiting
any applicable fees, charges or premiums payable in respect of that replacement  bill under clause A2.3 of the General Terms and Conditions
to the nominated account.

 

13                        Payment of bills

 

(a)                        You must pay to us the face value of a bill
accepted, discounted or endorsed by us
under the facility on its maturity date.

 

(b)                       Your obligations in relation to a bill so drawn and accepted, discounted or
endorsed continue despite the fact that we
are or become the holder of the bill
in our own right on or after its maturity date.

 

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

 

(d)                       You agree to indemnify us against any liability, loss or costs
(including consequential or economic loss) we
may incur on or in connection with:

 

(i)                          your or a security
provider’s default under the facility;

 

(ii)                       us exercising, enforcing or preserving
rights (or considering or attempting to do so) in connection with the facility or a bill.

 

You agree to pay us the amount of our liability, loss or costs when we specify. This indemnity is in addition
to any other indemnity or obligation in our
favour contained in this Agreement
or given by law.

 

(e)                        You may not prepay any bill accepted, discounted or endorsed by us under the facility unless we
agree.

 

14                        Power of attorney

 

(a)                        If
a drawdown notice in relation to
the facility provides that we are to draw bills under a power of attorney, you irrevocably appoint us
to be your attorney on your behalf and in your 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)                       You agree that:

 

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

 

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

 

36

 

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

 

(iv)                   you will indemnify us and our
officers against any liability, loss or costs
(including consequential or economic loss) we
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 us need be
concerned to see or enquire as to the propriety or expediency of anything which
we may do, purport to do or
perform in your name by
virtue of this power of attorney; and

 

(vi)                   you will ratify and confirm all that we lawfully do or cause to be done by
virtue of this power of attorney.

 

15                        Cancellation by you

 

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

 

(b)                       If
you give a notice under this
clause then:

 

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

 

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

 

16                        Economic costs and economic benefits

 

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

 

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

 

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

 

(i)                          increases
of profits or returns or other gains associated with changes in the rates
applicable to bills under the facility and the rates applicable to bills  we
would offer to enter into a new transaction when the event occurs, which
transaction is with a customer equivalent to you
for an amount of approximately the same amount as you pay, fail to pay or draw or are required to pay and for
a term approximately equal to the period from when the event occurs to the date
we assumed that amount would
otherwise be due for payment (assuming, where appropriate, that replacement  bills are drawn and accepted, discounted or endorsed by us in respect of that amount); 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 us (either generally in the course of our business or specifically in connection
with this Agreement) to fund or
maintain the facility or to
hedge, fix or limit our effective
cost of funding in relation to the facility.

 

(d)                       Economic costs will be determined and
become payable under clause A3 of the General Terms and Conditions.

 

17                        How we assign debits

 

Except as otherwise provided in these Specific Conditions, and subject
to this Agreement, we may debit all amounts, fees,
charges or premiums payable by you
in connection with the facility
to the nominated account.

 

18                        Additional consequences if you are in default

 

If you are in default under this Agreement then, in addition to clause A8.2
of the General Terms and Conditions:

 

(a)                        if
on the day when you make a
payment required under clause A8.2 of the General Terms and 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
we agree to deposit that portion
in an interest bearing deposit account on terms which we think fit. The deposit may be made
with any person we decide on
(including, without limitation, ourselves);
and

 

(b)                       when
a bill is subsequently presented
for payment, we agree to apply
the portion referred to in paragraph (a) above towards paying the holder
of that bill. We agree to pay to you the amount which we certify to be that part of the
portion, and any interest earnings (net of our
income tax liability in

 

37

 

connection with those earnings) on that part of
the portion, remaining after satisfaction of all your obligations (contingent or otherwise) under this Agreement and any facility.

 

19                        Rate advice

 

(a)                        The
yield rate applying on a drawdown date under the facility will be confirmed in the Bill Facility Record which we will forward to you within 7 banking days after the drawdown
date, except as set out in paragraph (b) below.

 

(b)                       Where
the facility is described as a
Bill Facility – Acceptance/Discount – National Flexible Rate Facility in the
Details of Facilities, the weighted average of all yield rates applying to the bill
components on a drawdown date
under the facility will be
confirmed in the Bill Facility Record which
we will forward to you within 7 banking days after the drawdown
date. Details of Facilities of individual yield rates are available on request.

 

(c)                        If
these Specific Conditions provide that we
are to advise you of a rate
applying to your  facility, you
may contact us before the
first drawing is made under the facility to ascertain the rate that will
apply to your  facility. The rate we quote will apply to your  facility
if you make your first drawing by 4.30pm on the date we quote the rate. If this condition is not satisfied, the
quote lapses and the quoted rate does not apply.

 

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

 

(a)                        You have the option to enter into a fixed rate  bill  facility
having the characteristics set out in the Details of Facilities.

 

(b)                       To
exercise the option, you must
send us before 3.00 pm (Melbourne
time) on the exercise date a
notice in a form acceptable to us
in our discretion. Once given,
this notice is irrevocable unless we
in our discretion agree otherwise.

 

(c)                        We are not obliged to act in accordance
with a notice given by you under
paragraph (b) above if we
consider that any of the conditions precedent set out in this Agreement are not satisfied.

 

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

 

(e)                        You may give us notice offering to surrender all or part of
the option. Unless otherwise confirmed by you,
an offer to surrender will be taken as an offer to surrender the whole of the
option. We may reject an
offer to surrender in our 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 you in respect of the surrender, when such amount is paid. You will then be taken to have surrendered
your rights in respect of the
option (or, if a partial surrender, the agreed part) and to have released us from any further obligation in respect
of the option (or, if a partial surrender, the agreed part). Any notice given
by us 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
you in accordance with paragraphs
(b)-(c) below at the time you
provide us with a drawdown notice for that bill; or

 

(ii)                       by
us in accordance with clause 8 of
these Specific Conditions – Bill Facility.

 

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

 

(i)                          you 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)                       you 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 you 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.

 

38

 

22                        Bill Facility - Acceptance / Endorsement

 

(a)                        Where
bills are not to be discounted by
us, we agree to make available to you bills accepted or endorsed under the facility by the time and in the place
specified in the Details of Facilities.

 

(b)                       If
we are specified as a paying
agent in the Details of Facilities, you
authorise us to pay the face
value of a bill drawn under the facility in accordance with its terms and
conditions on your behalf to the
person presenting the bill for
payment.

 

23                        Late Presentation Fee

 

A Late Presentation Fee is payable by you
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 we determine 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

 

For the purposes of these Specific Conditions and the Details of
Facilities – Bill Acceptance/Discount Facility:

 

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

 

amortisation schedule means, for a facility, the Amortisation Details
specified in the Details of Facilities for the facility
or any amortisation schedule provided
to you by us as a replacement, in accordance with
this Agreement.

 

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

 

Bill Facility Record means a document by
that name issued by us.

 

cap rate means the rate specified as such in the
Details of Facilities for the facility,
or if the rate is not specified in the Details of Facilities, the rate advised
to you as such before the first drawing under the facility and confirmed in the first Bill Facility Record  we provide to you.

 

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

 

conversion rate means the rate specified as such in the
Details of Facilities for the facility,
or if the rate is not specified in the Details of Facilities, the rate advised
to you as such before the first drawing under the facility and confirmed in the first Bill Facility Record  we provide to you.

 

down and out rate means the rate specified as such in the
Details of Facilities for the facility,
or if the rate is not specified in the Details of Facilities, the rate advised
to you as such before the first drawing under the facility and confirmed in the first Bill Facility Record  we provide to you.

 

Drawdown Schedule means a document by
that name issued by us.

 

economic benefits is the amount determined in accordance
with clause 16 of these Specific Conditions – Bill Facility.

 

exercise date means for a facility described as a Bill Facility -
Option - Acceptance and Discount - Fixed Rate the date specified as such in the
Details of Facilities.

 

facility floor means the amount specified as such in the
Details of Facilities of the facility as
reduced or increased in accordance with this Agreement.

 

fixed amount means the amount specified as such in the
Details of Facilities for the facility as
reduced or increased in accordance with this
Agreement.

 

fixed rate means the rate specified as such in the
Details of Facilities for the facility,
or if the rate is not specified in the Details of Facilities, the rate advised
to you as such before the first drawing under the facility and confirmed in the first Bill Facility Record  we provide to you.

 

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

 

floating rate means on a drawdown date the rate at which we are prepared to purchase bills
accepted, discounted or endorsed by us
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.

 

floor rate means the rate specified as such in the
Details of Facilities for the facility,
or if the rate is not specified in the Details of Facilities, the rate advised
to you as such before the first drawing under the facility and confirmed in the first Bill Facility Record  we provide to you.

 

39

 

floor/cap amount means the amount specified as such in the
Details of Facilities for the facility as
reduced or increased in accordance with this
Agreement.

 

floor/cap rate means on a drawdown
date:

 

(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.

 

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

 

participation rate means the rate specified as such in the
Details of Facilities for the facility,
or if the rate is not specified in the Details of Facilities, the rate advised
to you as such before the first drawing under the facility and confirmed in the first Bill Facility Record  we provide to you.

 

proceeds of discount has the meaning
described in these Specific Conditions.

 

rebate rate means the rate specified as such in the
Details of Facilities for the facility,
or if a rate is not specified in the Details of Facilities, the rate advised to
you as such before the first drawing under the facility and confirmed in the first Bill Facility Record  we provide to you.

 

trigger rate means the rate specified as such in the
Details of Facilities for the facility,
or if the rate is not specified in the Details of Facilities, the rate advised
to you as such before the first drawing under the facility and confirmed in the first Bill Facility Record  we provide to you.

 

yield
rate, in relation to a facility,
has the meaning described in the Details of Facilities for that facility.

 

The
definitions of other terms used in these Specific Conditions may be found
in clause B6 of the General Terms and Conditions.

 

40

 

10                                                              Specific Conditions – Bank Guarantee Facility

 

1                               Application of Part

 

Clauses
2 to 14 (inclusive) of these Specific Conditions - Bank Guarantee Facility
apply to any bank guarantee facility.

 

2                               Issue of Bank Guarantees

 

(a)                        Provided
you have met all the conditions
precedent and all financial, reporting or other covenants applicable to the facility, you
may apply for us to issue a bank guarantee to a beneficiary on or before the date issued, but only if:

 

(i)                          the
facility  amount owing for the bank guarantee  facility does not and, after the bank guarantee is issued, will not exceed the facility limit less any facility limit  deduction; and

 

(ii)                       you have submitted a complete and properly
authorised bank guarantee request
in the form required by us
from time to time.

 

(b)                       We may accept or reject your application for a bank guarantee in our discretion.

 

3                               Payment of Bank Guarantee

 

(a)                        In
addition to any indemnity obligations in the General Terms and Conditions, you indemnify us in respect of any amount we
pay to a beneficiary under a bank guarantee. Any amount you must pay us under this clause is payable in Australian dollars and
becomes due and payable upon the earlier of:

 

(i)                          our making payment under a bank guarantee; or

 

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

 

(iii)                    your
default under this Letter of Offer.

 

4                               We may end
our obligation

 

We may, at any time, end our 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) we are, 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 us by
that beneficiary.

 

5                               Partial payments

 

You agree that if a demand is made by a beneficiary for a partial payment of the guaranteed amount, we may at our discretion and without further reference to you, 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 our discretion. You agree that the terms and conditions of
this Letter of Offer apply to any
replacement bank guarantee issued
under this clause as if details of that bank
guarantee were included in the Details of Facilities.

 

6                               No obligations to enquire

 

(a)                        You irrevocably authorise us to immediately pay any amount demanded
at any time under a bank guarantee.

 

(b)                       You agree that we:

 

(i)                          need
not first refer to you or obtain your authority for the payment;

 

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

 

(iii)                    may meet any demand even
though you dispute the validity
of the demand.

 

7                               Return of Bank Guarantees

 

You are to return to us a bank
guarantee if it is ever given to you
by the beneficiary on production
of a bill of lading or otherwise.

 

8                               Foreign currency conversion

 

If we pay any amount to a beneficiary in a foreign currency, for the
purposes of calculating the amount in Australian Dollars for which you indemnify us under clause 3 of these Specific Conditions – Bank
Guarantee Facility, the foreign currency amount is to be converted to
Australian Dollars at the spot rate of exchange quoted by us on the day we make the payment to the beneficiary.

 

41

 

9                               Additional consequences if you
are in default

 

(a)                        If
you are in default under this Letter of Offer then, in addition to
clause 8 of the General Terms and Conditions, the following provisions will
apply.

 

(b)                       If,
on a day when you make a payment
required under clause A8.2 of the General Terms and 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 we agree:

 

(i)                          to
deposit that portion in an interest bearing deposit account on terms which we consider appropriate (which may include
making the deposit with ourselves);

 

(ii)                       to
use the deposited amount towards paying a beneficiary
of a bank guarantee when the beneficiary demands payment of moneys we are liable to pay under the bank guarantee; and

 

(iii)                    to pay to you the amount which we certify is that part of the
deposited amount and the interest earned on it (net of our income tax liability in connection
with those earnings) which remains after all of your obligations (contingent or otherwise) under this Agreement and any facility have been satisfied.

 

10                        Indemnity by you

 

As a
separate obligation, you
indemnify us against all actions,
proceedings, claims and demands brought or made against us and against all losses, costs, charges,
damages and expenses which we
incur or sustain or for which we
become liable, directly or indirectly, because of the issue of any bank guarantee.

 

11                        Preservation of your liability

 

Your liabilities and our rights under these Specific Conditions
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 this Agreement or under any bank guarantee; or

 

(b)                       our 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 you or another person in any way; or

 

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

 

(d)                       any
variation or novation of a right of ours or that of another person, or
alteration of a document, in respect of you
or another person including, without limitation, an increase in the maximum
liability of or other variation in connection with a bank guarantee; or

 

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

 

(f)                          invalidity
or irregularity in the execution of this Agreement
by you or any deficiency in your powers to enter into or observe your obligations under this Agreement.

 

12                        Late Payments

 

If a
payment is made under a bank guarantee
and is not promptly reimbursed to us
by you:

 

(a)                        you authorise us to debit the amount of the drawing (less any reimbursements in relation to that drawing) to any account  you have
with us (even if this would cause
the account to become overdrawn
or for any applicable overdraft limit to be exceeded); and

 

(b)                       default
interest shall apply to the amount of the drawing
that is not reimbursed, in accordance with clause A2.4 of the General Terms and
Conditions.

 

13                        How we assign debits

 

We may debit any account  you
have with us, with any amount you owe us
under or in connection with the facility.

 

14                        Definitions

 

For the purposes of these Specific Conditions and the Details of
Facilities – Bank Guarantee Facility:

 

bank guarantee facility means a facility which is described in the Details
of Facilities as a Bank Guarantee Facility.

 

guaranteed amount means, in relation to a bank guarantee, the amount specified as
the Guaranteed Amount in the bank guarantee.
The definitions of other terms used in these Specific Conditions may be
found in clause B6 of the General Terms and Conditions.

 

42

 

Acceptance of Letter of
Offer

 

To accept this Letter of Offer, each Customer must sign
the duplicate and return it to us before
the lapse date set out at the beginning of this document.

By executing this
document below, the Customer;

 

1.                                      accepts
the Letter of Offer;

 

2.                                      declares
that all the information the Customer
has given us is accurate and not
misleading and it is aware that we
are relying on it; and

 

3.                                      acknowledges
that before indicating that the Customer
intends to be bound, the Customer
has;

 

(i)                                     read
the Details of Facilities, Parts 4 to 7 (inclusive), any Specific Conditions
and the General Terms and Conditions; and

 

(ii)                                  received
and read a copy of each other contract documentation described within the Letter of Offer; and

 

4.                                      acknowledges
that, except to the extent that a security’s application is excluded in
relation to a facility as set out
in the Details of Facilities, every security
held by us (including the securities) extends to the agreement
between the Customer and us which results from the Customer’s acceptance of this Letter of Offer, in addition to all other
liabilities secured by those securities;
and

 

5.                                      acknowledges
and agrees that any existing
contractual documentation detailed in Part 3 of this Letter of Offer is varied as set out in
that Part 3; and

 

6.                                      declares
that the Customer understands
that any mortgaged or secured property will be at risk if the Customer or any security provider defaults; and

 

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

 

3/391
Park Road, regents Park NSW 2143; and

 

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

 

 

	
  Yours sincerely,

  
	
   

  
	
   

  
	
  /s/ Graeme
  Johnson

  	
   

  	
   

  
	
  Graeme Johnson

  
	
  Senior
  Relationship Manager

  

 

43

 

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

 

Companies Executing without using a Common Seal

 

 

Executed
By

 

Channell
Bushman Pty Ltd

 

By
being signed by:

 

 

	
  /s/ Tim Hankinson

  	
   

  	
    /s/ William H. Channell, Jr.

  	
   

  
	
  Signature of authorised person

  	
   

  	
  Signature of authorised person

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Tim Hankinson

  	
   

  	
  William H. Channell, Jr.

  	
   

  
	
  Name of authorised person

  	
   

  	
  Name of authorised person

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Director

  	
   

  	
  Director

  	
   

  
	
  Office held

  	
   

  	
  Office held

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  16

  	
  /

  	
  12

  	
  /

  	
  2005

  	
   

  	
  4

  	
  /

  	
  1

  	
  /

  	
  2006

  	
   

  
	
  Date

  	
   

  	
  Date

  	
   

  
												

 

 

Executed
By

 

Bushmans
Group Pty Ltd

 

By
being signed by:

 

 

	
  /s/ Tim Hankinson

  	
   

  	
   /s/ William H. Channell, Jr.

  	
   

  
	
  Signature of authorised person

  	
   

  	
  Signature of authorised person

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Tim Hankinson

  	
   

  	
  William H. Channell, Jr.

  	
   

  
	
  Name of authorised person

  	
   

  	
  Name of authorised person

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Director

  	
   

  	
  Director

  	
   

  
	
  Office held

  	
   

  	
  Office held

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  16

  	
  /

  	
  12

  	
  /

  	
  2005

  	
   

  	
  4

  	
  /

  	
  1

  	
  /

  	
  2006

  	
   

  
	
  Date

  	
   

  	
  Date

  	
   

  
												

 

44

 

Executed
By

 

Bushmans
Engineering Pty Ltd

 

By
being signed by:

 

 

	
  /s/ Tim Hankinson

  	
   

  	
   /s/ William H. Channell, Jr.

  	
   

  
	
  Signature of authorised person

  	
   

  	
  Signature of authorised person

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Tim Hankinson

  	
   

  	
  William H. Channell, Jr.

  	
   

  
	
  Name of authorised person

  	
   

  	
  Name of authorised person

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Director

  	
   

  	
  Director

  	
   

  
	
  Office held

  	
   

  	
  Office held

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  16

  	
  /

  	
  12

  	
  /

  	
  2005

  	
   

  	
  4

  	
  /

  	
  1

  	
  /

  	
  2006

  	
   

  
	
  Date

  	
   

  	
  Date

  	
   

  
												

 

45

 

Executed
By

 

Polyrib
Tanks Pty Ltd

 

By
being signed by:

 

 

	
  /s/ Tim Hankinson

  	
   

  	
   /s/ William H. Channell, Jr.

  	
   

  
	
  Signature of authorised person

  	
   

  	
  Signature of authorised person

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Tim Hankinson

  	
   

  	
  William H. Channell, Jr.

  	
   

  
	
  Name of authorised person

  	
   

  	
  Name of authorised person

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Director

  	
   

  	
  Director

  	
   

  
	
  Office held

  	
   

  	
  Office held

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  16

  	
  /

  	
  12

  	
  /

  	
  2005

  	
   

  	
  4

  	
  /

  	
  1

  	
  /

  	
  2006

  	
   

  
	
  Date

  	
   

  	
  Date

  	
   

  
												

 

 

Executed
By

 

Australian
Bushman Tanks Pty Ltd

 

By
being signed by:

 

 

	
  /s/ Tim Hankinson

  	
   

  	
  /s/ William H. Channell, Jr.

  	
   

  
	
  Signature of authorised person

  	
   

  	
  Signature of authorised person

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Tim Hankinson

  	
   

  	
  William H. Channell, Jr.

  	
   

  
	
  Name of authorised person

  	
   

  	
  Name of authorised person

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Director

  	
   

  	
  Director

  	
   

  
	
  Office held

  	
   

  	
  Office held

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  16

  	
  /

  	
  12

  	
  /

  	
  2005

  	
   

  	
  4

  	
  /

  	
  1

  	
  /

  	
  2006

  	
   

  
	
  Date

  	
   

  	
  Date

  	
   

  
												

 

46

 

 

Executed
By

 

Channell
Pty Ltd

 

By
being signed by:

 

 

	
  /s/ Tim Hankinson

  	
   

  	
   /s/ William H. Channell, Jr.

  	
   

  
	
  Signature of authorised person

  	
   

  	
  Signature of authorised person

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Tim Hankinson

  	
   

  	
  William H. Channell, Jr.

  	
   

  
	
  Name of authorised person

  	
   

  	
  Name of authorised person

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Director

  	
   

  	
  Director

  	
   

  
	
  Office held

  	
   

  	
  Office held

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  16

  	
  /

  	
  12

  	
  /

  	
  2005

  	
   

  	
  4

  	
  /

  	
  1

  	
  /

  	
  2006

  	
   

  
	
  Date

  	
   

  	
  Date

  	
   

  
												

 

47

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00104-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00104-of-00352.parquet"}]]