Document:

Exhibit 10.3

 

 

Corporate Letter of Offer

 

 

“Channell
Bushmans Group

 

8 October 2007

 

 

National
Australia Bank Limited ABN 12 004 044 937

 

 

Relationship
Management

 

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

 

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

 

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

 

The
dedicated team at the location is led by:

 

	
  •

  	
   

  	
  Director

  	
   

  	
  Patrick
  Ying

  
	
   

  	
   

  	
  Direct Telephone Number

  	
   

  	
  (02) 9237 9756

  
	
   

  	
   

  	
  Facsimile Number

  	
   

  	
  (02) 9237 9752

  
	
   

  	
   

  	
  Email

  	
   

  	
  Patrick.Ying@nab.com.au

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  •

  	
   

  	
  Associate
  Director

  	
   

  	
  Graeme
  Johnson

  
	
   

  	
   

  	
  Direct Telephone Number

  	
   

  	
  (02) 9237 9731

  
	
   

  	
   

  	
  Facsimile Number

  	
   

  	
  (02) 9237 9752

  
	
   

  	
   

  	
  Email

  	
   

  	
  Graeme.
  L.Johnson@nab.com.au

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  •

  	
   

  	
  Account
  Manager

  	
   

  	
  Linda
  Hardy

  
	
   

  	
   

  	
  Direct Telephone Number

  	
   

  	
  (02) 9237 1917

  
	
   

  	
   

  	
  Facsimile Number

  	
   

  	
  (02) 9237 9752

  
	
   

  	
   

  	
  Email

  	
   

  	
  Linda.
  H ardy@nab. com. au

  

 

Other important members of
the team will include:

 

	
  •

  	
   

  	
  Credit
  Analyst

  	
   

  	
  Joseph
  Ritchie

  
	
   

  	
   

  	
  Direct Telephone Number

  	
   

  	
  (02) 9237 9735

  
	
   

  	
   

  	
  Facsimile Number

  	
   

  	
  (02) 9237 9752

  
	
   

  	
   

  	
  Email

  	
   

  	
  Joseph.H
  .Ritchie@nab.com.au

  

 

 

	
  •

  	
   

  	
  Business
  Banking Assistant

  	
   

  	
  Ngoc Tran

  
	
   

  	
   

  	
  Direct Telephone Number

  	
   

  	
  (02) 9237 9253

  
	
   

  	
   

  	
  Facsimile Number

  	
   

  	
  (02) 9237 9752

  
	
   

  	
   

  	
  Email

  	
   

  	
  Ngoc.Chau.Tran@nab.com.au

  

 

Offer
Period

 

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

 

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

 

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

 

 

Yours sincerely,

 

 

	
  /s/ Graeme Johnson

  	
   

  
	
  Graeme
  Johnson

  
	
  Associate
  Director

  

 

 

Table
of Contents

 

	
  Part 1

  	
  Details of
  Facilities

  	
  7

  
	
   

  	
  1

  	
   

  	
  Facility Summary

  	
  7

  
	
   

  	
  2

  	
   

  	
  New facilities in this
  Letter of Offer

  	
  8

  
	
   

  	
  3

  	
   

  	
  Other facilities

  	
  10

  
	
  Part 2

  	
  Security

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Part 3

  	
  Establishment
  Fees and Charges

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Part 4

  	
  Conditions
  Precedent, Special Conditions and other information

  	
  13

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Part 5

  	
  Covenants
  and Undertakings

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Part 6

  	
  Property
  Conditions

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Part 7

  	
  General
  Conditions

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1

  	
  Conditions precedent

  	
  18

  
	
   

  	
  2

  	
  Facility limits and other
  limits

  	
  18

  
	
   

  	
  3

  	
  Payment obligations

  	
  18

  
	
   

  	
   

  	
  3.1

  	
  General repayment
  obligations

  	
  18

  
	
   

  	
   

  	
  3.2

  	
  Fees charges and other
  premiums

  	
  18

  
	
   

  	
   

  	
  3.3

  	
  Obligation to pay interest

  	
  19

  
	
   

  	
   

  	
  3.4

  	
  Interest rates

  	
  19

  
	
   

  	
   

  	
  3.5

  	
  Pricing Review

  	
  19

  
	
   

  	
   

  	
  3.6

  	
  Payments generally to be
  made in Australian Dollars

  	
  20

  
	
   

  	
   

  	
  3.7

  	
  Payment in cleared funds

  	
  20

  
	
   

  	
   

  	
  3.8

  	
  No set off or deduction

  	
  20

  
	
   

  	
   

  	
  3.9

  	
  Payments due on non-banking
  days

  	
  20

  
	
   

  	
   

  	
  3.10

  	
  Time for payment

  	
  20

  
	
   

  	
  4

  	
  Economic costs

  	
  20

  
	
   

  	
   

  	
  4.1

  	
  Payment of economic costs

  	
  20

  
	
   

  	
   

  	
  4.2

  	
  Economic events

  	
  21

  
	
   

  	
   

  	
  4.3

  	
  Calculation of economic
  costs

  	
  21

  
	
   

  	
  5

  	
  Representations and
  warranties

  	
  22

  
	
   

  	
   

  	
  5.1

  	
  General Representations and
  Warranties

  	
  22

  
	
   

  	
   

  	
  5.2

  	
  Additional representations
  and warranties from a trustee

  	
  23

  
	
   

  	
   

  	
  5.3

  	
  Representations and
  warranties are repeated

  	
  23

  
	
   

  	
  6

  	
  Undertakings and covenants

  	
  23

  
	
   

  	
   

  	
  6.1

  	
  Negative Pledge

  	
  23

  
	
   

  	
   

  	
  6.2

  	
  General undertakings

  	
  24

  
	
   

  	
   

  	
  6.3

  	
  Additional undertakings
  from a trustee

  	
  24

  
	
   

  	
   

  	
  6.4

  	
  Change of Shareholding

  	
  25

  
	
   

  	
   

  	
  6.5

  	
  Partnerships

  	
  25

  
	
   

  	
   

  	
  6.6

  	
  Class Order

  	
  25

  
	
   

  	
   

  	
  6.7

  	
  Changes to Accounting
  Standards

  	
  25

  
	
   

  	
   

  	
  6.8

  	
  Appointment of Consultants

  	
  26

  
	
   

  	
  7

  	
  Default

  	
  26

  
	
   

  	
   

  	
  7.1

  	
  General Events of Default

  	
  26

  
	
   

  	
   

  	
  7.2

  	
  Additional Events of
  Default

  	
  27

  
	
   

  	
   

  	
  7.3

  	
  Consequences of default

  	
  28

  
	
   

  	
   

  	
  7.4

  	
  Default Interest

  	
  28

  
	
   

  	
   

  	
  7.5

  	
  Fees

  	
  29

  
	
   

  	
   

  	
  7.6

  	
  Additional review rights

  	
  29

  
	
   

  	
   

  	
  7.7

  	
  Obligations not affected

  	
  29

  
	
   

  	
  8

  	
  Review

  	
  29

  
	
   

  	
   

  	
  8.1

  	
  Scope and frequency

  	
  29

  
	
   

  	
   

  	
  8.2

  	
  Assistance

  	
  29

  
	
   

  	
  9

  	
  Change of Circumstances

  	
  29

  
	
   

  	
   

  	
  9.1

  	
  Illegality

  	
  29

  
	
   

  	
   

  	
  9.2

  	
  Increased Costs

  	
  29

  
	
   

  	
  10

  	
  Liability for regulatory
  events

  	
  30

  

 

5

 

	
   

  	
  11

  	
  Confidentiality

  	
  30

  
	
   

  	
  12

  	
  Accounting for transactions

  	
  31

  
	
   

  	
  13

  	
  Setting off money

  	
  31

  
	
   

  	
  14

  	
  Holding Over

  	
  32

  
	
   

  	
  15

  	
  Telephone recording

  	
  32

  
	
   

  	
  16

  	
  Code of Banking Practice

  	
  32

  
	
   

  	
  17

  	
  Notices, other
  communications and service of documents

  	
  33

  
	
   

  	
   

  	
  17.1

  	
  Service

  	
  33

  
	
   

  	
   

  	
  17.2

  	
  NAB’s right to rely on
  notices

  	
  33

  
	
   

  	
  18

  	
  General

  	
  33

  
	
   

  	
   

  	
  18.1

  	
  Statements of Account

  	
  33

  
	
   

  	
   

  	
  18.2

  	
  The Bank’s certificates

  	
  33

  
	
   

  	
   

  	
  18.3

  	
  How the Bank may exercise its rights

  	
  34

  
	
   

  	
   

  	
  18.4

  	
  Preservation of the Borrowers’ liability

  	
  34

  
	
   

  	
   

  	
  18.5

  	
  Consents and Conditions

  	
  34

  
	
   

  	
   

  	
  18.6

  	
  Variation

  	
  34

  
	
   

  	
   

  	
  18.7

  	
  GST

  	
  35

  
	
   

  	
   

  	
  18.8

  	
  Valuations are for the Bank’s benefit

  	
  35

  
	
   

  	
   

  	
  18.9

  	
  Indemnities

  	
  35

  
	
   

  	
   

  	
  18.10

  	
  Inconsistent and applicable
  law

  	
  35

  
	
   

  	
   

  	
  18.11

  	
  Severability

  	
  35

  
	
   

  	
   

  	
  18.12

  	
  Assignment

  	
  35

  
	
   

  	
  19

  	
  Definitions and
  interpretation

  	
  36

  
	
   

  	
  20

  	
  Inconsistency

  	
  44

  
	
   

  	
   

  	
  20.1

  	
  Precedence of this clause

  	
  44

  
	
   

  	
   

  	
  20.2

  	
  Transaction documents

  	
  44

  
	
   

  	
   

  	
  20.3

  	
  Facilities

  	
  44

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Part 8

  	
  Bank
  Guarantee Facility Specific Conditions

  	
  45

  
	
   

  	
   

  	
   

  
	
  Acceptance
  of Letter of Offer

  	
  47

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Acknowledgment
  by Guarantor/Security Provider

  	
  49

  

 

6

 

Part 1              Details of
Facilities

 

1                                         Facility Summary

 

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

 

FACILITY
SUMMARY

 

	
  Borrower:

  	
   

  	
  Channell
  Pty Limited

  
	
   

  	
   

  	
   

  
	
  ABN:

  	
   

  	
  29002735622

  
	
   

  	
   

  	
   

  
	
  Facility
  Type:

  	
   

  	
  Guarantee by Bank

  
	
  Facility
  Limit:

  	
   

  	
  $300,000.00

  
	
   

  	
   

  	
   

  
	
  Facility
  Type:

  	
   

  	
  Business Card

  
	
  Facility
  Limit:

  	
   

  	
  $50,000.00

  
	
   

  	
   

  	
   

  
	
  Facility
  Type:

  	
   

  	
  Transactional Negotiation
  Authority

  
	
  Facility
  Limit:

  	
   

  	
  $200,000.00

  
	
   

  	
   

  	
   

  
	
  Borrower Total:

  	
   

  	
  $550,000.00

  
	
   

  	
   

  	
   

  
	
  Borrower:

  	
   

  	
  Bushmans
  Group Pty Limited

  
	
   

  	
   

  	
   

  
	
  Facility
  Type:

  	
   

  	
  Transactional Negotiation
  Authority

  
	
  Facility
  Limit:

  	
   

  	
  $275,000.00

  
	
   

  	
   

  	
   

  
	
  Facility
  Type:

  	
   

  	
  Business Card

  
	
  Facility
  Limit:

  	
   

  	
  $200,000.00

  
	
   

  	
   

  	
   

  
	
  Facility
  Type:

  	
   

  	
  Guarantee By Bank

  
	
  Facility
  Limit:

  	
   

  	
  $86,745.00

  
	
   

  	
   

  	
   

  
	
  Borrower Total:

  	
   

  	
  $561,745.00

  
	
   

  	
   

  	
   

  
	
  Group Total:

  	
   

  	
  $1,111,745.00
  (Australian dollar facilities only)

  

 

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

 

7

 

2                                         New facilities in this
Letter of Offer

 

New facilities are detailed below.

 

Borrower: Bushmans Group Pty Limited 

Bank
Guarantee Facility

 

	
  Purpose/Utilisation:

  	
   

  	
  Performance Guarantee

  
	
   

  	
   

  	
   

  
	
  Facility limit:

  	
   

  	
  $86,745 (eighty six
  thousand, seven hundred and forty five dollars)

  
	
   

  	
   

  	
   

  
	
  Expiry Date:

  	
   

  	
  31st October 2008

  
	
   

  	
   

  	
   

  
	
  Issuing Fee:

  	
   

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

  
	
   

  	
   

  	
   

  
	
  Half Yearly Fee:

  	
   

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

  
	
   

  	
   

  	
   

  
	
   

  	
   

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

  
	
   

  	
   

  	
   

  
	
   

  	
   

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

  
	
   

  	
   

  	
   

  
	
  Securities:

  	
   

  	
  All securities detailed in Part 2

  
	
   

  	
   

  	
   

  
	
  Specific Conditions:

  	
   

  	
  Bank Guarantee Facility
  Specific Conditions

  

 

8

 

Borrower: Channell Pty Limited

Bank
Guarantee Facility 

 

	
  Purpose/Utilisation:

  	
   

  	
  Performance Guarantee

  
	
   

  	
   

  	
   

  
	
  Facility limit:

  	
   

  	
  $300,000 (three hundred
  thousand dollars)

  
	
   

  	
   

  	
   

  
	
  Expiry Date:

  	
   

  	
  31st October 2008

  
	
   

  	
   

  	
   

  
	
  Issuing Fee:

  	
   

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

  
	
   

  	
   

  	
   

  
	
  Half Yearly Fee:

  	
   

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

  
	
   

  	
   

  	
   

  
	
   

  	
   

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

  
	
   

  	
   

  	
   

  
	
   

  	
   

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

  
	
   

  	
   

  	
   

  
	
  Securities:

  	
   

  	
  All securities detailed in Part 2

  
	
   

  	
   

  	
   

  
	
  Specific Conditions:

  	
   

  	
  Bank Guarantee Facility
  Specific Conditions

  
	
   

  	
   

  	
   

  

 

Borrower: Channell Pty Limited

Transaction
Negotiation Authorities Facility

 

	
  Purpose/Utilisation:

  	
   

  	
  Automation of Payroll

  
	
   

  	
   

  	
   

  
	
  Facility limit: 

  	
   

  	
  $200,000 (two hundred
  thousand dollars)

  
	
   

  	
   

  	
   

  
	
  Expiry Date:

  	
   

  	
  31st October 2008

  
	
   

  	
   

  	
   

  
	
  Securities:

  	
   

  	
  All securities detailed in Part 2

  
	
   

  	
   

  	
   

  
	
  Specific Conditions:

  	
   

  	
  Those contained in
  original facility documentation.

  

 

Borrower: Bushmans Group Pty Limited

Transaction
Negotiation Authorities Facility

 

	
  Purpose/Utilisation:

  	
   

  	
  Automation of Payroll

  
	
   

  	
   

  	
   

  
	
  Facility limit:

  	
   

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

  
	
   

  	
   

  	
   

  
	
  Expiry Date:

  	
   

  	
  31st October 2008

  
	
   

  	
   

  	
   

  
	
  Securities:

  	
   

  	
  All securities detailed in Part 2

  
	
   

  	
   

  	
   

  
	
  Specific Conditions:

  	
   

  	
  Those contained in
  original facility documentation.

  

 

9

 

Customer:
Bushmans Group Pty Limited

Business
Credit Card Facility

 

	
  Purpose/Utilisation:

  	
   

  	
  Purchasing

  
	
   

  	
   

  	
   

  
	
  Facility limit:

  	
   

  	
  $200,000
  (two hundred thousand dollars)

  
	
   

  	
   

  	
   

  
	
  Expiry:

  	
   

  	
  31st
  October 2008

  
	
   

  	
   

  	
   

  
	
  Securities:

  	
   

  	
  All securities detailed in Part 2

  
	
   

  	
   

  	
   

  
	
  Specific
  Conditions:

  	
   

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

  

 

Customer:
Channell Pty Limited

Business
Credit Card Facility

 

	
  Purpose/Utilisation:

  	
   

  	
  Purchasing

  
	
   

  	
   

  	
   

  
	
  Facility limit:

  	
   

  	
  $50,000 (fifty thousand
  dollars)

  
	
   

  	
   

  	
   

  
	
  Expiry:

  	
   

  	
  31st October 2008

  
	
   

  	
   

  	
   

  
	
  Securities:

  	
   

  	
  All securities detailed in Part 2

  
	
   

  	
   

  	
   

  
	
  Specific Conditions:

  	
   

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

  

 

3                                         Other facilities

 

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

 

10

 

Part 2              Security

 

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

 

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

 

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

 

Fixed &
Floating Charge

 

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 Pty Limited ABN 29 002 735 622

 

Guarantee
and Indemnity

 

2.                                       In support of Bushmans Group Pty Limited ABN
99 109 821 614 for $561,745.00 and other liabilities given by:- Channell Pty
Limited ABN 29 002 735 622

 

3.                                       Term Deposit Letter of Set Off over Term
Deposit Number 85-876-2380 in the name of Channell Pty Limited

 

11

 

Part 3              Establishment Fees
and Charges

 

The Borrower agrees to pay the following fees
and charges immediately on acceptance of this Letter of Offer (unless otherwise
advised by the Bank):

 

Not Applicable

 

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

 

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

 

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

 

12

 

Part 4              Conditions Precedent,
Special Conditions and other information

 

1                                         General

 

Not
Applicable

 

2                                         Other Information

 

13

 

Part 5              Covenants and
Undertakings

 

Reporting
Covenants

 

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

 

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

 

Annual Accounts (Audited - Including Cashflow)

 

Within
150 days of the close of each financial year, a copy of the audited annual
report or balance sheet, profit & loss account, and a copy of the
projected cashflow budget for the ensuing year for Channell Pty Limited ABN 29
002 735 622.

 

Interim Accounts (Excluding Cashflow)

 

Within
90 days of the close of each half year, a copy of the Borrower’s half yearly management accounts
including balance sheet and profit & loss statement for Channell Pty
Limited ABN 29 002 735 622.

 

Definitions

 

For the purposes of these
Covenants and Undertakings:

 

capital adequacy means tangible
net worth divided by total
tangible assets. current ratio means
Current Assets divided by Current Liabilities.

 

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

 

finance charges means operating lease rental expense.

 

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

 

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

 

intangible assets means deferred development expenses, deferred
foreign exchange gains, organisational or experimental expenses, research and
development expenses, intellectual property, future income tax benefits,
goodwill, patents, trademarks, service marks, design rights, franchises, copyrights,
licences, underwriting and formation

 

expenses
and other items of a like nature which, according to current accounting
practice, are regarded as intangible assets.

 

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

 

14

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(i)                                     municipal rates;

 

(ii)                                  water & sewerage rates;

 

(iii)                               land tax;

 

(iv)                              all insurance expenses;

 

(v)                                 electricity;

 

(vi)                              common area cleaning;

 

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

 

(viii)                        advertising & promotion costs;

 

(ix)                                air conditioning & ventilation
maintenance;

 

(x)                                   building cleaning & maintenance;

 

(xi)                                lift & escalator operation &
maintenance;

 

(xii)                             general repairs & maintenance;

 

(xiii)                          fire protection expenses;

 

(xiv)                         public address expenses;

 

(xv)                            gas & oil expenses;

 

(xvi)                         pest control;

 

(xvii)                      security;

 

(xviii)                   building management system expenses;

 

(xix)                           energy management systems;

 

(xx)                              sewage disposal;

 

15

 

(xxi)                           telephones;

 

(xxii)                        gardening/landscaping;

 

(xxiii)                     signage expenses;

 

(xxiv)                    lease commissions; and

 

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

 

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

 

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

 

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

 

tangible net worth means total tangible assets minus
total liabilities.

 

total tangible assets means all assets other than intangible
assets.

 

16

 

Part 6              Property Conditions

 

17

 

Part 7              General Conditions

 

1                                         Conditions precedent

 

Any
obligation on the Bank to provide
the Borro wer with anything under
a facility is conditional on all
of the following conditions precedent being met to the Bank’s satisfaction:

 

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

 

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

 

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

 

the Bank has received
every valuation the Bank requires;

 

the results of the Bank’s inquiries
and searches are to the Bank’s satisfaction;

 

in respect of all insurance policies that the Bank requires:

 

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

 

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

 

(iii)                               the Bank receives
such evidence of that insurance as the Bank requires.

 

(e)                                  the Bank has
received such evidence as it requires that each security remains enforceable, free from all prior security interests and third party rights
and interests.

 

(f)                                   the Bank has
received any other document it reasonably requires from a Borrower or a security pro vider;

 

(g)                               there is no event
of default or potential event of
default;

 

(h)                                 all other conditions precedent applicable to
the facility have been met.

 

2                                         Facility limits and other
limits

 

The Borrower must ensure
that the facility limit and any
other limit applicable to the facility (such
as any bill facility component limit) is
not exceeded at any time, without the Bank’s
prior approval. Any excess may attract default interest and
fees and charges, even where the excess is approved.

 

3                                         Payment obligations 3.1
General repayment obligations

 

The
Borrower must pay:

 

(a)                               the regular repayments, if any, required in
accordance with this Agreement;

 

(b)                               interest, fees, charges and premiums in
accordance with this Agreement;

 

(c)                                immediately, any amount by which the facility amount owing is in excess of the facility limit;

 

(d)                                 the facility
amount owing on the final
repayment date; and

 

(e)                                any other amounts owing to the Bank by it under this Agreement as set out in this Agreement or as otherwise advised by the Bank.

 

3.2                               Fees charges and other
premiums

 

(a)                                  All Borrowers,
jointly and severally:

 

(i)                                  are liable to pay the Bank all fees, charges and premiums set
out, or provided for, in this Agreement (including
the Fees Guide).

 

18

 

(ii)                                  are liable to pay the Bank, and indemnify the Bank for, an amount equal to any costs or taxes
in connection with:

 

(A)                              the transaction
documents, the facilities or
any transactions under or in relation to them;

 

(B)                                the Bank exercising,
enforcing or preserving rights, powers or remedies (or considering or
attempting to do so) in connection with any transaction
document, facility or any transactions under or in relation to them;
and

 

(C)                             the costs and remuneration of any receiver appointed by the Bank.

 

(b)                                 Fees that are payable when an event occurs may be
debited when, or after, that event occurs. Periodic fees (such as Service fees)
may be debited at any time during, or after, the period to which they
relate.

 

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

 

3.3                               Obligation to pay interest

 

(a)                                  Unless otherwise stated in the Specific
Conditions, interest charges are payable for each day and are calculated by
applying the daily interest rate to
the balance owing at the end of
that day (excluding any amount to which a default
interest rate applies).

 

(b)                                 The Specific Conditions for a facility set out when interest charges (if
any) are payable.

 

(c)                                  Where interest charges are debited to a loan account, they will be deemed to be part of
the facility amount owing from
the date they are debited.

 

3.4                               Interest rates

 

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

 

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

 

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

 

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

 

(b)                                 During a fixed
rate period or pricing period, the
relevant interest rate is fixed.
If the facility has a fixed interest rate, the initial fixed rate period or pricing period is set out in the Details. The Specific Conditions set out
any applicable rules regarding the quotation, setting and acceptance of
fixed rates.

 

(c)                                  If the Details
quote the amount of an indicator rate, interest rate, yield rate or default interest rate, and:

 

(i)                                     state that the rate is “indicative”; or

 

(ii)                                  indicates that the rate is the current rate,

 

then
the amount quoted is a guide only and may not be the rate that actually
applies to the facility.

 

3.5                               Pricing Review

 

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

 

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

 

(ii)                                  change the interest
rate or yield rate applicable
to a facility including by
changing or introducing a margin (including by making the margin positive or
negative), or

 

19

 

substituting
a different indicator rate for the relevant indicator rate (except where the
rate is a fixed rate).

 

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

 

3.6                               Payments generally to be
made in Australian Dollars

 

(a)                                  All amounts payable by a Borrower are payable in Australian Dollars
unless otherwise stated.

 

(b)                                 If the Bank
receives an amount in a currency other than that in which it is due:

 

(i)                                     the Bank may convert
the amount received into the due currency (and if necessary convert through a
third currency) on such day and at such rates as the Bank considers appropriate. The Bank may deduct its usual costs in connection with the conversion; and

 

(ii)                              the Borrower
satisfies its obligation to pay only to the extent of the amount of
the due currency obtained from the conversion after deducting conversion costs.

 

(c)                                  If the Bank
is debiting an amount to an account held by a Borrower, and that amount is in a currency
other than that of the account, the Bank may:

 

(i)                                     convert the amount to be debited into the
currency of the relevant account (and if necessary convert through a third
currency) on such day and at such rates as the Bank
considers appropriate; and

 

(ii)                                debit to that account the amount so converted,
plus the costs of conversion.

 

3.7                               Payment in cleared funds

 

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

 

3.8                               No set off or deduction

 

(a)                                  All payments by a Borrower must be made in full without any set-off,
counterclaim or deduction.

 

(b)                                 If a Borrower
or the Bank are, at
any time, compelled by law to deduct or withhold any amount (including taxes), that Borrower must indemnify the Bank
against that amount and pay concurrently to the Bank such additional amounts as will
result in payment to the Bank of
the full amount which would have been received if no deduction had been made.

 

3.9                               Payments due on non-banking
days

 

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

 

3.10                        Time for payment

 

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

 

4                                         Economic costs

 

4.1                               Payment of economic costs

 

(a)                                  Economic costs are payable whenever an economic event occurs in relation to a facility.

 

20

 

(b)                                 The Bank will
determine the amount of any economic costs in
accordance with this clause and will notify the Borrower accordingly. The Borrower
must pay the Bank the
amount of any economic costs on
demand.

 

4.2                               Economic events

 

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

 

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

 

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

 

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

 

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

 

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

 

except to the extent that this occurs:

 

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

 

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

 

(h)                                 on the expiry
date; or

 

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

 

4.3                               Calculation of economic
costs

 

The
Bank will determine economic costs by calculating a reasonable
estimate of the costs and losses
incurred by the Bank (including,
without limitation, loss of profits, fees, charges and premiums) in connection
with an economic event including
by reason of:

 

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

 

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

 

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

 

21

 

5                                         Representations and
warranties

 

5.1                               General Representations and
Warranties

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(j)                                     it is not insolvent;

 

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

 

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

 

(m)                               it has obtained and maintained in full force
and effect all material authorisations,

consents, filings, registrations and permits applicable to it or its business;

 

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

 

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

 

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

 

22

 

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

 

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

 

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

 

5.2                               Additional representations
and warranties from a trustee

 

Where
a Borrower enters into a transaction document as the trustee of a trust, it makes the following
representations and gives the following warranties to the Bank:

 

(a)                               it enters into each transaction document in its personal
capacity and as trustee of the trust and
for the benefit of the beneficiaries of the trust;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

5.3                               Representations and
warranties are repeated

 

The
representations made and warranties given under this clause or otherwise under
this Agreement, unless otherwise stated, are deemed to be repeated with
reference to the facts and circumstances then existing when any financial accommodation is requested, and
when it is provided, on the last day of each interest
period and when interest is capitalised or otherwise due and
payable.

 

6                                         Undertakings and covenants

 

6.1                               Negative Pledge

 

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

 

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

 

(b)                                 cease conducting its business, significantly
change the general character of any business it conducts nor engage in any
other business other than that in which it is presently operating;

 

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

 

(d)                               dispose of any of its subsidiaries;

 

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

 

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

 

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

 

23

 

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

 

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

 

(i)                                     under the transaction
documents; or

 

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

 

6.2                               General undertakings

 

Each
Borrower undertakes to the Bank that it will:

 

(a)                                  conduct its business and financial affairs in
a proper, orderly and efficient manner and keep proper financial, accounting
and other records of the same;

 

(b)                                 promptly give the Bank any information, documents or consents that the Bank reasonably requires, in the form specified,
in connection with it, the facilities or
the transaction documents to
which it is expressed to be a party;

 

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

 

(d)                                 take out and keep in full force and effect
insurance over all of its physical assets and premises for such amounts and
against such risks as a reasonably prudent person in its position would take
out;

 

(e)                                  promptly comply with any request by the Bank to take out such further insurance
cover as the Bank may reasonably
require;

 

(f)                                    ensure that its capital is not reduced or
made capable of being called up only in certain circumstances;

 

(g)                                 promptly notify the Bank if the Borrower changes its address; and

 

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

 

6.3                               Additional undertakings from
a trustee

 

(a)                                  Where a Borrower
enters into a transaction
document as the trustee of a trust,
that Borrower undertakes:

 

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

 

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

 

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

 

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

 

(b)                                 Where a Borrower
enters into a transaction
document as the trustee of a trust,
that Borrower undertakes
that, except with the Bank’s prior
written consent, none of the following will occur:

 

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

 

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

 

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

 

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

 

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

 

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

 

24

 

6.4                               Change of Shareholding

 

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

 

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

 

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

 

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

 

6.5                               Partnerships

 

If
a Borrower is a partnership:

 

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

 

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

 

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

 

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

 

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

 

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

 

(d)                                 it agrees to procure the execution of any
documents the Bank reasonably
requires to give full effect to paragraph (c) above.

 

6.6                               Class Order

 

(a)                                  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 the ASIC in order to satisfy ASIC class order eligibility
requirements for relief from certain Corporations
Act financial reporting obligations.

 

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

 

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

 

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

 

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

 

6.7                               Changes to Accounting
Standards

 

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

 

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

 

25

 

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

 

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

 

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

 

6.8                               Appointment of Consultants

 

(a)                                  If there is an event of default or a potential
event of default, the Bank may,
and at the Bank’s request a Borrower must, engage, such accountancy,
financial management and other consultants as the Bank may nominate to investigate the business affairs
of the Borrowers and the security providers and whether the Borrowers and the security providers have complied with the transaction documents, and to make
recommendations relating to the manner in which the Borrowers and security
pro viders carry on their business. Any such engagement (whether by
the Bank or a Borrower) will be at the Borrowers’ cost, and the Bank may debit those costs to any
account of the Borrower it
decides.

 

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

 

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

 

7                                         Default

 

7.1                               General Events of Default

 

A
Borrower is in default if, in
relation to a transaction document, or
any other agreement any Borrower or
security provider has with the Bank (each an “arrangement”):

 

(a)                                  any Borrower
or security provider do
not pay on time any amount due;

 

(b)                                 any actual or contingent indebtedness becomes
due and payable, or becomes capable of being declared due and payable, before
its stated maturity or expiry;

 

(c)                                any Borrower
or security provider fails
to comply with any provision of that agreement and, where that failure is
remediable, it is not remedied to the Bank’s
satisfaction within any period required by the Bank;

 

(d)                                 an event occurs which would allow the Bank to terminate that arrangement, or a transaction under it;

 

(e)                                any Borrower
or security provider breaches
any law or obligation by entering transactions or performing obligations under
that arrangement;

 

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

 

(g)                               a change in the financial circumstances of
any Borrower or security provider occurs which, in the Bank’s opinion, may have a material
adverse effect on that person’s ability to meet its obligations to the Bank;

 

(h)                                 the Bank reasonably
believes any Borrower or security provider has acted fraudulently.

 

A
Borrower is also in default if:

 

26

 

any actual or contingent
indebtedness in respect of financial
accommodation with any person other than the Bank in excess of the threshold debt amount, becomes due and
payable, or becomes capable of being declared due and payable, before its
stated maturity or expiry;

 

execution or distress or any
other process is levied or attempted or imposed against or over any of the
undertaking, property or assets of any Borrower
or security provider, or
an order for payment is made, or a judgment is entered or signed, against any Borrower or any security provider, for at least the threshold litigation amount or its
equivalent and it is not satisfied or stayed within 5 banking days (unless the order or judgment
is the subject of an appeal by the Borrower within
such period and the Bank is
satisfied that there is reasonable likelihood of success);

 

it or another person gives
the Bank information which the Bank reasonably believes to be incorrect
or misleading (including by omission, and including through the representations
and warranties under clause 5) in connection with a transaction document or any other agreement any Borrower or security provider has with the Bank;

 

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

 

any Borrower or security provider is insolvent;

 

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

 

any Borrower or security provider takes any action to reduce or attempt to
reduce its capital other than by redemption of redeemable preference shares, or
pass a resolution referred to in section 254N of the Corporations Act, in
either case without the prior written consent of the Bank;

 

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

 

any insurance which the Bank has taken out in relation to a facility, or any insurance which any Borrower or security provider is required to have under the transaction documents, is cancelled,
materially altered, or becomes void or unenforceable in a material way;

 

any other event occurs that
this Agreement states is an event of default (however described);

 

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

 

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

 

(ii)                                  the trustee’s right to be indemnified out of
the trust fund is restricted in
any way; or any Borrower or security provider is a partnership and any
of the events in paragraphs (a) to (s) occurs in relation to one or more
of the partners, in which case,
the event is deemed to have occurred in relation to that Borrower or security provider (as the case may be).

 

7.2                               Additional Events of Default

 

It
is an event of default if, in
relation to any facility to which
the Property Conditions apply, during the property
development period:

 

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

 

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

 

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

 

there
are unfunded cost overruns  in respect to a project;

 

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

 

27

 

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

 

7.3                               Consequences of default

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(c)                                  If the Bank
terminates a facility following
the occurrence of an event of default, and
at that time there are any treasury related transactions in existence between
the Bank and the Borrower (such as financial accommodation, foreign exchange,
money market and derivative transactions or general banking facilities) (“open positions”) then:

 

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

 

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

 

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

 

7.4                               Default Interest

 

(a)                                  The Borrower
must pay default interest charges on any part of the balance owing which is overdue (including
amounts in excess of the facility limit). Interest
charges payable under this paragraph are calculated daily by applying the daily default interest rate to that
overdue amount.

 

(b)                                 Default interest charges are:

 

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

 

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

 

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

 

28

 

7.5                               Fees

 

If
the Borrower does not pay on time
any amount due under this Agreement, or
if it exceeds a facility limit, a
fee may apply as detailed in the relevant Fees
Guide.

 

7.6                               Additional review rights

 

If
an event of default has occurred,
irrespective of whether or not the Bank has
exercised, or waived, any other rights that arise upon the occurrence of that event of default, the Bank may review the pricing
applicable to each of the facilities held
by the Borrower and shall have
the right, on written notice, to vary that pricing as set out in clause 8.

 

7.7                               Obligations not affected

 

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

 

8                                         Review 8.1 Scope and
frequency

 

The
Bank may review compliance
with the transaction documents, each
Borrower’s financial position and
that of each security pro vider:

 

(a)                                  periodically (at least annually); and

 

(b)                               at any time if the Bank reasonably believes that there is an event of default or potential event of default.

 

A
review fee may be payable.

 

8.2                               Assistance

 

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

 

9                                         Change of Circumstances

 

9.1                               Illegality

 

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

 

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

 

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

 

then:

 

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

 

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

 

9.2                               Increased Costs

 

(a)                                  Clause 9.2(b) applies if the Bank determines that in its opinion any
order of any court or change in relevant
regulation will:

 

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

 

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

 

29

 

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

 

and as a result there is:

 

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

 

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

 

by
an amount which the Bank considers
to be material.

 

(b)                                 If this clause applies:

 

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

 

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

 

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

 

10                                  Liability for regulatory
events

 

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

 

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

 

(i)                                     the Bank is
not liable for any loss incurred by the Borrower
or any other person if an event described in clause 10(a) occurs,
irrespective of the nature or cause of that loss, and the Bank has no obligation to contest any regulatory event or to mitigate its impact
on a Borrower or the Bank. Each Borrower releases the Bank
from all liability accordingly; and

 

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

 

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

 

11                                  Confidentiality

 

(a)                                  Each Borrower
and the Bank agrees,
subject to clause 11(b), to keep the terms of the transaction documents, and any information which either may provide
to the other under or in relation to the transaction
documents, confidential.

 

(b)                                 Clause 11(a) does not prevent
disclosure:

 

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

 

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

 

(iii)                               documents; as described in clause 10(c);

 

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

 

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

 

30

 

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

 

(vii)                           pursuant to clause 18.12;

 

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

 

(ix)                                to any guarantor or proposed guarantor; or

 

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

 

12                                  Accounting for transactions

 

(a)                               Each Borrower
irrevocably authorises the Bank to
open such accounts as the Bank requires in connection with a facility.

 

(b)                                 If a Borrower
authorises the Bank to
debit any amount to an account, the Bank can
debit that amount to that account even if it causes the account to become
overdrawn. Alternatively, if there are insufficient cleared funds in that
account, the Borrower authorises
the Bank to debit that amount to
any account of the Borrower the Bank decides, including an account the Bank opens in the Borrower’s name.

 

(c)                                  If a Borrower
authorises the Bank to
debit an amount to one of two or more accounts, the Bank may choose which of those accounts to debit at its
discretion.

 

(d)                                 If this Agreement
does not state to which account an amount may be debited or
credited, the Bank may debit
or credit that amount to any account of the Borrower
the Bank decides,
including an account the Bank opens
in the Borrower’s name..

 

(e)                                  Where the Bank
debits an account in the name of a Borrower,
opened by:

 

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

 

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

 

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

 

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

 

(g)                                 The Bank may assign
any date it considers appropriate to a debit or credit to an account. In the
case of a debit, the date must not be earlier than the date on which the
transaction occurs. In the case of a credit, the date must be as soon as
practicable after the transaction occurs: this is not necessarily the same day
that the transaction occurs.

 

(h)                               The Bank may subsequently
adjust debits and credits to an account or any balance
owing so as to accurately reflect the legal obligations of the Bank and the account holder (for example,
because of an error or because a cheque is dishonoured). If the Bank does this, it may make
consequential changes (including to interest charges).

 

(i)                                     Unless otherwise provided, the Bank may apply any payment in
connection with this Agreement towards satisfying obligations under this
Agreement as the Bank sees fit.

 

(j)                                     Where the Bank
is authorised to debit an amount to an account under this Agreement,
it can do so without prior notice.

 

13                        Setting off money

 

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

 

31

 

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

 

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

 

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

 

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

 

(b)                                 The Bank’s
rights under paragraph (a) above exist and are exercisable
whether or not the Bank has
agreed to permit any set-off for the purpose of calculation of interest between
any two or more accounts, and even though:

 

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

 

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

 

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

 

14                                  Holding Over

 

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

 

15                                  Telephone recording

 

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

 

16                                  Code of Banking Practice

 

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

 

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

 

(b)                                 general descriptive information concerning
the Bank’s banking services
(including information about cheques, account opening procedures, bank cheques,
the Bank’s obligations regarding
the confidentiality of customer information, complaint handling procedures, the
advisability of the Borrower reading
the terms and conditions applying to each banking service the Bank provides to it, and the advisability
of the Borrower informing the Bank promptly when it is in financial
difficulty;

 

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

 

(d)                               a copy of the Code.

 

32

 

17                                  Notices, other communications
and service of documents

 

17.1                        Service

 

(a)                               A notice, certificate or other communication
given in connection with this Agreement (“notice”)
must be in writing, or such other form permitted by this
Agreement. Written communications from a Borrower
must be signed by a director or another person approved by the Bank.

 

(b)                                 Notices may be:

 

(i)                                     given personally (if they are for a Borrower, to that Borrower, one of its partners or one of its directors; if they
are for the Bank, to one of the Bank’s employees at the office where this
Agreement was arranged or any other office the Bank
advises);

 

(ii)                                  left at the address last notified;

 

(iii)                               sent by prepaid post to the address last
notified;

 

(iv)                              sent by facsimile to the fax number last
notified or by another form of electronic communication to address last
notified;

 

(v)                                 where expressly allowed by this Agreement, by
the Bank publishing the notice on the internet or in the press;

 

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

 

(c)                                  Notices take effect from the time they are received
unless a later time specified in them.

 

(d)                                 If a notice
is sent by post, it is taken to be received three days after the
date of posting.

 

(e)                                  If a notice
is sent by fax machine that produces a transmission report, it is
taken to be received at the time shown in a transmission report that indicates
that the whole fax was sent.

 

(f)                                    If a notice
is sent by some other form of electronic communication using a
system that generates a delivery receipt, it is taken to be received at the
time shown in a delivery receipt that indicates that the whole of the message
was sent.

 

(g)                                 If a notice
is given by publishing it, it is taken to be received at the time
the notice is first published.

 

17.2                        NAB’s right to rely on
notices

 

Each
Borrower agrees that the Bank may rely on any notice from a Borrower, or that the Bank
believes in good faith is from that Borrower.
Each Borro wer jointly
and severally indemnifies the Bank against
costs the Bank incurs as a result of the Bank acting in accordance with this clause.

 

18                                  General 18.1 Statements of
Account

 

The
Bank will generally give the Borrower statements for any overdraft facility, NAB Business Plus facility or Foreign Currency Overdraft
Facility at least every three months, and for term
loan facilities at least every six months. If the Bank is not required by law or under the
Code of Banking Practice to give a statement, it may choose not to.

 

18.2                        The Bank’s certificates

 

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

 

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

 

33

 

18.3                        How the Bank may exercise its rights

 

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

 

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

 

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

 

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

 

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

 

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

 

18.4                        Preservation of the Borrowers’ liability

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

18.5                        Consents and Conditions

 

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

 

18.6                        Variation

 

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

 

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

 

34

 

18.7                        GST

 

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

 

18.8                        Valuations are for the Bank’s benefit

 

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

 

18.9                        Indemnities

 

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

 

18.10                 Inconsistent and applicable
law

 

(a)                                  To the extent permitted by law, this Agreement prevails to the extent it is
inconsistent with any law and all relief or protection conferred on you by any
law is negatived and excluded.

 

(b)                                 This Agreement
is governed by the laws of the state or territory where the
relationship management team is located, as set out in the Relationship
Management section preceding the Letter of Offer. Each Borrower and the Bank submit to the non-exclusive
jurisdiction of the courts of that place.

 

(c)                                  The Bank may serve
any document on a Borrower in a
court action by delivering it to, or leaving it at, the Borrower’s last known address or such
other address as the Borrower and
the Bank agree at any time. This
clause does not prevent any other method of service.

 

18.11                 Severability

 

(a)                                  If a provision of this Agreement is void or voidable or
unenforceable by the Bank, but
would not be void or voidable or unenforceable if it were read down, it shall
be read down accordingly.

 

(b)                                 If, despite paragraph (a), a provision of
this Agreement is still void or
voidable or unenforceable by NAB:

 

(i)                                     if the provision would not be void or
voidable or unenforceable if a word or words were omitted there from, that word
or those words (as the case may be) are severed; and

 

(ii)                                in any other case, the whole provision is
severed, and the remainder of this Agreement
has full force and effect.

 

18.12                 Assignment

 

(a)                               The Bank may assign
or otherwise deal with its rights or transfer by novation any of its rights and
obligations under any transaction document to
any person or combination of persons in any way it considers appropriate. If
the Bank does this, no Borrower may claim against any
assignee (or any other person who has an interest in a facility) any right of set-off or other
rights any Borrower may have
against the Bank.

 

(b)                               Each Borrower
agrees that the Bank may disclose
any information or documents the Bank considers
desirable to help it exercise its rights under paragraph (a), including by
disclosing information or documents at any time to a person to whom the Bank assigns or proposes to assign the Bank’s rights under the transaction documents.

 

35

 

(c)                                  Each Borrower
agrees, on request, to sign any documents or give any consents that
NAB considers desirable to help it exercise its rights under paragraph (a).

 

(d)                               The Bank may grant
by way of sub participation (being a right to share in the financial effects of
this Agreement, without any
rights against the Borrower) all
or part of the Bank’s rights
and benefits under this Agreement to
any other person without having to obtain the consent of or to notify any Borrower or security provider.

 

(e)                                  The rights of a Borrower are specific to that Borrower and may not be assigned without the Bank’s prior written consent.

 

19                                  Definitions and
interpretation

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Agreement:

 

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

 

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

 

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

 

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

 

ASIC means the Australian Securities and
Investments Commission.

 

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

 

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

 

balance owing means:

 

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

 

(ii)                                  for a drawing,
at any time, the amount of the drawing
less any amounts of principal repaid in relation to the drawing; and

 

for
a facility with multiple loan accounts or drawings, the sum of the balance owing for each such loan account or drawing

 

36

 

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

 

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

 

bank guarantee means a bank guarantee provided, or to be provided, by the Bank to a beneficiary
on the date issued.

 

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, 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 defined in the Austraclear System Regulations
from time to time) or anything the Bank deems
to be a “bill” for the purposes of this Agreement.

 

bill facility component and bill
facility component limit have the same meaning as set out in the
Bill Facility Specific Conditions.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Corporations Act means the Corporations Act 2001 (Cth).

 

cost to complete means, in relation to a project, the
amount which will be required to

 

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

 

(i)                                     the cost to complete construction;

 

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

 

37

 

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

 

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

 

costs includes
costs, charges, fees, expenses and other outgoings including those in
connection with advisers or professional consultants (in the case of legal
advisers, including in-house legal advisers, on a full indemnity basis or
solicitor and own clients basis, whichever is higher) and reasonable expenses
incurred by the use of the staff and facilities of NAB and, in the case of securities, where applicable, in
preserving and maintaining the assets and property the subject of the security (such as by paying insurance,
rates and taxes for the property)
interest, penalties, and fines.

 

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

 

daily interest rate means, for any day:

 

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

 

(ii)                                  in relation to any other facility (or any part of such a facility), the interest rate applying to the facility (or that part of the facility) for that day divided by 365.

 

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

 

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

 

default has
the meaning given in clause 7.

 

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

 

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

 

(i)                                     land acquisition costs and associated
expenses;

 

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

 

(iii)                               finance costs and interest expenses;

 

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

 

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

 

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

 

(vii)                           design consultancy, professional and
supervisory fees;

 

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

 

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

 

development and construction program means a document comprised of all critical
activities under each stage of the project, their
duration and relationship necessary to

 

38

 

establish a critical path
and target completion date for the project including
an adequate provision of a delay allowance.

 

drawdown date means:

 

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

 

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

 

drawdown notice means a notice requesting a drawing,
or otherwise giving instructions in relation to the drawing, in a form acceptable to the Bank.

 

drawing means
each financial accommodation actually
provided under a facility. economic costs and economic event each
has the meaning described in clause 4. event of default means an event so described
in clause 7.1 or clause 7.2.

 

facility means
financial accommodation provided
to the Borrower 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 the Bank under the Agreement in relation to a facility
which has not been fully and finally paid.

 

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

 

facility term means:

 

(i)                                  for a Bill Facility, the period beginning on
the commencement date and ending
on the expiry date;

 

(ii)                              for any other facility, the period beginning on its commencement date (if any) or otherwise on
its first drawdown date and
ending at the expiry of the facility term or
the expiry date.

 

Where no expiry date or facility
term is set out in the Details for
a facility or is otherwise
agreed, that facility is provided
on an ongoing basis subject to the terms of this Agreement and does not, for
the purposes of this Agreement, have a ‘facility
term’.

 

Fees Guide means
the Bank’s “A Guide to Fees and
Charges (Business)” and/or the Bank’s “A
Guide to Fees and Charges (International Trade Services)” booklet, as amended
from time to time, as the case may be.

 

final repayment date means in relation to a facility the
earlier of:

 

(i)                                     the last day of the facility term (if any);

 

(ii)                                  the date the facility
limit is cancelled; or

 

(iii)                               the date the facility
is terminated or otherwise ends,

 

or if that day is not a banking day, the next banking day unless otherwise stated in the
Specific Conditions for that facility or
unless otherwise agreed.

 

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

 

first drawdown date means for a facility, the
first date the Borrower makes or
obtains (as relevant) a drawing and
means, for a loan account, the
first date the Borrower makes or
obtains (as relevant) a drawing which
is to be debited to that loan account.

 

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

 

39

 

floating rate in relation to a Bill Facility, has the same meaning as set out in the
Bill Facility Specific Conditions.

 

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

 

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

 

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

 

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

 

GST means
goods and services tax or any similar tax.

 

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

 

A person is insolvent if:

 

(i)                                  they are (or state they are) an insolvent
under administration or insolvent (each as defined in the Corporations Act);

 

(ii)                                  they have a controller
appointed, are in liquidation, in provisional liquidation, under
administration or wound up or have had a receiver
appointed to any part of their property;

 

a
compromise, arrangement, assignment, moratorium or composition is proposed
with, or becomes effective in relation to, their creditors or any class of
their creditors (in each case, other than to carry out a reconstruction or
amalgamation while solvent on terms approved by the Bank);

 

(iv)                              an application or order has been made (and,
in the case of an application, it is not stayed, withdrawn or dismissed within
30 days), resolution passed, proposal put forward, or any other action taken,
in each case in connection with them, which is preparatory to or could result
in any of the things referred to above;

 

(v)                                 they are taken (under section 459F of
the Corporations Act) to have
failed to comply with a statutory demand;

 

(vi)                              they are the subject of an event described in
section 459C(2)(b) or section 585 of the Corporations Act (or they make a statement
from which NAB reasonably deduce they are so subject);

 

(vii)                           they are a natural person, they commit an act
of bankruptcy within the meaning of the Bankruptcy Act 1966 (Cwlth);

 

(viii)                        they are otherwise unable to pay their debts
when they fall due; or

 

(ix)                                something having a substantially similar
effect to any of the things referred to above happens in connection with them
under any law.

 

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

 

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

 

interest period means, the frequency with which, or the period for which, interest is
calculated and charged as the context requires as stated in this Letter of
Offer or as otherwise agreed.

 

interest rate means the per annum rate of interest applicable to a facility or part of a facility as described in the Details or as otherwise agreed.

 

40

 

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

 

loan account means an account the Bank establishes
or has already established in relation to one or more Borrowers or the facility for recording transactions in
connection with a facility and
includes, in relation to an overdraft (including a Foreign Currency Overdraft
Facility), the associated transaction account.

 

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

 

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

 

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

 

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

 

overdraft means
a facility described as such in
the Details other than a Foreign
Currency Overdraft Facility.

 

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

 

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

 

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

 

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

 

proceeds of discount has the meaning given to that term in the Bill Facility Specific Conditions.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

receiver includes
receiver, or receiver and manager or controller as defined in the Corporations Act.

 

41

 

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

 

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

 

(i)                                     law or other form of regulation;

 

(ii)                              practices or policies of a regulatory authority;

 

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

 

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

 

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

 

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

 

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

 

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

 

repricing date means:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

subsidiary has
the same meaning as under the Corporations
Act.

 

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

 

threshold debt amount means the amount set out in Part 4 of this Letter of Offer, or if
no such amount is set out, $zero .

 

threshold litigation amount means the amount set out in Part 4 of
this Letter of Offer, or if no such amount is set out, $zero.

 

42

 

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

 

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

 

total amount owing means, at any time, the total of every facility amount owing and

 

any
other amounts which are then due for payment, or which will or may become
due for payment, in connection with the transaction
documents.

 

trust means a trust or a settlement.

 

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

 

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

 

trust fund means, in relation to a trust, the assets of the trust.

 

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

 

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

 

(d)                                 A reference:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

43

 

The
singular includes the plural and vice versa.

 

To
the extent permitted by law, any authority given by a Borrower under this Agreement is irrevocable unless otherwise
stated.

 

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

 

(i)                                     Headings are for convenience only and do not
affect the interpretation of this Agreement,
except that where a clause heading includes the name of a facility that clause applies only to a facility with that name.

 

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

 

20                                  Inconsistency

 

20.1                        Precedence of this clause

 

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

 

20.2                        Transaction documents

 

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

 

(a)                                  a security;
or

 

(b)                               any other transaction
document,

 

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

 

20.3                        Facilities

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(g)                               the relevant Fees
Guide.

 

44

 

Part 8              Bank Guarantee
Facility Specific Conditions

 

1                                         Issue of Bank Guarantees

 

(a)                                  The Borrower
may apply for the Bank to
issue a bank guarantee to a beneficiary if:

 

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

 

(ii)                                  the request is in the form required by
the Bank from time to time;

 

(iii)                          the date the bank
guarantee is to be issued is on or before any issue date;

 

(iv)                              all conditions precedent have been met.

 

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

 

2                                         Nominated account

 

The
Borrower authorises the Bank to debit the nominated account with any amounts payable
by the Borrower in relation to
the facility including interest,
fees and charges, taxes, enforcement expenses, economic costs and amounts
payable under an indemnity, unless otherwise stated or agreed.

 

3                                         Indemnity

 

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

 

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

 

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

 

(c)                                the Borrower
being in default.

 

4                                         Payment of Bank Guarantee
without demand

 

The
Bank may, at any time, end its
obligations under a bank guarantee by
paying to the beneficiary the guaranteed amount or such lesser amount as
is required to discharge the Bank’s obligations
under the bank guarantee, even
though no demand is made on the Bank by
that beneficiary.

 

5                                         Partial payments

 

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

 

(b)                                 The Borrower
agrees that this Agreement applies
to any replacement bank guarantee issued
under this clause.

 

6                                         No obligation to enquire

 

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

 

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

 

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

 

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

 

7                                         Return of Bank Guarantees

 

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

 

45

 

8                                         Amounts paid on default

 

If,
on a day when the Borrower makes
a payment required under the clause “Consequences of Default” (see the General
Conditions), there are any bank guarantees  in respect of which payment of the whole
or part of the guaranteed amount has
not yet been demanded by the beneficiary, and
a portion of that payment represents those undemanded guaranteed amounts, then the Bank will:

 

(a)                               deposit that portion in an interest bearing
deposit account on terms which the Bank considers
appropriate (which may include making the deposit with the Bank).

 

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

 

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

 

9                                         Debiting accounts

 

The
Borrower authorises the Bank to debit to the nominated account any amounts payable by
the Borrower in relation to the facility including interest, fees and
charges, taxes, enforcement expenses, economic costs and amounts payable under
an indemnity, unless otherwise stated or agreed.

 

46

 

Acceptance
of Letter of Offer

 

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

 

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

 

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

 

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

 

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

 

(i)                                     read this Letter of Offer; and

 

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

 

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

 

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

 

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

 

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

 

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

 

 

Yours sincerely,

 

 

	
  /s/ Graeme Johnson

  	
   

  
	
  Graeme
  Johnson

  
	
  Associate
  Director

  

 

47

 

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

 

Companies
Executing without using a Common Seal

 

Executed By

 

Channell Pty
Limited ABN 29 002 735 622

 

By being signed by:

 

 

	
  /s/ George Apostolidis

  	
   

  	
  /s/ Amarjeet Kulkarni

  	
   

  
	
  Signature of Director

  	
   

  	
  Signature of
  Director/Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  George Apostolidis

  	
   

  	
  Amarjeet Kulkarni

  	
   

  
	
  Name of Director

  	
   

  	
  Name of Director/Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  9/10/07

  	
   

  	
  9/10/07

  
	
  Date

  	
   

  	
  Date

  
					

 

Executed By

 

Bushmans
Group Pty Limited ABN 90 090 744 022

 

By being signed by:

 

 

	
  /s/ George Apostolidis

  	
   

  	
   

  	
  /s/ Amarjeet Kulkarni

  	
   

  
	
  Signature of Director

  	
   

  	
  Signature of
  Director/Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  George Apostolidis

  	
   

  	
   

  	
  Amarjeet Kulkarni

  	
   

  
	
  Name of Director

  	
   

  	
  Name of Director/Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  9/10/07

  	
   

  	
  9/10/07

  
	
  Date

  	
   

  	
  Date

  

 

48

 

Acknowledgment
by Guarantor/Security Provider

 

By executing this
acknowledgment, the guarantor or security
provider named below acknowledges, agrees and confirms that:

 

	
  1.

  	
  it has received and read a
  copy of this Letter of Offer; and

  
	
   

  	
   

  
	
  2.

  	
  Part 1 of this Letter
  of Offer has the effect of varying certain other
  facilities as set out in that section; and

  
	
   

  	
   

  
	
  3.

  	
  each security (including any guarantee and
  indemnity) provided by it to support any of the facilities provided by the Bank is, and remains, in full force and effect, and
  continues, and extends, to secure all present and future obligations of the Borrowers, the guarantors and the security providers to the Bank including obligations in respect of
  those facilities and the other facilities as amended by this
  Letter of Offer.

  

 

 

Incorporated
Guarantor/Security Provider Executing without using a Common Seal

 

Executed By

 

Channell
Pty Limited ABN 29 002 735 622

 

By being signed by:

 

 

	
  /s/ George Apostolidis

  	
   

  	
   

  	
  /s/ Amarjeet Kulkarni

  	
   

  
	
  Signature of Director

  	
   

  	
  Signature of
  Director/Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  George Apostolidis

  	
   

  	
   

  	
  Amarjeet Kulkarni

  	
   

  
	
  Name of Director

  	
   

  	
  Name of Director/Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  9/10/07

  	
   

  	
  9/10/07

  
	
  Date

  	
   

  	
  Date

  

 

49Unassociated Document

    Exhibit
      10.1

    

    Supply
      and Sales Contract

    (English
      Summary/Translation)

     

    Contract
      No. 07nyc

    Date:
      October 8, 2007

    Buyer:
      SINOCHEM (the “Buyer”)

    Supplier:
      China Agritech, Inc. (the Supplier)

    

    Pursuant
      to the laws and regulations of the People's Republic of China
      ("PRC"),
      and on the basis of agreement reached through comprehensive negotiations, the
      Buyer and the Supplier enter into and consent to be bound by this supply and
      sales contract (the “Contract”) regarding the purchase of Green Vitality series
      products. 

    

    
      	1.  	
              Product
                name, categories, specification, unit price, amount and
                etc.

            

    

    

    
      	
              Name

            	
              Specification

            	
              Quantity

              øCase÷

            	
              Volume

              øLiter÷

            	
              Unit
                price

              (RMB/liter)

            	
              Amount

              øRMB÷

            
	
              Green
                Vitality

              (broad-spectrum)

            	
              180ml*50
                bottle/case

            	
              20,000

            	
              180,000

            	
              58.33

            	
              10,499,400

            
	
              Green
                Vitality

              (broad-spectrum)

            	
              15ml*300

              sack/case

            	
              160,000

            	
              720,000

            	
              66.67

            	
              48,002,400

            
	
              Total
                amount) :

            	
              RMB
                58,501,800 (approximate US$
                7,697,605)

            

    

    

    
      	2.  	
              Quality
                demand

            

    

    The
      quality and packing of the products provided by the Supplier should be in
      accordance with national laws and regulation. The Supplier also should provide
      all certificates needed in delivery and sales. 

    

    The
      Supplier should ensure that the products under this contract meet the current
      standard illustrated on the package, which have been confirmed by the Buyer
      prior to purchase. Meanwhile, the Supplier should handle all complaint from
      farmers immediately and give compensation for losses caused by quality issues
      in
      accordance with relevant laws and regulation.

    

    
      	3.  	
              Receiver,
                destination and delivery
                mode

            

    

    Destination
      of delivery will be the warehouse indicated by the Buyer, informed to the
      Supplier by facsimile. The Buyer should inform the Supplier 7 days before the
      delivery if the delivery destination needs to be changed. The Supplier is
      responsible for the delivery preparation and all delivery fees including the
      delivery to all the Buyer’s customers and the delivery to the warehouse.

    

    The
      Supplier should inform the Buyer the details of delivery including the
      destination, quantity and the receiver by fax right after the shipment. If
      the
      Supplier delivers the goods to wrong place or wrong receiver, the Supplier
      will
      not only be responsible to re-deliver the goods to the designated place and
      the
      receiver but also be responsible for the extra expenses or loss it cause to
      the
      Buyer due to the incidents. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    The
      Supplier should deliver all the products within 10 days after receiving the
      delivery notice (limited to per order at the quantity no more than 100 metric
      tons; there will be 5 days extension of delivery for the additional order of
      100
      metric tons.). If the Supplier cannot delivery the products on time, the
      purchase price should be paid on the lower market price when the price was
      lower
      upon the delivery. In addition, the Supplier should compensate the Buyer 5%
      of
      agreed total daily amount of goods as the delay penalty from the first day
      of
      delay and all the losses it caused to the Buyer due to the delay.

    

    
      	4.  	
              Sales
                region

            

    

    

    The
      Supplier shall assist the Buyer to exploit and expand the China market
      development as well as provide supports to promotions such as ads, promotional
      meeting, and technical service.

    

    
      	5.  	
              Payment

            

    

    

    The
      Supplier should check the actual sales of the Buyer per month and issue the
      invoice. The Buyer should make settlement of all payments within 5 days after
      receiving the invoice.

    

    6.
      Others:

    

    1.
      The
      Supplier will provide 100 technical staffs to assist the Buyer to expand the
      network of the retailing clients, fulfilling the agreed sales supports
      commitment. 

    

    2.
      The
      Buyer will advise the Supplier regarding products storage and related
      instruction of the delivery. The Supplier will be responsible for the storage
      and delivery expenses. Meanwhile, the Buyer will provide the full supports
      and
      conveniences for the Supplier’s technical staffs managing the related tasks
      during the process. 

    

    3.
      The
      Supplier will support the sales as follows:

    A.
      County-level AD 

    B.
      Technology support and operation training

    C.
      Ancillary promotional materials

    D.
      POP in
      local store

    E.
      Distributor conference and farmer conference

    F.
      Testing point

    G.
      Other
      supports approved by both of parts

    

    4.
      Any
      penalty, compensation, transportation, and economic damages shall be paid within
      10 days after settlement established via wiring transfer. The delay will be
      recognized and settled as the late payment violation. Neither party shall
      default the delivery or payment to offset any of the above payment.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    9.
      Effectiveness & dispute Settlement:

    

    This
      Contract is applicable with laws of People’s Republic of China. Both parties
      shall settle the disputes via negotiations possibly. Either party can file
      the
      case under the jurisdiction of the local people's court where the Plaintiff
      is
      located when the consensus cannot be reached.

     

    Neither
      the Buyer nor the Supplier is eligible to change or terminate this agreement
      without mutual agreement in written within the valid period (one year) of the
      contract. 

     

    This
      Contract has two originals, which are identical to each other, with each of
      the
      parties holding one copy. 

    

    
      	
              Buyer:
                SINOCHEM

            	
              Supplier:
                China Agritech, Inc.

            
	
              (Corporate
                Seal)

            	
              (Corporate
                Seal)

            
	
              By:
                

            	
              By:
                /s/ Yu Chang

            
	 	
              Yu
                Chang, CEO & President

            
	
              Tel:
                010-8807-9550

            	
              Tel:
                86-10-5962-1278

            
	
              Fax:010-8807-9625

            	
              Fax:
                86-
                10 -5962-1225

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