Document:

Exhibit
10.3.1

 

	
   

  	
   

  	
  Major Client Group

  
	
  Tel: (02) 9237 9731

  	
   

  	
   

  
	
  Fax: (02) 9237 9773

  	
   

  	
  Level 23

  255 George Street

  SYDNEY NSW 2000

  

 

 

24th October 2003

 

The Directors

Channell Pty Limited

Q3, 391 Park Road

REGENTS PARK NSW 2143

 

Dear Sirs,

 

BANKING FACILITIES

 

Further to our recent discussions we are pleased to advise that
National Australia Bank Limited ABN 12 004 044 937 (the Bank)
has agreed to provide the facilities (each a Facility
and collectively the Facilities)
described below to Channell Pty Limited ABN 29 002 735 622 (the Company). The word Borrower used
in this letter means the.

 

The Facilities are offered subject to the terms and conditions of this
letter of offer and the normal conditions applicable to Bank facilities of this
sort and this letter of offer supersedes all prior understandings and
agreements between the Bank and the Borrower, whether written or oral, unless
specified in this letter of offer.

 

DEBTOR FINANCE FACILITY

 

	
  Company:

  	
   

  	
  Channell Pty Limited ABN 29 002 735 622

  
	
   

  	
   

  	
   

  
	
  Limit:

  	
   

  	
  $1,200,000 (One million two hundred
  thousand dollars).

  
	
   

  	
   

  	
   

  
	
  Purpose:

  	
   

  	
  To cover financial requirements of the day
  to day operations of the Borrower.

  
	
   

  	
   

  	
   

  
	
  Purchase Charge:

  	
   

  	
  $1,750 per month, charged monthly in
  advance.

  
	
   

  	
   

  	
  Refer “Agreement – Annexure “F” Attached.

  
	
   

  	
   

  	
   

  
	
  Interest:

  	
   

  	
  The Bank’s Base Lending Rate as published
  in the financial press from time to time or the rate which replaces it minus
  a margin of 2.00% per annum.  The Base
  Lending Rate is currently 9.10% per annum, variable.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Any balance in excess of the Limit will be
  subject to the Default Rate as defined in Clause 24 Annexure A to this letter
  of offer.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Interest is payable monthly in arrears on
  the last business day of each month, and will be debited to the Participating
  Company’s account.

  

 

1

 

	
  Expiry Date:

  	
   

  	
  31st October  2004. Being a Debtor Finance,
  the availability of this Facility and its repayment are at all times at the
  Bank’s discretion.

  

 

GUARANTEES BY BANK FACILITY

 

	
  Company:

  	
   

  	
  Channell Pty Limited ABN 29 002 735 622

  
	
   

  	
   

  	
   

  
	
  Limit:

  	
   

  	
  $408,224 (Four hundred and eight thousand and
  two hundred twenty four dollars).

  
	
   

  	
   

  	
   

  
	
  Purpose:

  	
   

  	
  To allow for the issue of performance
  guarantees in the form of the Bank’s usual Bank Guarantee.

  
	
   

  	
   

  	
   

  
	
  Fees:

  	
   

  	
  An establishment fee of 3.00% per annum is
  payable on establishment of each guarantee and thereafter calendar
  half-yearly in advance calculated by reference to the aggregate of all
  guarantees then on issue and adjusted each subsequent half-year until the
  Bank’s liability under all guarantees has terminated.

  
	
   

  	
   

  	
   

  
	
  Conditions:

  	
   

  	
  Subject to the Bank’s usual terms and
  conditions documented in Annexure D.
  Guarantees will not be issued unless the Bank receives an executed Guarantee
  by Bank Indemnity and Request Form. No guarantee will be issued after the
  Expiry Date.

  
	
   

  	
   

  	
   

  
	
  Expiry Date:

  	
   

  	
  31st October  2004.

  

 

2

 

REVOLVING LEASE LIMIT

 

	
  Company:

  	
   

  	
  Channell Pty Limited ABN 29 002 735 622

  
	
   

  	
   

  	
   

  
	
  Limit:

  	
   

  	
  $250,000 (Two hundred and fifty thousand
  dollars).

  
	
   

  	
   

  	
   

  
	
  Purpose:

  	
   

  	
  To purchase equipment under lease
  arrangements.

  
	
   

  	
   

  	
   

  
	
  Fee:

  	
   

  	
  As agreed for each individual lease.

  
	
   

  	
   

  	
   

  
	
  Conditions:

  	
   

  	
  Subject to the Bank’s usual terms and
  conditions documented separately, and including without limitation the Bank’s
  duly executed lease documentation.

  
	
   

  	
   

  	
   

  
	
  Expiry Date:

  	
   

  	
  31st October  2004

  

 

TREASURY FACILITIES

 

In addition to the above facilities, the
Bank’s Treasury Operations have been allocated the necessary authority to quote
for the Company’s risk management requirements. 
Such facilities will remain uncommitted.

 

SECURITY

 

The documentation required by the Bank as
security for the Facilities is set out in the
Schedule and must be provided in a form and substance
acceptable to the Bank.

 

REVIEW DATE

 

All Facilities are subject to annual review
by 31st October 2004.  If the
Bank decides to extend one or all of the Facilities, it may do so on whatever
terms it thinks fit, in its absolute discretion after consulting with the
Company and will notify the Company accordingly.

 

GENERAL

 

In addition to the normal banking terms and
conditions applicable to the Facilities, the special terms and conditions set
out in the following annexures will also apply:

 

3

 

	
   

  	
  Annexure

  	
   

  	
  Title

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  A

  	
   

  	
  General Terms and Conditions

  	
   

  
	
   

  	
  B

  	
   

  	
  Financial Undertakings

  	
   

  
	
   

  	
  C

  	
   

  	
  Conditions Precedent

  	
   

  
	
   

  	
  D

  	
   

  	
  Letters of Credit and Guarantees by Bank -
  Terms and Conditions

  	
   

  
	
   

  	
  E

  	
   

  	
  Schedule

  	
   

  
	
   

  	
  F

  	
   

  	
  Debtor Finance Facility Agreement

  	
   

  

 

VARIATION
OF INTEREST RATES, MARGINS AND FEES

 

Unless specifically stated, interest rates, margins
and fees may be varied by the Bank in the light of conditions, prevailing from
time to time.  Although we will endeavour
to notify the Company of any change to fees as it occurs, if the Bank does not
do so for any reason, this will not prevent the charging of the new or adjusted
fee.

 

ACCEPTANCE

 

This offer remains available
for acceptance until 31st December 2003 after which it will at the
Bank’s option lapse.

 

Acceptance of these Facilities
and all the terms and conditions of this letter of offer is required by way of
a certified extract of resolution of directors of the Company.

 

THE CODE
OF BANKING PRACTICE

 

The Bank has adopted the Code of Banking Practice and
relevant provisions of the Code apply to this Letter of Offer if the Borrower
is 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
the Facilities as described in this Letter of Offer if any;

 

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

 

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

 

(ii)                        account
opening procedures;

 

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

 

(iv)                    complaint
handling procedures;

 

(v)                       bank
cheques;

 

(vi)                    the
advisability of the Borrower informing the Bank promptly when the Borrower is
in financial difficulty;

 

(vii)                 the advisability
of the Borrower reading the terms and conditions applying to each banking
service the Bank provides to the Borrower;

 

4

 

(c)                        general
descriptive information above:

 

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

 

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

 

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

 

GENERAL

 

Please note that the terms,
conditions and pricing detailed in this letter have been provided for the sole
use of the Borrower on the understanding that none of the material will be
divulged to outside parties without the prior written consent of the Bank.

 

We trust that the Facilities meet Borrower’s current requirements.  If any matter needs clarification, please do
not hesitate to contact me or Sam Mandoukos.

 

	
  Yours faithfully

  
	
   

  
	
   

  
	
  Graeme Johnson

  
	
  Senior Relationship Manager

  

 

5

 

ANNEXURE A

 

GENERAL TERMS AND CONDITIONS

 

	
   

  	
  CONTENTS

  	
   

  
	
   

  	
   

  
	
   

  	
  1.

  	
  REPRESENTATIONS AND WARRANTIES

  	
   

  
	
   

  	
  2.

  	
  GENERAL UNDERTAKINGS

  	
   

  
	
   

  	
  3.

  	
  ACCOUNTS

  	
   

  
	
   

  	
  4.

  	
  EVENTS
  OF DEFAULT

  	
   

  
	
   

  	
  5.

  	
  POTENTIAL EVENTS OF DEFAULT

  	
   

  
	
   

  	
  6.

  	
  OPEN TREASURY TRANSACTIONS

  	
   

  
	
   

  	
  7.

  	
  NON-WAIVER

  	
   

  
	
   

  	
  8.

  	
  CLASS
  ORDER

  	
   

  
	
   

  	
  9.

  	
  COSTS AND EXPENSES

  	
   

  
	
   

  	
  10.

  	
  PAYMENTS AND TAXES

  	
   

  
	
   

  	
  11.

  	
  LATE
  PAYMENTS

  	
   

  
	
   

  	
  12.

  	
  ILLEGALITY

  	
   

  
	
   

  	
  13.

  	
  CHANGE IN CIRCUMSTANCE

  	
   

  
	
   

  	
  14.

  	
  TRUSTS

  	
   

  
	
   

  	
  15.

  	
  SET-OFF

  	
   

  
	
   

  	
  16.

  	
  CHANGE OF OWNERSHIP

  	
   

  
	
   

  	
  17.

  	
  APPOINTMENT OF CONSULTANTS

  	
   

  
	
   

  	
  18.

  	
  BREAK
  COSTS

  	
   

  
	
   

  	
  19.

  	
  HOLDING
  OVER

  	
   

  
	
   

  	
  20.

  	
  ASSIGNMENT

  	
   

  
	
   

  	
  21.

  	
  CONFIDENTIALITY

  	
   

  
	
   

  	
  22.

  	
  INCONSISTENCY

  	
   

  
	
   

  	
  23.

  	
  GOVERNING LAW AND JURISDICTION

  	
   

  
	
   

  	
  24.

  	
  DEFINITIONS

  	
   

  

 

6

 

1.                             REPRESENTATIONS
AND WARRANTIES

 

The Borrower represents and warrants to the
Bank that as at the date of this letter of offer and at all times thereafter:

 

(a)                        (incorporation)  It is
duly incorporated and validly existing under the laws of its place of
incorporation;

 

(b)                       (power)  It has full
power, authority and legal right to carry on its business as presently
conducted;

 

(c)                        (information is accurate) 
All financial accounts, reports and factual information furnished to the
Bank at any time are true and accurate and not misleading in any material
respect, and no material change has taken place in respect to any of them since
the date they were presented to the Bank;

 

(d)                       (no default)   It is
not in material default of any law or any agreement, security or instrument
with the Bank or any other financial institution, and it is not in default in
respect of any material monetary obligation contracted by or imposed upon it;

 

(e)                        (no litigation)   No
litigation, arbitration or administrative proceedings are current or pending
or, to its knowledge, threatened against it;

 

(f)                          (solvency)   It is
solvent;

 

(g)                       (no potential event of default)  No Potential Event of Default has occurred
and is continuing;

 

(h)                       (no undisclosed trusts) 
Except as disclosed to and agreed to by the Bank in writing, it is not
trustee of any trust;

 

(i)                           (insurance)  It has
taken out and kept in full force and effect insurance over all of its physical
assets and its premises for such amounts and against such risks as a reasonably
prudent person in the Borrower’s position would take out including, without
limitation, terrorism insurance.

 

The Borrower also gives the above
representations and warranties in respect of every guarantor and Security
Provider.

 

These representations and warranties are
deemed to be repeated with reference to the facts and circumstances then
existing at each date of utilisation of any financial accommodation, rollover
of any bills of exchange or notes, at the beginning of each new interest period
and at the date of execution of each new document under which credit or
financial accommodation is granted by the Bank.

 

2.                             GENERAL
UNDERTAKINGS

 

The Borrower undertakes to the Bank that,
except with the prior written consent of the Bank:

 

(a)                        (notify defaults)  It
will promptly advise the Bank of any Event of Default or potential Event of
Default;

 

7

 

(b)                       (insurance)  It will
take out and keep in full force and effect the insurance policies referred to
in sub-paragraph 1(i) above, and further:

 

(i)                          provide
evidence to the Bank of the currency of all insurances on each annual review,
or upon request by the Bank, whichever is the earlier, and promptly comply with
any request to take out further insurance cover as the Bank may reasonably
require to supplement the existing insurance policies of the Borrower; and

 

(ii)                       not do or
omit to do, or suffer or permit to be done or not done, anything which may
materially prejudice any insurance policy; and

 

(iii)                    not vary, rescind,
terminate or cancel any insurance policy without the written consent of the
Bank;

 

(c)                        (comply with laws)  It
will comply with all applicable laws and pay all obligations that if unpaid
might result in a lien or claim against any of the Borrower’s assets;

 

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

 

(e)                        (other financial accommodation)  It will not raise any financial accommodation
from any other party, or give any security in relation to it;

 

(f)                          (disposal of assets) 
it will not dispose of any assets having an aggregate value greater than
$100,000 other than in its usual and ordinary course of business;

 

(g)                       (continue to stay in business)  It will not engage in any other business
other than that in which it is presently operating;

 

(h)                       (no merger or acquisition) 
It will not merge with or acquire another company or entity;

 

(i)                           (no disposal of subsidiaries) 
It will not dispose of any of its subsidiaries; and

 

(j)                           (not give security)  It
will not give any security over its assets.

 

3.                             ACCOUNTS

 

The Borrower will prepare its financial
accounts in accordance with generally accepted Accounting Standards

 

The Borrower will deliver to the Bank:

 

(a)                        (annual accounts) within four months after the close of each
financial year a copy of the annual report of the Borrower, and an audited
consolidated balance sheet and consolidated profit and loss account of the
Borrower for that financial year;

 

(b)                       (quarterly management accounts) within 30 days after the
close of each financial quarter, a copy of the unaudited quarterly balance
sheet and profit and loss account of the Borrower;

 

(c)                        (Budgets) by 30th November each year the
borrower is to provide a copy of the annual budget projected monthly for the
ensuing 12 months with assumptions attached; and

 

8

 

(d)                       (other information) such other financial information as the
Bank may reasonably require, within fourteen days after request.

 

4.                             EVENTS
OF DEFAULT

 

If an Event of Default occurs, the Borrower
will immediately notify the Bank.  The
notice will contain full details of the Event of Default, and such further
information as the Bank may require from the Borrower regarding the Event of
Default.

 

If an Event of Default occurs, the Bank may,
by written notice to the Borrower, terminate the Facilities and demand
repayment of the Money Owing.

 

Event of Default means:

 

(a)                        (payment default) the Borrower fails to pay to the Bank any
Money Owing from time to time due and payable to the Bank;

 

(b)                       (other defaults) the Borrower fails to perform and observe
any other terms or conditions of the Documents;

 

(c)                        (representations and warranties) a representation or warranty
given to the Bank in a Document or otherwise is incorrect or false in a
material respect when made or deemed to be repeated;

 

(d)                       (other financial accommodation) the Borrower fails to duly
perform or observe any of the terms and conditions of any other financial
accommodation (whether provided by the Bank or any other person);

 

(e)                        (orders and judgments) an order for payment is made or
judgment is entered or signed against the Borrower and is not satisfied within
7 days;

 

(f)                          (receivers) a receiver, manager, receiver and manager,
liquidator, provisional liquidator or administrator is appointed in respect of
the Borrower for the whole or any part of its undertaking, property or assets;

 

(g)                       (investigators) a person is appointed under legislation to
investigate or manage any part of the affairs of the Borrower;

 

(h)                       (winding up) a ground for winding up or bankruptcy of the
Borrower arises;

 

(i)                           (stop payment) the Borrower or any Security Provider stops
payment generally or ceases or threatens to cease to carry on its business or
the material part of its business;

 

(j)                           (meeting of creditors) the Borrower convenes a meeting of its
creditors or proposes or enters into any arrangement or composition for the
benefit of its creditors;

 

(k)                        (winding up resolution) a resolution is passed for the
winding up of the Borrower, other than for the purpose of a reconstruction or
amalgamation previously approved in writing by the Bank;

 

9

 

(l)                           (material adverse change) a change occurs in the financial
condition or in the whole or a major part of the operations of the Borrower,
which has had or could reasonably be expected to have a materially adverse
effect on the ability of the Borrower to perform its obligations to the Bank;

 

(m)                     (other security providers) any of the above events occurs in
relation to any person or Borrower who is a guarantor, or Security Provider in
connection with the Facilities;

 

(n)                       (loss of security) anything occurs which in the Bank’s
reasonable opinion terminates or reduces the enforceability of any part of the
Security Documents.

 

5.                             POTENTIAL
EVENT OF DEFAULT

 

If a Potential Event of Default occurs, the
Borrower will keep the Bank fully informed of all developments in resolving the
matter.

 

If a Potential Event of Default occurs, the
Bank retains the right to review the availability of the Facilities and to
notify the Borrower of the outcome of the review.

 

6.                             OPEN
TREASURY TRANSACTIONS

 

If the Bank terminate the Facilities
following the occurrence of an Event of Default, and if at that time there are
any Treasury Transactions in existence between the Bank and the Borrower (Open Positions) then:

 

(a)                        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.  Any such close out
shall be at market rates prevailing at the time;

 

(b)                       any costs
incurred by the Bank in closing out Open Positions under paragraph
(a) will be paid by the Borrower to the Bank upon demand by the Bank.  Any gain derived from the closing out of the
Open Positions will be credited to the Borrower and set off against the Money
Owing;

 

(c)                        the Bank
will give to the Company reasonable particulars of the manner of close out of
the Open Positions, and the basis of calculation of any amounts payable by or
to the Borrower arising from that close out.

 

7.                             NON-WAIVER

 

The liabilities of the Borrower and the
rights of the Bank 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 of or in any certificate or other
instrument which purports to be made, issued or delivered under the Documents
or under any letter of credit, Bank guarantee or other instrument issued under
the Documents; 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

 

10

 

(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 letter of credit or guarantee; 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 this agreement by the Borrower or any
deficiency in the powers of the Borrower to enter into or observe its
obligations under this letter of offer.

 

8.                             CLASS
ORDER

 

If the Borrower applies for a Class Order, it
will notify the Bank immediately in writing. 
The Bank may review (and if considered appropriate, terminate) all or
any of the Facilities made available to the Borrower.

 

In this paragraph a “Class Order” means an
order made by the Australian Securities and Investments Commission pursuant to
Part 2M.6 of the Corporations Act.

 

9.                             COSTS
AND EXPENSES

 

The Borrower will pay to the Bank on demand
all Taxes, costs and expenses of any nature incurred by the Bank in relation to
the Documents and the Facilities, whether payable directly or indirectly.  These amounts are payable regardless of
whether the Facilities are ever drawn down.

 

The Borrower will pay to the Bank all legal
costs incurred in relation to the preparation, negotiation, execution,
registration, administration and enforcement of the Documents (including the
Bank’s solicitors’ fees on a solicitor and own client basis).

 

10.                      PAYMENTS
AND TAXES

 

All payments due by the Borrower to the Bank
must be made on the due date in immediately available funds.

 

If payment is due on a day on which the Bank
is not open for business in the relevant State, then payment must be made on
the next business day in that State.

 

Notwithstanding, and without limitation to,
any other provision of this letter of offer:

 

(a)                        if GST is imposed on any supply made by
the Bank under or in connection with this letter of offer or the facilities
offered in this letter of offer, where any amount or consideration (“consideration”)
payable or to be provided by or on behalf of the Borrower under or in
connection with this letter of offer or the facilities offered in this letter
of offer in relation to that supply is exclusive of GST (“GST-exclusive consideration”), the Bank may in addition to that GST-exclusive consideration,
recover from the Borrower, or from a person acting on its behalf, an additional
amount on account of GST, such additional

 

11

 

amount to be calculated by multiplying the
GST-exclusive consideration for the relevant supply by the prevailing GST rate.
This sub-paragraph (a) does not apply to a supply for which the consideration
is inclusive of GST; or

 

(b)                       where the
Bank makes a supply under or in connection with this letter of offer or the
facilities offered in this letter of offer which is not a taxable supply and
the Bank is not entitled to an input tax credit (whether in whole or in part)
in respect of the amount of any GST charged to or recovered from the Bank by
any person, or payable by the Bank, or in respect of any amount which is
recovered from the Bank by way of reimbursement of GST referable directly or
indirectly to that supply, the Bank shall be entitled to increase any amount or
consideration payable by the Borrower on account of such input tax and recover
from the Borrower the amount of any such increase.

 

Any
additional amount on account of GST, or on account of an amount for which the
Bank is not entitled to an input tax credit, recoverable from the Borrower
pursuant to sub-paragraph (a) or sub-paragraph (b) of this paragraph shall be
calculated without any deduction or set-off of any other amount and is payable
by the Borrower upon demand by the Bank whether such demand is by means of an
invoice or otherwise.

 

In
relation to any consideration payable or to be provided under or in connection
with this letter of offer or the facilities offered in this letter of offer
that is inclusive of GST (“the existing GST inclusive
consideration”) in the event of an increase in the GST rate, the
Bank may, subject to issuing a Tax Invoice or Adjustment Note, as appropriate,
recover from the Borrower an additional amount on account of the increase in
the GST rate. This additional amount is to be determined by converting the
existing GST inclusive consideration to a GST exclusive amount (“value”) and multiplying it by the new prevailing GST rate
and by subtracting from that result the previous GST component.

 

For the
purposes of the above paragraph:

 

(i)                           the existing GST inclusive consideration is to be converted to the
value by using the GST rate immediately prior to the new prevailing GST rate;
and

 

(ii)                        the
previous GST component is equal to the difference between the existing GST
inclusive consideration and the value.

 

11.                      LATE
PAYMENTS

 

If any amount is not paid to the Bank when
due, it will accrue interest at the Default Rate until it is paid.  That interest will be calculated on daily
balances and added to the debt monthly if not paid.  This paragraph does not relieve the Borrower
of its obligation to make payments when due.

 

All payments must be made without set-off or
counter-claim, and be free and clear of any withholding or deduction for taxes,
levies, imposts or government charges of any kind unless prohibited by
law.  If any deduction is required by
Law, the Borrower will make the deduction, pay the Tax, and pay to the Bank
further amount(s) sufficient to ensure that the Bank receives the same net
amount as it would have received if no deduction had been made.

 

12

 

12.                      ILLEGALITY

 

If any change in Law makes it unlawful or
impossible for the Bank to maintain or give effect to its obligations under the
Documents, then the Bank shall promptly notify the Borrower.

 

The Bank and the Borrower will negotiate in
good faith to restructure each affected Facility in a manner which resolves the
problem.  If no agreement is reached within
30 (thirty) days after the Bank notified the Borrower, then the Borrower will
repay to the Bank on demand so much of the Money Owing as relates to the
affected Facility.

 

13.                      CHANGE
IN CIRCUMSTANCE

 

This
paragraph applies if any order of any court or any change in Law, or in the
official interpretation or application of Law by any government authority:

 

(a)                        subjects
the Bank to any Taxes or duties with respect to the Facilities or any part of
them, or changes the basis of taxation of the Bank for payment under the
Documents (except for taxes on the overall net income of the Bank); or

 

(b)                       imposes,
modifies or deems applicable any reserve, capital, adequacy or liquidity
adequacy requirements against any asset of, deposit with or for the account of
or loans by the Bank; or

 

(c)                        imposes on
the Bank any other condition with respect to the Documents or the obligations
of the Bank under them, or if the Bank complies with any request from any
applicable fiscal or monetary authority (whether or not having the force of
law);

 

If the
result of the above is to increase the cost to the Bank of making available or
maintaining a Facility, or to reduce the amount receivable in respect of a
Facility, or reduce any other amount due to the Bank in connection with a
Facility by an amount which the Bank considers material, then:

 

I.                               the
Bank will use its best efforts to notify the Borrower of that event; and

 

II.                           the
Borrower and the Bank will negotiate in good faith to restructure each affected
Facility in a manner which resolves the problem; and

 

III.                       if no
agreement is reached within 30 days after the Bank notified the Borrower, the
Borrower will pay to the Bank on demand, as additional interest or charges, an
amount which will compensate the Bank for the additional costs, calculated from
the date of that notification.

 

14.                      TRUSTS

 

The Borrower
warrants to the Bank that it is not the trustee of any trust.

 

15.                      SET-OFF

 

If an Event of Default occurs, the Bank may
at any time without notice to the Borrower combine, consolidate or merge all or
any of the Borrower’s accounts, and may set off the whole or any part of the
Money Owing against any credit balance in those accounts.

 

13

 

For that purpose, the Bank may redeem and/or
appropriate all or any part of any account, deposit or other arrangement
between the Bank and the Borrower under which the Bank may be indebted to the
Borrower, even if the balance on any such account and the Money Owing are not
expressed in the same currencies.  The
Bank may make any currency conversion it considers necessary or desirable for
this purpose.

 

16.                      CHANGE
OF OWNERSHIP

 

If the Borrower is listed on a stock
exchange, the Borrower will promptly notify the Bank if a majority of the
shares in the Borrower becomes held by a person who did not hold a majority of
the shares as at the date of the letter of offer.  For this purpose, associates shall be treated
as the one person.

 

In the case of a company which is not listed
on a stock exchange, no transfer of shares (or issue of shares) in that company
may be made, without the Bank’s prior written consent.  That consent will not apply to a transfer or
issue to any company which is a related corporation of the Company.

 

The Bank may review (and if considered appropriate
terminate) all Facilities made available to the Borrower upon the occurrence of
a change in shareholdings or an issue of shares referred to in this paragraph.

 

17.                      APPOINTMENT
OF CONSULTANTS

 

The Bank may at any time appoint accounting,
financial management and other consultants to examine the affairs of the
Borrower and to make recommendations relating to the manner in which the
Borrower carries on its business.  The
Borrower will provide all assistance considered necessary or desirable by the
consultant to enable the consultant to conduct a proper examination of the
affairs of the Borrower.  This includes,
without limitation, making the Borrower’s financial records available to the
Consultant.  The Borrower shall pay the
fees of the Consultant.

 

18.                      BREAK
COSTS

 

The Borrower indemnifies the Bank against any
loss, cost, charge, loss of profit or expense incurred by the Bank in
connection with:

 

(a)                        the
Borrower making a payment under any Document on a date which is not expressly
contemplated in the Document, whether that payment is made as a result of
demand by the Bank following an Event of Default or any other reason; and

 

(b)                       any
financial accommodation provided by the Bank at a fixed rate being repaid in
whole or in part during the period to which that fixed rate applies.

 

19.                      HOLDING
OVER

 

If the Bank continues to make a Facility
available to the Borrower after its Expiry Date, and this letter of offer has
not been extended, amended or replaced, then the terms of this letter of offer
will continue to apply to the Facility unless the Bank otherwise notifies the
Borrower.  The previous sentence is not a
waiver of any Event of Default, or a waiver of any of the Bank’s rights under
this letter of offer.

 

14

 

20.                      ASSIGNMENT

 

The Bank may assign, novate, sub-participate
or sell down by whatever form, all its rights under the Documents with the
prior consent of the  Borrower,
which consent will not be unreasonably withheld or delayed.

 

The Borrower may not assign its rights or
novate its obligation under the Documents.

 

21.                      CONFIDENTIALITY

 

The Bank and the Borrower will keep
confidential the terms of the Facilities, the Documents, and any information
which either of them may provide to the other. 
This obligation does not prevent disclosure:

 

(a)                        if allowed
or required by Law, or required by any stock exchange;

 

(b)                       in
connection with legal proceedings relating to the Documents;

 

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

 

(d)                       to a
subsidiary of the Bank, in which case this paragraph 21
will apply to the subsidiary.

 

22.                      INCONSISTENCY

 

If any provision of this letter of offer is
inconsistent with any provision of the Documents, this letter of offer will
prevail.

 

23.                      GOVERNING
LAW AND JURISDICTION

 

This letter of offer is governed by the Laws
of New South Wales.  Each party submits
to the jurisdiction of the Laws of that state, including appeal courts.

 

24.                      DEFINITIONS

 

The following terms shall have the following
meanings in this letter of offer:

 

Accounting Standards
means the accounting standards prescribed under the Corporations Act, Chapter
2M to the Corporations Regulations and, where not inconsistent with those
accounting standards and schedule, the accounting standards adopted from time
to time by the major accounting bodies in Australia in respect of the
preparation of accounts and financial statements.

 

Authorised Officer means:

 

(a)                        in the
case of the Bank, a director, secretary or an officer whose title contains the
word manager or a person performing the
functions of any of them; and

 

(b)                       in the case
of the Borrower or a Security Provider, a person appointed by the Borrower or
that Security Provider to act as an Authorised Officer under the Documents to
which it is a party and whose specimen signature as Authorised Officer has been
provided to the Bank.

 

15

 

Base Lending Rate
means the rate described as such or any rate replacing that rate as published
from time to time by the Bank in the financial press and includes any rate
adopted by the Bank to replace it.

 

Bill has the same
meaning as in the Bills of Exchange Act 1909 (Cwlth) and a reference to the
drawing or acceptance or endorsement of, or other dealing with, a Bill is to be
interpreted in accordance with that act.

 

Business Day means a
day (not being a Saturday or a Sunday) on which the Bank is open for general
banking business in Sydney.

 

Default Rate means
4.50% per annum above the Bank’s Base Lending Rate from time to time.

 

Documents means this
letter of offer, the Security Documents and each security document (however
described) including every guarantee, mortgage, charge, debenture, set-off
agreement and other instrument, notice, form, agreement or encumbrance from
time to time held by the Bank from the Borrower and any Security Provider.

 

Dollars, $ or A$ means the lawful currency of Australia.

 

Law means any law or
regulation (including any policy, directive or guidelines, whether or not
having the force of law, but compliance with which is in accordance with the
practice of responsible bankers).

 

Money Owing means
all money owing to the Bank by the Borrower on any account, and includes
without limitation:

 

(a)                        all money
lent or advanced by the Bank to the Borrower, in any currency, and which have
not been repaid to the Bank;

 

(b)                       all money
owing by the Borrower to the Bank in respect of any bills accepted and/or
endorsed and/or discounted facility made available by the Bank, including the
face value of all bills of exchange which are from time to time outstanding
(although the maturity dates of such outstanding bills has not occurred);

 

(c)                        the
aggregate amount of the Bank’s liability under any documentary letter of
credit, standby letter of credit, performance bond or bank guarantee issued by
the Bank on behalf of or at the request of the Borrower, although no payment
under it shall have been made or demanded;

 

(d)                       the
aggregate amount of money unpaid to the Bank in respect of any Treasury
Transaction, in any currency;

 

(e)                        all interest,
fees, charges and other money which the Borrower is required to pay to Bank
under any Document, and which are from time to time owing or unpaid to the
Bank; and

 

(f)                          Break
Costs being any loss, cost, charge or expense incurred pursuant to paragraph 18
of this Annexure.

 

16

 

The term includes, without limitation, any
money and amounts owing by the Borrower to the Bank which:

 

(a)                        are
presently owing and payable, are owing but not presently payable or are owing
upon a contingency;

 

(b)                       may become
owing or remain unpaid or for which the Bank may become liable by reason wholly
or partly of past events or by reason of anything done or omitted by the Bank
or the Borrower;

 

(c)                        may
reasonably, foreseeably become owing or remain unpaid on any account or in any
manner whatsoever by reason of the relation of bank and customer or by
operation of law or equity or otherwise by reason of anything done by the Bank
with the consent or at the express or implied request of the Borrower.

 

Potential Event of Default
means an event omission or circumstance which with the giving of notice and/or
lapse of time and/or other condition would become an Event of Default.

 

Schedule means
the schedule to this letter of offer set out as Annexure E.

 

Security Documents
means the various documents described in the Schedule to
this letter of offer.

 

Security Provider
means each person who is party to any of the Security Documents  but excluding the Bank and the Company.

 

Taxes or Tax means any tax, levy, impost, deduction, charge,
withholding and duty imposed by any authority and includes without limitation
any withholding tax, financial institutions duty, stamp duty, transaction duty
and other government charges or any kind (including penalties) payable in
respect of the Documents, or any payments, or transactions under them.  It does not include income tax on the Bank’s
own income.

 

Treasury Transaction includes,
without limitation, any interest rate or currency forward rate agreement, swap,
financial option, futures contract, currency exchange agreement, reciprocal
purchase agreement, swaption, floor, collar, cap and any similar type of
interest rate or currency risk management or forward purchase or sale
agreement, however described.

 

17

 

ANNEXURE B

 

FINANCIAL UNDERTAKINGS

 

1.                             FINANCIAL
RATIOS

 

The Borrower undertakes to the Bank to comply
with the following financial undertakings unless the Bank otherwise consents in
writing:

 

(a)                        Interest
Cover Ratio: earnings before interest and tax (EBIT) must not at any time fall
below a figure of 2 times the total amount of interest payable by the Borrower.

 

2.                            The
ratios in paragraph 1 will be determined on an
annualised basis, based on the most recent accounts of the Borrower available
at that time.

 

3.                             TERMS
USED

 

In this Annexure, the terms Total
Liabilities, Contingent Liabilities, Total Tangible Assets, Total Current
Assets, Total Current Liabilities, Earnings before Interest, Tax and Finance
Lease Repayments, Gross Interest Expense plus Finance Lease Repayments and Net
Profit after Tax and any other accounting or financial terminology will be
interpreted in accordance with the Accounting Standards in respect of the
accounts of the Borrower on a consolidated basis.

 

4.                             DEPARTURES
FROM ACCOUNTING STANDARDS

 

If the Borrower wishes to depart from the
Accounting Standards in preparing its accounts, the parties will consult with
each other on the changes (if any) required to the undertakings in paragraph 1 to ensure that they remain consistent.

 

5.                             COMPLIANCE
CERTIFICATE

 

The Borrower will also deliver to the Bank on
a calendar quarterly basis a certificate as to compliance, with Financial
Undertakings, giving reasonable particulars of any calculations.  The certificate will be signed by a director
or chief financial officer of the Borrower.

 

18

 

ANNEXURE C

 

CONDITIONS PRECEDENT

 

The Bank is not obliged to make the Facilities available to the
Borrower unless the Bank has received the following in form and substance
acceptable to the Bank:

 

(a)                        (board minutes) a certified copy of:

 

(i)                           an
extract of the minutes of a meeting of the board of directors of the Borrower
which evidences the resolutions authorising the acceptance and observance of
obligations under (and acknowledgment that the Borrower will benefit from) this
letter of offer and the appointment of Authorised Officers of the Borrower; and

 

(ii)                        an extract
of the minutes of a meeting of the board of directors of each Security Provider
which evidences the resolution authorising the appointment of Authorised
Officers of the Security Provider;

 

(b)                       (other authorisations) a certified copy of each authorisation
necessary to enter into, observe obligations under and enforce the Documents;

 

(c)                        (power of attorney) the original of each power of attorney
under which any person signs and delivers a Document for the Borrower or any
Security Provider and, if required by the Bank, evidence of its stamping and
registration;

 

(d)                       (specimen signatures) a certified specimen signature of each
Authorised Officer of each Borrower and of every Security Provider;

 

(e)                        (signed Documents) each Document signed and delivered and, if
required by the Bank, evidence of its stamping and registration;

 

(f)                          (solvency declaration) a statutory declaration that each
Borrower is solvent, signed by a director of the Borrower;

 

(g)                       (securities) the Security Documents;

 

(h)                       (no Events of Default) evidence that no Event of Default or
event which with the giving of notice, lapse of time or fulfilment of any
conditions would be likely to become an Event of Default continues unremedied
or would result from the provision of the proposed drawing;

 

(i)                           (other documents) the Bank has received the other approvals,
opinions or documents which it has reasonably requested;

 

(j)                           (establishment fee) payment of the establishment fee, if any
and however described;

 

(k)                        (other requirements) such other conditions precedent as the
Bank may specify by notice to the Company;

 

(l)                           (legal opinion) if requested, a legal opinion from solicitors
for the Bank, the Borrower and each Security Provider; and

 

(m)                     (payment of costs) evidence that all legal and other costs
and expenses (including stamp duty and registration fees) incurred by the Bank
in connection with the Facilities have been paid.

 

19

 

ANNEXURE D

 

LETTERS OF
CREDIT AND GUARANTEES BY BANK - TERMS

 

References to Borrower in
this Annexure are references to the company or companies specified as Participating Companies in respect of any Letters Of Credit
or Guarantees By Bank Facility in the letter of offer.

 

1.                             REQUEST
FOR ISSUE

 

The Borrower may request the Bank to issue a
letter of credit or guarantee by delivering to the Bank a properly signed
request (in a form specified by the Bank from time to time) stating:

 

(a)                        the
amount;

 

(b)                       the
beneficiary;

 

(c)                        the
contract in respect of which the letter of credit or guarantee is requested;
and

 

(d)                       the expiry
date, if applicable.

 

Each letter of credit and guarantee will be
in the Bank’s usual form, unless otherwise agreed and the Borrower agrees to
execute such additional documentation or forms required by the Bank’s normal
practice.

 

2.                             AUTHORITY
TO MAKE PAYMENTS

 

The Borrower irrevocably authorises the Bank
to immediately pay any amount for which a demand or request is made at any time
under a letter of credit or guarantee without reference to or further authority
from the Borrower.  The Bank need not
investigate or enquire whether a claim or demand on the Bank has been properly
made.  The Bank may meet any claim or
demand on the Bank notwithstanding that the Borrower may dispute the validity
of the claim or demand.

 

3.                             BORROWER’S
UNDERTAKING TO REIMBURSE

 

The Borrower agrees to pay to the Bank on
demand an amount equal to each amount demanded from or paid by the Bank under
any letter of credit or guarantee together with any incidental costs or
expenses.

 

4.                             INDEMNITY
BY THE BORROWER

 

As a separate obligation, the Borrower indemnifies
the Bank against all actions, proceedings, claims and demands brought or made
against the Bank and against all losses, costs, charges, damages and expenses
which the Bank incurs or sustains or for which the Bank becomes liable,
directly or indirectly, because of the issue of any letter of credit or
guarantee.

 

5.                             PRESERVATION
OF BORROWER’S LIABILITY

 

The liabilities of the Borrower and the
rights of the Bank under this Annexure D are
not affected by anything which might otherwise have that effect at law or in
equity including,

 

20

 

without limitation, one or more of the
following (whether occurring with or without the consent of a person):

 

(a)                        any
inaccuracy, insufficiency or forgery or in any certificate or other instrument
which purports to be made, issued or delivered under this letter of offer or
under any letter of credit or guarantee; 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 letter of credit or guarantee; 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 this letter of offer by the Borrower or any
deficiency in the powers of the Borrower to enter into or observe its
obligations under this letter of offer.

 

6.                             LATE
PAYMENTS

 

If a drawing is made under a letter of credit
or guarantee and is not promptly reimbursed by the Borrower to the Bank, an
interest rate of 4.50% per annum over the Bank’s Base Rate shall apply to the
amount of the drawing.  That amount
together with interest shall be debited to any account in the name of the
Borrower.

 

7.                             INSURANCE
UNDERTAKINGS

 

The Borrower undertakes to:

 

(a)                        insure
goods relating to each letter of credit to the Bank’s satisfaction; and

 

(b)                       deliver to
the Bank a copy of any insurance policy or certificate relating to those goods
when received or at a time agreed to by the Bank.

 

8.                             UNIFORM
CUSTOMS AND PRACTICE

 

Each documentary letter of credit will be
subject to the terms of the Uniform Customs and Practice for Documentary
Letters of Credit (1993 Revision) International Chamber of Commerce Publication
No. 500, or any subsequent revision of it and otherwise must be in a form
satisfactory to the Bank.

 

21

 

ANNEXURE E

 

SCHEDULE

 

GROUP MEMBERS:

 

	
  Company Name

  	
   

  	
  ABN

  	
   

  	
  Registered office

  	
   

  
	
  Channell Pty Ltd

  	
   

  	
  29 002 735 622

  	
   

  	
  5/391 Park Rd Regents Park NSW 2143

  	
   

  

 

SECURITIES:

 

The following Security Documents must be held in a form and substance
satisfactory to the Bank prior to drawdown of the Facilities.

 

1.                             First
ranking registered charge given to the Bank by Channell Pty Ltd ABN 29 002 735
622 over all its assets and undertakings.

 

2.                             Debtor
Finance Agreement

 

3.                             Master
Lease Agreement between the Bank and Channell Pty Ltd ABN 29 002 735 622

 

22Exhibit 10.3.2

 

	
   

  	
   

  	
  Major Client Group

  
	
   

  	
   

  	
   

  
	
  Tel

  	
  :  (02) 9237 9731

  	
  Level 23

  
	
  Fax

  	
  :  (02) 9237 9773

  	
  255 George Street

  
	
   

  	
   

  	
  SYDNEY NSW 2000

  
	
   

  	
   

  	
   

  
	
  13th July 2004

  	
   

  

 

The Directors

Channell Bushman Pty Limited

ACN 109 821 614

Suite 5, 391 Park Road

Regents Park NSW 2143

 

 

Dear Sirs,

 

BANKING FACILITIES

 

Further to our recent discussions we are pleased to
advise that National Australia Bank Limited ABN 12 004 044 937 (the Bank) has agreed to provide the facilities (each a Facility and collectively the Facilities)
described below to Channell Bushman Pty Limited ACN 109 821 614 (the Company) and its subsidiaries and related companies
specified in the Annexure E  Schedule
to this letter (collectively the Group and each
a Group Member).  The word Borrower used
in this letter means the Company, the Group, each Group Member and the
Participating Companies, individually and collectively as the context permits
and unless otherwise specified.

 

The Facilities are offered subject to the terms and
conditions of this letter of offer and the normal conditions applicable to Bank
facilities of this sort and this letter of offer supersedes all prior
understandings and agreements between the Bank and the Borrower, whether
written or oral, unless specified in this letter of offer.

 

	
  NATIONAL DEBTOR
  FINANCE FACILITY

  	
   

  
	
   

  	
   

  
	
  Participating Companies:

  	
  Bushmans Group Pty Limited ACN 090 744 022

  
	
   

  	
   

  
	
  Limit:

  	
  $2,000,000 (Two million dollars).

  
	
   

  	
   

  
	
  Purpose:

  	
  To cover financial requirements of the day to day
  operations of the Borrower.

  
	
   

  	
   

  
	
  Facility Fee:

  	
  1.25% per annum, charged monthly. This fee is
  calculated on the Limit or peak debt, whichever is the greater.

  

 

1

 

	
  Interest:

  	
  The 30 day BBSY bid rate shown at approximately
  10.10 am (Sydney time) on page “BBSY on the
  Reuters Monitor System” on the day the facility is drawn and then monthly
  thereafter, plus a margin of 1.25%.

  
	
   

  	
   

  
	
   

  	
  The BBSY Rate is currently 5.47% per annum,
  variable.

  
	
   

  	
   

  
	
   

  	
  Interest is payable monthly in arrears on the last
  business day of each month, and will be debited to the Participating
  Company’s account.

  
	
   

  	
   

  
	
  Establishment Fee:

  	
  Nil

  
	
   

  	
   

  
	
  Expiry Date:

  	
  31st July 2005. The availability of this
  Facility and its repayment are at all times at the Bank’s discretion.

  
	
   

  	
   

  
	
  Conditions:

  	
  The terms contained in the Annexure
  F, Debtor Finance Facility Agreement (“Agreement”)- Terms attached
  to this letter of offer.

  
	
   

  	
   

  
	
   

  	
  Fundamentally, the Agreement sets out the procedure
  and conditions for the future sale to the Bank of debts arising out of your
  business. Under the Agreement, you may from time to time offer to sell the
  Bank debts by delivering an offer document called an Invoice Statement. It is
  then up to the Bank, in its discretion, whether or not to accept your offer.

  
	
   

  	
   

  
	
   

  	
  The Agreement sets our all the terms and conditions
  of the facility. The terms of this letter are in addition to the Agreement.

  
	
   

  	
   

  
	
  BILL
  ACCEPTANCE/DISCOUNT FACILITY – ACQUISITION FUNDING

  
	
   

  	
   

  
	
  Participating Companies:

  	
  Channell Bushman Pty Limited ACN 109 821 614

  
	
   

  	
   

  
	
  Limit:

  	
  $8,000,000 (Eight million dollars).

  
	
   

  	
   

  
	
  Purpose:

  	
  To assist with the acquisition of the Bushman’s
  Group of Companies.

  
	
   

  	
   

  
	
  Utilisation:

  	
  The Participating Companies may present Bills to the
  Bank for acceptance and discounting by the Bank at the Discount Rate. The
  Participating Companies may select the drawdown date and rollover periods for
  the Bills which may be for periods of between 30 and 180 days or any other
  period that the Bank in its discretion permits. Each Bill presented for
  acceptance/discount is to have a face value of $100,000 (one hundred thousand
  dollars) and a maturity date no later than the Expiry Date.

  

 

2

 

	
  Discount Rate:

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

  
	
   

  	
   

  
	
  Establishment Fee:

  	
  1.25% of the facility limit.

  
	
   

  	
   

  
	
  Activation Fee:

  	
  1.40% per annum, payable upon activation and
  calculated on the face value and term of Bills accepted/discounted by the
  Bank.

  
	
   

  	
   

  
	
  Line Fee:

  	
  0.50% per annum on the Limit, payable half yearly in
  advance from initial draw down date.

  
	
   

  	
   

  
	
  Roll Fee:

  	
  $150 per Bill role/negotiation.

  
	
   

  	
   

  
	
  Expiry Date:

  	
  31st July 2009

  
	
   

  	
   

  
	
  Fixed Rate Option:

  	
  (a)           The Company may request that the
  Discount Rate applicable to the whole or any part of this Facility be fixed
  for a period of up to five years with effect from a specified date being the
  rollover date or the date of initial drawdown and terminating on or before
  the Expiry Date.

   

  (b)           Subject to the availability of
  funds and the appropriateness of the period selected, the Bank will quote a
  fixed Discount Rate as at the rollover date or the date of drawdown, and a
  time by which the quote must be accepted. If the Company accepts that quote
  within that time, the quoted fixed Discount Rate will apply to Bills drawn by
  any Participating Company and accepted and discounted by the Bank during the
  selected period.

   

  (c)           Bills drawn, accepted and
  discounted under this fixed rate option will have a term of 90 days.

  
	
   

  	
   

  
	
  Repayments:

  	
  The facility is to reduce by $400,000 (Four hundred
  thousand dollars) each September, December, March and June until cleared in
  full.

  
	
   

  	
   

  
	
  Conditions:

  	
  The terms contained in the Annexure
  D, Bill Acceptance / Discount Facility - Terms attached to this
  letter of offer and (as applicable) in the Bank’s Fixed Rate Bill Facility
  Letter dated on or about the date of this letter of offer will also apply.

  

 

3

 

	
  BILL
  ACCEPTANCE/DISCOUNT FACILITY – EARN-OUT FUNDING

  
	
   

  	
   

  
	
  Participating Companies:

  	
  Channell Bushman Pty Limited ACN 109 821 614

  
	
   

  	
   

  
	
  Limit:

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

  
	
   

  	
   

  
	
  Purpose:

  	
  To fund the ‘Earn-Out’ associated with the
  acquisition of the Bushman’s group of companies.

  
	
   

  	
   

  
	
  Utilisation:

  	
  The Participating Companies may present Bills to the
  Bank for acceptance and discounting by the Bank at the Discount Rate. The
  Participating Companies may select the drawdown date and rollover periods for
  the Bills, which may be for periods of between 30 and 180 days or any other
  period that the Bank in its discretion permits. Each Bill presented for
  acceptance/discount is to have a face value of $100,000 (one hundred thousand
  dollars) and a maturity date no later than the Expiry Date.

  
	
   

  	
   

  
	
  Discount Rate:

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

  
	
   

  	
   

  
	
  Establishment Fee:

  	
  1.25% of the facility limit.

  
	
   

  	
   

  
	
  Activation Fee:

  	
  1.40% per annum, payable upon activation and
  calculated on the face value and term of Bills accepted/discounted by the
  Bank.

  
	
   

  	
   

  
	
  Line Fee:

  	
  0.50% per annum on the Limit, payable half yearly in
  advance from initial draw down date.

  
	
   

  	
   

  
	
  Expiry Date:

  	
  31st July 2009

  
	
   

  	
   

  
	
  Repayments:

  	
  Subject to the additional conditions detailed below
  and draw down of the facility, commencing the 30th June 2005 the
  facility is to reduce by $63,000 (Sixty three thousand dollars) each
  September, December, March and June until cleared in full. Should the second
  drawing be made the facility repayments are to increase to $146,000 (One
  hundred and forty six thousand dollars) each September, December, March and June
  until cleared in full.

  

 

4

 

	
  Conditions:

  	
  Initial drawn down in July 2005 will only be
  permitted if net sales for the financial year ending June 2005 achieve
  $45,650,000.

   

  Second drawing in July 2006 will only be permitted
  is net sales for the financial year ending June 2006 achieves $50,215,000.

   

  The terms contained in the Annexure
  D, Bill Acceptance / Discount Facility - Terms attached to this
  letter of offer will also apply.

  
	
   

  	
   

  
	
  BILL
  ACCEPTANCE/DISCOUNT FACILITY – CAPEX FUNDING

  
	
   

  	
   

  
	
  Participating Companies:

  	
  Channell Bushman Pty Limited ACN 109 821 614

  
	
   

  	
   

  
	
  Limit:

  	
  Year One
  :

  	
  $2,500,000 (Two million five hundred thousand
  dollars) until 30th June 2005 then, subject to ‘Special
  Conditions’ detailed below:

  
	
   

  	
   

  	
   

  
	
   

  	
  Year Two
  :

  	
  $4,500,000 (Four million five hundred thousand
  dollars) until 30th June 2006 then, subject to ‘Special
  Conditions’ detailed below:

  
	
   

  	
   

  	
   

  
	
   

  	
  Year Three

  	
  $6,000,000 (Six million dollars).

  
	
   

  	
   

  
	
  Purpose:

  	
  To fund capital expenditure for the Bushman’s group of
  companies.

  
	
   

  	
   

  
	
  Utilisation:

  	
  The Participating Companies may present Bills to the
  Bank for acceptance and discounting by the Bank at the Discount Rate. The
  Participating Companies may select the draw down date and roll over periods
  for the Bills which may be for periods of between 30 and 180 days or any
  other period that the Bank in its discretion permits. Each Bill presented for
  acceptance/discount is to have a face value of $100,000 (one hundred thousand
  dollars) and a maturity date no later than the Expiry Date.

  
	
   

  	
   

  
	
  Discount Rate:

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

  
	
   

  	
   

  
	
  Establishment Fee:

  	
  1.25% of the facility limit.

  

 

5

 

	
  Activation Fee:

  	
  1.40% per annum, payable upon activation and
  calculated on the face value and term of Bills accepted/discounted by the
  Bank.

  
	
   

  	
   

  
	
  Line Fee:

  	
  0.50% per annum on the Limit, payable half yearly in
  advance from initial draw down date.

  
	
   

  	
   

  
	
  Expiry Date:

  	
  31st July 2009

  
	
   

  	
   

  
	
  Special Conditions:

  	
  Eligibility to drawn down Facility Limit Year Two
  will only be permitted if 1) net sales for the financial year ending June
  2005 are greater than $45,000,000 (forty five million dollars) and EBIT
  (Earnings before interest and tax) is greater than $3,000,000 (three million
  dollars).

   

  Eligibility to drawn down Facility Limit Year Three
  will only be permitted if 1) net sales for the financial year ending June
  2005 are greater than $49,000,000 (forty nine million dollars) and EBIT
  (Earnings before interest and tax) is greater than $4,000,000 (four million
  dollars).

   

  The terms contained in the Annexure
  D, Bill Acceptance / Discount Facility - Terms attached to this
  letter of offer will also apply.

  

 

TREASURY FACILITIES

 

In addition to
the above facilities, the Bank’s Treasury Operations have been allocated the
necessary authority to quote for the Company’s risk management
requirements.  Such facilities will
remain uncommitted.

 

SECURITY

 

The
documentation required by the Bank as security for the Facilities is set out in
the Schedule and must be provided in a
form and substance acceptable to the Bank.

 

6

 

CONDITIONS SUBSEQUENT

 

In the period
up to and including the Financial Assistance Satisfaction Date, the Borrower
must not drawdown any funds or request any other advances under the Facilities
for a purpose connected or associated, directly or indirectly, with the
acquisition of the shares or issued capital of the Bushman’s Group of Companies
without obtaining the prior written consent of the Bank.

 

If for any
reason the requirements of sections 260A and 260B of the Corporations Act in
connection with the financial assistance to be provided for the acquisition of
the shares and issued capital of the Bushman’s Group of Companies have not been
satisfied by the Financial Assistance Satisfaction Date, an Event of Default
shall be deemed to have occurred and all the Money Owing under the Facilities
shall become immediately due and payable on demand by the Bank.

 

REVIEW DATE

 

All Facilities
are subject to annual review by 31st July 2005.  If the Bank decides to extend one or all of
the Facilities, it may do so on whatever terms it thinks fit, in its absolute
discretion after consulting with the Company and will notify the Company accordingly.

 

GENERAL

 

In addition to
the normal banking terms and conditions applicable to the Facilities, the
special terms and conditions set out in the following annexures will also
apply:

 

	
  Annexure

  	
   

  	
  Title

  
	
   

  	
   

  	
   

  
	
  A

  	
   

  	
  General Terms and Conditions

  
	
  B

  	
   

  	
  Financial Undertakings

  
	
  C

  	
   

  	
  Conditions Precedent

  
	
  D

  	
   

  	
  Bill Acceptance/Discount Facility - Terms and
  Conditions

  
	
  E

  	
   

  	
  Schedule

  
	
  F

  	
   

  	
  Debtor Finance Facility Agreement

  

 

VARIATION OF INTEREST
RATES, MARGINS AND FEES

 

Unless specifically
stated, interest rates, margins and fees may be varied by the Bank in the light
of conditions, prevailing from time to time. Although we will endeavour to
notify the Company of any change to fees as it occurs, if the Bank does not do
so for any reason, this will not prevent the charging of the new or adjusted
fee.

 

ACCEPTANCE

 

This offer
remains available for acceptance until 30th July 2004 after which it
will at the Bank’s option lapse.

 

Acceptance of
these Facilities and all the terms and conditions of this letter of offer is
required by way of a certified extract of resolution of directors of the
Company. Upon receipt of this resolution the Bank will be entitled to drawn on
your account for the Establishment Fees detailed within this document.

 

7

 

THE CODE OF BANKING
PRACTICE

 

The Bank has
adopted the Code of Banking Practice and relevant provisions of the Code apply
to this Letter of Offer if the Borrower is 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 the Facilities as described in this Letter of Offer if
any;

 

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

 

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

 

(ii)                        account opening procedures;

 

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

 

(iv)                    complaint handling procedures;

 

(v)                       bank cheques;

 

(vi)                    the advisability of the Borrower informing the Bank promptly when
the Borrower is in financial difficulty;

 

(vii)                 the advisability of the Borrower reading the terms and conditions
applying to each banking service the Bank provides to the Borrower;

 

(c)                        general descriptive information above:

 

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

 

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

 

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

 

GENERAL

 

Please note
that the terms, conditions and pricing detailed in this letter have been
provided for the sole use of the Borrower on the understanding that none of the
material will be divulged to outside parties without the prior written consent
of the Bank.

 

8

 

We trust that
the Facilities meet Borrower’s current requirements.  If any matter needs clarification, please do
not hesitate to contact me.

 

	
  Yours faithfully

  
	
   

  
	
   

  
	
  Graeme Johnson

  
	
  Senior Relationship Manager

  

 

9

 

ANNEXURE A

 

GENERAL TERMS AND CONDITIONS

 

 

	
  CONTENTS

  
	
   

  	
   

  
	
  1.

  	
  REPRESENTATIONS AND
  WARRANTIES

  
	
  2.

  	
  GENERAL UNDERTAKINGS

  
	
  3.

  	
  ACCOUNTS

  
	
  4.

  	
  EVENTS OF DEFAULT

  
	
  5.

  	
  POTENTIAL EVENTS OF
  DEFAULT

  
	
  6.

  	
  OPEN TREASURY
  TRANSACTIONS

  
	
  7.

  	
  NON-WAIVER

  
	
  8.

  	
  CLASS ORDER

  
	
  9.

  	
  COSTS AND EXPENSES

  
	
  10.

  	
  PAYMENTS AND TAXES

  
	
  11.

  	
  LATE PAYMENTS

  
	
  12.

  	
  ILLEGALITY

  
	
  13.

  	
  CHANGE IN CIRCUMSTANCE

  
	
  14.

  	
  TRUSTS

  
	
  15.

  	
  SET-OFF

  
	
  16.

  	
  CHANGE OF OWNERSHIP

  
	
  17.

  	
  APPOINTMENT OF
  CONSULTANTS

  
	
  18.

  	
  BREAK COSTS

  
	
  19.

  	
  HOLDING OVER

  
	
  20.

  	
  ASSIGNMENT

  
	
  21.

  	
  CONFIDENTIALITY

  
	
  22.

  	
  INCONSISTENCY

  
	
  23.

  	
  GOVERNING LAW AND
  JURISDICTION

  
	
  24.

  	
  DEFINITIONS

  

 

10

 

1.         REPRESENTATIONS AND WARRANTIES

 

The Borrower
represents and warrants to the Bank that as at the date of this letter of offer
and at all times thereafter:

 

(a)                        (incorporation)  It is duly incorporated and validly existing
under the laws of its place of incorporation;

 

(b)                       (power)  It has full power, authority and legal right to
carry on its business as presently conducted;

 

(c)                        (information is accurate)  All financial accounts, reports and factual
information furnished to the Bank at any time are true and accurate and not
misleading in any material respect, and no material change has taken place in
respect to any of them since the date they were presented to the Bank;

 

(d)                       (no default)   It is not in material default of any law or
any agreement, security or instrument with the Bank or any other financial
institution, and it is not in default in respect of any material monetary
obligation contracted by or imposed upon it;

 

(e)                        (no litigation)   No litigation, arbitration or administrative
proceedings are current or pending or, to its knowledge, threatened against it;

 

(f)                          (solvency)   It is solvent;

 

(g)                       (no potential event of default)  No Potential Event of Default has occurred
and is continuing;

 

(h)                       (no undisclosed trusts)  Except as disclosed to and agreed to by the
Bank in writing, it is not trustee of any trust;

 

(i)                           (insurance)  It has taken out and kept in full force and
effect insurance over all of its physical assets and its premises for such
amounts and against such risks as a reasonably prudent person in the Borrower’s
position would take out including, without limitation, terrorism insurance.

 

The Borrower
also gives the above representations and warranties in respect of every
guarantor and Security Provider.

 

These
representations and warranties are deemed to be repeated with reference to the
facts and circumstances then existing at each date of utilisation of any
financial accommodation, rollover of any bills of exchange or notes, at the
beginning of each new interest period and at the date of execution of each new
document under which credit or financial accommodation is granted by the Bank.

 

2.                           GENERAL UNDERTAKINGS

 

The Borrower
undertakes to the Bank that, except with the prior written consent of the Bank:

 

11

 

(a)                        (notify defaults)  It will promptly advise the Bank of any Event
of Default or potential Event of Default;

 

(b)                       (insurance)  It will take out and keep in full force and
effect the insurance policies referred to in sub-paragraph 1(i) above, and
further:

 

(i)                          provide evidence to the Bank of the currency of all insurances on
each annual review, or upon request by the Bank, whichever is the earlier, and
promptly comply with any request to take out further insurance cover as the
Bank may reasonably require to supplement the existing insurance policies of
the Borrower; and

 

(ii)                       not do or omit to do, or suffer or permit to be done or not done,
anything which may materially prejudice any insurance policy; and

 

(iii)                    not vary, rescind, terminate or cancel any insurance policy without
the written consent of the Bank;

 

(c)                        (comply with laws)  It will comply with all applicable laws and
pay all obligations that if unpaid might result in a lien or claim against any
of the Borrower’s assets;

 

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

 

(e)                        (other financial accommodation)  It will not raise any financial accommodation
from any other party, or give any security in relation to it;

 

(f)                          (disposal of assets)  It will not dispose of any assets having an
aggregate value greater than $200,000 other than in its usual and ordinary
course of business;

 

(g)                       (continue to stay in business)  It will not engage in any other business
other than that in which it is presently operating;

 

(h)       (no merger or acquisition)  It will not merge with or acquire another
company or entity;

 

(i)        (no disposal of
subsidiaries)  It will not
dispose of any of its subsidiaries;

 

(j)        (not give security)  It will not give any security over its
assets;

 

(l)                           (asset purchase) It will not purchase
assets that exceed a value of $250,000 without the prior written consent of the
Bank.  This undertaking will not apply to
capital expenditures;

 

(m)                     (dividends) It will not make any
payments of dividends without the prior written consent of the Bank; and

 

(n)                       (related party debt) Any related
party debt to be subordinated to the Bank and have no repayments or interest
cost conditions while senior debt remains.

 

12

 

3.                           ACCOUNTS

 

The Borrower
will prepare its financial accounts in accordance with generally accepted
Accounting Standards.

 

The Borrower
will deliver to the Bank:

 

(a)                        (annual accounts) within four
months after the close of each financial year a copy of the annual report of
the Borrower, and an audited consolidated balance sheet and consolidated profit
and loss account of the Borrower for that financial year;

 

(b)                       (annual accounts) within four
months after the close of each financial year a copy of the audited
consolidated balance sheet and consolidated profit and loss account of Channell
Pty Ltd. In addition the Borrower must also provide a management consolidation
of the Borrower and Channell Pty Ltd, balance sheet and profit & loss.

 

(c)                        (management accounts) within 30
days after the close of each calendar quarter, management reports (which
include integrated balance sheet, profit and loss statements and cash flow) are
to be provided. Showing actuals to budgets with comments on any negative
variance on Sales, Gross Profit, Operating Expenses and EBIT in excess of 10%.
Any negative variance greater than 15% to constitute a right of review;

 

(d)                       (management accounts) within 30
days after the close of each calendar quarter Channell Pty Ltd is to provide
management reports (which include integrated balance sheet, profit and loss
statements). In addition the Borrower must also provide a management
consolidation of the Borrower and Channell Pty Ltd, balance sheet and profit
& loss.

 

(e)                        (forecast reports) revised annual
forecasts, projected monthly incorporating an integrated balance sheet, profit
and loss statements and cash flow with comments on assumptions are to be
provided on or before the commencement of each financial year; and

 

(f)                          (other information) such other
financial information as the Bank may reasonably require, within fourteen days
after request.

 

4.                           EVENTS OF DEFAULT

 

If an Event of
Default occurs, the Borrower will immediately notify the Bank.  The notice will contain full details of the
Event of Default, and such further information as the Bank may require from the
Borrower regarding the Event of Default.

 

If an Event of
Default occurs, the Bank may, by written notice to the Borrower, terminate the
Facilities and demand repayment of the Money Owing.

 

Event of Default means:

 

(a)                        (payment default) the Borrower
fails to pay to the Bank any Money Owing from time to time due and payable to
the Bank;

 

13

 

(b)                       (other defaults) the Borrower fails
to perform and observe any other terms or conditions of the Documents;

 

(c)                        (representations and warranties) a
representation or warranty given to the Bank in a Document or otherwise is
incorrect or false in a material respect when made or deemed to be repeated;

 

(d)                       (other financial accommodation) the
Borrower fails to duly perform or observe any of the terms and conditions of
any other financial accommodation (whether provided by the Bank or any other
person);

 

(e)                        (orders and judgments) an order for
payment is made or judgment is entered or signed against the Borrower and is
not satisfied within 14 days;

 

(f)                          (receivers) a receiver, manager,
receiver and manager, liquidator, provisional liquidator or administrator is
appointed in respect of the Borrower for the whole or any part of its
undertaking, property or assets;

 

(g)                       (investigators) a person is
appointed under legislation to investigate or manage any part of the affairs of
the Borrower;

 

(h)                       (winding up) a ground for winding
up or bankruptcy of the Borrower arises;

 

(i)                           (stop payment) the Borrower or any
Security Provider stops payment generally or ceases or threatens to cease to
carry on its business or the material part of its business;

 

(j)                           (meeting of creditors) the Borrower
convenes a meeting of its creditors or proposes or enters into any arrangement
or composition for the benefit of its creditors;

 

(k)                        (winding up resolution) a
resolution is passed for the winding up of the Borrower, other than for the
purpose of a reconstruction or amalgamation previously approved in writing by
the Bank;

 

(l)                           (material adverse change) a change
occurs in the financial condition or in the whole or a major part of the
operations of the Borrower, which has had or could reasonably be expected to
have a materially adverse effect on the ability of the Borrower to perform its
obligations to the Bank;

 

(m)                     (other security providers) any of
the above events occurs in relation to any person or Borrower who is a
guarantor, or Security Provider in connection with the Facilities;

 

(n)                       (loss of security) anything occurs
which in the Bank’s reasonable opinion terminates or reduces the enforceability
of any part of the Security Documents.

 

5.         POTENTIAL EVENT OF DEFAULT

 

If a Potential Event of Default occurs, the
Borrower will keep the Bank fully informed of all developments in resolving the
matter.

 

14

 

If a Potential
Event of Default occurs, the Bank retains the right to review the availability
of the Facilities and to notify the Borrower of the outcome of the review.

 

6.         OPEN TREASURY TRANSACTIONS

 

If the Bank
terminate the Facilities following the occurrence of an Event of Default, and
if at that time there are any Treasury Transactions in existence between the
Bank and the Borrower (Open Positions)
then:

 

(a)                        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.  Any
such close out shall be at market rates prevailing at the time;

 

(b)                       any costs incurred by the Bank in closing out Open Positions under paragraph (a) will be paid by the Borrower to the Bank upon
demand by the Bank.  Any gain derived
from the closing out of the Open Positions will be credited to the Borrower and
set off against the Money Owing;

 

(c)                        the Bank will give to the Company reasonable particulars of the
manner of close out of the Open Positions, and the basis of calculation of any
amounts payable by or to the Borrower arising from that close out.

 

7.                           NON-WAIVER

 

The
liabilities of the Borrower and the rights of the Bank 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 of or in any certificate or
other instrument which purports to be made, issued or delivered under the
Documents or under any letter of credit, Bank guarantee or other instrument
issued under the Documents; 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 letter of credit or guarantee; or

 

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

 

15

 

(f)                          invalidity or irregularity in the execution of this agreement by the
Borrower or any deficiency in the powers of the Borrower to enter into or
observe its obligations under this letter of offer.

 

8.                           CLASS ORDER

 

If the
Borrower applies for a Class Order, it will notify the Bank immediately in
writing.  The Bank may review (and if
considered appropriate, terminate) all or any of the Facilities made available
to the Borrower.

 

In this
paragraph a “Class Order” means an order made by the Australian Securities and
Investments Commission pursuant to Part 2M.6 of the Corporations Act.

 

9.                           COSTS AND EXPENSES

 

The Borrower
will pay to the Bank on demand all Taxes, costs and expenses of any nature
incurred by the Bank in relation to the Documents and the Facilities, whether
payable directly or indirectly.  These
amounts are payable regardless of whether the Facilities are ever drawn down.

 

The Borrower
will pay to the Bank all legal costs incurred in relation to the preparation,
negotiation, execution, registration, administration and enforcement of the
Documents (including the Bank’s solicitors’ fees on a solicitor and own client
basis).

 

10.                    PAYMENTS AND TAXES

 

All payments
due by the Borrower to the Bank must be made on the due date in immediately
available funds.

 

If payment is
due on a day on which the Bank is not open for business in the relevant State,
then payment must be made on the next business day in that State.

 

Notwithstanding,
and without limitation to, any other provision of this letter of offer:

 

(a)                        if GST is imposed on any supply made by
the Bank under or in connection with this letter of offer or the facilities
offered in this letter of offer, where any amount or consideration (“consideration”)
payable or to be provided by or on behalf of the Borrower under or in
connection with this letter of offer or the facilities offered in this letter
of offer in relation to that supply is exclusive of GST (“GST-exclusive consideration”), the Bank may in addition to that GST-exclusive consideration,
recover from the Borrower, or from a person acting on its behalf, an additional
amount on account of GST, such additional amount to be calculated by
multiplying the GST-exclusive consideration for the relevant supply by the
prevailing GST rate. This sub-paragraph (a) does not apply to a supply for
which the consideration is inclusive of GST; or

 

(b)                       where the Bank makes a supply under or in connection with this
letter of offer or the facilities offered in this letter of offer which is not
a taxable supply and the Bank is not entitled to an input tax credit (whether
in whole or in part) in respect of the amount of any GST charged to or
recovered from the Bank by any person, or payable by the Bank, or in respect of
any amount which is recovered from the Bank by way of reimbursement of GST

 

16

 

referable
directly or indirectly to that supply, the Bank shall be entitled to increase
any amount or consideration payable by the Borrower on account of such input
tax and recover from the Borrower the amount of any such increase.

 

Any additional amount on account of GST, or
on account of an amount for which the Bank is not entitled to an input tax
credit, recoverable from the Borrower pursuant to sub-paragraph (a) or
sub-paragraph (b) of this paragraph shall be calculated without any deduction
or set-off of any other amount and is payable by the Borrower upon demand by
the Bank whether such demand is by means of an invoice or otherwise.

 

In relation to any consideration payable or
to be provided under or in connection with this letter of offer or the
facilities offered in this letter of offer that is inclusive of GST (“the existing GST inclusive consideration”) in the event of
an increase in the GST rate, the Bank may, subject to issuing a Tax Invoice or
Adjustment Note, as appropriate, recover from the Borrower an additional amount
on account of the increase in the GST rate. This additional amount is to be
determined by converting the existing GST inclusive consideration to a GST
exclusive amount (“value”) and
multiplying it by the new prevailing GST rate and by subtracting from that
result the previous GST component.

 

For the purposes of the above paragraph:

 

(i)                           the
existing GST inclusive consideration is to be converted to the value by using
the GST rate immediately prior to the new prevailing GST rate; and

 

(ii)                        the previous GST component is equal to the difference between the
existing GST inclusive consideration and the value.

 

11.                    LATE PAYMENTS

 

If any amount
is not paid to the Bank when due, it will accrue interest at the Default Rate
until it is paid.  That interest will be
calculated on daily balances and added to the debt monthly if not paid.  This paragraph does not relieve the Borrower
of its obligation to make payments when due.

 

All payments
must be made without set-off or counter-claim, and be free and clear of any
withholding or deduction for taxes, levies, imposts or government charges of
any kind unless prohibited by law.  If
any deduction is required by Law, the Borrower will make the deduction, pay the
Tax, and pay to the Bank further amount(s) sufficient to ensure that the Bank
receives the same net amount as it would have received if no deduction had been
made.

 

12.                    ILLEGALITY

 

If any change
in Law makes it unlawful or impossible for the Bank to maintain or give effect
to its obligations under the Documents, then the Bank shall promptly notify the
Borrower.

 

The Bank and
the Borrower will negotiate in good faith to restructure each affected Facility
in a manner which resolves the problem. 
If no agreement is reached within 30 (thirty) days after the Bank
notified the Borrower, then the Borrower will repay to the Bank on demand so
much of the Money Owing as relates to the affected Facility.

 

17

 

13.                    CHANGE IN
CIRCUMSTANCE

 

This paragraph applies if any order of any
court or any change in Law, or in the official interpretation or application of
Law by any government authority:

 

(a)                        subjects the Bank to any Taxes or duties with respect to the
Facilities or any part of them, or changes the basis of taxation of the Bank
for payment under the Documents (except for taxes on the overall net income of
the Bank); or

 

(b)                       imposes, modifies or deems applicable any reserve, capital, adequacy
or liquidity adequacy requirements against any asset of, deposit with or for
the account of or loans by the Bank; or

 

(c)                        imposes on the Bank any other condition with respect to the
Documents or the obligations of the Bank under them, or if the Bank complies
with any request from any applicable fiscal or monetary authority (whether or
not having the force of law);

 

If the result of the above is to increase
the cost to the Bank of making available or maintaining a Facility, or to reduce
the amount receivable in respect of a Facility, or reduce any other amount due
to the Bank in connection with a Facility by an amount which the Bank considers
material, then:

 

I.                               the Bank will use its best efforts to notify the Borrower of that
event; and

 

II.                           the Borrower and the Bank will negotiate in good faith to
restructure each affected Facility in a manner which resolves the problem; and

 

III.                       if no agreement is reached within 30 days after the Bank notified
the Borrower, the Borrower will pay to the Bank on demand, as additional
interest or charges, an amount which will compensate the Bank for the
additional costs, calculated from the date of that notification.

 

14.                    TRUSTS

 

The
Borrower warrants to the Bank that it is not the trustee of any trust.

 

15.                    SET-OFF

 

If an Event of
Default occurs, the Bank may at any time without notice to the Borrower
combine, consolidate or merge all or any of the Borrower’s accounts, and may
set off the whole or any part of the Money Owing against any credit balance in
those accounts.

 

For that
purpose, the Bank may redeem and/or appropriate all or any part of any account,
deposit or other arrangement between the Bank and the Borrower under which the
Bank may be indebted to the Borrower, even if the balance on any such account
and the Money Owing are not expressed in the same currencies.  The Bank may make any currency conversion it
considers necessary or desirable for this purpose.

 

18

 

16.                    CHANGE OF OWNERSHIP

 

No transfer of
shares (or issue of shares) in that company may be made, without the Bank’s
prior written consent.  That consent will
not apply to a transfer or issue to any company which is a related corporation
of the Company.

 

The Bank may
review (and if considered appropriate terminate) all Facilities made available
to the Borrower upon the occurrence of a change in shareholdings or an issue of
shares referred to in this paragraph.

 

17.                    APPOINTMENT OF
CONSULTANTS

 

The Bank may
at any time appoint accounting, financial management and other consultants to
examine the affairs of the Borrower and to make recommendations relating to the
manner in which the Borrower carries on its business.  The Borrower will provide all assistance
considered necessary or desirable by the consultant to enable the consultant to
conduct a proper examination of the affairs of the Borrower.  This includes, without limitation, making the
Borrower’s financial records available to the Consultant.  The Borrower shall pay the fees of the
Consultant.

 

18.                    BREAK COSTS

 

The Borrower
indemnifies the Bank against any loss, cost, charge, loss of profit or expense
incurred by the Bank in connection with:

 

(a)                        the Borrower making a payment under any Document on a date which is
not expressly contemplated in the Document, whether that payment is made as a
result of demand by the Bank following an Event of Default or any other reason;
and

 

(b)                       any financial accommodation provided by the Bank at a fixed rate
being repaid in whole or in part during the period to which that fixed rate
applies.

 

19.                    HOLDING OVER

 

If the Bank
continues to make a Facility available to the Borrower after its Expiry Date,
and this letter of offer has not been extended, amended or replaced, then the
terms of this letter of offer will continue to apply to the Facility unless the
Bank otherwise notifies the Borrower. 
The previous sentence is not a waiver of any Event of Default, or a
waiver of any of the Bank’s rights under this letter of offer.

 

20.                    ASSIGNMENT

 

The Bank may
assign, novate, sub-participate or sell down by whatever form, all its rights
under the Documents with the prior consent of the  Borrower,
which consent will not be unreasonably withheld or delayed.

 

The Borrower
may not assign its rights or novate its obligation under the Documents.

 

19

 

21.                    CONFIDENTIALITY

 

The Bank and
the Borrower will keep confidential the terms of the Facilities, the Documents,
and any information which either of them may provide to the other.  This obligation does not prevent disclosure:

 

(a)                        if allowed or required by Law, or required by any stock exchange;

 

(b)                       in connection with legal proceedings relating to the Documents;

 

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

 

(d)                       to a subsidiary of the Bank, in which case this paragraph 21
will apply to the subsidiary.

 

22.                    INCONSISTENCY

 

                                      If any provision of this letter of offer is inconsistent with any
provision of the Documents, this letter of offer will prevail.

 

23.                    GOVERNING LAW AND
JURISDICTION

 

This letter of
offer is governed by the Laws of New South Wales.  Each party submits to the jurisdiction of the
Laws of that state, including appeal courts.

 

24.       DEFINITIONS

 

The following
terms shall have the following meanings in this letter of offer:

 

Accounting Standards means the accounting standards prescribed under the Corporations
Act, Chapter 2M to the Corporations Regulations and, where not inconsistent
with those accounting standards and schedule, the accounting standards adopted
from time to time by the major accounting bodies in Australia in respect of the
preparation of accounts and financial statements.

 

Authorised Officer means:

 

(a)                        in the case of the Bank, a director, secretary or an officer whose
title contains the word manager or a
person performing the functions of any of them; and

 

(b)                       in the case of the Borrower or a Security Provider, a person
appointed by the Borrower or that Security Provider to act as an Authorised
Officer under the Documents to which it is a party and whose specimen signature
as Authorised Officer has been provided to the Bank.

 

Base Lending Rate means the rate described as such or any rate replacing that rate as
published from time to time by the Bank in the financial press and includes any
rate adopted by the Bank to replace it.

 

Bill has the same meaning as in the Bills of Exchange Act 1909 (Cwlth)
and a reference to the drawing or acceptance or endorsement of, or other
dealing with, a Bill is to be interpreted in accordance with that act.

 

20

 

Bushman’s Group of
Companies means Bushmans Group Pty Limited
ABN 90 090 744 022, Polyrib Tanks Pty Limited ABN 49 062 942 661, Hold-On
Industries Australia Pty Limited ABN 49 072 185 461 and Australian Bushman
Tanks Pty Limited ABN 21 058 504 108.

 

Business Day means a day (not being a Saturday or a Sunday) on which the Bank is
open for general banking business in Sydney.

 

Default Rate means 6.00% per annum above the Bank’s Base Lending Rate from time
to time.

 

Documents means this letter of offer, the Security Documents and each
security document (however described) including every guarantee, mortgage,
charge, debenture, set-off agreement and other instrument, notice, form,
agreement or encumbrance from time to time held by the Bank from the Borrower
and any Security Provider.

 

Dollars, $ or A$ means the lawful currency
of Australia.

 

Financial Assistance
Satisfaction Date means the earlier of:

 

(a)                        the date on which all the requirements of sections 260A and 260B of
the Corporations Act (including the 14 day notice period in section 260B(6))
have been complied with in connection with the financial assistance to be
provided for the acquisition of the shares and issued capital of the Bushman’s
Group of Companies; and

 

(b)                       25 days after the date of acceptance of this letter of offer by the
Borrower.

 

Law means any law or regulation (including any policy, directive or
guidelines, whether or not having the force of law, but compliance with which
is in accordance with the practice of responsible bankers).

 

Money Owing means all money owing to the Bank by the Borrower on any account,
and includes without limitation:

 

(a)                        all money lent or advanced by the Bank to the Borrower, in any
currency, and which have not been repaid to the Bank;

 

(b)                       all money owing by the Borrower to the Bank in respect of any bills
accepted and/or endorsed and/or discounted facility made available by the Bank,
including the face value of all bills of exchange which are from time to time
outstanding (although the maturity dates of such outstanding bills has not
occurred);

 

(c)                        the aggregate amount of the Bank’s liability under any documentary
letter of credit, standby letter of credit, performance bond or bank guarantee
issued by the Bank on behalf of or at the request of the Borrower, although no
payment under it shall have been made or demanded;

 

(d)                       the aggregate amount of money unpaid to the Bank in respect of any
Treasury Transaction, in any currency;

 

21

 

(e)                        all interest, fees, charges and other money which the Borrower is
required to pay to Bank under any Document, and which are from time to time
owing or unpaid to the Bank; and

 

(f)                          Break Costs being any loss, cost, charge or expense incurred
pursuant to paragraph 18 of this Annexure.

 

The term
includes, without limitation, any money and amounts owing by the Borrower to
the Bank which:

 

(a)                        are presently owing and payable, are owing but not presently payable
or are owing upon a contingency;

 

(b)                       may become owing or remain unpaid or for which the Bank may become
liable by reason wholly or partly of past events or by reason of anything done
or omitted by the Bank or the Borrower;

 

(c)                        may reasonably, foreseeably become owing or remain unpaid on any
account or in any manner whatsoever by reason of the relation of bank and
customer or by operation of law or equity or otherwise by reason of anything
done by the Bank with the consent or at the express or implied request of the
Borrower.

 

Potential Event of Default means an event omission or circumstance which with the giving of
notice and/or lapse of time and/or other condition would become an Event of
Default.

 

Schedule means the schedule to this letter of offer set out as Annexure E.

 

Security Documents means the various documents described in the Schedule
to this letter of offer.

 

Security Provider means each person who is party to any of the Security Documents  but excluding the Bank and the Company.

 

Taxes or Tax means any tax, levy, impost,
deduction, charge, withholding and duty imposed by any authority and includes
without limitation any withholding tax, financial institutions duty, stamp
duty, transaction duty and other government charges or any kind (including
penalties) payable in respect of the Documents, or any payments, or
transactions under them.  It does not
include income tax on the Bank’s own income.

 

Treasury Transaction includes, without limitation, any interest rate or currency forward
rate agreement, swap, financial option, futures contract, currency exchange
agreement, reciprocal purchase agreement, swaption, floor, collar, cap and any
similar type of interest rate or currency risk management or forward purchase
or sale agreement, however described.

 

22

 

ANNEXURE B

 

FINANCIAL
UNDERTAKINGS

 

1.         FINANCIAL
RATIOS

 

The Borrower
undertakes to the Bank to comply with the following financial undertakings
unless the Bank otherwise consents in writing. The covenants (a), (b), (c)
& (d) are to be calculated on the consolidated position of the Borrower and
Channell Pty Ltd.:

 

(a)                        Debt to EBIT: Commencing December 2004
Gross debt (outstanding balance of Bank Bills and Debtor Finance but excluding
subordinated and related party debt) is not to exceed four times EBIT, reducing
to 3.50 times from September 2005. Calculations from September 2005 are to be
based on a four quarter rolling average.;

 

(b)                       Capital Adequacy Ratio; Commencing June
2005 shareholder funds must remain greater than 45% of Total Assets (including
goodwill). Ratio is to increase to 50% by June 2007.

 

(c)                        Debt Service Cover: Commencing June 2005
EBITDA must not at any time fall below a figure of 1.25 times the total amount
of interest payments and scheduled repayments. To be calculated on a four quarter
rolling average.

 

(d)                       Interest Cover Ratio: earnings before
interest and tax (EBIT) divided into the total amount of interest payable by
the Borrower must not at any time fall below a figure of 2.00 times for the
September 2004 and December 2004 quarters, then increase to 2.5 times for March
2005 and June 2005 quarters. Subsequent calculations are to be based on a four
quarter rolling average.

 

(e)                        Dividends: dividends are not to be
declared or paid until senior debt is cleared.

 

(f)                          No change to equity structure without
the Banks prior consent.

 

Financial
Ratio’s are to be reviewed at each annual review.

 

2.                            The ratios in paragraph 1
will be determined on an annualised basis, based on the most recent accounts of
the Borrower available at that time.

 

3.                           TERMS USED

 

In this
Annexure any accounting or financial terminology will be interpreted in
accordance with the Accounting Standards in respect of the accounts of the
Borrower on a consolidated basis.

 

4.                           DEPARTURES
FROM ACCOUNTING STANDARDS

 

If the Borrower
wishes to depart from the Accounting Standards in preparing its accounts, the
parties will consult with each other on the changes (if any) required to the
undertakings in paragraph 1 to ensure that they
remain consistent.

 

23

 

5.                           COMPLIANCE
CERTIFICATE

 

The Borrower
will also deliver to the Bank on a calendar quarterly basis a certificate as to
compliance, with Financial Undertakings, giving reasonable particulars of any
calculations.  The certificate will be
signed by a director or chief financial officer of the Borrower.

 

24

 

ANNEXURE C

 

CONDITIONS
PRECEDENT

 

The Bank is not obliged to make the Facilities
available to the Borrower unless the Bank has received the following in form
and substance acceptable to the Bank:

 

(a)                       (board minutes) a certified copy of:

 

(i)                           an extract of the minutes of a meeting of the board of directors of
the Borrower which evidences the resolutions authorising the acceptance and observance
of obligations under (and acknowledgment that the Borrower will benefit from)
this letter of offer and the appointment of Authorised Officers of the
Borrower; and

 

(ii)                        an extract of the minutes of a meeting of the board of directors of
each Security Provider which evidences the resolution authorising the
appointment of Authorised Officers of the Security Provider;

 

(b)                       (other authorisations) a certified
copy of each authorisation necessary to enter into, observe obligations under
and enforce the Documents;

 

(c)                        (power of attorney) the original of
each power of attorney under which any person signs and delivers a Document for
the Borrower or any Security Provider and, if required by the Bank, evidence of
its stamping and registration;

 

(d)                       (specimen signatures) a certified
specimen signature of each Authorised Officer of each Borrower and of every
Security Provider;

 

(e)                        (signed Documents) each Document
signed and delivered and, if required by the Bank, evidence of its stamping and
registration;

 

(f)                          (solvency declaration) a statutory
declaration that each Borrower is solvent, signed by a director of the
Borrower;

 

(g)                       (securities) the Security
Documents;

 

(h)                       (no Events of Default) evidence
that no Event of Default or event which with the giving of notice, lapse of
time or fulfilment of any conditions would be likely to become an Event of
Default continues unremedied or would result from the provision of the proposed
drawing;

 

(i)                           (other documents) the Bank has
received the other approvals, opinions or documents which it has reasonably
requested;

 

(j)                           (establishment fee) payment of the
establishment fee, if any and however described;

 

(k)                        (other requirements) such other
conditions precedent as the Bank may specify by notice to the Company;

 

25

 

(l)                           (payment of costs) evidence that
all legal and other costs and expenses (including stamp duty and registration
fees) incurred by the Bank in connection with the Facilities have been paid;

 

(m)                     (due diligence) Grant Thornton Due
Diligence to be assigned to the National Australia Bank Ltd;

 

(n)                       (insurance) copy of all Insurance
Policies;

 

(o)                       (employment contracts) written
confirmation that employment contracts with key staff are still in effect; and

 

(p)                       (equity) written confirmation that
Channell Commercial Corp Inc has contributed $15,000,000 as Paid Up Capital.

 

 

Conditions Precedent to the Debtor Finance
Facility Agreement

 

Notwithstanding anything contained in the Agreement,
it will not come into force until the following conditions have been fulfilled
or waived by the Bank:-

 

1.          The
Agreement and all security documents must be executed by all the appropriate
parties and unconditionally delivered to the Bank, together with all other
documents or other evidence the Bank may require to satisfy itself as to the
due execution, full effectiveness and priority of the securities;

2.          A copy
of your company’s and each incorporated guarantor’s Certificate of
Incorporation and Memorandum and Articles of Association certified by two
directors as being true, correct and up to date must be delivered to the Bank;

3.          If the
trust provisions of the Agreement apply, all relevant instruments of trust and
any other documents relating thereto certified as being true, correct and up to
date must be delivered to the Bank;

4.          Any
encumbrances that would in any way affect the priority of the securities
intended by the Bank must be removed or discharged;

5.          At the
Bank’s expense an officer of the Bank must have examined your accounts with the
result being to the Bank’s total satisfaction.

6.          A copy
of the most recent debtor validations completed by the company’s external
auditors is the be provided to the Bank prior to the initial drawdown of the
facility, and on a half yearly basis as completed by the company’s external
auditors.

 

Other Conditions

 

•                  Field Examination to
be conducted prior to the commencement of the facility, with the provision of
the facility dependent upon the results of the examination being satisfactory
to the Bank.

•                  Field Examinations to be conducted on a regular basis, with the
frequency determined by the Bank, with specific reference to clause 13.3(g).

•                  In terms of clause  8.1(c) of
the Debtor Finance Facility Agreement the Certificate of Debtors, and  the Debtor Aged Trial Balance is to be provided to the Bank
within 5 working days of previous month end

•                  In terms of clause 3.2 of the Debtor Finance Agreement all invoices
exceeding $15,000 are to be supported by some additional evidence of actual or
constructive delivery of goods or services, to the bank’s satisfaction.

 

26

 

•                  Financing against individual debtors account will be restricted to
15% of the total financed debtors ledger of $100,000 (whichever is the lesser)
unless the Bank specifically approves amounts in excess of either of those two
figures.

•                  Subject always to
Clause 1.1(24) of the Agreement, the Bank shall on a weekly basis determine the
Required Retention level of the Retention Reserve by bringing to account the
retention percentage of all monies collected in that week from Customers with
regard to Purchased Debts. This shall be in addition to the determination of
the Required Retention Level that would normally occur after the receipt by the
Bank of the month end Certificate of Debtors.

•                  The Bank will not
purchase any contract-related debt, which includes retentions, progress claims
or liquidated damages.

•                  All lending
covenants currently in place for other facilities provided by the Bank (and as
they may be amended from time to time) are also to apply to this facility.

•                  Inter-company
accounts, foreign debtors, personal debtors and COD sales are not to be
financed.

 

27

 

ANNEXURE
D

 

BILL ACCEPTANCE/DISCOUNT
FACILITY - TERMS

 

References to the Borrower in
this Annexure are references to the company or companies specified as Participating Companies in respect of this Bill Facility in
the letter of offer.

 

1.                           DRAWINGS

 

1.1                       Bills drawn by the Borrower under this Bill acceptance and/or
discount facility will be accepted by the Bank in accordance with the Bank’s
normal requirements and this letter of offer for the accommodation of the
Borrower.  Subject to paragraph 2 below, the Bank will pay to the Borrower the discounted
proceeds of the Bills less any money due and payable to the Bank by the
Borrower.  The face value of all Bills so
accepted by the Bank and outstanding will not exceed the limit of the Facility
at any time.

 

1.2                       The Borrower must give the Bank not less than three Business Days’
written notice prior to the proposed discount date specifying the proposed date
of drawdown/rollover, the aggregate face value of the Bills, the number of
Bills and their tenor and must deliver to the Bank the Bills which the Borrower
wishes the Bank to accept and discount.

 

1.3                       The Bank is not obliged to accept any Bill having a maturity date
later than the Expiry Date of the Facility.

 

1.4                       Bills will be drawn by the Borrower on the Bank with face values,
payable on such days to such persons and at such places in Australia as the
Borrower and the Bank agree.  A Bill must
not mature on a day which is not a Business Day.

 

1.5                       The Borrower and the Bank agree to observe the provisions of the
Bills of Exchange Act (Cwlth) as to anything necessary to be done to ensure the
validity of any Bills to be drawn or accepted under this Facility or to attract
the benefit of any provision of that Act.

 

1.6                       Bills accepted by the Bank will be discounted by the Bank at the
rate agreed between the Bank and the Borrower. 
The proceeds will be paid to the Borrower’s account, or applied under paragraph 2.2 below.

 

1.7                       Each Bill accepted by the Bank under the Facility will be a Document for purposes of this letter of offer.

 

1.8                       The obligation of the Bank to accept Bills is subject to the
Borrower’s compliance with all of its obligations under this letter of offer.

 

1.9                       Each Bill drawn by the Trustee and accepted by the Bank must bear an
endorsement to the effect that the Bills are drawn by the Trustee in its
capacity as trustee of the Trust and an express stipulation negativing the
liability of the Trustee as drawer and signed by drawer “without recourse”.

 

28

 

1.10                 The
Bank will issue to the Borrower an advice in relation to Bills drawn by the
Borrower as soon as practicable after they are drawn.  This advice will include details of the
discount or yield rate(s) applicable to those Bills.

 

2.                           REPLACEMENT
BILLS

 

2.1                       The Bank will accept and discount replacement Bills tendered to it
in accordance with paragraph 1 at
least two days before the maturity of those Bills previously accepted and
discounted pursuant to the letter of offer so that the maturing Bills will be
funded in whole or in part by replacement Bills and in such circumstances the
amount payable by the Bank to the Borrower in respect of the replacement Bills
will be netted off to satisfy or partly satisfy the payment obligations of the
Borrower in respect of the maturing Bills.

 

2.2                       As regards the replacement Bills and notwithstanding the provisions
of paragraph 1.

 

(a)                       If the Borrower has not appointed the Bank as the attorney of the
Borrower then the Borrower shall (except with the consent of the Bank) deliver
such replacement Bills to the Bank at least two Business Days prior to the
maturity date of the maturing Bills.

 

(b)                      If the Borrower has appointed the Bank as the attorney of the
Borrower, then, subject to sub-paragraphs (c) and (d) below, on the maturity
date of each Bill drawn and accepted under the Bill Facility, the Borrower is
taken to have instructed the Bank to draw in the Borrower’s name Bills on the
same terms as the maturing Bills, except that:-

 

(i)                           the replacement Bills
will have a face value equal to the lower of the face value of the maturing
Bills and the amount up to the available limit of the Bill Facility prevailing
on the maturity date of the maturing Bills (after such Bills mature); and

 

(ii)                        the maturity date of the replacement Bills will be the date that
occurs at the end of a period of the same length as the period between the date
on which the maturing Bills were drawn and the maturity date of those maturing
Bills.  However:

 

(A)                    if this means that the replacement Bills have a maturity date that
is not a Business Day, then the replacement Bills will be drawn to have a
maturity date that is the next Business Day after that day.  Any days that are added to such a period
because the day at the end of the period is not a Business Day, will be
disregarded for the purpose of calculating the next subsequent maturity date
(for example, if a ninety day Bill would mature on a Saturday, then the
maturity date for the purposes of this paragraph will be the next Business
Day.  However, a replacement Bill
subsequently drawn to replace that Bill will be for ninety days, again unless
the maturity date for that Bill would not be a Business Day, in which case it
will mature on the next Business Day); and

 

29

 

(B)                      if this means that the maturity date of the replacement Bills would
occur after the expiry date of the Bill Facility, then paragraph (A) above does
not apply and the maturity date for the replacement Bill will be:

 

•                                the
expiry date of the Bill Facility, if the expiry date is a Business Day; or

 

•                                the
last Business Day before the expiry date, if the expiry date is not a Business
Day.

 

(c)                       If sub-paragraph (b) above applies, the Borrower may subsequently
notify the Bank that it does not wish the procedure in sub-paragraph (b) to
apply for a specified period or for the remainder of the term of the Bill
Facility, by providing the Bank with a written notice to this effect in a form
acceptable to the Bank.  If such notice
is received by the Bank at least five Business Days prior to the maturity date
of a maturing Bill, then sub-paragraph (b) above will not apply to the Bank
that matures on that maturity date.

 

(d)                      If the Borrower gives or has given the Bank separate and specific
instructions to draw and sign Bills on its behalf (as the attorney of the
Borrower) on each relevant draw down date, then those instructions will prevail
over the procedure contained in sub-paragraph (b).  If this paragraph applies, the Bank will not
separately reconfirm these instructions with the Borrower on each draw down
date.

 

2.3                       Where the Bank has agreed to accept a replacement Bill under paragraph 2.1, the obligation of the Borrower to pay to the
Bank the face value of a maturing Bill on its maturity date may, at the
discretion of the Bank, be satisfied by the Bank:

 

(a)                       debiting the face value of the maturing Bill to an internal suspense
account of the Bank;

 

(b)                      accepting a replacement Bill;

 

(c)                       crediting the discounted proceeds of the replacement Bill to the
nominated account of the Borrower; and

 

(d)                      debiting the nominated account of the Borrower with all fees,
charges and premiums payable by the Borrower in respect of the replacement
Bill.

 

2.4                       As an alternative to the procedure as set out in paragraph 2.3
above, the Bank may:-

 

(a)                       debit the face value of the maturing Bills to an internal suspense
account of the Bank;

 

(b)                      accept the replacement Bill;

 

(c)                       credit the discounted proceeds of the replacement Bills in reduction
of the debit created to the internal suspense account referred to in
sub-paragraph (a);

 

30

 

(d)                      debit the nominated account of the Borrower for the amount of the
remaining balance of the internal suspense account referred to in sub-paragraph
(a); and

 

(e)                       debit all fees, charges and premiums payable by the Borrower in
respect of the replacement Bills to the nominated account of the Borrower.

 

2.5                       The procedure outlined in paragraphs 2.3 and 2.4
shall be adopted for administrative convenience only and shall not prejudice
the right of the Bank at any time to require the Borrower to pay to it the face
value of any Bill on its maturity date.

 

3.                           INDEMNITY
IN RESPECT OF BILLS

 

3.1                       The Borrower indemnifies the Bank against all liabilities of any
kind whether actual or contingent which are incurred by the Bank in accepting,
discounting, endorsing or becoming the payee or other holder of any Bill to
which a Borrower is party.  Subject to paragraph 2.2, the Borrower will pay to the Bank in
immediately available funds an amount equal to the face value of each Bill not
later than 11 a.m. on the date of maturity of each Bill.

 

3.2                       The obligations and liabilities of the Borrower under this Facility
and in relation to each Bill drawn and accepted shall continue notwithstanding
that the Bank becomes the holder of a Bill in its own right on or after its
maturity date.

 

3.3                       The Bank may pay any Bill on or after its maturity date without
being under any obligation to enquire as to the title of the person presenting
the same for payment.

 

3.4                       If the Borrower fails to pay to the Bank the face value of any Bill
either on its maturity date or upon service of a notice of default pursuant to
this letter of offer, the Bank may debit an account in the name of the Borrower
(whether opened by the Bank or the Borrower) with the face value of each such
Bill, and any costs, expenses and outgoings payable by the Borrower pursuant to
this letter of offer.

 

4.                           BANK TO
SIGN BILLS

 

4.1                       The Borrower appoints severally, each Authorised Officer of the Bank
as its attorney and authorises:

 

(a)                       to sign as drawer and endorser and to deliver and issue for the
Borrower each Bill to be drawn and endorsed by the Borrower under this
agreement; and

 

(b)                      severally, each Authorised Officer of the Bank to complete Bills in
accordance with the particulars specified in the relevant Drawdown Notice
(including any agreed variation of it) and otherwise in accordance with this
agreement in all respects in which they are incomplete (including, without
limitation, the completion of the face value and tenor of the Bills) and to
date them.

 

4.2                       The Borrower indemnifies the Bank and each Authorised Officer of the
Bank against all liabilities incurred in acting under the authority given by paragraph 4.1.

 

31

 

5.         CHANGES TO THE TERMS AND CONDITIONS OF THE BILL FACILITY

 

5.1                       The Bank may vary the terms and conditions of the Facility at any
time by giving the Borrower notice of the change.

 

5.2                       The Bank will give the Borrower written notice of the introduction
of any new fee or charge.  The Bank will
give the Borrower notice of other changes to the terms and conditions of this
Facility, either by writing to the Borrower or by press advertisement.

 

5.3                       The Bank does not have to give the Borrower notice of the
introduction of, or any change to, government fees and charges if the
introduction or change is publicised by or on behalf of the government.

 

32

 

	
  ANNEXURE “E”

  	
  SCHEDULE

  

 

GROUP MEMBERS:

 

	
  Company Name

  	
   

  	
  ACN

  	
   

  	
  Registered office

  
	
  Channell Bushman Pty Limited

  	
   

  	
  109 821 614

  	
   

  	
  Suite 3, 391 Park Road Regents Park NSW 2143

  
	
  Bushmans Group Pty Limited

  	
   

  	
  090 744 022

  	
   

  	
  Suite 3, 391 Park Road Regents Park NSW 2143

  
	
  Polyrib Tanks Pty Limited

  	
   

  	
  062 942 661

  	
   

  	
  Suite 3, 391 Park Road Regents Park NSW 2143

  
	
  Hold-On Industries Australia Pty Limited

  	
   

  	
  072 185 461

  	
   

  	
  Suite 3, 391 Park Road Regents Park NSW 2143

  
	
  Australian Bushman Tanks Pty Limited

  	
   

  	
  058 504 108

  	
   

  	
  Suite 3, 391 Park Road Regents Park NSW 2143

  

 

SPECIFIED ACCOUNTS:

 

	
  Account Name

  	
   

  	
  BSB

  	
   

  	
  Account Number

  
	
  Channell Bushman Pty Limited

  	
   

  	
  082-057

  	
   

  	
  57-189-3025

  
	
  Bushmans Group Pty Limited

  	
   

  	
  082-057

  	
   

  	
  57-132-0868

  57-185-8852

  
	
  Polyrib Tanks Pty Limited

  	
   

  	
  082-057

  	
   

  	
   

  
	
  Hold-On Industries Australia Pty Limited

  	
   

  	
  082-057

  	
   

  	
   

  
	
  Australian Bushman Tanks Pty Limited

  	
   

  	
  082-057

  	
   

  	
   

  

 

LEFT BLANK ON
PURPOSE

 

33

 

SECURITIES:

 

The following Security Documents must be held in a
form and substance satisfactory to the Bank prior to drawdown of the
Facilities.

 

1.          First ranking registered charge given
to the Bank by Channell Bushman Pty Limited ACN 109 821 614 over all its assets
and undertakings both present and future including uncalled and called but
unpaid capital.

 

2.          Guarantee and
Indemnity on account of Channell Bushman Pty Limited ACN 109 821 614 for  $15,750,000 given to the Bank by:

 

(a)        Bushmans Group Pty Limited ABN 90 090
744 022 supported by a first ranking registered charge over all its assets and
undertakings both present and future including uncalled and called but unpaid
capital;

 

(b)        Polyrib Tanks Pty Limited ABN 49 062 942
661 supported by a first ranking registered charge over all its assets and
undertakings both present and future including uncalled and called but unpaid
capital;

 

(c)        Hold-On Industries Australia Pty Limited
ABN 49 072 185 461 supported by a first ranking registered charge over all its
assets and undertakings both present and future including uncalled and called
but unpaid capital;

 

(d)        Australian Bushman Tanks Pty Limited ABN
21 058 504 108 supported by a first ranking registered charge over all its
assets and undertakings both present and future including uncalled and called
but unpaid capital;

 

(e)        Channell Pty Limited
ABN 29 002 735 622 supported by a first ranking registered charge over all its
assets and undertakings both present and future including uncalled and called
but unpaid capital

 

3.          Debtor Finance
Agreement on account of Bushmans Group Pty Limited ABN 90 090 744 022 secured
by a first ranking registered charge over all its assets and undertakings both
present and future including uncalled and called but unpaid capital and a
guarantee given to the Bank by:

 

34

 

(a)        Channell Bushman Pty Limited ACN 109 821
614 supported by a first ranking registered over all its assets and
undertakings both present and future including uncalled and called but unpaid
capital.

 

(b)        Polyrib Tanks Pty Limited ABN 49 062 942
661 supported by a first ranking registered charge over all its assets and
undertakings both present and future including uncalled and called but unpaid
capital;

 

(c)        Hold-On Industries Australia Pty Limited
ABN 49 072 185 461 supported by a first ranking registered charge over all its
assets and undertakings both present and future including uncalled and called
but unpaid capital;

 

(d)        Australian Bushman Tanks Pty Limited ABN
21 058 504 108 supported by a first ranking registered charge over all its
assets and undertakings both present and future including uncalled and called
but unpaid capital;

 

LEFT BLANK ON
PURPOSE

 

35

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00074-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00074-of-00352.parquet"}]]