EXHIBIT 7
Salomon Smith Barney
--------------------
A member of citigroup
MARGIN
LENDING
FACILITY
LEGAL DOCUMENTS &
APPLICATION FORM
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Contents Page
Facility Documentation 1
Risk Disclosure Statement 1
Margin Lending Facility Agreement 3
CHESS Sponsorship Agreement 12
Term of Business 14
Definitions 18
How to Establish Your Margin Lending Facility 19
Margin Lending Facility Client Application Form 21
Salomon Smith Barney is a member of Citigroup Inc and is affiliated with
Citibank, N.A. and its subsidiaries and branches worldwide (collectively
"Citibank"). Despite those affiliations, securities recommended, offered,
sold by, or held at, Salomon Smith Barney: (i) are not insured by the
Federal Deposit Insurance Corporation; (ii) are not deposits or other
obligations of any insured depository institution (including Citibank); and
(iii) are subject to investment risks, including the possible loss of the
principal amount invested.
Salomon Smith Barney Australia Securities Pty Limited
ABN 64 003 114 832
Salmon Smith Barney Australia Pty Limited
ABN 56 081 472 684
Level 16, Grosvenor Place
225 George Street
Sydney NSW 2000
Tel: (02) 9321 4000
Toll Free: 1 800 062 794
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FACILITY DOCUMENTATION
It is important that you fully understand the nature of the documents you
are entering into and the obligations that you accept. The legal documents
that will be entered into on your behalf by SSB are enclosed for your
records. PLEASE TAKE THE TIME TO READ THESE DOCUMENTS CAREFULLY.
LIST OF DOCUMENTS
1. RISK OF DISCLOSURE STATEMENT
Before you enter into margin lending transactions, you should be aware of
the risks involved and decide that margin lending is suitable for you, your
investment needs and risk profile. Please read the Risk Disclosure
Statement carefully, and if you have any questions, obtain independent
legal financial and taxation advice before entering into margin Lending
transactions.
2. MARGIN LENDING FACILITY AGREEMENT
This agreement sets out:
o your rights and obligations under the loan;
o the terms and conditions of the mortgage of securities which secures
the performance of your obligations;
o the terms of any guarantee of your obligations.
3. CHESS SPONSORSHIP TERMS
CHESS is an electronic system for the registration and transfer of the
ownership of securities traded on the Australian Stock exchange. Instead of
receiving a share certificate, your interest will be recorded
electronically on CHESS. You will appoint SSB as the sponsoring participant
of all CHESS approved securities bought for you through the margin lending
arrangement.
To protect SSB as mortgage of listed securities in your portfolio, you will
only be able to transfer or otherwise deal with the securities in your
portfolio at the direction of SSB or with its consent.
4. CLIENT AGREEMENT AND TERMS OF BUSINESS
This statement sets out the basis on which SSB will provide stockbroking
and other services to you. You are under no obligation to use these
services, but should you decide to do so, the Terms of Business in this
Agreement will apply.
IF YOU HAVE ANY QUESTIONS ABOUT THE DOCUMENTS PLEASE CALL SSB ON 1800 062
794 OR YOUR FINANCIAL ADVISER.
RISK DISCLOSURE STATEMENT
There is risk associated with borrowing against the value of securities and
securing that borrowing with those securities. You should obtain
independent advice to determine if such borrowing is appropriate to you and
your particular financial and taxation circumstances. In deciding whether
to borrow money on this basis, you should be aware of the following:
1. RECOURSE
SSB's right to recover the loan amount owing is not limited to its security
rights against your portfolio. SSB is entitled to recover the full amount
owing from you personally (except for the limited recourse loans).
However, SSB can be expected first to exercise its right to enforce its
mortgage over your portfolio (if that were necessary) to recover the amount
owing. If there is a shortfall, you will remain personally liable for that
shortfall and SSB is entitled to seek to recover that amount from you.
2. MARKET VOLATILITY AND MARGIN CALLS
You will be exposed to the volatility of financial markets. If there is a
fall in the value of the shares or other securities you have borrowed
against, you may be required to make up the shortfall. A margin call must
be met by 3 pm (Sydney time) on the business day following the margin call.
For example, if $50,000 is borrow on shares worth $100,000, but they later
lose value so that they are only worth $40,000 and so the value to SSB is
$20,000 (because of the applicable margin percentage). You would then
require an additional $30,000 in cleared funds or additional acceptable
securities to make up the shortfall in the security value of your
portfolio. Any additional approved securities lodged by you would have to
have a value substantially in excess of $30,000, as SSB will apply the
appropriate margin percentage to these approved securities to make up the
shortfall.
You should monitor the loan amount owing and your portfolio's security
value at all times. You should ensure that the loan amount owing is always
less than your portfolio's security value, otherwise a margin call will
occur.
3. CHANGING MARGIN PERCENTAGES AND MARGIN CALLS
SSB is prepared to lend funds up to a set percentage of the market value of
shares in specified corporations. Different percentages apply to shares in
different corporations. SSB may change this percentage at its absolute
discretion at any time (even down to 0%), which will affect the amount
which it is prepared to advance, or continue to lend, against your
portfolio.
Such a change in the margin percentage of particular shares in your
portfolio may be made even if there has been no change in the market value
of the shares you have borrowed against. You may then be required
immediately to either top up your security with additional approved shares
or other securities or with cleared funds or reduce your borrowing to
acceptable levels.
For example, if SSB has set the margin percentage at 65% for "XYZ" company.
On this basis you have borrowed $65,000 against the market value of "XYZ"
shares worth $100,000. SSB changes the margin percentage to 60% which means
you then require an additional $5,000 in cleared funds or approved
securities to make up the shortfall in the security value of your
portfolio. Any additional approved securities lodged by you will have the
appropriate margin percentage applied to them. Accordingly, approved
securities having a market value substantially greater than $5,000 would
have to be lodged.
4. CASHFLOW/TIMING RISK
If you are intending to negatively gear your investment you should be aware
of the associated cash flow and timing risks. For instance, you may not
have received the income or the benefit of any available tax deductions at
the time you are required to pay interest charges. There is therefore a
possible timing mismatch in terms of making an interest payment before you
receive the tax benefit. It is also possible that the interest rate payable
and the level of income from investments fluctuate. You should ensure that
you will have adequate income or resources at all times to meet any
interest payments and margin calls that you are required to make.
5. INTEREST
Interest accrued under the facility will be capitalised in accordance with
the facility terms unless you have instructed us otherwise. This will
increase the loan amount owing and will cause a margin call if, as a result
of that increase, the loan amount owing becomes more than your portfolio's
security value.
6. SSB CAN SELL EVEN IF YOU HAVE NOT RECEIVED NOTICE OF ITS INTENTION TO
DO SO
If you fail to meet a margin call or in some cases if there is a shortfall
in your security, SSB may exercise its rights in any way it wishes against
your portfolio whether or not you have received notice of such exercise.
SSB may declare that all money owing by you is immediately due and payable
following an event of default by you. SSB may then take certain steps,
including selling all or part of your portfolio. SSB is not obliged to give
you notice prior to acting on an event of default.
7. SALE OF YOUR PORTFOLIO
Due to market volatility, shares and other securities may vary considerably
in price and saleability at very short notice. Such volatility is a risk to
you as the owner and also to SSB who lends against the security of your
portfolio. SSB and its agents are not obliged to sell the shares and other
securities at any particular time and will not be liable to you or any
other person for any delay in selling your shares and other securities.
8. MAKE ARRANGEMENTS IF YOU GO AWAY
If you are intending to go away or if you will not be contactable for a
period of time, arrangements should be made with SSB so that you can
protect yourself against the possibility of SSB taking action to sell your
portfolio in certain circumstances to make up any shortfall occasioned by a
drop in value of the shares in your portfolio or a change in the applicable
margin percentage.
If you fail to rectify a shortfall, SSB may exercise its rights against
your portfolio even if you have not received notice of that and are not
aware of the margin call.
9. MONITORING
You should monitor your loan amount owing at all times. SSB is not obliged
to do the monitoring for you, and will not do so for your benefit, even if
it monitors those amounts for SSB's own benefit. Before entering into a
margin lending transaction of this type, you should carefully consider
whether you can monitor your obligations to the appropriate level.
10. STAMP DUTY AND OTHER FEES
SSB has advice that no loan security duty is payable on the margin lending
agreement if executed in accordance with its instructions, but if any stamp
duty or fines become payable in respect of the margin lending agreement or
transactions contemplated by it, you must pay those to the extent permitted
by law.
The minimum term of any loan is four months from the date the loan is drawn
down. If the loan is terminated within this period by you, a fee may be
charged.
11. TAKE INDEPENDENT ADVICE
You should take independent advice on this facility and the associated
documentation, especially on the risks involved and in respect of the tax
consequences of this facility for you, before entering into the margin
lending agreement. SSB is not providing personal investment or legal or tax
advice in making this facility available and, in particular, SSB has not
considered in any way the facility's suitability to your current or future
financial circumstances.
12. CONSUMER CREDIT CODE
The facility is provided wholly or predominately for business and/or
investment purposes. The investment purposes declaration contains a
warranty to that effect. The facility and the margin lending agreement will
not be covered by the Consumer Credit Code.
13. SECURITY VALUE CANNOT BE RELIED UPON
The amount that SSB is prepared to advance in return for security given
over certain shares is not an indication of the financial stability of the
corporation selected and should not be used as a guide as to which shares
you should borrow against.
14. GUARANTEE
If you plan to be a guarantor, you should consider carefully whether
guaranteeing the performance of the obligations of the borrower is
appropriate to you and your particular financial circumstances. SSB usually
requires an independent solicitor's certificate from guarantors.
As a guarantor, you should be aware of the following before deciding to
provide a guarantee:
(a) The borrower is exposed to the risks of the volatility of the share
market. Your obligations as guarantor are also subject to the
borrower's risks.
(b) Your obligations as guarantor of the borrower's obligations and SSB's
rights to deal with the securities you mortgage are subject to the
terms of the guarantee set out in the Margin Lending Facility
Agreement. You should read this Agreement carefully. In particular,
you should consider carefully the consequences for you of the borrower
drawing against the value of the securities which you have mortgaged
and in some cases the borrower's right to trade in your securities.
(c) SSB may sell the securities without notice to the borrower or
guarantor. If the borrower is required to make up any shortfall in
security, SSB may exercise its rights against any security held for it
whether or not you, as guarantor, have received notice of the
shortfall.
15. OTHER RISKS
This statement does not disclose all the risks involved in borrowing
against shares. This risk disclosure statement is intended to highlight to
you some of the more significant risks associated with a margin lending
facility.
MARGIN LENDING FACILITY AGREEMENT
The term "this Agreement" includes this Margin Lending Facility Agreement,
the CHESS Sponsorship Agreement, the Application Form, the Terms of
Business and all other documents executed in accordance with this
Agreement.
1. THE LOAN
1.1 We agree to make a facility and loan available to you on the terms of
this Agreement.
1.2 You may use the facility and loan from time to time in accordance with
the terms of this Agreement.
1.3 The loan and facility will only be made available to you, if you, and
if relevant the guarantor, have:
(a) given us any approval, document or information which we
reasonably requested from you by the time specified; and
(b) you have paid us any fees we require.
2. TERM
2.1 This Agreement will continue until it is terminated by you or SSB by
written notice to the other party and the loan amount outstanding is
repaid in full in accordance with the terms of this Agreement. There
is no minimum term for the loan, but if you repay the loan within the
initial four months from the drawdown date, SSB may, in its absolute
discretion, charge an administration fee.
2.2 The Loan will terminate automatically if:
(a) a default has occurred and is continuing;
(b) any declaration or undertaking we request you to give is not
correct, is misleading or has been breached; or
(c) the amount outstanding on a margin call exceeds the maximum loan
amount and you have made no arrangements with SSB to rectify this
position.
2.3 Time is of the essence in relation to your obligations under this
Agreement.
3. DRAWING AND USING A LOAN
3.1 You are not obliged to borrow money under this Agreement.
3.2 Once you make a request for the loan, it is irrevocable.
3.3 If you want to borrow, you must inform us (electronically, orally or
in writing) by 10.00am (Sydney time) at least one business day before
the drawdown date:
(a) the date on which you want the money;
(b) the amount you wish to borrow, subject to any minimum amount we
specify from time to time;
(c) where or to whom the money is to be paid, including bank account
details;
(d) whether it is to be a fixed or floating rate loan; and for a
fixed rate loan, the loan term; and
(e) details (including the identity and the amount) of the securities
you intend to purchase.
3.4 We will transfer the loan in accordance with your request as soon as
possible, and no later than the drawdown date.
3.5 We are not liable for any loss you may suffer or incur because the
price of any securities you intend to purchase increases or cease to
be available because of the time it takes to lend you money or forward
any communications on your behalf.
4. INTEREST
4.1 You must pay us interest on each loan in accordance with the rate
which we specify on or before the drawdown date.
4.2 Interest is calculated on the daily balance of each loan from and
including the drawdown date. Interest accrues each day and is
calculated on the number of days lapsed and a 365 day year.
FIXED RATE LOAN
4.3 You must pay us interest in advance, for the term of a fixed rate
loan.
FLOATING RATE LOAN
4.4 For a floating rate loan, you must pay us interest on a monthly basis
in arrears on the last business day of each month.
PAYMENT OF INTEREST
4.5 Unless you have instructed us otherwise, we will add any interest due
and payable to the balance of your loan amount on the interest payment
date.
4.6 The increased loan amount will bear interest thereafter, and may cause
a margin call.
NOTICE OF INTEREST RATE
4.7 We will give you notice of the interest rate for a floating rate loan
and any change in that interest rate.
4.8 If any amount owing under this Agreement is merged in a court order
you must pay interest on that amount as a separate obligation.
5. PAYMENT
5.1 You may repay part or all of the loan amount outstanding at any time
by giving us three business days' notice. Once you give us notice, you
must pay and repay the amount notified on the date notified. If you
make such a payment, you may be subject to additional costs.
5.2 You must pay us any money you owe in cleared funds into the account we
nominate from time to time. All payments must be made by the due date
or on the previous business day if a due date is not a business day.
5.3 You must pay all amounts due under this Agreement in full without
setting off amounts you believe we owe you, or a guarantor, or without
counterclaiming any amount from us. All payments you make must be free
of any withholding or deduction of taxes, unless the law prevents
this.
5.4 We may setoff any money we owe you against money you owe us.
REPAYMENT OF A FIXED RATE LOAN
5.5 If you have a fixed rate loan you must, by 3.00pm (Sydney time) on the
maturity date of the loan, either:
(a) pay to us in cleared funds the total loan amount outstanding; or
(b) make alternative arrangements (including extending the term of
the loan) that are acceptable to us.
5.6 If you do not comply with clause 5.5 above, the fixed rate loan will
be immediately converted to a floating rate loan on the maturity date.
REPAYMENT OF A FLOATING RATE LOAN
5.7 The loan amount outstanding for a floating rate loan is repayable
immediately on demand by us after giving three business days' notice.
5.8 We undertake not to make such a demand until four months after the
first drawdown date, unless default has occurred.
5.9 If you pay and repay the total loan amount outstanding for any loan
then we will release the mortgaged property for that loan on your
request.
NO REFUND
5.10 We are under no obligation to refund to you any portion of interest
paid to us, even if it is interest paid in advance.
6. RELEASE OF MORTGAGED PROPERTY
6.1 If at any time the security value of your portfolio exceeds the total
loan amount, you may request that we release part of the mortgaged
property.
6.2 We are not obliged to release any of the mortgaged property, but may
do so in our absolute discretion if we are satisfied that after the
release, the security value of your portfolio will be, and is likely
to remain, greater than the total loan amount outstanding.
7. SALE OF SECURITIES
7.1 You may sell any of the securities in your portfolio provided that:
(a) you have obtained our consent; and
(b) you repay from the proceeds received at settlement at least
enough of the loan amount outstanding to ensure that after the
sale, the loan amount outstanding is not more than the security
value of your portfolio.
8. MARGIN CALL
8.1 The loan amount outstanding must not at any time exceed the security
value of your portfolio. If the loan amount outstanding exceeds the
security value of your portfolio, a margin call is triggered.
8.2 We may make more than one margin call on any one business day and you
must comply with all of those margin calls in aggregate.
8.3 If a margin call is triggered we will give you a margin call notice
either in writing (including by fax) or orally (including by
telephone).
8.4 If we give you a margin call notice then you must by 3.00pm (Sydney
time) on the next business day either:
(a) pay to us part of the total loan amount outstanding; or
(b) give us security interest over additional property that is
acceptable to us; or
(c) sell, or irrevocably direct us to sell, a part or all of your
mortgaged property (and apply the sale proceeds in repaying the
loan amount outstanding); or
to ensure that the loan amount outstanding is reduced to an amount which is
not (and will not in the reasonably foreseeable future be) greater than the
security value of your portfolio.
8.5 If either:
(a) the All Ordinaries Share Price Index of the Australia Stock
Exchange falls by 10% or more in any 24 hour period, or by 15% or
more over two consecutive business days; or
(b) the market value of a security forming part of the mortgaged
property falls by 10% or more in any 24 hour period; or
(c) we cannot contact you or your authorised representative to give a
margin call notice after having made reasonable effort to do so;
or
(d) you fail to comply with a margin call notice
then we may sell such part of your portfolio as is necessary to ensure
that the loan amount outstanding is reduced to an amount which is not
(and will not in the reasonably foreseeable future be) greater than
the security value of your portfolio. We undertake to apply the
proceeds of any such sale to your loan amount.
8.6 You acknowledge and agree that:
(a) it is your sole responsibility (and not ours) to monitor the
total loan amount outstanding and the value of your portfolio at
all times;
(b) if we monitor your loan amount and the value of your portfolio we
do so for our benefit only;
(c) we are under no obligation to give you a margin call notice
(despite being entitled to) and you must not take it as a
representation that we will not give such a notice, and
(d) we may sell any of the securities forming part of the mortgaged
properties at any time without giving you a margin call, notice
or any other call notice if the events in clause 8.5 above occur.
9. LIMITATIONS ON RECOURSE
LIMITED RECOURSE LOANS
9.1 Our recourse against:
(a) you in respect of the loan amount outstanding; and
(b) the guarantor in respect of the loan amount outstanding
in connection with a limited recourse loan is limited to the relevant
mortgaged property.
9.2 Clause 9.1 means that, if there is a default, the maximum amount we
may recover from you (in respect of the loan amount outstanding) and
the guarantor (in respect of the loan amount outstanding) in
connection with any such loan is the amount we obtain from enforcing
our rights in respect of the mortgaged property given by you and the
guarantor respectively for that loan with the exceptions described
below in this clause 9.
9.3 The limit on our recourse described in clauses 9.1 and 9.2 does not
apply if any of the following occur:
(a) in our opinion, you or the guarantor have breached a material
undertaking to us (other than the obligation to repay the loan
amount outstanding); or
(b) in our opinion, a material representation or warranty by either
you or the guarantor was or becomes incorrect or misleading; or
(c) In respect of the loan, we have relied on a statement or some
conduct of either you or the guarantor which in our reasonable
opinion was materially false or misleading.
9.4 In any case, even if our recourse is limited as described in clauses
9.1 and 9.2 we may prove for the loan amount outstanding and otherwise
participate in the winding up or bankruptcy of you or the guarantor if
another creditor initiates those proceedings.
9.5 The limit on our recourse described in clauses 9.1 and 9.2:
(a) does not release you or the guarantor from its obligations under
this agreement;
(b) does not in any way affect our right to recover personally from
you interest, costs or taxes in connection with that loan; and
(c) does not prevent us from obtaining equitable relief in connection
with this agreement (other than an order requiring repayment of
all or some of the loan amount outstanding).
GUARANTOR LIMITED RECOURSE FACILITIES
9.6 In respect of a guarantor limited recourse facility:
(a) there is no limit on our ability to enforce our rights against
you; and
(b) our rights against the guarantor are limited in the same manner
as set out in clause 9 with the intent that, for the purposes of
this clause 9.6, clause 9 is to be read as if the references to
the borrower in clauses 9.1 and 9.2 did not appear and each
reference to a loan, a limited recourse loan or was a reference
to the guarantor limited recourse facility.
10. MORTGAGE
10.1 For the purpose of securing payment to SSB of the loan amount
outstanding you agree to mortgage to SSB all securities and new rights
in which you have an interest or which you are entitled to:
(a) in the case of any shares or other securities that you purchase
or refinance using all or part of the proceeds of any loan under
this agreement, on the date of purchase or refinancing;
(b) in the case of new rights, on the date you become entitled to
them;
(c) in the case of securities that SSB directs are to be mortgaged
property for the purposes of the mortgage, on the date of that
direction; and
(d) in the case of any securities which after the date of this
agreement are transferred into your margin lending account with
SSB, which shall have a specific account number and holder
identification number upon the date of transfer into that
account.
10.2 Any statement issued by SSB in respect of margin lending account will
not constitute the grant of any mortgage.
10.3 SSB's mortgage interest in securities may, with its consent, be
conditional upon any specific terms and conditions with those
securities.
10.4 The mortgage takes effect on and from the date of this agreement.
DIVIDEND REINVESTMENT PLAN ("DRP")
10.5 If DRP securities are part the mortgaged property, then the DRP
securities so issued or, to be issued automatically become part of the
mortgaged property from the time that you as mortgagor acquire any
right, title or interest in them.
CHARGE
10.6 We may register a charge in respect of the mortgaged property.
YOUR OBLIGATIONS
10.7 You must
(a) deposit, or cause to be deposited, with us any agreements,
documentation or evidence which we require in respect of the
mortgaged property;
(b) deposit, or cause to be deposited, with us any relevant transfers
from a sponsoring participant to us relating to securities that
are to be held subject to a sponsorship agreement; and
(c) direct SSB Nominees to apply on your behalf for newly issued
securities, unless we direct otherwise;
(d) deposit, or cause to be deposited with us any certificates or
other documents of title evidencing the mortgaged property.
10.8 You must not, without our express prior consent:
(a) sell, part with possession or otherwise deal with any interest in
the mortgaged property;
(b) allow any security interest to come into existence which affects
the mortgaged property;
(c) create any trust, power or lien in connection with the mortgaged
property or allow one to continue;
(d) abandon, settle, compromise, discontinue any proceedings against
any person in respect of any right that you have in relation to
the mortgaged property;
(e) take steps to change any of the mortgaged property that are
certificated securities to uncertificated securities (or vice
versa);
(f) change or attempt to change the sponsoring participant, holder
name or holder address in relation to any of the mortgaged
property that is uncertificated security;
(g) waive any of your rights or release any person from its
obligations in connection with the mortgaged property; or
(h) grant any other rights of any kind over the mortgaged property.
YOUR RIGHTS
10.9 You may:
(a) receive or retain dividends, interest or other income in respect
of the mortgaged property; and
(b) exercise new rights only with our consent; and
(c) exercise any voting power in respect of mortgaged property that
is subject to a sponsorship agreement; and
(d) in respect of mortgaged property that is registered in the name
of SSB Nominees, you may not exercise any voting power.
10.10 If we agree that you may sell any part of the mortgaged property, you
must apply the proceeds from that sale to the loan amount to ensure
that after repayment the loan amount outstanding does not exceed the
security value of your portfolio.
INFORMATION
10.11 You undertake to promptly provide us with any information we
reasonably request about the mortgaged property or anything in
relation to it.
11. DISCHARGE
11.1 If the loan amount outstanding is paid in full and you are not in
default, we will release you from the mortgage or otherwise transfer
back to you all of the interest in the mortgaged property, if you so
request.
12. NEW RIGHTS
12.1 You may only deal in new rights if we consent to the dealing.
12.2 If, in our reasonable opinion, the value of the mortgaged property
will be adversely affected by the new rights we will request and you
must:
(a) sell the new rights that we nominate; or
(b) transfer the new rights to the nominee; or
(c) exercise the new rights which will then form part of the
mortgaged property; or
(d) any combination of the above.
12.3 Any proceeds received from a dealing in new rights will be applied
towards repaying the loan amount outstanding at that time.
12.4 We need not:
(a) enforce the payment of any dividends in respect of the mortgaged
property; or
(b) exercise any rights (including voting rights) in relation to the
mortgaged property;
(c) sell the mortgaged property (even if it may depreciate in value);
(d) be liable for any loss caused by any delay or omission in taking
action with respect to the mortgaged property.
12.5 We may take any action that we consider fit at any time to:
(a) register the mortgaged property in our name; or
(b) maintain the mortgaged property; or
(c) obtain the benefit of any agreement entered into by you in
relation to the mortgaged property; or
(d) receive any new rights; or
(e) do or cause anything to be done to protect the priority of this
mortgage;
(f) give up the possession of the mortgaged property at our absolute
discretion; or
(g) do anything that you should have done under this Agreement, but
that we consider you have not done or not done properly; or
(f) retain all instruments and documents of title of mortgaged
property until that mortgage property is released.
SECURITY
12.6 This mortgage is a continuing security for all of the loan amount
outstanding. It continues until it is finally discharged by us. It
will not be considered satisfied or discharged by anything which
happens in the meantime and which might otherwise affect the mortgage
at law or in equity.
OTHER SECURITY INTERESTS
12.7 The mortgage in this Agreement is a principal obligation and should
not be treated as ancillary or collateral to any other security
interest nor are they prejudicially affected by any other security
interest that we may hold.
13. DEFAULT
WHEN YOU WILL BE IN DEFAULT
13.1 You, or the guarantor, are in default if:
(a) you, or the guarantor, do not pay on time all amounts payable
under this Agreement, or
(b) you, or the guarantor, do something which you, or the guarantor,
have agreed not to do, or do not do something you or the
guarantor have agreed to do under this Agreement, or
(c) you, or the guarantor, give us incorrect or misleading
information in connection with this Agreement; or
(d) you, or the guarantor, become insolvent or bankrupt or steps are
taken to make you or the guarantor so; or
(e) you, or the guarantor, are in default under any other security or
mortgage or withdraw from it, or
(f) any of the mortgaged property that was quoted by or admitted to
trading status by the Australian Stock Exchange as at the date it
became mortgaged property ceases to be so quoted or admitted; or
(g) you or the guarantor do not carry out in full an undertaking
given in this Agreement within the specified period or within 2
business days if no period is specified; or
(h) we reasonably believe that the ability of you or the guarantor to
comply with this Agreement has been reduced due to a change in
your or the guarantor's business, assets or financial position;
or
(i) (if you or the guarantor are a natural person) that person dies,
becomes insane or is declared incapable of administering your or
the guarantor's affairs; or
(j) in our reasonable opinion, the value of our interest in any of
the mortgaged property is materially adversely affected; or
(k) an order is made in respect of the mortgaged property under
section 741, 742, 737 or 734(2) of the Corporations Law or under
any provision of any other similar laws; or
(l) an event occurs which renders enforceable any security interest
we hold in connection with obligations incurred under this
Agreement; or
(m) you or the guarantor take any action to limit, to suspend or to
terminate the sponsorship agreement or our appointment as
sponsoring participant; or
(n) this Agreement is or becomes wholly or partly void, voidable or
unenforceable, or is claimed to be so, by either you or the
guarantor or anyone on your behalf; or
(o) any event occurs which with the giving of notice, lapse of time
or fulfillment of any condition would be likely to become a
default; or
(p) you create, attempt to create or allow to exist any security
interest over any of the mortgaged property without obtaining our
prior consent.
WHAT CAN HAPPEN THEN?
13.2 If you or the guarantor are in default, then we may do any one or more
of the following:
(a) notify you and the guarantor that the loan amount outstanding is
immediately due and payable; and
(b) direct you and the guarantor to immediately pay us all or part of
the total loan amount outstanding, and
(c) exercise all of our rights under the mortgage to sell,
appropriate or otherwise deal with the mortgaged property,
undertake any other action authorised by this Agreement or by
law; and
(d) to provide any instruction to a sponsoring participant necessary
to give effect to any dealings;
and use the proceeds from any such actions to pay and repay the total
loan amount outstanding.
13.3 We need not give you, the guarantor or any other person any notice
before we take any of the actions described in clause 13.2 above.
13.4 If a default relates or is attributable to a specific loan, we may, in
our absolute discretion exercise our rights under this clause 13 in
respect of that loan only and the related mortgage and mortgaged
property.
GUARANTEE AND INDEMNITY
14. GUARANTEE
14.1 The guarantor unconditionally and irrevocably guarantees the payment
to us of the guaranteed money.
14.2 If you do not pay the guaranteed money on time and in accordance with
the terms of this Agreement, the guarantor agrees to pay the
guaranteed money to us on demand from us.
14.3 We need not make a demand upon you to pay us or take action to enforce
our rights against you before we claim from the guarantor.
14.4 The guarantor gives a mortgage, makes the same declarations and enters
into the same agreement with us as if the guarantor was named in
clause 10 "Mortgage" and clause 17 "Declarations and Undertakings"
instead of you.
14.5 The guarantee in this clause is a continuing obligation and extends to
all of the guaranteed money.
15. INDEMNITY
15.1 The guarantor unconditionally and irrevocably indemnifies us and must
therefore pay us on demand for any loss or costs we suffer or incur
if:
(a) you do not, are not obliged to, or are unable to, pay us the
guaranteed money in accordance with this Agreement; or
(b) the guarantor is not obliged to pay us an amount under clause 14
above; or
(c) we are obliged, or we agree, to pay an amount to a trustee in
bankruptcy, liquidator or controller (as defined in the
Corporations Law) (or to a bankrupt person or insolvent company)
in connection with a payment by the guarantor or you. (For
example, we may have to or may agree to pay interest on the
amount).
ACKNOWLEDGEMENT
15.2 The guarantor acknowledges that it is responsible for making itself
aware of your financial position.
15.3 The indemnity in this clause 15 is a continuing obligation,
independent of the guarantor's other obligations under this Agreement.
It continues even after those obligations end. It is not necessary for
us to incur expenses or make payment before enforcing a right of
indemnity conferred by this guarantee and indemnity.
16. OUR RIGHTS ARE PROTECTED
16.1 Rights given to us under this guarantee and indemnity and the
guarantor's liability under it are not affected by any act or omission
by us or anything else that might otherwise affect them under Law.
16.2 Under law, a trustee in bankruptcy, a liquidator or a controller (as
defined in the Corporations Law) may ask us to refund a payment we
have received in connection with this Agreement or guaranteed money.
To the extent that we are obliged, or agree, to make a refund, we may
treat the payment as if it had not been made to us. We are then
entitled to our rights against the guarantor under this guarantee and
indemnity as if the payment had not been made. This applies despite
anything in this guarantee and indemnity or the fact that the
guarantor may have ended it.
16.3 The guarantor must pay all amounts due under the guarantee and
indemnity in full without setting off amounts the guarantor believes
we owe to you or to the guarantor and without counterclaiming amounts
from us.
16.4 All payments the guarantor makes must also be free of any withholding
or deduction for taxes, unless the law prevents this.
16.5 We may set off any money we owe the guarantor against any money the
guarantor owes us under the guarantee and indemnity in this Agreement.
17. DECLARATIONS AND UNDERTAKINGS
17.1 You, and the guarantor (if any), declare that:
(a) you solely own the mortgaged property held by you (or by another
for you), and that no one else has any rights affecting the
mortgaged property (such as other mortgages or the rights of a
beneficiary under a trust) other than those agreed to in writing
by us; and
(b) all the information you have given us is correct and not
misleading; and
(c) you have not withheld any information that might have caused us
not to enter into this Agreement; and
(d) you (and no other person) breach any law or any obligation to
another person by entering into or becoming bound by this
Agreement;
(e) your obligations under this Agreement are valid and binding and
you benefit by entering into this Agreement;
(f) any securities forming part of the mortgaged property are fully
paid up and the transfer is not subject to any restriction under
any constituent documents of the securities or their issuer or
under the Business Rules;
(g) you do not hold any interest in the mortgaged property as trustee
or agent unless you have provided us with the details of the
trust; and
(h) you will use all of the money lent to you by us under this
Agreement wholly or predominantly for business or investment
purposes. You acknowledge that by making this declaration you may
lose your protection under the Consumer Credit Code; and
(i) you have and will rely on your own judgment and have not and will
not rely on any statements or representations made by us; and
(j) you have taken such independent financial and legal advice as you
think fit prior to entering into this Agreement; and
(k) you have full legal capacity and power to enter into this
Agreement.
17.2 Each of the declarations made in this clause 17 continue and you must
tell us promptly if anything has happened which prevents you from
repeating any one or more of the declarations at any time.
17.3 You, and the guarantor (if any), agree to:
(a) promptly give us any information or documents we request; and
(b) promptly tell us if there is a default or if it is reasonably
likely that a default will occur in the foreseeable future; and
(c) do everything (such as obtaining consents, finding and producing
documents, producing receipts and getting documents completed and
signed) to bind you and your successors to this Agreement and try
your best to get other people to bind themselves and others to
this Agreement as needed and if we ask them;
(d) tell us of any change of the information contained in the
Application Form; and
(e) make sure that any new or existing director of you (if you are a
company) promptly enters into this Agreement if we ask, or
(f) not to do or admit to do anything or knowingly permit or cause
anything to be done or omitted which could mean that the
mortgaged property is likely to become lessened in value or
prejudicially affected.
18. TRUSTEE DECLARATIONS AND UNDERTAKINGS
18.1 If you or the guarantor is a trustee of a trust and make this
Agreement in that capacity, then you and the guarantor declare that:
(a) you are the only trustee of the trust, the trust has been
properly constituted and the trust deed is valid and enforceable;
(b) no action has been taken or proposed to remove you as trustee or
to appoint additional or alternative trustees; and
(c) you have given us true (ie complete and up to date) copies of
the trust deed and other documents relating to the trust which
contain all the terms of the trust;
(d) all necessary resolutions have been duly passed and all consents,
approvals and other procedural matters have been obtained or
attended to as required by the trust deed; and
(e) you have the power to enter into this Agreement, to perform your
obligations under this Agreement and to allow them to be
enforced; and
(f) you have entered into this Agreement in your personal capacity
and also as trustee, and for the benefit of the beneficiaries;
and
(g) you have the right to be indemnified out of the trust fund for
all of the obligations you incur under this Agreement and the
trust fund is sufficient to cover your right of indemnity;
(h) no action has been taken or proposed to terminate the trust or
revoke any of your powers and (so far as you are aware) no one
intends to take any such action; and
(i) our rights under this Agreement have priority over the interests
of the beneficiaries; and
(j) no property of the trust been resettled or satisfied or
transferred to any other trust or trusts;
(k) any securities which are purported to be secured to us under the
mortgage contemplated by this Agreement will be the property of
the trust.
18.2 Each of the declarations named in clause 18.1 above continue after you
and the guarantor make this Agreement. You must tell us immediately if
anything has happened which prevents you or the guarantor from
repeating any one or more of those declarations at anytime.
18.3 You and the guarantor agree:
(a) to exercise your right of indemnity from the trust fund and
beneficiaries if you need to in order to meet your obligations
under this Agreement; and
(b) do everything you have to do as trustee of the trust; and
(c) not do anything which may negatively effect your obligations to
us as trustee of the trust; and
(d) ensure that, unless we agree in writing:
(i) the trust is not terminated; and
(ii) you do not retire or cease to act; and
(iii) you are not replaced or removed and no new trustee is
appointed; and
(iv) the terms of the trust deed are not otherwise varied.
18.4 If we request you or the guarantor to execute any documents or to do
any act in the future, it must do so, if it is for the purpose of
further or more perfectly:
(a) mortgaging the mortgage property to us; or
(b) registering us (or SSB Nominees) as the registered holder of the
mortgaged property; or
(c) securing the fulfillment of yours or the guarantors declarations,
undertakings or obligations under this Agreement: or
(d) granting to us the rights and powers that this Agreement is
intended and purports to grant to us.
19. CERTIFICATION
CERTIFICATED SECURITIES
19.1 If the mortgage property includes certificated securities you must
appoint SSB Nominees to hold them as your nominee on the nominee terms
in clause 21. We may act an your behalf to initiate a conversion of
certificated securities to uncertificated securities if possible. You
appoint us as agent to act on your behalf for this purpose.
UNCERTIFICATED SECURITIES
19.2 You must ensure that:
(a) these securities are registered in your name; and
(b) we are maintained as sponsoring participant in respect of those
securities under the CHESS sponsorship agreement.
20. SPONSORSHIP
20.1 You agree to appoint and to maintain us as your sponsoring participant
under the CHESS Sponsorship Agreement.
20.2 You must not provide us with any instructions that are inconsistent
with this Agreement.
20.3 You must not terminate our appointment as sponsoring participant
without our written consent.
20.4 If a loan is used to subscribe for an issue of uncertificated
securities, then you must require those securities be vested upon
issue in your name subject to the sponsorship agreement.
20.5 We are authorised to lend any securities held by you subject to the
sponsorship agreement to any person under a securities lending
arrangement, without giving you notice or requesting your consent. You
are not entitled to the benefit of any commission or benefit that
arises from the securities lending arrangement.
21. NOMINEE
21.1 You agree to appoint and to maintain the appointment of SSB Nominees
for the purpose of this Agreement.
21.2 You must, upon request from SSB Nominees, pay all the costs, fees,
Taxes, losses, damages and liabilities incurred by SSB Nominees for
acting in accordance with the Agreement.
21.3 You do not have to pay any amount resulting from the fraud or gross
negligence of SSB Nominees.
21.4 SSB Nominees may apply any money held by it as your nominee in or
towards satisfaction of any amount owing by you to us or SSB Nominees.
21.5 You, and the guarantor, indemnify SSB Nominees against, and must
therefore pay SSB Nominees on demand, all loss or costs suffered or
incurred as a result of it acting is your nominee except when such
loss or costs are caused by the fraud or gross negligence of SSB
Nominees.
21.6 As SSB Nominee is a related entity, we may substitute any other
related entity as nominee without prior notice to you. Any other
termination of SSB Nominees' appointment and the appointment of
another person as nominee requires our prior written consent.
21.7 You must not provide any instructions to SSB Nominees that are
inconsistent with this Agreement. You may terminate SSB Nominees
appointment as your nominee on or after the loan amount outstanding
has been paid in full and the mortgage has been released and
discharged in accordance with this Agreement, by giving SSB Nominees
written notice of that termination.
21.8 Termination of SSB Nominees appointment does not affect any rights or
obligations accrued to the time of termination.
22. COSTS AND COMMISSIONS
22.1 When we ask, you and the guarantor must pay us for:
(a) all costs in connection with the negotiation, stamping,
registration, variation or discharge of this Agreement; and
(b) the drawing, engrossing, execution and service of any demand or
notice given by us; and
(c) your performance or observance (or default of performance or
observance) of this Agreement; and
(d) all costs in connection with any Taxes we have to pay in
connection with this Agreement when the transaction contemplated
by his Agreement or any instrument entered into as a result of
this Agreement; and
(e) our costs in responding to any enquiry about you from any
authority; and
(f) any increase in our costs of supplying the loan amount to you.
22.2 If we agree, some or all of the costs and taxes payable under this
clause may be funded by a loan.
23. INDEMNITY
23.1 You and the guarantor indemnify us against, and must therefore pay us
on demand, all loss or costs suffered or incurred as a result of:
(a) the occurrence of any default;
(b) our entering into and performing our obligations under this
Agreement;
(c) any inaccuracy in or breach of any of the representations,
warranties, declarations or undertakings that you or the
guarantor give;
(d) our entry into any hedging or option arrangements to preserve the
value of the mortgaged property after you or the guarantor become
subject to a moratorium on the payment of your debts or an
administrator is appointed;
(e) any omission made by you or the guarantor in any certificate or
declaration delivered or any oral or written statement made by
you or the guarantor, whether prior to entering into this
Agreement or pursuant to any of the terms of it;
(f) the Loan being repaid on any date other than its maturity date;
or
(g) any other amount under this Agreement not being paid on its due
date.
23.2 The indemnities in this Agreement are continuing obligations,
independent of your other obligations or the guarantor's obligations
under this Agreement. They continue after we release the mortgaged
property. It is not necessary for us to incur expense or make payment
before enforcing a right of indemnity conferred by this Agreement.
24. HEDGING
24.1 You acknowledge that we may hedge any liability or risk we have or
might have under the terms of this Agreement by entering into options,
futures or any other hedging instrument or transaction over the
securities in your portfolio.
24.2 If we have any right, interest in or entitlement to any security or
new right as a result of clause 24.1 above, we:
(a) hold that right interest or entitlement and any deposit derived
from it on our own behalf, and not for you or on your behalf;
(b) can deal with that right, interest or entitlement and any profits
derived from it according to out discretion; and
(c) are under no duty to account to you in relation to that right,
interest or entitlement or any deposits derived from it.
25. MISCELLANEOUS
HOW WE MAY EXERCISE OUR RIGHTS
25.1 We may exercise our right or remedy or give or refuse our consent in
any way that we consider appropriate including by imposing conditions
and without giving you or the guarantor any reasons for our actions.
25.2 If we do not exercise a right or remedy fully or at a given time, we
can still exercise it later. Our rights and remedies under this
Agreement are in addition to other rights and remedies provided by
law. We may enforce our rights and remedies in any order that we
choose.
25.3 We are not liable for loss caused by the exercise or attempted
exercise of, failure to exercise or delay in exercising a right or
remedy, whether or not caused by our negligence.
25.4 The rights and powers granted to us, or our officers, agents or
employees under statute or at general law can only operate to enhance
those contained in this Agreement, not to diminish or to curtail them.
ASSIGNMENT
25.5 We may assign our right under this Agreement, without giving you or
the guarantor notice. You and the guarantor agree that we may disclose
any information or documents we consider necessary to help us exercise
this right.
25.6 Your rights are personal to you and the guarantor and may not be
assigned without our written consent.
TELEPHONE RECORDING
25.7 We (or SSB Nominees) can record yours and the guarantor's telephone
conversation with us (or SSB Nominees) and may use these recordings as
we see fit.
25.8 We (or SSB Nominees) may keep the recordings for as long as we wish.
AUTHORISED REPRESENTATIVES
25.9 You may give us notice of any person authorised to give us
instructions or to receive notices from us or to do anything that you
and the guarantor are entitled to do under the Agreement. You must
provide us with a name and specimen signatures of any such persons
that are authorised.
25.10 By agreeing to become a guarantor under this Agreement, the guarantor
appoints you its authorised representative to give us instructions and
to receive notice from us or to do anything that you and the guarantor
are entitled to do under the Agreement.
25.11 If you want to change or remove your authorised representative, the
revocation is effective only when it is given to us in writing.
25.12 If you are a company, then unless you tell us otherwise, we will
assume that you will authorise your directors and secretaries jointly
and each of them severally to act as your authorised representatives.
25.13 You are bound by anything we do relying on instructions we receive
from your authorised representative or the guarantor.
CONFIDENTIALITY
25.14 We may share all the information you give us or that we collect about
you in connection with the agreement with the following people:
(a) a related body corporate; and
(b) a corporation that enters into financial arrangements with us;
and
(c) any party to this Agreement, any authorised representative and
any broker for you or the guarantor; and
(d) any person, if required, or allowed by law or by stock exchange
or required by the constituent documents of any entity
(securities in or of which comprise the mortgaged property); and
(e) any person in connection with the establishment and the operation
of the loan.
NOTICES
25.15 Notice, certificates, consents and other communications in connection
with this Agreement must be in writing unless otherwise specified.
25.16 Communications may be:
(a) left at the address last notified; or
(b) sent by mail to the address last notified; or
(c) sent by fax to the fax number last notified; or
(d) sent by electronic message system or given by any other means
permitted by law.
25.17 Communications take effect from the time they are received unless a
later time is specified in them. Communications sent by post are taken
to be received 5 business days after they are posted if sent to an
address within Australia and 10 business days after they are posted if
sent to an address outside Australia. Communications that are left at
an address are taken to have been received on the day that they are
left at that address.
25.18 Communications that are sent by a fax machine that produces a
transmission report are taken to be received at the time the
transmitting machine produces a report that indicates that the
communication was sent to the recipient's fax machine.
OUR CERTIFICATE
25.19 We may give you or the guarantor a certificate signed by us or our
lawyers about a matter or about an amount payable in connection with
this Agreement. This certificate is sufficient evidence of the matter
or amount unless it is proved to be incorrect.
WAIVER AND INCONSISTENCY
25.20 A provision under this Agreement or right created under it may not be
waived or varied except in writing signed by the party or parties to
be bound.
25.21 The provisions of this Agreement prevail to the extent that they are
inconsistent with any law and prevail over any drawdown terms or any
notices or instructions under this Agreement.
JOINT AND SEPARATE LIABILITY
25.22 If there is more than one of you, you are liable for all your
obligations under this Agreement, both separately and jointly. This
means that your obligations apply to each of you individually and to
any two or more of your together.
25.23 This also means that any one or more of you may exercise rights in
relation to this Agreement on behalf of all of you and the rest of you
will also be bound.
25.24 If we deal with any one of you, we will be taken to have dealt with
all of you.
25.25 Joint and separate liability applies to the guarantor also.
26. POWER OF ATTORNEY
26.1 Both you and the guarantor irrevocably appoint us, SSB Nominees and
each authorised officer of us and SSB Nominees separately as its
attorney.
26.2 If we ask, you or the guarantor must formally approve anything that an
attorney does.
26.3 Each attorney may:
(a) do anything which you as owner of the mortgaged property can do
or which you or the guarantor is obliged to do under this
Agreement (including completing blanks in this Agreement,
executing deeds, selling, assigning or otherwise dealing with the
mortgaged property, commencing, conducting and defending legal
proceedings, signing any off market share transfer, or
authorising, instructing or requesting the amendment of your or
the guarantors details as necessary; and
(b) delegate your powers (and revoke a delegation); and
(c) exercise your powers even if this involves a conflict in duty or
you have a personal interest in doing so.
27. LIMITATION OF OBLIGATIONS RECOVERABLE UNDER THE MORTGAGE
27.1 This clause applies whether you are a company or any other person.
27.2 Notwithstanding any other provision in the facility terms, the total
amount secured by and ultimately recoverable under the mortgage will
be the amount specified in the schedule applicable to your margin
lending facility which will be completed prior to or at the same time
as execution of this margin lending facility agreement.
28. MAXIMUM PROSPECTIVE LIABILITY
28.1 This clause applies only if you are a company.
28.2 For the purpose only of establishing priorities, in accordance with
section 282 of the Corporations Law, between the mortgage and any
other mortgage(or other security interest) granted by you to any
person in respect of the mortgaged property, and without affecting any
of your obligations or any of SSB's rights under the mortgage, the
prospective liabilities secured by the mortgage include, without
limitation, the amount which is from time to time the limit of the
amount secured by the mortgage under clause 27.
28.3 If the limit on the amount secured by the mortgage is increased at any
time, SSB may lodge a notice under section 268(2) of the Corporations
Law on your behalf and the maximum prospective liability shall be
deemed to have been increased accordingly.
29. APPLICABLE LAW
29.1 This agreement is governed by the law in force in New South Wales.
Each party submits to the non-exclusive jurisdiction of the Courts of
New South Wales.
The Schedule
Date of Agreement 19 September 2000
FIRST APPLICANT/GUARANTOR
Name Trefoil International III, SPRL
ACN (if company) N/A
Address Avenue De Cortenberg 75,
1000 Brussels, Belgium
Postcode
Telephone & facsimile (818) 973 4225/(818) 845 4675
SECOND APPLICANT/GUARANTOR (if applicable)
Name _____________________________
ACN (if company) _____________________________
Address _____________________________
_____________________________
Postcode _____________________________
Telephone & facsimile
Maximum prospective liability $ 300,000,000 (total amount secured)
This is a specimen agreement. The binding agreement will be executed
by an attorney appointed in accordance with the power of attorney in
this agreement.
<PAGE>
CHESS SPONSORSHIP AGREEMENT
WHAT IS CHESS?
1. CHESS is a system of registering securities on computer. It is
operated by the securities clearing house under the SCH business
rules. Instead of receiving a share certificate, you receive a holding
statement.
Only certain categories of people may control securities on CHESS (we
fall within one of these categories). Other people who have securities
on CHESS need their holding "sponsored" by a "controlling participant"
for the purposes of CHESS. This agreement relates to your appointment
of us as your "controlling participant".
OUR AUTHORITY AND OBLIGATIONS
2. You appoint us as your "controlling participant" for the purposes of
CHESS with respect to your holding of the mortgaged property. You
authorise us as your agent to do any act under CHESS relating to your
holding.
3. Subject to clause 27, we will not initiate any transfer or conversion
into or out of your holding sponsored under this agreement without
your express authority.
4. Subject to clause 5, we are not obliged to transfer securities into
your holding until payment is received for those securities.
5. If we demand that you pay for securities, but the contract for the
purchase of those securities remains unpaid, we may sell those
securities at your risk and expense (including any brokerage and stamp
duty).
6. If we claim that you have not paid us an amount lawfully owed to us,
we can refuse to comply with your withdrawal instructions (but only to
the extent necessary to retain in your holding sponsored under this
agreement securities with a value equal to 120% of the current market
value of the amount claimed).
7. Subject to clauses 5, 6 and 27, we will initiate any transfer,
conversion or other action necessary to give effect to withdrawal
instructions within the scheduled time.
ACKNOWLEDGEMENTS BY YOU
8. You acknowledge that:
(a) before you signed this agreement you read this agreement and that
you understood the effect of this agreement; and
(b) if you die or become bankrupt, a holder record lock will be
applied to all your holdings sponsored under this agreement in
accordance with rule 11.2 of the SCH business rules (unless your
legally appointed representative or trustee elects to remove
those holdings from the CHESS subregister); and
(c) if you die, this agreement is deemed to remain in operation in
respect of the legally appointed representative authorised to
administer your estate for a period of up to three calendar
months after the removal of the holder record lock pursuant to
rule 11.6.6 of the SCH business rules (unless your legally
appointed representative elects to remove the holdings sponsored
under this agreement from the CHESS subregister).
9. If you are a joint holder, you also acknowledge that:
(a) if one of the joint holders dies, all holdings under the joint
holder record shall be transferred into new holdings under a new
holder record in the name of the surviving holdings (this
agreement remains valid for the new holdings under the new holder
record); and
(b) if one of you becomes bankrupt, we will:
(i) establish a new holder record in the name of the one of you
that is bankrupt, transfer that person's interest into new
holdings under the new holder record and request the
securities clearing house to apply a holder record lock to
all holdings under that holder record (unless the legally
appointed representative of the bankrupt holder elects to
remove the holdings from the CHESS subregister); and
(ii) establish a new holder record in the names of the other
joint holders and transfer their interest into new holdings
under the new holder record.
SECURITY, OTHER INTERESTS AND SUB-POSITIONS
10. If you tell us that securities are to be lodged with Options Clearing
House Pty Limited as cover for written positions in the Australian
options market, you authorise us to take whatever action is required
by Options Clearing House Pty Limited or the SCH business rules to
give effect to that cover.
11. If you tell us that a charge or other interest in securities has been
or is to be given to a person, then you authorise us to take whatever
action is required by that person in accordance with the SCH business
rules to give effect to or record that interest.
12. We may take steps to create a sub-position over your holding in the
circumstances contemplated by clauses 10 or 11. We may also create a
sub position if you consent. If we do this, your ability to transfer,
convert or otherwise deal with the securities will be restricted in
accordance with the SCH business rules.
INFORMATION
13. You must promptly give us any information or documents we ask for to
enable us to:
(a) perform our obligations or to act as your "controlling
participant" or agent under this agreement; or
(b) comply with the requirements of the securities clearing house or
the SCH business rules.
14. Information or documents you give us may be disclosed:
(a) to any person for these purposes;
(b) if required by any regulatory authority (including the securities
clearing house) or if allowed or required by law; or
(c) to our officers, employees, advisers and agents; or
(d) if you consent; or
(e) to enable us to enforce our rights.
FEES AND INDEMNITIES
15. You must pay us the fees notified by us to you from time to time in
connection with these sponsorship arrangements.
16. You indemnify us against, and you must therefore pay us on demand for,
liability, loss or costs (including consequential or economic loss) we
suffer or incur:
(a) in connection with us performing our obligations under this
agreement; or
(b) in connection with us acting as your "controlling participant" or
agent for the purposes of CHESS; or
(c) if you do something you agree not to do, or don't do something
you agree to do, under this agreement.
17. You must pay us these amounts when we ask. We can also debit any of
these amounts to any account you have with us even if we do not
expressly ask you to pay us.
The indemnity in clause 16 is a continuing obligation, independent of
your other obligations to us. It continues even after this agreement
is terminated. It is not necessary for us to incur expense or make
payment before enforcing a right of indemnity conferred by this
agreement.
SUSPENSION FROM CHESS
18. If we are suspended from CHESS participation, then (subject to the
assertion by our liquidator, receiver, administrator or trustee of an
interest in securities controlled by us) you may within 20 business
days of the securities clearing house giving notice of the suspension
give a notice to the securities clearing house requesting that your
holdings sponsored under this agreement be removed either:
(a) from the CHESS subregister; or
(b) from our control to the control of another broker with whom you
have entered into a valid sponsorship agreement pursuant to rule
19.5.3 of the SCH business rules.
If you do not give the securities clearing house such a notice, the
securities clearing house may change your CHESS sponsor under rule
19.5.4 of the SCH business rules, in which case you will be deemed to
have entered into a new sponsorship agreement with the substitute
broker on the same terms as this agreement.
COMPLAINT PROCEDURES
19. If you make a claim for compensation, our ability to satisfy that
claim will depend upon our financial circumstances.
20. You may make a claim on the national guarantee fund in the
circumstances specified under part 7.10 of the Corporations Law.
21. If we breach this agreement, you may refer that breach to any
regulatory authority, including the securities clearing house.
TERMINATION
22. This agreement is terminated if:
(a) either party notifies the other in writing that it wants to
terminate this agreement (in which case this agreement is
terminated from the time the notice is received unless a later
time is specified in the notice);
(b) if we become insolvent;
(c) if our participation as a broker in CHESS is terminated or
suspended.
23. The termination of this agreement does not affect any rights or
obligations that have accrued before that time.
BUSINESS RULES
24. This agreement is subject to the SCH business rules. You must not do
anything that would prevent or hinder us from complying with our
obligations under the SCH business rules.
25. If this agreement is inconsistent with the SCH business rules, the SCH
business rules prevail to the extent of the inconsistency.
MORTGAGE
26. You have given a mortgage over your sponsored holding of mortgaged
property to us.
27. You acknowledge that:
(a) your rights under this CHESS sponsorship agreement are subject to
SSB's rights under that mortgage; and
(b) before acting on your instructions, we must obtain SSB's consent
(as mortgagee); and
(c) we must act in accordance with any instructions given to us by
SSB (as mortgagee), even if they contradict instructions that you
have given or will give later; and
(d) we are under no duty to enquire whether SSB (as mortgagee) may
validly give any consent or instruction and you may not challenge
the validity of those instructions or any action taken by us in
accordance with those instructions; and
(e) our appointment under clause 2, for the purpose of securing the
performance of your obligations under the mortgage is irrevocable
until SSB executes a release of the mortgage or otherwise
consents in writing.
MISCELLANEOUS
NOTICES AND OTHER COMMUNICATIONS
28. Unless otherwise required or permitted by us or by the SCH business
rules, notices and other communications must be in writing. Written
notices or other communications may be:
(a) sent or faxed to the address or fax number last notifed (which at
the date of this agreement is the address or fax number in the
Details); or
(b) left at, or sent by courier or post to, (in the case of a
company) the company's head office or principal place of business
or (in the case of an individual) the individual's place of
residence or business last known to the person sending the
document.
They take effect from the time received unless a later time is
specified in them. If sent by post, they are taken to be received on
the second business day after a correctly addressed and stamped
envelope is posted. If sent by courier, they are taken to be received
when delivered to the correct address. If sent by fax, they are taken
to be received when the sender's fax machine indicates a successful
transmission to the correct fax number.
WAIVER AND VARIATION
29. We can vary this agreement by giving you written notice of the
variation. We will give you:
(a) at least 7 business days' notice of the variation if the
variation is, in our reasonable opinion, to remove any
inconsistency between this agreement and the SCH business rules;
and
(b) at least 20 business days' notice in other cases.
30. Subject to clause 29, a provision of this agreement, or a right
created under it, may not be waived or varied except in writing signed
by the party or parties to be bound.
APPLICABLE LAW
31. This agreement is governed by the laws in force in New South Wales.
You and we submit to the non-exclusive jurisdiction of the courts of
New South Wales.
<PAGE>
TERMS OF BUSINESS
The following terms and conditions ("these Terms") will apply to all
services provided by SSB to Margin Lending - Execution Only or Financial
Adviser Clients. Any order placed by you with SSB will constitute assent by
you to be bound by these Terms. Any additional or different Terms
stipulated by you or set out in any communication from you will not be
effective or binding upon SSB unless agreed by you and SSB in writing. If
there is any inconsistency between these Terms and the terms and conditions
in the Margin Lending Facility Agreement, the terms and conditions in the
Margin Lending Facility Agreement will prevail.
1. DEFINITIONS.
For the purposes of these Terms:
"ASX Business Rules" means the Business Rule of the ASX.
"contract note" means any contract not issued by SSB on execution of
an order.
"options contract" has the meaning give to that term in the ASX
Business Rules.
"order" means any order placed by you with SSB to purchase or sell or
otherwise deal in securities.
"SCH" means ASX Settlement and Transfer Corporation Pty Ltd ACN 008
504 532.
"services" means any services provided by SSB to you including, but
not limited to, those services set out in clause 2.1.
"transaction" means a transaction formed on execution of an order.
2. SALOMON SMITH BARNEY SERVICES.
2.1 SSB will provide you with dealing services together with related
research in relation to the following investments:
(a) shares in Australian companies;
(b) debentures, stocks, bonds or other debt instruments, issued or
proposed to be issued by a government, public agency or body
corporate;
(c) warrants over investments falling within (a) and (b) above;
(d) unit trusts and other prescribed interests whether offered in
Australia or elsewhere; and
(e) derivatives and other products traded on markets operated by the
ASX.
2.2 SSB may also provide other services if agreed between you and SSB.
2.3 Nothing in these Terms will limit or restrict the right of SSB, or any
of its officers, directors or employees or persons otherwise
associated with SSB, to engage in the provision of services of a
similar nature to the services or, subject to the Corporations Law, to
act as principal in any dealing in securities.
3. EXECUTION
3.1 Each order executed by SSB on your behalf will be transacted in
accordance with, and SSB and you will be bound by, the Corporations
Law, the ASX Business Rules and the SCH Business Rules and the
procedures, customs, usages and practices of the ASX and its related
entities as amended from time to time, which are applicable to the
order.
3.2 In executing any order placed by you with SSB, you acknowledge that
SSB will be your agent.
3.3 You may, either orally or in writing, give instructions to SSB to deal
in securities on your behalf, SSB reserves the right to refuse to
accept any order in its absolute discretion where it is not satisfied
that the individual placing the order has appropriate authority or for
any other reason.
3.4 SSB will not be responsible for confirming the receipt of instructions
or verifying the authenticity of your instructions. If a conflict
occurs between your records and SSB's records regarding the substance
of your instructions, SSB's records will prevail.
3.5 SSB will endeavor to provide best execution in relation to each
transaction.
3.6 Subject to the provisions of the ASX Business Rules, you acknowledge
that SSB may from time to time allocate a sale or purchase of
securities for its own account or its associates when it has an
unexecuted order on the same Terms for those securities from you.
4. SALOMON SMITH BARNEY'S CHARGES
4.1 You agree to pay SSB on demand:
(a) SSB's charges with respect to the execution of orders:
(i) applicable at the time of execution; or
(ii) if such charges are the subject of a separate agreement
between SSB and you, in accordance with that agreement;
(b) all stamp duty, duties and taxes payable on that agreement or in
connection with the execution of orders or on transactions on
your behalf;
(c) all amounts incurred by SSB as a result of your default under
these Terms, the Corporations Law, the ASX Business Rules, the
SCH Business Rules or otherwise including, but not limited to,
all legal costs and expenses on a full indemnity basis; and
(d) interest on any unpaid amount required to be paid under these
Terms for the period that the amount remains unpaid at a rate per
annum equal to the rate which is 2% above the Commonwealth Bank
of Australia's reference rate published from time to time by the
Commonwealth Bank of Australia or any rate substituted for that
rate.
4.2 You agree that all amounts due to SSB under clause 4.1 may be deducted
from any funds held by SSB on your behalf or, at your discretion, will
be paid by you as stated in any contract note.
5. YOUR MONEY
5.1 In accordance with the Corporation Law and the ASX Business Rules, any
funds received by SSB on your behalf will be held in trust.
5.2 Should you require SSB to place money on deposit for you, you agree to
provide SSB with your written confirmation of that instruction and
your acknowledgement that such money is not covered by the trust
provisions of the Corporations Law or the ASX Business Rules.
6. SETTLEMENT
6.1 You agree to settle your accounts with SSB by the time and date shown
on the contract note or as otherwise directed by SSB and for that
purpose you will deliver to SSB:
(a) funds to cover any payment due or any payment that will be due
between the date of placing your order and any of the days
immediately preceding the date shown on the contract note (in
either case the funds required to be delivered are to "due" for
the purposes of these Terms); or
(b) any documents required by SSB (including instruments or documents
of title for securities) (the "Documents")
6.2 If you fail to make payment to SSB by the due date shown on the
contract note, SSB, after notifying you and at SSB's discretion, has a
general lien over and power to sell or realise any securities which
SSB holds or has agreed to purchase for you.
6.3 If you fail to deliver the Documents to SSB on demand or by the due
date shown on the contract note, SSB, after notifying you and at SSB's
discretion, has power to purchase equivalent securities at your
expense to make good your default.
6.4 You indemnify SSB with respect to any loss, costs, charges or expenses
suffered or incurred by SSB as a result of your failure to make any
payment or deliver the Documents to SSB in accordance with these Terms
or any contract note.
7. RIGHTS ISSUES, TAKEOVERS, ETC
7.1 Where SSB through SSB Nominees, holds securities on your behalf SSB
will so far as practicable be responsible for:
(a) taking up any rights;
(b) exercising any conversion or subscription of rights;
(c) dealing with takeovers or other capital reconstructions;
(d) exercising voting rights; and
(e) any other necessary action
relating to the securities, provided that SSB has received written
instructions from you regarding those investments (together where
appropriate with sufficient funds to cover any payments due) no later
than 5pm on the second business day preceding either the last date for
accepting an offer or lodging a form of proxy to exercise voting
rights or the payment date, as the case may be.
7.2 Where investments are in the course of settlement SSB will so far as
is practicable be responsible for taking up rights attributed thereto
provided that SSB has received written instructions from you regarding
those investments (together where appropriate with sufficient funds to
cover any payment due) no later than 5pm on the second business day
preceding the required payment date.
8. DIVIDENDS
8.1 Where SSB purchases securities on your behalf and a dividend is
subsequently declared or payable on those securities, you agree that
the dividend will take the form of a cash payment unless you have
already provided SSB with alternative written instructions, no later
than 5pm on the second business day preceding the date on which a
contrary declaration would be required.
8.2 You agree that dividends may not be paid to you without any tax
deduction whether in the form of a cash payment or otherwise unless
you provide SSB with your tax file number.
8.3 Where SSB sells securities cum dividend, cum interest or cum capital
return, on your behalf and you have previously elected to receive the
dividend, interest or capital return otherwise than in cash, and the
securities are not transferred to the purchaser prior to the closing
date for entitlement to the dividend, interest or capital return, SSB
will credit a sum equal to the amount of the dividend, interest or
capital return to the purchasers and you agree to pay that sum to SSB.
9. RIGHT TO RETAIN YOUR FUNDS
9.1 SSB is entitled to retain any securities or sums due to you pending
settlement of any liability (whether present or deferred) that you may
have to SSB and to set off sums due to SSB against amounts which SSB
holds for you in any account.
10. FINANCIAL ADIVSER CLIENT
10.1 If you are a client of a financial adviser you acknowledge and agree
that:
(a) orders placed with SSB will be carried out on an execution only
basis and SSB will not provide you with any advice or
recommendations relating to the merits of any securities;
(b) your financial adviser (not SSB) is responsible for making
securities recommendations to you and your adviser is required to
obtain information concerning your investment objections,
financial situation and particular needs to ensure that he/she
has a reasonable basis for recommendations made to you;
(c) any advice or recommendations provided by SSB will be made only
to your financial adviser who will assess the suitability of such
advice or investment recommendations based on your investment
objectives, financial situation and particular needs.
11. CONFIDENTIALITY
11.1 SSB undertakes to keep all information received from you in connection
with these Terms private and confidential, except to the extent that:
(a) you give your prior consent to its disclosure,
(b) SSB is required to disclose information to the Australian
securities & Investments Commission, the ASX or any other
regulatory or governmental authority having jurisdiction over
SSB; or
(c) the disclosure is necessary to carry out SSB's obligations under
these Terms.
11.2 SSB undertakes to use any information received from you in connection
with these Terms only for the purpose which it was given and for your
benefit.
12. MATERIAL INTERESTS
12.1 You acknowledge that SSB, any of it officers or a related entity of
SSB may have a material interest in, or conflict of duty in relation
to, any order executed with or for you. You authorise SSB to execute
orders on your behalf in situations of conflict of interest including,
without limitation, where SSB is:
(a) dealing as principal in the securities that are the subject of
the order or providing services to other persons with interest in
or proposing to acquire such securities;
(b) dealing as agent on your behalf with a person connected with SSB
or conducting a crossing by matching your order with the order of
another party (who may be a person connected with SSB);
(c) sponsoring or underwriting a new issue involving the securities
that you are buying or selling; or
(d) holding a principal position in the securities concerned.
13. Independence Policy
13.1 You acknowledge that SSB is not, in providing the services to you,
obliged to use or disclose the information, whether or not unpublished
and/or price sensitive, which is in the possession of any officer of
SSB, another of SSB's business areas or of any related entity of SSB,
in circumstances where the individuals processing your order are
prevented from knowing or taking account of such information by reason
of chinese walls or independence policies implemented by SSB.
14. Authority
14.1 You represent, warrant and undertake to SSB that:
(a) you are by your Constitution, deed of partnership, trust deed or
other constitutional document, empowered to enter into these
Terms with SSB; and
(b) you will obtain and maintain in effect all necessary consents
approvals or licenses required by any governmental or regulatory
body applicable to each transaction entered into on your behalf
by SSB and that you will comply with all applicable laws.
15. CURRENCY
15.1 All currency exchange risks in respect of any transaction entered into
on your behalf by SSB shall be borne by you. Any conversion from one
currency to another required to be made for performing or enforcing
any transaction may be effected by SSB in the manner and at the time
as SSB may in its absolute discretion decide. SSB will take all
reasonable steps to obtain the best exchange rate available.
16. CHANGES
16.1 Where additional or different terms become binding on you and SSB, all
orders placed thereafter shall be governed by these Terms as varied.
16.2 No amendment will affect any outstanding order or transaction or legal
rights or obligations that may have arisen before the date of the
variation.
17. INDEMNITY
17.1 You Indemnify and agree to keep indemnified SSB and its employees,
agents and representatives from and against all sums of money,
actions, proceedings, suits, claims, demands, damages, costs, expenses
and any other amounts whatsoever arising out of any default, whether
by act or omission, of you under these Terms or any order or
transaction or anything lawfully done by SSB in accordance with,
pursuant or incidental to these Terms or any request by you or by
reason of SSB complying with any direction, request or requirement of
the ASX Business Rules, the Corporations Law, the SCH Business Rules
or any regulatory authority.
18. TERMINATION
18.1 Either party may terminate these Terms in accordance with the Margin
Lending Facility Agreement only.
18.2 Termination of these Terms shall not affect the completion of
transactions already initiated or any other rights or obligations
arising prior to the date of termination.
19. GOVERNING LAW
19.1 These Terms are governed by and construed in accordance with the law
of New South Wales and the parties submit to the non-exclusive
jurisdiction of the courts of New South Wales.
20. GENERAL
20.1 EMPLOYEES PROTECTED.
Every exemption from liability, defence or immunity available to SSB
shall also be available to and extend to protect every one of its
employees, agents or representatives. For the purposes of this clause
20.1, SSB shall be or shall be deemed to be acting as agent on behalf
of its employees, agents or representatives.
20.2 SEVERABILITY
Each part of these Terms is severable from the balance of these Terms
and if any part of these Terms is illegal, void, invalid or
unenforceable, then that will not effect the legality, effectiveness,
validity or enforceability of the balance of these Terms.
20.3 TAPE RECORDING OF CONVERSATIONS
You acknowledge that SSB may record telephone conversations between
you and SSB. If there is a dispute these records may be used as
evidence.
20.4 Joint Accounts
If the account is opened in two or more names the liabilities of all
parties are joint and several and SSB is under no obligation to
inquire into or see to the application or disposition of the
securities or money.
20.5 TIME OF ESSENCE
Time is of the essence with respect to these Terms.
Additional Terms for ASX Derivative Products
21. DEFINITIONS AND INTERPRETATIONS
21.1 "ASX Derivative Products" includes Exchange Traded Options, Share
Ratios, LEPOs or any other ASX Derivative Product.
"Exchange Traded Options" means options traded on the market of the
ASX.
"Exploratory Booklet" means the current explanatory booklet provided
by the ASX for the relevant ASX Derivative Product.
"OCH" means Options Clearing House Pty. Limited.
"OCH Rules" means the Business Rules of the OCH.
21.2 Other Terms used in the following additional terms ("these Additional
Terms") have the same meaning as in the Terms.
22. MARGINS
22.1 You agree not to breach, either alone or in concert with others, the
position or exercise limits referred to in the Explanatory Booklet.
22.2 You agree to observe the margin requirements as established pursuant
to the OCH Rules.
22.3 You acknowledge SSB's right to close out any contract if you fail to
deposit the required margin or make the required payments within 24
hours (in the case of cash covered written positions) or within 48
hours (in any other case) of SSB making the required payments or
depositing the required margin with OCH, or as required by the OCH
Rules.
22.4 You agree to maintain with SSB a deposit or bank guarantee for such
sum as shall from time to time be determined by the board of the ASX,
with respect to your dealings in ASX Derivative Products.
23. OBLIGATIONS OF SALOMON SMITH BARNEY
23.1 Upon registration of a contract with OCH in the name of SSB, you
acknowledge that SSB incurs obligations to OCH as principal, even
though SSB may have entered into the contract on your behalf.
24. YOUR RIGHTS
24.1 You acknowledge that any benefit or right obtained by SSB upon
registration of a contract with OCH by novation of a contract under
ASX Business Rule 10.5 or any other legal result of registration is
personal to SSB and the benefit of that benefit, right or legal result
does not pass to you. You have no rights, whether by way of
subrogation or otherwise, against ASX or OCH in relation to any
transaction by SSB in ASX Derivative Products.
25. DEFAULT.
25.1 If:
(a) you fail to pay, or provide security for, any amount payable to
SSB;
(b) you fail to complete, under ASX Business Rule 3.6, a contract for
the transfer of underlying securities following the exercise of
an Exchange Traded Option;
(c) a guarantee lodged by you pursuant to the ASX Business Rules is
withdrawn or become ineffective; or
(d) any other event occurs which constitutes a default,
SSB may, in addition to any other rights which it may have against
you, without giving prior notice to you, take any action, or refrain
from taking action, which it considers reasonable in the circumstances
in connection with open contracts registered in your account and,
without limitation, SSB may:
(a) enter into one or more transactions to effect the close out of
one or more open contracts in accordance with ASX Business Rule
10.8;
(b) exercise one or more Exchange Traded Options in accordance with
ASX Business Rule 10.13.2.1; or
(c) exercise any other rights conferred by the ASX Business Rules or
the Terms of Business or perform any other obligations arising
under the ASX Business Rules or the Terms of Business in respect
of those open contracts,
and you must account to SSB as if those actions were taken on your
instructions and, without limitation, are liable for any deficiency
and entitled to any surplus which may result.
26. APPOINTMENT AS AGENT
26.1 You irrevocably appoint severally OCH and every director, manager and
assistant manager for the time being of OCH, at the option of OCH, to
do all acts and execute all documents on your behalf for the purpose
of exercising the powers conferred on OCH under ASX Business Rule
10.10 including, without limitation, the power to transfer or close
out open contracts if you commit an event of default.
27. RIGHT TO REFUSE TO DEAL
27.1 You acknowledge that SSB may at any time refuse to deal in or may
limit dealings in, ASX Derivative Products for you. SSB will notify
you of any refusal or limitation as soon as practicable.
28. INCONSISTENCY
28.1 If the Board of ASX prescribes amended minimum terms for ASX
Derivative Products for the purposes of the ASX Business Rules (the
"New Terms"), to the extent of any inconsistency between these Terms
and the New Terms, the New Terms will override these Additional Terms
and apply as if you and SSB had entered into an agreement comprising
the New Terms. SSB will provide you with a copy of the New Terms
applicable to your trading in ASX Derivative Products.
29. Non Professional Investors
29.1 If you are not a professional investor, SSB has provided you with a
copy of the ASX Explanatory Booklet relevant to the particular ASX
Derivative Product that you will be trading and the Risk Disclosure
Statement in relation to ASX Derivative Products. You acknowledge that
you have read and understood those documents.
ADDITIONAL TERMS OF BUSINESS FOR ASX WARRANTS
30. About ASX Warrants
30.1 SSB has provided you with a copy of the ASX Explanatory Booklet
entitled Warrants and you acknowledge that you have read a copy of the
Explanatory Booklet.
30.2 You understand that neither ASX Derivatives nor Options Clearing House
Pty Limited have any involvement whatsoever with Warrants.
30.3 You are aware that admission to trading status of a Warrant does not
imply that the ASX or the National securities Exchanges Guarantee
Corporation Limited gives any guarantee or warranty as to the
viability of the Warrant-Issuer or Guarantor. You acknowledge that
failure of the Warrant-Issuer or the Guarantor (if applicable) to
fulfill their obligations does not give rise to a claim against the
ASX, handling Member Organisations or the National securities
Exchanges Guarantee Corporation Limited.
31. Warrant Terms.
31.1 You aware that a Warrant has a limited life and cannot be traded after
its expiry date.
31.2 You are aware that Warrants do not have standardised Terms of Issue
and acknowledge that it is your responsibility to become aware of the
Terms of Issue of any Warrant in which you choose to invest.
31.3 You are aware that Warrants may be subject to adjustments after their
initial issue. You acknowledge that it is your responsibility to
become aware of any adjustments which may have been made to any
Warrant in which you choose to invest.
<PAGE>
DEFINITIONS
These words and expressions have these special meanings in this agreement:
THIS AGREEMENT means this Agreement, any sponsorship agreement, the
application form, power of attorney, any client agreement or any other
document contemplated by and executed in connection with this Agreement.
APPLICATION FORM means the form for applying for a loan required by us from
time to time.
APPROVED SECURITY means any share, stock, unit in a trust or other security
that is notified to you by SSB as being aceptable to SSB for the purposes
of the facility.
ASX means the Australian Stock Exchange Limited (ACN 008 624 691).
BANKRUPT MEANS BEING IN A STATE OF "BANKRUPTCY" AS THAT TERM IS DEFINED IN
THE SCH BUSINESS RULES.
BUSINESS DAY means a week day in which the banks and the Australian Stock
Exchange are open for business in Sydney.
CERTIFICATE means a share certificate or other document evidencing title
for a security.
CERTIFICATED SECURITY means a security, title to which is evidenced by a
certificate.
CHESS stands for Clearning House Electronic Subregister System and has the
meaning in the SCH business rules. It is a system of registering
securities on computer.
CHESS subregister has the meaning in the SCH business rules. Generally, it
means that part of a register of securities that is administered by the
securities clearing house.
CONVERSION has the meaning in the SCH business rules. Generally, it means
the movement of securities from one holding on one subregister to another
holding on another subregister without a change in legal ownership.
COSTS includes charges and expenses (including stamp duty and other
government charges); and costs, charges and expenses in connection with
legal and other advisers on a full indemnity basis.
DEFAULT means an event described in clause 13.
DRAWDOWN DATE means the date on which a loan is or is to be made available
to you.
FACILITY means the loan facility provided to you by SSB subject to the
facility terms if your application is approved by SSB.
FUTURE SECURITY means:
(a) securities that are acquired wholly or partly with the proceeds of the
loan and which are registered in the name of SSB Nominees on your
behalf or in your name in accordance with the Sponsorship Agreement;
and
(b) securities which are registered in your name which after this
Agreement have been executed, are identified in the register of
members of the company, or other register of holders of such
securities, by a holder identification number assigned by SSB Nominees
in accordance with the Sponsorship Agreement; and
(c) securities that you transfer to us or to SSB Nominees after this
Agreement was entered into, whether pursuant to the terms of this
Agreement or otherwise; and
(d) securities which are issued to you pursuant to a dividend re
investment plan attaching to mortgaged property securing a loan
amount.
GUARANTEED MONEY means at any time in respect of a loan amount for which
the guarantor has agreed to be a guarantor, the total loan amount
outstanding at that time in respect of that loan (unless otherwise agreed
between the guarantor and us).
GUARANTOR LIMITED RECOURSE FACILITY means a facility which is subject to
clause 9.6 and which has been agreed by us in writing to be a guarantor
limited recourse facility.
GUARANTOR means a person (if any) whose name is shown as such on the
Application Form and any person who subsequently becomes guarantor of your
obligations in respect of a loan. If there is more than one, guarantor
means each of them separately and every two or more of them jointly.
Guarantor includes successors.
HOLDER RECORD has the meaning in the SCM business rules. Generally, it
means the details recorded by securities clearing house in CHESS for the
purpose of operating one or more holdings.
HOLDER RECORD LOCK has the meaning in the SCH business rules. Generally,
it means the facility in CHESS for preventing securities from being
deducted from a holding.
HOLDING has the meaning in the SCH Business Rules. Generally, it means a
holding of securities by a person.
INCLUDING when introducing an example does not limit the meaning of the
words to which the example relates to that example or examples of a similar
kind.
A person is INSOLVENT or in INSOLVENCY if insolvent or an insolvent under
administration or it has a controller appointed (each as defined in
Corporations Law), bankrupt, in receivership, in receivership and
management, in liquidation, in provisional liquidation, under
administration, wound up, subject to any arrangement, assignment or
composition.
LIMITED RECOURSE LOAN means a loan which is subject to the terms of clause
9 of this agreement and which has been agreed by you and us in writing to
be a limited recourse loan.
LOAN AMOUNT means the amount of money we decide to make available to you.
LOAN AMOUNT OUTSTANDING means at any time in respect of a particular loan
the balance owing on the loan account for that loan at that time plus:
(a) all accrued interest charges, default interest charges, costs, taxes
and other amounts which you must pay under this Agreement in
connection with your loan but which have not been debited to the loan
account at that time; and
(b) all money which you will or may owe us in the future under this
Agreement in connection with that loan.
MARGIN CALL NOTICE means the notice given by us to you under clause 8.
MARGIN PERCENTAGE means the percentage of the market value a security that
SSB is prepared to lend against.
MATURITY DATE means for a loan or facility the last day of the term of that
loan as agreed between you and us.
MORTGAGED PROPERTY means all of the securities (including new rights and
future securities) mortgaged or charged by the mortgage.
NEW RIGHTS means any present or futures rights in connection with the
mortgaged property:
(a) in all allotments, offers, benefits, privileges, rights, bonuses,
securities, stock, debentures, distributions or rights to take up
securities; or
(b) consequent on any conversion, redemption, substitution, cancellation,
reclassification, forfeiture, consolidation or subdivision; or
(c) consequent on a reduction of capital, liquidation or scheme of
arrangement (but it does not include dividends).
PAYABLE IN RELATION TO AN AMOUNT means an amount that is currently payable
or will be payable in the future.
PERSON includes an individual, a firm, a body corporate, an unincorporated
association and an authority.
PORTFOLIO means all the shares and other securities (including any new
rights) that are or upon settlement of any outstanding settlement will be
mortgaged to us under the mortgage.
SCH BUSINESS RULES means the business rules of the securities clearing
house for CHESS.
SSB NOMINEES means Bowyang Nominees Pty Ltd (ABN 56 081 472 684) or any
other nominee of SSB.
SECURITY means:
(a) a security that is quoted or admitted to trading status by the
Australian Stock Exchange;
(b) a security or interest in an unlisted collective investment scheme;
(c) options to purchase, subscribe for or acquire any of the above;
(d) other securities within the meaning of section 92(1) of the
Corporations Law;
(e) futures contracts within the meaning of section 72 of the Corporations
Law;
(f) anything that is notified to you by SSB as being acceptable to SSB for
the purposes of a margin loan; and
(g) for the purpose of the CHESS sponsorship agreement, has the meaning in
the SCH business rules. Generally, it means quoted securities and
quoted rights (within the meaning of section 1097A of the Corporations
Law) and securities to which a declaration by the Australian
securities and Investments Commission under section 1097C or 1113A of
the Corporations Law applies.
SECURITIES CLEARING HOUSE means ASX Settlement and Transfer Corporation Pty
Limited (ACN 008 504 532) and its agents appointed under the SCH business
rules.
SECURITY INTEREST means any security for the payment of money or
performance of obligations including a mortgage, charge, lien, pledge,
trust or power.
SECURITY VALUE for a security, means an amount equal to its margin
percentage of its market value.
SCHEDULED TIME has the meaning given in the SCH business rules. The
scheduled time varies depending on the act to which it relates.
SPONSORING PARTICIPANT means the broker or other participant that sponsors
your participation in the CHESS system of registration of security
holdings.
SPONSORSHIP AGREEMENT means the agreement between the Sponsoring
Participant and you setting out the terms of sponsorship of securities
under CHESS.
SUBPOSITION has the meaning given in the SCH business rules. Generally, it
means an arrangement under which activity relating to the securities may be
restricted and access to the securities given to a person other than your
normal sponsor.
TAXES means taxes, levies, imposts, duties and other charges whenever
imposed by a governmental authority (for example, goods and services tax or
any similar tax, stamp duties, financial institutions duties and debits
tax).
TRANSFER, as used in the CHESS sponsorship agreement, has the meaning in
the SCH business rules. Generally, it means a transfer of securities to or
from a holding on CHESS.
US, WE OR OUR means Salomon Smith Barney Australia Securities Pty Limited
ABN 64 003 114 832 ("SSB") and includes:
(a) any body of which SSB is the successor or transferee;
(b) if SSB is reconstituted or amalgamated with another body - the new
person formed; and
(c) a person to which some or all of SSB's business, including its right
to receive the amount owing, is transferred or assigned.
WITHDRAWAL INSTRUCTIONS has the meaning in the SCH business rules.
Generally, it means the instructions by a person who is sponsored on CHESS
for the withdrawal of securities from the sponsored holdings.
YOU means each borrower named as an applicant.
The singular includes the plural and vice versa.
A reference to a document includes any variation or replacement of it. A
reference to law means common law, principles of equity and laws made by
parliament and includes regulations and other instruments made by
parliament and consolidations, amendments, reenactments or replacements of
any of them.
A reference to any thing includes the whole and each part of it.
<PAGE>
SIGNED by the parties as an agreement at Sydney in the State of New South
Wales on 19 September 2000.
SIGNED by Bassem Jammal as attorney for Trefoil International III, SPRL
under a power of attorney dated 30 August 2000.
/s/ Bassem Jammal /s/ Arthur Basha
----------------------------- ------------------------------
Bassem Jammal Signature of witness
Vice President & Head of Margin Lending Arthur Basha
Salomon Smith Barney Australia Securities Level 16, 225 George Street
Pty Limited Sydney NSW 2000
BY EXECUTING THIS AGREEMENT THE ATTORNEY STATES THAT THE ATTORNEY HAS
RECEIVED NO NOTICE OF REVOCATION OF THE POWER OF ATTORNEY.
SIGNED by Paul Seymour as attorney for Salomon Smith Barney Australia
Securities Pty Limited.
/s/ Paul Seymour /s/ Arthur Basha
----------------------------- ------------------------------
Paul Seymour Signature of witness
Director Arthur Basha
Salomon Smith Barney Australia Securities Level 16, 225 George Street
Pty Limited Sydney NSW 2000
