BT Margin Lending Application

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1 BT Margin Lending Application

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3 Contents 2 Chess explanation 3 Risk disclosure statement 4 Guarantor and Third Party additional risk disclosure statement 5 Privacy disclosure and consent 7 BT Margin Loan Facility Deed 23 Guarantee and Indemnity 27 How to apply for a BT Margin Loan 29 BT Margin Lending Loan Application Form 39 Optional forms Applying for a BT Margin Loan Before you apply for a BT Margin Loan, we recommend that you read our Margin Lending Made Easy brochure. This will provide you with a good understanding of how the product works. You can download this from our website or you can phone our BT Customer Relations Consultants on and request them to send one to you. Detailed instructions on how to apply for a BT Margin Loan are contained on page 27 of this booklet. A checklist is also provided to help you in this process. Issued by BT Securities Limited ABN as agent for Westpac Banking Corporation ABN Date of issue March

4 CHESS explanation BT Securities Limited ( BTS ) has a legal responsibility to explain CHESS sponsorship to you. When you sign the Loan Application Form, you are acknowledging that this explanation has been given to you and that you understand this explanation. Please contact our Customer Relations Consultants on if you have any questions regarding CHESS sponsorship. CHESS (Clearing House Electronic Subregister System) is a paperless system that electronically records share ownership. Rather than share certifi cates, ownership is recorded on an account in CHESS. CHESS is operated by the ASX Settlement and Transfer Corporation Pty Ltd ( ASTC ). It operates under published rules known as ASTC Settlement rules ( ASTC rules ) that all participants must abide by. Any issuer sponsored holdings you provide as security for the borrower s loan will be converted by BTS into a CHESS holding in the name of the relevant security provider, unless they are not eligible. Most subsequent share purchases will also be held in the same CHESS holding. Sponsorship on CHESS In order to maintain a share holding on CHESS the borrower (and the third party) must be sponsored. This is arranged by signing an agreement with a Sponsoring Participant. BTS is a Sponsoring Participant. BTS sponsorship agreement forms part of the BT Margin Loan Facility Deed (the Facility Deed ) and may also be a separate agreement. An explanation of the main points of the sponsorship agreement is set out below. The Facility Deed authorises BTS to establish a CHESS holding in the name of the relevant security provider and control it on their behalf, acting on their instructions or via contract notes received from their broker. BTS will convert existing shares to a CHESS holding, free of charge, and carry out the instructions of the relevant security provider relating to their shareholdings by sending the appropriate electronic message to CHESS and processing messages received from CHESS. Statements detailing any change to a CHESS shareholding in the name of the relevant security provider will be sent to them each month by the ASTC. If there is no change to their CHESS shareholding they will receive an annual statement. BTS will only operate a CHESS account in accordance with the Facility Deed and will also abide by the ASTC Rules. The Facility Deed contains conditions and acknowledgements that are required under the ASTC Rules, including: that the Australian Stock Exchange Limited and its subsidiaries are not responsible for regulating or supervising the relationship between the relevant security provider and BTS an acknowledgment that, for the benefi t of the ASTC and companies in which shares are held, you will not make any claim against them that transfers effected under the ASTC by BTS were not authorised by the relevant security provider that the relevant security provider will not make a claim against the broker s National Guarantee Fund unless a transfer is also effected by a broker that a responsible offi cer of BTS has explained the sponsorship agreement to the relevant security provider before the Facility Deed was executed by them (this section contains that explanation) the relevant security provider understood the intent and effect of the sponsorship before it executed the Facility Deed. If BTS is suspended from participating in CHESS under the ASTC, the relevant security provider has a right to request the ASTC to remove the holding from the CHESS sub-register or from the control of BTS. In order to preserve the loan security, the Facility Deed requires the relevant security provider to exercise that right in a way that will preserve the loan security under the Facility Deed. Unless BTS agrees otherwise, the relevant security provider appoints BTS to sponsor only those securities of that security provider that are included in the loan portfolio (as defi ned in the Facility Deed). The relevant security provider may have more than one sponsor if they wish. Any other sponsors they appoint will not be able to sponsor the shares of that security provider held in your loan portfolio unless approved by BTS. Full sponsorship on CHESS all shares held under this sponsorship are mortgaged to BTS as security for the margin lending facility to the borrower under the Facility Deed, including those shares with a zero lending ratio. This means, for example, that the relevant security provider may not be free to deal with the shares and the shares may be sold to meet a margin call or to pay the balance of the borrower s loan if an event of default occurs. 2

5 Risk disclosure statement Risk disclosure statement The following are some risks associated with being a borrower, guarantor, or provider of third party security for the BT Margin Loan Facility. Any proposed borrower, guarantor or third party security provider should obtain independent professional advice, including from your solicitor and your fi nancial planner, before applying. 1. Gearing can magnify the effect of both gains and falls in the value of an investment. If money is borrowed from another source in order to provide the borrower s equity for a BT Margin Loan Facility, then this will increase the borrower s overall gearing level. The higher the overall gearing level, the greater the effect that a fall in the value of the investment will have on the borrower s fi nancial situation. Any asset that is provided as security for that other loan, including by a security provider (such as security over a home or other assets) will also be at risk of being sold to repay the borrower s loan. 2. A margin call may be made in a number of situations, eg if the value of the supporting investment falls, BT Securities Limited ( BTS ) changes its lending ratios or buffer or the borrower does not make the required interest payments. 3. Each of the borrower and the security provider gives BT (Queensland) Pty Limited ( BTQ ) and its authorised offi cers a power of attorney under which they can, among other things, sell some or all of borrower s and/or the security provider s portfolio. The attorneys can exercise their powers at any time regardless of whether the borrower or the security provider are in default. The attorneys are not obliged to exercise their powers. However, if they do they may use any sale proceeds to pay some or all of the amount owed to BTS. The attorneys selling some or all of a portfolio may result in a realised profi t or loss on the investment and in a disruption to any tax planning and investment strategy. For example, if the borrower does not meet a margin call, the attorneys may sell some or all of the security provider s portfolio to repay some or all of the loan (even if the security provider does not know about the margin call). 4. BTS may vary the lending ratio assigned to any security (including reducing it to zero) at any time. This reduction may result in a margin call or pending transactions not being completed. The lending ratio that is assigned to each security, and any change in that ratio, are not to be taken as recommendations by BTS. The lending ratio is not based on an assessment of the suitability of the security to form part of a portfolio. 5. There is the risk that any dividends, distributions and additional tax refunds that the borrower anticipates may not be paid or their payment may not coincide with the time when interest payments must be made on the loan. For this reason, none of the borrower, the guarantor nor the security provider should rely on anticipated dividends, distributions and additional tax refunds as the sole source of income to meet interest payments or possible margin calls. 6. All dividends, distributions, bonus issues, rights issues and other rights and entitlements defi ned as entitlements in the BT Margin Loan Facility Deed (the Facility Deed ) will be mortgaged to BTS and neither the borrower nor the security provider will have access to them unless BTS agrees. In addition, neither the borrower nor the security provider may be able to accept takeover offers or other offers related to their securities. 7. In certain circumstances the loan will be in default (see clause 34 of the Facility Deed). None of the borrower, the guarantor or the security provider has control over many of these circumstances, such as a signifi cant fall in the market, the delisting of a company, or the default by another person. If any default occurs, BTS can demand immediate repayment of the loan, the guarantee and/or a portfolio can be sold without giving the borrower, the guarantor or the security provider notice in order to repay any outstanding loan balance. 8. A fall in the value of the loan portfolio between the time that the borrower places an order with their broker and the time that settlement occurs may mean that BTS is unable to settle the purchase for the borrower. This may result in fail fees being incurred by the borrower. 9. BTS can vary the interest rate applicable to the loan at any time, except on any amount for which the borrower has prepaid interest. Interest is calculated on the higher of the loan balance and $20,000 even if there is less outstanding and will be charged for a minimum period of 2 months even if the loan is repaid earlier. Prepayments of interest will not be refunded in any circumstance, even if the borrower repays part or all of the loan. 10. BTS rights to recover money owing to it from the borrower are not limited to the loan portfolio. This means that if there is money still owing to BTS after all of the security portfolio has been sold, then BTS may seek to recover any defi ciency from the 3

6 Risk disclosure statement borrower personally or under any guarantee of the borrower s obligations. 11. BTS does not provide the borrower, the guarantor or security provider with fi nancial, investment, taxation or legal advice regarding the Facility Deed, its suitability to the borrower s circumstances or how the borrower should invest the money it borrows under the Facility Deed. It has not considered whether the guarantor should guarantee the borrower s loan. It has not considered whether the security provider should provide third party security for the borrower s loan. 12. The borrower s fi nancial planner may receive a commission from BTS during the term of the loan. The payment of that commission by BTS is not an endorsement of any fi nancial planner and BTS does not, in any circumstances, accept any responsibility for any statement, act or omission of any planner. 13. BTS may open a margin call account on the borrower s behalf with the BT Cash Management Trust (the Trust ) or another cash investment product which it selects, unless the borrower instructs BTS otherwise. The Trust or other cash investment product may earn fees from any money invested in it. BTS may in some cases advance money under the margin loan and invest it in the margin call account (see clause 2.2 of the Facility Deed). The margin call account will be part of the borrower s loan portfolio and will be mortgaged to BTS. As with other investments in that loan portfolio, investment in the margin call account involves the risk of a fall in the value of the investment, and BTS does not guarantee any return (including a return of capital) from the margin call account. If the borrower requests BTS to do so, BTS will send them a copy of the prospectus or other disclosure document for the Trust or other investment product used as the margin call account. 14. A security provider will be permitted to purchase securities using money advanced from the borrower s margin loan unless the borrower instructs us otherwise. The borrower will be liable for any amount advanced to a third party to settle a purchase made by the third party. Guarantor and Third Party additional risk disclosure statement The following are some additional risks associated with providing a guarantee or third party security for the BT Margin Loan Facility. As a third party, you will have no control over the loan, the loan portfolio, or any arrangements relating to the loan. You should obtain independent professional advice before providing that security. 1. The borrower may operate the loan without reference to you and therefore can increase or decrease the loan amount and/or your risks as guarantor or third party (as the case may be) without your knowledge or agreement. 2. The BT Margin Loan Facility between BTS, BTQ and the borrower can be changed at any time without contacting you. 3. You cannot cancel the guarantee or security (as the case may be) which you provide without BTS s written agreement. BTS will normally not agree to release you unless the borrower has repaid all money owing or, in the case of a third party, there is suffi cient security available after your investments have been removed from the loan portfolio. 4. In the case of a third party, if the borrower agrees to use the loan to pay for a purchase of shares in your name, a fall in the value of the loan portfolio between the time that you place an order with your broker and the time that settlement occurs may mean that BTS is unable to settle the purchase for you. This may result in fail fees being incurred by you. You must also consider how you might be affected by the loss of the investments you intend to offer as security. By signing the power of attorney in the Loan Application Form you acknowledge that you have read, understood and accept these risks. 4

7 Privacy disclosure and consent 1. Privacy disclosure and consent You being the person(s) whose names appear in this application as: the proposed borrower and/or director(s) of the proposed borrower; the proposed guarantor(s) and/or director(s) of the proposed guarantor(s) of the obligations of the proposed borrower; or the proposed third party provider of a security of the proposed borrower s obligations, give the following acknowledgements, consents and authorities in conjunction with and in relation to the application being made by the borrower for the BT Margin Loan Facility. 2. Notice of disclosure of credit information to a credit reporting agency Under the Privacy Act, BTS is allowed to give a credit reporting agency personal information about you. The information which may be given to an agency is covered by the Privacy Act and includes, to the extent applicable: (e) permitted information about you which will allow you to be identifi ed; details of any cheques drawn by you for an amount not less than $100 which have been dishonoured more than once; in specifi ed circumstances, whether in the opinion of BTS, you have committed a serious credit infringement; where you are a proposed borrower: (ii) (iii) (iv) (v) the fact that you have applied for credit and the amount of credit applied for; the fact that BTS is a current credit provider; payments which are overdue for more than 60 days and for which collection action has commenced; advice that payments are no longer overdue; and whether credit provided to you by BTS has been paid or otherwise discharged; where you are a proposed guarantor: (ii) the fact that you have offered to act as guarantor in respect of credit or an application for credit; and the fact that you have failed to pay an amount due by you as guarantor where, amongst other things: you have received notice of default by the borrower and have not paid for 60 days after that notice; and (f) BTS has, in addition to that notice, commenced action to recover the amount due from you; and where you are a proposed third party security provider: the fact that you have offered to act as third party security provider in respect of credit or an application for credit; and (ii) the fact that BTS has commenced enforcement action in respect of your security, or has otherwise dealt with any property, the subject of that security. This information may be given before, during or after the assessment is made of whether to accept the application of the borrower. 3. Agreement that BTS may obtain and provide credit reports and other information about your credit worthiness. You agree to BTS, for the purpose of assessing whether to provide credit to the borrower, or accept you, or the entity of which you are a director, as guarantor or third party security provider in respect of credit applied for, or provided to, the borrower: obtaining from a credit reporting agency a credit report containing information about your personal credit worthiness; obtaining a report about your commercial activities or commercial credit worthiness from any business which provides information about the commercial credit worthiness of persons, your accountant or any supplier to you; and giving to and obtaining from any credit provider named in the Loan Application Form or in a credit report on you issued by a credit reporting agency, information about your credit arrangements for the purposes of: (ii) (iii) (iv) assessing the application of the borrower and/or the application by you, or the entity of which you are a director, to act as guarantor or third party security provider for the borrower; notifying a failure by you to observe your obligations (if any) as borrower or guarantor or third party security provider (as applicable); allowing another credit provider to ascertain the status of your obligations to BTS where you are in default with one or more other credit providers; and generally assessing your credit worthiness. 5

8 Privacy disclosure and consent You understand the information exchanged can include any information about your personal and/or commercial credit worthiness, credit standing, credit history or credit capacity which the Privacy Act allows credit providers to give to or receive from each other. You agree that if BTS approves the borrower s application for the BT Margin Loan Facility, the Facility Deed remains in force until the BT Margin Loan Facility ceases. 4. Other privacy consents and acknowledgments You agree that: BTS, BTQ, Westpac Banking Corporation ( Westpac ) and any company which is related to BTS, BTQ and Westpac (including, without limitation, any nominee or authorised offi cer of BTS, BTQ or Westpac) (together, the BT Financial Group ); where you are not the borrower the borrower and any offi cer or employee of the borrower (where it is a company); any guarantor (or any other guarantor) or proposed guarantor of the BT Margin Loan Facility whether or not named in the Loan Application Form and any representative, fi nancial planner or broker of that guarantor; any third party security provider (or any other third party security provider) or proposed third party security provider of the BT Margin Loan Facility whether or not named in the Loan Application Form and any representative, fi nancial planner or broker of that third party security provider; where you are not the borrower the broker of the borrower and any employee of that broker; your broker or fi nancial planner and any employee of that broker or fi nancial planner; any person you have appointed as your representative for the BT Margin Loan Facility; any person through whom the borrower has applied, or by whom the borrower is introduced, to BTS (eg fi nancial planner, broker or accountant); ASTC and any person appointed by BTS as the sponsor of your participant sponsored holding on CHESS in relation to securities; any organisation acquiring an interest in the BT Margin Loan Facility or Securities or involved in managing BTS s or BTQ s corporate risk and funding functions (for example organisations involved in securitisation); and any payment systems operators and participants in the payment system, (each referred to as a Recipient ) may exchange with each other any personal information about you including: any information provided by or about you in the Loan Application Form or any other margin lending documents; any other personal information you provide to any Recipient or which any Recipient otherwise lawfully obtains about you; any transaction details or transaction history arising out of your arrangements with any Recipient; where the Privacy Act allows, or provided you agree, any information referred to in sections 2 and 3 above. You agree that if BTS or BTQ engages anyone (a Service Provider ) to do something on its behalf (for example a mailing house, a debt collection agency, auditor or a solicitor), then BTS and/or BTQ and the Service Provider may exchange with each other any personal information referred to above and any other personal information the Service Provider lawfully obtains about you in the course of acting on BTS s and/or BTQ s behalf. You agree that any personal information referred to above may be used by any Recipient and Service Provider for any purpose related to the BT Margin Lending Facility to which this application relates and to carry out any associated payments, transactions, administration and account servicing. In addition, such information can be used to assess any application you make for a different product or service, for planning, product development and research purposes and to seek your feedback on BTS s products and services. BT Financial Group may give any personal information about you to entities other than the Recipients and the Service Providers referred to above where it is required or allowed by law or where you have otherwise consented (including in other sections of this Loan Application Form). You understand that: if you fail to provide any information requested in any margin lending documents, or do not agree to any of the possible exchanges or uses of such information as set out above, the Loan Application Form of the borrower may not be accepted by BTS; and you can access most personal information that BTS and BTQ and their related companies hold about you by contacting BTS on or by writing to us at the address listed inside the back cover of this BT Margin Loan Application Booklet. Sometimes that access will not be possible, in which case you will be told why. 5. Marketing Consent BTS and members of the BT Financial Group may contact you from time to time with various product offers and special promotions. This may happen via mail, or telephone. If you do not wish to receive material about BT Financial Group s products and services, please contact BTS on or write to us at the address inside the back cover of this BT Margin Loan Application Booklet. 6

9 BT Margin Loan Facility Deed Important This section contains the terms of your BT Margin Loan Facility and, if you are to provide security for another person, the terms of your mortgage. Please read it and retain it in a safe place for future reference. When you sign the Loan Application Form, you are confi rming that you have read, understood and accepted the terms contained in this section. This deed is between each of you, BT Securities Limited ABN ( BTS ) and BT (Queensland) Pty Limited ABN ( BTQ ). If you are applying to be a borrower, this deed incorporates four distinct legal concepts: a loan to you by BTS; a mortgage given by you to BTS; the nominee arrangements with BTQ and the appointment of BTS and BTQ as your attorney; and the appointment of BTS or someone approved by BTS as your CHESS sponsor. If you are applying to be a third party security provider, this deed incorporates three distinct legal concepts: a mortgage given by you to BTS to secure the obligations of the borrower; the nominee arrangements with BTQ and the appointment of BTS and BTQ as your attorney; and the appointment of BTS or someone approved by BTS as your CHESS sponsor. This deed will be executed by BTS as your attorney. Once BTS signs this deed, it is binding on you, BTS and BTQ. The date BTS signs is the commencement date of this deed. 7

10 BT Margin Loan Facility Deed Section A Loan Facility This section applies to the borrower only, and not to any third party security provider. The loan 1. How much the borrower can borrow 1.1 All loans made to the borrower under this deed are made at BTS absolute discretion, and BTS is not required to lend for any reason. BTS is not liable for any amount incurred as a result of BTS not lending. 1.2 The borrower can borrow as many times as they wish, as long as the loan balance never exceeds the loan limit. 1.3 The loan limit is the total of: the market value of each security in the loan portfolio; multiplied by the percentage lending ratio BTS assigns to that security. 1.4 The market value of each security and each percentage lending ratio is determined by BTS in its absolute discretion and can be changed by BTS, at any time. Borrowing money 2. Borrowing 2.1 If the borrower wants a loan, they must give suffi cient notice to BTS: when they want the money (this must be a business day); how much they want to borrow (subject to any minimum amount BTS specifi es); and where and to whom the money is to be paid (if not to the borrower r or a third party for the acquisition of securities then only with BTS consent). 2.2 If the borrower does not use all of a loan to fund the purchase of securities, BTS may open a margin call account in BTS or BTQ s name. The borrower directs BTS and BTQ to do everything necessary to open and maintain the margin call account. The borrower will be the benefi cial owner of any balance in the margin call account, subject to BTS rights under this deed. The margin call account may, in BTS discretion, be an interest bearing account. The borrower authorises and directs BTS, BTQ and their offi cers and employees to deposit into the margin call account any part (e) (f) of a loan which the borrower does not use immediately to purchase securities. If the borrower has prepaid any interest and the amount against which that interest has been prepaid exceeds the total amount owing at any time, the borrower authorises BTS to lend to the borrower that excess under clause 1 and deposit that excess into the margin call account. BTS may deposit any credit balance in the loan account into the margin call account. The borrower may deposit their own funds into the margin call account at any time. BTS is not obliged to withdraw any amount from the margin call account, even if the borrower requests it, but BTS may: (ii) (iii) (iv) fund the purchase of securities by the borrower or a third party; meet a margin call; pay or prepay interest under this deed; or pay any of the total amount owing, from that account. 3. Borrowing to purchase listed securities 3.1 The borrower cannot instruct BTS or BTQ to purchase listed securities for the borrower or a third party. However, the borrower or a third party can instruct a broker r to purchase listed securities and provide to BTS a copy of the contract note for settlement. 3.2 BTS will assume (unless BTS agrees to the contrary) that a buy contract note received from any broker r which indicates that the borrower or a third party is the buyer is evidence of the borrower s request: for a loan under clause 1 to be paid to the broker r to settle the contract note; and for BTS to register (or cause to be registered) the securities in the buyer s Participant Sponsored Holding or in BTQ s name as required by BTS. 4. Borrowing to apply for unlisted securities, entitlements and new issues 4.1 If BTS receives an instruction under clause 2.1 in relation to unlisted securities, entitlements or new issues, the buyer of the securities (whether the borrower or a third party) is taken to declare that each applicant has read the relevant prospectus or other offer document and agrees to be bound by the conditions of the offer. 8

11 4.2 BTS may in its discretion decide whether the unlisted securities, entitlements or new issues are to be applied for in the applicant s or BTQ s name. 4.3 If the application is unsuccessful for any reason, the refunded application money will be used to repay the loan balance when it is received. Repaying the loan 5. Repayments 5.1 Subject to the other provisions of this deed, the borrower may repay all or any of the total amount owing at any time, and the borrower must pay the total amount owing on the day BTS specifi es by notice. 5.2 If the borrower repays more than the total amount owing, BTS is not required to pay the borrower interest on the excess. Margin calls 6. What is a margin call? 6.1 If at any time the loan balance exceeds the loan limit by more than the buffer, the borrower must do one or more of the following: arrange for extra securities acceptable to BTS to form part of the loan portfolio; repay some or all of the loan balance; or arrange to sell or redeem some or all of the loan portfolio (with the proceeds used to reduce the loan balance), so that the loan balance no longer exceeds the loan limit. This is a margin call, and must be satisfi ed by 12 noon on the business day after it occurs. 6.2 The borrower is responsible for monitoring whether the loan balance exceeds the loan limit by more than the buffer at any time, and ensuring that a margin call does not occur. BTS may, but is not obliged to, notify the borrower if a margin call occurs. If a margin call is not satisfi ed by the time specifi ed in clause 6.1, BTS may, without any notice to any of you, take any action it thinks fi t (including as set out in clause 6.1 to (inclusive)) to ensure that the loan balance does not exceed the loan limit at that time. Interest 7. Interest charges 7.1 The borrower must pay interest to BTS on the loan balance from and including the day on which BTS fi rst makes a loan. 7.2 Interest accrues each day at the interest rate that BTS specifi es from time to time, and is calculated on the loan balance at the end of that day using a 365 day year. However, if the loan balance is less than $20,000 on any day interest will be calculated on an amount of $20, If any person notifi es the borrower, whether before or after the date of this deed, of an interest rate which is different from that specifi ed by BTS, the borrower may notify BTS of that different rate, and BTS may (but is not obliged to) specify that notifi ed rate as the applicable interest rate under this clause 7. That different rate will only apply on and from the date BTS specifi es that it is the applicable rate. 7.4 Unless the borrower pays interest on the loan in advance, interest is due on the last day of each calendar month. 7.5 If the borrower does not pay BTS any interest on the due date (including under clause 39.5), BTS may capitalise that interest to form part of the loan balance. 8. Prepayment of interest If the borrower and BTS agree, the borrower may pay interest in advance on any agreed date. Any interest prepaid is not refundable, even if the borrower repays the loan balance early. Section B The mortgage This section applies to both the borrower and each third party security provider 9. What is mortgaged? 9.1 To secure payment of the total amount owing, you mortgage to BTS all your interest in your loan portfolio. 9.2 Your mortgage in clause 9.1 takes effect over securities at the following times: for a security in clause 12.1 when BTS has made an entry in its securities register to record the security as forming part of your loan portfolio; for a security in clause 12.1(ii) when BTS pays money to another lender in order to refi nance a loan to the borrower by that lender; for a security in clause 12.1(iii) when that security is acquired; and for any entitlement t (including an entitlement which is also a security) when you acquire any interest in the entitlement. 9.3 Before the time referred to in clause 9.2, any of your securities that are in BTS possession are held as bailee for you. 9

12 BT Margin Loan Facility Deed 9.4 The amount recoverable at any time by BTS under the mortgage under this clause 10 is limited to the greater of: $1,000; and the market value of your loan portfolio at that time. 9.5 The total amount recoverable from a third party under this deed, including under the mortgage from that third party under this Section B, may not exceed the amount recovered from the enforcement of this deed and that mortgage at the time of enforcement. 10. How this mortgage affects you and the loan portfolio 10.1 You must: pay when due all amounts which may become payable on your loan portfolio; and promptly deliver to BTS, on request, copies of notices that relate to any proposed resolutions or meetings of any company or trust whose securities or entitlements are included in your loan portfolio Until the borrower has fully paid the total amount owing, you are not entitled to, or to claim an interest in or bring an action relating to: any of the loan portfolio; or any payment from, or arising out of the insolvency of, any issuer of securities or entitlements that are part of the loan portfolio, or of any co-borrower or third party; or any of BTS rights under this deed or a collateral security, and you must not create or allow to exist any other interest (including a security interest) t) over any securities or entitlements which form part of your loan portfolio If a claim is successfully made that a disposition in connection with the total amount owing is void or voidable under laws relating to insolvency or for any other reason, then each of BTS and BTQ is entitled to its rights under this deed as if the disposition had never occurred. If BTS or BTQ asks, you must do everything necessary to restore any security interest from you which it held immediately before the disposition Neither BTS nor BTQ need take any action whatsoever in relation to the loan portfolio, and need not: enforce the payments under securities or entitlements in the loan portfolio; (e) vote at any meeting; sell the loan portfolio, even if it may depreciate, or has depreciated, in value; marshall or appropriate in your favour; or deliver to you any notices or other correspondence This deed does not merge with or adversely affect, and is not adversely affected by: another security interest t or right or remedy to which BTS is entitled at any time; or a judgment or order that BTS obtains against you or any other person The rights of BTS under this deed against a third party, and that third party s liabilities under this deed, are not affected by any act or omission by BTS or by anything else under law or otherwise, including: (e) (f) (g) (h) the fact that BTS varies or replaces any arrangement under which the total amount owing is expressed to be owing, such as by increasing the loan limit or extending the term of the borrower s loan; the fact that BTS releases the borrower or another third party or gives them a concession, such as more time to pay; the fact that BTS releases, loses the benefi t of or does not obtain any security interest; the fact that BTS does not register any security interest t which could be registered; the fact that BTS releases any person who guarantees any of the borrower s obligations; the fact that the obligations of any person who guarantees any of the borrower s obligations may not be enforceable; the fact that any person who was intended to guarantee any of the borrower s obligations does not do so or does not do so effectively; the variation of the terms of this deed; or the death, mental or physical disability or insolvency of any person including any of you This deed binds each person who signs it even if another person who was intended to sign does not sign it or is not bound by it This deed is a continuing security and is not discharged by any one payment. 10

13 11. Further assurances If at any time BTS asks you to execute any document or do any act or thing (including transferring to or depositing with it (or BTQ) further securities to be held as part of your loan portfolio, free of any other security interest), t) you must comply with that request. Section C Loan Portfolio This section applies both to borrower and each third party security provider The loan portfolio 12. What is the loan portfolio? 12.1 Your loan portfolio comprises: those securities in which you have any interest: (ii) (iii) for which BTS (in its absolute discretion), after the date of this deed, makes entries in its securities register r to record the securities as forming part of your loan portfolio; or which you have requested BTS to include in your loan portfolio in connection with refi nancing, after the date of this deed, of a loan the borrower has with another lender; or which are acquired after the date of this deed; any entitlements; and the proceeds of any sale of those securities, including the release of any cash cover or other security. The loan portfolio comprises all your loan portfolios. 13. How the loan portfolio is held 13.1 Listed securities in the loan portfolio will normally be held in a Participant Sponsored Holding in accordance with clauses 23 to 29, if so specifi ed by BTS. However, listed securities in the loan portfolio may be held by BTQ in accordance with clause 22, if so specifi ed by BTS Holdings in the loan portfolio evidenced by a certifi cate will be held by BTS, unless they are converted to a Participant Sponsored Holding or transferred to BTQ Unlisted securities in the loan portfolio will normally be held by BTQ in accordance with clause 22. However, unlisted securities in the loan portfolio may be held other than by BTQ subject to the securities register r recording BTS security interest, if so specifi ed by BTS. 14. Sale of listed securities 14.1 You cannot instruct BTS or BTQ to sell listed securities for you. However, you can instruct a broker r to sell those listed securities and to provide BTS with a copy of the contract note for settlement BTS and BTQ will assume (unless BTS agrees otherwise) that a sell contract note received from any broker r is evidence of your request to: deliver the securities being sold to the broker; and use the proceeds of the sale to repay part or all of the total amount owing. 15. Redemption of unlisted securities 15.1 If you want to redeem unlisted securities which form part of your loan portfolio, you must: if BTQ is the registered holder, give BTQ satisfactory notice as to: (ii) (iii) when you want the securities redeemed (this must be a business day); which securities you wish to redeem; and how many securities or their dollar value you wish to redeem (subject to any minimum amount BTQ specifi es); and if you are the registered holder, provide BTS with a completed and signed request in the form required by the security issuer On receiving your instructions, BTQ and BTS may redeem or otherwise deal with your loan portfolio, and apply the proceeds to pay or repay part or all of the total amount owing. 16. Release of securities 16.1 If you want any of your loan portfolio to be released from the mortgage, you must: give satisfactory notice to BTS as to: (ii) (iii) (iv) when you want your loan portfolio released (this must be a business day); which part of your loan portfolio you want released; how many securities or entitlements or the dollar value you want released (subject to any minimum amount BTS specifi es); and where the securities or entitlements are to be delivered; and 11

14 BT Margin Loan Facility Deed sign and deliver to BTQ any transfer forms required by BTQ if it is the registered holder On receiving your instructions, or if at any time BTS or BTQ wish to release any of your loan portfolio, BTS or BTQ may: if BTQ is the registered holder, transfer the securities or entitlements or cause them to be transferred; or if you are the registered holder of the securities: (ii) (iii) 17. Securities of a third party return relevant certifi cates to you or your representative; cause the securities or entitlements to be released from your Participant Sponsored Holding; and/or remove any restriction arranged by it preventing the redemption or sale of the securities or entitlements, and you must allow the securities or entitlements to be transferred to you. BTS and BTQ may deal with securities or entitlements of a person that form part of the loan portfolio and: they do not need to obtain the consent of any other person or notify any such other person before or after doing this; they may apply the proceeds of any dealing to repay part or all of the total amount owing; and this may affect the loan limit. 18. Conditions of sale, redemption and release of securities BTS will only comply with an instruction from you under clauses 15 or 16 if it is satisfi ed that: 19. Takeovers you have met all your obligations under this deed; and if all of the loan portfolio is affected, the total amount owing has been or will be repaid; or if some of the loan portfolio is affected, the total amount owing will not exceed the remaining loan limit. If you want to accept a takeover offer in respect of securities in your loan portfolio you must obtain BTS prior written consent. 20. Corporate action In the event of a corporate action in respect of an issuer of securities forming any of the loan portfolio, BTS may transfer the legal title in those securities to BTQ at your cost before the corporate action takes effect. 21. Options 21.1 If you wish to sell options in relation to any securities which are or will be in your loan portfolio, you must obtain BTS prior written consent You authorise BTS to: (e) give instructions to any broker r in relation to your options to the same extent that you are able to do so, including: (ii) (iii) (iv) (v) to close out an open position; to transfer an open position to an account with another broker r or to a different account with the same broker; to accept a transfer of an open position from an account (which may not be in your name) with another broker r in order to close out (wholly or partly) an open position; as to payment of any amounts by a broker r or clearing house in relation to options; and to reject your directions; lodge securities forming part of your loan portfolio with ACH if required by either your broker r or the ACH; make any payment which is required or which BTS considers necessary or desirable in relation to any options; take any action in relation to the loan account or your loan portfolio to satisfy any obligation or liability in relation to options; and provide any information in relation to the loan account to any broker r in relation to options, and to obtain from any broker r any information BTS requires in relation to your account with the broker r or any options. The nominee arrangement 22. What BTQ can do 22.1 BTQ (under the global nominee deed), or any other person BTS determines from time to time, acts as your nominee if BTS specifi es. If BTS determines that another person act as your nominee, that other person will so act on terms approved by BTS, and 12

15 BTS may execute on your behalf as your attorney any documents it thinks appropriate in relation to the appointment of the new nominee If BTQ holds securities that form part or all of your loan portfolio as your nominee, it may do, or refrain from doing, anything it determines including: CHESS sponsorship arranging the deposit of documents of title for all the securities it holds with BTS; appointing BTS and any offi cer or employee of BTS as its attorney for the purposes of perfecting or exercising its rights or powers; and applying any money held by it as your nominee in or towards the satisfaction of any amount that you owe to BTS or BTQ. 23. Appointment of BTS as your sponsor 23.1 You appoint BTS as your Sponsoring Participant for relevant securities that form part of your loan portfolio The regulatory regime which applies to BTS is the Act. BTS is holder of an Australian Financial Services Licence, No under the Act. You can obtain information as to the status of BTS from the Australian Securities and Investments Commission The CHESS Holdings to which this sponsorship agreement relates are those held under the Holder Identifi cation Numbers (HINs) specifi ed by you for existing Holdings (where you have transferred those Holdings to be governed by this deed) or the HINs notifi ed by BTS to you (where new Holdings have been established for you by BTS under CHESS or where you have requested BTS to arrange the issue of a new HIN). 24. Your acknowledgements You acknowledge as follows Before you executed this deed, an explanation of the effect of this sponsorship agreement was provided to you by BTS (this explanation is contained in the CHESS explanation section on page 2) and you understood the effect of this sponsorship agreement In the event of your death or bankruptcy, a Holder Record Lock will be applied to all your Participant Sponsored Holdings in accordance with the settlement rules, unless your legally appointed representative or trustee elects to remove your Participant Sponsored Holdings from the CHESS Subregister In the event of your death, this sponsorship agreement shall 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 a Holder Record Lock applied pursuant to clause 24.2, unless your legally appointed representative elects to remove your Participant Sponsored Holdings from the CHESS Subregister If BTS is not a Market Participant of ASX, neither ASX nor any related party of ASX has any responsibility for supervising or regulating the relationship between you and BTS, other than in relation to the settlement rules relating to this sponsorship agreement If a Transfer is taken to be effected by BTS under Section 9 of the settlement rules and the Source Holding for the Transfer is a Participant Sponsored Holding under this sponsorship agreement, then: Joint Holdings you may not assert or claim against ASTC or the relevant Issuer that the Transfer was not effected by BTS or that BTS is not authorised by you to effect the Transfer; and unless the Transfer is also taken to have been effected by a Market Participant of ASX or a Clearing Participant of ACH, you have no claim arising out of the Transfer against the National Guarantee Fund under Part 7.5, Division 4 of the Corporations Regulations. Where this sponsorship agreement applies to a joint Participant Sponsored Holding, you acknowledge: 24.6 that in the event of the death of one of the Holders, BTS will transfer all Holdings under the joint Holder Record into new Holdings under a new Holder Record in the name of the surviving Holder(s), and that this sponsorship agreement will remain valid for the new Holdings under the new Holder Record; and 24.7 that in the event of the bankruptcy of one of the Holders BTS will: establish a new Holder Record in the name of the bankrupt Holder, transfer the interest of the bankrupt Holder into new Holdings under the new Holder Record and request that ASTC apply a Holder Record Lock to all Holdings under that Holder Record, unless the legally appointed representative of the bankrupt Holder elects to remove those Holdings from the CHESS Subregister; and 13

16 BT Margin Loan Facility Deed 25. BTS Rights establish a new Holder Record in the name(s) of the remaining Holder(s) and Transfer the interest(s) of the remaining Holder(s) into new Holdings under the new Holder Record Where you authorise BTS to buy securities, you will pay for those securities within three business days of the date of purchase Subject to Clause 25.3, BTS is not obliged to transfer securities into your Participant Sponsored Holding until payment is received Where a contract for the purchase of securities remains unpaid, after BTS has made a demand on you to pay for the securities, BTS may sell those securities that are the subject of that contract at your risk and expense and that expense will include brokerage and stamp duty Where BTS claims that you have not paid an amount lawfully owed to it, BTS has the right to refuse to comply with your Withdrawal Instructions, but only to the extent necessary to retain securities of the minimum value held in a Participant Sponsored Holding (where the minimum value is equal to 120% of the current market value of the amount claimed). 26. Your Rights 26.1 Subject to clauses 25.3 and 25.4, BTS will initiate any Transfer, Conversion or other action necessary to give effect to Withdrawal Instructions within two (2) business days of the date of the receipt of the Withdrawal Instructions In the event that BTS breaches any of the provisions of this sponsorship agreement, you may refer that breach to any regulatory authority, including ASIC and ASTC In the event that BTS is suspended from CHESS participation, subject to the assertion of an interest in Securities controlled by BTS, by the liquidator, receiver, administrator or trustee of BTS: you have the right, within twenty (20) business days of ASTC giving Notice of Suspension, to give notice to ASTC requesting that any of your Participant Sponsored Holdings be removed either: (ii) from the CHESS Subregister; or from the control of BTS to the control of another Participant with whom you have entered a valid Sponsorship Agreement pursuant to Rule of the settlement rules; or where you do not give notice under clause 26.3, ASTC may effect a change of Controlling Participant under Rule of the settlement rules and you will be deemed to have entered into a new Sponsorship Agreement with the substitute Participant on the same terms as the existing sponsorship agreement. In these circumstances, the new Participant must enter into a Sponsorship Agreement with you within ten (10) business days of the change of Controlling Participant. 27. Claims for compensation 27.1 You may lodge a complaint against BTS or any claim for compensation with ASTC Subject to clause 27.3, BTS has no compensation arrangements in place for Participant Sponsored Holders BTS is required to lodge, and has lodged, a Sponsorship Bond with the ASTC. You may be entitled to make a claim to ASTC under the Sponsorship Bond. The ability of BTS to satisfy the claim will depend upon BTS fi nancial circumstances As BTS is not a Market Participant of ASX or a Clearing Participant of ACH, if BTS breaches a provision of this sponsorship agreement, you are not entitled to make a claim on the National Guarantee Fund for compensation. 28. Change of Controlling Participant 28.1 If you receive a Participant Change Notice from BTS at least 20 business days prior to the date proposed in the Participant Change Notice for the change of Controlling Participant, you are under no obligation to agree to the change of Controlling Participant, and may choose to do any of the things set out in clauses 28.2 or You may choose to terminate this sponsorship agreement by giving Withdrawal Instructions under the settlement rules to BTS, indicating whether you wish to: transfer your Participant Sponsored Holding to another Controlling Participant; or transfer your Participant Sponsored Holding to one or more Issuer Sponsored Holdings If you do not take any action to terminate this sponsorship agreement in accordance with clause 28.2 above, and do not give any other instructions to BTS which would indicate that you do not agree to the change of Controlling Participant then, on the Effective Date, this sponsorship agreement 14