TO THE CLIENT AS ADDRESSED. 1 April Dear Sir/Madam,

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1 Deloitte Touche Tohmatsu ABN Lonsdale Street Melbourne VIC 3000 GPO Box 78 Melbourne VIC 3001 Australia DX: 111 Tel: +61 (0) Fax: +61 (0) TO THE CLIENT AS ADDRESSED Dear Sir/Madam, Opes Prime Stockbroking Ltd ACN Leveraged Capital Pty Ltd ACN (all administrators appointed) (all receivers and managers appointed) ( the Group ) We refer to the appointment of Messrs Salvatore Algeri and Chris Campbell of Deloitte as receivers and managers of the Group also on Thursday 27 March 2008 by ANZ Banking Group Ltd ( ANZ ) pursuant to charges duly registered by ANZ over the Group. This appointment follows the appointment of Messrs John Lindholm, Peter McCluskey and Adrian Brown of Ferrier Hodgson as administrators of the Group on Thursday 27 March 2008 by resolution of the Boards of Directors of the Group ( the Directors ). We have entered into possession and control of the companies we have been appointed over. The Australian Securities Exchange Limited ("ASX") has suspended Opes Prime Stockbroking Ltd from acting as an ASX Market Participant, an ACH Clearing Participant and an ASTC Settlement Participant. Accordingly, the Group has ceased to trade. The position regarding Opes Prime Stockbroking Ltd ("Opes") and Leveraged Capital Pty Ltd ("Leveraged Capital") client accounts is still unclear and will take some time to reconcile. We have therefore provided this update to commence direct communication with the Group s clients. Leveraged Capital provided similar securities lending services to those provided by Opes. Unless otherwise indicated, our comments in relation to Opes apply equally to Leveraged Capital. Liability limited by a scheme approved under Professional Standards Legislation. Sun 30 March :44 PM i C:\DOCUMENTS AND SETTINGS\CCLARK\MY DOCUMENTS\DELOITTE_ OPES CIRCULAR TO CLIENTS FINAL.DOC

2 Page 2 1 Background to the appointment of external controllers 1.1 Appointment of controllers to the Group On Thursday 27 March 2008, the Directors appointed John Lindholm of Ferrier Hodgson as voluntary administrator when they became aware of a number of cash and stock movement irregularities in relation to a small number of accounts. The shortfalls in these accounts led the Directors to believe the trading operations could not continue. As a result of the appointment of administrators to the Group, one of the Group s secured creditors, ANZ Banking Group Ltd appointed Salvatore Algeri and Chris Campbell from the Deloitte Corporate Reorganisation Group as receivers and managers of the Group. The receivers and managers have frozen all client accounts, including client direct trading facilities, for both Opes Prime Stockbroking Ltd and Leveraged Capital Pty Ltd following their appointment at approximately 5.15pm on Thursday 27 March The receivers and managers are currently undertaking a review of the financial position of the Group. This includes a review and reconciliation of all individual client accounts and the reconciliation of the position of financiers and other counterparties. 1.2 Appointment of administrators to Trader Dealer Pty Ltd The administrators of the Group were also appointed as administrators of Trader Dealer Pty Ltd ( Trader Dealer ) by the Board of Trader Dealer on Thursday 27 March We advise that receivers and managers have not been appointed to Trader Dealer at the time of writing, and the Trader Dealer is under the control of the administrators. We understand that the operations of Trader Dealer (an authorised representative of Opes) necessarily ceased upon the suspension of Opes trading participation by the ASX. 1.3 Information regarding external controllers We have enclosed a leaflet outlining various reference sources for further information regarding the effect of the appointment of administrators and receivers and managers (Appendix 1). 2 Overview of status of client accounts 2.1 Trades not settled at appointment date The voluntary administrators promptly informed the ASX of their appointment, as we did on our appointment as receivers and managers. We understand that unless a trade fails for reasons beyond the control of Opes (or the receivers and managers), we expect the trades that had matched on CHESS prior to the appointment of the voluntary administrators will be settled by close of business on Tuesday.

3 Page 3 Requests to purchase or sell stock made by or through Opes which had not been matched prior to appointment of the voluntary administrators cannot be honoured by Opes. In addition, as many of you will have read in the press, the Australian Securities and Investments Commission has announced an investigation into the affairs of Opes, including any possible breaches of the Corporations Act 2001 (Cth). The voluntary administrators and receivers and managers are co-operating fully with this investigation. 2.2 Contractual Arrangements The staff of Opes and Deloitte have fielded a significant number of phone calls and inquiries since our appointment from customers and counterparties of Opes understandably concerned and seeking to clarify their position. All creditors or potential creditors of Opes should seek their own advice on issues relating to their personal situation. That said, we have briefly reviewed what appear to be the standard form contracts used by Opes with its customers and counterparties, and our initial view is as follows Securities lending contracts Opes has securities lending contracts with retail investors, institutional counterparties and international counterparties in different forms. Individual customer contracts, which number over one thousand, have not at this point been individually reviewed. However, we have reviewed what we consider to be the key pro-forma documents. The views expressed below reflect our current view of these pro-forma documents. If you are a party to a negotiated contract, which is not in the form of a pro-forma document, you may be in a different position. Generally speaking, the contracts provide for three types of arrangements with Opes: (a) equity finance pursuant to which a counterparty lent securities to Opes and was provided with funding by Opes, generally in the form of cash, but potentially also securities; (b) stock lending pursuant to which a counterparty who owned securities or held securities lent securities to Opes for a fee; (c) stock borrowing pursuant to which a counterparty borrowed securities from Opes and had an obligation to redeliver equivalent securities at the termination of the securities loan. The contracts share certain key features. The focus in the document is on a loan of securities, and the provision of collateral for the loan (in the form of cash or securities). Accordingly, the term lender is used to describe the counterparty who lends the securities, rather than the counterparty who is provided with cash, even though that party might well think of themselves in an economic or functional sense as the borrower because they expect to have to repay that cash when the securities loan expires or is terminated.

4 Page 4 Where securities are lent by a stock lender (such as a retail customer) to a borrower (such as Opes), absolute title to the securities passes from the lender to the borrower, and the borrower has a contractual obligation to redeliver equivalent securities on the termination or expiry of the securities loan, and the lender has an obligation to repay funds provided to the lender of the securities by the borrower. As a consequence, while economically a retail customer may have received funds from Opes and provided securities to Opes, the securities are not owned by the retail customer (or indeed, as you will see, Opes) and Opes' interest in the relevant securities is not in the form of a security interest. If you are finding the references to lender and borrower confusing, this is likely to be because: first, while the language of "lender" and "borrower" is used, the lending agreements provide for a transfer of securities and a contractual obligation to redeliver equivalent securities or equivalent collateral (as the case may be); and secondly, a party who thinks of itself as the borrower (of cash) is legally the lender (of securities) and is referred to as such in the contractual documentation. There is substantial explanatory information on the website of the Australian Securities Lending Association at which you may find informative. The appointment of voluntary administrators to Opes on 27 March 2008 was either of itself an event of default under the pro-forma securities lending contracts or a circumstance that would constitute an event of default if a notice is given by the non-defaulting party (e.g. a retail customer) to Opes. Various counterparties have already served such notices on Opes, and you should consider whether you wish to do so, and if necessary, seek appropriate advice. A form that you can use if you wish is attached in Appendix 2. For the avoidance of doubt, we attach in Appendix 3 a notice advising that circumstances have occurred which would constitute an event of default if a notice is given by a nondefaulting party. The consequence of the event of default is that: the obligation of the borrower of securities to redeliver equivalent securities (or noncash collateral) is replaced with an obligation to pay an amount calculated by reference to the value of the relevant securities as at a valuation date; and both parties obligations are accelerated and netted off, as a result of which there is either a net payment obligation from Opes to the counter-party or from the counterparty to Opes. Further, Opes entered into securities lending contracts with its financiers (principally Merrill Lynch and ANZ), under which securities were either:

5 Page 5 lent by Opes to the financier, with the result that the financier acquired legal and beneficial title to those securities free of any security interest and had an obligation at the relevant time to deliver equivalent securities to Opes, and in consideration for which the financier provided cash and or other securities as 'collateral' to Opes; and/or lent by the financier to Opes, with the result that Opes acquired legal and beneficial title to those securities free of any security interest but had an obligation at the relevant time to deliver equivalent securities to the financier. Opes provided cash and/or securities to the financier as collateral for return of equivalent securities. Again, where securities were provided as collateral to the financier, title to those securities was acquired by the financier, but the financier had a contractual obligation to redeliver equivalent securities on the termination or expiry of the securities loan. The net effect of these agreements appears to be as follows. Generally speaking, all securities lent to Opes are owned by the financiers by virtue of Opes defaulting on the AMSLA with the financiers. Accordingly, Opes is not in a position to return securities (even if a customer repays in full cash or securities provided by Opes), because Opes does not own the securities, and as a result of an event of default occurring in the securities lending contract with each financier, Opes no longer has a right to require a financier to redeliver the relevant securities. As a result of the insolvency of Opes, each financier may be a net debtor or creditor of Opes, depending on a range of factors still to be determined. Similarly, each counter-party to a securities lending contract may or may not be a debtor or creditor of Opes. It appears that a small number of securities may either have not been on-lent to Opes' financiers, or have been returned by the relevant financier prior to our appointment. We are still trying to verify this situation Institutional counterparties Opes provided a number of services other than securities lending to institutional counterparties, including clearing and settlement services and custody services. Institutions to whom Opes provided such services may have a continuing proprietary interest in any securities still held in a custody account. We are not currently aware, and have not been able to identify, a custody account maintained by Opes in the name of a third party, or a custody account maintained by a third party in the name of Opes, with subledgers for Opes institutional clients. This will need to be assessed in due course. 2.3 Other claims Obviously, creditors and counterparties will potentially be in very different positions, and will have different types of claims against Opes. While we expect many to be unsecured creditors of Opes, some may have a proprietary claim to particular assets or some other type of claim which is entitled to priority for reasons that are peculiar to a particular customer or

6 Page 6 counterparty. These will need to be addressed in due course, either by us or (on our retirement) by the voluntary administrators. 3 Receivership process going forward 3.1 Estimated return to creditors At this stage, we are not in a position to advise on either the likely return to creditors (including clients of the Group) or when we will be able to retire as receivers and managers of Opes so that any remaining realisation of the assets of Opes and their distribution among creditors can be conducted by the voluntary administrators. 3.2 Communication process We have opened a call centre for clients of the Group to contact with queries regarding their specific accounts. The telephone number for this call centre is (03) Representatives of the receivers and managers can also be reached on this number to address client queries. We request that all electronic correspondence regarding client accounts is forwarded to opesprime@deloitte.com.au for the duration of our appointment. All correspondence will be directed to the appropriate party and responded to as early as practicable. This circular will be published on the Group s website in due course The receivers and managers will continue to provide updates to clients either via direct , or via the Group s website. 3.3 Disclaimer Please note that the views expressed in this letter are provisional only. Nothing in this letter constitutes legal or financial advice. If you have any concerns about your legal rights and obligations, you should consult a legal advisor. Yours faithfully Salvatore Algeri Receiver and Manager Deloitte Touche Tohmatsu Christopher Campbell Receiver and Manager Deloitte Touche Tohmatsu

7 Page 7 ASIC/IPAA Information sheet for APPENDIX 1 Opes Prime Group Ltd ACN Opes Prime Stockbroking Ltd ACN Leveraged Capital Pty Ltd ACN Hawkswood Investments Pty Ltd ACN (all administrators appointed) (all receivers and managers appointed) ( the Group ) Insolvency information for directors, employees, creditors and shareholders ASIC has nine insolvency information sheets to assist you if you re affected by a company s insolvency and have little or no knowledge of what's involved. These plain language information sheets give directors, employees, creditors and shareholders a basic understanding of the three most common company insolvency procedures liquidation, voluntary administration and receivership. There s also a glossary of commonly used insolvency terms. The Insolvency Practitioners Association of Australia (IPAA), the leading professional organisation in Australia for insolvency practitioners, endorses these publications and encourages its members to make their availability known to affected people. List of insolvency information sheets Insolvency: a glossary of terms Voluntary administration: a guide for creditors Voluntary administration: a guide for employees Liquidation: a guide for creditors Liquidation: a guide for employees Receivership: a guide for creditors Receivership: a guide for employees Insolvency: a guide for shareholders Insolvency: a guide for directors

8 Page 8 Getting copies of these information sheets Visit ASIC s website You can also visit the IPAA s website This site also contains the IPAA s Statements of Best Practice, applicable to IPAA members. ~Report as to the Affairs of the company as at /a report containing the following information:- Important note: These information sheets contain a summary of basic information on the topic. They are not a substitute for legal advice. Some provisions of the law referred to may have important exceptions or qualifications. They may not contain all of the information about the law or the exceptions and qualifications that are relevant to your circumstances. You will need a qualified professional adviser to take into account your particular circumstances and to tell you how the law applies to you.

9 Page 9 APPENDIX 2 Notice of default or circumstances that would be an event of default with giving of notice by the nondefaulting party Dear customer or counterparty Notice of Default We understand that you are party to an Australian Master Securities Lending Agreement (Lending Agreement) with Opes Prime Stockbroking Limited ACN (administrators appointed) (receivers and managers appointed) (Opes), or Lending Agreement with Leveraged Capital Pty Ltd ACN (Leveraged Capital). On Thursday 27 March 2008, the directors of Opes and Leveraged Capital appointed John Lindholm, Peter McCluskey and Adrian Brown of Ferrier Hodgson as voluntary administrators of each of Opes and Leveraged Capital. Subsequently on 27 March 2008, we, Salvatore Algeri and Christopher Robert Campbell of Deloitte, were appointed receivers and managers of each of Opes and Leveraged Capital by Australian and New Zealand Banking Group Limited. Each of the appointment of the voluntary administrators and our appointment constitute an Act of Insolvency under the Lending Agreement and either constitute an Event of Default under the Lending Agreement or circumstances which with the giving of notice by you to Opes would each constitute an Event of Default. In accordance with clause 12.2 of the Lending Agreement (or clause 14.2 or otherwise as the case may be, depending on the version), Opes hereby gives you notice that the appointment of the voluntary administrators and the receivers and managers either constitutes an 'Event of Default' under clause 12.1 of the Lending Agreement (or clause 14.1 or otherwise, as the case may be, depending on the version) or circumstances that would each constitute an Event of Default with the giving of notice by you to Opes or Leveraged Capital as the case may be. If you decide to serve a notice of an Event of Default on Opes or Leveraged Capital, an appropriate form is attached. You should consider obtaining independent advice before signing and serving the notice.

10 Page 10 Opes and Leveraged Capital reserve their respective positions in relation to any other Events of Default or occurrences that would constitute an Event of Default with the giving of notice. Yours faithfully Opes Prime Stockbroking Limited (administrators appointed) (receivers and managers appointed) by its receivers and managers Leveraged Capital Pty Ltd (administrators appointed) (receivers and managers appointed) by its receivers and managers Salvatore Algeri Deloitte Receiver and Manager Christopher Campbell Deloitte Receiver and Manager

11 Page 11 APPENDIX 3 Pro-forma default notice TO GO BY HAND OR BY REGISTERED OR CERTIFIED MAIL TO: Opes Prime Stockbroking Limited (administrators appointed)(receivers and managers appointed) ('Company') and/or Leveraged Capital Pty Ltd (administrators appointed)(receivers and managers appointed) ('Company') (delete as appropriate) Level 17, 330 Collins Street Melbourne VIC 3000 I/We, being (insert names, ACN, and any relevant trust capacity): ('Customer') of (insert current address and contact details): are party to a securities lending agreement with the Company dated (insert date), hereby give notice that by reason of the appointment of voluntary administrators to the Company on 27 March 2008, an Event of Default has occurred for the purposes of the relevant clause of the Securities Lending Agreement (being clause 12.1, or 14.1, or otherwise, as the case may be, depending on the version). Yours sincerely Signed for and on behalf of the Customer by its authorised representative