Credit Suisse AG, Sydney Branch v Springsure Property Holdings Pty Ltd

[1] The plaintiff granted a finance facility to Springsure Creek Coal Pty Ltd (as borrower) in 2012.

[2] Amongst the documents which were entered into in relation to that transaction were:

• (a) a Guarantee Facilities Agreement dated 29 June 2012; and
• (b) a Security Trust Deed dated 6 July 2012.

[3] The Guarantee Facilities Agreement was the primary facility agreement. Amongst other things, it recorded the terms on which the plaintiff made the finance facility available to the borrower and provided that various guarantors named in its terms guaranteed the obligations which the borrower owed to the plaintiff. It is evident from subsequent events that the various forms of security including over land and mining tenements must have been given to secure the performance of obligations expressed in this instrument.

[4] The Security Trust Deed was a trust deed which regulated the exercise of rights under the Guarantee Facilities Agreement as between various entities associated with the plaintiff. The parties to it included the plaintiff and various entities associated with it, the borrower, and the guarantors named in the Guarantee Facilities Agreement.

[5] On 11 February 2014 the plaintiff and the defendant (and others) executed three instruments which had the effect of making the defendant a party to the Guarantee Facilities Agreement as a new guarantor of the borrower's obligations to the plaintiff and also of charging certain property as security for its obligations thereunder. The three instruments were:

• (a) the First Amendment Deed, which:
  • (i) amended and restated the Guarantee Facilities Agreement, made the defendant a party (and a "Guarantor") to the amended and restated document, and set out the amended and restated document in schedule 2; and
  • (ii) amended and restated the Security Trust Deed, and set out the amended and restated document in schedule 3;
• (b) a General Security Agreement, which charged certain property of the defendant as security for its obligations under the Guarantee Facilities Agreement; and
• (c) an Accession Deed, which had the effect that the defendant was taken to be a party to the Security Trust Deed.

[6] Later in 2014, the defendant became registered proprietor of 3 lots of real property in Queensland. On 17 July 2014, it acquired the First Kilmore Access Road Property and the Second Kilmore Access Road Property. In September 2014 it acquired the Turkey Road Property.

[7] On 22 September 2014, voluntary administrators were appointed to the borrower and to the defendant. That appointment was an event of default under the Guarantee Facilities Agreement in respect of each of them. The result was that, amongst other things, the defendant became liable for the borrower's obligations under the Guarantee Facilities Agreement. The plaintiff has demanded payment of monies from the defendant, which has been unable to pay.

[8] The plaintiff claims that the effect of the obligations to which the defendant subjected itself by entering into the three instruments referred to at [5] was that the defendant charged its interest in the after-acquired land in favour of the plaintiff as security for payment of all money owing by the defendant under the Guarantee Facilities Agreement. For its part, the defendant contended that the proper construction of the General Security Agreement was such that the property charged did not include after-acquired land.

[9] By its claim in this proceeding (and amongst other things) the plaintiff seeks:

• (a) a declaration that the relevant properties are subject to equitable mortgages in its favour;
• (b) a declaration that the equitable mortgages secure payment of all money owing by the defendant under the Guarantee Facilities Agreement and the General Security Agreement; and
• (c) a declaration that it holds a caveatable interest in the relevant properties.

[10] On 31 October 2016 I ordered that there be a separate determination, prior to determination of the other issues and claims in this proceeding, of the following separate question:

Whether, on the proper construction of the General Security Agreement (as defined by the Second Further Amended Statement of Claim), the Properties (as defined by the Second Further Amended Statement of Claim) are "Collateral" within the meaning of clause 2.1 of the General Security Agreement.

[11] I record that I have been greatly assisted by the careful and detailed written and oral submissions provided to me by both sides. For the reasons which follow, I accept the plaintiff's argument that "Collateral" should be interpreted to include after-acquired land. The result is that the question should be answered as follows:

On the proper construction of the General Security Agreement (as defined by the Second Further Amended Statement of Claim), the Properties (as defined by the Second Further Amended Statement of Claim) are "Collateral" within the meaning of clause 2.1 of the General Security Agreement.

[12] Although some terms will be quoted in the body of these reasons, in large part I will seek to avoid so doing. To the extent it is necessary to quote extensively from the terms of the instruments I do so in appendices to these reasons. An emphasised clause reference in the body of these reasons will indicate that the term is quoted in an appendix.

[13] It is appropriate first to refer in a little more detail to certain aspects of the First Amendment Deed and the General Facilities Deed to which the defendant became bound on 11 February 2014.

[14] It is not necessary to refer to the Security Trust Deed. Its only relevance for present purposes is that clause 1.4 in the General Security Agreement picks up and applies to the General Security Agreement the definitions of the Security Trust Deed, and the definitions of the Security Trust Deed in turn (by clause 1.4 when read with clause 1.2(1)(f)) pick up and apply definitions in the General Facilities Agreement.

[15] It will then be appropriate to identify the broad operation of the General Security Agreement, including by explaining the significance to its operation of the term "Collateral" and how the contest about its definition arises.

[16] The First Amendment Deed took effect from the date on which various conditions precedent set out in clause 2 were met. Amongst other things, that included due execution of:

• (a) the Accession Deed and the General Security Agreement;
• (b) a real property mortgage between the defendant as mortgagor and the plaintiff as mortgagee in respect of a property called "Den-Lo Park" (known to the parties as having been purchased by the defendant in 2011 and valued at $7.25 million as at 19 June 2011); and
• (c) a specific security agreement between the defendant's parent company as grantor and the plaintiff as secured party in relation to shares in the defendant held by its parent company.

[17] As at the date on which the First Amendment Deed took effect:

• (a) (by clause 3) the Guarantee Facilities Agreement was amended and restated as binding upon the parties to the First Amendment Deed, providing (when one has regard to its terms) a finance facility for an amount of up to $67,300,000, and potentially an amount up to $112,300,000;
• (b) (by clause 4) the Security Trust Deed was amended and restated as binding upon the parties to the First Amendment Deed;
• (c) (by clause 5) the plaintiff released certain property which had previously stood as security for the borrower's obligations, namely mining tenements EPC1131 and EPC1140 (which were known to the parties to be valued collectively at between $2,040,000 and $2,680,000 as at 1 December 2012).

[18] By clause 2.1, the finance facility already described was made available to the borrower by the Participants, a term defined to include the plaintiff.

[19] By clause 15.1, each guarantor (including the defendant):

• (a) guaranteed to the plaintiff and certain entities associated with it (referred to as Finance Parties) punctual performance of obligations under "the Finance Documents";
• (b) undertook to each Finance Party that whenever relevant obligors (including the defendant and the borrower) did not pay amounts due under or in connection with any Finance Document, the guarantor must pay the amount as if it was the principal obligor; and
• (c) indemnified each Finance Party against loss in certain circumstances.

[20] By clause 1.1(53), Finance Document was defined to include, amongst other things, the First Amendment Deed, the General Facilities Agreement itself and each Security Document. The latter term was defined, by clause 1.1(118), to include the General Security Agreement, referring to it as (emphasis added):

the general security agreement between [the defendant] as guarantor and [the plaintiff] as secured party dated on or about the date the First Amendment Deed over all of the assets of [the defendant];

[21] The reference to "assets" in that description included "present and future properties, revenues and rights of every description": see clause 1.2(1)(b).

[22] Consistently with the evident contemplation that the defendant had in fact granted the plaintiff a security over all its assets, including present and future assets, the General Facilities Agreement contained the following facilitative terms which would affect the manner with which the defendant could deal with any future assets acquired by it (including land):

• (a) By clause 17.2, each Obligor (a term defined in clause to include the defendant, the borrower and the other guarantors) was required to supply such information regarding its financial condition, business and operation as any Finance Party (through a nominated agent) might reasonably request.
• (b) By clause 19.2, each Obligor was subject to a negative pledge against creating or permitting to subsist any security over the whole or any part of its present or future property except certain defined permitted securities.
• (c) By clause 19.3, each Obligor was subject to an obligation against disposing of any assets (as earlier defined) except subject to particular constraints.
• (d) By clause 22, each Obligor was permitted to grant a security over present or future property, which was otherwise prohibited by clause 19.2, provided sufficient money was deposited into a Cash Cover Account (an account itself the subject of security obligations in clause 18.8) so as to not adversely affect the lending parties.

[23] By clause 2.1(1), the defendant (referred to as "the Grantor") granted security in the "Collateral" to the plaintiff (referred to as "the Secured Party") "to secure payment of the Secured Money and punctual performance of all of the Grantor's other obligations under the Transaction Documents to the Secured Party at any time".

[24] By clause 3.1, the defendant was obliged to comply with all of its obligations and undertakings as contained in the Transaction Documents and to pay monies to the plaintiff in accordance with them.

[25] "Transaction Documents" was defined in clause 1.1(34) by cross-reference to the meaning given to that term in the Security Trust Deed. Clause 1.1(25) of that document defined the term to include, amongst other things, the Guarantee Facilities Agreement, and each "Security Document". "Security Document" was not specifically defined in the Security Trust Deed, but having regard to clause 1.4 of the Security Trust Deed, the definition of the term in the Guarantee Facilities Agreement was applicable. Two observations should be made:

• (a) First, the term operated to pick up the description of the General Security Agreement to which I have referred at [20]-[21] above, namely that it was a security over all of the assets of the defendant, including "present and future properties, revenues and rights of every description"; and
• (b) Second, the promise in clause 3.1, to comply with all of the obligations and undertakings in the Transaction Documents, carried with it the promise to comply with all of the obligations and undertakings in the Guarantee Facilities Agreement, including the facilitative terms to which I have referred at [22] above.

[26] Consistently with the contemplation that the defendant had in fact granted the plaintiff a security over all its assets, including present and future assets:

• (a) "Collateral" was defined in clause 1.1(6) as follows:

Collateral means all of the Grantor's present and after-acquired property, including anything in respect of which the Grantor has at any time a sufficient right, interest or power to grant a Security;

(b) "Property" was defined in clause 1.2(1)(l) as follows:

"property" or "asset" includes any real or personal, present or future, tangible or intangible property or asset and any right, interest, revenue or benefit in, under or derived from the property or asset;

(c) The General Security Agreement itself contained the following further facilitative terms which would affect the manner with which the defendant could deal with future assets acquired by it (including land):

• (i) By clause 5.1, the defendant accepted certain restrictions on its dealing with Collateral, including disposing of it or creating or allowing another interest in it.
• (ii) By clause 6.3, the defendant accepted that it was deemed to have made certain representations and warranties in relation to Collateral which was acquired or which came into existence after the date of the General Security Agreement, including (by clauses 6.2(2)(a) and (b)) that it was solely owned by the defendant and was free from any security other than permitted security.
• (iii) By clause 8.2(2)(a) and (b), the defendant undertook to give detailed information to the plaintiff concerning Collateral, including "promptly on the acquisition by [the defendant] of any Land, full particulars of the Land".

[27] However, the defendant contended that the difficulty with the proposition that the security was intended to cover all assets, including after-acquired assets, was to be found in clause 1.2(1)(a). I will quote that clause and repeat the quotation of clause 1.2(1)(l) to provide the counterpoint:

(1) In this document, unless the context indicates otherwise, reference to:

(a) the following words and expressions have the meanings given to them in the [Personal Property Securities Act 2009 (Cth)]: account; after-acquired property, attaches, bankruptcy; chattel paper; circulating asset, collateral, company, control, documents of title, effective, financing statement, financing charge statement, fixtures, future advance, interest, inventory, located, intermediated security, investment instrument, negotiable instrument, perfected, perfection, personal property, possession, proceeds, provides, purchase money security interest, register, registration, serial number, value, verification and statement;

(l) 'property' or 'asset' includes any real or personal, present or future, tangible or intangible property or asset and any right, interest, revenue or benefit in, under or derived from the property or asset;

[28] The defendant contends that instead of using the clause 1.2(1)(l) definition of "property" to give meaning to the words "present and after-acquired property" within the definition of Collateral, it is appropriate to use the clause 1.2(1)(a) PPSA definition of "after-acquired property" to give meaning to those words. The PPSA, which generally is not concerned at all with interests in land, defines "after-acquired property" as meaning "personal property acquired by the grantor after a security agreement is made": s 10. It excludes land. Thus, says the defendant, "Collateral" should be interpreted so as to include after-acquired personal property, but to exclude after-acquired land.

The proper construction of the definition of "Collateral" in the General Security Agreement

[29] For the reasons which follow, I think it is plain that the context of the definition of "Collateral" is such as to indicate the parties did not intend to use the clause 1.2(1)(a) definition of "after-acquired property" to give meaning to the words "present and after-acquired property" where they appear within the definition of Collateral. Rather they intended to use the clause 1.2(1)(l) definition of "property" to give meaning to those words.

[30] Once that conclusion is reached, the separate question must be determined in the plaintiff's favour, because the application of the clause 1.2(1)(l) definition of "property" compels that answer.

[31] I acknowledge that reaching that conclusion means that the clause 1.2(1)(a) PPSA definition of "after-acquired property" will be otiose, because if "after-acquired property" is not used in its PPSA sense in the definition of Collateral, then that would mean that it is not used in that sense anywhere in the General Security Agreement.

[32] But as Lord Hoffmann in Beaufort Developments (NI) Ltd v Gilbert-Ash NI Ltd [1998] UKHL 19; [1999] 1 AC 266 at 274 observed:

[T]he argument from redundancy is seldom an entirely secure one. The fact is that even in legal documents (or, some might say, especially in legal documents) people often use superfluous words. Sometimes the draftsmanship is clumsy; more often the cause is a lawyer's desire to be certain that every conceivable point has been covered. One has only to read the covenants in a traditional lease to realise that draftsmen lack inhibition about using too many words ... In the case of a contract which has been periodically re-negotiated, amended and added to over many years, it is unreasonable to expect that there will be no redundancies or loose ends.

[33] The argument from redundancy is particularly insecure in relation to clause 1.2(1)(a) because:

• (a) the words "bankruptcy", "located", "intermediated security", and "purchase money security interest" are defined in clause 1.2(1)(a) but not used in the General Security Agreement; and
• (b) the defined term "company" in clause 1.2(1)(a) is not used in the General Security Agreement (as opposed to the capitalised form of the word, which is plainly used in the sense defined in clause 1.1(7)).

[34] I think the following specific contextual matters are important.

[35] First, the word "Collateral" is defined in an expanded way by the words "including anything in respect of which the Grantor has at any time a sufficient right, interest or power to grant a Security". As to this:

• (a) Clause 1.2(4) provides that "including" and similar expressions are not words of limitation.
• (b) In Urica Library System BV v Sanderson Computers Pty Ltd [1997] NSWSC 454, Sheller JA (with whom Mason P and Meagher JA agreed), observed that the word "including" can serve a number of different functions:
  • (i) one is to "extend the meaning of the word defined beyond its ordinary meaning";
  • (ii) another is "not merely to add to the natural significance of the word defined, but to afford an exhaustive explanation of the meanings to be attached to that word in the particular document"; and
  • (iii) a third might be "not so much to extend the ordinary meaning of the defined term as to specify as falling within the definition that which might otherwise have been in doubt".
• (c) I agree with the plaintiff's submission that the words after "including" enhance rather than limits the scope of what goes before them.
• (d) I also agree with the plaintiff's submission that the "means" part of the definition cannot be used to restrict the scope of the subsequent "including" part, because to do so would be fundamentally inconsistent with the meaning of the word "include", especially given the intention revealed by clause 1.2(4). As was said by Kitto J in ; at 401-402, the word "include" "indicates that the whole of its object is within its subject ..."

[47] The result is that in my view the parties have chosen language in the definition of Collateral which deliberately seeks to cast the net in a wide way to pick up property whether present or after-acquired and whatever the nature of the interest held at any time. The definition must be taken to include the properties identified in the separate question.

[48] The separate question should be answered as follows:

On the proper construction of the General Security Agreement (as defined by the Second Further Amended Statement of Claim), the Properties (as defined by the Second Further Amended Statement of Claim) are "Collateral" within the meaning of clause 2.1 of the General Security Agreement.

Appendix 1: Relevant terms from the General Security Agreement

Parties Springsure Property Holdings Pty Ltd ACN 151 660 561 of Level 4, 260 Queen Street, Brisbane, Queensland 4000 (Grantor)

Credit Suisse AG, Sydney Branch ABN 17 061 700 712 as Security Trustee for the Springsure Creek Security Trust of Level 41, 101 Collins Street, Melbourne, Victoria 3000 (Secured Party)

(6) Collateral means all the Grantor's present and after-acquired property, including anything in respect of which the Grantor has at any time a sufficient right, interest or power to grant a Security;

(16) Improvements means any improvements, fixtures, plant or machinery affixed to or used with any Land that is part of the Collateral;

(34) Transaction Documents has the meaning given in the Security Trust Deed;

(1) In this document, unless the context indicates otherwise, reference to:

(a) the following words and expressions have the meanings given to them in the PPSA: account; after-acquired property, attaches, bankruptcy; chattel paper; circulating asset, collateral, company, control, documents of title, effective, financing statement, financing charge statement, fixtures, future advance, interest, inventory, located, intermediated security, investment instrument, negotiable instrument, perfected, perfection, personal property, possession, proceeds, provides, purchase money security interest, register, registration, serial number, value, verification and statement;

(i) property or asset includes any real or personal, present or future, tangible or intangible property or asset and any right, interest, revenue or benefit in, under or derived from the property or asset;

(4) "Including" and similar expressions are not words of limitation.

Words and expressions defined in the Security Trust Deed apply to this document (including words and expressions incorporated in the Security Trust Deed) unless that word or expression is defined in this document or the context indicates otherwise.

(1) The Grantor grants Security in the Collateral to the Secured Party to secure payment of the Secured Money and punctual performance of all of the Grantor s other obligations under the Transaction Documents to the Secured Party at any time.

The Grantor must comply with all of its obligations and undertakings as contained in the Transaction Documents and pay the Secured Money to the Secured Party in accordance with the Transaction Documents and any other obligation under which the Secured Money is payable.

The Grantor must not do, or agree to do, any of the following unless it is permitted to do so by another provision in a Transaction Document:

(1) create or allow another interest in the Collateral including any Security; or

(2) dispose, or part with possession, of any Collateral.

The Grantor represents and warrants to the Secured Party that:

(a) it has and will have at all times, in relation to the Collateral:

(ii) sufficient rights to grant a Security to the Secured Party;

(iii) any owner or lessor of any property in respect of which the Grantor has an interest as buyer or lessee or which the Grantor receives as a commercial consignment; and

(b) the Collateral is free from Security other than Permitted Security;

When the Grantor acquires any Collateral or the Collateral comes into existence after the date of this document, the Grantor is deemed to have given the representations and warranties set out in this clause 6 in relation to that Collateral.

(B) any property in which the Grantor has rights that is or is capable of being subject to a Security in favour of any supplier or third party and the amounts involved;

(ii) any other information in the possession or under the control of the Grantor that in the Secured Party's reasonable opinion is relevant to the Collateral or this document;

(b) promptly on the acquisition by it of any Land, full particulars of the Land;

not cause or permit any Land that is part of the Collateral to be leased or licensed for occupancy or use otherwise than at a rent that is not less than the full market rent and otherwise on terms that a prudent and reasonable owner of the Land would in the ordinary course of business cause or permit;

Without limiting clause 16.3, but subject to any restriction imposed by the Secured Party in the terms of the Receiver s appointment, the Receiver may do any one or more of the following things:

(b) receive rents and profits derived from the Collateral;

(l) subdivide or consolidate any Land forming part of the Collateral;

Appendix 2: Relevant terms from the Guarantee Facilities Agreement

Parties Springsure Creek Coal Pty Ltd (ABN 73 119 713 601) of Level 4, 260 Queen Street, Brisbane QLD 4000 (the Borrower)

The Guarantors named in Part II of Schedule 1 of Level 4, 260 Queen Street, Brisbane QLD 4000 (a Guarantor)

Credit Suisse AG, Singapore Branch (ARBN 061 700 712) of Hansapoint, 10 Changi Business Park Central 2, #02-01/10 & #04-01/10, Singapore 486030 (the Agent)

Credit Suisse AG, Singapore Branch (ARBN 061 700 712) of Hansapoint, 10 Changi Business Park Central 2, #02-01/10 & #04-01/10, Singapore 486030 (the Arranger)

Credit Suisse AG, Sydney Branch (ARBN 061 700 712) of Level 41, 101 Collins Street, Melbourne Victoria 3000 (the Security Trustee)

The Participants named in Part III of Schedule 1 (each an Original Participant)

Credit Suisse AG, Sydney Branch of Level 41, 101 Collins Street, Melbourne Victoria 3000 (the Issuing Bank)

(k) each document or agreement entered into or delivered under each of the documents referred to in clauses (a) to (g) (including any notice of default, waiver or consent); and

(l) any other document that the Agent designates as a Finance Document with the consent of the Borrower (such consent not to be unreasonably withheld);

(b) the general security agreement between Springsure Property as guarantor and the Security Trustee as secured party dated on or about the date the First Amendment Deed over all of the assets of Springsure Property;

(1) Unless a contrary indication appears, any reference in this document to:

(b) assets includes present and future properties, revenues and rights of every description;

(1) Subject to the terms of this document, the Participants will make available to the Borrower:

(a) an Australian dollar bank guarantee issuance facility in an aggregate amount equal to the Facility A Commitment; and

(b) an Australian dollar bank guarantee issuance facility in an aggregate amount equal to the Facility B Commitment.

Each Guarantor irrevocably and unconditionally jointly and severally:

(1) guarantees to each Finance Party punctual performance by each other Obligor of all of its obligations under the Finance Documents;

(2) undertakes with each Finance Party that whenever an Obligor does not pay any amount when due under or in connection with any Finance Document (or anything which would have been due if the Finance Document or the amount was enforceable, valid and not illegal), that Guarantor must immediately on demand pay that amount as if it was the principal obligor; and

(3) indemnifies each Finance Party immediately on demand against any Loss suffered by that Finance Party if any obligation guaranteed by it (or anything which would have been an obligation guaranteed by it if not unenforceable, invalid or illegal) is or becomes unenforceable, invalid or illegal. The amount of the Loss is equal to the amount which that Finance Party would otherwise have been entitled to recover.

Each of clauses 15.1(1) and 15.1(3) is a separate obligation. Neither is limited by reference to the other.

Each Obligor must supply to the Agent (in sufficient copies for all the Participants, if the Agent so requests):

(1) all documents dispatched by the Obligor to its shareholders (or any class of them) or its creditors generally (or any class of them) at the same time as they are dispatched, other than share registry documents provided to shareholders in relation to their holdings, or correspondence with individual shareholders that will not warrant or be the subject of a public document or wider distribution to shareholders;

(2) promptly upon becoming aware of them, the details of any litigation, arbitration or administrative proceedings which are current, threatened or pending against it claiming any Loss in excess of A$1,000,000; and

(3) promptly, such further information regarding the financial condition, business and operations of it as any Finance Party (through the Agent) may reasonably request.

(b) deposit an amount equal to or greater than A$17,300,000 into the Cash Cover Account.

(2) Subject to the terms of this document, at all time after the Utilisation Date the Borrower must maintain a minimum balance standing to the credit of the Cash Cover Account of A$17,300,000.

(3) The Borrower agrees that the Security Trustee may at any time nominate any representative of the Security Trustee to be at its option sole or joint authorised signatory to the Cash Cover Account at any time.

(4) The Borrower agrees that it is an express term of the Cash Cover Account that:

(a) interest will accrue and be paid on amounts deposited in the Cash Cover Account at the prevailing rate of interest paid on deposits in the amount of the Cash Cover by the Account Bank;

(b) the Borrower must not withdraw any money from the Cash Cover Account;

(c) no part of the money in the Cash Cover Account is repayable to the Borrower unless and until all the Secured Money has been paid and satisfied in full; and

(d) the Borrower has not and the Borrower must not, assign, grant a Security over, or otherwise dispose of, any interest in the Cash Cover Account (except in favour of the Security Trustee).

(5) Provided that no Event of Default has occurred and is subsisting, 3 Business Days after each Quarter Date, the Account Bank will transfer interest accrued on amounts deposited in the Cash Cover Account to an account nominated by the Borrower.

(6) The Security Trustee is irrevocably authorised by the Borrower at any time after a Default without prior notice to Borrower to apply and set off any part or the whole of the moneys in Cash Cover Account in or towards payment of any of the Secured Money.

Each Obligor must not and shall ensure that none of its Subsidiaries will create or permit to subsist any Security over the whole or any part of its present or future property other than a Permitted Security.

(1) Each Obligor must not and shall ensure that none of its Subsidiaries will enter into a single transaction or a series of transactions (whether related or not) and whether voluntary or involuntary to sell, lease, transfer or otherwise dispose of an asset except:

(a) trading stock or surplus assets so long as it does not materially change the operations of the Obligor;

(b) in the ordinary course of day to day business not exceeding A$1,000,000 in a calendar year;

(c) to another Obligor, provide that such asset is or remains subject to a Security in favour of the Security Trustee (including a Security under a Security Document);

(d) disposals on arm's length terms of obsolete assets which are not required for the efficient operation of the business of the Group;

(e) any expenditure of cash in payment of assets and services acquired in the ordinary course of its ordinary business;

(h) any Disposal to which the Agent (acting on the instructions of the Majority Finance Parties) has given its prior written consent.

(1) Provided that no Event of Default as occurred, if:

(a) any Obligor or any Subsidiary of an Obligor proposes a single transaction or a series of transactions (whether related or not) and whether voluntary or involuntary to sell, lease, transfer or otherwise dispose of any asset (Disposal Transaction) which is not permitted or consented to by the Majority Finance Parties under clause 19.3, the Disposal Transaction may occur without the prior written consent of the Majority Finance Parties on the basis that sufficient amounts are deposited in the Cash Cover Account on completion of such transaction to ensure that the Net Exposure is equal to zero;

(b) an Obligor or any Subsidiary of an Obligor proposes to incur or have outstanding any Financial Indebtedness (New Debt) which is not consented to by the Participants under clause 19.1, such New Debt may be incurred without the prior written consent of the Participants on the basis that sufficient amounts are deposit in the Cash Cover Account on completion of such transaction to ensure that the Net Exposure is equal to zero; and

(c) any Obligor or any Subsidiary of an Obligor proposes to grant Security over the whole or any part of its present or future property in respect of any New Debt (Third Party Security) which is not permitted or consented to by the Participant under clause 19.2, granting of the Third Party Security may proceed without the prior written consent of the Participants on the basis that sufficient amounts are deposited in the Cash Cover Account on completion of such transaction to ensure that the Net Exposure is equal to zero

provided that the Agent is satisfied as to the mechanism by which the relevant amounts will be deposited into the Cash Cover Account on completion.

(2) if the Borrower exercises any of the options set out in clause 22(1), it must ensure that the Net Exposure remains equal to zero at all times after the relevant option is exercised.

Appendix 3: Relevant terms from the Security Trust Deed

Parties Credit Suisse AG, Sydney Branch ABN 17 061 700 712 of Level 41, 101 Collins Street, Melbourne Victoria 3000 (Security Trustee)

Credit Suisse AG, Singapore Branch of Hansapoint, 10 Changi Business Park Central 2, #02-01/10 & #04-01/10, Singapore 486030 (Agent)

Each party named in each capacity in Item 1 of Schedule 1 (each an Initial Beneficiary)

The parties named in Item 2 of Schedule 1 (each an Initial Security Providers)

(d) any other document that is a Finance Document (as defined under the Facility Agreement);

(f) any other document that the Security Trustee and the Debtor agree at any time is a Transaction Document for the purpose of this document; and

(g) any document or agreement entered into for the purpose of amending or novating any of the above;

(f) agreement or document is to the agreement or document as amended, novated, supplemented or replaced, except to the extent prohibited by this document;

1.4 Words and expressions in the Facility Agreement

Words and expressions defined in the Facility Agreement apply to this document unless that word or expression is defined in this document or the context indicates otherwise.