Terms and Conditions of Supply

Johnson Hi-Tech (Australia) Pty Ltd (A.B N. 010 802 598) trading as JOHNEX explosives ("Supplier”) will supply Goods to the Purchaser on the following Terms and Conditions of Supply (“Terms and Conditions”):

1. DEFINITIONS AND INTERPRETATIONS

1.1 In these Terms and Conditions:

(a) “CCA” means the Competition and Consumer Law Act 2010 (Cth).

(b) “Force Majeure Event” means any occurrence or omission as result of which the Supplier is prevented from or delayed in performing any of its obligations under these Terms and Conditions and which are beyond the reasonable control of the Supplier and not caused by the Suppliers fault or negligence including, but not limited to, any act of God, lightning, earthquake, storm, fire, flood, explosion or natural disaster, any industrial dispute of any kind, strikes, lockouts, ban, any civil disorder, insurrection, act of terrorism, war or riot and any act or omission of government or any government agency, department, body or authority.

(c) "Goods" means the goods or products requested by the Purchaser in its Order, and includes where applicable any services provided by the Supplier.

(d) “FTA” means the Fair Trading Act 2010 (WA) or any other relevant fair trading legislation in the other States or Territories of Australia (as applicable).

(e) “Loss” means any one or more of the following:

(i) loss, including but not limited to direct loss, indirect loss, consequential loss, special loss, loss of anticipated profits and/or loss of business opportunity;

(ii) liability;

(iii) to the maximum extent permitted by law, personal injury or harm;

(iv) damage including but not limited to any damages or compensation and/or any damage to reputation; or

(v) cost or expense including legal costs on a full indemnity basis, of whatever kind and however it arises;

(f) "Order" means a purchase order or other request by a Purchaser to the Supplier to supply the Purchaser with Goods.

(g) “Personal Properties Securities Register” has the meaning defined in section 147 of the PPS Act;

(h) “PPS Act” means the Personal Property Securities Act 2009 (Cth) (as amended) and any other legislation and regulations in respect of it and the following words in clauses 11 and 12 have the respective meanings given to them in the PSS Act: “collateral”, “financing change statement”, “financing statement”, “interested person”, “purchase money security”, “interest”, “register”, “registration”, “security agreement”, “security interest” and “verification statement”; and

(i) “Price” means the price payable for Goods.

(j) "Purchaser" means the person, partnership, corporation or other legal entity which places an order with the Supplier for the supply of Goods, including any applicant for credit with the Supplier.

1.2 Where the Purchaser comprises more than one person or entity, these Terms and Conditions bind each such person or entity jointly and severally.

1.3 Headings shall not affect the construction or interpretation of these Terms and Conditions.

2. QUOTATIONS

2.1 All Prices are open for acceptance by the Purchaser within thirty (30) days, provide that the Supplier reserves the right to refuse to accept an Order.

2.2 All Prices are inclusive of Goods and Services Tax and are quoted excluding freight unless otherwise stated in writing.

3. ACCEPTANCE

By placing an Order with the Supplier, the Purchaser fully accepts all these Terms and Conditions of supply.

4. DELIVERY

4.1 Any entity engaged by the Supplier to transport the Goods to the Purchaser shall be the agent of the Purchaser and shall not be an agent of the Supplier.

4.2 The Supplier will not be responsible for the late or non-delivery of the Goods or for any Loss in respect of the Goods once the Goods are no

longer in the Supplier’s possession, except where otherwise agreed in writing between the Supplier and the Purchaser.

4.3 The Purchaser shall provide labour, forklifts or cranes and reasonable access at the point of delivery of the Goods for the purpose of unloading the Goods without delay.

5. WARRANTIES

To the maximum extent permitted by law, all warranties and guarantees are excluded from these Term and Conditions and the Supplier gives no warranty or guarantee in relation to the Goods supplied to the Purchaser.

6. LIMITATION OF LIABILITY

6.1 Subject to the mandatory provisions of the CCA, the FTA, the Sale of Goods Act 1895 (WA) and any other relevant legislation, the Suppliers liability for breach of any term, warranty, or condition of these Terms and Conditions (whether implied by law or otherwise) shall, at the Suppliers option, be limited to the replacement of the Goods, the supply of equivalent Goods, the repair of the Goods or the cost of repairing or replacing the Goods.

6.2 Nothing in these Terms and Conditions is intended to have the effect of contracting out of any applicable provisions of the CCA or the FTA, except to the extent permitted by those Acts where applicable.

7. CLAIMS

7.1 Any claim by the Purchaser in respect of defective, damaged or wrongly supplied Goods must be made in writing within seven (7) days of receipt of those Goods.

7.2 The Supplier will not accept a claim by the Purchaser under clause 7.1 if made more than seven (7) days from receipt of the Goods.

7.3 The Supplier will not accept the return of or give credit to the Purchaser for the Goods the subject of the claim under clause 7.1 unless agreed to in writing by the Supplier.

7.4 The Supplier will not assess a claim under clause 7.1 without being supplied with full written particulars and documentation from the Purchaser.

8. PAYMENT

8.1 Unless otherwise agreed in writing, payment for the supply of the Goods shall be made 30 days from end of month of supply

8.2 If the Purchaser fails to pay the Price and any other monies due under these Term and Conditions to the Supplier by the due date for payment, the Supplier may:

(a) charge interest at the rate of 4% per annum above the Reserve Bank of Australia cash rate (from time to time) calculated dail y on the outstanding amount calculated from the date payment is due to the date payment is made or judgment (as applicable); and

(b) suspend all credit of the Purchaser; and

(c) suspend further deliveries of Goods until all amounts due, including any interest payable.

8.3 The Purchaser agrees to pay the Supplier on demand any costs (including legal costs on a solicitor-client basis) that the Supplier incurs in recovering any amounts which the Purchaser owes to the Supplier.

8.4 Receipt by the Supplier of any form of payment other than cash is not deemed to be payment of the Price until that form of payment has been honoured, cleared or recognised and until then the Supplier’s ownership or rights in respect of the Goods continues.

9. RETENTION OF TITLE

9.1 The Purchaser agrees that until full payment of the Price and all other monies owing to the Supplier by the Purchaser in respect of an Order is made, all right, title, estate and interest in the Goods remains the property of the Supplier.

9.2 Until the Purchaser has paid the Price to the Supplier:

(a) the Goods are held by the Purchaser as fiduciary bailee of the Supplier;

(b) the Purchaser must store the Goods separately and so that they are readily identifiable as the property of the Supplier;

(c) the Purchaser must not sell the Goods except with the prior written consent of the Supplier or in the ordinary course of the Purchaser's business; and

(d) and, any proceeds of such re-sale, insofar as they relate to the Goods, shall be held on trust for the Supplier in a separate account.

10. RISK

10.1 All risk for the Goods passes to the Purchaser on delivery.

10.2 If any of the Goods are damaged or destroyed following delivery but prior to ownership passing to the Purchaser, the Supplier is entitled to receive all insurance proceeds payable for the Goods. The production of these Terms and Conditions by the Supplier is sufficient evidence of the Supplier’s rights to receive the insurance proceeds without the need for any person dealing with the Supplier to make further enquiries.

11. SECURITY AND CHARGE

Despite anything to the contrary contained herein or any other rights which the Supplier may have howsoever:

(a) The Purchaser mortgages and charges all of its interest in all real property, personal property, assets or other property capable of being mortgaged and/or charged in favour of the Supplier to secure all amounts and other monetary obligations payable under these T erms and Conditions. The Purchaser acknowledge and agree that the Supplier (or the Supplier’s nominee) is entitled to lodge where appropriate registered security(ies) (including an fixed charge, security interest under the PPS Act, or an absolute caveat), and such registered security(ies) must be withdrawn on satisfaction of all payments and other monetary obligations payable under these Terms and Conditions.

(b) Should the Supplier elect to proceed in any manner in accordance with this clause 11 and/or its sub-clauses, the Purchaser indemnifies the Supplier from and against all of the Supplier’s costs and disbursements, including legal costs on a solicitor-own client basis.

(c) The Purchaser agree to irrevocably nominate constitute and appoint the Supplier as the Purchaser’s true and lawful attorney to perform all necessary acts to give effect to the provisions of this clause 11.

12. PPS ACT

12.1 The Purchaser:

(a) consents to the Supplier affecting and maintaining a registration on the Personal Properties Securities Register (in any manner the Supplier considers appropriate) in relation to any security interest contemplated or constituted by these Terms and Conditions in the Goods and the proceeds arising in respect of any dealing with the Goods; and

(b) the Purchaser agrees to sign any documents and provide all assistance and information to the Supplier required to facilitate the registration and maintenance of any security interest.

12.2 The Supplier may at any time register a financing statement or financing change statement in respect of a security interest (including any purchase money security interest). The Purchaser waives any right to receive notice of a verification statement in relation to any registration on the Personal Properties Securities Register of any security interest in respect of the Goods.

12.2 The Purchaser undertakes to:

(a) do anything (in each case, including executing any new document or providing any information) that is required by the Supplier:

(i) in order for the Supplier to acquire and maintain one or more perfected security interests under the PPS Act in respect of the Goo ds and its proceeds;

(ii) register a financing statement or financing change statement; and

(iii) ensure that the Supplier’s security position, and rights and obligations, are not adversely affected by the PPS Act;

(b) not register a financing change statement in respect of a security interest contemplated or constituted by these Terms and Conditions without the Supplier’s prior written consent; and

(c) not register, or permit to be registered, a financing statement or a financing change statement in relation to the Goods in favour of a third party without the Supplier’s prior written consent.

12.3 If Chapter 4 of the PPS Act would otherwise apply to the enforcement of a security interest arising under or in connection with these

Terms and Conditions and:

(a) section 115(1) of the PPS Act allows for the contracting out of provisions of the PPS Act, the following provisions of the PPS Act will not apply and the Purchaser will have no rights under them: section 95 (to the extent that it requires the secured party to give notices to the grantor); section 96; section 118 (to the extent that it allows a secured party to give notices to the grantor); section 121(4); section 125; section 130; section 132(3)(d); section 132(4); section 135; section 142 and section 143; and

(b) pursuant to section 115(7) of the PPS Act allows for the contracting out of provisions of the PPS Act, the following provisions of the PPS Act will not apply and the Purchaser will have no rights under them: section 127; section 129(2) and (3); section 130(1); section 132, section 134(2); section 135; section 136(3), (4) and (5) and section 137.

12.4 Unless otherwise agreed and to the extent permitted by the PPS Act, the Purchaser and the Supplier agree not to disclose information of the kind referred to in section 275(1) of the PPS Act to an interested person, or any other person requested by an interested person. The Purchaser waives the any right it may have, or but for this clause may have had, under section 275(7)(c) of the PPS Act to authorise the disclosure of the above information.

12.5 For the purposes of section 20(2) of the PPS Act, the collateral is Goods including any Goods which are provided by th e Supplier to the Purchaser from time to time. These Terms and Conditions constitute a security agreement for the purposes of the PPS Act.

12.6 The Supplier may apply amounts received in connection with these Terms and Conditions to satisfy obligations secured by a security interest contemplated or constituted by these Terms and Conditions in any way the Supplier determines in its absolute discretion.

12.7 The Purchaser agrees to notify in writing any third party to which it on sells the Goods, that the Supplier may have affected a registration on the Personal Property Security Register in relation to the Goods and that such registration will be maintained until such time as the Purchaser has paid the Supplier the amount invoiced for the Goods.

13. PURCHASERS ASSURANCES AND INDEMNITY

The Purchaser:

(a) acknowledges that it is aware of the government regulations relating to explosives and of the dangerous nature of the Goods; (b) shall provide the Supplier a copy of its current licence authorising it to be in possession of explosives;

(c) undertakes to comply with all government regulations relating to the handling, storage and use of the Goods and will ensure t hat the

Goods are safely handled at all times; and

(d) agrees to fully indemnify the Supplier for any claims that may be made against it arising out of the Purchaser's negligence or misuse of the Goods.

14. DEFAULT & CONSEQUENCES OF DEFAULT

14.1 Without prejudice to any other remedies the Supplier may have, if at any time the Purchaser is in breach of any obligation (i ncluding those relating to payment), the Supplier may suspend or terminate the supply of Goods to the Purchaser and any of its other obligations under these Terms and Conditions. The Supplier is not liable to the Purchaser for any Loss the Purchaser suffers because the Supplier has exercised its rights under this clause 14.1.

14.2 In the event that:

(a) any money payable to the Supplier becomes overdue, or in the Supplier’s opinion the Purchaser will not be able to meet its pa yments as they fall due; or

(b) the Purchaser becomes insolvent, convenes a meeting with its creditors or proposes or enters into an arrangement with creditors or makes an assignment for the benefit of its creditors; or

(c) a receiver, manager, liquidator (provisional or otherwise), administrator, bankruptcy trustee or similar person is appointed in respect of the Purchaser or any assets of the Purchaser, then, without prejudice to the Supplier’s other remedies at law:

(d) the Supplier is entitled to cancel all or part of any Order made by or for the Purchaser which remains unperformed; and

(e) all amounts owing to the Supplier are, whether or not due for payment, immediately due and payable.

14.3 In the event that the Purchaser is in default or breach of any of the terms of these Terms and Conditions and such default or breach is not remedied within seven (7) days of notice being provided by the Supplier to the Purchaser, then without prejudice to its other remedies at law, the Purchaser is liable to the Supplier for an amount of liquidated damages equal to the unpaid balance of the Price of Goods supplied to the Purchaser.

15. FORCE MAJEURE

15.1 The Supplier shall not be responsible for any failure of delay in performance of any of its obligations under these Terms and Conditions if it is prevented or delayed in performing its obligations by a Force Majeure Event.

15.2 The Suppliers obligations under these Terms and Conditions shall be suspended or delayed to the extent that, and for so long as, the Supplier’s ability to perform its obligations are affected by the Force Majeure Event.

15.3 The Supplier will not be liable for any costs, losses, expenses or damages incurred by the Purchaser during the period of sus pension or delay caused by the Force Majeure Event.

15.4 The Supplier will use reasonable endeavors to minimize the effect and any resulting delay caused by the Force Majeure Event.

15.5 If the Force Majeure Event continues for more than sixty (60) days either the Supplier or Purchaser may terminate these Terms and Conditions with fourteen (14) days notice in writing.

16. SUPPLIER’S RIGHTS TO DISPOSE OF UNPAID GOODS

In the event that:

(a) the Supplier retains possession or control of the Goods; (b) payment of all or part of the Price is due to the Supplier;

(c) the Supplier has made demand in writing of the Purchaser for payment of the invoiced and due Price in terms of these Terms and Conditions; and

(d) the Supplier has not received the invoiced and due amount of the Goods, then, whether the property in the Goods has passed to the Purchaser or has remained with the Supplier, the Su pplier may dispose of the Goods and may claim from the Purchaser the Loss to the Supplier on such disposals.

17. CANCELLATION

17.1 The Supplier may cancel any Order at any time before the Goods are delivered by giving written notice to the Purchaser. On gi ving such notice the Supplier must repay to the Purchaser any sums paid in respect of the Price.

17.2 The Supplier is not liable for any Loss whatever arising from such cancellation under clause 17.1.

17.3 In the event that the Purchaser cancels delivery of Goods, the Purchaser is liable for any Loss incurred by the Supplier (including, but not limited to, any loss of profits) up to the time of cancellation.

18. LIEN & STOPPAGE IN TRANSIT

Where the Supplier has not received or been tendered the whole of the Price, or the payment has been dishonoured, the Supplier has: (a) a lien on the Goods;

(b) the right to retain them for the Price while the Supplier is in possession of them;

(c) the right of stopping the Goods in transit whether or not delivery has been made or ownership has passed; (d) a right of resale; and

(e) the foregoing right of disposal in clause 16, provided that the lien of the Supplier continues despite the commencement of proceedings or judgment for the unpaid amount having been obtained.

19. INTELLECTUAL PROPERTY

19.1 Where the Supplier has designed or drawn Goods for the Purchaser, then the copyright or any other intellectual property right in those designs and drawings remains the property of the Supplier, and can only be used by the Purchaser at the Supplier’s discretion.

19.2 All intellectual property and associated intellectual property rights comprised in or associated with the Goods remains the property of the Supplier or the property of any third party owner that has licensed or otherwise authorised the Supplier’s use of that intellectual property, and the Purchaser is not granted any right or title in such intellectual property.

19.3 The Purchaser must not copy, vary, modify or reverse engineer any intellectual property comprised in or associated with the Goods without the prior written consent of the Supplier, and such consent may be withheld at the Supplier’s absolute and unfettered discretion.

19.4 Where any designs of specifications have been supplied by the Purchaser for manufacture, by or to the order of the Supplier then the Purchaser warrants that the use of those designs or specifications for the manufacture, processing, assembly or supply of the Goods does not infringe the rights of any third party.

20. APPLICABLE LAW

These Terms and Conditions shall be governed by and construed in accordance with the laws of Western Australia and in the event of a dispute concerning these Terms and Conditions, the Supplier and Purchaser agree to submit to the jurisdiction of the courts of Western Australia.

21. PURCHASER’S DISCLAIMER

To the maximum extent permitted by law, the Purchaser hereby disclaims and renounces any right to rescind, or cancel any Orde r with the Supplier or to sue for damages or to claim restitution arising out of any misrepresentation made to the Purchaser by the Supplier and the Purchaser acknowledges that the Goods are bought relying solely upon the Purchaser’s skill, judgment and own investigation.