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1. GENERAL INTERPRETATION

In these conditions:

(1) Tuftmaster Carpets Pty Ltd (ACN 004 802 584) 5-7 Cope St, Preston, Victoria 3072 ("Tuftmaster");

(2) 'Buyer' means the purchaser of any goods specified on a purchase order to Tuftmaster, or a purchase order made by telephone, fax or e-mail to Tuftmaster:

(3) 'Goods' means the products specified on a purchase order from the Buyer to Tuftmaster;

(4) Each time the Buyer places a written or verbal purchase order for goods with Tuftmaster or the Buyer accepts goods from Tuftmaster the Buyer agrees to be bound by these terms and conditions. These Terms and Conditions supersede any other written or verbal agreement between the parties and any other terms or conditions referred to in any purchase order placed or other document produced by the Buyer;

(5) 'PPSA' means the Personal Properties Securities Act 2009;

(6) 'PMSI' means a purchase money security interest as defined by the PPSA;

(7) "security interest", "purchase money security interest", "attached", "attachment", "perfected", "accession", "commingled" and all related terms have the meanings given them by the PPSA.

2. QUOTATIONS AND PRICES

2.1 Any price quoted by Tuftmaster to the Buyer for any goods is based on Tuftmaster's estimated cost of production, manufacture and/or supply at the time of quotation. The price quoted is subject to alteration by Tuftmaster due to any increase in Tuftmaster's costs between the date of quotation and the customer's confirmation.

2.2 Any price quoted in a purchase order or Agreement of Sale is based on and applies to any quantities, delivery dates, places of delivery and contract start and end dates set out in the Agreement of Sale. Tuftmaster is free to alter the price quoted in the purchase order or Agreement of Sale if there is any change in the quantity, delivery dates, and place of delivery or contract start and end dates.

2.3 Unless otherwise expressly agreed by Tuftmaster in writing all goods will be charged for at the prices ruling at the date or dates of delivery. All prices quoted are exclusive of GST which if applicable will be for the Buyer's account. All prices are expressed in Australian dollars, unless otherwise specified in writing by Tuftmaster.

2.4 A, quotation is not an offer by Tuftmaster to sell and may be withdrawn without notice. Any order given in respect of a quotation is not binding on Tuftmaster until accepted by Tuftmaster in writing.

3. ORDERS

Orders accepted by Tuftmaster may not be cancelled or altered in whole or in part by the Buyer without Tuftmaster's written consent.

4. TERMS OF PAYMENT

Net cash 30 days from date of Statement, but Tuftmaster reserves the right to vary the terms of payment or to require payment in cash in full prior to delivery

5. INTEREST

Where an account is not paid by the Buyer as provided in this Agreement Tuftmaster shall without prejudice to any other remedies available to it be entitled to charge interest on the amount outstanding calculated from the date payment is due until the date payment is made on the amount outstanding from time to time at 2.0% per month compounding.

6. CLAIMS

6.1 Any claim by the Buyer for short or wrongful delivery of the goods must be notified to Tuftmaster in writing within 7 days after delivery of the goods to the Buyer. Any claim which the Buyer does not notify within that time (time being of the essence) shall subject to the discretion of Tuftmaster be deemed to have been absolutely waived.

6.2 The Buyer must, subject to obtaining prior written authority from Tuftmaster, return a sample of the subject of a claim to Tuftmaster within 21 days from the date of receipt of authorisation.

6.3 Tuftmaster makes no representation about, and accepts no responsibility for, the goods complying with any law, regulation or standard that applies in any jurisdiction outside Australia.

7. DESCRIPTION

Any description of the goods is given in the way of identification only and the use of such description shall not constitute the contract of sale by description.

8. IMPLIED TERMS AND LIABILITY

8.1 Tuftmaster acknowledges that, under applicable State, Territory, and Commonwealth laws, certain conditions and warranties may be implied in the contract between Tuftmaster and the Buyer and rights and remedies conferred upon the Buyer and other parties in relation to goods which cannot be excluded, restricted or modified by agreement ("Non-excludable Rights"). The limitations below are subject to these Non-excludable Rights.

8.2 Subject to the above, Tuftmaster disclaims all conditions and warranties expressed or implied, and rights and remedies conferred on the Buyer or other parties, by statute the common law, equity, trade, custom or usage or otherwise howsoever and all such conditions and warranties and such rights and remedies are hereby expressly excluded other than any Non-excludable Rights.

8.3 Tuftmaster's liability under s274 of the Competition and Consumer Act is expressly limited to a liability to pay to the purchaser an amount equal to:
(1) the cost of replacing the goods;
(2) the cost of obtaining equivalent goods; or
(3) the cost of having the goods repaired, where repair, such as reprocessing is an option, whichever is the lowest amount.

8.4 Where so permitted the liability of Tuftmaster for a breach of a Non-excludable Right is limited, at Tuftmaster's option, in the case of goods, to the replacement or repair of the goods, or the supply or acquisition of equivalent goods.

9. INDIRECT LOSS

Subject to Clause 8, in no event shall Tuftmaster be liable (whether before or after discharge of the contract or otherwise) for any loss or damage to the Buyer howsoever arising including any loss or damage arising from or caused or contributed to by negligence of Tuftmaster, its servants or agents, nor shall Tuftmaster be liable for special, incidental, indirect or consequential, or economic loss or damage suffered by the Buyer as a result of a breach by Tuftmaster of its obligations or otherwise including but not limited to economic or moral loss, loss of profits or revenue or costs arising from such breach.

10. INDEMNITY

The Buyer shall indemnify and keep indemnified and hold Tuftmaster harmless from and against all liabilities, losses, damages, costs or expenses incurred or suffered by Tuftmaster, and from and against all actions, proceedings, claims or demands made against Tuftmaster, arising from one or more of the following:

(a) as a result of the Buyer's failure to comply with any laws, rules, standards or regulations applicable in relation to the goods or the use of the goods;

(b) as a result of any other negligence, breach of contract or other breach of duty by the Buyer; or

(c) as a result of Tuftmaster adhering to instructions that the Buyer has given Tuftmaster about the goods.

11. DELIVERY AND FORCE MAJEURE

11.1 Unless otherwise expressly agreed by Tuftmaster in writing the goods will be delivered ex works.

11.2Any time quoted for delivery is an estimate only.

11.3 Tuftmaster shall not be liable for any loss or damage which is a consequence or result of any failure to deliver or delay in delivering the goods or shipping documents or service whatever the cause of such failure to deliver or late delivery maybe.

11.4 Tuftmaster shall not be liable for any loss or damage to the Buyer or any other party in connection with the Contract that is the direct or indirect result or consequence of any circumstances of whatsoever nature beyond Tuftmaster's control including but not limited to fire, flood, drought, explosion, epidemic, riot, embargo, war, hostilities between any powers, civil commotion, breakdown of machinery, strike, lock-out or other industrial act or dispute or the break-down of or accident to plant, crop failure or crop sabotage, the unavailability or shortage of raw materials, labour, power supplies or transport facilities, failure or delay in delivery or shipment on the part of manufacturers, producers, suppliers, merchants or agents, delay in delivery from a manufacturer's plant to the port of shipment, delay in transportation or failure or inability to obtain licenses or any act of God or any law, regulation, order, direction or policy of any local, State or Federal Government or Government authority or instrumentality (a Force Majeure Event).

11.5 If Tuftmaster determines that it is unable to comply with any term or condition in the Contract by reason of a Force Majeure Event or that it is unable to deliver within a reasonable time or at all Tuftmaster may cancel the Contract. In the event of cancellation the Buyer shall have no claim against Tuftmaster for any loss, cost or expense whatsoever. The Buyer shall not be relieved of any obligation to accept or pay for the goods by reason of any delay in or failure to deliver.

11.6 For the purposes of this clause freight or shipping space shall be deemed unavailable if Tuftmaster, having taken all reasonable steps to procure the same, has failed to do so. Tuftmaster shall not be deemed to have failed to take all reasonable steps because it may have allocated available freight or shipping space for shipment of other goods under contracts entered into before or after this contract.

11.7 Tuftmaster reserves the right to treat the action of any Government affecting the goods intended to satisfy this Contract such as the alteration or introduction of any duty, tax, export or import license, minimum government prices, quotas, trade impediments, or other restrictions as a Force Majeure Event entitling Tuftmaster to cancel the Contract by giving written notice of the cancellation to the Buyer.

11.8 All payments under this Contract and under any other existing contract between the Buyer and Tuftmaster are to be made on the due date as a condition precedent to future deliveries under the Contract.

12. PROPERTY & RISK

(a) The risk of loss or damage to the goods shall pass to the Buyer on delivery.

(b) Property in the goods shall not pass from Tuftmaster to the Buyer until the Buyer has paid all monies outstanding from the Buyer to Tuftmaster on any account in full.

(c) The Buyer agrees to store the goods separately and mark them so as to render them identifiable as being made from or with goods which are the property of Tuftmaster.

13. RIGHTS IN RELATION TO THE GOODS:

13.1 In connection with the goods while they remain the property of Tuftmaster, the Buyer agrees with Tuftmaster that:

13.1.1 the Buyer has no right or claim to any interest in the goods to secure any liquidated or un liquidated debt or obligation Tuftmaster owes to the Buyer;

13.1.2 the Buyer cannot claim any lien over the goods;

13.1.3 the Buyer will not create any absolute or defeasible interest in the goods in relation to any third party except as may be authorised by Tuftmaster;

13.1.4 where the Buyer is in actual or constructive possession of the goods:

13.1.4.1 the Buyer will not deliver them or any document of title to the goods to any person except as directed by Tuftmaster; and

13.1.4.2 it is in possession of the goods as a bailee of those goods and owes Tuftmaster the duties and liabilities of a bailee.

13.2 In connection with the goods, Tuftmaster states to the Buyer that:

13.2.2 Tuftmaster has the right to supply the goods to the Buyer;

13.2.3 the activities of the Buyer in supplying the goods do not infringe the rights of the owner of the goods (where Tuftmaster is not the owner of the goods).

13.2.4 if the goods are not owned by Tuftmaster, that Tuftmaster is authorised to supply the goods to the Buyer.

13.3 Tuftmaster and the Buyer agree that:

13.3.1 the property of Tuftmaster in the goods remains with Tuftmaster until Tuftmaster has been paid in full for the goods under all individual contracts for the supply of the goods between Tuftmaster and the Buyer;

13.3.2 the Buyer is a bailee of the goods until such time as property in them passes to the Buyer and that this bailment continues in relation to each of the goods until the price of the goods has been paid in full;

13.3.3 pending payment in full for the goods, the Buyer:

13.3.3.1 must not supply any of the goods to any person outside of its ordinary or usual course of business;

13.3.3.2 must not allow any person to have or acquire any security interest in the goods;

13.3.3.3 must insure the goods for their full insurable or

13.3.3.4 replacement value (whichever is the higher) with an insurer licensed or authorised to conduct the business of insurance in the place where the Buyer carries on business;

13.3.3.5 must not remove, deface or obliterate any identifying plate, mark or number on any of the goods.

13.4 Despite clause 13.3, if the Buyer supplies any of the goods to any person before all monies payable by the Buyer have been paid to Tuftmaster (and have not been claimed or clawed-back by any person standing in the place of or representing the Buyer), the Buyer agrees that:

13.4.1 it holds the proceeds of re-supply of all the goods on trust for and as agent for Tuftmaster immediately when they are receivable or are received;

13.4.2 it must either pay the amount of the proceeds or re-supply to Tuftmaster immediately when they are received or pay those proceeds into an account with a bank or a financial institution or deposit- taking institution as trustee for Tuftmaster;

13.4.3 any accessory or item which accedes to any of the goods by an act of the Buyer or any person at the direction or request of the buyer becomes and remains the property of Tuftmaster until Tuftmaster is paid in accordance with clause 17.3.1 when the property in the goods (including the accessory) passes to the Buyer;

13.4.4 if the Buyer fails to pay for the goods within the period of credit (if any) extended by Tuftmaster to the Buyer, Tuftmaster may recover possession of all the goods at any site owned, possessed or controlled by the Buyer and the Buyer agrees that Tuftmaster has an irrevocable license to do so.

14. CHARGE OVER LAND

14.1 In consideration of Tuftmaster selling the goods to the Buyer, the Buyer agrees to charge all the Buyer's interest in land in favour of Tuftmaster to secure payment of all monies due to Tuftmaster, whether contingently or otherwise. The Buyer acknowledges that Tuftmaster may lodge a caveat pursuant to the charge hereby created.

15. PERFORMANCE AND REPRESENTATIONS

The Buyer acknowledges that neither Tuftmaster nor any person purporting to act on its behalf has made any representation or given any promise or undertaking which is not expressly set out in writing whether as to the fitness of the goods for any particular purpose or any other matter.

16. INSTALMENTS

The failure of Tuftmaster to deliver any instalment shall not entitle the Buyer to cancel the balance of the order. In the event of the Buyer making default in respect of any instalment, Tuftmaster may elect to treat the default as a breach of contract relating to each other instalment.

17. DEFAULT IN PAYMENT

17.1 Tuftmaster may treat any default by the Buyer in payment of any monies due to Tuftmaster as a breach of these Terms and Conditions. Tuftmaster reserves the right thereupon to cease work on the relevant order and all other orders placed by the Buyer and hold all the Buyer's work until the due payment or payments are made. Recurring payments default may, at Tuftmaster's discretion, lead to the Buyer's account with Tuftmaster being closed and any further order placed by the Buyer and accepted by Tuftmaster will only be processed when prepaid. The buyer shall pay all of Tuftmaster's costs and expenses (including legal costs determined as between Solicitor/own client and mercantile agents) which may be incurred in the recovery or attempted recovery of overdue amounts from the buyer.

17.2 If Tuftmaster reasonably anticipates that the Buyer will fail to pay for the goods otherwise fail to observe and or perform the Buyer's obligations under these Terms, Tuftmaster may cancel the order for the goods. Cancellation of the order pursuant to this clause shall not affect the rights of Tuftmaster to recover from the Buyer any monies due to Tuftmaster by reason of the order or damages in breach thereof. If:
a. the Buyer makes default in any payment due hereunder;
b. a resolution is passed or proposed or a petition is presented or an application made for winding up of the Buyer;
c. a Receiver or a Receiver and Manger is appointed of the property or any part of the property of the Buyer;
d. the Buyer makes or proposes to make any arrangement with its creditors;
e. execution is levied upon the assets of the Buyer and is not satisfied within seven days, then Tuftmaster may at its option withhold further deliveries of the goods or cancel the Contract without prejudice to its rights under this Contract provided that Tuftmaster may at any time and from time to time upon such terms as it may determine waive any of its rights under this clause without prejudice to its rights to subsequently rely upon such clause.

18. WAIVER

Failure by Tuftmaster to insist upon strict performance of any term, warranty or condition of the Deed or these terms and conditions of sale shall not be deemed as a waiver thereof or of any rights Tuftmaster may have and no express waiver shall be deemed a waiver of any subsequent breach of any term warranty or condition.

19. INTELLECTUAL PROPERTY RIGHTS

The Buyer warrants that any design or instruction furnished to Tuftmaster shall not be such as will cause Tuftmaster to infringe any Intellectual property rights (including patents, registered designs, trademarks, copyright, confidential information and the like) in the execution of the Buyer's order and the Buyer agrees to indemnify Tuftmaster against any infringement or unauthorised use of the intellectual property rights arising out of the manufacture or use of the goods and it is especially agreed that the sale and purchase of goods does not confer on the Buyer any license or rights under any intellectual property rights which is the property of Tuftmaster.

20. INSPECTION

Any inspection or test agreed upon prior to acceptance of the goods by the Buyer must, unless otherwise agreed, be carried out at Tuftmaster's premises. In the event of any specialised inspection being required or special tests prescribed by the Buyer, the cost shall be to the Buyer's account. In the case of any inspection prior to acceptance of the goods, Tuftmaster accepts no responsibility for any defects in the goods which are identified once the goods in question have left Tuftmaster's premises but which should reasonably have been detected upon inspection at Tuftmaster's premises.

21. INSTRUCTIONS BY THE BUYER

The Buyer shall indemnify Tuftmaster from and hold it harmless against all losses, expenses or liability whatsoever and howsoever incurred by Tuftmaster as result of compliance_ or adherence by Tuftmaster with any instruction of the Buyer in relation to the goods.

22. NOTICES

Any notice to be given by the Buyer to Tuftmaster shall be sent to Tuftmaster's valid business address 5-7 Cope St, Preston, Victoria, 3072. No notice shall be deemed to have been given until it is actually received at the address.

23. SEVERANCE

If any provision of this Agreement is determined to be void by any court of competent jurisdiction, then such determination shall not affect any other provision in the Agreement and each such other provision shall remain in full force and effect.

24. DISPUTE RESOLUTION

If a dispute arises out of or in connection with an order or this Agreement the parties shall use their best endeavours to bring the matter to the other party's attention as soon as possible, to resolve the dispute through discussion in good faith and to promptly elevate it to senior levels of management as appropriate for the nature of the dispute. If the dispute remains unresolved within 7 business days following the referral of the dispute to senior levels of management, either party may commence litigation in a Victorian Court that has jurisdiction to hear and determine the dispute.

25. EXECUTION OF CREDIT APPLICATION AS A DEED

Where the Buyer completes a credit application the parties acknowledge and accept that the terms and conditions of the application are executed as a Deed.

26. GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of Victoria and the parties submit to the jurisdiction of its Courts.

27. SECURITY INTEREST

The Buyer gives Tuftmaster a Security Interest in all of the Buyer's present and after-acquired property in which Goods or materials supplied or financed by Tuftmaster have been attached or incorporated.

27. SECURITY INTEREST

The Buyer gives Tuftmaster a Security Interest in all of the Buyer's present and after-acquired property in which Goods or materials supplied or financed by Tuftmaster have been attached or incorporated.

28. PERSONAL PROPERTIES SECURITIES ACT 2009

28.1 The Buyer hereby acknowledges that these Terms and Conditions of Trade constitute a security agreement which creates a security interest in favour of Tuftmaster in all Goods previously supplied by Tuftmaster to the Buyer (if any) and all after acquired Goods supplied by Tuftmaster to the Buyer (or for the Buyer's account) to secure the payment from time to time and at a time, including future advances. The Buyer agrees to grant a "Purchase Money Security Interest" to Tuftmaster.

28.2 The Buyer acknowledges and agrees that by assenting to these terms the Buyer grants a security interest (by virtue of the retention of title clause in these Terms and Conditions of Trade) to Tuftmaster and all Goods previously supplied by Tuftmaster to the Buyer (or for the Buyer's account) and these terms shall apply notwithstanding anything express or implied to the contrary contained in the Buyer's purchase order.

28.3 The Buyer undertakes to:

28.3.1 sign any further documents and/or provide any further information (which information the Buyer warrants to be complete, accurate and up-to-date in all respects) which Tuftmaster may reasonably require to enable registration of a financing statement or financing change statement on the Personal Property Securities Register ("PPSR");

28.3.2 not register a financing change statement as defined in section 10 of the PPSA or make a demand to alter the financing statement pursuant to section 178 of the PPSA in respect of the Goods without the prior written consent of Tuftmaster;

28.3.3 give Tuftmaster not less than 14 days' written notice of any proposed change in the Buyer's name and/or any other changes in the Buyer's details (including by not limited to changes in the Buyer's address, facsimile number, email address, trading name or business practice);

28.3.4 pay all costs incurred by Tuftmaster in enforcing or attempting to enforce the security interest created by these Terms and Conditions of Trade

28.3.5 be responsible for the full costs incurred by Tuftmaster (including actual legal fees and disbursements on a solicitor and client basis) in obtaining an order pursuant to section 182 of the PPSA; and

28.3.6 the Buyer waives any rights it may have under sections 115 of the PPSA upon enforcement.

28.4 Pursuant to section 157 of the PPSA, unless otherwise agreed to in writing by Tuftmaster, the Buyer waives the right to receive the verification statement in respect of any financing statement or financing change statement relating to the security interest.

28.5 The Buyer agrees that immediately on request by Tuftmaster the Buyer will procure from any persons considered by Tuftmaster to be relevant to its security position such agreement and waivers as Tuftmaster may at any time require.