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Better health and ageing for all Australians

Home > For Health Professionals > Aged care > Residential Care

Residential Care

Zero Real Interest Loan Agreement - Round 1 and Round 2.

This is a text version only of the standard Zero Real Interest Loan Agreement, you will need to print the PDF version for use.

In this section:

Zero Real Interest Loan Agreement

[Name of Borrower]
ABN [to be advised]
Borrower

Commonwealth of Australia as represented by the Department of Health and Ageing
ABN 83 605 426 759
Commonwealth

Intentionally left blank

Zero Real Interest Loan Facility Agreement made on

Parties

[CU Note: name of Borrower] ABN [CU Note: ABN to be advised] of
[CU Note: Borrower's address to be advised]

("Borrower")

Commonwealth of Australia as represented by the Department of Health and Ageing ABN 83 605 426 759

("Commonwealth")

Background

The Commonwealth recognises a need to build or expand residential aged care facilities in areas of high need.
The Commonwealth has committed to provide Zero Real Interest Loans to assist approved providers with services in regions with operational residential aged care ratios below the current national target ratio, regions where there are not a large number of recently allocated places already under development, regions which have failed to attract a sufficient number of quality applications in recent Aged Care Approvals Rounds, specific geographic areas of undersupply and regions with a high proportion of indigenous people who require care at an earlier age.
The Borrower is an approved provider under the Aged Care Act 1997 (Cth).
The Commonwealth has determined that the Project is consistent with its objectives in regard to the creation of additional (permanent) residential aged care places in areas of high need such as regional and undersupplied areas. The Commonwealth has approved the Borrowers application for a Zero Real Interest Loan for capital works and the creation of additional residential aged care places and intends to lend the amount of the Facility Limit subject to the terms and conditions set out in this document. Particularly, the Commonwealth is providing the Funds to the Organisation for the Organisation to
[Option A] purchase, lease or otherwise be entitled to access and use the Property and construct on, and operate from, the Property a residential aged care facility.

[Option B] [extend / refurbish / renovate] an existing building on the Property in order to expand the residential aged care facility.

[Note to Drafters: Delete options which do not apply]

Operative provisions

1. Definitions and interpretation

1.1 Definitions

In this document:
"Act" means the Aged Care Act 1997 (Cth).

"Advance" means a loan by the Commonwealth to the Borrower under this document or, where the context requires, the balance of the loan which is outstanding.

"Allocation" means, in respect of residential aged care accommodation places, in accordance with Division14 of the Act and the subsections 4.49(2) and (3) of the Allocation Principles 1997.

"Approval" includes all relevant consents, authorisations, registrations, filings, agreements, notifications, certificates, permissions, licences, approvals, permits, authorities or exemptions issued by, from or with any Proper Authority;

"BCII Act" means the Building and Construction Industry Improvement Act 2005;

"Business Day" means a day that is not a Saturday, a Sunday or a public holiday in the place concerned.

"Certificate of Occupancy" means a certificate issued by the relevant Proper Authority that provides such certificates confirming that the relevant Works comply with all relevant Laws, Approvals and other requirements and are fit for the purpose of occupancy and their Designated Use.

"Constitution" means the replaceable rules, constitution or combination of both as those terms are used in section 134 of the Corporations Act 2001 (Cth).

"CPI" has the meaning given in clause 12.2(d).

"Date for Practical Completion" means the date specified in Item 3 of Schedule 1 by which the Borrower must achieve Practical Completion of the Works;

"Date of Practical Completion" means the date that Practical Completion actually occurs.

"Default Rate" means a rate equal to the RBA Cash Rate plus 3% per annum.

"Department" means the Department of Health and Ageing ABN 83 605 426 759.

"Designated Use" means the use of the Property exclusively for the Purpose.

"Designated Use Period" means the period of 10 years from the Date of Practical Completion.

"Determination" means a determination by the Secretary for residential aged care accommodation places to take effect under section 15-3 of the Act.

"Drawdown Date" means the date on which an Advance is made or, where the context requires, is proposed to be made.

"Drawdown Stage" means a stage at which the Borrower is entitled to draw down an Advance from the Zero Real Interest Loan Facility as detailed in Schedule 2.

"Encumbrance" means a mortgage, charge, pledge, lien, encumbrance, security interest, title retention, preferential right, trust arrangement, contractual right of set-off, or any other security agreement or arrangement in favour of any person.

"Event of Default" has the meaning given in clause 20.1.

"Event of Insolvency" means:

a "controller" (as defined in section 9 of the Corporations Act 2001 (Cth)), trustee, administrator or similar officer is appointed in respect of a person or any asset of a person

a liquidator or provisional liquidator is appointed in respect of a corporation;

any application (not being an application withdrawn or dismissed within 7 days) is made to a court for an order, or an order is made, or a meeting is convened, or a resolution is passed, for the purpose of:

appointing a person referred to in paragraphs (a) or (b) other than under a solvent scheme of arrangement pursuant to Part 5.1 of the Corporations Act 2001 (Cth);

winding up a corporation; or

proposing or implementing a scheme of arrangement;
any event or conduct occurs which would enable a court to grant a petition, or an order is made, for the bankruptcy of an individual or his estate under any Insolvency Provision;

a moratorium of any debts of a person, a personal insolvency agreement or any other assignment, composition or arrangement (formal or informal) with a person's creditors or any similar proceeding or arrangement by which the assets of a f. person are
subjected conditionally or unconditionally to the control of that person's creditors or a trustee, is ordered, declared or agreed to, or is applied for and the application is not withdrawn or dismissed within 7 days;

a person becomes, or admits in writing that it is, or is declared to be, or is taken under any applicable law to be, insolvent or unable to pay its debts; or

any writ of execution, garnishee order, mareva injunction or similar order, attachment, distress or other process is made, levied or issued against or in relation to any asset of a person.

"Facility Limit" means the amount of the loan detailed in Item 1 of Schedule 1.

"Financial Liability" means any present or future, actual or contingent indebtedness in respect of any financial accommodation, bill of exchange, credit or hedging arrangement, finance lease or hire purchase arrangement or any guarantee or other assurance given in respect of any such indebtedness.

"Insolvency Provision" means any law relating to insolvency, sequestration, liquidation or bankruptcy (including any law relating to the avoidance of conveyances in fraud of creditors or of preferences and any law under which a liquidator or trustee in bankruptcy may set aside or avoid transactions) and any provision of any agreement, arrangement or scheme, formal or informal, relating to the administration of any of the assets of any person.

"Interest" means interest payable under clauses 12 and 13.

"Interest Period" means a period of one calendar month, or such other period as the Commonwealth approves in its absolute discretion.

"Law" means any applicable statute, regulation, by-law, ordinance or subordinate legislation in force from time to time anywhere in Australia, whether made by a State, Territory, the Commonwealth, or a local government, and includes the common law as in force from time to time.

"Lock up Stage" means that stage of the Works when, to the extent that these are applicable:

all wall and roof frames are completed, braced and straightened;

windows are fully installed (including fly screens);

electrical, gas and plumbing rough in is complete;

baths are installed;

front and back doors are complete with locks; and

eaves, barges, external walls and roof coverings are complete.

"Obligations" means all the liabilities and obligations of the Borrower to the Commonwealth under or by reason of:

the document; or

any other transaction, matter or event,
and includes any liabilities or obligations which:

are liquidated or unliquidated;

are present, prospective or contingent;

are in existence before or come into existence after the date of this document;

relate to the payment of money or the performance or omission of any act;

sound in damages only; or

accrue as a result of any Event of Default,
and irrespective of:

whether the Borrower is liable or obligated solely, or jointly, or jointly and severally with another person;

the circumstances in which the Commonwealth comes to be owed each liability or obligation, including any assignment of any liability or obligation; or

the capacity in which the Commonwealth comes to owe or to be owed that liability or obligation.

"Payment Date" means the 21st day of each calendar month.

"Permitted Liens" means:

liens for:
rates, taxes, duties or fees of any kind; or

money payable for work performed by suppliers, mechanics, workmen, repairmen, employees or arising in the ordinary course of business,

either not yet due or being contested in good faith (where adequate reserves have been provided by the Borrower) by appropriate proceedings so long as the enforcement of such lien is stayed or otherwise suspended during the course of such proceedings; and

liens arising out of the judgments or awards against the Borrower with respect to which at the time an appeal or proceeding for review is being prosecuted in good faith and with respect to which there shall have been secured a stay of execution pending such appeal or proceeding for review.

"Potential Event of Default" means any event which with the giving of notice, lapse of time, satisfaction of a condition or determination could constitute an Event of Default.

"Practical Completion" occurs when the requirements of clause 4.6 have been met;

"Prescribed Rate" for each Interest Period means interest calculated in accordance with clause 12.2.

"Prior Encumbrances" means the Encumbrances over the Property existing at the date of this document and detailed in Item 9 of Schedule 1.

"Project" means the Project for which the Zero Real Interest Loan Facility has been provided, as detailed in Item 2 of Schedule 1.

"Project Budget" means the budget detailing how the Borrower will expend the Zero Real Interest Loan Facility, and identifying the Borrower's contributions and other contributions (if any) and the proposed expenditure of such amounts for the purposes of conducting the Project and otherwise performing obligations under this document.

"Project Commencement Date" means the date of this document.

"Project Documents" means all plans, drawings and other information relating to the Project and the Works that are brought into existence by or on behalf of the Borrower under or in connection with this document or otherwise relating to the Works or the Project, including those documents identified in Item 6 of Schedule 1.

"Project Manager" means a suitably qualified project manager engaged or employed by the Borrower to supervise all construction works

"Project Plan" means the project plan detailing how the Borrower will conduct and complete the Project in accordance with this document, including timeframes for completion of various stages of the Project.

"Proper Authority" includes any ministry, department, government, governmental or semi-governmental authority, agency, instrumentality, council, corporation or other legal entity with legislative authority which has jurisdiction or authority over or in connection with this document, the Works, the Property or the Designated Use;

"Property" means real property purchased, leased or made available by the Borrower for the purposes of the Project, which is detailed in Item 4 of Schedule 1.

"Purpose" means the purpose of the loan detailed in Item 5 of Schedule 1.

"RBA Cash Rate" for any period means:

the rate known as the "Interbank Overnight Cash Rate", as determined by the Reserve Bank of Australia and published on the Reserve Bank of Australia website at or about 9.00 am (Sydney time) on the first day of that period; or

if no rate referred to in paragraph (a) of this definition is determined or the basis on which the rate referred to in paragraph (a) of this definition is calculated changes after the date of this document, the rate determined by the Commonwealth, acting reasonably, to be the appropriate equivalent rate having regard to prevailing market conditions.

Rates will be expressed as a yield percent per annum to maturity and if necessary will be rounded up to the nearest second decimal place.

"Related Body Corporate" has the meaning given in section 9 of the Corporations Act 2001 (Cth).

"Relevant Jurisdiction" means the State or Territory where the Property is situated.

"Repayment Schedule" means Schedule 3.

“Secretary” means the person occupying or performing the duties of the Office of the Secretary of the Department and includes any person designated in writing by that person to perform any function or to exercise any of the powers of the Secretary under this document;

"Statute" means any legislation of the Parliament of the Commonwealth of Australia or of any State or Territory of the Commonwealth of Australia in force at any time, and any rule, regulation, ordinance, by-law, statutory instrument, order or notice at any time made under that legislation.

"Taxes" means all taxes, levies, imposts, deductions, charges and withholdings assessed, imposed, collected or withheld under any legislation and, in each case, all interest, fines, penalties, charges, fees or other amounts in respect of them.

"Termination Date" means the earlier of:

the date which is 12 years from the date of this document;

any date on which the Zero Real Interest Loan Facility is terminated or cancelled by the Commonwealth in accordance with this document; and

such other date as may be agreed by the parties.

"Trust" means the trust (if any) detailed in Item 7 of Schedule 1, constituted by the Trust Deed.

"Trust Deed" means the deed (if any) detailed in Item 8 of Schedule 1.

"Works" means the construction and development works necessary to complete the Project.

"Zero Real Interest Loan Facility" means the Zero Real Interest Loan Facility placed at the disposal of the Borrower by the Commonwealth in accordance with the terms of this document.
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1.2 Interpretation

In this document:

headings are for convenience only and do not affect interpretation;
and unless the context indicates a contrary intention:

"person" includes an individual, the estate of an individual, a corporation, a Proper Authority, an association or a joint venture (whether incorporated or unincorporated), a partnership and a trust;

a reference to a party includes that party's executors, administrators, successors and permitted assigns, including persons taking by way of novation and, in the case of a trustee, includes a substituted or an additional trustee;

a reference to a document (including this document) is to that document as varied, novated, ratified or replaced from time to time;

a reference to a Statute includes its delegated legislation and a reference to a Statute or delegated legislation or a provision of either includes consolidations, amendments, re-enactments and replacements;

a word importing the singular includes the plural (and vice versa), and a word indicating a gender includes every other gender;

a reference to a party, clause, schedule, exhibit, attachment or annexure is a reference to a party, clause, schedule, exhibit, attachment or annexure to or of this document, and a reference to this document includes all schedules, exhibits, attachments and annexures to it;

if a word or phrase is given a defined meaning, any other part of speech or grammatical form of that word or phrase has a corresponding meaning;

where the day on or by which any sum is payable or any act, matter or thing is to be done is a day other than a Business Day, that sum will be paid and that act, matter or thing will be done on the immediately preceding Business Day;

any agreement, undertaking, acknowledgement, condition or other term that is made or given by the Borrower will be deemed to be a covenant by the Borrower in favour and for the benefit of the Commonwealth;

all accounting terms used in this document have the meaning given to them under Australian accounting standards;

"includes" in any form is not a word of limitation; and

a reference to "$" or "dollar" is to Australian currency.

1.3 Joint and several liability

If more than one party is identified as the "Borrower", that expression refers to them, and the obligations of the Borrower under this document bind them, jointly and severally.Top of page

2. The Zero Real Interest Loan Facility

2.1 Commitment

The Commonwealth agrees to make Advances to the Borrower under the Zero Real Interest Loan Facility up to an aggregate principal amount equal to the Facility Limit, subject to the terms of this document and in reliance on the representations and warranties contained in it.

2.3 Termination

The Zero Real Interest Loan Facility terminates on the Termination Date.

3. Planning, design and Approvals

3.1 Project Budget and Project Plan

The Borrower must ensure that the Project Plan and Project Budget annexed to this document:

have been prepared diligently, effectively and to a high professional standard;

will, if implemented in accordance with this document, ensure that all timeframes arising under this document will be met and the Works will meet all requirements of this document and, in particular, will be fit for the Designated Use at all times during the Designated Use Period; and

are consistent with the Purpose.
Prior to the date of this document, the Commonwealth has reviewed the Project Plan and the Project Budget and has notified the Borrower that either:
the Project Plan and the Project Budget are acceptable to the Commonwealth; or

the Project Plan or the Project Budget (or both as the case may be), in the Commonwealth's opinion, require amendment in order to meet the requirements specified in clause 3.1(a).
On receipt of any notification under clause 3.1(b)(ii), the Borrower has amended the Project Plan and the Project Budget so as to take into account the Commonwealth's comments and has resubmitted those documents for re-consideration by the Commonwealth in accordance with clause 3.1(b) within 30 days of receipt of the notification under clause 3.1(b)(ii) and prior to the date of this document.

The Borrower must perform the Project in accordance with the Project Plan and the Project Budget once they are acceptable to the Commonwealth and must not make any amendment to the Project Plan or the Project Budget that would substantively alter the:
nature of, or the manner of completion of, the Works as provided for in the Project Plan or Project Budget (or both as the case may be);

amount of the Advance to be spent by the Borrower on any aspect of the Works or the nature of items on which the Funds are to be spent as provided for in the Project Budget; or

consistency of the Project Plan or the Project Budget (or both as the case may be) with the Purpose,
unless approved in writing by the Commonwealth.
For the avoidance of doubt, the Commonwealth's review of, or comment on, the Project Plan and the Project Budget does not in any way limit or affect the Borrower's obligations under this document. If there is any inconsistency between the Project Plan (that is notified to the Borrower as being acceptable to the Commonwealth) or the Project Budget (that is notified to the Borrower as being acceptable to the Commonwealth) and this document, this document will take precedence to the extent of any such inconsistency.

3.2 Design of the Works

The Borrower is responsible for the design of the Works and must ensure the design of the Works:

is conducted with the level of skill and care of a prudent and competent design professional

complies with all Laws and required Approvals;

will ensure that the Works are fit for the purpose of use for the Designated Use on and from the Date of Practical Completion, and throughout the Designated Use Period;

will ensure that a Certificate of Occupancy will be issued in respect of the Works on their completion; and

complies with the Act and any applicable standards for accreditation and certification of residential care services which are or would be applicable in relation to the provision of residential care by the Borrower.

3.3 Project Documents

The Borrower must develop, prepare and maintain copies of all documents necessary to complete the Works in accordance with this document, including all documents that would be prepared by a prudent and competent design professional in order to ensure the Works are, on completion, fit for use for the Designated Use, throughout the Designated Use Period.

The Borrower must deliver the Project Documents identified in Item 6 of Schedule 1 to the Commonwealth no later than the relevant date specified in Schedule 2.

Without limiting or affecting the Borrower's obligations under this document, the Borrower must make copies of the Project Documents available to the Commonwealth for inspection and review in accordance with clause 16.

3.4 Approvals

The Borrower must obtain all Approvals for:
the construction of the Works; and

the use of the Works for the Designated Use during the Designated Use Period,
in accordance with this document and must deliver a copy of each Approval to the Commonwealth promptly on request.
If the Works must be varied to obtain any Approval, the Borrower must notify the Commonwealth in writing of those variations and, unless the Commonwealth otherwise consents in writing, must ensure that no variation will adversely impact on the Project, the Works, the Purpose and the use of the Works for the Designated Use throughout the Designated Use Period.

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4. Conduct of the Project

4.1 Obligation to perform the Project

In consideration of the provision of the Zero Real Interest Loan Facility, the Borrower must:

perform the Project in accordance with the terms and conditions set out in this document, the Project Plan and the Project Budget;

carry out the Works diligently and use its best endeavours to complete the Project as soon as possible and in any event by the Date for Practical Completion; and

ensure that all work undertaken under this document is consistent with and in furtherance of the Purpose.

4.2 Performance of the Works

The Borrower must:

appoint a Project Manager to supervise the Works, and must notify the Commonwealth in writing of that appointment;

comply with the timeframes (if any) specified in the Project Plan that is in a form acceptable to the Commonwealth in accordance with clause 3.1(b)(i) and otherwise comply with the timeframes specified in Schedule 2 for completion of the Works and the Project more generally; and

ensure that the Works are carried out:

in accordance with the Approvals for the Works;

in accordance with the Project Plan and Project Budget;

in accordance with the requirements and standards of all Laws applicable to the Works;

diligently, effectively and to a high professional standard; and

so as to ensure that the Works will be fit for the Designated Use at all times during the Designated Use Period.

For the avoidance of doubt, to the extent of any inconsistency between the timeframes (if any) specified in the Project Plan which is acceptable to the Commonwealth in accordance with clause 3.1(b)(i) and the dates contemplated by in Schedule 2, the dates contemplated by Schedule 2 will prevail.

4.3 Commencement of the Works

Without limiting the Borrower's obligations under clause 4.3(b), the Borrower must not commence the Works until it has:
obtained all relevant Approvals required under clause 3.4 that are necessary to enable the commencement of the Works;

obtained all insurances required under clause 9;

complied with its obligations under clause 6.2(a);

delivered the Project Documents detailed in Item 6 of Schedule 1 to the Commonwealth,
and it has obtained written confirmation from the Commonwealth (which will not be unreasonably withheld) that the Commonwealth is satisfied that the Borrower has complied with the requirements set out above.
The Borrower must:
obtain written confirmation from the Commonwealth under clause 4.3(a); and

commence the Works,
on or before the relevant date specified Schedule 2 with time being of the essence.

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4.4 Subcontracting

The Borrower must, promptly on request by the Commonwealth, provide details in writing of all subcontractors that the Borrower is using, or proposes to use, in relation to the conduct of the Project.

The Borrower must ensure that all subcontracts it enters into in respect of the Project are consistent with and will not in any way limit or affect the Borrower's compliance with its obligations, or the Commonwealth’s rights, under this document.

If requested, the Borrower must promptly provide to the Commonwealth a copy of any subcontract to the Commonwealth.

4.5 Inspection of Works

At all reasonable times during the construction of the Works upon giving reasonable notice and subject to the Borrower's reasonable requirements in relation to safety and security:
the Commonwealth or persons authorised by the Commonwealth may enter the Property to inspect and examine the Works; and

the Commonwealth may give notice to the Borrower of any omission, fault or defect in the Works.
Within 10 Business Days, or such longer reasonable time having regard to the nature of the omission, fault or defect, after the receipt of a notice under clause 4.5(a)(ii), the Borrower must cause all matters specified in that notice to be rectified and
must notify the Commonwealth when rectification has been effected.

Despite the Commonwealth's right to inspect and examine the construction of the Works:
the Commonwealth is not obliged to check the construction of the Works for any defect, fault or omission; and

the Borrower is not relieved of responsibility for any defect, fault or omission in respect of the Works.

4.6 Practical Completion of the Works

In order to achieve Practical Completion:

the Works must be:
complete and free from errors, omissions and defects, except for errors, omissions or defects that:
are of a minor nature;

the immediate making good of which by the Borrower is not reasonably practicable;

the existence of which or the making good of which by the Borrower will not significantly inconvenience users of the Property or the Works for the Designated Use; and

which do not cause any legal or physical impediment to the use and occupation of the Property and the Works for the Designated Use; and
fit for the purpose of use for the Designated Use;
all of the residential aged care places detailed in Item 2 and/or 5 of Schedule 1 have received a Determination, under section 15-3 of the Act, from the Secretary for the places to take effect;

the Works must have been commenced to be used by or on behalf of the Borrower for the Designated Use; and

the Borrower must obtain from:
its authorised representative; and

a suitably qualified and independent person engaged for the purposes of inspecting the Works on their completion and determining whether, in the professional opinion of that person, the Works meet the requirements set out in clauses 4.6(a)(i) and 4.6(a)(ii),
a written statement that the Works meet the requirements set out in clauses 4.6(a)(i) and 4.6(a)(ii), and provide each such written statement to the Commonwealth.

4.7 Date for Practical Completion

The Borrower must achieve Practical Completion of the Works on or before the Date for Practical Completion with time being of the essence.

4.8 Defects after Practical Completion

The Borrower must promptly rectify any defects, faults or omissions in the Works which:

are referred to in clause 4.6(a)(i); or

otherwise become apparent after the Date of Practical Completion and which would, or would reasonably be expected to impact on the fitness of the Works or the Property (or both as the case may be) for the purpose of use for the Designated Use.

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5. Assumption of risks for the Works

5.1 Responsibility for the Project

The Borrower is fully responsible for the performance of the Project and for ensuring compliance with the requirements of this document and all Laws, and will not be relieved of that responsibility because of any:

involvement by the Commonwealth or any third party in the performance of the Project;

ipayment of the Advance made to the Borrower on account of the Project; or

isubcontracting of all or any part of the Works or the Project.

5.2 Acceptance of risk

The Borrower accepts all risks in respect of, and the Commonwealth does not accept any risk for, the conduct of the Works and the Project including all risks of and associated with the design, construction and commissioning of the Works, including the risk of the actual cost of the design, construction and commissioning of the Works being greater than anticipated.

6. The Property

6.1 Performing the Project

The Borrower must carry out the Project on the Property identified in Item 5 of Schedule 1.

6.2 Tenure

On or before the relevant date specified in Schedule 2, the Borrower must have tenure, and must substantiate to the reasonable satisfaction of the Commonwealth that it has tenure over the Property by way of fee simple, lease, an option to purchase or option to lease, or otherwise, that is sufficient to enable the Borrower to undertake the Project and comply with its obligations under this document, including under clause 7.

A lease, option to purchase or option to lease the Property must be on arms' length terms to the reasonable satisfaction of the Commonwealth.

Despite any other clause in this document, the Borrower acknowledges and agrees that it is not entitled to receive, and the Commonwealth is not obliged to pay, any part of the Advance, and, if it has been paid the Advance, no part of the Advance is to be expended by the Borrower, unless and until the Borrower has complied with clause 6.2(a).

If the Borrower has not complied with clause 6.2(a) within the timeframes specified in Schedule 2, the Commonwealth may in its absolute discretion terminate this document for default in accordance with clause 20.2.

6.3 No Disposal of the Property before Practical Completion

The Borrower must not Dispose of the Property prior to Practical Completion without first obtaining the Commonwealth's consent in writing (such consent may be withheld at the Commonwealth’s sole and unfettered discretion). If the Commonwealth provides its consent:

the Commonwealth may require the Borrower to repay immediately all Advances made by the Commonwealth; and

all such amounts will bear interest at the Default Rate from the date specified by the Commonwealth until such time as they are repaid in full, after making due allowance for any prior amounts repaid by the Borrower.

6.4 Disposal of the Property after Practical Completion

During the Designated Use Period, the Borrower must not Dispose of the Property, or any part of the Property, without first:

obtaining the Commonwealth’s consent in writing (such consent may be given subject to conditions, including the repayment of the Advance); and

requiring the purchaser, transferee, lessee, licensee, mortgagee, chargee or other disponee to enter into a deed of covenant with the Commonwealth under which the purchaser, transferee, lessee, licensee, mortgagee, chargee or other disponee covenants in favour of the Commonwealth to use the Property and the Works for the Designated Use until the expiry of the Designated Use Period.

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7. Designated Use

7.1 Borrower must use Property

As a fundamental condition of this document, the Borrower undertakes:

for the Designated Use Period:

to use the Property and the Works, or to ensure that the Property and the Works are used, for the Designated Use;

to ensure the Property and the Works are not left unused or unoccupied for a period in excess of four weeks without first obtaining the written consent of the Commonwealth; and

not to use the Property or the Works, or permit the Property or the Works to be used for any purpose, other than the Designated Use, without first obtaining the written consent of the Commonwealth; and
at all times until the Termination Date:
to safeguard the Property and the Works against loss, damage and unauthorised use;

to maintain the Property and the Works in good condition;

to reinstate the Property and the Works if they are damaged or destroyed.

7.2 Compliance

During the Designated Use Period, the Borrower will ensure that the Property:

complies with any applicable Laws;

without limiting clause 7.2(a), meets any applicable standards, including the standards for accreditation and certification of residential care services which are applicable under the Act for the provision of residential care; and

without limiting any other obligation it may have under this document (including this clause 7), is maintained to a standard which is appropriate for the Purpose and which ensures the Borrower meets its obligations under clause 7.2.

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8. The Funding

8.1 Payment of the Funds

Subject to Parliamentary appropriation and to the provisions of this document, the Commonwealth agrees to pay the amount of the Facility Limit specified in Item 1 of Schedule 1 to the Borrower in accordance with the Drawdown Stages detailed in Schedule 2.

Despite any other clause of this document:
the Commonwealth may, at its absolute discretion defer, reduce or not make a payment of the Advance;

the Borrower is not entitled to receive, and the Commonwealth is not obliged to pay, any amount under this document; and

if the Borrower has received any Advance, the Borrower is not entitled to spend the Advance,
if at any time:

the Commonwealth has insufficient funding available at the time the payment is due to the Borrower;

the Commonwealth has become entitled to terminate this document under clause 20;

the Borrower has not complied, to the reasonable satisfaction of the Commonwealth, with its obligations under clauses 6.2(a), or 9 of this document; or

the Borrower has not complied with any provision of this document which provides that the Borrower will not be entitled to spend or receive any Advance until that obligation has been complied with.

8.2 Use of the Zero Real Interest Loan Facility

Funds provided under this document:

must only be used for the purposes of carrying out the Project and the Purpose in performing this document;

may not be applied towards administrative and other general costs of the Borrower that are not directly associated with the performance of the Project (including the Borrower's costs of administering this document); and

must not, unless the prior written approval of the Commonwealth has been obtained, be used in a manner which is inconsistent with the Project Budget.

Amounts of Funds

The funding to be contributed by the Commonwealth in relation to the Project will not exceed the Facility Limit specified in Item 1 of Schedule 1. The Commonwealth accepts no liability for any debts incurred by the Borrower, or any of its board members, employees, agents contractors or subcontractors, or for any budget overruns.

9. Insurance

9.1 Obligation to obtain and maintain insurance

Prior to commencing the Works, the Borrower must obtain (and ensure its subcontractors maintain) the insurances required by clause 9.2(a) (which must be obtained on the terms specified in clause 9.2(a)) and all other appropriate types and amounts of insurance to cover the Borrower (or its subcontractors' (as the case may be)) activities under or in connection with this document. The Borrower must maintain these insurances until Practical Completion of the Works.

Prior to the Commencement of the Designated Use Period, the Borrower must obtain the insurances required by clause 9.2(b)) and all other appropriate types and amounts of insurance to cover the Borrower's (or its subcontractor’s (as the case may be)) activities under or in connection with this document. The Borrower must maintain these insurances throughout the Designated Use Period.

9.2 Insurance

The Borrower must obtain and maintain, or procure that any builder undertaking the Works must obtain and maintain, the following insurance up until Practical Completion of the Works in accordance with clause 9.1:

contract works policy covering loss or damage to the Works and any temporary work excluding the Borrower's plant and machinery and including materials stored off-site or in transit and the Borrower must ensure that this policy notes the interest of the Commonwealth;

public liability policy covering legal liability (including liability assumed under contract) for loss or damage to property or injury or death to persons arising out of or in connection with carrying out the Works, for the sum of $20,000,000.00 for any one occurrence;

professional indemnity policy to cover the Borrower's liability and liability of its subcontractors for breach of professional duty (if applicable) arising out of any negligence, whether in relation to errors in design, documentation, supervision or other professional duties. Such cover must extend to liability for personal injury, illness or death of anyone in connection with the provision of professional services or as a result of breach of professional duty, for such sum as a prudent person in the position of the Borrower would effect and maintain. The Borrower's professional indemnity policy must be maintained for a period of at least 10 years following the achievement of Practical Completion of the Works;

workers compensation insurance as required by Law and extending to indemnify the Commonwealth against statutory liability to persons employed by the Borrower;
The Borrower must obtain and maintain the following insurance during the Designated Use Period in accordance with clause 9.1:
property, machinery and business interruption policy covering physical loss and damage to the Property, fixtures and fittings, chattels, plant and machinery and any associated business interruption;

public liability policy covering legal liability (including liability assumed under contract) for loss or damage to property or injury or death to persons arising out of or in connection with carrying out the Project, for the sum of $20,000,000.00 for any one occurrence;

workers compensation insurance as required by Law and extending to indemnify the Commonwealth against statutory liability to persons employed by the Borrower.

9.3 Proceeds of Insurance

If during the term of this document:

the Works or the Property (or both as the case may be) are lost, damaged or destroyed by a risk against which the Borrower is required under this document to be insured against; and

the payment of insurance money under the relevant insurance policy has not been refused in whole as a direct consequence of any act or omission of the Commonwealth in breach of this document,

then the Borrower must:

c. claim and obtain payment of any insurance moneys to which it is entitled under the relevant insurance policy in respect of the relevant loss, damage or destruction;
d. apply all relevant insurance proceeds in:
if required by the Commonwealth, reinstating the Works or the Property (or both as the case may be); or

otherwise, paying the Commonwealth the amount of the insurance proceeds up to the Facility Limit.

9.4 Copies of insurance

The Borrower must, on request, promptly provide to the Commonwealth any relevant insurance policies and certificates of currency for inspection.Top of page

10. Bank Accounts

The Borrower must open an account at a Bank into which all Advances are to be paid. The Borrower must hold all of the Advances in the bank account until such time as they are required for the purposes of the Project.

The Borrower must not use that bank account for the duration of the Project for any other purpose.

The Borrower must provide to the Department all bank account statements as may be required by the Department from time to time.

11. Repayment and prepayments

11.1 Repayment

The Borrower will repay to the Commonwealth all Advances and all other money the payment or repayment of which forms part of the Obligations in accordance with the Repayment Schedule

11.2 Prepayment

In addition to the payments required under the Repayment Schedule, the Borrower may prepay the whole or part of an Advance (if part, in a minimum of $100,000 or a multiple of it) on the last day of its current Interest Period on giving not less than 10 Business Days' prior written notice to the Commonwealth.

Any notice of prepayment given by the Borrower is irrevocable and the Borrower is bound to prepay in accordance with the notice.

Interest accrued on any amount prepaid under this document must be paid at the time of prepayment.

Any prepayment is permanent and the Facility will be cancelled to the extent of the prepayment.

12. Interest

12.1 Calculation of interest

Interest on each Advance accrues daily and is to be computed on a daily basis on a year of 365 days.

The rate of Interest for each Advance is the Prescribed Rate as determined under clause 12.2. If Interest is paid when due and there is then no subsisting Event of Default, the Commonwealth will accept Interest calculated at the Prescribed Rate.

The Commonwealth's written statement as to the rate of Interest at any time will be conclusive and binding on the Borrower in the absence of manifest error on the face of the statement.

12.2 Prescribed rate

The Prescribed Rate is a rate of Interest equal to the Current Quarterly CPI Rate. The Prescribed Rate will be determined and revised on a quarterly basis on the last day of September, December, March and June in each year and will apply to the Borrower from the first day of the month following publication of the CPI rate for the relevant quarter.

If the CPI is no longer published either party may ask the President of the Institute to nominate an index published quarterly which reflects the rate of price change in the area and group in Australia.

Despite the other provisions of this clause 12.2, the Prescribed Rate will not be less than zero.

In this clause 12.2:

"CPI" means the CPI (All Groups) published by the Australian Statistician or the index that replaces it under paragraph (b).
"Current Quarterly CPI Rate" means the percentage rate of change in the CPI for the quarter prior to the relevant Review Date as published on the Australian Bureau of Statistics website 'www.abs.gov.au'
"Review Date" means the last day of September, December, March and June in each year.

12.3 Payment of interest

The Borrower will pay to the Commonwealth the accrued Interest in relation to each Advance monthly in arrears on each Payment Date, calculated up to the 20th day of that calendar month. The Commonwealth will advise the Borrower in writing 7 to 14 days prior to the Payment Date in each month of the amount of Interest payable.

12.4 Initial Interest payments following an Advance

Interest payments will commence on the 21st day of the calendar month ending immediately after the month in which the first Drawdown Date occurs.

Interest payments for Advances (other than the first Advance) will be advised by the Commonwealth on the 7th day of each calendar month and will be payable on the 21st day of each calendar month, where the relevant Drawdown Date is between the 1st and 6th day of the relevant month.

Where a Drawdown Date of an Advance (other than the first Advance) occurs after the 6th day of the relevant calendar month, Interest payments for that Advance will commence on the 21st day of the calendar month ending immediately after the month in which the Drawdown Date occurs.

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13. Interest when in default

13.1 Payment of Interest at Default Rate

If:

the Borrower is in default under this document and clause 20.2 applies; or

Interest at the Default Rate is expressed to be otherwise payable under this document,

then if required by the Commonwealth, the Borrower will pay Interest at the Default Rate on all amounts due and payable by it under or in respect of this document and which are unpaid.

13.2 Accrual of interest

Interest shall accrue on all amounts which are due but unpaid from day to day from the due date up to the date of actual payment before and (as a separate and independent obligation) after judgment, at the Default Rate.

14. Payments

14.1 Time and place

Unless expressly provided otherwise in writing, all payments by the Borrower under this document are to be made to the Commonwealth in dollars in immediately available funds by direct debit from the account that the Borrower from time to time designates, or as otherwise agreed between the Borrower and the Commonwealth. The Borrower will be required to enter into a direct debit service agreement with the Department to facilitate direct debit payments. The service agreement will be in the Department's usual form, as varied from time to time by the Department.

14.2 No deduction for Taxes and no set-off or counterclaim

All payments by the Borrower under this document, whether of principal, interest or other amounts due under this document, will be:

free of any set-off or counterclaim; and

without deduction or withholding for any present or future Taxes, unless the Borrower is compelled by law to deduct or withhold the same, in which event the Borrower will pay to the Commonwealth any additional amount necessary to enable the Commonwealth to receive, after all deductions and withholdings for Taxes, a net amount equal to the full amount which would otherwise have been payable had no such deduction or withholding been required to be made.

14.3 Merger

If the liability of the Borrower to pay any of the Obligations to the Commonwealth becomes merged in any judgment or order, the Borrower will, as an independent obligation, pay Interest at the rate which is the higher of that payable under this document and that fixed by or payable under the judgment or order.

15. Reporting obligations

The Borrower must provide to the Department the reports detailed in Schedule 4 at the times required by Schedule 4.

16. Access to Premises and Materials

16.1 Right of access

The Borrower must give the Auditor-General, the Privacy Commissioner and persons authorised in writing by the Department (referred to in this clause 16 collectively as ‘those permitted’) access to all premises at which:

records and materials associated with this document are stored; or

work under the Project is carried out.

16.2 Right to copy

The Borrower must give to those permitted, access, in order to be able to inspect and copy materials, in the Borrower's possession or control, for the purposes associated with this document or any review of performance under this document. The Borrower must also give those permitted access to any assets, wherever they may be located and reasonable access to the Borrower's employees for the same purpose.

16.3 Prior notice required

The rights referred to in clause 16.1 and 16.2 are, wherever practicable, subject to:

the provision of reasonable prior notice by the Department (except where it believes that there is an actual or apprehended breach of the law);

access being sought during reasonable times (except where those permitted believe that there is an actual or apprehended breach of the law); and

the Borrower's reasonable security procedures.

16.4 Borrower to assist

The Borrower agrees to provide all assistance reasonably requested by the Department in respect of any inquiry into or concerning the Project or this document.

16.5 Sub-contracts

The Borrower must ensure that any subcontract entered into for the purposes of this document contains an equivalent clause allowing those permitted to have access as specified in this clause 16.

16.6 Clause does not limit other rights

Nothing in this document limits or restricts in any way any duly authorised function, power, right or entitlement of the Commonwealth Auditor-General or a delegate of the Auditor-General or the Privacy Commissioner or a delegate of the Privacy Commissioner. The rights of the Commonwealth under this document are in addition to any other duly authorised power, right or entitlement of the Commonwealth Auditor-General or a delegate of the Auditor-General or the Privacy Commissioner or a delegate of the Privacy Commissioner.

16.7 Application of clause

This clause 16 applies until the date of the expiration or earlier termination of this document and for a period of 7 years from that date.Top of page

17. Representations and warranties

17.1 General representations and warranties

The Borrower represents and warrants to the Commonwealth:

(Legally binding obligation): this document constitutes a valid and legally binding obligation of the Borrower;

(Execution, delivery and performance): the execution, delivery and performance of this document does not violate any Statute or law, or any document or agreement to which the Borrower is a party or which is binding on it or any of its assets;

(Authorisation): all consents, licences, approvals and authorisations of every Proper Authority required to be obtained by the Borrower in connection with the execution, delivery and performance of this document have been obtained and are valid and subsisting;

(No material adverse effect): no litigation, arbitration, mediation, conciliation, criminal or administrative proceedings are current, pending or, to the knowledge of the Borrower, threatened, which, if adversely determined would or could have a material adverse effect on the business assets or financial condition of the Borrower;

(Borrowings): the Borrower is not in default in the payment of any material sum, or in the satisfaction of any material obligation in respect of any Financial Liability, and no event has occurred which with the giving of notice, lapse of time or other condition could constitute a default in respect of any Financial Liability;

(Information): all information relating to the Borrower provided to the Commonwealth in connection with the Zero Real Interest Loan Facility and this document is true in all material respects and is not, by omission or otherwise, misleading in any material respect;

(No Event of Default): no event has occurred which constitutes an Event of Default or a Potential Event of Default;

(Statutes): the Borrower has complied with all Statutes (the Borrower should note that under the Criminal Code Act 1995 (Cth) section 137.1, giving false or misleading information to the Commonwealth is a serious offence);

(Pari passu): the Obligations of the Borrower under this document do and will rank at least pari passu with all other present and future unsecured obligations of the Borrower other than obligations in respect of Taxes and employees' remuneration which are accorded statutory priority;

(No trusts): the Borrower is not the trustee of any trust nor holds any property subject to or impressed by any trust other than the Trust;

(No request for funding): the Borrower has not and will not make application to the Commonwealth for any other funding (including grants) to carry out the Project;

(Sufficiency of amounts): the Borrower warrants that the Funds, together with all other contributions made or received by the Borrower in relation to the Project, will be sufficient to ensure the due and proper completion of the Works and the Borrower's other obligations under this document.

17.2 Corporate representations and warranties

The Borrower represents and warrants to the Commonwealth that:

(Existence): the Borrower is duly registered and remains in existence;

(No violation): the execution, delivery and performance of the document does not violate the Borrower's Constitution or any law applying to it and, if the Borrower or any of its subsidiaries is listed on the Australian Stock Exchange Limited or on any other stock exchange, those listing requirements or business rules;

(Due authority): the Borrower has taken all corporate and other action required to enter into this document and to authorise the execution and delivery of this document and the satisfaction of its obligations under it;

(Filings): the Borrower has filed all corporate notices and effected all registrations with the Australian Securities and Investments Commission and all of those filings and registrations are current, complete and accurate; and

(Status): the Borrower is an approved provider of residential care services as approved by the Secretary.

17.3 Representations and warranties repeated

Each representation and warranty in this document will be repeated on each day whilst any of the Obligations remain outstanding (whether or not then due for payment) or the Zero Real Interest Loan Facility is available for drawdown, with reference to the facts and circumstances then subsisting, as if made on each such day.

18. General Undertakings

For as long as any amount is outstanding under the Zero Real Interest Loan Facility or the Zero Real Interest Loan Facility is available for drawdown, the Borrower undertakes to the Commonwealth that it will:

(Satisfy Obligations): satisfy the Obligations;

(Maintain all consents): obtain, renew, maintain and comply with all consents, licences, approvals and authorisations necessary for the validity and enforceability of this documents, the satisfaction of its obligations under this document and it will promptly provide copies of these to the Commonwealth when they are obtained or renewed;

(Comply with Statute): comply with all Statutes and all lawful requirements of every Proper Authority;

(Proper books of account): keep or cause to be kept:
proper books of account, in which it will make true and perfect entries of all dealings and transactions now or in the future conducted by it, including, in respect of its business;

those books of account, vouchers and all other documents relating to its affairs and its business at its registered office or other place or places where those books of account, vouchers and documents of a similar nature have previously been kept,

and will ensure that those books of accounts, vouchers and other documents are available at all reasonable times for inspection and copying by the Commonwealth or any employee, agent or professional adviser of the Commonwealth that the Commonwealth may from time to time appoint;

(Compliance with accounting standards): ensure that each of the balance sheet or statement of financial position, profit and loss account or statement of financial performance and cash flow statement furnished to the Commonwealth is prepared in accordance with its Constitution, any applicable Statute, and all accounting principles and practices generally accepted in Australia consistently applied, or if not consistently applied, accompanied by details of the inconsistencies, and gives a true and fair view of its financial condition and the result of its operations as at the date, and for the period ending on the date, to which those reports and accounts are prepared;

(Notification of certain events): immediately notify the Commonwealth in writing if it becomes aware of the occurrence of the following:
(Event of Default): any Event of Default or Potential Event of Default;

(Litigation): any litigation, arbitration, criminal or administrative proceedings or labour disputes relating to the Borrower or the Borrower's property, assets or revenues that involves a claim against the Borrower in excess of $100,000 or that, if decided adversely to the Borrower, could have a material adverse effect on the ability of the Borrower to perform the Obligations; or

(Appointment as trustee): if it becomes or is appointed the trustee of any trust other than the Trust or comes to hold any property subject to or impressed by any trust other than the Trust.

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19. Negative pledge

19.1 Pledge

Subject to clause 19.2 and except as disclosed to the Commonwealth in writing prior to the date of this document, the Borrower will not without the Commonwealth's prior written consent:

create, purport or attempt to create or permit to exist any Encumbrance however ranking other than a Permitted Lien over any part of the Property;

sell, convey, assign, transfer, lease or otherwise dispose or part with possession of, make any bailment over, grant any option over or create or permit to exist any other interest in any part of the Property;

do or permit any act, omission or thing whereby the Property or any part of it becomes or could be liable to surrender, forfeiture or cancellation or becomes prejudiced in any manner;

subject to this document, deal with or attempt to deal with the Property or any part of it other than in the ordinary course of its ordinary business;

create, purport or attempt to create or permit to exist any Encumbrance however ranking other than a Permitted Lien over any part of any assets or undertaking of the Borrower including its uncalled capital (other than the Property); or

take any steps towards doing any of these things.

19.2 Prior Encumbrances

The Commonwealth acknowledges and agrees that the prior creation and continued existence of the Prior Encumbrances will not be taken to be a breach or default under this document.

20. Default and termination

20.1 Events of Default

Each of the following events is an Event of Default, whether or not the cause is beyond the control of the Borrower, or any other person:

(Failure to pay): the Borrower does not pay at or before the due time on the due date and in the manner specified in this document or otherwise in accordance with the Obligations;

(Funds misapplied): the Borrower applies any funds provided by the Zero Real Interest Loan Facility to a purpose other than the Purpose;

(Failure to commence or complete Project): the Borrower fails to commence the Project by the Project Commencement Date, or fails to complete any part of the Project or fails to complete the Project by the Project Completion Date;

(Use of Property): the Borrower fails to rectify a breach of clause 7.1 within six months (or such other period as is agreed in writing by the Borrower and the Commonwealth) from the date on which the breach first occurred;

(Transfer of Property): if the Borrower demolishes, transfers ownership or effective control of the Property or buildings or part of the land and buildings on the Property to another person within the Designated Use Period without the prior written approval of the Secretary, which approval of the Secretary may be given subject to conditions;

(Failure to comply): the Borrower defaults in fully performing and observing any provision of this document (other than a provision requiring the payment of money as contemplated by clause 20.1(a) or clause 20.1(d)), and if that default is capable of remedy it has not been remedied within 14 days of its occurrence;

(Untrue warranty): any representation, warranty or statement made, repeated or deemed to be made or repeated in this document or in connection with the Zero Real Interest Loan Facility or any accounts, or any opinion furnished under this document is proved to be untrue in any material respect when made or repeated or deemed to be made or repeated (as the case may be);

(Breach of undertaking): the Borrower breaches any undertaking given at any time to the Commonwealth or fails to comply with any condition imposed by the Commonwealth in agreeing to any matter (including any waiver);

(Event of Insolvency): any Event of Insolvency occurs in relation to the Borrower;

(Investigation): any investigation into the affairs or particular affairs of the Borrower is directed or commenced under the Corporations Act 2001 (Cth);

(Illegality): at any time it is unlawful for the Borrower to perform any of its obligations under this document;

(Failure to comply with Statutes): the Borrower fails to duly and punctually comply with all Statutes binding on it;

(Cessation of business): the Borrower ceases or threatens to cease, to carry on its business;

(Change in control): without the Commonwealth's prior written consent, effective control of the Borrower is altered from that subsisting at the date of this document. For the purpose of this clause 20.1(n) "effective control" means:
control of the composition of the board of directors of the Borrower;

control of more than half of the voting power of the Borrower; or

control of more than half of the issued share capital of the Borrower excluding any part thereof which carries no right to participate beyond a specified amount in the distribution of either profit or capital;

(Cessation or suspension of official quotation): where the Borrower or any of its subsidiaries listed on the Australian Stock Exchange Limited or on any other stock exchange ceases to be so listed, or trading in its shares is suspended for a period of not less than 14 days;

(Reduction in capital): without the Commonwealth's prior written consent, the Borrower takes action to reduce its share capital (other than by the redemption of redeemable preference shares);

(Reserve liability): without the Commonwealth's prior written consent, any meeting of the Borrower is convened for the purpose of considering or passing a special resolution under section 254N(1) of the Corporations Act 2001 (Cth) or any such resolution is proposed at any meeting of the Borrower;

(Death or incapacity): in the case of a Borrower who is an individual, the death of that individual, or the making of an order for the management of affairs of that individual under any law relating to mental health or to mental and/or physical incapacity;

(Material change): any other event or series of events whether related or not (including, any material adverse change in the business assets or financial condition of the Borrower) occurs which in the opinion of the Commonwealth could affect the ability or willingness of the Borrower to satisfy all or any of its respective obligations under this document;

(New Trustee etc): without the Commonwealth’s prior written consent, there occurs the appointment of a new or additional trustee of the Trust, any resettlement of the Trust, any variation of the Trust Deed, any vesting or distribution of any assets of the Trust, any breach of trust by the Borrower, the Borrower for any reason loses or ceases to be entitled to its right of indemnity against the assets of the Trust or, as a result of the act or omission of the Borrower the assets of the Trust are diminished or made less accessible to the Commonwealth;

(Failure to maintain standards): the Borrower fails to meet any applicable standards, including the standards for accreditation and certification of residential care services under the Act, which are applicable in relation to the provision of residential care by the Borrower; and

(Failure to comply with the Act): the approval of the Borrower as a provider of aged care under the Act ceases and/or the provisional allocation period ceases without the allocation of places taking effect.

20.2 Commonwealth's rights on Event of Default

If any Event of Default occurs and if it continues, the Commonwealth may, by written notice to the Borrower:

declare the Commonwealth's obligations under this document to be cancelled immediately and the same and the Zero Real Interest Loan Facility will be cancelled immediately; and/or

declare all Advances, Interest on Advances and all other money the payment of which forms part of the Obligations immediately due and payable, and the same are immediately due and payable; and/or

apply Interest at the Default Rate to any Advances which have not been repaid or paid when due.

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21. Indemnities

The Borrower will on demand indemnify the Commonwealth against any loss, cost or expenses which the Commonwealth may sustain or incur as a consequence of:

any sum payable by the Borrower under this document not being paid when due;

the occurrence of any Event of Default or Potential Event of Default;

an Advance not being provided for any reason including failure to fulfil any condition precedent but excluding any default by the Commonwealth; or

the Commonwealth receiving payments of principal other than on the last day of an Interest Period for any reason including prepayment in accordance with this document.

Such losses, costs or expenses will include the amount determined in good faith by the Commonwealth as being any loss including loss of margin, cost or expense incurred by reason of the liquidation or re-employment of deposits or other funds acquired or contracted for by the Commonwealth to fund or maintain the Advance or amount.

22. Compliance with Laws and policies

22.1 Obligations

The Borrower must, in carrying out its obligations under this document, comply with:

the provisions of any relevant Laws statutes, regulations, by-laws, and requirements of any Proper Authority;

any policies notified to the Borrower in writing by the Commonwealth; and

the Act.

22.2 BCII Act

This clause 22.2 applies if the Facility Limit:
is at least $5,000,000.00; and

represents at least 50% of the total construction value of the Works.
In the performance of the Project, the Borrower must comply with the requirements of the National Code and the Code Guidelines.

Subject to the exclusions specified in the Building and Construction Industry Improvement (Accreditation Scheme) Regulations 2005, the Borrower must ensure that any contract will not be entered into with a builder for building work, as defined in section 5 of the BCII Act, relating to the Project, if the builder is not accredited under the OHS Accreditation Scheme, at the time the contract for building work is to be entered into.

The Borrower must ensure that any building contract to which clause 22.2(c) applies requires the builder to remain accredited under the OHS Accreditation Scheme while carrying out the building work relating to the Project.

Compliance with the National Code and the Code Guidelines, or the OHS Accreditation Scheme does not limit or affect the Borrower's obligations under this document, or otherwise arising out of or in connection with the Project.

The Borrower must ensure that adequate records are created and maintained in respect of compliance with the National Code, the Code Guidelines and the OHS Accreditation Scheme in relation to the Project.

The Borrower must permit (and must ensure that each subcontractor and builder permits) the Commonwealth or any person authorised by the Commonwealth, including the Office of the Australian Building and Construction Commissioner and the Office of the Federal Safety Commissioner, to have access to any construction sites or places (including privately funded construction sites or places) to which the National Code, the Code Guidelines or the OHS Accreditation Scheme apply, to:

inspect any work, material, machinery, appliance, article or facility;

inspect and copy any record relevant to the Project or this document;

interview any person; and

request the Borrower to produce any specified document within a specified period (being not less than 14 days from the date of the request) in person, by fax or by post,

as is necessary to allow validation of compliance with the Code, the Code Guidelines and the OHS Accreditation Scheme in relation to the Project.
If the Borrower does not ensure compliance with the requirements of the National Code, the Code Guidelines, or the OHS Accreditation Scheme in the performance of this document such that a sanction is applied by the Code Monitoring Group, then the Commonwealth, without prejudice to any rights that would otherwise accrue, is entitled to record that non-compliance and take it into account in the evaluation of any future tenders or applications for funding that may be lodged by the Borrower or any of its related entities in respect of work for or funding from any part of the Commonwealth or its agencies.

Despite any other provision of this document, the Borrower must not appoint a contractor, subcontractor, consultant or supplier in relation to the Project where the appointment would breach a sanction imposed by the Code Monitoring Group.

The Borrower must ensure that all subcontracts impose obligations on the subcontractors equivalent to the obligations under this clause 22.2 utilising the form set out in the "Model contract clauses: agreements with contractors" set out in the document titled "Model Tender and Contract Documentation" which is available at www.workplace.gov.au/building.

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23. Borrower as trustee

23.1 Application of clause

This clause 23 applies if the Borrower is the Trustee of the Trust.

23.2 Borrower's capacity

The Borrower is liable under this document in its personal capacity and in its capacity as trustee of the Trust, and every reference in this document to any property, asset, undertaking, matter or thing held by or in any way relating to the Borrower will be construed as extending to and, unless the context indicates a contrary intention, binding on all such property, and every such asset, undertaking, matter or thing that at any time is held by, or relates to, the Borrower either in its personal capacity or as trustee of the Trust.

23.3 Trustee's representations

The Borrower represents and warrants to the Commonwealth that:

(Trustee): the Borrower has power to enter into this document in its capacity as trustee of the Trust;

(Trust validly created): the Trust has been validly created and is in existence at the date of this document;

(Trustee validly appointed): the Borrower has been validly appointed as trustee of the Trust and is presently the sole trustee of the Trust;

(Trust Deed): the Trust is solely constituted by the Trust Deed, a true copy of which was provided to the Commonwealth or its agent before the date of this document;

(Vesting date not declared): a date has not been declared under the Trust Deed as the date on which the Trust will be vested or come to an end;

(No proceedings): no proceedings of any description have been or are likely to be commenced or threatened which could have a material adverse effect on the assets or financial position of the Trust or the Borrower's trusteeship of the Trust;

(No acquisition of trust assets): the Borrower has not done, or failed to do, any act whereby any of the assets of the Trust have been acquired by any other person, no assets of the Trust are presently registered in the name of any other person, and no person, other than the beneficiaries previously notified to the Commonwealth has acquired any right of any kind whether vested or contingent in any asset of the Trust;

(Commercial benefit): it is to the commercial benefit of the Trust that the Borrower enters into this document in its capacity as trustee of the Trust and charges the property of the Trust as provided in this document; and

(Rights of indemnity and exoneration against Trust assets) the Borrower as trustee of the Trust has valid rights of indemnity and exoneration against the assets of the Trust, which rights are available for satisfaction of all liabilities and other obligations incurred by the Borrower under this document.

23.4 Trustee undertakings

For as long as any amount is outstanding under the Zero Real Interest Loan Facility or the Zero Real Interest Loan Facility is available for drawdown, the Borrower undertakes to the Commonwealth:

(New trustee): immediately notify the Commonwealth in writing if it ceases to be the trustee of the Trust, and procure that any new trustee executes in favour of the Commonwealth any documents, guarantees and Encumbrances which the Commonwealth requires and which are no more onerous that those required or obtained by the Commonwealth under or in relation to the Zero Real Interest Loan Facility;

(Determination of Trust etc): notify the Commonwealth immediately in writing if the Trust is determined or for any other reason ceases to exist, or it is required or directed by any of the beneficiaries of the Trust to do any act or thing in relation to the Trust or the trust funds of the Trust;

(No distribution): procure that no distribution of any of the capital of the Trust is made without the prior written consent of the Commonwealth; and

(Interest no to be subjugated): not without the prior written consent of the Commonwealth and until satisfaction of all the Obligations, exercise in its own favour personally any right of indemnification, reimbursement, recoupment, lien or charge to which it might be entitled personally against any beneficiary or against or in respect of money or other assets forming part of the Trust.

24. Expenses and stamp duties

24.1 Expenses

Each party will pay its own costs and disbursements in connection with the negotiation, preparation and execution of this document.

24.2 Stamp duties

The Borrower:

must pay all stamp duty, transaction, registration and similar Taxes, including fines and penalties and debits tax which may be payable to or required to be paid by any appropriate authority or determined to be payable in connection with the execution, delivery, performance or enforcement of this document or any payment, receipt or other transaction contemplated by them; and

indemnifies the Commonwealth against any loss or liability incurred or suffered by it as a result of the delay or failure by the Borrower to pay Taxes.

25. Assignments

25.1 Assignments by the Borrower

The Borrower cannot assign any of its rights under this document without the Commonwealth's prior written consent.

25.2 Successors and assigns

This document is binding on and enures to the benefit of each party to it and that party's respective successors and permitted assigns.

26. Governing law

This document is governed by and must be construed according to the law applying in the Relevant Jurisdiction.

27. Jurisdiction

Each party irrevocably submits to the non-exclusive jurisdiction of the courts of the Relevant Jurisdiction, and the courts competent to determine appeals from those courts, with respect to any proceedings which may be brought at any time relating to this document.

The Borrower irrevocably waives any objection it may now or in the future have to the venue of any proceedings, and any claim it may now or in the future have that any proceedings have been brought in an inconvenient forum, if that venue falls within clause 27(a).

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28. Miscellaneous

28.1 Statement by the Commonwealth

A statement in writing signed by an officer of the Commonwealth stating the amount payable by the Borrower under this document to the Commonwealth or stating any other act, matter or thing relating to this document is conclusive and binding on the Borrower in the absence of manifest error on the face of the statement.

28.2 Notices

Each communication (including each notice, consent, approval, request and demand) under or in connection with this document:

must be in writing;

must be addressed as follows (or as otherwise notified by that party to each other party from time to time):
To the Borrower:

To the address for service of notice detailed in Item 10 of Schedule 1.

To the Commonwealth:
To the address for service of notice detailed in Item 11 of Schedule 1.

must be signed by the party making it or (on that party's behalf) by the solicitor for, or any attorney, director, secretary, or authorised agent of, that party;

must be delivered by hand or posted by prepaid post to the address, or sent by fax to the number, of the addressee, in accordance with clause 28.2(b); and

is taken to be received by the addressee:
(in the case of prepaid post sent to an address in the same country) on the third day after the date of posting;

(in the case of prepaid post sent to an address in another country) on the fifth day after the date of posting by airmail;

(in the case of fax) at the time in the place to which it is sent equivalent to the time shown on the transmission confirmation report produced by the fax machine from which it was sent; and

(in the case of delivery by hand) on delivery,

but if the communication is taken to be received on a day that is not a working day or after 5.00 pm, it is taken to be received at 9.00 am on the next working day ("working day" meaning a day that is not a Saturday, Sunday or public holiday and on which banks are open for business generally, in the place to which the communication is posted, sent or delivered).

28.3 Continuing obligation

This document constitutes a continuing obligation regardless of any settlement of account, intervening payment, express or implied revocation or any other matter or thing, until a final discharge of it has been given to the Borrower.

28.4 Settlement conditional

Any settlement or discharge between the Commonwealth and the Borrower is conditional on any security or payment given or made to the Commonwealth by the Borrower or any other person in relation to the Obligations not being avoided, repaid or reduced by virtue of any Insolvency Provision. If a security or payment is so avoided, repaid or reduced, the Commonwealth will be entitled to recover its value or amount from the Borrower subsequently as if the settlement or discharge had not occurred.

28.5 Further assurance

The Borrower on demand by the Commonwealth and at the entire cost and expense of the Borrower will perform all such acts and execute all such agreements, assurances and other documents and instruments as the Commonwealth reasonably requires to perfect or improve the rights and powers afforded, created, or intended to be afforded or created, by this document.

28.6 Severance

If at any time a provision of this document is or becomes illegal, invalid or unenforceable in any respect under the law of any jurisdiction, that will not affect or impair:

the legality, validity or enforceability in that jurisdiction of any other provision of this document; or

the legality, validity or enforceability under the law of any other jurisdiction of that or any other provision of this document.

28.7 Remedies cumulative

The rights and remedies conferred by this document on the Commonwealth are cumulative and in addition to all other rights or remedies available to the Commonwealth by law or by virtue of this document.

28.8 Waiver

Failure to exercise or enforce, or a delay in exercising or enforcing, or the partial exercise or enforcement of, a right, power or remedy provided by law or under this document by a party does not preclude, or operate as a waiver of, the exercise or enforcement, or further exercise or enforcement, of that or any other right, power or remedy provided by law or under this document.

A waiver or consent given by a party under this document is only effective and binding on that party if it is given or confirmed in writing by that party.

No waiver of a breach of a term of this document operates as a waiver of another breach of that term or of a breach of any other term of this document.

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28.9 No variation

This document may not be varied except by written instrument executed by the parties.

28.10 Indemnities

Each indemnity in this document is a continuing obligation, separate and independent from the other obligations of the parties, and survives termination, completion or expiration of this document.

It is not necessary for the Commonwealth to incur expense or to make any payment before enforcing a right of indemnity conferred by this document.

28.11 Time of essence

Time is of the essence in respect of the Borrower's obligations under this document.

28.12 Changes in legislation

If any legislation changes the Borrower's rights or obligations under this document so that the Commonwealth's rights or obligations are adversely affected, the Borrower waives its rights under that legislation to the extent that the waiver is not prohibited or made ineffective by law.

28.13 Counterparts

This document may be executed in any number of counterparts and by the parties on separate counterparts. Each counterpart constitutes an original of this document, and all together constitute one agreement.

28.14 No fetter

This document will not restrict or otherwise affect the lawful discretion of the Department, the Secretary or the Commonwealth to exercise their functions or powers pursuant to any Act.

28.15 Release of information

The Borrower acknowledges and agrees that:

the Department may from time to time make publicly available information about the Zero Real Interest Loan program and the Borrower's participation in the Zero Real Interest Loan program for purposes including:
meeting reporting obligations to parliament and parliamentary committees; and

disseminating knowledge publicly about the availability of Zero Real Interest Loans.

information about the Borrower's participation in the Zero Real Interest Loan program may include:
the fact that the Borrower has entered into the Zero Real Interest Loan Facility;

the location of the Project;

the aged care services to be provided on completion of the Project;

the number of places to be operated on completion of the Project;

the Date for Practical Completion; and

the amount of the Zero Real Interest Loan Facility (or individual milestone amounts).

The Borrower consents to the Department making publicly available information contemplated by this clause 28.15.

28.16 Continuing effect of this document

The following provisions of this document continue in full force and effect until the expiry of the Designated Use Period despite the repayment of all amounts owing by the Borrower to the Commonwealth under this document:

clause 7.1(a) (Designated Use Period);

clause 9.2(b) (Insurance);

clause 19 1 (Negative Pledge);

clause 20 (Default and Termination);

clause 22.1 (Compliance with laws);

clause 26 (Governing law);

clause 27 (Jurisdiction);

clause 28.2 (Notices).

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Schedule 1 - Contract Particulars

Item Number	Detail
Item 1 Amount of Loan	$[insert]
Item 2 The Project	[insert]
Item 3 Date for Practical Completion	2 years from the first Drawdown Date
Item 4 The Property	[insert]
Item 5 Purpose	[insert]
Item 6 Project Documents	[insert]
Item 7 Name of Trust (if Borrower is a Trustee)	[insert]
Item 8 Details of the Trust Deed (if Borrower is the trustee of a trust)	Parties: [insert] Date of trust Deed: [insert]
Item 9 Prior Encumbrances	[insert]
Item 10 Borrower's address for service of notices	[insert]
Item 11 Department's contact details	[insert]

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Schedule 2 - Project Schedule

Project Milestones	Drawdown stages	Total Drawdown amounts (cumulative)	Conditions precedent to Drawdown - Documentary Evidence required from Borrower	Loan Administration requirements of Department	Relevant Deadlines
Milestone 1	25% of Facility Limit	25% of Facility Limit	Execute Zero Real Interest Loan Agreement, provide evidence of entitlement to land (clause 6.2(a) applies), provide Project Plan and Project Budget	Review of Project Plan and Project Budget	On or before the date of Zero Real Interest Loan Agreement
Milestone 2	25% of Facility Limit	50% of Facility Limit	Obtain evidence of interest in Land and Development Application for the Works and provide Project Documents	Check Development Application	within 6 months from date of Zero Real Interest Loan Agreement
Milestone 3	25% of Facility Limit	75% of Facility Limit drawn down	Commence construction of the Works including building footings	Review of documentation submitted by Borrower	within 12 months from date of Zero Real Interest Loan Agreement
Milestone 4	25% of Facility Limit	100% of Facility Limit	Works achieve Lock Up Stage	Review of documentation submitted by Borrower	within 18 months from date of Zero Real Interest Loan Agreement
Milestone 4A	N/A	N/A	The facility has a Certificate of Occupancy, and has received a Determination from the Secretary for the places to take effect.	certificate of occupancy, Secretary's Determination	within 24 months from date of Zero Real Interest Loan Agreement

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Schedule 3 - Repayment Schedule

1. Principal

The Borrower must repay the Facility Limit (the loan principal) by equal monthly payment instalments.
The first payment instalment is due the date which is one month after the second anniversary of the first Drawdown Date.
Thereafter, payment instalments must be made monthly on each Payment Date.

2. Interest

Interest must be paid on each Payment Date in accordance with clause 12.

Schedule 4 - Reporting Schedule

The Borrower must provide the following reports to the Department in accordance with the requirements set out below:

Report title and content and format requirements	Date for delivery of report
All reporting requirements under the Aged Care Act 1997	As prescribed under the Act
Title: Milestone 1 report Contents: Evidence of entitlement to land (refer Part 3) Project budget Project plan	On or before the date of the Zero Real Interest Loan Agreement
Title: Milestone 2 report Contents: Statutory Declaration that confirms Borrower is using funds for the Agreed Purpose Evidence of interest in land Project Approval documents (refer Part 3) such as development & building approvals council permits & licences project designs & structural reports details of subcontractors ( if any) Project progress report- Schedule 4b (see attached)	Within 6 months from the date of the Zero Real Interest Loan Agreement
Title: Milestone 3 report Contents: Statutory Declaration that confirms Borrower is using funds for the Agreed Purpose and that construction has commenced Project progress report - Schedule 4b (see attached)	Within 12 months from the date of the Zero Real Interest Loan Agreement
Title: Milestone 4 report Contents: Statutory Declaration that confirms Borrower is using funds for the Agreed Purpose Project progress report - Schedule 4b (see attached) Evidence that work has achieved lock up stage. (Refer to definitions within the Loan Agreements for what constitutes ‘lock up stage’)	Within 18 months from the date of the Zero Real Interest Loan Agreement
Title: Milestone 4A report Contents: Statutory Declaration that confirms Borrower has used funds for the Agreed Purpose Authorised copy of Certificate of Occupancy Authorised copy of Confirmation of Determination. (This need only apply if the State and Territory Offices have not already provided ZRIL team with a copy)	Within 24 months from the date of the Zero Real Interest Loan Agreement

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Schedule 4B: ZRIL Project Progress Report

Name of Approved Provider:
Name and address of Service:
Date of ZRIL Agreement:
Amount of ZRIL:
Project Commencement Date:

Financial information:

1. Amount spent on the Project at the date of the report.

2. Amount of the ZRIL spent on the Project at the date of the report.

3. Amount of the Provider’s contribution spent on the Project at the date of the report.

4. Amount of ZRIL funds that are committed but not spent at the date of the report.

5. Amount of interest earned on ZRIL funds and how interest is expected to be used.

6. Provider’s financial year end date.

7. Amount and details of any Other Contributions.

Please provide copies of all relevant financial documentation such as:

Project cash flow budget
Bills and Fees
Quotations for work to be done

Other information:

8. Details of any breach of conditions of the ZRIL Agreement by the Provider.

9. Is the project being undertaken as described in the Project Plan and Budget of the Agreement?

10. Statement describing progress on the Project.

11. If the project has not commenced as required in the Project Plan and Budget of the Agreement provide reasons for any delays and how they will be addressed. If the project has commenced and the anticipated project completion date is after the date specified in the Agreement provide reasons for the delays and how they will be addressed.

12. If any dispute has arisen with a third party in respect of the Project, identify the third party and the nature of the dispute.

13. Any additional information which is relevant to the progress of the Project.

Full Name..........................................................................Signature................................................................

Position..............................................................................Date.......................................................................
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Signed as an agreement.

Commonwealth

Signed sealed and delivered
for and on behalf of the
Commonwealth of Australia by:

------------------------------------------------------------------------- Signature: ----------------------------------------------------------

Signature of Witness:---------------------------------------------- Printed Name: -----------------------------------------------------

Printed Name of Witness: ---------------------------------------- Position:-------------------------------------------------------------

Position: -------------------------------------------------------------

Borrower

Signed sealed and delivered by
[Borrower] in the presence of:

------------------------------------------------------------------------- Signature: ----------------------------------------------------------

Signature of Witness:---------------------------------------------

Name of Witness in full: ------------------------------------------

Position: -------------------------------------------------------------

Executed by [Borrower] by
or in the presence of:

Signature of Director:---------------------------------------------- Signature of Secretary/other Director: -----------------------------------------------------

Name of Director in full:------------------------------------------- Name of Secretary/other Director in full: ----------------------------------------------------

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Zero Real Interest Loan Agreement - Round 1 and Round 2.

In this section:

Zero Real Interest Loan Agreement

Table of Contents

Zero Real Interest Loan Facility Agreement made on

Parties

Background

Operative provisions

1. Definitions and interpretation

1.1 Definitions

1.2 Interpretation

1.3 Joint and several liability

2. The Zero Real Interest Loan Facility

2.1 Commitment

2.3 Termination

3. Planning, design and Approvals

3.1 Project Budget and Project Plan

3.2 Design of the Works

3.3 Project Documents

3.4 Approvals

4. Conduct of the Project

4.1 Obligation to perform the Project

4.2 Performance of the Works

4.3 Commencement of the Works

4.4 Subcontracting

4.5 Inspection of Works

4.6 Practical Completion of the Works

4.7 Date for Practical Completion

4.8 Defects after Practical Completion

5. Assumption of risks for the Works

5.1 Responsibility for the Project

5.2 Acceptance of risk

6. The Property

6.1 Performing the Project

6.2 Tenure

6.3 No Disposal of the Property before Practical Completion

6.4 Disposal of the Property after Practical Completion

7. Designated Use

7.1 Borrower must use Property

7.2 Compliance

8. The Funding

8.1 Payment of the Funds

8.2 Use of the Zero Real Interest Loan Facility

Amounts of Funds

9. Insurance

9.1 Obligation to obtain and maintain insurance

9.2 Insurance

9.3 Proceeds of Insurance

9.4 Copies of insurance

10. Bank Accounts

11. Repayment and prepayments

11.1 Repayment

11.2 Prepayment

12. Interest

12.1 Calculation of interest

12.2 Prescribed rate

12.3 Payment of interest

12.4 Initial Interest payments following an Advance

13. Interest when in default

13.1 Payment of Interest at Default Rate

13.2 Accrual of interest

14. Payments

14.1 Time and place

14.2 No deduction for Taxes and no set-off or counterclaim

14.3 Merger

15. Reporting obligations

16. Access to Premises and Materials

16.1 Right of access

16.2 Right to copy

16.3 Prior notice required

16.4 Borrower to assist

16.5 Sub-contracts

16.6 Clause does not limit other rights

16.7 Application of clause

17. Representations and warranties

17.1 General representations and warranties

17.2 Corporate representations and warranties

17.3 Representations and warranties repeated

18. General Undertakings

19. Negative pledge