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MUL`s: Additional Information in re: Transactions with ANZ

Document date:  Thu 26 Sep 2002
Published:  Thu 26 Sep 2002 16:42:14
Document No:  195365
Document part:  A
Market Flag:  N
Classification:  Other

MULTIEMEDIA LIMITED                           2002-09-26  ASX-SIGNAL-G

HOMEX - Melbourne                                                     

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Following discussions with the Australian Securities and
Investments Commission, the Company has determined it is now
appropriate to provide the market with additional information in
relation to the transactions between Australia & New Zealand Banking
Group Limited (ANZ) and the Company.

We have advised previously that the Company entered into a Marketing
Agreement with ANZ, and an Equity Agreement that resulted in the ANZ
being issued 47,315,769 shares in the Company. Under the Equity
Agreement ANZ committed to pay any shortfall in minimum revenues from
the product up to an amount that it was estimated would have been
generated by 10,000 users, amounting to contingent payments to the
Company for three years of a maximum amount of $1,800,000 per annum.

In July, 2001, ANZ and the Company varied the terms of the Equity
Agreement and entered into a 4 year loan agreement for an amount of
$3,000,000, where interest was capitalised until September 2003. The
terms of the marketing arrangement were not altered. ANZ continued to
market the products supplied under the Marketing Agreement and ANZ
included the products in their offerings to small business customers.
The effect of the variation to the Equity Agreement in July, 2001,
was that ANZ would continue its marketing, but would no longer be
obliged to make up any shortfall in revenue for years 2 & 3 of the
arrangement. In exchange for the release of ANZ's contingent penalty
obligation, the Company had access to funds significantly earlier
than it may have received the contingent penalty payments. This
enabled the Company to acquire revenue generating businesses, which
now form the core of the Company's business operations. At the time
of the variation, it was anticipated that the revenues contemplated
under the marketing arrangement would nevertheless be generated,
however, this has not come to fruition to date. The effect of this
has been recorded in the recently released Form 4B, Preliminary Final
Report.

The Company has been in discussions with ANZ for a period of time in
relation to these transactions and the parties have reached agreement
in principle to settle the transactions. As a result of the proposed
settlement, the parties will exchange settlement amounts, which will
result in a net outflow of funds from the Company of $600,000, and
the loan will be extinguished through bringing forward the remaining
minimum revenue commitments. Following completion of the settlement
of the transactions, the marketing arrangements with ANZ will cease.

A condition precedent to the completion of the settlement is
placement at a price of 1 cent each of 35,486,827 shares which would
be held by ANZ upon exercise of an option agreement disclosed to the
market on 3rd October, 2001.

The parties anticipate completing the settlement prior to 1 October,
2002. If this does not occur, the Company would not be fully
compliant with the terms of its loan facility with ANZ, entitling ANZ
to exercise its rights under the loan agreement. In this regard, ANZ
has not indicated it will take this course of action and in the event
of completion not taking place the Company would enter into further
discussions with ANZ with regard to the loan facility.

The outcome of the restructurings of arrangements with ANZ (including
the proposed settlement) is that the Company will have received
$3,900,000, ahead of the scheduled payment times for the contingent
penalty payments, effectively gaining early access to funds which
were contingent in nature.

Mr Adrian Ballintine, Chief Executive Officer & Group Managing
Director, who is presently offshore pursuing the Company's business
interests, advises that overall the transactions have been positive
for the Company. The directors will keep the market informed of
developments in this matter.

For additional information please contact:

Mr Adrian Ballintine, Chief Executive Officer & Group Managing
Director on (03) 9603 3200, or by email at
shareholder@multiemedia.com.