EXHIBIT 10.4
THE COMPANIES LISTED IN SCHEDULE ONE
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(Mortgagors)
AND
WESTPAC BANKING CORPORATION
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(Agent)
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DEED OF CHARGE
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Victorian property
COPYRIGHT RESERVED
ALLEN ALLEN & HEMSLEY
Level 46, MLC Centre,
19-29 Martin Place,
SYDNEY NSW 2000
Tel: 229 8765
Doc. Ref: MEB3RYD3
Ref: PJC 817534 MEB
TABLE OF CONTENTS
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Clause Page
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1. INTERPRETATION
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1.1 Definitions
1.2 General
1.3 Document or agreement
1.4 Joint and several obligations
2. CHARGE
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2.1 Charge
2.2 Prospective liability
2.3 Increase in prospective liability
3. NATURE OF CHARGE
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3.1 Priority
3.2 Nature of charge
3.3 Dealing with Mortgaged Property
3.4 Crystallisation
3.5 De-crystallisation
3.6 Dealing with proceeds
4. REPRESENTATIONS AND WARRANTIES
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4.1 Representations and warranties
4.2 Reliance on representations and warranties
5. COVENANTS
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5.1 Covenants
5.2 General covenants
5.3 Covenants relating to Mortgaged Property
5.4 Term of covenants
5.5 Financial undertakings
5.6 Definitions
6. FURTHER ASSURANCES
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6.1 Further assurances
6.2 Interest in land
6.3 Title documents
7. EVENTS OF DEFAULT
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7.1 Events of Default
7.2 Consequences
(ii)
Clause Page
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8. APPOINTMENT OF RECEIVER
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8.1 Appointment
8.2 Agent of Mortgagors
8.3 Receiver's powers
8.4 Receiver appointed after commencement
of winding up
8.5 Powers exercisable by the Agent
8.6 Withdrawal
9. POWER OF ATTORNEY
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10. COMPLETION OF BLANK SECURITIES
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11. PERFORMANCE OF MORTGAGORS' OBLIGATIONS
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12. STATUTORY POWERS
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12.1 Powers in augmentation
12.2 Leasing
12.3 Notice not required
13. APPLICATION OF MONEYS RECEIVED
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13.1 Order
13.2 Moneys actually received
13.3 Amounts contingently due
13.4 Notice of subsequent Security Interests
13.5 Conversion of currencies on application
14. OTHER SECURITY INTERESTS OVER MORTGAGED PROPERTY
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15. PROTECTION OF AGENT, RECEIVER AND ATTORNEY
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16. PROTECTION OF THIRD PARTIES
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16.1 No Enquiry
16.2 Receipt
17. EXPENSES, INDEMNITY
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17.1 Expenses
17.2 Indemnity
17.3 Amounts in foreign currency
18. FOREIGN CURRENCY INDEMNITY
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19. STAMP DUTIES
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(iii)
Clause Page
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20. INTEREST ON OVERDUE AMOUNTS
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20.1 Interest
20.2 Rate
20.3 Foreign currency basis
21. CERTIFICATE AS TO AMOUNT OF SECURED MONEYS
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22. SURVIVAL OF REPRESENTATIONS AND INDEMNITIES
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23. CONTINUING SECURITY
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24. OTHER SECURITIES
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25. WAIVERS, REMEDIES CUMULATIVE
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26. CONSENTS AND OPINION
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27. SEVERABILITY OF PROVISIONS
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28. MORATORIUM LEGISLATION
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29. ASSIGNMENTS
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30. NOTICES
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31. AUTHORISED OFFICERS
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32. GOVERNING LAW AND JURISDICTION
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33. THIRD PARTY PROVISIONS
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33.1 Security not to be affected
33.2 Principal and independent obligation
33.3 No marshalling
33.4 No competition
33.5 Suspense account
33.6 Rescission of payment
33.7 Variation
33.8 Indemnity
34. SET OFF
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35. COUNTERPARTS
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36. ACKNOWLEDGEMENT BY MORTGAGOR
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37. ATTORNEYS
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EXECUTION PAGE
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THIS DEED is made on 5 April 1991
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BETWEEN:
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1. THE COMPANIES LISTED IN SCHEDULE ONE (each a "Mortgagor"); and
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2. WESTPAC BANKING CORPORATION A.R.B.N. 007-457-141 of 60 Martin Place,
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Sydney (the "Agent").
WHEREAS:
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A. From time to time a Mortgagor may wish the Mortgagees to provide advances
and accommodation to a Mortgagor or another person.
B. This charge is given to the Agent as trustee for itself and any other
Mortgagee.
NOW THIS DEED WITNESSES and it is agreed as follows.
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1. INTERPRETATION
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1.1 Definitions
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When used in this Deed the following terms have the following meanings unless
the context requires otherwise.
"Agency Agreement" means the agreement so entitled dated on or about the date of
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this Deed between (among others) the Agent, certain banks and financial
institutions and the Mortgagors.
"Associate" means:
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(a) a Related Body Corporate of a Mortgagor;
(b) any person, or the trustee or manager of any trust, which has a Controlling
Interest in a Mortgagor or a Related Body Corporate of a Mortgagor;
(c) a Related Body Corporate of any corporation or trust included in paragraph
(b) or (e);
(d) any director of any corporation included in paragraph (a), (b) or (c) or
of the manager or of the trustee of any trust included in paragraph (a),
(b) or (c) or any spouse, child, parent or sibling of any such director;
(e) any corporation, or the trustee or manager of any trust, in which any one
or more persons or trusts mentioned in paragraph (a), (b), (c), (d), (e),
(f) or (g) alone or together has a Controlling Interest;
(f) the trustee of any discretionary trust of which any person included in
paragraph (a), (b), (c), (d), (e) or (g) is a beneficiary (whether or not
through one or more other discretionary trusts); or
(g) any corporation of which a director of a Mortgagor or a Related Body
Corporate of a Mortgagor is also a director.
For the purposes of this definition:
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(i) where a person is a beneficiary of a discretionary trust, that person
shall be deemed to own, and control, all the assets of that trust;
(ii) "director" has the meaning given in the Corporations Law; and
(iii) a person has a "Controlling Interest" in a corporation or trust if:
(A) the corporation or its directors, or the trustee or manager of the
trust or its directors, are accustomed or under an obligation,
whether formal or informal, to act in accordance with the
directions, instructions or wishes of that person or of that person
in concert with others; or
(B) the person has a relevant interest as defined in the Corporations
Law in aggregate in more than 20% of the issued or voting shares,
units or other interests in the corporation or trust (in number,
voting power or value), or would have such a relevant interest if
any rights were exercised to subscribe for, or acquire or convert
into, shares, units or other interests which are issued or unissued
were exercised. The definition of relevant interest will apply as if
units or other interests were shares.
"Attorney" means any attorney appointed under this Deed or any Collateral
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Security.
"Authorisation" includes:
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(a) any consent, authorisation, registration, filing, agreement, notarisation,
certificate, permission, licence, approval, authority or exemption from,
by or with a Governmental Agency; or
(b) in relation to anything which will be prohibited or restricted in whole or
part by law if a Governmental Agency intervenes or acts in any way within
a specified period after lodgement, filing, registration or notification,
the expiry of such period without such intervention or action.
"Authorised Officer" means:
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(a) in respect of a Mortgagor, any director or secretary, or any person from
time to time nominated as an Authorised Officer by that Mortgagor by a
notice to the Agent accompanied by certified copies of signatures of all
new persons so appointed; and
(b) in respect of the Agent, any person whose title includes the word
"Manager" or "President" or cognate expressions (including any person
acting in any such office) or any secretary or director.
"Borrower" means The Galore Group Limited, GLG Australia Limited, The Galore
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Group (USA) Inc., Vilbrent Pty. Limited or any other Charging Group Member which
incurs Financial Indebtedness to a Mortgagee.
"Business Day" means a day (not being a Saturday or a Sunday) on which banks are
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open for general banking business in Sydney.
"Charging Group Member" means:
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(a) a Mortgagor; or
(b) any Related Body Corporate of a Mortgagor which has granted a first charge
over all its assets and undertaking to the Agent satisfactory to the Agent
to secure the Secured Moneys.
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"Collateral Security" means any Security Interest, Guarantee or other document
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or agreement at any time created or entered into by a Mortgagor under this Deed
or otherwise as security for any Secured Moneys, satisfactory to the Agent.
"Core Business" means:
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(a) the manufacture, wholesaling and retailing of barbecues, heaters, camping
equipment, leisure products and related accessories;
(b) the distribution of domestic LP gas and leisure products; and
(c) the retailing of prescription glasses and frames and other optical
products through dispensing units whether or not with on-site laboratories
established under the name "Optic Express".
"Event of Default" means any of the events specified in Clause 7.
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"Excluded Taxes" means any Tax imposed by any jurisdiction on the net income of
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a Mortgagee as a consequence of the Mortgagee being a resident of or organised
or doing business in that jurisdiction but not any Tax:-
(a) which is calculated on or by reference to the gross amount of any payments
derived by a Mortgagee under any Transaction Document or any other
document referred to in any Transaction Document (without the allowance of
any deduction); or
(b) which is imposed as a result of a Mortgagee being considered a resident of
that jurisdiction or organised or doing business in that jurisdiction
solely as a result of it being a party to any Transaction Document or any
transaction contemplated by any Transaction Document.
"Financial Indebtedness" means any indebtedness, present or future, actual or
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contingent, in respect of moneys borrowed or raised or any financial
accommodation whatsoever. It includes without limitation any indebtedness under
or in respect of any bill, acceptance, endorsement, Guarantee, interest, gold or
currency exchange, hedge or other arrangement, redeemable share, discounting
arrangement, finance or capital Lease, hire purchase, deferred purchase price
(for more than 90 days) of any asset or service, any obligation to deliver goods
or other property or to provide services paid for in advance by any financier or
in relation to any other financing transaction.
"Galore Guarantee" means any guarantee and indemnity agreement entered into
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between the Guarantor and the Agent.
"Governmental Agency" means any government or any governmental, semi-
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governmental or judicial entity or authority.
"Guarantee" means any guarantee, indemnity, letter of credit, legally binding
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letter of comfort or suretyship or any other obligation (whatever called and of
whatever nature):
(a) to pay or to purchase;
(b) (whether by the advance of money, the purchase of or subscription for
shares or other securities, the purchase of assets, rights or services, or
otherwise) to provide funds for the payment or discharge of;
(c) to indemnify against the consequences of default in the payment of; or
(d) otherwise to be responsible for,
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any obligation or indebtedness, any dividend, capital or premium on shares or
stock, or the insolvency or financial condition of any other person.
"Guarantor" means Cook-On Gas Products (Australia) Pty. Limited (A.C.N. 001 532
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912).
"Holding Company" means The Galore Group Limited incorporated in the Australian
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Capital Territory.
"Intellectual Property" means any intellectual or industrial property including
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without limitation:
(a) any patent, trade mark or service mark, copyright, registered design,
trade secret, or confidential information; or
(b) any licence or other right to use or to grant the use of any of them or to
be the registered proprietor or user of any of them.
"Lease" means:
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(a) any lease, licence, charter, hire purchase or hiring arrangement of any
asset;
(b) any other agreement or arrangement under which any asset is or may be used
or operated by a person other than the owner; or
(c) any agreement or arrangement under which any asset is or may be managed or
operated for or on behalf of the owner or another person by a person other
than the owner, and the operator or manager or its Related Body Corporate
or associate (whether in the same or another agreement or arrangement) is
required to make or assure minimum, fixed and/or floating rate payments of
a periodic nature,
(other than agreements under which the manager of a joint venture uses assets
owned by the joint venturers on behalf of the joint venture),
and where used as a verb is defined accordingly.
"Licenced Optometrist" means a optometrist which has a subsisting agreement or
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arangement for a licence of facilities with Optic Express Pty. Limited.
"Liquidation" includes official management, compromise, receivership,
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amalgamation, administration, reconstruction, winding up, dissolution,
assignment for the benefit of creditors, arrangement or compromise with
creditors, bankruptcy or death.
"Marketable Security" has the meaning given in the Corporations Law, but also
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includes:
(a) a right or an option in respect of unissued Marketable Securities;
(b) a document referred to in the exceptions to the definition of debenture in
the Corporations Law, or a right or option in respect of issued or
unissued such documents;
(c) a unit or other interest in a trust or a right or option in respect of
issued or unissued units or other interests in a trust; and
(d) a negotiable instrument or a right or option in respect of issued or
unissued negotiable instruments.
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"Material Adverse Effect" means, in the opinion of the Agent a material adverse
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effect upon the ability of any Relevant Company to perform its obligations under
any Transaction Document or upon the security of any Mortgagee or the financial
condition or business of any Relevant Company.
"Material Document" means:
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(a) any Lease (including, without limitation, any right to use Intellectual
Property or any franchise); or
(b) any other document or agreement which is material to the business of a
Mortgagor, the Mortgaged Property or the security of any Mortgagee, or
which is reasonably specified by the Agent as being so.
"Mortgaged Property" means all assets and undertaking of a Mortgagor charged or
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mortgaged under this Deed or any Collateral Security.
"Mortgagee" means:
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(a) the Agent;
(b) any company, bank or financial institution for which the Agent is acting
as agent or trustee under the Agency Agreement;
(c) any other person which the Mortgagors and the Agent agree is to be a
Mortgagee for the purposes of this Deed; or
(d) any successor or assignee of any of the above.
"Nominated Account" means any bank account opened by a Mortgagor before or after
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the execution of this Deed at the request of the Agent.
"Potential Event of Default" means any event which with the passage of time
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and/or the giving of notice would be an Event of Default.
"Power" means any power, right, authority, discretion or remedy which is
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conferred on any Mortgagee or any Receiver or Attorney:
(a) by this Deed or any Collateral Security; or
(b) by law in relation to this Deed or any Collateral Security.
"Receiver" means any receiver or receiver and manager appointed under this Deed
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or any Collateral Security.
"Related Body Corporate" has the meaning given in the Corporations Law but on
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the basis that "Subsidiary" when used in the Corporations Law has the meaning
given in this Deed and "corporation" includes trusts.
"Relevant Company" means a Mortgagor, a Borrower or any of their Subsidiaries or
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any person who gives or creates a Guarantee or Security Interest in respect of
any of the Secured Moneys.
"Secured Moneys" means all moneys which the Guarantor (whether alone or with any
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other person) is or at any time may become actually or contingently liable to
pay to or for the account of a Mortgagee (whether alone or with any other
person) under a Galore Guarantee.
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"Security Interest" means any mortgage, pledge, lien or charge or any security
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or preferential interest or arrangement of any kind, or any other right of or
arrangement with any creditor to have its claims satisfied prior to other
creditors with, or from the proceeds of, any asset (including, without
limitation, retention of title other than in the course of day-to-day trading
and any deposit of money by way of security) but excluding any charge or lien
arising in favour of any Governmental Agency by operation of law provided there
is no default in payment of the moneys secured by such charge or lien.
"Subsidiary" has the meaning given in the Corporations Law but so that:
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(a) a corporation shall also be deemed to be a Subsidiary of another
corporation if that other corporation has appointed or is in a position to
appoint a director or directors who are in a position to cast, or control
the casting of, more than one-half of the maximum number of votes that
might be cast at a meeting of the board of directors of the first-mentioned
corporation;
(b) a trust may be a Subsidiary, for the purposes of which any units or other
beneficial interests will be deemed shares; and
(c) a corporation or trust may be a Subsidiary of a trust if it would have
been a Subsidiary if that trust were a corporation.
"Tax" includes any tax, levy, impost, deduction, charge, rate, duty, compulsory
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loan or withholding which is levied or imposed by a Governmental Agency,
including (without limitation) any withholding, income, stamp or transaction
tax, duty or charge together with any related interest, penalty, charge, fee or
other amount.
"Transaction Document" means:
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(a) this Deed, the Agency Agreement, any Galore Guarantee or any Collateral
Security;
(b) (i) any agreement for or relating to the provision of financial
accommodation to or for the account of a Borrower by a Mortgagee,
whether alone or with any other person, including without limitation
a Security Interest;
(ii) any document or agreement defined as a Transaction Document in such
agreement; or
(iii) any other document or agreement which a Mortgagor and the Agent at
any time agree is to be a Transaction Document for the purposes of
this Deed;
(c) any document or agreement:
(i) to which a Mortgagor and/or a Borrower is or becomes party (whether
or not with others) and either:
(A) the Agent (whether or not with others) is or becomes a party;
or
(B) rights under that document or agreement are assigned to the
Agent (whether or not with others); or
(ii) which in any way relates to or requires the payment of any Secured
Moneys; or
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(d) any document or agreement entered into under, or for the purpose of
amending or novating, any of them (including, without limitation, any
undertaking by or to a party or its lawyers).
"Treasury Facility' means any transaction or arrangement relating to the
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purchase (whether spot or forward), exchange, hedging, fixing, adjustment or
indemnification in respect of interest, currency or financial instruments,
indebtedness or indicators of any kind or any other treasury operation.
"Unpaid Capital" means any uncalled or unpaid share capital or premiums of a
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Mortgagor.
"US Subsidiary" means Barbeques Galore Inc. (incorporated in California), Pool
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Patio 'n Things Inc. (incorporated in California) or Galore Group (USA) Inc.
(incorporated in Delaware).
1.2 General
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In this Deed headings are for convenience only and do not affect interpretation.
Except to the extent that the context requires otherwise:
(a) references to any legislation or to any provision of any legislation
include any modification or re-enactment of it, or any provision
substituted for it, and all statutory instruments issued under such
legislation or provision;
(b) the singular includes the plural and vice versa;
(c) any gender includes all genders;
(d) words denoting an individual include a corporation and vice versa;
(e) references to Clauses and Schedules are references to clauses and
schedules of this Deed;
(f) references to any document or agreement (including this Deed) include
references to that document or agreement as amended, novated, supplemented
or replaced from time to time;
(g) references to any party to this Deed or any other document or agreement
include its successors or permitted substitutes or assigns;
(h) "writing" and cognate expressions include all means of reproducing words
in a tangible and permanently visible form;
(i) "asset" includes any real or personal, present or future, tangible or
intangible property or asset (including, without limitation, any
Intellectual Property), and any right, revenue or benefits and any right
or interest in, under or derived from any of the foregoing;
(j) a limited partnership will be regarded as a corporation;
(k) an Event of Default will be deemed to be "subsisting" unless and until it
has been waived in writing by the Agent or remedied to the satisfaction of
the Agent; and
(l) without limiting the meaning of the term, references to amounts for which
a person is contingently liable or which are contingently owing by a
person include amounts which that person may become actually or
contingently liable to pay on the occurrence of a contingency whether or
not that liability will arise because of an obligation existing at the
relevant time.
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1.3 Document or agreement
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In this Deed references to an "agreement" include any Security Interest,
Guarantee, undertaking, deed, agreement or legally enforceable arrangement
whether or not in writing and references to a "document" include any agreement
(as so defined) in writing, or any certificate, notice, instrument or document
of any kind.
1.4 Joint and Several obligations
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The obligations of each Mortgagor under this Deed are joint and several and this
Deed will be binding on each Mortgagor notwithstanding anything done or omitted
to be done by any other Mortgagor or by the Agent in relation to any Mortgagor.
2. CHARGE
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2.1 Charge
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(a) Each Mortgagor charges to the Agent for itself and as trustee for the
Mortgagees all its present and future assets and undertaking including,
without limitation, Unpaid Capital but excluding any such assets or
undertaking of a Mortgagor on the date of this Deed and on the date of any
notice under Clause 31 which are on such date situate in the Australian
Capital Territory, the Northern Territory or any State of Australia other
than Victoria.
(b) The charge secures the due and punctual payment of the Secured Moneys.
(c) The charge is given in consideration of the Mortgagees entering the
Transaction Documents and/or providing or continuing to provide advances
and financial accommodation from time to time to the Guarantor under any
Galore Guarantee and/or for other valuable consideration received.
2.2 Prospective liability
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Subject to Clause 2.3, for the purposes of the Corporations Law alone the
maximum prospective liability (as defined in the Corporations Law) secured by
this Deed is A$200,000,000 or its equivalent but this Clause does not limit the
amount of actual liability at any time secured by or recoverable under this
Deed.
2.3 Increase in prospective liability
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The Agent may from time to time lodge a notice under section 268(2) of the
Corporations Law on behalf of the Mortgagors specifying an increase in the
maximum prospective liability secured by this Deed. From the date of lodgement
the sum specified in Clause 2.2 will be deemed to be varied to the sum specified
in the notice.
3. NATURE OF CHARGE
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3.1 Priority
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The charge is a first charge and takes priority over all Security Interests
except those described in Schedule Two and ranks pari passu with each Collateral
Security.
3.2 Nature of charge
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The charge operates:
(a) as a fixed charge as regards all present and future:
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(i) freehold and leasehold property or any other interest in real
property;
(ii) Unpaid Capital;
(iii) machinery (other than stock-in-trade), plant, any item of equipment
having a value in excess of A$50,000 or its equivalent;
(iv) insurance policies, and any proceeds of any policy of an amount
exceeding A$50,000;
(v) books of account, registers, minute books, statements, invoices,
accounting and other records (including without limitation those
recorded electronically) and all software;
(vi) interests in any partnership;
(vii) Intellectual Property and goodwill;
(viii) Marketable Securities;
(ix) Authorisations;
(x) documents and agreements of any kind;
(xi) book and other debts and the proceeds of such debts (other than
proceeds which may be dealt with by a Mortgagor under Clause
3.6(a));
(xii) accounts opened in the name of a Mortgagor or for the benefit of a
Mortgagor under any Transaction Document (including the Nominated
Accounts);
(xiii) other assets that are not acquired for disposal in the ordinary
course of a Mortgagor's business.
and all right, title and interest of a Mortgagor in under or derived from
the above (except as expressly provided); and
(b) subject to Clause 3.4, as a floating charge only as regards all other
assets charged.
All sub-paragraphs of paragraph (a) are to be construed independently. None
limits the generality of any other.
3.3 Dealing with Mortgaged Property
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(a) Except with the prior written consent of the Agent, no Mortgagor may:
(i) create or allow to exist any Security Interest over any Mortgaged
Property which ranks in priority to, equally with or after this
security; or
(ii) in any other way:
(A) dispose of;
(B) create or allow any interest in; or
(C) part with possession of,
any Mortgaged Property, except:
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(D) as expressly permitted in Clause 5 or any Transaction Document;
(E) subject to any Transaction Document (including this Deed):
(I) any disposal of or dealing with any asset for the time
being subject to the floating charge in the ordinary
course of its ordinary business; or
(II) any disposal of or dealing with any asset for the time
being subject to the fixed charge the value of which is,
or during any one calendar month the aggregate values of
which are, less than A$50,OOO; or
(b) Where by law the Agent may not restrict the creation of any Security
Interest over an asset ranking after the charge created by this Deed, then
paragraph (a) will not restrict that creation, but each Mortgagor shall
ensure that before any such Security Interest is created the holder of
such Security Interest enters into a deed of priority in form and
substance specified by the Agent.
3.4 Crystallisation
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The floating charge referred to in Clause 3.2 will automatically and immediately
crystallise and operate as a fixed charge:
(a) in respect of any asset:
(i) upon notice to the relevant Mortgagor from the Agent (which it may
only give following the occurrence of an Event of Default which is
subsisting);
(ii) if the relevant Mortgagor:
(A) creates or allows any Security Interest over;
(B) sells, Leases or otherwise disposes of;
(C) creates or allows any interest in; or
(D) parts with possession of,
that asset, in breach of any Transaction Document or agrees or
attempts to do so or takes any step towards doing so without the
prior written consent of the Agent;
(iii) upon any step being taken with a view to levying or enforcing any
distress, attachment or other execution on that asset or to
enforcing any Security Interest in respect of that asset;
(iv) upon the Commissioner of Taxation or its successor signing a notice
under:
(A) section 218 or section 255 of the Income Tax Assessment Act
1936;
(B) section 38 of the Sales Tax Assessment Act 1930; or
(C) any similar legislation,
which will affect that asset; or
that asset, in breach of any Transaction Document or agrees or
attempts to do so or takes any step towards doing so without the
prior written consent of the Agent;
(iii) upon any step being taken with a view to levying or enforcing any
distress, attachment or other execution on that asset or to
enforcing any Security Interest in respect of that asset;
(iv) upon the Commissioner of Taxation or its successor signing a notice
under:
(A) section 218 or section 255 of the Income Tax Assessment Act
1936;
(B) section 38 of the Sales Tax Assessment Act 1930; or
(C) any similar legislation, which will affect that asset; or
(v) upon any Governmental Agency taking any step which may result in any
amount of any Tax or any amount owing to a Governmental Agency
ranking ahead of the floating charge with respect to that asset; or
(b) in respect of all the Mortgaged Property:
(i) if an order is made or a resolution is passed for the winding up of
any Mortgagor; or
(ii) upon the security constituted by this Deed being enforced in any way.
Except where expressly stated no notice or action by the Agent is necessary for
the charge to crystallise.
3.5 De-crystallisation
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The Agent may at any time, by notice to the relevant Mortgagor, release from the
fixed charge any asset which has become subject to a fixed charge under Clause
3.4. That asset will then again be subject to the floating charge and to the
further operation of that Clause.
3.6 Dealing with proceeds
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(a) Subject to any Transaction Document (including this Deed) a Mortgagor may
deal with the proceeds of any book or other debt as it thinks fit where:
(i) the book or other debt arose in the ordinary course of its business;
(ii) the proceeds do not arise from the sale or other disposal of, Lease
of, or grant of any interest in, an asset the subject of the fixed
charge;
(iii) the proceeds are received before the floating charge crystallises
in respect of all the Mortgaged Property and before anything occurs
as described in Clause 3.4(a) with respect to the debt or those
proceeds; and
12
(d) Each Mortgagor shall give notices and directions necessary or requested by
the Agent to ensure paragraphs (b) and (c) are complied with.
(e) Failure by the Agent to require a Mortgagor to comply with this Clause
will not constitute a waiver.
(f) Without prejudice to paragraph (e), if for any reason the Agent waives or
is deemed to have waived the requirements of this Clause, the charge
created by this Deed will still operate as a fixed charge in respect of
the relevant debt or other asset under which the relevant moneys or
proceeds are payable or receivable.
(g) In this clause "proceeds" includes moneys or consideration payable whether
or not received by a Mortgagor.
4. REPRESENTATIONS AND WARRANTIES
- -----------------------------------
4.1 Representations and warranties
- -----------------------------------
Each Mortgagor makes the following representations and warranties on the date of
this Deed.
(a) (Status): It is a corporation validly existing under the laws of the place
------
of its incorporation specified above.
(b) (Corporate power): It has the corporate power to enter into and perform
---------------
its obligations under the Transaction Documents to which it is expressed
to be a party, to carry out the transactions contemplated by those
documents and to carry on its business as now conducted or contemplated.
(c) (Corporate authorisations): It has taken all necessary corporate action to
------------------------
authorise the entry into and performance of the Transaction Documents to
which it is expressed to be a party, and to carry out the transactions
contemplated by those documents.
(d) (Documents binding): Each Transaction Document to which it is expressed to
-----------------
be a party is, subject to any necessary stamping and registration, its
valid and binding obligation enforceable in accordance with its terms.
This Deed is effective security over the Mortgaged Property with the
priority stated in Clause 3.1.
(e) (Transactions permitted): Neither the execution and performance by it of
----------------------
the Transaction Documents to which it is expressed to be a party nor any
transaction contemplated under any such document will violate in any
respect any provision of:
(i) any law or treaty or any judgment, ruling, order or decree of any
Governmental Agency binding on it;
(ii) its memorandum or articles of association or other constituent
documents; or
(iii) any other document or agreement which is binding upon it or its
assets,
and, except as may be provided by the Transaction Documents, did not and
will not result in:
(iv) the creation or imposition of any Security Interest on any of its
assets under any of the foregoing; or
(v) the acceleration of or cancellation of any obligation with respect
to any Financial Indebtedness, or anything which constitutes (or
which, with the giving of notice and/or lapse of time would
constitute) an event of default, cancellation event, prepayment
event or similar event (whatever called) under any agreement
relating to Financial Indebtedness.
(f) (Accounts):
--------
(i) Its most recent consolidated and unconsolidated audited accounts
give a true and fair view of its and its Subsidiaries' state of
affairs as at the date to which they relate and the results of its
and its Subsidiaries' operations for the accounting period ended on
that date.
(ii) There has been no change in its and its Subsidiaries' state of
affairs since that date which may have a material adverse effect
upon it or its ability to perform its financial or other obligations
under any Transaction Document.
(iii) Those accounts have been prepared in accordance with all applicable
laws and accounting principles and practices generally accepted in
Australia consistently applied, except to the extent of departures
from such principles and practices disclosed in such accounts.
(iv) There is no material Financial Indebtedness or any other material
contingent liability which is not disclosed in those accounts.
(v) No indemnity has been executed by any Relevant Company for the
purposes of obtaining an exemption, order or relief under section
313 of the Corporations Law.
(g) (No litigation): No litigation, arbitration, Tax claim, dispute or
-------------
administrative proceeding is presently current or pending or, to its
knowledge, threatened, which is likely to have a material adverse effect
upon it or its Subsidiaries or its ability to perform its financial or
other obligations under any Transaction Document or upon the security of
the Agent.
(h) (No default): Other than as disclosed to the Agent in writing prior to the
----------
date of this Deed:
(i) no Relevant Company is in default under any document or agreement
(including without limitation any Authorisation) binding on it or
its assets which default relates to Financial Indebtedness or is
material.
(ii) nothing has occurred which is or would with the giving of notice
and/or lapse of time constitute an event of default, cancellation,
prepayment event or similar event (whatever called) under any such
document or agreement (and which is subsisting).
(i) (Authorisations): All Authorisations, if any, required in relation to the
--------------
execution, delivery or performance by it and the validity and
enforceability of the Transaction Documents to which it is a party and the
transactions contemplated by such documents have been obtained or effected
and are in full force and effect.
(j) (No misrepresentation): All information provided by it to the Agent in
--------------------
relation to the Transaction Documents is true in all material respects as
at the date of this Deed and is not, by the omission of information or
otherwise, misleading.
14
(k) (No undisclosed agreements): There are in existence no documents or
-------------------------
agreements which have not been disclosed to any Mortgagee and which are
material to the security constituted by this Deed or which have the effect
of varying any of the Transaction Documents.
(l) (Copies of documents): All copies of documents and agreements (including,
-------------------
without limitation, its latest audited accounts and all Authorisations)
given by it or on its behalf to the Agent constitute true and complete
copies. Such documents and agreements are in full force and effect.
(m) (Title):
-----
(i) It is and will be the sole beneficial owner of the Mortgaged
Property purported to be charged or mortgaged by it and all material
assets included in its latest audited accounts free and clear of any
other third party right or interest whatsoever including any
Security Interest other than any Security Interest created or
permitted by any Transaction Document.
(ii) None of its or its Subsidiaries' assets is subject to any Security
Interest which is pot permitted by Clause 5.2(f) or any agreement to
give such a Security Interest.
(iii) None of its Subsidiaries (other than the US Subsidiaries or a
Subsidiary which has given a first charge over all of its assets to
secure the Secured Moneys) has any Financial Indebtedness save for
Galore US Inc. to Sanwa Bank California for a maximum principal
amount of US$500,000 and save for any Collateral Security.
(iv) Paragraph (m)(i) is correct with respect to each Subsidiary as if
references to "it" were to the Subsidiary.
(n) (Subsidiaries). All its Subsidiaries (other than the US Subsidiaries and
------------
G.L.G. Pte Trading Limited) are party to this Deed.
(o) (Trust): It does not hold any assets as the trustee of any trust.
-----
4.2 Reliance on representations and warranties
- -----------------------------------------------
Each Mortgagor acknowledges that the Agent has entered the Transaction Documents
in reliance on the representations and warranties in this Clause.
5. COVENANTS
- -------------
5.1 Covenants
- --------------
(a) Each Mortgagor shall duly and punctually pay the Secured Moneys payable by
it. After an Event of Default which is subsisting it will pay all Secured
Moneys on demand by the Agent.
(b) Each Mortgagor shall ensure that no Event of Default occurs.
(c) Each Mortgagor shall duly and punctually comply with its obligations under
the Transaction Documents and ensure that its and each Borrower's
representations and warranties in the Transaction Documents are true and
ensure that each Borrower duly and punctually complies with its
obligations under the Transaction Documents.
15
5.2 General covenants
- ----------------------
Each Mortgagor covenants with the Agent as follows, except to the extent that
the Agent consents otherwise.
(a) (Corporate reporting and information): It will furnish to the Agent:
------------------------------------
(i) (annual accounts): in the case of the Holding Company only, as soon
---------------
as practicable (and in any event not later than 120 days) after the
close of each of its financial years copies of its consolidated
audited balance sheet and profit and loss account;
(ii) (semi-annual accounts): in the case of the Holding Company only, as
--------------------
soon as practicable (and in any event not later than 90 days) after
the first half of each of its financial years copies of its
consolidated unaudited balance sheet and profit and loss account in
respect of that half-year;
(iii) (quarterly management accounts): in the case of the Holding Company
-----------------------------
only, as soon as practicable (and in any event not later than 45
days) after the close of each quarter of its financial year copies
of its consolidated unaudited management accounts in respect of
that quarter;
(iv) (ratios): in the case of the Holding Company only, at the time it
------
delivers the financial statements under sub-paragraphs (i) or (ii),
a certificate of two of its directors that the requirements of
Clause 5.5 have been met at the last day of the last six or 12
month period ended 30 June or 31 December, as the case may be;
(v) (documents issued to shareholders): promptly, all documents issued
--------------------------------
by it as required by applicable law to its shareholders, debenture
holders or holders of any other Marketable Securities issued by it;
(vi) (litigation): promptly, written particulars of any litigation,
----------
arbitration, Tax claim, dispute or administrative proceeding in
relation to the Mortgaged Property or it and its Subsidiaries
involving a claim of A$50,000 or its equivalent if the claim is for
liquidated damages, or, if the claim is for unliquidated damages is
likely in the opinion of the directors of the Holding Company to
result in an award of at least that amount, other than a claim for
worker's compensation;
(vii) (Governmental Agency): promptly, any notice, order or material
-------------------
correspondence from or with a Governmental Agency relating to the
Mortgaged Property or its use which may, or compliance with which
may, in the reasonable opinion of the directors of the Holding
Company adversely affect the value of the Mortgaged Property; and
(viii) (other information): upon request, any financial and other
-----------------
information in relation to the Mortgaged Property or its and its
Subsidiaries' financial condition or business which the Agent may
reasonably request.
(b) (Accounting principles): In the case of the Holding Company only, it will
---------------------
ensure that each balance sheet and profit and loss account furnished under
paragraph (a) will:
(i) be prepared in accordance with all applicable laws and accounting
principles and practices generally accepted in Australia
consistently applied except to the extent disclosed in such
accounts; and
16
(ii) give a true and fair view of its consolidated and unconsolidated
state of affairs and the result of its consolidated operations, as
at the date, and for the period ending on the date, to which such
accounts are prepared.
(c) (Authorisations): It will use its best endevours to ensure that all
--------------
Authorisations required for:
(i) the validity, enforceability and performance of its obligations
under the Transaction Documents and the effectiveness and priority
of this charge;
(ii) the validity, enforceability and performance of the Material
Documents; and
(iii) it and its Subsidiaries to carry on their business,
are obtained and promptly renewed and maintained in full force and effect.
It will comply with them. It will provide copies promptly to the Agent
when they are obtained or renewed.
(d) (Notice to Agent): It will give notice to the Agent as soon as it becomes
---------------
aware of:
(i) any Event of Default or Potential Event of Default;
(ii) any proposal by any Governmental Agency to acquire compulsorily any
of the Mortgaged Property or the whole or a substantial part of its
or any of its Subsidiaries' assets or business or of any asset;
(iii) any substantial dispute between it or any of its Subsidiaries and
any Governmental Agency; and
(iv) any change in its Authorised Officers, giving specimen signatures
of any new Authorised Officer so appointed, and, where requested by
the Agent, evidence satisfactory to the Agent of the authority of
those Authorised Officers.
(e) (Disposal of assets): It will not sell or otherwise dispose of, part with
------------------
possession of, or create any interest in, any of the Mortgaged Property or
all or a substantial part of its assets or agree or attempt to do so
(whether in one or more related or unrelated transactions) except, in the
case only of assets over which this charge is floating:
(i) as permitted by paragraph (f);
(ii) disposals of assets in exchange for other assets comparable in
value (other than a factoring on recourse terms or a sale and Lease
back or similar transaction); and
(iii) disposals in the ordinary course of day-to-day trading.
Where a Subsidiary issues shares and its holding company does not acquire
all the shares or (as the case may be) a ratable portion of those shares
according to its then shareholding it will be deemed a disposal by the
holding company.
(f) (Negative pledge): It will not create or allow to exist any Security
---------------
Interest over its assets other than:
17
(i) this Deed or any Collateral Security;
(ii) liens arising by operation of law in the ordinary course of day-to-
day trading;
(iii) in the case of Vilbrent Pty Limited, the first ranking Real
Property Act mortgage registered number W415483 to Permanent
Custodians Limited over the whole of the land contained in
Certificate of Title Folio Identifier 10/533334 at Auburn;
(iv) by a US Subsidiary for so long as it has not given a Security
Interest over the relevant asset to the Agent or otherwise in
favour of a Charging Group Member where the chargor executes a deed
of priority subordinating such Security Interest to this Deed and
the Collateral Security on terms satisfactory to the Agent.
(g) (Security deposit): It will not deposit or lend money on terms that it
----------------
will not be repaid unless or until its or any other person's obligations
or indebtedness are performed or discharged, other than as a condition of
a Lease where such condition is a usual commercial term. It will not
deposit money with or lend money to any person to whom it is, or is likely
to become, actually or contingently indebted other than a Mortgagee, a
Charging Group Member, Bromic Pty Limited, G.L.G. (NZ) Pty Limited or a
Licensed Optometrist and will furnish to the Agent at the time the Holding
Company furnishes quarterly management accounts to the Agent under Clause
5.2(a) (iii) a statement of its accounts with Bromic Pty Limited and
G.L.G. (NZ) Pty Limited as at the end of the quarter.
(h) (Title retention): It will not enter into any agreement with respect to
---------------
the acquisition of assets on title retention terms except in the ordinary
course of day-to-day trading.
(i) (Sale and Lease back): It will not sell or otherwise dispose of any of its
-------------------
assets to any person where under the terms of such sale or disposal, or
under a related transaction, such asset is or may be Leased to or used,
chartered, hired, operated or managed by any Relevant Company or Associate
under any Lease.
(j) (Partnership and joint ventures): It will not enter into any partnership,
------------------------------
franchise arrangement or joint venture with any other person in relation
to the Mortgaged Property unless the nature of its rights and liabilities
under such partnership, franchise arrangement or joint venture has been
disclosed to the Agent or is substantially similar to those previously
disclosed to the Agent and any material difference has been previously
disclosed to the Agent.
(k) (Corporate existence):
-------------------
(i) It will do all things necessary to maintain its corporate existence
in good standing.
(ii) It will not transfer its jurisdiction of incorporation or enter any
merger or consolidation except in the case of a transfer within
Australia with the consent of the Agent not to be unreasonably
withheld.
(l) (Compliance with law): It will comply duly and punctually with all laws
-------------------
binding upon it in all material respects.
(m) (Pay Taxes):
---------
(i) It will pay when due all Taxes payable by it.
18
(ii) It need not pay Taxes for which it has set aside sufficient
reserves and which are being contested in good faith except where
failure to pay such Taxes may have a material adverse effect upon
it or its ability to perform any of its financial or other
obligations under any Transaction Document or may prejudice the
Mortgaged Property or the security of the Agent.
(iii) It will pay such contested Taxes after the final determination or
settlement of any such contest.
(n) (Commercial dealings):
-------------------
(i) It will not deal in any way with any person who is not a Charging
Group Member except at arms' length in the ordinary course of
business for valuable commercial consideration or as disclosed to
the Agent with the Agent's prior written consent or except with a
US Subsidiary, Bromic Pty Limited, G.L.G. (NZ) Pty Limited or a
Licensed Optometrist on terms previously disclosed to the Agent.
(ii) Subject to paragraph (iii) where the other party to the dealing is
an Associate (other than Bromic Pty Limited or G.L.G. (NZ) Pty
Limited) the adequacy of the consideration and the terms of the
dealing must be supported by an independent valuation or other
verification of compliance with sub-paragraph (i) specified by the
Agent, in each case by a person satisfactory to the Agent.
(iii) It will immediately notify the Agent of any dealing with Rebel
Sports Pty Limited, Rebel Concepts Pty Limited, Rebel Sports
(Bankstown) Pty Limited, Rebel Sports (Bondi) Pty Limited, Rebel
Sports (Miranda) Pty Limited or Rebel Sports (Penrith) Pty Limited,
however an independent valuation is only required if requested by
the Agent.
(iv) It will obtain a fair market rent or licence fee under any Lease
granted by it in respect of any of the Mortgaged Property.
(v) It will not enter into any Treasury Facility other than for the
sole purpose of creating a hedge for interest rate or currency
movement risks associated with the ordinary course of its business.
(o) (Financial assistance): It will not:
--------------------
(i) advance money or make available any financial accommodation to or
for the benefit of; or
(ii) give any Guarantee or Security Interest in connection with any
indebtedness, obligation or liability of,
any person other than;
(iii) a Charging Group Member;
(iv) a US Subsidiary (on terms previously disclosed to the Agent); or
(v) the Guarantees given in connection with Bromic Pty. Limited and
G.L.G. (NZ) Pty. Limited prior to the date of this Deed,
but it may:
19
(vi) deposit funds with a bank in the ordinary course of its business
unless, where the bank is not a Mortgagee, it owes Financial
Indebtedness to that bank;
(vii) allow its customers to acquire goods and services on extended terms
in the ordinary course of trading; and
(viii) make a loan to any person (other than a director of the Holding
Company) engaged in the full-time employment of a Charging Group
Member, but so that the aggregate amount owing by such person shall
not at any time exceed A$120,000.
(p) (Distributions): It will not make any payment or distribution (including
-------------
without limitation by management or other fee, interest, dividend, return
of capital, repayment or redemption) to or for the benefit of any
Associate or its shareholders in their capacity as shareholders except:
(i) dividends in the ordinary course of business paid out of trading
profits (excluding extraordinary items) and paid when there is no
Event of Default subsisting and the aggregate amount of which
during the previous 12 month period does not exceed 50% of Earnings
(as defined in Clause 5.6(c)) for that 12 month period;
(ii) reasonable directors' fees and salaries and other emoluments;
(iii) payments under dealings permitted under paragraph (n); and
(iv) payments to a Charging Group Member or a US Subsidiary, Bromic Pty
Limited or G.L.G. (NZ) Pty Limited on terms previously disclosed to
the Agent.
(q) (Change of business): It will not cease or materially change any Core
-------------------
Business. It will not take any action whether by acquisition or otherwise
which would constitute or result in an alteration to the nature of a Core
Business of a Mortgagor or a Mortgagor's Subsidiaries and if such
alteration or such alterations in the aggregate would constitute a
material alteration to the nature of a Core Business of a Mortgagor and a
Mortgagor's Subsidiaries taken as a whole.
(r) (Subsidiaries)
------------
(i) It will not create or acquire a Subsidiary unless at the time of
becoming a Subsidiary the Subsidiary gives a first charge over all
its assets and undertaking to secure the Secured Moneys
satisfactory to the Agent.
(ii) It will ensure that each of its Subsidiaries complies with
paragraphs (e) to (r) inclusive as if binding on each of them and
as if references to "it" were to the Subsidiary.
(iii) It will ensure that none of its Subsidiaries (other than a
Subsidiary which has given a first charge over all its assets to
secure the Secured Moneys satisfactory to the Agent) incurs any
Financial Indebtedness except to:
(A) a Mortgagee; or
(B) a Mortgagor or any other person who has given a first charge
over all its assets and undertaking to secure the Secured
Moneys satisfactory to the Agent.
20
(s) (Further security): It will procure that any Subsidiary provides:
----------------
(a) a Security Interest over any asset located in Australia and any
asset of the type described in Clause 3.2(a) of this Deed located
outside Australia to secure; or
(b) a Guarantee of,
any Secured Moneys, at the request of the Agent in form and substance
acceptable to the Agent within 30 days of the date of the request.
5.3 Covenants relating to Mortgaged Property
- ---------------------------------------------
Each Mortgagor covenants with the Agent as follows, except to the extent that
the Agent otherwise consents.
(a) (Pay outgoings):
-------------
(i) Subject to sub-paragraph (ii), it will pay when due all outgoings
payable by it in respect of the Mortgaged Property (including
without limitation rent and Taxes).
(ii) It need not pay outgoings which are being contested in good faith
except where failure to pay such outgoings may have a material
adverse effect upon it or its ability to perform any of its
financial or other obligations under any Transaction Document or
may prejudice the Mortgaged Property or any Security Interest held
by the Agent.
(iii) It will pay such contested outgoings after the final determination
or settlement of such contest.
(iv) On request by the Agent it will immediately hand to the Agent
evidence of every payment covered by the request.
(b) (Maintenance):
-----------
(i) It will maintain each item of the Mortgaged Property which has a
value in excess of A$50,000 in a good state of repair and in good
working order and condition.
(ii) On being required to do so by the Agent it will immediately amend
every defect in the repair and condition of any item of the
Mortgaged Property which has a value in excess of A$50,000 (fair
wear and tear excepted).
(c) (Insurance):
---------
(i) (General obligation): In its name and in the name of the Agent on
------------------
behalf of each Mortgagee it will:
(A) insure and keep insured the Mortgaged Property which is
of an insurable nature to the full replacement or re-
instatement value; and
(B) take out and keep in force other insurance with respect to
the Mortgaged Property and each business in which the
Mortgaged Property is used (including, without limitation,
any insurance reasonably requested by the Agent and public
risk, worker's compensation, product liability and business
interruption insurance),
21
in the manner and to the extent which the Agent acting on the
advice of substantial and reputable brokers determines to be
reasonable and customary for a business enterprise engaged in a
similar business and in a similar locality, and for property of the
nature of the Mortgaged Property.
(ii) (Alternative obligation): If the Agent makes no determination or
----------------------
request under sub-paragraph (i), the relevant Mortgagor shall take
out and keep in force insurance in the amount and against the risks
which a business enterprise holding property and engaged in a
business in a locality similar to that of the relevant Mortgagor
would prudently insure against.
(iii) (Payment of premiums): It will pay when due all premiums,
-------------------
commissions, levies, stamp duties, charges and other expenses
necessary for effecting each such insurance policy and maintaining
it in force.
(iv) (Insurers): It will take out each such insurance policy with
--------
substantial and reputable insurers approved by the Agent, located
in jurisdictions approved by the Agent. The approval in each case
is not to be unreasonably withheld.
(v) (Information): On request it will deliver to the Agent certificates
-----------
of currency in respect of all such insurance policies, and all
other details as to the insurance policies which the Agent
requires.
(vi) (Annual report): At least once every year it will provide to the
-------------
Agent a report as to such insurance policies as at the date of the
report and claims and other material events with respect to such
insurances during the previous twelve months.
(vii) (No prejudicial action): It will not do anything nor permit
---------------------
anything to be done which may prejudice any such policy or omit to
do anything where omission may prejudice any such insurance policy.
(viii) (Contents of policy): Without limiting sub-paragraphs (i) or (ii)
------------------
it will ensure that each such insurance policy with respect to the
Mortgaged Property is on terms and conditions satisfactory to the
Agent acting on the advice of reputable and substantial brokers and
without limitation provides that:
(A) the Agent (on behalf of the Mortgagees) is named as loss
payee;
(B) the proceeds of any loss in respect of insurance of the
Mortgaged Property will be paid to the Agent other than
claims of less than A$50,000 or its equivalent and claims
under any public liability policy in each case made before
notice by the Agent to the insurer that this Deed has become
enforceable and except where the proceeds are used by way of
replacement or reinstatement in accordance with the relevant
policy;
(C) the amount of any excess or deductible payable by the insured
in respect of any claim will not exceed the customary amount
for similar policies in the reasonable opinion of the Agent
acting on the advice of reputable and substantial brokers;
22
(D) the insurer waives its right to set off or counter claim or
to make any other deduction or withholding as against the
Agent and all persons claiming under the Agent except for his
rights under section 54 of the Insurance Contracts Act 1984;
and
(E) the insurer will not terminate the insurance policy unless it
has given not less than 14 days prior notice to the Agent
specifying the default or breach and the relevant default or
breach has not been rectified before the expiry of the period
of the notice.
(ix) (Remedy of default): If:
-----------------
(A) any default is made by a Mortgagor in effecting or keeping up any
such insurance policy;
(B) any fact or circumstance arises which in the reasonable opinion of
the Agent may entitle the insurer to cancel or avoid any such
insurance policy; or
(C) in the reasonable opinion of the Agent the insurer under any such
policy may not be capable of meeting a claim,
the Agent may do anything which in its opinion is advisable or necessary
to effect or keep up that insurance policy or take out a new policy
complying with this Clause, in each case at the cost of the relevant
Mortgagor and either in its name or in the name of the relevant Mortgagor.
The Agent is not under any obligation to do so.
(x) (Enforcement by Agent): It will do everything necessary and provide all
--------------------
documents, evidence and information necessary to enable the Agent to make
a claim, and to collect or recover any moneys due in respect of any such
insurance policy.
(xi) (Notice of claims): As soon as possible it will notify:
----------------
(A) (1) the Agent; and
(2) (when it is required or it is advisable to do so) the
relevant insurer,
of the occurrence of any event which does or may give rise to
any claim of A$50,000 or its equivalent or more under any
such insurance policy; and
(B) the Agent of;
(1) any cancellation, change or reduction in any such insurance
policy which has a value in excess of A$50,000;
(2) any such insurance policy becoming void or voidable; or
(3) any other material circumstance or correspondence
relating to any such insurance policy.
(xii) (Use of insurance proceeds): It will use the proceeds of all such
-------------------------
insurance policies received by it for the following purposes.
23
(A) If no Event of Default is subsisting:
(1) to the extent necessary, in the replacement, repair or
reimbursement of the relevant Mortgaged Property; or
(2) in discharging the relevant liability or in making good the
relevant loss covered by the insurance policy,
as the case may be. The Agent will make available for those
purposes to the relevant Mortgagor all proceeds received by the
Agent as and when the proceeds are actually required to pay amounts
due and payable for those purposes. Each Mortgagor will apply any
surplus in reduction of the Secured Moneys unless the Agent agrees
otherwise.
(B) if an Event of Default is subsisting:
(1) for any of the purposes described in sub-paragraph (A); or
(2) towards payment of the Secured Moneys,
at the option of the Agent.
(c) (Alterations): It will not make or permit any person to make material
-----------
alterations to any real property comprised in the Mortgaged Property
without the prior written consent of the Agent.
(d) (Preservation and protection of security):
---------------------------------------
(i) It will do promptly everything necessary and everything reasonably
required by the Agent to:
(A) preserve and protect the value of the Mortgaged Property; and
(B) protect and enforce its title and the Agent's title as
mortgagee to the Mortgaged Property.
(ii) Without limiting the generality of sub-paragraph (i), no Mortgagor
will permit lodgment of a caveat forbidding the recording of any
interest of it or a Mortgagee in the Mortgaged Property.
(iii) If any such caveat is lodged (other than a caveat lodged by the
relevant Mortgagee) the relevant Mortgagor will promptly do
everything in its power to remove it.
(iv) The generality of this paragraph does not limit nor is it limited
by the generality of any other paragraph of this Clause 5.
(e) (Other Security Interests): It will duly and punctually comply with all
------------------------
Security Interests affecting the Mortgaged Property and the obligations
secured by those Security Interests.
24
(f) (Acquisition of assets): It will notify the Agent:
---------------------
(i) immediately of the creation or acquisition of a Subsidiary or of
any, agreement for the purchase of, or other acquisition of, any
estate or interest in, any land it enters into (other than an
interest dealt with in paragraph (ii));
(ii) at the time the Holding Company furnishes the annual accounts under
Clause 5.2(a)(i) of each agreement for lease or lease of any land
it has entered into during the immediately preceding financial
year.
5.4 Term of covenants
- ----------------------
Each covenant in this Clause continues from the date of this Deed until the
Secured Moneys are fully and finally repaid.
5.5 Financial undertakings
- ---------------------------
Each Mortgagor undertakes to the Agent on behalf of each Mortgagee as follows,
except to the extent that the Agent consents otherwise.
(a) (Gearing ratio): It will ensure that Total Liabilities do not as at 30
-------------
June or 31 December in any year exceed 70% of Total Tangible Assets as at
that time.
(b) (Current ratio): It will ensure that Total Current Assets as at 30 June or
-------------
31 December in any year are not less than 125% of Total Current
Liabilities as at that time.
(c) (Interest cover): It will ensure that Interest Expense for the six month
--------------
period ended 30 June 1991 and then for each 12 month period ending 31
December and 30 June is not greater than 50% of Earnings for that period.
(d) (Overseas Subsidiary): It will ensure that the aggregate amount of all
-------------------
assets of the Subsidiaries of the Holding Company which are incorporated
outside Australia as shown by such financial statements or other evidence
required by the Agent at no time exceeds US$10,000,000.00 or its
equivalent.
5.6 Definitions
- ----------------
In Clause 5.5 the following terms have the following meanings.
(a) "Accounts" means at any time the then latest audited consolidated balance
--------
sheet and profit and loss account of the Holding Company and its
Subsidiaries or any other accounts prepared in the manner approved by the
Agent and provided to the Agent under this Agreement and in the case of
any interim accounts includes, where necessary to make a determination
over a 12 month period, so much of the last audited financial statements
as is necessary.
(b) "Auditors" means Horwath & Horwath or such other firm of accountants
--------
appointed by the Holding Company to audit its accounts with the approval
of the Agent.
(c) "Earnings" means, for any period of 12 months, the aggregate amount of
--------
consolidated pre-tax profit excluding extraordinary items plus Interest
Expense and depreciation and amortisation of goodwill, other intangibles
and non-cash items of the Holding Company and its Subsidiaries for that
period, as shown by the Accounts.
25
(d) "Interest Expense" means, for any period of 12 months, all interest and
----------------
amounts in the nature of interest or of similar effect to interest
(including amounts other than principal payable under this Agreement) paid
or payable by the Holding Company and its Subsidiaries in that period, as
shown in the Accounts including, without limitation:
(i) any dividend payable on any stock or share included as Financial
Indebtedness;
(ii) the non-capital component of rentals in respect of finance or
capitalised Lease obligations;
(iii) the face value of bills of exchange or other financial instruments
(but not reliquefication bills drawn under any Transaction
Document) drawn, issued, endorsed or accepted by the Holding
Company or any of its Subsidiaries less their net proceeds after
discount or issue and payment of any acceptance, endorsement,
underwriting or similar fee; and
(iv) all line, facility, letter of credit, guarantee and similar fees
and all fees and other amounts of a regular or recurring nature
payable in relation to Financial Indebtedness but not:
(A) unused line fees; and
(B) establishment, arrangement and other fees payable once only
on the initial provision of financial accommodation,
but excluding all transactions between any two of the Holding Company and
its Subsidiaries.
(e) "Tangible Assets" means all assets other than goodwill, patents,
---------------
trademarks, design rights, franchises, future Tax benefits, underwriting
and formation expenses and any other items which according to generally
accepted Australian accounting principles and practices are regarded as
intangible assets.
(f) "Total Current Assets" means at any time the aggregate amount of the
--------------------
current assets of the Holding Company and its Subsidiaries as shown by the
Accounts, adjusted as necessary to include:
(i) (new Subsidiaries): the aggregate amount of all current assets of
----------------
any corporation that has become a Subsidiary of the Holding Company
since the date of the Accounts,
after:
(ii) (former Subsidiaries): deducting the aggregate amount of all
-------------------
current assets of any Subsidiary that has ceased to be a Subsidiary
since the date of the Accounts to the extent they were reflected in
the Accounts; and
(iii) (further adjustments): making any further adjustments which in
-------------------
the reasonable opinion of the Auditors are appropriate to make a
proper determination of the total current assets of the Holding
Company and its Subsidiaries on a consolidated basis in accordance
with the Corporations Law and, to the extent not inconsistent,
generally accepted Australian accounting principles and practices
including without limitation any adjustment to include the
difference, if any, in the value between the cost of stock
manufactured by any Subsidiary of the Holding Company and the value
at which such stock is acquired by any other Subsidiary in the
ordinary course of business between such Subsidiaries.
26
(g) "Total Current Liabilities" means at any time the aggregate amount of all
-------------------------
current liabilities of the Holding Company and its Subsidiaries in respect
of Financial Indebtedness or otherwise (but excluding any Financial
Indebtedness (less interest or any amount in the nature of interest) under
any Facility Document as defined in the Agency Agreement), as shown by the
Accounts, adjusted as necessary to include (without limitation or
duplication):
(i) (maturing obligations): all Financial Indebtedness and other
--------------------
obligations of the Holding Company and its Subsidiaries payable
within 12 months of the date of determination (excluding any
Financial Indebtedness (less interest or any amount in the nature
of interest) under any Facility Document as defined in the Agency
Agreement);
(ii) (new subsidiaries): the aggregate amount of all current liabilities
----------------
of any corporation that has become a Subsidiary of the Holding
Company since the date of the Accounts;
after:
(iii) (former subsidiaries): deducting the aggregate amount of all
-------------------
current liabilities of any Subsidiary that has ceased to be a
Subsidiary since the date of the Accounts to the extent they were
reflected in the Accounts;
(iv) (eliminations): eliminating all inter-company balances between any
------------
two of the Holding Company and its Subsidiaries; and
(v) (further adjustments): making any further adjustments which in the
-------------------
reasonable opinion of the Auditors are appropriate to make a proper
determination of the total current liabilities of the Holding
Company and its Subsidiaries on a consolidated basis in accordance
with the Corporations Law and, to the extent not inconsistent,
generally accepted Australian accounting principles and practices.
(1) "Total Liabilities" means at any time the aggregate amount of all secured
-----------------
and unsecured direct liabilities excluding Contingent Liabilities of the
Holding Company and its Subsidiaries in respect of Financial Indebtedness
or otherwise, as shown by the Accounts, adjusted as necessary to include
(without limitation or duplication):
(i) (new subsidiaries): the aggregate amount of all secured and
----------------
unsecured liabilities of any corporation that has become a
Subsidiary of the Holding Company since the date of the Accounts;
(ii) (provisions): all provisions for estimated liabilities for Tax and
----------
long service leave and for dividends recommended, declared or
accrued but not paid since the date of the Accounts;
(iii) (new accommodation): the unrepaid principal (including the
-----------------
principal component of such liability in respect of any finance
Lease) of any liability in respect of Financial Indebtedness when
the proceeds or the benefits of the same have been received by the
Holding Company or any of its Subsidiaries since the date of the
Accounts, but excluding the amount of any such proceeds which have
been applied in reduction of any liabilities otherwise included in
the definition,
27
after:
(iv) (former subsidiaries): deducting the aggregate of all secured and
-------------------
unsecured liabilities of any corporation that has ceased to be a
Subsidiary since the date of the Accounts to the extent they were
reflected in the Accounts;
(v) (deferrals): deducting any provision for deferred income Tax
---------
appearing as a liability in the Accounts;
(vi) (eliminations): eliminating all inter-company balances between any
------------
two of the Holding Company and its Subsidiaries (including any
Subsidiary which has become one since the date of the Accounts);
and
(vii) (further adjustments): making any further adjustments which in the
-------------------
reasonable opinion of the Auditors are appropriate to make a proper
determination of the total liabilities of the Holding Company and
its Subsidiaries on a consolidated basis in accordance with the
Corporations Law and, to the extent not inconsistent, generally
accepted Australian accounting principles and practices.
(i) "Total Tangible Assets" means at any time the aggregate of the book values
---------------------
of all tangible assets of the Holding Company and its Subsidiaries, as
shown by the Accounts, adjusted as necessary to include (without
limitation or duplication):
(i) (new subsidiaries): the aggregate amount of all Tangible Assets of
----------------
any corporation that has become a Subsidiary of the Holding Company
since the date of the Accounts;
(ii) (new issues): the aggregate proceeds of any issue of shares or
----------
other securities by the Holding Company received since the date of
the Accounts;
(iii) (revaluations): the excess (if any) of the value of any asset of
------------
the Holding Company or a Subsidiary over the book value shown in
the Accounts for that asset as assessed by a qualified independent
valuer approved by the Agent;
after:
(iv) (provisions): deducting the amount shown in the Accounts of any
----------
income yet to mature at the date of adjustment and any provisions
for depreciation and for bad and doubtful debts appearing in the
books of the Holding a Company or any of its Subsidiaries;
(v) (revaluations): deducting any amount by which the book value of any
------------
asset is written up after the date of this Agreement in excess of
its cost, except where it has been written up in accordance with a
valuation by a qualified independent valuer approved by the Agent;
(vi) (former subsidiaries): deducting the aggregate amount (disclosed by
-------------------
the latest audited balance sheet of the relevant corporation) of
the book value of tangible assets of any corporation which has
ceased to be a Subsidiary of the Holding Company since the date of
the Accounts;
(vii) (eliminations): eliminating all inter-company balances between any
------------
two of the Holding Company and its Subsidiaries; and
28
(viii) (further adjustments): making any further adjustments which in the
--------------------
reasonable opinion of the Auditors are appropriate to make a
proper determination of the total tangible assets of the Holding
Company and its Subsidiaries on a consolidated basis in accordance
with the Corporations Law and, to the extent not inconsistent,
generally accepted Australian accounting principles and practices.
(j) "Contingent Liabilities" means at any time the aggregate amount of the
----------------------
contingent liabilities of the Holding Company and its Subsidiaries in
respect of Financial Indebtedness or otherwise, as shown by the Accounts,
but excluding any Guarantee, adjusted as necessary to include:
(i) (new subsidiaries): the aggregate amount of contingent liabilities
-----------------
of any corporation that has become a Subsidiary of the Holding
Company since the date of the Accounts,
after:
(ii) (former subsidiaries): deducting the aggregate of contingent
--------------------
liabilities of any Subsidiary that has ceased to be a Subsidiary
since the date of the Accounts to the extent they were reflected
in the Accounts; and
(iii) (further adjustments): making any further adjustments which in the
--------------------
reasonable opinion of the Auditors are appropriate to make a
proper determination of the contingent liabilities of the Holding
Company and its Subsidiaries on a consolidated basis in accordance
with the Corporations Law and, to the extent not inconsistent,
generally accepted Australian accounting principles and practices.
6. FURTHER ASSURANCES
- ----------------------
6.1 Further assurances
- -----------------------
Whenever the Agent requests a Mortgagor to do anything:
(a) for more satisfactorily mortgaging, assuring or securing the Mortgaged
Property to the Agent in a manner not inconsistent with this Deed or any
Collateral Security; or
(b) for aiding in the execution or exercise of any Power,
that Mortgagor shall do it immediately at its own cost. It may include (without
limitation) registering this Deed, the execution or registering of any other
document or agreement, the delivery of documents or evidence of title and the
execution and delivery of blank transfers.
6.2 Interest in land
- ----------------------
(a) Without limiting Clause 6.1, if requested by the Agent, upon acquiring any
fee simple interest in real property comprised in the Mortgaged Property a
Mortgagor shall execute a legal or statutory mortgage over that interest
securing the Secured Moneys in the form and substance required by the
Agent. The relevant Mortgagor shall use its best endeavours to register
that mortgage.
(b) The mortgage may not contain any obligation more onerous than in the
relevant Transaction Documents.
29
6.3 Title documents
- --------------------
Without limiting Clause 6.1. each Mortgagor will forthwith deliver to the Agent
all documents of title held or received by it to:
(a) any interest in real property; or
(b) any Marketable Securities other than:
(i) scrip for any shares it holds in a Subsidiary, Bromic Pty Ltd or
G.L.G. (NZ) Pty Ltd;
(ii) negotiable instruments in aggregate face value at any time of
A$50,000; and
(iii) a Marketable Security, the subject of a notice from the Agent to
the relevant Mortgagor,
which it may retain, unless delivery is specifically requested by the
Agent at any time.
7. EVENTS OF DEFAULT
- ---------------------
7.1 Events of Default
- ----------------------
Each of the following is an Event of Default (whether or not it is in the
control of a Mortgagor).
(a) (Obligations under Transaction Documents): A Mortgagor or any Relevant
----------------------------------------
Company fails:
(i) to pay when due or within any applicable grace period any amount
payable by it under any Transaction Document;
(ii) to comply with any of its other obligations under any Transaction
Document and, if that failure can be remedied in that period, does
not remedy the failure within a further 14 days; or
(iii) to satisfy within the stipulated time any condition subject to
which the Agent or a Mortgagee has waived compliance with any
condition precedent in any Transaction Document.
(b) (Misrepresentation): Any representation, warranty or statement by or on
-----------------
behalf of any Relevant Company in any Transaction Document, or in any
document provided under or in connection with any Transaction Document, is
not true or is misleading in any material respect when made or repeated.
(c) (Cross default):
-------------
(i) Any Financial Indebtedness of any Relevant Company aggregating to
at least $500,000 or its equivalent:
(A) is not paid when due (or within any applicable grace period);
or
(B) becomes due and payable or capable of being declared due and
payable before its stated maturity or expiry;
(ii) any facility or obligation granted or owed by any person to any
Relevant Company to provide financial accommodation or to acquire
or underwrite Financial Indebtedness aggregating to at least
A$500,000 or its equivalent is prematurely terminated; or
30
(iii) an event of default as defined in any other Transaction Document
(other than an event of default disclosed in writing to the Agent
prior to the date of this Deed) occurs and is not remedied or
waived within 3 Business Days.
For the purposes of this paragraph, if a person is required to provide
cash cover for Financial Indebtedness it will be deemed to be due and
payable.
(d) (Winding up, arrangements, insolvency etc.):
-----------------------------------------
(i) Except for the purposes of a solvent reconstruction or
amalgamation previously approved by the Agent:
(A) an application (other than a frivolous or vexatious
application) or an order is made, proceedings are
commenced, a resolution is passed or proposed in a notice
of meeting or an application to a court or other steps are
taken for:
(I) the winding up, dissolution, official management or
administration of any Relevant Company; or
(II) any Relevant Company entering into any arrangement,
compromise or composition with or assignment for the
benefit of its creditors or any class of them; or
(B) any Relevant Company ceases or suspends the conduct of all
or a substantial part of a Core Business or disposes of or
threatens to dispose of a substantial part of its assets or
threatens to do so.
(ii) any Relevant Company is, or is deemed under any applicable
legislation to be, unable to pay its debts when they fall due
(other than as a result of a failure to pay a debt or claim the
subject of a good faith dispute) or stops or suspends or
threatens to stop or suspend payment of all or any class of its
debts.
(e) (Enforcement against assets): With respect to any of the assets and
--------------------------
undertaking of any Relevant Company:
(i) a receiver, receiver and manager, administrative receiver or
similar officer is appointed;
(ii) any Security Interest becomes enforceable or is enforced; or
(iii) a distress, attachment or other execution for an amount in excess
of A$50,000 is levied or enforced or applied for.
(f) (Reduction of capital): Without the prior consent of the Agent (which
--------------------
shall be withheld, if, without limitation, in the opinion of the Agent
such action will reduce the value to the Mortgagees of this Deed or any
Collateral Security), any Relevant Company:
(i) reduces its capital (except by the redemption of redeemable
shares);
(ii) passes a resolution to reduce its capital or a resolution under
section 188(2) or 205(10) of the Corporations Law or any
equivalent provision, or calls a meeting to consider such a
resolution; or
31
(iii) applies to a court to call any such meeting or to sanction any
such resolution or reduction.
(g) (Inspector): An inspector is appointed under any companies legislation to
---------
investigate all or any part of the affairs of any Relevant Company in
circumstances material to its financial condition.
(h) (Analogous process): Anything which is analogous to anything referred to
-----------------
in paragraphs (d) to (g) inclusive, or which has substantially similar
effects with respect to any Relevant Company occurs under any applicable
law.
(i) (Vitiation of Transaction Documents):
----------------------------------
(i) All or any part of any Transaction Document is terminated (other
than with the consent of all parties to the document, as a result of
due performance or as a result of closing out a treasury contract)
or is or becomes void, illegal, invalid, unenforceable or of limited
force and effect;
(ii) any party becomes entitled to terminate, rescind or avoid all or any
part of any Transaction Document; or
(iii) any Relevant Company alleges or claims that an event described in
sub-paragraph (i) has occurred or that it is entitled as described
in sub-paragraph (ii).
(j) (Amendment of articles): The memorandum or articles of association or
---------------------
other constituent documents of any Relevant Company are amended in a
material respect without the prior written consent of the Agent (which will
not be withheld unreasonably).
(k) (Revocation of Authorisation): Any Authorisation which is material to the
---------------------------
performance by any Relevant Company of any Transaction Document, or to the
validity and enforceability of any Transaction Document or to the security
of the Agent, is repealed, revoked or terminated or expires, or is modified
or amended in a manner reasonably unacceptable to the Agent, and is not
replaced by another Authorisation acceptable to the Agent.
(l) (Material adverse change): Any other event or series of events, whether
-----------------------
related or not, occurs (including, without limitation, any material adverse
change in the business, assets or financial condition of any Relevant
Company) which in the opinion of the Agent may adversely affect the
security of the Agent or the ability or willingness of any Relevant Company
to comply with any of its obligations under any Transaction Document.
(m) (Control of Mortgagor and Borrower):
---------------------------------
(i) A Mortgagor or a Borrower becomes a Subsidiary of another person;
(ii) any person, being entitled (within the meaning of Section 609 of the
Corporations Law to less than 20% of the shares or stock (as to
votes or paid up capital) of a Mortgagor or a Borrower at the date
of this Deed becomes entitled to 20% or more of the shares or stock
(as to votes or paid up value) of a Borrower or a Mortgagor (as the
case may be);
32
(iii) any person, being entitled (as so defined) to less than 50% of the
voting shares or stock (as to votes or paid up capital) of a
Borrower or a Mortgagor at the date of this Deed becomes entitled to
more than 50% of the voting shares or stock (as to votes or paid up
capital) of a Borrower or a Mortagor (as the case may be);
(iv) in the reasonable opinion of the Agent there is a material change
in:
(A) the ownership or control of a Mortgagor or a Borrower; or
(B) the management of the Charging Group Members taken as a whole.
(n) (Compulsory acquisition):
----------------------
(i) All or any part of the Mortgaged Property or other assets of any
Relevant Company, with a value in aggregate in excess of A$50,0O0,
is compulsorily acquired by or by order of any Governmental Agency
or under any law without the Relevant Company receiving assets of
equivalent value;
(ii) any Governmental Agency orders the sale, vesting or divesting of all
or any part of the Mortgaged Property, or other assets of any
Relevant Company, with a value in aggregate in excess of A$50,000,
without the Relevant Company receiving assets of equivalent value;
or
(iii) any Governmental Agency takes any step for the purpose of any of the
above or proposes or threatens to do any of the above.
(o) (Governmental interference): Any law or anything done by any Governmental
-------------------------
Agency wholly or partially to a material extent renders illegal, prevents
or restricts the performance or effectiveness of any Transaction Document
or otherwise has a Material Adverse Effect.
(p) (Share buy-backs): Without the prior consent of the Agent, a Relevant
---------------
Company:
(i) effects a buy back (as defined in the Corporations Law) of any of
its shares (including, without limitation, a buy-back, an employee-
share purchase or an odd-lot purchase (all of which are defined in
the Corporations Law));
(ii) passes a resolution to buy back (as defined in the Corporations Law)
any of its shares (including, without limitation, a buy-back, an
employee-share purchase or an odd-lot purchase (all of which are
defined in the Corporations Law)) or passes a resolution under
Section 206GC, Section 206HB, Section 206JA or Section 206JB of the
Corporations Law or any equivalent provision, or calls a meeting to
consider such a resolution; or
(iii) applies to a court to call any such meeting or to sanction any such
resolution or reduction.
7.2 Consequences
- -----------------
In addition to any other rights provided by this Deed or any other Transaction
Document, upon the occurrence of an Event of Default, and at any time
subsequently, the Agent may and shall if so directed by the Mortgagees by notice
to the Mortgagors:
33
(a) declare the Secured Moneys immediately payable; and/or
(b) terminate any obligation of the Agent or a Mortgagee under the Transaction
Documents; and/or
(c) at the joint and several cost of the Borrowers appoint a firm of
independent accountants or other experts to review and report to the Agent
and the Mortgagees on the affairs, financial condition and business of any
Mortgagor at which time the Mortgagors shall ensure that such party is
given access to all records and information of a Mortgagor as it shall
from time to time require.
8. APPOINTMENT OF RECEIVER
- ----------------------------
8.1 Appointment
- ----------------
To the extent permitted by law, at any time after an Event of Default (whether
or not it is continuing) the Agent or any Authorised Officer of the Agent may:
(a) appoint any person or any two or more persons jointly and/or severally to
be a receiver or receiver and manager of all or any of the Mortgaged
Property;
(b) remove any Receiver;
(c) appoint another Receiver in addition to or in place of any Receiver; and
(d) fix the remuneration of any Receiver.
8.2 Agent of Mortgagors
- ------------------------
Subject to Clause 8.4, every Receiver will be the agent of the relevant
Mortgagor. The relevant Mortgagor alone will be responsible for his acts and
defaults.
8.3 Receiver's powers
- ----------------------
In addition to any powers granted by law, and except to the extent specifically
excluded by the terms of his appointment, every Receiver will have power to
do anything in respect of the Mortgaged Property that a Mortgagor could do,
including (without limitation):
(a) (to take possession and collect): to take possession of, collect, get in
------------------------------
and manage the Mortgaged Property;
(b) (to Lease): to Lease any of the Mortgaged Property for any term (whether or
--------
not the Receiver has taken possession);
(c) (to carry on business): to carry on or concur in carrying on any business;
--------------------
(d) (to acquire any asset): to acquire in any manner any asset (including
--------------------
without limitation to take it on Lease), after that acquisition it will be
included in the Mortgaged Property;
(e) (to maintain and improve the Mortgaged Property): to do anything for the
----------------------------------------------
maintenance, protection or improvement of any of the Mortgaged Property or
for obtaining income or returns from any of the Mortgaged Property
(including, without limitation, by development, sub-division, construction,
alteration, or repair of any property or by pulling down, dismantling or
scrapping any property);
34
(f) (to raise money):
--------------
(i) to borrow or raise any money from the Agent or any other person
approved by the Agent; and
(ii) to grant any Security Interest over any of the Mortgaged Property to
secure such money, such Security Interest may rank in priority to or
equally with or after the security created by this Deed, it may be
given in the name of a Mortgagor or otherwise;
(g) (to sell):
-------
(i) to sell any of the Mortgaged Property (whether or not the Receiver
has taken possession); and
(ii) without limitation any sale may be made:
(A) by public auction, private treaty, or tender;
(B) for cash or on credit;
(C) in one lot or in parcels;
(D) either with or without special conditions or stipulations as to
title or time or mode of payment of purchase money or
otherwise;
(E) with power to allow the whole or any part of the purchase money
to be deferred (whether with or without any security); and
(F) whether or not in conjunction with the sale of any property by
any person;
(h) (options): to grant or take put or call options;
-------
(i) (to sever fixtures): to sever fixtures;
-----------------
(j) (to employ): to employ or discharge any person as employee, contractor,
---------
agent, professional adviser, consultant or auctioneer for any purpose;
(k) (to compromise): to make or accept any arrangement or compromise;
-------------
(1) (to give receipts): to give receipts for all moneys and other assets which
----------------
may come into the hands of the Receiver; and
(m) (to perform and enforce agreements):
---------------------------------
(i) to perform or enforce;
(ii) to exercise or refrain from exercising a Mortgagor's rights and
powers under; or
(iii) to obtain the benefit in other ways of,
any documents or agreements or rights which form part of the Mortgaged
Property and any documents or agreements entered into in exercise of any
Power;
(n) (to vary and terminate agreements): to vary, rescind or terminate any
--------------------------------
document or agreement (including without limitation to surrender or accent
the surrender of Leases);
35
(o) (to take insolvency proceedings): to make debtors bankrupt and to wind up
------------------------------
companies and to do any thing in relation to any bankruptcy, winding up
official management, scheme of arrangement or receivership or other
administration (including without limitation to attend and vote at meetings
of creditors and appoint proxies for such meetings);
(p) (to take proceedings): to commence, defend, prosecute, settle, discontinue
-------------------
and compromise proceedings in the name of a Mortgagor or otherwise;
(q) (to execute documents): to enter into and execute documents or agreements
--------------------
on behalf of itself or a Mortgagor for any of the purposes of this Deed
(including, without limitation, to sign, accept or endorse cheques,
promissory notes and bills of exchange);
(r) (to operate bank accounts): to operate any bank account comprising part of
------------------------
the Mortgaged Property and to open and operate any further bank account;
(s) (to surrender Mortgaged Property): to surrender, release or transfer any of
-------------------------------
the Mortgaged Property;
(t) (to exchange Mortgaged Property): to exchange with any person any of the
------------------------------
Mortgaged Property for other property;
(u) (to promote companies): to promote the formation of companies with a view
--------------------
to purchasing all or any of the Mortgaged Property or assuming a
obligations of the Mortgagor or otherwise;
(v) (to delegate): to delegate to any person approved by the Agent any of the
-----------
powers conferred upon the Receiver (including delegation);
(w) (to have access): to have access to and make use of the premises, plant,
--------------
equipment and accounting and other services of a Mortgagor and the services
of its staff;
(x) (to vote): to exercise any voting or other rights or powers in respect of
-------
any of the Mortgaged Property and to do anything in relation to Marketable
Securities;
(y) (to make calls): to make calls on the members of a Mortgagor in respect of
-------------
any Unpaid Capital;
(z) (to insure): to take out insurance;
---------
(aa) (insurance claims): to make, enforce, compromise and settle all claims in
----------------
respect of insurance; and
(bb) (incidental power): to do anything incidental to the exercise of any other
----------------
Power.
All of the above paragraphs are to be construed independently. None limits the
generality of any other.
Any dealing under any such power will be on the terms and conditions the
Receiver thinks fit.
8.4 Receiver appointed after commencement of winding up
- --------------------------------------------------------
The power to appoint a Receiver may be exercised notwithstanding that:
(a) an order may have been made or a resolution may have been passed for the
winding up of a Mortgagor; and
36
(b) a receiver appointed in those circumstances may not, or may not in some
respects, act as the agent of a Mortgagor.
8.5 Powers exercisable by the Agent
- ------------------------------------
Whether or not a Receiver has been appointed, to the extent permitted by law the
Agent may exercise any Power of a Receiver at any time after an Event of Default
(whether or not it is continuing) in addition to any Power of the Agent and
without giving notice. It may exercise those Powers and its Powers without
taking possession or being liable as mortgagee in possession.
8.6 Withdrawal
- ---------------
The Agent may at any time give up possession of the Mortgaged Property and may
at any time withdraw any receivership.
9. POWER OF ATTORNEY
- ----------------------
9.1 For valuable consideration and by way of security each Mortgagor
- ------
irrevocably appoints each Authorised Officer of the Agent severally its
attorney to do anything which:
(a) that Mortgagor is obliged to do under or in relation to any Transaction
Document; or
(b) the Agent or any Receiver is authorised or empowered to do under any
Transaction Document or any law but it may only do something at the times
that the Agent or a Receiver (if a Receiver had been appointed) would have
been able to do it.
9.2 Without limitation, the Attorney may:
- ------
(a) at any time, do anything necessary or considered expedient by the Agent or
the Attorney for securing, preserving or perfecting the security contained
in this Deed (including, without limitation, anything under Clause 10 or
11) and for this purpose he may execute legal mortgages, transfers,
assignments and other assurances in favour of the Agent of any of the
Mortgaged Property; and
(b) for any purpose from time to time delegate his powers (including
delegation).
9.3 No Attorney appointed under this Deed may act, nor has power to act,
- ------
inconsistently with this Deed or any other Transaction Document.
10. COMPLETION OF BLANK SECURITIES
- -----------------------------------
The Agent, any Authorised Officer of the Agent, any Receiver or any Attorney may
complete any document which at any time is executed by or on behalf of a
Mortgagor and deposited with the Agent under or as collateral security to this
Deed or any Collateral Security. It may complete it in favour of the Mortgagees,
the Agent on behalf of the Mortgagees, any appointee of the Mortgagee or any
purchaser.
11. PERFORMANCE OF MORTGAGORS' OBLIGATIONS
- -------------------------------------------
If a Mortgagor at any time fails duly to perform any obligation in any
Transaction Document the Agent may do anything which in its opinion is necessary
or expedient to make good or to attempt to make good that failure to its
satisfaction.
37
12. STATUTORY POWERS
- ---------------------
12.1 Powers in augmentation
- ---------------------------
The powers conferred on a mortgagee by any law:
(a) are in augmentation of the powers conferred by this Deed or any Collateral
Security;
(b) (to the extent permitted by law) may be exercised by the Agent immediately
upon the occurrence of an Event of Default; and
(c) are excluded or varied only so far as they are inconsistent with the
express terms of this Deed or any Collateral Security.
12.2 Leasing
- ------------
Each Mortgagor shall furnish the Agent at the time the Holding Company furnishes
the annual accounts under Clause 5.2(a)(i) with details of any Lease it has
surrendered or had surrendered or become entitled to surrender during the
immediately preceding financial year. No Mortgagor shall exercise any power of
Leasing conferred on a Mortgagor by or under any law except as expressly
permitted or contemplated in any Transaction Document.
12.3 Notice not required
- ------------------------
To the extent permitted by law each Mortgagor dispenses with any notice or lapse
of time required by any law before enforcing this Deed or any Collateral
Security or exercising any Power and agrees that:
(a) neither the Agent nor any Mortgagee will be required to give notice to any
person before any such enforcement or exercise; and
(b) any law requiring the giving of any notice or the compliance with any
procedure or the lapse of time before any such enforcement or exercise is
excluded.
13. APPLICATION OF MONEYS RECEIVED
- -----------------------------------
13.1 Order
- ----------
Subject to any law which applies notwithstanding any agreement to the contrary,
all moneys received by any Receiver, any Attorney or Mortgagee under or by
virtue of this Deed shall be applied in the manner and order determined by the
Agent or, if the Agent does not make any such determination, in the following
order:
(a) First: all costs, charges and expenses of any Mortgagee or any Receiver or
Attorney which are incurred in or are incidental to the exercise or
performance or attempted exercise or performance of any Power or otherwise
in relation to this Deed or any Collateral Security.
(b) Second: any other outgoings which the Receiver, Attorney or the Agent
thinks fit to pay.
(c) Third: the Receiver's remuneration.
(d) Fourth: to each holder of a Security Interest of which the Agent is aware
and which has priority over this Deed in relation to the relevant Mortgaged
Property, to the extent, and in order, of priority.
38
(e) Fifth: to the Agent for the account of the Mortgagees towards satisfaction
of the Secured Moneys.
(f) Sixth: to each holder of a Security Interest of which the Agent is aware
and which ranks after this Deed in relation to the relevant Mortgaged
Property, to the extent, and in order, of priority.
(g) Seventh: the surplus (if any) belongs to the relevant Mortgagor:
(i) the surplus will not carry interest; and
(ii) upon paying the surplus to the credit of an account in the name of
that Mortgagor with any bank carrying on business within the
Commonwealth of Australia, the Receiver, Mortgagee or Attorney (as
the case may be) will be under no further liability in respect of
it.
13.2 Moneys actually received
- -----------------------------
In applying any moneys towards satisfaction of the Secured Moneys a Mortgagor is
to be credited only with the money available for that purpose which is actually
received by the relevant Mortgagee. The credit will date from the time of
receipt.
13.3 Amounts contingently due
- -----------------------------
If, at the time of a distribution of an amount under Clause 13.1, any of the
Secured Moneys is contingently owing to any Mortgagee, the Agent may retain any
of that amount. If it does, it shall place the amount retained on short term
interest bearing deposit until the relevant Secured Moneys become actually due
or cease to be contingently owing, and the Agent shall then:
(a) pay that Mortgagee itself the amount which does become actually due to it;
and
(b) apply the balance of the amount retained (together with interest earned on
the deposit) in accordance with Clause 13.1.
13.4 Notice of subsequent Security Interests
- --------------------------------------------
(a) If any Mortgagee receives actual or constructive notice of any subsequent
Security Interest affecting any of the Mortgaged Property that Mortgagee
may open a separate account in the name of the relevant Mortgagor or the
Borrower in its books.
(b) If the Mortgagee does not open such a new account it will be treated as if
it had done so at the time it received actual or constructive notice of the
Security Interest.
(c) From the time the new account is opened or is deemed to be opened:
(i) all advances and accommodation made available by the Mortgagee to
that Mortgagor or the Borrower;
(ii) all payments and repayments made by that Mortgagor or the Borrower
to the Mortgagee, and
(iii) moneys to be applied towards the Secured Moneys under Clause
13.1(e),
39
will be or be deemed to be debited or credited, as appropriate, to the new
account. Payments, repayments and other moneys will only be applied in
reduction of other Secured Moneys if, and to the extent that, there is no
debit balance in that account.
13.5 Conversion of currencies on application
- --------------------------------------------
For the purposes of making an application under Clause 13.1 any Mortgagee, any
Receiver or any Attorney may purchase one currency with another, whether or not
through an intermediate currency, whether spot or forward, in the manner and at
the time it thinks fit.
14. OTHER SECURITY INTERESTS OVER MORTGAGED PROPERTY
- -----------------------------------------------------
(a) For all the purposes of this Deed any Mortgagee and any Receiver or
Attorney may rely on the certificate of a holder of another Security
Interest affecting or purporting to affect the Mortgaged Property as to the
amount and property secured by the Security Interest.
(b) The Agent may at any time pay the amount certified by the holder of a prior
ranking Security Interest or purported prior ranking Security Interest as
necessary to discharge it. From the date of payment that amount will be
part of the Secured Moneys and each Mortgagor will indemnify the Agent on
demand against that amount, whether or not that Security Interest or
purported Security Interest was valid or prior ranking or the property or
moneys stated in the certificate were secured by it.
15. PROTECTION OF AGENT, RECEIVER AND ATTORNEY
- -----------------------------------------------
Subject to any law which applies notwithstanding any agreement to the contrary,
no Mortgagee nor any Receiver or Attorney will be liable in respect of:
(a) any act, omission, delay, negligence or breach of duty in the exercise or
non-exercise of any Power; nor
(b) for any loss (including consequential loss) which results,
except where it arises from fraud or wilful default on the part of the Agent,
Receiver or Attorney.
16. PROTECTION OF THIRD PARTIES
- --------------------------------
16.1 No enquiry
- ---------------
No party to any Dealing (as defined below) and no person asked to register a
Dealing:
(a) is bound to enquire:
(i) as to whether an Event of Default has occurred or whether this Deed
has become enforceable;
(ii) as to whether a person who is or is purported to be a Receiver or
Attorney is duly appointed;
(iii) as to the amount of Secured Moneys and as to whether Secured Moneys
are due and payable; or
(iv) in any other way as to the propriety or regularity of the Dealing;
or
40
(b) is affected by express notice that the Dealing is unnecessary or improper.
Notwithstanding any irregularity or impropriety in any Dealing, as regards the
protection of any party to the Dealing or a person registering a Dealing, it
will be deemed to be authorised by this Deed and will be valid accordingly.
In this Clause a "Dealing" is:
(a) any payment or delivery or handing over of an asset to; or
(b) any acquisition, incurring of Financial Indebtedness, receipt, sale, Lease,
disposal or other dealing, by
the Agent or any Receiver or Attorney, or person who is purported to be a
Receiver or Attorney.
16.2 Receipt
- ------------
The receipt of any Authorised Officer of the Agent or any Attorney or Receiver
(or person who is purported to be a Receiver or Attorney) for any moneys or
assets payable to or receivable or received by it exonerates discharges the
person paying those moneys or handing over that asset from being concerned to
see to their application, or being liable or accountable for their loss or
misapplication.
17. EXPENSES,INDEMNITY
- -----------------------
17.1 Expenses
- -------------
On demand each Mortgagor shall reimburse the Agent for the expenses of the Agent
in relation to:
(a) the preparation, execution and completion of the Transaction Documents and
any subsequent consent, approval, waiver or amendment; and.
(b) (i) the actual or contemplated enforcement of the Transaction Documents,
or the actual or contemplated exercise, preservation or consideration
of any right or powers under, the Transaction Documents; and
(ii) any enquiry by a Governmental Agency converning a transaction or
activity for which or in connection with which finance or funds
raised under a Transaction Document are used or provided,
including without limitation any expenses incurred in retaining consultants
to evaluate matters of material concern to the Agent and administrative
costs including any time of its executives (such time and costs to be
charged at reasonable rates),
and including in each case reasonable legal costs and expenses on a full
indemnity basis before an Event of Default has occurred, and after an Event of
Default has occurred, including all legal costs and expenses on a full indemnity
basis.
17.2 Indemnity
- --------------
On demand, each Mortgagor shall indemnify the Agent and each Receiver and
Attorney against all losses, costs, charges, expenses, liabilities, outgoings
and payments which the Agent or any Receiver or Attorney pays, is liable to pay
or sustains in any way:
41
(a) in relation to the Mortgaged Property or the exercise or attempted exercise
of any Power; or
(b) as a consequence of the occurence of an Event of Default or Potential Event
of Default,
except where it arises from the fraud or wilful default on the part of the
Agent, Receiver or Attorney.
17.3 Amounts in foreign currency
- --------------------------------
Where an amount to be reimbursed or indemnified against is denominated in
another currency, if the Agent so requests, each Mortgagor will reimburse or
indemnify it against the amount of Australian dollars which the Agent certifies
that it used to buy the relevant amount of the other currency in accordance with
its normal procedures. If the Agent does not so request, each Mortgagor will
reimburse or indemnify it in the relevant currency.
18. FOREIGN CURRENCY INDEMNITY
- -------------------------------
Whenever:
(a) any amount payable by a Mortgagor is received or recovered by the Agent or
a Mortgagee in a currency (the "Payment Currency") other than the currency
in which payment was to be made (the "Relevant Currency") for any reason
(including without limitation as a result of any judgment or order, or the
Liquidation of that Mortgagor or any proof or claim in relation to that
Liquidation); and
(b) the amount actually received by the Agent or a Mortgagee in accordance with
its normal practice by converting the Payment Currency into the Relevant
Currency is less than the relevant amount in the Relevant Currency,
then as an independent obligation that Mortgagor shall indemnify the Agent or a
Mortgagee, as appropriate against the deficiency upon demand.
19. STAMP DUTIES
- -----------------
19.1 Each Mortgagor shall pay all stamp, transaction, registration and similar
- -------
Taxes (including fines and penalties, other than arising from the wilful default
of the Agent) other than Excluded Taxes which may be payable or determined to be
payable in relation to the execution, delivery, performance or enforcement of
any Transaction Document or any payment or receipt or any other transaction
contemplated by any Transaction Document.
19.2 Such Taxes include any financial institutions duty, debits tax or other
- ------
Taxes payable by return and any such Taxes passed on to the Agent by any bank or
financial institution.
19.3 Each Mortgagor shall indemnify the Agent on demand against any liabilities
- ------
resulting from delay or omission to pay such Taxes.
20. INTEREST ON OVERDUE AMOUNTS
- --------------------------------
20.1 Interest
- -------------
On demand by the Agent each Mortgagor shall pay interest on any of the Secured
Moneys which are due and payable by it and unpaid (including without limitation
interest payable under this Clause).
42
20.2 Rate
- ---------
Unless any Transaction Document provides otherwise, interest accrues from day to
day from the due date (or in the case of amounts to be reimbursed or indemnified
against under Clause 17 or 18, from the date of disbursement or loss) up to the
date of actual payment, before and (as a separate and independent obligation)
after judgment, in the currency of the relevant amount at the rate which is the
higher of:
(a) the rate (if any) applicable to the Secured Moneys under any Transaction
Document immediately prior to the due date; and
(b) the aggregate of 2% per annum and:
(i) if the amount is denominated in Australian dollars, the indicator
lending rate of the Agent in respect of loans of A$100,000 and over
from time to time calculated on a daily basis and a year of 365 days;
or
(ii) if the amount is denominated in any other currency, the rate which is
determined by the Agent to be:
(A) the arithmetic mean of the rates displayed on the Reuters screen
LIBO page (in the case of US dollars or the equivalent page for
other currencies) for the making of deposits in the currency
concerned for funding periods not exceeding three months selected
by the Agent from time to time and for the value date which is the
date of default, disbursement or loss as the case may be (or, as
appropriate, the expiry of any relevant funding period referred to
above). That arithmetic mean will be rounded upwards, if
necessary, to the nearest 1/16th of one percent; or
(B) if no such rates are available, the Agent's cost of funds in that
currency from time to time.
If no earlier demand is made for its payment, accrued interest under this Clause
will be deemed to be demanded at the end of each calendar quarter (and will
start to accrue interest accordingly).
20.3 Foreign currency basis
- ---------------------------
Interest on amounts other than Australian dollars or Sterling will be calculated
on a daily basis and a year of 360 days.
21. CERTIFICATE AS TO AMOUNT OF SECURED MONEYS
- -----------------------------------------------
A certificate signed by any Authorised Officer of the Agent will be conclusive
evidence any against any Mortgagor, in the absence of manifest error:
(a) as to the amount of Secured Moneys stated in that certificate; and
(b) that a document specified in that certificate is a Transaction Document.
22. SURVIVAL OF REPRESENTATIONS AND INDEMNITIES
- ------------------------------------------------
22.1 All representations and warranties in any Transaction Document will
- ------
survive the execution and delivery of the Transaction Documents and the
provision of advances and accommodation.
43
22.2 Each indemnity in any Transaction Document:
- ------
(a) is a continuing obligation;
(b) is a separate and independent obligation of the party giving the indemnity
from its other obligations under the Transaction Documents; and
(c) will survive termination or discharge of the relevant Transaction Document.
23. CONTINUING SECURITY
- -----------------------
This Deed and each Collateral Security is a continuing security notwithstanding
any settlement of account, intervening payment or anything whatsoever until a
final discharge of this Deed and each Collateral Security has been given to each
Mortgagor.
24. OTHER SECURITIES
- ---------------------
No Power and nothing in this Deed or any Collateral Security merges in, or in
any other way prejudicially affects or is prejudicially affected by:
(a) any other Security Interest; or
(b) any judgment, right or remedy against any person,
which the Agent or any person claiming through the Agent may have at any
time.
25. WAIVERS, REMEDIES CUMULATIVE
- ---------------------------------
25.1 No failure to exercise and no delay in exercising any Power operates as a
- ------
waiver. Nor does any single or partial exercise of any Power preclude any other
or further exercise of that Power, or the exercise of any other Power.
25.2 The rights, powers and remedies provided to the Agent in this Deed are
- ------
cumulative and not exclusive of any rights, powers or remedies provided by law.
26. CONSENTS AND OPINION
- -------------------------
Except where expressly stated the Agent may give or withhold, or give
conditionally, approvals and consents be satisfied or unsatisfied, and form
opinions, at its absolute discretion.
27. SEVERABILITY OF PROVISIONS
- -------------------------------
(a) Any provision of this Deed or any Collateral Security which is prohibited
or unenforceable in any jurisdiction will be ineffective as to that
jurisdiction to the extent of the prohibition or unenforceability. That
will not invalidate the remaining provisions of this Deed or any Collateral
Security nor affect the validity or enforceability of that provision in any
other jurisdiction.
(b) Without limiting the generality of paragraph (a):
(i) the definition of Secured Moneys does not include any obligation so
long as and to the extent that the inclusion of that obligation would
avoid or invalidate or render ineffective Clauses 2 and 3 or the
security constituted Deed; and
44
(ii) the definition of the Mortgaged Property does not include any property
so long as and to the extent the inclusion of that property would
invalidate or avoid or render ineffective the security constituted by
this Deed,
but each Mortgagor shall use its best endeavours to satisfy any condition
or obtain any consent which may be necessary to include such obligation or
property validly under this Deed.
28. MORATORIUM LEGISLATION
- ---------------------------
To the full extent permitted by law all legislation which at any time directly
or indirectly:
(a) lessens; varies or affects in favour of a Mortgagor any obligation under
this Deed or any Collateral Security; or
(b) delays; prevents or prejudicially affects the exercise of any Power,
is excluded from this Deed and any Collateral Security.
29. ASSIGNMENTS
- -----------------
Subject to the other Transaction Documents, any Mortgagee may assign its rights
under this Deed and each Collateral Security. If this Deed is assigned, the
Secured Moneys will include all actual and contingent liability of each
Mortgagor and the Borrower to the assignee, whether or not it was incurred
before the assignment or in contemplation of it.
30. NOTICES
- ------------
All notices, requests, demands, consents, approvals, agreements or other
communications to or by a party to this Deed shall:
(a) be in writing;
(b) be signed by an Authorised Officer of the sender; and
(c) be deemed to be duly given or made:
(i) (in the case of delivery in person or by post, facsimile transmission
or cable) when delivered, received or left at the address of the
recipient shown in this Deed or to any other address it may have
notified the sender; or
(ii) (in the case of telex) on receipt by the sender of the answerback code
of the recipient at the end of transmission,
but if delivery or receipt is on a day on which business is not generally
carried on in the place to which such communication is sent or is later
than 4 p.m. (local time), it will be deemed to have been duly given or made
at the commencement of business on the next such day or which business is
generally carried on in that place.
31. AUTHORISED OFFICERS
- ------------------------
Each Mortgagor irrevocably authorises the Agent to rely on a certificate by any
person purporting to be a director or secretary of that Mortgagor as to the
identity and signatures of its Authorised Officers. The relevant Mortgagor
warrants that those persons have been authorised to give notices and
communications under or in connection with the Transaction Documents.
45
32. GOVERNING LAW AND JURISDICTION
- -----------------------------------
This Deed is governed by the laws of New South Wales. Each Mortgagor submits to
the non-exclusive jurisdiction of its courts.
33. THIRD PARTY PROVISIONS
- ---------------------------
33.1 Security not to be affected
- --------------------------------
None of this Deed, any Collateral Security, any Power nor the obligations of any
Mortgagor under this Deed will be affected by anything which but for this
provision might operate to release, prejudicially affect or discharge them or in
any way exonerate a Mortgagor from any of its obligations including, without
limitation:
(a) the grant to any person of any time, waiver or other indulgence, or the
discharge or release of any person;
(b) any transaction or arrangement that may take place between any Mortgagee
and person;
(c) the Liquidation of any person;
(d) any Mortgagee becoming a party to or bound by any compromise, moratorium,
assignment of property, scheme of arrangement, composition of debts or
scheme of reconstruction by or relating to any person;
(e) any Mortgagee exercising or delaying or refraining from exercising any
other security or any of the rights, powers or remedies conferred on it by
law or by any Transaction Document or by any other document or agreement
with any person;
(f) the amendment, variation, novation, replacement, rescission, invalidity,
extinguishment, repudiation, avoidance, unenforceability, frustration,
failure, expiry, termination, loss, release, discharge, abandonment,
assignment or transfer either in whole or in part and either with or
without consideration of any Transaction Document, or of any other
Guarantee, Security Interest or other document or agreement now or in the
future held by a Mortgagee from any person or of any right, obligation,
power or remedy;
(g) the taking or perfection of or failure to take or perfect any Security
Interest or Guarantee;
(h) the failure by any Relevant Company or any Mortgagee to notify a Mortgagor
of any default by any Relevant Company under any Transaction Document or
any other agreement with any Mortgagee;
(i) any Mortgagee obtaining a judgment against any person for the payment of
any Secured Moneys;
(j) any legal limitation, disability, incapacity or other circumstances
relating to any person; or
(k) any change in the members or constitution of any partnership or of any
person;
(l) any Guarantee or Security Interest to secure all or part of the Secured
Moneys not being valid or executed by or binding upon any person.
46
33.2 Principal and independent obligation
- -----------------------------------------
This Deed and each Collateral Security is a principal and independent obligation
and except for stamp duty purposes it is not to be treated as ancillary or
collateral to any other Security Interest, right or obligation.
33.3 No marshalling
- -------------------
No Mortgagee shall be under any obligation to marshal or appropriate in favour
of a Mortgagor, or to exercise, apply or recover:
(a) any Security Interest or Guarantee (including, without limitation, any
Transaction Document) held by that Mortgagee at any time; or
(b) any of the funds or assets that Mortgagee may be entitled to receive or
have a claim upon.
33.4 No competition
- -------------------
Until the Secured Moneys have been irrevocably paid and discharged in full no
Mortgagor is entitled on any grounds whatsoever:
(a) to be subrogated to any Mortgagee or to claim the benefit of any Security
Interest or Guarantee held by that Mortgagee at any time; or
(b) either directly or indirectly to prove in, to claim or to receive the
benefit of, any distribution, dividend or payment arising out of or
relating to the Liquidation of the Borrower or the Guarantor or any other
person who gives a Guarantee or Security Interest in respect of any of the
Secured Moneys.
The receipt of any distribution, dividend or other payment by any Mortgagee out
of or relating to such Liquidation will not prejudice the right of the Agent to
recover the Secured Moneys by enforcement of this Deed and each Collateral
Security.
33.5 Suspense account
- ---------------------
In the event of the Liquidation of a Mortgagor or any other person, each
Mortgagor authorises the Agent:
(a) to prove for all moneys received by any Receiver, Attorney or Mortgagee
under or by virtue of this Deed or any Collateral Security or any other
Guarantee or Security Interest in or towards satisfaction of the Secured
Moneys payable to the Mortgagees by the relevant Mortgagor; and
(b) (i) to retain and carry to a suspense account; and
(ii) to appropriate at the discretion of the Agent;
any dividends received in the Liquidation of the relevant Mortgagor or any
other person and all other moneys received in respect of the Secured
Moneys,
until the Mortgagees have been paid in full in respect of the Secured Moneys.
33.6 Rescission of payment
- --------------------------
Whenever for any reason (including without limitation under any law relating to
Liquidation, fiduciary obligations or the protection of creditors):
47
(a) all or part of any transaction of any nature (including without limitation
any payment or transfer) made during the term of this Deed which affects or
relates in any way to the Secured Moneys is void set aside or voidable;
(b) any claim that it is so is upheld, conceded or compromised; or
(c) any Mortgagee is required to return or repay money or assets received by it
under any such transaction or the equivalent for value of that money or
asset,
the Mortgagees will immediately become entitled against each Mortgagor to all
rights in respect of the Secured Moneys and the Mortgaged Property which it
would have had if all or the relevant part of the transaction or receipt had not
taken place. Each Mortgagor will indemnify the Mortgagees on demand against any
resulting loss, costs or expenses. This clause continues to apply after the
discharge of this Deed.
33.7 Variation
- --------------
(a) Subject to any other Transaction Document, any Mortgagee may from time to
time:
(i) amend any Transaction Document to which it is a party;
(ii) provide further accommodation to the Borrower or the Guarantor; or
(iii) increase the limit (if any) of accommodation to be made available by
it,
at its absolute discretion and without notice to or consent by any
Mortgagor.
(b) This Deed extends to cover all Transaction Documents and all agreements
from time to time in force between any Mortgagee and a Mortgagor as
contemplated by paragraph (a).
33.8 Indemnity
- --------------
If any of the Secured Moneys (including moneys which would have been Secured
Moneys if they were recoverable) are not recoverable from a Mortgagor for any
reason, including without limitation any legal limitation, disability or
incapacity affecting a Mortgagor and whether or not:
(a) any transaction relating to the Secured Moneys was void or illegal or has
been subsequently avoided; or
(b) any matter or fact relating to any such transaction was or ought to have
been within the knowledge of any Mortgagee,
each Mortgagor shall indemnify each Mortgagee on demand in respect of such
moneys and agrees to pay such moneys to the Agent for the account of the
relevant Mortgagees on demand.
34. SET OFF
- ------------
34.1 Each Mortgagor authorises any Mortgagee to apply any credit balance in any
- ------
currency (whether or not matured) in any of its accounts with any branch of that
Mortgagee towards satisfaction of any sum at any time due and payable by it to
the Agent under or in relation to any Transaction Document. No Mortgagee is
obliged to make the application.
48
34.2 Each Mortgagee may effect any currency exchanges appropriate to implement
- ------
that application.
35. COUNTERPARTS
- -----------------
This Deed may be executed in any number of counterparts. All counterparts taken
together will be deemed to constitute one instrument.
36. ACKNOWLEDGMENT BY MORTGAGORS
- ---------------------------------
Each Mortgagor confirms that:
(a) it has not entered into this Deed in reliance on, or as a result of, any
statement or conduct of any kind of or on behalf of any Mortgagee or any
Related Body Corporate of any Mortgagee (including, without limitation, any
advice, warranty, representation or undertaking); and
(b) neither any Mortgagee nor any Related Body Corporate of any Mortgagee is
obliged to do anything (including, without limitation, disclose anything or
give advice), except as expressly set out in the Transaction Documents.
37. ATTORNEYS
- --------------
Each of the attorneys executing this Deed states that he has no notice of the
revocation of his power of attorney.
49
SCHEDULE ONE
------------
MORTGAGORS
----------
NAME A.C.N. REGISTERED
- ---- ------ ----------
ADDRESS
-------
The Galore Group Limited 008 577 759 c/-Sly and Weigall
4th Floor
54 Marcus Clarke Street
Canberra City ACT 2601
Vilbrent Pty. Ltd. 002 055 567 327 Chisholm Road
Auburn NSW 2144
Barbeques Galore Pty. Ltd. 001 354 454 327 Chisholm Road
Auburn NSW 2144
Optic Express Pty. Ltd. 001 819 852 327 Chisholm Road
Auburn NSW 2144
The Galore Group
(International) Pty. Ltd. 001 753 073 327 Chisholm Road
Auburn NSW 2144
Bosmana Pty. Ltd. 002 060 335 327 Chisholm Road
Auburn NSW 2144
Pricotech Leisure Brands 002 060 273 327 Chisholm Road
Pty. Ltd. Auburn NSW 2144
Redgun Pty. Ltd. 002 065 330 327 Chisholm Road
Auburn NSW 2144
G.L.G. Australia Pty. Ltd. 001 185 002 327 Chisholm Road
Auburn NSW 2144
Park-Tee Engineering Pty. Ltd. 001 387 382 327 Chisholm Road
Auburn NSW 2144
Douglas Manufacturing Pty. 002 177 424 327 Chisholm Road
Ltd. Auburn NSW 2144
Australian Enamellers Pty. 002 909 864 327 Chisholm Road
Ltd. Auburn NSW 2144
Cook-on-Gas Products 001 532 912 327 Chisholm Road
(Australia) Pty. Ltd. Auburn NSW 2144
Cougar Leisure Products 005 669 198 327 Chisholm Road
Pty. Ltd. Auburn NSW 2144
Galore Group Services 007 903 022 U5 1181 Churchill Road
Pty. Ltd. Cavan, SA 5094
Galore Steel Industries 003 352 949 327 Chisholm Road
Pty. Ltd. Auburn NSW 2144
50
SCHEDULE TWO
------------
Nil
IN WITNESS the parties have executed and delivered this Deed in the Australian
- ----------
Capital Territory.
THE MORTGAGORS
- --------------
SIGNED SEALED AND DELIVERED )
- --------------------------- )
for and on behalf of )
THE GALORE GROUP LIMITED ) /s/ BETTIE ANNE McNEE
- ------------------------ ) ---------------------------
by its attorney: ) BETTIE ANNE McNEE
[SIGNATURE APPEARS HERE]
- --------------------------
SIGNED SEALED AND DELIVERED )
- --------------------------- )
for and on behalf of )
VILBRENT PTY. LIMITED ) /s/ BETTIE ANNE McNEE
- -------------------- ) ---------------------------
by its attorney: ) BETTIE ANNE McNEE
[SIGNATURE APPEARS HERE]
- --------------------------
SIGNED SEALED AND DELIVERED )
- --------------------------- )
for and on behalf of )
BARBEQUES GALORE PTY. LTD ) /s/ BETTIE ANNE McNEE
- ------------------------- ) ---------------------------
by its attorney: ) BETTIE ANNE McNEE
[SIGNATURE APPEARS HERE]
- --------------------------
SIGNED SEALED AND DELIVERED )
- --------------------------- )
for and on behalf of )
OPTIC EXPRESS PTY. LTD ) /s/ BETTIE ANNE McNEE
- ------------------------ ) ---------------------------
by its attorney: ) BETTIE ANNE McNEE
[SIGNATURE APPEARS HERE]
- --------------------------
51
SIGNED SEALED AND DELIVERED )
- --------------------------- )
for and on behalf of )
THE GALORE GROUP )
- ---------------- )
(INTERNATIONAL) PTY. LTD ) /s/ BETTIE ANNE McNEE
- ------------------------ ) ---------------------------
by its attorney: ) BETTIE ANNE McNEE
[SIGNATURE APPEARS HERE]
- --------------------------
SIGNED SEALED AND DELIVERED )
- --------------------------- )
for and on behalf of ) /s/ BETTIE ANNE McNEE
BOSMANA PTY. LTD ) ---------------------------
- ---------------- ) BETTIE ANNE McNEE
by its attorney: )
[SIGNATURE APPEARS HERE]
- --------------------------
SIGNED SEALED AND DELIVERED )
- --------------------------- )
for and on behalf of )
PRICOTECH LEISURE BRANDS PTY ) /s/ BETTIE ANNE McNEE
- ---------------------------- ) ---------------------------
LTD by its attorney: ) BETTIE ANNE McNEE
- ---
[SIGNATURE APPEARS HERE]
- --------------------------------
SIGNED SEALED AND DELIVERED )
- --------------------------- )
for and on behalf of )
REDGUN PTY. LTD ) /s/ BETTIE ANNE McNEE
- --------------- ) ---------------------------
by its attorney: ) BETTIE ANNE McNEE
[SIGNATURE APPEARS HERE]
- --------------------------
SIGNED SEALED AND DELIVERED )
- --------------------------- )
for and on behalf of ) /s/ BETTIE ANNE McNEE
G.L.G. AUSTRALIA PTY. LTD ) ---------------------------
- ------------------------- ) BETTIE ANNE McNEE
by its attorney: )
[SIGNATURE APPEARS HERE]
- --------------------------
52
SIGNED SEALED AND DELIVERED )
- --------------------------- )
for and on behalf of )
PARK-TEC ENGINEERING PTY. ) /s/ BETTIE ANNE McNEE
- ------------------------- ) ---------------------------
LTD by its attorney: ) BETTIE ANNE McNEE
- ---
[SIGNATURE APPEARS HERE]
- --------------------------
SIGNED SEALED AND DELIVERED )
- --------------------------- )
for and on behalf of )
DOUGLAS MANUFACTURING PTY. ) /s/ BETTIE ANNE McNEE
- -------------------------- ) ---------------------------
LTD by its attorney: ) BETTIE ANNE McNEE
- ---
[SIGNATURE APPEARS HERE]
- --------------------------
SIGNED SEALED AND DELIVERED )
- --------------------------- )
for and on behalf of )
AUSTRALIAN ENAMELLERS PTY. ) /s/ BETTIE ANNE McNEE
- -------------------------- ) ---------------------------
LTD by its attorney: ) BETTIE ANNE McNEE
- ---
[SIGNATURE APPEARS HERE]
- --------------------------
SIGNED SEALED AND DELIVERED )
- --------------------------- )
for and on behalf of )
COOK-ON-GAS PRODUCTS ) /s/ BETTIE ANNE McNEE
- -------------------- ) ---------------------------
(AUSTRALIA) PTY. LTD ) BETTIE ANNE McNEE
- -------------------- )
by its attorney: )
[SIGNATURE APPEARS HERE]
- --------------------------
SIGNED SEALED AND DELIVERED )
- --------------------------- )
for and on behalf of ) /s/ BETTIE ANNE McNEE
COUGAR LEISURE PRODUCTS ) ---------------------------
- ----------------------- ) BETTIE ANNE McNEE
PTY. LTD by its attorney: )
- --------
[SIGNATURE APPEARS HERE]
- --------------------------
53
SIGNED SEALED AND DELIVERED )
- --------------------------- )
for and on behalf of )
GALORE GROUP SERVICES PTY. /s/ BETTIE ANNE McNEE
- -------------------------- ---------------------------
LTD by its attorney: BETTIE ANNE McNEE
- ---
[SIGNATURE APPEARS HERE]
- --------------------------
SIGNED SEALED AND DELIVERED )
- --------------------------- )
for and on behalf of )
GALORE STEEL INDUSTRIES ) /s/ BETTIE ANNE McNEE
- ----------------------- ) ---------------------------
PTY. LTD by its attorney: ) BETTIE ANNE McNEE
- --------
[SIGNATURE APPEARS HERE]
- --------------------------
THE AGENT
- ---------
SIGNED SEALED AND DELIVERED )
- --------------------------- )
for and on behalf of )
WESTPAC BANKING CORPORATION )
- --------------------------- )
by its attorney ) /s/ JAMES GRANT
in the presence of: ) ---------------------------
Attorney
[SIGNATURE APPEARS HERE] Print name: JAMES GRANT
- --------------------------
Witness
Print name:
[LETTERHEAD OF ANZ BANK APPEARS HERE]
14 July, 1994.
The Directors
The Galore Group Limited
327 Chisholm Road
AUBURN NSW 2144
Dear Sirs,
LETTER OF OFFER
- ---------------
THE GALORE GROUP LIMITED A.C.N. 008 577 759 ("THE CUSTOMER")
- ------------------------------------------------------------
Australia and New Zealand Banking Group Limited (the "Bank") is pleased to offer
the availability of the Facilities listed below to each company listed as a
Customer in Schedule 1 to this letter.
The Facilities are offered on the terms set out in this Letter of Offer, the
General Conditions and the Specific Conditions for each Facility as at the date
of this Letter of offer (together the "Agreement").
A summary of the Facilities is as follows:
Facility Limit
--------------
Facility AUD
-------- ---
1. Interchangeable Facility
i. Variable Rate Commercial Bill Acceptance/Discount Facility
ii. Fixed Rate Commercial Bill Facility
Total Facility Limit for the Interchangeable Facility 5,400,000
2. Multi Option Facility
i. Variable Rate Commercial Bill Acceptance/Discount Facility
ii. Documentary Credit/Documents Surrendered Facility (Local or Overseas)
iii. Bills Negotiated Not Under Credit Facility (Bills Payable Overseas)
Total Facility Limit for the Multi Option Facility 9,600,000
3. Overdraft Facility 2,400,000
4. Indemnity/Guarantee Facility 150,000
5. Encashment Facility/Payroll 850,000
6. Foreign Currency Dealing Facility 2,000,000
7. Foreign Currency Settlement Facility (1,000,000)
-----------
Total Facility Limits $20,400,000
===========
LIMIT APPROVAL FEE $20,000
- 2 -
LETTER OF OFFER
THE GALORE GROUP LIMITED 14 July, 1994.
- --------------------------------------------------------------------------------
1. INTERCHANGEABLE FACILITY
------------------------
Total Facility Limit: $5,400,000
Termination Date: 30 June, 1997
Purpose: Term debt.
Total Facility Limit for
Interchangeable Facility
(and separate Facility Limits): The Customer may only make a Drawing under
or otherwise make use of a particular
Facility included in the Interchangeable
Facility if, on the Drawdown Date (or the
date when the relevant amount of Principal
Outstanding is to be made available), the
Principal Outstanding under both the
Facilities included in the Interchangeable
Facility does not exceed the Total Facility
Limit for the Interchangeable Facility.
Line Fee: 0.75% p.a. on the Facility Limit, payable
in advance on the date of the Agreement and
afterwards quarterly.
(i) Variable Rate Commercial Bill
Acceptance/Discount Facility:
Yield Rate: For each Drawing of Bills, a rate quoted by
the Bank in respect of the face value of
the Bills for the relevant tenor.
Fees: Acceptance Fee:
For each Bill, an amount equal to 0.75%
p.a. on the face amount of the Bill payable
on the Drawdown Date for the Bill.
Specific Conditions: Apply.
(ii) Fixed Rate Commercial Bill
Facility
Yield Rate: For each Drawing of Bills, a rate fixed for
all rollovers up until the last day of the
term.
Fees: Acceptance Fee:
For each Bill, an amount equal to 0.75%
p.a. on the face amount of the Bill payable
on the Drawdown Date for the Bill.
Specific Conditions: Apply.
- 3 -
LETTER OF OFFER
THE GALORE GROUP LIMITED 14 July, 1994.
- --------------------------------------------------------------------------------
2. MULTI OPTION FACILITY
---------------------
Total Facility Limit: $9,600,000
Termination Date: Not before the next Annual Review Date.
Purpose: Trade Finance.
Total Facility Limit for
Multi Option Facility
(and separate Facility Limits): The Customer may only make a Drawing under
or otherwise make use of a particular
Facility included in the Multi Option
Facility if, on the Drawdown Date (or the
date when the relevant amount of Principal
Outstanding is to be made available), the
Principal Outstanding under all the
Facilities included in the Multi Option
Facility does not exceed the Total
Facility Limit for the Multi Option
Facility.
(i) Variable Rate Commercial
Bill Acceptance/Discount
Facility (Trade)
Yield Rate: For each Drawing of Bills, a rate quoted
by the Bank in respect of the face value
of the Bills for the relevant tenor.
Acceptance Fee:
For each Bill, an amount equal to 1.5%
p.a. on the face amount of the Bill
payable on the Drawdown Date for the Bill.
Specific Conditions: Apply.
(ii) Documentary Credit /
Documents Surrendered Facility
(Local or Overseas):
Subject to Bank's Agreement: The Customer is only entitled to have the
Bank open a Documentary Credit if the Bank
agrees to the terms of the Customer's
application and if the Customer executes
all documents required by the Bank.
Fees: Bank's standard charges to apply.
Specific Conditions: Do not apply.
(iii) Bills Negotiated Not Under
Credit Facility (Bills Payable
Overseas)
Subject to Bank's Agreement: The Customer is only entitled to have the
Bank negotiate a Bill or trade documents
under the Facility if the Bank agrees to
the terms of the Customer's Lodgement
Letter and if the Customer executes all
documents required by the Bank.
Fees: Bank's standard charges to apply.
Specific Conditions: Do not apply.
- 4 -
LETTER OF OFFER
THE GALORE GROUP LIMITED 14 July, 1994.
- --------------------------------------------------------------------------------
3. OVERDRAFT FACILITY
------------------
Total Facility Limit: $2,400,000
Termination Date: Not before the next Annual Review date.
Purpose: Working capital.
Interest Rate: Bank Reference Rate (currently 9.0% p.a.)
for amounts up to the Facility Limit.
Interest Payment: Monthly in arrears on the first Business
Day of each calendar month, accruing daily
starting on the first day of overdraft
(interest payable monthly).
Fees: Line Fee:
0.75% p.a. on the Facility Limit, payable
quarterly in arrears on the 15th day of
each February, May, August and November,
in respect of the calendar quarter which
ended on the last day of the preceding
month.
Specific Conditions: Do not apply.
4. INDEMNITY / GUARANTEE FACILITY
------------------------------
Facility Limit: $150,000
Termination Date: Not before the next Annual Review date.
Fee Rate for each 1.0% p.a. subject to Minimum Fee of $50
Bank Guarantee per half year. The Minimum Fee is subject
to variation any time during the term of
the Facility.
Fee Payment: For each Bank Guarantee, the fee is
payable on the date of drawdown and
afterwards half yearly.
Specific Conditions: Apply.
5. ENCASHMENT FACILITY / PAYROLL
-----------------------------
Facility Limit: $850,000
Termination Date: Not before the next Annual Review date.
Purpose: To allow each Customer specified in
Schedule 1 to cash cheques at specified
branches.
Fees: Establishment Fee:
$50.00 for each encashment arrangement.
This charge is subject to variation at any
time during the term of the Facility.
Renewal Fee:
$50.00 p.a. for each encashment
arrangement. This charge is subject to
variation at any time during the term of
the Facility.
Specific Conditions: Do not apply.
- 5 -
LETTER OF OFFER
THE GALORE GROUP LIMITED 14 July, 1994.
- --------------------------------------------------------------------------------
6. FOREIGN CURRENCY
----------------
DEALING FACILITY
----------------
Facility Limit: AUD2,000,000
(For this purpose the Bank adjusts the
face value of the Customer's obligation
under each transaction by a multiplier
(determined by the Bank). The process
includes conversion of any foreign
currency amount to the equivalent amount
in AUD.)
Termination Date: Not before the next Annual Review date.
Purpose: Spot and forward exchange dealing
(including currency swaps).
No Pay Away Exposure except
under Foreign Currency
Settlement Facility: The Bank does not assume any pay away
exposure under this Facility unless and to
the extent that it links this Facility
with a Foreign Currency Settlement
Facility. Except to that extent the Bank
can have no obligation to deliver currency
under a contract until it is satisfied
that counter funds have been lodged by or
on behalf of the Customer.
Subject to Bank's Agreement: The Customer may only enter into a foreign
currency contract with the Bank if the
Bank agrees to the terms of the contract
and if the Customer executes all other
documents required by the Bank.
Maximum contract term: The maximum term for a Foreign Currency
Dealing contract is 6 months.
Specific Conditions: Do not apply.
7. FOREIGN CURRENCY
----------------
SETTLEMENT FACILITY
-------------------
Facility Limit: (AUD1,000,000)
(For this purpose the Bank will determine
the prevailing market rates to convert
foreign currency amounts to the equivalent
amounts in AUD.)
The Facility is linked to the Foreign
Currency Dealing Facility. The Facility
Limit represents the extent to which the
Bank will assume pay away exposure, on any
one settlement day, in respect of foreign
exchange contracts maturing on that day.
Termination Date: Not before the next Annual Review date.
Purpose: To allow delivery of currency under
foreign exchange contracts before the Bank
has received confirmation that counter
funds have been lodged by or on behalf of
the Customer.
Subject to Bank's Agreement: The Bank will only assume pay away
exposure in respect of the Customer's
obligation under a foreign exchange
contract, if the Bank has agreed to the
terms of the contract and the Customer has
executed all documents required by the
Bank.
Specific Conditions: Do not apply.
- 6 -
LETTER OF OFFER
THE GALORE GROUP LIMITED 14 July, 1994.
- --------------------------------------------------------------------------------
SECURITY: Conditions precedent to use of the Facilities
- ------- include provision of the following securities in
favour of the Bank, each in the form furnished by,
and approved by the Bank:
(a) Cross Deed of Covenant (standard ANZ Bank
document) between and on account of each
Company which is a Customer;
(b) Joint and Several Guarantee (standard ANZ Bank
document), unlimited as to amount by:
The Galore Group Limited
Vilbrent Pty Limited
Barbecues Galore Pty Limited
Galore Pty Limited (formerly Optic Express
Pty Ltd)
The Galore Group (Int'l) Pty Limited
Bosmana Pty Limited
Pricotech Leisure Brands Pty Limited
Redgun Pty Limited
G.L.G. Australia Pty Limited
Park-tec Engineering Pty Limited
Douglas Manufacturing Pty Limited
Australian Enamellers Pty Limited
Cook-on-Gas Products (Aust.) Pty Limited
Cougar Leisure Products Pty Limited
Galore Group Services Pty Limited
Galore Group Nominees Pty Limited
G.L.G. Trading Pte Ltd
The Galore Group (USA)
Barbecues Galore Inc.
Pool Patio 'n Things Inc.
(c) First ranking Registered Mortgage Debenture
over all the assets and undertaking of The
Galore Group Limited and its wholly owned
subsidiaries (excluding US corporations).
(This to be a fixed and floating charge over
all present and future assets, undertaking
(including goodwill) and unpaid/uncalled
capital of the company).
(d) First Registered Guarantee Mortgage by
Vilbrent Pty Limited being the Registered
Proprietor over the property situated at
345 Chisholm Road, Auburn.
(e) Second Registered Guarantee Mortgage by
Vilbrent Pty Limited being the Registered
Proprietor over property situated at
327 Chisholm Road, Auburn.
(The costs for which the Customer is liable
under the General Conditions include costs of
preparing security documents and costs of any
property valuations required by the Bank in
connection with the securities).
ANNUAL REVIEW: The facilities are subject to Annual Review
- ------------- so that (in accordance with the General
Conditions and with the exclusion of the
Interchangeable Facility) the Bank may
terminate them and require repayment, or amend
the terms on which the facilities are
available, by giving 30 days' notice to the
Customer.
-7-
LETTER OF OFFER
THE GALORE GROUP LIMITED 14 July 1994.
- --------------------------------------------------------------------------------
ANNUAL REVIEW
- -------------
DATE: 31 July in each year.
- ----
GOVERNMENT DUTIES/
- ------------------
TAXES/CHARGES: Subject to any applicable law, the Customer
- ------------- indemnifies the Bank in respect of and shall on
demand pay to the Bank all transaction charges (such
as financial institutions duty and debits tax).
CHANGE OF CONTROL: For the purposes of the Agreement, a Change of
- ----------------- Control occurs if, in the opinion of the Bank, there
is a change in the control of the Customer, directly
or indirectly (whether by change of ownership or
voting power) and the Bank determines that the
change is unacceptable for the purposes of the
Agreement.
OTHER CONDITIONS: In addition to the provisions of the General
- ---------------- Conditions, the following conditions shall apply:
(a) Split Banking Arrangements
--------------------------
The Bank's provision of Facilities aggregating
$20,400,000 is conditional upon the total bank
facilities requirements not exceeding
$33,200,000 and reducing by $2,800,000 by
31/12/94. The balance of the requirements
(maximum $12,800,000) will be provided by St.
George Bank on common terms and conditions.
The St. George Bank Facility will reduce by
$2,800,000 by 31/12/94.
(b) Security Arrangements
---------------------
The mortgage security proposed shall secure
the Bank and St. George Bank parri passu in
proportion to the actual level of utilisation
of their respective facilities. The security
arrangements shall be governed by a security
structure under which the Bank shall be
appointed the security agent.
(c) Structure and Documentation
---------------------------
The Split Banking Arrangements and the
Security Arrangements shall be structured and
documented according to legal advice to be
obtained by and satisfactory to the Bank.
(d) Existing First Mortgage Borrowing
---------------------------------
The Customer agrees that the fixed rate loan
(AUD2.1M.) relating to the 327 Chisholm Road
property will be fully repaid from cashflow
accumulation upon expiry in 1996, so that the
existing first mortgage is discharged.
(e) United States Subsidiaries and Assets
-------------------------------------
Galore Group's business and trading assets in
the United States may not be pledged or
otherwise encumbered without the prior written
consent of the Bank. The subsidiaries may not
be sold or otherwise disposed of without the
Bank's consent.
-8-
LETTER OF OFFER
THE GALORE GROUP LIMITED 14 July, 1994.
- --------------------------------------------------------------------------------
(f) Restriction on Provision of Accommodation to
--------------------------------------------
Others
------
Other than under normal terms of trade, the
Customer may not:
(i) provide financial accommodation for the
benefit of or to; or
(ii) give any guarantee or security interest
in connection with any indebtness of;
any party other than a mortgagor company, with
the exception of the guarantees currently
provided in connection with Bromic Pty Limited
and GLG (NZ) Pty Limited.
(g) Financial Performance Covenants
-------------------------------
The Customer shall observe the following
financial performance covenants:
Gearing Ratio (max.) 30/6/94 30/6/95 30/6/96
------- ------- -------
-Total Liabilities/
Shareholders Funds
as at 30/6 and 31/12 1.2X 1.2X 1.2X
Current Ratio (min.)
-Total Tangible Current
Assets/Total Current
Liabilities as at 30/6
and 31/12 1.20X 1.20X 1.20X
Interest Cover (min.)
-EBIT/Int. 2.0X 2.0X 2.0X
Overseas Subsidiary (max.)
-Aggregate amount of all
assets of subsidiaries
incorporated outside
Australia USD10M. USD10M. USD10M.
and an Authorised Representative shall certify
compliance to the Bank as at the dates shown.
(h) Management Accounts
-------------------
The Customer will provide to the Bank monthly
management accounts covering group operations
within 45 days of each month.
(i) Dividend Payout Limitation
--------------------------
Dividends paid to shareholders in respect to a
financial year may not exceed 50% of the
Customer's net profit after tax during the
relevant year.
(j) Convertibility
--------------
The Customer may convert undrawn capacity
under the Multi Option Facility (minimum
parcel $1M) to the Interchangeable Facility.
Conversion shall be a permanent reduction in
the Multi Option Facility and amounts
converted shall be subject to a line fee of
0.75% p.a. and an acceptance fee of 0.95% p.a.
-9-
LETTER OF OFFER
THE GALORE GROUP LIMITED 14 July, 1994.
- --------------------------------------------------------------------------------
OFFER PERIOD: This offer is available for acceptance until
the close of business on 15 July, 1994.
ACCEPTANCE: The Customer may accept this offer by:
(a) executing or, if it is a corporation, having
its Authorised Representative execute on its
behalf, in each case in the place indicated
for execution:
(i) the enclosed copy of this Letter of
Offer; and
(ii) the confirmation of the General
Conditions and the Specific Conditions
on the duplicate cover page of the
enclosed copy of the General Conditions
titled "Australia and New Zealand
Banking Group Limited - General
Conditions Credit Facilities"; and
(b) returning the executed documents to the Bank,
together with a cheque made out to the Bank
for the Limit Approval Fee.
If you have any questions in relation to this Letter of Offer or the Conditions,
please do not hesitate to contact Peter Meares on telephone number 227 1808.
Yours sincerely,
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
/s/ Peter D. Meares
PETER D. MEARES
SENIOR MANAGER - MARKETING
- --------------------------
BUSINESS BANKING
- ----------------
MARTIN PLACE REGION.
- -------------------
SCHEDULE 1
----------
CUSTOMER A.C.N. FACILITIES FACILITIES LIMIT
- -------- ------ ---------- ----------------
AUD
---
The Galore Group Limited 008 577 759 TBA TBA
Vilbrent Pty Limited 002 055 567 TBA TBA
Barbecues Galore Pty Limited 001 354 454 TBA TBA
Pricotech Leisure Brands Pty Limited 002 060 273 TBA TBA
G.L.G. Australia Pty Limited 001 185 002 TBA TBA
Park-tec Engineering Pty Limited 001 387 382 TBA TBA
Australian Enamellers Pty Limited 002 909 864 TBA TBA
Galore Group Services Pty Limited 002 060 335 TBA TBA
The Customer confirms that it and (if it is a corporation) its directors are
aware of, understand and agree to the terms of this Letter of Offer and of the
General Conditions and the Specific Conditions, if any, which are contained in
separate documents, in the case of the Specific Conditions, if any, bearing the
same reference at the foot of their first pages as that appearing at the foot of
the first page of this letter.
Each of:
The Galore Group Limited
Vilbrent Pty Limited
Barbeques Galore Pty Limited
Pricotech Leisure Brands Pty Limited
G.L.G. Australia Pty Limited
Park-tec Engineering Pty Limited
Australian Enamellers Pty Limited
Galore Group Services Pty Limited
gives the confirmation set out above and accepts the Bank's offer as set out in
this Letter of Offer, in the General Conditions and in the Specific Conditions
for each Facility.
Dated
------- ------------ 199..
[day] [month] [year]
Signed for and on behalf of each Customer
by its Authorised Representative )
) --------------------------
Name (printed):
Signed by ) --------------------------
in the presence of: )
)
)
- ---------------------------- )
Witness
Name (printed):
The following Sureties confirm that they and (if they are companies) their
directors are aware of and understand the terms of this Letter of Offer and of
the General Conditions and the Specific Conditions contained in separate
documents and described above, all of which make up the Agreement between the
Customer and the Bank.
Signed for and on behalf of )
The Galore Group Ltd ) ----------------------------------
by its director ) Name (printed):
Signed for and on behalf of )
Vilbrent Pty Ltd ) ----------------------------------
by its director ) Name (printed):
Signed for and on behalf of )
Barbecues Galore Pty Ltd ) ----------------------------------
by its director ) Name (printed):
Signed for and on behalf of )
Galore Pty Ltd ) ----------------------------------
by its director ) Name (printed):
Signed for and on behalf of )
The Galore Group (Int'l) Pty Ltd ) ----------------------------------
by its director ) Name (printed):
Signed for and on behalf of )
Bosmana Pty Ltd ) ----------------------------------
by its director ) Name (printed):
Signed for and on behalf of )
Pricotech Leisure Brands Pty Ltd ) ----------------------------------
by its director ) Name (printed):
Signed for and on behalf of )
Redgun Pty Ltd ) ----------------------------------
by its director ) Name (printed):
Signed for and on behalf of )
G.L.G. Australia Pty Ltd ) ----------------------------------
by its director ) Name (printed):
Signed for and on behalf of )
Park-Tec Engineering Pty Ltd ) ----------------------------------
by its director ) Name (printed):
Signed for and on behalf of )
Douglas Manufacturing Pty Ltd ) ----------------------------------
by its director ) Name (printed):
Signed for and on behalf of )
Australian Enamellers Pty Ltd ) ----------------------------------
by its director ) Name (printed):
Signed for and on behalf of )
Cook-on-Gas Products (Aust) Pty Ltd ) ----------------------------------
by its director ) Name (printed):
Signed for and on behalf of )
Cougar Leisure Products Pty Ltd ) ----------------------------------
by its director ) Name (printed):
Signed for and on behalf of )
Galore Group Services Pty Ltd ) ----------------------------------
by its director ) Name (printed):
Signed for and on behalf of )
Galore Group Nominees Pty Ltd ) ----------------------------------
by its director ) Name (printed):
Signed for and on behalf of )
G.L.G. Trading Pte Ltd ) ----------------------------------
by its director ) Name (printed):
Signed for and on behalf of )
The Galore Group (USA) Inc. ) ----------------------------------
by its director ) Name (printed):
Signed for and on behalf of )
Barbecues Galore, Inc. ) ----------------------------------
by its director ) Name (printed):
Signed for and on behalf of )
Pool Patio 'n Things, Inc. ) ----------------------------------
by its director ) Name (printed):
================================================================================
VARIATION LETTER
to
THE GALORE GROUP LIMITED
Dated 12th December 1996
Australia and New Zealand Banking Group Limited
ACN 005 357 522
====[LOGO OF AUTSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED APPEARS HERE]=====
- --------------------------------------------------------------------------------
[LETTERHEAD OF ANZ CORPORATE BANKING APPEARS HERE]
12 December 1996
The Directors
The Galore Group
327 Chisholm Road
AUBURN NSW 2144
Dear Sirs,
VARIATION LETTER
THE GALORE GROUP LIMITED
Following our recent discussions we are pleased to offer additional facilities
and variations to some of the conditions on which the existing facilities are
provided as follows.
Customer ACN
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The Galore Group Limited ("Galore") 008 577 759
Vilbrent Pty Limited 002 055 567
Barbecues Galore Pty Limited 001 354 454
Pricotech Leisure Brands Pty Limited 002 060 273
G.L.G. Australia Pty Limited 001 185 002
Park-tec Engineering Pty Limited 001 387 382
Australian Enamellers Pty Limited 002 909 864
Galore Group Services Pty Limited 002 060 335
(each a "Customer" and collectively
referred to as the "Galore Group")
Summary of facilities
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Except where specifically stated to the contrary, the facilities to be provided
and specified below may be drawn by each Customer, provided the aggregate
drawings of the Galore Group under any facility does not exceed the Facility
limit for that facility.
Facility Facility Limit
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AUD
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1. Interchangeable Facility
i. Variable Rate Commercial Bill Acceptance/Discount Facility
ii. Fixed Rate Commercial Bill Facility
Total Facility Limit for the Interchangeable Facility 7,550,000
2. Multi Option Facility
i. Variable Rate Commercial Bill Acceptance/Discount Facility
ii. Documentary Credit/Documents Surrendered Facility (Local
or Overseas)
iii. Bills Negotiated Not Under Credit Facility (Bills Payable
Overseas)
Total Facility Limit for the Multi Option Facility 14,100,000
3. Documentary Credit Facility (Local or Overseas) 5,000,000
4. Overdraft Facility 2,400,000
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5. Indemnity/Guarantee Facility 300,000
6. Encashment Facility/Payroll 850,000
7. Foreign Currency Dealing Facility 2,500,000
8. Foreign Currency Settlement Facility 3,000,000
9. Lease Finance Facility 1,000,000
10. Seasonal Trade Facility 5,000,000
11. Standby Facility 12,000,000
(Variable Rate Commercial Bill
Acceptance/Discount Facility)
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Total Facility Limits 53,700,000
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The varied facilities are as follows:
2. MULTI OPTION FACILITY
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Total facility limit: $14,100,000
Termination date: Not before the next review date.
Purpose: Trade Finance.
Total facility limit for
Multi Option Facility
(and separate facility limits): You may only make a drawing under or
otherwise make use of a particular
facility included in the Multi Option
Facility so long as the making of the
drawing would not cause:
(i) the amount outstanding under
both the facilities included in the
Multi Option Facility to exceed the
total facility limit for the Multi
Option Facility; and
(ii) the amount of the outstanding
drawings under the particular facility
under which the drawing is made to
exceed the facility limit, if any, for
that particular facility.
(i) Variable Rate Commercial Bill Acceptance/Discount Facility (Trade)
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Facility Limit: $1,000,000
Yield Rate: For each drawing of bills, a rate
quoted by us in respect of the face
value of the bills for the relevant
tenor.
Line Fee: 0.50% p.a. This fee is payable
quarterly in arrears.
Acceptance Fee: For each bill, an amount equal to
0.625% p.a. on the face amount of the
bill payable on the drawdown date for
the bill.
Conditions: Specific Conditions are attached for
this facility.
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(ii) Interchangeable
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Documentary Credit/Documents Surrendered
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(Local or Overseas)
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Bills Negotiated Not Under Credit Facility
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(Bills Payable Overseas)
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Facility limit: AUD13,100,000 (for this purpose we
will determine prevailing market rates
to convert foreign currency amounts to
the equivalent amounts in AUD).
Conditions Precedent: You are only entitled to use this
facility if we agree to the terms of
your application and if you execute
all documents required by us.
Purpose: Establishment of documentary credits
at sight or at term.
Fees: Drawings are to be discounted at the
bank bill buying rate plus a margin of
1.125% p.a for AUD amounts or in the
case of foreign currency amounts, our
cost of funds (as determined by us)
plus a margin of 1.125%.
Specific Conditions: There are no Specific Conditions which
apply to this facility except that
drawings are to be refinanced on
finance terms not exceeding 180 days
including the term of the letter of
credit.
3. DOCUMENTARY CREDIT FACILITY
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(Local or Overseas)
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Facility limit: AUD5,000,000 (for this purpose we will
determine prevailing market rates to
convert foreign currency amounts to
the equivalent amounts in AUD.)
Termination date: Not before the next review date.
Purpose: Establishment of documentary credits
at sight.
Condition precedent: You are only entitled to use the
facility if we agree to the terms of
your application and if you execute
all documents required by us.
Fees: As advised by us from time to time.
Specific Conditions: There are no Specific Conditions which
apply to this facility.
11. STANDBY FACILITY
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Variable Rate Commercial Bill
Acceptance/Discount Facility:
Facility limit: $12,000,000 (representing the
aggregate face value of the bills).
Termination date: (a) If by 30 September 1998 an
underwriting arrangement, acceptable
to us, has not been entered into for
the listing of Galore or any other
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associated entity of Galore in the
United States of America ("US") under
the Initial Public Offering ("IPO"),
30 September 1998; or
(b) If an underwriting arrangement,
acceptable to us, has been entered
into for the listing of Galore or any
other associated entity of Galore
under the IPO, the date which is the
earlier of:
(i) 31 December 1998; or
(ii) the date on which the
listing of Galore or any other
associated entity of Galore
occurs in the US.
Purpose: To assist Galore in funding its
proposed selective share reduction.
Repayment arrangement: Unless repaid earlier, this facility
will be repaid from either:
(a) the proceeds of the IPO; or
(b) if the IPO is delayed, from the
proceeds of the sale of the assets of
Pricotech Leisure Brands Pty Limited;
or
(c) any other external resources.
Yield rate: For each drawing of bills, a rate
quoted by us for the face value of the
bills for the relevant tenor.
Fees: Establishment Fee:
$25,000 payable on acceptance of this
variation letter.
Line Fee:
1.0% pa on the facility limit, payable
quarterly in advance, commencing on
the date notified to you by us.
Acceptance Fee:
For each bill, an amount equal to 0.5%
pa on the face value amount of the
bill calculated on the tenor of the
bill and payable on the drawdown date
for the bill.
Conditions precedent: You will only be entitled to use the
facility if:
(a) you are fully drawn under
facilities 1, 2, 4 and 10 provided to
you by us and provided we are
satisfied, from the cashflow forecast
provided by you, that the Galore Group
cashflow:
(i) requires a drawing, and
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(ii) will be sufficient to enable
you to meet all your obligations
to us; and
(b) Galore to have raised not less
than $10,000,000 pursuant to the issue
of unsecured and unsubordinated
convertible notes (the "Notes") issued
pursuant to the terms of a Note
Subscription Agreement dated 25
October, 1996 (the "Note Subscription
Agreement") between Galore and SBC
Warburg Australia Limited; and
(c) you have provided us with
evidence (to our satisfaction) that
the proposed selective share reduction
as detailed in the Notice of Annual
General Meeting and Information
Memorandum dated 25 October, 1996 has
been approved by the shareholders and
the courts as required under the
Corporations Law or such other
regularity requirements; and
(d) we must have received a valuation
of Galore by Ernst & Young, verifying
that the price offered for the
selective share reduction is a fair
and reasonable price; and
(e) we must have received a
certificate signed by the directors of
Galore stating that the asset value of
Pricotech Leisure Brand Pty Limited
during the period between November
1996 and January 1997 will be between
$8,000,000 and $10,000,000; and
(f) we must have received the
additional security referred to below
and any other documentation in
connection with the security, in a
form satisfactory to us and our legal
advisers; and
(g) we and our legal advisers, must
be satisfied that all legal
requirements in relation to the
selective share reduction are in
order; and
(h) we have received a certification,
to our satisfaction, that your stock
(or any part thereof) is not subject
to any retention of title arrangement
in favour of any third party (the
certification must be provided by one
of your directors and by one other
person, being a director or secretary
of you); and
(i) you must present to us an
interest rate management policy and
that policy must be acceptable to us;
and
(j) the terms of the Notes and the
Note Subscription Agreement are
acceptable to us.
Special Conditions: Specific conditions are attached for
this facility.
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This facility may only be drawn by
Galore.
Further Security
The existing security held by us is to remain in full force and together with
the further security now to be taken, will extend to cover the existing
facilities currently being provided to you by us and the additional facilities
in this letter.
(f) Mortgage debentures (the "US Debentures") over all the assets and
undertaking of Galore and its subsidiaries in the United States or its
equivalent security under the laws of the United States of America, as
advised by our US legal advisers, ranking second to a mortgage debenture
granted in favour of Merrill Lynch Business Financial Services Inc.
(g) Cross Guarantee between all members of the Galore Group and including all
your US subsidiaries.
(h) A Deed of Priority between us and Merrill Lynch Business Financial
Services Inc, in a form satisfactory to us, granting them a USD 2,150,000
priority (which priority will reduce in accordance with the terms of the
repayment arrangements under part of the facilities which it secures) in
relation to our US Debentures. The Deed of Priority must have reduced to
USD1,500,000.00 prior to any drawdown under the Standby Facility beyond
$11 million. And if requested by us:
(i) Issuing and stamping of additional new debenture certificates in our
favour; and
(j) completion of a Statutory Declaration which outlines the value of total
assets in each state (previously forwarded to you).
We will engage Gadens Ridgeway to prepare the necessary security documentation
to complete our security position.
The security arrangements are governed by a security structure under which ANZ
Capel Court Limited has been appointed security agent.
Other Conditions
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Negative Pledge
You undertake not to:
(a) create or permit an encumbrance over your assets or give any guarantee or
indemnity or similar security to any third party for any obligation
without our prior written consent, except for a second ranking charge,
upon terms acceptable to us and granted to the holders of the Notes (the
"Noteholders"), pursuant to the terms of the Notes and subject to a
priority agreement (acceptable to us), between us and the Noteholders or
their representative (as the case may be); and
(b) make any payments under the Notes where there subsists, or upon payment,
will occur, an event of default or potential event of default under the
terms and conditions of this agreement or the terms and conditions of the
Notes.
Cross Default
In addition to any other event of default under this agreement, it is an event
of default under this agreement if an Early Redemption Event (as that term is
defined in the terms of the Notes) occurs or if you breach any of the terms of
the Notes.
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Listing in the US
Galore undertakes not to make the IPO unless we have given our prior written
consent to the terms of the IPO. Such consent will not be unreasonably withheld.
All proceeds raised from the IPO must be deposited into an account opened with
us, named "Galore IPO account" unless prohibited by any relevant legislation or
regulatory requirement or an underwriting agreement entered into in relation to
the IPO provided we are reasonably satisfied that our security will extend to
those proceeds or that those proceeds form part of our security. If the proceeds
are deposited into an account named "Galore IPO account" no money or amount may
be withdrawn from that account until all money owing to us, whether actual or
contingent, under the Standby Facility has been unconditionally repaid to us in
full and in priority to the Noteholders.
Acknowledgment
We acknowledge that you have the right to issue up to 3,700,000 share options
under an executive employee option scheme provided the documentation for the
scheme is acceptable to us and our legal advisers.
Capital Expenditure Budget
The Galore Group's annual capital expenditure budget is to be presented to us
and approved by us prior to the commencement of the next financial year. You
will not, without our prior written consent, spend or incur any capital expenses
in aggregate in excess of $500,000 of your budget for that year.
Further Financial Performance Covenants
For the avoidance of doubt, with respect to the financial covenants, "you" or
"your" means Galore and all its subsidiaries.
Previous references to "Gearing Ratio" are deleted.
You shall observe the following financial performance covenants:
Leverage Ratio is not to exceed 2.0:1. (To be monitored on a monthly basis).
Shareholders Funds, including the principal outstanding under the Notes (but
excluding any capitalised or deferred interest under the Notes) is not to fall
below $20,000,000.
Current Ratio not to fall below 1.50:1 (being Total Tangible Current Assets
divided by Total Current Liabilities) (To be monitored monthly).
For any financial year, dividends declared and loans made to shareholders are
not to exceed 50% of NPAT.
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Other Ratios 30/6/97 30/6/98
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Effective Gearing Ratio (being 2.85:1 2.85:1
Shareholders Funds less
Intangible Assets divided by
Total Liabilities)
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Interest Cover (being EBIT 1.5X 1.5x
divided by Gross Interest).
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"Accounting Standards" means:
(a) the accounting standards prescribed under the Corporations Law, the
Corporations Regulations and, where not inconsistent with those Accounting
Standards and regulations, generally accepted principles and practices in
Australia consistently applied by you as between your members; or
(b) such other standards, principles and practices that we may otherwise agree
to in writing from time to time.
"EBIT" means earnings before income tax and before Gross Interest, being your
gross income less costs and expenses incurred by you during the same period as
disclosed by the profit and loss account excluding any income tax expense and
Gross Interest.
"Intangible Assets" means:
(a) patents, patent rights, trademarks, trade names, franchises, copyrights,
licences, permits, goodwill, and other intangible assets classified as such
in accordance with generally accepted Accounting Standards; and
(b) all prepayments; and
(c) future income tax benefits being the estimated amount of future saving in
income tax likely to arise as a result of:
(i) the reversal of timing differences; and
(ii) the recoupment of carried forward tax losses, calculated in
accordance with Accounting Standards.
"Gross Interest" means the aggregate of interest and amounts in the nature of
interest incurred (including without limitation payments in the nature of
interest under any finance leases) or paid or for which provision has been made
during the relevant accounting period, including without limitation such
payments under the Notes, determined on a gross (not net) basis.
"Leverage Ratio" means the total funded debt divided by Shareholders Funds,
where Shareholders Funds include the principal outstanding under the Notes.
"NPAT" means your net income on a consolidated basis equal to the gross revenues
and other income, less the aggregate of:
a) operating expenses;
b) selling, administrative and general expense;
c) taxes;
d) contingency and other reserves;
e) depreciation, depletion and amortisation of properties;
and including abnormal and extraordinary items of income or expense, all
computed and consolidated in accordance with Accounting Standards.
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"Shareholders Funds" means the total consolidated net book value of your assets
after all appropriate deductions in accordance with generally accepted
Accounting Standards (including without limitation, reserves for doubtful
receivable, obsolescence, depreciation and amortisation) less the consolidated
liabilities (including tax and other proper accruals, and any deferred income)
calculated in accordance with Accounting Standards.
"Total Tangible Current Assets" means, at any time, the aggregate of all your
assets calculated on a consolidated basis which would be classified as current
assets, in accordance with Accounting Standards, less Intangible Assets.
"Total Current Liabilities" means, at any time, the aggregate of all your
liabilities calculated on a consolidated basis which would be classified as
current liabilities, in accordance with Accounting Standards.
"Total Liabilities" means the total of all your liabilities (including
provisions, tax and other accruals, dividends declared or accrued but not paid,
and any deferred income) calculated in accordance with Accounting Standards and
computed on a consolidated basis.
Financial Information
You must ensure that all Financial Information provided to us complies with all
relevant Accounting Standards and gives a true and fair view of the financial
condition and the result of your operations as at the date and in relation to
the period in respect of which they were prepared.
"Financial Information" includes without limitation profit and loss accounts and
balance sheets (including any statements, reports and notes attached OR issued
in relation to those accounts and balance sheets).
Certificate of Compliance with Financial Undertakings
You must provide a certificate of compliance with the financial ratios specified
in this letter, including reasonable details of the methodology used to
calculate the ratios, and certify that all Financial Information provided to us
gives a true and fair view of your financial condition and the result of your
operations as at the date and in relation to the period in respect of which they
were prepared.
The certificate referred to in the preceding paragraph must be signed by one of
your directors and by one other person, being a director or secretary of you.
These certificates must be provided within 45 days of the end of each financial
half year.
Undertakings in Relation to the Notes
With respect to the Notes, Galore agrees:
(a) to provide us with a copy of any notice or demand it receives under the
terms and conditions of the Notes, immediately once that notice or demand
is received by Galore including without limitation any notice to convene a
meeting of Noteholders to discuss or consider any action following the
occurrence of an Early Redemption Event;
(b) to immediately notify us if it has or is likely to breach any term or
condition of the Notes (and provide us with reasonable details of the
breach or the likely breach); and
(c) not to agree to amend the terms and conditions of the Notes without our
prior written consent.
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Additional Event of Default
You will commit an event of default if you complete:
(a) a selective share reduction without first having raised $10,000,000 from
the issue of the Notes; or
(b) any other form of share reduction.
If you commit the event of default referred to in the preceding paragraph, then
in addition to any other rights or remedies we may have under this agreement, we
may cancel all your facilities and demand immediate payment of all outstanding
money.
Costs
All costs and fees, including legal expenses and stamp duty, associated with the
preparation, negotiation and execution of this letter and the further securities
are to be paid by you or to be debited to your account.
In addition, subject to any applicable law, you indemnify us in respect of and
on demand will pay to us all transaction charges (such as financial institutions
duty and debits tax).
No Retention of Title
We must receive a certification, to our satisfaction, that your stock (or any
part thereof) is not subject to any retention of title arrangement in favour of
any third party.
The certification referred to in the preceding paragraph must be provided by one
of your directors and by one other person, being a director or secretary of you,
within 45 days of the end of each financial year.
Renegotiation of Facilities
All terms and conditions relevant to all your facilities will be subject to
renegotiation prior to 31 December 1998. If the terms and conditions of all your
facilities cannot be agreed upon between us on or before 31 December 1998, then
despite any provision to the contrary you will repay or pay to us on 31 December
1998 all outstanding money under all facilities provided to you and at the same
time you agree to pay to us all other amounts outstanding but unpaid under any
transaction document.
No Other Variations
Except as indicated in this letter, no other existing arrangements and
conditions for the Facilities are varied or replaced, and those arrangements and
conditions for the Facilities continue despite the variations in this letter.
Conditions Continue
Until you accept our offer and have complied with all conditions precedent, the
arrangements for the facilities that we are making available to you, including
the conditions on which the facilities are being made, continue.
Annual Review
Our next annual review of your facilities will be on 16 February 1997.
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Offer Period
Our offer is available for acceptance until the close of business on 31 December
1996 unless otherwise extended by us in writing.
We may withdraw our offer at any time before you accept it if we become aware of
anything which, in our opinion, adversely alters the basis on which we made our
offer.
Acceptance
To accept this offer, please sign the duplicate of this letter where indicated
and return it to us.
If you wish to discuss these or any other arrangements, please feel free to
contact myself on 9227 1478 or Jason Mares on 9227 1705.
Your faithfully,
/s/ Neil Shilbury
Neil Shilbury
Senior Manager Corporate Banking
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SIGNED on behalf of BARBECUES GALORE INC. )
by its authorised representative in the )
presence of: )
)
) [SIGNATURE APPEARS HERE]
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Signature of witness ) Signature of authorised
) representatives
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Name of witness - please print )
)
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Address of witness Name of authorised representative -
please print
SIGNED on behalf of POOL PATIO'N THINGS, INC. )
by its authorised representative in the )
presence of: )
) [SIGNATURE APPEARS HERE]
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Signature of witness ) Signature of authorised
) representative
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Name of witness - please print )
)
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Address of witness Name of authorised representative -
please print
SIGNED on behalf of COOK-ON GAS PRODUCTS (AUST) )
PTY LTD by its authorised representative )
in the presence of: )
)
) [SIGNATURE APPEARS HERE]
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Signature of witness ) Signature of authorised
) representative
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)
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Address of witness Name of authorised representative -
please print
To accept our offer:
[_] SIGN the attached duplicate variation letter and extract where indicated.
[_] RETURN the signed variation letter to the Bank at our address shown in the
letter by 31st December 1996.
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SIGNED on behalf of VILBRENT PTY LTD by its )
authorised representative in the presence of: )
)
) [SIGNATURE APPEARS HERE]
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Signature of witness ) Signature of authorised
) representative
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Name of witness - please print )
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Address of witness Name of authorised representative -
please print
SIGNED on behalf of BARBECUES GALORE PTY LTD by )
its authorised representative in the presence of: )
)
) [SIGNATURE APPEARS HERE]
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Signature of witness ) Signature of authorised
) representative
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Name of witness - please print )
)
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Address of witness Name of authorised representative -
please print
SIGNED on behalf of PRICOTECH LEISURE BRANDS PTY )
LTD by its authorised representative )
in the presence of: )
)
) [SIGNATURE APPEARS HERE]
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Signature of witness ) Signature of authorised
) representative
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Address of witness Name of authorised representative -
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SIGNED on behalf of G.L.G. AUSTRALIA PTY )
LTD by its authorised representative in the )
presence of: )
)
) [SIGNATURE APPEARS HERE]
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Signature of witness ) Signature of authorised
) representative
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Name of witness - please print )
)
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Address of witness Name of authorised representative -
please print
SIGNED on behalf of PARK-TEC )
ENGINEERING PTY LTD by its authorised )
representative in the presence of: )
)
) [SIGNATURE APPEARS HERE]
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Signature of witness ) Signature of authorised
) representative
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Name of witness - please print )
)
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Address of Witness Name of authorised representative -
please print
SIGNED on behalf of AUSTRALIAN )
ENAMELLERS PTY LTD by its authorised )
representative in the presence of: )
)
) [SIGNATURE APPEARS HERE]
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Signature of witness ) Signature of authorised
) representative
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Address of witness Name of authorised representative -
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SIGNED on behalf of GALORE GROUP )
SERVICES PTY LIMITED by its authorised )
representative in the presence of: )
)
) [SIGNATURE APPEARS HERE]
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Signature of witness ) Signature of authorised
) representative
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Address of Witness Name of authorised representative -
please print
SURETY ACKNOWLEDGMENT
To: Australia and New Zealand Banking Group Limited
Surety acknowledgment to Variation Letter dated 12th December 1996.
Each of the following sureties acknowledges that the securities given, or to be
given by us secure all present and future obligations of the customer(s) to the
Bank, including obligations in respect of the facilities as varied by the
variation letter and in respect of the additional facilities detailed in the
variation letter.
SIGNED on behalf of THE GALORE GROUP )
LTD by its authorised representative in the )
presence of: )
)
) [SIGNATURE APPEARS HERE]
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Signature of witness ) Signature of authorised
) representative
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Address of Witness Name of authorised representative -
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SIGNED on behalf of VILBRENT PTY LTD by its )
authorised representative in the presence of: )
)
) [SIGNATURE APPEARS HERE]
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Signature of witness ) Signature of authorised
) representative
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SIGNED on behalf of BARBECUES GALORE )
PTY LTD by its authorised representative in the )
presence of: )
)
) [SIGNATURE APPEARS HERE]
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Signature of witness ) Signature of authorised
) representatives
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Name of witness - please print )
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Address of Witness Name of authorised representative -
please print
SIGNED on behalf of PRICOTECH LEISURE )
BRANDS PTY LTD by its authorised )
representative in the presence of: )
)
) [SIGNATURE APPEARS HERE]
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Signature of witness ) Signature of authorised
) representative
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Address of Witness Name of authorised representative -
please print
SIGNED on behalf of G.L.G. AUSTRALIA PTY )
LIMITED by its authorised representative
in the presence of: )
)
) [SIGNATURE APPEARS HERE]
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Signature of witness ) Signature of authorised
) representative
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Address of Witness Name of authorised representative -
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SIGNED on behalf of PARK-TEC )
ENGINEERING PTY LTD by its authorised )
representative in the presence of: )
)
) [SIGNATURE APPEARS HERE]
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Signature of witness ) Signature of authorised
) representatives
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Name of witness - please print )
)
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Address of witness Name of authorised representative -
please print
SIGNED on behalf of AUSTRALIAN )
ENAMELLERS PTY LTD by its authorised )
representative in the presence of: )
)
) [SIGNATURE APPEARS HERE]
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Signature of witness ) Signature of authorised
) representative
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Name of witness - please print )
)
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Address of witness Name of authorised representative -
please print
SIGNED on behalf of GALORE GROUP )
SERVICES PTY LTD by its authorised )
representative in the presence of: )
)
) [SIGNATURE APPEARS HERE]
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Signature of witness ) Signature of authorised
) representative
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Name of witness - please print )
)
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Address of Witness Name of authorised representative -
please print
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SIGNED on behalf of GALORE PTY LTD by its )
authorised representative in the )
presence of: )
) [SIGNATURE APPEARS HERE]
- ------------------------------------- ) ----------------------------------
Signature of witness ) Signature of authorised
) representative
- ------------------------------------- )
Name of witness - please print )
)
- ------------------------------------- ) ----------------------------------
Address of witness Name of authorised representative -
please print
SIGNED on behalf of THE GALORE GROUP )
(INT'L) PTY LTD by its authorised )
representative in the presence of: )
)
) [SIGNATURE APPEARS HERE]
- ------------------------------------- ) ----------------------------------
Signature of witness ) Signature of authorised
) representative
- ------------------------------------- )
Name of witness - please print )
)
- ------------------------------------- ) ----------------------------------
Address of witness Name of authorised representative -
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SIGNED on behalf of BOSMANA PTY LTD )
by its authorised representative in )
the presence of: )
) [SIGNATURE APPEARS HERE]
- ------------------------------------- ) ----------------------------------
Signature of witness ) Signature of authorised
) representative
- ------------------------------------- )
Name of witness - please print )
)
- ------------------------------------- ) ----------------------------------
Address of witness Name of authorised representative -
please print
5
SIGNED on behalf of REDGUN PTY LTD )
by its authorised representative in )
the presence of: )
) [SIGNATURE APPEARS HERE]
- ------------------------------------- ) ----------------------------------
Signature of witness ) Signature of authorised
) representative
- ------------------------------------- )
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)
- ------------------------------------- ) ----------------------------------
Address of Witness Name of authorised representative -
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SIGNED on behalf of DOUGLAS )
MANUFACTURING PTY LTD by its )
authorised representative in )
the presence of: )
) [SIGNATURE APPEARS HERE]
- ------------------------------------- ) ----------------------------------
Signature of witness ) Signature of authorised
) representative
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)
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SIGNED on behalf of COUGAR LEISURE )
PRODUCTS PTY LTD by its authorised )
representative in the presence of: )
)
) [SIGNATURE APPEARS HERE]
- ------------------------------------- ) ----------------------------------
Signature of witness ) Signature of authorised
) representative
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)
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ACCEPTANCE
To: Australia and New Zealand Banking Group Limited
Acceptance of offer
Variation Letter dated 12th December 1996.
We accept the additional facilities and variations detailed in this letter.
We each state that each of the additional facilities in this variation letter is
for commercial purposes and that the financial accommodation made available by
the Bank under each of the additional facilities will not be used wholly and
exclusively for the personal, domestic or household use by any person.
Dated: 1996.
SIGNED on behalf of THE GALORE GROUP )
LTD by its authorised representative in the )
presence of: )
)
) [SIGNATURE APPEARS HERE]
- ------------------------------------- ) ----------------------------------
Signature of witness ) Signature of authorised
) representative
- ------------------------------------- )
Name of witness - please print )
)
- ------------------------------------- ) ----------------------------------
Address of witness Name of authorised representative -
please print