EXHIBIT 10.1
GE CAPITAL FINANCE PTY LTD
DAISYTEK AUSTRALIA PTY LTD
ACN 075 675 795
(COMPANY)
DAISYTEK AUSTRALIA (QLD) PTY LTD
ACN 097 222 163
(GUARANTOR)
---------------------------------
A$ FACILITY AGREEMENT
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GE CAPITAL FINANCE PTY LTD (ACN 075 554 175)
A$ FACILITY AGREEMENT
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PARTIES
GE CAPITAL:
GE CAPITAL FINANCE PTY LIMITED ACN 075 554 175
Level 13, 255 George Street, Sydney NSW 2000
Facsimile No: 02 8249 3783
COMPANY:
DAISYTEK AUSTRALIA PTY LTD. ACN 075 675 795
Unit 3, 196 Bourke Road, Alexandria NSW 2015
Facsimile No: (02) 9700 7580
GUARANTOR:
DAISYTEK AUSTRALIA (QLD) PTY LTD. ACN 097 222 163
Unit 3, 196 Bourke Road, Alexandria NSW 2015
Facsimile No: (02) 9700 7580
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DETAILS
FACILITY DESCRIPTION:
Revolving credit facility,.
FACILITY LIMIT:
A$35,000,000
LETTER OF CREDIT FACILITY LIMIT:
A$500,000 as a sublimit of the facility limit.
MATURITY DATE:
3 years from the date of this agreement.
INTEREST RATE:
Index rate plus 2.7%.
PURPOSE:
Working capital, refinancing existing working
capital indebtedness including partial repayment
of inter-company debt and trade finance.
FEES CLOSING FEE:
A$150,000 - see clause 7.1 (a).
UNUSED FACILITY FEE:
0.5% per annum on that part of the facility limit
that is unused - see clause 7.1(b).
STANDBY LETTER OF CREDIT FEE:
2.5% per annum on the face value amount of standby
letters of credit issued (calculated on the basis
of a 360-day year and actual days elapsed)
payable monthly in arrears, plus any charges
assessed by the issuing bank - see clause 7.1(d).
TRADE LETTER OF CREDIT ISSUANCE FEE:
0.5% flat for each six month validity (or part
thereof) on the face value amount of trade
letters of credit, payable at the end of the
month in which the trade letters of credit are
issued (subject to a minimum fee of A$100), plus
any charges assessed by the issuing bank - see
clause 7.1(e).
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TRADE LETTERS OF CREDIT AMENDMENT FEE:
An amendment fee of 0.5% flat (subject to a
minimum fee of A$100) for any amendment to any
trade letters of credit in which:
(a) there is an increase in the face value amount;
or
(b) the expiry date is extended beyond any six
month validity,
on the increase in face value amount - see clause
7.1(f).
All other amendments would attract an amendment
fee of A$100, payable at the time of the
amendment, plus any charges assessed by the
issuing bank.
TERM LETTER OF CREDIT FEE:
2.7% per annum (calculated on the basis of a
360-day year and actual days elapsed) on the face
value amount of any drawing under a term letter of
credit, calculated from the date of GE Capital's
acceptance of the drawing until the required
maturity payment date - see clause 7.1(g).
FIELD EXAMINATION FEE:
A$900.00 per person, per day for each field
examination - see clause 7.1(c).
EARLY TERMINATION FEE:
(a) 2% of the facility limit if the
facility is cancelled or terminated
before the first anniversary of the date
of this agreement due to:
(i) a voluntary default (being an
event of default arising from
events or circumstances over
which an obligor has direct
control) by an obligor;
(ii) the company terminating the
facility (other than pursuant
to clause 11.4); or
(iii) the facility is terminated due
to voluntary default (being an
event of default arising from
events or circumstances over
which an obligor has direct
control) by an obligor;
(b) 1% of the facility limit if the facility
is cancelled or terminated after the
first anniversary of the date of this
agreement but before the second
anniversary due to:
(i) a voluntary default (being an
event of default arising from
events or circumstances over
which an obligor has direct
control) by an obligor;
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(ii) the company terminating the
facility (other than pursuant
to clause 11.4); or
(iii) the facility is terminated due
to voluntary default (being an
event of default arising from
events or circumstances over
which an obligor has direct
control) by an obligor;
(c) 0.5% of the facility limit if the
facility is cancelled or terminated
after the second anniversary of the date
of this agreement but before the third
anniversary due to:
(i) a voluntary default (being an
event of default arising from
events or circumstances over
which an obligor has direct
control) by an obligor;
(ii) the company terminating the
facility (other than pursuant
to clause 11.4); or
(iii) the facility is terminated due
to voluntary default (being an
event of default arising from
events or circumstances over
which an obligor has direct
control) by an obligor.
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GENERAL TERMS
INTERPRETATION
Definitions of terms printed like this are at the end of these General Terms
before the Schedules.
1. THE FACILITY
1.1 GE Capital agrees to provide the company with a loan facility in
Australian dollars of an amount not exceeding the facility limit. The
facility limit is an overall collective limit which.
2. USING THE FACILITY
DRAWINGS
2.1 The company need not use the facility. However, if the company wants to
use the facility, it may do so by one or more drawings.
REQUESTING A DRAWING
2.2 If the company wants a drawing, the company agrees to give a drawdown
notice signed by an authorised officer of the company to GE Capital by
11am on the business day it wants the drawing and GE Capital agrees to
compare the signature of the authorised officer on the drawdown notice
against the specimen signature certificate provided to it.
EFFECT OF A DRAWDOWN NOTICE
2.3 A drawdown notice is effective when GE Capital actually receives it in
legible form. An effective drawdown notice is irrevocable unless the
company advises GE Capital in writing that the company no longer
requires a drawing and at that time GE Capital has not taken any steps
to make the drawing available which GE Capital cannot rescind or
reverse without GE Capital incurring a loss.
CONDITIONS TO FIRST DRAWING
2.4 Before the company requests the first drawing, the company must:
(a) ensure that GE Capital receives every item listed in Schedule
1 in form and substance satisfactory to GE Capital; and
(b) ensure that GE Capital receives all other documents required
by GE Capital to verify the items in Schedule 1 in form and
substance satisfactory to GE Capital.
2.5 The company must ensure that the information contained in all
transaction documents is true, complete and not misleading or deceptive
and discloses all matters material to GE Capital. Before GE Capital is
obliged to provide any financial accommodation, it must be satisfied as
to those matters. GE Capital is entitled to rely on the items in
Schedule 1 and the information contained in them without further
enquiry.
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2.6 Any transaction document required to be certified must be certified by
a secretary or a director of the relevant entity as being true,
complete and not misleading or deceptive as at the time of
certification and at the date of this agreement.
2.7 GE Capital agrees to notify the company as soon as practicable after GE
Capital is satisfied that the conditions to first drawing are
satisfied. To the extent that the company is unable to secure a
landlord acknowledgement referred to in item 17 of Schedule 1 by the
date that the first drawing is required, GE Capital agrees to hold, as
a reserve against Excess Availability, an amount representing rent for
a three month period for each of the properties that are occupied by
the company at which eligible inventory is located that the company has
not procured a landlord acknowledgement for the period that the
acknowledgement is not in place.
CONDITIONS TO ALL DRAWINGS
2.8 GE Capital need not provide any financial accommodation unless:
(a) it is to be provided prior to the maturity date set out in the
Details; and
(b) GE Capital is satisfied that providing the drawing will not
result in a breach of clause 3.1; and
(c) GE Capital has received a drawdown notice in respect of it;
and
(d) GE Capital is satisfied that the representations and
warranties in clause 12 ("Representations and warranties") and
the statements in the drawdown notice are true, complete and
not misleading at the date of the drawdown notice and at the
drawdown date; and
(e) GE Capital is satisfied that no event of default has occurred
(other than one which has either been waived by GE Capital or
remedied) and no event of default would result from the
provision of the financial accommodation.
BENEFIT OF CONDITIONS
2.9 Each condition precedent to drawing is for the sole benefit of GE
Capital and may be waived or modified by GE Capital.
LETTERS OF CREDIT
2.10 The provisions set out in Schedule 5 and Schedule 8A apply in relation
to letters of credit provided or to be provided under this agreement.
The obligors agree to comply with the provisions set out in those
Schedules.
3. AVAILABILITY LIMITS
3.1 The total of the current drawings and the letter of credit liability at
any time must not exceed the lesser of:
(a) the facility limit; and
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(b) the aggregate borrowing base at that time.
3.2 If the total of the current drawings and letter of credit liability
exceeds the limits set out in clause 3.1, the company agrees to
immediately repay to GE Capital so much of the current drawings or
cancel or repay a letter of credit equal to the excess.
4. INTEREST
INTERPRETATION
4.1 In this clause 4, references to the company in respect of a current
drawing are references to the company in whose name the current drawing
is made.
INTEREST CHARGES
4.2 The company agrees to pay interest on the daily balance of each current
drawing. The interest charge for each day is calculated by applying the
interest rate to the daily balance of the current drawing on the basis
of a 360 day year. The interest rate for any day will be determined on
the first business day of the calendar month in which the day falls.
INTEREST PAYMENT
4.3 On each interest payment date the company agrees to pay GE Capital the
interest which has accrued from and including the first day of the
calendar month of the preceding month up to and including the last day
of that calendar month.
5. PAYMENTS
REPAYMENT
5.1 The company agrees to pay to GE Capital all cash receipts, by way of
deposit into a controlled account. To the extent not already paid, each
company agrees to repay to GE Capital the total of the current drawings
and on the maturity date.
PREPAYMENT
5.2 The company may prepay a current drawing at any time. The facility
limit is not reduced by the amounts prepaid under this clause 5.2.
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MANNER OF PAYMENT
5.3 The obligor agrees to make payments under each transaction document to
GE Capital on the due date (or, if that is not a business day, on the
next business day) in Australian dollars in immediately available funds
without set-off or counterclaim and without any deduction in respect of
taxes (unless prohibited by law) into the account nominated by GE
Capital. The obligor satisfies a payment obligation only when GE
Capital receives the amount.
PAYMENT APPLICATION
5.4 A payment under a transaction document will be applied by GE Capital on
the next business day after it is actually received by GE Capital in
the account nominated by GE Capital only for the purpose of calculating
interest.
CONVERSION OF CURRENCY
5.5 All payments by the obligors under this agreement must be made in
Australian dollars. If GE Capital receives an amount in a currency
other than Australian dollars:
(a) it may convert the amount received into Australian dollars
(even though it may be necessary to convert through a third
currency to do so) on the day and at the rates (including spot
rate, same day value rate or value tomorrow rate) as it
considers appropriate. It may deduct its usual costs in
connection with the conversion; and
(b) the obligor satisfies its obligation to pay in Australian
dollars only to the extent of the amount of Australian dollars
obtained from the conversion after deducting the costs of the
conversion.
5.6 Where GE Capital is obliged to make a payment under this agreement in a
currency other than Australian dollars, the obligor must reimburse GE
Capital for that payment in Australian dollars unless GE Capital
specifies otherwise. For the purpose of calculating the amount payable
in Australian dollars, GE Capital may:
(a) convert the amount payable into Australian dollars (even
though it may be necessary to convert through a third currency
to do so) on the day and at the rates (including spot rate,
same day value rate or value tomorrow rate) as it considers
appropriate. It may add its usual costs in connection with the
conversion in calculating the amount payable; and
(b) the obligor satisfies its obligation to make any payment under
this agreement only to the extent that the moneys received by
GE Capital are sufficient to pay the liability in the other
currency including the costs of the conversion to that
currency.
APPLICATION OF PAYMENTS
5.7 GE Capital will apply amounts paid by the obligor or on its behalf
and/or to GE Capital from any controlled account, towards:
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(a) satisfying obligations under the transaction documents in the
manner GE Capital sees fit, unless the transaction documents
expressly provide otherwise; and
(b) satisfying any money owed by the obligor to any related entity
of GE Capital.
5.8 If there are no current drawings, no letter of credit liabilities and
no money payable or to become payable in the future by the obligor to
GE Capital or any of its related entities, GE Capital will at the
written direction of the company, apply amounts paid by the obligor or
on its behalf to an account of the company nominated by the company.
5.9 Once the facility has terminated (either through the effluxion of time
or otherwise) and all current drawings and other money due and owing to
GE Capital have been repaid, GE Capital will direct the bank that
maintains the blocked account to transfer any credit balance in the
blocked account to an account nominated by the company.
6. CANCELLATION
6.1 The company may cancel or terminate the facility. It may do this if the
company gives GE Capital at least 20 business days notice in writing.
Once given, the notice is irrevocable. When the cancellation or
termination takes effect, the total of the current drawings and all
other amounts payable or to become payable in the future under the
transaction documents are immediately due and payable including without
limitation the early termination fee.
7. FEES
FEES
7.1 The company agrees to pay GE Capital:
(a) the closing fee on the first drawdown date under this
agreement;
(b) the unused facility fee payable monthly in arrears on the
first business day of each month and on the maturity date;
(c) the field examination fee on completion of any field
examination after the date of this agreement, the amount of
which will be notified by GE Capital to the company by way of
debit from the company's loan account plus all out of pocket
expenses incurred by GE Capital in conducting the field
examination;
(d) the standby letter of credit fee of 2.5% per annum on the face
value amount of standby letters of credit issued payable
monthly in arrears, plus any charges assessed by the issuing
bank;
(e) the trade letter of credit issuance fee of 0.5% flat for each
six month validity (or part thereof) on the face value amount
of trade letters of credit payable at the end of the month in
which trade letters of credit are issued (subject to a minimum
fee of A$100, plus any charges assessed by the issuing bank;
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(f) the trade letter of credit amendment fee as specified in the
Details on the date of the amendment;
(g) the term letter of credit fee of 2.7% per annum on the face
value amount of any drawing under a term letter of credit
payable monthly in arrears (calculated on the basis specified
in the Details); and
(h) subject to the other terms of this agreement, the early
termination fee, if required under the Details, on the date on
which the facility is cancelled or terminated, (but only if
the facility is cancelled or terminated prior to the maturity
date) either voluntarily by the company or otherwise.
7.2 GE Capital agrees that, provided it has received the early termination
fee, it waives its rights to take action against the company for loss
of bargain damages or loss of yield.
8. LOAN ACCOUNT
8.1 GE Capital agrees to maintain a loan account on its books to record:
(a) all current drawings;
(b) all other amounts due and payable by the obligor to GE Capital
under the transaction documents including but not limited to
interest, fees and amounts deemed to be current drawings;
(c) all payments made by or on behalf of the obligor or by means
of the locked box agreement or blocked account agreement; and
(d) all other debits and credits as provided for in the
transaction documents.
The balance in the loan account is sufficient evidence (absent error)
of the amounts due and owing to GE Capital by the obligors. However, a
failure to record or an error in recording does not limit or otherwise
affect an obligor's obligations under the transaction documents.
8.2 GE Capital agrees to provide the company with a monthly statement of
transactions for the facility. Unless the company notifies GE Capital
of any objection to any item in that statement (specifically describing
the basis for the objection), within 120 days after the date of the
statement, each item in the statement is (absent obvious error) prima
facie evidence of the correctness of the item.
9. WITHHOLDING TAX
PAYMENTS TO GE CAPITAL
9.1 If a law requires the obligor to deduct an amount in respect of taxes
from a payment under any transaction document such that GE Capital
would not actually receive on the due date the full amount provided for
under the transaction document, then:
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(a) the amount payable is increased so that, after making the
deduction and further deductions applicable to additional
amounts payable under this clause 9.1, GE Capital is entitled
to receive (at the time the payment is due) the amount it
would have received if no deductions had been required; and
(b) the obligor agrees to make the deductions; and
(c) the obligor agrees to pay the amounts deducted to the relevant
authority in accordance with applicable law and deliver the
copies of receipts to GE Capital.
10. COMPENSATION FOR CHANGED CIRCUMSTANCES
COMPENSATION
10.1 The company agrees to compensate GE Capital on demand if, in GE
Capital's opinion, any law or change in law taking effect after the
date of this agreement, a change in any law's interpretation or
application by an authority after the date of this agreement or
compliance by GE Capital or any of its related entities with any such
law, changed law or changed interpretation or application directly:
(a) increases the cost of the facility to GE Capital; or
(b) reduces any amount received or receivable by GE Capital, or
its effective return, in connection with the facility; or
(c) reduces GE Capital's return on capital allocated to the
facility, or its overall return on capital.
Compensation need not be in the form of a lump sum and may be demanded
as a series of payments. GE Capital agrees that this clause does not
apply to an increased cost event such as a change in company tax rates
or the introduction of other expenses that does not directly effect or
increase the cost to GE Capital of providing financial accommodation
under the Transaction Documents.
CALCULATION IN REASONABLE DETAIL
10.2 If GE Capital makes a demand under clause 10.1, it agrees to provide
the company with reasonably detailed calculations of how the amount
demanded has been ascertained. However, nothing in this clause 10.2
obliges GE Capital to provide details of its business or tax affairs
which it considers in good faith to be confidential.
MITIGATION
10.3 If requested by the company, in any case where clause 10.1 applies, GE
Capital will use its reasonable endeavours to take such steps as may be
reasonable and available to it to minimise the amount of any increased
cost, reduction, loss of return or payment. Failure by GE Capital to do
so does not release the company from its obligations under clause 10.1
and the company agrees that no right of action arises as a result.
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10.4 Nothing in clause 10.3 obliges GE Capital to incur any additional costs
or to take any steps which, in GE Capital's opinion, could be
detrimental to its interests, whether by way of an economic, legal or
regulatory disadvantage or in any other way.
10.5 The company must reimburse GE Capital on demand for any costs incurred
in taking any steps under clause 10.3.
11. ILLEGALITY OR IMPOSSIBILITY
GE CAPITAL'S RIGHT TO SUSPEND OR CANCEL
11.1 This clause 11 applies if GE Capital determines that:
(a) a change in a law; or
(b) a change in the interpretation or administration of a law by
an authority; or
(c) a new law taking effect after the date of this agreement,
makes it (or will make it) illegal or impossible for GE Capital to
fund, provide, or continue to fund or provide, financial accommodation
under the transaction documents. In these circumstances, GE Capital, by
giving a notice to the company, may suspend or cancel some or all of GE
Capital's obligations under this agreement as indicated in the notice.
EXTENT AND DURATION
11.2 The suspension or cancellation:
(a) must apply only to the extent necessary to avoid the
illegality or impossibility; and
(b) in the case of suspension, may continue only for so long as
the illegality or impossibility continues.
NOTICE REQUIRING REPAYMENT
11.3 If the illegality or impossibility relates to a current drawing, GE
Capital, by giving a notice to the company, may require repayment of
all or part of that current drawing. The company agrees to repay the
amount specified within 5 business days after receiving the notice.
FEES
11.4 The early termination fee is not payable by the company if the early
repayment occurs solely because of a cancellation or suspension under
this clause, and provided no event of default has occurred.
11.5 The unused facility fee is not payable by the company for that part of
the facility that is cancelled or suspended under this clause, and
provided no event of default has occurred or occurs, for the period of
the suspension or cancellation.
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12. REPRESENTATIONS AND WARRANTIES
REPRESENTATIONS AND WARRANTIES
12.1 The obligor (to the extent applicable) represents and warrants (except
in relation to matters disclosed to GE Capital by the company and
accepted by GE Capital in writing) that:
(a) (INCORPORATION AND EXISTENCE) it has been incorporated as a
company limited by shares in accordance with the laws of its
place of incorporation, is validly existing under those laws
and has power and authority to carry on its business as it is
now being conducted; and
(b) (POWER) it has power to enter into the transaction documents
to which it is a party and observe its obligations under them;
and
(c) (AUTHORISATIONS) it has in full force and effect the
authorisations necessary for it to enter into the transaction
documents to which it is a party, to observe its obligations
and exercise its rights under them and to allow them to be
enforced; and
(d) (NO CONTRAVENTION OR EXCEEDING POWER) the transaction
documents and the transactions under them which involve it do
not contravene its constituent documents or any law or
obligation by which it is bound or to which any of its assets
are subject or cause a limitation on its powers or the powers
of its directors to be exceeded; and
(e) (OBLIGATIONS VALID, BINDING AND ENFORCEABLE) its obligations
under the transaction documents are valid and binding and
enforceable against it in accordance with their terms; and
(f) (FINANCIAL STATEMENTS) its most recent audited or unaudited
(as the case may be) financial statements and any other of its
financial statements which it has given to GE Capital are a
true and fair statement of its financial position as at the
date to which they are prepared, are prepared in accordance
with GAAP and disclose or reflect all its actual and (in
respect of the end of the financial year audited financial
statements only) contingent liabilities as at that date, and
there has been no change in its financial position since the
date of those statements that is likely to have a material
adverse effect. For the purposes of this clause, GE Capital
agrees that a change in the obligor's financial position that
is less than $300,000 shall not constitute a material adverse
effect; and
(g) (CONSOLIDATED ACCOUNTS) the most recent audited consolidated
financial statements of the reporting group of the company and
any other consolidated financial statements which it has given
to GE Capital are a true and fair statement of the reporting
group's financial position as at the date to which they are
prepared, are prepared in accordance with GAAP and disclose or
reflect all the economic entity's actual and (in respect of
the end of the financial year audited consolidated financial
statements only) contingent liabilities as at that date, and
there has been no change in its financial position since the
date of those
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statements that is likely to have a material adverse effect.
For the purposes of this clause, GE Capital agrees that a
change in the obligor's financial position that is less than
$300,000 shall not constitute a material adverse effect; and
(h) (EVENT OF DEFAULT) no event of default has occurred or
continues unremedied; and
(i) (DEFAULT UNDER LAW - MATERIAL ADVERSE EFFECT) neither it nor
any of its subsidiaries is in default under a law or
obligation affecting any of them or their assets in a way
which is likely to have a material adverse effect; and
(j) (LITIGATION) there is no pending or threatened proceeding
affecting it or any of its subsidiaries or any of their assets
before a court, governmental agency, commission or arbitrator
except those in which a decision against it or the subsidiary
(either alone or together with other decisions) would be
insignificant; and all proceedings which seek damages in
excess of A$250,000 or injunctive relief or allege criminal
misconduct of it or any of its subsidiaries have been set out
in the disclosure statement; and
(k) (TRUSTEE MATTERS) it enters into the transaction documents in
its own capacity and as trustee of each of the trusts or
settlements which have been listed in the disclosure
statement, and in respect of each of the trusts listed in the
disclosure statement:
(i) it has power to enter into and perform the
transaction documents and carry on the transactions
contemplated by the transaction documents;
(ii) it holds the trust property on trust under the deeds
and documents referred to in the disclosure statement
which are up to date and comprise all documents in
relation to the trust and all terms of the trust and
all resolutions and directions relating to the trust;
(iii) the transaction documents are entered into as part of
the due and proper administration of the trust and
are for the benefit of the beneficiaries of the
trust;
(iv) no conflict of interest or breach of trust occurs as
a result of the obligor entering into the transaction
documents; and
(v) no beneficiary is presently entitled to any of the
assets subject to the trust; and
(l) (REAL PROPERTY) all of the real property owned, leased,
subleased or used by it or any of its subsidiaries have been
set out in the disclosure statement; and the disclosure
statement specifies whether it or any of its subsidiaries is a
lessor, sublessor or assignor in respect of that property; and
specifies whether it or any of its subsidiaries has any
contractual rights in respect of any real property; and
(m) (NO DAMAGE TO REAL PROPERTY) none of its real property has
suffered any material damage by fire or other cause which has
not been repaired and restored in all material respects to its
original condition or otherwise remedied; and
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(n) (EMPLOYMENT MATTERS) there are no pending or threatened
strikes or other material employment disputes against it or
any of its subsidiaries; and hours worked and payments made to
its employees or the employees of any of its subsidiaries
comply with all applicable laws; and except as set out in the
disclosure statement neither it nor any of its subsidiaries is
a party to or bound by any collective bargaining agreement,
management agreement, consulting agreement or any employment
agreement, in each case involving more than A$250,000 and
except as set out in the disclosure statement and there are no
complaints or charges against it or any of its subsidiaries
pending or, to its knowledge, threatened to be filed with any
authority or arbitrator in connection with the employment or
termination of employment by it or any of its subsidiaries of
any individual; and
(o) (JOINT VENTURES, SUBSIDIARIES AND AFFILIATES) except as set
out in the disclosure statement neither it nor any of its
subsidiaries has any subsidiaries, is engaged in any joint
venture or partnership, or is an affiliate of any other
person; and
(p) (CAPITAL STRUCTURE) all of its issued and outstanding share
capital and the issued and outstanding share capital of any of
its subsidiaries is owned by each of the persons and in the
amounts set out in the disclosure statement; and there are no
outstanding rights to purchase, options, warrants or similar
rights or agreements pursuant to which it or any of its
subsidiaries may be required to issue, sell, repurchase or
redeem any of their share capital or other equity securities
or any share capital or other equity securities of its
subsidiaries; and
(q) (INDEBTEDNESS) all of its indebtedness in excess of A$250,000
excluding indebtedness under this agreement) and the
indebtedness in excess of A$250,000 of each of its
subsidiaries is described in the disclosure statement; and
(r) (TAXES) all taxes which are due and payable by it and each of
its subsidiaries have been paid or provision has been made for
them to be paid, except where the amount of the tax is the
subject of a good faith contest with the appropriate authority
and meeting the requirements set out in clause 13.1 k); and
details of any of its tax returns or any tax return of its
subsidiaries which are currently being audited are set out in
the disclosure statement along with any assessments or
threatened assessments in connection with those audits; and
neither it nor any of its subsidiaries has executed or filed
any agreement or other document extending the period for
assessment or collection of any taxes or having that effect;
and neither it nor any of its subsidiaries are liable for any
taxes under any agreement or as a transferee; and
(s) (BROKERS) no broker or finder acting on its behalf or on
behalf of any of its subsidiaries brought about the obtaining
or making of the facility other than as disclosed in writing
to GE Capital; and
(t) (INTELLECTUAL PROPERTY) it and each of its subsidiaries owns
or has rights to use all intellectual property necessary to
conduct that business, and each patent, trademark, copyright
and licence is listed, together with application or
registration numbers, as applicable, in the disclosure
statement; and it and each of its subsidiaries conducts its
business without infringing or interfering with any
intellectual property of any person; and
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(u) (RANKING OF SECURITY) GE Capital has been granted a first
ranking fixed and floating charge and mortgage over all
present and future assets of the company which takes priority
over all other security interests; and
(v) (ENVIRONMENTAL MATTERS) except as set out in the disclosure
statement:
(i) its real property is free of any hazardous material
other than those that are used by the obligor as part
of carrying on its business;
(ii) it and each of its subsidiaries are and have been in
compliance with all environmental laws, except for
such non-compliance which would not result in
environmental liabilities which could reasonably be
expected to exceed A$250,000;
(iii) it and each of its subsidiaries have obtained, and
are in compliance with, all environmental permits
required for the operations of their business as
presently conducted or as proposed to be conducted,
except where the failure to so obtain or comply with
such environmental permits would not result in
environmental liabilities which could reasonably be
expected to exceed A$250,000, and all such
environmental permits are valid and uncontested;
(iv) it and each of its subsidiaries are not involved in
operations or know of any facts, circumstances or
conditions that are likely to result in any
environmental liabilities which could be reasonably
be expected to exceed A$250,000;
(v) neither it nor any of its subsidiaries has received a
notice identifying any of them as a person who may be
the potential recipient of any clean-up notice or
potential recipient of any claim for contribution or
indemnity by any other person who may be served with
a clean-up notice or requesting information under any
statutes, and, to its knowledge, there are no facts,
circumstances or conditions that may result in it or
any of its subsidiaries being identified as a person
who may be the potential recipient of any clean-up
notice or potential recipient of any claim for
contribution or indemnity by any other person who may
be served with a clean-up notice under any statutes;
(vi) it and each of its subsidiaries have provided to GE
Capital copies of all existing environmental reports,
reviews and audits and all written information
pertaining to their actual or potential environmental
liabilities; and
(w) (INSURANCE) the disclosure statement sets out all insurance
policies maintained by it or any of its subsidiaries, as well
as a summary of the terms of those policies; and
(x) (BANK ACCOUNTS) the disclosure statement lists all banks and
other financial institutions at which it or any of its
subsidiaries maintains deposits or other accounts and
correctly identifies the name, address and telephone number of
each
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institution, the name in which the account is held, a
description of the purpose of the account, and the complete
account number; and
(y) (AGREEMENTS AND OTHER DOCUMENTS) it has given GE Capital
accurate and complete copies (or summaries) of all of the
following agreements or documents to which it or any of its
subsidiaries is subject and each of which are listed in the
disclosure statement:
(i) supply agreements and purchase agreements not
terminable within 60 days following written notice
issued by that entity and involving transactions in
excess of A$500,000 per annum;
(ii) any lease of equipment having a remaining term of one
year or longer and requiring aggregate rental and
other payments in excess of A$250,000 per annum;
(iii) licenses and permits, the absence of which could be
reasonably likely to have a material adverse effect;
(iv) instruments or documents evidencing indebtedness in
excess of A$250,000 and any security interest granted
with respect thereto; and
(v) instruments and agreements evidencing the issuance of
any equity securities, warrants, rights or options to
purchase equity securities of that entity; and
(z) (OWNERSHIP OF PROPERTY) it has good title to all real property
(other than leasehold properties) held by it or on its behalf
and all undertakings carried on by it, as beneficial owner, or
as trustee of a trust set out in the disclosure statement,
free from encumbrances other than permitted security interests
and easements and covenants burdening real property, and there
are no facts known to it or any of its subsidiaries which may
result in any encumbrances arising over that property; and
(aa) (BENEFIT) it benefits by entering into the transaction
documents to which it is a party; and
(bb) (SOLVENCY) there are no reasonable grounds to suspect that it
or any of its subsidiaries is unable to pay its debts as and
when they become due and payable; and
(cc) (NO BENEFIT TO RELATED PARTY) no person has contravened or
will contravene section 208 of the Corporations Act 2001
(Cwlth) by entering into any transaction document or
participating in any transaction in connection with a
transaction document; and
(dd) (FULL DISCLOSURE) it has disclosed in writing to GE Capital
all facts relating to it and its subsidiaries, the transaction
documents and all things in connection with them which are
material to the assessment of the nature and amount of the
risk undertaken by GE Capital in entering into the transaction
documents and doing anything in connection with them; and
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(ee) (DISCLOSURES) all information disclosed to GE Capital in
connection with any transaction document is true and complete
and is not misleading or deceptive in any material way,
including information contained in any borrowing base
certificate, drawdown notice and disclosure statement; and
(ff) (NO IMMUNITY) neither it nor any of its subsidiaries has
immunity from the jurisdiction of a court or from legal
process.
CONTINUATION AND REPETITION OF REPRESENTATIONS AND WARRANTIES
12.2 The obligor repeats each of the representations and warranties in this
clause 12 at the time of each drawdown notice and on each drawdown
date.
12.3 The obligor must notify GE Capital of anything that happens at any time
that makes any one or more of the representations and warranties in
this clause 12 untrue, incomplete or misleading and deceptive by
reference to the then current circumstances.
13. UNDERTAKINGS
GENERAL UNDERTAKINGS
13.1 The reporting group undertakes to:
(a) (ACCOUNTING RECORDS) keep proper accounting records in
accordance with GAAP and ensure that each of its subsidiaries
does the same; and
(b) (INFORMATION) promptly give GE Capital any document or other
information that GE Capital reasonably requests from time to
time; and
(c) (STATUS CERTIFICATES) on request from GE Capital, give GE
Capital a certificate signed by two of its directors which
states whether (to the best of their knowledge after making
due enquiries) an event of default continues unremedied; and
(d) (MAINTAIN AUTHORISATIONS) obtain, renew on time and comply
with the terms of, each authorisation necessary for it to
enter into the transaction documents to which it is a party,
to observe its obligations and exercise its rights under them
and to allow them to be enforced; and
(e) (INCORRECT REPRESENTATION OR WARRANTY) promptly notify GE
Capital if any representation or warranty made by it or on its
behalf in connection with a transaction document is found to
be or becomes incorrect or misleading; and
(f) (ENSURE NO EVENT OF DEFAULT) do everything necessary to ensure
that no event of default occurs and ensure that each of its
subsidiaries does the same; and
(g) (NOTIFY DETAILS OF EVENT OF DEFAULT) if an event of default or
other event which has a material adverse effect occurs, notify
GE Capital as soon as possible but, in any event, within five
business days giving full details of the event and any step
taken or proposed to remedy it; and
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(h) (PURPOSE) use the facility only for the purpose set out in the
Details; and
(i) (CONTINUE BUSINESS) continue to conduct its business
substantially as now conducted or as otherwise permitted under
the transaction documents; and
(j) (USE ONLY CERTAIN NAMES) transact business in those business
and company names listed in the disclosure statement; and
(k) (MAKE PAYMENTS) duly and punctually pay and discharge or cause
to be paid and discharged all taxes, assessments and other
charges imposed by any authority on it or its property.
However, it may in good faith contest by appropriate
proceedings the validity or amount of any such charge if:
(i) at the time it commences the contest no event of
default has occurred and is continuing;
(ii) adequate reserves in respect of the charge are
maintained in its books;
(iii) the contest is maintained and prosecuted continuously
with due diligence and operates to suspend collection
or enforcement of the charge or any encumbrance in
respect of it;
(iv) no encumbrance arises in respect of the charge; and
(v) GE Capital has not notified the company that GE
Capital reasonably believes that the charge could
have or result in a material adverse effect; and
(l) (LANDLORD, MORTGAGEE AND BAILEE AGREEMENTS) promptly obtain
agreements in form and substance satisfactory to GE Capital
from each landlord or mortgagee of the company, of real
property where any property owned, used or occupied by the
company or subject to a security interest in favour of GE
Capital is located and each bailee of its property, containing
a waiver or subordination of all encumbrances or claims that
that person may assert against the company's property; and
(m) (DEPOSIT OF FUNDS) within one business day of receipt of any
cheques, cash or other items of payment deposit those items
into a controlled account; and
(n) (PUBLIC NOTICES) give to GE Capital copies of all:
(i) documents issued by it as required by applicable law
to be issued to its shareholders;
(ii) material documents filed by it with the Australian
Securities and Investments Commission; and
(iii) press releases made available by it to the public,
promptly following issue or filing of the relevant document or
statement; and
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(o) (DEFAULT NOTICES UNDER LEASES) give to GE Capital copies of
any default notices received under or with respect to any
licensed or leased location or warehouse where any property
owned, used or occupied by the company or subject to a
security interest in favour of GE Capital is located
immediately upon receipt by the company; and
(p) (CLOSE ACCOUNTS - CREDIT REASONS) if requested by GE Capital,
promptly, but in any case within 30 days of the request, close
those accounts specified by GE Capital and establish
replacement accounts. GE Capital may only make a request under
this clause if, in its reasonable judgment, it decides that
the creditworthiness of the bank or financial institution
holding the relevant account is no longer acceptable; and
(q) (CLOSE ACCOUNTS - OPERATIONAL REASONS) if requested by GE
Capital, promptly, but in any case within 30 days of the
request, close those of its accounts specified by GE Capital
and establish replacement accounts. GE Capital may only make a
request under this clause if, in its reasonable opinion, the
operating performance, funds transfer and/or availability
procedures or performance of the relevant bank or financial
institution with respect to the relevant accounts is no longer
acceptable; and
(r) (ENVIRONMENTAL MATTERS) conduct its operations and keep and
maintain its real property in compliance with all
environmental laws and environmental permits other than
non-compliance which could not reasonably be expected to have
a material adverse effect; and implement any and all
investigation, remediation, removal and response actions which
are appropriate or necessary to maintain the value and
marketability if its real property or to otherwise comply with
environmental laws and environmental permits; and notify GE
Capital promptly after it becomes aware of any violation of
environmental laws or environmental permits which is
reasonably likely to result in environmental liabilities in
excess of A$250,000 and of any fact, matter or circumstance
which it knows or reasonably anticipates may make it or any of
its subsidiaries a person who may be the potential recipient
of any clean-up notice or potential recipient of any claim for
contribution or indemnity by any other person who may be
served with a clean-up notice; and promptly forward to GE
Capital a copy of any order, notice, request for information
or any communication or report (including any actual or
threatened clean-up notice) received by it in connection with
any such violation or any other matter relating to any
environmental laws or environmental permits that could
reasonably be expected to result in environmental liabilities
in excess of A$250,000, in each case whether or not any
authority has taken or threatened any action in connection
with any such violation or other matter; and
(s) (INTELLECTUAL PROPERTY) conduct its business without
infringing or interfering with any intellectual property of
any person; and obtain all patents, trademarks, copyrights
permits and licences necessary or required for the conduct of
its business.
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FINANCIAL UNDERTAKINGS
13.2 The company agrees:
(a) to ensure that the capital expenditures of the reporting group
in any financial year do not (in total) exceed:
(i) A$1,200,000 or such other amount as agreed by the
parties for the year ended 31 March 2003;
(ii) A$500,000 or such other amount as agreed by the
parties for the year ended 31 March 2004;
(iii) A$500,000 or such other amount as agreed by the
parties for the year ended 31 March 2005;
(iv) A$500,000 or such other amount as agreed by the
parties for the year ended 31 March 2006; and
(b) to ensure that, at all times, the tangible net worth of the
reporting group is at least $4,000,000; and
(c) to ensure that, at all times, the fixed charge coverage ratio
of the reporting group (calculated by reference to the
previous 12 month period) is not less than [1.10:1] at all
times.
NEGATIVE COVENANTS
13.3 The reporting group undertakes that it will not (in its own capacity or
as trustee of any trust or in respect of any property subject to any
trust of which it is a trustee), without the prior consent (not to be
unreasonably withheld) of GE Capital:
(a) (MERGERS) form or acquire any subsidiary or merge or
consolidate with, acquire all or substantially all of the
assets or share capital or otherwise combine with or acquire
any person; or
(b) (INVESTMENTS) make or permit to exist any investment in, or
any loan or other financial accommodation to any person; or
(c) (INDEBTEDNESS) incur, assume or permit to exist any
indebtedness except permitted indebtedness; or
(d) (REPAYMENT) voluntarily prepay, redeem, purchase, defease or
otherwise satisfy indebtedness prior to its due date except
under the transaction documents,; or
(e) (RELATED PARTY TRANSACTIONS) enter into or be party to any
transaction with any other company or related entity to the
company except:
(i) for the payment of permitted payments; or
(ii) where the transaction is:
(A) in the ordinary course of business; and
(B) pursuant to the reasonable requirements of
its business; and
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Facility Agreement-Daisytek Australia Pty Limited 12/02/03
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(C) upon terms that are no less favourable to it
than would be obtained in a comparable arm's
length transaction with a person who is not
another company or a related entity, or
affiliate of the company; or
(f) (LOANS TO EMPLOYEES) enter into any lending transaction (other
than any advances on commissions to employees) with any of its
employees or any employees of any of its subsidiaries for a
principal amount of more than A$10,000, or in aggregate
A$50,000 or increase existing indebtedness except permitted
indebtedness; or
(g) (CAPITAL STRUCTURE) make any change in its capital structure
as described in the disclosure statement; or
(h) (BUSINESS) make any change to any of its business objectives,
purposes or operations if that change could have a material
adverse effect; or
(i) (GUARANTEES) enter into or give any guarantee or other
assurance against financial loss in connection with money
borrowed or raised by it or at its request or any of its
subsidiaries; or
(j) (SECURITY INTERESTS) create or allow to exist a security
interest on the whole or any part of its present or future
property except permitted security interests; or
(k) (DISPOSE OF PROPERTY) dispose of all or a substantial part of
its property (either in a single transaction or in a series of
transactions whether related or not and whether voluntarily or
involuntarily) except:
(i) the sale of inventory in the ordinary course of
business; or
(ii) disposals of equipment, real property or fixtures
that are obsolete or no longer used or useful in its
business where the value of the property disposed of
is less than A$250,000 in total for the reporting
group in any financial year; or
(iii) disposals of other equipment or fixtures where the
value of the property disposed of is less than
A$250,000 in total for the reporting group in any
financial year; or
(l) (SALE-LEASEBACKS) enter into any sale-leaseback, synthetic
lease or similar transaction involving its assets; or
(m) (CANCELLATION OF INDEBTEDNESS) cancel any claim or debt owing
to it except for reasonable consideration negotiated on an
arm's length basis and in the ordinary course of business
consistent with past practices; or
(n) (RESTRICTED PAYMENTS) make any restricted payment other than
payment of permitted payments; or
(o) (COMPANY NAME AND CONSTITUTION) change its name, identity,
corporate structure or constitution; or
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(p) (LOCATION OF BUSINESS) change its registered office address,
principal place of business, corporate offices or warehouses
or locations at which any of its property is held; or
(q) (FINANCIAL YEAR) change its financial year; or
(r) (IMPAIRMENT OF INTERCOMPANY TRANSFERS) directly or indirectly
enter into or become bound by any agreement or other
arrangement other than the transaction documents which could
directly or indirectly restrict, prohibit or require the
consent of any person with respect to the payment of dividends
or distributions or repayment of intercompany loans by any of
its subsidiaries to it; or
(s) (SPECULATIVE TRANSACTIONS) enter into any transaction
involving commodity options, futures contracts, interest rate
swaps or similar transactions except solely to hedge against
fluctuations in the prices of foreign currencies receivable or
payable by it; or
(t) (LICENCES AND LEASES) enter into one or more operating
licences or leases for equipment or real property if the total
of all payments under those licences or leases in any year of
the licences or leases are greater than A$250,000; or
(u) (ACQUIRE REAL PROPERTY OR WAREHOUSE SPACE) lease or acquire
any real property or warehouse space or send any inventory to
a processing or converting facility unless agreements referred
to in clause 13.1(l) have been obtained for that real
property, warehouse space or facility; or
(v) (PRESS RELEASES) issue any press release or other public
disclosure using the name of GE Capital or any of its related
entities or referring to any transaction document without the
prior written consent of GE Capital, unless it is required to
do so by law and it consults with GE Capital before issuing
that press release or other public disclosure; or
(w) (BANK ACCOUNT BALANCES) accumulate or maintain cash in
disbursement or payroll accounts as at the date of any
determination in excess of the total sum of cheques
outstanding against those accounts as at that date, amounts
necessary to meet unanticipated liabilities incurred in the
ordinary course of business in an amount no greater than
$250,000 and amounts necessary to meet minimum balance
requirements; or
(x) (NEW BANK ACCOUNTS) open any new deposit or other accounts
with any bank or financial institution or create any term
deposit, unless GE Capital has consented to the opening of the
account; or
(y) (RELATED PARTY INDEBTEDNESS) pay or otherwise satisfy
indebtedness owed or payable to any related entity of the
company except; or
(z) (TRUST MATTERS) exercise any power, take any step or grant any
consent or approval in respect of any trust of which it is
trustee to:
(i) amend any trust deed;
(ii) make any capital distribution in cash from trust
assets;
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(iii) resign or appoint any new or additional trustee
appointor or other similar position;
(iv) appoint any new beneficiaries to the class of
beneficiaries;
(v) alter the vesting date;
(vi) allow use of the trust property by any beneficiaries
of the trust;
(vii) blend or mix trust property with any other property;
(viii) breach any of its obligations under the trust deed or
limit or exclude the company's right of indemnity
under the trust.
FINANCIAL REPORTING
13.4 The company undertakes to:
(a) (MONTHLY FINANCIAL INFORMATION) give GE Capital, within 30
days of the end of each month:
(i) an unaudited consolidated and consolidating balance
sheet of the reporting group as at the last day of
that financial month; and
(ii) unaudited consolidated and consolidating profit and
loss statements both for that month and the financial
year to date for the reporting group setting out in
comparative form the figures for the corresponding
period in the previous year and the figures contained
in the projections for that year; and
(iii) a certificate signed by the directors of the company
showing the calculations used in determining
compliance with the financial undertakings set out in
clause 13.2 and stating that the financial
information gives a true and fair view in accordance
with GAAP of the financial position and results of
operations of the reporting group, any other
information presented is true and complete in all
material respects and that no event of default has
occurred or is continuing or, if that statement
cannot be made, the nature of each event of default
and the steps taken to correct them; and
(b) (QUARTERLY FINANCIAL INFORMATION) give GE Capital, within 30
days of the end of each March, June, September and December,
unaudited consolidated and consolidating cash flow statements
both for that quarter and the financial year to date for the
reporting group setting out in comparative form the figures
for the corresponding period in the previous year and the
figures contained in projections for that year; and
(c) (OPERATING PLAN) give to GE Capital as soon as it is available
but by no later than 30 days after the end of each financial
year an annual operating plan on a monthly basis for the
reporting group approved by the directors of each company in
the reporting group. The operating plan must include:
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(i) a statement of all of the material assumptions on
which the plan is based; and
(ii) monthly balance sheets and a monthly profit and loss
and cash flow statements for the following year.
The operating plan must include sales, gross profits,
operating expenses, operating profit, cash flow projections,
excess borrowing availability and all prepared on the same
basis and in similar detail as that on which the financial
information referred to in sub-paragraph (a) are provided (and
in the case of cash flow projections, representing
management's good faith estimates of future financial
performance based on historical performance), and include
plans for capital expenditures; and
(d) (MANAGEMENT LETTER) give to GE Capital within five business
days after its receipt, a copy of any management letter,
exception report or similar letters or reports received by the
obligor from its auditors or accountants; and
(e) (ANNUAL FINANCIAL STATEMENTS) give the consolidated and
consolidating financial statements of each obligor and the
unqualified audited consolidated financial statements of the
reporting group for each financial year to GE Capital within
120 days after the end of that year. Those consolidated
financial statements must set out in comparative form the
figures for the corresponding period in the previous year; and
(f) (OFFICER'S CERTIFICATE) give to GE Capital at the same time as
the financial statements in clause 13.4(d), a certificate
signed by its directors showing in reasonable detail the
calculations used in determining compliance with each of the
financial undertakings in clause 13.2 and stating that the
financial information gives a true and fair view in accordance
with GAAP of the financial position and results of operations
of each obligor and the reporting group, any other information
presented is true, complete and not misleading or deceptive in
any material respects and that no event of default has
occurred or is continuing or, if that statement cannot be
made, the nature of each event of default and the steps taken
to correct them; and
(g) (RECONCILIATION REPORT) give GE Capital at the same time as
the delivery of the monthly financial reports referred to in
clause 13.4(a) a reconciliation of the accounts receivable and
accounts payable trial balances and month end inventory
perpetual reports of the reporting group to the general ledger
of the reporting group and monthly financial reports delivered
under clause 13.4(a); and
(h) (INTELLECTUAL PROPERTY APPLICATIONS) give GE Capital at the
same time as the delivery of the annual financial statements
referred to in clause 13.4(d), a list of any applications for
the registration of any patent trademark or copyright which
the obligor has filed in the preceding year.
OTHER REPORTS
13.5 The company undertakes to provide to GE Capital in form and substance
satisfactory to GE Capital:
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(a) (BORROWING BASE CERTIFICATE) on request by GE Capital, but no
less frequently than 10 business days after the end of each
month except for each March month end where the information is
to be provided within 15 business days from the March month
end, a borrowing base certificate for the company; and
(b) (ACCOUNTS RECEIVABLE ROLL FORWARD ANALYSIS) within 10 business
days after the end of each month except for each March month
end where the information is to be provided within 15 business
days from the March month end, reports showing all additions
and reductions (cash and non-cash) to the accounts receivable
of the company for that month; and
(c) (DISCLOSURE STATEMENT) on request by GE Capital a disclosure
statement for; and
(d) (INVENTORY ANALYSIS) within 10 business days after the end of
each month except for each March month end where the
information is to be provided within 15 business days from the
March month end, reports showing all inventory held by the
company at the end of the preceding month identifying
separately raw materials, work in progress, unfinished goods,
finished goods and their respective values and identifying the
composition of the raw materials, work in progress, unfinished
goods and finished goods and their respective locations; and
(e) (OUTSTANDING ACCOUNTS) on request by GE Capital, but no less
frequently than 10 business days after the end of each month
except for each March month end where the information is to be
provided within 15 business days from the March month end, a
summary report of accounts outstanding of the company aged
from invoice date as follows: 1 to 30 days, 31 to 60 days, 61
to 90 days and 91 days or more; and
(f) (ACCOUNTS PAYABLE) on request by GE Capital, but no less
frequently than 10 business days after the end of each month
except for each March month end where the information is to be
provided within 15 business days from the March month end, a
summary report of accounts payable of the company aged from
invoice date as follows: 1 to 30 days, 31 to 60 days, 61 to 90
days and 91 days or more.
COMMUNICATIONS WITH THIRD PARTIES
13.6 The obligor authorises GE Capital to communicate directly with its
accountants, auditors and other advisers and agrees to instruct them to
make available to GE Capital all information which they have concerning
it and its subsidiaries provided GE Capital gives prior written notice
to the relevant obligor.
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14. OTHER RIGHTS OF GE CAPITAL
14.1 If GE Capital at any time has a reasonable basis to believe that there
may be a violation of any environmental laws or environmental permits
by any obligor or any environmental liability or any threatened or
actual service of any clean-up notice or any claim for contribution or
indemnity against any obligor by any other person served or threatened
to be served with any clean-up notice, which, in each case, could
reasonably be expected to have a material adverse effect, then the
obligor on the request of GE Capital agrees to:
(a) cause the performance of such environmental investigations and
preparation of such environmental reports as GE Capital may
reasonably request, which must be conducted by reputable
environmental consulting firms acceptable to GE Capital and be
in form and substance acceptable to GE Capital; and
(b) permit GE Capital or its representatives to have access to all
real property for the purpose of conducting such environmental
investigations and testing as it deems reasonably appropriate.
15. EVENTS OF DEFAULT
EVENTS OF DEFAULT
15.1 Each of the following is an event of default:
(a) (NON PAYMENT - TRANSACTION DOCUMENT) the company does not pay
on time any amount payable under any transaction document in
the manner required under it; or
(b) (CROSS DEFAULT) any present or future monetary obligations of
the obligor or any of its subsidiaries for amounts totalling
more than A$250,000 are not satisfied on time (or at the end
of their period of grace) or become prematurely payable.
(A "monetary obligation" means a monetary obligation in
connection with:
(i) money borrowed or raised; or
(ii) any hiring arrangement, redeemable preference share,
letter of credit or financial markets transaction
(including a swap, option or futures contract); or
(iii) a guarantee or indemnity in connection with money
borrowed or raised.);
or
(c) (NON OBSERVANCE OF OBLIGATIONS) the obligor does not observe
any of its obligations under any transaction documents or
under any other agreement or obligation with GE Capital or its
related entities; or
(d) (ENFORCEMENT AGAINST ASSETS) distress is levied or a judgment,
order or encumbrance is enforced, or becomes enforceable,
against any property of the
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obligor or any of its subsidiaries for amounts in total
exceeding A$250,000 (or the equivalent in any other currency
in which the enforcement occurs); or
(e) (INCORRECT DOCUMENT) any document or information contained in
any document given under clause 2.4 ("Conditions to first
drawing") is untrue, incomplete or misleading in any material
respect in GE's opinion; or
(f) (INCORRECT REPRESENTATION OR WARRANTY) a representation or
warranty made by or in respect of the obligor in connection
with a transaction document is found to have been untrue,
incorrect or misleading when made, or the obligor fails to
make a disclosure in accordance with clause 12.3
("Continuation of representations and warranties"); or
(g) (INSOLVENCY) the obligor is or becomes insolvent or steps are
taken to make any of those persons insolvent; or
(h) (CEASING BUSINESS) the obligor stops payment, ceases to carry
on its business or a material part of it, or threatens to do
either of those things except to reconstruct or amalgamate
while solvent on terms approved by GE Capital; or
(i) (VOIDABLE TRANSACTION DOCUMENT) a transaction document or a
transaction in connection with it is or becomes (or is claimed
to be) wholly or partly void, voidable or unenforceable or is
terminated without the written consent of GE Capital or does
not have (or is claimed not to have) the priority GE Capital
intended it to have ("claimed" in this case means claimed by
the obligor or any of its related entities or anyone on behalf
of any of them); or
(j) (CHANGE OF CONTROL) the persons who at the date of this
agreement have control of the obligor cease to have control of
the obligor, or one or more other persons acquire control of
the obligor after the date of this agreement in each case,
without the prior consent of GE Capital; or
(k) (CHANGE IN GROUP STRUCTURE) the persons who at the date of
this agreement are affiliates, subsidiaries, or related
entities of the reporting group cease to have that
relationship with the obligor or the reporting group (other
than persons that are non-Australian corporations); or
(l) (REDUCTION OF CAPITAL) the obligor, without the consent of GE
Capital, takes action to reduce its capital or buy back any of
its ordinary shares or passes a resolution referred to in
section 254N(1) of the Corporations Act 2001 (Cwlth); or
(m) (APPOINTMENT OF MANAGER) a person is appointed under
legislation to manage any part of the affairs of the obligor;
or
(n) (MATERIAL ADVERSE CHANGE) an event occurs which is (or a
series of events occur which, together, are) likely to have a
material adverse effect on the obligor and its subsidiaries or
the reporting group individually or taken as a whole; or
(o) (BREACH OF UNDERTAKING) an undertaking given to GE Capital or
its solicitors by the obligor or another person in a
transaction document is breached or not wholly performed
within any period specified in the undertaking or, where no
period is
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specified and the undertaking is not an on-going undertaking,
within 7 days after the date of the undertaking; or
(p) (DEFAULT UNDER OTHER TRANSACTION DOCUMENT) an event occurs
which is called an event of default under any transaction
document other than this agreement or any other event occurs
which renders a transaction document enforceable; or
(q) (POTENTIAL EVENT OF DEFAULT) an event occurs which, with the
giving of notice, lapse of time or fulfilment of any
condition, would become an event of default in the reasonable
opinion of GE Capital; or
(r) (TRUST MATTERS) any of the following occur in respect of any
trust of which the obligor is trustee:
(i) the obligor makes any cash distribution or
resettlement of the assets of the trust;
(ii) the obligor resigns its position as trustee of the
trust or is removed or replaced as trustee or for any
other reason ceases to be the sole trustee of the
trust;
(iii) the terms of the trust are amended, revoked, varied,
altered or added to so as to limit or prejudice the
powers of the obligor to perform its obligations
under the transaction documents to GE Capital;
(iv) the obligor breaches the terms of the trust;
(v) the trust is wound up or a controller, receiver or
receiver and manager is appointed to the trust or any
trust property; or
(vi) the trust is found to be improperly constituted, the
trust is terminated or the trustee does not have the
requisite powers to enter into the transaction
documents.
CONSEQUENCES OF DEFAULT
15.2 If an event of default occurs, then at the option of GE Capital:
(a) the interest rate applicable to the current drawings is the
default rate;
(b) the total of the current drawings, interest on them and all
other amounts payable under the transaction documents, are
either:
(i) payable on demand; or
(ii) immediately due for payment; and
(c) any of GE Capital's obligations may be terminated.
GE Capital may elect any or all of these options in its absolute
discretion. The election of any of these options gives immediate effect
to those provisions, without any need for notice to the obligor.
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16. COSTS AND INDEMNITIES
REIMBURSEMENT AND INDEMNITY
16.1 The company agrees to pay or reimburse GE Capital and indemnifies GE
Capital for and against loss, liability and costs it suffers or incurs,
on demand for:
(a) GE Capital's costs in connection with:
(i) the negotiation, preparation, execution, stamping and
registration of all transaction documents; and
(ii) it being satisfied that conditions to drawing have
been met; and
(iii) the general on-going administration of the facility
(including giving and considering consents, waivers
and releases); and
(b) GE Capital's costs in otherwise acting in connection with the
transaction documents, such as enforcing or preserving rights
(or considering enforcing or preserving them) or doing
anything in connection with any enquiry by an authority
involving the company or any of its related entities; and
(c) taxes and fees (including registration fees) and fines and
penalties in respect of fees paid or that GE Capital
reasonably believes are payable in connection with any
transaction document or a payment or receipt or any other
transaction contemplated by any transaction document or any
supply of anything by GE Capital to the company. However, the
company need not pay a fine or penalty in connection with
taxes or fees to the extent that it has placed GE Capital in
sufficient cleared funds for GE Capital to be able to pay the
taxes or fees by the due date; and
(d) if GST has application to any supply made under or in
connection with this agreement or a transaction document, in
addition to any other consideration expressed as payable
elsewhere in this agreement or a transaction document, an
additional amount on account of GST, such amount to be
calculated by multiplying the amount or consideration payable
by the company for the relevant supply by the prevailing GST
rate (taking into account any input tax credit actually
received by GE Capital which in GE Capital's opinion relates
to a GST payment made in respect of any supply made under or
in connection with this agreement). Any amount payable on
account of GST by the company under this clause must be
calculated without any deduction or set off of any other
amount (other than as expressly permitted under this clause)
and is payable by the company on demand by GE Capital whether
the demand is by means of an invoice or otherwise; and
(e) if GE Capital is unable to obtain a full input tax credit for
an amount paid on account of GST by GE Capital to another
person in respect of a supply made by another person to GE
Capital in respect of this agreement or a transaction document
or matters arising under this agreement or a transaction
document, an amount equal to the input tax credit to which GE
Capital is not entitled under the GST legislation.
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OTHER LOSS
16.2 The company indemnifies GE Capital from and against any costs,
liability or loss suffered or incurred by GE Capital arising from, or
in connection with:
(a) any claim made against it by reason of financial accommodation
requested under a transaction document not being provided in
accordance with the request for any reason except default of
GE Capital; and
(b) financial accommodation under a transaction document being
repaid, discharged or made payable other than on its due date;
and
(c) GE Capital acting in connection with a transaction document in
good faith on fax or telephone instructions purporting to
originate from the offices of the company or to be given by an
authorised officer of the company; and
(d) an event of default; and
(e) GE Capital exercising or attempting to exercise rights in
connection with a transaction document after an event of
default; and
(f) any indemnity GE Capital gives a controller or an
administrator of the company; and
(g) all claims by third parties in respect of letters of credit
issued under this agreement including without limitation, all
letter of credit liabilities.
ITEMS INCLUDED IN LOSS, LIABILITY AND COSTS
16.3 The company agrees that:
(a) the costs referred to in clause 16.1 ("Reimbursement and
indemnity") and the liability, loss or costs in clause 16.2
("Other loss") include legal costs in accordance with any
written agreement as to legal costs or, if no agreement, on
whichever is the higher of a full indemnity basis or solicitor
and own client basis; and
(b) the costs referred to in clauses 16.1(a) and (b)
("Reimbursement and indemnity") include those paid or payable,
to persons engaged by GE Capital in connection with the
transaction documents (such as consultants).
PAYMENT OF EMPLOYEES' LOSSES
16.4 The company agrees to pay GE Capital an amount equal to any liability,
loss or costs of the kind referred to in clause 16.2 ("Other loss")
suffered or incurred by any employee, officer, agent or contractor of
GE Capital.
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CURRENCY CONVERSION ON JUDGMENT DEBT
16.5 If a judgment or proof of debt for an amount in connection with a
transaction document is expressed in a currency other than Australian
dollars, then the company indemnifies GE Capital against:
(a) any difference arising from converting the other currency if
the rate of exchange used by GE Capital under clause 5.5
("Conversion of currency") for converting currency when it
receives a payment in the other currency is less favourable to
GE Capital than the rate of exchange used for the purpose of
the judgment or acceptance of proof of debt; and
(b) the costs of conversion.
CERTIFICATE BY GE CAPITAL
16.6 A statement or certificate given by GE Capital setting out the amount
of any loss, liability or costs incurred or suffered by GE Capital
(including the extent of GE Capital's entitlement to a full or reduced
input tax credit for GST paid in respect of any matter contemplated in
a transaction document) is, absent manifest error, final, binding and
conclusive evidence against the obligor of the amount of that loss,
liability or cost.
17. INTEREST ON OVERDUE AMOUNTS
OBLIGATION TO PAY
17.1 If the obligor fails to pay any amount under this agreement on the due
date for payment, the obligor agrees to pay to GE Capital on demand
interest on that amount at the default rate. The interest accrues from
day to day from and including the due date up to but excluding the date
of actual payment and is calculated on actual days elapsed and a year
of 360 days.
COMPOUNDING
17.2 Interest payable under clause 17.1 ("Obligation to pay") which is not
paid when due for payment may be added to the overdue amount by GE
Capital at intervals which GE Capital determines from time to time or,
if no determination is made, every 30 days. Interest is payable on the
increased overdue amount at the default rate in the manner set out in
clause 17.1 ("Obligation to pay").
INTEREST FOLLOWING JUDGMENT
17.3 If a liability becomes merged in a judgment, then the company agrees to
pay GE Capital on demand interest on the amount of that liability as an
independent obligation. This interest:
(a) accrues from the date the liability becomes due for payment
both before and after the judgment until the liability is
paid; and
(b) is calculated at the rate that is the higher of the judgment
rate and the default rate.
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18. GUARANTEE AND INDEMNITY
REQUEST AND CONSIDERATION
18.1 By signing this agreement, the guarantor requests GE Capital to enter
into this agreement and agrees to be bound by this guarantee, the
provisions set out in Schedule 7, and this agreement in consideration
of GE Capital doing so.
19. ATTORNEY
APPOINTMENT OF ATTORNEY
19.1 The obligor irrevocably appoints GE Capital and each of its authorised
officers individually as its attorney and agrees to ratify all action
taken by an attorney under clause 19.2 ("Attorneys' powers").
ATTORNEYS' POWERS
19.2 Each attorney may where an Event of Default has occurred and subsists:
(a) perform and observe the obligations of the obligor under this
agreement to enable GE Capital to exercise its rights under
this agreement; and
(b) do anything which an obligor may lawfully do to exercise their
right of proof after an event relating to insolvency occurs in
respect of obligor (these things may be done in the obligor's
name or the attorney's name and they include signing and
delivering documents, taking part in legal proceedings and
receiving any dividend arising out of the right of proof); and
(c) delegate its powers (including this power) and may revoke a
delegation; and
(d) exercise its powers even if this involves a conflict of duty
and even if it has a personal interest in doing so.
APPLICATION OF INSOLVENCY DIVIDENDS
19.3 The attorney need not account to an obligor for any dividend received
on exercising the right of proof under clause 19.2 ("Attorneys'
powers") except to the extent that any dividend remains after GE
Capital has received all amounts payable or to become payable in the
future under this agreement.
RIGHT OF PROOF LIMITED
19.4 Each obligor agrees not to exercise a right of proof after an event
occurs relating to the insolvency of the company or any other obligor
independently of an attorney appointed under clause 19.1 ("Appointment
of attorney").
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20. DEALING WITH INTERESTS
NO DEALING BY COMPANY
20.1 The obligor may not assign or otherwise deal with its rights under any
transaction document or allow any interest in them to arise or be
varied, in each case without GE Capital's written consent.
DEALINGS BY GE CAPITAL
20.2 GE Capital may assign or otherwise deal with its rights under the
transaction documents (including by participation or syndication) in
any way it sees fit and without the consent of any other person,
including an obligor. GE Capital must notify the company as soon as
reasonably practicable of any assignment or other dealing with its
rights under the transaction documents.
NO SET-OFF AGAINST ASSIGNEES
20.3 If GE Capital assigns or otherwise deals with its rights under this
agreement, the obligor may claim against any assignee (or any other
person who has an interest in this agreement) any right of set-off or
other right the obligor has against GE Capital provided that the rights
of the obligor arise under this agreement or the transaction documents.
21. NOTICES
FORM
21.1 All notices, certificates, consents, approvals, waivers and other
communications in connection with a transaction document ("Notices")
must be in writing, signed by an authorised officer of the sender and
marked for attention as set out in the Parties or, if the recipient has
notified otherwise in writing, then marked for attention in the way
last notified.
DELIVERY
21.2 All Notices must be:
(a) left at the address set out in the Parties; or
(b) sent by prepaid post (airmail, if outside Australia) to the
address set out in the Parties; or
(c) sent by facsimile to the number set out in the Parties.
If the intended recipient has notified the sender in writing of a
changed postal address or changed facsimile number, then the Notice
must be to the address or number notified.
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WHEN EFFECTIVE
21.3 A Notice takes effect from the time it is received unless a later time
is specified in it.
DEEMED RECEIPT - POSTAL
21.4 If sent by post, a Notice is taken to be received one business day
after posting (or seven days after posting if sent to or from a place
outside Australia).
DEEMED RECEIPT - FACSIMILE
21.5 If sent by facsimile, a Notice is taken to be received at the time
shown in the transmission report of the sender as the time that the
whole facsimile was sent.
22. GENERAL
SET-OFF
22.1 At any time after an event of default, GE Capital may set off any
amount due for payment by GE Capital to the obligor against any amount
due for payment by the obligor to GE Capital under the transaction
documents. Where an event of default has occurred and subsists, the
obligor may claim or set-off any money owing by GE Capital to it
against money owing by the obligor to GE Capital.
SUSPENSE ACCOUNT
22.2 GE Capital may place in a suspense account for no longer than 5
Business Days and provided an event of default has occurred and
subsists any payment it receives from the obligor for as long as it
thinks prudent and need not apply it towards satisfying any money owing
to GE Capital under this agreement.
CERTIFICATES
22.3 GE Capital may give the obligor a certificate about an amount payable
or other matter in connection with a transaction document. The
certificate is (absent obvious error) final, binding and conclusive
evidence of the amount or matter.
PROMPT PERFORMANCE
22.4 If this agreement specifies when the obligor must perform an
obligation, the obligor agrees to perform it by the time specified. The
obligor agrees to perform all other obligations promptly.
DISCRETION IN EXERCISING RIGHTS
22.5 GE Capital may exercise a right or remedy or give or refuse its consent
in any way it considers appropriate, including by imposing conditions
unless a transaction document states otherwise.
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CONSENTS
22.6 The obligor agrees to comply with all conditions in any consent GE
Capital gives in connection with any transaction document.
PARTIAL EXERCISING OF RIGHTS
22.7 If GE Capital does not exercise a right or remedy fully or at a given
time, GE Capital can still exercise it later.
NO LIABILITY FOR LOSS
22.8 GE Capital is not liable for loss caused by the exercise or attempted
exercise of, failure to exercise, or delay in exercising, a right or
remedy other than caused by GE's negligence or default.
REMEDIES CUMULATIVE
22.9 The rights and remedies of GE Capital under any transaction document
are in addition to other rights and remedies given by law independently
of that transaction document.
RIGHTS AND OBLIGATIONS ARE UNAFFECTED
22.10 Rights given to GE Capital under this agreement and the obligor's
liabilities under it are not affected by any law that might otherwise
affect them.
INDEMNITIES
22.11 The indemnities in this agreement are continuing obligations,
independent of the obligor's other obligations under this agreement and
continue after this agreement ends. It is not necessary for GE Capital
to incur expense or make payment before enforcing a right of indemnity
conferred by this agreement.
VARIATION AND WAIVER
22.12 Unless this agreement expressly states otherwise, a provision of this
agreement, or right created under it, may not be waived or varied
except in writing signed by the party or parties to be bound.
CONFIDENTIALITY
22.13 The obligors consent to GE Capital disclosing information provided by
the obligors that is not publicly available:
(a) in connection with any person exercising rights or dealing
with rights or obligations under a transaction document
(including in connection with preparatory steps such as
negotiating with any potential assignee or potential
participant of GE Capital's rights or other person who is
considering contracting with GE Capital in connection with a
transaction document); or
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(b) to a person considering entering into (or who does enter into)
a credit swap with GE Capital involving credit events relating
to the obligor or any of its related entities; or
(c) to officers, employees, legal and other advisers and auditors
of GE Capital; or
(d) to any party to a transaction document or any related entity
of GE Capital; or
(e) with the consent of the obligor about whom the information
relates (which consent must not be unreasonably withheld); or
(f) as allowed necessary or required by any law court, regulatory
body, tribunal, authority, judicial or quasi-judicial
proceedings or by any stock exchange.
FUrTHER STEPS
22.14 The obligor agrees to do anything GE Capital asks (such as obtaining
consents, signing and producing documents and getting documents
completed and signed) to bind the obligor and any other person intended
to be bound under the transaction documents.
INCONSISTENT LAW
22.15 To the extent permitted by law, each transaction document prevails to
the extent it is inconsistent with any law.
SUPERVENING LEGISLATION
22.16 Any present or future legislation which operates to vary the
obligations of an obligor in connection with a transaction document
with the result that GE Capital's rights, powers or remedies are
adversely affected (including by way of delay or postponement) is
excluded except to the extent that its exclusion is prohibited or
rendered ineffective by law.
TIME OF THE ESSENCE
22.17 Time is of the essence in any transaction document in respect of an
obligation of the obligor to pay money.
APPLICABLE LAW
22.18 The transaction documents are governed by the law in force in New South
Wales. The obligor and GE Capital submit to the non-exclusive
jurisdiction of the courts of New South Wales.
SERVING DOCUMENTS
22.19 Without preventing any other method of service, any document in a court
action may be served on a party by being delivered to or left at that
party's address for service of notices under clause 21 ("Notices").
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ADVERTISING
22.20 The obligor consents to the publication by GE Capital of a "tombstone"
or similar advertising material relating to the transactions
contemplated in the transaction documents.
COUNTERPARTS
22.21 This agreement may consist of a number of copies of this agreement each
signed by one or more parties to the agreement. When taken together,
the signed copies are treated as making up the one document. Any copy
of this agreement signed by a party is binding on that party whether or
not that or any other copy is signed by or binding upon any other
party.
SEVERANCE
22.22 Each word, phrase, sentence, paragraph and clause in each transaction
document is severable no matter how they are linked. If any word,
phrase, sentence, paragraph or clause is defective, unenforceable, void
or voidable they may be severed and the remaining words will continue
to be of full force and effect.
23. INTERPRETATION
MEANINGS
23.1 These meanings apply in each transaction document unless the contrary
intention appears:
AFFILIATE means, in relation to a person:
(a) each person that directly or indirectly owns or controls 5% or
more of the share capital having ordinary voting power in the
election of directors of that corporation; and
(b) each person that controls, is controlled by or is under common
control with that corporation.
AGGREGATE BORROWING BASE means for a particular day, an amount equal to
the sum of:
(c) 85% (less the borrowing base dilution) of the value (as
determined by GE Capital) of the company's eligible accounts;
PLUS
(d) the lesser of:
(i) $20,000,000;
and
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(ii) 50% of the company's eligible inventory valued on a
first in first out basis at the lower of cost and net
realisable (market) value,
in each case less any reserves established by GE Capital from
time to time.
AUTHORISED OFFICER means:
(a) in the case of GE Capital, a director, secretary or an officer
whose title contains the word "manager" or a person performing
the functions of any of them or the solicitor of GE Capital;
and
(b) in the case of an obligor, a person appointed in writing by
the relevant obligor to act as an authorised officer under the
transaction documents to which it is a party.
BILL has the meaning it has in the Bills of Exchange Act 1909 (Cwlth)
and a reference to the drawing or acceptance or endorsement of, or
other dealing with, a bill is to be interpreted in accordance with that
Act.
BLOCKED ACCOUNT AGREEMENT means an agreement governing any bank account
into which deposits by the company are made, containing an irrevocable
direction to the bank to transfer funds in the account telegraphically
daily to an account nominated by GE Capital.
BORROWING BASE CERTIFICATE means a certificate in the form set out in
Schedule 3, or any other form required by GE Capital, duly completed by
the company and signed by an authorised officer of the company.
BORROWING BASE DILUTION is the amount expressed as a percentage by
which the dilution exceeds 5% at the time of calculation.
BUSINESS DAY means a day on which banks are open for general banking
business in Sydney (not being a Saturday, Sunday or public holiday in
Sydney).
CAPITAL EXPENDITURE means any expenditure for fixed assets or
improvements (or for replacements, substitutions or additions to them)
that have a useful life of more than one year and that are required to
be capitalised under GAAP.
CAPITAL LEASES means any lease of property that in accordance with GAAP
would be required to be classified and accounted for as a finance lease
on the balance sheet of the lessee.
CAPITAL LEASE OBLIGATIONS means with respect to any capital lease the
amount of the obligation of the lessee that, in accordance with GAAP,
would appear on the balance sheet of the lessee in respect of that
capital lease.
CLEAN-UP NOTICE means any order, direction, notice or other requirement
of any authority in respect of remediation.
CLOSING DATE means the date of the first drawdown of funds under this
agreement.
CLOSING FEE means the fee described as such in the Details.
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COMPANY means each of the persons so described in the Parties, jointly
and severally in its own capacity and as trustee of any trust. A
reference to any property of the company includes a reference to
property or assets of the company as trustee of the trusts in the
disclosure statement.
CONTROL of a corporation includes the direct or indirect power to
directly or indirectly:
(a) be in a position to cast or control the casting of, more than 30%
of the maximum number of votes that may be cast at a general meeting;
or
(b) control the membership of its board of directors,
whether or not the power has statutory, legal or equitable force or is
based on statutory, legal or equitable rights and whether or not it
arises by means of trusts, agreements, arrangements, understandings,
practices, the ownership of any interest in shares or stock of the
corporation or otherwise.
CONTROLLER has the meaning it has in the Corporations Act 2001 (Cwlth).
CONTROLLED ACCOUNT means each account governed and operated by the
locked box agreement or the blocked account agreement.
COSTS includes charges, expenses and internal administration costs; and
costs, charges and expenses in connection with advisers on a full
indemnity basis, and any GST paid or payable by GE Capital except to
the extent that GE Capital is entitled to a full or reduced input tax
credit.
CURRENT DRAWING means the outstanding principal amount of a drawing
made under the facility and any amount deemed to be a drawing under the
facility.
CURRENT LC means any letter of credit which has not been discharged in
full or in respect of which LC obligations remain unsatisfied.
DEFAULT RATE means the interest rate plus 3% per annum.
DEPRECIATION EXPENSE means depreciation expense of the reporting group
determined in accordance with GAAP.
DILUTION, which is to be calculated monthly, means for each of the
companies, severally, the total of non cash credits made to the
accounts receivable of the company for the 12 month period ending on
the date of determination divided by the total sales for that period,
expressed as a percentage and rounded to the nearest whole number. The
dilution is calculated at any time by reference to the most recent
accounts receivable roll forward analysis provided by the company to GE
Capital under clause 13.5 or as otherwise determined by GE Capital.
DISCLOSURE STATEMENT means a statement or notice containing or
purporting to contain the disclosures referred to in Schedule 6 or
otherwise required or made under this agreement, duly completed by the
reporting group and signed by an authorised officer of the
company/reporting as being true, correct and not misleading or
deceptive at the date of the statement or notice and includes each
statement or notice given prior to the date of this agreement.
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DRAWDOWN DATE means the date on which a drawing is or is to be made.
DRAWDOWN NOTICE means a completed and signed notice containing the
information and representations and warranties set out in Schedule 2,
or otherwise in the form required by GE Capital from time to time.
EARLY TERMINATION FEE means the fee described as such in clause 7.1(h)
and the Details.
EBITDA means an amount equal to net income of the reporting group less
the sum of:
(a) income tax credits; and
(b) interest income; and
(c) gain from extraordinary items; and
(d) any aggregate net gain (but not any aggregate net loss)
arising from the sale, exchange or other disposition of
capital assets (including any fixed assets, whether tangible
or intangible, all inventory sold in conjunction with the
disposition of fixed assets and all securities); and
(e) any other non-cash gains which have been added in determining
net income, in each case to the extent included in the
calculation of net income in accordance with GAAP, but without
duplication;
PLUS (to the extent deducted in determining net income), the
sum of:
(f) amortisation of goodwill; and
(g) depreciation expenses; and
(h) any income tax expense; and
(i) interest expense; and
(j) loss from extraordinary items; and
(k) the amount of any deduction to net income as the result of any
grant to any members of the management of any shares, in each
case to the extent included in the calculation of net income
in accordance with GAAP, but without duplication.
For purposes of the definition of EBITDA, the following items are
excluded in determining net income:
(a) the income (or deficit) of any person accrued prior to the
date it became a subsidiary of, or was merged or consolidated
into, the company or any of its subsidiaries;
(b) the income (or deficit) of any person (other than a
subsidiary) in which the company or any of its subsidiaries
has an ownership interest, except to the extent any such
income has actually been received in the form of cash
dividends or distributions;
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Facility Agreement-Daisytek Australia Pty Limited 12/02/03
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(c) the undistributed earnings of any subsidiary of the company or
any of its subsidiaries to the extent that the declaration or
payment of dividends or similar distributions by such
subsidiary is not at the time permitted by the terms of any
contractual obligation or requirement of law applicable to
such subsidiary;
(d) any restoration to income of any contingency reserve, except
to the extent that provision for such reserve was made out of
income accrued during the relevant period;
(e) any write-up of any asset;
(f) any net gain from the collection of the proceeds of life
insurance policies;
(g) any net gain arising from the acquisition of any securities,
or the extinguishment, under GAAP, of any indebtedness, of the
company or any of its subsidiaries;
(h) in the case of a successor to the company or any of its
subsidiaries by consolidation or merger or as a transferee of
its assets, any earnings of such successor prior to such
consolidation, merger or transfer of assets; and
(i) any deferred credit representing the excess of equity in any
subsidiary of the company or any of its subsidiaries at the
date of acquisition of such subsidiary over the cost to the
company or any of its subsidiaries of the investment in such
subsidiary.
ELIGIBLE ACCOUNTS means those accounts of each company which GE
Capital, in its reasonable judgment, determines to be eligible accounts
based on the most recent borrowing base certificate and excluding,
among other accounts, the exclusionary criteria.
ELIGIBLE INVENTORY means the inventory of the company which GE Capital
in its reasonable judgment determines to be eligible inventory at the
time based on the most recent borrowing base certificate, and
excluding, amongst other items the exclusionary criteria.
ENCUMBRANCE means any security interest, notice under section 218 or
255 of the Income Tax Assessment Act 1936 (Cwlth) or under any similar
provision of a State, Territory or Commonwealth law, right to remove
things from land (known as a "profit a prendre"), easement, restrictive
or positive covenant (other than easements and covenants burdening real
property), equity, interest, garnishee order, writ of execution, right
of set-off, lease, licence to use or occupy, assignment of income or
monetary claim, and any agreement to create any of them or allow any of
them to exist.
ENVIRONMENTAL LAWS means any law concerning the environment and
includes laws, statutes, ordinances, codes, rules, standards,
regulations and policies from time to time concerning:
(a) the carrying out of uses, works or development or the
subdivision of land;
(b) emissions of substances into the atmosphere, waters and land;
(c) pollution and contamination of the atmosphere, waters and
land;
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(d) production, use, handling, storage, transportation and
disposal of:
(i) waste;
(ii) hazardous substances; and
(iii) dangerous goods;
(e) conservation, heritage and natural resources;
(f) threatened, endangered and other flora and fauna species;
(g) the erection and use of structures; and
(h) the health and safety of people,
whether made or in force before or after the date of this agreement.
ENVIRONMENTAL LIABILITIES means, with respect to any person, all
liabilities, obligations, responsibilities, response, remedial and
removal costs, investigation and feasibility study costs, capital
costs, operation and maintenance costs, losses, damages (including all
consequential and indirect damages) costs and expenses (including all
fees, disbursements and expenses of counsel, experts and consultants),
fines, penalties, sanctions, claims for contribution and indemnity,
whether arising under statute or otherwise, and interest incurred as a
result of or related to any claim, suit, action, investigation,
proceeding or demand by any person, whether based in contract, tort,
implied or express warranty, strict liability, criminal or civil
statute or common law, including any arising under or related to any
environmental laws or environmental permits.
ENVIRONMENTAL PERMITS means all permits, licences, authorisations,
consents, certificates, approvals, registration or other written
documents required by any authority under any environmental laws.
EVENT OF DEFAULT means an event of default so described in this
agreement (see clause 15 ("Events of default")).
EXCLUSIONARY CRITERIA means the criteria set out in Schedule 4.
EXCESS AVAILABILITY means at any time:
(a) the lesser of the facility limit and the aggregate borrowing
base;
LESS
(b) current drawings and current LC's at that time,
as calculated by GE Capital.
FACE VALUE AMOUNT means in respect of a letter of credit, the amount
shown on a letter of credit as the maximum amount payable under it. If
a letter of credit is issued in a currency other than Australian
dollars, GE Capital may at any time convert the amount shown on the
letter of credit into Australian dollars on the day and at the rates as
it
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Facility Agreement-Daisytek Australia Pty Limited 12/02/03
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considers appropriate (even though it may be necessary to convert
through a third currency) for the purpose of determining the face value
amount at that time.
FACILITY means the facilities made available under this agreement or
any one of them.
FACILITY LIMIT means the amount set out as such in the Details.
FIELD EXAMINATION FEE means the fee set out in clause 7.1(c) and the
Details.
FINANCIAL STATEMENTS means:
(a) a profit and loss statement;
(b) a balance sheet; and
(c) a statement of cash flows,
together with any notes to those documents and a directors' declaration
as required under the Corporations Act 2001 (Cwlth) and any other
information necessary to give a true and fair view prepared in
accordance with GAAP.
FIXED CHARGE COVERAGE RATIO means the ratio of:
(a) EBITDA for that period; less
any capital expenditures for the same period which are not
financed through the incurrence of indebtedness (excluding
under this facility); plus
any proceeds of a sale - leaseback transaction for which GE
Capital's prior written consent has been granted in accordance
with clause 13.3(l), for the same period;
to
(b) fixed charges.
FIXED CHARGES means the total of all cash interest expense, fee expense
and income taxes of the reporting group paid or accrued plus scheduled
payments of principal with respect to indebtedness.
FUNDED DEBT means all indebtedness of the reporting group for borrowed
money evidenced by notes, bonds, debentures, or similar evidences of
indebtedness and which by its terms matures more than one year from, or
is directly or indirectly renewable or extendable at the debtor's
option under a revolving credit or similar agreement obligating the
lender or lenders to extend credit over a period of more than one year
from the date of creation thereof, and specifically including capital
lease obligations, current maturities of long-term debt, revolving
credit and short-term debt extendable beyond one year at the option of
the debtor, and also including its obligations under the transaction
documents.
GAAP means generally accepted accounting principles in Australia,
consistently applied.
GE CAPITAL means the person so described in the Parties.
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Facility Agreement-Daisytek Australia Pty Limited 12/02/03
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GST means any tax in the nature of a consumption tax, a goods and
services tax, a value added tax or similar tax including without
limitation any tax arising out of the passage of the "A New Tax System
(Goods and Services Tax) Act, 1999" (Commonwealth) and associated
legislation.
GUARANTEE means the guarantee and indemnity in clause 18 ("Guarantee
and indemnity").
GUARANTEED MONEY means, at any time, all amounts then due for payment
or which will or may become due for payment in the future by the
company to GE Capital in connection with the transaction documents
(including transactions in connection with them).
GUARANTOR means each of the persons so described in the Parties,
jointly and severally.
HAZARDOUS MATERIAL means any substance, material or waste which is
regulated by or forms the basis of liability (including, without
limitation any environmental liability) now or hereafter under, any
environmental laws, including any material or substance which is:
(a) defined as a "solid waste", "hazardous waste", "hazardous
material", "hazardous substance", "extremely hazardous waste",
"restricted hazardous waste", "pollutant", "contaminant",
"hazardous constituent", "special waste", "toxic substance" or
other similar term or phrase under any environmental laws;
(b) petroleum or any fraction or by-product thereof, asbestos,
polychlorinated biphenyls or any radioactive substance; or
(c) may be the subject of any clean-up notice.
INDEBTEDNESS means all indebtedness, actual or contingent, including
but without duplication:
(a) all indebtedness for borrowed money or for the deferred
purchase price of property payment for which is deferred six
months or more;
(b) all reimbursement and other obligations with respect to
letters of credit, bankers' acceptances and surety bonds,
whether or not matured;
(c) all obligations evidenced by notes, bonds, debentures or
similar instruments;
(d) all indebtedness created or arising under any conditional sale
or other title retention agreement with respect to property
acquired (even though the rights and remedies of the seller or
lender under such agreement in the event of default are
limited to repossession or sale of such property);
(e) all capital lease obligations;
(f) all obligations under commodity purchase or option agreements
or other commodity price hedging arrangements, in each case
whether contingent or matured;
(g) all obligations under any foreign exchange contract, currency
swap agreement, interest rate swap, cap or collar agreement or
other similar agreement or
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Facility Agreement-Daisytek Australia Pty Limited 12/02/03
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arrangement designed to alter risks arising from fluctuations
in currency values or interest rates, in each case whether
contingent or matured;
(h) all indebtedness secured by (or for which the holder of such
indebtedness has an existing right, contingent or otherwise,
to be secured by) any encumbrance upon or in property or other
assets (including accounts and contract rights) owned by the
company and its subsidiaries on a consolidated basis, even
though the company and its subsidiaries on a consolidated
basis has not assumed or become liable for the payment of such
indebtedness; and
(i) obligations under the transaction documents.
INDEX RATE means in respect of each month:
(a) the 90 day Bank Bill Swap Rate for the first business day of
that month which is quoted as the "Bank Bill Swap Reference
Rate- Average Bid" in the Money Market section in the
following business day's edition of the Australian Financial
Review; or
(b) if there is an obvious error in the rate described in (a), or
if that rate or publication is not published, the average bid
rate for bills having a tenor of 90 days as displayed on the
Reuters Monitor System designated "BBSY" on the first business
day of that month; or
(c) if there is an obvious error in the rate described in (b) or
if that rate is not displayed by 10:30am Sydney time on the
relevant day, the rate set by GE Capital in good faith at
10:30am on that date.
INSOLVENT means:
(a) being an insolvent under administration or insolvent (each as
defined in the Corporations Act 2001 (Cwlth)), or having a
controller appointed, or being in receivership, in
receivership and management, in liquidation, in provisional
liquidation, under administration, wound up, subject to any
arrangement, deed of company arrangement, assignment or
composition, protected from creditors under any statute,
dissolved (other than to carry out a reconstruction while
solvent) or otherwise being unable to pay debts when they fall
due or having something similar happen; and
(b) in the case of any person registered under the Companies Act
1993 of New Zealand, a body corporate presumed to be unable to
pay its debts under Section 287 of that Act, or declared at
risk under the Corporations (Investigation and Management) Act
1989 of New Zealand, or a statutory manager is appointed or
any step is taken with a view to making an appointment.
INTELLECTUAL PROPERTY means all patents, copyrights, trademarks, trade
secrets, customer lists and any licence to use any of them.
INTEREST EXPENSE means interest expense of the reporting group (whether
cash or non-cash) determined in accordance with GAAP. It also includes
interest expense with respect to any funded debt.
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INTEREST PAYMENT DATE means the first business day of each month and
the maturity date.
INTEREST RATE means the interest rate set out in the Details.
LAW means a treaty, a law, regulation, ordinance, an official directive
or request having the force of law, and an official directive, request,
guideline or policy with which obligors similar to or of the same class
as the obligor carrying on business in Australia normally comply.
LC OBLIGATIONS means the obligations incurred by GE Capital under or in
relation to a letter of credit.
LETTER OF CREDIT means any letter of credit, services, accommodation,
guarantee, indemnity, payment, undertaking or confirming facility
provided at the company's request by or on behalf of GE Capital or any
steps taken to attempt to provide those facilities by GE Capital.
LETTER OF CREDIT APPLICATION means a request that GE Capital incur LC
obligations in a form acceptable to the issuing bank selected by GE
Capital.
LETTER OF CREDIT FACILITY means the letter of credit facility provided
under this agreement.
LETTER OF CREDIT FACILITY LIMIT means the amount set out as such in the
Details.
LETTER OF CREDIT FEE means the fee described in clause 7.1(c) and the
Details.
LETTER OF CREDIT LIABILITY means any claim, action, loss, liability,
charge, cost, expense, outgoing or payment which GE Capital incurs or
which is payable or to become payable in the future by GE Capital in
relation to or arising out of:
(a) GE Capital procuring the issuance of or making any payment in
relation to any letter of credit or any request by the company
to issue a letter of credit including without limitation under
any indemnity given by GE Capital to procure the issuance of a
letter of credit;
(b) any claim for payment in relation to a letter of credit;
(c) anything done by any person who is or claims to be entitled to
the benefit of a letter of credit; or
(d) anything done by the issuer of any letter of credit,
including without limitation, interest, commission, charges, costs and
expenses paid, payable or charged to GE Capital in respect of a letter
of credit.
MATERIAL ADVERSE EFFECT means something which in the reasonable opinion
of GE Capital materially adversely affects:
(a) the legality, validity or enforceability of a transaction
document; or
(b) the relevant entity's ability to observe its obligations under
any transaction document or carry on its business as it is
currently being conducted; or
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(c) the rights of GE Capital under a transaction document; or
(d) the ability of GE Capital to enforce its rights under the
transaction documents; or
(e) the relevant entity's business, assets, value, operations,
prospects or financial or other condition; or
(f) the risks to GE Capital under any transaction document.
MATURITY DATE means the maturity date set out in the Details, but if
that is not a business day, then the preceding business day.
OBLIGOR means the company and the guarantors and each of them jointly
and severally.
PERMITTED INDEBTEDNESS means:
(a) the indebtedness described in the disclosure statement which
has been approved by GE Capital; and
(b) indebtedness arising under the transaction documents; and
(c) indebtedness otherwise expressly permitted or required under
the transaction documents; and
(d) indebtedness owing to trade creditors incurred in the ordinary
course of business that are not overdue by more than six
months unless such are contested in good faith; and
(g) all obligations under any foreign exchange contracts entered
into in the ordinary course of the company's business;
PERMITTED PAYMENT means a payment by the company to a person that has
entered into a transaction document with GE Capital provided the
payment is made in accordance with the terms of the transaction
document, and no event of default has occurred or will occur by making
the payment.
PERMITTED SECURITY INTERESTS means:
(a) a security interest created under a transaction document; and
(b) a security interest arising by operation of law to secure a
monetary obligation maturing not more than 90 days after the
date on which it is originally incurred; and
(c) a retention of title provision or romalpa clause created under
any document.
PROJECTIONS means forecasted balance sheets, profit and loss statements
and cash flow statements, all prepared on a consolidated and
consolidating basis, and otherwise consistent with the historical
financial statements, together with appropriate supporting details and
a statement of underlying assumptions.
REAL PROPERTY means, in respect of a person, the real property owned,
leased, subleased used or controlled by that person.
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RELATED ENTITY has the meaning it has in the Corporations Act 2001
(Cwlth).
REMEDIATION means the investigation, clean-up, removal, abatement,
disposal, control, containment, encapsulation or other treatment of any
hazardous material and includes the monitoring and risk management of
any hazardous material.
REPORTING GROUP means each of the obligors that are companies, and
their subsidiaries on a consolidated basis jointly and severally, in
their own capacities and as trustee of any trust.
RESTRICTED PAYMENT means:
(a) the declaration or payment of any dividend or the incurrence
of any liability to make any other payment or distribution of
cash or other property or assets in respect of a company's
share capital; or
(b) any payment on account of the purchase, redemption,
defeasance, sinking fund or other retirement of a person's
share capital or any other payment or distribution made in
respect of the company's share capital, either directly or
indirectly; or
(c) any payment or repayment of principal of, premium, if any, or
interest, fees or other charges on or with respect to, and any
redemption, purchase, retirement, defeasance, sinking fund or
similar payment and any claim for rescission or with respect
to, any subordinated debt of the company; or
(d) any payment made to redeem, purchase, repurchase or retire, or
to obtain the surrender of, any outstanding warrants, options
or other rights to acquire the company's share capital; or
(e) any payment of a claim for the rescission of the purchase or
sale of, or for material damages arising from the purchase or
sale of shares in the company's share capital or of a claim
for reimbursement, indemnification or contribution arising out
of or related to any such claim for damages or rescission; or
(f) any payment, repayment, loan, contribution, or other
disposition or transfer of funds or other property to any
affiliate or related entity of the company; or
(g) management or consultancy fees paid or payable to a related
entity or affiliate of the company.
SECURITY INTEREST means any security for the payment of money or
performance of obligations including a mortgage, charge, lien, pledge,
trust or power. Security interest also includes a guarantee.
STANDBY LETTER OF CREDIT means each letter of credit which is not a
trade letter of credit or a term letter of credit.
SUBSIDIARY of an entity means another entity which is a subsidiary of
the first within the meaning of part 1.2 division 6 of the Corporations
Act 2001 (Cwlth) or is a subsidiary of or otherwise controlled by the
first within the meaning of any approved accounting standard.
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TANGIBLE NET WORTH means the book value of the assets of the reporting
group less:
(a) goodwill, capitalised organisational expenses, capitalised
research and development expenses, capitalised marketing
costs, trademarks, trade names, copyrights, patents, patent
applications, licences and rights in any of them and other
intangible items;
(b) unamortised debt discount and expense;
(c) prepaid expenses;
(d) any write up in the book value of any asset resulting from a
revaluation;
(e) any reserves applicable to those assets; and
(f) the liabilities of the reporting group (including accrued and
deferred income taxes but excluding all amounts owing to
Daisytek Inc. subordinated under the subordination agreement
referred to in Item 18 of Schedule 1),
all as determined in accordance with GAAP.
TAXES means taxes, levies, imposts, charges and duties imposed by any
authority (including without limitation GST, stamp duty and any other
transaction duties) (together with any related interest, penalties,
fines and expenses in connection with them), except if imposed on the
overall net income of GE Capital.
TERM LETTER OF CREDIT means any letter of credit issued which is
payable on a deferred payment basis or at a fixed and determinable
future date.
TRADE LETTER OF CREDIT means any letter of credit issued in connection
with the purchase by the company of finished goods and/or capital
equipment approved in advance by GE Capital.
TRANSACTION DOCUMENTS means:
(a) this agreement;
(b) each of the documents set out in Schedule 1 or required to be
provided as set out in Schedule 1;
(c) each document required to be provided by or on behalf of an
obligor under this agreement;
(d) each document which the company acknowledges in writing to be
a transaction document;
(e) each document including or containing obligations of any of
the obligors to GE Capital; and
(f) each other document connected with any of the documents set
out in sub-clauses (a) to (e).
UNUSED FACILITY FEE means the fee described in clause 7.1(b) and the
Details.
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WORKING CAPITAL means current assets less current liabilities as those
terms are defined in schedule 5 to the regulations to the Corporations
Act 2001 (Cwlth).
REFERENCES TO CERTAIN GENERAL TERMS
23.2 Unless the contrary intention appears, a reference in a transaction
document to:
(a) a group of persons is a reference to any two or more of them
collectively and to each of them individually;
(b) an agreement, representation or warranty in favour of two or
more persons is for the benefit of them collectively and each
of them individually;
(c) an agreement, representation or warranty by two or more
persons binds them collectively and each of them individually;
(d) anything (including an amount) is a reference to the whole and
each part of it;
(e) a document (including this agreement) includes any variation
or replacement of it;
(f) any legislation includes any consolidation, amendment,
re-enactment or replacement of it and any regulations and
other instruments made under it;
(g) an accounting term is a reference to that term as it is used
in accounting standards under the Corporations Act 2001
(Cwlth), or, if not inconsistent with those standards, in
accounting principles and practices generally accepted in
Australia;
(h) Australian dollars or $ is a reference to the lawful currency
of Australia;
(i) a time of day is a reference to Sydney time;
(j) a week is a reference to the period of seven consecutive days
commencing on each Sunday;
(k) the word "person" includes an individual, a firm, a body
corporate, an unincorporated association and an authority;
(l) a particular person includes a reference to the person's
executors, administrators, successors, substitutes (including
persons taking by novation) and assigns;
(m) the word "payable" in relation to an amount, means an amount
which is currently payable or will or may be payable in the
future; and
(n) the words "including", "for example" or "such as" when
introducing an example, do not limit the meaning of the words
to which the example relates to that example or examples of a
similar kind.
NUMBER
23.3 The singular includes the plural and vice versa.
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HEADINGS
23.4 Headings are for convenience only and do not affect the interpretation
of this agreement.
Page 53 of 79 Pages
SCHEDULE 1 - CONDITIONS PRECEDENT (CLAUSE 2.4)
<Table>
<Caption>
ITEM FORM RESPONSIBLE
- --------------------------------------------------------------- -------------------- ----------------------------------
1 Extract of minutes of a meeting of each obligor's Certified Copy Format provided by GE Capital.
board of directors which evidences the resolutions:
Executed copy from company
(a) authorising the signing and delivery of
transaction documents to which the entity is
a party and the observance of obligations
under those documents; and
(b) appointing authorised officers of the entity;
and
(c) which acknowledge that the transaction
documents (to which the entity is a party)
will benefit that entity; and
(d) authorising the execution of a power of
attorney to enable execution of transaction
documents to which it is a party by the
attorney.
2 Each document which evidences any other necessary Certified copy Company
corporate or other action of each obligor in connection with the
transaction documents to which it is party.
3 Certificate of specimen signatures of: Original Format supplied by GE Capital
(a) each authorised officer of the obligor; and Executed copy from obligor
(b) each other person who is authorised to sign a
transaction document for the obligor.
4 A$ Facility Agreement fully signed by each obligor. Original Company
5 Fixed and floating charge over all present and Original Company
future assets and undertaking of the obligors fully
signed and in registrable form.
</Table>
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<Table>
<Caption>
ITEM FORM RESPONSIBLE
- --------------------------------------------------------------- -------------------- ----------------------------------
6 Fully signed Corporations Act 2001 (Cwlth) Form Original Company
309 from each of the obligors.
7 A statutory declaration from a director or Original Company
secretary of each obligor providing the charge
setting out the value and location of the assets of
the obligor.
8 Evidence of payment of stamp duty or a cheque in Original Company
favour of GE Capital's solicitors for the amount of
the estimated duty.
9 Initial borrowing base certificate completed and Original Format from GE Capital.
certified. Completed by company.
10 A letter authorising the obligor's accountant to Original Company
communicate with GE Capital in accordance with
clause 13.6.
11 Financial statements for the year ended 31 March Original Company
2002
12 Initial disclosure statement completed and Original Format from GE Capital.
certified by each obligor. Completed by Company.
13 Initial drawdown notice completed and certified. Original Format from GE Capital.
Completed by company.
14 Certified copy of all trust deeds to which any Certified copy Company
obligor is a party including all variations to the
trust deeds.
15 All documents required by GE Capital to satisfy GE Original Company
Capital that the trust deeds to which any obligor is
a party will not have a material adverse effect on
any transaction document including acknowledgements
by trustees and beneficiaries.
16 A legal opinion from GE Capital's solicitor on Original GE Capital
terms acceptable to GE Capital.
17
18 Acknowledgments or agreements fully executed by Original Company
all landlords, mortgagees, and occupiers of
properties at which eligible inventory is located,
or other persons in possession of eligible
inventory.
</Table>
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<Table>
<Caption>
ITEM FORM RESPONSIBLE
- --------------------------------------------------------------- -------------------- ----------------------------------
19 Subordination agreement fully executed by all Original Company
parties, subordinating the repayment of all
indebtedness of the company to its related entities
and affiliates so long as the company has any
liability to GE Capital on terms acceptable to GE
Capital.
20 Power of attorney for execution of transaction Certified copy Company
documents.
21 Evidence of insurance on terms and in amounts Copy Company
approved by GE Capital and noting GE Capital's
security interest.
22 Evidence that the excess availability of the Copy Company
reporting group on the closing date is at least
A$2,250,000 without increase to current liabilities
or deterioration in working capital.
23 Authority to complete documents and comply with Original Company
requisitions, fully signed by each of the obligor.
24 Blocked account agreement fully signed, in respect Original Company
of all blocked accounts operated by the reporting
group.
25 Release of all security interests over assets of Original Company
the obligors other than those approved by GE
Capital.
26 Evidence of corporate structure, capital Copies Company
structure, debt instruments and material contracts,
on terms acceptable to GE Capital.
27 Evidence of all waivers and consents required by Copies Company
government or semi government authorities or third
parties allowing the obligors to enter into the
transaction documents on terms acceptable to GE
Capital.
28 Statutory declaration as to corporate matters Original Company
disclosing matters required by GE Capital
29 A US legal opinion provided by the internal legal Original Company
counsel of Daisytek, Inc. on terms acceptable to GE
Capital.
</Table>
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SCHEDULE 2 - INITIAL DRAWDOWN NOTICE (CLAUSE 2.2)
To: GE Capital Finance Pty Limited
Level 13, 255 George Street
Sydney NSW 2000
Attention: The Account Manager - Daisytek Australia Pty
Limited
[DATE]
DRAWDOWN NOTICE - A$ FACILITY AGREEMENT BETWEEN DAISYTEK
AUSTRALIA PTY LIMITED, DAISYTEK AUSTRALIA (QLD) PTY LIMITED
AND GE CAPITAL FINANCE PTY LIMITED DATED [ ] ("FACILITY
AGREEMENT")
Under clause 2.2 ("Requesting a drawing") of the facility
agreement, we give notice that the company wants to borrow
under the facility as follows:
(a) the requested drawdown date is ;
(b) the amount of the proposed drawing is A$ ;
(c) the proposed drawing is to be paid to:
Account number:
Account name:
Bank:
Branch:
BSB:
(d) the company making the proposed drawing is ________.
_________________ represents and warrants that the
representations and warranties in clause 12 ("Representations
and warranties") of the facility agreement are true complete
and correct and not misleading on the date of this notice and
that each will be true complete and correct and not misleading
on the drawdown date and that I am an authorised officer of
the company.
The Interpretation clause of the facility agreement applies to
this notice as if it was fully set out in this notice.
- --------------------------------------------------------------------------------
Facility Agreement-Daisytek Australia Pty Limited 12/02/03
Page 57 of 79 Pages
------------------------------------------
Signed
------------------------------------------
Printed Name
being an authorised officer of
------------------------------------------
- --------------------------------------------------------------------------------
Facility Agreement-Daisytek Australia Pty Limited 12/02/03
Page 58 of 79 Pages
SCHEDULE 3 - BORROWING BASE CERTIFICATE
<Table>
<Caption>
GE CAPITAL
Commercial Finance
- -------------------------------------------------------------------------------------------------------------------------
BORROWING BASE CERTIFICATE
------------------------------------
Borrower Name: DAISYTEK AUSTRALIA PTY LTD PREVIOUSLY FAXED: Y or N
- -------------------------------------------------------------------------------------------------------------------------
Date: CERTIFICATE NUMBER:
- -------------------------------------------------------------------------------------------------------------------------
TOTAL A$
1. Total Accounts Receivables as of : $
------------------------
2. Ineligible Accounts Receivable as of:
(a) Accounts over 90 days past invoice date $
------------------------
(b) Credits over 90 days past invoice date $
------------------------
(c) Cross Age (>50% past invoice date) $
------------------------
(d) Inter company or related party Accounts (<90 days invoice date) $
------------------------
(e) Contra Accounts(<90 days past invoice date) $
------------------------
(f) Foreign Accounts Other than Goldata NV trading as Goldata
Computer Supplies (up to $3.0 million) or relating to a debtor
outside Australia, New Zealand, Canada, the United Kingdom $
and the United States of America (Not Under L/C or Credit
Insurance) (<90 days past invoice date)
------------------------
(g) Rebates and Discounts (<90 days past invoice date) $
------------------------
(h) Non Trade Debtors (<90 days past invoice date) $
------------------------
(i) Cash & Employee Accounts (< 90 days past invoice date) $
------------------------
(j) Other: _________ $
------------------------
3. Total ineligible Accounts Receivable $
------------------------
4. Total Eligible Accounts Receivable (line 1 less line 3) $
------------------------
5. Account Receivable Advance Rate 85%
------------------------
6. Available Accounts Receivable (line 4 times line 5) $
------------------------
7. Total Inventories As Per Perpetual as of:
8. Ineligible Inventories:
------------------------
(a) Stock In Transit $
------------------------
(b) Book To Physical Variance Reserve
------------------------
(c) At Locations of Less Than $100,000 $
------------------------
(d) Held At Outside Storage (For Which Bailee Waivers Are Not Held) $
------------------------
(e) Packaging/Non Stock Items $
------------------------
(f) Stock Subject to Retention of Title $
------------------------
</Table>
- --------------------------------------------------------------------------------
Facility Agreement-Daisytek Australia Pty Limited 12/02/03
Page 59 of 79 Pages
<Table>
(g) Excess Inventory Calculation $
------------------------
(h) Other:___________ $
------------------------
9. Total ineligible Inventories $
------------------------
10. Total Eligible Inventories (line 7 less line 9) $
------------------------
11. Inventory Advance Rate 50%
------------------------
12. Available Inventory (line 10 times line 11) $
------------------------
13. Less Employee Entitlements $
------------------------
14. Net Inventory Availability (line 12 less line 13) $
------------------------
15. Total Revolver Availability (line 6 plus line 14) $
------------------------
16. Current Revolving Loan Balance $
------------------------
17. Reserve for Bank Guarantees/Letters of Credit/FX $
------------------------
18. Reserve - Other $
------------------------
19. Reserve for Rent (3 Months Per Location) $
------------------------
20. Reserve for Stamp Duty $
21. Excess Availability (line 15 less lines 16, 17, 18,19,20)
------------------------
$
========================
</Table>
I certify that the above information is true and correct and not misleading and
that the eligible accounts in line 4 and eligible inventory in line 10 include
only eligible accounts and eligible inventory permissible under the A$ Facility
Agreement dated ____________________ between GE Capital Finance Pty Limited and
Daisytek Australia Pty Ltd.
PREPARED BY: SIGNATURE:
------------------- ---------------------
(Print Name Please)
TITLE:
-------------------------
- --------------------------------------------------------------------------------
Facility Agreement-Daisytek Australia Pty Limited 12/02/03
Page 60 of 79 Pages
SCHEDULE 4 - EXCLUSIONARY CRITERIA
1. In respect of eligible accounts, the exclusionary criteria excludes any
account:
(a) which does not arise from the sale of goods or the performance
of services by the company in the ordinary course of its
business;
(b) if the company's right to receive payment is not absolute or
is contingent;
(c) if the company is not able to bring suit or otherwise enforce
its remedies against the account debtor through judicial
process;
(d) to the extent any defence, counterclaim, set-off or dispute is
asserted as to the account;
(e) if the account represents a progress billing consisting of an
invoice for goods sold or used or services rendered pursuant
to a contract under which the account debtor's obligation to
pay that invoice is subject to the company's completion of
further performance under that contract;
(f) that is not a true and correct statement of bona fide
indebtedness incurred in the amount of the account for goods
sold to or services rendered and accepted by the applicable
account debtor;
(g) with respect to which an invoice, acceptable to GE Capital in
form and substance, has not been sent to the applicable
account debtor;
(h) that is not owned by the company;
(i) that is subject to any right, claim, security interest or
other interest of any other person other than a retention of
title interest or claim, other than in favour of or GE
Capital;
(j) that arises from a sale to any officer, other employee,
related entity or affiliate of the obligor, or to any entity
which has any common officer with the obligor;
(k) that is not paid within 90 days following its invoice date;
(l) if the relevant account debtor is or becomes insolvent:
(m) if GE Capital's interest in it is not a first priority
perfected security interest;
(n) as to which any of the representations or warranties
pertaining to accounts set forth in any transaction document
is untrue;
(o) which is payable in any currency other than Australian
Dollars;
(p) that is the obligation of a debtor outside Australia, New
Zealand, Canada, the United Kingdom and the United States of
America, unless the account is supported by a letter of credit
in which GE Capital has a first priority security interest or
credit insurance acceptable to GE Capital except for debts
owing to the company by Goldata NV trading as Goldata Computer
Supplies (Belgium) who
- --------------------------------------------------------------------------------
Facility Agreement-Daisytek Australia Pty Limited 12/02/03
Page 61 of 79 Pages
shall be eligible for debts up to an amount not exceeding
A$3,000,000 or such other amounts as advised from time to time
in writing by GE Capital to the company;
(q) that is the obligation of a debtor to whom the company is or
may become liable for goods sold or services rendered by the
debtor to the company, to the extent of the company's
liability to the debtor;
(r) that arises with respect to goods which are delivered on a
cash-on-delivery basis or placed on consignment, guaranteed
sale or other terms by reason of which the payment by the
debtor may be conditional;
(s) payable by a debtor where the total unpaid accounts of that
debtor exceed 25%, except where the debtor is Officeworks
Superstores Pty Ltd (a subsidiary of Coles Myer Limited) in
which case its total unpaid accounts exceeding 30% (or such
other percentages advised to the company in writing by GE
Capital from time to time), of the aggregate of all accounts
payable to the company at that time, to the extent of that
excess;
(t) that are accounts of a debtor if 50% or more of the accounts
owing from that debtor remain unpaid within the periods
specified in (k) for the debtor;
(u) that arises from any bill-and-hold or other sale of goods
which remain in the company's possession or under the
company's control;
(v) to the extent that the account exceeds any credit limit
established by GE Capital in GE Capital's sole discretion;
(w) that represents interest payments or service charges owing to
the company; or
(x) which is unacceptable to GE Capital in its reasonable credit
judgment.
2. In respect of eligible inventory, the exclusionary criteria excludes
any item:
(y) subject to any retention of title claim (to the extent of all
amounts owing from time to time to any supplier having or
claiming a retention of title claim) or encumbrance or which
is covered by a negotiable document of title other than any
right or claim of GE Capital;
(z) not located on premises owned or operated by the company and
identified in the disclosure statement;
(aa) not located on premises where an agreement, acknowledgment or
waiver in a form acceptable to GE Capital has been provided to
GE Capital by the owner, mortgagee and occupier (if it is not
an obligor) of the premises where the inventory is located;
(bb) located on premises where the aggregate value of the items on
those premises is less than A$100,000;
(cc) in transit;
- --------------------------------------------------------------------------------
Facility Agreement-Daisytek Australia Pty Limited 12/02/03
Page 62 of 79 Pages
(dd) which is not covered by insurance acceptable to GE Capital;
(ee) in GE Capital's good faith credit judgement which is obsolete,
unsaleable, shop worn, damaged or unfit for further processing
or is not of good and merchantable quality or free from
defects;
(ff) which consists of slow moving items, discontinued items,
returned items, or used items held for re-sale or finished
goods on hand for a period in excess of 12 months where the
current inventory holdings are greater than the sales levels
for that item for the previous 12 months;
(gg) which does not meet all standards imposed by any government
authority, including relating to its production, acquisition
or importation;
(hh) which is held by the company on consignment or placed by the
company on consignment;
(ii) subject to any licensing, patent, royalty, trademark, trade
name or copyright agreement (excluding agreements made between
the company and Hewlett Packard, Avery Denison, Epson,
Lexmark, Kyocera, Panasonic or any other suppliers as advised
from time to time in writing by GE Capital to the company) or
requires the consent of any person for the completion,
manufacture or sale;
(jj) which is unacceptable to GE Capital in its reasonable credit
judgment;
(kk) which is covered by a negotiable document of title, unless the
document and evidence of acceptable insurance covering the
inventory has been delivered to GE Capital;
(ll) which does not consist of finished goods;
(mm) which is held for rental or lease by or on behalf of the
company;
(nn) which in any way fails to meet or violates any warranty,
representation or covenant contained in this agreement or any
other transaction document.
- --------------------------------------------------------------------------------
Facility Agreement-Daisytek Australia Pty Limited 12/02/03
Page 63 of 79 Pages
SCHEDULE 5 - LETTERS OF CREDIT (CLAUSE 2.11)
REQUESTING A LETTER OF CREDIT
s5.1 If the company wants a letter of credit to be issued, the
company must have excess availability in excess of the face
value amount of the letter of credit requested. The company
agrees to give a letter of credit application to GE Capital no
later than 2 business days before the proposed issuance date.
The letter of credit application must contain:
(oo) details of the beneficiary of the requested letter of
credit; and
(pp) the proposed issuance date of the requested letter of
credit (which must be no later than 2 business days
after the date of the letter of credit application);
and
(qq) the proposed expiry date (if any) of the requested
letter of credit which must be no later than one year
after the issuance date without GE Capital's written
consent, and must not be any later than the maturity
date; and
(rr) the face value amount in Australian dollars of the
requested letter of credit (which must be an amount
which when added to the face value amount of each
current LC must not exceed the letter of credit
facility limit and must not exceed the amount of any
excess availability calculated at that time); and
(ss) any other information GE Capital may reasonably
require from time to time.
GE Capital is not obliged to incur LC obligations.
LETTER OF CREDIT FACILITY LIMIT
s5.2 The total amount of the letter of credit liability which is
payable or to become payable in respect of all letters of
credit issued under this agreement must not exceed the letter
of credit facility limit.
EFFECT OF A LETTER OF CREDIT APPLICATION
s5.3 A letter of credit application is effective when GE Capital
actually receives it in legible form. An effective letter of
credit application is irrevocable unless the company advises GE
Capital in writing that the company no longer requires a letter
of credit and at that time GE Capital has not taken any steps to
make the letter of credit available which GE Capital cannot
rescind or reverse without GE Capital incurring a loss.
- --------------------------------------------------------------------------------
Facility Agreement-Daisytek Australia Pty Limited 12/02/03
Page 64 of 79 Pages
CONDITIONS PRECEDENT TO ISSUE OF AN LC
s5.4 The company must ensure to GE Capital's reasonable satisfaction
that all requirements of the letter of credit regarding a
request for payment under the letter of credit are satisfactory
to GE Capital and the issuing bank.
PAYMENT OF AN LC
s5.5 If a letter of credit is called or if any letter of credit
liability arises or is paid by GE Capital, then the amount
called, payable or paid must be immediately repaid to GE
Capital. GE Capital may debit the company's loan account with
the amount required to be paid. The debit is deemed to be a
current drawing under the facility of the amount called payable
or paid. The company acknowledges its indebtedness to GE Capital
for the amount of that current drawing.
s5.6 If any letter of credit is issued in a currency other than
Australian dollars, GE Capital may convert the amount of the
letter of credit liability into Australian dollars (even though
it may be necessary to convert through a third currency to do
so) for the purpose of calculating the amount of the letter of
credit liability on the day and at the rates it considers
appropriate and may add its usual costs in connection to the
conversion to Australian dollars.
s5.7 Without prejudice to any other power of GE Capital, upon or at
any time after the occurrence of an event of default, GE
Capital may require the company by notice to pay to GE Capital
cash cover equal to 105% of the face value amount of each
current LC. Upon receiving the notice the company must
immediately pay the cash cover specified in the notice to GE
Capital in immediately available funds and in Australian
dollars. The additional 5% of the face value amount of each
current LC ("Buffer") is to be applied by GE Capital against
any costs relating to foreign exchange conversion. To the
extent that such costs are less than the amount representing
the Buffer, GE Capital shall repay the balance of the cash
cover to the company.
s5.8 If any LC obligations are subsisting on the maturity date, the
company must either immediately:
(tt) cause each current LC to be returned to the issuer
and cancelled; or
(uu) pay to GE Capital, in immediately available funds, an
amount equal to 105% of the aggregate amount of the
face value amount of each current LC to be held by GE
Capital as cash collateral in an account of GE
Capital; or
(vv) procure the delivery to GE Capital of a bank
guarantee in form and substance and in currencies
approved by GE Capital in an amount equal to 105% of
the aggregate amount of the face value amount of
current LCs.
s5.9 Without prejudice to any other power of GE Capital, if any LC
obligations are subsisting on the maturity date or on the
occurrence of any event of default, GE Capital may pay the
beneficiary all amounts payable or to become payable in the
future under the letter of credit.
- --------------------------------------------------------------------------------
Facility Agreement-Daisytek Australia Pty Limited 12/02/03
Page 65 of 79 Pages
SCHEDULE 6 - DISCLOSURES
1 CLAUSE 12.1 j) - LITIGATION MATTERS
2 CLAUSE 12.1 k) - TRUSTEE MATTERS
3 CLAUSE 12.1 l) - REAL PROPERTY
4 CLAUSE 12.1 n) - EMPLOYMENT MATTERS
5 CLAUSE 12.1 o) - JOINT VENTURES, SUBSIDIARIES AND AFFILIATES
6 CLAUSE 12.1 p) - SHARE CAPITAL
SHAREHOLDER SHARES HELD FULLY PAID
7 CLAUSE 12.1 q) - INDEBTEDNESS
8 CLAUSE 12.1 r) - TAXES
9 CLAUSE 12.1 t) - INTELLECTUAL PROPERTY
10 CLAUSE 12.1 v) - ENVIRONMENTAL MATTERS
10 CLAUSE 12.1 w) - INSURANCE POLICIES
11 CLAUSE 12.1 x) - BANK ACCOUNTS
12 CLAUSE 12.1 y) - AGREEMENTS AND OTHER DOCUMENTS
13 CLAUSE 13.1 j) - BUSINESS NAMES
- --------------------------------------------------------------------------------
Facility Agreement-Daisytek Australia Pty Limited 12/02/03
Page 66 of 79 Pages
SCHEDULE 7 - GUARANTEE AND INDEMNITY (CLAUSE 18.1)
GUARANTEE
s7.1 The guarantor unconditionally and irrevocably guarantees
payment to GE Capital of the guaranteed money and guarantees
to GE Capital the due performance by the company of the
company's obligations to GE Capital under the transaction
documents as a principal obligation. If the company does not
pay the guaranteed money on time and in accordance with the
transaction documents, then the guarantor agrees to pay the
guaranteed money to GE Capital on demand. A demand may be made
at any time and from time to time and whether or not GE
Capital has made demand on the company.
NATURE OF GUARANTEE
s7.2 This guarantee is a continuing obligation and extends to all
of the guaranteed money.
INDEMNITY
s7.3 The guarantor unconditionally and irrevocably indemnifies GE
Capital as a principal obligation against any liability or
loss (including consequential or economic loss) arising, and
any costs GE Capital suffers or incurs:
(ww) if an obligor does not, is not obliged to, or is
unable to, pay the guaranteed money in accordance
with the transaction documents; or
(xx) if the guarantor is not obliged to pay GE Capital an
amount under clause s7.1 ("Guarantee"); or
(yy) if GE Capital is obliged, or agrees, to pay an amount
to a trustee in bankruptcy or liquidator (of an
insolvent person) in connection with a payment by an
obligor (for example, GE Capital may have to, or may
agree to, pay interest on the amount); or
(zz) if the guarantor defaults under this guarantee; or
(aaa) in connection with any person exercising, or not
exercising, rights under this guarantee; or
(bbb) if any obligor defaults under this agreement or any
transaction document; or
(ccc) if the guaranteed money is not recoverable or
recovered by GE Capital from any obligor.
REINSTATEMENT OF RIGHTS
s7.4 A trustee in bankruptcy, liquidator or controller or any other
person may ask GE Capital to refund a payment it has received
or otherwise repay money it has received in connection with
this guarantee the guaranteed money or the
- --------------------------------------------------------------------------------
Facility Agreement-Daisytek Australia Pty Limited 12/02/03
Page 67 of 79 Pages
transactions documents. To the extent GE Capital is obliged
to, or agrees to, make a refund or repayment it may treat the
payment as if it had not been made. It is then entitled to its
rights against the guarantor under this guarantee as if the
payment had never been made. This applies despite anything in
this guarantee.
RIGHTS OF GE CAPITAL ARE PROTECTED
s7.5 Rights given to GE Capital under this guarantee (and the
guarantor's liabilities under it) are not affected by any act
or omission by GE Capital or by anything else that might
otherwise affect them under law or otherwise, including:
(ddd) the fact that it varies or replaces any arrangement
under which the guaranteed money is expressed to be
owing, such as by increasing the facility limit or
extending the term; or
(eee) the fact that it releases the company or an obligor
or gives it a concession, such as more time to pay or
compromises any of the guaranteed money; or
(fff) the fact that the company opens an account with it;
or
(ggg) the fact it releases, loses the benefit of or does
not obtain any transaction document; or
(hhh) the fact that it does not register any transaction
document which could be registered; or
(iii) the fact that it releases any person who guarantees
any of the company's obligations; or
(jjj) the fact that a person becomes a guarantor after the
date of this agreement; or
(kkk) the fact that the obligations of any person who
guarantees any of the company's obligations may be
void or may not be enforceable; or
(lll) the fact that any person who was intended to
guarantee any of the company's obligations does not
do so or does not do so effectively; or
(mmm) the death, mental or physical disability or
insolvency of any person including an obligor; or
(nnn) changes in the membership, name or business of any
person; or
(ooo) any neglect, omission, default or delay of GE
Capital.
NO MERGER
s7.6 This guarantee does not merge with or adversely affect, and is
not adversely affected by, any of the following:
(ppp) any other guarantee, indemnity, or security interest,
or other right or remedy to which GE Capital is
entitled; or
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Facility Agreement-Daisytek Australia Pty Limited 12/02/03
Page 68 of 79 Pages
(qqq) a judgment which GE Capital obtains against the
guarantor in connection with the guaranteed money or
any other amount payable under this guarantee.
GE Capital may still exercise rights under this guarantee as
well as under the judgment, other guarantee, indemnity, security
interest, or other right or remedy.
EXTENT OF GUARANTOR'S OBLIGATIONS
s7.7 If more than one person is named as "guarantor" each of them
is liable for all the obligations under this guarantee both
separately on its own and jointly with any one or more other
persons named as "guarantor". This guarantee binds each person
who signs as "guarantor" even if another person who was
intended to sign does not sign it or is not bound by it.
GUARANTOR'S RIGHTS ARE SUSPENDED
s.7.8 As long as any of the guaranteed money remains unpaid, the
guarantor may not, without GE Capital's written consent:
(rrr) reduce its liability under this guarantee by claiming
that it or any obligor or any other person has a
right of set-off subrogation or counterclaim against
GE Capital; or
(sss) exercise any legal right to claim to be entitled to
the benefit of another guarantee, indemnity, or
security interest given in connection with the
guaranteed money or any other amount payable under
this guarantee (for example, the guarantor may not
try to enforce any security interest GE Capital has
taken to ensure repayment of the guaranteed money);
or
(ttt) claim an amount from the company, or another
guarantor of the company's obligations, under a right
of indemnity or any other claim, or enforce any right
against either of them; or
(uuu) claim an amount in the insolvency of any obligor; or
(vvv) directly or indirectly withdraw or seek to withdraw
any money loaned by the guarantor to the company or
otherwise owing to the guarantor by the company or
accept or receive any property or payment of the
company or take any encumbrance or security interest
from the company; or
(www) transfer, assign or otherwise dispose of any claim
the guarantor may have against the company other than
by way of complete release or make or cause any other
person to claim, demand or bring an action against
the company directly or indirectly.
Any money, property or other benefit received by the guarantor from the
company in contravention of this clause is received on the
basis that it is held on trust for GE Capital and will be paid
to GE Capital on receipt by the guarantor.
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Facility Agreement-Daisytek Australia Pty Limited 12/02/03
Page 69 of 79 Pages
CROSS GUARANTEE
s7.9 This guarantee takes effect as a cross-guarantee and
cross-indemnity when one or more of the company are the same
as one or more of the guarantor. In those circumstances it is
a separate guarantee and indemnity in relation to each obligor
as if that person were:
(xxx) the only person included in the definition of
"company"; and
(yyy) excluded from the definition of "guarantor".
- --------------------------------------------------------------------------------
Facility Agreement-Daisytek Australia Pty Limited 12/02/03
Page 70 of 79 Pages
SCHEDULE 8A - MASTER AGREEMENT FOR DOCUMENTARY LETTERS OF CREDIT
TERMS AND CONDITIONS
The company ("APPLICANT") will require, from time to time, Documentary Letters
of Credit. GE Capital Finance Pty Limited ("GE CAPITAL") may, upon the
Applicant's application therefor, and to the extent such application is approved
in accordance with the Facility Agreement by GE Capital, arrange for the
issuance of credits through GE Capital Trade Services Ltd (the "BANK"), a Hong
Kong corporation and wholly owned by General Electric Capital Corporation or
through another financial institution satisfactory to GE Capital. Each
Documentary Letter of Credit issued through the Bank (hereinafter each such
Documentary Letter of Credit will be referred to as the "Credit") will be
governed by and interpreted in accordance with the following terms and
conditions. Capitalized terms shall have the meanings accorded them in Section
9, Definitions, below.
1. PAYMENT TERMS.
Applicant agrees to pay to GE Capital on demand in the manner provided
for by the Facility Agreement in the currency stipulated in the
Facility Agreement, in immediately available funds: (i) each amount
drawn under the Credit in Dollars or in the event that drafts under the
Credit are payable in a currency other than Dollars, the Dollar
Equivalent of each amount so drawn; (ii) interest on each amount (or
the Dollar Equivalent thereof) so drawn for each day from the date of
payment of the relevant draft to and including the date of payment in
full of such amount by Applicant to GE Capital, at a rate per annum
equal to the rate per annum on Annex A hereto, or, if none is
specified, in accordance with the Facility Agreement; and (iii) any and
all commissions and charges of, and any and all costs and expenses
incurred by, GE Capital, the Bank and each of their correspondents in
relation to the Credit and all drafts thereunder.
2. SECURITY INTEREST.
Under the Transaction Documents the Applicant has granted to GE Capital
security over all of its assets and undertakings. The rights under the
Transaction Documents do not limit any other rights GE Capital or the
Bank may have at law, including the interest in and unqualified right
to the possession and disposal of all property shipped under or in
connection with the Credit, and also in and to all shipping documents,
documents of title or drafts drawn under the Credit.
3. ADMINISTRATION OF CREDIT.
(a) Applicant will promptly examine the copy of the Credit (and
any amendments thereof) sent to Applicant, as well as all
other instruments and documents delivered to Applicant from
time to time in connection with the Credit, and, in the event
Applicant has any claim of non-compliance with the
instructions or of any discrepancy or other irregularity,
Applicant will immediately notify GE Capital thereof in
writing, and Applicant will conclusively be deemed to have
waived any such claim against GE Capital, Bank and their
correspondents unless such immediate notice is given as
aforesaid.
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Facility Agreement-Daisytek Australia Pty Limited 12/02/03
Page 71 of 79 Pages
(b) Neither Bank, GE Capital nor any of their correspondents shall
be responsible for, and neither Bank's and GE Capital's powers
and rights hereunder nor Applicant's Obligations shall be
affected by: (i) any act or omission pursuant to Applicant's
instructions; (ii) any other act or omission of Bank, GE
Capital or their correspondents or their respective agents or
employees other than any such arising from its or their gross
negligence or wilful misconduct; (iii) the validity, accuracy
or genuineness of drafts, documents or required statements,
even if such drafts, documents or statements should in fact
prove to be in any or all respects invalid, inaccurate,
fraudulent or forged (and notwithstanding that Applicant shall
have notified Bank or GE Capital thereof); (iv) failure of any
draft to bear any reference or adequate reference to the
Credit; (v) errors, omissions, interruptions or delays in
transmission of delivery of any messages however sent and
whether or not in code or otherwise; (vi) any act, default,
omission, insolvency or failure in business of any other
person (including any correspondent) or any consequences
arising from causes beyond Bank's or GE Capital's control; or
(vii) any acts or omissions of any Beneficiary of the Credit
or transferee of the Credit, if transferable. Without limiting
the generality of the foregoing, the Bank may (i) act in
reliance on any oral, telephone, telegraphic, electronic,
facsimile or written request, notice, or instruction believed
in good faith to be from or have been authorized by the
Applicant, (ii) receive, accept or pay as complying with the
terms of the Credit any Drafts or other documents, otherwise
in order, which are signed by or issued to any person or
entity acting as the representative of, or in the place of,
the party in whose name the Credit provides that any Drafts or
other documents should be drawn or issued and (iii) waive its
stipulation that the bank nominated in the Credit shall accept
or pay the Drafts, and the Bank may then accept presentations
of Drafts and documents for payment directly.
(c) GE Capital may appoint any of its other related bodies
corporate as "Bank" at any time and any Bank may assign or
otherwise deal with all or any portion of its rights under
this Agreement or the Credit, (including without limitation
any reimbursement obligation owing to it) in any way it sees
fit including to any subsidiary or related bodies corporate of
General Electric Capital Corporation, in each case without
prior notice to Applicant. GE shall notify the Applicant of
any such appointments.
4. EXTENSIONS, INCREASES AND MODIFICATIONS OF CREDIT.
Each Applicant agrees that GE Capital, acting through the Bank may at
any time and from time to time, in its discretion, by agreement with
one or more other Applicants: (a) further finance or refinance any
transaction under the Credit; (b) renew, extend or change the time of
payment or the manner, place or terms of payment of any of the
Obligations; (c) settle or compromise any of the Obligations or
subordinate the payment thereof to the payment of any other debts of or
claims against any Applicant which may at the time be due or owing to
the Bank; or (d) release any Applicant or any Guarantor or any
Collateral, or modify the terms under which such Collateral is held, or
forego any right of setoff, or modify or amend in any way this
Agreement or the Credit, or give any waiver of consent under this
Agreement.
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5. RESERVE REQUIREMENTS AND SIMILAR COSTS.
If Bank is now or hereafter becomes subject to any reserve, special
deposit or similar requirement against assets of, deposits with, or for
the account of, or credit extended by, Bank, or any other condition is
imposed upon Bank which imposes a cost upon Bank, and the result, in
the determination of Bank is to increase the cost to Bank of
maintaining a Credit or paying or funding the payment of any draft
thereunder, or to reduce the amount of any sum received or receivable,
directly, by Bank hereunder, Applicant will pay to Bank upon demand
such amounts required to compensate Bank for such increased cost or
reduction. In making the determinations contemplated hereunder, Bank
may make such estimates, assumptions, allocations and the like which
Bank in good faith determines to be appropriate, but Bank's selection
thereof, and Bank's determinations based thereon, shall be final and
binding and conclusive upon Applicant absent manifest error.
6. POSSESSION OF PROPERTY BY APPLICANT.
If the Applicant obtains possession of goods or other property, if any,
covered by the Credit, prior to the Bank's receipt and review of
documents, then all discrepancies and other irregularities of said
documents shall be deemed waived by the Applicant, and the Bank is
authorized and directed to pay any Drafts drawn or purporting to be
drawn upon the Credit.
7. PARTIAL SHIPMENTS.
(a) Except as otherwise expressly stated in the Credit (i) partial
shipments may be made under the Credit, and the Bank may
honour the relative Drafts without inquiry regardless of any
apparent disproportion between the quantity shipped and the
amount of the relative Draft and the total amount of the
Credit and the total quantity to be shipped under the Credit,
and (ii) if the Credit specifies shipments in instalments
within stated periods and the shipper fails to ship in any
designated period, shipments of subsequent instalments may
nevertheless be made in their respective designated periods
and the Bank may honour the relative Drafts.
8. EVENTS OF DEFAULT, REMEDIES; PRE-FUNDING.
(a) If any Event of Default shall have occurred and be continuing,
GE Capital may declare all or any part of the Obligations
(including any such which may be contingent and not matured)
to be immediately due and payable. GE Capital may exercise any
other rights it may have under the Transaction Documents if an
Event of Default occurs.
(b) Without limiting the generality of the foregoing, Applicant
agrees that if: (a) any Event of Default or event which with
notice or lapse of time would become an Event of Default shall
have occurred; (b) GE Capital at any time and for any reason
reasonably deems itself or Bank to be insecure or the risk of
non-payment or non-performance of any of the Obligations to
have increased; or (c) in the event that the Credit is
denominated in a currency other than Dollars, GE Capital
determines that such currency is unavailable or that the
transactions contemplated by this Agreement are unlawful or
contrary to any regulations to which GE Capital or Bank may be
subject or that due to currency fluctuations the Dollar
Equivalent of the amount of a Credit exceeds the amount of
Dollars that Bank in its sole judgment expected to be its
maximum exposure under a Credit, then Applicant will upon
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demand pay to GE Capital an amount equal to the undisbursed
portion, if any, of the Credits, and such amount shall be held
as additional Collateral for the payment of all Obligations,
and after the expiration hereof, to the extent not applied to
the Obligations, shall be returned to Applicant.
9. DEFINITIONS.
As used herein, the following terms shall have the following meanings:
"AGREEMENT" shall mean, collectively, the Application of Documentary
Letter of Credit, these terms and conditions, the Joint Signature
Agreement, and the Authorization and Agreement of Account Party
appended hereto, as the same may be amended, modified, supplemented or
restated from time to time.
"APPLICANT" shall mean the Company as defined in the Facility
Agreement; provided that if two or more persons or entities are named
as companies the terms "Applicant" and "Applicants" shall mean each and
all of such persons and entities, individually and collectively, except
that, if the term "Applicant" is preceded by the word "any" or "each"
or a word or words of similar import, such terms shall be deemed to
refer to each of such persons or entities, individually.
"CREDIT" shall mean a Documentary Letter of Credit issued by Bank upon
Applicant's request of GE Capital, as the same may be amended and
supplemented from time to time, and any and all renewals, increases,
extensions and replacements thereof and therefor.
"DOLLAR EQUIVALENT" shall mean: (a) the number of Dollars that is
equivalent to an amount of a currency other than Dollars, determined by
applying the Bank's selling rate (or the relevant currency against
Dollars applicable to cable transfers to the place where and in the
currency in which the relevant amount is payable; or (b) in the event
that Bank shall not at the time be offering such a rate, the amount of
Dollars that Bank, in its sole judgment, specifies as sufficient to
reimburse or provide funds to Bank in respect of amounts drawn or
drawable under a Credit; in either case as and when determined by Bank.
"DOLLARS" shall mean currency stipulated in the Facility Agreement for
payment of a Letter of Credit.
"DRAFT" means any draft (sight or time), receipt, acceptance, cable or
other written demand for payment.
"EVENT OF DEFAULT" has the meaning assigned to it in the Facility
Agreement.
"FACILITY AGREEMENT" means this Facility Agreement between the
Applicant and GE Capital.
"GUARANTOR" shall mean any maker, drawer, acceptor, guarantor,
endorser, surety, accommodation party or other person liable upon or in
respect of the Obligations.
"OBLIGATIONS" shall mean and include all indebtedness, obligations and
liabilities of Applicant to GE Capital or Bank, present or future, due
or to become due, absolute or contingent, arising hereunder, in
connection with the Credit or any financing or refinancing thereof or
under the Facility Agreement.
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"TRANSACTION DOCUMENT has the meaning assigned to it in the Facility
Agreement.
10. EXPENSES; INDEMNIFICATION.
Applicant agrees to reimburse GE Capital and Bank upon demand for and
to indemnify and hold GE Capital and Bank harmless from and against all
claims, liabilities, losses, costs and expenses, including attorneys'
fees and disbursements, incurred or suffered by GE Capital and/or Bank
in connection with the Credit; such claims, liabilities, losses, costs
and expenses shall include but not be limited to all such incurred or
suffered by GE Capital and/or Bank in connection with (a) GE Capital
and/or Bank's exercise of any right or remedy granted to it hereunder,
(b) any claim and the prosecution or defence thereof arising out of or
in any way connected with this Agreement including, without limitation,
as a result of any act or omission by a Beneficiary, (c) the collection
or enforcement of the Obligations, and (d) any of the events or
circumstances referred to in paragraph 3(b) hereof.
11. LICENSES; INSURANCE.
The Applicant shall indemnify GE Capital for any losses, expenses
incurred by it as a consequence of the failure by the Beneficiaries of
the Credit to procure any necessary import and export or other licenses
for import or export or shipping of any goods referred to in or
pursuant to the Credit and to comply and to cause the Beneficiaries to
comply with all foreign and domestic governmental regulations in regard
to the shipment and warehousing of such goods or otherwise relating to
or affecting the Credit, including governmental regulations pertaining
to transactions involving designated foreign countries or their
nationals. The Applicant shall to keep such goods adequately covered by
insurance in amounts, with carriers and for such risks as shall be
satisfactory to GE Capital, and to cause GE Capital's interest to be
endorsed thereon, and to furnish GE Capital on demand with evidence
thereof. Should the insurance upon said goods for any reason be
unsatisfactory to GE Capital, GE Capital may, at its expense, obtain
insurance satisfactory to it.
12. NO WAIVERS OF RIGHTS HEREUNDER; RIGHTS CUMULATIVE.
No delay by GE Capital or Bank in exercising any right hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise
of any right preclude other or further exercises thereof or the
exercise of any other right. No waiver or amendment of any provision of
this Agreement shall be enforceable against GE Capital or Bank unless
in writing and signed by an officer of GE Capital, and unless it
expressly refers to the provision affected, any such waiver shall be
limited solely to the specific event waived. All rights granted GE
Capital or Bank hereunder shall be cumulative and shall be
supplementary of and in addition to those granted or available to GE
Capital or Bank under applicable law and nothing herein shall be
construed as limiting any such other right.
13. CONTINUING AGREEMENT; TERMINATION.
This Agreement shall continue in full force and effect until the
expiration of the Credit, but, notwithstanding any such expiration,
this Agreement shall continue in full force and effect until all
Obligations then outstanding (whether absolute or contingent) shall
have been paid in full and all rights of Bank hereunder shall have been
satisfied or other arrangements for the securing of such rights
satisfactory to Bank shall have been made.
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14. PERFORMANCE STANDARDS.
Notwithstanding any provision to the contrary herein, GE Capital
reserves the right to decline (i) any request made by the Applicant for
the issuance of a Credit or (ii) any instruction provided by the
Customer if, in its discretion, GE Capital determines that the issuance
of such Credit or the carrying out of such instruction contravenes GE
Capital's customary procedures or policy or any applicable law, rule or
regulation.
15. GOVERNING LAW; JURISDICTION; CERTAIN WAIVERS.
(a) This Agreement shall be governed by and interpreted and
enforced in accordance with the laws of the State of New South
Wales, and GE Capital and Bank shall have the rights and
remedies of a party under applicable law.
(b) Applicant agrees that all actions and proceedings relating
directly or indirectly to this Agreement shall be litigated
only in courts located within the State of New South Wales or
elsewhere as GE Capital may select and that such courts are
convenient forums therefor and submits to the personal
jurisdiction of such courts.
(c) Applicant waives personal service of process upon it and
consents that any such service of process may be made by
certified or registered mail, return receipt requested,
directed to Applicant at its address last specified for
notices hereunder, and service so made shall be deemed
completed two (2) days after the same shall have been so
mailed.
(d) Each Credit and this Agreement shall be subject to the Uniform
Customs and Practice for Documentary Credits (1993 Revision)
International Chamber of Commerce Publication No. 500, or the
most recent revision thereof, the terms of which are known to
the parties, and the same shall be considered as incorporated
herein.
16. NOTICES.
Any notice to GE Capital or Bank shall be provided in the manner
stipulated in the Facility Agreement. Any notice to Bank should be
addressed to GE Capital (on behalf of the Bank).
17. THIRD PARTY BENEFICIARY.
Applicant hereby acknowledges that Bank may enforce its rights under
this Agreement directly against the Applicant as if Bank were named
herein as a party.
18. GENERAL.
(a) If this Agreement is executed by two or more Applicants, they
shall be jointly and severally liable hereunder.
(b) This Agreement shall be binding upon the heirs, executors,
administrators, assigns or successors of each of the
Applicants and shall inure to the benefit of and be
enforceable by GE Capital, its successors, transferees and
assigns.
(c) Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such
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Facility Agreement-Daisytek Australia Pty Limited 12/02/03
Page 76 of 79 Pages
prohibition or unenforceability without invalidating the
remaining provisions hereof in that jurisdiction or affecting
the validity or enforceability of such provision in any other
jurisdiction.
(d) This Agreement shall be deemed to be a "Transaction Document"
for all purposes under the Facility Agreement.
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SIGNING PAGE
EXECUTED AS AN AGREEMENT
DATE:
- --------------------------------------------------------------------------------
SIGNED by
as attorney for GE CAPITAL
FINANCE PTY LIMITED under
power of attorney dated in
the presence of:
- -------------------------------- --------------------------------
Signature of witness By signing this agreement as
attorney the attorney states
that the attorney has not
received notice of revocation of
the power of attorney
- --------------------------------
Name of witness (block letters)
- --------------------------------
Address of witness
- --------------------------------
Occupation of witness
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Facility Agreement-Daisytek Australia Pty Limited 12/02/03
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SIGNED by
as attorney for DAISYTEK
AUSTRALIA PTY LIMITED ACN
075 675 795 under power of attorney
dated
in the presence of:
- -------------------------------- --------------------------------
Signature of witness By signing this agreement as
attorney the attorney states
that the attorney has not
received notice of revocation of
the power of attorney
- --------------------------------
Name of witness (block letters)
- --------------------------------
Address of witness
- --------------------------------
Occupation of witness
SIGNED by
- --------------------------------------------------------------------------------
as attorney for DAISYTEK
AUSTRALIA (QLD) PTY LIMITED
ACN [ ] under
power of attorney dated
in the presence of:
- -------------------------------- --------------------------------
Signature of witness By signing this agreement as
attorney the attorney states
that the attorney has not
received notice of revocation of
the power of attorney
- --------------------------------
Name of witness (block letters)
- --------------------------------
Address of witness
- --------------------------------
Occupation of witness
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