EXHIBIT 10.3
[LETTERHEAD OF ANZ APPEARS HERE]
25 May, 1998
The Directors
Barbeques Galore Limited
327 Chisholm Road
Auburn NSW 2144
Dear Sirs,
Following our recent discussions I am pleased to enclose our formal letter of
offer.
The attached documents include:
. The LETTER OF OFFER - detailing the facilities, security and conditions.
. A COPY of the LETTER OF OFFER - this copy is for you to sign and return to
accept the offer. The covering customer information sheet details the steps
you need to take to accept this offer and satisfy those things required
before the facilities will be made available.
. DRAFT EXTRACT OF MINUTES OF A MEETING OF DIRECTORS - this is an example of
what is required for the minutes of a meeting of directors to approve
acceptance of our offer.
. GENERAL CONDITIONS - specifies the general conditions of use for ANZ
facilities.
. SPECIFIC CONDITIONS - details additional conditions specific to facilities
which are part of this offer and for which Specific Conditions apply.
For your information, clause 23 of the General Conditions clarifies the meaning
of many of the words and legal expressions used in the documents.
Any future changes will be covered by variation letters.
Should you have any questions about the offer, please contact me on 9227 1705. I
suggest you contact your solicitor for any detailed legal queries.
To accept this offer please sign and return the copy of the letter of offer to
me. Please note that this offer expires on 30 June 1998.
Yours sincerely,
/s/ Neil Shilbury /s/ Jason Mares
NEIL SHILBURY JASON MARES
SENIOR MANAGER MANAGER
CORPORATE BANKING CORPORATE BANKING
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LETTER OF OFFER
TO
BARBEQUES GALORE LIMITED
GROUP
DATED 25 MAY, 1998
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
ACN 005 357 522
================================================================================
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LETTER OF OFFER
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ISSUING OFFICE: Corporate Banking
Level 13, 20 Martin Place SYDNEY NSW 2000
We are pleased to offer the facilities set out below to Barbeques Galore
Limited.
The facilities made available are fully interchangeable between all companies
listed as Participants.
CUSTOMER ACN
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Barbeques Galore Limited 008 577 759
PARTICIPANTS
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Barbeques Galore Limited 008 577 759
Vilbrent Pty Limited 002 055 567
Barbeques Galore Australia Pty Limited 001 354 454
Pricotech Leisure Brands Pty Limited 002 060 273
G.L.G. Australia Pty Limited 001 185 002
Park-Tec Engineering Pty Limited 001 387 382
Australian Enamellers Pty Limited 002 909 864
Galore Group Services Pty Limited 002 060 335
For the purposes of this offer document we will refer to the above Customer and
Participants collectively as the Barbeques Galore Limited Group.
The Facilities specified below are available to the Barbeques Galore Limited
Group and for the sake of record we have detailed the facilities as per their
current allocation. The provision of future variation offer documents will occur
should your overall facilities be increased however movement between individual
like facilities can occur at your discretion without the need of formal
documentation. Each year at the specified annual review time we will provide an
annual review letter of offer which will summarise the Barbeques Galore Limited
Group allocation of facilities.
SUMMARY OF FACILITIES
A summary of facilities is as follows:
FACILITY FACILITY LIMIT
AUD
BARBEQUES GALORE LIMITED GROUP
A. Overdraft $ 2,400,000
B. Documentary Credit/Documents Surrendered/Fixed-Variable $20,000,000
Rate Commercial Bill Acceptance-Discount Facility
C. Payroll $ 900,000
D. Encashment $ 50,000
E. Indemnity/Guarantee Facility $ 300,000
F. Foreign Currency Dealing Facility $ 2,500,000
G. Foreign Currency Settlement $ 3,000,000
H. Seasonal Trade $ 6,000,000
I. Fixed/Variable Rate Commercial Bill Acceptance/Discount $ 5,000,000
Facility
J. Fixed/Variable Rate Commercial Bill Acceptance/Discount $ 3,450,000
Facility
K. Lease Finance Facility $ 4,000,000
TOTAL $47,600,000
Details of the facilities are set out in the facilities schedule to this letter
of offer.
EXISTING SECURITY
Details of existing security are set out in the security schedule on this letter
of offer.
FURTHER SECURITY
The existing security held by us is to remain in full force and together with
the further security now to be taken, will extend to cover the existing
facilities currently being provided to you by us and the additional facilities
in this letter.
. Mortgage debentures (the "US DEBENTURES") over all the assets and
undertaking of Barbeques Galore Limited and its subsidiaries in the United
States or its equivalent security under the laws of the United States of
America, as advised by our US legal advisers, ranking second to a mortgage
debenture granted in favour of Merrill Lynch Business Financial Services
Inc.
1. Cross Guarantee between all members of the Barbeques Galore Limited and
including all your US subsidiaries.
2. A Deed of Priority between us and Merrill Lynch Business Financial Services
Inc, in a form satisfactory to us, granting them a USD 1,000,000 priority.
3. First RM Freehold Charge over property at 45 Princes Road, Regents Park.
This is to be accompanied by a professional valuation by JLW addressed to
Australia and New Zealand Banking Group for mortgagee purposes and is to be
acceptable to us.
We will engage Gadens Ridgeway to prepare the necessary security documentation
to complete our security position with such costs being for your account.
The completion of item 1, 2 & 3 above is to be by 30/06/98.
The security arrangements are governed by a security structure under which ANZ
Capel Court Limited has been appointed security agent.
And if requested by us you will complete the following:
. Issuing and stamping of additional new debenture certificates in our
favour; and
. Completion of a Statutory Declaration which outlines the value of total
assets in each Australian state to be completed each 6 month period ending
May and January.
OTHER CONDITIONS
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INTEREST ON CURRENT ACCOUNTS
The interest rate applicable on creditor funds is currently based on the
Calculated Cash Rate (CCR) less 0.50% pa. This rate fluctuates daily and can be
verified in the interest rate section of the Australian Financial Review.
INTEREST RATE ON EXCESSES AND OVERDUE AMOUNTS
For the purposes of Clause 8 of the General Conditions, the applicable rate of
interest is our Reference Rate (currently 7.95%) plus 2.0% pa.
REVISED PRICING STRUCTURE
We reserve our rights to reintroduce the pricing structure which was applicable
to your facilities immediately prior to the issuance of this letter of offer
should the Interest Cover covenant as detailed herein not be adhered to.
NEGATIVE PLEDGE
You undertake not to:
create or permit an encumbrance over your assets or give any guarantee or
indemnity or similar security to any third party for any obligation without
our prior written consent.
CAPITAL EXPENDITURE BUDGET
Barbeques Galore Limited Group's annual capital expenditure budget is to be
presented to us and approved by us prior to the commencement of the next
financial year. You will not,
without our prior written consent, spend or incur any capital expenses in
aggregate in excess of $500,000 of your budget for that year.
FINANCIAL PERFORMANCE COVENANTS
For the avoidance of doubt, with respect to the financial covenants, "you" or
"your" means Barbeques Galore Limited and all its subsidiaries.
You shall observe the following financial performance covenants:
. Shareholders Funds are not to fall below $40,000,000.
. Current Ratio not to fall below 1.50:1 (being Total Tangible Current Assets
divided by Total Current Liabilities).
. Effective Gearing Ratio [being Total Liabilities divided by (Shareholders
Funds less Intangible Assets)] to be less than 1.25:1 as at 31/01 and
1.50:1 as at 31/07.
. Interest Cover (being EBIT divided by Gross Interest) to be at least
2.50:1. The verification of compliance of this covenant is to be made
against the Group's last 12 months P&L statements. i.e. a rolling 12 month
P&L statement.
All financial covenants will be tested against 31/07 and 31/01 half-yearly
accounts.
The following definitions apply to the above financial covenants.
"ACCOUNTING STANDARDS" means:
(a) financial statements prepared in accordance with generally accepted
accounting principles in the United States ("US GAAP"); or
(b) such other standards, principles and practices that we may otherwise agree
to in writing from time to time.
"EBIT" means earnings before income tax and before Gross Interest, being your
gross income less costs and expenses incurred by you during the same period as
disclosed by the profit and loss account excluding any income tax expense and
Gross Interest.
"INTANGIBLE ASSETS" means:
(a) patents, patent rights, trademarks, trade names, franchises, copyrights,
licenses, permits, goodwill, and other intangible assets classified as such
in accordance with generally accepted Accounting Standards; and
(b) all prepayments; and
(c) future income tax benefits being the estimated amount of future saving in
income tax likely to arise as a result of:
(i) the reversal of timing differences; and
(ii) the recoupment of carried forward tax losses, calculated in
accordance with Accounting Standards.
"GROSS INTEREST" means the aggregate of interest and amounts in the nature of
interest incurred (including without limitation payments in the nature of
interest under any finance leases) or paid or for which provision has been made
during the relevant accounting period.
"SHAREHOLDERS FUNDS" means the total consolidated net book value of your assets
after all appropriate deductions in accordance with generally accepted
Accounting Standards (including without limitation, reserves for doubtful
receivable, obsolescence, depreciation and amortisation) LESS the consolidated
liabilities (including tax and other proper accruals, and any deferred income)
calculated in accordance with Accounting Standards.
"TOTAL TANGIBLE CURRENT ASSETS" means, at any time, the aggregate of all your
assets calculated on a consolidated basis which would be classified as current
assets, in accordance with Accounting Standards, less Current Intangible Assets.
"TOTAL CURRENT LIABILITIES" means, at any time, the aggregate of all your
liabilities calculated on a consolidated basis which would be classified
liabilities, in accordance with Accounting Standards.
"TOTAL LIABILITIES" means the total of all your liabilities (including
provisions, tax and other accruals, dividends declared or accrued but not paid,
and any deferred income) calculated in accordance with Accounting Standards and
computed on a consolidated basis.
CERTIFICATE OF COMPLIANCE WITH FINANCIAL UNDERTAKINGS
You must provide a certificate of compliance with the financial ratios specified
in this letter, including reasonable details of the methodology used to
calculate the ratios, and certify that all Financial Information provided to us
gives a true and fair view of your financial condition and the result of your
operations as at the date and in relation to the period in respect of which they
were prepared.
The certificate referred to in the preceding paragraph must be signed by one of
your directors and by one other person, being a director or secretary. These
certificates must be provided within 60 days of the half year to 31 July and 90
days of the full year end to 31 January.
RETENTION OF TITLE
Director's certificate confirming the actual Australian dollar level of your
stock (or any part thereof) which is subject to any retention of title
arrangement in favour of any third party.
The certification referred to in the preceding paragraph must be signed by a
Director and Chief Financial Officer and provided annually within 90 days of
the 31 January year end balance date.
CHANGE OF CONTROL
If a change of control occurs it is an event of default unless waived by us.
For the purposes of this agreement, a change of control occurs if, without our
prior written consent, effective control of Barbeques Galore Limited or any
surety or any of Barbeques Galore Limited's subsidiaries or any surety's
subsidiaries is, in our opinion altered to any material extent from that
subsisting at the date of our letter of offer and that alteration will in our
opinion materially adversely affect your ability to comply with your obligations
to us.
"Effective control of a corporation means:
(a) control of the composition of the board of directors of that corporation;
(b) control of 40% or more of the voting rights attaching to shares in that
corporation;
(c) control of 40% or more of the issued share capital of that corporation".
FINANCIAL MONITORING
You agree to provide us with:
. Your Form 20-F (US GAAP) audited financial statements as soon as they are
available, but not later than 120 days after balance date.
. Your quarterly Nasdaq financial reporting package with budget comparisons
within 60 days of the quarter end. This package is to include balance
sheet and profit & loss statement. Budget comparisons are also to include
the Group's original full 12 month cash flow forecast against which the
current actual cash flow can be compared.
. Annual budget information upon Board ratification but not later than 60
days after the financial year end.
. Statutory Declaration evidencing the Australian dollar level of assets held
in each Australian state to be provided with annual audited accounts.
. Any other information as required by ANZ.
ANNUAL REVIEW
The facilities are subject to annual review. The next review date will be on 16
June 1998.
GENERAL CONDITIONS AND SPECIFIC CONDITIONS
Our General Conditions (Second Edition 1995) apply to the facilities as well as
any applicable Specific Conditions (Second Edition 1995) to the facilities. Both
the General Conditions and any applicable Specific Conditions are enclosed with
this letter of offer.
CONDITIONS PRECEDENT
Our obligations to make any facilities available is subject to our being
satisfied that you have complied with Clause 4 of the General Conditions.
VALUATIONS
You agree that the properties listed in the attached security schedule and also
the property at 45 Princes Road, Regents Park will be valued for us at least
once each 3 years at your cost while facilities continue to be provided by us.
Each valuation must be undertaken by a reputable licensed property valuer
acceptable to us and must be addressed to Australia and New Zealand Banking
Group Limited for mortgagee purposes and acknowledge that we are relying on the
valuation provided.
YEAR 2000 ISSUES
In accordance with clause 6 of the General Conditions, we may require you to
provide information on how you are dealing with risks associated with Year 2000
Issues.
If, in our opinion, Year 2000 Issues may have a material adverse effect on:
(i) your business, assets or financial position; or
(ii) your ability to perform your obligations under any transaction documents,
you agree that we may appoint an independent consultant as agreed with you, or
if we can not agree then a consultant as selected by us, and at your cost to
assess such risks and to gather such information as may reasonably be required.
You also agree that if we do appoint an independent consultant, you will
co-operate with the consultant and allow such assess to your business, including
your information technology systems, as shall be reasonably necessary.
Year 2000 Issues are any Issues which relate to the possible impact to your
business of any fact or circumstance caused by the way dates and times are
processed prior to or after 1/1/2000.
OFFER PERIOD
Our offer is available for acceptance until the close of business on 30 June
1998, unless otherwise extended by the Bank in writing.
We may withdraw our offer at any time before you accept it if we become aware of
anything which, in our opinion, adversely alters the basis on which we made our
offer.
ACCEPTANCE
To accept this offer, please sign the duplicate of this letter of offer where
indicated and return it to us at this office.
Yours faithfully,
/s/ Neil Shilbury /s/ Jason Mares
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NEIL SHILBURY JASON MARES
SENIOR MANAGER MANAGER
CORPORATE BANKING CORPORATE BANKING
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FACILITIES SCHEDULE
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FACILITIES SCHEDULE to letter of offer dated 28 May, 1998.
A. OVERDRAFT
Gross Limit:$2,400,000
Facility limit:
Net Limit: $2,000,000
The overdraft has been provided with set-off for
interest purposes between accounts conducted by
you with us. This arrangement is in place on the
understanding that you acknowledge our right to
apply the whole or part of any credit balances in
any of your accounts held with us in payment of
any debit balances of any of your accounts held
with us.
Termination date: Not before the next review date.
Purpose: Working capital requirements.
Interest rate: ANZ's reference rate (currently 7.95% pa) for
amounts up to the facility limit.
ANZ's reference rate is published weekly (usually
each Monday) in the Australian Financial Review.
Interest payment: Monthly in arrears on the first business day of
each month, accruing daily starting on the first
day of overdraft (interest is charged and payable
monthly).
Fees: Line fee:
0.05% pa on the highest facility limit recorded
for your accounts. This fee is payable quarterly
in arrears on the 15th day of each February, May,
August and November, for the quarter ended
January, April, July and October respectively.
Set-off fee
$150 per account per quarter. This fee is payable
quarterly in arrears on the last day of the
quarter ended January, April, July and October
respectively.
Transfer fee
A daily transfer fee of $10.00 per transfer
exists for transactions between the ODTD and
STA with your main operating account.
Prepayment: Prepayment or cancellation of the facility
(in whole or in part) may be effected without
penalty at any time at the election of the
customer.
Specific Conditions There are no Specific Conditions which apply
to this facility.
B. DOCUMENTARY CREDIT/DOCUMENTS SURRENDERED/FIXED-VARIABLE
RATE COMMERCIAL BILL ACCEPTANCE-DISCOUNT FACILITY - FULLY INTERCHANGEABLE
Facility limit: AUD $20,000,000
(For this purpose we will determine exchange
rates to convert foreign currency amounts to
the equivalent amounts in AUD).
Termination date: Not before the next review date.
Purpose: Establishment of documentary credits at sight
or at term and refinance of trade documents.
Condition precedent: You are only entitled to use the facility if
we agree to the terms of your application and
if you execute all documents required by us.
Fees: Our standard fees apply to establishment and
documentary handling of your documentary
credits.
Inward documents refinanced will be at the
relative commercial bill rate plus a margin
of 1.0% p.a.
Specific Conditions Should the trade documents be refinanced via
Fixed/Variable Commercial Bill
Acceptance/Discount then the same terms,
conditions and pricing are applicable as
those detailed in Facilities H, I or J
detailed herein. There are no other Specific
Conditions which apply to this facility
except that any drawing is to be refinanced
on finance terms not exceeding 180 days
including the term of the letter of credit.
C. PAYROLL
Facility limit: $900,000
Termination date: Not before the next review date.
Purpose: Enable processing of payroll via ANZ OnLine.
Specific Conditions: There are no Specific Conditions which apply
to this facility.
D. ENCASHMENT
Facility limit: $50,000
Termination date: Not before the next review date.
Purpose: Enable the encashment of cheques at various
Branches.
Fees: Establishment fee:
$45 for each encashment arrangement. This
charge is subject to variation at any time
during the term of the facility.
Renewal fee:
$45 for each encashment arrangement. This
charge is subject to variation at any time
during the term of the facility.
Specific Conditions: There are no Specific Conditions which apply
to this facility.
E. INDEMNITY/GUARANTEE FACILITY
Facility limit: $300,000
Termination date: Not before the next review date.
Purpose: Rental bonds
Fee rate for each Bank Guarantee: 1.0% pa subject to a minimum fee of $80 per
half year. The minimum fee is subject to
variation at any time during the term of the
facility.
Fee payment: For each Bank Guarantee, the fee is payable
on the date of drawdown and afterwards half
yearly.
Specific Conditions: Specific Conditions for the facility are
enclosed.
F. FOREIGN CURRENCY DEALING FACILITY
Facility limit: AUD 2,500,000
(For this purpose we adjust the face value of
the customer's obligation under each
transaction by a multiplier (determined by
us). The process includes conversion of any
foreign currency amount to the equivalent
amount in AUD).
Termination date: Not before the next review date.
Purpose: Spot and forward exchange dealing (including
currency swaps).
No pay away exposure except We do not assume any pay away exposure under
under Foreign Currency Settlement this facility unless and to the extent that
Facility limit: it links this facility with a Foreign
Currency Settlement Facility. Except to that
extent we can have no obligation to deliver
currency under a contract until we are
satisfied that counter funds have been lodged
by you or on your behalf.
Condition precedent: You may only enter into a foreign currency
contract with us if we agree to the terms of
the contract and if you execute all other
documents required by us.
Maximum contract term: The maximum term for a foreign currency
dealing contract is 12 months.
Specific Conditions: There are no Specific Conditions which apply
to this facility.
G. FOREIGN CURRENCY SETTLEMENT FACILITY
Facility limit: AUD 3,000,000
(For this purpose we will determine the
exchange rates to convert foreign currency
amounts to the equivalent amounts in AUD).
The facility is linked to the Foreign
Currency Dealing Facility. The facility limit
represents the extent to which we will assume
pay away exposure, on any one settlement day,
for foreign
exchange contracts maturing on that day.
Termination date: Not before the next review date.
Purpose: To allow delivery of currency under foreign exchange
contracts before we have received confirmation that
counter funds have been lodged by you or on your
behalf.
Condition precedent: We will only assume pay away exposure for your
obligation under a foreign exchange contract, if we
have agreed to the terms of the contract and you have
executed all documents required by us.
Specific Conditions: There are no Specific Conditions which apply to this
facility.
H. VARIABLE RATE COMMERCIAL BILL ACCEPTANCE/ DISCOUNT FACILITY - SEASONAL TRADE
Facility limit: $6,000,000 - available only between 1/7 and 31/01 of
each year unless otherwise agreed.
Termination date: Not before the next review date.
Purpose: Working capital requirements during peak
import/manufacturing periods.
Yield rate: For each drawing of bills, our cost of funds rate
quoted for the face value of the bills for the relevant
tenor.
Fees: Line Fee:
0.50% pa on the facility limit, payable quarterly in
advance.
Acceptance fee:
For each drawing an amount equal to 0.50% pa on the
amount of the drawing.
Specific Conditions: Specific Conditions (Second Edition 1995) for the
facility are enclosed.
I. FIXED/VARIABLE RATE COMMERCIAL BILL ACCEPTANCE/DISCOUNT FACILITY
Facility limit: $5,000,000
Termination date: 1 February 2001
Purpose: Purchase of capital equipment and any permanent
working capital requirements.
Yield rate: For each drawing of bills, our cost of funds rate
quoted for the face value of the bills for the
relevant tenor. Currently this facility is drawn
to $2,150,000 at a rate of 8.60% p.a.maturing
06/05/99.
Fees: Line Fee:
0.50% pa on the facility limit, payable quarterly
in advance commencing on the date of acceptance of
our offer.
Acceptance Fee:
For each bill, an amount equal to 0.50% pa on the
face amount of the bill calculated on the tenor of
the bill and payable on the drawdown date for the
bill.
Specific Conditions Specific Conditions (Second Edition 1995) for the
facility are enclosed.
J. FIXED/VARIABLE RATE COMMERCIAL BILL ACCEPTANCE/DISCOUNT FACILITY
Facility limit: $3,450,000
Termination date: 1 February 2001
Purpose: Purchase of 45 Princes Road, Regents Park NSW.
Yield rate: For each drawing of bills, our cost of funds rate
quoted for the face value of the bills for the
relevant tenor.
Fees: Line Fee:
0.50% pa on the facility limit, payable
quarterly in advance commencing on the date
of acceptance of our offer.
Acceptance Fee:
For each bill, an amount equal to 0.50% pa on
the face amount of the bill calculated on the
tenor of the bill and payable on the drawdown
date for the bill.
Specific Conditions Specific Conditions (Second Edition 1995) for
the facility are enclosed.
K. LEASE FINANCE FACILITY
Facility limit: $4,000,000
Termination date: Not before the next review date.
Purpose: To fund plant and equipment and store fitout
purchases.
Subject to execution of Lease You are entitled to a lease only upon
Acknowledgment acceptance by us, and execution by the
parties (in the standard form provided by
us), of a Lease Acknowledgment in terms of
the Master Lease Agreement which constitute
the Specific Conditions for the
facility/leases already drawn under the
facility before your acceptance of our offer.
Specific Conditions Specific Conditions (Second Edition 1995) for
the facility are enclosed.
BARBEQUES GALORE LIMITED
(ACN 008 577 759)
Directors' Resolution made pursuant to Article 83 (1)
We, being all the directors of BARBEQUES GALORE LIMITED at the time this
document is last signed, are in favour of the following resolution:
THAT THE DOCUMENTS NUMBERED 1-6 (the "Documents") AND THE LETTER OF OFFER DATED
25 MAY 1998 ("the Letter of Offer") AND THE SECURITIES NUMBERED 2-5 (the
"Securities") AS SUMMARISED IN THE EXTRACTS OF BOARD MINUTES (ATTACHED HERETO
FOR EASE OF REFERENCE) BE APPROVED IN THEIR ENTIRETY IN THE MANNER CONTEMPLATED
BY THE AUSTRALIAN AND NEW ZEALAND BANKING GROUP LIMITED
Director Date of Signing
Sam Linz /s/ Sam Linz 26/6/98
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Robert Gavshon /s/ Robert Gavshon 26/6/98
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John Price /s/ John Price 26/6/98
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Gordon Howlett /s/ Gordon Howlett 26/6/98
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Philip Gardiner /s/ Philip Gardiner 26/6/98
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Sydney Selati _________________ _______________
BARBEQUES GALORE LIMITED
(ACN 008 577 759)
Directors' Resolution trade pursuant to Article 83(1)
We, being all the directors of BARBEQUE GALORE LIMITED at the time this document
is last signed, are in favour of the following resolution:
THAT THE DOCUMENTS NUMBERED 1-6 (the "Documents") AND THE LETTER OF OFFER DATED
25 MAY 1998 ("the Letter of Offer") AND THE SECURITIES NUMBERED 2-5 (the
"Securities") AS SUMMARISED IN THE EXTRACTS OF BOARD MINUTES (ATTACHED HERETO
FOR EASE OF REFERENCE) BE APPROVED IN THEIR ENTIRETY IN THE MANNER CONTEMPLATED
BY THE AUSTRALIAN AND NEW ZEALAND BANKING GROUP LIMITED.
Director Date of Signing
Sam Linz /s/ Sam Linz 26/6/98
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Robert Gavshon /s/ Robert Gavshon 26/6/98
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John Price /s/ John Price 26/6/98
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Gordon Howlett ----------------------- ---------------
Philip Gardiner ----------------------- ---------------
Sydney Selari /s/ Sydney Selari 7/1/98
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EXTRACT OF BOARD MINUTES
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BARBEQUES GALORE LIMITED A.C.N. 008 577 759 (the "COMPANY")
EXTRACT OF MINUTES OF A MEETING OF DIRECTORS OF THE COMPANY HELD AT 327 CHISHOLM
ROAD AUBURN NEW ZEALAND ON THE 1ST DAY OF JULY 1998 AT AM/PM AGREEMENT WITH
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED (the "BANK")
The following documents were tabled:
1. Letter of Offer dated 25 May 1998 from the Bank to the Customer in relation
to certain facilities (the "Letter of Offer");
2. the Bank's General Conditions (Section Edition 1995);
3. the Bank's Specific Conditions for Variable Rate Commercial Bill
Acceptance/Discount Facility (Second Edition 1995);
4. the Bank's Specific Conditions for Fixed Rate Commercial Bill
Acceptance/Discount Facility (Second Edition 1995);
5. the Bank's Specific Conditions for Indemnity/Guarantee Facility (Second
Edition 1995);
6. the Bank's Specific Conditions for Lease Finance Facility (Second Edition
1995);
(Documents 1-6 inclusive collectively are called the "Documents").
AFTER DUE DISCLOSURE OF ALL DISCLOSABLE INTERESTS IT WAS RESOLVED THAT:
(a) each of the documents is approved for acceptance by execution or
confirmation of acceptance by the means (as required by the Bank)
substantially in the form produced at the meeting or with any additions,
variations and amendments approved by an Authorised Representative;
(b) the exercise of the Company's rights and the performance of its obligations
under which each Transaction Document is approved;
(c) each Authorised Representative of the Company is jointly and severally
authorised to act fully and effectually on behalf of the Company in all
dealings, matters and transactions with the Bank now or in the future,
including:
(i) to act in terms of and for the purposes of the Letter of Offer and
any other documents relevant to the facilities; and
(ii) to complete, execute, deliver, confirm, accept or otherwise effect
the entry by the Company into any Transaction Document, including any
documents supplemental to or varying a facility or in relation to new
or additional facilities; and
(iii) to complete, execute and deliver to the Bank on behalf of the Company
any surety acknowledgment of changes in the facilities provided by
the Bank to the Customers and any confirmation that any security,
guarantees or indemnity given by the Company continues to secure
facilities provided to the Customers despite any change in
arrangements between the Bank and the Customers;
(e) in these resolutions "Transaction Documents" has the same meaning as in the
Bank's General Conditions and include the Documents; and
(f) in these resolutions
"Authorised Representative" means:
(i) each person named in any Account Operating Authority (which has
previously been given by the Company to the Bank) as being able
to act severally on behalf of the Company; or
(ii) if the Account Operating Authority does not permit each of the
named persons to act severally, two or more persons named in that
Account Operating Authority acting jointly in accordance with any
restrictions contained in the Account Operating Authority;
"Account Operating Authority" has the same meaning as in the
Bank's General Conditions.
I, David Glaser, certify that:
*(1) I am a secretary of the Company;
(2) this is a complete, correct and up to date copy of an extract from the
minutes of a properly held meeting of the Board of Directors held on
the date shown above; and
(3) the resolutions described above were validly passed and have not been
amended or revoked.
DATED JULY 1, 1998
/s/ David Glaser
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Signature
*delete as appropriate
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EXTRACT OF BOARD MINUTES
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BARBEQUES GALORE LIMITED A.C.N. 008 577 759 (the "COMPANY")
EXTRACT OF MINUTES OF A MEETING OF DIRECTORS OF THE COMPANY HELD AT 327 CHISHOLM
ROAD AUBURN NEW ZEALAND ON THE 1st DAY OF JULY 1998 AT AM/PM
SECURITIES IN FAVOUR OF AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED (the
"BANK")
The following documents were tabled:
1. Letter of Offer dated 25 May 1998 from the Bank to Barbeques Galore Limited
in relation to certain facilities (the "letter of offer").
Existing Securities
2 Refer attached Security Appendix detailing same.
Further Securities
3. Mortgage debentures (the "US DEBENTURES") over all the assets and
undertaking of Barbeques Galore Limited Group and its subsidiaries in the
United States or its equivalent security under the laws of the United
States of America, as advised by our US legal advisers, ranking second to a
mortgage debenture granted in favour of Merrill Lynch Business Financial
Services Inc.
4. Cross Guarantee between all members of the Barbeques Galore Limited Group
and including all your US subsidiaries.
5. A Deed of Priority between us and Merrill Lynch Business Financial Services
Inc, in a form satisfactory to us, granting them a USD 2,150,000 priority
(which priority will reduce in accordance with the terms of the repayment
arrangements under part of the facilities which it secures) in relation to
our US Debentures. The Deed of Priority must have reduced to
USD1,500,000.00 prior to any drawdown under the Standby Facility.
(Documents 2-5 inclusive collectively are called the "Securities").
AFTER DUE DISCLOSURE OF ALL DISCLOSUABLE INTERESTS IT WAS RESOLVED THAT:
(a) the Company acting in its own capacity agrees to provide the Securities to
the Bank for the obligations to the Bank of the customers named in the
Letter of Offer (the "customers");
(b) it was noted that:
(i) under the Securities the Company is liable to the Bank for all
moneys which the Customers may owe the Bank now or in the future
(including, but not limited to, any money which may be owned to
the Bank under the facilities referred to in the Letter of
Offer); and
(ii) the amount of this liability may exceed the amount of the
facilities set out in the Letter of Offer.
(c) each of the documents is approved for acceptance by execution or
confirmation of acceptance by the means (as required by the Bank)
substantially in the form produced at the meeting, together with all other
deeds and documents (the "ancillary documents") which may be required by
the Bank in order to give an effective security;
(d) the exercise of the Company's rights and the performance of its obligations
acting in its own capacity under each of the Securities and the ancillary
documents is approved;
(e) where the form of any of the Securities or the ancillary documents requires
execution under the Common Seal of the Company, the Common Seal of the
Company be affixed to the relevant document in accordance with the Articles
of Association of the Company;
(f) the directors first considered whether the execution of the Securities was
of commercial benefit to the Company. Having decided that it was of
commercial benefit to the Company to execute the Securities, the directors
passed this resolution; and
(g) each [Authorised Representative]/[director] of the Company is jointly and
severally authorised on behalf of the Company to act fully and effectually
in all dealings, matters and transactions with the Bank about the
Securities now or in the future, including;
(i) to act in terms of and for the purposes of the Securities and any
other document relevant to the facilities provided by the Bank to
the Customers; and
(ii) to complete, execute and deliver to the Bank on behalf of the
Company any acknowledgement of changes in the facilities provided
by the Bank to the Customers (including increased or additional
facilities) and any confirmation that the Securities and any
other security, guarantee or indemnity which may be given by the
company its own continue to secure facilities provided to the
Customers despite any changes in arrangements between the Bank
and the Customers; and
(h) in these resolutions
"Authorised Representative" means:
(i) each person named in any Account Operating Authority (which has
previously been given by the Company to the Bank) as being able
to act severally on behalf of the Company; or
(ii) if an Account Operating Authority does not permit each of the
named persons to act severally, two or more persons named in that
Account Operating Authority acting jointly in accordance with any
restrictions contained in that Account Operating Authority;
"Account Operating Authority" has the same meaning as in the
Bank's General Conditions which are incorporated in the Letter of
Offer.
I, David Maurice Glaser, certify that:
--------------------
(Insert Secretary's full name)
*(1) I am a secretary of the Company;
(2) this is a complete, correct and up to date copy of an extract from the
minutes of a properly held meeting of the Board of Directors held on
the date shown above; and
(3) the resolutions described above were validly passed and have not been
amended or revoked.
DATED July 1, 1998
/s/ David Maurice Glaser
- ------------------------
Signature
*delete as appropriate.