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                                                                    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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<PAGE>

         (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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                           (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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         (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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         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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         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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                  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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<PAGE>

         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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<PAGE>

         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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<PAGE>

HEADINGS

23.4     Headings are for convenience only and do not affect the interpretation
         of this agreement.








                              Page 53 of 79 Pages
<PAGE>


SCHEDULE 1 - CONDITIONS PRECEDENT (CLAUSE 2.4)

<Table>
<Caption>
ITEM                                                            FORM                 RESPONSIBLE
--------------------------------------------------------------- -------------------- ----------------------------------
<S>                                                             <C>                  <C>
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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<PAGE>


<Table>
<Caption>
ITEM                                                            FORM                 RESPONSIBLE
--------------------------------------------------------------- -------------------- ----------------------------------
<S>                                                             <C>                  <C>
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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<PAGE>

<Table>
<Caption>
ITEM                                                            FORM                 RESPONSIBLE
--------------------------------------------------------------- -------------------- ----------------------------------
<S>                                                             <C>                  <C>
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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                              Page 56 of 79 Pages
<PAGE>


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.




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<PAGE>

                  ------------------------------------------
                  Signed


                  ------------------------------------------
                  Printed Name
                  being an authorised officer of



                  ------------------------------------------



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                              Page 58 of 79 Pages
<PAGE>


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$
<S>                                                                                   <C>
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>





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<PAGE>

<Table>
<S>                                                                                              <C>
           (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:
                                                      -------------------------






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                              Page 60 of 79 Pages
<PAGE>


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





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                              Page 61 of 79 Pages
<PAGE>

                  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;




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<PAGE>

         (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.




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                              Page 63 of 79 Pages
<PAGE>


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.





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<PAGE>

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.




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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





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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





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                  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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                  (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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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".




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<PAGE>



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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         (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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                  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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Facility Agreement-Daisytek Australia Pty Limited                       12/02/03
                              Page 77 of 79 Pages
<PAGE>



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




--------------------------------------------------------------------------------
Facility Agreement-Daisytek Australia Pty Limited                       12/02/03
                              Page 78 of 79 Pages
<PAGE>



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




--------------------------------------------------------------------------------
Facility Agreement-Daisytek Australia Pty Limited                       12/02/03
                              Page 79 of 79 Pages