<PAGE>
                                                                   EXHIBIT 10.24


                                                                    Bank One, NA
                                                                ARBN 065 752 918
                                                              ABN 31 065 752 918
                                                    Level 32, 60 Margaret Street
                                                    Sydney, New South Wales 2000
                                                       Telephone: 61 2 9250 2100
                                                       Facsimile: 61 2 9223 1823

13 December, 2001

Mr. Paul Sultana
Financial Controller
Daisytek Australia Pty Ltd
Unit 3, 196 Bourke Road
ALEXANDRIA NSW 2015

Dear Paul,

                 CREDIT AGREEMENT FOR A$20,000,000 AVAILABLE TO
  DAISYTEK AUSTRALIA PTY LTD (THE "BORROWER") GUARANTEED BY DAISYTEK, INC. AND
              DAISYTEK INTERNATIONAL CORPORATION (THE "GUARANTOR")

We are pleased to advise the following amendments be made to your Credit
Agreement (the "Agreement") available to the Borrower with Bank One, NA (the
"Bank") as originally documented 18 DECEMBER 2000 and subsequently amended from
time to time:

1.       CLAUSE 1.1 DEFINITIONS

         "TERMINATION DATE" means January 1, 2003.

2.       APPENDIX A has been amended to read:

                                   APPENDIX A

FACILITY PRICING:          Facility pricing to be determined by the following
                           grid of Total Debt to EBITDA with Total Debt to
                           EBITDA definition to match leverage covenant included
                           in the Term Sheet. Current pricing is set at Level 5.
                           The calculation of ratios is based on the accounts of
                           Daisytek, Inc. as stipulated in the Credited
                           Agreement between Daisytek, Inc. and various banks
                           dated December 18, 2000 as amended.

                                  PRICING GRID

<Table>
<Caption>
                            LEVEL 1            LEVEL 2              LEVEL 3           LEVEL 4            LEVEL 5
--------------------- ------------------ ------------------- ------------------ ------------------- ------------------
<S>                   <C>                <C>                 <C>                <C>                 <C>
TOTAL                       < 1.0           >=1.0 < 1.50       >=1.50 < 2.0        >=2.0 < 2.5        >=2.5 < 3.00
DEBT/EBITDA
--------------------- ------------------ ------------------- ------------------ ------------------- ------------------
FACILITY FEE              32.5 bps            37.5 bps           42.5 bps            50.0 bps           50.0 bps
--------------------- ------------------ ------------------- ------------------ ------------------- ------------------
ADVANCE MARGIN            142.5 bps          150.0 bps           170.0 bps          187.5 bps           212.5 bps
--------------------- ------------------ ------------------- ------------------ ------------------- ------------------
ALL-IN COST               175.0 bps          187.5 bps           212.5 bps          237.5 bps           262.5 bps
--------------------- ------------------ ------------------- ------------------ ------------------- ------------------
</Table>

bps= basis points



<PAGE>
                                                                    Bank One, NA
                                                                ARBN 065 752 918
                                                              ABN 31 065 752 918
                                                    Level 32, 60 Margaret Street
                                                    Sydney, New South Wales 2000
                                                       Telephone: 61 2 9250 2100
                                                       Facsimile: 61 2 9223 1823

ACCEPTANCE

If the terms and conditions of this letter are acceptable to you, please arrange
for the duplicate of this letter to be executed and returned to the Bank by 1
January 2002. Any request by the Borrower for funds under the Agreement will
constitute acceptance of the amendments.

For and on behalf of
BANK ONE, NA



WILLIAM H. GIFFEN
First Vice President
General Manager - Corporate Banking

THE BORROWER AGREES AND ACCEPTS THE AMENDMENTS TO THE FACILITY ON THE TERMS AND
CONDITIONS DESCRIBED IN THE CREDIT AGREEMENT LETTER DATED 13 DECEMBER 2001.

THE COMMON SEAL OF DAISYTEK AUSTRALIA PTY LTD
Was hereunto affixed in the presence of:

Ralph Mitchell           /s/ RALPH MITCHELL               Dec. 15, 2001
--------------------     ---------------------------      ---------------------
Name (Director)          Signature                        Date

Jeff Malanga             /s/ JEFF MALANGA
--------------------     ---------------------------
Name (Director)          Signature

CC:      Ralph Mitchell, CFO, Daisytek International Jeff Malanga, Treasurer,
         Daisytek International



<PAGE>


                                    GUARANTY

GUARANTY: To induce Bank One, NA, a national banking association having its
principal office in Chicago, Illinois, directly or through any of its branches,
offices, subsidiaries or affiliates (collectively, the "Lender"), in its sole
discretion, to make loans or extend or continue credit, including letters of
credit and Rate Management Transactions (as defined below), to DAISYTEK
AUSTRALIA PTY LTD, a CORPORATION, and existing under the laws of AUSTRALIA (the
"Borrower"), whether to Borrower alone or to the Borrower and others, and
because the undersigned (the "Guarantor") has determined that executing this
Guaranty is in its interest and to its financial benefit, the Guarantor, as
primary obligor and not merely as surety, absolutely and unconditionally
guarantees to the Lender the prompt payment when due, whether at stated
maturity, upon acceleration or otherwise, and at all times thereafter, of any
and all existing and future indebtedness, obligation and liability of every
kind, nature and character, direct or indirect, absolute or contingent
(including, without limitation, all renewals, extensions and modifications
thereof, and all interest, fees and other monetary obligations incurred or
accrued during the pendency of any bankruptcy, insolvency, receivership or other
similar proceeding, regardless of whether allowed or allowable in such
proceeding), of the Borrower to the Lender howsoever and whensover created,
arising, evidenced or acquired (the "Obligations"). The Guarantor further agrees
to pay all costs and expenses including, without limitation, all court costs and
attorneys' and paralegal's fees (including allocated costs of in-house counsel
and paralegals) and expenses paid or incurred by the Lender in endeavoring to
collect all or any part of the Obligations from, or in prosecuting any action
against, the Borrower, the Guarantor or any other guarantor of all or any part
of the Obligations (such costs and expenses, together with the Obligations,
collectively the "Guaranteed Debt"). The Guarantor further agrees that the
Guaranteed Debt may be extended or renewed in whole or in part without notice to
or further assent from it, and that it remains bound upon its guarantee
notwithstanding any such extension or renewal. The term "Rate Management
Transaction", as used herein, means any transaction (including an agreement with
respect thereto) now existing or hereafter entered into between Borrower and
Lender which is a rate swap, basis swap, forward rate transaction, commodity
swap, commodity option, equity or equity index swap, equity or equity index
option, bond option, interest rate option, foreign exchange transaction, cap
transaction, floor transaction, collar transaction, forward transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
or any other similar transaction (including any option with respect to any of
these transactions) or any combination thereof, whether linked to one or more
interest rates, foreign currencies, commodity prices, equity prices or other
financial measures.

NATURE OF GUARANTY: This Guaranty is a guaranty of payment and not of
collection. The Guarantor waives any right to require the Lender to sue the
Borrower, any other guarantor, or any other person obligated for all or any part
of the Guaranteed Debt, or otherwise to enforce its payment against any
collateral securing all or any part of the Guaranteed Debt.

NO DISCHARGE OR DIMINISHMENT OF GUARANTY: Except as otherwise provided herein
and to the extent provided herein, the obligations of the Guarantor hereunder
are unconditional and absolute and not subject to any reduction, limitation,
impairment or termination for any reason (other than the indefeasible payment in
full in cash of the Guaranteed Debt), including: any claim of waiver, release,
extension, renewal, settlement, surrender, alteration, or compromise of any of
the Guaranteed Debt, by operation of law or otherwise; any change in the
corporate existence, structure or ownership of the Borrower or any other
guarantor of or other person liable for any of the Guaranteed Debt, or any
insolvency, bankruptcy, reorganization or other similar proceeding affecting the
Borrower, or any other guarantor of or other person liable for any of the
Guaranteed Debt, or their assets or any resulting release or discharge of any
obligation of the Borrower, or any other guarantor of or other person liable for
any of the Guaranteed Debt; or the existence of any claim, setoff or other
rights which the Guarantor may have at any time against the Borrower, any other
guarantor of the Guaranteed Debt, the Lender, or any other person, whether in
connection herewith or in any unrelated transactions. The obligations of the
Guarantor hereunder are not subject to any defense or setoff, counterclaim,
recoupment, or termination whatsoever by reason of the invalidity, illegality,
or unenforceability of any of the Guaranteed Debt or otherwise, or any provision
of applicable law or regulation purporting to prohibit payment by Borrower or
any other guarantor of or other person liable for any of the Guaranteed Debt of
the Guaranteed Debt or any part thereof. Further, the obligations of the
Guarantor hereunder are not discharged or impaired or otherwise affected by the
failure of the Lender to assert any claim or demand or to enforce any remedy
with respect to all or any part of the Guaranteed Debt; any waiver or
modification of or supplement to any provision or any agreement relating to the
Guaranteed Debt; any release, non-perfection, or invalidity of any indirect or
direct security for the obligations of the Borrower for all or any part of the
Guaranteed



<PAGE>



Debt or any obligations of any other guarantor of or other person liable for any
of the Guaranteed Debt, or any action or failure to act by Lender with respect
to any collateral securing any part of the Guaranteed Debt; any default, failure
or delay, willful or otherwise, in the payment or performance of any of the
Guaranteed Debt; or any other circumstance, act, omission or delay that might in
any manner or to any extent vary the risk of the Guarantor or that would
otherwise operate as a discharge of the Guarantor as a matter of law or equity
(other than the indefeasible payment in full in cash of the Guaranteed Debt).

DEFENSES WAIVED: To the fullest extent permitted by applicable law, the
Guarantor waives any defense based on or arising out of any defense of the
Borrower or the unenforceability of all or any part of the Guaranteed Debt from
any cause, or the cessation from any cause of the liability of the Borrower,
other than the indefeasible payment in full in cash of the Guaranteed Debt.
Without limiting the generality of the foregoing, the Guarantor irrevocably
waives acceptance hereof, presentment, demand, protest and, to the fullest
extent permitted by law, any notice not provided for herein, as well as any
requirement that at any time any action be taken by any person against the
Borrower, any other guarantor of any of the Guaranteed Debt, or any other
person. The Lender may, at its election, foreclose on any security held by it by
one or more judicial or nonjudicial sales, accept an assignment of any such
security in lieu of foreclosure or otherwise act or fail to act with respect to
any collateral securing all or a part of the Guaranteed Debt, compromise or
adjust any part of the Guaranteed Debt, make any other accommodation with the
Borrower, any other guarantor or any other person liable on any of the
Guaranteed Debt or exercise any other right or remedy available to it against
the Borrower, any other guarantor or any other person liable on any of the
Guaranteed Debt, without affecting or impairing in any way the liability of the
Guarantor under this Guaranty except to the extent the Guaranteed Debt has been
fully and indefeasibly paid in cash. To the fullest extent permitted by
applicable law, the Guarantor waives any defense arising out of any such
election even though that election may operate, pursuant to applicable law, to
impair or extinguish any right of reimbursement or subrogation or other right or
remedy of the Guarantor against the Borrower, any other guarantor or any other
person liable on any of the Guaranteed Debt, as the case may be, or any
security.

FOREIGN CURRENCY: The specification of payment in a specific currency at a
specific place and time pursuant to the documentation relating to the Guaranteed
Debt is essential. That currency or those currencies are also the currency of
account and payment under this Guaranty. If the Guarantor is unable for any
reason to effect payment of a specific currency (other than United States
currency) as required by the preceding sentence or if the Guarantor defaults in
the payment when due of any amount of a specific currency (other than United
States currency) under this Guaranty, the Lender may, at its option, require
such payment to be made to the Head Office of the Lender in the equivalent
amount in United States currency at the Lender's then current selling rate for
electronic transfers of that currency to the place or places where the
Guaranteed Debt was payable. In the event that any payment, whether pursuant to
a judgment or otherwise, does not result in payment of the amount of currency
due under this Guaranty, upon conversion to the currency of account and transfer
to the place specified for payment, the Lender has an independent cause of
action against the Guarantor for the deficiency.

RIGHTS OF SUBROGATION: The Guarantor will not assert any right, claim or cause
of action, including, without limitation, a claim of subrogation, contribution
or indemnification that it has against the Borrower, any person liable on the
Guaranteed Debt, or any collateral, until the Borrower and the Guarantor have
fully performed all their obligations to the Lender.

REINSTATMENT; STAY OF ACCELERATION: If at any time any payment of any portion of
the Guaranteed Debt is rescinded or must otherwise be restored or returned upon
the insolvency, bankruptcy, or reorganization of the Borrower or otherwise, the
Guarantor's obligations under this Guaranty with respect to that payment shall
be reinstated at such time as though the payment had not been made and whether
or not the Lender is in possession of this Guaranty. If acceleration of the time
for payment of any of the Guaranteed Debt is stayed upon the insolvency,
bankruptcy or reorganization of the Borrower, all such amounts otherwise subject
to acceleration under the terms of any agreement relating to the Guaranteed Debt
shall nonetheless be payable by the Guarantor forthwith on demand by the Lender.

INFORMATION: The Guarantor assumes all responsibility for being and keeping
itself informed of the Borrower's financial condition and assets, and of all
other circumstances bearing upon the risk of nonpayment of the Guaranteed Debt
and the nature, scope and extent of the risks that the Guarantor assumes and
incurs under this


                                       2
<PAGE>


Guaranty, and agrees that the Lender does not have any duty to advise the
Guarantor of information known to it regarding those circumstances or risks.

TERMINATION: The Lender may continue to make loans or extend credit to the
Borrower based on this Guaranty until five days after it receives written notice
of termination from the Guarantor. Notwithstanding receipt of any such notice,
the Guarantor will continue to be liable to the Lender for any Guaranteed Debt
created, assumed or committed to prior to the fifth day after receipt of the
notice, and all subsequent renewals, extensions, modifications and amendments
with respect to, or substitutions for, all or any part of that Guaranteed Debt.

TAXES: All payments of the Guaranteed Debt will be made by the Guarantor free
and clear of and without deduction for or on account of any and all present or
future taxes, levies, imposts, duties, charges, deductions or withholdings of
whatever nature imposed by any governmental authority with respect to such
payments, and any and all liabilities with respect to the foregoing, but
excluding franchise taxes and taxes imposed on overall net income of the Lender
by the United States of America or the jurisdiction in which Lender's applicable
Lending Installation is located (collectively, "Taxes"). If the Guarantor is
required by law to deduct any Taxes from or in respect of any sum payable to the
Lender under this Guaranty, (a) the sum payable must be increased as necessary
so that after making all required deductions (including deductions applicable to
additional sums payable under this provision) the Lender receives an amount
equal to the sum it would have received had no such deductions been made, (b)
the Guarantor must then make such deductions, and must pay the full amount
deducted to the relevant authority in accordance with applicable law, and (c)
the Guarantor must furnish to the Lender within 45 days after their due date
certified copies of all official receipts evidencing payment thereof.

LIMITATION: Regardless of the amount of Guaranteed Debt outstanding at any time,
the Guarantor's obligations under this Guaranty to the Lender shall not exceed
the principal sum of A$20,000,000 (AUSTRALIAN TWENTY MILLION DOLLARS) FOR THE
REVOLVING CREDIT FACILITY AND US$1,000,000 (US ONE MILLION DOLLARS) FOR THE
FOREIGN EXCHANGE FACILITY plus accrued interest and all costs, fees and expenses
(including attorneys' fees) incurred in collecting or enforcing the Guarantor's
obligations under this Guaranty.

SEVERABIILITY: The provisions of this Guaranty are severable, and in any action
or proceeding involving any state corporate law, or any state, federal or
foreign bankruptcy, insolvency, reorganization or other law affecting the rights
of creditors generally, if the obligations of the Guarantor under this Guaranty
would otherwise be held or determined to be avoidable, invalid or unenforceable
on account of the amount of the Guarantor's liability under this Guaranty, then,
notwithstanding any other provision of this Guaranty to the contrary, the amount
of such liability shall, without any further action by the Guarantor or the
Lender, be automatically limited and reduced to the highest amount that is valid
and enforceable as determined in such action or proceeding. This Section with
respect to the maximum liability of the Guarantor is intended solely to preserve
the rights of the Lender to the maximum extent not subject to avoidance under
the applicable law, and neither the Guarantor nor any other person or entity
shall have any right or claim under this Section with respect to such maximum
liability of Guarantor, except to the extent necessary so that the obligations
of the Guarantor hereunder shall not be rendered voidable under applicable law.
The Guarantor agrees that the Guaranteed Debt may at any time and from time to
time exceed the maximum liability of the Guarantor without impairing this
Guaranty or affecting the rights and remedies of the Lender hereunder, provided
that, nothing in this sentence shall be construed to increase the Guarantor's
obligations hereunder beyond its maximum liability.

REPRESENTATIONS BY GUARANTOR: The Guarantor represents that: (a) it is duly
organized, validly existing and in good standing (to the extent such concept
applies to the Guarantor) under the laws where it is organized, and has all
requisite authority to conduct its business in each jurisdiction in which its
business is conducted; (b) the execution and delivery of this Guaranty and the
performance of the obligations it imposes (i) are within its powers; (ii) have
been duly authorized by all necessary action of its governing body; and (iii) do
not violate any law, conflict with the terms of its articles of incorporation or
organization, its by-laws or any agreement by which it is bound or require the
consent of approval of any governmental authority or any third party; (c) this
Guaranty is a valid and binding agreement, enforceable according to its terms,
except as such enforceability may be limited by bankruptcy, insolvency or
similar laws affecting the enforcement of creditor's rights generally; and (d)
all balance sheets, income statements, and other financial statements furnished
to the Lender are accurate and fairly reflect the financial condition of the
organizations and persons to which they apply on their effective dates,



                                       3
<PAGE>



including contingent liabilities of every type, which financial condition has
not changed materially and adversely since those dates.

INCORPORATION: The Guarantor agrees that so long as all or any portion of the
Guaranteed Debt remains outstanding, it will observe, for the benefit of the
Lender, the covenants and events of default set forth in the Credit Agreement
dated December 18, 2000 and subsequent Amendment Lettered dated May 17, 2001 and
December 13, 2001 between BANK ONE AUSTRALIA and the Guarantor, as amended (the
"Credit Agreement"), which provisions and related definitions are incorporated
by reference, mutatis mutandis. Those provisions and definitions remain in
effect until this Guaranty is no longer in force, notwithstanding any amendment,
modification, or termination of the Credit Agreement. An event of default under
and as define in the Credit Agreement constitutes an event of default under this
Guaranty, which entitles the Lender to accelerate the Guarantor's obligations
under this Guaranty and to exercise any and all of the remedies set forth in
this Guaranty.

LENDING INSTALLATIONS; SETOFF: The Guaranteed Debt may be booked at any office,
branch, subsidiary or affiliate of the Lender, as selected by the Lender (each a
"Lending Installation"). All terms of this Guaranty apply to and may be enforced
by or on behalf of any Lending Installation. Without limiting the rights of the
Lender under applicable law, if either (i) the Guaranteed Debt is then due,
whether pursuant to any agreement evidencing the Guaranteed Debt, an event of
default under this Guaranty, or otherwise, or (ii) the Guarantor is insolvent
(whether or not all or any part of the Guaranteed Debt is then due), then the
Guarantor authorizes the Lender to apply any sums standing to the credit of the
Guarantor with the Lender or any of its Lending Installations toward the payment
of the Guaranteed Debt by the Guarantor under this Guaranty.

NOTICES: All notices, requests and other communications to any party under this
Guaranty must be in writing (including bank wire, facsimile transmission or
similar writing) and must be given to that party, in the case of the Guarantor,
at its address or facsimile number set forth on the signature page hereof and,
in the case of the Lender, at its Head Office or as otherwise specified in a
notice by one party to the other. Each notice, request or other communication is
effective (i) if given by facsimile transmission, when transmitted to the
facsimile number specified below and confirmation of receipt is received, (ii)
if given by mail, 72 hours after the communication is deposited in the mails
with first class postage prepaid, addressed as specified above, or (iii) if
given by any other means, when delivered at the address specified above.

MISCELLANEOUS: No provision of this Guaranty may be amended, supplemented or
modified, or any of its terms and provisions waived, except by a written
instrument executed by the Lender and the Guarantor. No failure on the part of
the Lender to exercise, and no delay in exercising, any right under this
Guaranty waives that right; not does any single or partial exercise of any right
under this Guaranty preclude any other or further exercise of that or any other
right. The remedies provided in this Guaranty are cumulative and not exclusive
of any remedies provided by law. This Guaranty binds the Guarantor and its
successors and assigns, and benefits the Lender and its successors and assigns.
The use of headings does not limit the provisions of this Guaranty.

GOVERNING LAW: THIS GUARANTY IS TO BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL
LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS, BUT GIVING EFFECT
TO FEDERAL LAWS APPLICABLE TO THE LENDER.

CONSENT TO JURISDICTION: THE GUARANTOR IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE
JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE COURT SITTING IN
CHICAGO IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY
AND THE GUARANTOR IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION
OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY
WAIVES ANY OBJECTION IT MAY NOW OR LATER HAVE AS TO THE VENUE OF ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH A COURT IS AN
INCONVENIENT FORUM. THIS PROVISION DOES NOT LIMIT THE RIGHT OF THE LENDER TO
BRING PROCEEDINGS AGAINST THE GUARANTOR IN THE COURTS OF ANY OTHER JURISDICTION.
ANY JUDICIAL PROCEEDING BY THE GUARANTOR AGAINST THE LENDER INVOLVING, DIRECTLY
OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED
WITH THIS GUARANTY SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS.



                                       4
<PAGE>



WAIVER OF JURY TRIAL: THE GUARANTOR AND THE LENDER EACH WAIVE TRIAL BY JURY IN
ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER
SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO,
OR CONNECTED WITH THIS GUARANTY OR THE RELATIONSHIP IT ESTABLISHES.


Dated:                    , 2001              GUARANTOR:
      --------------------                    DAISYTEK, INC

Address for Notices:.

                                          By: /s/ RALPH MITCHELL
                                             -----------------------------------
Facsimile No.:                            Title:  EVP & CFO
              ------------------------          --------------------------------


                                              GUARANTOR:
                                              DAISYTEK INTERNATIONAL CORPORATION
Address for Notices:



                                          By: /s/ RALPH MITCHELL
                                             -----------------------------------
Facsimile No.:                            Title:  EVP & CFO
              ------------------------          --------------------------------



                                       5
<PAGE>



                             BANK ONE                           tel 214 290 2000
                             INTERNATIONAL CORPORATION          fax 214-290-2276
                             Mail Code TX1-2478                 www.bankone.com
                             PO Box 655415
                             Dallas, TX  75265-5415

AGREEMENT made the 18th day of December 2000,

BETWEEN: BANK ONE, NA (ARBN 064 474 102) of Level 32, 60 Margaret Street, Sydney
NSW (the "Bank")

AND: DAISYTEK AUSTRALIA PTY LTD (ACN 075 675 795) (the "Borrower")

WHEREBY IT IS AGREED as follows:

A.       The Borrower has requested that the Bank provide or continue to provide
         certain financial accommodation to the Borrower.

B.       The Bank desires to provide or to continue to provide such financial
         accommodation to the Borrower upon and subject to the terms and
         conditions of this Agreement.

C.       The obligations of the Borrower under this Agreement ("Guaranteed
         Amount") are unconditionally guaranteed by the DAISYTEK, INC. and
         DAISYTEK INTERNATIONAL CORPORATION (the "Guarantor").

1.       INTERPRETATION

         1.1      Definitions

                  In this Agreement unless the context otherwise requires:

                  "ACCOMMODATION LIMIT" means $15,000,000 or such other amount
                  (Australian Fifteen Million Dollars) which both parties may
                  agree upon in writing from time to time.

                  "ADVANCE" means any cash advance drawn under this Facility.

                  "THIS AGREEMENT" means this Agreement and any other agreement
                  expressed to be supplemental to this Agreement to which the
                  parties to this Agreement are parties and any amendments to
                  any such document.

                  "APPROVED PURPOSES" means the working capital needs,
                  acquisitions and other general corporate purposes of the
                  Borrower.

                  "AUTHORIZED OFFICER" means:

                  (a)      in relation to the Borrower, all persons designated
                           by the Borrower as an Authorized Officer from time to
                           time, and notified in writing by the Borrower to the
                           Bank; and

                  (b)      in relation to the Bank, persons designated by the
                           Bank as Authorized Officers.

                  "BANK" means it successors and permitted assigns.

                  "BBSY" means in respect of any day and in respect of any
                  Interest Period the rate per centum per annum quoted on the
                  page numbered 'BBSY' of the Reuters Monitor System under the
                  heading 'Average Bid Rate' for such Interest Period at or
                  about 10.00 am (Sydney time) on such day or on the first day
                  if such Interest Period (rounded up if necessary, to the
                  nearest four decimal places) PROVIDED THAT if in respect of
                  any Interest Period BBSY cannot be determined in accordance
                  with the foregoing procedures then BBSY for that Interest
                  Period shall mean such rate as is agreed between the Bank and
                  the Borrower



1
<PAGE>



                  having regard to comparable indices then available and in the
                  absence of any such agreement shall be the rate stipulated by
                  the Bank having regard to such comparable indices.

                  "BILL" has the same meaning as in the Bills of Exchange Act
                  1909 (but does not include a cheque).

                  "THE BORROWER" includes its successors and permitted assigns.

                  "BUSINESS DAY" means a day on which Australian trading banks
                  are open for a full range of banking business in the
                  metropolitan area of Adelaide, South Australia, Melbourne,
                  Victoria and Sydney, New South Wales.

                  "DRAWDOWN" means an Advance made by the Bank to the Borrower
                  pursuant to this Agreement.

                  "DRAWDOWN DATE" means a date upon which an Advance is made by
                  the Bank to the Borrower pursuant to this Agreement.

                  "DRAWDOWN NOTICE" means a notice of intention of the Borrower
                  to borrow or redraw hereunder in the form or the effect of the
                  form in Schedule I, signed by an Authorized Officer of the
                  Borrower and received no later than 2.00 pm (Eastern Standard
                  Time) one (1) Business Day before the proposed date of such
                  borrowing, redrawing by the Bank.

                  "EVENT OF DEFAULT" means any of the events designated as such
                  in this Agreement.

                  "FACILITY" means the commitment to provide Advances under this
                  Agreement.

                  "FINANCIAL YEAR" means the period from 1 July to the next
                  following 30 June or such other period of one (1) year as the
                  parties may agree in writing from time to time.

                  "FIXED RATE LOAN" means a Cash Advance made under the Facility
                  for a term of more than 180 days with an interest rate fixed
                  for the whole of the term of such advance.

                  "GUARANTEED AMOUNT" means the aggregate of the Accommodation
                  Limit and the Overdraft Limit specified in Schedule VII and
                  any other agreed amount.

                  "GUARANTOR" means its successors and permitted assigns.

                  "INTEREST PERIOD" means each period of each Advance being a
                  period of not less than 1 day nor more than 180 days or such
                  other period as the Bank and the Borrower may agree provided
                  that such period shall not extend beyond the Repayment Date.

                  "LOANS" means the aggregate of all Principal Moneys which are
                  from time to time owing (including contingently owing) or
                  unpaid to the Bank and all other monies from time to time
                  owing (including contingently owing) and unpaid to the Bank
                  under this Agreement.

                  "PRINCIPAL MONEYS" means the aggregate of the Advances
                  outstanding.

                  "QUARTER" means each quarter period ending on the last days of
                  March, June, September and December in each year.

                  "REFERENCE BANKS" means such banks as may from time to time be
                  determined by the Bank to be "Reference Banks."

                  "REPAYMENT DATE" means with respect to Advances the
                  Termination Date.

                  "SECURITY INTEREST" means any security or preferential
                  interest or arrangement of any kind in any asset or other
                  right of or arrangement of any kind with any creditor to have
                  its claim satisfied before other creditors with or from the
                  proceeds of any asset, any deposit of money by way of security
                  and any retention of title other than in the ordinary course
                  of day to day trading conducted at arms length not including a
                  charge or



2
<PAGE>



                  lien arising in favor of a governmental agency by operation or
                  statute unless there is a default in payment of money secured
                  by that charge or lien.

                  "SUBSIDIARY" means:

                  (a)      a subsidiary as defined in the Corporations Law; or

                  (b)      In respect of a person any entity of which that
                           person owns or controls, or is in a position to own
                           or control whether directly or indirectly, more than
                           fifty percent (50%) of the capital or voting rights;
                           and includes any subsidiary formed or acquired after
                           the date of this Agreement.

                  "TERMINATION DATE" means January 1, 2002.

         1.2      Construction

                  In this Agreement unless the context otherwise requires:

                  (a)      A reference to any Act of Parliament or to any
                           section or provision thereof shall be read as if the
                           words "or any statutory modification or re-enactment
                           thereof or any statutory provision substituted
                           therefore" were added to such reference.

                  (b)      A reference to winding up shall when applied to
                           individuals be deemed to refer to bankruptcy.

                  (c)      A reference to an accounting term or "Australian
                           Accounting Standards" is to be interpreted in
                           accordance with approved accounting standards and
                           practices under the Corporations Law, and, where not
                           inconsistent with those accounting standards and
                           practices generally accepted principles and practices
                           in Australia consistently applied to a body corporate
                           or as between bodies corporate and over time. A
                           reference to "consolidated" in relation to accounts
                           or other financial information, data or statistics
                           with respect to a person means treated for accounting
                           purposes as if accounting standards and generally
                           accepted accounting principles for the creation of
                           consolidated accounts applicable to a holding company
                           and its subsidiaries applied to the person.

                  (d)      References to sub-clauses, clauses and schedules are
                           references to sub-clauses, clauses and schedules of
                           this Agreement.

                  (e)      References to any agreement, license or other
                           instrument shall be deemed to include references to
                           such agreement, license or other instrument as varied
                           or replaced from time to time.

                  (f)      Words importing any gender shall include all other
                           genders; words importing individuals shall include
                           partnerships and corporations and vice versa; words
                           importing the singular number shall include the
                           plural and vice versa; the index (if any) any
                           headings are for convenience and shall not affect the
                           interpretation of this Agreement.

                  (g)      Where under or pursuant to this Agreement or anything
                           done under this Agreement the day on or by which any
                           act, matter or thing is to be done is not a Business
                           Day such act, matter or thing may be done on the next
                           succeeding day which is a Business Day (except with
                           respect to the payment of monies payable under this
                           Agreement which shall be made on the immediately
                           preceding day which is a Business Day).

2.       THE FACILITY

         2.1      The Bank agrees to furnish to the Borrower upon and subject to
                  the terms and conditions of this Agreement Advances up to the
                  Accommodation Limit in aggregate.

         2.2      The Facility may be made available in Australian currency.



3
<PAGE>



         2.3      The Borrower may request that any part of the Facility be made
                  available either in Australian currency or in a currency other
                  than Australian currency.

                  In the event that the Borrower shall request that any part of
                  the Facility be made available in a currency other than
                  Australian currency then the Bank shall not be required to so
                  make that part of the Facility available in a currency other
                  than Australian currency if:

                  2.3.1    the aggregate amount borrowed in Australian currency
                           and the then Australian dollar countervalue of any
                           currency other than Australian currency (calculated
                           as provided in Clause 2.7) borrowed or to be borrowed
                           shall be greater than the Accommodation Limited; or

                  2.3.2    the Bank is not satisfied with any designated period
                           of borrowing or risk exposure; or

                  2.3.3    for any reason whatsoever it is impractical for the
                           Bank to make available any accommodation under the
                           Facility in a currency other than Australian
                           currency.

         2.4      Where any accommodation under the Facility is denominated in a
                  currency other than Australian currency, repayment or payment
                  in respect of such accommodation and payments of Interest
                  thereon and fees in respect thereof shall be made by the
                  Borrower in the currency of such accommodation.

         2.5      The Borrower agrees that currency fluctuations are to the
                  account of the Borrower and that the Borrower bears the risk
                  for the same.

         2.6      All sums falling due hereunder by way of interest or fees on a
                  per annum percentage basis shall be calculated on the basis of
                  a 365 day year for Advances or fees payable in Australian
                  currency and a 360 day year for all other currencies for the
                  actual number of days elapsed.

         2.7      The Australian dollar countervalue of any amount of any
                  currency other than Australian currency to be determined for
                  any purpose shall, as between the Bank and the Borrower, be
                  calculated at the Bank's spot selling rate of exchange in
                  respect of the same on the day any such calculation is
                  required to be made at the particular time of the day
                  determined by the Bank. A certificate signed by the Bank
                  stating any such rate of exchange shall be conclusive evidence
                  of such rate of exchange.

         2.8      Subject to any specific provision to the contrary and to
                  Clause 2.9, where the Borrower comprises two or more persons
                  they are bound jointly, each of them severally and any two or
                  more of them jointly and severally.

         2.9      The only party liable as a principal debtor under this
                  Agreement in relation to any Advances is the party that draws
                  the Advance.

3.       ACCOMMODATION LIMIT

         3.1      At any one time the aggregate amount of Advances outstanding
                  shall not exceed the Accommodation Limit.

         3.2      The Bank shall not be obliged to make any Advance to the
                  Borrower if to so do would result in a breach of Clause 3.1.

         3.3      The Bank may act upon the oral instruction of any of the
                  following persons in the position of: Chief Financial Officer,
                  Treasurer, Controller, Director of Cash Management of the
                  Guarantor or Financial Controller of the Borrower.

4.       PURPOSE OF THE FACILITY

         Utilisation of this Facility by the Borrower under this Agreement shall
         be used solely for the Approved Purposes and no other purpose except
         with the prior written approval of the Bank to do otherwise. The Bank
         shall not have any responsibility to ensure that it is so utilised.



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<PAGE>



5.       ADVANCES

         5.1      Each Advance shall be repayable at the stated maturity date
                  established by the Bank (from an overnight basis to a period
                  not to exceed 180 days nor the Repayment Date) at or about the
                  time of Advance or, if no such stated maturity is established,
                  upon demand. All Advances must be repaid by the Repayment
                  Date.

         5.2      Interest for each Advance shall be calculated to be a margin
                  as determined by the Pricing Grid in Appendix A plus BBSY as
                  agreed to between the Bank and the Borrower.

         5.3      Interest shall be calculated daily and be paid monthly in
                  arrears, save that the last interest payment shall be made on
                  the Repayment Date.

         5.4      The Borrower may repay an Advance in whole (but not in part)
                  before the maturity date if, but only if:

                  5.4.1    The Borrower gives the Bank at least 5 business days
                           irrevocable notice in writing of the Borrower's
                           intention to repay;

                  5.4.2    The Borrower makes payment to the Bank of all monies
                           payable pursuant to subparagraph 5.5;

                  5.4.3    The Borrower makes payment on the day of payment
                           specified in the notice.

         5.5      In the event that the Borrower wishes to make early repayment
                  of an Advance or if for any reason early repayment of an
                  Advance is demanded by the Bank as a result of an Event of
                  Default, the Borrower shall pay to the Bank in addition to all
                  other monies then payable an amount sufficient to compensate
                  and to indemnify the Bank for and against all losses
                  (including loss of profits), costs, damages and expenses which
                  the Bank determines that the Bank will or is likely to suffer
                  or incur as a result of such early repayment. The Borrower
                  acknowledges that the Bank may endeavor to arrange or enter
                  into an interest rate swap agreement or other commitment and
                  may as a consequence of this (whether directly or indirectly)
                  suffer or incur losses, costs, damages or expenses in the
                  event that all or part of the relevant advance is repaid prior
                  to the due date of payment.

         5.6      All notices of drawdown (whether verbal or written) shall be
                  irrevocable. The obligations of the Borrower shall be absolute
                  and unconditional and shall not be subject to any reduction,
                  termination, or other impairment by any set-off, deduction,
                  counterclaim, agreement, defense, suspension, deferment, or
                  otherwise, and the Borrower shall not be released from any
                  obligations under the Facility, nor shall such obligations be
                  prejudiced or affected for any reason including without
                  limitation:

                  5.6.1    by any falsity, inaccuracy, insufficiency or forgery
                           which on its face purports to be signed or authorized
                           pursuant to a Notice of Drawdown;

                  5.6.2    by any failure by the Bank to inquire whether any
                           cable, fax or telex has been inaccurately transmitted
                           or received, or has been sent by an unauthorized
                           person.

         5.7      Any Advance may, at the discretion of the Bank, be made by a
                  nominated subsidiary of the Bank. In such event the Bank shall
                  be agent of the nominated subsidiary in all matters dealing
                  with payment and recovery.

         5.8      Whenever the Borrower intends to borrow or redraw any of
                  Advance amount under the Facility, it shall give the Bank a
                  Drawdown Notice of such intent no later than 2:00 p.m.
                  (Eastern Standard Time) one (1) business day before the
                  proposed date of such borrowing or redrawing. A Drawdown
                  Notice for an Advance shall be in the form or the effect of
                  the form in Schedule 1. The Bank's acceptance of such Drawdown
                  notice is subject to Clause 3.



5
<PAGE>



6.       LETTERS OF CREDIT - SECTION DELIBERATELY LEFT BLANK

7.       SBLC - SECTION DELIBERATELY LEFT BLANK

8.       INTEREST

         The Borrower shall pay to the Bank interest on all further monies
         (other than interest) due and unpaid by the Borrower to the Bank under
         or pursuant to this Agreement at the rate of five (5%) percent above
         the rate of the Bank's Overdraft Reference Rate which applies as at the
         date such monies become due and payable. All interest which accrues
         under this sub-clause during any calendar month shall become due and
         payable by the Borrower to the Bank on the last Business Day of that
         calendar month and if not then paid shall be compounded and bear
         interest accordingly.

9.       FEES

         9.1      Establishment Fee: N/A.

         9.2      Line Fee: The Borrower shall pay to the Bank a line fee as
                  determined by the Pricing Grid in Appendix A, per annum
                  calculated in respect of each Quarter on the Accommodation
                  Limit and be payable Quarterly in arrears. The Line Fee shall
                  accrue from the date of signing this Agreement.

         9.3      Expenses: Whether or not the Borrower shall draw down under
                  this Agreement the Borrower shall forthwith reimburse the Bank
                  for the charges and expenses incurred by the Bank.

                  9.3.1    in contemplation of or in carrying out its duties
                           under this Agreement;

                  9.3.2    in connection with the negotiation, preparation or
                           execution of this Agreement or the administration of
                           this Agreement; and

                  9.3.3    in connection with the enforcement of, or the
                           exercise or purported or attempted exercise of any
                           right, authority or remedy conferred on the Bank
                           under or by virtue of this Agreement;

                  including in each case the fees and expenses of legal advisors
                  on a solicitor and own client basis and all stamp duty
                  (including financial institutions duty and duty passed on to
                  the Bank by any bank or financial institution) levied on or in
                  connection with this Agreement or any payment or the receipt
                  of any payment under this Agreement.

         9.4      The Borrower shall forthwith pay any and all stamp duty
                  (including any financial institutions or other receipts duty),
                  registration and similar taxes or charges imposed by
                  governmental authorities which may have been paid or may be
                  payable or determined to be payable in connection with:

                  9.4.1    the execution, delivery, performance or enforcement
                           of this Agreement;

                  9.4.2    on or in respect of any transaction contemplated by
                           this Agreement;

                  9.4.3    any other matter or thing done or arising out of or
                           in connection with this Agreement; or

                  9.4.4    any transaction related to this Agreement;

                  and shall indemnify the Bank against any and all liabilities
                  with respect to or resulting from delay or omission to pay
                  such taxes or charges including any fines or penalties (save
                  those due to delay or negligence on the part of the Bank).

         9.5      Increase in Costs by Government Action

                  If any law, regulation or regulatory requirement or judgment,
                  order or direction of any court, tribunal or authority binding
                  on the Bank in any jurisdiction taking effect after the date
                  of this Agreement, or if



6
<PAGE>



                  compliance by the Bank with any direction, request or
                  requirement (whether or not having the force of law) or any
                  competent governmental or other authority, shall:

                  9.5.1    subject the Bank to taxes or change the basis of
                           taxation of the Bank with respect to any payment
                           under this Agreement; or

                  9.5.2    impose, modify or deem applicable any reserve or
                           prudential or capital adequacy requirement or require
                           the making or the varying of terms of any special
                           deposits against or in respect of any assets or
                           liabilities (whether contingent or otherwise) of,
                           deposits with or for the account of, or loans by, the
                           Bank; or

                  9.5.3    impose on the Bank any other conditions with respect
                           to this Agreement or its obligations under this
                           Agreement;

                  and if, as a result of any of the foregoing:

                  9.5.4    the cost to the Bank of making or keeping the
                           Facility available or otherwise performing its
                           obligations under this Agreement or allocating its
                           capital resources is increased; or

                  9.5.5    the amount payable or the effective rate of return on
                           its overall capital to the Bank under this Agreement
                           is reduced; or

                  9.5.6    The Bank makes a payment or foregoes or suffers a
                           reduction in a return on or calculated by reference
                           to any amount payable to it under this Agreement;

                  then, and in each such case, the Bank shall notify the
                  Borrower and give the Borrower the option exercisable by
                  notice in writing to the Bank within ten (10) Business Days of
                  receipt of notice of the Bank of:

                  9.5.7    paying an amount or amounts to the Bank from time to
                           time on demand to compensate the Bank in full for any
                           cost or reduction of the kind referred to effective
                           from the date on which the cost or reduction is
                           actually incurred by the Bank; or

                  9.5.8    terminating this Agreement on the first to occur of
                           the end of the then current Interest Period and the
                           Repayment Date by paying to the Bank the debt owing
                           to it on that date with accrued interest and all
                           other monies payable under this Agreement, together
                           with an amount determined by the Bank to compensate
                           it up to that date for actual cost or reduction of
                           the type referred to.

                  If the Borrower fails to make an election the Borrower shall
                  be deemed to have made the election in sub-clause 5.7 of this
                  Clause. The Bank's certificate in respect of any cost or
                  reduction of the kind referred to shall be prima facie
                  evidence of the incurring of any such cost or reduction,
                  except in the case of manifest error.

         9.6      Gross Up

                  9.6.1    If at any time any applicable law, regulation or
                           regulatory requirement of any government authority,
                           monetary agency of central bank requires the Borrower
                           to make any deduction or withholding in respect of
                           taxes from any payment due under this Agreement:

                           (a)      the sum due from the Borrower in respect of
                                    the payment shall be increased to the extent
                                    necessary to ensure that, after the making
                                    of the deduction or withholding, the Bank
                                    receives a net sum equal to the sum which it
                                    would have received had no such deduction or
                                    withholding been required to be made; and

                           (b)      the Borrower shall indemnify the Bank
                                    against any losses or costs incurred by the
                                    Bank by reason of any failure of the
                                    Borrower to make any such deduction or
                                    withholding.



7
<PAGE>



                           The Borrower shall promptly deliver to the Bank any
                           receipts, certificates or other proof evidencing the
                           amounts (if any) paid or payable in respect of any
                           such deduction nor withholding, together with any
                           other information which the Bank may reasonably
                           require.

                  9.6.2    If the Bank or any person on its behalf is required
                           by any applicable law, regulation or regulatory
                           requirement of any government authority, monetary
                           agency or central bank to make any deduction or
                           withholding from, or any payment on or calculated by
                           reference to, any amount received or receivable under
                           this Agreement (other than taxes payable on the
                           overall net income of the Bank) then (without
                           prejudice to sub-clause 6.1) the Borrower shall upon
                           demand indemnify and hold harmless the Bank against
                           any such deduction, withholding or payment together
                           with any related cost, loss, expense, interest,
                           penalties or other liability by payment to each such
                           person of such amounts and in such currencies as the
                           person concerned may certify are required to
                           compensate it for any such deduction, withholding or
                           payment together with any related cost, loss,
                           expense, interest, penalties or other liability.

         9.7      GST Gross Up

                  In this clause 9.7, GST means a goods and services or similar
                  tax imposed in Australia, together with any related interest,
                  penalties, fines or other charges.

                  9.7.1    Notwithstanding any other provision of this
                           Agreement:

                           (a)      in the event that GST has application to any
                                    supply made under or in connection with this
                                    agreement by a party, that party may, in
                                    addition to any amount or consideration
                                    payable under this Agreement, recover from
                                    the Borrower an additional amount on account
                                    of GST, such amount to be calculated by
                                    multiplying the relevant amount or
                                    consideration payable by the Borrower for
                                    the relevant supply by the prevailing GST
                                    rate; and/or

                           (b)      without limiting the generality of the
                                    foregoing, in the event that a party (other
                                    than the Borrower) is not entitled to an
                                    input tax credit in respect of the amount of
                                    any GST charged to or recovered from that
                                    party by any person, or payable by that
                                    party, or in respect of any amount which is
                                    recovered from that party by way of
                                    reimbursement of GST reforable directly or
                                    indirectly to any supply made under or in
                                    connection with this Agreement, that party
                                    shall be entitled to increase any amount or
                                    consideration payable by the Borrower on
                                    account of such input tax and recover from
                                    the Borrower the amount of any such
                                    increase.

                  9.7.2    Any additional amount on account of GST, or on
                           account of an amount for which a party is not
                           entitled to an input tax credit, recoverable from the
                           Borrower pursuant to sub-paragraph 9.7.1(a) or (b) of
                           this clause shall be calculated without any deduction
                           or set-off of any other amount and is payable by the
                           Borrower upon demand by the party whether such demand
                           is by means of an invoice or otherwise.

                  9.7.3    Each party will use its best endeavors to determine
                           reasonably the extent (if any) to which any amount
                           payable by the Borrower to that party for any supply
                           made under this Agreement may be reduced as a direct
                           consequence of the abolition of or reduction in any
                           taxes, duties, or statutory charges paid or payable
                           by that party (as part of the imposition of GST)
                           which directly relate to the supply by that party,
                           and the amount payable by the Borrower to that party
                           shall be reduced only to the extent of the reduction
                           (if any) so determined by the Bank.

                  9.7.4    Without limiting sub-paragraph 9.7.1(a), if requested
                           by the Borrower in writing the relevant party will
                           provide an invoice in relation to any supply to which
                           sub-paragraph 9.7.1(a) has been applied no later than
                           28 days after the request is made.

10.      TERMINATION OF FACILITY

         Subject to any agreement in writing to the contrary entered into the
         Bank and the Borrower the Facility shall terminate on the Termination
         Date and the Borrower shall pay to the Bank the Advances forthwith.



8
<PAGE>



11.      CONDITIONS PRECEDENT

         11.1     To the Facility

                  The granting of this Facility is subject to the Bank receiving
                  prior to any requests of the Borrower, all of the following in
                  the form and substance satisfactory to the Bank;

                  11.1.1   There exists no Event of Default

                  11.1.2   A copy of the Board resolution of the Borrower
                           authorizing the Borrower to enter into this Agreement
                           and appointing authorized persons to sign all
                           applications notices and documents to be delivered
                           hereunder and for the operation of the Facility; and
                           specimen signatures of the authorized persons
                           appointed under the Board resolution referred to
                           herein.

                  11.1.3   A copy of this Agreement duly executed by the
                           Borrower.

                  11.1.4   A Guarantee duly executed by the Guarantors in a form
                           and substance acceptable to the Bank.

                  11.1.5   A copy of the Board resolution of the Guarantor
                           authorizing the issuance of the guarantee referred to
                           in sub-clause 11.1.5, and appointing authorized
                           persons to sign all applications notices and
                           documents to be delivered hereunder; and specimen
                           signatures of the authorized persons appointed under
                           the Board resolution referred to herein.

         11.2     To a Drawdown

                  The obligation of the Bank to make any Advance is subject to
                  the fulfillment (to the reasonable satisfaction of the Bank)
                  of the following conditions precedent:

                  11.2.1   The Bank has duly received from the Borrower a
                           request for a Drawdown in the form of a Drawdown
                           notice.

                  11.2.2   All representations given to the Bank herein are true
                           and correct as at the date of such Advance.

                  11.2.3   No Event of Default exists.

                  11.2.4   The Bank is satisfied that there has been no material
                           or adverse change in the financial condition of the
                           Borrower.

                  11.2.5   This Agreement is valid and binding on the Borrower
                           and is enforceable in accordance with its terms.

                  11.2.6   The Bank has received the items outlined in
                           sub-clause 11.1 and such other things as it may
                           reasonably require before drawdown.

12.      REPRESENTATIONS AND WARRANTIES

         The Borrower represents and warrants to the Bank as follows:

         12.1     The Borrower is a limited liability corporation duly
                  incorporated and validly existing under the laws of Australia
                  and has the corporate power to own property and assets and to
                  carry on business as it is now being conducted.

         12.2     This Agreement constitutes a legal valid and immediately
                  binding obligation on the Borrower and is enforceable in
                  accordance with its express terms.

         12.3     Third Party Rights. The execution, delivery and performance of
                  this Agreement by the Borrower shall not violate in any
                  respect any provision of:



9
<PAGE>



                  12.3.1   any law or regulation or any order or decree or any
                           government authority, agency or court of the
                           Commonwealth of Australia or of a State or Territory
                           thereof;

                  12.3.2   the Memorandum or Articles of Association of the
                           Borrower; nor

                  12.3.3   any mortgage, contract or other undertaking or
                           instruments to which the Borrower is party or which
                           is binding upon the Borrower or any of its assets.

         12.4     All authorizations, approvals, consents, licenses, filings,
                  registrations, notarizations and other requirements or any
                  governmental judicial or public body, authority, bureau or
                  agency in the Commonwealth of Australia or in a State or
                  Territory thereof now obtainable and required in connection
                  with the execution, delivery, performance, validity or
                  enforceability of this Agreement have been obtained or
                  effected and are in full force and effect and true copies
                  thereof (where applicable) have been delivered to the Bank and
                  all fees payable in connection therewith have been paid and
                  there has been no default in the performance of any of the
                  terms or conditions of any of the same.

         12.5     The Borrower is not in default under any agreement undertaking
                  or instrument to which it is a party or by which it is bound,
                  such default being material in the context of this Agreement
                  and no event has occurred which with the giving of notice of
                  lapse of time or both would constitute such a default.

         12.6     No litigation or governmental proceeding is pending or, to the
                  knowledge of the Borrower, threatened against the Borrower or
                  any of its Subsidiaries which could have a material adverse
                  effect on the condition, financial or otherwise, of the
                  Borrower and its Subsidiaries on a consolidated basis.

         12.7     The Borrower and each of its Subsidiaries have duly filed all
                  taxation returns required to be filed (none of which are so
                  far as the Borrower is aware likely to be the subject of any
                  dispute) and have paid all taxation levied or assessed upon it
                  has complied with all assessments and notices in respect
                  thereof or have established adequate reserves for payment
                  thereof.

         12.8     The obligations of the Borrower under this Agreement rank at
                  least equally with all other unsecured and unsubordinated
                  indebtedness of the Borrower except any liabilities mandatory
                  preferred by law.

         12.9     In entering into this Agreement the Borrower is not acting as
                  a trustee of any trust or settlement.

         12.10    The Borrower holds all necessary licenses, permits, consents,
                  approvals or authorities for its business and property and use
                  of premises and such are valid in full force and effect in all
                  respects and are in good standing and all fees due in respect
                  thereof have been paid and all conditions relating thereto
                  have been duly complied with and no notice of breach or
                  termination thereof has been given or has been or is
                  threatened and no circumstances have arisen or are in
                  existence to the knowledge of the Borrower which would with
                  the giving of notice or lapse of time or both entitle any
                  competent authority to call into question, suspend, cancel or
                  terminate the same nor are there any circumstances to indicate
                  that equivalent licenses, permits, consents, approvals or
                  authorizations would not be granted to the Borrower upon
                  renewal on no less favorable terms than exist now.

         12.11    All risks usually insured against according to sound
                  commercial practice by persons carrying on activities similar
                  to the Borrower's are fully insured against in amounts
                  representing the present full replacement or reinstallation
                  values or market values and in the name of and for the benefit
                  of the Borrower absolutely.

         12.12    The Borrower is not aware of any fact or circumstance which
                  might reasonably be expected to affect in any material adverse
                  way the financial position, operations, aspects,
                  profitability, or prospects of the Borrower or the business of
                  the Borrower or the value of the property of the Borrower
                  other than those expressly disclosed in writing to the Bank or
                  affecting as a whole the industry in which the Borrower
                  participates.

         12.13    All information provided by or on behalf of the Borrower
                  whether prior to or after the date of this Agreement to the
                  Bank is true and correct and is not, by the omission of
                  information or otherwise, misleading and all projections
                  contained therein were arrived at after the due and careful
                  consideration and were based on the best information available
                  and on fair assumptions.



10
<PAGE>



         The representations and warranties in this clause shall be deemed to be
         repeated by the Borrower on and as of the date of each Advance or issue
         of Letter of Credit or Guarantee (as the case may be) as if made with
         reference to the facts and circumstances existing at such date.

         The Borrower acknowledges that the Bank relies on the representations
         and warranties made or given in this Agreement by the Borrower and that
         the Bank is induced by each such representation and warranty to enter
         into this Agreement and the rights of the Bank in respect of a breach
         of any representation or warranty shall not be affected by
         investigation (if any) made by the Bank into the affairs of the
         Borrower.

13.      GENERAL OBLIGATIONS

         The Borrower hereby so far as the following shall apply to the Borrower
         agrees that on and from the date of this Agreement and so long as any
         amount payable under this Agreement is outstanding:

         13.1     The Borrower shall take all action necessary to obtain and
                  promptly review from time to time all authorizations,
                  approvals, consents, licenses and exemptions as may be
                  required under any applicable law or regulation to enable the
                  Borrower to perform its obligations under this Agreement or
                  required for the validity or enforceability of this Agreement
                  or any transaction contemplated by this Agreement.

         13.2     The Borrower shall prepare and maintain in accordance with
                  Australian Accounting Standards proper and adequate books and
                  records reflecting fully all transactions entered into by the
                  Borrower and all its Subsidiaries.

         13.3     The Borrower shall promptly notify the Bank in writing of the
                  occurrence or pending or threatened occurrence of any event
                  which may cause or constitute a breach of any of the
                  representations or warranties or agreements of the Borrower in
                  this Agreement including any event which may result in a
                  material change in the business of the Borrower and any other
                  event which constitutes or which may with the giving of notice
                  or lapse of time or both or other conditions constitute an
                  Event of Default.

         13.4     The Borrower shall comply with all requirements of the
                  Corporations Law or of the corresponding legislation of any
                  other place applicable to the Borrower.

         13.5     The Borrower shall permit representatives of the Bank (or any
                  accountants or other experts designated by it) during normal
                  business hours and upon reasonable notice to visit and inspect
                  and examine the books of account records (excluding company
                  minute books), reports and other papers (and to make copies
                  and to take extracts therefrom) of the Borrower and to discuss
                  its affairs, finances and accounts with its officers,
                  accountants and auditors, all at such times and as often as
                  may be reasonably requested by the Bank but only in so far as
                  such matters relate to information as may reasonably be
                  required by the Bank for any purpose connected with this
                  Agreement.

         13.6     Neither the Borrower nor any of its Subsidiaries shall, except
                  as permitted in this Agreement, without the prior written
                  consent of the Bank create or assume or permit to exist or
                  arise any Security Interest whatsoever over any part of its
                  present or future undertakings, property, assets uncalled
                  capital or revenues. The Borrower and its Subsidiaries
                  represent and warrant to the Bank that there is no such
                  Security Interest over any part of their present or future
                  undertakings, property, assets, uncalled capital or revenues
                  in existence as at the date of this Agreement.

         13.7     The Borrower shall permit the Bank upon written request of the
                  Bank to from time to time inspect the register of the members
                  of the Borrower at the Borrower's registered office or other
                  place or places where the register or any branch register is
                  so kept at any time during regular business hours and the
                  Borrower shall furnish the Bank with any information which the
                  Bank may consider reasonably necessary to enable it to
                  determine whether or not there has been at any time after the
                  date of this Agreement a transfer of the effective management
                  and control of the Borrower.

         13.8     The Borrower shall furnish to the Bank copies of all such
                  accounts, documents, reports, notices, circulars, particulars
                  and certificates which are required to be furnished by the
                  Borrower to any stock exchange, corporate affairs office (or
                  analogue office) or shareholder at the same time as they are
                  furnished to that stock exchange, corporate affairs (or
                  analogous office) or shareholder and when requested by the
                  Bank copies of such documents, reports, notices, circulars,
                  particulars or certificates which are required under



11
<PAGE>



                  the provision of any trust deed to which the Borrower is a
                  party to be furnished to the trustee thereunder from time to
                  time.

         13.9     The Borrower shall comply in all material respects with all
                  applicable laws, rules, regulations and orders including,
                  without limitation, paying when due all taxation, assessments
                  and governmental charges imposed upon it or its assets and all
                  other claims which may become a lien upon any of its property
                  except to the extent contested in good faith and by
                  appropriate procedure unless the loss of such contested
                  proceedings would have a material adverse effect on the
                  ability of the Borrower to meet its obligations under this
                  Agreement.

         13.10    The Borrower shall provide updated signatory lists and
                  specimen signatures from time to time of persons authorized to
                  sign documents and operate the Facility.

14.      FINANCIAL INFORMATION

         The Borrower shall supply the Bank with all financial or other
         information as the Bank may reasonably request in writing always
         including the following without request:

         14.1     As soon as possible but in any event within 120 days of the
                  end of each Financial Year copies of the audited annual profit
                  and loss statement and balance sheet of the Guarantor and
                  unaudited annual profit and loss statement and balance sheet
                  of the Borrower along with corresponding accounting workpapers
                  prepared in accordance with Guarantor audit.

         14.2     As soon as possible but in any event within 60 days of the end
                  of each quarterly period a copy of the management accounts and
                  of the unaudited balance sheet and profit and loss statement
                  of the Borrower and the Guarantor.

         14.3     Quarterly certificate of compliance from the Guarantors that
                  they are not in breach of any obligations or covenants under
                  any of their debt.

         All of the financial information referred to above shall be prepared in
         accordance with applicable accounting standards.

15.      FINANCIAL COVENANTS - SECTION DELIBERATELY LEFT BLANK

16.      EVENTS OF DEFAULT

         If any of the following events occur ("Events of Default") the Loans
         shall at the option of the Bank and notwithstanding any delay or
         previous waiver of the right to exercise such option become immediately
         due and payable upon written demand by the Bank to the Borrower and the
         obligations to the Bank under this Agreement shall be cancelled on the
         occurrence of any of the following events:

         16.1     If the Borrower fails to pay the Loans or any part thereof or
                  any interest thereon or any other monies payable to the Bank
                  at or before the due time on the due date in the manner
                  specified in this Agreement and such default continues for
                  more than three (3) days.

         16.2     If the Borrower fails to observe or perform any obligations to
                  be observed or performed by it under this Agreement or in
                  connection with any transaction contemplated by this Agreement
                  and if such default shall in the opinion of the Bank be
                  capable of prompt remedy, the Borrower shall not have remedied
                  such default within five (5) days after notification by the
                  Bank to the Borrower requiring remedy of such default.

         16.3     Any representation or statement made or deemed to be made by
                  the Borrower in this Agreement or in writing pursuant to this
                  Agreement shall not be complied with or shall prove to be
                  untrue in any respect which materially adversely affects the
                  interests of the Bank on any date as of which it was made or
                  deemed made.

         16.4     The Borrower fails to duly pay any debt constituting principal
                  and interest owed by it to any other persons other than the
                  Bank with respect to borrowed money or money otherwise owed
                  under any note, bond, or



12
<PAGE>



                  similar instrument or fails to pay when the same becomes due
                  and payable in excess of A$35,000 and which breach or default
                  has not been waived and, with notice or the passage of time,
                  or both, allows the maturity of such debt to be accelerated.

         16.5     If all or any part of this Agreement becomes void, illegal,
                  invalid, unenforceable, or of limited or reduced force or
                  effect.

         16.6     Any other present or future indebtedness of the Borrower, or
                  any Subsidiary of the Borrower for borrowed money shall become
                  due and payable prior to the stated maturity thereof as a
                  result of a default or any such indebtedness shall not be paid
                  on the due date thereof or upon the expiration of any
                  applicable grace period therefor, or the Borrower, or any
                  Subsidiary of the Borrower shall fail to pay when due or upon
                  the expiration of any applicable grace period therefor any
                  amount payable by it under any present or future guarantee for
                  borrowed money or for the purchase of fixed assets on deferred
                  terms or any encumbrance over any assets of the Borrower, or
                  any Subsidiary of the Borrower shall be or become enforceable.

         16.7     A distress or other execution is levied or enforced upon or
                  against any part of the property of the Borrower for an amount
                  exceeding A$500,000.00 and is not withdrawn or satisfied
                  within fourteen (14) days of having been so levied or enforced
                  and the Bank considers that such event is prejudicial to the
                  interests of the Bank under this Agreement.

         16.8     If the Borrower fails (as defined in Section 459F of the
                  Corporations Law) to comply with a statutory demand (as
                  defined in Section 9 of the Corporations Law) or is presumed
                  to be insolvent pursuant to Section 459C(2)(a) of the
                  Corporations Law or admits such fact in writing.

         16.9     If the Borrower is wound up or if a petition is presented or
                  an order is made for the winding up of the Borrower and is not
                  withdrawn within fourteen (14) days or if a resolution is
                  passed for the winding up of the Borrower otherwise than for
                  the purpose of reconstruction of amalgamation the terms of
                  which have previously been approved in writing by the Bank
                  such approval not to be unreasonably withheld.

         16.10    If a receiver or receiver and manager is appointed in respect
                  of any part of the assets of the Borrower or an encumbrancer
                  takes possession of the undertaking or the property of the
                  Borrower or any part thereof.

         16.11    If the Borrower makes default under any charge or security in
                  favor or any person other than the Bank.

         16.12    If an inspector of all or any part of the affairs of the
                  Borrower is appointed pursuant to the Corporations Law (or the
                  corresponding legislation of any place applicable to the
                  Borrower).

         16.13    If the Borrower suspends payment of its debts, which
                  expression shall have the meaning that it has for the purposes
                  of Section 40 of the Bankruptcy Act 1996 of Australia.

         16.14    If a compromise or arrangement is proposed between the
                  Borrower and its creditors or any class of them or if an
                  application is made to a court for an order summoning of
                  creditors or any class of them of the Borrower.

         16.15    If without the prior written consent of the Bank the Borrower
                  reduces or attempts to reduce its capital or buy back any of
                  its shares.

         16.16    If the Borrower stops payment generally.

         16.17    If the Borrower is placed under voluntary administration
                  pursuant to Part 5.3A of the Corporations Law or causes or
                  propose to cause a meeting of its creditors to be summoned for
                  the purposes of placing it under administration pursuant to
                  Part 5.3A of the Corporations Law.

         16.18    If any of the property of the Borrower or the ownership of
                  which is in the opinion of the Bank material to the ability of
                  the Borrower to perform its obligations under this Agreement
                  is seized or otherwise expropriated, nationalized, confiscated
                  or acquired through any governmental action or intervention or
                  if custody or control of such property shall be assumed by any
                  government or government agency.



13
<PAGE>



         16.19    If any governmental or semi-governmental authorization
                  approval license consent or agreement which the Bank deems
                  essential to the Borrower's performance of its obligations
                  under this Agreement is revoked, terminated, cancelled or
                  withheld.

         16.20    If without the prior written consent of the Bank the
                  Memorandum or Articles of Association of the Borrower is
                  altered in a manner which in the reasonable opinion of the
                  Bank is material to the performance by the Borrower of its
                  obligations under this Agreement.

         16.21    If a meeting of the Borrower is called for the purpose of
                  considering and if thought fit passing any resolution the
                  passing of which would constitute or give rise to an Event of
                  Default.

         16.22    If in the opinion of the Bank there is a material change in
                  the ownership, control or management of the Borrower which is
                  likely to adversely affect the ability of the Borrower to
                  conduct its business in a proper manner and to carry out its
                  obligations under this Agreement.

         16.23    If the Borrower defaults in the performance or observance of
                  any provision of any other indebtedness to or security of the
                  Bank and the Borrower whether the indebtedness or security is
                  collateral to this Agreement or whether it is a separate
                  Agreement between the Bank and the Borrower and such default
                  continues for more than seven (7) days after the due date.

         16.24    If the Borrower shall do any act, deed, matter or thing or
                  knowingly or willingly permit or suffer any act, deed, matter
                  or thing to be done whereby directly or indirectly the
                  security of the Bank shall in the opinion of the Bank become
                  deteriorated or lessened in value.

         16.25    If the Borrower shall at any time not have an auditor
                  appointed pursuant to the provision of the Corporations Law.

         16.26    If the Borrower makes any material change to the business it
                  carries on without the prior written consent of the Bank or if
                  the Borrower ceases or threatens to cease to carry on its
                  business.

         16.27    If the Borrower suffers any material adverse change in its
                  financial condition which may materially affect the interest
                  of the Bank unless such change is agreed to in writing by the
                  Bank.

         16.28    The Guarantor shall cease, directly or indirectly, to own free
                  and clear of all liens or other encumbrances, 75% of the
                  issued share capital of the Borrower.

         16.29    If any of the above events of default occur in respect of the
                  Guarantor.

         16.30    If the Guarantor withdraws its Guarantee.

         16.31    If either Guarantor defaults under any of its credit
                  agreements.

17.      INDEMNITIES

         The Borrower indemnifies the Bank from and against all actions, suits,
         claims, demands, losses, liabilities, damages, costs and expenses which
         may be made or brought against or suffered or incurred by the Bank
         arising out of or in connection with:

         17.1     any Event of Default or any event which with the giving of
                  notice, the passage of time or the fulfillment of any other
                  condition would become an Event of Default; or

         17.2     any failure by the Borrower to take an Advance in accordance
                  with any request for a Drawdown.

18.      CERTIFICATIONS

         18.1     Any document or thing required to be certified by the Borrower
                  shall be certified by a director or secretary of the Borrower
                  or in such other manner as the Bank may approve.



14
<PAGE>



         18.2     A certificate signed by an Authorized Officer of the Bank
                  stating any amount or rate for the purpose of this Agreement
                  shall in the absence of manifest error be conclusive and
                  binding on the Borrower.

19.      POWER OF ATTORNEY

         If any Event of Default occurs, the Borrower hereby irrevocably
         appoints the Bank and each Authorized Officer severally its attorney to
         do all acts and things which may or ought to be done by the Borrower
         under this Agreement and without limiting the generality of the
         foregoing the attorney shall have power in the name of the Borrower to
         sign, draw, endorse, accept or negotiate any draft, order, cheque,
         promissory note or other instrument of a like nature or not as the
         attorney shall think fit.

20.      UNLAWFULNESS

         If:

         20.1     any law, regulation or regulatory requirement or judgment,
                  order in direction of any court, tribunal or authority binding
                  upon the Bank in the jurisdiction in which the Bank is formed
                  or has its principal or lending office(s) or in which action
                  is required to be performed by it for the purposes of this
                  Agreement; or

         20.2     any change in the interpretation of any such law, regulation
                  or regulatory requirement or judgment, order or direction of
                  any court, tribunal or authority by any government or
                  governmental agency charged with the administration thereof or
                  by a court of competent jurisdiction or compliance by the Bank
                  with any respect or direction (whether or not having this
                  force of law) of the Reserve Bank of Australia or any
                  government or other governmental agency in accordance with
                  whose requests or directions the Bank is accustomed to act;

         renders it unlawful for the Bank to meet any of its obligations under
         the Facility, the Bank shall promptly notify the Borrower and the
         following provisions shall apply:

         20.3     the Borrower and the Bank shall negotiate for a period not
                  exceeding thirty (30) days with a view to the Bank making
                  arrangements to be able to meet the relevant obligations under
                  the Facility in whole or in part in a manner which is not
                  unlawful; and

         20.4     if no such arrangements have been made by the end of such
                  period, thereupon the Bank shall be released from its
                  obligations under this Agreement, the Facility shall be
                  cancelled and the Borrower shall pay to the Bank the Loans
                  under this Agreement.

21.      AUTHORITY TO DEBIT ACCOUNTS

         The Borrower irrevocably authorizes and directs the Bank to debit any
         account or accounts of the Borrower with the Bank in respect of any
         amounts that are from time to time due and payable under this
         Agreement.

22.      NO WAIVER

         No failure to exercise and no delay in exercising on the part of the
         Bank any right, power or privilege under this Agreement shall operate
         as a waiver thereof, nor shall any single or partial exercise of any
         right, power or privilege preclude any other or further exercise
         thereof, or the exercise of any other right, power or privilege. The
         rights and remedies of the Bank provided in this Agreement are
         cumulative and not exclusive of any rights or remedies provided by law
         or equity or legislation or regulation.

23.      MERGER

         23.1     The representations and warranties of the Borrower in this
                  Agreement shall survive the execution of this Agreement and
                  the making of any Advance or issue of Letter of Credit or
                  Guarantee under this Agreement and shall inure for the benefit
                  of the Bank until the Loans have been paid in full by the
                  Borrower to the Bank.



15
<PAGE>



         23.2     If the liability of the Borrower to pay the Bank any monies
                  payable under this Agreement becomes merged in any deed,
                  judgment, order or other thing the Borrower shall pay interest
                  on the amount owing from time to time under this Agreement and
                  that fixed by or payable under that deed, judgment, order or
                  other thing.

24.      TIME OF THE ESSENCE

         Time shall be of the essence as regards any date or period determined
         under this Agreement save only to the extent that any such date or
         period may be altered by mutual agreement between the parties whereupon
         time shall be of the essence as regards such altered date or period.

25.      SET OFF

         25.1     the Borrower and the Bank do expressly acknowledge and agree
                  that:

                  25.1.1   Where the Bank now or at any time in the future is
                           indebted on any account to the Borrower pursuant to
                           the arrangements made between them such arrangements
                           are hereinafter referred to as the "Arrangements."

                  25.1.2   Notwithstanding the Arrangements and any other
                           provision of this Agreement (and without prejudice to
                           the Bank's other rights and remedies) any monies
                           (whether by way of principal interest or otherwise
                           and whether present future actual or contingent)
                           which the Bank may now or may hereafter owe to the
                           Borrower under the Arrangements may be applied to and
                           set off by the Bank as and when the same may become
                           due and payable pro rata against the Loans as and
                           when they become due and payable to the intent and
                           effect:

                           (i)      first that the Bank may at any time and from
                                    time to time deduct from and retain out of
                                    the monies otherwise payable by the Bank to
                                    the Borrower pursuant to the Arrangements
                                    such amounts as the Bank may think fit and
                                    apply or set off such amounts in or toward
                                    or against satisfaction of the Loans; and

                           (ii)     secondly that upon default by the Borrower
                                    hereunder the Bank shall not be obliged to
                                    pay any monies to the Borrower under the
                                    Arrangements until the obligations of the
                                    Borrower to the Bank to pay any monies to
                                    the Bank hereunder are paid and satisfied in
                                    full.

         25.2     The contractual rights of set off conferred on the Bank under
                  sub-clause 25.1 of this clause are in addition to, and not in
                  substitution for, any rights of set off otherwise conferred on
                  or available to the Bank at law or in equity including
                  (without limitation) any banker's rights of set off or right
                  of combination of accounts or banker's lien.

         25.3     For the avoidance of doubt the Bank and the Borrower further
                  declare and acknowledge that the debts and liabilities arising
                  or created hereunder and pursuant hereto and under and
                  pursuant to the Arrangements are mutual debts within the
                  meaning of Section 85(1) of the Bankruptcy Act 1966 of the
                  Commonwealth of Australia (as incorporated in the Corporations
                  Law) and that upon the liquidation or bankruptcy of the
                  Borrower the provisions of Section 86 of the said Bankruptcy
                  Act shall apply so that any sum due from the Borrower to the
                  Bank hereunder shall be set off against any sum due from the
                  Bank to the Borrower under the Arrangements.

         25.4     The Borrower acknowledges and agrees that it will not and will
                  not attempt to prevent the Bank from exercising its rights of
                  set off as aforesaid in the circumstances contemplated in
                  respect thereof.

26.      APPROPRIATION

         The Bank may appropriate any payment towards the satisfaction of any
         monies due by the Borrower in any way that the Bank thinks fit and
         notwithstanding any purported appropriation by the Borrower.



16
<PAGE>



27.      SUCCESSORS

         This Agreement shall bind the parties and their respective heirs,
         executors, administrators, successors and assigns.

28.      ASSIGNMENT

         The Bank may at any time assign the benefits and obligations on its
         part to be enjoyed or performed under this Agreement. The Borrower
         shall not assign or purport to assign any of the benefits or
         obligations on its part to be enjoyed or performed under this Agreement
         without the consent in writing of the Bank.

29.      NOTICES

         Any notice, demand, consent or other communication to be given under or
         in connection with this Agreement shall be in writing or if it is to be
         given by the Bank may be signed by any Authorized Officer of the Bank
         or any solicitor for the time being acting for the Bank and if it is to
         be given by the Borrower shall be under the common seal of the Borrower
         or the hand of an Authorized Officer of the Borrower and may be served
         either:

         29.1     personally; or

         29.2     by posing the same by registered or certified mail to the
                  party to whom the notice is directed at its address appearing
                  in this Agreement or at any other address of which prior
                  notification shall have been given by post shall be deemed to
                  have been received by the party to whom it is addressed at the
                  expiration of forty eight (48) hours after the same has been
                  properly posted; or

         29.3     by facsimile transmission;

                  To the Bank: Bank One, N.A., Level 32, 60 Margaret Street,
                               Sydney  NSW  2000
                  Attention:   Mr. W. H. Giffen
                  Facsimile:   (02) 9223 1823

                  or by other facsimile number of which prior to notification
                  shall have been given to the sender prior to the transmission
                  of the facsimile and any facsimile transmission shall be
                  deemed to have been served on the date of transmission by the
                  sender if the sender shall receive confirmation of receipt
                  from the recipient. The original of any facsimile transmission
                  shall be posted in accordance with sub-clause 29.2 of this
                  clause on the date of transmission or if transmitted after
                  usual posting hours the next Business Day.

         If the date of dispatch is not a Business Day in the place to which
         such notice, request, demand or other communication is sent it shall be
         deemed to have been received at the commencement of business on the
         next following Business Day in such place. Notice given to any one or
         more of the persons (if more than one) comprised in the expressions
         "the Borrower" shall be deemed notice to all such persons. Signatures
         may be manuscript or may be printed or reproduced by other mechanical
         means.

30.      OTHER DOCUMENTS

         The Borrower shall either before or after the making of any Advance
         under this Agreement do all such acts, matters and things and shall
         sign or execute and deliver all such documents or writing or assurances
         as may in the reasonable opinion of the Bank be necessary or expedient
         to further and more effectually carry into full effect the provisions
         of this Agreement and for conferring the full benefit thereof upon the
         Bank.

31.      AMENDMENT

         No amendment of this Agreement shall bind the parties unless made in
         writing expressed to be supplemental to or in substitution for the
         whole or part of this Agreement.



17
<PAGE>



32.      GOVERNING LAW AND JURISDICTION

         This Agreement and the rights and obligations of the parties shall be
         governed by and construed in accordance with the laws in force in the
         state of New South Wales and the parties agree by the execution of this
         Agreement to irrevocably submit to the non-exclusive jurisdiction of
         the Courts in the state of New South Wales in respect of all matters
         arising under or in connection with this Agreement provided always that
         the Bank may proceed in the Courts of any Territory State or country
         having or claiming jurisdiction in respect of the matter which is the
         subject of the proceedings.

33.      SEVERANCE

         Any provision of this Agreement which is or becomes prohibited,
         invalid, unlawful, void or unenforceable in any jurisdiction shall, as
         to such jurisdiction, be ineffective and capable of severance without
         affecting the remaining provisions of this Agreement or affecting the
         validity or enforceability of such provision in any other jurisdiction.

34.      COUNTERPARTS

         This Agreement may be executed in any number of counterparts and all of
         such counterparts taken together shall be deemed to constitute one and
         the same instrument.

35.      ENTIRE AGREEMENT

         This Agreement contains all of the terms and conditions upon which the
         Bank will provide financial accommodation to the Borrower and
         supersedes any previous or extant arrangements with respect to the
         same.

IN WITNESS WHEREOF the parties have signed this Agreement on the day and year
hereinabove first mentioned.

SIGNED for and on behalf of
BANK ONE, NA


         /s/ WILLIAM H. GIFFEN                          /s/ RALPH MITCHELL
---------------------------------------         --------------------------------
Authorized Signature (Name/Title)               Signature
First Vice President


THE COMMON SEAL OF
Daisytek Australia Pty Ltd
was hereunto affixed in the presence of:

                                                        /s/ KATHRYN SEMON
---------------------------------------         --------------------------------
Authorized Signatory (Name/Title)               Signature


---------------------------------------         --------------------------------
Authorized Signatory (Name/Title)               Signature



18
<PAGE>




                                   APPENDIX A

FACILITY PRICING:          Facility pricing to be determined by the following
                           grid of Total Debt to EBITDA with Total Debt to
                           EBITDA definition to match leverage covenant included
                           in the Term Sheet. Initial pricing shall be set at
                           Level 3. The calculation of ratios is based on the
                           accounts of Daisytek, Inc. as stipulated in the
                           Credit Agreement between Daisytek, Inc. and various
                           banks dated 12/18 2000.

                                  PRICING GRID

<Table>
<Caption>
                                  LEVEL 1             LEVEL 2              LEVEL 3            LEVEL 4             LEVEL 5
--------------------------- -------------------- ------------------- -------------------- ------------------ -------------------
<S>                         <C>                  <C>                 <C>                  <C>                <C>
Total Debt/EBITDA                  < 1.0            >=1.0 <1.50         >= 1.50 <2.0        >= 2.0 <2.5         >= 2.5 <3.0
--------------------------- -------------------- ------------------- -------------------- ------------------ -------------------
Facility Fee                     20.0 bps            25.0 bps             30.0 bps           37.5 bps             37.5 bps
--------------------------- -------------------- ------------------- -------------------- ------------------ -------------------
Advance Margin                   130.0 bps           137.5 bps            157.5 bps          175.0 bps           200.0 bps
--------------------------- -------------------- ------------------- -------------------- ------------------ -------------------
All-In Cost                      150.0 bps           162.5 bps            187.5 bps          212.5 bps           237.5 bps
--------------------------- -------------------- ------------------- -------------------- ------------------ -------------------
</Table>

bps= basis points



19
<PAGE>



                                   SCHEDULE I

                             ADVANCE DRAWDOWN NOTICE

TO:      Money Market Desk
         BANK ONE, N.A. (A.R.B.N. 065 752 918)
         Level 4
         70 Hindmarsh Square
         ADELAIDE SA 5000

FAX:     08 8223 2948

In accordance with Facility Agreement dated _______ day of ____________ ("the
Agreement") DAISYTEK AUSTRALIA PTY LTD (A.C.N. 075 675 795) irrevocably gives
you notice of drawdown under the Facility as follows:

                                     ADVANCE

1.       Date of Drawdown:
                                                  -----------------------------

2.       Amount of Drawdown:                      $
                                                  -----------------------------
         (currency and amount)

3.       Tenor Required:
                                                  -----------------------------

4.       Other requests/special conditions (if any)


The Borrower by its execution of this Notice reaffirms and reconstitutes all
representations and warranties or agreements of the Borrower in the Agreement as
if made at the date of this Notice and certifies that no Event of Default (as
defined in the Agreement) has occurred or is continuing or is likely to result
from this transaction.

DATED this                  day of

SIGNED for and on behalf
Daisytek Australia Pty Ltd



---------------------------------------         --------------------------------
Authorized Signatory:  Name/Title               Signature


---------------------------------------         --------------------------------
Authorized Signatory:  Name/Title               Signature





20