-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VF/5OQ1b/BrtNnJdA7PsbXuKbh2/Hz/5QeVuc9e0+LI2vzGA+QyEsTdDgtCDUCXG baprBCb7io5XombHuAp8zQ== /in/edgar/work/20000901/0000950148-00-001921/0000950148-00-001921.txt : 20000922 0000950148-00-001921.hdr.sgml : 20000922 ACCESSION NUMBER: 0000950148-00-001921 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 9 CONFORMED PERIOD OF REPORT: 20000821 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20000901 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SIZZLER INTERNATIONAL INC CENTRAL INDEX KEY: 0000870760 STANDARD INDUSTRIAL CLASSIFICATION: [5812 ] IRS NUMBER: 954307254 STATE OF INCORPORATION: DE FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-10711 FILM NUMBER: 715873 BUSINESS ADDRESS: STREET 1: 6101 W CENTINELA AVE STREET 2: STE 200 CITY: CULVER CITY STATE: CA ZIP: 90230 BUSINESS PHONE: 3105680135 FORMER COMPANY: FORMER CONFORMED NAME: COLLINS FOODS INC DATE OF NAME CHANGE: 19600201 8-K 1 v65255e8-k.txt FORM 8-K (08/21/2000) 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of report: August 21, 2000 (Date of earliest event reported) 1-10711 --------- (Commission File No.) Sizzler International, Inc. ------------------------------- (Exact name of Registrant as specified in its charter) Delaware 95-4307254 ---------- ------------- (State or other jurisdiction (IRS Employer Identification of incorporation) Number) 6101 West Centinela Avenue, Suite 200, Culver City, CA 90230 ------------------------------------------------------------ (Address of principal executive offices, including zip code) (310) 568-0135 ------------------- (Registrant's telephone number, including area code) 2 ITEM 5. OTHER EVENTS On August 21, 2000 Sizzler International, Inc. (the "Company") successfully concluded an internal reorganization of its Australian division and a refinancing of its existing credit facility with Westpac Banking Corporation. In connection with the refinancing, the Company increased its existing Westpac credit facility by AUD$8 million to AUD$46 million. The credit facility is to be collateralized by the Company's Australian division assets and certain intellectual property. The loan provides for a three-year term at an interest rate equal to the Australian interbank borrowing rate, plus a 2.25 percent margin. The credit facility is subject to a mandatory principal reduction payment of AUD$10 million by December 15, 2000 in certain events, as well as to other financial and other covenants and restrictions of a kind that management believes is customary for a loan of this type. The Company originally entered into its existing credit facility in 1997 in connection with its emergence from Chapter 11 proceedings. The principal loan documents relating to the refinancing are filed with this report. On August 23, 2000, the Company issued a press release announcing earnings for the first quarter and same-store sales, which press release is filed with this report. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (c) Exhibits Number Description ------ ----------- 10.1 AUD$46,000,000 Bill Acceptance and Discount Facility dated August 21, 2000 between Collins Restaurants Management Pty Ltd. and Westpac Banking Corporation. 10.2 Unlimited Cross Guarantee and Indemnity and Negative Pledge with Financial Ratio Covenants dated August 21, 2000 between various subsidiaries of the Registrant and Westpac Banking Corporation. 10.3 Guaranty and Indemnity dated August 21, 2000 between the Registrant as Guarantor and Westpac Banking Corporation as Financier. 3 10.4 Stock Pledge August 21, 2000 between Sizzler Asia Holdings, Inc. as Chargor and Westpac Banking Corporation as Financier. 10.5 Fixed and Floating Charge dated August 21, 2000 between Collins Restaurants Management Pty Ltd. as Chargor and Westpac Banking Corporation as Financier. 10.6 Fixed and Floating Charge dated August 21, 2000 between Sizzler Asia Holdings, Inc. as Chargor and Westpac Banking Corporation as Financier. 10.7 Subordination Deed dated August 21, 2000 between the Registrant and various of its subsidiaries as Junior Creditor and Westpac Banking Corporation as Senior Creditor 99.1 Press Release dated August 23, 2000 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunder duly authorized. Sizzler International, Inc. By: /s/ Steven R. Selcer ------------------------------ Name: Steven R. Selcer Title: Vice President and Chief Financial Officer Dated: September 01, 2000 EX-10.1 2 v65255ex10-1.txt EXHIBIT 10.1 1 EXHIBIT 10.1 15th Floor 260 Queen Street, Brisbane G.P.O. Box 2237, Brisbane Qld. 4001 Australia Telephone No. (07) 3227 2513 Facsimile No. (07) 3221 9620 21 August 2000 The Secretary, Collins Restaurants Management Pty Ltd 16-20 Edmonstone Street, Newmarket, Qld 4051 Dear Sirs, A$46,000,000.00 BILL ACCEPTANCE AND DISCOUNT FACILITY Westpac Banking Corporation (WESTPAC) is pleased to offer Collins Restaurants Management Pty Ltd ACN 093 912 979 the BORROWER) a facility on the following terms. Please confirm the Borrower's acceptance of this offer by signing the accompanying copy of this letter and returning it before the expiry date of 31 August 2000. Some terms used in this letter are defined in the text or in Clause 2. - -------------------------------------------------------------------------------- 1. FACILITY DETAILS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1.1 MAXIMUM FACE $46,000,000.00 (forty-six million Australian dollars) as AMOUNT OF BILLS reduced from time to time (the Commitment). OUTSTANDING AT ANY TIME: Each time the Commitment is reduced (or when the Commitment is cancelled) the Borrower shall retire sufficient Bills to ensure that the maximum face amount of outstanding Bills does not at any time exceed the Commitment. The Commitment will be automatically cancelled on the last day of the Term. If the face amount of the Bills maturing on any day exceeds the face amount of Bills accepted and discounted on that day, the Commitment will reduce by the amount of that excess. 2 Page 2 - -------------------------------------------------------------------------------- The Borrower shall pay to Westpac, and the Commitment will automatically reduce by: - -------------------------------------------------------------------------------- (a) (SCHEDULED REDUCTIONS): $667,000.00 on the last Business Day of each month, commencing 30 September 2000; and upon each of the scheduled repayment dates, the Commitment will automatically reduce by the amount of the payment due on that date, AND; (b) (ASSET BASED REDUCTIONS): (i) an amount to be agreed between the Borrower and Westpac (the REDUCTION AMOUNT) (in accordance with the procedure set out in paragraph 1.1A below) equal to credit funds held by the CFG Group in excess of $4,000,000 on the last Business Day of each quarter (commencing on 31 December 2000) after making the following deductions: (A) the Scheduled Reduction which falls due on that day; (B) anticipated tax payments during the following quarter; (C) capital expenditure due in the following quarter and consented to by Westpac (for the purposes of this clause Westpac shall be deemed to have consented to the Capital Expenditure in clause 12.3(v) of the Cross Guarantee and Negative Pledge); (D) unpresented cheques forwarded to external trade creditors (including KFC Australia Pty Ltd) during that quarter; and the relevant payment shall be made, and the Commitment will reduce, in accordance with paragraph 1.1A; and (ii) an amount equal to the net sale proceeds of any asset sales by a Guarantor other than: (A) an asset with a market value of less than $100,000.00; (B) a sale for the purpose of a sale and leaseback; or (C) a sale to a Group entity for the purpose of Restructure; on the day the settlement proceeds are received by or on behalf of a Guarantor. However, if the day upon which settlement proceeds are received ("SETTLEMENT DAY") does not coincide with a day upon which outstanding Bills mature ("BILL 3 Page 3 - -------------------------------------------------------------------------------- ROLLOVER DATE") the reduction in the Commitment shall take place on the first Bill Rollover Date occurring after that Settlement Day and the proceeds of sale will be deposited with Westpac in a specially nominated interest bearing account (over which Westpac has an immediate right of set-off and appropriation) until that Bill Rollover Date, at which time they will be applied towards meeting the Bills maturing on that date. 1.1A AGREEING THE (a) At least two Business Days before the end of each REDUCTION AMOUNT quarter the Borrower shall deliver a certificate (signed by two directors) to Westpac. That certificate shall certify: (i) the projected cash balance on the last Business Day of the quarter; (ii) the Scheduled Reductions due on the last Business Day of the quarter; (iii) anticipated tax payments during the following quarter; (iv) planned capital expenditure due in the following quarter; and (v) unpresented cheques forwarded to external trade creditors (including KFC Australia Pty Ltd) during that quarter. Unpresented cheques aggregating less than $100,000.00 need not be included in the certificate. The certificate is to state the proposed Reduction Amount. Westpac shall then either confirm the proposed Reduction Amount or propose an alternative Reduction Amount before the close of business on the last Business Day of the end of the relevant quarter. Otherwise, the Reduction Amount shall be the amount proposed by the Borrower. If Westpac proposes an alternative Reduction Amount, the alternative Reduction Amount shall be negotiated in good faith. If the Borrower and Westpac agree the Reduction Amount before the close of business on the last Business Day of the quarter, the relevant payment shall be made, and the Commitment will reduce, on the first Business Day of the following quarter. If the Borrower and Westpac cannot agree the Reduction Amount before the close of business on the last Business Day of the relevant quarter, then on the first Business Day of the following quarter: (i) the Borrower shall pay to Westpac, and the Commitment will be reduced by, the higher of the Reduction Amounts proposed by the 4 Page 4 - -------------------------------------------------------------------------------- Borrower and Westpac (the HPA); and (ii) Westpac will provide to the Borrower an overdraft (the TEMPORARY OVERDRAFT) having a limit equal to the difference between the HPA and the Reduction Amount proposed by the Borrower to assist it to make that payment. If, within the first 10 days of the following quarter (the RELEVANT PERIOD), the Borrower and Westpac agree on a Reduction Amount less than the HPA, the Commitment will (from the date agreement is reached) increase by the difference between the agreed amount and the HPA and the Borrower may require Westpac to accept and discount Bills having a corresponding face amount for the purpose of assisting it to repay the Temporary Overdraft. The amounts described above may be rounded to the nearest $100,000.00. - -------------------------------------------------------------------------------- 1.1B TEMPORARY (a) The Borrower shall repay the Temporary Overdraft OVERDRAFT (and all interest accrued on it) on the earlier of the date the Reduction Amount is agreed and the last day of the Relevant Period. (b) Interest shall be charged on a daily basis on the Temporary Overdraft at the rate which is the aggregate of the Reuters BBSY 1 month bid rate (on the day the overdraft is created) and the Acceptance Fee. - -------------------------------------------------------------------------------- 1.2 DISCOUNT RATE: For each Bill, the Reuters BBSY bid rate for a period equal to the term of the Bill, on the date on which the Bill is to be discounted, or if there is no BBSY rate for that term, the rate selected by Westpac as equivalent (DISCOUNT RATE). - -------------------------------------------------------------------------------- 1.3 FEES: - - ESTABLISHMENT FEE: $350,000.00 is payable as follows: (a) $10,000.00 receipt of which is acknowledged by Westpac; and (b) $340,000.00; on acceptance of this offer. If the Facility is not drawn down the establishment fee shall be non-refundable. - - LINE FEE: 1.0% per annum of the average daily amount of the Commitment for each calendar quarter from the date of acceptance of this letter payable quarterly in advance on the first Business Day of each calendar quarter and on the date of acceptance of this letter (or at any other intervals designated by Westpac from time to time). If the Commitment is cancelled or reduced in the quarter the relevant amount of fee is refundable. - - ACCEPTANCE FEE: 1.25% per annum (the ACCEPTANCE FEE) calculated on the face amount of each Bill accepted from and including the date of acceptance until the Bill's maturity date. - - PREPARATION FEE: $100.00 per Drawdown Notice given in terms of Clause 5.3 . - -------------------------------------------------------------------------------- 5 Page 5 - -------------------------------------------------------------------------------- 1.4 TERM: (a) 3 years from the date of acceptance of this offer (the 'Original Date') or any longer period approved by Westpac under paragraph (b). Until Westpac agrees to extend the term under paragraph (b), the term ends on the Original Date. (b) The Borrower may by written request made to Westpac not later than the date which is 3 months before the Original Date and not earlier than the date which is 18 months before the Original Date request that the term be extended for a period of 18 months. Westpac may, in its absolute discretion agree to extend the term, in which case the term will end on the date which is 18 months after the Original Date. (c) If Westpac agrees to extend the term under paragraph (b) then Westpac will, subject to the terms and conditions of this letter, provide the Facility to the Borrower to the end of the term on the same terms and conditions asat the Original Date, subject only to the condition that the Borrower pay, as consideration of Westpac's agreement to extend the term, an extension fee of $75,000.00. The Borrower must pay this amount to Westpac not later than the Original Date. - -------------------------------------------------------------------------------- 1.5 PURPOSE: Working Capital - -------------------------------------------------------------------------------- 1.6 SECURITY: The Security Documents. - -------------------------------------------------------------------------------- 2. DEFINITIONS - -------------------------------------------------------------------------------- In this letter the following definitions apply. ACCEPTANCE FEE has the meaning given in Clause 1.3. ACCOUNTS has the meaning given in the Cross Guarantee and Negative Pledge. ASSET BASED REDUCTION means a payment by the Borrower, and a reduction of the Commitment, under Clause 1.1(b). AUTHORISATION includes any consent, registration, filing, lodgement, agreement, certificate, notorisation, permission, licence, approval, authority or exemption from, by or with any Governmental Agency. Where a Governmental Agency can prohibit or restrict some thing if it acts within a specified period after formal notification of it (for example, lodgement, registration or filing), Authorisation includes the expiry of that period without that action. BANK DOCUMENT has the meaning given in the Cross Guarantee and Negative Pledge. BILL means a BILL OF EXCHANGE as defined in the Bills of Exchange Act 1909 which is, or is to be, accepted or discounted under this letter or is taken to be accepted or discounted under this letter (whether or not it physically exists). It includes a bill which bears a purported signature on behalf of a Borrower which has been discounted by Westpac under this letter, even if that signature was not authorised or forged. 6 Page 6 - -------------------------------------------------------------------------------- BUSINESS DAY means any weekday on which Westpac is open at the address referred to on the signature page and at the address at which Bills drawn under this letter are to be accepted and discounted. CFG GROUP means Collins Foods Group Pty Ltd ACN 009 937 900 and each of its subsidiaries. For clarification, it includes Sizzler Steak Seafood Salad (S) Pte Ltd. COMMITMENT has the meaning given in Clause 1.1. CROSS GUARANTEE AND NEGATIVE PLEDGE means the agreement titled "Unlimited Cross Guarantee and Indemnity with Negative Pledge and Financial Ratio Covenants" between CFG and its Subsidiaries, Sizzler International Marks Inc. and certain of its Subsidiaries and Westpac, and dated on or about the date the Borrower accepts this letter. DISCOUNT RATE has the meaning given in Clause 1.2. DRAWDOWN NOTICE means a notice in the form of Schedule B. EBIT has the meaning given in the Cross Guarantee and Negative Pledge. EVENT OF DEFAULT has the meaning given in the Cross Guarantee and Negative Pledge. FACILITY means the facility provided under this letter. GOVERNMENTAL AGENCY means any government or any governmental, semi-governmental, statutory, judicial entity or authority. It includes any self regulatory organisation established under statute and any stock or futures exchange. GROUP has the meaning given in the Cross Guarantee and Negative Pledge. GUARANTOR has the meaning given in the Cross Guarantee and Negative Pledge. MANAGEMENT EQUITY AGREEMENT means the agreement or agreements to be entered into between Restaurants Concepts International, Inc and certain executives, senior managers and selected employees of companies in the CFG Group reasonably acceptable to Westpac (the 'Australian Management Group') pursuant to which Restaurant Concepts International, Inc agrees that the Australian Management Group may acquire equity in Collins Foods Group Pty Ltd ACN 009 937 900. MATERIAL ADVERSE EFFECT has the same meaning as in the Cross Guarantee and Indemnity. "REFERENCE LENDING RATE" means the rate Westpac regularly publishes in major metropolitan newspapers as its "Reference Lending Rate" or such other rate as may supersede Westpac's Reference Lending Rate and apply as a base rate to loans made by Westpac over $1,000,000. RESTRUCTURE means the restructure of the Group as described to Westpac before the date of this letter. For the purpose of this letter and the Cross Guarantee and Negative Pledge, the Restructure is complete when: (a) Collins Foods Group Pty Ltd ACN 009 937 900 holds all of the issued shares in: - Sizzler Asia Holdings, Inc; - Collins Restaurants Queensland Pty Ltd; - Collins Restaurants Management Pty Ltd; and - Sizzler Restaurants Group Pty Ltd; (b) Sizzler Asia Holdings, Inc holds all of the issued shares in: - Sizzler Restaurant Services, Inc; - Sizzler South East Asia, Inc; and - Sizzler New Zealand, Limited; 7 Page 7 - -------------------------------------------------------------------------------- and not less than 50% of the issued shares in Sizzler Steak Seafood Salad (S) Pte Ltd; and (c) all of the issued shares in Collins Foods Group Pty Ltd ACN 009 937 900 are held by Restaurants Concepts International, Inc. SCHEDULED REDUCTION means a payment by the Borrower, and a reduction of the Commitment, under Clause 1.1(a). SECURITY INTEREST includes any mortgage, pledge, lien, charge or other security or any arrangement which gives a creditor a preferential right to an asset or its proceeds. SECURED PROPERTY means all property the subject of a Security Document. SECURITY DOCUMENT means each document described in clause 5.2 (b) (i) of this letter and the Security Interests which at the date of this letter secure the Borrower's indebtedness to Westpac which documents are, for clarification, listed in Schedule D. SUBSIDIARY of a corporation is an entity whose accounts are included in that corporation's consolidated accounts. TAX includes a tax, levy, duty or charge (and associated penalty or interest) imposed by a Governmental Agency. TERM means the period determined in accordance with paragraph 1.4. - -------------------------------------------------------------------------------- 3. INTERPRETATION - -------------------------------------------------------------------------------- A reference to an OUTSTANDING Bill is to a Bill which has been accepted or discounted under this letter (or in respect of which a Borrower has not paid the face amount or provided cash cover under this letter). This applies whether or not the Bill has matured, been presented for payment or been paid on presentation by Westpac. In relation to periods of time, a reference to a BUSINESS DAY is a reference to a whole Business Day. - -------------------------------------------------------------------------------- 4. WHO MAY ISSUE DRAWDOWN NOTICES AND DRAW BILLS - -------------------------------------------------------------------------------- INTENTIONALLY DELETED - -------------------------------------------------------------------------------- 5. THE FACILITY - -------------------------------------------------------------------------------- 5.1 FACILITY The Borrower can require Westpac to accept Bills and discount them under the Facility on any Business Day. 5.2 CONDITIONS PRECEDENT TO ISSUE OF THE FIRST DRAWDOWN NOTICE Before the Borrower can require the acceptance and discount of Bills, the Borrower must: (a) sign and return a copy of this letter; (b) deliver the following in form and substance reasonably satisfactory to Westpac: 8 Page 8 - -------------------------------------------------------------------------------- (i) the following security documents duly executed and, if applicable, in registrable form (A) the Cross Guarantee and Negative Pledge; (B) a Stock Pledge by Sizzler Asia Holdings Inc of its shares in Sizzler New Zealand Ltd, Sizzler Restaurant Services, Inc and Sizzler South East Asia, Inc.; (C) a first party charge by each of Sizzler Asia Holdings Inc and Collins Restaurants Management Pty Ltd ACN 093 912 979 over all its assets and undertaking; (D) first mortgages over all commercial leasehold property of Collins Restaurants Queensland Pty Ltd ACN 009 988 381, Sizzler Restaurants Group Pty Ltd ACN 010 102 388 and Collins Foods Group Pty Ltd ACN 009 937 900 situated in Australia; (E) a conditional guarantee limited to A$10 million by Sizzler International, Inc; (F) a subordination agreement between the parties (other than Collins Properties, Inc) to the existing subordination agreement dated 24 September 1997 and Sizzler Asia Holdings, Inc and Collins Restaurants Management Pty Ltd ACN 093 912 979; (G) Letter of Security over Deposit over money held by Collins Restaurants Management Pty Ltd ACN 093 912 979 in an account with Westpac to pay interest and management fees to Restaurant Concepts International, Inc and Sizzler International, Inc.; and (H) Deeds of Assumption by each of Collins Restaurants Queensland Pty Ltd ACN 009 988 381, Sizzler Restaurants Group Pty Ltd ACN 010 102 388 and Collins Foods Group Pty Ltd ACN 009 937 900; (ii) a verification certificate from the Borrower and each Guarantor in the form attached to this letter; (iii) an undertaking from Sizzler Asia Holdings, Inc to do everything necessary to perfect the Stock Pledge described in paragraph (b) (i) (B) and the company charge described in paragraph (b) (i) (C) given by it as a Security Interest over the property described in the relevant instrument; and (iv) an undertaking from Collins Restaurants Queensland Pty Ltd not to encumber its franchise rights relating to Kentucky Fried Chicken, on substantially similar terms to the undertaking given by Collins Foods International, Inc to Westpac in September 1997; (c) satisfy the conditions precedent described in Schedule C; (d) satisfy Westpac's requirements in relation to the security documents referred to in paragraph (b)(i); and (e) pay the balance of the establishment fee. 5.3 DRAWDOWN NOTICE REQUIRED The obligation of Westpac to accept or discount Bills pursuant to this letter is subject to the Borrower giving Westpac a Drawdown Notice by 10.30am (Sydney time) at least 3 Business Days (or such shorter period as Westpac agrees to accept) before the proposed date for accepting and discounting Bills (the DRAWDOWN DATE) 9 Page 9 - -------------------------------------------------------------------------------- 5.4 NO DEFAULT Westpac is not obliged to accept or discount Bills under this letter if on the Drawdown Date there is: (a) a continuing Event of Default; or (b) a breach or other event which with notice or time or both would become an Event of Default. However, Westpac may at its discretion make available to the Borrower an amount not exceeding the face amount of the Bills requested. That amount, if provided at all by Westpac, will be provided as a loan which is repayable on the earlier of: (c) demand by Westpac for repayment of that amount, and (d) notice by Westpac under Clause 11 (Westpac's Remedies and Powers) below. The Borrower shall pay interest monthly in arrears on the loan. The interest will accrue from day to day at a rate equal to 2.0% per annum plus Westpac's Reference Lending Rate then applicable. 5.5 CONDITIONS SUBSEQUENT The Borrower must satisfy the following conditions after the first Drawdown Date: (a) delivery to Westpac not later than the last day of the first operating quarter of CFG Group after the date of acceptance of this offer, an opinion in form and substance reasonably acceptable to Westpac from PricewaterhouseCoopers that the Restructure has been completed and the most recent projected consolidated balance sheet of CFG Group given to Westpac based on figures as at 28 May 2000 is, in all material respects, a true and correct statement of the assets and liabilities of CFG Group as at the date or during the period stated in the opinion; (b) the requirement that the Management Equity Agreement is in full force and effect by not later than 15 December 2000; (c) (i) that there is no change in the Chief Executive Officer (CEO) of Collins Foods Group Pty Ltd or any other significant change in the management of any company in the CFG Group which, in Westpac's reasonable opinion, has or is likely to have a Material Adverse Effect; and (ii) if there is a change of the type described in paragraph (i), a person or persons reasonably acceptable to Westpac is not appointed to the relevant position within 90 days of Westpac giving written notice to Collins Foods Group Limited that it considers that the change in the CEO or management has or is likely to have a Material Adverse Effect; and (d) delivery to Westpac of lessor's right of entry letters signed by Collins Property Development Pty Ltd for each property leased by that company to Collins Restaurants Queensland Pty Ltd ACN 009 988 381, Sizzler Restaurants Group Pty Ltd ACN 010 102 388 and Collins Foods Group Pty Ltd ACN 009 937 900. 5.6 BREACH OF CONDITIONS SUBSEQUENT If the condition described in clause 5.5(a) or the condition described in clause 5.5(c) is not satisfied by the due date then Westpac may: (a) by giving not less than thirty (30) days written notice to the Borrower, vary the terms and conditions on which the Facility is provided. If Westpac gives the Borrower notice that it wishes to change any of the terms and conditions of the Facility, then unless Westpac agrees otherwise with the Borrower: 10 Page 10 - -------------------------------------------------------------------------------- (i) the changes take effect from the day when the Borrower accepts the changes; and (ii) if the Borrower does not accept the changes before the end of the notice period then, with effect from the end of the notice period, the Facility becomes repayable on demand made by Westpac. If Westpac makes demand pursuant to this clause, then the Borrower must within thirty (30) days of the date of the demand pay to Westpac: - all money actually or contingently owing (including any cost or loss determined under clause 7.3 or clause 8.8 of this letter) by it to Westpac under or in connection with this letter; and - the face amount of all Bills drawn by it and outstanding as at the repayment date; or (b) by giving not less than sixty (60) days prior written notice to the Borrower, terminate the Facility. If Westpac gives notice under this paragraph, then termination takes effect at the end of the notice period. The Borrower must pay Westpac immediately upon termination: - all money actually or contingently owing (including any cost or loss determined under clause 7.3 or clause 8.8 of this letter) by it to Westpac under or in connection with this letter; and - the face amount of all Bills drawn by it and outstanding on the date of termination. If the condition described in clause 5.5 (b) is not satisfied by the due date, then Westpac may by written notice given to the Borrower (and a copy of any such notice must also be sent to Sizzler International, Inc) require the Borrower to repay outstanding Bills and cancel the Commitment by an amount of A$10,000,000.00. If the Borrower does not do so within thirty (30) days of the date of the written notice given by Westpac to the Borrower, Westpac may cancel the Commitment by an amount of $10,000,000.00 and make demand under the conditional guarantee referred to in clause 5.2(b)(i)(E) of this letter. - -------------------------------------------------------------------------------- 6. FACILITY PROCEDURES - -------------------------------------------------------------------------------- 6.1 FORM OF BILLS Bills prepared under this letter must: (a) be in a form acceptable to Westpac and, to the extent practicable, have a face amount of $100,000, $500,000, or $1,000,000 or any other amount specified by Westpac, (b) be expressed to be drawn by the Borrower and signed by it as drawer, (c) be payable at Westpac's office at: 3rd Floor, 255 Elizabeth Street, Sydney, NSW 2000, or any other address which Westpac may specify, (d) have the name of the payee left blank, (e) have a term, as required by the Borrower (or, in the case where the fixed rate discount option applies, Westpac), of 30, 60, 90, 120, 150 or 180 days or any other term Westpac and the Borrower may agree, and (f) mature on a Business Day which is not later than the last day of the Term. 11 Page 11 - -------------------------------------------------------------------------------- The Borrower must select terms for Bills in order to comply with the reductions in Commitment specified in Clause 1.1 so that the total face amount of outstanding Bills will not at any time exceed the reduced Commitment. 6.2 PREPARATION OF BILLS Westpac will ordinarily prepare Bills itself, but it may require the Borrower giving a Drawdown Notice to prepare Bills under this letter. If Westpac prepares Bills, it may prepare one Bill having a face amount equal to the aggregate face amount of Bills having the same maturity date and referred to in the relevant Drawdown Notice. 6.3 AUTHORITY Each Borrower irrevocably and for value authorises Westpac: (a) to complete and deliver Bills under this letter, (b) on behalf of the Borrower and in its name to prepare Bills complying with this letter and to sign them as drawer and if applicable, endorse them, and to alter any non-complying Bills. - -------------------------------------------------------------------------------- 7. ACCEPTANCE AND DISCOUNT - -------------------------------------------------------------------------------- 7.1 ACCEPTANCE AND DISCOUNT When it is obliged under this letter to accept and discount Bills Westpac shall: (a) accept those Bills, (b) if necessary, insert as payee itself or any other person who is to buy those Bills, and (c) discount those Bills and pay to the Borrower or as it directs an amount equal to the sum of the face amount of those Bills less the sum of: (i) a discount amount for each Bill which would result in a yield to maturity on that Bill calculated at the Discount Rate (expressed as a yield percent per annum) or, where a fixed rate applies to that Bill, that fixed rate, (ii) the Acceptance Fee for the Bills, (iii) the preparation fee for the Bills, (iv) any applicable stamp duty or other tax payable by Westpac on or in respect of the Bills or any payment under this letter (including financial institutions duty), and (v) any other amount owing by the Borrower to Westpac under this letter. 7.2 FIXED RATE OPTION In a Drawdown Notice the Borrower may request Westpac to inform it of the fixed rate at which Westpac will discount a series of Bills with the total face amount nominated in the Drawdown Notice and during the period nominated in the Drawdown Notice. That period must not be less than 180 days. It must end no later than the last day of the Term. Westpac shall quote to the Borrower by telephone the fixed rate by 9.45 am (Brisbane time) on the relevant date specified in the Drawdown Notice . The rate will be expressed as a percent per annum and a yield to maturity. If the Borrower wishes to accept that quote, it shall do so by telephone while that quote is current. 12 Page 12 - -------------------------------------------------------------------------------- If the Borrower does accept the quote, then during that period except as set out in Clause 7.3: (a) Westpac on behalf of the Borrower or, at Westpac's request, the Borrower shall prepare, sign as drawer, complete, and deliver Bills with terms selected by Westpac, so that at all times during that period there are Bills outstanding which have a total face amount equal to the amount nominated, and (b) Westpac shall discount those Bills at that rate in accordance with this letter. If the Borrower does not accept that quote, the ordinary procedures for setting the discount rate under this letter will apply. Westpac is entitled to rely on a facsimile communication purporting to be signed by an authorised signatory of the Borrower if Westpac believes the communication to be genuine. 7.3 PREPAYMENT DURING FIXED RATE PERIOD During the period a fixed rate applies, the Borrower can prepay all or part of the total face amount of the Bills for which it selected a fixed rate on giving two Business Days irrevocable notice in writing. If that occurs, or if the Commitment is cancelled, Westpac's obligation to prepare and discount Bills at the fixed rate is correspondingly reduced or cancelled. If for that or any other reason (excluding default by Westpac), Bills of the total face amount are not drawn and discounted for the full fixed rate period, then the Borrower shall pay Westpac the amount which Westpac certifies to be the cost or loss resulting from the liquidation or re-employment of deposits or other funds acquired or contracted for by Westpac to fund or maintain the discounting of Bills at the fixed rate, and the termination or reversing of any agreement or arrangement entered into by Westpac to fix, hedge or limit the effective cost of funding or maintaining Bills under the fixed rate option. - -------------------------------------------------------------------------------- 8. PAYMENT OBLIGATIONS - -------------------------------------------------------------------------------- 8.1 INDEMNITY The Borrower shall indemnify Westpac on demand against all liabilities of Westpac as acceptor or endorser of Bills drawn by the Borrower. 8.2 LIABILITY ON BILLS As between Westpac and the Borrower, the Borrower is primarily liable in respect of all Bills accepted by Westpac on its behalf. Accordingly: (a) the liability of the Borrower with respect to any Bill will not be discharged because Westpac becomes the holder of that Bill before, on or after its maturity, and (b) not later than 11 am on the maturity date for each Bill, the Borrower shall pay to Westpac an amount equal to the face amount of that Bill. 8.3 NETTING OFF Where new Bills are to be drawn and accepted on the maturity date of old Bills, only the net amount as between the amounts payable on that date: (a) to Westpac under this Clause 8 in respect of the face amount of the old Bills, and 13 Page 13 - -------------------------------------------------------------------------------- (b) by Westpac by way of proceeds of the new Bills under Clause 7 (Acceptance and Discount), need be paid. 8.4 FEES The Borrower will pay fees as set out in this letter. 8.5 REPAYMENTS The Facility will terminate at the expiry of the Term, and at that time the Borrower will pay to Westpac: (a) all money owing by it to Westpac under or in connection with the Facility , and (b) the face amount of all outstanding Bills drawn by it. 8.6 CANCELLATION OF COMMITMENT The Borrower can cancel (in minimum amounts of $100,000.00 and multiples of $100,000.00) all or part of the undrawn Commitment by giving not less than seven days irrevocable notice in writing to Westpac. 8.7 METHOD OF PAYMENT The Borrower will make all payments at the address on the signature page of this letter or as specified by Westpac. Payments must be in cleared funds and free of any set-off or deduction, except for taxes where required by law. All payments will be made by 11am (local time) in the place of payment. Unless otherwise stated, amounts payable under Clause 10 (Yield Protection and Additional Payments) below are payable within 2 Business Days of demand. 8.8 PREPAYMENT The Borrower can prepay all or part of the total face amount of outstanding Bills (in a minimum amount of A$100,000.00 and multiples of A$100,000.00) on giving seven days irrevocable notice in writing to Westpac. The Borrower shall pay Westpac the amount which Westpac certifies to be the cost or loss resulting from the prepayment of any Bill before its maturity date. 14 Page 14 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 9. INTEREST RATE HEDGING POLICY - -------------------------------------------------------------------------------- 9.1 HEDGING STRATEGY The Borrower must, as a minimum, hedge projected floating rate interest exposure of the Borrower under the Facility in accordance with a hedging strategy determined by the Borrower and reasonably acceptable to Westpac in relation to notional principal amounts of not less than 66% (or such other amount as is acceptable to Westpac acting reasonably) of the projected principal outstanding under the Facility for the period to the end of the Term. 9.2 DOCUMENTATION The Borrower (or another entity acceptable to Westpac) must sign, not later than the date which is 14 days after: (i) the date of acceptance of this letter; or (ii) the date on which Westpac delivers the documents to the Borrower to sign; whichever is later, an ISDA Agreement (including the master agreement, schedules and confirmations) with such changes as Westpac reasonably requires to give effect to clause 9.1. - -------------------------------------------------------------------------------- 10. YIELD PROTECTION AND ADDITIONAL PAYMENTS - -------------------------------------------------------------------------------- 10.1 YIELD PROTECTION Whenever Westpac determines that a Change in Law (as defined below) has the effect of: (a) increasing its costs of funding or maintaining the Facility, or reducing its return or amounts received in respect of the Facility; or (b) reducing its return on capital allocated to the Facility (including because more capital needs to be allocated to the Facility or cannot be used elsewhere), then it will promptly notify the Borrower, and they must pay Westpac the amount it certifies is necessary to compensate it. That certificate will give an outline of the calculation, and will be conclusive and bind the Borrower in the absence of manifest error. If the Borrower so requests, Westpac will negotiate in good faith with a view to finding a means of minimising the effect, but it is not a defence that the effect could have been avoided or minimised. A CHANGE IN LAW is the introduction of, or a change in, any law, official directive, ruling or request or a change in its interpretation. If it does not have the force of law, it must be one with which responsible Australian banks would comply. Without limitation, it includes any of these circumstances which occurs with respect to capital adequacy, special deposit, liquidity, reserve, prime assets, tax or prudential requirements (except a change in tax on overall net income). 15 Page 15 - -------------------------------------------------------------------------------- 10.2 INDEMNITY AND COSTS The Borrower will indemnify Westpac against any liability, loss, cost or expense (including legal costs on a full indemnity basis) it incurs as a result of an Event of Default or the actual or contemplated enforcement of this letter or any Bank Document. The Borrower will pay Westpac's reasonable external legal costs in relation to the preparation of each Bank Document, any amendment of it, or any consent or waiver under it. 10.3 TAX If the Borrower is required to deduct any Tax from any payment under a Bank Document (except a Tax on Westpac's overall net income), then: (a) the Borrower must pay that amount to the appropriate authority and promptly give Westpac evidence of payment; and (b) the amount payable is increased so that (after deducting that Tax, and paying any taxes on the increased amount) Westpac receives the same amount it would have received had no deduction been made. 10.4 CURRENCY INDEMNITY The Borrower will indemnify Westpac if any amount payable under or in connection with a Bank Document is received in a currency which is different from that in which it is required to be paid under this letter. This indemnity applies whatever the reason for receipt of the amount in a different currency. 10.5 STAMP DUTY The Borrower will pay all stamp, transaction and other similar duties and charges in relation to this letter, any Bill accepted and discounted under it, any Bank Document and any transaction under them. This includes financial institutions duty and debits tax. The Borrower will also pay any fines and penalties unless they result from a failure by Westpac to lodge a document for stamping in sufficient time, having received from the Borrower the amount of stamp duty in good time. 10.6 GOODS AND SERVICES TAX (a) All payments to be made by the Borrower under or in connection with the Facility have been calculated without regard to GST. If all or part of any such payment is the consideration for a taxable supply for GST purposes then, when the Borrower makes the payment: (i) it must pay to Westpac an additional amount equal to that payment (or part) multiplied by the appropriate rate of GST; and (ii) Westpac will promptly provide to the Borrower a tax invoice complying with the GST law. (b) Where under this letter or a Bank Document the Borrower or a Guarantor is required to reimburse or indemnify for an amount, the Borrower or the Guarantor (as the case may be) will pay the relevant amount (including any sum in respect of GST) less any GST input tax credit Westpac determines that it is entitled to claim in respect of that amount. 16 Page 16 - -------------------------------------------------------------------------------- (c) Any word or expression used in this clause which is defined in A New Tax System (Goods and Services Tax) Act 1999 (Cth) has the same meaning in this document. - -------------------------------------------------------------------------------- 11. WESTPAC'S REMEDIES AND POWERS - -------------------------------------------------------------------------------- 11.1 EVENT OF DEFAULT If an Event of Default occurs then Westpac may either or both: (a) terminate the Facility and cancel the Commitment; and (b) by written notice require the Borrower to pay to Westpac: (i) all money actually or contingently owing by it to Westpac under or in connection with this letter, and (ii) the face amount of all Bills drawn by it and outstanding as at the date of that notice. The Borrower will pay those amounts immediately. 11.2 AMOUNTS PAID ON UNMATURED BILLS AND CONTINGENT AMOUNTS (a) Any amount paid to Westpac under this Clause in respect of any outstanding Bill or in respect of any sum contingently owing, and (b) interest credited under this clause, will accrue and be credited with interest at a rate and in a manner which Westpac determines would under its normal procedures apply to deposits of a similar amount at call (or of any other term specified by Westpac). Westpac may apply it in or towards satisfaction of any sum at any time payable to Westpac under or in relation to this letter or any Bank Document, including in respect of Bills. It is repayable by Westpac to the extent only that on any day it exceeds the amount of all money owing to Westpac under or in connection with this letter or any Bank Document (including, without limitation, the total face amount of the outstanding Bills and all amounts which are then or may subsequently become contingently owing). 11.3 DEFAULT INTEREST Interest will accrue each day on each amount due but unpaid. The rate will be the aggregate of Westpac's Reference Lending Rate then applicable plus the Acceptance fee plus 2% per annum. That interest accrues before and after any judgment. Westpac may debit the Borrower's account with accrued interest under this paragraph on any day. If it does not do so more often it will be taken to have done so monthly. That interest will then itself bear interest. 11.4 APPLICATION OF MONEY - SET-OFF If the Borrower does not pay an amount when due, Westpac may apply any money in any of the Borrower's accounts (whether or not matured) in payment of any amount payable under this letter. It need not do so. It can convert currencies using its normal procedures. 17 Page 17 - -------------------------------------------------------------------------------- 11.5 NO WAIVER No failure to exercise a power, and no delay in exercising a power, operates as a waiver. Waivers must be in writing. - -------------------------------------------------------------------------------- 12. GENERAL - -------------------------------------------------------------------------------- 12.1 STATEMENT A written statement by Westpac as to any amount due under this letter or a Bank Document will be sufficient evidence of that amount unless the Borrower proves it wrong. 12.2 ASSIGNMENT The Borrower may not assign its rights under this letter. Westpac may transfer any part of its rights and, with the Borrower's consent, obligations. The Borrower will not withhold that consent unreasonably. Westpac may disclose information to a potential transferee or sub-participant. Where Westpac wants to transfer part of its obligations the Borrower will sign when reasonably requested by Westpac a document which will effect that transfer and which does not increase the Borrower's obligations. Westpac will bear its own costs and stamp duty on that document. 12.3 NOTICES AND WESTPAC AUTHORISED SIGNATORIES Any notice, demand, statement, certificate or other communication by Westpac may be given by any person whose title includes the word "manager", "head", "counsel" or "president", or any attorney authorised to do so. Any such person may sign a Bill on behalf of Westpac or the Borrower. Notices must be in writing. They may be sent by facsimile, post or any other means to the recipient's address or number set out on the signature page or any other address or number notified to the sender by the recipient. Notices will be taken to have been given if delivered or left at that address, on the dates on which they are delivered or left. 12.4 AUTHORISED SIGNATORIES All documents (including Bills) required to be signed by the Borrower under this letter shall be signed on its behalf by one or more authorised signatories referred to in the verification certificate given in respect of the Borrower, or any other or additional authorised signatories subsequently appointed, whose names and specimen signatures have been notified to Westpac. 12.5 GOVERNING LAW AND JURISDICTION This letter is governed by Queensland law. The Borrower accepts the non-exclusive jurisdiction of the courts having jurisdiction there. 18 Page 18 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SCHEDULE A -- FORM OF VERIFICATION CERTIFICATE - -------------------------------------------------------------------------------- QUEENSLAND TO WIT We, .........................................., and .......................... , of, .........................................., and .......................... in the State of Queensland do solemnly and sincerely declare as follows: (a) We are Directors of .................................................... Pty Ltd ACN ___ ___ ___ (the COMPANY), of .............................. ........................................................................ (b) On .........................., 20.... a duly convened meeting of the Directors of the Company was held, at which a quorum was present. The Directors met to consider entering into the documents referred to below and the transactions they evidence, to secure (among other things) financial accommodation of $46,000,000.00 (the ACCOMMODATION) made available or continuing to be made available (at the request of the Company) by Westpac Banking Corporation (WESTPAC) to Collins Restaurants Management Pty Ltd (the BORROWER). (c) The following documents (the BANK DOCUMENTS) submitted by Westpac to the Company and required by Westpac (among others) as security for the Accommodation, were tabled at the meeting: - [complete as appropriate] (d) The Directors considered the terms on which the Accommodation was being offered, including the terms of the Bank Documents and passed resolutions that: (i) The Company confirms its request to Westpac for the Accommodation made available or continuing to be made available to the Borrower; (ii) In order to secure the payment to Westpac of: (A) the Accommodation; (B) all other moneys specifically agreed to be paid by the Company to Westpac in the Bank Documents; and (C) all moneys at any time owing by the Company or the Borrower to Westpac on any account (including interest). the Company execute and deliver the Bank Documents. (e) It was also duly resolved that ........................................ and .................................................................... be authorised to affix the common seal of the Company to the Bank Documents. (f) The resolutions were duly passed in all respects in accordance with the constitution of the Company and the Corporations Law or, as the case may be, the laws governing such matters in the Company's place of incorporation (the RELEVANT LAW). (g) The Bank Documents were duly executed in accordance with the resolutions, the Company's constituent documents and the Relevant Law. (h) Before passing the resolutions, the Directors considered the interests of the Company and determined that entering into the Bank Documents was in the Company's interests, for the proper purposes of the Company, and not prejudicial to its creditors. 19 Page 19 - -------------------------------------------------------------------------------- (i) The Secretary was authorised and directed to sign all documents and do other things necessary to enable the Bank Documents to be duly stamped and registered (if applicable). (j) Each Director at the meeting declared to the meeting prior to the passing of the resolutions (or had previously disclosed) all interests and any conflicts of interest and duty on that Director's part (including detailed particulars of the full nature and extent of such interests and where a general notice of a Director's interest had previously been given, detailed particulars of any change in the extent of that interest) as required by the constituent documents of the Company and the Relevant Law. The Secretary was directed to record every such declaration by the Directors at the meeting in the minutes of the meeting, in accordance with the Relevant Law. (k) Since the date of its incorporation, the Company has not in general meeting or otherwise at any time made or passed any resolution or taken any action nor has any other event happened, as a result of which the Company is prevented from giving guarantees or indemnities or executing the Bank Documents or as a result of which the right or power of the Company to guarantee and indemnify and to give security over its assets has been abrogated or restricted, nor has the Company in general meeting or otherwise at any time passed any resolution or taken any other action or proceedings having the effect of in any way altering or otherwise affecting in whole or in part its constitution which has not been fully disclosed to Westpac. (l) Since the date of its incorporation, the Company has not in general meeting or otherwise at any time passed any resolution not to call up unpaid calls on shares nor has any meeting of the Company been convened for the purpose of considering or passing any such special resolution. (m) There is no unsatisfied judgement in any court nor any writ of execution issued out of any court which might be enforced against any part of the property or assets of the Company nor is there (to the best of its knowledge and belief after making due enquiry) pending any action or suit against the Company which has not been disclosed to Westpac or in relation to the winding up of the Company nor has any resolution been passed for the winding up of the Company. (n) The Company is solvent and there are reasonable grounds to expect that, on execution of each Bank Document to which it is a party, it will continue to be able to pay all its debts as and when they become due and payable. (o) The copy of the constituent documents of the Company provided to Westpac on or about is a true and up to date copy of the same. (p) All the shares referred to in the Schedule below are held beneficially by the person referred to as holding them and no shares are held on trust or for any other person or corporation (except as expressly disclosed in the Schedule). (q) At the date of this declaration the Company has not given any charge or charges and does not intend to give any charges prior to entering into the Bank Documents to Westpac. (r) We certify that the Company is not prohibited under Part 3.2A of the Corporations Law, or under any similar provisions in any other Relevant Law, from entering into the Bank Documents. (s) We certify that in entering into the Bank Documents and undertaking any action contemplated by the Restructure (as defined in the letter dated 28 August 2000 20 Page 20 - -------------------------------------------------------------------------------- from Westpac to the Borrower) the Company will not contravene Part 2J.3 of the Corporations Law or any similar provisions in any other Relevant Law. (t) We certify that no corporate authorisation (other than the resolutions referred to in paragraph (d) and (e) are required for the Company to enter into and perform its obligations under the Bank Documents. (u) We certify that no event has occurred or is likely to occur in relation to the Company which has or is likely to have a Material Adverse Effect (as defined in the letter dated 28 August 2000 from Westpac to the Borrower). (v) We certify that at the date of this declaration the particulars described in the Schedule below are true and correct. THE SCHEDULE SHAREHOLDERS & SHARES HELD (PARAGRAPH (p)) [Please complete details] NAME AND ADDRESS OF SECRETARY (PARAGRAPH (v)) [Please complete details] AND we make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the "Oaths Act 1867 (Queensland). DECLARED before me at ..............this ) ...................day of ..........20.. ) ............................ ) Director ) (Full name to be printed) ) A Justice of the Peace ) ............................ ) Director 21 Page 21 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SCHEDULE B -- FORM OF DRAWDOWN NOTICE - -------------------------------------------------------------------------------- TO: [Name] Westpac Banking Corporation, [address] COLLINS RESTAURANTS MANAGEMENT PTY LTD A.C.N. 093 912 979 (the BORROWER) A$46,000,000.00 BILL ACCEPTANCE AND DISCOUNT FACILITY I refer to the facility letter dated [INSERT DATE OF LETTER]. I am authorised to give this irrevocable notice on behalf of the Borrower. The representations by the Borrower in the letter are true as of today. No Event of Default (as defined in the letter) or event has occurred. No breach or other event has occurred which with notice or both would become an Event of Default. The Borrower requests you to prepare, complete, draw, endorse (if necessary), sign and deliver on the Borrower's behalf Bills (details of which appear in the schedule below) drawn by the Borrower on Westpac. The Borrower acknowledges that, unless Westpac specially requires it to prepare and draw Bills, Westpac will do so. The Borrower requests Westpac to do as follows on [INSERT DATE] 20[INSERT YEAR]: [NOTE: DATE MUST BE A BUSINESS DAY.] (1) accept the Bills for the Borrower's accommodation; (2) complete the name of the payee on the Bills, buy them or at Westpac's option sell them to any person and credit the net proceeds after deducting any moneys payable under (3) below to the Borrower's Account Number [INSERT ACCOUNT NUMBER] at the [INSERT BRANCH NAME] Branch of Westpac; and (3) deduct from the proceeds referred to in (2) above the amount of Westpac's acceptance and other fees and any stamp or other duty payable in respect of the Bills; [and] (4) [state the fixed rate at which Westpac would be prepared to discount a series of Bills having a total face amount of $[*] during a period of [*] months.]
SCHEDULE - -------------------------------------------------------------------------------- DRAWER DATE OF EXECUTION MATURITY DATE FACE AMOUNT NO. OF BILL - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Signed for and on behalf of COLLINS RESTAURANTS MANAGEMENT PTY LTD
- ------------------------------------------- Authorised Officer of the Borrower Dated [*] [To be signed by authorised signatory whose signature and status have been verified to Westpac]. 22 Page 22 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SCHEDULE C -- CONDITIONS PRECEDENT - -------------------------------------------------------------------------------- ADDITIONAL CONDITIONS PRECEDENT PART 1 - DELIVERY OF THE FOLLOWING TO WESTPAC IN FORM AND SUBSTANCE REASONABLY ACCEPTABLE TO WESTPAC (a) (AUTHORISATIONS) evidence that each Authorisation which is: (i) necessary for the execution, delivery or performance by the Borrower or each Guarantor, or the validity or enforceability of the Bank Document to which each Borrower or Guarantor is a party; (ii) necessary for the effectiveness of each Security Document; or (iii) material to the conduct of the business of the Borrower or a Guarantor, has been obtained and is in full force and effect. (b) (CORPORATE AUTHORISATION) evidence that the Borrower and each Guarantor has taken the necessary corporate action to authorise its entry into and performance of each Bank Document to which it is a party (as well as each transaction contemplated by each such Bank Document). (c) (ACCOUNTS) for the Borrower and each Guarantor, the Accounts and other financial information reasonably required by Westpac. (d) (FEES) evidence that all fees and expenses payable to Westpac on or before the first Drawdown Date (including fees of Westpac's advisors) have been paid or will be paid from the proceeds of the first drawdown of Bills. (e) (LEGAL OPINIONS) (i) an opinion from Hogan Besley Boyd, legal advisors to the Borrower confirming that in undertaking the Restructure, the Group will comply with all applicable laws; and (ii) an opinion from internal Counsel at Sizzler International Inc. confirming, in respect of each Guarantor which is incorporated under a law of the United States of America that: - the entity is duly organised, validly existing and in good standing under the laws of the place of its incorporation; and - the entity has the requisite power and authority to execute, deliver and perform the Bank Documents to which it is a party and that all necessary action has been taken to authorise the execution, delivery and performance of the Bank Documents to which it is a party and that the entity has validly executed and delivered those documents. (f) (SEARCHES AND ENQUIRIES) the results of all searches and enquiries required by Westpac with respect to the Borrower and each Guarantor and the Secured Property. (g) (TAX OPINION) an opinion from PricewaterhouseCoopers that after the Restructure is completed, no company in the Group will have a liability to pay a Tax other than a Tax for which the Group has set aside sufficient reserves of liquid assets to pay the Tax and any fine, penalty, interest or other cost payable if the Tax is assessed as payable. (h) (HEADS OF AGREEMENT) a copy of signed Heads of Agreement for the Management Equity Agreement, which agreement must be unconditional. 23 Page 23 - -------------------------------------------------------------------------------- (i) (NO CHANGE IN BALANCE SHEET) a certificate signed by not less than two directors of Collins Foods Group Pty Ltd ACN 009 937 900 that no event has occurred or is likely to occur in relation to the CFG Group which has or is likely to have a Material Adverse Effect on the financial position of the CFG Group as shown in the most recent balance sheet given to Westpac based on figures as at 28 May 2000. (j) (OTHER INFORMATION) such other information relating to the Restructure, the Borrower or a Guarantor or an associated entity of any of them as Westpac may reasonably request. (k) (TITLE DOCUMENTS) all documents and evidence of title to the Secured Property. (l) (MEZZANINE DEBT) evidence that Sizzler International Inc. has agreed to lend Collins Foods Group Pty Ltd ACN 009 937 900 certain moneys on terms reasonably acceptable to Westpac including without limitation that the amount lent is subordinated to the Borrower's indebtedness to Westpac on terms reasonably acceptable to Westpac. PART 2 - THE FOLLOWING CONDITIONS BEING SATISFIED ON EACH DRAWDOWN DATE (a) (REPRESENTATIONS TRUE) the representations and warranties by the Borrower and each Guarantor in the Cross Guarantee and Negative Pledge are true in all material respects as at the date of the Relevant Drawdown Notice and the relevant Drawdown Date as though they had been made at that date in respect of the facts and circumstances then subsisting. (b) (NO MATERIAL ADVERSE CHANGE) Westpac being satisfied that no event or change has occurred in relation to a Guarantor that has or would be likely to have a Material Adverse Effect. 24 Page 24 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SCHEDULE D -- EXISTING SECURITY DOCUMENTS - --------------------------------------------------------------------------------
DATE SECURITY DOCUMENTS REG. NO 24-9-97 STOCK PLEDGE by SIZZLER INTERNATIONAL INC. of the issued capital of Collins Foods International Pty Ltd and Sizzler International Marks Inc. 19-9-97 First Registered Charge by COLLINS FOODS GROUP PTY LTD over 610709 all its assets, undertaking and uncalled capital 19-9-97 First Registered Charge by COLLINS FINANCE AND MANAGEMENT 610719 PTY LTD over all its assets, undertaking and uncalled capital 19-9-97 First Registered Charge by COLLINS FOODS AUSTRALIA PTY LTD 610716 over all its assets, undertaking and uncalled capital 19-9-97 First Registered Charge by COLLINS FOODS INTERNATIONAL PTY Ltd 610718 over all its assets, undertaking and uncalled capital other 9726660435 than the KFC Franchise Agreements 9716148 19-9-97 First Registered Charge by COLLINS INTERNATIONAL INC over all 9726660563 its assets, undertaking and uncalled capital 971318459 19-9-97 First Registered Charge by COLLINS PROPERTY DEVELOPMENT PTY 610706 LTD over all its assets, undertaking and uncalled capital 19-9-97 First Registered Charge by FURNACE CONCEPTS AUSTRALIA CORP 610708 over all its assets, undertaking and uncalled capital 9716144 19-9-97 First Registered Charge by FURNACE CONCEPTS INTERNATIONAL INC 9726660487 over all its assets, undertaking and uncalled capital 9716147 19-9-97 First Registered Charge by COLLINS RESTAURANTS QUEENSLAND PTY 610715 LTD over all its assets, undertaking and uncalled capital 19-9-97 First Registered Charge by RESTAURANT CONCEPTS INTERNATIONAL 9726660430 INC over all its assets, undertaking and uncalled capital 9716149 19-9-97 First Registered Charge by RESTAURANT CONCEPTS OF AUSTRALIA 9726660496 PTY LTD over all its assets, undertaking and uncalled capital 9716145 19-9-97 First Registered Charge by SIZZLER AUSTRALIA PTY LTD over all 610710 its assets, undertaking and uncalled capital 19-9-97 First Charge by SIZZLER FRANCHISE DEVELOPMENT, LTD over all its assets, undertaking and uncalled capital 19-9-97 First Registered Charge by SIZZLER INTERNATIONAL MARKS INC 9726660521 over all its assets, undertaking and uncalled capital 97131846 19-9-97 First Registered Charge by SIZZLER NEW ZEALAND LIMITED over WNOS- all its assets, undertaking and uncalled capital 483105 9726660423 9716150
25 Page 25 - --------------------------------------------------------------------------------
DATE SECURITY DOCUMENTS REG. NO 19-9-97 First Registered Charge by SIZZLER RESTAURANT SERVICES INC over 9726660511 all its assets, undertaking and uncalled capital 9716143 19-9-97 First Registered Charge by SIZZLER SOUTH-EAST ASIA INC over 9726660493 all its assets, undertaking and uncalled capital 9716146 19-9-97 First Registered Charge by SIZZLER SOUTH PACIFIC PTY LTD over 610720 all its assets, undertaking and uncalled capital 9716142 19-9-97 First Registered Charge by SIZZLER RESTAURANTS GROUP PTY LTD 610712 over all its assets, undertaking and uncalled capital Mortgages over leases as set out in Annexure A.
26 Page 26 - -------------------------------------------------------------------------------- SIGNED for WESTPAC BANKING CORPORATION by its Attorneys ...................................... ..................................... Head of Westpac Institutional Bank Qld Manager Legal ADDRESS: 15th floor, 260 Queen Street, Brisbane Qld. 4001 FACSIMILE: (07) 3221 9620 Accepted by COLLINS RESTAURANTS MANAGEMENT PTY LTD ACN 093 912 979 Date of Acceptance: ............................................................ THE COMMON SEAL of ) COLLINS RESTAURANTS MANAGEMENT PTY LTD ) was duly affixed by authority of the ) Board of Directors in the presence of ) ............................. ) ) Authorised officer ) (insert name) ....................... ) ) and ) ) ............................. ) Authorised officer (insert name) ....................... ADDRESS: ..................................................... ..................................................... FACSIMILE: ..................................................... EX-10.2 3 v65255ex10-2.txt EXHIBIT 10.2 1 EXHIBIT 10.2 Dated the 21st day of August 2000 COLLINS FOODS GROUP PTY LTD ACN 009 937 900 AND THE OTHER COMPANIES LISTED IN SCHEDULE A In Account with WESTPAC BANKING CORPORATION A.R.B.N. 007 457 141 UNLIMITED CROSS GUARANTEE AND INDEMNITY AND NEGATIVE PLEDGE WITH FINANCIAL RATIO COVENANTS BY THE GUARANTORS LISTED IN SCHEDULE A 2 viii TABLE OF CONTENTS UNLIMITED CROSS GUARANTEE AND INDEMNITY AND NEGATIVE PLEDGE WITH FINANCIAL RATIO COVENANTS............................................................................. 1 DEFINITIONS AND INTERPRETATION............................................................... 2 1. DEFINITIONS........................................................................... 2 CONDITIONS OF GUARANTEE AND INDEMNITY........................................................ 7 2. GUARANTEE............................................................................. 7 3. EXTENT OF GUARANTEE................................................................... 7 4. CONTINUING GUARANTEE.................................................................. 7 5. INSOLVENCY............................................................................ 7 6. VARIATION OF ARRANGEMENTS WITH CUSTOMER............................................... 8 7. UNCONDITIONAL OBLIGATION.............................................................. 8 8. REFUND OF PAYMENTS.................................................................... 8 9. INDEMNITY............................................................................. 9 10. OTHER SECURITY........................................................................ 9 NEGATIVE PLEDGE AND FINANCIAL RATIO COVENANTS................................................ 10 11. REPRESENTATIONS AND WARRANTIES........................................................ 10 12. UNDERTAKINGS.......................................................................... 11 12.1 Information.................................................................... 11 12.2 Negative Pledges............................................................... 12 12.3 Financial Covenants............................................................ 13 12.4 General Undertakings........................................................... 15 12.5 Undertakings by Guarantors..................................................... 16 13. EVENTS OF DEFAULT..................................................................... 16 14. WESTPAC'S REMEDIES AND POWERS......................................................... 18 14.1 Event of Default............................................................... 18 14.2 No waiver...................................................................... 19 GENERAL PROVISIONS........................................................................... 20 15. PAYMENTS.............................................................................. 20 15.1 Payments....................................................................... 20 15.2 Time of payment................................................................ 20 15.3 Interest....................................................................... 20 16. YIELD PROTECTION...................................................................... 21 17. ADDITIONAL PAYMENTS................................................................... 21 17.1 Indemnity and costs............................................................ 21 17.2 Currency Indemnity............................................................. 21 17.3 Expenses....................................................................... 21 17.4 Goods and Services Tax......................................................... 22 18. GENERAL............................................................................... 22 18.1 Term........................................................................... 22 18.2 Statements..................................................................... 22
3 ix 18.3 Notices........................................................................ 22 18.4 Agent for Service of Process................................................... 23 19. APPROPRIATION AND SET-OFF............................................................. 23 19.1 Appropriation.................................................................. 23 19.2 Set-Off........................................................................ 23 20. ASSIGNMENT AND TRANSFER............................................................... 23 21. RELIANCE.............................................................................. 23 22. MULTIPLE PARTIES...................................................................... 24 22.1 Multiple Guarantors............................................................ 24 22.2 Multiple Customers............................................................. 24 23. NEW GUARANTORS........................................................................ 24 24. LAW AND JURISDICTION.................................................................. 24 25. COUNTERPARTS.......................................................................... 24 26. ATTORNEYS............................................................................. 25 27. INCONSISTENCY......................................................................... 25 28. RELEASE OF GUARANTORS................................................................. 25 SCHEDULE A -- GUARANTORS..................................................................... 27 EXECUTION.................................................................................... I TABLE OF CONTENTS............................................................................ VIII
4 1 UNLIMITED CROSS GUARANTEE AND INDEMNITY AND NEGATIVE PLEDGE WITH FINANCIAL RATIO COVENANTS THE GUARANTEES, INDEMNITIES, NEGATIVE PLEDGES AND FINANCIAL RATIO COVENANTS IN THIS AGREEMENT ARE GIVEN BY EACH OF THE COMPANIES LISTED IN SCHEDULE A (each, a "GUARANTOR") TO WESTPAC BANKING CORPORATION (ARBN 007 457 141) ("WESTPAC") of 15th Floor, 260 Queen Street, Brisbane, Queensland FOR the liabilities and obligations to Westpac of EACH OTHER OF THE COMPANIES LISTED IN SCHEDULE A (each, a "CUSTOMER") on the conditions set out in this Agreement IN EXCHANGE FOR Westpac providing or continuing credit to one or more (whether jointly or severally) of the Customers, or not taking immediate action to enforce those Customers' obligations to Westpac. THE LIABILITIES AND OBLIGATIONS WHICH THE GUARANTORS GUARANTEE TO WESTPAC ARE: All liabilities and obligations of the Customer to Westpac of any kind and for any reason, now or in the future, whether or not currently contemplated, including where Westpac obtains rights because of an assignment or transfer (as amended, the "GUARANTEED OBLIGATIONS") and all money which the Customer may owe to Westpac, now or in the future, for any reason under or in relation to the Guaranteed Obligations, whether the money is or becomes owed: (a) by the Customer alone, or together with one or together with one or more others, or (b) actually or contingently, (including amounts referred to in Clause 1) (the "GUARANTEED MONEY"). Each Guarantor's liability as guarantor under this Agreement is unlimited. 5 2 DEFINITIONS AND INTERPRETATION 1. DEFINITIONS In this Agreement: "ADMINISTRATION" includes bankruptcy, administration arising out of mental illness or incapacity, administration of an insolvent estate, administration of a corporation, arrangement, receivership or winding up, dissolution or anything similar. "ACCOUNTS" means profit and loss accounts, balance sheets, cash flow statements and statements, reports (including auditor's reports and director's reports) and notes attached to, or intended to be read with, any of them. "AGREEMENT" includes any document or instrument of any kind, any deed, agreement or arrangement. "ANYONE" includes without limitation anyone who signs this Agreement, the Customer or anyone else who gives a Security. "AUTHORISATION" includes any consent, registration, filing, lodgment, agreement, certificate, notarisation, permission, licence, approval, authority or exemption, from by or with any Governmental Agency. Where a Governmental Agency can prohibit or restrict something if it acts within a specified period after formal notification of it (for example lodgment, registration or filing), Authorisation includes the expiry of that period without that action. "BANK DOCUMENT" means this Agreement, any agreement the performance of which is secured or guaranteed by this Agreement, any agreement that documents the terms of any Finance Debt between Westpac and any one or more Guarantors, any Security, or any agreement or document issued under or entered into in connection with any of them including without limitation any subordination agreement. It includes any amendment or replacement of any of them. "BILL FACILITY" means the bill acceptance and discount facility described in the Bill Facility Agreement. "BILL FACILITY AGREEMENT" means the Agreement between Collins Restaurants Management Pty Ltd ACN 093 912 979 and Westpac dated on or about the date of this Agreement. "CFI" means Collins Foods International Pty Ltd A.R.B.N. 009 980 250. "CFI GROUP" means CFI and its Subsidiaries. "CFG" means Collins Foods Group Pty Ltd ACN 009 937 900. "CFG GROUP" means CFG and its Subsidiaries. "EBITDA" means, for a period, the aggregate of: (a) Operating Cash Flow for the period; and (b) Interest Expense for the period (excluding Interest Expense relating to Subordinated Debt); "COMMITMENT" has the same meaning as in the Bill Facility Agreement. "EVENT OF DEFAULT " has the meaning given in clause 13 below. "FINANCE DEBT" includes any indebtedness, present or future, actual or contingent in relation to money borrowed or raised or any other financing. It includes any such 6 3 indebtedness under or in respect of any of the following: a Guarantee, a discounting arrangement, a Finance Lease, deferred purchase price (for more than 90 days), or an obligation to deliver property or provide services paid for in advance by a financier. It also includes exposure under any interest, commodity, securities, index, or currency exchange, option, hedge, swap or other similar arrangement. "FINANCE LEASE" means a Lease which under Australian Accounting Standard 17 is (or would if that Standard was applied to the relevant company or the Lease was regarded as a "lease" for the purposes of that Standard be) regarded as a finance lease or which under any other applicable Accounting Standard would be regarded as a finance lease. "FRANCHISOR" means a franchisor under any franchise agreement to which a Relevant Company is a party. "FREE CASH FLOW" means, for any period: (a) EBITDA for the period; less (b) capital expenditure for the period which is not to exceed the amount specified in clause 12.3(v); for CFG Group, and for any period before the Restructure is complete, the Group. "GOVERNMENTAL AGENCY" means any government or any governmental, semi-governmental, statutory, judicial entity or authority. It includes any self-regulatory organisation established under statute and any stock or futures exchange. "GROUP" means the CFI Group and the SIM Group . "GUARANTEE" means any guarantee, indemnity, letter of comfort or other assurance against loss. It includes any obligation to be responsible for the solvency or financial condition of another party, or for payment of a debt or obligation of another party, either directly or indirectly (for example, by acquiring the debt or obligation). "GUARANTEED" has a corresponding meaning. "GUARANTEED MONEY" includes at any time: (a) money which the Customer would have owed Westpac under or in relation to the Guaranteed Obligations but for some reason as described in Clause 9; (b) money which the Customer is or may become liable to pay to Westpac as surety for the liabilities of another person; (c) money owed because of an assignment to Westpac; (d) money which will become payable to Westpac by the Customer only if particular circumstances occur, even though the Customer may not at a particular time be under an existing obligation to pay that money (for example damages or compensation). "GUARANTEED OBLIGATIONS" includes at any time obligations and liabilities which the Customer would have owed Westpac but for some reason as described in Clause 9. "GUARANTOR" means any party which gives any Guarantee or Security Interest in relation to the obligations of a Customer to Westpac now or in the future. "INTEREST EXPENSE" means all gross interest expenses and all other outgoings in the nature of interest (including, without limitation, Finance Lease charges) incurred by CFG Group and for any period before the Restructure is complete, the Group in respect of Total Group Debt as disclosed by the Latest Financial Information. "LATEST FINANCIAL INFORMATION" means the most recent consolidated or aggregated (as the case may be) financial information (after making such adjustments as in the opinion of CFG's auditor are necessary for the proper determination of the financial condition of 7 4 CFG Group or for any period before the Restructure is complete, the Group) as at or prior to the date at which an examination is being made to determine Total Liabilities or Total Tangible Assets for the purposes of this Agreement. "LEASE" means: (a) any lease, charter, hire purchase or hiring arrangement of any property; (b) any other agreement under which any property is or may be used or operated by a person other than the owner; or (c) any agreement or arrangement under which any property is or may be managed or operated for or on behalf of the owner or another person by a person other than the owner, and the operator or manager or its related body corporate (as defined in the Corporations Law) (whether in the same or another agreement or arrangement) is required to make or assure minimum, fixed and/or floating rate payments of a periodic nature; but does not include an Operating Lease. "LEASE RENTAL OBLIGATIONS" means, for a period, the aggregate amount of all payments required to be made during the period pursuant to an Operating Lease. "MATERIAL ADVERSE EFFECT" means, in the reasonable opinion of Westpac, a material adverse effect on: (a) the business, assets, operations, material contracts (taken as a whole) or condition, financial or otherwise of a Guarantor; (b) the ability of a Guarantor to perform any of its obligations under a Bank Document; (c) the rights or benefits available to Westpac under the Bill Facility Agreement; or (d) the effectiveness of, or the validity or enforceability of any Bank Document. "OPERATING CASH FLOW" means, for any period, the aggregate of: (a) operating profit (or loss) for the period before income tax excluding abnormal items; and (b) amortisation and depreciation for the period as determined in accordance with generally accepted accounting principles; of CFG Group and, for any period before the Restructure is complete, the Group. "OPERATING LEASE" means a Lease which under the Australian Accounting Standard 17 is (or would if that Standard was applied to the relevant Company or the Lease was regarded as a "lease" for the purposes of that Standard) regarded as an operating lease or which under any other applicable Accounting Standard would be regarded as an operating lease. "POTENTIAL EVENT OF DEFAULT" means any event, thing or circumstance which with the giving of notice or passage of time or both would become an Event of Default. It includes any breach of a Bank Document. "REFERENCE LENDING RATE" means the rate Westpac regularly publishes in major metropolitan newspapers as its "Reference Lending Rate" or such other rate as may supercede its Reference Lending Rate. "RELEVANT COMPANY" means any Guarantor or Customer or any Subsidiary of any of them. "RESTRUCTURE" means the restructure of the Group as described to Westpac before the date of this Agreement. For the purpose of this Agreement and the Bill Facility Agreement, the Restructure is complete when: 8 5 (a) Collins Foods Group Pty Ltd ACN 009 937 900 holds all of the issued shares in: - Sizzler Asia Holdings, Inc; - Collins Restaurants Queensland Pty Ltd; - Collins Restaurants Management Pty Ltd; and - Sizzler Restaurants Group Pty Ltd; (b) Sizzler Asia Holdings, Inc holds all of the issues shares in: - Sizzler Restaurant Services, Inc.; - Sizzler South East Asia, Inc.; - Sizzler New Zealand Limited; and and not less than 50% of the issued shares in Sizzler Steak Seafood Salad (S) Pte Ltd; (c) all of the issued shares in Collins Foods Group Pty Ltd ACN 009 937 900 are held by Restaurants Concepts International, Inc. "SECURITY" is any Security Interest, claim or other right held by Westpac from or against the Customer or anyone else in relation to the Guaranteed Obligations or the Guaranteed Money, now or in the future. It includes the rights against any Guarantor under this Agreement. "SECURITY INTEREST" includes any mortgage, pledge, lien, charge or other security or any arrangement which gives a creditor a preferential right to an asset or its proceeds. "SENIOR INTEREST" means, for a period, the Interest Expense incurred during the period in respect of the Total Senior Debt. "SIM" means Sizzler International Marks Inc. "SIM GROUP" means SIM and its subsidiaries. "SUBORDINATED DEBT" means all Finance Debt (other than Finance Debt payable to Westpac) which has been subordinated on terms acceptable to Westpac. "SUBSIDIARY" of a corporation is an entity whose accounts are included in that corporation's consolidated accounts. TANGIBLE ASSETS means all assets other than future tax benefits, goodwill, patents, trademarks, trade names, design rights, franchises, underwriting and formation expenses and other items of a like nature which according to current accounting practice are regarded as intangible assets. TOTAL GROUP DEBT means at any time the aggregate amount (as disclosed by the Latest Financial Information) of all outstanding Finance Debt of CFG Group and for any period before the Restructure is complete, the Group other than trade creditors, TNA's (Transaction Negotiation Authorities), Cheque Cashing Authorities and Finance Debt owing to Sizzler International, Inc. or any of its subsidiaries which is subordinated to monies owing to Westpac. TOTAL LIABILITIES means at any time the aggregate amount (as disclosed by the Latest Financial Information) of all secured and unsecured liabilities of CFG Group and for any period before the Restructure is complete, the Group other than deferred income tax liabilities. "TOTAL SENIOR DEBT" means all Finance Debt which is not Subordinated Debt. 9 6 TOTAL TANGIBLE ASSETS means at any time the aggregate of the book values of all Tangible Assets of CFG Group and for any period before the Restructure is complete, the Group as disclosed by the Latest Financial Information. "VERIFICATION CERTIFICATE" means a certificate described in any Bank Document and given by a director or secretary of any Guarantor confirming the matters described therein. Where an EXAMPLE is given, it does not limit what else might be included. Unless otherwise stated all references to MONEY are references to Australian dollars. References to ANY DOCUMENT include references to the document as varied, supplemented or novated. References to any GENDER include all genders. References to PERSONS include references to any entity including without limitation any individual or body corporate. References to the PLURAL include the SINGULAR and vice versa. 10 7 CONDITIONS OF GUARANTEE AND INDEMNITY 2. GUARANTEE The Guarantor guarantees to Westpac that the Customer will: (a) pay to Westpac on time all the Guaranteed Money, and (b) perform the Guaranteed Obligations. If the Customer does not pay an amount of the Guaranteed Money when it is due, Westpac may demand that the Guarantor pay that amount. The Guarantor must then immediately pay that amount to Westpac. Westpac can make any number of demands and demand can be made: (c) for all or part of the Guaranteed Money; and (d) even if Westpac does not take action to recover the Guaranteed Money from the Customer. 3. EXTENT OF GUARANTEE This Agreement is a guarantee for the full amount of the Guaranteed Money and is a principal obligation and shall not be treated as ancillary or collateral to any other right or obligation. 4. CONTINUING GUARANTEE The Guarantor's obligations under this Agreement are continuing. Even though Westpac receives payments from or makes arrangements with the Customer or anyone else, the Guarantor is still liable for the Guaranteed Money and the Guaranteed Obligations now and in the future. The guarantee hereunder is a guarantee of payment, and not merely of collectability, and may be enforced against any Guarantor without first proceeding against the Customer or any collateral for or other guarantees of the Guaranteed Obligations. 5. INSOLVENCY If: (a) the Customer or anyone goes into Administration, and (b) in the Administration, Westpac makes a claim which in any way relates to any of the Guaranteed Money or other money owed to Westpac by the Customer, then if Westpac receives money as a result of making such a claim or for any other reason, it may set that money aside. Westpac need not use the money set aside to pay the Guaranteed Money until it has received enough in respect of the Guaranteed Money (including the amount set aside) to pay all of the Guaranteed Money. Until that happens, the Guarantor is fully liable for the Guaranteed Money, as if Westpac had not received the money set aside. 11 8 Until the Guaranteed Money has been irrevocably paid and discharged in full, the Guarantor shall not be entitled either directly or indirectly to prove in any Administration of the Customer or claim or receive any benefit of any such Administration. 6. VARIATION OF ARRANGEMENTS WITH CUSTOMER This Agreement applies automatically to all dealings between Westpac and the Customer, whether or not those dealings increase the Guarantor's liability and whether or not Westpac notifies, or obtains the consent of, the Guarantor including: (a) a change in the Guaranteed Obligations or Guaranteed Moneys, or (b) new or replacement obligations. 7. UNCONDITIONAL OBLIGATION The Guarantor's liability under this Agreement is unconditional. It is not affected by anything which might release the Guarantor from or limit all or part of its obligations, including if: (a) Westpac does not exercise any of its Security or rights against the Customer or anyone, (b) Westpac makes any arrangement, transaction or compromise with the Customer or anyone, including one which varies, takes away or limits its Security or rights or its freedom to exercise them, (c) Westpac gives the Customer or anyone a full or partial discharge or release or time to pay or any other concession, (d) this or any document or Security is temporarily or permanently unenforceable, is not taken by Westpac, is lost, is not signed by anyone or is not binding on anyone intended to give a Guarantee or Security, (e) there is a change in the nature or constitution of the Customer or anyone including its members, (f) that or any other Guarantor, the Customer or anyone dies, becomes insolvent or incapacitated or goes into some form of Administration, or (g) the Customer or anyone has any claim against Westpac. 8. REFUND OF PAYMENTS For some reason (for example, a law about Administration or directors' duties) Westpac may have to refund or give up any money which the Customer or anyone else has paid to it, or which it recovers in any way. If that happens the Guarantor owes Westpac all the money that it would have owed if the amount refunded or given up had never been paid to or received by Westpac. The Guarantor will do everything it can to restore to Westpac any rights against the Guarantor or its property which Westpac had before it received the money which it later had to refund or give up. 12 9 9. INDEMNITY If for any reason (for example, lack of capacity or authority, Administration, illegality or inadequate or improper execution or stamping): (a) Westpac has no legal right to recover an amount of the Guaranteed Money from the Customer or enforce the Guaranteed Obligations, or (b) the Customer is not bound by obligations that would otherwise have been Guaranteed Obligations or owe an amount that would otherwise have been included in the Guaranteed Money, the amount will be taken to be part of the Guaranteed Money, and the Guarantor will pay it to Westpac whenever Westpac demands, and the obligations will be taken to be part of the Guaranteed Obligations. This applies even if Westpac knew or should have known of the problem, and even if, because of the problem, the Customer could never have been required to pay Westpac the amount. This is a principal and independent obligation. 10. OTHER SECURITY Any other Security held by Westpac for all or part of the Guaranteed Money or the Guaranteed Obligations is independent of this Agreement. Nothing affecting any Security will affect the Guarantor's liability under this Agreement. Westpac can enforce this Agreement and any Security in any order it wishes, or can choose not to enforce any Security at all. Until the Guaranteed Money is paid in full, the Guarantor cannot claim the benefit of, and has no right to, the Security held by Westpac. 13 10 NEGATIVE PLEDGE AND FINANCIAL RATIO COVENANTS 11. REPRESENTATIONS AND WARRANTIES Each Guarantor makes the following representations and warranties to the extent they relate to it. (a) (STATUS) Each Relevant Company is incorporated in the place stated by the Guarantor to Westpac. Any Bank Document to which a Relevant Company is expressed to be a party is its binding obligation enforceable against it, and does not breach any document or agreement binding on it or any other Guarantor or Relevant Company or any law or the memorandum and articles of association or any other constituent documents of the Relevant Company. (b) (AUTHORITY) It has the power to enter into each Bank Document to which it is a party and to carry out any transaction or obligation contemplated by it. Furthermore, no further corporate action is necessary for it to enter into the Bank Documents to which it is party and draw under any facility provided to it under a Bank Document. Each person held out in a Verification Certificate or other document signed by a secretary or director as having that authority, is authorised to sign a draw down or other notice on its behalf. (c) (INFORMATION) All information provided by it to Westpac is or was true when given and is not misleading by omission or otherwise in all material respects. (d) (DISCLOSURE) It has no material obligation other than those incurred in the ordinary course of day to day trading (whether to pay money or otherwise and whether or not contingent) to any person outside of the CFG Group which it has not disclosed in writing to Westpac prior to the date of this Agreement. (e) (ACCOUNTS) Its holding company's most recent consolidated and unconsolidated accounts give a true and fair view in all material respects under generally accepted accounting principles. There has been no material adverse change or Material Adverse Effect since the period they cover. They disclose all material Finance Debt and material contingent liabilities. (f) (LITIGATION) No litigation, tax claim, dispute or other proceeding is current or, to its knowledge, threatened, which is likely to have a Material Adverse Effect. (g) (NO TRUSTEE) No Relevant Company is a trustee, except for a Subsidiary which is a trustee of its superannuation funds and except for any implied constructive or resulting trust which arises under its ordinary course of business. (h) (NO DEFAULT) There is no subsisting Event of Default, or Potential Event of Default. (i) (OTHER SECURITY INTERESTS) The execution and performance of this Agreement and each other Bank Document to which it is a party does not result in a Security Interest (other than under a Bank Document) being created on, or a charge crystallising over, its or any other Guarantor's or Relevant Company's assets. (j) (SOLVENCY) It is solvent and there are reasonable grounds to expect that, on execution of each Bank Document to which it is a party, it will continue to be able to pay all its debts as and when they become due and payable. 14 11 (k) (ENVIRONMENTAL LAW) No environmentally hazardous substance affects any of its property the subject of a Security in breach of any law or the requirements of any Governmental Agency. Without limiting clause 12.1(a)(v)(B), the above representations and warranties are repeated on each day on which a Customer draws down or otherwise makes use of any facility provided by Westpac under a Bank Document. 12. UNDERTAKINGS CFG undertakes as follows unless Westpac otherwise consents in writing. 12.1 INFORMATION (a) (INFORMATION) It will provide the following to Westpac: (i) Audited consolidated or aggregated (as the case may be) annual Accounts (not later than 120 days from balance date); (ii) Consolidated or aggregated (as the case may be) annual projections and budgets (not later than 120 days from balance date); (iii) Consolidated or aggregated (as the case may be) quarterly management Accounts (within 45 days after the end of the quarter), which relate to CFG Group and for any period before the Restructure is complete, the Group, (iv) a certificate by two of its directors (not later than 45 days from the end of each accounting quarter and on production of the audited consolidated and aggregated (as the case may be) annual accounts) including the following representations/information: (A) that nothing has occurred which constitutes an Event of Default or Potential Event of Default; (B) that the representations and warranties by each Guarantor in this Agreement are true in all material respects as though they had been made at the date of the certificate in respect of the facts and circumstances then subsisting; (C) that it and each other company in the CFG Group has complied with and continues to comply with the financial undertakings in clauses 12.2 (Negative Pledges) and 12.3 (Financial Covenants); and (D) the CFG Group's and for any period before the Restructure is complete, the Group's consolidated: (1) interest rate and foreign exchange exposures at the time of the report and details of hedging or other risk reduction strategies applied by management to the exposures; (2) balance sheet; (3) profit and loss account; (4) cash flow statement; and (5) performance against budget and revised forecast for the month, quarter, year to date and corresponding period of the preceding year, 15 12 In the case of audited Accounts, the certificate should have attached a certificate by the auditor as to compliance with the financial undertakings; (v) details of any material property or real estate acquired or purchased by a Relevant Company; (vi) promptly, details of any actual or proposed sale of any asset the proceeds of which must be dealt with under clause 1.1(b)(ii) of the Bill Facility Agreement; (vii) promptly, all documents issued by it to any stock exchange or shareholders; (viii) promptly, details of any substantial dispute between a Relevant Company and a Governmental Agency, or a proposal by a Governmental Agency to acquire compulsory all or a substantial part of any Relevant Company's assets; (ix) promptly, details of any substantial dispute between a Relevant Company and a Franchisor; (x) promptly, notice of any litigation to which it or a Relevant Company is a party which may have a Material Adverse Effect; (xi) promptly, any other information reasonably requested by Westpac; (xii) promptly, any other information in relation to the financial condition or business of the CFG Group or, for any period before the Restructure is complete, the Group which Westpac may reasonably request; and (xiii) promptly, any correspondence between a Relevant Company and a Government Agency which is likely to have a Material Adverse Effect on the CFG Group's business or assets. (b) (QUARTERLY MEETINGS) At Westpac's request, it will meet with Westpac quarterly to review the consolidated and aggregated quarterly management Accounts (within 14 days after receipt by Westpac of the consolidated and aggregated quarterly management Accounts); (c) (NOTICE OF DEFAULT) It will immediately notify Westpac as soon as it becomes aware of any Event of Default or Potential Event of Default. (d) (INSURANCE POLICIES) It will deliver to Westpac up-to-date copies of insurance policy(ies) insuring all assets forming part of Westpac's Security for full replacement value against fire and other risks duly signed by the insurance company(ies) and having the interest of Westpac noted as mortgagee. 12.2 NEGATIVE PLEDGES (a) (NEGATIVE PLEDGE) It will not create or allow, nor permit any Relevant Company to create or allow, a Security Interest over any of its assets or enter any other transaction or arrangement which gives a creditor a preferential right to an asset owned or used by it except a lien or statutory charge which arises by operation of law in the ordinary course of its day to day business and does not secure Finance Debt, but only so long as it pays the amount secured promptly, except where that amount is being contested in good faith; (b) (ASSETS) It will not dispose, nor permit any Relevant Company to dispose, of all or any part of its assets or an interest in them or agree or attempt to do so (whether in one or more related or unrelated transactions) except: (i) disposals in the ordinary course of its day to day trading; 16 13 (ii) disposal of an asset with a market value of less than $100,000.00; (iii) disposal of an asset for the purpose of a sale and leaseback; (iv) disposal of an asset to a Group entity for the purpose of the Restructure; or (v) disposal of an asset where: (A) the net sale proceeds of the asset will be paid to Westpac pursuant to clause 1.1 (b) (ii) of the Bill Facility Agreement; and (B) if the asset sold has a market value of more than $100,000.00, Westpac has consented to the disposal of the asset or the market value of the asset and all other assets with a market value exceeding $100,000.000 disposed of during a period does not exceed the maximum aggregate amount approved by Westpac for the period. Where a Subsidiary issues shares and its holding company does not acquire all of the shares, or a rateable portion of its shares according to its then shareholding, the holding company will be taken to have disposed of the shares that it does not acquire. (c) (CHANGE OF BUSINESS) It will ensure that the Relevant Companies will not substantially change the nature of the main business or businesses carried on by them as a whole, and that no Relevant Company will take any action which would have that effect, whether by disposal, acquisition or otherwise. (d) (NEW SUBSIDIARY) It will ensure that no Relevant Company will create or acquire a new subsidiary unless within 3 months that Subsidiary becomes a party to a Guarantee in relation to the Bank Documents satisfactory to Westpac, and provides evidence satisfactory to Westpac that it is bound by the Guarantee. (e) (ARMS LENGTH DEALINGS) It will ensure that no Relevant Company will deal with any other party except at arms length for full commercial consideration in the ordinary course of business. (f) (PARTNERSHIP) It will not enter into any partnership without Westpac's consent. For this purpose Westpac consents to the existing arrangements with Sizzler Steak Seafood Salad Pte Ltd in Singapore. (g) (NO OTHER LOANS) It will ensure that no Relevant Company will make or receive: - any Finance Debt other than Subordinated Debt; or - any payment in connection with any Finance Debt other than Subordinated Debt; except as permitted by a Bank Document. 12.3 FINANCIAL COVENANTS CFG Group will maintain the following financial ratios on a consolidated basis (unless Westpac otherwise agrees to vary them, whether temporarily or otherwise): (i) (MINIMUM EBITDA) for the period from 30 April 2000 to 30 April 2001, EBITDA on a twelve monthly rolling basis is to be not less than A$18,000,000.00; (ii) (TOTAL SENIOR DEBT/FREE CASH FLOW) at all times on and from 1 May 2001, the ratio of Total Senior Debt to Free Cash Flow is not to exceed three times; 17 14 (iii) (TOTAL LIABILITIES/TOTAL TANGIBLE ASSETS) the percentage of Total Liabilities to Total Tangible Assets must not during any of the following periods exceed the amounts shown below for that period:
Period Percentage - -------------------------------------------------------------------------------- From and including 30 April 2000 up to 205% and including 23 July 2000 - -------------------------------------------------------------------------------- From and including 24 July 2000 up to 195% and including 15 October 2000 - -------------------------------------------------------------------------------- From and including 16 October 2000 up to 190% and including 4 February 2001 - -------------------------------------------------------------------------------- From and including 5 February 2001 up to 180% and including 14 October 2001 - -------------------------------------------------------------------------------- From 15 October 2001 170% - --------------------------------------------------------------------------------
(iv) (FIXED CHARGE COVER) the ratio of: (EBITDA and Lease Rental Obligations) to (Senior Interest plus Lease Rental Obligations) for CFG Group and for any period before the Restructure is complete, the Group on a twelve monthly rolling basis is not to be less than: - for any period ending before 4 February 2001 -- 1.8 times; and - for any period after 4 February 2001 -- 1.7 times; (v) (CAPITAL EXPENDITURE) in each of the following financial years, capital expenditure of CFG Group and for any period before the Restructure is complete, the Group (including the costs of assets subject to any Lease) must not exceed the following amounts at the following times without Westpac's prior written consent. Year ending 30 April: (i) 2000, $6,325,000.00; (ii) 2001, $6,240,000.00; (iii) 2002, $6,448,000.00; (iv) 2003, $6,706,000.00; in addition, capital expenditure on a twelve month rolling basis for each quarter in the financial year starting 1 May 2000 and ending 30 April 2001 is not to exceed:
Quarter ending Maximum Amount - -------------------------------------------------------------------------------- 23 July 2000 $8,294,000.00 - -------------------------------------------------------------------------------- 15 October 2000 $8,553,000.00 - -------------------------------------------------------------------------------- 4 February 2001 $9,178,000.00 - --------------------------------------------------------------------------------
(vi) (TOTAL SENIOR DEBT CAP) the Total Senior Debt must not at any time exceed $46,000,000.00; and (vii) (NO DIVIDENDS) CFG will not declare or pay any dividend without the prior written consent of Westpac. 18 15 Compliance with the above financial covenants is to be determined on a twelve monthly rolling basis on the last day of each operational quarter by reference to the information provided to Westpac under clause 12.1 (a) and where the determination is to be made in respect of all or part of a period before the Restructure is complete, the determination will be made for that part of the period on the information relating to the Group provided under clause 12.1(a). 12.4 GENERAL UNDERTAKINGS (a) (PAYMENTS TO SIZZLER INTERNATIONAL, INC) It will ensure that no company in the CFG Group makes, without the prior written consent of Westpac, any payments to Sizzler International, Inc. or Restaurants Concept International, Inc other than the following permitted payments: (i) a maximum aggregate amount of $58,000,000.00, to Sizzler International, Inc when the Restructure is complete; (ii) an annual payment not exceeding $3,900,000.00 ("Payment") in any twelve month period commencing 1 May and ending 30 April for management fees and Interest Expense on Subordinated Debt owing to Restaurants Concepts International, Inc or Sizzler International, Inc.which is to be paid as follows: (A) until the Commitment is reduced to $38,000,000.00, the whole amount of the Payment is to be paid into a deposit account held by Collins Restaurants Management Pty Ltd ACN 093 912 978 with Westpac (the "Account"); (B) when the Commitment is reduced to $38,000,000.00 or less, 64% of the amount of the Payment can be paid direct to Sizzler International, Inc or Restaurants Concepts International, Inc (as the case may be) and the remainder of the Payment must be paid into the Account; and (C) when the Commitment is reduced to $32,000,000.00 or less, the whole amount of the Payment can be paid directly to Sizzler International, Inc or Restaurants Concepts International, Inc (as the case may be). Without limitation, Westpac agrees that if: - no Total Senior Debt is due and unpaid; and - no Event of Default or Potential Event of Default has occurred; Westpac will: (A) when the Commitment is reduced to $38,000,000.00 release 64% of the funds in the Account to Collins Restaurants Management Pty Ltd to enable it to pay management fees and Interest Expense on Subordinated Debt to Restaurants Concepts International, Inc or Sizzler International, Inc as the case may be; and (B) when the Commitment is reduced to $32,000,000.00, remove any restriction on the right of Collins Restaurants Management Pty Ltd to withdraw funds from the Account. Each Guarantor agrees that if there is any material breach of a financial covenant in clause 12.3 or 12.4 of this Agreement, that it is not remedied to the reasonable satisfaction of Westpac within 30 days of Westpac giving written notice of the 19 16 breach to CFG, Westpac may apply the funds in the Account in repayment of Finance Debt owing to Westpac. (b) (CHANGE IN MANAGEMENT) CFG will immediately notify Westpac in writing if there is a change in the person holding the position of the chief executive officer of CFG or any other significant change in the management of any company in the CFG Group. 12.5 UNDERTAKINGS BY GUARANTORS Each Guarantor gives the undertakings contained in this Clause 12, other than the undertakings contained in Sub-clauses 12.1 (a)(i) -- (v), 12.1(b) and 12.1(d) unless Westpac otherwise consents in writing. 13. EVENTS OF DEFAULT Each of the following is an Event of Default (even if outside the control of any Relevant Company) except as stated below. (a) (OBLIGATIONS UNDER TRANSACTION DOCUMENTS) Any Relevant Company fails to do any of the following (to the extent applicable to it): (i) pay principal under a Bank Document or any interest or other amount under a Bank Document on the due date; (ii) comply with any of its financial undertakings in clauses 12.2 (Negative Pledges), 12.3 (Financial Covenants); or (iii) comply with any other material obligation in the Bank Documents and, if that failure can be remedied within 30 days of written notice from Westpac, it does not remedy that failure within 30 days of written notice from Westpac of that failure. (b) (NON PAYMENT BY SII) Sizzler International, Inc fails to make a payment on time under a limited guarantee with Westpac dated on or about the date of this Agreement. (c) (MISREPRESENTATION) A representation or statement by or on behalf of a Relevant Company in a Bank Document, or in a document provided under it, is misleading in a material respect. (d) (CROSS DEFAULT) Finance Debt of a Relevant Company totalling at least $50,000.00 or an equivalent sum in any currency: (i) is not paid when due (or within an applicable grace period) except where it is being contested in good faith; or (ii) becomes due and payable before its stated maturity, except as a result of an exercise of a prepayment right in the absence of default; or (iii) an obligation to provide finance to a Relevant Company totalling at least that amount is terminated except as a result of voluntary termination in the absence of default, or an event of default as defined in any other Bank Document occurs. (e) (WINDING UP) An application or order is made, or a resolution is passed or proposed in a notice of meeting, for: 20 17 (i) the winding up, dissolution, official management or administration of a Relevant Company or any analogous process; or (ii) an arrangement compromise or composition with its creditors or a class of them, or (iii) an application is made for any of the above except one which is frivolous and vexatious. (f) (ENFORCEMENT AGAINST ASSETS) A receiver, receiver and manager, administrator or similar officer is appointed over a Relevant Company or a material asset or any material portion of its assets. A Security Interest is enforced, or distress or other execution levied, against a material asset or any material portion of the assets of a Relevant Company. (g) (REDUCTION OF CAPITAL) A Guarantor or Customer reduces its capital, cancels its uncalled capital or buys back its shares to an extent which is likely to cause a breach of the financial undertakings in clause 12. (h) (INSOLVENCY) A Relevant Company is insolvent or is deemed or presumed insolvent under any applicable law. A Relevant Company ceases or threatens to cease carrying on its business or paying its debts. A Relevant Company disposes or threatens to dispose of a substantial part of its assets. (i) (BANK DOCUMENTS) All or a material part of a Bank Document is for any reason: (i) terminated or of no force or limited force; or (ii) terminable at the option of the Relevant Company, except as expressly provided under that Bank Document; or (iii) a Relevant Company alleges that it is so. (j) (INVESTIGATION) An investigator or any other form of enquiry is instituted under the Corporations Law or similar legislation into the affairs of a Relevant Company which in the reasonable opinion of Westpac is likely to have a Material Adverse Effect. (k) (REVOCATION OF AUTHORISATION) An Authorisation which is material to the business of a Guarantor or to the performance by the Relevant Companies of the Bank Documents or their validity or enforceability ceases to have effect and is not replaced by another Authorisation acceptable to Westpac. (l) (MATERIAL ADVERSE CHANGE) There are any other circumstances including a material adverse change to the business assets or financial condition of the CFG Group as a whole or the Relevant Companies taken as a whole which may in the opinion of Westpac have a Material Adverse Effect. (m) (CONTROL) Any Relevant Company or its holding company becomes controlled by another person or there is a substantial change in the control of CFG other than pursuant to the Restructure. (n) (FUNDING APPLIED FOR ANY OTHER PURPOSE) Funding by Westpac to any Relevant Company is applied for any purpose other than the purpose it was provided for. (o) (PRIOR INTEREST NOT DISCLOSED) A Relevant Company did not disclose to Westpac in writing, before or at the time this Agreement was executed, the fact that a Security Interest, trust, option or other third party right or interest affects its property, assets and rights the subject of a Security. 21 18 (p) (CHANGE IN CONSTITUENT DOCUMENTS) Any Relevant Company alters its Memorandum or Articles of Association or other constituent documents in any material way without the consent of Westpac. (q) (COMPULSORY ACQUISITION): (i) All or any material part of any Relevant Company's property the subject of a Security is compulsorily acquired by or by order of any Governmental Agency or under any law and the amount of compensation received or to be received by that Relevant Company in respect of that acquisition is, in the opinion of Westpac, substantially less than the value of the property acquired or that amount is not dealt with in accordance with this Agreement; (ii) Any Governmental Agency orders the sale, vesting or divesting of all or any material part of a Relevant Company's property the subject of a Security and the amount of any compensation received or to be received by that Relevant Company in respect of that sale, vesting or divesting is, in the opinion of Westpac, substantially less that the value of the property sold, vested or divested or that amount is not dealt with in accordance with this Agreement; or (iii) Any Governmental Agency takes any step for the purposes of any of the above, the result of which (whether individually or cumulatively) has a Material Adverse Effect). Nothing in paragraph (d) or (f) is an Event of Default if done for the purpose of solvent reorganisation previously approved by Westpac. 14. WESTPAC'S REMEDIES AND POWERS 14.1 EVENT OF DEFAULT In addition to any other rights provided by law or any Bank Document at any time after an Event of Default (whether or not it is continuing) Westpac may do either or both of the following: (a) terminate any facility provided under any Bank Document; and (b) by written notice require the Customer to repay all amounts lent or provided to it under any Bank Document (subject to the provisions of the Bank Document), and all other amounts actually or contingently outstanding by it under this Agreement or any Bank Document, and the respective Customer must pay them immediately. (c) by written notice require the Guarantor to pay all the amounts Guaranteed by it under this Agreement or any Bank Document (whether or not contingently due), and the respective Guarantor must pay them immediately. If an amount is paid to Westpac to cover an amount contingently owing, Westpac will hold that amount in an interest bearing account until the amount becomes actually owing or ceases to be contingently owing. Westpac will then apply the amount in the account (including interest) in payment of the amount actually owing and return the balance to the relevant Guarantor. 22 19 14.2 NO WAIVER No failure to exercise a right or power, and no delay in exercising a right or power, operates as a waiver. Waivers must be in writing. 23 20 GENERAL PROVISIONS 15. PAYMENTS 15.1 PAYMENTS The Guarantor will make all payments under this Agreement when Westpac demands them and without deducting any amounts the Guarantor may claim from Westpac. Payments must be in cleared funds and free of any set-off or deduction, except for taxes where required by law. The Guarantor must pay: (a) in the currency in which the amounts demanded are denominated, and (b) at Westpac's address set out on the front cover or any other address which Westpac gives from time to time. If any amount is received by Westpac in a currency other than that in which it was demanded, the Guarantor will compensate Westpac for any exchange loss. If the Guarantor is required to deduct any tax from any payment (except a tax on Westpac's overall net income), then: (a) it must pay that amount to the appropriate authority and promptly give Westpac evidence of payment, and (b) the amount payable is increased so that (after deducting that tax, and paying any taxes on the increased amount) Westpac receives the same amount it would have received had no deduction been made. 15.2 TIME OF PAYMENT Unless otherwise stated, amounts payable under any of the Clauses 16 (Yield Protection) and 17 (Additional Payments), are payable within two Business Days of demand. 15.3 INTEREST The Guarantor will pay interest on any amount which has been demanded by Westpac but remains unpaid at the rate at which overdue amounts bear interest under the Bank Documents. If several rates are provided for in the Bank Documents, interest under these conditions will be payable at the highest of those rates. Interest will accrue each day on each amount due under a Bank Document but unpaid. Unless otherwise specified in the Bank Document, the rate will be Westpac's Reference Lending Rate then applicable plus: (a) in the case of a facility governed by a Bank Document, any margin applied by Westpac under the relevant Bank Document plus 2% per annum; and (b) otherwise, 4% per annum. That interest accrues before and after any judgment. Unless it does so more often, Westpac will be taken to have debited monthly the Guarantor's account with accrued interest under this paragraph. That interest will then itself bear interest. Despite any other provision in any other Bank Document, but only for the purpose of calculating interest, if Westpac is paid moneys by one or more of the Guarantors under a Bank Document and Westpac, although being entitled to apply those moneys to reduce the Secured Moneys, decides instead to deposit the moneys into one or more suspense 24 21 accounts, interest on the Secured Moneys will be calculated on the difference between the Secured Moneys and the aggregate of all amounts held in such suspense account(s). 16. YIELD PROTECTION Whenever Westpac determines that a Change in Law (as defined below) has the effect of: (a) increasing its costs of funding or maintaining a facility under a Bank Document, or reducing its return or amounts received in respect of the facility; or (b) reducing its return on capital allocated to a facility under a Bank Document (including because more capital needs to be allocated to the facility or cannot be used elsewhere), then it will promptly notify the relevant Guarantor, who must pay Westpac the amount Westpac certifies is necessary to compensate it. That certificate will give an outline of the calculation, and will be conclusive and bind the Guarantor in the absence of manifest error. If the Guarantor so requests, Westpac will negotiate in good faith with a view to finding a means of minimising the effect, but it is not a defence that the effect could have been avoided or minimised. A CHANGE IN LAW is the introduction of, or a change in, any law, official directive, ruling or request or a change in its interpretation. If it does not have the force of law, it must be one with which responsible Australian banks would comply. Without limitation, it includes any occurrence which is a "Change in Law" as described above and which relates to capital adequacy, special deposit, liquidity, reserve, prime assets, tax or prudential requirements (except a change in tax on overall net income). 17. ADDITIONAL PAYMENTS 17.1 INDEMNITY AND COSTS Each Guarantor will indemnify Westpac against any liability, loss, cost or expense (including legal costs and goods and services tax on a full indemnity basis and the cost to Westpac of in house counsel at reasonable rates) it incurs in or as a result of an Event of Default or Potential Event of Default or a breach of its obligations, or actual or contemplated enforcement of this Agreement or any Bank Document to which it is a party or any Security. 17.2 CURRENCY INDEMNITY Each Guarantor will indemnify Westpac if any amount payable under or in connection with a Bank Document is received in a currency which is different from that in which it is required to be paid under this Agreement. This indemnity applies whatever the reason for receipt of the amount in a different currency. 17.3 EXPENSES The Guarantor will pay: (a) all stamp, transaction and other similar duties and charges, plus (b) all external legal costs which Westpac incurs (on a full indemnity basis), 25 22 in relation to this Agreement or any Bank Document to which it is a party and any Security and any transaction under them. This includes financial institutions duty and debits tax. The Guarantor will on a full indemnity basis pay all amounts which Westpac incurs in relation to the enforcement of this Agreement or any Security. Each Guarantor will also pay any fines and penalties unless they result from a failure by Westpac to lodge a document for stamping in sufficient time, having received from the Guarantor the amount of stamp duty in good time. 17.4 GOODS AND SERVICES TAX (a) All payments to be made by the Guarantor or Customer under or in connection with this Agreement have been calculated without regard to GST. If all or part of any such payment is the consideration for a taxable supply for GST purposes then, when the Guarantor or Customer makes the payment: (i) it must pay to Westpac an additional amount equal to that payment (or part) multiplied by the appropriate rate of GST; and (ii) Westpac will promptly provide it with a tax invoice complying with the GST law. (b) Where under this letter or a Bank Document the Customer or a Guarantor is required to reimburse or indemnify for an amount, the Customer or the Guarantor (as the case may be) will pay the relevant amount (including any sum in respect of GST) less any GST input tax credit Westpac determines that it is entitled to claim in respect of that amount. (c) Any word or expression used in this clause which is defined in A New Tax System (Goods and Services Tax) Act 1999 (Cth) has the same meaning in this document. 18. GENERAL 18.1 TERM This Agreement will continue so long as there is any liability, obligation, document or agreement between Westpac and any Guarantor or Westpac releases it. 18.2 STATEMENTS The Guarantor agrees that a written statement by Westpac, setting out the amount which the Guarantor owes under this Agreement, is sufficient proof that the Guarantor owes the amount stated, unless it is proved wrong. 18.3 NOTICES Any notice, demand, statement, certificate or other communication by Westpac under any Bank Document may be given by any person whose title includes the word "manager", "counsel", "head" or "president", or any attorney authorised to do so. Notices may be sent by facsimile, post or any other means to the recipient's address or number set out on the signature page of this Agreement or in any other address or number notified to the sender by the recipient. 26 23 Notices will be taken to have been given if delivered or left at that address on the date on which it is delivered or left. 18.4 AGENT FOR SERVICE OF PROCESS Each Guarantor having its registered office outside Queensland: (a) irrevocably appoints Collins Restaurants Management Pty Ltd ACN 093 912 979 ("CRM") as its agent for service of process relating to any proceedings before the courts and appellate courts of the State of Queensland in connection with each Bank Document; and (b) agrees that failure by CRM to notify it of the process will not invalidate the proceedings concerned. 19. APPROPRIATION AND SET-OFF 19.1 APPROPRIATION Any money paid to Westpac to reduce the Customer's debts to Westpac may be used to pay off any part of the Customer's debts which Westpac chooses. 19.2 SET-OFF If the Guarantor has any money in any account with Westpac, Westpac may use it to pay money the Guarantor owes to Westpac under this Agreement, but it need not do so. It can convert currencies using its normal procedures. To the maximum extent allowed by law, the Guarantor gives up any right to set off any amounts Westpac owes it against amounts owed by the Guarantor under this Agreement. 20. ASSIGNMENT AND TRANSFER Westpac can transfer its rights under this Agreement to someone else. If Westpac does, this Agreement will apply to the transferee as if it were Westpac. To the maximum extent allowed by law, any transfer will be free of any set off, equity or cross-claim which but for this paragraph the Guarantor would have had against Westpac or the transferee of this Agreement. Westpac may disclose information concerning the Guarantee or the Guarantor to a potential transferee or sub-participant of this Agreement, the Guaranteed Obligations or the Guaranteed Money. No Guarantor may assign its rights under any Bank Document. 21. RELIANCE The Guarantor acknowledges that it did not sign this Agreement relying on any promises or statements made by Westpac. It does not matter whether they were made in response to any question or not. The only terms which apply to this Agreement are contained in it. Westpac is not required to do anything in relation to, or tell the Guarantor anything concerning, the Customer's financial and business condition and affairs or its transactions with Westpac. 27 24 22. MULTIPLE PARTIES 22.1 MULTIPLE GUARANTORS The terms of this Agreement apply to each Guarantor individually and to all Guarantors as a group. Each Guarantor is individually liable for the full amount of the Guaranteed Moneys, even if one or more of the others: (a) has not signed or is not bound by it, or (b) in the future stops being liable (for example, because Westpac releases that Guarantor). Westpac can demand payment from one or more of the Guarantors without demanding it from the others. References to "the Guarantor", "a Guarantor" or "Guarantors" shall be construed accordingly. 22.2 MULTIPLE CUSTOMERS The terms of the guarantee and this Agreement apply to each Customer individually and to all of them as a group. Without limiting the above, this Agreement applies to money owed by any one or more of them. References to "the Customer", "a Customer" or "Customers" shall be construed accordingly 23. NEW GUARANTORS A party can join this Agreement as a guarantor. To do so the party must sign an accession agreement in the form attached. Upon signing the agreement the party will automatically become a guarantor under this Agreement and it, as well as the other parties to this Agreement, will have the same obligations and rights as if the party were named in it as a Guarantor and Customer, and as if the party had signed this Agreement. 24. LAW AND JURISDICTION This Agreement is governed by Queensland law. The Guarantor accepts the non-exclusive jurisdiction of the courts having jurisdiction there. Any law that allows the Guarantor or the Customer to avoid or defer payment, or that gives the Guarantor or Customer rights not contained in this Agreement, does not apply, unless the law is one which applies despite an agreement to the contrary. If any part of this Agreement is prohibited or unenforceable, it will not affect the remaining part. 25. COUNTERPARTS This Agreement may be executed in any number of counterparts. All of such counterparts, taken together, shall be deemed to constitute the one instrument. 28 25 26. ATTORNEYS Each attorney executing this agreement states that he has no notice of revocation of his power of attorney. 27. INCONSISTENCY (a) Subject to paragraph (b), to the extent that there is any express inconsistency between the terms of this Agreement and any other Bank Document the terms of this Agreement shall prevail. (b) To the extent that there is any inconsistency between the terms of this Agreement and s cross guarantee and negative pledge dated 19 September 1997 between CFI, Westpac and others (the "earlier agreement") the earlier agreement prevails until the Restructure is complete. This Agreement terminates the earlier agreement (except in respect of any liability arising under it prior to termination) from the time that the Restructure is complete. 28. RELEASE OF GUARANTORS (a) If: (i) the Restructure is complete; (ii) no Event of Default or Potential Event of Default has occurred; and (iii) Westpac has received the opinion from PricewaterhouseCoopers referred to in clause 5.5(a) of the Bill Facility Agreement in form and substance reasonably satisfactory to it, Westpac will: (iv) release the following Guarantors from liability under this Agreement: - Collins Foods Australia Pty Ltd ACN 009 914 103; - Collins Finance and Management Pty Ltd ACN 009 996 721; - Sizzler Australia Pty Ltd ACN 010 060 876; - Subject to satisfaction of paragraph (b), Collins Property Development Pty Ltd ACN 010 539 616; and - Subject to paragraph (c), each of the companies in the SIM Group; and (v) release Sizzler International, Inc from its obligations under the Stock Pledge with Westpac dated 19 September 1997. (b) Westpac is not required to release Collins Property Development Pty Ltd from this Agreement unless that company has granted leases on terms reasonably satisfactory to Westpac over all interests in land owned or occupied by the company in favour of Collins Restaurants Queensland Pty Ltd or Sizzler Restaurants Group Pty Ltd and Westpac holds a first registered mortgage from the relevant company over the lease of each property and a lessor's right of entry deed for each property 29 26 (c) Westpac is not required to release a company in the SIM Group from this Agreement unless SIM has entered into a franchise and licence agreement (relating to the granting of Sizzler intellectual property in the Asia Pacific region) with a company in the CFG Group on terms reasonably satisfactory to Westpac and both of those companies have entered into a Tripartite Agreement on terms reasonably acceptable to Westpac with Westpac in relation to that Agreement. (d) Each Guarantor consents to the release of a Guarantor pursuant to this clause and agrees that its liability under this Agreement is not affected by the release of any other Guarantor. 30 27 SCHEDULE A -- GUARANTORS
ACN/ARBN/ PLACE OF NAME OF COMPANY INCORPORATION POSTAL ADDRESS - --------------- ------------- -------------- Collins Foods Group Pty Ltd 009 937 900 16 Edmondstone Street, Newmarket, Qld 4051 Collins Finance and Management Pty Ltd 009 996 721 16 Edmondstone Street, Newmarket, Qld 4051 Collins Foods Australia Pty Ltd 009 914 103 16 Edmondstone Street, Newmarket, Qld 4051 Collins Foods International Pty Ltd 009 980 250 16 Edmondstone Street, Nevada Newmarket, Qld 4051 Collins International Inc Delaware 16 Edmondstone Street, Newmarket, Qld 4051 Collins Property Development Pty Ltd 010 539 616 16 Edmondstone Street, Newmarket, Qld 4051 Furnace Concepts Australia Corp. 070 065 468 16 Edmondstone Street, Nevada Newmarket, Qld 4051 Furnace Concepts International Inc Nevada 16 Edmondstone Street, Newmarket, Qld 4051 Collins Restaurants Queensland Pty Ltd 009 988 381 16 Edmondstone Street, Newmarket, Qld 4051 Restaurant Concepts of Australia Pty Ltd Nevada 16 Edmondstone Street, (Deregistered in Australia 24-04-96, Newmarket, Qld 4051 code s350, Formerly A.R.B.N. 010 761 770) Restaurant Concepts International Inc Nevada 16 Edmondstone Street, Newmarket, Qld 4051 Sizzler Australia Pty Ltd 010 060 876 16 Edmondstone Street, Newmarket, Qld 4051 Sizzler Franchise Development Limited Bermuda 16 Edmondstone Street, Newmarket, Qld 4051 Sizzler International Marks Inc. Delaware 16 Edmondstone Street, Newmarket, Qld 4051 Sizzler New Zealand Limited Nevada 16 Edmondstone Street, Newmarket, Qld 4051 Sizzler Restaurant Services Inc Nevada 16 Edmondstone Street, Newmarket, Qld 4051 Sizzler South Pacific Pty Ltd 010 713 852 16 Edmondstone Street, Nevada Newmarket, Qld 4051 Sizzler South-East Asia Inc Nevada 16 Edmondstone Street, Newmarket, Qld 4051
31 28
ACN/ARBN/ PLACE OF NAME OF COMPANY INCORPORATION POSTAL ADDRESS - --------------- ------------- -------------- Sizzler Asia Holdings, Inc Delaware 16 Edmonstone Street, Newmarket, Qld 4051 Collins Restaurants Management Pty Ltd 093 912 979 16 Edmondstone Street, Newmarket, Qld 4051 Sizzler Restaurants Group Pty Ltd 010 102 388 16 Edmondstone Street, Newmarket, Qld 4051
32 29 SCHEDULE B - FORM OF ACCESSION AGREEMENT THIS ACCESSION AGREEMENT is made the day of 20 -------------------- --------- -- BY [*] A.C.N. [*] of [*] (the "NEW GUARANTOR") AND EACH OF THE COMPANIES LISTED IN THE SCHEDULE (each an "EXISTING GUARANTOR") TO WESTPAC BANKING CORPORATION A.R.B.N. 007 457 141 ("WESTPAC"). THIS ACCESSION AGREEMENT IS ENTERED INTO IN EXCHANGE FOR Westpac giving credit, or continuing to provide it, or not taking immediate action to enforce the obligations of any Customer referred to in the Cross Guarantee and Indemnity and Negative Pledge with Financial Ratio Covenants dated [*] between Westpac and the Existing Guarantors (as amended from time to time, the "GUARANTEE") and for other good and valuable consideration. Expressions defined in the Guarantee have the same meaning in this Accession Agreement. THE NEW GUARANTOR AND THE EXISTING GUARANTORS agree with and acknowledge to Westpac: (a) That the New Guarantor shall as and from the date of this Accession Agreement be subject in all respects to all those obligations to Westpac, and the Existing Guarantors shall have the same liability with respect to the indebtedness of the New Guarantor as if the New Guarantor was a Guarantor and Customer respectively named as a party to the Guarantee and all the terms of the Guarantee shall apply to and bind the Guarantors (including the New Guarantor) accordingly. (b) That at the time of executing this Accession Agreement the New Guarantor is aware that the Existing Guarantors have already incurred liabilities to Westpac and that the existence of such liabilities is not to diminish or release in any way the liabilities of the New Guarantor arising under clause (a) of this Accession Agreement or Westpac's rights powers and remedies arising because of this Accession Agreement. (c) [That at the time of executing this Accession Agreement the Existing Guarantors are aware that the New Guarantor has already incurred liabilities to Westpac and that the existence of such liabilities is not to diminish or release in any way the liabilities of the Existing Guarantors arising under the Guarantee.] [insert if the New Guarantor has existing liabilities to Westpac] This Agreement may be executed in any number of counterparts. All of such counterparts, taken together, shall be deemed to constitute the one instrument. Clause 18.4 of the Guarantee applies to this Agreement as if stated in it (with "Guarantor" being read to include the New Guarantor). SCHEDULE
ACN/ARBN/ PLACE OF NAME OF COMPANY INCORPORATION POSTAL ADDRESS - --------------- ------------- -------------- Collins Foods Group Pty Ltd 009 937 900 16 Edmondstone Street, Newmarket, Qld 4051 Collins Finance and Management Pty Ltd 009 996 721 16 Edmondstone Street, Newmarket, Qld 4051
33 30
ACN/ARBN/ PLACE OF NAME OF COMPANY INCORPORATION POSTAL ADDRESS - --------------- ------------- -------------- Collins Foods Australia Pty Ltd 009 914 103 16 Edmondstone Street, Newmarket, Qld 4051 Collins Foods International Pty Ltd 009 980 250 16 Edmondstone Street, Nevada Newmarket, Qld 4051 Collins International Inc Delaware 16 Edmondstone Street, Newmarket, Qld 4051 Collins Property Development Pty Ltd 010 539 616 16 Edmondstone Street, Newmarket, Qld 4051 Furnace Concepts Australia Corp. 070 065 468 16 Edmondstone Street, Nevada Newmarket, Qld 4051 Furnace Concepts International Inc Nevada 16 Edmondstone Street, Newmarket, Qld 4051 Collins Restaurants Queensland Pty Ltd 009 988 381 16 Edmondstone Street, Newmarket, Qld 4051 Restaurant Concepts of Australia Pty Ltd Nevada 16 Edmondstone Street, (Deregistered in Australia 24-04-96, Newmarket, Qld 4051 code s350, Formerly A.R.B.N. 010 761 770) Restaurant Concepts International Inc Nevada 16 Edmondstone Street, Newmarket, Qld 4051 Sizzler Australia Pty Ltd 010 060 876 16 Edmondstone Street, Newmarket, Qld 4051 Sizzler Franchise Development Limited Bermuda 16 Edmondstone Street, Newmarket, Qld 4051 Sizzler International Marks Inc. Delaware 16 Edmondstone Street, Newmarket, Qld 4051 Sizzler New Zealand Limited Nevada 16 Edmondstone Street, Newmarket, Qld 4051 Sizzler Restaurant Services Inc Nevada 16 Edmondstone Street, Newmarket, Qld 4051 Sizzler South Pacific Pty Ltd 010 713 852 16 Edmondstone Street, Nevada Newmarket, Qld 4051 Sizzler South-East Asia Inc Nevada 16 Edmondstone Street, Newmarket, Qld 4051 Sizzler Asia Holdings, Inc. Delaware 16 Edmonstone Street, Newmarket, Qld 4051 Collins Restaurants Management Pty Ltd 093 912 979 16 Edmonstone Street Newmarket, Qld 4051 Sizzler Restaurants Group Pty Ltd 010 102 388 16 Edmonstone Street, Newmarket, Qld 4051
34 31 EXECUTED AS AN AGREEMENT in THE COMMON SEAL of ) ) --------------------------------- was duly affixed by authority of the ) Director Board of Directors in the presence of ) ) (insert name) ) --------------------------------- ----------------------- ) Director/Secretary and ) ) (insert name) ) ----------------------- ) [ONE EXECUTION TO BE INCLUDED FOR EACH NEW GUARANTOR AND EACH EXISTING GUARANTOR] 35 i EXECUTION EXECUTED AS AN AGREEMENT in ON THE COMMON SEAL of ) ) COLLINS FOODS GROUP PTY LTD ) ) was duly affixed by authority of the ) --------------------------------- Board of Directors in the presence of ) Authorised officer ) (insert name) ) ----------------------- ) --------------------------------- and ) Authorised officer ) (insert name) ) ----------------------- ) THE COMMON SEAL of ) ) COLLINS FINANCE AND MANAGEMENT PTY LTD ) ) was duly affixed by authority of the ) --------------------------------- Board of Directors in the presence of ) Authorised officer ) (insert name) ) ----------------------- ) --------------------------------- and ) Authorised officer ) (insert name) ) ----------------------- ) THE COMMON SEAL of ) ) COLLINS FOODS AUSTRALIA PTY LTD ) ) was duly affixed by authority of the ) --------------------------------- Board of Directors in the presence of ) Authorised officer ) (insert name) ) ----------------------- ) --------------------------------- and ) Authorised officer ) (insert name) ) ----------------------- ) 36 ii THE COMMON SEAL of ) ) COLLINS FOODS INTERNATIONAL PTY LTD ) ) was duly affixed by authority of the ) --------------------------------- Board of Directors in the presence of ) Authorised officer ) (insert name) ) ----------------------- ) --------------------------------- and ) Authorised officer ) (insert name) ) ----------------------- ) THE COMMON SEAL of ) ) COLLINS INTERNATIONAL INC. ) ) was duly affixed by authority of the ) --------------------------------- Board of Directors in the presence of ) Authorised officer ) (insert name) ) ----------------------- ) --------------------------------- and ) Authorised officer ) (insert name) ) ----------------------- ) THE COMMON SEAL of ) ) COLLINS PROPERTY DEVELOPMENT PTY LTD ) ) was duly affixed by authority of the ) --------------------------------- Board of Directors in the presence of ) Authorised officer ) (insert name) ) ----------------------- ) --------------------------------- and ) Authorised officer ) (insert name) ) ----------------------- ) 37 iii THE COMMON SEAL of ) ) FURNACE CONCEPTS AUSTRALIA CORP. ) ) was duly affixed by authority of the ) --------------------------------- Board of Directors in the presence of ) Authorised officer ) (insert name) ) ----------------------- ) --------------------------------- and ) Authorised officer ) (insert name) ) ----------------------- ) THE COMMON SEAL of ) ) FURNACE CONCEPTS INTERNATIONAL INC. ) ) was duly affixed by authority of the ) --------------------------------- Board of Directors in the presence of ) Authorised officer ) (insert name) ) ----------------------- ) --------------------------------- and ) Authorised officer ) (insert name) ) ----------------------- ) THE COMMON SEAL of ) ) COLLINS RESTAURANTS QUEENSLAND PTY LTD ) ) was duly affixed by authority of the ) --------------------------------- Board of Directors in the presence of ) Authorised officer ) (insert name) ) ----------------------- ) --------------------------------- and ) Authorised officer ) (insert name) ) ----------------------- ) 38 iv THE COMMON SEAL of ) ) RESTAURANT CONCEPTS OF AUSTRALIA PTY LTD ) ) was duly affixed by authority of the ) --------------------------------- Board of Directors in the presence of ) Authorised officer ) (insert name) ) ----------------------- ) --------------------------------- and ) Authorised officer ) (insert name) ) ----------------------- ) THE COMMON SEAL of ) ) RESTAURANT CONCEPTS INTERNATIONAL INC. ) ) was duly affixed by authority of the ) --------------------------------- Board of Directors in the presence of ) Authorised officer ) (insert name) ) ----------------------- ) --------------------------------- and ) Authorised officer ) (insert name) ) ----------------------- ) THE COMMON SEAL of ) ) SIZZLER AUSTRALIA PTY LTD ) ) was duly affixed by authority of the ) --------------------------------- Board of Directors in the presence of ) Authorised officer ) (insert name) ) ----------------------- ) --------------------------------- and ) Authorised officer ) (insert name) ) ----------------------- ) 39 v THE COMMON SEAL of ) ) SIZZLER FRANCHISE DEVELOPMENT, LTD ) ) was duly affixed by authority of the ) --------------------------------- Board of Directors in the presence of ) Authorised officer ) (insert name) ) ----------------------- ) --------------------------------- and ) Authorised officer ) (insert name) ) ----------------------- ) THE COMMON SEAL of ) ) SIZZLER INTERNATIONAL MARKS INC. ) ) was duly affixed by authority of the ) --------------------------------- Board of Directors in the presence of ) Authorised officer ) (insert name) ) ----------------------- ) --------------------------------- and ) Authorised officer ) (insert name) ) ----------------------- ) THE COMMON SEAL of ) ) SIZZLER NEW ZEALAND LIMITED ) ) was duly affixed by authority of the ) --------------------------------- Board of Directors in the presence of ) Authorised officer ) (insert name) ) ----------------------- ) --------------------------------- and ) Authorised officer ) (insert name) ) ----------------------- ) 40 vi THE COMMON SEAL of ) ) SIZZLER RESTAURANT SERVICES INC. ) ) was duly affixed by authority of the ) --------------------------------- Board of Directors in the presence of ) Authorised officer ) (insert name) ) ----------------------- ) --------------------------------- and ) Authorised officer ) (insert name) ) ----------------------- ) THE COMMON SEAL of ) ) SIZZLER SOUTH PACIFIC PTY LTD ) ) was duly affixed by authority of the ) --------------------------------- Board of Directors in the presence of ) Authorised officer ) (insert name) ) ----------------------- ) --------------------------------- and ) Authorised officer ) (insert name) ) ----------------------- ) THE COMMON SEAL of ) ) SIZZLER SOUTH-EAST ASIA INC. ) ) was duly affixed by authority of the ) --------------------------------- Board of Directors in the presence of ) Authorised officer ) (insert name) ) ----------------------- ) --------------------------------- and ) Authorised officer ) (insert name) ) ----------------------- ) 41 vii THE COMMON SEAL of ) ) SIZZLER ASIA HOLDINGS, INC DELAWARE PTY ) LTD ) ) was duly affixed by authority of the ) --------------------------------- Board of Directors in the presence of ) Authorised officer ) (insert name) ) ----------------------- ) --------------------------------- and ) Authorised officer ) (insert name) ) ----------------------- ) THE COMMON SEAL of ) ) COLLINS RESTAURANTS MANAGEMENT PTY LTD ) ) was duly affixed by authority of the ) --------------------------------- Board of Directors in the presence of ) Authorised officer ) (insert name) ) ----------------------- ) --------------------------------- and ) Authorised officer ) (insert name) ) ----------------------- ) THE COMMON SEAL of ) ) SIZZLER RESTAURANTS GROUP PTY LTD ) ) was duly affixed by authority of the ) --------------------------------- Board of Directors in the presence of ) Authorised officer ) (insert name) ) ----------------------- ) --------------------------------- and ) Authorised officer ) (insert name) ) ----------------------- ) EX-10.3 4 v65255ex10-3.txt EXHIBIT 10.3 1 EXHIBIT 10.3 SIZZLER INTERNATIONAL, INC. WESTPAC BANKING CORPORATION GUARANTEE AND INDEMNITY MINTER ELLISON Lawyers Waterfront Place 1 Eagle Street BRISBANE QLD 4000 DX 102 Brisbane Telephone (07) 3226 6333 Facsimile (07) 3229 1066 SKL GB 1090692 2 GUARANTEE AND INDEMNITY AGREEMENT dated August 21, 2000 BETWEEN SIZZLER INTERNATIONAL, INC (a company incorporated in Delaware, United States of America) ('GUARANTOR') AND WESTPAC BANKING CORPORATION ARBN 007 457 141 of 260 Queen Street, Brisbane, Queensland, Australia ('THE FINANCIER') RECITALS A. At the request of the Guarantor, the Financier has agreed to enter into a bill facility agreement dated on or about the date of this Agreement (the 'Principal Agreement') with Collins Restaurants Management Pty Ltd ACN 093 912 979 ('THE DEBTOR'). B. In consideration of the Financier agreeing to enter into the Principal Agreement, the Guarantor has agreed to provide a guarantee and indemnity, on the terms set out in this agreement, in respect of the Debtor's obligations under the Principal Agreement. AGREEMENT 1. DEFINITIONS 1.1 In this agreement, the following words and expressions have the meanings indicated unless the contrary intention appears. "AUTHORISED OFFICER" means: (a) in relation to the Financier, an attorney of the Financier and a person holding or acting in the office of director, chief executive or secretary or whose title includes the word 'Manager' or 'Director; and (b) in relation to the Guarantor, a person holding or acting in the office of president, vice president, chief financial officer, chief executive or secretary. 'BUSINESS DAY' means a day on which banks (as that term is defined in the Banking Act 1959 (Cth)) are open for general business in Brisbane, excluding Saturdays or Sundays. 'COLLATERAL SECURITY' means every letter of credit, bond, guarantee, indemnity, mortgage, charge, pledge, lien, encumbrance, negotiable instrument, security, deed, agreement and document now or in the future held or taken by the Financier or entered into by the Financier and any other person in connection with the Guaranteed Obligation. 'GUARANTEED MONEYS' means all moneys owing by the Debtor, on any account, to the Financier up to a maximum amount of A$10 million. 'SUBSIDIARY' of a corporation means an entity whose accounts are included in the first corporations consolidated accounts. 3 2 2. CONSIDERATION The Guarantor acknowledges that the Guarantor is entering into this agreement in consideration of the Financier agreeing at the request of the Guarantor to enter into the Principal Agreement with the Debtor. 3. GUARANTEE AND INDEMNITY 3.1 The Guarantor unconditionally and irrevocably guarantees to the Financier that the Debtor will pay the Guaranteed Moneys to the Financier ('the Guaranteed Obligation'). 3.2 If: (a) the Debtor does not pay the Guaranteed Moneys or any part of the Guaranteed Moneys on time; and (b) the Financier makes a demand on the Guarantor, the Guarantor must pay the Guaranteed Moneys to the Financier on demand, whether or not the Financier has made a demand on the Debtor. 3.3 The Financier shall only be entitled to make a demand on the Guarantor pursuant to clause 3.2 if: (a) the Financier does not receive on or before 15 December 2000 evidence reasonably satisfactory to it that a management equity agreement, as defined in the Principal Agreement, is signed by all of the parties to it and in full force and effect as at 15 December 2000; and (b) the 30 day written notice period referred to in the last paragraph of clause 5.6 of the Principal Agreement has expired. 3.4 The Guarantor unconditionally and irrevocably indemnifies the Financier against all losses, damages, costs and expenses which the Financier may now or in the future suffer or incur consequent on or arising directly or indirectly out of any breach or non-observance by the Debtor of the Guaranteed Obligation up to a maximum amount of $10 million. 3.5 The indemnity contained in clause 3.4 remains effective even if the Guaranteed Obligation is or may be unenforceable or at any time not immediately enforceable against the Debtor (whether by reason of any legal limitation, disability or incapacity on or of the Debtor and whether the Principal Agreement was void ab initio or has been subsequently avoided and whether or not any of the relevant facts were or ought to have been known by the Financier). 3.6 The other provisions of this agreement apply to the Guarantor's indemnity even if the guarantee contained in clause 3.1 is invalid or unenforceable and the Guarantor waives all rights which may be inconsistent with this clause. 4 3 4. PRESERVATION OF RIGHTS OF THE FINANCIER 4.1 This agreement constitutes a continuing guarantee and indemnity for the purpose of securing the whole of the Guaranteed Obligation, even if the Guaranteed Obligation is partially performed. 4.2 The liabilities of the Guarantor under this agreement are not altered or extinguished nor are the rights of the Financier against the Guarantor under this agreement adversely affected by anything which might otherwise have that effect at law or in equity including, but not limited to, one or more of the following (whether occurring with or without any person's consent): (a) the granting of time or other indulgence or concession to, compounding or compromising with or wholly or partially releasing the Debtor, any other Guarantor or any other person in any way; (b) laches, acquiescence, delay, acts, omissions or mistakes on the part of the Financier or any other person; (c) the transaction of business, expressly or impliedly, with, for or at the request of the Debtor, the Guarantor or any other person; (d) any variation, assignment or novation of the Principal Agreement (whether by the Debtor or the Financier or both of them); (e) changes which from time to time may take place in the membership, name or business of a firm, partnership, committee or association whether by death, retirement, admission or otherwise whether or not the Debtor, the Guarantor or any other person was a member; (f) the existence of any Collateral Security or of any obligation of the Guarantor to the Financier in addition to the Guarantor's obligations under this agreement; (g) the loss or impairment of a Collateral Security or a Collateral Security being void, voidable or unenforceable; (h) the Financier or any other person dealing in any way with any Collateral Security or with any right which the Financier may now or in the future have from or against the Debtor or any other person (including, but not limited to, taking, abandoning or releasing (wholly or partially), realising, exchanging, varying or abstaining from perfecting or taking advantage of it); (i) the death or insolvency of any person; (j) a change in the legal capacity, rights or obligations of any person; (k) the fact that any person is a trustee, nominee, joint owner, joint venturer or a member of a partnership, firm or association; (l) a judgment against the Debtor or any other person. 4.3 This agreement is valid and fully enforceable against any executing party despite: 5 4 (a) any failure to execute by any person intended to be, or in contemplation as, a party to this agreement; (b) any defect in the manner of execution of this agreement by any party; or (c) this agreement being for any other reason unenforceable against any party or against any person intended to be, or in contemplation as, a party to this agreement. 4.4 If: (a) a claim is made that any payment, obligation or transaction ('RELEVANT EVENT') in connection with the Guaranteed Obligation is void or voidable under any law relating to insolvency or the protection of creditors or for any other reason; (b) that claim is upheld, conceded or compromised; and (c) a release, settlement or discharge has been made or given on the faith of the Relevant Event, that release, settlement or discharge is void and, accordingly: (d) the Financier and the Guarantor may exercise all rights and be subject to all liabilities which they respectively would have had if the Relevant Event had not occurred and any release, settlement or discharge had not been made or given; and (e) the Guarantor must take all steps and sign all documents required by the Financier in connection with the replacement or reinstatement of this agreement and any other securities previously held by the Financier from the Guarantor. 4.5 Even if payment is made to the Financier under this agreement, in the event of the insolvency of the Debtor or the Guarantor, the Financier may prove for any amount payable to it under the Principal Agreement or this agreement as if that payment had not been made. 5. RESTRICTIONS ON GUARANTOR 5.1 The Guarantor waives any right which it may have to require the Financier to proceed against or enforce any other right, power, remedy or security against or to claim payment from the Debtor or any other person before claiming from the Guarantor under this agreement. 5.2 Until the Guarantor is released from its obligations under this agreement the Guarantor: (a) may not claim the benefit of any Collateral Security; (b) must hold or cause to be held in trust for the Financier any security which is held by or for the Guarantor from the Debtor; 6 5 (c) in the event of the insolvency of the Debtor or any other Guarantor, must not prove in that insolvency in competition with the Financier, whether in respect of an amount paid by the Guarantor under this agreement or otherwise; (d) must not raise against the Financier a defence, set-off or counterclaim available to itself, the Debtor or any other Guarantor, or claim a set-off or make a counterclaim against the Financier, in reduction of the Guarantor's liability under this agreement; and (e) must not make a claim or enforce a right against the Debtor or any other Guarantor or against their estate or property. 6. WARRANTIES 6.1 The Guarantor represents and warrants that: (a) it has in full effect the authorisations necessary to enter into this agreement, perform obligations under it and allow it to be enforced; (b) its obligations under this agreement are not void, voidable or unenforceable; (c) it has fully disclosed in writing to the Financier all facts relating to the Guarantor, this agreement and anything in connection with it which are material to the assessment of the nature and amount of the risk undertaken by the Financier in entering into this agreement and doing anything in connection with it; (d) its obligations under this agreement rank at least equally with all other unsecured and unsubordinated indebtedness of the Guarantor except liabilities mandatorily preferred by law; and (e) it is not entering into this agreement in its capacity as a trustee of any trust or settlement. 6.2 The Guarantor also represents and warrants that: (a) it has been duly incorporated in accordance with the relevant legislation in force in its place of incorporation, is validly existing under that legislation, owns its rights, property, undertaking and assets and has power and authority to carry on its business as it is now being conducted; (b) it has power to enter into and observe its obligations under this agreement; (c) this agreement and the transactions under it do not contravene its constituent documents or its obligations or cause a limitation of its powers or the powers of its directors to be exceeded; (d) the most recent audited financial report of the Guarantor and audited consolidated financial statements of the Guarantor and its Subsidiaries give a true and fair view of its financial position and their consolidated financial 7 6 position in all material respects as at the date to which they are prepared and disclose or reflect all their material actual and contingent liabilities; (e) there has been no material adverse change in the financial position of the Guarantor or in the consolidated financial position of the Guarantor and its Subsidiaries since the date to which the audited financial report of the Guarantor and audited consolidated financial statements of the Guarantor and its Subsidiaries were last prepared before the date of this agreement; (f) neither the Guarantor nor any of its Subsidiaries is in default under a law, regulation, official directive, instrument, undertaking or obligation which has or may have a material affect on any of them or their respective assets; (g) there is no pending or threatened action or proceeding affecting the Guarantor or any of its Subsidiaries or any of their respective assets before a court, governmental agency, commission or arbitrator which may have a material affect on the Guarantor's ability to perform the Guaranteed Obligations; (h) neither the Guarantor nor any of its Subsidiaries has immunity from the jurisdiction of a court or from legal process (whether through service of notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise). 6.3 The warranties set out in this clause are made on the date of this agreement and apply continuously throughout the term of this agreement. 7. CERTIFICATE A certificate signed by an Authorised Officer of the Financier specifying any matter of a factual nature which is relevant to any of the rights or obligations of the Financier, the Debtor or the Guarantor in connection with the Guaranteed Obligation is admissible in any proceedings and is conclusive evidence of the matters specified in it except in the case of manifest error. 8. DISCHARGE OF GUARANTOR 8.1 The Financier may in its absolute discretion retain its copy of this agreement and decline to execute a release or discharge of the Guarantor from its liabilities under this agreement until the Financier is satisfied that no payment or other transaction in connection with the Guaranteed Obligation remains liable to be avoided as described in clause 4.4. 8.2 A discharge or release of the Guarantor from its liabilities under this agreement: (a) is effective if it is in writing and signed by an Authorised Officer of the Financier; and (b) is subject to clause 4.4. 9. ASSIGNMENT 8 7 The Financier may assign its rights under this agreement and is not obliged to give notice to, or obtain the consent of, the Guarantor in respect of the assignment. 10. COSTS 10.1 The Guarantor must pay to the Financier on demand: (a) all taxes, levies, imposts, deductions and charges of any nature whatever (other than income tax imposed on the income of the Financier) and all stamp, financial institutions, registration and other governmental duties (together with interest or penalties, if any) imposed under the laws of the Commonwealth of Australia or its States or Territories and incurred directly or indirectly by the Financier on or in respect of this agreement; (b) all other costs, charges and expenses incurred by or on behalf of the Financier: (i) in or about the preparation and execution of this agreement including all legal costs and expenses; and (ii) on or in connection with the preservation of the rights of the Financier or any breach or default in the observance or performance by the Guarantor of the provisions of this agreement. 10.2 For the purposes of this clause and in the absence of manifest error a written statement signed by an Authorised Officer of the Financier setting out any amount payable in terms of this clause is conclusive. 11. ENTIRE AGREEMENT This agreement constitutes the entire agreement of the parties as to its subject matter. The parties acknowledge that there is no other understanding, agreement, warranty, representation or indemnity, whether expressed or implied and whether given or reached prior to or at the same time as this agreement, in any way relating to these provisions or any of the matters to which this agreement relates, other than any warranty implied by statute the operation of which cannot be excluded. 12. ALTERATION This agreement may only be altered in writing signed by each party. 13. FURTHER ACTION Each party must: (a) use its best endeavours to do all things necessary or desirable to give full effect to this agreement; and (b) refrain from doing anything which might hinder performance of this agreement. 14. GOVERNING LAW AND JURISDICTION 9 8 14.1 This agreement is governed by the law of Queensland. 14.2 Each party irrevocably and unconditionally submits to the non-exclusive jurisdiction of the courts of Queensland. 15. AGENT FOR SERVICE OF PROCESS The Guarantor, having its registered office outside Queensland: (a) irrevocably appoints Collins Restaurants Management Pty Ltd ACN 093 912 979 as its agent for service of process relating to any proceedings before the courts and appellate courts of the State of Queensland in connection with this document; (b) agrees that failure by CRM to notify it of the process will not invalidate the proceedings concerned; and (c) agrees that nothing shall affect the right to serve process in any other manner permitted by law. 16. NOTICE 16.1 A notice given by a party to another party under this agreement must be: (a) in writing; (b) directed to the recipient's address specified in this agreement or as varied by written notice; and (c) hand delivered or sent by prepaid post or facsimile to that address. 16.2 For the purposes of clause 16.1(b) the Guarantor's address is the address of the agent appointed pursuant to clause 15. 16.3 A notice given in accordance with clause 16.1 is taken to be received: (a) if hand delivered, on delivery; (b) if sent by prepaid post, 2 Business Days after the date of posting; or (c) if sent by facsimile, when the confirmation is received. 16.4 The provisions of this clause are in addition to any other method of service permitted by law. 17. WAIVER The failure of the Financier at any time to require performance by the Guarantor of an obligation under this agreement is not a waiver of the Financier's right at any time later to insist on performance of that or any other obligation under this agreement. 18. SEVERABILITY 10 9 18.1 The parties agree that a construction of this agreement which results in all provisions being enforceable is to be preferred to a construction which does not so result. 18.2 If, despite the application of clause 18.1, a provision of this agreement is illegal or unenforceable: (a) if the provision would not be illegal or unenforceable if a word or words were omitted, that word or those words will be severed; and (b) in any other case, the whole provision will be severed, and the remainder of this agreement will continue to have full force and effect. 19. COUNTERPARTS This agreement may be executed in any number of counterparts. A counterpart unconditionally executed and delivered by a party binds that party. 20. INTERPRETATION 20.1 In this agreement, unless the contrary intention appears: (a) the singular include the plural and vice versa and words importing a gender include other genders; (b) words and expressions importing natural persons include partnerships, bodies corporate, associations, governments and governmental and local authorities and agencies; (c) a reference to any legislation or statutory instrument or regulation is construed in accordance with the Acts Interpretation Act 1901 (Cth) or the equivalent State legislation, as applicable; (d) other grammatical forms of defined words or expressions have corresponding meanings; (e) a reference to a clause, paragraph, schedule or annexure is a reference to a clause or paragraph of or schedule or annexure to this agreement and a reference to this agreement includes any schedules and annexures; (f) if a party to this agreement comprises 2 or more persons, the provisions of this agreement binding that party binds those persons jointly and severally; (g) words and expressions defined in the Corporations Law as at the date of this agreement have the meanings given to them in the Corporations Law at that date; (h) a reference to a party to this agreement or any other document or agreement includes its successors and permitted assigns; (i) a reference to dollars or '$' is a reference to Australian dollars; 11 10 (j) a reference to a document or agreement, including this agreement, includes a reference to that document or agreement as novated, altered or replaced from time to time; (k) headings are for ease of reference only and do not affect the construction of this agreement; and (l) a reference to writing includes typewriting, printing, lithography, photography and any other method of representing or reproducing words, figures or symbols in a permanent and visible form. 21. GOODS AND SERVICES TAX 21.1 All payments to be made by the Guarantor under or in connection with this agreement have been calculated without regard to GST. If all or part of any such payment is the consideration for a taxable supply for GST purposes then, when the Guarantor makes the payment: (a) it must pay to the Financier an additional amount equal to that payment (or part) multiplied by the appropriate rate of GST; and (b) the Financier will promptly provide to the Guarantor a tax invoice complying with the GST law. 21.2 Where under this agreement the Guarantor is required to reimburse or indemnify for an amount, the Guarantor will pay the relevant amount (including any sum in respect of GST) less any GST input tax credit the Financier determines that it is entitled to claim in respect of that amount. 21.3 Any word or expression used in this clause which is defined in A New Tax System (Goods and Services Tax) Act 1999 (C'th) has the same meaning in this document. EXECUTED as an agreement. THE COMMON SEAL of ) SIZZLER INTERNATIONAL, INC. ) is fixed to this document in accordance with ) its constitution in the presence of ) - ----------------------------------- ----------------------------------- Signature of authorised officer Signature of authorised officer (Please delete as applicable) - ----------------------------------- ----------------------------------- Name of authorised officer (print) Name of authorised officer (print) 12 11 SIGNED for and on behalf of WESTPAC BANKING ) WESTPAC BANKING CORPORATION by CORPORATION by ) its attorneys who respectively ) state that at the time of their and ) executing this instrument they ) have no notice of the its duly constituted attorneys in the presence ) revocation of the Power of of ) Attorney registered in the ) office of the Registrar General ) No. 390 Book 4047 under the ) authority of which they have ) executed this instrument - ----------------------------------- ----------------------------------- Witness EX-10.4 5 v65255ex10-4.txt EXHIBIT 10.4 1 EXHIBIT 10.4 SIZZLER ASIA HOLDINGS, INC. WESTPAC BANKING CORPORATION ARBN 007 457 141 STOCK PLEDGE MINTER ELLISON Lawyers Waterfront Place 1 Eagle Street BRISBANE QLD 4000 DX 102 BRISBANE Telephone (07) 3226 6333 Facsimile (07) 3229 1066 GB 1090692 2 TABLE OF CONTENTS
1. INTERPRETATION........................................................1 2. CHARGE................................................................5 3. [INTENTIONALLY OMITTED]...............................................6 4. CHARGOR'S OBLIGATIONS.................................................6 5. CHARGOR'S REPORTING OBLIGATIONS.......................................8 6. ACCESS TO AND INVESTIGATION OF RECORDS................................8 7. BETTER SECURITY AND RIGHTS FOR FINANCIER..............................8 8. REPRESENTATIONS AND WARRANTIES........................................9 9. EFFECT OF EVENT OF DEFAULT...........................................10 10. FINANCIER'S POWERS...................................................10 11. RECEIVER'S POWERS....................................................14 12. POWER OF ATTORNEY....................................................15 13. NOTICES AND DEMANDS FROM THE FINANCIER...............................16 14. PRESERVING THE FINANCIER'S RIGHTS, POWERS AND REMEDIES...............17 15. THIRD PARTY PROVISIONS...............................................18 16. MISCELLANEOUS........................................................20
3 STOCK PLEDGE DEED dated August 21, 2000 BETWEEN SIZZLER ASIA HOLDINGS, INC., A DELAWARE CORPORATION, UNITED STATES OF AMERICA C/- 16 EDMONDSTONE STREET, NEWMARKET, BRISBANE, QUEENSLAND, AUSTRALIA ("CHARGOR") AND WESTPAC BANKING CORPORATION ARBN 007 457 141 OF 260 QUEEN STREET, BRISBANE, QUEENSLAND, AUSTRALIA ("FINANCIER") 1. INTERPRETATION 1.1 DEFINITIONS In this document: "ATTORNEY" means an attorney appointed under a Relevant Agreement. "AUTHORISED OFFICER" means: (a) in relation to the Financier, an attorney of the Financier and a person holding or acting in the office of director, chief executive or secretary or whose title includes the word 'Manager' or 'Director'; and (b) in relation to the Chargor, a person holding or acting in the office of president, vice president, chief financial officer, chief executive or secretary. "BUSINESS DAY" means a day on which banks (as defined in the Banking Act 1959 (Cth)) are open for general banking business in Brisbane, excluding Saturdays and Sundays and public holidays. "CHARGE" means the charge over, and security interest in the Charged Property created under this document. "CHARGED PROPERTY" means: (a) 100 shares of the common stock of Sizzler Restaurant Services, Inc ('SRS') represented by Certificate Number 1; (b) 100 shares of the common stock of Sizzler South East Asia, Inc ('SSEA'), represented by Certificate Number 1; (c) 100 shares of the common stock of Sizzler New Zealand, Limited ('SNZ') represented by Certificate Number 1; (d) all other shares of capital stock of whatever class of SRS, SSEA and SNZ, that are now or hereafter owned by the Chargor, together with the certificates representing such shares; 4 2 (e) all shares, securities, moneys or property representing any dividends, distributions, warrants, rights and options relating to such shares; (f) without affecting the provisions of any Relevant Agreement prohibiting a consolidation or merger, in the event of any consolidation or merger of SRS, SSEA or SNZ all shares of each class of capital stock of the successor corporation, together with the certificates representing such shares; and (g) all proceeds of the foregoing. "COLLATERAL SECURITY" means a Guarantee, Security Interest or negotiable instrument held or given, whether before or after this document is executed, as security for or otherwise in connection with the Secured Money. "DEBTOR" means a Customer or Guarantor as defined in the Negative Pledge. "EVENT OF DEFAULT" has the meaning given to it in the Negative Pledge and includes the Events of Default contained in clauses 13(a)(iii) (without the word "other" in the first line), (b), (d), (e) (with respect to the first sentence only), (g) (with respect to the first sentence only) and (p) of the Negative Pledge as if the Chargor were a Relevant Company. "GUARANTEE" means a guarantee, indemnity, letter of credit, letter of comfort or any other obligation (whatever it is called and whatever its nature) by which a person is responsible for another person"s obligation or debt. "LIQUIDATION" includes official management, receivership, compromise, arrangement, amalgamation, administration, reconstruction, winding up, dissolution, assignment for the benefit of creditors, arrangement or compromise with creditors, bankruptcy or death. "NEGATIVE PLEDGE" means the Unlimited Cross Guarantee and Indemnity and Negative Pledge with Financial Ratio Covenants dated on or around the date of this document between the Financier, Collins Foods Group Pty Ltd ACN 009 937 900 and others. "PERMITTED SECURITY INTEREST" means: (a) a Security Interest which the Financier has consented to. It does not include a Security Interest which the Financier has consented to on one or more conditions if those conditions are not complied with; and (b) a lien or charge on the Charged Property arising by operation of law in the ordinary course of the Chargor's ordinary business. It does not include a lien or charge which secures overdue debts. "POTENTIAL EVENT OF DEFAULT" means any event, thing or circumstance which with the giving of notice or passage of time or both would become an Event of Default. "PUBLIC AUTHORITY" means the Crown, a government, a minister of a government, a government department, a statutory corporation, or a semi-government or judicial entity. "RECEIVER" means a receiver or receiver and manager appointed under this document. When two or more persons are appointed, the expression "Receiver" refers to each of those persons severally as well as to two or more of them jointly. 5 3 "RECORDS" means all the information which relates in any way to a specified person's business or any transaction entered into by the person, whether the information is recorded electronically, magnetically or otherwise. "RELEVANT AGREEMENT" means: (a) this document; and (b) a Collateral Security; and (c) an agreement between: (i) the Financier and the Chargor; or (ii) the Financier and a Debtor; or (iii) the Financier and any combination of the Chargor and one or more Debtors; that relates to the Secured Money or another Relevant Agreement or contains terms on which the Secured Money remains outstanding; and (d) a document that the Chargor and the Financier agree is a Relevant Agreement. "SECURED MONEY" means all money that the Chargor or a Debtor is liable to pay to the Financier at or after the date of this document on any account and in any way whatever, and whether: (a) the Chargor or Debtor is liable alone or together with another person; or (b) the Chargor or Debtor is liable as principal debtor, surety, partner, trustee, beneficiary or otherwise; or (c) the relevant liability: (i) is actual or contingent, ascertained or unascertained, fixed or fluctuating; (ii) is in respect of principal, interest, Guarantee obligations, purchase obligations, fees or damages; or (iii) is in dollars, another currency or a combination of currencies, or is of any other character. Without limitation, "Secured Money" includes: (d) all Taxes and all reasonable costs and expenses (including, but not limited to, legal costs and expenses on a full indemnity basis) which the Financier or a Receiver or Attorney pays, or is liable to pay, in connection with: (i) a Relevant Agreement, or negotiating, preparing, completing, registering or stamping a Relevant Agreement; or (ii) maintaining, preserving or protecting the Charged Property; or 6 4 (iii) surveying, valuing, inspecting or reporting on the Charged Property; or (iv) obtaining or attempting to obtain payment of the Secured Money from any person; or (v) protecting, enforcing or exercising a right, power or remedy of the Financier or a Receiver or Attorney under or in connection with a Relevant Agreement; or (vi) an Event of Default or Potential Event of Default; or (vii) the Financier providing financial accommodation to or at the request of the Chargor; or (viii) a receipt or payment of money under, or a transaction contemplated by, a Relevant Agreement; and (e) interest on all of the foregoing at the rates specified in the Relevant Agreements. If no rate is specified, the rate is as reasonably determined by the Financier. Interest accrues from day to day, computed from the time: (i) the Secured Money became owing (whether or not it is immediately payable); or (ii) in relation to costs and expenses, the relevant amount was incurred. Interest on Secured Money may be capitalised monthly or at the times agreed between the parties. It then bears interest on itself. Interest continues to be payable despite the Winding Up of any person, or any judgement obtained against any person. "SECURITY INTEREST" means a mortgage, pledge, lien, charge, preferential right, trust arrangement, agreement or other arrangement given, arising or created as security. "TAX" includes a tax, levy, duty or charge (and associated penalty or interest) imposed by a Public Authority. It includes income, withholding, stamp and transaction taxes and duties but does not include income tax on the overall net income of the Financier. "WINDING UP" includes: (a) dissolution, liquidation, provisional liquidation and bankruptcy; and (b) a procedure which is equivalent or analogous in any jurisdiction. 1.2 OTHER EXPRESSIONS In this document, unless the contrary intention appears: (a) the singular includes the plural and vice versa; (b) other grammatical forms of defined words or expressions have corresponding meanings; (c) if this document binds two or more persons, it binds them severally and jointly; 7 5 (d) a reference to a party to this document includes that party's successors and permitted assigns; (e) a reference to a document or agreement includes that document or agreement as novated, altered or replaced; (f) when two or more persons are named as Chargor, the term "Chargor" is a reference to each of them alone and also to any two or more of them together. The same applies to the term "Debtor"; (g) a reference to any thing includes the whole or any part of that thing and a reference to a group of things or persons includes each thing or person in that group; (h) "dollars" and "$" refer to Australian currency; (i) words implying natural persons include partnerships, bodies corporate, associations and Public Authorities; (j) a reference to any legislation or statutory instrument or regulation is construed in accordance with the Acts Interpretation Act 1901 (Cth) or the equivalent State legislation, as applicable. 2. CHARGE 2.1 CREATING THE CHARGE The Chargor charges, pledges and grants a security interest in the Charged Property in favour of the Financier as security for the payment of the Secured Money. 2.2 FIXED CHARGE The Charge is a fixed charge. 2.3 CONTINUING SECURITY AND DISCHARGING THE CHARGE The Charge is a continuing security. It remains in effect until the Financier gives a final discharge to the Chargor. The Chargor is only entitled to a final discharge if: (a) all of the Secured Money has been paid; and (b) the Financier is satisfied that there are no amounts which will subsequently fall within the description of the Secured Money. In satisfying itself under paragraph (b), the Financier may consider any matters it thinks relevant, including (without limitation) the possibility that a payment to reduce the Secured Money might be repayable, void or voidable under a law relating to insolvency or protecting creditors. 2.4 FIRST PRIORITY SECURITY INTEREST The Charge is a first charge. With respect to any Charged Property as to which the law of any state of the United States of America governs the granting, perfection or effect of perfection of a security interest, the Charge created hereunder is a first priority perfected security interest. 8 6 3. [INTENTIONALLY OMITTED] 4. CHARGOR'S OBLIGATIONS 4.1 POSITIVE OBLIGATIONS The Chargor must: (a) pay when due the Taxes assessed, levied or imposed on the Charged Property (other than those being contested in good faith) or the Financier in connection with the Charged Property; and (b) comply with all laws and with the mandatory requirements of any Public Authority concerning the Charged Property except where the requirement to do so is being contested in good faith; and (c) operate each Debtor that it owns, directly or indirectly, in a manner designed to avoid an Event of Default; and (d) prosecute and defend (at the Chargor's expense) all legal proceedings which are advisable, or which the Financier advises the Chargor that it considers advisable, to avoid a material adverse effect on the Charged Property; and (e) do everything necessary to ensure that the Charged Property at all times includes all of the issued and outstanding shares of capital stock of SRS, SSEA and SNZ. 4.2 NEGATIVE OBLIGATIONS The Chargor must not, without the consent of the Financier: (a) deal with or dispose of the Charged Property; or (b) permit a Security Interest (other than a Permitted Security Interest) to affect the Charged Property; or (c) apply for or obtain money, goods or services from a Public Authority, fail to pay an amount to a Public Authority (unless the Chargor is contesting the liability to pay in good faith and has set aside sufficient reserves to meet the liability) or do anything else which might lead to a liability or Tax being imposed on the Charged Property; or (d) do or allow anything to be done which may (other than in an immaterial way) prejudice the Financier"s security or rights under a Relevant Agreement. 4.3 OBLIGATIONS CONCERNING CHARGED PROPERTY The Chargor must: (a) immediately deposit with the Financier all certificates, documents of title or other documents that from time to time represent or evidence the Charged Property, endorsed in blank by the Chargor by an effective endorsement; 9 7 (b) on demand by the Financier, deposit with it stock powers or transfers executed in blank by the Chargor; (c) punctually pay all calls, instalments and other moneys which may at any time be payable on any of the Charged Property (other than those being contested in good faith) or which, if unpaid, may result in the creation of a Security Interest over any of the Charged Property; (d) promptly notify the Financier in writing when the Chargor becomes entitled to any of the rights or property referred to in paragraphs (c) - (f) of the definition of "Charged Property"; (e) deliver to the Financier, promptly after receipt by the Chargor, a copy of: (i) any notice convening a meeting of the holders of any of the Charged Property; and (ii) any report, accounts, notice or circular issued to the holders of any of the Charged Property; 4.4 OBLIGATIONS CONCERNING VOTING RIGHTS AND DIVIDENDS The Chargor: (a) may until an Event of Default or Potential Event of Default occurs exercise voting rights conferred upon it as the holder of any of the Charged Property, but it must not in doing so permit or cause anything to occur that would be an Event of Default or Potential Event of Default or otherwise be inconsistent with the terms of this document. However, if an Event of Default or Potential Event of Default occurs, the Chargor may no longer exercise any of those voting rights, except with the prior written consent of the Financier; and (b) may, until an Event of Default occurs and subject to paragraph (a): (i) acquire any of the rights or property referred to in paragraphs (c) - (f) of the definition of "Charged Property"; and (ii) receive and use in the ordinary course of its business cash dividends payable in relation to the Charged Property. However, if an Event of Default occurs: (iii) the Chargor may not do any of the things specified in paragraphs (i) or (ii) and from then on only the Financier, a Receiver or Attorney may do those things; and (iv) the Chargor must (at its cost) do all things necessary to enable the Financier, Receiver or Attorney to do the things specified in paragraphs (i) and (ii); and (c) must immediately pay to the Financier any money it receives in connection with the Charged Property (other than dividends referred to in paragraph (b)(ii)). The Financier may apply that money to reduce the Secured Money in the manner specified in clause 16.9. 10 8 5. CHARGOR'S REPORTING OBLIGATIONS 5.1 NOTICES TO THE FINANCIER The Chargor must notify the Financier as soon as an Authorised Officer of the Chargor becomes aware of: (a) an Event of Default or Potential Event of Default; or (b) a representation or warranty in any Relevant Agreement becoming materially false or misleading (giving full details); or (c) a material requirement or notice of a Public Authority in connection with the Charged Property and must give the Financier a copy of any related document it has and full details of all relevant facts known to the Chargor concerning the requirement or notice; or (d) any other requirement, notice, order or direction relating to the Charged Property given to the Chargor and must give to the Financier a copy of any related document served on the Chargor, giving full particulars of all relevant facts known to the Chargor. 6. ACCESS TO AND INVESTIGATION OF RECORDS 6.1 GIVING ACCESS TO RECORDS The Chargor must: (a) ensure that the Records of the Chargor relating to the Charged Property are available for inspection at reasonable times by the Financier and persons acting on the Financier's behalf; and (b) allow the Financier and persons acting on the Financier's behalf to inspect and to take copies of or extracts from the Chargor's Records during business hours and give reasonable assistance to them. 7. BETTER SECURITY AND RIGHTS FOR FINANCIER 7.1 BETTER SECURITY AND RIGHTS The Chargor must, at the Chargor's cost, do whatever the Financier reasonably requires to: (a) more satisfactorily secure the Charged Property as security to the Financier for the payment of the Secured Money; or (b) enable the Financier to better exercise its rights over the Charged Property, and must use its best efforts to make anyone else who has an interest in the Charged Property or claims under or in trust for the Chargor do the same. 7.2 EXAMPLES This includes, but is not limited to: 11 9 (a) executing a further Security Interest (including a legal mortgage) over, or other documents relating to, the Charged Property; and (b) delivering the stock certificates or other title documents representing or evidencing the Charged Property to the Financier, endorsed in blank by an effective endorsement, or accompanied by a stock power or transfer in blank, in a form reasonably satisfactory to the Financier. 8. REPRESENTATIONS AND WARRANTIES 8.1 THE CHARGOR REPRESENTS AND WARRANTS TO THE FINANCIER THAT: (a) the Chargor was properly incorporated and validly exists; and (b) the Chargor has the power to enter into this document and to carry out any transaction or obligation contemplated by it; and (c) all necessary actions have been taken to make this document valid and binding on the Chargor and to enable the Chargor to carry out any transaction or obligation contemplated by this document; and (d) no Event of Default or Potential Event of Default has occurred; and (e) the Chargor executing and performing this document and any other Relevant Agreements does not result in a Security Interest (other than under a Relevant Agreement) being created or crystallised on an asset of the Chargor; and (f) neither this document nor any other Relevant Agreement conflicts with the operation or terms of any document or arrangement which binds the Chargor; and (g) all information provided to the Financier by or on behalf of the Chargor is accurate and not misleading by omission; and (h) the shares comprised in the Charged Property are duly authorised, validly existing, fully paid and nonassessable; and (i) it has the right and power to charge the Charged Property in the manner set out in this document; and (j) it is the sole legal and beneficial owner of the Charged Property and the Charged Property is free from: (i) all Security Interests or third party rights and interests of any kind; and (ii) any restriction on transfer or rights of pre-emption; and (k) the issuance of shares comprised in the Charged Property does not contravene any law, rule or directive of any Public Authority or of any stock exchange. 8.2 THE REPRESENTATIONS AND WARRANTIES IN THIS CLAUSE ARE REPEATED ON EACH DAY ON WHICH THE REPRESENTATIONS AND WARRANTIES IN THE NEGATIVE PLEDGE ARE REPEATED. 12 10 9. EFFECT OF EVENT OF DEFAULT After an Event of Default the Financier may declare the Secured Money payable. If so, the Secured Money becomes immediately payable, unless the Financier specifies otherwise. 10. FINANCIER'S POWERS 10.1 GENERALLY (a) After an Event of Default, the Financier may do the things which a mortgagee and an absolute owner could do to the Charged Property and exercise the rights, powers and remedies of a mortgagee and an absolute owner of the Charged Property. These include, but are not limited to, the things and powers described in this clause 10, and the rights, powers and remedies of a secured party under the Uniform Commercial Code of any jurisdiction in the United States of America; (b) The Financier need not make a demand or give notice to anyone before doing these things or exercising these powers, except if notice is required as described in clause 10.10. 10.2 TO TAKE POSSESSION OF CHARGED PROPERTY After an Event of Default the Financier may: (a) take possession of the Charged Property; and (b) receive the income, dividends, proceeds and profits from the Charged Property. 10.3 TO DEAL WITH THE CHARGED PROPERTY After an Event of Default the Financier may do any of the following: (a) (EXERCISE RIGHTS) exercise the rights and powers of an absolute owner and do everything expedient in connection with shares, securities or other rights which form part of the Charged Property. The Chargor appoints the Financier and any Authorised Officer of the Financier nominated by the Financier for this purpose, severally and jointly, to be the authorised representative and proxy of the Chargor to do the things described in this paragraph; and (b) (TRANSFERS) complete and procure the registration of any transfers or other documents that may have been lodged with the Financier in relation to the Charged Property; and (c) (BANK ACCOUNTS) open and operate bank accounts in the name of the Chargor (alone or together) to the exclusion of the Chargor; and (d) (CONTRACTUAL RIGHTS) (i) perform the Chargor's obligations under; and (ii) enforce or exercise or not exercise the Chargor's rights and powers under; and 13 11 (iii) agree to vary or rescind, a contract, instrument, arrangement or right forming part of the Charged Property; and (e) (COMPROMISE) settle, compromise or submit to arbitration a dispute in connection with the Charged Property; and (f) (PERFORM CHARGOR'S OBLIGATIONS) do everything it may to comply with the obligations of the Chargor under a Relevant Agreement; and (g) (REMEDY BREACH) do everything it may to make good a breach or default inherent in an Event of Default, to its own satisfaction; and (h) (DEPOSIT MONEY IN SUSPENSE OR OTHER ACCOUNTS) invest, deposit or hold the Charged Property in any way that, and for as long as, the Financier thinks fit and vary, transpose or reinvest the Charged Property; and (i) (RECOVER, PROTECT CHARGED PROPERTY) do everything the Financier thinks necessary to recover or protect the Charged Property; and (j) (LEGAL PROCEEDINGS) commence, prosecute, defend and settle proceedings which the Financier considers expedient in connection with this document or the Charged Property in or before a Public Authority in the name of the Chargor or otherwise; and (k) (EXCHANGE) exchange the Charged Property for any other property or rights (with or without giving or receiving any other consideration for the exchange); and (l) (TRANSFER OBLIGATIONS) effect a novation of or otherwise transfer to any person obligations of the Chargor which arise under a Relevant Agreement or otherwise; and (m) (IMPROVE CHARGED PROPERTY) do anything which the Financier considers would help improve the value of the Charged Property, obtain income or returns from it or make it saleable or more saleable. Without limitation, the Financier may improve or alter the Charged Property, acquire additional property in the name of the Chargor and undertake any marketing or publicity campaign; and (n) (EXECUTE DOCUMENTS) enter into agreements and execute documents itself or on behalf of the Chargor for any purpose in connection with the Charged Property; and (o) (BORROW, SECURE) in the name of the Chargor or otherwise: (i) obtain financial accommodation (including, but not limited to, from a party associated with the Financier) for any purpose which the Financier considers expedient in connection with the Charged Property; and (ii) secure the payment or repayment of indebtedness relating to that financial accommodation by a Security Interest over the Charged 14 12 Property, however it ranks for priority with the Charge or a Collateral Security; and (p) (EMPLOY AND APPOINT PERSONS) employ staff and appoint professionals and consultants for any purpose, and at the remuneration, that the Financier thinks fit; and (q) (DELEGATE) delegate to any person for any time that the Financier thinks fit any of the powers of the Financier under this document, including this right of delegation; and (r) (INCIDENTAL POWER) do anything the Financier thinks expedient in its interests and incidental to any of its powers under this document, without limiting those powers; and (s) (SPEND MONEY) spend money in exercising its powers in this document. That money then forms part of the Secured Money. 10.4 TO DISCHARGE OR ACQUIRE PRIOR SECURITY After an Event of Default the Financier may: (a) purchase the debt secured by a prior Security Interest; or (b) pay the amount required to discharge or satisfy that debt (including, but not limited to, a debt secured by a Permitted Security Interest); or (c) take a transfer or assignment of that Security Interest and any Guarantee, document or right ancillary or collateral to it. 10.5 EXERCISE OF RIGHTS UNDER CLAUSE 10.4 If the Financier exercises its rights under clause 10.4: (a) the Charged Property is security for the same amount paid by the Financier. This does not limit any other debt acquired by the Financier; and (b) that debt is immediately payable to the Financier and forms part of the Secured Money and interest accrues on the unpaid amount of that debt under clause 3.2; and (c) the Financier need not enquire whether the money claimed to be owing is actually owing in connection with the prior Security Interest, or an ancillary or collateral document; and (d) the person with the benefit of the prior Security Interest need not enquire whether there is any money owing under a Relevant Agreement; and (e) the Chargor directs any person with the benefit of a prior Security Interest to give the Financier any information it requires in connection with the prior Security Interest. This includes, but is not limited to, the state of accounts for that Security Interest. 15 13 10.6 TO SELL AND GIVE OPTIONS After an Event of Default the Financier may do any of the following: (a) (SELL) sell or help sell the Charged Property on the terms and in the manner it thinks fit, whether or not the Financier has taken possession; and (b) (OPTIONS) give an option to purchase the Charged Property on the terms it thinks fit; and (c) (SELL TOGETHER WITH OTHER PROPERTY) sell the Charged Property with any other property in any manner that the Financier thinks expedient; and (d) (HIVE OFF ASSETS OR OBLIGATIONS) promote the formation of any company so that the company may purchase or acquire the Charged Property or assume obligations of the Chargor or both; and (e) (EFFECT HIVE-OFF) sell or assign the Charged Property or assume the Chargor's obligations. 10.7 TO APPOINT RECEIVERS After an Event of Default, the Financier may: (a) appoint one or more persons to be a Receiver or Receivers of the Charged Property, with the powers and rights described in this clause 10 (or such lesser powers as the Financier determines); and (b) remove that Receiver or those Receivers; and (c) if a Receiver is removed, retires or dies, appoint another or others in his or her place; and (d) in the case of removal or retirement of a Receiver, reappoint that person. 10.8 TO APPOINT MORE THAN ONE RECEIVER If the Financier appoints two or more persons to be the Receiver, the Financier may appoint them to act jointly, severally or jointly and severally. If it is not specified in the instrument of appointment, the Receivers are appointed to act severally. 10.9 TO PAY THE RECEIVER The Financier may fix the remuneration of a Receiver at an amount agreed between the Financier and the Receiver. 10.10 NOTICE OR LAPSE OF TIME REQUIRED BEFORE RIGHTS EXERCISED (a) If notice or lapse of time is required under any statute before the Financier can exercise its power of sale or any other rights available to it under this document or by law, then that notice or lapse of time is dispensed with. (b) Paragraph (a) only applies if the relevant statute allows notice or lapse of time to be dispensed with. 16 14 (c) If the relevant statute does not allow notice or lapse of time to be dispensed with, but allows it to be shortened, then for the purposes of this document, the period of notice or lapse of time is one day. 10.11 TO GIVE UP POSSESSION AND TERMINATE RECEIVERSHIP The Financier may: (a) give up possession of the whole or any part of the Charged Property; or (b) terminate a receivership, or both. 10.12 PERSONS DEALING NOT BOUND TO ENQUIRE A person dealing with the Financier or a Receiver or Attorney: (a) need not enquire whether there has been a default by the Chargor under a Relevant Agreement or whether the Financier, Receiver or Attorney has acted properly; or (b) need not enquire whether the Financier, a Receiver or an Attorney has executed or registered an instrument or exercised a right, power or remedy properly or with authority, and whenever the Financier, a Receiver or an Attorney deals with the Charged Property, that dealing is authorised and valid as far as anyone involved with that dealing is concerned. The receipt of the Financier or a Receiver or Attorney for any money payable to the Chargor discharges the person paying that money to the extent of the payment. 10.13 RESPONSIBILITY FOR LOSS The Financier is not responsible for a loss arising in connection with it exercising or failing to exercise its powers under a Relevant Agreement nor for an act or failure of an employee or agent of the Financier or any Receiver. The Financier need not account for more money than it actually receives. 11. RECEIVER'S POWERS 11.1 GENERAL Unless the terms of the Receiver's appointment say otherwise, the Receiver has the following powers over the Charged Property which the Receiver is appointed to deal with: (a) all the rights and powers given by law to mortgagees in possession, receivers or receivers and managers; and (b) all the rights and powers of the Financier under this document and at law (other than the power to appoint Receivers); and 17 15 (c) power to obtain financial accommodation from the Financier, alone or together with any other person, for a purpose and on the terms that the Receiver considers expedient in connection with the Charged Property; and (d) power to secure the payment or repayment of indebtedness relating to that financial accommodation by a Security Interest over the Charged Property, however it ranks for priority with the Charge or a Collateral Security. The Receiver may exercise these rights and powers in the name of the Chargor or otherwise. 11.2 RECEIVER IS AGENT OF CHARGOR A Receiver is the agent of the Chargor. The Chargor alone is responsible for the Receiver's acts and defaults. But the Receiver, to the extent required by law, ceases to be the agent of the Chargor if a resolution is passed or an order is made to Wind Up the Chargor. The Receiver may become the agent of the Financier if the Financier gives a notice to the Receiver in writing to that effect. The Financier may appoint a further Receiver, despite that resolution or order. 11.3 ACCOUNTABILITY OF RECEIVER A Receiver is not responsible for a loss arising in connection with the exercise or execution of the Receiver's powers, nor for any act or default of an employee or agent of the Financier or the Receiver. A Receiver need not account for more money than the Receiver actually receives. 12. POWER OF ATTORNEY 12.1 APPOINTMENT AND POWERS The Chargor for valuable consideration irrevocably appoints the Financier, each Authorised Officer of the Financier and each Receiver separately as its attorneys to do the following on the Chargor's behalf and in the name of the Chargor or the Attorney after the occurrence of an Event of Default or Potential Event of Default: (a) anything which the Chargor must do under a Relevant Agreement; and (b) anything which, in the opinion of the Attorney: (i) would give effect to a right, power or remedy of the Financier or a Receiver; or (ii) the Chargor should do, under a Relevant Agreement or by law; and (c) enter into or execute transactions, documents and agreements which, in the opinion of the Attorney, the Chargor should enter into or execute under a Relevant Agreement; and (d) use the Chargor's name to exercise the powers of the Financier or a Receiver under a Relevant Agreement, the law or otherwise; and 18 16 (e) obtain the issue of duplicate certificates for the shares, securities or other rights comprised in the Charged Property if the original certificates are lost or destroyed or believed to be so; and (f) direct payment or any delivery of a dividend, notice, scrip or attend to any other matter relating to the Charged Property; and (g) give any direction or instruction to any person that the attorney reasonably considers is necessary or desirable to better secure the Charged Property to the Financier or to permit or facilitate the exercise or preservation of a right or power of the Financier under a Relevant Agreement; and (h) perfect a security given by the Chargor in favour of the Financier over the Charged Property; and (i) exercise voting rights or any other power, right or remedy relating to the Charged Property, and the Chargor agrees to ratify anything done by an Attorney under this power of attorney. 12.2 ATTORNEY MAY DELEGATE POWERS An Attorney may delegate its powers (including the power to delegate) to any person for any period and may revoke the delegation. 12.3 PURPOSE The power of attorney created under this clause is irrevocable and is granted to secure the performance by the Chargor of the Chargor's obligations under each Relevant Agreement to which the Chargor is a party. 13. NOTICES AND DEMANDS FROM THE FINANCIER 13.1 SIGNING A notice from or demand by the Financier to or on the Chargor may be signed by an Authorised Officer of the Financier or by a solicitor acting for the Financier. This signature may be handwritten or printed or reproduced by other means. 13.2 SENDING In addition to any method of service provided for by statute, a notice from or demand by the Financier is given to or made on the Chargor if it is: (a) sent by facsimile to the facsimile number of the Chargor last known to the Financier or, if more than one facsimile number is known to the Financier, to any of those facsimile numbers; or (b) left for the Chargor or sent by prepaid mail (and by airmail if to an address outside Australia) to the Chargor at: (i) the address of the Chargor set out in this document; or (ii) the Chargor's usual place of business last known to the Financier; or 19 17 (iii) the Chargor's registered office; or (iv) premises owned or occupied by the Chargor. 13.3 VALIDITY A notice or demand is validly given even if: (a) the Chargor has been Wound Up or the Chargor is absent from the place the notice or demand is left at, or delivered or sent to; or (b) the notice or demand is returned unclaimed. 13.4 RECEIPT A notice or demand is taken to have been received by the Chargor: (a) if delivered personally, on the same day; and (b) if posted to an address in Australia, on the second Business Day after it was posted; and (c) if posted to an address outside Australia, on the fourth Business Day after it was posted; and (d) if sent by facsimile, when a transmission report is produced by the sender's facsimile machine indicating that the notice or demand has been sent to the relevant number. 14. PRESERVING THE FINANCIER'S RIGHTS, POWERS AND REMEDIES 14.1 PRESERVATION (a) The fact that the Financier does not exercise, or delays the exercise of, any right, power or remedy does not affect any of its other rights, powers or remedies. (b) The fact that the Financier delays the exercise of any right, power or remedy does not constitute a waiver of that right, power or remedy. (c) The fact that the Financier exercises a right, power or remedy does not prevent the Financier from exercising that right, power or remedy again. (d) This document does not operate to extinguish or prejudice any right, power or remedy of the Financier under a Relevant Agreement or in connection with the Secured Money. 14.2 MORATORIUM LEGISLATION A moratorium does not apply to a Relevant Agreement or the recovery of the Secured Money except if: (a) the Financier agrees in writing that it does; or (b) it cannot be excluded by law. 20 18 14.3 REINSTATING OR REPLACING RIGHTS If any payment made to the Financier in reduction of the Secured Money is repaid or void or conceded to be void, voidable or repayable for any reason, then, despite any release, settlement or discharge in connection with the Secured Money: (a) that payment has not discharged the relevant liability; and (b) the Financier may recover the amount of that payment from the Charged Property; and (c) the Chargor must immediately do all acts and things the Financier requires to replace or reinstate the Charge and any Collateral Security which has been released in connection with that payment. 14.4 EFFECT OF RELEASE (a) A full or partial release of this Charge by the Financier does not release the Charged Property under this document until the Financier receives the Secured Money, regardless of any: (i) receipt given, payout figure quoted or other form of account stated; or (ii) error or miscalculation by the Financier. 15. THIRD PARTY PROVISIONS 15.1 INDEPENDENT SECURITY Neither this document nor the obligations of the Chargor under this document will be abrogated, prejudiced or affected by: (a) the granting of time or any other indulgence, consideration or concession to the Chargor, a Debtor or any other person; (b) the release, discharge, abandonment, waiver, loss, impairment, relinquishment, transfer or other dealing with (either in whole or in part and whether with or without consideration) any Relevant Agreement or any right of the Financier against the Chargor, a Debtor or any other person; (c) any transaction or arrangement that may take place between the Financier and a Debtor or any other person; (d) the Financier varying, exchanging, renewing or releasing any Relevant Agreement or refusing to do so; (e) any variation of a transaction, arrangement or document between the Financier and any other person (including, but not limited to any increase in the amount of financial accommodation provided or agreed to be provided to any Debtor); (f) the capitalising and adding to principal of all interest accrued on the Secured Money (or any part of the Secured Money) but not yet paid; (g) any Collateral Security or right which the Financier now holds or in the future may obtain; 21 19 (h) the Financier failing or neglecting to recover any of the Secured Money by the realisation of any Collateral Security or otherwise; (i) any laches, acquiescence, delay, and omission or mistake on the part of the Financier or any other person; (j) the insolvency, Winding Up or incapacity or change in the legal capacity of the Chargor or a Debtor; (k) any judgment or order against the Chargor, a Debtor or other person; (l) any lack of power by the Chargor or a Debtor to enter into any Relevant Agreement or give any Collateral Security either in its own right or in the capacity in which it is purporting to act; (m) the liability of the Chargor, a Debtor or any other person to the Financier ceasing from any cause (including but not limited to being released or discharged by the Financier); (n) any Collateral Security or any other security taken or held at any time by the Financier being in whole or in part void, defective in form or substance or unenforceable; (o) property secured under a Collateral Security being destroyed, forfeited, extinguished, surrendered, resumed or determined; (p) any impossibility or illegality of performance of any Relevant Agreement or any provision of any Relevant Agreement; (q) any default, misrepresentation, negligence, misconduct or other action or inaction of any kind by any person; (r) any irregularity or deficiency in the execution of this document or any Collateral Security by the Chargor or any Debtor or any lack of authority or power of any person in relation to such execution; (s) the failure to give notice to, or the lack of consent of the Chargor or a Debtor before or after the happening of any of the acts or events mentioned in this subclause or before the making of any agreement or transaction between the Financier and the Chargor, a Debtor or other person; (t) any other dealing, matter or thing which, but for this provision could or might operate to affect or discharge the liability of the Charged Property under this document. 15.2 NO OBLIGATION TO PROCEED The Financier will not be required to proceed against any Debtor or exhaust any remedies it may have against any Debtor or enforce any Collateral Security but shall be entitled to demand and receive payment from any Debtor or realise upon the Charged Property when any payment is due under any Relevant Agreement and whether due from that person or not. 22 20 15.3 NO OBLIGATION TO MARSHAL The Financier will not be obliged to marshal in favour of the Chargor any security held by the Financier or any funds or assets that the Financier may be entitled to receive or have a claim upon. 15.4 WINDING UP OF DEBTOR On the Winding Up of any Debtor the Chargor authorises the Financier: (a) to prove for all money which has been paid under any Relevant Agreement; and (b) to retain and to carry to a suspense account and appropriate at the Financier's discretion any dividends received; until the Financier has been paid in full. 15.5 EXCLUSION OF RIGHTS The Chargor must not: (a) until the Financier has received all the Secured Money and the Financier is satisfied that it will not have to repay any money received by it in connection with the Secured Money (either directly or indirectly): (i) claim or exercise any right of set-off, counter-claim or other right or release at law or in equity which has or might have the effect of reducing or discharging the Secured Money; (ii) claim or exercise any right of subrogation or otherwise claim the benefit of any Collateral Security; (iii) prove or claim in the liquidation or bankruptcy of any Debtor in competition with the Financier or otherwise claim or receive the benefit of any distribution, dividend or payment arising out of the liquidation or bankruptcy of a Debtor; or (iv) claim or recover any sum paid by the Chargor pursuant to this document from any person or commence any action in respect of any right which may accrue to the Chargor in respect of sums paid by the Chargor under this document; or (b) whether or not the Secured Money has been paid in full call upon the Financier to sue or take proceedings against any Debtor or raise a defence, set-off or counter-claim of itself or any Debtor in reduction of its liability under this document. 16. MISCELLANEOUS 16.1 NO OBLIGATION TO EXERCISE RIGHTS OR GIVE CONSENT Each of the Financier and a Receiver may: (a) exercise or not exercise any right, power or remedy; and 23 21 (b) give or not give consent; and (c) make or not make a decision, under this document, in its absolute discretion without giving a reason and without being liable or accountable for the consequences. In relation to the giving or not giving of consent, the Financier will act in a manner which the Financier determines in its absolute discretion to be reasonable. Such determination shall not be questioned by the Chargor. 16.2 CONSENT MUST BE IN WRITING A consent given or a right, power or remedy waived by the Financier is effective only if given or waived in writing. 16.3 NOTIFICATION FROM CHARGOR If the Chargor is required under this document to notify the Financier about anything, the Chargor must do so in writing. 16.4 FINANCIER MAY SET OFF Without any demand or notice, the Financier may set off and apply indebtedness it owes to the Chargor (whatever the currency) against the Secured Money: (a) whether the indebtedness is owed alone or with any other person; and (b) whether or not the Secured Money or that indebtedness is immediately payable. 16.5 CHARGOR MUST NOT SET OFF The Chargor must not claim, exercise or attempt to exercise a right of set-off or any other right which might reduce or discharge the Secured Money. 16.6 NO MARSHALLING The Financier need not resort to a Collateral Security or other Security Interest before exercising a power under this document. 16.7 SUSPENSE ACCOUNT The Financier may credit money received in or towards satisfaction of the Secured Money to a suspense account. The Financier may keep the money in that account for as long as the Financier thinks fit. Interest will not accrue on such account. The Financier may apply the money to reduce the Secured Money whenever it thinks fit. 16.8 SURPLUS PROCEEDS If surplus money remains in the hands of the Financier or a Receiver after payment of all the Secured Money (and satisfaction of any obligation ranking in priority to the Secured Money or secured by a Security Interest over the Charged Property): (a) no trust arises over that surplus money; and 24 22 (b) that surplus money does not carry interest and the Financier or Receiver may pay it to an account in the name of the Chargor (whether or not opened by the Financier or Receiver for that purpose). The Financier or Receiver is then no longer liable for the surplus money. 16.9 APPLYING RECEIPTS The Financier may apply or appropriate money received to reduce the Secured Money in the order, and to satisfy whatever part of the Secured Money, the Financier sees fit. 16.10 TACKING For the purpose of applying section 282 of the Corporations Law or any equivalent provision in any jurisdiction, if the Financier is obliged to make further advances under a Relevant Agreement, that Relevant Agreement is taken to be incorporated in this document so that this document imposes on the Financier an obligation to advance that money. 16.11 THE FINANCIER MAY ASSIGN RIGHTS The Financier may assign or otherwise deal with its rights and benefits under this document. 16.12 THE FINANCIER MAY DISCLOSE INFORMATION The Financier may disclose to a potential assignee or participant any information about the Chargor, any Debtor or a Relevant Agreement which it considers appropriate. 16.13 CERTAIN NOTICES OR DEMANDS A notice from or demand by the Financier stating: (a) that a specified sum of money is owing or payable (or both) under a Relevant Agreement; or (b) that an Event of Default has occurred; or (c) something relevant to the rights or obligations of the Financier or the Chargor under a Relevant Agreement, is admissible in proceedings and is conclusive evidence of the matters stated except if there is manifest error. 16.14 IF DUE DATE NOT A BUSINESS DAY If anything should be done under this document on a day that is not a Business Day, it must be done on the previous Business Day. 16.15 SEVERABILITY (a) A construction of this document that results in all provisions being enforceable is to be preferred to a construction that does not so result. (b) If, despite the application of paragraph (a), a provision of this document is illegal or unenforceable: 25 23 (i) and it would be legal and enforceable if a word or words were omitted, that word or those words are severed; and (ii) in any other case, the whole provision is severed, and the remainder of this document continues in force. 16.16 GOVERNING LAW AND JURISDICTION This document is governed by the law of Queensland except: (a) as required by mandatory provisions of law; and (b) to the extent that the validity, perfection or enforceability of any of the security interests hereunder, or remedies hereunder, are dependent on the laws of a jurisdiction other than Queensland, in which case the governing law shall (to that extent only) be the law of that jurisdiction. The parties hereto agree and intend that: (c) a proper forum/jurisdiction for any litigation or process arising out of or related to this Agreement shall be any court located in Queensland; and (d) a proper forum/jurisdiction for any litigation or process in respect of any of the Charged Property located in a jurisdiction other than Queensland shall be any court located either in Queensland or that other jurisdiction. The Chargor irrevocably and unconditionally submits to the non-exclusive jurisdiction of the courts of Queensland and/or the other jurisdiction referred to in paragraph (d) (as the case may be). The Chargor, to the extent permitted by applicable laws, hereby expressly waives any defence or objection to jurisdiction or venue based on the doctrine of forum non conveniens, and stipulates that the courts of Queensland and/or that other jurisdiction (as the case may be) shall have in personam jurisdiction and venue over it for the purpose of any such litigation or process arising out of or related to this document. 16.17 AGENT FOR SERVICE OF PROCESS The Chargor, having its registered office outside Queensland: (a) irrevocably appoints Collins Restaurants Management Pty Ltd ACN 093 912 979 ('CRM') as its agent for service of process relating to any proceedings before the courts and appellate courts of the State of Queensland in connection with this document; (b) failure by CRM to notify to the process will not invalidate the proceedings concerned; and (c) agrees that nothing shall affect the right to serve process in any other manner permitted by law. 26 24 16.18 FINANCIER NEED NOT EXECUTE This document is enforceable by the Financier even if the Financier does not execute it. EXECUTED as a deed. THE COMMON SEAL of SIZZLER ) ASIA HOLDINGS, INC. is affixed in ) accordance with its articles of ) association in the presence of ) Witness Director/Authorised Officer Name (print) Name (print) EX-10.5 6 v65255ex10-5.txt EXHIBIT 10.5 1 EXHIBIT 10.5 COLLINS RESTAURANTS MANAGEMENT PTY LTD WESTPAC BANKING CORPORATION ARBN 007 457 141 FIXED AND FLOATING CHARGE MINTER ELLISON Lawyers Waterfront Place 1 Eagle Street BRISBANE QLD 4000 DX 102 BRISBANE Telephone (07) 3226 6333 Facsimile (07) 3229 1066 GB 1090692 2 FIXED AND FLOATING CHARGE DEED dated August 21, 2000 BETWEEN COLLINS RESTAURANTS MANAGEMENT PTY LTD ACN 093 912 979 OF 16 EDMONSTONE STREET, NEWMARKET, BRISBANE, QUEENSLAND, AUSTRALIA ("CHARGOR") AND WESTPAC BANKING CORPORATION ARBN 007 457 141 OF 260 QUEEN STREET, BRISBANE, QUEENSLAND, AUSTRALIA ("FINANCIER") 1. INTERPRETATION 1.1 DEFINITIONS In this document: "ATTACHMENT NOTICE" means a notice or direction under which a Public Authority requires money, which would otherwise be payable to the Chargor, to be paid or transferred to it or to the Crown. This includes notices under section 218 or section 255 of the Income Tax Assessment Act 1936 (Cth) or under section 74 of the Sales Tax Assessment Act 1992 (Cth). "ATTORNEY" means an attorney appointed under a Relevant Agreement. "AUTHORISED OFFICER" means: (a) in relation to the Financier, an attorney of the Financier and a person holding or acting in the office of director, chief executive or secretary or whose title includes the word 'Manager' or 'Director; and (b) in relation to the Chargor, a person holding or acting in the office of president, vice president, chief financial officer, chief executive or secretary. "BUSINESS DAY" means a day on which banks (as defined in the Banking Act 1959 (Cth)) are open for general banking business in Brisbane, excluding Saturdays and Sundays and public holidays. "CHARGE" means the charge over, and security interest in, the Charged Property created under this document. "CHARGED PROPERTY" means all the property, assets and rights of the Chargor, whether acquired before or after this document is executed, wherever located. This includes all property, assets and rights held by the Chargor as trustee and wherever located. The Charged Property includes, without limitation, all the property, assets and rights of the Chargor described in Schedule A hereto. "COLLATERAL SECURITY" means a Guarantee, Security Interest or negotiable instrument held or given, whether before or after this document is executed, as security for or otherwise in connection with the Secured Money. 3 2 "DEBTOR" means a person any of whose present or future, actual or contingent indebtedness or liabilities to the Financier is or are supported or secured by a present or future Guarantee or Security Interest given or entered into by the Chargor. "EVENT OF DEFAULT" has the meaning given to it in the Negative Pledge. "GUARANTEE" means a guarantee, indemnity, letter of credit, letter of comfort or any other obligation (whatever it is called and whatever its nature) by which a person is responsible for another person's obligation or debt. "LIQUIDATION" includes official management, receivership, compromise, arrangement, amalgamation, administration, reconstruction, winding up, dissolution, assignment for the benefit of creditors, arrangement or compromise with creditors, bankruptcy or death. "LIQUOR ACT" means any Statute regulating the sale, disposal and consumption of liquor; "LIQUOR LICENCE" means any licence or permit issued now or in the future, to or acquired by the Chargor pursuant to a Liquor Act; "MARKETABLE SECURITIES" has the meaning given to it in the Corporations Law. "NEGATIVE PLEDGE" means the Unlimited Cross Guarantee and Indemnity and Negative Pledge with Financial Ratio Covenants dated on or around the date of this document between the Financier, Collins Foods Group Pty Ltd ACN 009 937 900 and others. "PERMITTED SECURITY INTEREST" means: (a) a Security Interest which the Financier has consented to. It does not include a Security Interest which the Financier has consented to on one or more conditions if those conditions are not complied with; and (b) a lien or charge on the Charged Property arising by operation of law in the ordinary course of the Chargor's ordinary business. It does not include a lien or charge which secures overdue debts. "POTENTIAL EVENT OF DEFAULT" means any event, thing or circumstance which with the giving of notice or passage of time or both would become an Event of Default. "PUBLIC AUTHORITY" means the Crown, a government, a minister of a government, a government department, a statutory corporation, or a semi-government or judicial entity. "RECEIVER" means a receiver or receiver and manager appointed under this document. When two or more persons are appointed, the expression "Receiver" refers to each of those persons severally as well as to two or more of them jointly. "RECORDS" means all the information which relates in any way to a specified person's business or any transaction entered into by the person, whether the information is recorded electronically, magnetically or otherwise. "RELEVANT AGREEMENT" means: (a) this document; and (b) a Collateral Security; and 4 3 (c) an agreement between: (i) the Financier and the Chargor; or (ii) the Financier and a Debtor; or (iii) the Financier and any combination of the Chargor and one or more Debtors; that relates to the Secured Money or another Relevant Agreement or contains terms on which the Secured Money remains outstanding; and (d) a document that the Chargor and the Financier agree is a Relevant Agreement. "SECURED MONEY" means all money that the Chargor or a Debtor is liable to pay to the Financier at or after the date of this document on any account and in any way whatever, and whether: (a) the Chargor or Debtor is liable alone or together with another person; or (b) the Chargor or Debtor is liable as principal debtor, surety, partner, trustee, beneficiary or otherwise; or (c) the relevant liability: (i) is actual or contingent, ascertained or unascertained, fixed or fluctuating; (ii) is in respect of principal, interest, Guarantee obligations, purchase obligations, fees or damages; or (iii) is in dollars, another currency or a combination of currencies, or is of any other character. "SECURITY INTEREST" means a mortgage, pledge, lien, charge, preferential right, trust arrangement, agreement or other arrangement given, arising or created as security. "SUBSIDIARY" has the meaning given to it in the Negative Pledge. "TAX" includes a tax, levy, duty or charge (and associated penalty or interest) imposed by a Public Authority. It includes income, withholding, stamp and transaction taxes and duties but does not include income tax on the overall net income of the Financier. "WINDING UP" includes: (a) dissolution, liquidation, provisional liquidation and bankruptcy; and (b) a procedure which is equivalent or analogous in any jurisdiction. 1.2 OTHER EXPRESSIONS In this document, unless the contrary intention appears: (a) the singular includes the plural and vice versa; 5 4 (b) other grammatical forms of defined words or expressions have corresponding meanings; (c) if this document binds two or more persons, it binds them severally and jointly; (d) a reference to a party to this document includes that party's successors and permitted assigns; (e) a reference to a document or agreement includes that document or agreement as novated, altered or replaced; (f) when two or more persons are named as Chargor, the term "Chargor" is a reference to each of them alone and also to any two or more of them together. The same applies to the term "Debtor"; (g) a reference to any thing includes the whole or any part of that thing and a reference to a group of things or persons includes each thing or person in that group; (h) "dollars" and "$" refer to Australian currency; (i) words implying natural persons include partnerships, bodies corporate, associations and Public Authorities; (j) a reference to any legislation or statutory instrument or regulation is construed in accordance with the Acts Interpretation Act 1901 (Cth) or the equivalent State legislation, as applicable. 2. CHARGE 2.1 CREATING THE CHARGE (a) Subject to paragraph (b), the Chargor charges and grants a security interest in the Charged Property in favour of the Financier as security for the payment of the Secured Money. (b) If any part of the Charged Property is prohibited under an agreement entered into by the Chargor in good faith with an independent third party from being made the subject of the Charge without the consent of that third party, then the Charge shall not take effect over that part of the Charged Property until that consent is obtained. 2.2 FIXED CHARGE The Charge is a fixed charge over: (a) real property; and (b) plant, equipment and machinery other than stock-in-trade and work-in-progress; and (c) Marketable Securities; and (d) negotiable or other instruments; and 6 5 (e) the benefit of any Guarantee or Security Interest held by the Chargor; and (f) the benefit of any contract or agreement to which the Chargor is a party; and (g) any right to recover money or property (other than book debts) by legal proceedings; and (h) capital, including premiums and uncalled and called but unpaid capital; and (i) licences connected with the Chargor's business; and (j) goodwill, patents, trade marks, service marks, copyrights, and registered designs; and (k) the Chargor's Records and all software and other means used to access the Chargor's Records; and (l) all certificates of title and other documents evidencing title to the Charged Property; and (m) insurance policies and proceeds; and (n) the interest of the Chargor in any partnership or joint venture; and (o) accounts and deposits with the Financier where there is some restriction on the right of the Chargor to withdraw or use the funds in those accounts or deposits; and (p) all book debts owed to the Chargor not included in the above which arise in the ordinary course of trading, but this does not include proceeds of those debts which are received before the first to occur of: (i) the Charge being enforced; and (ii) the Financier requiring those proceeds to be paid into an account or deposit of the type mentioned in sub-paragraph (o) (the Financier may require the proceeds to be paid into such an account at any time after an Event of Default or Potential Event of Default); and (q) any other personal property that is not acquired for disposal in the ordinary course of the Chargor's business; and (r) interests in any of the property, assets or rights described in this subclause. 2.3 FLOATING CHARGE The Charge is a floating charge on the rest of the Charged Property. 2.4 THE FLOATING CHARGE BECOMES FIXED The floating charge becomes fixed: (a) over any part of the Charged Property not already subject to a fixed charge under this document: 7 6 (i) if, unless with the prior written consent of the Financier or as expressly permitted under a Relevant Agreement, the Chargor: (A) creates or allows any Security Interest over; (B) sells, leases, licences or otherwise disposes of; (C) creates or allows any interest in; or (D) parts with possession of, that asset or agrees or attempts to do so or takes any step towards doing so; (ii) on any step being taken with a view to levying or enforcing any distress, attachment or other execution on that part of the Charged Property or to enforcing any Security Interest in respect of that part of the Charged Property; (iii) on a Public Authority signing an Attachment Notice which will affect that part of the Charged Property; or (b) over all of the Charged Property: (i) if any order is made or a resolution is passed for the Winding Up of the Chargor or the Chargor is otherwise subjected to or enters into Liquidation; or (ii) on this document being enforced in any way following the occurrence of an Event of Default or Potential Event of Default; or (c) over any part of the Charged Property not already subject to a fixed charge under this document: (i) if the Financier notifies the Chargor that the Charge is fixed over a specified part of the Charged Property; or (ii) when it becomes fixed by law. Except where expressly stated, no notice or action by the Financier is necessary for the floating charge to become fixed. 2.5 THE PARTIES TREAT THE FIXED CHARGE AS FLOATING AGAIN (a) The Financier may notify the Chargor that the Charge is no longer fixed on the assets specified in the Financier's notice ("RELEVANT ASSETS"), with effect from the date specified in that notice. (b) From the date specified in that notice, the Relevant Assets (whether acquired before or after that date) are subject to the floating charge until the Charge crystallises under clause 2.4. 2.6 CONTINUING SECURITY AND DISCHARGING THE CHARGE 8 7 The Charge is a continuing security. It remains in effect until the Financier gives a final discharge to the Chargor. The Chargor is only entitled to a final discharge if: (a) all of the Secured Money has been paid; and (b) the Financier is satisfied that there are no amounts which will subsequently fall within the description of the Secured Money. In satisfying itself under paragraph (b), the Financier may consider any matters it thinks relevant, including (without limitation) the possibility that a payment to reduce the Secured Money might be repayable, void or voidable under a law relating to insolvency or protecting creditors. 2.7 PRIORITY AMOUNT - MAXIMUM PROSPECTIVE LIABILITY The maximum prospective liability secured by the Charge is $100,000,000.00. This amount and this clause: (a) apply only to fix priority under section 282(3) of the Corporations Law; and (b) do not affect any obligation of the Chargor under a Relevant Agreement including, but not limited to, its obligation to pay the Secured Money; and (c) do not in any way fix a limit on the amount which may be secured by this document. 2.8 FIRST PRIORITY SECURITY INTEREST The Charge is a first charge. With respect to any Charged Property as to which the law of any state of the United States of America governs the granting, perfection or effect of perfection of a security interest, the Charge created hereunder is a first priority perfected security interest. 3. PAYMENT OBLIGATIONS 3.1 SECURED MONEY The Chargor must pay the Secured Money (free from any deduction, set-off or counter-claim): (a) at the times and in the way specified in the Relevant Agreements; and (b) otherwise, on demand to or as directed by the Financier. 3.2 INTEREST The Chargor must pay interest on the Secured Money to or as directed by the Financier, at the rates specified in the Relevant Agreements. If no rate is specified, the rate is as determined by the Financier. Interest accrues from day to day, computed from the time: (a) the Secured Money became owing (whether or not it is immediately payable); or (b) in relation to money payable under clause 3.3, the relevant amount was incurred. 9 8 Interest may be capitalised monthly or at the times agreed between the parties. It then bears interest itself under this clause. Interest continues to be payable despite the Winding Up of any person, or any judgment obtained against any person. 3.3 COSTS AND EXPENSES The Chargor indemnifies the Financier against, and must pay on demand to the Financier, all Taxes and all reasonable costs and expenses (including, but not limited to, legal costs and expenses on a full indemnity basis) which the Financier or a Receiver or Attorney pays, or is liable to pay, in connection with: (a) a Relevant Agreement, or negotiating, preparing, completing, registering or stamping a Relevant Agreement; or (b) maintaining, preserving or protecting the Charged Property; or (c) surveying, valuing, inspecting or reporting on the Charged Property; or (d) obtaining or attempting to obtain payment of the Secured Money from any person; or (e) protecting, enforcing or exercising a right, power or remedy of the Financier or a Receiver or Attorney under or in connection with a Relevant Agreement; or (f) an Event of Default or Potential Event of Default; or (g) the Financier providing financial accommodation to or at the request of the Chargor; or (h) a receipt or payment of money under, or a transaction contemplated by, a Relevant Agreement. 3.4 CONTINGENT LIABILITIES If the Financier has declared the Secured Money to be immediately payable (under clause 9 or a similar provision in a Relevant Agreement), the money which the Chargor must immediately pay to the Financier includes an amount equal to the sum of: (a) the contingent liability of the Chargor or a Debtor under a Guarantee; and (b) the aggregate face value of all negotiable instruments: (i) drawn, accepted or endorsed by the Financier at the express or implied request of the Chargor or a Debtor; and (ii) which have not yet matured or which have not yet been discharged to the satisfaction of the Financier; and (c) any other amount which may become payable by the Chargor to the Financier in connection with a contingent liability. 3.5 LOSS RESULTING FROM EVENT OF DEFAULT The Chargor indemnifies the Financier against all losses (including foregone profits) the Financier suffers in connection with or as a result of an Event of Default. 10 9 3.6 INDEMNIFIED AMOUNTS IN FOREIGN CURRENCY Where under this document the Chargor must reimburse or indemnify the Financier against an amount denominated in a currency other than Australian dollars, the Chargor must pay the amount in the relevant currency, except as follows. The Financier may request it be paid in Australian dollars. In that case, the Chargor will pay the amount of Australian dollars which the Financier certifies that it used to buy the relevant amount of the other currency at the rate determined by the Financier to be its usual selling rate for the other currency. 3.7 CURRENCY INDEMNITY The Chargor promises to indemnify the Financier on demand against any shortfall which arises whenever, for any reason (including as a result of a judgment or order, or Liquidation): (a) the Financier receives or recovers an amount in one currency ("PAYMENT CURRENCY") in respect of an amount due to it in another currency ("DUE CURRENCY"); and (b) the amount actually received or recovered by the Financier at its usual rate of exchange in accordance with its normal practice when it converts the Payment Currency into the Due Currency is less than the relevant amount of the Due Currency. 4. CHARGOR'S OTHER OBLIGATIONS 4.1 POSITIVE OBLIGATIONS The Chargor must: (a) carry on its business in a proper and efficient way and obtain, renew and maintain all material licences, consents and approvals advisable in connection with the Chargor's business; and (b) maintain proper and adequate books and records in accordance with applicable accounting standards; and (c) pay when due the Taxes assessed, levied or imposed on the Chargor (other than those being contested in good faith, provided sufficient reserves have been set aside to meet the potential liability), the Charged Property or the Financier in connection with the Charged Property; and (d) comply with each term of each material lease and material contract to which it is a party unless the term is the subject of a bona fide dispute or is legally unenforceable; and (e) ensure that each of its Subsidiaries complies with clauses 4.1(a), (b), (c) and (d) for its own business and property; and (f) ensure that each of its Subsidiaries has granted and registered or promptly grants and registers a charge to the Financier over all of its property, assets and rights in form and substance satisfactory to the Financier; 11 10 (g) comply with all laws and with the mandatory requirements of any Public Authority and promptly carry out work required by a Public Authority concerning the Charged Property except where the requirement to do so is being contested in good faith; and (h) do everything necessary to ensure no Event of Default occurs; and (i) prosecute and defend (at the Chargor's expense) all legal proceedings which are advisable, or which the Financier advises the Chargor that it considers advisable, to avoid a material adverse effect on the Charged Property; and (j) protect the Charged Property, keep it in good repair and good working condition and, if requested by the Financier, replace any part of the Charged Property which, in the Financier's opinion, needs replacement; and (k) give the Financier the certificates of title and other documents evidencing title to that part of the Charged Property over which the Charge is a fixed charge as soon as they are available to the Chargor or its agents; and (l) promptly give the Financier the Security Interests (and documents in connection with the Security Interests) in favour of the Chargor which secure the performance of any obligation or the payment of any money owed to the Chargor; and (m) take whatever action the Financier reasonably requires in connection with environmentally hazardous substances. 4.2 NEGATIVE OBLIGATIONS The Chargor must not, without the consent of the Financier: (a) materially change the scope or nature of its business as it is carried on at the date of this document; or (b) do or allow anything to be done in derogation of the Financier's rights, powers or remedies under any Relevant Agreement; or (c) deal with or dispose of: (i) the Charged Property over which the Charge is fixed; or (ii) the Charged Property over which the Charge is floating, except in the ordinary course of the ordinary business of the Chargor; except as permitted under clause 12.2(b) of the Negative Pledge; (d) permit a Security Interest (other than a Permitted Security Interest) to affect the Charged Property; or (e) apply for or obtain money, goods or services from a Public Authority, fail to pay an amount to a Public Authority (unless the Chargor is contesting the liability to pay in good faith and has set aside sufficient reserves to meet the liability) or do anything else which might lead to a liability or Tax being imposed on the Charged Property; or 12 11 (f) other than in the ordinary course of the Chargor's business materially alter or remove a building, improvement or fixture which is part of the Charged Property; or (g) acquire or dispose of an asset, or incur a liability, except in the ordinary course of the Chargor's ordinary business and on "arm's length" terms or as permitted under clause 12.2(b) of the Negative Pledge; or (h) dispose of any book debts owed to it, or any of its monetary claims or; or (i) deposit money: (i) on terms that the money is redeemable, repayable or may be withdrawn only if the Chargor pays some other debt or performs some other obligation; or (ii) if a right of set-off (however described) may be exercised against the deposit, except that the Chargor may lodge security deposits required to be lodged under leases entered into at arms" length or with Public Authorities (other than in respect of moneys which are delinquent); or (j) buy or agree to buy anything on terms reserving title to any person until paid for (except stock purchases in the ordinary course of business); or (k) call up uncalled capital or uncalled premiums of the Chargor or receive it in advance of calls or apply it except to pay the Secured Money; or (l) allow an environmentally hazardous substance to be released on or from the Charged Property in breach of any law or the requirements of any Public Authority; or (m) do or allow anything to be done which may (other than in an immaterial way) prejudice the Financier's security or rights under a Relevant Agreement. 4.3 UNDERTAKINGS RELATING TO LIQUOR LICENCE If the Chargor at any time holds a Liquor Licence the Chargor undertakes to the Financier that: (a) (i) it will personally carry on the business in respect of which the Liquor Licence is held upon the premises to which the Liquor Licence relates ("LICENSED PREMISES") or cause that business to be carried on by a person previously nominated by it and who is acceptable to the relevant licencing authority; (ii) it will perform and observe the provisions and requirements of: (A) the Liquor Act; (B) all other statutes affecting or relating to the licensed premises and the business carried on at the licensed premises; and 13 12 (C) any order or notice given, sent or served upon the Financier or the Chargor pursuant to or by virtue of the Liquor Act or any other statute; (iii) it will apply for all licenses, permits and renewals of licences and permits necessary or desirable for the conduct of the business carried on at the licensed premises and will oppose any application to restrict or cancel any such licence; and (iv) it will not: (A) change the use of the licensed premises; (B) remove or apply to remove the Liquor Licence or allow the Liquor Licence to be removed from the licensed premises to other premises; (C) surrender or attempt to surrender, suspend or attempt to suspend, or transfer or attempt to transfer the Liquor Licence or vary any of the conditions of the Liquor Licence; or (D) mortgage, charge, assign, transfer, lease or part with possession of the licensed premises or any part of them to any person or attempt to do so, without the Financier's prior written consent. (b) If and when required by the Financier after the occurrence of an Event of Default, the Chargor shall use its best endeavours to obtain a transfer of the Liquor Licence to the Financier or its nominee. 5. CHARGOR'S INSURANCE OBLIGATIONS 5.1 POSITIVE OBLIGATIONS The Chargor must: (a) maintain, with underwriters and on terms reasonably acceptable to the Financier: (i) insurance over the Charged Property for its full insurable value (or such other amount as the Financier specifies) against loss, damage or destruction resulting from theft, fire, storm and the other risks usually covered by insurance, and the risks the Financier specifies; and (ii) worker's compensation, public risk, business interruption, loss of rent insurance and the other insurance which a prudent person would have if involved in a business similar to the Chargor's; and (iii) the other insurance which the Financier reasonably specifies; (b) ensure that this insurance: (i) has the interest of the Financier as chargee or mortgagee endorsed on the policy; or 14 13 (ii) if the Financier directs, is in both the names of the Chargor and the Financier for their respective rights and interests; and (c) deliver to the Financier: (i) the insurance policies relating to this insurance ("INSURANCE POLICIES"); and (ii) all alterations and additions to the Insurance Policies, immediately after they are issued; and (d) on request, give the Financier certificates of currency for the Insurance Policies; and (e) punctually pay the sums (including stamp duty) necessary to maintain every Insurance Policy and give the Financier promptly on request the receipt for the premium sum paid; and (f) notify the Financier immediately after becoming aware of anything which might give rise to a claim or right to claim under an Insurance Policy which claim might or will exceed $1,000,000.00. 5.2 NEGATIVE OBLIGATIONS The Chargor must not without the consent of the Financier: (a) do or allow anything to be done which might cause an Insurance Policy to be prejudiced; or (b) take steps to bring about a material change to the cover under an Insurance Policy; or (c) insure the Charged Property other than as specified in clause 5.1; or (d) make, enforce, settle or compromise a claim or do anything inconsistent with the powers of the Financier under clause 5.3. 5.3 INSURANCE CLAIMS The Chargor may not without the consent of the Financier: (a) make, enforce, settle and compromise insurance or compensation claims in connection with the Charged Property; or (b) sue for, recover, receive and give discharges for money payable in connection with the Insurance Policies, where such claims or money payable exceed $1,000,000.00. 5.4 INSURANCE PROCEEDS (a) If the Chargor receives money payable under an Insurance Policy before a final discharge of this Charge, the Chargor must, if a Potential Event of Default or 15 14 Event of Default has occurred or, in any event, if the amount received is in excess of $1,000,000.00, pay it to the Financier immediately; (b) the Financier may apply money received under an Insurance Policy either: (i) if a Potential Event of Default or Event of Default has occurred and is outstanding, in or towards payment of the Secured Money, whether due or not; or (ii) in replacing, rebuilding or repairing, under the supervision of the Financier, or the Financier's builder or architect, the property destroyed or damaged. 6. CHARGOR'S REPORTING OBLIGATIONS 6.1 NOTICES TO THE FINANCIER The Chargor must notify the Financier as soon as an Authorised Officer of the Chargor becomes aware of: (a) an Event of Default or Potential Event of Default; or (b) a representation or warranty in any Relevant Agreement becoming materially false or misleading (giving full details); or (c) the Charged Property being acquired or resumed by a Public Authority or a proposal to do so; or (d) the Chargor acquiring or intending to acquire a Subsidiary; or (e) a material requirement or notice of a Public Authority in connection with the Charged Property and must give the Financier a copy of any related document it has and full details of all relevant facts known to the Chargor concerning the requirement or notice; or (f) any environmentally hazardous substance released from or affecting the Charged Property in breach of any law or the requirements of any Public Authority. 7. ACCESS TO AND INVESTIGATION OF RECORDS AND LAND 7.1 GIVING ACCESS TO RECORDS AND LAND The Chargor must: (a) ensure that the Records of the Chargor and its Subsidiaries are available for inspection at reasonable times by the Financier and persons acting on the Financier's behalf; and (b) allow the Financier and persons acting on the Financier's behalf to inspect and to take copies of or extracts from the Chargor's and its Subsidiaries' Records during business hours and give reasonable assistance to them; and 16 15 (c) allow, or obtain for the Financier and persons acting on the Financier's behalf, full access at all times during business hours to the Charged Property and to any land or building: (i) occupied by the Chargor or its Subsidiaries; or (ii) forming or containing part of the Charged Property, and give reasonable assistance to them. 7.2 INVESTIGATING ACCOUNTANTS If the Financier at any time is of the opinion that an Event of Default or Potential Event of Default has occurred or is likely to occur, the Financier may appoint a firm of independent accountants or other experts ("INVESTIGATING ACCOUNTANTS") to investigate the affairs and financial position of the Chargor and, if the Financier requires, of the Subsidiaries of the Chargor. The Chargor: (a) unconditionally authorises the Investigating Accountants to take the action which is reasonably necessary for the investigation. This does not include the power to manage the Chargor's business (unless an Event of Default has occurred and the Financier is exercising enforcement rights under this document); and (b) agrees to give the Investigating Accountants all reasonable assistance and access to all relevant records and information for that purpose; and (c) unconditionally authorises the Investigating Accountants to disclose to the Financier and its advisers all information and documentation in connection with the investigation. The Chargor must pay the reasonable costs and expenses of the investigations to the Investigating Accountants on demand and reimburse the Financier for its costs and expenses. 8. BETTER SECURITY AND RIGHTS FOR FINANCIER 8.1 BETTER SECURITY AND RIGHTS The Chargor must, at the Chargor's cost, do whatever the Financier reasonably requires to: (a) more satisfactorily secure to the Financier the payment of the Secured Money; or (b) enable the Financier to better exercise its rights over the Charged Property, and must use its best efforts to make anyone else who has an interest in the Charged Property or claims under or in trust for the Chargor do the same. 8.2 EXAMPLES This includes, but is not limited to, executing: (a) a Security Interest (including a legal mortgage) over the Charged Property; 17 16 (b) ancillary Guarantees or other documents; and (c) financing statements suitable for filing or recording in any state of the United States of America, in a form reasonably satisfactory to the Financier. 9. EFFECT OF EVENT OF DEFAULT After an Event of Default the Financier may declare the Secured Money payable. If so, the Secured Money becomes immediately payable, unless the Financier specifies otherwise. 10. FINANCIER'S POWERS 10.1 GENERALLY (a) After an Event of Default, the Financier may do the things which a mortgagee and an absolute owner could do to the Charged Property and exercise the rights, powers and remedies of a mortgagee and an absolute owner of the Charged Property. These include, but are not limited to, the things and powers described in this clause 10, and the rights, powers and remedies of a secured party under the Uniform Commercial Code of any jurisdiction in the United States of America. (b) The Financier need not make a demand or give notice to anyone before doing these things or exercising these powers, except if notice is required as described in clause 10.10. 10.2 TO TAKE POSSESSION OF CHARGED PROPERTY After an Event of Default the Financier may: (a) take possession of the Charged Property; and (b) receive the rents and profits of the Charged Property. 10.3 TO DEAL WITH THE CHARGED PROPERTY AND CHARGOR'S BUSINESS After an Event of Default the Financier may do any of the following: (a) (CARRY ON BUSINESS) carry on or participate in the Chargor's business in the name of the Chargor or the Financier or otherwise; and (b) (BANK ACCOUNTS) operate bank accounts in the name of the Chargor (alone or together) to the exclusion of the Chargor; and (c) (NEGOTIABLE INSTRUMENTS) deal with negotiable instruments in the name of the Chargor; and (d) (CONTRACTUAL RIGHTS) (i) perform the Chargor's obligations under; and 18 17 (ii) enforce or exercise or not exercise the Chargor's rights and powers under; and (iii) agree to vary or rescind, a contract, instrument, arrangement or right forming part of the Charged Property; and (e) (COMPROMISE) settle, compromise or submit to arbitration a dispute in connection with the Charged Property; and (f) (PERFORM CHARGOR'S OBLIGATIONS) do everything it may to comply with the obligations of the Chargor under a Relevant Agreement; and (g) (REMEDY BREACH) do everything it may to make good a breach or default inherent in an Event of Default, to its own satisfaction; and (h) (DEPOSIT MONEY IN SUSPENSE OR OTHER ACCOUNTS) invest, deposit or hold the Charged Property in any way that, and for as long as, the Financier thinks fit and vary, transpose or reinvest the Charged Property; and (i) (MAKE CALLS) make calls on the members of the Chargor for the uncalled capital or uncalled premiums subject to the Charge; and (j) (RECOVER, PROTECT CHARGED PROPERTY) do everything the Financier thinks necessary to recover or protect the Charged Property including, but not limited to, Winding Up debtors of the Chargor; and (k) (LEGAL PROCEEDINGS) commence, prosecute, defend and settle proceedings which the Financier considers expedient in connection with this document or the Charged Property in or before a Public Authority in the name of the Chargor or otherwise; and (l) (MARKETABLE SECURITIES) exercise the rights and powers of an absolute owner in connection with Marketable Securities which form part of the Charged Property. The Chargor appoints the Financier and each Authorised Officer of the Financier separately to be the authorised representative and proxy of the Chargor to do the things described in this paragraph; and (m) (EXCHANGE) exchange the Charged Property for any other property or rights (with or without giving or receiving any other consideration for the exchange); and (n) (TRANSFER OBLIGATIONS) effect a novation of or otherwise transfer to any person obligations of the Chargor which arise under a Relevant Agreement or otherwise; and (o) (IMPROVE CHARGED PROPERTY) do anything which the Financier considers would help improve the value of the Charged Property, obtain income or returns from it or make it saleable or more saleable. Without limitation, the Financier may improve or alter the Charged Property, acquire additional property in the name of the Chargor, reorganise or restructure the CHARGOR'S business or any process or procedure carried on by the Chargor, and undertake any marketing or publicity campaign; and 19 18 (p) (BUILD, PULL DOWN, REBUILD OR ALTER) (i) build a new building or improvement; and (ii) pull down, rebuild or alter a building or improvement, on land which, or an interest in which, is part of the Charged Property; and (o) (EXECUTE DOCUMENTS) enter into agreements and execute documents itself or on behalf of the Chargor for any purpose in connection with a Relevant Agreement; and (r) (BORROW, SECURE) in the name of the Chargor or otherwise: (i) obtain financial accommodation (including, but not limited to, from a party associated with the Financier) for any purpose which the Financier considers expedient in connection with its powers under a Relevant Agreement; and (ii) secure the payment or repayment of indebtedness relating to that financial accommodation by a Security Interest over the Charged Property, however it ranks for priority with the Charge or a Collateral Security; and (s) (EMPLOY AND APPOINT PERSONS) employ staff and appoint professionals and consultants for any purpose, and at the remuneration, that the Financier thinks fit; and (t) (DELEGATE) delegate to any person for any time that the Financier thinks fit any of the powers of the Financier under this document, including this right of delegation; and (u) (INCIDENTAL POWER) do anything the Financier thinks expedient in its interests and incidental to any of its powers under this document, without limiting those powers; and (v) (SPEND MONEY) spend money in exercising its powers in this document. That money then forms part of the Secured Money. 10.4 TO DISCHARGE OR ACQUIRE PRIOR SECURITY INTEREST After an Event of Default the Financier may: (a) purchase the debt secured by a prior Security Interest; or (b) pay the amount required to discharge or satisfy that debt (including, but not limited to, a debt secured by a Permitted Security Interest); or (c) take a transfer or assignment of that Security Interest and any Guarantee, document or right ancillary or collateral to it, at the Chargor's cost. 10.5 EXERCISE OF RIGHTS UNDER CLAUSE 10.4 If the Financier exercises its rights under clause 10.4: 20 19 (a) the Chargor is indebted to the Financier for the same amount paid by the Financier. This does not limit any other debt acquired by the Financier; and (b) that debt is immediately payable to the Financier and forms part of the Secured Money and interest accrues on the unpaid amount of that debt under clause 3.2; and (c) the Financier need not enquire whether the money claimed to be owing is actually owing in connection with the prior Security Interest, or an ancillary or collateral document; and (d) the person with the benefit of the prior Security Interest need not enquire whether there is any money owing under a Relevant Agreement; and (e) the Chargor directs any person with the benefit of a prior Security Interest to give the Financier any information it requires in connection with the prior Security Interest. This includes, but is not limited to, the state of accounts for that Security Interest. 10.6 TO SELL AND LEASE After an Event of Default the Financier may do any of the following: (a) (SELL) sell or help sell the Charged Property on the terms and in the manner it thinks fit, whether or not the Financier has taken possession; and (b) (OPTIONS) give an option to purchase the Charged Property on the terms it thinks fit; and (c) (SEVER FIXTURES) sever fixtures belonging to the Chargor and sell them apart from the Charged Property; and (d) (LEASE, ETC) lease the Charged Property or give licences or rights over the Charged Property in the name of the Chargor or otherwise (whether or not the Financier has taken possession) for whatever term, at whatever rent or fee and on whatever terms the Financier thinks fit; and (e) (DEAL WITH LEASES) renew, vary, accept the surrender of or terminate a lease or licence of the Charged Property; and (f) (SELL OR LEASE TOGETHER WITH OTHER PROPERTY) sell or lease the Charged Property with any other property in any manner that the Financier thinks expedient, with full power to apportion costs, expenses, purchase money and rent between the properties sold or leased; and (g) (HIVE OFF ASSETS OR OBLIGATIONS) promote the formation of any company so that the company may purchase or acquire the Charged Property or assume obligations of the Chargor or both; and (h) (EFFECT HIVE-OFF) sell or assign the Charged Property or assume the Chargor'S obligations. 10.7 TO APPOINT RECEIVERS 21 20 After an Event of Default, the Financier may: (a) appoint one or more persons to be a Receiver or Receivers of the Charged Property, with the powers and rights described in this clause 10 (or such lesser powers as the Financier determines); and (b) remove that Receiver or those Receivers; and (c) if a Receiver is removed, retires or dies, appoint another or others in his or her place; and (d) in the case of removal or retirement of a Receiver, reappoint that person. 10.8 TO APPOINT MORE THAN ONE RECEIVER If the Financier appoints two or more persons to be the Receiver, the Financier may appoint them to act jointly, severally or jointly and severally. If it is not specified in the instrument of appointment, the Receivers are appointed to act severally. 10.9 TO PAY THE RECEIVER The Financier may fix the remuneration of a Receiver at an amount agreed between the Financier and the Receiver. 10.10 NOTICE OR LAPSE OF TIME REQUIRED BEFORE RIGHTS EXERCISED (a) If notice or lapse of time is required under any statute before the Financier can exercise its power of sale or any other rights available to it under this document or by law, then that notice or lapse of time is dispensed with. (b) Paragraph (a) only applies if the relevant statute allows notice or lapse of time to be dispensed with. (c) If the relevant statute does not allow notice or lapse of time to be dispensed with, but allows it to be shortened, then for the purposes of this document, the period of notice or lapse of time is one day. 10.11 TO GIVE UP POSSESSION AND TERMINATE RECEIVERSHIP The Financier may: (a) give up possession of the whole or any part of the Charged Property; or (b) terminate a receivership, or both. 10.12 PERSONS DEALING NOT BOUND TO ENQUIRE A person dealing with the Financier or a Receiver or Attorney: (a) need not enquire whether there has been a default by the Chargor under a Relevant Agreement or whether the Financier, Receiver or Attorney has acted properly; or 22 21 (b) need not enquire whether the Financier, a Receiver or an Attorney has executed or registered an instrument or exercised a right, power or remedy properly or with authority, and whenever the Financier, a Receiver or an Attorney deals with the Charged Property, that dealing is authorised and valid as far as anyone involved with that dealing is concerned. The receipt of the Financier or a Receiver or Attorney for any money payable to the Chargor discharges the person paying that money to the extent of the payment. 10.13 RESPONSIBILITY FOR LOSS The Financier is not responsible for a loss arising in connection with it exercising or failing to exercise its powers under a Relevant Agreement nor for an act or failure of an employee or agent of the Financier or any Receiver. The Financier need not account for more money than it actually receives. 11. RECEIVER'S POWERS 11.1 GENERAL Unless the terms of the Receiver's appointment say otherwise, the Receiver has the following powers over the Charged Property which the Receiver is appointed to deal with: (a) all the rights and powers given by law to mortgagees in possession, receivers or receivers and managers; and (b) all the rights and powers of the Financier under this document and at law (other than the power to appoint Receivers); and (c) power to obtain financial accommodation from the Financier, alone or together with any other person, for a purpose and on the terms that the Receiver considers expedient in connection with the Charged Property; and (d) power to secure the payment or repayment of indebtedness relating to that financial accommodation by a Security Interest over the Charged Property, however it ranks for priority with the Charge or a Collateral Security. The Receiver may exercise these rights and powers in the name of the Chargor or otherwise. 11.2 RECEIVER IS AGENT OF CHARGOR A Receiver is the agent of the Chargor. The Chargor alone is responsible for the Receiver's acts and defaults. But the Receiver, to the extent required by law, ceases to be the agent of the Chargor if a resolution is passed or an order is made to Wind Up the Chargor. The Receiver may become the agent of the Financier if the Financier gives a notice to the Receiver in writing to that effect. The Financier may appoint a further Receiver, despite that resolution or order. 11.3 ACCOUNTABILITY OF RECEIVER 23 22 A Receiver is not responsible for a loss arising in connection with the exercise or execution of the Receiver's powers, nor for any act or default of an employee or agent of the Financier or the Receiver. A Receiver need not account for more money than the Receiver actually receives. 12. POWER OF ATTORNEY 12.1 APPOINTMENT AND POWERS The Chargor for valuable consideration irrevocably appoints the Financier, each Authorised Officer of the Financier and each Receiver separately as its attorneys to do the following on the Chargor's behalf and in the name of the Chargor or the Attorney after the occurrence of an Event of Default or Potential Event of Default: (a) anything which the Chargor must do under a Relevant Agreement; and (b) anything which, in the opinion of the Attorney: (i) would give effect to a right, power or remedy of the Financier or a Receiver; or (ii) the Chargor should do, under a Relevant Agreement or by law; and (c) enter into or execute transactions, documents and agreements which, in the opinion of the Attorney, the Chargor should enter into or execute under a Relevant Agreement; and (d) use the Chargor's name to exercise the powers of the Financier or a Receiver under a Relevant Agreement, the law or otherwise, and the Chargor agrees to ratify anything done by an Attorney under this power of attorney. 12.2 ATTORNEY MAY DELEGATE POWERS An Attorney may delegate its powers (including the power to delegate) to any person for any period and may revoke the delegation. 12.3 PURPOSE The power of attorney created under this clause is irrevocable and is granted to secure the performance by the Chargor of the Chargor's obligations under each Relevant Agreement to which the Chargor is a party. 13. NOTICES AND DEMANDS FROM THE FINANCIER 13.1 SIGNING A notice from or demand by the Financier to or on the Chargor may be signed by an Authorised Officer of the Financier or by a solicitor acting for the Financier. This signature may be handwritten or printed or reproduced by other means. 13.2 SENDING 24 23 In addition to any method of service provided for by statute, a notice from or demand by the Financier is given to or made on the Chargor if it is: (a) sent by facsimile to the facsimile number of the Chargor last known to the Financier or, if more than one facsimile number is known to the Financier, to any of those facsimile numbers; or (b) left for the Chargor or sent by prepaid mail (and by airmail if to an address outside Australia) to the Chargor at: (i) the address of the Chargor set out in this document; or (ii) the Chargor's usual place of business last known to the Financier; or (iii) the Chargor's registered office; or (iv) premises owned or occupied by the Chargor. 13.3 VALIDITY A notice or demand is validly given even if: (a) the Chargor has been Wound Up or the Chargor is absent from the place the notice or demand is left at, or delivered or sent to; or (b) the notice or demand is returned unclaimed. 13.4 RECEIPT A notice or demand is taken to have been received by the Chargor: (a) if delivered personally, on the same day; and (b) if posted to an address in Australia, on the second Business Day after it was posted; and (c) if posted to an address outside Australia, on the fourth Business Day after it was posted; and (d) if sent by facsimile, when a transmission report is produced by the sender's facsimile machine indicating that the notice or demand has been sent to the relevant number. 14. PRESERVING THE FINANCIER'S RIGHTS, POWERS AND REMEDIES 1.41 PRESERVATION (a) The fact that the Financier does not exercise, or delays the exercise of, any right, power or remedy does not affect any of its other rights, powers or remedies. (b) The fact that the Financier delays the exercise of any right, power or remedy does not constitute a waiver of that right, power or remedy. 25 24 (c) The fact that the Financier exercises a right, power or remedy does not prevent the Financier from exercising that right, power or remedy again. (d) This document does not operate to extinguish or prejudice any right, power or remedy of the Financier under a Relevant Agreement or in connection with the Secured Money. 14.2 MORATORIUM LEGISLATION A moratorium does not apply to a Relevant Agreement or the recovery of the Secured Money except if: (a) the Financier agrees in writing that it does; or (b) it cannot be excluded by law. 14.3 REINSTATING OR REPLACING RIGHTS If any payment made to the Financier in reduction of the Secured Money is repaid or void or conceded to be void, voidable or repayable for any reason, then, despite any release, settlement or discharge in connection with the Secured Money: (a) that payment has not discharged the relevant liability; and (b) the Financier may recover the amount of that payment from the Chargor; and (c) the Chargor must: (i) immediately do all acts and things the Financier requires to replace or reinstate the Charge and any Collateral Security which has been released in connection with that payment; and (ii) indemnify the Financier against and pay on demand all costs and expenses in connection with replacing or reinstating the Charge and any Collateral Securities. 1.4 EFFECT OF RELEASE (a) A full or partial release of this Charge by the Financier does not release the Chargor from personal liability under this document until the Financier receives the Secured Money, regardless of any: (i) receipt given, payout figure quoted or other form of account stated; or (ii) error or miscalculation by the Financier. (b) Each indemnity given by the Chargor to the Financier under this document is a continuing indemnity. A full or partial release of this Charge does not release the Chargor from liability under an indemnity unless the release is specifically of that indemnity. 15. MISCELLANEOUS 15.1 NO OBLIGATION TO EXERCISE RIGHTS OR GIVE CONSENT 26 25 Each of the Financier and a Receiver may: (a) exercise or not exercise any right, power or remedy; and (b) give or not give consent; and (c) make or not make a decision, under this document, in its absolute discretion without giving a reason and without being liable or accountable for the consequences. In relation to the giving or not giving of consent, the Financier will act in a manner which the Financier determines in its absolute discretion to be reasonable. Such determination shall not be questioned by the Chargor. 15.2 CONSENT MUST BE IN WRITING A consent given or a right, power or remedy waived by the Financier is effective only if given or waived in writing. 15.3 NOTIFICATION FROM CHARGOR If the Chargor is required under this document to notify the Financier about anything, the Chargor must do so in writing. 15.4 FINANCIER MAY SET OFF Without any demand or notice, the Financier may set off and apply indebtedness it owes to the Chargor (whatever the currency) against the Secured Money: (a) whether the indebtedness is owed alone or with any other person; and (b) whether or not the Secured Money or that indebtedness is immediately payable. 15.5 CHARGOR MUST NOT SET OFF The Chargor must not claim, exercise or attempt to exercise a right of set-off or any other right which might reduce or discharge the Secured Money. 15.6 NO MARSHALLING The Financier need not resort to a Collateral Security or other Security Interest before exercising a power under this document. 15.7 SUSPENSE ACCOUNT The Financier may credit money received in or towards satisfaction of the Secured Money to a suspense account. The Financier may keep the money in that account for as long as the Financier thinks fit. Interest will not accrue on such account. The Financier may apply the money to reduce the Secured Money whenever it thinks fit. 15.8 SURPLUS PROCEEDS If surplus money remains in the hands of the Financier or a Receiver after payment of all the Secured Money (and satisfaction of any obligation ranking in priority to the Secured Money or secured by a Security Interest over the Charged Property): 27 26 (a) no trust arises over that surplus money; and (b) that surplus money does not carry interest and the Financier or Receiver may pay it to an account in the name of the Chargor (whether or not opened by the Financier or Receiver for that purpose). The Financier or Receiver is then no longer liable for the surplus money. 15.9 APPLYING RECEIPTS The Financier may apply or appropriate money received to reduce the Secured Money in the order, and to satisfy whatever part of the Secured Money, the Financier sees fit. 15.10 TACKING For the purpose of applying section 282 of the Corporations Law or any equivalent provision in any jurisdiction, if the Financier is obliged to make further advances under a Relevant Agreement, that Relevant Agreement is taken to be incorporated in this document so that this document imposes on the Financier an obligation to advance that money. 15.11 THE FINANCIER MAY ASSIGN RIGHTS The Financier may assign or otherwise deal with its rights and benefits under this document. 15.12 THE FINANCIER MAY DISCLOSE INFORMATION The Financier may disclose to a potential assignee or participant any information about the Chargor, any Debtor or a Relevant Agreement which it considers appropriate. 15.13 CERTAIN NOTICES OR DEMANDS A notice from or demand by the Financier stating: (a) that a specified sum of money is owing or payable (or both) under a Relevant Agreement; or (b) that an Event of Default has occurred; or (c) something relevant to the rights or obligations of the Financier or the Chargor under a Relevant Agreement, is admissible in proceedings and is conclusive evidence of the matters stated except if there is manifest error. 15.14 IF DUE DATE NOT A BUSINESS DAY If anything should be done under this document on a day that is not a Business Day, it must be done on the previous Business Day. 15.15 SEVERABILITY (a) A construction of this document that results in all provisions being enforceable is to be preferred to a construction that does not so result. 28 27 (b) If, despite the application of paragraph (a), a provision of this document is illegal or unenforceable: (i) and it would be legal and enforceable if a word or words were omitted, that word or those words are severed; and (ii) in any other case, the whole provision is severed, and the remainder of this document continues in force. 15.16 GOVERNING LAW AND JURISDICTION This document is governed by the law of Queensland, except: (a) as required by mandatory provisions of law; (b) to the extent that the validity, perfection or enforceability of any of the security interests hereunder, or remedies hereunder, are dependent on the laws of a jurisdiction other than Queensland, in which case the governing law shall (to that extent only) be the law of that jurisdiction. The parties hereto agree and intend that: (c) a proper forum/jurisdiction for any litigation or process arising out of or related to this Agreement shall be any court located in Queensland; and (d) a proper forum/jurisdiction for any litigation or process in respect of any of the Charged Property located in a jurisdiction other than Queensland shall be any court located either in Queensland or that other jurisdiction. The Chargor irrevocably and unconditionally submits to the non-exclusive jurisdiction of the courts of Queensland and/or the other jurisdiction referred to in paragraph (e) (as the case may be). The Chargor, to the extent permitted by applicable laws, hereby expressly waives any defence or objection to jurisdiction or venue based on the doctrine of forum non conveniens, and stipulates that the courts of Queensland and/or that other jurisdiction (as the case may be) shall have in personam jurisdiction and venue over it for the purpose of any such litigation or process arising out of or related to this document. 15.17 FINANCIER NEED NOT EXECUTE This document is enforceable by the Financier even if the Financier does not execute it. 29 28 SCHEDULE A The Charged Property includes, without limitation, all of the following property, assets and rights of the Chargor, whether now owned or hereafter acquired: accounts, general intangibles, rights to payment of money, rights and benefits under contracts and agreements, tax refunds, insurance proceeds, instruments, chattel paper, letters of credit, promissory notes, drafts, bills of exchange, trade acceptances, documents, inventory, goods, copyrights, patents, trademarks, equipment, motor vehicles, documents of title, investment property, and all other tangible and intangible property, including without limitation, proceeds and products of the foregoing, and books and records relating to the foregoing. All terms used in this Schedule A shall have the definitions set forth in the Commercial Code of the State of California. 30 29 EXECUTED as a deed. THE COMMON SEAL OF COLLINS ) RESTAURANTS MANAGEMENT PTY ) LTD is affixed in accordance with its ) constituent documents in the presence of ) - ----------------------------------- ----------------------------------- Authorised Officer/Director Authorised Officer/Director - ----------------------------------- ----------------------------------- Please Print Full Name Please Print Full Name EX-10.6 7 v65255ex10-6.txt EXHIBIT 10.6 1 EXHIBIT 10.6 SIZZLER ASIA HOLDINGS, INC. WESTPAC BANKING CORPORATION ARBN 007 457 141 FIXED AND FLOATING CHARGE MINTER ELLISON Lawyers Waterfront Place 1 Eagle Street BRISBANE QLD 4000 DX 102 BRISBANE Telephone (07) 3226 6333 Facsimile (07) 3229 1066 GB 1090692 2 FIXED AND FLOATING CHARGE DEED dated August 21, 2000 BETWEEN SIZZLER ASIA HOLDINGS, INC., A COMPANY INCORPORATED IN DELAWARE, THE UNITED STATES OF AMERICA OF c/- 16 EDMONDSTONE STREET, NEWMARKET, BRISBANE, QUEENSLAND, AUSTRALIA ("CHARGOR") AND WESTPAC BANKING CORPORATION ARBN 007 457 141 OF 260 QUEEN STREET, BRISBANE, QUEENSLAND, AUSTRALIA ("FINANCIER") 1. INTERPRETATION 1.1 DEFINITIONS In this document: "ATTACHMENT NOTICE" means a notice or direction under which a Public Authority requires money, which would otherwise be payable to the Chargor, to be paid or transferred to it or to the Crown. This includes notices under section 218 or section 255 of the Income Tax Assessment Act 1936 (Cth) or under section 74 of the Sales Tax Assessment Act 1992 (Cth). "ATTORNEY" means an attorney appointed under a Relevant Agreement. "AUTHORISED OFFICER" means: (a) in relation to the Financier, an attorney of the Financier and a person holding or acting in the office of director, chief executive or secretary or whose title includes the word 'Manager' or 'Director; and (b) in relation to the Chargor, a person holding or acting in the office of president, vice president, chief financial officer, chief executive or secretary. "BUSINESS DAY" means a day on which banks (as defined in the Banking Act 1959 (Cth)) are open for general banking business in Brisbane, excluding Saturdays and Sundays and public holidays. "CHARGE" means the charge over, and security interest in, the Charged Property created under this document. "CHARGED PROPERTY" means all the property, assets and rights of the Chargor, whether acquired before or after this document is executed, wherever located. This includes all property, assets and rights held by the Chargor as trustee and wherever located. The Charged Property includes, without limitation, all the property, assets and rights of the Chargor described in Schedule A hereto. "COLLATERAL SECURITY" means a Guarantee, Security Interest or negotiable instrument held or given, whether before or after this document is executed, as security for or otherwise in connection with the Secured Money. 3 2 "DEBTOR" means a person any of whose present or future, actual or contingent indebtedness or liabilities to the Financier is or are supported or secured by a present or future Guarantee or Security Interest given or entered into by the Chargor. "EVENT OF DEFAULT" has the meaning given to it in the Negative Pledge. "GUARANTEE" means a guarantee, indemnity, letter of credit, letter of comfort or any other obligation (whatever it is called and whatever its nature) by which a person is responsible for another person's obligation or debt. "LIQUIDATION" includes official management, receivership, compromise, arrangement, amalgamation, administration, reconstruction, winding up, dissolution, assignment for the benefit of creditors, arrangement or compromise with creditors, bankruptcy or death. "LIQUOR ACT" means any Statute regulating the sale, disposal and consumption of liquor; "LIQUOR LICENCE" means any licence or permit issued now or in the future, to or acquired by the Chargor pursuant to a Liquor Act; "MARKETABLE SECURITIES" has the meaning given to it in the Corporations Law. "NEGATIVE PLEDGE" means the Unlimited Cross Guarantee and Indemnity and Negative Pledge with Financial Ratio Covenants dated on or around the date of this document between the Financier, Collins Foods Group Pty Ltd ACN 009 937 900 and others. "PERMITTED SECURITY INTEREST" means: (a) a Security Interest which the Financier has consented to. It does not include a Security Interest which the Financier has consented to on one or more conditions if those conditions are not complied with; and (b) a lien or charge on the Charged Property arising by operation of law in the ordinary course of the Chargor's ordinary business. It does not include a lien or charge which secures overdue debts. "POTENTIAL EVENT OF DEFAULT" means any event, thing or circumstance which with the giving of notice or passage of time or both would become an Event of Default. "PUBLIC AUTHORITY" means the Crown, a government, a minister of a government, a government department, a statutory corporation, or a semi-government or judicial entity. "RECEIVER" means a receiver or receiver and manager appointed under this document. When two or more persons are appointed, the expression "Receiver" refers to each of those persons severally as well as to two or more of them jointly. "RECORDS" means all the information which relates in any way to a specified person's business or any transaction entered into by the person, whether the information is recorded electronically, magnetically or otherwise. "RELEVANT AGREEMENT" means: (a) this document; and (b) a Collateral Security; and 4 3 (c) an agreement between: (i) the Financier and the Chargor; or (ii) the Financier and a Debtor; or (iii) the Financier and any combination of the Chargor and one or more Debtors; that relates to the Secured Money or another Relevant Agreement or contains terms on which the Secured Money remains outstanding; and (d) a document that the Chargor and the Financier agree is a Relevant Agreement. "SECURED MONEY" means all money that the Chargor or a Debtor is liable to pay to the Financier at or after the date of this document on any account and in any way whatever, and whether: (a) the Chargor or Debtor is liable alone or together with another person; or (b) the Chargor or Debtor is liable as principal debtor, surety, partner, trustee, beneficiary or otherwise; or (c) the relevant liability: (i) is actual or contingent, ascertained or unascertained, fixed or fluctuating; (ii) is in respect of principal, interest, Guarantee obligations, purchase obligations, fees or damages; or (iii) is in dollars, another currency or a combination of currencies, or is of any other character. "SECURITY INTEREST" means a mortgage, pledge, lien, charge, preferential right, trust arrangement, agreement or other arrangement given, arising or created as security. "SUBSIDIARY" has the meaning given to it in the Negative Pledge. "TAX" includes a tax, levy, duty or charge (and associated penalty or interest) imposed by a Public Authority. It includes income, withholding, stamp and transaction taxes and duties but does not include income tax on the overall net income of the Financier. "WINDING UP" includes: (a) dissolution, liquidation, provisional liquidation and bankruptcy; and (b) a procedure which is equivalent or analogous in any jurisdiction. 1.2 OTHER EXPRESSIONS In this document, unless the contrary intention appears: (a) the singular includes the plural and vice versa; 5 4 (b) other grammatical forms of defined words or expressions have corresponding meanings; (c) if this document binds two or more persons, it binds them severally and jointly; (d) a reference to a party to this document includes that party's successors and permitted assigns; (e) a reference to a document or agreement includes that document or agreement as novated, altered or replaced; (f) when two or more persons are named as Chargor, the term "Chargor" is a reference to each of them alone and also to any two or more of them together. The same applies to the term "Debtor"; (g) a reference to any thing includes the whole or any part of that thing and a reference to a group of things or persons includes each thing or person in that group; (h) "dollars" and "$" refer to Australian currency; (i) words implying natural persons include partnerships, bodies corporate, associations and Public Authorities; (j) a reference to any legislation or statutory instrument or regulation is construed in accordance with the Acts Interpretation Act 1901 (Cth) or the equivalent State legislation, as applicable. 2. CHARGE 2.1 CREATING THE CHARGE (a) Subject to paragraph (b), the Chargor charges and grants a security interest in the Charged Property in favour of the Financier as security for the payment of the Secured Money. (b) If any part of the Charged Property is prohibited under an agreement entered into by the Chargor in good faith with an independent third party from being made the subject of the Charge without the consent of that third party, then the Charge shall not take effect over that part of the Charged Property until that consent is obtained. 2.2 FIXED CHARGE The Charge is a fixed charge over: (a) real property; and (b) plant, equipment and machinery other than stock-in-trade and work-in-progress; and (c) Marketable Securities; and (d) negotiable or other instruments; and 6 5 (e) the benefit of any Guarantee or Security Interest held by the Chargor; and (f) the benefit of any contract or agreement to which the Chargor is a party; and (g) any right to recover money or property (other than book debts) by legal proceedings; and (h) capital, including premiums and uncalled and called but unpaid capital; and (i) licences connected with the Chargor's business; and (j) goodwill, patents, trade marks, service marks, copyrights, and registered designs; and (k) the Chargor's Records and all software and other means used to access the Chargor's Records; and (l) all certificates of title and other documents evidencing title to the Charged Property; and (m) insurance policies and proceeds; and (n) the interest of the Chargor in any partnership or joint venture; and (o) accounts and deposits with the Financier where there is some restriction on the right of the Chargor to withdraw or use the funds in those accounts or deposits; and (p) all book debts owed to the Chargor not included in the above which arise in the ordinary course of trading, but this does not include proceeds of those debts which are received before the first to occur of: (i) the Charge being enforced; and (ii) the Financier requiring those proceeds to be paid into an account or deposit of the type mentioned in sub-paragraph (o) (the Financier may require the proceeds to be paid into such an account at any time after an Event of Default or Potential Event of Default); and (q) any other personal property that is not acquired for disposal in the ordinary course of the Chargor's business; and (r) interests in any of the property, assets or rights described in this subclause. 2.3 FLOATING CHARGE The Charge is a floating charge on the rest of the Charged Property. 2.4 THE FLOATING CHARGE BECOMES FIXED The floating charge becomes fixed: (a) over any part of the Charged Property not already subject to a fixed charge under this document: 7 6 (i) if, unless with the prior written consent of the Financier or as expressly permitted under a Relevant Agreement, the Chargor: (A) creates or allows any Security Interest over; (B) sells, leases, licences or otherwise disposes of; (C) creates or allows any interest in; or (D) parts with possession of, that asset or agrees or attempts to do so or takes any step towards doing so; (ii) on any step being taken with a view to levying or enforcing any distress, attachment or other execution on that part of the Charged Property or to enforcing any Security Interest in respect of that part of the Charged Property; (iii) on a Public Authority signing an Attachment Notice which will affect that part of the Charged Property; or (b) over all of the Charged Property: (i) if any order is made or a resolution is passed for the Winding Up of the Chargor or the Chargor is otherwise subjected to or enters into Liquidation; or (ii) on this document being enforced in any way following the occurrence of an Event of Default or Potential Event of Default; or (c) over any part of the Charged Property not already subject to a fixed charge under this document: (i) if the Financier notifies the Chargor that the Charge is fixed over a specified part of the Charged Property; or (ii) when it becomes fixed by law. Except where expressly stated, no notice or action by the Financier is necessary for the floating charge to become fixed. 2.5 THE PARTIES TREAT THE FIXED CHARGE AS FLOATING AGAIN (a) The Financier may notify the Chargor that the Charge is no longer fixed on the assets specified in the Financier's notice ("RELEVANT ASSETS"), with effect from the date specified in that notice. (b) From the date specified in that notice, the Relevant Assets (whether acquired before or after that date) are subject to the floating charge until the Charge crystallises under clause 2.4. 8 7 2.6 CONTINUING SECURITY AND DISCHARGING THE CHARGE The Charge is a continuing security. It remains in effect until the Financier gives a final discharge to the Chargor. The Chargor is only entitled to a final discharge if: (a) all of the Secured Money has been paid; and (b) the Financier is satisfied that there are no amounts which will subsequently fall within the description of the Secured Money. In satisfying itself under paragraph (b), the Financier may consider any matters it thinks relevant, including (without limitation) the possibility that a payment to reduce the Secured Money might be repayable, void or voidable under a law relating to insolvency or protecting creditors. 2.7 PRIORITY AMOUNT - MAXIMUM PROSPECTIVE LIABILITY The maximum prospective liability secured by the Charge is $100,000,000.00. This amount and this clause: (a) apply only to fix priority under section 282(3) of the Corporations Law; and (b) do not affect any obligation of the Chargor under a Relevant Agreement including, but not limited to, its obligation to pay the Secured Money; and (c) do not in any way fix a limit on the amount which may be secured by this document. 2.8 FIRST PRIORITY SECURITY INTEREST The Charge is a first charge. With respect to any Charged Property as to which the law of any state of the United States of America governs the granting, perfection or effect of perfection of a security interest, the Charge created hereunder is a first priority perfected security interest. 3. PAYMENT OBLIGATIONS 3.1 SECURED MONEY The Chargor must pay the Secured Money (free from any deduction, set-off or counter-claim): (a) at the times and in the way specified in the Relevant Agreements; and (b) otherwise, on demand to or as directed by the Financier. 3.2 INTEREST The Chargor must pay interest on the Secured Money to or as directed by the Financier, at the rates specified in the Relevant Agreements. If no rate is specified, the rate is as determined by the Financier. Interest accrues from day to day, computed from the time: (a) the Secured Money became owing (whether or not it is immediately payable); or 9 8 (b) in relation to money payable under clause 3.3, the relevant amount was incurred. Interest may be capitalised monthly or at the times agreed between the parties. It then bears interest itself under this clause. Interest continues to be payable despite the Winding Up of any person, or any judgment obtained against any person. 3.3 COSTS AND EXPENSES The Chargor indemnifies the Financier against, and must pay on demand to the Financier, all Taxes and all reasonable costs and expenses (including, but not limited to, legal costs and expenses on a full indemnity basis) which the Financier or a Receiver or Attorney pays, or is liable to pay, in connection with: (a) a Relevant Agreement, or negotiating, preparing, completing, registering or stamping a Relevant Agreement; or (b) maintaining, preserving or protecting the Charged Property; or (c) surveying, valuing, inspecting or reporting on the Charged Property; or (d) obtaining or attempting to obtain payment of the Secured Money from any person; or (e) protecting, enforcing or exercising a right, power or remedy of the Financier or a Receiver or Attorney under or in connection with a Relevant Agreement; or (f) an Event of Default or Potential Event of Default; or (g) the Financier providing financial accommodation to or at the request of the Chargor; or (h) a receipt or payment of money under, or a transaction contemplated by, a Relevant Agreement. 3.4 CONTINGENT LIABILITIES If the Financier has declared the Secured Money to be immediately payable (under clause 9 or a similar provision in a Relevant Agreement), the money which the Chargor must immediately pay to the Financier includes an amount equal to the sum of: (a) the contingent liability of the Chargor or a Debtor under a Guarantee; and (b) the aggregate face value of all negotiable instruments: (i) drawn, accepted or endorsed by the Financier at the express or implied request of the Chargor or a Debtor; and (ii) which have not yet matured or which have not yet been discharged to the satisfaction of the Financier; and (c) any other amount which may become payable by the Chargor to the Financier in connection with a contingent liability. 3.5 LOSS RESULTING FROM EVENT OF DEFAULT 10 9 The Chargor indemnifies the Financier against all losses (including foregone profits) the Financier suffers in connection with or as a result of an Event of Default. 3.6 INDEMNIFIED AMOUNTS IN FOREIGN CURRENCY Where under this document the Chargor must reimburse or indemnify the Financier against an amount denominated in a currency other than Australian dollars, the Chargor must pay the amount in the relevant currency, except as follows. The Financier may request it be paid in Australian dollars. In that case, the Chargor will pay the amount of Australian dollars which the Financier certifies that it used to buy the relevant amount of the other currency at the rate determined by the Financier to be its usual selling rate for the other currency. 3.7 CURRENCY INDEMNITY The Chargor promises to indemnify the Financier on demand against any shortfall which arises whenever, for any reason (including as a result of a judgment or order, or Liquidation): (a) the Financier receives or recovers an amount in one currency ("PAYMENT CURRENCY") in respect of an amount due to it in another currency ("DUE CURRENCY"); and (b) the amount actually received or recovered by the Financier at its usual rate of exchange in accordance with its normal practice when it converts the Payment Currency into the Due Currency is less than the relevant amount of the Due Currency. 4. CHARGOR'S OTHER OBLIGATIONS 4.1 POSITIVE OBLIGATIONS The Chargor must: (a) carry on its business in a proper and efficient way and obtain, renew and maintain all material licences, consents and approvals advisable in connection with the Chargor's business; and (b) maintain proper and adequate books and records in accordance with applicable accounting standards; and (c) pay when due the Taxes assessed, levied or imposed on the Chargor (other than those being contested in good faith, provided sufficient reserves have been set aside to meet the potential liability), the Charged Property or the Financier in connection with the Charged Property; and (d) comply with each term of each material lease and material contract to which it is a party unless the term is the subject of a bona fide dispute or is legally unenforceable; and (e) ensure that each of its Subsidiaries complies with clauses 4.1(a), (b), (c) and (d) for its own business and property; and 11 10 (f) ensure that each of its Subsidiaries has granted and registered or promptly grants and registers a charge to the Financier over all of its property, assets and rights in form and substance satisfactory to the Financier; (g) comply with all laws and with the mandatory requirements of any Public Authority and promptly carry out work required by a Public Authority concerning the Charged Property except where the requirement to do so is being contested in good faith; and (h) do everything necessary to ensure no Event of Default occurs; and (i) prosecute and defend (at the Chargor's expense) all legal proceedings which are advisable, or which the Financier advises the Chargor that it considers advisable, to avoid a material adverse effect on the Charged Property; and (j) protect the Charged Property, keep it in good repair and good working condition and, if requested by the Financier, replace any part of the Charged Property which, in the Financier's opinion, needs replacement; and (k) give the Financier the certificates of title and other documents evidencing title to that part of the Charged Property over which the Charge is a fixed charge as soon as they are available to the Chargor or its agents; and (l) promptly give the Financier the Security Interests (and documents in connection with the Security Interests) in favour of the Chargor which secure the performance of any obligation or the payment of any money owed to the Chargor; and (m) take whatever action the Financier reasonably requires in connection with environmentally hazardous substances. 4.2 NEGATIVE OBLIGATIONS The Chargor must not, without the consent of the Financier: (a) materially change the scope or nature of its business as it is carried on at the date of this document; or (b) do or allow anything to be done in derogation of the Financier's rights, powers or remedies under any Relevant Agreement; or (c) deal with or dispose of: (i) the Charged Property over which the Charge is fixed; or (ii) the Charged Property over which the Charge is floating, except in the ordinary course of the ordinary business of the Chargor; except as permitted under clause 12.2(b) of the Negative Pledge; (d) permit a Security Interest (other than a Permitted Security Interest) to affect the Charged Property; or (e) apply for or obtain money, goods or services from a Public Authority, fail to pay an amount to a Public Authority (unless the Chargor is contesting the 12 11 liability to pay in good faith and has set aside sufficient reserves to meet the liability) or do anything else which might lead to a liability or Tax being imposed on the Charged Property; or (f) other than in the ordinary course of the Chargor's business materially alter or remove a building, improvement or fixture which is part of the Charged Property; or (g) acquire or dispose of an asset, or incur a liability, except in the ordinary course of the Chargor's ordinary business and on "arm's length" terms or as permitted under clause 12.2(b) of the Negative Pledge; or (h) dispose of any book debts owed to it, or any of its monetary claims or revenue; or (i) deposit money: (i) on terms that the money is redeemable, repayable or may be withdrawn only if the Chargor pays some other debt or performs some other obligation; or (ii) if a right of set-off (however described) may be exercised against the deposit, except that the Chargor may lodge security deposits required to be lodged under leases entered into at arms' length or with Public Authorities (other than in respect of moneys which are delinquent); or (j) buy or agree to buy anything on terms reserving title to any person until paid for (except stock purchases in the ordinary course of business); or (k) call up uncalled capital or uncalled premiums of the Chargor or receive it in advance of calls or apply it except to pay the Secured Money; or (l) allow an environmentally hazardous substance to be released on or from the Charged Property in breach of any law or the requirements of any Public Authority; or (m) do or allow anything to be done which may (other than in an immaterial way) prejudice the Financier's security or rights under a Relevant Agreement. 4.3 UNDERTAKINGS RELATING TO LIQUOR LICENCE If the Chargor at any time holds a Liquor Licence the Chargor undertakes to the Financier that: (a) (i) it will personally carry on the business in respect of which the Liquor Licence is held upon the premises to which the Liquor Licence relates ("LICENSED PREMISES") or cause that business to be carried on by a person previously nominated by it and who is acceptable to the relevant licencing authority; (ii) it will perform and observe the provisions and requirements of: (A) the Liquor Act; 13 12 (B) all other statutes affecting or relating to the licensed premises and the business carried on at the licensed premises; and (C) any order or notice given, sent or served upon the Financier or the Chargor pursuant to or by virtue of the Liquor Act or any other statute; (iii) it will apply for all licenses, permits and renewals of licences and permits necessary or desirable for the conduct of the business carried on at the licensed premises and will oppose any application to restrict or cancel any such licence; and (iv) it will not: (A) change the use of the licensed premises; (B) remove or apply to remove the Liquor Licence or allow the Liquor Licence to be removed from the licensed premises to other premises; (C) surrender or attempt to surrender, suspend or attempt to suspend, or transfer or attempt to transfer the Liquor Licence or vary any of the conditions of the Liquor Licence; or (D) mortgage, charge, assign, transfer, lease or part with possession of the licensed premises or any part of them to any person or attempt to do so, without the Financier's prior written consent. (b) If and when required by the Financier after the occurrence of an Event of Default, the Chargor shall use its best endeavours to obtain a transfer of the Liquor Licence to the Financier or its nominee. 5. CHARGOR'S INSURANCE OBLIGATIONS 5.1 POSITIVE OBLIGATIONS The Chargor must: (a) maintain, with underwriters and on terms reasonably acceptable to the Financier: (i) insurance over the Charged Property for its full insurable value (or such other amount as the Financier specifies) against loss, damage or destruction resulting from theft, fire, storm and the other risks usually covered by insurance, and the risks the Financier specifies; and (ii) worker's compensation, public risk, business interruption, loss of rent insurance and the other insurance which a prudent person would have if involved in a business similar to the Chargor's; and (iii) the other insurance which the Financier reasonably specifies; (b) ensure that this insurance: 14 13 (i) has the interest of the Financier as chargee or mortgagee endorsed on the policy; or (ii) if the Financier directs, is in both the names of the Chargor and the Financier for their respective rights and interests; and (c) deliver to the Financier: (i) the insurance policies relating to this insurance ("INSURANCE POLICIES"); and (ii) all alterations and additions to the Insurance Policies, immediately after they are issued; and (d) on request, give the Financier certificates of currency for the Insurance Policies; and (e) punctually pay the sums (including stamp duty) necessary to maintain every Insurance Policy and give the Financier promptly on request the receipt for the premium sum paid; and (f) notify the Financier immediately after becoming aware of anything which might give rise to a claim or right to claim under an Insurance Policy which claim might or will exceed $1,000,000.00. 5.2 NEGATIVE OBLIGATIONS The Chargor must not without the consent of the Financier: (a) do or allow anything to be done which might cause an Insurance Policy to be prejudiced; or (b) take steps to bring about a material change to the cover under an Insurance Policy; or (c) insure the Charged Property other than as specified in clause 5.1; or (d) make, enforce, settle or compromise a claim or do anything inconsistent with the powers of the Financier under clause 5.3. 5.3 INSURANCE CLAIMS The Chargor may not without the consent of the Financier: (a) make, enforce, settle and compromise insurance or compensation claims in connection with the Charged Property; or (b) sue for, recover, receive and give discharges for money payable in connection with the Insurance Policies, where such claims or money payable exceed $1,000,000.00. 15 14 5.4 INSURANCE PROCEEDS (a) If the Chargor receives money payable under an Insurance Policy before a final discharge of this Charge, the Chargor must, if a Potential Event of Default or Event of Default has occurred or, in any event, if the amount received is in excess of $1,000,000.00, pay it to the Financier immediately; (b) the Financier may apply money received under an Insurance Policy either: (i) if a Potential Event of Default or Event of Default has occurred and is outstanding, in or towards payment of the Secured Money, whether due or not; or (ii) in replacing, rebuilding or repairing, under the supervision of the Financier, or the Financier's builder or architect, the property destroyed or damaged. 6. CHARGOR'S REPORTING OBLIGATIONS 6.1 NOTICES TO THE FINANCIER The Chargor must notify the Financier as soon as an Authorised Officer of the Chargor becomes aware of: (a) an Event of Default or Potential Event of Default; or (b) a representation or warranty in any Relevant Agreement becoming materially false or misleading (giving full details); or (c) the Charged Property being acquired or resumed by a Public Authority or a proposal to do so; or (d) the Chargor acquiring or intending to acquire a Subsidiary; or (e) a material requirement or notice of a Public Authority in connection with the Charged Property and must give the Financier a copy of any related document it has and full details of all relevant facts known to the Chargor concerning the requirement or notice; or (f) any environmentally hazardous substance released from or affecting the Charged Property in breach of any law or the requirements of any Public Authority. 7. ACCESS TO AND INVESTIGATION OF RECORDS AND LAND 7.1 GIVING ACCESS TO RECORDS AND LAND The Chargor must: (a) ensure that the Records of the Chargor and its Subsidiaries are available for inspection at reasonable times by the Financier and persons acting on the Financier's behalf; and 16 15 (b) allow the Financier and persons acting on the Financier's behalf to inspect and to take copies of or extracts from the Chargor's and its Subsidiaries' Records during business hours and give reasonable assistance to them; and (c) allow, or obtain for the Financier and persons acting on the Financier's behalf, full access at all times during business hours to the Charged Property and to any land or building: (i) occupied by the Chargor or its Subsidiaries; or (ii) forming or containing part of the Charged Property, and give reasonable assistance to them. 7.2 INVESTIGATING ACCOUNTANTS If the Financier at any time is of the opinion that an Event of Default or Potential Event of Default has occurred or is likely to occur, the Financier may appoint a firm of independent accountants or other experts ("INVESTIGATING ACCOUNTANTS") to investigate the affairs and financial position of the Chargor and, if the Financier requires, of the Subsidiaries of the Chargor. The Chargor: (a) unconditionally authorises the Investigating Accountants to take the action which is reasonably necessary for the investigation. This does not include the power to manage the Chargor's business (unless an Event of Default has occurred and the Financier is exercising enforcement rights under this document); and (b) agrees to give the Investigating Accountants all reasonable assistance and access to all relevant records and information for that purpose; and (c) unconditionally authorises the Investigating Accountants to disclose to the Financier and its advisers all information and documentation in connection with the investigation. The Chargor must pay the reasonable costs and expenses of the investigations to the Investigating Accountants on demand and reimburse the Financier for its costs and expenses. 8. BETTER SECURITY AND RIGHTS FOR FINANCIER 8.1 BETTER SECURITY AND RIGHTS The Chargor must, at the Chargor's cost, do whatever the Financier reasonably requires to: (a) more satisfactorily secure to the Financier the payment of the Secured Money; or (b) enable the Financier to better exercise its rights over the Charged Property, and must use its best efforts to make anyone else who has an interest in the Charged Property or claims under or in trust for the Chargor do the same. 17 16 8.2 EXAMPLES This includes, but is not limited to, executing: (a) a Security Interest (including a legal mortgage) over the Charged Property; (b) ancillary Guarantees or other documents; and (c) financing statements suitable for filing or recording in any state of the United States of America, in a form reasonably satisfactory to the Financier. 9. EFFECT OF EVENT OF DEFAULT After an Event of Default the Financier may declare the Secured Money payable. If so, the Secured Money becomes immediately payable, unless the Financier specifies otherwise. 10. FINANCIER'S POWERS 10.1 GENERALLY (a) After an Event of Default, the Financier may do the things which a mortgagee and an absolute owner could do to the Charged Property and exercise the rights, powers and remedies of a mortgagee and an absolute owner of the Charged Property. These include, but are not limited to, the things and powers described in this clause 10, and the rights, powers and remedies of a secured party under the Uniform Commercial Code of any jurisdiction in the United States of America. (b) The Financier need not make a demand or give notice to anyone before doing these things or exercising these powers, except if notice is required as described in clause 10.10. 10.2 TO TAKE POSSESSION OF CHARGED PROPERTY After an Event of Default the Financier may: (a) take possession of the Charged Property; and (b) receive the rents and profits of the Charged Property. 10.3 TO DEAL WITH THE CHARGED PROPERTY AND CHARGOR'S BUSINESS After an Event of Default the Financier may do any of the following: (a) (CARRY ON BUSINESS) carry on or participate in the Chargor's business in the name of the Chargor or the Financier or otherwise; and (b) (BANK ACCOUNTS) operate bank accounts in the name of the Chargor (alone or together) to the exclusion of the Chargor; and (c) (NEGOTIABLE INSTRUMENTS) deal with negotiable instruments in the name of the Chargor; and 18 17 (d) (CONTRACTUAL RIGHTS) (i) perform the Chargor's obligations under; and (ii) enforce or exercise or not exercise the Chargor's rights and powers under; and (iii) agree to vary or rescind, a contract, instrument, arrangement or right forming part of the Charged Property; and (e) (COMPROMISE) settle, compromise or submit to arbitration a dispute in connection with the Charged Property; and (f) (PERFORM CHARGOR'S OBLIGATIONS) do everything it may to comply with the obligations of the Chargor under a Relevant Agreement; and (g) (REMEDY BREACH) do everything it may to make good a breach or default inherent in an Event of Default, to its own satisfaction; and (h) (DEPOSIT MONEY IN SUSPENSE OR OTHER ACCOUNTS) invest, deposit or hold the Charged Property in any way that, and for as long as, the Financier thinks fit and vary, transpose or reinvest the Charged Property; and (i) (MAKE CALLS) make calls on the members of the Chargor for the uncalled capital or uncalled premiums subject to the Charge; and (j) (RECOVER, PROTECT CHARGED PROPERTY) do everything the Financier thinks necessary to recover or protect the Charged Property including, but not limited to, Winding Up debtors of the Chargor; and (k) (LEGAL PROCEEDINGS) commence, prosecute, defend and settle proceedings which the Financier considers expedient in connection with this document or the Charged Property in or before a Public Authority in the name of the Chargor or otherwise; and (l) (MARKETABLE SECURITIES) exercise the rights and powers of an absolute owner in connection with Marketable Securities which form part of the Charged Property. The Chargor appoints the Financier and each Authorised Officer of the Financier separately to be the authorised representative and proxy of the Chargor to do the things described in this paragraph; and (m) (EXCHANGE) exchange the Charged Property for any other property or rights (with or without giving or receiving any other consideration for the exchange); and (n) (TRANSFER OBLIGATIONS) effect a novation of or otherwise transfer to any person obligations of the Chargor which arise under a Relevant Agreement or otherwise; and (o) (IMPROVE CHARGED PROPERTY) do anything which the Financier considers would help improve the value of the Charged Property, obtain income or returns from it or make it saleable or more saleable. Without limitation, the 19 18 Financier may improve or alter the Charged Property, acquire additional property in the name of the Chargor, reorganise or restructure the Chargor's business or any process or procedure carried on by the Chargor, and undertake any marketing or publicity campaign; and (p) (BUILD, PULL DOWN, REBUILD OR ALTER) (i) build a new building or improvement; and (ii) pull down, rebuild or alter a building or improvement, on land which, or an interest in which, is part of the Charged Property; and (q) (EXECUTE DOCUMENTS) enter into agreements and execute documents itself or on behalf of the Chargor for any purpose in connection with a Relevant Agreement; and (r) (BORROW, SECURE) in the name of the Chargor or otherwise: (i) obtain financial accommodation (including, but not limited to, from a party associated with the Financier) for any purpose which the Financier considers expedient in connection with its powers under a Relevant Agreement; and (ii) secure the payment or repayment of indebtedness relating to that financial accommodation by a Security Interest over the Charged Property, however it ranks for priority with the Charge or a Collateral Security; and (s) (EMPLOY AND APPOINT PERSONS) employ staff and appoint professionals and consultants for any purpose, and at the remuneration, that the Financier thinks fit; and (t) (DELEGATE) delegate to any person for any time that the Financier thinks fit any of the powers of the Financier under this document, including this right of delegation; and (u) (INCIDENTAL POWER) do anything the Financier thinks expedient in its interests and incidental to any of its powers under this document, without limiting those powers; and (v) (SPEND MONEY) spend money in exercising its powers in this document. That money then forms part of the Secured Money. 10.4 TO DISCHARGE OR ACQUIRE PRIOR SECURITY INTEREST After an Event of Default the Financier may: (a) purchase the debt secured by a prior Security Interest; or (b) pay the amount required to discharge or satisfy that debt (including, but not limited to, a debt secured by a Permitted Security Interest); or (c) take a transfer or assignment of that Security Interest and any Guarantee, document or right ancillary or collateral to it, at the Chargor's cost. 20 19 10.5 EXERCISE OF RIGHTS UNDER CLAUSE 10.4 If the Financier exercises its rights under clause 10.4: (a) the Chargor is indebted to the Financier for the same amount paid by the Financier. This does not limit any other debt acquired by the Financier; and (b) that debt is immediately payable to the Financier and forms part of the Secured Money and interest accrues on the unpaid amount of that debt under clause 3.2; and (c) the Financier need not enquire whether the money claimed to be owing is actually owing in connection with the prior Security Interest, or an ancillary or collateral document; and (d) the person with the benefit of the prior Security Interest need not enquire whether there is any money owing under a Relevant Agreement; and (e) the Chargor directs any person with the benefit of a prior Security Interest to give the Financier any information it requires in connection with the prior Security Interest. This includes, but is not limited to, the state of accounts for that Security Interest. 10.6 TO SELL AND LEASE After an Event of Default the Financier may do any of the following: (a) (SELL) sell or help sell the Charged Property on the terms and in the manner it thinks fit, whether or not the Financier has taken possession; and (b) (OPTIONS) give an option to purchase the Charged Property on the terms it thinks fit; and (c) (SEVER FIXTURES) sever fixtures belonging to the Chargor and sell them apart from the Charged Property; and (d) (LEASE, ETC) lease the Charged Property or give licences or rights over the Charged Property in the name of the Chargor or otherwise (whether or not the Financier has taken possession) for whatever term, at whatever rent or fee and on whatever terms the Financier thinks fit; and (e) (DEAL WITH LEASES) renew, vary, accept the surrender of or terminate a lease or licence of the Charged Property; and (f) (SELL OR LEASE TOGETHER WITH OTHER PROPERTY) sell or lease the Charged Property with any other property in any manner that the Financier thinks expedient, with full power to apportion costs, expenses, purchase money and rent between the properties sold or leased; and (g) (HIVE OFF ASSETS OR OBLIGATIONS) promote the formation of any company so that the company may purchase or acquire the Charged Property or assume obligations of the Chargor or both; and 21 20 (h) (EFFECT HIVE-OFF) sell or assign the Charged Property or assume the Chargor's obligations. 10.7 TO APPOINT RECEIVERS After an Event of Default, the Financier may: (a) appoint one or more persons to be a Receiver or Receivers of the Charged Property, with the powers and rights described in this clause 10 (or such lesser powers as the Financier determines); and (b) remove that Receiver or those Receivers; and (c) if a Receiver is removed, retires or dies, appoint another or others in his or her place; and (d) in the case of removal or retirement of a Receiver, reappoint that person. 10.8 TO APPOINT MORE THAN ONE RECEIVER If the Financier appoints two or more persons to be the Receiver, the Financier may appoint them to act jointly, severally or jointly and severally. If it is not specified in the instrument of appointment, the Receivers are appointed to act severally. 10.9 TO PAY THE RECEIVER The Financier may fix the remuneration of a Receiver at an amount agreed between the Financier and the Receiver. 10.10 NOTICE OR LAPSE OF TIME REQUIRED BEFORE RIGHTS EXERCISED (a) If notice or lapse of time is required under any statute before the Financier can exercise its power of sale or any other rights available to it under this document or by law, then that notice or lapse of time is dispensed with. (b) Paragraph (a) only applies if the relevant statute allows notice or lapse of time to be dispensed with. (c) If the relevant statute does not allow notice or lapse of time to be dispensed with, but allows it to be shortened, then for the purposes of this document, the period of notice or lapse of time is one day. 10.11 TO GIVE UP POSSESSION AND TERMINATE RECEIVERSHIP The Financier may: (a) give up possession of the whole or any part of the Charged Property; or (b) terminate a receivership, or both. 10.12 PERSONS DEALING NOT BOUND TO ENQUIRE A person dealing with the Financier or a Receiver or Attorney: 22 21 (a) need not enquire whether there has been a default by the Chargor under a Relevant Agreement or whether the Financier, Receiver or Attorney has acted properly; or (b) need not enquire whether the Financier, a Receiver or an Attorney has executed or registered an instrument or exercised a right, power or remedy properly or with authority, and whenever the Financier, a Receiver or an Attorney deals with the Charged Property, that dealing is authorised and valid as far as anyone involved with that dealing is concerned. The receipt of the Financier or a Receiver or Attorney for any money payable to the Chargor discharges the person paying that money to the extent of the payment. 10.13 RESPONSIBILITY FOR LOSS The Financier is not responsible for a loss arising in connection with it exercising or failing to exercise its powers under a Relevant Agreement nor for an act or failure of an employee or agent of the Financier or any Receiver. The Financier need not account for more money than it actually receives. 11. RECEIVER'S POWERS 11.1 GENERAL Unless the terms of the Receiver's appointment say otherwise, the Receiver has the following powers over the Charged Property which the Receiver is appointed to deal with: (a) all the rights and powers given by law to mortgagees in possession, receivers or receivers and managers; and (b) all the rights and powers of the Financier under this document and at law (other than the power to appoint Receivers); and (c) power to obtain financial accommodation from the Financier, alone or together with any other person, for a purpose and on the terms that the Receiver considers expedient in connection with the Charged Property; and (d) power to secure the payment or repayment of indebtedness relating to that financial accommodation by a Security Interest over the Charged Property, however it ranks for priority with the Charge or a Collateral Security. The Receiver may exercise these rights and powers in the name of the Chargor or otherwise. 11.2 RECEIVER IS AGENT OF CHARGOR A Receiver is the agent of the Chargor. The Chargor alone is responsible for the Receiver's acts and defaults. But the Receiver, to the extent required by law, ceases to be the agent of the Chargor if a resolution is passed or an order is made to Wind Up the Chargor. The Receiver may become the agent of the Financier if the Financier gives a 23 22 notice to the Receiver in writing to that effect. The Financier may appoint a further Receiver, despite that resolution or order. 11.3 ACCOUNTABILITY OF RECEIVER A Receiver is not responsible for a loss arising in connection with the exercise or execution of the Receiver's powers, nor for any act or default of an employee or agent of the Financier or the Receiver. A Receiver need not account for more money than the Receiver actually receives. 12. POWER OF ATTORNEY 12.1 APPOINTMENT AND POWERS The Chargor for valuable consideration irrevocably appoints the Financier, each Authorised Officer of the Financier and each Receiver separately as its attorneys to do the following on the Chargor's behalf and in the name of the Chargor or the Attorney after the occurrence of an Event of Default or Potential Event of Default: (a) anything which the Chargor must do under a Relevant Agreement; and (b) anything which, in the opinion of the Attorney: (i) would give effect to a right, power or remedy of the Financier or a Receiver; or (ii) the Chargor should do, under a Relevant Agreement or by law; and (c) enter into or execute transactions, documents and agreements which, in the opinion of the Attorney, the Chargor should enter into or execute under a Relevant Agreement; and (d) use the Chargor's name to exercise the powers of the Financier or a Receiver under a Relevant Agreement, the law or otherwise, and the Chargor agrees to ratify anything done by an Attorney under this power of attorney. 12.2 ATTORNEY MAY DELEGATE POWERS An Attorney may delegate its powers (including the power to delegate) to any person for any period and may revoke the delegation. 12.3 PURPOSE The power of attorney created under this clause is irrevocable and is granted to secure the performance by the Chargor of the Chargor's obligations under each Relevant Agreement to which the Chargor is a party. 24 23 13. NOTICES AND DEMANDS FROM THE FINANCIER 13.1 SIGNING A notice from or demand by the Financier to or on the Chargor may be signed by an Authorised Officer of the Financier or by a solicitor acting for the Financier. This signature may be handwritten or printed or reproduced by other means. 13.2 SENDING In addition to any method of service provided for by statute, a notice from or demand by the Financier is given to or made on the Chargor if it is: (a) sent by facsimile to the facsimile number of the Chargor last known to the Financier or, if more than one facsimile number is known to the Financier, to any of those facsimile numbers; or (b) left for the Chargor or sent by prepaid mail (and by airmail if to an address outside Australia) to the Chargor at: (i) the address of the Chargor set out in this document; or (ii) the Chargor's usual place of business last known to the Financier; or (iii) the Chargor's registered office; or (iv) premises owned or occupied by the Chargor. 13.3 VALIDITY A notice or demand is validly given even if: (a) the Chargor has been Wound Up or the Chargor is absent from the place the notice or demand is left at, or delivered or sent to; or (b) the notice or demand is returned unclaimed. 13.4 RECEIPT A notice or demand is taken to have been received by the Chargor: (a) if delivered personally, on the same day; and (b) if posted to an address in Australia, on the second Business Day after it was posted; and (c) if posted to an address outside Australia, on the fourth Business Day after it was posted; and (d) if sent by facsimile, when a transmission report is produced by the sender's facsimile machine indicating that the notice or demand has been sent to the relevant number. 25 24 14. PRESERVING THE FINANCIER'S RIGHTS, POWERS AND REMEDIES 14.1 PRESERVATION (a) The fact that the Financier does not exercise, or delays the exercise of, any right, power or remedy does not affect any of its other rights, powers or remedies. (b) The fact that the Financier delays the exercise of any right, power or remedy does not constitute a waiver of that right, power or remedy. (c) The fact that the Financier exercises a right, power or remedy does not prevent the Financier from exercising that right, power or remedy again. (d) This document does not operate to extinguish or prejudice any right, power or remedy of the Financier under a Relevant Agreement or in connection with the Secured Money. 14.2 MORATORIUM LEGISLATION A moratorium does not apply to a Relevant Agreement or the recovery of the Secured Money except if: (a) the Financier agrees in writing that it does; or (b) it cannot be excluded by law. 14.3 REINSTATING OR REPLACING RIGHTS If any payment made to the Financier in reduction of the Secured Money is repaid or void or conceded to be void, voidable or repayable for any reason, then, despite any release, settlement or discharge in connection with the Secured Money: (a) that payment has not discharged the relevant liability; and (b) the Financier may recover the amount of that payment from the Chargor; and (c) the Chargor must: (i) immediately do all acts and things the Financier requires to replace or reinstate the Charge and any Collateral Security which has been released in connection with that payment; and (ii) indemnify the Financier against and pay on demand all costs and expenses in connection with replacing or reinstating the Charge and any Collateral Securities. 14.4 EFFECT OF RELEASE (a) A full or partial release of this Charge by the Financier does not release the Chargor from personal liability under this document until the Financier receives the Secured Money, regardless of any: (i) receipt given, payout figure quoted or other form of account stated; or 26 25 (ii) error or miscalculation by the Financier. (b) Each indemnity given by the Chargor to the Financier under this document is a continuing indemnity. A full or partial release of this Charge does not release the Chargor from liability under an indemnity unless the release is specifically of that indemnity. 15. MISCELLANEOUS 15.1 NO OBLIGATION TO EXERCISE RIGHTS OR GIVE CONSENT Each of the Financier and a Receiver may: (a) exercise or not exercise any right, power or remedy; and (b) give or not give consent; and (c) make or not make a decision, under this document, in its absolute discretion without giving a reason and without being liable or accountable for the consequences. In relation to the giving or not giving of consent, the Financier will act in a manner which the Financier determines in its absolute discretion to be reasonable. Such determination shall not be questioned by the Chargor. 15.2 CONSENT MUST BE IN WRITING A consent given or a right, power or remedy waived by the Financier is effective only if given or waived in writing. 15.3 NOTIFICATION FROM CHARGOR If the Chargor is required under this document to notify the Financier about anything, the Chargor must do so in writing. 15.4 FINANCIER MAY SET OFF Without any demand or notice, the Financier may set off and apply indebtedness it owes to the Chargor (whatever the currency) against the Secured Money: (a) whether the indebtedness is owed alone or with any other person; and (b) whether or not the Secured Money or that indebtedness is immediately payable. 15.5 CHARGOR MUST NOT SET OFF The Chargor must not claim, exercise or attempt to exercise a right of set-off or any other right which might reduce or discharge the Secured Money. 15.6 NO MARSHALLING The Financier need not resort to a Collateral Security or other Security Interest before exercising a power under this document. 27 26 15.7 SUSPENSE ACCOUNT The Financier may credit money received in or towards satisfaction of the Secured Money to a suspense account. The Financier may keep the money in that account for as long as the Financier thinks fit. Interest will not accrue on such account. The Financier may apply the money to reduce the Secured Money whenever it thinks fit. 15.8 SURPLUS PROCEEDS If surplus money remains in the hands of the Financier or a Receiver after payment of all the Secured Money (and satisfaction of any obligation ranking in priority to the Secured Money or secured by a Security Interest over the Charged Property): (a) no trust arises over that surplus money; and (b) that surplus money does not carry interest and the Financier or Receiver may pay it to an account in the name of the Chargor (whether or not opened by the Financier or Receiver for that purpose). The Financier or Receiver is then no longer liable for the surplus money. 15.9 APPLYING RECEIPTS The Financier may apply or appropriate money received to reduce the Secured Money in the order, and to satisfy whatever part of the Secured Money, the Financier sees fit. 15.10 TACKING For the purpose of applying section 282 of the Corporations Law or any equivalent provision in any jurisdiction, if the Financier is obliged to make further advances under a Relevant Agreement, that Relevant Agreement is taken to be incorporated in this document so that this document imposes on the Financier an obligation to advance that money. 15.11 THE FINANCIER MAY ASSIGN RIGHTS The Financier may assign or otherwise deal with its rights and benefits under this document. 15.12 THE FINANCIER MAY DISCLOSE INFORMATION The Financier may disclose to a potential assignee or participant any information about the Chargor, any Debtor or a Relevant Agreement which it considers appropriate. 15.13 CERTAIN NOTICES OR DEMANDS A notice from or demand by the Financier stating: (a) that a specified sum of money is owing or payable (or both) under a Relevant Agreement; or (b) that an Event of Default has occurred; or (c) something relevant to the rights or obligations of the Financier or the Chargor under a Relevant Agreement, 28 27 is admissible in proceedings and is conclusive evidence of the matters stated except if there is manifest error. 15.14 IF DUE DATE NOT A BUSINESS DAY If anything should be done under this document on a day that is not a Business Day, it must be done on the previous Business Day. 15.15 SEVERABILITY (a) A construction of this document that results in all provisions being enforceable is to be preferred to a construction that does not so result. (b) If, despite the application of paragraph (a), a provision of this document is illegal or unenforceable: (i) and it would be legal and enforceable if a word or words were omitted, that word or those words are severed; and (ii) in any other case, the whole provision is severed, and the remainder of this document continues in force. 15.16 GOVERNING LAW AND JURISDICTION This document is governed by the law of Queensland, except: (a) as required by mandatory provisions of law; (b) to the extent that the validity, perfection or enforceability of any of the security interests hereunder, or remedies hereunder, are dependent on the laws of a jurisdiction other than Queensland, in which case the governing law shall (to that extent only) be the law of that jurisdiction. The parties hereto agree and intend that: (c) a proper forum/jurisdiction for any litigation or process arising out of or related to this Agreement shall be any court located in Queensland; and (d) a proper forum/jurisdiction for any litigation or process in respect of any of the Charged Property located in a jurisdiction other than Queensland shall be any court located either in Queensland or that other jurisdiction. The Chargor irrevocably and unconditionally submits to the non-exclusive jurisdiction of the courts of Queensland and/or the other jurisdiction referred to in paragraph (e) (as the case may be). The Chargor, to the extent permitted by applicable laws, hereby expressly waives any defence or objection to jurisdiction or venue based on the doctrine of forum non conveniens, and stipulates that the courts of Queensland and/or that other jurisdiction (as the case may be) shall have in personam jurisdiction and venue over it for the purpose of any such litigation or process arising out of or related to this document. 15.17 AGENT FOR SERVICE OF PROCESS The Chargor, having its registered office outside Queensland: 29 28 (a) irrevocably appoints Collins Restaurants Management Pty Ltd ACN 093 912 979 ('CRM') as its agent for service of process relating to any proceedings before the courts and appellate courts of the State of Queensland in connection with this document; (b) failure by CRM to notify to the process will not invalidate the proceedings concerned; and (c) agrees that nothing shall affect the right to serve process in any other manner permitted by law. 15.18 FINANCIER NEED NOT EXECUTE This document is enforceable by the Financier even if the Financier does not execute it. SCHEDULE A The Charged Property includes, without limitation, all of the following property, assets and rights of the Chargor, whether now owned or hereafter acquired: accounts, general intangibles, rights to payment of money, rights and benefits under contracts and agreements, tax refunds, insurance proceeds, instruments, chattel paper, letters of credit, promissory notes, drafts, bills of exchange, trade acceptances, documents, inventory, goods, copyrights, patents, trademarks, equipment, motor vehicles, documents of title, investment property, and all other tangible and intangible property, including without limitation, proceeds and products of the foregoing, and books and records relating to the foregoing. All terms used in this Schedule A shall have the definitions set forth in the Commercial Code of the State of California. 30 29 EXECUTED as a deed. THE COMMON SEAL OF SIZZLER ASIA ) HOLDINGS INC. is affixed in ) accordance with its constituent ) documents in the presence of ) - ------------------------------ ---------------------------------- Authorised Officer/Director Authorised Officer/Director - ------------------------------ ---------------------------------- Please Print Full Name Please Print Full Name EX-10.7 8 v65255ex10-7.txt EXHIBIT 10.7 1 EXHIBIT 10.7 COLLINS FOODS GROUP PTY LTD ACN 009 937 900 COLLINS FOODS INTERNATIONAL PTY LTD ARBN 009 980 250 COLLINS INTERNATIONAL INC COLLINS RESTAURANTS QUEENSLAND PTY LTD ACN 009 988 381 SIZZLER NEW ZEALAND LIMITED SIZZLER SOUTH PACIFIC PTY LTD ARBN 010 713 952 SIZZLER SOUTH-EAST ASIA INC SIZZLER RESTAURANTS GROUP PTY LTD ACN 010 102 388 SIZZLER RESTAURANT SERVICES, INC SIZZLER ASIA HOLDINGS INC. COLLINS RESTAURANTS MANAGEMENT PTY LTD ACN 093 912 979 (EACH A 'DEBTOR') SIZZLER INTERNATIONAL, INC. SIZZLER INTERNATIONAL MARKS INC. RESTAURANT CONCEPTS OF AUSTRALIA, PTY LTD SIZZLER FRANCHISE DEVELOPMENT, LTD FURNACE CONCEPTS INTERNATIONAL, INC FURNACE CONCEPTS AUSTRALIA CORP. ARBN 070 065 468 RESTAURANT CONCEPTS INTERNATIONAL INC, SIZZLER AUSTRALIA PTY LTD ACN 010 060 876 COLLINS PROPERTY DEVELOPMENT PTY LTD ACN 010 539 616 COLLINS FINANCE AND MANAGEMENT PTY LTD ACN 009 996 721 COLLINS FOODS AUSTRALIA PTY LTD ACN 009 914 103 (EACH A 'JUNIOR CREDITOR') WESTPAC BANKING CORPORATION ARBN 007 457 141 ('SENIOR CREDITOR') SUBORDINATION DEED MINTER ELLISON Lawyers Waterfront Place 1 Eagle Street BRISBANE QLD 4000 DX 102 BRISBANE Telephone (07) 3226 6333 Facsimile (07) 3229 1066 GB 1090692 2 TABLE OF CONTENTS
1. INTERPRETATION......................................................................2 2. CONSIDERATION.......................................................................4 3. SUBORDINATION.......................................................................5 4. REPRESENTATIONS AND WARRANTIES......................................................7 5. PERMITTED PAYMENTS..................................................................7 6. RESTRICTIONS ON INDEBTEDNESS........................................................8 7. UNDERTAKINGS........................................................................8 8. PRESERVATION OF SENIOR CREDITOR'S RIGHTS...........................................10 9. NO COMPETITION.....................................................................10 10. OTHER SECURITY.....................................................................10 11. COSTS AND EXPENSES.................................................................10 12. SET OFF............................................................................11 13. ASSIGNMENT.........................................................................11 14. POWER OF ATTORNEY..................................................................11 15. CERTIFICATES.......................................................................12 16. NOTICES............................................................................12 17. SEVERABILITY.......................................................................13 18. GOVERNING LAW AND JURISDICTION.....................................................13 19. AGENT FOR SERVICE OF PROCESS.......................................................13 20. ATTORNEYS..........................................................................14 21. NOVATION AND TERMINATION OF EARLIER DEED...........................................14
3 SUBORDINATION DEED DEED dated August 21, 2000 BETWEEN: COLLINS FOODS GROUP PTY LTD ACN 009 937 900 COLLINS FOODS INTERNATIONAL PTY LTD ARBN 009 980 250 COLLINS INTERNATIONAL INC, A COMPANY INCORPORATED IN DELAWARE, UNITED STATES OF AMERICA COLLINS RESTAURANTS QUEENSLAND PTY LTD ACN 009 988 381 SIZZLER NEW ZEALAND LIMITED, A COMPANY INCORPORATED IN NEVADA, UNITED STATES OF AMERICA SIZZLER SOUTH PACIFIC PTY LTD ARBN 010 713 952 SIZZLER SOUTH-EAST ASIA INC, A COMPANY INCORPORATED IN NEVADA, UNITED STATES OF AMERICA SIZZLER RESTAURANTS GROUP PTY LTD ACN 010 102 388 SIZZLER RESTAURANT SERVICES, INC, A COMPANY INCORPORATED IN NEVADA, UNITED STATES OF AMERICA SIZZLER ASIA HOLDINGS, INC, A COMPANY INCORPORATED IN DELAWARE, UNITED STATES OF AMERICA COLLINS RESTAURANTS MANAGEMENT PTY LTD ACN 093 912 979 each of or c/- 16 Edmondstone Street, Newmarket, Brisbane, Queensland, Australia (EACH A 'DEBTOR') AND SIZZLER INTERNATIONAL, INC., A COMPANY INCORPORATED IN DELAWARE, UNITED STATES OF AMERICA SIZZLER INTERNATIONAL MARKS INC., A COMPANY INCORPORATED IN DELAWARE, UNITED STATES OF AMERICA RESTAURANT CONCEPTS OF AUSTRALIA, PTY LTD SIZZLER FRANCHISE DEVELOPMENT, LTD, A COMPANY INCORPORATED IN BERMUDA FURNACE CONCEPTS INTERNATIONAL, INC, A COMPANY INCORPORATED IN NEVADA, UNITED STATES OF AMERICA FURNACE CONCEPTS AUSTRALIA CORP. ARBN 070 065 468 RESTAURANT CONCEPTS INTERNATIONAL INC, A COMPANY INCORPORATED IN NEVADA, UNITED STATES OF AMERICA SIZZLER AUSTRALIA PTY LTD ACN 010 060 876 COLLINS PROPERTY DEVELOPMENT PTY LTD ACN 010 539 616 COLLINS FINANCE AND MANAGEMENT PTY LTD ACN 009 996 721 COLLINS FOODS AUSTRALIA PTY LTD ACN 009 914 103 each of c/- 16 Edmondstone Street, Newmarket, Brisbane, Queensland, Australia (EACH A 'JUNIOR CREDITOR') AND WESTPAC BANKING CORPORATION ARBN 007 457 141, of 260 Queen Street, Brisbane, Queensland ('SENIOR CREDITOR') 4 2 RECITAL The Senior Creditor, each Junior Creditor and each Debtor have agreed that the Subordinated Debt will be subordinated to the Senior Debt on the terms and to the extent provided in this document. AGREEMENT 1. INTERPRETATION 1.1 DEFINITIONS In this document: 'ACCESSION DEED' means an Accession Deed substantially in the form of annexure 'A'. 'AUTHORISED OFFICER' means, in relation to a body corporate, a person for the time being holding or acting in the office of director, chief executive, deputy chief executive or secretary of that body corporate or a person the title of whose office at the body corporate includes the word 'Manager' or the word 'Director' or the like. 'BUSINESS DAY' means a day on which the Senior Creditor is generally open for business except a Saturday, Sunday or public holiday. 'CONTROLLER' means an administrator, receiver, receiver and manager, trustee, provisional liquidator, liquidator, inspector, statutory manager or any other person (however described) holding or appointed to an analogous office or acting or purporting to act in an analogous capacity whether pursuant to any statute, the order or authority of any Public Authority, a Security Interest or otherwise. 'EVENT OF DEFAULT' means any event of default or other event in relation to or under any document or arrangement evidencing the Subordinated Debt or Senior Debt which entitles a Junior Creditor or the Senior Creditor to accelerate the due date for payment or discharge of any liability. 'GROUP' has the same meaning as in the Negative Pledge. 'GUARANTEE' means a guarantee, indemnity, letter of credit, letter of comfort or any other obligation whatever called and of whatever nature by which a person is responsible for an obligation or debt of another. 'JUNIOR CREDITOR' includes the parties specified as such on the first page of this documents and any person who becomes a Junior Creditor under an Accession Deed; 'NEGATIVE PLEDGE' means the Unlimited Cross Guarantee and Indemnity and Negative Pledge with Financial Ratio Covenants dated on or around the date of this document between the Senior Creditor, Collins Foods Group Pty Ltd and its Subsidiaries and others. 'POTENTIAL EVENT OF DEFAULT' means any event, thing or circumstance which with the giving of notice or passage of time or both would become an Event of Default. 'PUBLIC AUTHORITY' means the Crown, any government or minister or any governmental, semi-governmental or judicial entity, department, instrumentality or authority. 5 3 'RESTRUCTURE' means the restructure of the Group as described to Westpac before the date of this Deed. For the purpose of this Deed, the Restructure is complete when: (a) Collins Foods Group Pty Ltd ACN 009 937 900 holds all of the issued shares in: - Sizzler Asia Holdings, Inc; - Collins Restaurants Queensland Pty Ltd; - Collins Restaurants Management Pty Ltd; and - Sizzler Restaurants Group Pty Ltd; and (b) Sizzler Asia Holdings, Inc. holds all of the issued shares in: - Sizzler Restaurant Services, Inc; - Sizzler South East Asia, Inc; and - Sizzler New Zealand, Limited; and not less than 50% of the issued shares in Sizzler Steak Seafood Salad (S) Pte Ltd; and (c) all of the issued shares in Collins Food Group Pty Ltd ACN 009 937 900 are held by Restaurants Concepts International, Inc. 'SECURITY INTEREST' means any mortgage, pledge, lien, charge or other preferential right, trust arrangement, agreement or arrangement of any kind given or created as or by way of security. 'SENIOR DEBT' means all money, debts and liabilities now or in the future owing or remaining unpaid by any Debtor to the Senior Creditor (whether actually or contingently and whether alone or with any other person) on any account or in any way whatever. 'SIZZLER INTERNATIONAL' means Sizzler International Inc. a company incorporated in Delaware, United States of America. 'SUBORDINATED DEBT' means all money, debts and liabilities now or in the future owing or remaining unpaid by any Debtor to any Junior Creditor (whether actually or contingently and whether alone or with any other person) on any account or in any way whatever. 'SUBSIDIARY' has the same meaning it has in the Negative Pledge. 'SURETY', in respect of a Debtor, means a person other than the Debtor who at any time has given a Guarantee, alone or jointly or jointly and severally in respect of the Debtor's Senior Debt or Subordinated Debt. 'WINDING UP' of or in relation to a person includes: 6 4 (a) the dissolution, receivership, administration, liquidation, provisional liquidation or bankruptcy of that person and any form of administration of that person under any law relating to insolvency or bankruptcy; and (b) any equivalent or analogous procedure (however described) to which that person may be subject under the law of any jurisdiction. 1.2 CONSTRUCTION In this document, headings are for reference only and do not affect its meaning and unless the contrary intention appears: (a) the singular includes the plural and vice versa and words importing a gender include other genders; (b) other grammatical forms of defined words or expressions have corresponding meanings; (c) where there are two or more persons bound or to be bound an agreement or obligation binds those persons severally and any two or more of them jointly; (d) a reference to a party to this document includes that party's successors and permitted assigns; (e) a reference to a document or agreement, including this document, includes a reference to that document or agreement as novated, altered or replaced from time to time; (f) a reference to writing includes any mode of representing or reproducing words in a visible form; (g) a reference to any thing includes the whole or any part of that thing and a reference to a group of things or persons includes each thing or person in that group; (h) a reference to 'dollar' or '$' is a reference to Australian currency; (i) a reference to any legislation or statutory instrument or regulation is to be construed in accordance with the Acts Interpretation Act 1901 (Cth) or the equivalent State legislation, as applicable, as if this document were an Act; and (j) words and expressions importing natural persons include partnerships, bodies corporate, associations and Public Authorities. 2. CONSIDERATION Each Junior Creditor and each Debtor acknowledge entering into and incurring obligations and giving rights under this document in consideration of the Senior Creditor continuing to provide financial accommodation to or at the request of any Debtor. 7 5 3. SUBORDINATION 3.1 SUBORDINATION OF DEBT Until the Senior Creditor has received payment of the Senior Debt in full: (a) no Debtor will: (i) except as permitted under clause 5, pay or allow payment of the Subordinated Debt owed by it; (ii) permit or assist a Junior Creditor to recover the Subordinated Debt owed by it; or (iii) set off the Subordinated Debt owed by it against any indebtedness to the Junior Creditor to which that Subordinated Debt is owed; and (b) no Junior Creditor will: (i) except as permitted under clause 5, accept payment of the Subordinated Debt owed to it; (ii) demand payment of, sue for or take other action to cause payment or acceleration of payment of the Subordinated Debt owed to it; (iii) take or be a party to any proceeding or action for the purpose of the appointment of a Controller in respect of or the Winding Up of any Debtor (other than a Debtor being wound up in accordance with clause 3.6); or (iv) exercise any right of set off or combination of accounts in respect of any Debtor. 3.2 WINDING UP PROCEEDINGS In any proceedings for the Winding Up of a Debtor (other than a Debtor being wound up in accordance with clause 3.6): (a) payment of the Debtor's Subordinated Debt is conditional on the Senior Creditor having received payment of the Senior Debt in full; (b) until the Senior Creditor has received payment of the Senior Debt in full no Junior Creditor will, except on request from the Senior Creditor, prove for any of its Subordinated Debt and will on proving immediately send a copy of its notice of proof to the Senior Creditor; and (c) until the Senior Creditor has received payment of the Senior Debt in full, each Junior Creditor will on request from the Senior Creditor prove for the whole of its Subordinated Debt and will on proving send a copy of its notice of proof to the Senior Creditor. 8 6 3.3 PROCEEDS If, before the Senior Creditor has received payment of the Senior Debt in full, a Junior Creditor receives any payment or recovers any amount in respect of the Subordinated Debt owed to it which is not permitted under clause 5 ('RECEIPT'): (a) the Junior Creditor will pay an amount equal to the Receipt to the Senior Creditor to be applied in reduction of the Senior Debt; and (b) to the extent that this does not create any Security Interest which would: (i) breach any law or directive of any Public Authority; or (ii) require registration in order not to be void or voidable in full or against certain parties, the Receipt will be held for and on behalf of the Senior Creditor by the Junior Creditor and will be paid by the Junior Creditor in accordance with clause 3.3(a). 3.4 NON-RETAINABLE RECEIPT If any payment received by the Senior Creditor in respect of the Senior Debt is subsequently avoided or repaid or conceded to be or compromised as being void, voidable or repayable under any law relating to insolvency or the protection of creditors or to any other matter or event whatever then despite any release, discharge, acknowledgment or notice of revocation of this document having been given on the basis of any such payment, the payment will be deemed not to have been made and the Senior Creditor's right to receive the full amount of the Senior Debt under this document prior to any payment by any Debtor of the whole or any part of the Subordinated Debt owed by it (other than as permitted under clause 5) will not be prejudiced or affected. 3.5 CONSENT TO CREATION OF SUBORDINATED DEBT The Senior Creditor consents to the creation of Subordinated Debt of $1,500,000.00 between Collins Finance and Management Pty Ltd ACN 009 996 721 and Collins Foods Group Pty Ltd ACN 009 937 900. 3.6 WINDING UP FOR THE PURPOSE OF RESTRUCTURE If: (a) a Junior Creditor or Debtor is being Wound Up as part of the Restructure (whether or not the Restructure is complete for the purpose of this document); and (b) the Subordinated Debt owing by or to the Junior Creditor or Debtor as the case may be has been repaid without breaching any provision of this document before any proceedings for the Winding Up commenced; and (c) no Event of Default or Potential Event of Default has occurred, Westpac will consent to the Winding Up of the Junior Creditor or Debtor as the case may be, and release it from any further obligation under this document. 9 7 4. REPRESENTATIONS AND WARRANTIES 4.1 REPRESENTATIONS AND WARRANTIES OF JUNIOR CREDITORS AND DEBTORS Each Junior Creditor and Debtor represents and warrants to the Senior Creditor that: (a) it is a corporation and is properly incorporated and validly existing; (b) it is empowered to enter into this document and to carry out any transaction or obligation contemplated by this document and all necessary actions have been taken to render this document valid and binding on it and to enable it to carry out any transaction or obligation contemplated by this document; (c) the execution and performance of this document by it has not and will not: (i) result in the contravention of a law or a directive of any Public Authority; (ii) result in the creation of a Security Interest on or the crystallisation of a charge over any asset of it; or (iii) conflict with the operation or terms of any document or arrangement which binds it; (d) after the Restructure is complete it will not owe or have the benefit of any money, debt or liability now or in the future owing or remaining unpaid by or to a company which is at the date of this document a member of the Sizzler International Inc. group of companies unless that company is described as a Debtor or Junior Creditor (as the case may be) in this document 4.2 RELIANCE BY SENIOR CREDITOR Each Junior Creditor and Debtor acknowledges that the Senior Creditor has entered into this document in reliance upon the representations and warranties given in this clause 4. 5. PERMITTED PAYMENTS 5.1 GENERAL PROVISIONS ABOUT PAYMENT So long as: (a) no Senior Debt is due and unpaid; (b) no Event of Default or Potential Event of Default has occurred; and (c) neither a Debtor nor a Junior Creditor is in breach of the provisions of this document, each Debtor may pay, and each Junior Creditor may receive and retain payment of: (d) such payments in respect of the Subordinated Debt owed by it or to it (as the case may be) as are permitted under the Negative Pledge or this document; and (e) such payments as the Senior Creditor may allow by notice to the relevant Debtor and relevant Junior Creditor. 10 8 5.2 SPECIFIC PROVISIONS ABOUT PAYMENT Subject to clause 5.1, the following are permitted payments which may be made after the date of this Deed: (a) a maximum amount of A$58,000,000.00 to Sizzler International, when the Restructure is complete; and (b) an annual payment not exceeding A$3,900,000.00 in any twelve month period commencing 1 May and ending 30 April to Sizzler International for management fees and interest payments on the Subordinated Debt; and (c) such other payments as the Senior Creditor may allow from moneys held by Collins Restaurants Management Pty Ltd ACN 093 912 979 in a term deposit account with Westpac to pay accrued interest on Subordinated Debt and management fees to Sizzler International. 6. RESTRICTIONS ON INDEBTEDNESS (a) Each Debtor undertakes that it will not become in any way indebted to any Subsidiary of Sizzler International (other than a Junior Creditor or a Debtor); and (b) Sizzler International undertakes that it will not permit any Debtor to become so indebted to any Subsidiary of Sizzler International (other than a Junior Creditor), unless each party to this document and the relevant Subsidiary first executes and delivers to the Senior Creditor an Accession Deed under which the relevant Subsidiary agrees to be bound by this Deed as a Junior Creditor. Each Debtor and Junior Creditor irrevocably authorises each Authorised Officer of the Senior Creditor to execute any Accession Deed on its behalf. This authority is given as security for the obligations of the party giving it to the Senior Creditor. 7. UNDERTAKINGS 7.1 DEBTOR'S UNDERTAKINGS Each Debtor undertakes that: (a) it will not novate, vary, replace or rescind any agreement or instrument under which the Debtor's obligations in respect of the Subordinated Debt owed by it arise without the written consent of the Senior Creditor (such consent not to be unreasonably withheld); (b) it will not permit any Guarantee to be given in respect of the Subordinated Debt owed by it; (c) it will not grant or permit to be granted a Security Interest in respect of the Subordinated Debt owed by it; (d) it will notify the Senior Creditor immediately if it receives a demand for payment of any part of the Subordinated Debt owed by it; and 11 9 (e) it will promptly provide the Senior Creditor with copies of all documents evidencing the Subordinated Debt owed by it and any amendments, waivers or variations to or in relation to such documents. 7.2 JUNIOR CREDITOR'S UNDERTAKINGS Each Junior Creditor undertakes that: (a) it will not novate, vary, replace or rescind any agreement or instrument under which a Debtor's obligations in respect of the Subordinated Debt owed to it arise without the written consent of the Senior Creditor (such consent not to be unreasonably withheld); (b) it will not assign the Subordinated Debt owed to it or any interest in it without the prior written consent of the Senior Creditor; (c) it will not accept the benefit of a Guarantee in respect of the Subordinated Debt owed to it; (d) it will not take or permit to exist a Security Interest in respect of the Subordinated Debt owed to it; (e) it will not waive payment of or release any Debtor or any of the Debtor's Sureties from an obligation to pay the Subordinated Debt owed to it or cause or permit its right to be paid the Subordinated Debt owed to it to be prejudiced; (f) it will exercise any voting power it has as shareholder of any Debtor to ensure that the Debtor does not breach its obligations under this document; (g) it will use its best efforts to ensure that no Debtor breaches its obligations under this document; (h) it will notify the Senior Creditor of any default in any agreement or instrument under which a Debtor's obligations in respect of the Subordinated Debt owed to it arises; (i) it will promptly provide the Senior Creditor with copies of all documents evidencing the Subordinated Debt owed to it and any amendments, waivers or variations to or in relation to such documents; and (j) if an Event of Default or Potential Event of Default occurs and the Senior Creditor waives its right to require payment of the Senior Debt, it must also waive any rights which it has arising from the occurrence of that Event of Default or Potential Event of Default or the waiver by the Senior Creditor of its rights, to require payment of the Subordinated Debt owed to it. 7.3 SIZZLER INTERNATIONAL'S UNDERTAKINGS Sizzler International undertakes that: (a) it will exercise any voting power it has as shareholder of any other Junior Creditor to ensure that the Junior Creditor does not breach its obligations under this document; 12 10 (b) it will use its best efforts to ensure that no other Junior Creditor breaches its obligations under this document. 8. PRESERVATION OF SENIOR CREDITOR'S RIGHTS 8.1 CONTINUING SUBORDINATION The subordination of the Subordinated Debt on the terms of this document constitutes a continuing subordination and will not be affected by the repayment in whole or in part from time to time of the Senior Debt. 8.2 OBLIGATIONS NOT AFFECTED The subordination of the Subordinated Debt on the terms of this document and the obligations of each Junior Creditor under this document will not be abrogated, prejudiced or affected by: (a) the granting of time or any other indulgence by the Senior Creditor to any Debtor or to any other person; (b) the taking, variation, compromise, exchange, renewal, or release of or failure to perfect any rights against any asset of or any rights under any Security Interest in respect of the Senior Debt; (c) the unenforceability, impossibility, illegality or invalidity of any obligation of any Debtor to the Senior Creditor in respect of any agreement or instrument under which the Debtor's obligations in respect of the Senior Debt arise; or (d) any other dealing, matter or thing which but for this provision could or might operate to affect or discharge the obligations of any Junior Creditor under this document. 9. NO COMPETITION Until the Senior Creditor has received payment of the Senior Debt in full no Junior Creditor will by reason of any payment or performance under this document: (a) be subrogated to any right or security which the Senior Creditor may hold in respect of the Senior Debt or be entitled to any right of contribution or indemnity; or (b) claim, rank, prove or vote as a creditor of any Debtor or any of the Debtor's Sureties in competition with the Senior Creditor. 10. OTHER SECURITY Each Junior Creditor waives any right it may have of requesting the Senior Creditor to proceed against or enforce any other Security Interest or to claim payment from any person before claiming the benefit of this document. 11. COSTS AND EXPENSES Each Debtor indemnifies the Senior Creditor against and must pay on demand to the Senior Creditor all taxes, registration fees, costs, charges, expenses and liabilities 13 11 (including, but not limited to, all legal costs and disbursements on a full indemnity basis) which the Senior Creditor may be liable to pay in connection with: (a) the negotiation, preparation, completion, registration or stamping of this document; and (b) the protection, enforcement or exercise or attempted enforcement or exercise of any right, power, authority or remedy conferred on the Senior Creditor under this document, by law or otherwise. 12. SET OFF The Senior Creditor may without any demand or notice, set off and apply any or all indebtedness at any time owing by the Senior Creditor to any Junior Creditor against any debt owing by that Junior Creditor to the Senior Creditor whether or not that indebtedness or that debt is immediately due and payable. 13. ASSIGNMENT The Senior Creditor may at any time assign or otherwise deal with or dispose of all or any of its rights or benefits under this document. 14. POWER OF ATTORNEY 14.1 GRANT Each Junior Creditor for valuable consideration irrevocably appoints the Senior Creditor and each Authorised Officer of the Senior Creditor severally to be the Junior Creditor's attorneys and in the Junior Creditor's name (or in the name of the attorney) and on the Junior Creditor's behalf after the occurrence of an Event of Default or Potential Event of Default: (a) to do anything which the Junior Creditor is obliged to do under this document; (b) to do anything which in the opinion of the attorney: (i) is necessary or expedient to give effect to any right, power or remedy conferred on the Senior Creditor; or (ii) it is necessary or expedient that the Junior Creditor do, under this document; (c) to sign or enter into (or both) all transactions, documents, agreements and instruments which in the opinion of the attorney it is necessary or expedient that the Junior Creditor sign or enter into under this document; and (d) generally to use the Junior Creditor's name in the exercise of all or any of the powers conferred on the Senior Creditor by or under this document, statute, the general law or otherwise, and the Junior Creditor undertakes to ratify anything done by an attorney under this power of attorney. 14 12 14.2 DELEGATION BY ATTORNEY Any attorney may delegate its powers (including the power to delegate) to any person for any period and may revoke any delegation. 14.3 STATEMENT OF PURPOSE The power of attorney created under this clause 14 is irrevocable and is granted to secure the performance by each Junior Creditor of the Junior Creditor's obligations under this document. 15. CERTIFICATES A certificate signed by an Authorised Officer of the Senior Creditor about a matter or about a sum payable to the Senior Creditor in connection with this document is admissible in proceedings and is, except where there is manifest error, conclusive evidence of the matters stated. 16. NOTICES 16.1 WHO MAY SIGN A NOTICE Any notice from or demand by the Senior Creditor to or on a Debtor or Junior Creditor may (without limiting any other valid form of execution) be signed by an Authorised Officer of the Senior Creditor or by any solicitor acting for the Senior Creditor, whose signature may be handwritten or printed or otherwise reproduced by mechanical means. 16.2 HOW A NOTICE MAY BE SENT In addition to any method of service provided for by statute, a notice or demand by or on behalf of the Senior Creditor is taken to have been given to or made on a Debtor or Junior Creditor if: (a) sent by telex or facsimile to the telex or facsimile number of the Debtor or the Junior Creditor last known to the Senior Creditor or, if more than one telex or facsimile number is known to the Senior Creditor, to any such telex or facsimile number; (b) left for the Debtor or the Junior Creditor or sent by mail (and by airmail if to an address outside Australia) to the Debtor or the Junior Creditor at: (i) any address of the Debtor or the Junior Creditor set out in this document; (ii) the Debtor or the Junior Creditor's usual abode or place of business last known to the Senior Creditor; (iii) the Debtor or the Junior Creditor's registered office; or (iv) any premises owned or occupied by the Debtor or the Junior Creditor. 16.3 VALIDITY OF NOTICE Service under clause 16.2 is valid even if: 15 13 (a) the Winding Up of the relevant Debtor or Junior Creditor has occurred or the Debtor or Junior Creditor is absent from the place at or to which the notice or demand is left, delivered or sent; or (b) where the notice or demand is sent by post or otherwise, it is returned unclaimed. 16.4 RECEIPT OF NOTICE Any notice or demand is taken to have been received by the relevant Debtor or Junior Creditor: (a) if left or delivered personally, on the same day; (b) if sent by post to an address in Australia, on the second Business Day after the date of posting; (c) if sent by post to an address outside Australia, on the fourth Business Day after the date of posting; (d) if sent by telex, on receipt of the Debtor or the Junior Creditor's answerback code; and (e) if sent by facsimile, on production of a transmission report by the sender's facsimile machine indicating that the notice or demand has been sent to the relevant number. 17. SEVERABILITY 17.1 PREFERRED CONSTRUCTION A construction of this document which results in all provisions being enforceable is to be preferred to a construction which does not so result. 17.2 SEVERANCE If, despite the application of clause 17.1 a provision of this document is illegal or unenforceable: (a) if the provision would not be illegal or unenforceable if a word or words were omitted, that word or those words will be severed; and (b) in any other case, the whole provision will be severed, and the remainder of this document will continue to have full force and effect. 18. GOVERNING LAW AND JURISDICTION This document is governed by the law of Queensland and each Debtor and Junior Creditor irrevocably and unconditionally submits to the non-exclusive jurisdiction of the courts of Queensland. 19. AGENT FOR SERVICE OF PROCESS Each Debtor and Junior Creditor having its registered office outside Queensland: 16 14 (a) irrevocably appoints Collins Restaurants Management Pty Ltd ACN 093 912 979 ('CRM') as its agent for service of process relating to any proceedings before the courts and appellate courts of the State of Queensland in connection with this document; (b) agrees that failure by CRM to notify it of the process will not invalidate the proceedings concerned; and (c) agrees that nothing shall affect the right to serve process in any other manner permitted by law. 20. ATTORNEYS Each attorney executing this document states that he or she has no notice of the revocation of his or her power of attorney. 21. NOVATION AND TERMINATION OF EARLIER DEED (a) The parties to this document, other than Sizzler Asia Holdings, Inc. ('SAH') and Collins Restaurants Management Pty Ltd ACN 093 912 979 ('CRM') are parties with Collins Properties, Inc to a Subordination Deed dated 24 September 1997 (the 'earlier deed'). (b) By signing this document the parties agree: (i) that SAH and CRM and each of the parties to the earlier deed shall assume obligations towards each other and acquire rights against each other as though SAH and CRM were originally named in the earlier deed as a Debtor (as defined in the earlier deed); and (ii) SAH and CRM shall be deemed to be a party to the earlier deed as a Debtor (as defined in the earlier deed). (c) To the extent that there is any inconsistency (other than under this clause 21) between the term of this deed and the earlier deed, the earlier deed prevails, subject to clause 21(b) of this deed, until the Restructure is complete. This deed terminates the earlier deed (except in respect of any liability arising under it prior to termination) from the time that the Restructure is complete. 17 15 EXECUTED as a deed. THE COMMON SEAL of COLLINS FOODS ) GROUP PTY LTD ACN 009 937 900 is affixed ) in accordance with its constituent documents ) in the presence of ) - -------------------------------------------- ---------------------------------- Authorised Officer/Director Authorised Officer/Director - -------------------------------------------- ---------------------------------- Please Print Full Name Please Print Full Name THE COMMON SEAL of COLLINS FOODS ) INTERNATIONAL PTY LTD ARBN 009 980 250 is ) affixed in accordance with its constituent ) documents in the presence of ) - -------------------------------------------- ---------------------------------- Authorised Officer/Director Authorised Officer/Director - -------------------------------------------- ---------------------------------- Please Print Full Name Please Print Full Name THE COMMON SEAL of COLLINS INTERNATIONAL ) INC is affixed in accordance with its ) constituent documents in the presence of ) - -------------------------------------------- ---------------------------------- Authorised Officer/Director Authorised Officer/Director - -------------------------------------------- ---------------------------------- Please Print Full Name Please Print Full Name THE COMMON SEAL of COLLINS RESTAURANTS ) QUEENSLAND PTY LTD ACN 009 988 381 is ) affixed in accordance with its constituent ) documents in the presence of ) - -------------------------------------------- ---------------------------------- Authorised Officer/Director Authorised Officer/Director - -------------------------------------------- ---------------------------------- Please Print Full Name Please Print Full Name 18 16 THE COMMON SEAL of SIZZLER NEW ZEALAND ) LIMITED is affixed in accordance with its ) constituent documents in the presence of ) - -------------------------------------------- ---------------------------------- Authorised Officer/Director Authorised Officer/Director - -------------------------------------------- ---------------------------------- Please Print Full Name Please Print Full Name THE COMMON SEAL of SIZZLER SOUTH PACIFIC ) PTY LTD ARBN 010 713 952 is affixed in ) accordance with its constituent documents ) in the presence of ) - -------------------------------------------- ---------------------------------- Authorised Officer/Director Authorised Officer/Director - -------------------------------------------- ---------------------------------- Please Print Full Name Please Print Full Name THE COMMON SEAL of SIZZLER SOUTH-EAST ASIA ) INC is affixed in accordance with its ) constituent documents in the presence of ) - -------------------------------------------- ---------------------------------- Authorised Officer/Director Authorised Officer/Director - -------------------------------------------- ---------------------------------- Please Print Full Name Please Print Full Name THE COMMON SEAL of SIZZLER RESTAURANTS ) GROUP PTY LTD ACN 010 102 388 is affixed ) in accordance with its constituent ) documents in the presence of ) - -------------------------------------------- ---------------------------------- Authorised Officer/Director Authorised Officer/Director - -------------------------------------------- ---------------------------------- Please Print Full Name Please Print Full Name 19 17 THE COMMON SEAL of SIZZLER RESTAURANT ) SERVICES, INC is affixed in accordance with ) its constituent documents in the presence ) of - -------------------------------------------- ---------------------------------- Authorised Officer/Director Authorised Officer/Director - -------------------------------------------- ---------------------------------- Please Print Full Name Please Print Full Name THE COMMON SEAL OF SIZZLER ASIA HOLDINGS, ) INC is affixed in accordance with its ) constituent documents in the presence of ) - -------------------------------------------- ---------------------------------- Authorised Officer/Director Authorised Officer/Director - -------------------------------------------- ---------------------------------- Please Print Full Name Please Print Full Name THE COMMON SEAL OF COLLINS RESTAURANTS ) MANAGEMENT PTY LTD ACN 093 912 979 is ) affixed in accordance with its ) constituent documents in the presence of ) - -------------------------------------------- ---------------------------------- Authorised Officer/Director Authorised Officer/Director - -------------------------------------------- ---------------------------------- Please Print Full Name Please Print Full Name THE COMMON SEAL of SIZZLER INTERNATIONAL, ) INC. is affixed in accordance with its ) constituent documents in the presence of ) - -------------------------------------------- ---------------------------------- Authorised Officer/Director Authorised Officer/Director - -------------------------------------------- ---------------------------------- Please Print Full Name Please Print Full Name 20 18 THE COMMON SEAL of SIZZLER INTERNATIONAL ) MARKS INC is affixed in accordance ) with its constituent documents in the ) presence of ) - -------------------------------------------- ---------------------------------- Authorised Officer/Director Authorised Officer/Director - -------------------------------------------- ---------------------------------- Please Print Full Name Please Print Full Name THE COMMON SEAL of RESTAURANT CONCEPTS OF ) AUSTRALIA, PTY LTD is affixed in accordance ) with its constituent documents in the ) presence of ) - -------------------------------------------- ---------------------------------- Authorised Officer/Director Authorised Officer/Director - -------------------------------------------- ---------------------------------- Please Print Full Name Please Print Full Name THE COMMON SEAL of SIZZLER FRANCHISE ) DEVELOPMENT, LTD is affixed in accordance ) with its constituent documents in the ) presence of ) - -------------------------------------------- ---------------------------------- Authorised Officer/Director Authorised Officer/Director - -------------------------------------------- ---------------------------------- Please Print Full Name Please Print Full Name THE COMMON SEAL of FURNACE CONCEPTS ) INTERNATIONAL, INC is affixed in accordance ) with its constituent documents in the ) presence of ) - -------------------------------------------- ---------------------------------- Authorised Officer/Director Authorised Officer/Director - -------------------------------------------- ---------------------------------- Please Print Full Name Please Print Full Name 21 19 THE COMMON SEAL of FURNACE CONCEPTS ) AUSTRALIA CORP ARBN 070 065 468 is affixed ) in accordance with its constituent ) documents in the presence of ) - -------------------------------------------- ---------------------------------- Authorised Officer/Director Authorised Officer/Director - -------------------------------------------- ---------------------------------- Please Print Full Name Please Print Full Name THE COMMON SEAL of RESTAURANT CONCEPTS ) INTERNATIONAL INC is affixed in accordance ) with its constituent documents in the ) presence of ) - -------------------------------------------- ---------------------------------- Authorised Officer/Director Authorised Officer/Director - -------------------------------------------- ---------------------------------- Please Print Full Name Please Print Full Name THE COMMON SEAL of SIZZLER AUSTRALIA PTY ) LTD ACN 010 060 876 is affixed in ) accordance with its constituent documents ) in the presence of ) - -------------------------------------------- ---------------------------------- Authorised Officer/Director Authorised Officer/Director - -------------------------------------------- ---------------------------------- Please Print Full Name Please Print Full Name 22 20 THE COMMON SEAL of COLLINS PROPERTY ) DEVELOPMENT PTY LTD ACN 010 539 616 is ) affixed in accordance with its constituent ) documents in the presence of ) - -------------------------------------------- ---------------------------------- Authorised Officer/Director Authorised Officer/Director - -------------------------------------------- ---------------------------------- Please Print Full Name Please Print Full Name THE COMMON SEAL of COLLINS FINANCE AND ) MANAGEMENT PTY LTD ACN 009 996 721 is ) affixed in accordance with its constituent ) documents in the presence of ) - -------------------------------------------- ---------------------------------- Authorised Officer/Director Authorised Officer/Director - -------------------------------------------- ---------------------------------- Please Print Full Name Please Print Full Name THE COMMON SEAL of COLLINS FOODS AUSTRALIA ) PTY LTD ACN 009 914 103 is affixed in ) accordance with its constituent documents ) in the presence of ) - -------------------------------------------- ---------------------------------- Authorised Officer/Director Authorised Officer/Director - -------------------------------------------- ---------------------------------- Please Print Full Name Please Print Full Name 23 21 SIGNED for and on behalf of WESTPAC BANKING ) Westpac Banking Corporation by CORPORATION ARBN 007 457 141 by its duly ) its duly constituted Attorney: constituted Attorney ) ) who certifies that he/she has no notice of ).................................. revocation of the powers granted pursuant ) to Power of Attorney No. ) in the presence of ) ............................................ A Justice of the Peace 24 22 ANNEXURE 'A' ACCESSION DEED DEED dated 2000 BETWEEN [NAME] Incorporated in [#] of [#] (the 'New Junior Creditor') AND WESTPAC BANKING CORPORATION ARBN 007 457 141 of 260 Queen Street, Brisbane ('Senior Creditor') for itself and on behalf of all other parties to the Subordination Deed RECITAL A. The Senior Creditor, Sizzler International, Inc and others entered into a Subordination Deed dated 2000 ('Subordination Deed'). B. The New Junior Creditor proposes to become a Junior Creditor under the Subordination Deed. AGREEMENT 1. INTERPRETATION 1.1 Definitions Expressions defined in the Subordination Deed have the same meaning in this document. 1.2 Construction Clause 1.2 of the Subordination Deed applies to this document as if stated in it. 2. Novation With effect from the date of this document: (d) the New Junior Creditor and each of the parties to the Subordination Deed shall assume obligations towards each other and acquire rights against each other as though the New Junior Creditor were originally named in the Subordination Deed as a Junior Creditor; and 25 23 (e) the New Junior Creditor shall be deemed a party to the Subordination Deed as a Junior Creditor. 3. Notices For the purposes of the Subordination Deed, the address for correspondence of the New Junior Creditor is the address set out in the Schedule. 4. Counterparts This document may be executed in any number of counterparts. All of such counterparts taken together shall be deemed to constitute the one instrument. 5. Governing Law and Jurisdiction This document is governed by the law of Queensland and each party to it irrevocably and unconditionally submits to the non-exclusive jurisdiction of the Courts of Queensland. 6. Agent for Service of Process Each of the Debtors, Junior Creditors and New Junior Creditor having its registered office outside Queensland: (f) irrevocably appoints Collins Restaurants Management Pty Ltd ACN 093 912 979 ('CRM') as its agent for service of process relating to any proceedings before the courts and appellate courts of the State of Queensland in connection with this document; (g) agrees that failure by CRM to notify it of the process will not invalidate the proceedings concerned; and (h) agrees that nothing shall affect the right to serve process in any other manner permitted by law. 7. Attorneys Each attorney executing this document states that he or she has no notice of the revocation of his or her power of attorney. 26 24 SCHEDULE [ADDRESS OF NEW JUNIOR CREDITOR] EXECUTED as a deed. NEW JUNIOR CREDITOR: SIGNED SEALED and DELIVERED for and on ) behalf of [#] by its attorney in the ) presence of ) - -------------------------------------------- ---------------------------------- Signature of witness Attorney - -------------------------------------------- Name of witness (print) OTHER PARTIES: SIGNED SEALED and DELIVERED for and on ) behalf of WESTPAC BANKING CORPORATION for ) itself and on behalf of the other parties ) to the Subordination Deed by ) its duly constituted attorney in the presence of: - -------------------------------------------- ---------------------------------- Signature of witness Attorney - -------------------------------------------- Name of witness (print) EX-99.1 9 v65255ex99-1.txt EXHIBIT 99.1 1 EXHIBITI 99.1 NEWS BULLETIN [SIZZLER LOGO] FROM: RE: SIZZLER INTERNATIONAL, INC. 6101 W. Centinela Ave., Suite 200 THE FINANCIAL RELATIONS BOARD Culver City, CA 90230 BSMG WORLDWIDE (310) 568-0135 NYSE: SZ - -------------------------------------------------------------------------------- AT THE COMPANY: AT THE FINANCIAL RELATIONS BOARD: Steven Selcer Kim Forster Haris Tajyar Moira Conlon Vice President Vice President, General Information Investor Contact and CFO Planning (310) 442-0599 (310) 442-0599 (310) 568-0135 (310) 568-0135 - -------------------------------------------------------------------------------- FOR IMMEDIATE RELEASE AUGUST 23, 2000 SIZZLER INTERNATIONAL REPORTS INCREASE IN FIRST QUARTER EARNINGS AND SAME-STORE SALES ---------------------- HIGHLIGHTS: o 15th consecutive quarter of increased earnings from continuing operations o First quarter net income increases 14% to $2.9 million o Domestic remodels generating over 12% same-store sales growth o Australian KFC same-store sales increase over 6% CULVER CITY, CA--AUGUST 23, 2000--SIZZLER INTERNATIONAL, INC. (NYSE: SZ) today announced solid gains in earnings and same-store sales for it first fiscal quarter ended July 23, 2000. For the first quarter, the company reported revenues of $54.7 million compared with $57.0 million in the first quarter a year ago. The slight decline in total revenues is primarily due to Sizzler operating 6 fewer units this year, as well as an unfavorable exchange rate, which was nearly 11% lower than the prior year. Excluding the effect of the weakening in the Australian dollar exchange rate, revenues would have been $58.2 million, an increase of 2.1%. In addition, despite the weak Australian dollar, Sizzler reported a 14% increase in net income to $2.9 million, or $0.10 per diluted share, over last year's first quarter income of $2.5 million, or $0.09 per diluted share. - more - Financial Relations Board, Inc. serves as financial relations counsel to this company is acting on the company's behalf in issuing this bulletin and receiving compensation therefor. The information contained herein is furnished for information purposes only and is not to be construed as an offer to buy or sell securities 2 Sizzler International, Inc. Page 2 of 6 POSITIVE TRENDS IN SAME STORE SALES GROWTH For the quarter, same store sales increased 1.9% across company owned U.S. Sizzler locations; 0.6% in the Australian Sizzler locations; and 6.1% from Australian KFC units. "Today's results reflect the 15th consecutive quarter of net income growth, excluding the one time charges in the third quarter of fiscal 2000," said Charles Boppell, President and CEO of Sizzler International. "This strong and continuing trend is a direct reflection of our management team's ability to continue to strengthen and expand our operations. Looking ahead, we expect to maintain and possibly accelerate this positive trend as we continue to improve our restaurants' operations around the globe," continued Mr. Boppell. "Our domestic repositioning program continues to generate solid sales growth and increased customer counts. Our average remodeled and re-launched store produced over 12% same-store sales growth for the quarter. This is a clear growth opportunity for Sizzler USA as we look to completing the repositioning of the remaining domestic company-owned stores by year-end," said Thomas E. Metzger, FMP, President of Sizzler USA. As of the end of the quarter, 24 units had been completely repositioned, with the completion of construction, retraining of restaurant employees and a local marketing campaign. A further 25 units are currently in various stages of the re-image process. REPURCHASING PROGRAM Sizzler has completed the repurchase of approximately 847,000 of the 1.5 million shares of common stock that has been authorized to repurchase by its Board of Directors. Subject to applicable laws and other factors, the company expects to complete its stock repurchase program as soon as practicable. INVESTOR CONFERENCE CALL Sizzler will be holding an investor conference call to discuss the Company's financial and operational results today at 11:00 am EDT. Investors will have the opportunity to listen to the conference call over the Internet through StreetEvents at www.streetevents.com. To listen to the live call, please go to the web site, enter the Individual Investor Center, and enter the Sizzler ticker symbol, SZ. Please go to the site at least 15 minutes early to register, download, and install any necessary audio software. In order to listen to the call investors must have RealPlayer 7 or higher installed on their computer. Please visit www.real.com to download the appropriate software. For those who cannot listen to the live broadcast, a replay will be available shortly after the call. ABOUT SIZZLER Sizzler International, Inc. operates, franchises or joint ventures 348 Sizzler restaurants worldwide, in addition to the 102 KFC restaurants in Queensland, Australia. - more - Financial Relations Board, Inc. serves as financial relations counsel to this company is acting on the company's behalf in issuing this bulletin and receiving compensation therefor. The information contained herein is furnished for information purposes only and is not to be construed as an offer to buy or sell securities 3 Sizzler International, Inc. Page 3 of 6 To the extent that certain statements contained in this document may be deemed under federal securities laws to be forward-looking statements, Sizzler intends that they be subject to the safe-harbor applicable to forward-looking statements under such laws. Such statements may include, but are not limited to, statements regarding (i) the continued positive impact of the remodel program on sales and customer counts; (ii) the completion of the remodeling of domestic company owned stores as scheduled; (iii) the continuation of the company's stock repurchase program; and (iv) the continued success of the company's four pronged growth strategy and the continuation and possible acceleration of net income growth trends across the globe. Sizzler cautions that these statements are qualified by important factors that could cause actual results to differ from those reflected by the forward-looking statements contained herein. Such factors include, but are not limited to, (a) the failure of the company's newly remodeled stores and/or new food offerings to continue to appeal to customers; (b) the failure to complete the remodel program as scheduled; (c) general economic, regulatory, and other factors pertaining to share repurchase; (d) the satisfaction of all conditions to consummation of the Oscar's acquisition, including but not limited to any required government and other approvals; (e) the company's ability to operate the Oscar's division profitably and successfully open new units; (f) possible negative impact on the company's Australia operations as a result of the implementation of the new goods and services tax in Australia; (g) the possible negative impact of exchange rate fluctuations; and (h) other risks as detailed from time to time in Sizzler's SEC reports, including Quarterly Reports on Form 10Q, Current Reports on Form 8-K, and Annual Reports on Form 10-K. For more information on Sizzler International, Inc. via facsimile at no cost, simply call 1-800-PRO-INFO and dial client code "SZ." - more - Financial Relations Board, Inc. serves as financial relations counsel to this company is acting on the company's behalf in issuing this bulletin and receiving compensation therefor. The information contained herein is furnished for information purposes only and is not to be construed as an offer to buy or sell securities 4 Sizzler International, Inc. Page 4 of 6 SIZZLER INTERNATIONAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE TWELVE WEEKS ENDED JULY 23, 2000 AND JULY 25, 1999 (in thousands, except share data)
2000 1999 (Unaudited) (Unaudited) - -------------------------------------------------------------------------------- REVENUES Restaurants $ 52,312 $ 54,841 Franchise Operations 2,346 2,164 - -------------------------------------------------------------------------------- Total Revenues 54,658 57,005 - -------------------------------------------------------------------------------- COSTS AND EXPENSES Cost of sales 18,943 20,207 Labor and related expenses 14,234 14,845 Other operating expenses 11,930 11,551 Depreciation and amortization 1,805 2,078 General and administrative expenses 4,312 4,658 - -------------------------------------------------------------------------------- Total operating costs 51,224 53,339 - -------------------------------------------------------------------------------- Interest expense 747 872 Investment income (559) (182) - -------------------------------------------------------------------------------- Total Costs and expenses 51,412 54,029 - -------------------------------------------------------------------------------- INCOME BEFORE INCOME TAXES 3,246 2,976 - -------------------------------------------------------------------------------- Provision for income taxes 381 470 NET INCOME $ 2,865 $ 2,506 ================================================================================ Basic and diluted earnings per share $ 0.10 $ 0.09 ================================================================================
- more - 5 Sizzler International, Inc. Page 5 of 6 SIZZLER INTERNATIONAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands)
July 23 April 30 ASSETS 2000 2000 - ---------------------------------------------------------------------------------------------------------------- (Unaudited) (Audited) Cash Assets: Cash and cash equivalents $ 36,905 $ 38,789 Receivables, net reserves of $786 at July 23, 2000 and $847 at April 30, 2000 4,811 4,173 Inventories 4,124 4,333 Current tax asset 2,544 2,544 Prepaid expenses and other current assets 888 1,132 - ---------------------------------------------------------------------------------------------------------------- Total current assets 49,272 50,971 - ---------------------------------------------------------------------------------------------------------------- Property and equipment, net 52,177 46,316 Property held for sale, net 6,781 8,931 Long-term notes receivable, net reserves of $0 at July 23, 2000, and $73 at April 30, 2000 1,830 1,224 Deferred income taxes 3,490 3,405 Intangible assets, net of accumulated amortization $871 at July 23, 2000, and $889 at April 30, 2000 1,869 1,876 Other assets 3,644 3,157 - ---------------------------------------------------------------------------------------------------------------- Total Assets $119,063 $115,880 ================================================================================================================
- more - 6 Sizzler International, Inc. Page 6 of 6 SIZZLER INTERNATIONAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except for share data)
July 23 April 30 LIABILITIES AND STOCKHOLDERS' INVESTMENT 2000 2000 - ------------------------------------------------------------------------------------------------------------------- (Unaudited) (Audited) Current Liabilities: Current portion of long-term debt $ 5,147 $ 5,206 Accounts payable 9,746 8,196 Other current liabilities 10,471 10,209 Income taxes payable 2,820 2,530 - ------------------------------------------------------------------------------------------------------------------- Total current liabilities 28,184 26,141 - ------------------------------------------------------------------------------------------------------------------- Long-term debt, net of current portion 20,126 21,198 Deferred gain on sale and lease back 8,074 8,269 Pension liability 9,563 9,637 Stockholders' Investment: Capital stock- Preferred, authorized 1,000,000 shares, $5 par value; no shares issued -- -- Common, authorized 50,000,000 shares, $0.01 par value; outstanding 27,919,886 shares at July 23, 2000 and 28,797,828 shares at April 30, 2000 288 288 Additional paid-in capital 278,421 278,408 Accumulated deficit (216,904) (219,769) Treasury stock, 846,700 shares at cost at July 23, 2000 and 706,700 shares at April 30, 2000 (2,303) (1,948) Accumulated other comprehensive income (6,386) (6,344) - ------------------------------------------------------------------------------------------------------------------- Total stockholders' investment 53,116 50,635 - ------------------------------------------------------------------------------------------------------------------- Total liabilities and stockholders' investment $ 119,063 $ 115,880 ===================================================================================================================
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