AMENDMENT
Amendment (this "Amendment"), dated as of October 9, 2001, among
General Electric Capital Corporation ("GE Capital"), Danka Business Systems PLC
("Danka") and Danka Office Imaging Company ("Danka OI").
WHEREAS, GE Capital and Danka are parties to that certain Amended and
Restated Global Operating Agreement dated as of March 31, 2000 (as amended, the
"Global Operating Agreement"); and
WHEREAS, GE Capital and Danka OI are parties to that certain U.S.
Direct Operating Agreement dated effective as of March 31, 2000 (as amended, the
"U.S. Direct Operating Agreement"); and
WHEREAS, Danka OI and GE Capital are parties to that certain License
Agreement effective March 31, 2000 (as amended, the "License Agreement");
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth below, the parties hereto hereby agree as follows:
1. Capitalized Terms. Capitalized terms used in this Amendment and not
herein defined shall have the respective meanings set forth in the Global
Operating Agreement.
2. Amendments to Global Operating Agreement. Effective immediately, the
Global Operating Agreement is hereby amended as follows:
(a) Section 1.1 of the Global Operating Agreement is hereby
amended and restated to read in its entirety as follows:
"1.1 Programs.
(a) Danka and GE Capital acknowledge that, from time to
time, the parties hereto and/or their respective Affiliates may enter
into Programs to support sales of Equipment by Danka or its Affiliates.
The terms and conditions of each Program shall be as set forth in the
Principal Documents relating to such Program.
(b) As of December 27, 1997, the parties hereto and
certain of their respective Affiliates, among others, entered into a
Program for Danka's United States-based Affiliates governed by the
Principal Documents set forth on Schedule 1.1 hereof and relating
thereto (the "United States Program - Trust Structure"). As of the date
hereof, Danka Office Imaging Company and GE Capital are entering into a
Program providing for the origination of certain Leases by GE Capital
pursuant to the U.S. Direct Operating Agreement (the "United States
Program - Direct Structure").
(c) [Intentionally Omitted]
(d) [Intentionally Omitted]
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(e) Danka and GE Capital, on behalf of themselves and
their respective Affiliates, hereby agree that (i) except to the extent
provided in subsection (f) below, neither GE Capital nor any Program
Affiliates shall have any obligation to (A) enter into, purchase or
otherwise acquire any Lease from, (B) purchase or otherwise acquire any
Equipment from or (C) otherwise finance any Equipment sold, leased or
distributed by, Danka or any of its Affiliates, in any case, pursuant
to the United States Program - Trust Structure and (ii) except as
provided in clause (i) above, all of the terms and conditions of the
Principal Documents related to the United States Program - Trust
Structure shall continue in full force and effect including, without
limitation, as they relate to the Leases outstanding thereunder, until
they are terminated in accordance with their terms or as otherwise
agreed by the parties thereto. By way of clarification and not by way
of limitation, Danka and GE Capital, on behalf of themselves and their
respective Affiliates, agree that, except to the extent provided in
subsection (f) below, neither GE Capital nor any of its Program
Affiliates shall have any obligation to take any of the actions
described in clause (i) of this subsection (e) pursuant to, or in
connection with, the United States Program - Trust Structure from and
after the date of this Agreement.
(f) Notwithstanding subsection (e) hereof, Danka and GE
Capital agree that, subject to all of the terms and conditions of the
Principal Documents that relate to the United States Program - Trust
Structure (including, without limitation, Section 6.1 of the Servicing
Agreement, dated as of December 22, 1997, constituting a part thereof),
Danka shall be entitled to submit prospective Financings of Leases and
Equipment to GE Capital (or the applicable Program Affiliate) for
consideration to be included under such U.S. Program, if, at the time
such prospective Financing is submitted by Danka or its Affiliates to
GE Capital (or the applicable Program Affiliate):
(i) the Equipment that is the subject of such
prospective Financing is an add-on or upgrade to Equipment
that is presently financed pursuant to a Lease that was
entered into pursuant to the United States Program - Trust
Structure; or
(ii) such prospective Financing would be a "lease
schedule" entered into pursuant to the terms of a "master
lease" that was Financed pursuant to the United States Program
- Trust Structure; or
(iii) the Customer under such prospective
Financing is already the lessee or obligor under a Lease that
was entered into pursuant to the United States Program - Trust
Structure and has requested "summary" billing or that all
rental and other charges associated with the Equipment it owns
or uses pursuant to any Lease be billed to it on a
consolidated basis; or
(iv) GE Capital and Danka mutually agree thereto.
(g) To the extent that Danka and GE Capital, and/or their
respective Affiliates, shall hereafter enter into any additional
Programs, relating to jurisdictions outside of the United States,
Schedule 1.1 shall be amended to refer to such Programs and
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to specify the Principal Documents, Program Affiliates and any
Incentive Management Payment Provisions relating to such Programs."
(b) Subsection (e) of Section 2.1 of the Global Operating
Agreement is hereby amended by adding the words "quality scorecards and" to such
subsection in the first line thereof after the word "review".
(c) The Global Operating Agreement is hereby amended by adding the
following as Subsection (k) to Section 4.1:
"(k) Danka shall deliver to GE Capital, on or before the date that is
fifteen (15) days after Danka shall have filed any quarterly report
under the Securities Exchange Act of 1934, a certificate setting forth
United States Reprographic Hardware Sales for the quarter and the
portion of any Measurement Period then ended, certified by Danka's
Chief Financial Officer as true and correct in all material respects,
to the best of his knowledge, after due inquiry. In addition to the
foregoing, Danka shall deliver to GE Capital, on or before the date
that is fifteen (15) days after Danka shall have filed any annual
report under the Securities Exchange Act of 1934, a certificate setting
forth United States Reprographic Hardware Sales for the year and the
Measurement Period then ended, certified by Danka's Chief Financial
Officer as true and correct in all material respects, to the best of
his knowledge, after due inquiry."
(d) The last sentence of Section 7.1(b) of the Global Operating
Agreement is hereby amended and restated to read in its entirety as follows:
"For the avoidance of doubt, the parties agree that except for (x) the
obligations of Danka under Article VIII in respect of Measurement
Periods ending on or prior to the date of termination of this Agreement
and (y) the obligations of Danka under Sections 8.2(b) and 8.2(g)
(which obligations shall survive termination of this Agreement),
Article VIII of this Agreement shall not survive the termination of
this Agreement."
(e) The dates "April 1, 2002," "March 31, 2003" and "April 1,
2003" set forth in the first, seventh and ninth lines of Section 7.2 of the
Global Operating Agreement shall be changed to "April 1, 2005," "March 31, 2006"
and April 1, 2006", respectively.
(f) The Global Operating Agreement is hereby amended by adding the
following as Subsection (d) to Section 7.4:
"(d) Upon the occurrence and continuance of a Qualifying
Change in Control of Danka, Danka shall have the right, at its
sole discretion and upon at least 20 Business Days' prior
written notice to GE Capital, to terminate this Agreement,
effective at any time on or after January 1, 2002, as and to
the extent provided in subsection 7.1(b) hereof (such
termination shall not be effective retroactively and the
effective date of such termination shall not pre-date January
1, 2002.)"
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(g) Section 7.5 of the Global Operating Agreement is hereby
amended and restated to read in its entirety as follows:
"7.5 Effect of Termination; Termination Fee and Alternative Termination
Fee.
(a) In the event a party terminates this Agreement pursuant to
Section 7.4 as a result of a Danka Event of Default or a GE Capital Event
of Default, such party shall have the right to exercise all rights and
remedies as may be available in law or in equity, including, without
limitation, claims for Damages.
(b) If GE Capital terminates this Agreement pursuant to Section
7.4 due to the occurrence and continuance of
(i) a Qualifying Change in Control of Danka and there has
been an Impairment with respect to Danka; or
(ii) a Complete Cessation of Distribution of Office
Imaging Solutions; or
(iii) a Complete Cessation of Service; or
(iv) the dissolution or liquidation of Danka or any of its
Affiliates (other than a Permitted Reorganization with respect to such
Person) that is a party to any Principal Document relating to a U.S.
Program or the French Program; or
(v) a Bankruptcy Event with respect to Danka or any of
its Affiliates that is a party to any Principal Document relating to the
U.S. Program that is active at the time of such termination,
then no later than ten (10) days after such termination, Danka shall pay
the Termination Fee to GE Capital. In the event Danka pays GE Capital the
Termination Fee pursuant to this Section 7.5, then the parties agree that
Danka shall not be also obligated to GE Capital in respect of a Trigger
Payment that would otherwise be payable pursuant to this Agreement in
connection with any Measurement Period which Measurement Period is included
in the calculation of the amount of such Termination Fee.
(c) If Danka terminates this Agreement pursuant to Section 7.4 due to the
occurrence and continuance of a Qualifying Change in Control of Danka then
no later than ten (10) days after such termination, Danka shall pay the
Alternative Termination Fee to GE Capital. In the event Danka pays GE
Capital the Alternative Termination Fee pursuant to this Section 7.5, then
the parties agree that Danka shall not be also obligated to GE Capital in
respect of a Trigger Payment that would otherwise be payable pursuant to
this Agreement in connection with any Measurement Period which Measurement
Period is included in the calculation of the amount of such Alternative
Termination Fee.
(d) Interest on any unpaid amounts that remain due and payable for more
than 30 days after written notice that such amount is due and owing shall
have been given to the obligor of such amount shall accrue from the date
such amount became overdue at an
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annual rate of 12% (or, if not permitted by applicable law, such lower rate
as may be permitted), until paid, before as well as after judgment."
(h) Article VIII of the Global Operating Agreement is hereby
amended and restated to read in its entirety as follows:
"Article VIII
Volume Payments
---------------
8.1 Target Volume. For each Measurement Period, Danka
shall, and shall cause its Affiliates to, use reasonable efforts to enter
into sufficient Financings in order that the aggregate Volume with respect
to such Measurement Period shall be at least equal to the target volume for
such period as set forth in the following table (subject to Section 8.2(b)
with respect to any Interrupted Measurement Period, the "Target Volume"):
Measurement Period Target Volume
------------------ -------------
From 4/1/99 through 3/31/00 $220.0 million
From 4/1/00 through 3/31/01 $245.0 million
From 4/1/01 through 3/31/02 The greater of (x) the Sales Volume for
such Measurement Period and (y)
$170.0 million
From 4/1/02 through 3/31/03 The greater of (x) the Sales Volume
for such Measurement Period and (y)
$164.0 million
From 4/1/03 through 3/31/04 The Sales Volume for such
Measurement Period
From 4/1/04 through 3/31/05 The Sales Volume for such Measurement
Period
From 4/1/05 through 3/31/06 The Final Year Sales Volume for such
Measurement Period
The sole remedy of GE Capital for any failure by Danka to use such efforts
or meet the Target Volume in any Measurement Period shall be Danka's
obligation to make Trigger
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Payments pursuant to Section 8.2 below (provided that the foregoing shall
not limit any rights or remedies of GE Capital in respect of the breach by
Danka of any other provision of this Agreement). Any failure by Danka to
use such efforts or meet the Target Volume in any Measurement Period shall
not be deemed to be or constitute a Danka Event of Default.
8.2 Trigger Payments.
(a) Within 15 days after Danka shall have reported to GE
Capital the annual United States Reprographic Hardware Sales with respect
to each Measurement Period (or 15 days after the date that the last item of
Backlog (as such term is defined in the U.S. Direct Operating Agreement) is
Financed by GE Capital pursuant to the U.S. Direct Operating Agreement ),
GE Capital shall deliver to Danka a notice setting forth (i) the Actual
Volume, Adjusted Target Volume and Approval Rate, in each case, for such
Measurement Period and (ii) the calculations provided below setting forth
the amount of any cash payment required to be made by Danka to GE Capital
pursuant to this Section 8.2 with respect to such Measurement Period (a
"Trigger Payment"). All such information and calculations shall be
certified by the Manager of Finance of GE Capital VFS's Center for
Specialized Alliances (in his capacity as such) as being true and correct
in all material respects, to the best of his knowledge, after due inquiry.
Within 15 days after the end of each calendar quarter in a Measurement
Period (other than a calendar quarter that is the end of such Measurement
Period), GE Capital shall deliver to Danka its good faith estimate of the
Volume funded by GE Capital or its Program Affiliates during such
Measurement Period through the end of such calendar quarter, the Approval
Rate, the aggregate amount proposed to be Financed by GE Capital or any
Program Affiliate in connection with all of the Prospective Financings
submitted by Danka or any of its Affiliates to GE Capital or any Program
Affiliate in connection with the Qualifying Programs and the Funding Rate,
in each case in respect of the period beginning on the first day of such
Measurement Period and ending on the last day of such calendar quarter.
(b) If this Agreement is terminated and such termination
results in an Interrupted Measurement Period, then any Trigger Payment due
in respect of such Interrupted Measurement Period shall be calculated in
accordance with subsection (c) hereof without giving effect to the fact
that such Measurement Period is an Interrupted Measurement Period; provided
that the Target Volume for such Interrupted Measurement Period shall be
calculated on a pro rated basis calculated based on the actual number of
days (365 or 366) in the Measurement Period during which such termination
occurs. By way of example, if the Target Volume was $170 million for the
Measurement Period during which the termination occurred, such Measurement
Period consisted of 365 days and the Agreement was terminated on the 100th
day of such Measurement Period, the Target Volume for such Interrupted
Measurement Period would be equal to (i) 100 multiplied by the quotient of
$170 million divided by 365 or (ii) $46,575,342.
(c) If the amount of the Actual Volume for any
Measurement Period is less than the Adjusted Target Volume for such
Measurement Period (a "Volume Shortfall"), then the Trigger Payment due to
GE Capital for such Measurement Period shall be an amount equal to the
product of (i) the excess of the Adjusted Target Volume
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over the Actual Volume, in each case, calculated for such Measurement
Period multiplied by (ii) 4.75%.
(d) Danka shall pay to GE Capital the amount of any
Trigger Payment no later than 15 days after delivery by GE Capital of the
related notice under Section 8.2(a).
(e) Any amounts funded by GE Capital or any Program
Affiliate in respect of Backlog (as such term is defined in the U.S. Direct
Operating Agreement) shall be included for purposes of determining any
Trigger Payment and Termination Fee due pursuant to the terms of this
Agreement.
(i) The following definitions contained in Appendix I to the
Global Operating Agreement are hereby amended as follows:
(i) The definition of "Adjusted Target Volume"
is hereby amended by deleting the last two sentences thereof in their
entirety.
(ii) The definitions of "Aggregate Volume,"
"Carry Back Volume Credit," "Carry Forward Volume Credit", "Excess Volume
Measurement Period," "Fiscal Year Start Date," "Look Back Measurement
Period" and "Trigger Payment Return" are each hereby deleted in their
entirety.
(iii) The definition of "Actual Volume" is hereby
amended and restated to read in its entirety as follows:
"'Actual Volume' for any Measurement Period that is not an
Interrupted Measurement Period means the sum of (x) all Volume with
respect to such Measurement Period, to be measured commencing on the
first day of such period and ending on the last day of such period
minus (y) an amount equal to the Exclusion Amount (if any), and for
any Measurement Period that is an Interrupted Measurement Period,
means the sum of (x) all Volume with respect to such Interrupted
Measurement Period, to be measured commencing on the first day of
such period and ending on the day this Agreement is terminated minus
(y) an amount equal to the Exclusion Amount (if any) and thereafter
prorated in the manner set forth in Section 8.2(b) to reflect the
actual number of days comprising the Interrupted Measurement Period.
(iv) The definition of "Measurement Period" is
hereby amended and restated to read in its entirety as follows:
" 'Measurement Period' means a twelve-month period
from April 1, 1999 through March 31, 2000; from April 1, 2000
through March 31, 2001; from April 1, 2001 through March 31, 2002;
from April 1, 2002 through March 31, 2003; from April 1, 2003
through March 31, 2004; from April 1, 2004 through March 31, 2005;
or from April 1, 2005 through March 31, 2006."
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(v) The definition of "Termination Fee" is
hereby amended and restated to read in its entirety as follows:
" 'Termination Fee' means, as of the date that this
Agreement is terminated pursuant to Section 7.4 hereof, an amount
equal to the sum of (i) the Trigger Payment that would be due in
respect of the Interrupted Measurement Period during which the
termination date occurred, assuming that the Actual Volume for such
Measurement Period was equal to the aggregate Actual Volume funded
by GE Capital or the applicable Program Affiliates during such
Interrupted Measurement Period prior to the date this Agreement is
terminated and without giving effect to the terms of Section 8.2(b)
(after calculating the Adjusted Target Volume for such Interrupted
Measurement Period), plus (ii) an amount equal to the greater of (x)
zero, and (y) an amount equal to the product of (i) $565,000,000
minus the sum of the aggregate Actual Volume funded by GE Capital or
the applicable Program Affiliates during all previous Measurement
Periods (and the Interrupted Measurement Period) as measured from
4/1/01 to the date that this Agreement is terminated pursuant to
Section 7.4 hereof multiplied by (ii) 4.75%. For purposes of the
foregoing calculation only, Actual Volume for any Measurement Period
that is not an Interrupted Measurement Period and for which Danka
shall have previously paid to GE Capital a Trigger Payment in
respect thereof means the Target Volume with respect to such
Measurement Period."
(vi) The definition of "Term of this Agreement"
is hereby amended and restated to read in its entirety as follows:
" 'Term of this Agreement' means the period
commencing on December 27, 1997 and ending on March 31, 2007, as
such term may be modified pursuant to Section 7.1 hereof."
(vii) The definition of "Danka Event of Default"
is hereby amended and restated to read in its entirety as follows:
"Danka Event of Default" means the occurrence and
continuance of any of the following:
(i) the dissolution or liquidation of Danka or any of its
Affiliates (other than a Permitted Reorganization with respect to
such Person) that is a party to any Principal Document relating to a
U.S. Program or the French Program; or
(ii) a Bankruptcy Event with respect to Danka or any of its
Affiliates that is a party to any Principal Document relating to a
U.S. Program or the French Program; or
(iii) a material breach by Danka or any of its Affiliates of any of
its representations, warranties, covenants or obligations under this
Agreement (other than the occurrence of a Bankruptcy Event) which
breach, if curable, is not cured
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within thirty (30) days' written notice thereof from GE Capital,
specifying the nature of such breach in reasonable detail; or
(iv) an Event of Default (as to Danka or any Danka Affiliate that
is a party to any Principal Document) or Danka Event of Default (as
defined in any of the other Principal Documents) under any other
Principal Document (other than the occurrence of a Bankruptcy
Event); or
(v) a Third Party Enforcement Event."
(viii) The definition of "Senior Financing
Facility" is hereby amended and restated to read in its entirety as
follows:
"'Senior Financing Facility' means (i) the credit
arrangement evidenced, in part, by that certain Amended and Restated
Credit Agreement entered into as of June 29, 2001 among Danka, Bank
of America, National Association and the other parties thereto and
(ii) each other credit facility or similar arrangement entered into
by Danka or Danka Office Imaging Company in connection with the
restatement, refinancing, replacement, renewal or extension of the
arrangement described in clause (i) hereof, whether in whole or in
part and whether initially or in connection with any subsequent
total or partial restatement, refinancing, replacement or renewal or
extension thereof."
(ix) The definition of "Indebtedness Default" is
hereby amended and restated in its entirety as follows:
"'Indebtedness Default' shall mean any failure of
Danka or any of its Affiliates to perform or observe any condition
or covenant made by it under, or that any event shall have occurred
or condition shall exist, under (a) the Senior Financing Facility,
or (b) any agreement or instrument that governs or otherwise relates
to any credit facility or similar arrangement (whether syndicated or
held by a single lender) contemplating loans, advances or other
extensions of credit in an aggregate maximum amount equal to or
greater than $500 million, if the effect of such failure, event or
condition is to cause, or to permit the holder or holders of the
loans, advances or other extensions of credit thereunder or
beneficiary or beneficiaries of the loans, advances or other
extensions of credit thereunder (or a trustee or agent on behalf of
such holder or holders or beneficiary or beneficiaries) to cause the
loans, advances or other extensions of credit thereunder to be
declared to be due and payable prior to their stated maturity and
such failure, event or condition continues without cure for (i) the
applicable cure period (if any) set forth in such agreement or
instrument or (ii) if no applicable period shall be set forth in
such agreement or instrument, a period of 30 days after GE Capital
delivers to Danka written notice of such failure, event or
condition); provided, however, that in the event that (a) such
agreement or instrument is amended so as to eliminate the condition,
covenant or event that gave rise to such right of acceleration or
(b) the holder or holders or beneficiary or beneficiaries of the
loans, advances or other extensions of credit thereunder agree to
forbear from
9
exercising, or waive their right to exercise, such right of
acceleration, then so long as such amendment, forbearance or waiver
is effective, any failure, event or condition that is the subject of
such amendment, forbearance or waiver shall not constitute an
Indebtedness Default."
(x) The definition of "Net Worth Test" is hereby
amended and restated in its entirety as follows:
"Net Worth Test" means the determination of whether
Danka shall have (i) Consolidated Net Worth at the times and in the
amounts equal to, or greater than, the sum of (A) an amount equal to
75% of the Adjusted Consolidated Net Worth (as such term is used in
that certain Amended and Restated Credit Agreement entered into as
of June 29, 2001 among Danka, Bank of America, National Association
and the other parties thereto) of Danka and its Subsidiaries (as
such term is used in that certain Amended and Restated Credit
Agreement entered into as of June 29, 2001 among Danka, Bank of
America, National Association and the other parties thereto) on June
30, 2001 plus (B) an amount equal to 50% of the consolidated net
income of Danka and its Subsidiaries (as such term is used in that
certain Amended and Restated Credit Agreement entered into as of
June 29, 2001 among Danka, Bank of America, National Association and
the other parties thereto) (if positive) for each calendar quarter
commencing on or after July 1, 2001 (on a cumulative basis), or (ii)
the net worth (or similar concept) at the times and in the amounts
equal to, or greater than, those that constitute the Modified Net
Worth Test.
(xi) The definition of "Funding Rate" is hereby
amended and restated in its entirety as follows:
"Funding Rate" means, for any Measurement Period
(including any Interrupted Measurement Period), an amount equal to
the quotient of (i) the aggregate actual amount funded to Danka or
any of its Affiliates by GE Capital or any Program Affiliates in
respect of Leases and Exempt Leases in connection with the
Qualifying Programs during such Measurement Period divided by (ii)
the aggregate Approval Amount of all of the Prospective Financings
submitted by Danka or any of its Affiliates to GE Capital or any
Program Affiliate in connection with the Qualifying Programs during
such Measurement Period.
(j) The following new definitions are hereby added (in the
appropriate alphabetical order) to Appendix I of the Global Operating Agreement:
"'Alternative Termination Fee' means, as of the date
that this Agreement is terminated (which shall in no event occur
prior to January 1, 2002) by Danka pursuant to Section 7.4 hereof
due to the occurrence and continuance of a Qualifying Change in
Control of Danka, an amount equal to the sum of (i) the Termination
Fee, plus (ii) an amount equal to $130,000,000 multiplied by 4.75%."
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" 'Exclusion Amount' shall mean the total lease
volume financed by GE Capital (as measured in United States
currency) under the terms of any Other Program (but not including
any portion thereof financed by GE Capital and originated through
Danka's distribution channel) as measured during the previous twelve
full calendar months (without including any partial calendar
month.)"
" 'Final Year Sales Volume' for the Measurement
Period 4/1/05 through 3/31/06 means the greater of (x) 63% of
Danka's and its Affiliates' United States Reprographic Hardware
Sales during such Measurement Period, as reported to GE Capital by
Danka, in the time and manner as provided for in Section 4.1(k) and
(y) an amount equal to the greater of (i) zero and (ii) an amount
equal to $565,000,000 minus the sum of the aggregate Actual Volume
funded by GE Capital or the applicable Program Affiliates during all
previous Measurement Periods (as well as the Measurement Period for
which Final Year Sales Volume is being determined) as measured from
4/1/01 to the expiration of the Measurement Period for which Final
Year Sales Volume is being determined."
"'Other Program' means any lease financing program
(and not any Program) to support sales of Equipment by any Person
(other than Danka or its Affiliates) that may have been entered into
by GE Capital and/or any of its Affiliates, on the one hand, and
such Person, on the other hand, that such Person and GE Capital may
have reduced to a signed writing at any time prior to a Qualifying
Change in Control of Danka involving such Person (and where, by way
of such Qualifying Change in Control of Danka, such Person (whether
acting alone or with any Group of Persons) (x) becomes the
"beneficial owner" (within the meaning of Rule 13d-3 under the
United States Securities Exchange Act of 1934, as amended) of
securities of Danka representing more than fifty percent (50%) of
the combined voting power of the then outstanding securities of
Danka ordinarily having the right to vote in the election of
directors thereof or (y) shall have entered into an agreement with
Danka with respect to an acquisition of a substantial part of the
direct or indirect assets of Danka."
" 'Sales Volume' for any Measurement Period means 63%
of Danka's and its Affiliates' United States Reprographic Hardware
Sales during such Measurement Period, as reported to GE Capital by
Danka, in the time and manner as provided for in Section 4.1(k)."
" 'United States Reprographic Hardware Sales' means
an amount equal to the total sales volume (as measured in United
States currency) of all of Danka's and its Affiliates domestic
United States reprographic (photocopier) hardware sales during a
given Measurement Period."
(k) Schedule X to the Global Operating Agreement is hereby deleted
in its entirety.
(l) Schedule Y to the Global Operating Agreement is hereby deleted
in its entirety.
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3. Amendment to U.S. Direct Operating Agreement. Effective immediately,
Section 9.1 of the U.S. Direct Operating Agreement is hereby amended by changing
the date "March 31, 2004" set forth in clause (i) thereof to "March 31, 2007".
4. Amendment to License Agreement. Effective immediately, Section 5 of the
License Agreement is hereby amended by changing the date "March 31, 2004" set
forth in subsection (a) thereof to "March 31, 2007."
5. Confirmation of Guaranty. By its execution of this Amendment, Danka OI
hereby consents to all of the terms and provisions of this Amendment, the Global
Operating Agreement and each of the other Principal Documents, and ratifies and
confirms that each of the other Principal Documents to which it is a party,
including but not limited to that certain Unconditional Guarantee, dated as of
December 22, 1997, made by Danka OI in favor of GE Capital, remains in full
force and effect and enforceable in accordance with its terms.
6. References to this Amendment and Effect on Principal Documents.
(a) From and after the effective date of this Amendment each
reference in the Global Operating Agreement, the U.S. Direct Operating Agreement
and the License Agreement to "this agreement", "hereunder" or "herein" or words
of like import shall mean and be a reference to such agreement, as affected and
amended hereby.
(b) The Global Operating Agreement, the U.S. Direct Operating
Agreement and the License Agreement, each as amended hereby, shall remain in
full force and effect and are hereby ratified and confirmed in all respects.
(c) Danka expressly acknowledges and agrees that GE Capital's
acceptance of, and agreement to, the provisions of this Amendment does not
constitute an election by GE Capital to adopt a Modified Net Worth Test pursuant
to Section 6.3 of the Global Operating Agreement. Nothing contained herein shall
be construed to prohibit or impair GE Capital's right to make such an election
at a future date.
7. Governing Law; Binding Effect. In all respects, including all matters
of construction, validity and performance, this Amendment shall be governed by,
and construed and enforced in accordance with, the internal laws of the State of
New York (without regard to conflict of law provisions) and any applicable laws
of the United States of America, and shall be binding upon the parties hereto
and their respective successors and permitted assigns.
8. Execution in Counterparts. This Amendment may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, this Amendment has been duly executed as of the
date first written above.
GENERAL ELECTRIC CAPITAL
CORPORATION
By:
-------------------------------------
Name:
Title: Its Authorized Representative
DANKA BUSINESS SYSTEMS PLC
By:
-------------------------------------
Name:
Title:
DANKA OFFICE IMAGING COMPANY
By:
-------------------------------------
Name:
Title:
13
