Short-Term Credit Scheme

IDC Credit 39699 3/11/09 2:28 PM Page 1 Short-Term Credit Scheme Revolving credit and guarantee facilities

IDC Credit 39699 3/11/09 2:28 PM Page 2 Dear Customer Thank you for making the IDC your financier of choice for your working capital requirements. Below is all the information you will need about how the facility works and how draws are done under the facility. Should you require further information or clarity on any information contained herein, then kindly contact the Account Manager assigned to you. Should you not know who is the Account Manager assigned to you, kindly contact the Head of International Finance Department on 011 269 3000. 1. Due diligence Kindly provide us with the following information to enable us to conduct the legal due diligence: REVOLVING CREDIT AND GUARANTEE FACILITIES CHECKLIST Yes No Identification information Company information Full name and registration number Physical address Postal address Telephone and fax numbers Shareholder/s information Full name and registration number Physical address Postal address Telephone and fax numbers Surety/ies information Full name and registration number Physical address Postal address Telephone and fax numbers Contract or order Original or certified copy Buyers information Buyer understands that she/he has to give us a letter confirming payment into joint bank account Banking details (operating account) Bank Branch name Branch number Account number Joint bank account details, if required: Prescribed application form given to borrower

IDC Credit 39699 3/11/09 2:29 PM Page 3 REVOLVING CREDIT AND GUARANTEE FACILITIES CHECKLIST Yes No The following has been explained to the borrower: Documents which have to be signed Master loan agreement Individual loan agreement Request for drawdown Security documents as indicated under CPs Conditions precedent Signing of all documents (including or excluding document regarding other facilities) Joint and several/proportional suretyship/guarantee Cession of debtors (clarify whether all debtors or financed debtors) Cession of proceeds Cession of loan accounts Subordination of loan accounts General notarial bond Special notarial bond Fees Raising fee for revolving credit facility, if applicable Establishment fee for guarantee facility if applicable Agreement fee

IDC Credit 39699 3/11/09 2:29 PM Page 4 SHORT-TERM EXPORT FINANCE AND LOCAL BRIDGING FINANCE The IDC offers the following short-term funding products: Bridging finance Pre-shipment and post-shipment export finance Guarantees 1. Short-term bridging and export finance The IDC will finance up to 75% of the cost to execute export contracts and up to 100% of the cost to execute local contracts (ie SA-based). All short-term products are based on the borrower having received a confirmed contract or order from its buyer. We require a letter of credit or a commercial/cgic short-term insurance policy if the confirmed contract or order has not been placed by a reputable/blue-chip/ government entity (to be determined by the IDC). 1.2 Fees The fees charged for a short-term facility are: an upfront once off 0,5% raising fee; an upfront once off R2 500 agreement fee; or the higher of R1 500 or 0,15% per drawdown, on the value of each drawdown amount. Note: All fees are exclusive of VAT. 1.3 Term of facility Finance is available as a 12-month single transaction or as a revolving credit facility, which may be renewed annually, if certain criteria are met by the borrower. 1.4 Finance requirements The IDC requires the client to be adequately capitalised, but reduced owner contributions may be considered for traders and emerging entrepreneurs. The current minimum structure (debt to total assets) required by the IDC from the client is as follows: if the borrower is a manufacturer, the IDC requires a structure of 25% or more; if the borrower is a trader, the IDC requires a structure of 15% or more; and if the borrower is a BEE entrepreneur, the IDC would be willing to accept a structure as low as 10%. The requirement for a short-term facility should be in excess of R1 million. The client must be able to show a trading history of at least a year unless a Newco has been established, in which case the IDC requires strong management with the relevant experience to have already been appointed by such Newco. 1.5 Documentation The short-term facility shall be regulated by a master loan agreement (MLA), signed by the IDC, the client and any relevant stakeholders such as shareholders or members of the client or sureties of the client s debt. Typically, the IDC requires the following security to be made available to it upon the approval of a short-term facility: Suretyships from the borrower and stakeholders; Cession of insurance policies relevant to the transaction; Cession of all proceeds of the contract being funded by the IDC; Cession of book debts of the client; Cession of all loan accounts of the client; If the client owns fixed or movable property, then the IDC requires a general and/or special notarial bond to be registered over such property up to the value of the loan facility being granted to the client; A joint bank account must be opened by the client, where the IDC shall be a mandatory co-signatory and which account shall not have any internet, telephone or automated teller machine banking services available to it; and Any further security deemed appropriate to the transaction being funded.

IDC Credit 39699 3/11/09 2:29 PM Page 5 The IDC typically ringfences the proceeds of contracts or orders its finances. Hence, the client is required to open a joint bank account. The joint bank account must be separate from the client s operating account and should not have internet, mobile or automated teller machine banking services available to it. The IDC will require written confirmation from a bank with which the client has opened a joint bank account. The IDC would already require a letter from each of the client s buyers that they will pay proceeds to the joint bank account. Only withdrawals by a representative of the client and representatives from the IDC are permitted on the joint bank account. For ease of reference, a joint bank account can be opened by the client using the attached Absa forms and proving the required documents to the IDC Account Manager. Drawdown guide for advances in terms of the short-term facility: 1) Each advance under the short-term facility shall be subject to the prior written approval of the IDC, which written approval shall take the form of an individual loan agreement (ILA). 2) The ILA is concluded between the IDC and the client with respect to each buyer that the client has. 3) All advances shall be made in the manner and for the purpose stipulated in the relevant ILA and upon receipt by the IDC of all documents and conditions precedent required in terms of the master loan agreement and the ILA. 4) Unless otherwise agreed by the IDC, all advances to the client shall be paid by the IDC directly to the borrower s supplier, into its bank account as stipulated in the relevant ILA. 5) Subsequent advances for the same buyer can be made by submission of a request for drawdown, the format of which is contained in the MLA. 2. Guarantees 2.1 General One of the IDC s most popular short-term products is the performance guarantee. However, the IDC also offers the following guarantees: Payment guarantees to secure overdraft facilities with commercial banks; and Advance payment guarantees if the buyer puts a deposit down and requests a guarantee from the borrower and/or bid bonds/tender guarantees when the borrower does not win the tender then the guarantee is cancelled. Guarantees often assist smaller companies who do not yet have the track record like their larger counterparts. It has become an increasing trend for suppliers who win tenders, to provide the company calling for bids with a performance bond for peace of mind that the contract will be adequately fulfilled. Should the supplier not meet its contractual/tender obligations, the guarantee will be forfeited, thereby providing the customer with a degree of comfort. Because many smaller suppliers cannot fund such guarantees and commercial banks are often hesitant to provide certain entities with such support without a certain level of collateral, clients often approach the IDC due to its increased appetite for risk. 2.2 Fees The fees charged for a guarantee facility are as follows: Guarantee fee of 2% per annum, payable quarterly in advance; for the quarter or part thereof for performance guarantees only. Payment or advance payment guarantee fees are determined according to the risk associated with the payment. The fees are also payable quarterly in advance (a base rate of prime less 2% is applied as a cost of funding for the loans. The margin above is used as the guarantee fee pricing). An upfront once off R5 000 establishment fee is payable on all guarantee facilities. An upfront once off R2 500 agreement fee is payable on all guarantee facilities. Note: All fees are exclusive of VAT. 2.3 Term The term of a guarantee facility is structured around the requirements set by the relevant tender document or contract awarded to the client. 2.4 Finance requirements The finance requirements for a guarantee facility are the same as those of the shortterm bridging and export finance as stated above.

IDC Credit 39699 3/11/09 2:29 PM Page 6 ABSA APPLICATION FORMS TO APPLY FOR JOINT BANK ACCOUNT Below is the relevant application form for the joint account as requested in the master loan agreement. All borrower clients must complete this form. The originally completed application form together with the following documents must be sent to the IDC: Certified copies of the identity documents of all the client s signatories. Certified copies of proof of residence and telephone numbers of all the client s signatories. Any further information required by Absa Bank. The client signatories should be indicated as B signatories and the IDC will be indicated as A signatories in terms of the IDC signatory list, and all signatories need to initial each page. The complete pack of original documents will be sent to Absa by the IDC before the account is opened. APPLICATION/CONTINUATION OF EXISTING AND NEW CHEQUE ACCOUNTS CHEQUE ACCOUNTS IN THE NAME OF: IDC/ (Pty) Limited/CC (Name of customer) Reg No: VAT No: NAME OF ACCOUNT/ ACCOUNT NAME OF BRANCH SPECIAL NAME NUMBER 1. Protea Park Avenue IDC/ (Pty) Limited/CC 2. 3. 4. 5. Signed at on 20 * * * Insert capacity eg director, member, partner, trustee secretary, etc as the case may be.

IDC Credit 39699 3/11/09 2:29 PM Page 7 CERTIFICATE OF SIGNING AUTHORITIES Account holder: Account number: Account name: Registration number: To: IDC/ (Pty) Limited/CC 1940/014201/06 (IDC REGISTRATION NUMBER). The Manager Absa Bank Limited (Registration number 1986/004794/06) ( the bank ) I/We hereby certify that the following persons have signing authority on the aforesaid account as from 20 Furthermore, I/we attach hereto, for your records, specimen signatures of each signatory designated hereunder. New signatories/or additional signatories must be added to existing signatories. (Delete which is not applicable.) Full names, identity number and capacity Group *Signature Full names: IDC SIGNATORIES A ID: AS PER ATTACHED LIST Full names: ID: B Full names: ID: B Full names: ID: B Please note: Make a double line after the last entry, followed by a diagonal line over the remaining unused lines. ** All documents, cheques, etc pertaining to the captioned account are must be signed by: NB: NB: 1) ** ANY ONE TO SIGN ALONE 2) ** ANY TWO TO SIGN TOGETHER 3) ** ANY ONE "A" AND ONE B TO SIGN 4) ** ANY ONE "A" AND ONE B OR ANY TWO A s TO SIGN TOGETHER 5) ** SPECIAL INSTRUCTION: ** Delete which is not applicable Signed at on 20 * Insert capacity director, member, partner, trustee secretary, etc as the case may be. ** Delete which is not applicable.

IDC Credit 39699 3/11/09 2:29 PM Page 8 You can also visit the IDC offices nearest to you in the following addresses: Head Office Industrial Development Corporation of SA Limited 19 Fredman Drive, Sandown PO Box 784055, Sandton, 2146 Tel: 011 269 3000 Fax: 011 269 3116 Email: callcentre@idc.co.za Regional Office Eastern Cape Office Nandipha Vena Regional Manager Lukin Road, Hammer Mill House The Quarry Office Park, 1st Floor, Berea East London PO Box 19048,Tecoma, 5214 Tel: 043 721 0733/4 Fax: 043 721 0735 Email: east_london@idc.co.za Limpopo Office Loni Mamatela Regional Manager 43 Biccard Street Biccard Office Park, Suite 6 Polokwane Private Bag X9307, Polokwane, 0699 Tel: 015 299 4080/4099 Fax: 015 295 4521 Email: polokwane@idc.co.za Northern Cape Office Mehmood Ahmed Regional Manager 13 Bishops Avenue Sanlam Business Complex, Block D Kimberly PO Box 808, Kimberly, 8301 Tel: 053 807 1050/1/2/3 Fax: 053 832 7396 Email: kimberly@idc.co.za Free State Office Stoffel Meyer Regional Manager 12A President Steyn Street Westdene Bloemfontein Private Bag XII, Suite 25, Brandhof, 9324 Tel: 051 411 1450 Fax: 051 447 4895 Email: bloemfontein@idc.co.za North West Office David McGluwa Regional Manager 32B Heystek Street Sunecto Building, 1st Floor Rustenburg Private Bag X82245, Rustenburg, 0030 Tel: 014 591 9660/1 Fax: 014 592 4485 Email: rustenburg@idc.co.za KwaZulu Natal Office Pat Moodley and Manoj Seonath Regional Managers 199 Smith Street The Embassy Building Office 2301, Durban PO Box 2411, Durban Tel: 031 337 4455 Fax: 031 337 4790 Email: durban@idc.co.za Western Cape Office Lizo Ntloko Regional Manager 2 Riebeeck Street Absa Centre, Office 2817 Cape Town PO Box 6905, Roggebaai, 8012 Tel: 021 421 4794 Fax: 021 419 3570 Email: cape_town@idc.co.za GRAPHICOR 39699 This brochure has been printed on Cyclus Print. Cyclus Print stock is a 100% recycled and environmentally friendly paper, with no harmful chemicals being used in the production process.