Danka to Relocate into New St. Petersburg, Florida Headquarters and Extend Senior Credit Facility.

Business Editors

ST. PETERSBURG, Fla.--(BUSINESS WIRE)--Oct. 1, 2002

Headquarters Deal will Consolidate Operations and Reduce Real Estate

Liabilities Senior Credit; Facility Extension Gives Company

Greater Security, Flexibility

Danka Business Systems PLC (Nasdaq:DANKY) today announced that it will relocate from its current corporate campus into a new, state of the art Corporate Headquarters to be completed by next summer. The business transaction involves three properties in St. Petersburg, Florida, including an unfinished 157,000 square foot building located at 11101 Roosevelt Boulevard, which will become Danka's new Corporate Headquarters under an agreement with the buyer to lease the property. The buildings were previously owned by a tax retention operating lease (TROL) facility, a financing vehicle under which Danka was the lessee of these previously underutilized properties.

Under the terms of the transaction, the Corporate Headquarters, Danka National Supply Center, and a third support facility have been acquired for the sum of $31.4 Million by Corporate Property Associates 15 Incorporated, a publicly held, non-traded real estate investment trust (REIT) managed by W. P. Carey & Co. LLC (NYSE:WPC) and a member of the $4 Billion W.P. Carey Group. Danka has entered into long-term leases to occupy the buildings. Danka's pre-existing obligations on the buildings, which included payment of financing and other operating costs, have been terminated and the net sum of $21.2 Million was paid to the TROL lenders in full satisfaction of the obligations relating to such properties under the TROL. Approximately $7.7 Million of the purchase price will be used to complete construction and tenant improvements in the Corporate Headquarters and support facility.

Danka Chairman and Chief Executive Officer, Lang Lowrey, commented: "We are very excited about moving into this new facility. By consolidating our corporate operations we will significantly reduce our overall tenancy costs and at the same time increase our efficiency. Uniting the vast majority of our St. Petersburg employees under the same roof will improve interaction among our corporate staff and accelerate our responsiveness to customers and our colleagues in the field. At the same time, this initiative will enable us to further reduce our real estate exposure."

Danka announced that it has also entered into a contract with respect to the sale by the TROL of the remaining three buildings on its current corporate campus in St. Petersburg which it will be vacating. The proceeds from this sale will permit Danka to terminate the TROL arrangements in full. "With the closing of this sale, the TROL lenders will have been repaid $34.4 Million over the past five quarters and we will have effectively eliminated our exposure to the risk of real estate ownership," commented Lowrey.

Danka also announced that it has exercised its option to extend its credit facility with its senior bank lenders for an additional two years, through March 31, 2006.

"We are pleased to have extended our senior credit facility through the end of our 2006 fiscal year," commented Lowrey. "This extension allows us to continue our debt reduction initiatives and the opportunity to seek long-term financing under more favorable capital market conditions." Mark Wolfinger, Danka's Chief Financial Officer, added "We believe that our senior leaders have further validated the success of our efforts over the past six quarters by granting this extension in a very difficult lending environment and in a fashion which gives us flexibility to address other elements of our capital structure."

Danka's interest rate under the extended facility will be fixed at LIBOR plus 7.5%, provided that the facility has a Moody's credit rating of at least B2. The extended facility consists of a term loan commitment of $121 Million, a revolver commitment of $70 Million and a letter of credit commitment of $30 Million. As previously disclosed, Danka will be required to make term loan repayments of $4 Million quarterly through March 31, 2003, and $8 Million quarterly thereafter. Danka has paid an exercise fee of $2.76 Million for the extension and, if the facility is not earlier refinanced, will be required to pay commitment fees equal to 1% of the total commitments under the facility at December 31, 2002, March 31, 2003, December 31, 2003, March 31, 2004, December 31, 2004 and June 30, 2005 and commitment fees equal to 2% of the total commitments under the facility at June 30, 2003 and June 30, 2004. Danka's outstanding balance under the facility as of June 30, 2002 were $140.5 Million, down from $240.0 Million at June 30, 2001. There would be no prepayment penalty in the event that Danka were to refinance the facility before its stated maturity.

Forward-Looking Statements: Certain statements contained herein, or otherwise made by our officers, including statements related to our future performance and our outlook for our businesses and respective markets, projections, statements of management's plans or objectives, forecasts of market trends and other matters, are forward looking statements, and contain information relating to us that is based on the beliefs of our management as well as assumptions, made by, and information currently available to, our management. The words "goal", "anticipate", "expect", "believe" and similar expressions as they relate to us or our management are intended to identify forward looking statements. No assurance can be given that the results in any forward looking statement will be achieved. For the forward looking statements, we claim the protection of the safe harbor for forward looking statements provided for in the Private Securities Litigation Reform Act of 1995. Such statements reflect our current views with respect to future events and are subject to certain risks, uncertainties and assumptions that could cause actual results to differ materially from those reflected in the forward looking statements. Factors that might cause such actual results to differ materially from those reflected in any forward looking statements include, but are not limited to, the following: (i) any material adverse change in financial markets or in our own position, (ii) any inability to achieve or maintain cost savings, (iii) increased competition from other high-volume and digital copier distributors and the discounting of such copiers by our competitors, (iv) any inability by us to procure, or any inability by us to continue to gain access to and successfully distribute, new products, including digital products and high-volume copiers, or to continue to bring current products to the marketplace at competitive costs and prices, (v) any negative impact from the loss of any of our key upper management personnel, (vi) fluctuations in foreign currencies, (vii) any change in economic conditions in domestic or international markets where we operate or have material investments which may affect demand for our services and (viii) other factors identified in our periodic reports filed with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect our analysis only as of the date they are made. We undertake no obligation, and do not intend, to update these forward looking statements to reflect events or circumstances that arise after the date they are made. Furthermore, as a matter of policy, we do not generally make any specific projections as to future earnings nor do we endorse any projections regarding future performance, which may be made by others outside our company.

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