Exhibit 10.1(d)

 

DATED  22  FEBRUARY  2008

 

EVOLVING SYSTEMS LIMITED

AND

 

BRIDGE BANK, N.A.

 

DEBENTURE

 

 

 

[g67101kg01i001.gif]

 

19 Cavendish Square

London W1A 2AW

DX 42748 Oxford Circus North

telephone  +44(0)20 7636 1616

fax  +44 (0)20 7491 2899

Ref : 028176/00002/H3326953.5

 

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CONTENTS

 

CLAUSE

 

PAGE

1.

DEFINITIONS AND INTERPRETATION

2

2.

COVENANT TO PAY

12

3.

INTEREST

12

4.

SECURITY

12

5.

CONVERSION OF FLOATING CHARGE

14

6.

FURTHER ASSURANCE

15

7.

DEPOSIT OF DOCUMENTS AND TITLE DEEDS

16

8.

NEGATIVE PLEDGE

16

9.

THE DEPOSIT ACCOUNT

17

10.

THE BOOK DEBTS ACCOUNT

17

11.

REPRESENTATIONS AND WARRANTIES

18

12.

UNDERTAKINGS

18

13.

Dividends and voting rights

21

14.

COSTS AND BANK’S PERFORMANCE OF COVENANTS

23

15.

DEFAULT

23

16.

STATUTORY POWER OF SALE

24

17.

RECEIVER OR ADMINISTRATOR

24

18.

PROTECTION OF THIRD PARTIES

27

19.

No LIABILITY AS MORTGAGEE IN POSSESSION AND INDEMNITY

27

20.

REASSIGNMENT

28

21.

POWER OF ATTORNEY

28

22.

CUMULATIVE AND CONTINUING SECURITY

29

23.

AVOIDANCE OF PAYMENTS

29

24.

PRIOR CHARGES

29

25.

OPENING A NEW ACCOUNT

30

26.

SUSPENSE ACCOUNT

30

27.

PAYMENTS AND WITHHOLDING TAXES

30

28.

CURRENCY

31

29.

SET-OFF

31

30.

ASSIGNMENT

32

31.

WAIVERS

32

32.

SEVERABILITY

32

33.

THE LAND REGISTRY

32

34.

NOTICES

33

35.

LAW AND JURISDICTION

33

36.

COUNTERPARTS AND DELIVERY

33

 

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THIS DEBENTURE is made as a Deed  on the 22nd day of  February  2008

 

BETWEEN:

 

(1)                                  EVOLVING SYSTEMS LIMITED (registered in
England and Wales under company number 02325854) the registered office of which
is at One Angel Square, Torrens Street, London EC1V 1PL (the “Chargor”); and

 

(2)                                  BRIDGE BANK, N.A. of 55 Almaden Boulevard,
San Jose, A 95113, United States of America (the “Bank”).

 

RECITALS

 

(A)                              The Bank has agreed to make available to the
Chargor a revolving loan facility of up to US$5,000,000 (five million American
dollars) subject to and upon the terms and conditions contained in the Loan
Agreement (as defined below).

 

(a)                                  The Bank requires the Chargor, and the
Chargor has agreed, to enter into this Debenture for the purpose of providing
security to the Bank for the Secured Liabilities.

 

IT IS AGREED as follows:

 

1.                                      DEFINITIONS AND INTERPRETATION

 

1.1                                 DEFINITIONS

 

In this Debenture the following expressions have the following meanings, unless
the context otherwise requires:

 

“Administrator”

 

means any administrator appointed pursuant to this Debenture.

 

 

 

“Book Debts”

 

means:

 

 

 

 

 

(a)

all book and other debts in existence from time to time (including, without
limitation, any sums whatsoever owed by banks or similar institutions), both
present and future, due, owing to or which may become due, owing to or purchased
or otherwise acquired by the Chargor; and

 

 

 

 

 

 

(b)

the benefit of all rights whatsoever relating to the debts referred to above
including, without limitation, any related agreements, documents, rights and
remedies (including, without limitation, negotiable or non-negotiable
instruments, guarantees, indemnities, legal and equitable charges, reservation
of proprietary rights, rights of tracing, unpaid vendors liens and all similar
connected or related rights and assets).

 

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“Book Debts Account”

 

means such separate and denominated account or accounts with the Bank, Royal
Bank of Scotland plc or such bank as may be specified or approved in writing by
the Bank for the purpose of receiving payments of the proceeds of realisation
and collection of Book Debts (the Borrower’s account number 21775153 with Royal
Bank of Scotland plc (sort code 15 -10 -00) being so approved at today’s date).

 

 

 

“Cash Deposit”

 

means all sums from time to time standing to the credit of the Deposit Accounts
and all interest on such sums.

 

 

 

“Charged Property”

 

means the whole or any part of the property, assets, income and undertaking of
the Chargor from time to time mortgaged, charged or assigned to the Bank
pursuant to this Debenture.

 

 

 

“Contracts”

 

means all the Chargor’s rights, title, interest and benefit in and to any
contract the details of which are referred to in Schedule 3.

 

 

 

“Costs”

 

means all costs, charges or expenses of whatsoever nature (including, without
limitation, legal fees) including, without limitation, disbursements and any
Value Added Tax to be charged on such costs, charges, expenses and
disbursements.

 

 

 

“Default Rate”

 

means the annual rate of interest specified in the second sentence of Clause
2.3(b) of the Loan Agreement.

 

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“Deposit Accounts”

 

means the interest bearing accounts with Royal Bank of Scotland plc (sort code
15-10-00) Account Numbers or names 21775188, EVOSYS — USD1, TERTEL — EURI, Euro
Money Fund and Sterling Money Fund and the Book Debts Account;

 

or such other accounts as the Bank may in its discretion, approve or require, as
any such account may be redesignated or renumbered from time to time and
“Deposit Accounts” means any of them.

 

 

 

“Distribution Rights”

 

means all allotments, accretions, offers, options, rights, bonuses, benefits and
advantages, whether by way of conversion, redemption, preference, option or
otherwise which at any time accrue to or are offered or arise in respect of any
Investments or Shares, and includes all dividends, interest and other
distributions paid or payable on or in respect of them.

 

 

 

“Event of Default”

 

means any of those events or circumstances set out in Clause 8 (Events of
Default) of the Loan Agreement and an Event of Default is “continuing” if it has
not been remedied to the satisfaction of the Bank or waived by it in writing.

 

 

 

“Facility Documents”

 

means this Debenture, the Loan Agreement and each of the Security Documents.

 

 

 

“Fixtures”

 

means all assets of whatsoever nature, apart from land and buildings, forming
part of any freehold or leasehold property owned by the Chargor and deemed by
law to be immovable property other than tenant’s fixtures.

 

 

 

“Future Plant and Machinery”

 

means all plant and machinery, equipment, fittings, installations, apparatus,
tools, motor vehicles and all other such assets (other than Fixtures)
whatsoever, wherever situate, which become the property of the Chargor after the
date of this Debenture.

 

4

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“Future Property”

 

means all estates and other interests in any freehold, leasehold or other
immovable property (including, without limitation, all Fixtures on such
property) which become the property of the Chargor after the date of this
Debenture, all proceeds of sale derived from such property and the benefit of
all covenants to which the Chargor is entitled in respect of such property.

 

 

 

“Insolvency Act”

 

means the Insolvency Act 1986.

 

 

 

“Intellectual Property”

 

means all subsisting patents and subsisting rights of a similar nature held in
any part of the world, applications for patents and such rights, divisions and
continuations of such applications for patents, registered and unregistered
trade marks (including but not limited to those listed in Schedule 1B),
registered and unregistered service marks, registered designs, utility models
(in each case for their full period and all extensions and renewals of them),
applications for any of them and the right to apply for any of them in any part
of the world, inventions, confidential information, Know-how, business names,
trade names, brand names, copyright and rights in the nature of copyright,
design rights and get-up and any similar rights existing in any country; and the
benefit (subject to the burden) of any and all agreements, arrangements and
licences in connection with any of the foregoing.

 

 

 

“Investments”

 

means all or any stocks, shares (other than any Shares and the Chargor’s shares
in Evolving Systems GmbH), bonds and securities of any kind (marketable or
otherwise), negotiable instruments and warrants and any other financial
instruments as defined in the Regulations.

 

5

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“Know-how”

 

means all the body of knowledge, technical experience, expertise and skills,
technical processes, secret processes formulae and technical information held by
the Chargor and relating to its business, which is not in the public domain.

 

 

 

“Loan Agreement”

 

means the Loan Agreement dated the date of this Debenture and made between the
Bank (1) and the Chargor (2).

 

 

 

“LPA”

 

means the Law of Property Act 1925.

 

 

 

“Material Adverse Effect”

 

has the meaning given to it in the Loan Agreement (as if “Loan Agreement” and
“Collateral” there were Facility Documents and Charged Property respectively and
with such other changes as are necessary to fit the context).

 

 

 

“Occupational Leases”

 

means all leasehold interests and other occupational rights whatsoever
(including, without limitation, all licences and agreements for leases) in
existence from time to time relating to the whole or any part of the Property,
the immediate reversion to which is vested in the Chargor.

 

 

 

“Other Property”

 

means all estates and other interests in any freehold, leasehold or other
immovable property (including, without limitation, all Fixtures on such
property) which are the property of the Chargor at the date of this Debenture
and do not form part of the Scheduled Property, all proceeds of sale derived
from such property and the benefit of all covenants to which the Chargor is
entitled in respect of such property.

 

 

 

“Permitted Lien”

 

shall have the same meaning as in the Loan Agreement with such changes as are
necessary to fit this context.

 

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“Permitted Transfer”

 

(a)

means a conveyance, sale, lease, transfer or disposition by the Chargor
permitted under Clause 7.1 of the Loan Agreement.

 

 

 

 

“Planning Acts”

 

means the Planning and Compulsory Purchase Act 2004, the Town and Country
Planning Act 1990, the Planning (Listed Buildings and Conservation Areas) Act
1990, the Planning (Hazardous Substances) Act 1990, the Planning and
Compensation Act 1991, and the Local Government Planning and Land Act 1980 .

 

 

 

“Plant and Machinery”

 

means all plant and machinery, equipment fittings, installations and apparatus,
tools, motor vehicles and all other such assets (other than Fixtures)
whatsoever, wherever situate, which are the property of the Chargor at the date
of this Debenture.

 

 

 

“Property”

 

means the Scheduled Property, the Other Property and the Future Property.

 

 

 

“Receiver”

 

means any receiver appointed pursuant to this Debenture.

 

 

 

“Regulations”

 

means the Financial Collateral Arrangements (No 2) Regulations 2003 (S.I.
2003/3226) or equivalent legislation in any applicable jurisdiction bringing
into effect Directive 2002/47/EC on financial collateral arrangements, and
“Regulation” means any of them.

 

 

 

“Rights”

 

means all the Chargor’s rights, title and interest from time to time in any
lease, licence or occupational right whatsoever together with the entire benefit
of all the Chargor’s rights, title and interest from time to time in any renewal
of, replacement of or variation to any such lease, licence or occupational right
(including, without limitation, all its rights, title and interest in any
occupational Lease, agreement for any Occupational Lease and any associated
agreements which may be granted by the Chargor or any person deriving title from
the Chargor from time to time over or in respect of the whole or any part of the
Property and any other properties (freehold or leasehold) in which the Chargor
has an interest).

 

7

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“Scheduled Property”

 

means all the property short particulars of which are set out in Schedule 1 (The
Scheduled Property) (if any), including, without limitation, all Fixtures on
such property.

 

 

 

“Secured Liabilities”

 

means all moneys, debts and liabilities from time to time due, owing or incurred
by the Chargor to the Bank on any current or other account whatsoever pursuant
to the Facility Documents, in each case:

 

 

(a)

whether present or future;

 

 

 

 

 

 

(b)

whether alone or jointly with any other person;

 

 

 

 

 

 

(c)

whether actual or contingent;

 

 

 

 

 

 

(d)

whether as principal or as surety;

 

 

 

 

 

 

(e)

in whatsoever name, form or style and whether not originally incurred by the
Chargor to the Bank;

 

 

 

 

 

 

(f)

in whatsoever currency denominated; or

 

 

 

 

 

 

(g)

otherwise;

 

 

 

 

 

including, without limitation, all liabilities in connection with foreign
exchange transactions, accepting, endorsing or discounting notes or bills, under
bonds, guarantees indemnities, documentary or other credits or any instruments
from time to time entered into by the Bank for or at the request of the Chargor
together with interest to the date of

 

8

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payment at such rates and upon such terms as may from time to time be agreed and
all commission, fees, costs (including, without limitation, legal fees) and
other charges and provided always that no obligation or liability shall be
included in the definition of Secured Liabilities to the extent that, if it were
so included, this Debenture (or any part of it) would constitute unlawful
financial assistance within the meaning of sections 151 and 152 of the Companies
Act 1985.

 

 

 

“Security Documents”

 

means any document entered into by any person from time to time creating (a) any
Security Interest, directly or indirectly, for the obligations of the Chargor or
any other person under the Facility Documents including, without limitation,
this Debenture or (b) any guarantee, indemnity or other similar undertaking in
respect of any such obligations.

 

 

 

“Security Interest”

 

means any mortgage, charge, assignment, pledge, lien, right of set-off,
hypothecation encumbrance, priority or other security interest (whether fixed or
floating) including, without limitation, any “hold-back” or “flawed asset”
arrangement together with any preferential right, retention of title, deferred
purchase, leasing, sale or purchase, sale and leaseback arrangement, trust
agreement declaration of trust, trust arising by operation of law, any option or
agreement for any of the same or any arrangement which has substantially the
same commercial or substantive effect as the creation of security.

“Shares”

 

means all shares held by the Chargor in its Subsidiaries and which are listed in
Schedule 1A but not including its shares in Evolving Systems GmbH.

 

9

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1.2                               INTERPRETATION

 

1.2.1                                        IN THIS DEBENTURE:

 

1.2.1.1                                       THE CONTENTS PAGE AND CLAUSE
HEADINGS ARE INCLUDED FOR CONVENIENCE ONLY AND DO NOT AFFECT THE CONSTRUCTION OF
THIS DEBENTURE;

 

1.2.1.2                                       WORDS DENOTING THE SINGULAR
INCLUDE THE PLURAL AND VICE VERSA; AND

 

1.2.1.3                                       WORDS DENOTING ONE GENDER INCLUDE
EACH OTHER GENDER.

 

1.2.2                                           IN THIS DEBENTURE, UNLESS THE
CONTEXT OTHERWISE REQUIRES, REFERENCES TO:

 

1.2.2.1                                       PERSONS INCLUDE REFERENCES TO
NATURAL PERSONS, FIRMS, PARTNERSHIPS, COMPANIES, CORPORATIONS ASSOCIATIONS,
ORGANISATIONS AND TRUSTS (IN EACH CASE WHETHER OR NOT HAVING A SEPARATE LEGAL
PERSONALITY);

 

1.2.2.2                                       DOCUMENTS, INSTRUMENTS AND
AGREEMENTS (INCLUDING, WITHOUT LIMITATION, THIS DEBENTURE AND ANY DOCUMENT
REFERRED TO IN THIS DEBENTURE) ARE REFERENCES TO SUCH DOCUMENTS, INSTRUMENTS AND
AGREEMENTS AS MODIFIED, AMENDED, VARIED, SUPPLEMENTED OR NOVATED FROM TIME TO
TIME;

 

1.2.2.3                                       RECEIVERS ARE REFERENCES TO
RECEIVERS OF WHATSOEVER NATURE INCLUDING, WITHOUT LIMITATION, RECEIVERS AND
MANAGERS AND ADMINISTRATIVE RECEIVERS;

 

1.2.2.4                                       THE TERMS THE “BANK” THE
“RECEIVER” AND THE “ADMINISTRATOR” INCLUDE, WHERE THE CONTEXT SO ADMITS,
REFERENCES TO ANY DELEGATE OF ANY SUCH PERSON AND ANY SUBSTITUTE PERSON
APPOINTED IN RESPECT OF ANY OF THEM;

 

1.2.2.5                                       A PARTY TO THIS DEBENTURE INCLUDE
REFERENCES TO ITS SUCCESSORS, TRANSFEREES AND ASSIGNS;

 

1.2.2.6                                       RECITALS, CLAUSES AND SCHEDULES
ARE REFERENCES TO RECITALS TO THIS DEBENTURE, CLAUSES OF THIS DEBENTURE AND
SCHEDULES TO THIS DEBENTURE; AND REFERENCES TO THIS DEBENTURE INCLUDE ITS
SCHEDULES

 

10

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1.2.2.7                                       PARAGRAPHS ARE REFERENCES TO
PARAGRAPHS OF THE SCHEDULE IN WHICH THE REFERENCES APPEAR;

 

1.2.2.8                                       STATUTORY PROVISIONS (WHERE THE
CONTEXT SO ADMITS AND UNLESS OTHERWISE EXPRESSLY PROVIDED) ARE CONSTRUED AS
REFERENCES TO THOSE PROVISIONS AS RESPECTIVELY AMENDED, CONSOLIDATED, EXTENDED
OR RE-ENACTED FROM TIME TO TIME, AND TO ANY ORDERS REGULATIONS INSTRUMENTS OR
OTHER SUBORDINATE LEGISLATION MADE UNDER THE RELEVANT STATUTE; AND

 

1.2.2.9                                       A TIME OF DAY IS A REFERENCE TO
LONDON TIME.

 

1.3                               LOAN AGREEMENT DEFINED TERMS

 

Unless otherwise defined in this Debenture, terms defined in the Loan Agreement
bear the same meaning in this Debenture.

 

1.4                               CONFLICT WITH LOAN AGREEMENT

 

If there is any conflict between the provisions of this Debenture and the
provisions of the Loan Agreement, the provisions of the Loan Agreement shall
prevail.

 

1.5                               SECTION 2(1) LAW OF PROPERTY (MISCELLANEOUS
PROVISIONS) ACT 1989

 

The terms of the other Finance Documents and of any side letters between any
parties in relation to any Finance Document are incorporated in this Deed to the
extent required to ensure that any purported disposition of the Charged Property
contained in this Deed is a valid disposition in accordance with section
2(1) Law of Property (Miscellaneous Provisions) Act 1989.

 

1.6                               THIRD PARTY RIGHTS

 

Save as expressly provided in clause 18.2 and save for a Receiver or
Administrator and their delegates and sub-delegates or as otherwise expressly
provided to the contrary in a Facility Document a third party (being any person
other than the Chargor and the Bank) has no right under the Contracts (Rights of
Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this
Deed. Notwithstanding any term of any Facility Document, the consent of any such
third party is not required to rescind or vary this Deed at any time.

 

1.7                               PERPETUITY PERIOD

 

The perpetuity period applicable to all trusts declared by this Deed shall be 80
years.

 

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1.8                               ENTERPRISE ACT 2002

 

Paragraph 14 of Schedule B1 of the Insolvency Act 1986 (as inserted by section
248 of, and Schedule 16 to, the Enterprise Act 2002) applies to the floating
charge created by this Deed.

 

2.                                      COVENANT TO PAY

 

The Chargor shall on demand pay to the Bank or discharge, as the case may be,
all the Secured Liabilities when the Secured Liabilities become due.

 

3.                                      INTEREST

 

The Chargor shall pay to the Bank interest on the Secured Liabilities (after as
well as before any demand made or judgment obtained or the liquidation or
administration of the Chargor) at the rates and upon the terms set out in Clause
2.3(a) of the Loan Agreement or if applicable the Default Rate and shall be
compounded and computed in accordance with such Clause 2.3.

 

4.                                      SECURITY

 

By way of continuing security in favour of the Bank for the payment and
discharge of the Secured Liabilities, the Chargor with full title guarantee
hereby charges to the Bank or assigns to the Bank (as the case may be) the
property set out below in the manner set out below. (Each assignment set out
below is an absolute assignment for the purposes of Section 136 of the LPA
(Legal assignments of things in action) and is not made by way of charge only):

 

4.1                               SCHEDULED PROPERTY

 

By way of first fixed charge by way of legal mortgage, the Scheduled Property
and all Rights relating to the Scheduled Property in existence at the date of
this Debenture.

 

4.2                               OTHER PROPERTY AND THE FUTURE PROPERTY

 

By way of first fixed charge:

 

4.2.1                                           THE OTHER PROPERTY AND THE
FUTURE PROPERTY;

 

4.2.2                                           ALL RIGHTS RELATING TO THE OTHER
PROPERTY AND THE FUTURE PROPERTY; AND

 

4.2.3                                           ALL RIGHTS RELATING TO THE
SCHEDULED PROPERTY COMING INTO EXISTENCE AFTER THE DATE OF THIS DEBENTURE.

 

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4.3                               CONTRACTS

 

By way of absolute legal assignment, the Contracts.

 

4.4                               BOOK DEBTS

 

By way of first fixed charge, the Book Debts.

 

4.5                               CASH DEPOSIT AND DEPOSIT ACCOUNTS

 

4.5.1                                     BY WAY OF FIRST FIXED CHARGE, ALL THE
CHARGOR’S RIGHTS, TITLE, INTEREST AND BENEFIT IN THE CASH DEPOSIT AND THE
DEPOSIT ACCOUNTS

 

4.6                               SHARES AND INVESTMENTS

 

THE CHARGOR MORTGAGES OR (IF TO THE EXTENT THAT THIS DEBENTURE DOES NOT TAKE
EFFECT AS A MORTGAGE) CHARGES BY WAY OF FIXED CHARGE:

 

4.6.1                                        ALL SHARES AND INVESTMENTS; AND

 

4.6.2                                        ALL RELATED DISTRIBUTION RIGHTS.

 

4.7                               INTELLECTUAL PROPERTY

 

By way of first fixed charge, all the Intellectual Property of the Chargor.

 

4.8                                 PLANT AND MACHINERY

 

By way of first fixed charge, the Plant and Machinery.

 

4.9                               FUTURE PLANT AND MACHINERY

 

By way of first fixed charge, the Future Plant and Machinery.

 

4.10                         GOODWILL

 

By way of first fixed charge, all the goodwill and uncalled capital for the time
being of the Chargor.

 

4.11                         FLOATING CHARGE

 

By way of first floating charge, all the undertaking and assets of the Chargor
whatsoever, wherever situate, whether movable, immovable, present or future
(including without limitation, its uncalled capital for the time being and all
the undertaking and assets of the Chargor referred to above which are, for any
reason not validly charged or assigned pursuant to Clauses 4.1 (Scheduled
Property) to 4.10 (Goodwill) (inclusive) of this Debenture).

 

13

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4.12                         SECURITY RESTRICTIONS

 

4.12.1                       THERE SHALL BE EXCLUDED FROM THE CHARGE CREATED BY
CLAUSE 4 ANY PROPERTY HELD BY THE CHARGOR UNDER A LEASE OR OTHER AGREEMENT WHICH
EITHER PRECLUDES ABSOLUTELY OR CONDITIONALLY (INCLUDING REQUIRING THE CONSENT OF
ANY THIRD PARTY) THE CHARGOR FROM CREATING ANY CHARGE OVER ITS INTEREST IN THAT
PROPERTY (EACH AN EXCLUDED PROPERTY) UNTIL THE RELEVANT CONDITION OR WAIVER HAS
BEEN SATISFIED OR OBTAINED.

 

4.12.2                       FOR EACH EXCLUDED PROPERTY (WHICH SHALL NOT INCLUDE
PROPERTY HELD BY THE CHARGOR PURSUANT TO STANDARD FORM CONTRACTS LEASES OR OTHER
AGREEMENTS ENTERED INTO BY IT IN AND FOR THE PURPOSES OF ITS ORDINARY COURSE OF
BUSINESS), THE CHARGOR UNDERTAKES, AS SOON AS PRACTICABLE AFTER RECEIPT OF A
REQUEST IN WRITING FROM THE BANK, TO:

 

(I)                                                                     APPLY
FOR THE RELEVANT CONSENT OR WAIVER OF PROHIBITION OR CONDITIONS AND, TO USE
COMMERCIALLY REASONABLE ENDEAVOURS TO OBTAIN THAT CONSENT OR WAIVER OF
PROHIBITION ;

 

(II)                                                                  KEEP THE
BANK INFORMED OF ITS PROGRESS IN OBTAINING SUCH CONSENT OR WAIVER; AND FORTHWITH
UPON RECEIPT OF SUCH CONSENT OR WAIVER, PROVIDE THE BANK WITH A COPY.

 

4.12.3                       FORTHWITH UPON RECEIPT OF THE RELEVANT WAIVER OR
CONSENT, THE RELEVANT FORMERLY EXCLUDED PROPERTY SHALL STAND CHARGED TO THE BANK
UNDER CLAUSE 4. IF REQUIRED BY THE BANK AT ANY TIME FOLLOWING RECEIPT OF THAT
WAIVER OR CONSENT, THE CHARGOR WILL EXECUTE A VALID FIXED CHARGE IN SUCH FORM AS
THE BANK SHALL REQUIRE.

 

5.                                      CONVERSION OF FLOATING CHARGE

 

5.1                               CONVERSION BY NOTICE

 

The Bank may by notice to the Chargor convert the floating charge contained in
this Debenture into a fixed charge as regards such Charged Property as the Bank
may specify (whether generally or specifically) in that notice (i) if it
considers (acting reasonably) that it would be desirable to do so in order to
protect, preserve or supplement the charges over the Charged Property or the
priority of those charges; or (ii) on, or at any time following, the occurrence
of an Event of Default (if the Event of Default is continuing at the relevant
time).

 

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5.2                               AUTOMATIC CONVERSION

 

If, without the prior written consent of the Bank:

 

5.2.1                                         THE CHARGOR CREATES ANY SECURITY
INTEREST OVER ANY OF THE CHARGED PROPERTY, OR ATTEMPTS TO DO SO, OTHER THAN A
PERMITTED LIEN, OR

 

5.2.2                                         ANY PERSON LEVIES OR ATTEMPTS TO
LEVY ANY DISTRESS, ATTACHMENT, EXECUTION OR OTHER LEGAL PROCESS AGAINST ANY OF
SUCH CHARGED PROPERTY, OR

 

5.2.3                                         A RECEIVER IS APPOINTED OVER ANY
CHARGED PROPERTY, OR

 

5.2.4                                         THE BANK RECEIVES NOTICE OF A
PROPOSAL OR INTENTION TO APPOINT AN ADMINISTRATOR OF THE CHARGOR (OR ONE IS
APPOINTED)

 

the floating charge created by this Debenture over the Charged Property the
subject of such Security Interest or process will automatically, without notice,
be converted into a fixed charge as soon as such event occurs but without
prejudice to any other circumstance in which such floating charge may
crystallise.

 

6.                                      FURTHER ASSURANCE

 

6.1                               GRANT OF FURTHER SECURITY

 

The Chargor shall:

 

6.1.1                                         PROMPTLY, AT ANY TIME IF SO
REQUIRED BY THE BANK, AT ITS OWN EXPENSE EXECUTE AND DELIVER TO THE BANK SUCH
FURTHER LEGAL OR OTHER MORTGAGES, CHARGES, ASSIGNMENTS SECURITIES, AUTHORITIES
AND DOCUMENTS AS THE BANK MAY IN ITS REASONABLE DISCRETION REQUIRE OF THE WHOLE
OR SUCH PART OF THE CHARGED PROPERTY AS THE BANK MAY SPECIFY, IN SUCH FORM AS
THE BANK MAY IN ITS REASONABLE DISCRETION REQUIRE, TO SECURE THE PAYMENT OR
DISCHARGE OF THE SECURED LIABILITIES, INCLUDING, WITHOUT LIMITATION, IN ORDER TO
VEST THE WHOLE OR SUCH PART OF THE CHARGED PROPERTY IN THE BANK, THE NOMINEE OF
THE BANK OR IN ANY PURCHASER FROM THE BANK OR THE RECEIVER OR ADMINISTRATOR;

 

6.1.2                                         PENDING THE EXECUTION AND DELIVERY
OF ANY SUCH ASSIGNMENTS, HOLD SUCH CHARGED PROPERTY UPON TRUST FOR THE BANK
SUBJECT TO THE PROVISIONS OF THIS DEBENTURE; AND

 

15

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6.1.3                                         PENDING THE EXECUTION AND DELIVERY
OF ANY SUCH MORTGAGES, CHARGES, OR OTHER SECURITY, HOLD SUCH CHARGED PROPERTY
SUBJECT TO THE PROVISIONS OF THIS DEBENTURE.

 

6.2                               NOTIFICATION OF ACQUISITION OF PROPERTY

 

6.2.1                                         THE CHARGOR SHALL IMMEDIATELY
NOTIFY THE BANK OF ANY CONTRACT FOR THE ACQUISITION BY THE CHARGOR OF ANY
FREEHOLD OR LEASEHOLD PROPERTY .  THE CHARGOR SHALL, IN THE CASE OF ANY SUCH
PROPERTY TITLE TO WHICH (EITHER BEFORE OR AFTER THE ACQUISITION OF SUCH
PROPERTY) IS REGISTERED AT THE LAND REGISTRY:

 

6.2.1.1                                    PROMPTLY NOTIFY THE BANK OF THE TITLE
NUMBER(S); AND

 

6.2.1.2            AT THE SAME TIME AS APPLICATION IS MADE TO THE LAND REGISTRY
FOR THE REGISTRATION OF THE CHARGOR AS THE REGISTERED PROPRIETOR OF SUCH
PROPERTY, REQUEST THE CHIEF LAND REGISTRAR TO ENTER A NOTICE OF THIS DEBENTURE
ON THE CHARGES REGISTER OF THE PROPERTY SO ACQUIRED BY THE CHARGOR SUBSTANTIALLY
IN THE FORM OF THE NOTICE SET OUT IN CLAUSE 33 (THE LAND REGISTRY).

 

6.2.2                                         THE CHARGOR SHALL, PROMPTLY AFTER
ITS ACQUISITION SUPPLY THE BANK WITH FULL DETAILS OF ANY FUTURE PROPERTY AND
DEPOSIT WITH THE BANK SUCH DOCUMENTS RELATING TO SUCH ASSETS AS THE BANK MAY IN
ITS DISCRETION REQUIRE.

 

7.                                      DEPOSIT OF DOCUMENTS AND TITLE DEEDS

 

7.1                               THE CHARGOR SHALL DEPOSIT WITH THE BANK (AND
THE BANK DURING THE CONTINUANCE OF THIS SECURITY MAY HOLD AND RETAIN):

 

7.1.1                                         ALL DEEDS AND DOCUMENTS OF TITLE
RELATING TO THE SCHEDULED PROPERTY, THE OTHER PROPERTY AND THE FUTURE PROPERTY
INCLUDING, WITHOUT LIMITATION, ALL OCCUPATIONAL LEASES; AND

 

7.1.2                                         ALL SUCH DEEDS AND DOCUMENTS OF
TITLE (IF ANY) RELATING TO THE BOOK DEBTS AS THE BANK MAY FROM TIME TO TIME
SPECIFY.

 

8.                                      NEGATIVE PLEDGE

 

The Chargor shall not:

 

8.1                              CREATE, PURPORT TO CREATE OR ALLOW TO SUBSIST,
ANY SECURITY INTEREST OVER THE WHOLE OR ANY PART OF THE CHARGED PROPERTY EXCEPT
FOR ANY PERMITTED LIEN;

 

8.2                              CONVEY, ASSIGN, TRANSFER, OR AGREE TO CONVEY,
ASSIGN OR TRANSFER THE WHOLE OR ANY PART OF THE CHARGED PROPERTY EXCEPT BY MEANS
OF A PERMITTED TRANSFER;

 

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8.3                              PERMIT ANY OTHER PERSON TO BE REGISTERED AT THE
LAND REGISTRY AS PROPRIETOR OF ANY INTEREST (INCLUDING ANY EASEMENT OR
OVERRIDING INTEREST) IN ANY OF THE CHARGED PROPERTY OR

 

8.4                              RELEASE, EXCHANGE, COMPOUND, SET OFF, GRANT
TIME OR INDULGENCE IN RESPECT OF, OR IN ANY OTHER MANNER DEAL WITH, ALL OR ANY
OF THE BOOK DEBTS SAVE AS EXPRESSLY PROVIDED IN THIS DEBENTURE OR EXCEPT IN THE
ORDINARY COURSE OF ITS BUSINESS.

 

9.                                      THE DEPOSIT ACCOUNT

 

9.1                               THE CHARGOR SHALL OPEN AND MAINTAIN THE
DEPOSIT ACCOUNTS.

 

9.2                              THE CHARGOR SHALL NOT WITHDRAW FROM THE DEPOSIT
ACCOUNTS ALL OR ANY OF THE CASH DEPOSIT EXCEPT THAT, UNLESS AND UNTIL THE
SECURITY CONSTITUTED BY THIS DEBENTURE HAS BECOME ENFORCEABLE IN ACCORDANCE WITH
CLAUSE 15, THE CHARGOR SHALL BE ENTITLED TO WITHDRAW (OR DIRECT ANY TRANSFER OF)
ALL OR ANY PART OF THE MONIES IN THE DEPOSIT ACCOUNTS IN AND FOR THE PURPOSES OF
THE ORDINARY COURSE OF ITS BUSINESS WITHOUT THE PRIOR WRITTEN CONSENT OF THE
BANK, BUT FOLLOWING THE BANK SUBSEQUENTLY TAKING ACTION TO ENFORCE THIS
DEBENTURE, THE BANK SHALL BE ENTITLED (IN ITS ABSOLUTE DISCRETION) TO REFUSE TO
PERMIT ANY SUCH WITHDRAWAL OR TRANSFER.

 

9.3                              THE CHARGOR SHALL FORTHWITH GIVE TO THE
FINANCIAL INSTITUTION WITH WHOM THE DEPOSIT ACCOUNTS ARE HELD AN IRREVOCABLE
NOTICE OF CHARGE IN THE FORM SET OUT IN PART 1 OF SCHEDULE 2 (FORM OF NOTICE TO
THIRD PARTY BANK) OR SUCH OTHER FORM AS THE BANK MAY IN ITS DISCRETION
REASONABLY REQUIRES.

 

10.                               THE BOOK DEBTS ACCOUNT

 

Until all the security constituted by this Debenture is discharged the Chargor
shall:

 

10.1                        COLLECT AND REALISE ALL BOOK DEBTS IN THE ORDINARY
COURSE OF ITS BUSINESS. FOR THE AVOIDANCE OF DOUBT, IT IS HEREBY DECLARED THAT
FOR THE PURPOSES OF THIS DEBENTURE, THE ORDINARY COURSE OF BUSINESS OF THE
CHARGOR DOES NOT INCLUDE OR EXTEND TO THE SELLING, ASSIGNING OR IN ANY OTHER WAY
FACTORING OR DISCOUNTING ANY BOOK DEBTS. THE CHARGOR SHALL HOLD THE PROCEEDS OF
SUCH COLLECTION AND REALISATION OF THE BOOK DEBTS UPON TRUST FOR THE BANK
PENDING PAYMENT OF SUCH PROCEEDS INTO THE BOOK DEBTS ACCOUNT;

 

10.2                        PAY THE PROCEEDS OF SUCH COLLECTION AND REALISATION
INTO THE BOOK DEBTS ACCOUNT UNLESS AND TO THE EXTENT THE BANK OTHERWISE AGREES
IN WRITING;

 

10.3                        NOT WITHDRAW FROM THE BOOK DEBTS ACCOUNT ALL OR ANY
MONIES STANDING TO THE CREDIT OF THE BOOK DEBTS ACCOUNT EXCEPT THAT, UNLESS AND
UNTIL THE SECURITY CONSTITUTED BY THIS DEBENTURE HAS BECOME ENFORCEABLE IN
ACCORDANCE WITH CLAUSE 15, THE CHARGOR SHALL

 

17

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BE ENTITLED TO WITHDRAW (OR DIRECT ANY TRANSFER OF) ALL OR ANY PART OF THE
MONIES IN THE BOOK DEBTS ACCOUNT IN AND FOR THE PURPOSES OF THE ORDINARY COURSE
OF ITS BUSINESS WITHOUT THE PRIOR WRITTEN CONSENT OF THE BANK, BUT FOLLOWING THE
BANK SUBSEQUENTLY TAKING ACTION TO ENFORCE THIS DEBENTURE, THE BANK SHALL BE
ENTITLED (IN ITS ABSOLUTE DISCRETION) TO REFUSE TO PERMIT ANY SUCH WITHDRAWAL OR
TRANSFER; AND

 

10.4                        IF CALLED UPON SO TO DO BY THE BANK AT ANY TIME
AFTER THE OCCURRENCE OF AN EVENT OF DEFAULT WHICH IS CONTINUING EXECUTE A LEGAL
ASSIGNMENT OF THE BOOK DEBTS TO THE BANK IN SUCH TERMS AS THE BANK MAY IN ITS
DISCRETION REQUIRE, GIVE SUCH NOTICE OF THAT LEGAL ASSIGNMENT TO THE DEBTORS
FROM WHOM THE BOOK DEBTS ARE DUE, OWING OR INCURRED AND TAKE ANY SUCH OTHER STEP
AS THE BANK MAY IN ITS DISCRETION REQUIRE TO PERFECT SUCH LEGAL ASSIGNMENT.

 

11.                               REPRESENTATIONS AND WARRANTIES

 

11.1                         THE CHARGOR REPRESENTS AND WARRANTS TO THE BANK
THAT:

 

11.1.1                               OWNERSHIP OF THE CHARGED PROPERTY

 

it is absolutely, solely and beneficially entitled to all the Charged Property
as from the date it or any part of it fails to be charged under this Debenture
and the rights of the Chargor in respect of the Charged Property are free from
any Security Interest of any kind other than a Permitted Lien;

 

11.1.2          NO DISPOSAL

 

it has not sold or agreed to sell or otherwise disposed of, or agreed to dispose
of, the benefit of all or any of the Chargor’s right, title and interest in and
to the Charged Property except by means of a Permitted Transfer;

 

11.1.3          SHARES AND INVESTMENTS

 

all Shares and Investments beneficially owned by it as at the date of this
Debenture are described opposite its name in Schedule 1A.

 

11.2                        THE REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS
CLAUSE ARE GIVEN AND MADE ON AND AS OF THE DATE OF THIS DEBENTURE, SHALL SURVIVE
THE EXECUTION OF THIS DEBENTURE AND ARE DEEMED TO BE REPEATED AT EACH TIME THE
REPRESENTATIONS AND WARRANTIES IN THE LOAN AGREEMENT ARE DEEMED TO BE REPEATED.

 

12.                               UNDERTAKINGS

 

The Chargor gives each of the undertakings contained in this Clause to the Bank.

 

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12.1                         DURATION

 

The undertakings in this Clause shall remain in force during the continuance of
the security constituted by this Debenture.

 

12.2                         TO PROVIDE INFORMATION

 

The Chargor shall furnish to the Bank as soon as reasonably practicable
following written demand from the Bank such information and supply such
documents or papers relating to the Charged Property from time to time as the
Bank may in its discretion reasonably require.

 

12.3                         NOTIFICATION OF EVENT OF DEFAULT

 

The Chargor shall notify the Bank in writing of the happening of any Event of
Default promptly upon any of its responsible personnel becoming aware of the
same.

 

12.4                         THE PROPERTY

 

Except as permitted under the Loan Agreement, the Chargor shall:

 

12.4.1          AT ALL TIMES KEEP IN GOOD AND SUBSTANTIAL REPAIR AND CONDITION,
ALL BUILDINGS, ERECTIONS AND STRUCTURES ON AND IN THE PROPERTY;

 

12.4.2          KEEP ALL PLANT AND MACHINERY AND FUTURE PLANT AND MACHINERY IN
GOOD REPAIR, WORKING ORDER AND CONDITION AND FIT FOR ITS PURPOSE; AND

 

12.4.3          WHERE IT IS UNECONOMIC TO REPAIR ANY PART OF THE CHARGED
PROPERTY, REPLACE SUCH PART BY ANOTHER SIMILAR ASSET OF EQUAL OR GREATER QUALITY
AND VALUE.

 

12.5                         THE CHARGOR SHALL NOT:

 

12.5.1                               CARRY OUT ANY MATERIAL WORKS OF DEMOLITION
OR CONSTRUCTION IN OR TO THE PROPERTY;

 

12.5.2                               SEVER ANY FIXTURES EXCEPT FOR EFFECTING ANY
NECESSARY REPAIRS OR REPLACING THE SAME WITH NEW OR IMPROVED MODELS; NOR

 

12.5.3                               EXCEPT WITH THE PRIOR WRITTEN CONSENT OF
THE BANK, CARRY ON AN DEVELOPMENT WITHIN THE MEANING OF THE PLANNING ACTS IN OR
UPON ANY PART OF THE PROPERTY.

 

12.6                         TITLE

 

The Chargor shall:

 

19

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12.6.1                                COMPLY IN ALL MATERIAL RESPECTS WITH,
ENFORCE AND NOT WAIVE, RELEASE OR VARY (OR AGREE SO TO DO) ANY RESTRICTIVE OR
OTHER COVENANTS OR OBLIGATIONS AFFECTING THE PROPERTY;

 

12.6.2                                PAY ALL RENTS, RATES, TAXES AND OUTGOINGS
HOWEVER ARISING PAYABLE IN RESPECT OF THE WHOLE OR ANY PART OF THE PROPERTY OWED
BY IT OR BY THE OWNER OR OCCUPIER OF THE WHOLE OR ANY PART OF THE PROPERTY AND
COMPLY IN ALL MATERIAL RESPECTS WITH ALL RESTRICTIVE AND OTHER COVENANTS AND
OBLIGATIONS TO BE PERFORMED BY IT UNDER ANY LEASE UNDER WHICH IT HOLDS THE WHOLE
OR ANY PART OF THE PROPERTY;

 

12.6.3                                IF THE BANK OR THE RECEIVER OR
ADMINISTRATOR PAYS ANY SUCH SUM, REIMBURSE THE BANK OR THE RECEIVER OR
ADMINISTRATOR IN FULL, ON DEMAND, THE AMOUNT OF SUCH SUM TOGETHER WITH INTEREST
AT THE DEFAULT RATE CALCULATED IN ACCORDANCE WITH CLAUSE 3 (INTEREST) FROM THE
DATE OF PAYMENT BY THE BANK OR THE RECEIVER OR ADMINISTRATOR UNTIL THE DATE OF
REIMBURSEMENT;

 

12.6.4                                ENFORCE ALL MATERIAL RESTRICTIVE OR OTHER
COVENANTS AND OBLIGATIONS OWED TO IT BY ANY LESSOR UNDER ANY SUCH LEASE;

 

12.6.5                                NOT WAIVE, RELEASE OR VARY (OR AGREE SO TO
DO) ANY MATERIAL OBLIGATION OWED TO IT BY ANY SUCH LESSOR OR ANY PROVISION OF
ANY SUCH LEASE;

 

12.6.6                                NOT EXERCISE ANY OPTION OR POWER TO BREAK
OR TERMINATE ANY SUCH LEASE; NOT SURRENDER OR AGREE TO SURRENDER ANY SUCH LEASE;

 

12.6.7                                NOT DO, OR OMIT TO DO, ANYTHING UNDER ANY
SUCH LEASE WHEREBY SUCH LEASE MIGHT BE FORFEITED; AND

 

12.6.8                                EXCEPT WITH THE PRIOR WRITTEN CONSENT OF
THE BANK, NOT AGREE ANY INCREASE IN THE RENT PAYABLE UNDER ANY SUCH LEASE.

 

12.7                         NO CREATION OF EASEMENTS ETC.

 

The Chargor shall not grant, create, or permit to be acquired, any easement,
right, interest or privilege relating to or affecting the whole or any part of
the Property.

 

12.8                         LEASING

 

The Chargor shall not

 

12.8.1                                EXERCISE ANY STATUTORY OR OTHER POWER OF
LEASING, AGREEING TO LEASE OR ACCEPTING SURRENDERS OF LEASES OTHERWISE AVAILABLE
TO THE CHARGOR OF THE WHOLE OR ANY PART OF THE PROPERTY;

 

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12.8.2                                GRANT OR AGREE TO GRANT OR CREATE ANY
OCCUPATIONAL LEASE OF ANY DESCRIPTION OR CONTRACTUAL RIGHT TO OCCUPY OR USE THE
WHOLE OR ANY PART OF THE PROPERTY; NOR

 

12.8.3                                GRANT ANY LICENCE OR PERMISSION TO ASSIGN,
UNDERLET OR PART WITH, OR SHARE OCCUPATION OR POSSESSION OF THE WHOLE OR ANY
PART OF THE PROPERTY.

 

12.9                         OCCUPATIONAL LEASES

 

The Chargor shall:

 

12.9.1                                COMPLY WITH ALL RESTRICTIVE AND OTHER
COVENANTS AND OBLIGATIONS, HOWEVER ARISING, TO BE PERFORMED BY IT AS LESSOR
UNDER ANY OCCUPATIONAL LEASE;

 

12.9.2                                ENFORCE ALL RESTRICTIVE AND OTHER
COVENANTS AND OBLIGATIONS, HOWEVER ARISING, OWED TO IT AS LESSOR UNDER ANY
OCCUPATIONAL LEASE;

 

12.9.3                                NOT WAIVE, RELEASE OR VARY (OR AGREE SO TO
DO) ANY RIGHTS OR ANY PROVISION OF ANY OCCUPATIONAL LEASE;

 

12.9.4                                EXCEPT WITH THE PRIOR WRITTEN CONSENT OF
THE BANK, NOT:

 

12.9.4.1                              EXERCISE ANY OPTION OR POWER TO BREAK,
TERMINATE, RENEW OR EXTEND ANY OCCUPATIONAL LEASE;

 

12.9.4.2                              ACCEPT OR AGREE TO ACCEPT ANY SURRENDER OF
ANY OCCUPATIONAL LEASE; NOR

 

12.9.4.3                              GRANT ANY CONSENT OR LICENCE AS LESSOR OR
GRANTOR UNDER ANY OCCUPATIONAL LEASE; AND

 

12.9.5                                COMPLY WITH ANY PROVISIONS CONTAINED IN
ANY OCCUPATIONAL LEASE FOR THE REVIEW OF THE RENTS THEREBY RESERVED AND, EXCEPT
WITH THE PRIOR WRITTEN CONSENT OF THE BANK, SHALL NOT SETTLE OR AGREE TO SETTLE
ANY SUCH RENT REVIEW.

 

12.10                   INVESTIGATION OF TITLE AND OTHER ENQUIRIES

 

The Chargor shall, at its expense, grant the Bank or its solicitors on
reasonable request all such facilities within the power of the Chargor to enable
the Bank or such solicitors to carry out investigations of title to the Property
and to carry out general enquiries relating to the Property which a prudent
mortgagee might carry out.

 

13.                               DIVIDENDS AND VOTING RIGHTS

 

13.1                         BEFORE DEFAULT OR DEMAND

 

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FOR SO LONG AS NO EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING:

 

(A)                               THE CHARGOR SHALL PAY ALL MONIES ARISING FROM
THE DISTRIBUTION RIGHTS RELATING TO THE SHARES AND INVESTMENTS INTO THE DEPOSIT
ACCOUNT;

 

(B)                              THE CHARGOR SHALL NOT EXERCISE ANY VOTING AND
OTHER RIGHTS AND POWERS ATTACHED TO THE SHARES AND INVESTMENTS IN A MANNER WHICH
IS INCONSISTENT WITH THE SECURITY CONSTITUTED OR INTENDED TO BE CONSTITUTED BY
THIS DEBENTURE OR IS IN BREACH OF ANY OF THE PROVISIONS OF ANY OF THE FACILITY
DOCUMENTS; AND

 

(C)                               PROMPTLY FOLLOWING RECEIPT, THE CHARGOR SHALL
FORWARD TO THE BANK COPIES OF ANY NOTICE FOR AN EXTRAORDINARY OR ANNUAL GENERAL
MEETING OF THE COMPANY WHICH HAS ISSUED THE SHARES OR INVESTMENTS (AS THE CASE
MAY BE) AT WHICH RESOLUTIONS ARE PROPOSED TO EITHER (A) TO PLACE THE COMPANY
INTO ANY FORM OF  WINDING UP, OR (B) TO APPLY FOR AN ADMINISTRATION ORDER, OR
(C) TO APPLY FOR AN AUTOMATIC MORATORIUM UNDER THE INSOLVENCY ACT 2000.

 

13.2                         AFTER DEFAULT OR DEMAND

 

AFTER AN EVENT OF DEFAULT OCCURS AND IS CONTINUING THE CHARGOR SHALL PROMPTLY
PAY OVER TO THE BANK ALL MONIES ARISING FROM THE DISTRIBUTION RIGHTS RELATING TO
THE SHARES AND INVESTMENTS WHICH IT MAY RECEIVE, AND EXERCISE ALL VOTING AND
OTHER RIGHTS AND POWERS ATTACHED TO THE SHARES AND INVESTMENTS IN ANY MANNER
WHICH THE BANK MAY DIRECT.

 

13.3                           OTHER OBLIGATIONS IN RESPECT OF SHARES AND
INVESTMENTS

 

THE CHARGOR SHALL:

 

13.3.1             PROMPTLY COPY TO THE BANK, AND COMPLY WITH, ALL REQUESTS FOR
INFORMATION WHICH IS WITHIN ITS KNOWLEDGE AND WHICH ARE MADE UNDER SECTION 793
OF THE COMPANIES ACT 2006 OR ANY SIMILAR PROVISION CONTAINED IN ANY ARTICLE OF
ASSOCIATION OR OTHER CONSTITUTIONAL DOCUMENT RELATING TO ANY OF ITS SHARES AND
INVESTMENTS; AND

 

13.3.2                  comply with all other conditions and obligations assumed
by it in respect of any of the Shares and Investments where failure to so comply
would adversely affect the interests of the Bank.

 

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14.                               COSTS AND BANK’S PERFORMANCE OF COVENANTS

 

14.1                           COSTS UNDERTAKING

 

14.1.1                                     THE CHARGOR SHALL PROMPTLY ON DEMAND
PAY OR REIMBURSE TO THE BANK AND ANY ADMINISTRATOR OR RECEIVER THE AMOUNT OF ALL
REASONABLE COSTS INCURRED BY THE BANK AND ANY ADMINISTRATOR OR RECEIVER (WHICH
SHALL FORM PART OF THE SECURED LIABILITIES) IN CONNECTION WITH:

 

14.1.1.1                                      THE NEGOTIATION, PREPARATION,
PRINTING, EXECUTION, REGISTRATION, PERFECTION AND COMPLETION OF THIS DEBENTURE,
THE CHARGED PROPERTY OR ANY DOCUMENT REFERRED TO IN THIS DEBENTURE; OR

 

14.1.1.2                                      ANY ACTUAL OR PROPOSED AMENDMENT
OR EXTENSION OF OR ANY WAIVER OR CONSENT UNDER THIS DEBENTURE.

 

14.1.2                                     THE CHARGOR SHALL PROMPTLY PAY ON
DEMAND TO THE BANK AND ANY ADMINISTRATOR OR RECEIVER THE AMOUNT OF ALL COSTS IN
ANY WAY INCURRED BY THE BANK AND/OR THE ADMINISTRATOR AND/OR THE RECEIVER .IN
RELATION TO THE PROTECTION, ENFORCEMENT OR PRESERVATION OF ANY OF THE BANK’S
RIGHTS UNDER THIS DEBENTURE OR IN SUING FOR OR RECOVERING ANY OF THE SECURED
LIABILITIES (INCLUDING, WITHOUT LIMITATION, THE COSTS OF ANY PROCEEDINGS IN
RELATION TO THIS DEBENTURE OR THE SECURED LIABILITIES).

 

14.2                           BANK’S PERFORMANCE OF COVENANTS

 

If the Chargor fails to perform any of the undertakings contained in Clause 12.4
(Property) to Clause 12.9 (Occupational Leases) (inclusive), the Bank may (save
in relation to Environmental Matters) perform any such covenant at the Chargor’s
expense and the Chargor shall reimburse the Bank for the Costs of such
performance on demand. Nothing in this Debenture shall oblige the Bank to
perform any covenant of the Chargor.

 

15.                               DEFAULT

 

15.1                           ENFORCEMENT

 

This Debenture will become enforceable on the occurrence of any Event of
Default  which is continuing or if the Chargor requests the Bank to appoint a
Receiver or Administrator over the whole or any part of its undertaking or.
assets or if a petition is presented for an administration order to be made in
respect of the Chargor or any document or notice is signed for the appointment
of an administrator of the Chargor under the Insolvency Act.

 

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16.                               STATUTORY POWER OF SALE

 

16.1                           FOR THE PURPOSES OF ALL POWERS IMPLIED BY
STATUTE, AND IN PARTICULAR THE POWER OF SALE UNDER SECTION 101 OF THE LPA
(POWERS INCIDENT TO ESTATE OR INTEREST IN A MORTGAGE), THE SECURED LIABILITIES
WILL BE DEEMED TO HAVE BECOME DUE WHEN THE SECURITY CREATED BY THIS DEBENTURE
BECOMES ENFORCEABLE AND SECTION 103 OF THE LPA (REGULATION OF EXERCISE OF POWER
OF SALE) AND SECTION 93 OF THE LPA (RESTRICTION ON CONSOLIDATION OF MORTGAGES)
WILL NOT APPLY.

 

16.2                           THE STATUTORY POWERS OF LEASING CONFERRED ON THE
BANK ARE EXTENDED SO AS TO AUTHORISE THE BANK TO LEASE, MAKE ARRANGEMENTS FOR
LEASES, ACCEPT SURRENDER OF LEASES AND GRANT OPTIONS ON SUCH TERMS AND
CONDITIONS AS THE BANK MAY IN ITS DISCRETION THINK FIT. THE BANK IS NOT OBLIGED
TO COMPLY WITH ANY OF THE PROVISIONS OF SECTION 99 (LEASING POWERS OF MORTGAGOR
AND MORTGAGEE IN POSSESSION) AND SECTION 100 (POWERS OF MORTGAGOR AND MORTGAGEE
IN POSSESSION TO ACCEPT SURRENDERS OF LEASES) OF THE LPA.

 

16.3                           EACH OF THE BANK, THE RECEIVER AND THE
ADMINISTRATOR MAY EXERCISE SUCH PERSON’S STATUTORY POWER OF SALE IN RESPECT OF
THE WHOLE OR ANY PART OF THE PROPERTY.

 

17.                               RECEIVER OR ADMINISTRATOR

 

17.1                           APPOINTMENT OF RECEIVER OR ADMINISTRATOR

 

17.1.1                                     AT ANY TIME AFTER THE SECURITY
CONSTITUTED BY THIS DEBENTURE HAS BECOME ENFORCEABLE, WHETHER OR NOT THE BANK
HAS ENTERED INTO OR TAKEN POSSESSION OF THE WHOLE OR ANY PART OF THE CHARGED
PROPERTY PURSUANT TO THIS DEBENTURE (IN ADDITION TO, AND WITHOUT LIMITING, ALL
STATUTORY AND OTHER POWERS OF THE BANK UNDER THE LPA, INSOLVENCY ACT OR
OTHERWISE):

 

17.1.1.1                                      THE BANK MAY, BY WRITING UNDER THE
HAND OF ANY AUTHORISED OFFICER OF THE BANK, APPOINT ANY PERSON TO BE A RECEIVER
OR TO BE AN ADMINISTRATOR OF ALL OR ANY PART OF THE CHARGED PROPERTY AND SUCH
PERSON SHALL, WITH EFFECT FROM THE DATE OF SUCH APPOINTMENT, BE A “RECEIVER” OR
“ADMINISTRATOR” AS THE CASE MAY BE;

 

17.1.1.2                                      THE BANK MAY, FROM TIME TO TIME,
IN SIMILAR MANNER, REMOVE THE RECEIVER OR ADMINISTRATOR AND APPOINT ANOTHER IN
HIS PLACE;

 

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17.1.1.3                                      THE BANK MAY, EITHER AT THE TIME
OF APPOINTMENT OR AT ANY TIME THEREAFTER, FIX THE REMUNERATION OF THE RECEIVER
OR ADMINISTRATOR;

 

17.1.1.4                                      THE BANK MAY, WITHOUT FURTHER
NOTICE AND WITHOUT THE RESTRICTIONS CONTAINED IN SECTION 103 OF THE LAW OF
PROPERTY ACT 1925 (REGULATION OF EXERCISE OF POWER OF SALE), EXERCISE IN RESPECT
OF ALL OR ANY PART OF THE SHARES AND THE INVESTMENTS ALL THE POWERS AND RIGHTS
EXERCISABLE BY THE REGISTERED HOLDER OF THE SHARES AND THE INVESTMENTS AND ALL
OTHER POWERS CONFERRED ON MORTGAGEES BY THE LAW OF PROPERTY ACT 1925 AS VARIED
OR EXTENDED BY THIS DEBENTURE; AND

 

17.1.1.5                                      THE BANK MAY APPLY ANY DIVIDENDS,
INTEREST OR OTHER PAYMENTS RECEIVED OR RECEIVABLE BY THE BANK IN RESPECT OF THE
SHARES AND THE INVESTMENTS AS IF THEY WERE PROCEEDS OF SALE.

 

None of the restrictions imposed by the LPA in relation to the appointment of
receivers, the giving of notice or otherwise shall apply.

 

17.1.2                                     THE RECEIVER OR ADMINISTRATOR MAY
FROM TIME TO TIME DELEGATE, BY POWER OF ATTORNEY OR OTHERWISE, TO ANY PERSON ANY
OF HIS POWERS AND DISCRETIONS, WHETHER ARISING BY STATUTE, THE PROVISIONS OF
THIS DEBENTURE OR OTHERWISE, UPON SUCH TERMS AND FOR SUCH PERIODS OF TIME AS HE
MAY IN HIS DISCRETION THINK FIT AND MAY FROM TIME TO TIME TERMINATE ANY SUCH
DELEGATION. THE BANK SHALL NOT BE LIABLE TO THE CHARGOR FOR ANY LOSS OR DAMAGE
ARISING FROM ANY SUCH DELEGATE’S ACT, DEFAULT, NEGLECT OR MISCONDUCT SAVE TO THE
EXTENT ARISING FROM SUCH DELEGATE’S FRAUD, WILFUL DEFAULT OR GROSS NEGLIGENCE.

 

17.2                           POWERS

 

The Receiver and Administrator each has (but is not obliged to exercise) all the
powers (save in relation to Environmental Matters) to do or abstain from doing
anything which the Chargor could do or abstain from doing in relation to the
Charged Property in addition to the powers conferred by the LPA and the
Insolvency Act as if, in each case he was an administrative receiver appointed
thereunder.

 

17.3                           RECEIVER AS AGENT OF THE CHARGOR

 

The Receiver and Administrator are both at all times and for all purposes the
agent of the Chargor. Subject to the provisions of the Insolvency Act, the
Chargor is solely responsible for all the Receiver and Administrator’s acts,
defaults, neglect and

 

25

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misconduct of any nature whatsoever and for his remuneration and Costs, to the
exclusion of liability on the part of the Bank, save to the extent arising from
the Receiver or Administrator’s fraud, wilful default or gross negligence.

 

17.4                           SEVERAL POWER

 

Where more than one Receiver or Administrator is appointed, each has the power
to act severally unless the Bank specifies otherwise in the appointment.

 

17.5                           POWERS EXERCISABLE BY THE BANK

 

17.5.1                                     THE BANK MAY EXERCISE ALL POWERS
GRANTED TO THE RECEIVER OR ADMINISTRATOR BY THIS DEBENTURE, WHETHER AS ATTORNEY
OF THE CHARGOR OR OTHERWISE.

 

17.5.2                                     THE POWERS OF THE RECEIVER AND THE
ADMINISTRATOR ARE IN ADDITION TO, AND WITHOUT PREJUDICE TO, ALL STATUTORY AND
OTHER POWERS OF THE BANK AS PROVIDED IN CLAUSE 16 (STATUTORY POWER OF SALE) OR
OTHERWISE AND SO THAT, INTER ALIA, SUCH POWERS ARE AND REMAIN EXERCISABLE BY THE
BANK IN RESPECT OF THAT PART OF THE CHARGED PROPERTY IN RESPECT OF WHICH NO
APPOINTMENT OF A RECEIVER OR ADMINISTRATOR BY THE BANK IS FROM TIME TO TIME
SUBSISTING.

 

17.6                           APPLICATION OF PROCEEDS

 

The provisions of Sections 99 to 109 inclusive of the LPA are varied and
extended to the extent that all monies received by the Receiver or Administrator
be applied in the following order:

 

17.6.1                                     IN FULL PAYMENT OF HIS REMUNERATION
AND THE COSTS OF REALISATION INCLUDING, WITHOUT LIMITATION, ALL COSTS OF, OR
INCIDENTAL TO, ANY EXERCISE OF ANY POWER REFERRED TO IN THIS DEBENTURE
INCLUDING, WITHOUT LIMITATION, ALL OUTGOINGS PAID BY THE RECEIVER OR
ADMINISTRATOR;

 

17.6.2                                     PROVIDING FOR THE MATTERS SPECIFIED
IN PARAGRAPHS (I) TO (III) INCLUSIVE OF SECTION 109 (8) OF THE LPA (APPOINTMENT,
POWERS, REMUNERATION AND DUTIES OF RECEIVER);

 

17.6.3                                     IN OR TOWARDS SATISFACTION OF ANY
DEBTS OR OTHER IMPOSTS WHICH ARE BY STATUTE MADE PAYABLE IN PREFERENCE TO THE
SECURED LIABILITIES TO THE EXTENT TO WHICH SUCH DEBTS OR IMPOSTS ARE MADE SO
PAYABLE;

 

17.6.4                                     IF SO REQUIRED BY THE BANK IN ITS
DISCRETION, IN OR TOWARDS SATISFACTION OF THE SECURED LIABILITIES: AND

 

26

--------------------------------------------------------------------------------

 

17.6.5                                     TO THE PERSON ENTITLED TO ANY
SURPLUS.

 

18.                               PROTECTION OF THIRD PARTIES

 

18.1                           ANY PERSON (INCLUDING, WITHOUT LIMITATION, ANY
PURCHASER. MORTGAGOR OR MORTGAGEE) (IN THIS CLAUSE A “PURCHASER”) DEALING WITH
THE BANK MAY ASSUME WITHOUT INQUIRY THAT

 

18.1.1                                     SOME PART OF THE SECURED LIABILITIES
HAS BECOME DUE;

 

18.1.2                                     A DEMAND FOR SUCH SECURED LIABILITIES
HAS BEEN DULY MADE; AND

 

18.1.3                                     SUCH SECURED LIABILITIES HAVE BECOME
DUE WITHIN THE MEANING OF SECTION 101 OF THE LPA (POWERS INCIDENT TO ESTATE OR
INTEREST IN A MORTGAGE).

 

18.2                           NO PURCHASER DEALING WITH THE RECEIVER
ADMINISTRATOR OR THE BANK IS TO BE CONCERNED TO ENQUIRE WHETHER ANY POWER
EXERCISED OR PURPORTED TO BE EXERCISED BY THE RECEIVER ADMINISTRATOR OR THE BANK
HAS BECOME EXERCISABLE, OR AS TO THE PROPRIETY OR REGULARITY OF ANY SALE BY, OR
OTHER DEALING WITH, THE RECEIVER OR ADMINISTRATOR OR THE BANK. ANY SUCH SALE OR
DEALING IS DEEMED TO BE WITHIN THE POWERS CONFERRED BY THIS DEBENTURE AND TO BE
VALID AND EFFECTIVE ACCORDINGLY. ALL THE PROTECTION TO PURCHASERS CONTAINED IN
SECTION 104 (CONVEYANCE ON SALE) AND SECTION 107 (MORTGAGEE’S RECEIPT,
DISCHARGES ETC.) OF THE LPA AND SECTION 42(3) OF THE INSOLVENCY ACT (PROHIBITION
UPON ENQUIRY INTO ADMINISTRATIVE RECEIVER’S POWERS) APPLY TO ANY PURCHASER.

 

19.                               NO LIABILITY AS MORTGAGEE IN POSSESSION AND
INDEMNITY

 

19.1                           MORTGAGEE’S LIABILITY

 

Neither the Bank nor the Receiver or Administrator is:

 

19.1.1                                     LIABLE TO ACCOUNT AS MORTGAGEE IN
POSSESSION IN RESPECT OF THE CHARGED PROPERTY; NOR

 

19.1.2                                     LIABLE FOR ANY LOSS UPON REALISATION
OR EXERCISE OF ANY POWER, AUTHORITY OR RIGHT OF THE BANK OR THE RECEIVER OR
ADMINISTRATOR ARISING UNDER THIS DEBENTURE, NOR FOR ANY ACT, DEFAULT, NEGLECT OR
MISCONDUCT OF ANY NATURE WHATSOEVER SAVE TO THE EXTENT OF ITS OWN FRAUD, WILFUL
DEFAULT OR GROSS NEGLIGENCE.

 

19.2                           POSSESSION

 

If the Bank or the Receiver or Administrator enters into possession of the
Charged Property, such person may at any time go out of possession at the
discretion of such person.

 

27

--------------------------------------------------------------------------------

 

19.3                           INDEMNITY

 

The Chargor hereby agrees to indemnify and hold harmless the Bank, any
Administrator and any Receiver from and against all actions, claims, expenses,
demands and liabilities whether arising out of contract or in tort or in any
other way incurred or which may at any time be incurred by him or by any
manager, agent, officer, servant or workman for whose debt, default or
miscarriage he may be answerable for anything done or omitted to be done in the
exercise or purported exercise of his powers under the provisions of this
Debenture except for losses caused by the gross negligence or willful misconduct
of the person seeking indemnification.

 

20.                               REASSIGNMENT

 

Subject to Clause 23.1 (Avoidance of payments). upon irrevocable discharge in
full of the Secured Liabilities the Bank shall reassign to the Chargor all the
Chargor’s rights. title, interest and benefit in and to the Charged Property and
the Bank shall, at the request and cost of the Chargor, take whatever action is
necessary to release or re-assign the Charged Property from this Debenture.

 

21.                               POWER OF ATTORNEY

 

21.1                           THE CHARGOR IRREVOCABLY APPOINTS, BY WAY OF
SECURITY THE BANK, EACH PERSON DERIVING TITLE FROM THE BANK AND THE RECEIVER AND
ADMINISTRATOR , JOINTLY AND SEVERALLY TO BE ITS ATTORNEY (WITH FULL POWER TO
APPOINT SUBSTITUTES AND TO SUB-DELEGATE) FOR IT, IN ITS NAME, ON ITS BEHALF AND
AS ITS ACT AND DEED OR OTHERWISE TO SIGN OR EXECUTE ANY DEED OR DOCUMENT OR DO
ANY ACT OR THING WHICH THE CHARGOR IS, OR MAY BECOME, OBLIGED TO (BUT DOES NOT
IN A TIMELY FASHION) SIGN, EXECUTE OR DO PURSUANT TO THIS DEBENTURE OR WHICH THE
BANK, THE RECEIVER AND ADMINISTRATOR OR ANY PERSON DERIVING TITLE FROM THE BANK
OR THE RECEIVER OR ADMINISTRATOR MAY IN THE DISCRETION OF SUCH PERSON THINK FIT
IN CONNECTION WITH THE EXERCISE OF ANY OF THE POWERS OF SUCH PERSON OR THE
REALISATION OF ANY SECURITY CONSTITUTED BY THIS DEBENTURE.

 

21.2                           WITHOUT PREJUDICE TO THE GENERALITY OF THE
FOREGOING, THE CHARGOR UNCONDITIONALLY UNDERTAKES TO THE BANK, AND SEPARATELY TO
THE RECEIVER AND THE ADMINISTRATOR AND TO EACH PERSON DERIVING TITLE FROM THE
BANK OR THE RECEIVER OR ADMINISTRATOR, THAT IT SHALL RATIFY AND CONFIRM ANYTHING
DONE OR PURPORTED TO BE DONE BY ANY ATTORNEY APPOINTED PURSUANT TO THIS CLAUSE.

 

28

--------------------------------------------------------------------------------

 

EACH OF THE BANK, ANY THE RECEIVER AND ADMINISTRATOR AGREES THAT THE POWER OF
ATTORNEY PROVIDED UNDER THIS CLAUSE 21 SHALL ONLY BE RELIED UPON AND EXERCISED
BY SUCH PERSON AFTER THE OCCURRENCE OF AN EVENT OF DEFAULT WHICH A IS
CONTINUING.

 

22.                               CUMULATIVE AND CONTINUING SECURITY

 

22.1                           THIS DEBENTURE IS A CONTINUING SECURITY TO THE
BANK REGARDLESS OF ANY INTERMEDIATE PAYMENT OR DISCHARGE OF THE WHOLE OR ANY
PART OF THE SECURED LIABILITIES AND WILL NOT BE PREJUDICED OR AFFECTED BY ANY
ACT, OMISSION OR CIRCUMSTANCE WHICH, BUT FOR THIS CLAUSE, MIGHT AFFECT OR
DIMINISH ITS EFFECTIVENESS.

 

22.2                           THE SECURITY CONSTITUTED BY THIS DEBENTURE IS IN
ADDITION TO, IS NOT IN SUBSTITUTION FOR, IS WITHOUT PREJUDICE TO, AND DOES NOT
MERGE WITH, ANY RIGHTS WHATSOEVER WHICH THE BANK MAY HAVE, WHETHER IN RESPECT OF
THE SECURED LIABILITIES OR OTHERWISE, INCLUDING, WITHOUT LIMITATION, ANY RIGHTS
ARISING UNDER ANY OTHER SECURITY INTEREST, ANY BILL, NOTE, GUARANTEE, CONTRACT
OR APPLICABLE RULE OF LAW.

 

22.3                           ANY RECEIPT, RELEASE OR DISCHARGE OF THE SECURITY
CONSTITUTED BY, OR OF ANY LIABILITY ARISING UNDER, THIS DEBENTURE SHALL NOT
RELEASE OR DISCHARGE THE CHARGOR FROM ANY LIABILITY WHICH MAY EXIST
INDEPENDENTLY OF THIS DEBENTURE TO THE BANK.

 

22.4                           WHERE THE SECURITY CONSTITUTED BY THIS DEBENTURE
INITIALLY TAKES EFFECT AS A COLLATERAL OR FURTHER SECURITY TO ANY OTHER SECURITY
INTEREST HELD BY THE BANK THEN, NOTWITHSTANDING ANY RECEIPT, RELEASE OR
DISCHARGE GIVEN IN RESPECT OF SUCH OTHER SECURITY INTEREST, THIS DEBENTURE SHALL
TAKE EFFECT AS AN INDEPENDENT SECURITY FOR ANY MONIES, LIABILITIES OR OTHER SUMS
SECURED BY SUCH OTHER SECURITY INTEREST.

 

23.                               AVOIDANCE OF PAYMENTS

 

23.1                           WHERE ANY DISCHARGE (WHETHER IN RESPECT OF THE
OBLIGATIONS OF THE CHARGOR THIS DEBENTURE ANY OTHER SECURITY OR OTHERWISE) IS
MADE IN WHOLE OR IN PART OR ANY ARRANGEMENT IS MADE ON THE FAITH OF ANY PAYMENT,
SECURITY OR OTHER DISPOSITION WHICH IS AVOIDED OR MUST BE RESTORED ON
INSOLVENCY, LIQUIDATION OR OTHERWISE WITHOUT LIMITATION, THE SECURITY AND THE
LIABILITY OF THE CHARGOR UNDER THIS DEBENTURE SHALL CONTINUE AS IF THE DISCHARGE
OR ARRANGEMENT HAD NOT OCCURRED.

 

23.2                           THE BANK MAY CONCEDE OR COMPROMISE ANY CLAIM THAT
ANY PAYMENT SECURITY OR OTHER DISPOSITION IS LIABLE TO AVOIDANCE OR RESTORATION.

 

24.                               PRIOR CHARGES

 

24.1                           IF THERE SUBSISTS ANY PRIOR SECURITY INTEREST
AGAINST THE CHARGED PROPERTY AND EITHER ANY STEP IS TAKEN TO EXERCISE ANY POWER
OR REMEDY CONFERRED BY SUCH SECURITY

 

29

--------------------------------------------------------------------------------

 

INTEREST OR THE BANK OR THE RECEIVER OR ADMINISTRATOR EXERCISES ANY POWER OF
SALE PURSUANT TO THIS DEBENTURE, THE BANK MAY REDEEM SUCH PRIOR SECURITY
INTEREST OR PROCURE THE TRANSFER OF SUCH SECURITY INTEREST TO ITSELF AND MAY
SETTLE AND PASS THE ACCOUNTS OF THE PERSON ENTITLED TO SUCH SECURITY INTEREST.
ANY ACCOUNTS SO SETTLED AND PASSED ARE CONCLUSIVE AND BINDING ON THE CHARGOR.

 

24.2                           THE CHARGOR SHALL REIMBURSE THE BANK FOR ANY
COSTS INCURRED BY THE BANK IN EXERCISE OF ITS RIGHTS UNDER THIS CLAUSE.

 

25.                               OPENING A NEW ACCOUNT

 

25.1                           IF THE BANK RECEIVES NOTICE OF ANY SUBSEQUENT
SECURITY INTEREST AFFECTING THE CHARGED PROPERTY OTHER THAN ANY PERMITTED LIEN,
THE BANK MAY OPEN A NEW ACCOUNT FOR THE CHARGOR IN ITS BOOKS.

 

25.2                           IF THE BANK DOES NOT OPEN SUCH NEW ACCOUNT, THEN,
UNLESS THE BANK GIVES EXPRESS WRITTEN NOTICE TO THE CONTRARY TO THE CHARGOR, ALL
PAYMENTS BY OR ON BEHALF OF THE CHARGOR TO THE BANK WILL BE TREATED AS FROM THE
TIME OF RECEIPT OF NOTICE OF SUCH SUBSEQUENT SECURITY INTEREST BY THE BANK AS
HAVING BEEN CREDITED TO A NEW ACCOUNT OF THE CHARGOR AND NOT AS HAVING BEEN
APPLIED IN REDUCTION OF THE AMOUNT OF THE SECURED LIABILITIES AS AT THE TIME
WHEN THE NOTICE WAS RECEIVED.

 

26.                               SUSPENSE ACCOUNT

 

The Bank may, in its reasonable discretion credit to any suspense or impersonal
account and hold in such account, on such terms as the Bank may in its
reasonable discretion think fit, all monies received, recovered or realised by
the Bank pursuant to this Debenture (including, without imitation, the proceeds
of any conversion of currency) pending the application from time to time (as the
Bank may effect in its discretion) of such monies and accrued interest if any,
in or towards satisfaction of the Secured Liabilities.

 

27.                               PAYMENTS AND WITHHOLDING TAXES

 

Subject to Clause 12 of the Loan Agreement, the Chargor shall pay and discharge
the Secured Liabilities without any set-off, counterclaim, restriction or
condition, without regard to any equities between the Chargor and the Bank and
free and clear of, and without deduction or withholding for, or on account of,
any Taxes, except to the extent that the Chargor is required by law to deduct or
withhold any Taxes, in which case it shall pay to the Bank such additional
amount as may be necessary in order to ensure that the net amount received by
the Bank after the required deduction or withholding (including, without
limitation, any required deduction or

 

30

--------------------------------------------------------------------------------

 

withholding on such additional amount) is equal to the amount that the Bank
would have received had no such deduction or withholding been made. Any
additional amount paid under this Clause shall be treated as agreed compensation
and not as interest.

 

28.                               CURRENCY

 

28.1                           ALL MONIES RECEIVED OR HELD BY THE BANK OR ANY
RECEIVER IN RESPECT OF THE SECURED LIABILITIES MAY, FROM TIME TO TIME AFTER
DEMAND HAS BEEN MADE, BE CONVERTED INTO SUCH OTHER CURRENCY AS THE BANK IN ITS
REASONABLE DISCRETION CONSIDERS NECESSARY OR DESIRABLE TO COVER THE OBLIGATIONS
AND LIABILITIES ACTUAL OR CONTINGENT OF THE CHARGOR IN THAT OTHER CURRENCY AT
THE EXCHANGE RATE AVAILABLE TO THE BANK FOR PURCHASING THAT OTHER CURRENCY WITH
THE EXISTING CURRENCY (THE “EXCHANGE RATE”).

 

28.2                           IF AND TO THE EXTENT THAT THE CHARGOR FAILS TO
PAY THE AMOUNT DUE ON DEMAND THE BANK MAY IN ITS ABSOLUTE DISCRETION WITHOUT
NOTICE TO THE CHARGOR PURCHASE AT ANY TIME THEREAFTER SO MUCH OF ANY CURRENCY AS
THE BANK CONSIDERS NECESSARY OR DESIRABLE TO COVER THE OBLIGATIONS AND
LIABILITIES OF THE CHARGOR IN SUCH CURRENCY HEREBY SECURED AT THE EXCHANGE RATE
FOR PURCHASING SUCH CURRENCY WITH ANOTHER RELEVANT CURRENCY  AND THE CHARGOR
HEREBY AGREES TO INDEMNIFY THE BANK AGAINST THE FULL AMERICAN DOLLAR COST
INCURRED BY THE BANK FOR SUCH PURCHASE.

 

28.3                           NEITHER THE BANK NOR ANY RECEIVER SHALL BE LIABLE
TO THE CHARGOR FOR ANY LOSS RESULTING FROM ANY FLUCTUATION IN EXCHANGE RATES
BEFORE OR AFTER THE EXERCISE OF THE FOREGOING POWERS.

 

28.4                           NO PAYMENT TO THE BANK (WHETHER UNDER ANY
JUDGMENT OR COURT ORDER OR OTHERWISE) SHALL DISCHARGE THE OBLIGATION OR
LIABILITY OF THE CHARGOR IN RESPECT OF WHICH IT WAS MADE UNLESS AND UNTIL THE
BANK SHALL HAVE RECEIVED PAYMENT IN FULL IN THE CURRENCY IN WHICH SUCH
OBLIGATION OR LIABILITY WAS INCURRED AND TO THE EXTENT THAT THE AMOUNT OF ANY
SUCH PAYMENT SHALL, ON ACTUAL CONVERSION INTO SUCH CURRENCY, FALL SHORT OF SUCH
OBLIGATION OR LIABILITY ACTUAL OR CONTINGENT EXPRESSED IN THAT CURRENCY THE BANK
SHALL HAVE A FURTHER SEPARATE CAUSE OF ACTION AGAINST THE CHARGOR, SHALL BE
ENTITLED TO ENFORCE THE SECURITY CONSTITUTED BY THIS DEBENTURE TO RECOVER THE
AMOUNT OF THE SHORTFALL AND SUCH AMOUNT WILT BEAR INTEREST IN ACCORDANCE WITH
CLAUSE 3 (INTEREST) FROM THE DATE OF PAYMENT BY THE BANK UNTIL THE DATE OF
REIMBURSEMENT.

 

29.                               SET-OFF

 

The Chargor agrees the Bank may at any time without notice or further demand
notwithstanding any settlement of account or other matter whatsoever, combine or

 

31

--------------------------------------------------------------------------------

 

consolidate all or any of its then existing accounts wherever situate (whether
current, deposit, loan or of any other nature whatsoever whether subject to
notice or not and whether in sterling or in any other currency) and set-off or
transfer any sum standing to the credit of any one or more such accounts in or
towards satisfaction of the Secured Liabilities. Where such combination set-off
or transfer requires the conversion of one currency into another, such
conversion shall be calculated at the Exchange Rate for purchasing the currency
for which the Chargor is liable, with the existing currency.

 

30.                               ASSIGNMENT

 

Neither the Bank nor the Chargor may assign, transfer, novate or dispose of any
of or any interest in, its rights and obligations under this Debenture, save as
provided in Clause 12.1 (Successors and Assigns) of the Loan Agreement.

 

31.                               WAIVERS

 

No failure or delay or other relaxation or indulgence on the part of the Bank to
exercise any power, right or remedy shall operate as a waiver thereof nor shall
any single or partial exercise or waiver of any power, right or remedy preclude
its further exercise or the exercise of any other power, right or remedy.

 

32.                               SEVERABILITY

 

Each of the provisions of this Debenture is distinct and severable from the
others and if at any time one or more of such provisions is or becomes illegal,
invalid or unenforceable the validity, legality and enforceability of the
remaining provisions hereof shall not in any way be affected or impaired
thereby.

 

33.                               THE LAND REGISTRY

 

The Chargor hereby applies to the Chief Land Registrar to enter a restriction in
the Proprietorship Registers of the registered titles (if any) of the Scheduled
Property or, in the case of the first registration of the whole or any part of
the Scheduled Property, against the Scheduled Property, or both, of a
restriction in the following form:

 

“Except under an order of the Registrar no disposition or dealing by the
proprietor of the land is to be registered without the consent of the proprietor
for the time being of the charge hereby created”.

 

32

--------------------------------------------------------------------------------

 

34.                               NOTICES

 

Each party may give any notice, demand or other communication under or in
connection with this debenture in the manner set forth and subject to the terms
of section 10 of the loan agreement at the address identified with its name
below.

 

35.                               LAW AND JURISDICTION

 

This Debenture shall be governed by and construed in accordance with English
law.

 

36.                               COUNTERPARTS AND DELIVERY

 

36.1                           THIS DEBENTURE MAY BE EXECUTED IN ANY NUMBER OF
COUNTERPARTS, EACH OF WHICH IS AN ORIGINAL, AND WHICH TOGETHER CONSTITUTE ONE
AND THE SAME DOCUMENT.

 

36.2                           IF THIS DEBENTURE IS EXECUTED IN MORE THAN ONE
COUNTERPART, THIS DEBENTURE IS DEEMED TO BE DELIVERED AND HAS EFFECT WHEN:

 

36.2.1                                     EACH PARTY OTHER THAN THE BANK HAS
EXECUTED A COUNTERPART OF THIS DEBENTURE;

 

36.2.2                                     EACH PARTY OTHER THAN THE BANK HAS
HANDED OVER SUCH COUNTERPART TO ONE OF THE OTHER PARTIES TO THIS DEBENTURE; AND

 

36.2.3                                     EACH OF THE COUNTERPARTS HAS BEEN
DATED.

 

36.3                           IF THIS DEBENTURE IS NOT EXECUTED IN MORE THAN
ONE COUNTERPART, THIS DEBENTURE IS DEEMED TO BE DELIVERED AND HAS EFFECT WHEN
EACH PARTY OTHER THAN THE BANK HAS EXECUTED THIS DEBENTURE AND THIS DEBENTURE
HAS BEEN DATED. IT SHALL TAKE EFFECT AS A DEED EVEN THOUGH IT MAY NOT BE
EXECUTED BY THE BANK AT ALL OR SIGNED BY IT UNDER HAND.

 

36.4                           THE EXECUTION (WHETHER UNDER HAND OR AS A DEED)
OR SEALING OF THIS DEBENTURE BY OR ON BEHALF OF A PARTY CONSTITUTES AN AUTHORITY
TO THE SOLICITORS OR LEGAL COUNSEL ACTING FOR THAT PARTY IN CONNECTION WITH THIS
DEBENTURE, OR ANY AGENT OR EMPLOYEE OF SUCH SOLICITORS OR LEGAL COUNSEL, TO
DELIVER IT AS A DEED ON BEHALF OF THAT PARTY.

 

36.5                           EACH PARTY TO THIS DEBENTURE AGREES TO BE BOUND
BY THIS DEBENTURE DESPITE THE FACT THAT ANY OTHER PERSON WHICH WAS INTENDED TO
EXECUTE OR TO BE BOUND DOES NOT DO SO OR IS NOT EFFECTUALLY BOUND AND DESPITE
THE FACT THAT ANY SECURITY INTEREST CONTAINED IN THIS DEBENTURE IS TERMINATED OR
BECOMES INVALID OR UNENFORCEABLE AGAINST ANY OTHER PERSON WHETHER OR NOT SUCH
TERMINATION, INVALIDITY OR ENFORCEABILITY IS KNOWN TO THE BANK.

 

33

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF this Debenture has been executed and delivered as a deed on
the date written at the beginning of this Debenture.

 

34

--------------------------------------------------------------------------------

 

 

 

 

SCHEDULE 1

 

THE SCHEDULED PROPERTY

 

 

 

 

 

Short Description of Property

 

Title Number (if any)

 

 

 

None

 

 

 

 

35

--------------------------------------------------------------------------------

 

 

SCHEDULE 1A

 

THE SHARES

 

 

 

 

 

Name of Company

 

Number of Shares

None

 

 

 

SCHEDULE 1B

 

TRADEMARKS

 

Mark

 

Registration Number

 

Class

 

Filing Date

Evident

 

E1620657

 

09, 16, 38, 42

 

07/04/2000

Tertio

 

E1023795

 

09, 16, 38, 42

 

14/12/1998

Provident

 

E1022870

 

09, 16, 38, 42

 

14/12/1998

Evident

 

2175392

 

09, 16, 38, 42

 

20/08/1998

Tertio

 

2175389

 

09, 16, 38, 42

 

20/08/1998

Tertio

 

1578744

 

42

 

20/07/1994

Tertio

 

2010862

 

38

 

10/02/1995

Provident

 

2184361

 

09, 16, 38, 42

 

14/12/1998

Tertio
Technology with
Business Sense

 

2175453

 

09, 16, 38, 42

 

28/08/1998

Stylized
Keyboard
Design

 

2201294

 

09, 16, 38, 42

 

25/06/1999

Observant

 

2175386

 

09, 16, 38, 42

 

20/08/1998

Stylized
Keyboard
Design

 

E1225598

 

9, 16, 42

 

21/06/2000

Observant
(Expired)

 

E681585

 

9, 16, 38, 42

 

26/12/1999

 

 

36

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SCHEDULE 2

 

FORM OF NOTICE TO THIRD PARTY BANK

 

Part I

 

Notice

 

[TO BE TYPED ON THE HEADED NOTEPAPER OF THE CHARGOR]

 

To:                                                        [                        
]

 

                                                             Attention
[                            ]

 

[Date]

 

Dear Sirs

 

Account No. [                      ] Sort Code [               ] (the “Deposit
Account”)

 

Account No. [                      ] Sort Code [               ] (the “Book
Debts Accounts”)

 

We hereby give you notice that by a Debenture dated the same date as this
letter, (the “Debenture”), we have charged to Bridge Bank, N.A. (the “Bank”)
Bank all our rights, title, interest and benefit in and to the Book Debts
Accounts and the Deposit Account and all amounts standing to the credit of such
accounts from time to time, all interest on such sums and all other amounts of
whatever nature deriving directly or indirectly from such sums.

 

Please return a copy of the attached letter on your own headed notepaper with a
receipted copy of this notice forthwith, to the Bank care of its solicitors
Howard Kennedy, facsimile number 020 7663 8713, attention Simon Pullen Esq.

 

 

37

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We hereby agree to indemnify you on demand for and against any and all costs,
losses and expenses suffered or incurred by you as a result of complying with
the undertakings contained in the attached letter to the Bank with which you are
hereby instructed to comply, together with all other instructions which you may
receive from the Bank from time to time in relation to such undertakings.

 

Expressions defined in the Debenture shall have the same meanings when used in
this notice.

 

This notice shall be governed by and construed in accordance with English law.

 

Yours faithfully

 

 

For and on behalf of

 

Evolving Systems Limited

 

 

38

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Part 2

 

Acknowledgement from Third Party Bank (“TPB”)

 

[TO BE TYPED ON THE HEADED NOTEPAPER OF TPB]

 

To:

Bridge Bank, N.A. (the “Bank”)

 

 

 

 

 

 

Care of

 

 

 

 

 

 

 

Howard Kenney

 

 

 

 

 

 

19 Cavendish Square

 

 

 

 

 

 

London

 

 

 

 

 

 

 

W1A 2AW

 

 

 

 

 

 

 

 

 

 

 

Attention:

Simon Pullen Esq

 

 

 

 

 

 

Fax:

020 7663 8713

 

 

[Date]

 

Dear Sirs

 

Evolving Systems Limited (the “Chargor”)

 

We refer to the notice received today from the Chargor (a copy of which we
attach, duly receipted) (the “Notice”).

 

Expressions defined in the Notice shall have the same meanings in this letter.

 

1.                                       We hereby acknowledge that the Chargor
has charged to the Bank all of its rights, title, interest and benefit in and to
the Account and the Deposit Account (the “Accounts”).

 

2.                                       We hereby irrevocably undertake to you
that until receipt by us of a notice from you confirming that you no longer have
any interest in the Accounts we shall:

 

2.1                                 not exercise any right of combination,
consolidation, merger or set-off which we may have in respect of, or otherwise
exercise any other right which we may have to apply any monies from time to time
standing or accruing to the credit of the Accounts;

 

2.2                                 promptly notify you of (a) any renewal,
renumbering or redesignation of the Accounts save for any renewal, renumbering
or redesignation which does not materially alter the identity of the Accounts;
and (b) any Security Interest in respect of the Accounts

 

 

39

--------------------------------------------------------------------------------

 

 

on the part of a third party coming to our notice (or the attempted creation of
any such Security Interest);

 

2.3                                 promptly send to you copies of all monthly
Account statements, given or made by us in connection with the Accounts;

 

2.4                                 upon receipt by us of a notice from you
declaring that an Event of Default has occurred and is continuing not permit or
effect any withdrawal or transfer from the Accounts save for withdrawals and
transfers requested by you in writing to us pursuant to the terms of this
letter; and

 

2.5                                 upon receipt by us of a notice from you
declaring that an Event of Default has occurred and is continuing, comply with
all instructions received by us from you or purportedly from you from time to
time on the Business Day following receipt with respect to the conduct of the
Accounts provided that such instructions are given in writing, by facsimile to
number [          ] or post to [                     ], attention [          ]
or as otherwise notified to you by us from time to time and are signed by or
purportedly signed by [                             ]] and provided further that
such instructions are received by 12 noon (London time) on any Business Day and
[TPB] telephones telephone number [            ] (or any other employee of the
Bank approved by you to us, in writing from time to time) by 5 p.m. (London
time) on that same Business Day (or as soon thereafter as is practicable) to
obtain verification of such instructions and provided further that, upon receipt
by us of a notice from you declaring that an Event of Default has occurred and
is continuing,  we shall permit no withdrawals whatsoever from the relevant
account until we have complied with your instructions.

 

This letter shall be governed by and construed in accordance with English law.

 

Yours faithfully

 

 

For and on behalf of

 

[TPB]

 

 

40

--------------------------------------------------------------------------------

 

 

SCHEDULE 3

 

THE CONTRACTS

 

 

 

NONE

 

 

41

--------------------------------------------------------------------------------

 

 

EXECUTED and DELIVERED as a DEED

 

for and on behalf of

 

EVOLVING SYSTEMS LIMITED by:

 

 

Director

 

 

 

 

 

Secretary

 

 

Notice Details:

 

Address:

 

c/o Evolving Systems

 

 

9777 Pyramid Court

 

 

Suite 100

 

 

Englewood

 

 

Colorado

 

 

80112 USA

 

 

 

Fax No:

 

001 303 802 1138

 

 

 

Attention:

 

Anita T. Moseley

 

 

 

With a copy to:

 

 

 

 

 

Fax No:

 

001 303 802 1420

 

 

 

Attention:

 

Brian R. Ervine

 

 

42

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EXECUTED and DELIVERED as a DEED

 

for and on behalf of

 

BRIDGE BANK, N.A. by:

 

                                                                                              
Authorised Officer

 

 

Notice Details:

 

Address:

55 Almaden Boulevard

 

 

 

San Jose

 

 

 

CA 95113

 

 

 

 

Fax No:

001 408 423 8520

 

 

Attention:

Dan Pistone

 

 

43

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