Exhibit 10.2

 

DENTONS

 

CGA/04 7826.00001/48870716.05

 

Debenture

 

Dated16 August 2017

 

Evolving Systems Holdings Limited

(the Company}

 

The companies listed in Schedule 1

(together with the Company, the Original Chargors}

 

East West Bank

(the Lender}

 

Dentons UKMEA LLP
One Root Place
London EC4M 7WS
United Kingdom

DX242

 

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

 

Debenture

 

Dated 16 August 2017

 

Between

 

(1)                                 Evolving Systems Holdings Limited, a company
incorporated under the laws of England and Wales with registered number 05272751
having its registered office at 2nd Floor, 31 Chertsey Street, Guildford,
Surrey, GU1 4HD  (the Company);

 

(2)                                 The companies listed in Schedule 1 (Original
Chargors) (together with the Company, the Original Chargors); and

 

(3)                                 East West Bank (the Lender).

 

Recitals

 

A.                                    The Lender has agreed to make credit
facilities available on the terms of the Facility Agreement.

 

B.                                    The Chargors have agreed to provide
Security to the Lender to secure the payment and discharge of the Secured
Liabilities.

 

This deed witnesses

 

1                                         Definitions and interpretation

 

1.1                             Definitions

 

Words and expressions defined in the Facility Agreement shall have the same
meanings in this Debenture unless they are expressly defined in it and, in
addition, in this Debenture:

 

Act means the Law of Property Act 1925. Account means a Current Account.

 

Account Bank means, in respect of each Account, the bank or other financial
institution at which that Account is held.

 

Assigned Agreements means the Acquisition  Documents.

 

Authorisation means an authorisation, consent, approval, resolution, licence,
exemption, filing, notarisation or registration.

 

Chargor means each Original Chargor and each company which grants Security over
its assets in favour of the Lender by executing a Security Accession Deed in
accordance with Clause 21 (Additional Chargors).

 

Current Account means:

 

(a)                                 each account of a Chargor set out in
Schedule 7 (Cu”ent Accounts); and

 

(b)                                 any other account which a Charger holds with
any bank or financial institution from time to time.

 

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

 

Default Rate means the rate of interest specified in, and calculated in
accordance with, clause 8.3 (Default interest) of the Facility Agreement.

 

Derivative Contract means any master agreement, schedule, transaction,
confirmation, novation or other instrument entered into by a Charger and a
counterparty from time to time in connection with protection against or benefit
from fluctuation in any rate or price.

 

Distribution Rights means all dividends, interest and other distributions paid
or payable on or in respect of any Investments or Shares and any right to
receive them.

 

Equipment means, in relation to a Charger, all its fixed and moveable plant,
machinery, tools, vehicles, computers and office and other equipment and the
benefit of all related Authorisations, agreements and warranties.

 

Facility Agreement means the facility agreement dated on or about the date of
this Debenture between, among others, Evolving Systems Holdings Limited as
borrower, the Chargors and the Lender (as defined in that agreement).

 

Insurance means, in relation to a Charger, each contract or policy of insurance
to which that Charger is a party or in which it has an interest.

 

Intellectual Property means:

 

(a)                                 any patents, trade marks, service marks,
designs, business names, copyrights, database rights, design rights, domain
names, moral rights, inventions, confidential information, knowhow and other
intellectual property rights and interests (which may now or in the future
subsist), whether registered or unregistered; and

 

(b)                                 the benefit of all applications and rights
to use such assets of each Group Company (which may now or in the future
subsist).

 

lntra·Group Loan means a loan made by a Charger to another Group Company.
Investments means all or any stocks, shares (other than any Shares), bonds and
securities of any kind (marketable or otherwise), negotiable instruments and
warrants and any other financial instruments (as defined in the Regulations).

 

Land has the same meaning as it has in section 205(1) of the Act.

 

Receiver means a receiver appointed pursuant to this Debenture or to any
applicable law, whether alone or jointly, and includes a receiver and/or manager
and, if the Lender is permitted by law to appoint an administrative receiver,
includes an administrative receiver.

 

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.

 

Secured Liabilities means the liabilities of the Obligors to the Lender under or
pursuant to the Finance Documents.

 

Security means a mortgage, charge, pledge, lien, assignment by way of security,
retention of title provision, trust or flawed asset arrangement (for the purpose
of, or which has the effect of, granting security) or other security interest
securing any obligation of any person or any other agreement or arrangement in
any jurisdiction having a similar effect.

 

Security Accession Deed means a deed executed by a Group Company substantially
in the form set out in Schedule 10 (Form of Security Accession Deed), with those
amendments which the lender may approve or reasonably require.

 

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

 

Security Assets means, in relation to a Chargor, all of its assets which are the
subject of any Security created or to be created by this Debenture.

 

Security Period means the period starting on the date of this Debenture and
ending on the date on which the lender is satisfied that:

 

(a)                                 all of the Secured liabilities are
irrevocably discharged in full; and

 

(b)                                 it does not have any commitment or liability
to provide financial accommodation to any of the Obligors under the Finance
Documents.

 

Shares means all shares held by a Chargor in its Subsidiaries.

 

Trade Mark means each United Kingdom registered trade mark owned now or in the
future by a Chargor (including those registered trade marks described in Part 1
of Schedule 9 (Trade Marks)).

 

Trade Mark Application means each application for the United Kingdom
registration of a trade mark which has been made at the date of this Debenture,
or which may be made in the future by a Chargor (including those applications 
described in Part 2 of Schedule 9 (Trade Marks)).

 

Trade Mark Chargor means a Chargor that owns Trade Mark Property.

 

Trade Mark Property means:

 

(a)                                 all Trade Marks;

 

(b)                                 all Trade Mark Applications;

 

(c)                                  any goodwill of a Chargor’s business to
which any Trade Mark or Trade Mark Application relates; and

 

(d)                                 any other right which may arise from, relate
to, or be associated with any Trade Mark or Trade Mark Application or, in either
case, its use in a Chargor’s business.

 

1.2                               Construction

 

1.2.1                     The principles of construction set out in clause 1.2
(Construction) of the Facility Agreement shall apply to this Debenture, insofar
as they are relevant to it and subject to any necessary changes, as they apply
to the Facility Agreement.

 

1.2.2                     Unless a contrary intention appears, any reference in
this Debenture to:

 

(a)                                 this Debenture is a reference to this
Debenture as amended, varied, novated, supplemented and replaced from time to
time;

 

(b)                                 a Chargor or the Lender includes any one or
more of its assigns, transferees and successors in title (in the case of a
Charger, so far as any such is permitted); and

 

(c)                                  the Lender (except for the references in
Clause 17 (Power of attorney)), includes its duly appointed nominees, attorneys,
correspondents, trustees, advisers, agents, delegates and sub-delegates.

 

1.2.3                     The liabilities of the Chargors under this Debenture
are joint and several.

 

1.3                               Third party rights

 

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

 

1.3.1                     Unless expressly provided to the contrary in this
Debenture, a person who is not a party to this Debenture has no right under the
Contracts (Rights of Third Parties) Act 1999 (the Third Parties Act) to enforce
or to enjoy the benefit of any term of this Debenture.

 

1.3.2                     The parties to this Debenture may rescind, vary,
waive, release, assign, novate or otherwise dispose of all or any of their
respective rights or obligations under this Debenture without the consent of any
person that is not a party (without prejudice to the terms of the other Finance
Documents).

 

1.3.3                     The Lender or any person described in Clauses 12
(Protection of purchasers) or Clause 13 (Protection of the Lender) may, subject
to this Clause 1.3(Third party rights) and the Third Parties Act, rely on any
Clause of this Debenture which expressly confers rights on it.

 

1.4                               Effect as a deed

 

This Debenture shall take effect as a deed even if it is signed under hand on
behalf of the Lender.

 

1.5                               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 Debenture
to the extent required to ensure that any purported disposition of an interest
in Land contained in this Debenture is a valid disposition in accordance with
section 2( 1) of the Law of Property (Miscellaneous Provisions) Act 1989.

 

2                                         Covenant to pay

 

The Chargors covenant with the Lender that they will on demand pay and discharge
the Secured Liabilities when due.

 

3                                         Creation of Security

 

3.1                               Land

 

Each Charger charges:

 

(a)                                 by way of legal mortgage its interest in the
Land referred to opposite its name in Schedule 2 (Land charged by way of legal
mortgage); and

 

(b)                                 by way of fixed charge any right, title or
interest which it has now or may subsequently acquire to or in any other Land.

 

3.2                               Shares

 

Each Chargor mortgages or (if or to the extent that this Debenture does not take
effect as a mortgage) charges by way of fixed charge:

 

(a)                                 all Shares: and

 

(b)                                 all related Distribution Rights.

 

3.3                               Investments

 

Each Chargor mortgages or (if and to the extent that this Debenture does not
take effect as a mortgage) charges by way of fixed charge:

 

(a)                                 all Investments: and

 

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

 

(b)                                 all related Distribution Rights, including
those held for it by any nominee.

 

3.4                               Equipment

 

Each Chargor charges by way of fixed charge all Equipment in so far as it is not
charged by way of legal mortgage under Clause 3.1 (Land).

 

3.5                               Controlled Debts

 

Each Chargor charges by way of fixed charge:

 

(a)                                 its Controlled Debts; and

 

(b)                                 all benefits, rights and Security held in
respect of, or to secure the payment of, the Controlled Debts.

 

3.6                               Intellectual Property

 

Each Chargor charges by way of fixed charge all its Intellectual Property,
including, where a Chargor is a Trade Mark Chargor:

 

(a)                                 the Trade Mark Property which belongs to it
now or at any time during the Security Period; and

 

(b)                                 all fees, royalties and other rights of
every kind deriving from the Trade Mark Property.

 

3.7                               Goodwill

 

Each Charger charges by way of fixed charge its goodwill.

 

3.8                               Uncalled capital

 

Each Chargor charges by way of fixed charge its uncalled capital.

 

3.9                               Authorisations

 

Each Chargor charges by way of fixed charge the benefit of all Authorisations it
holds in relation to any Security Asset.

 

3.10                        Derivative Contracts

 

Each Chargor charges by way of fixed charge its right to receive all moneys
payable under any Derivative Contract.

 

3.11                        Assigned Agreements

 

3.11.1              Each Charger assigns absolutely all its rights and interests
under the Assigned Agreements to which it is party and each Intra-Group Loan.

 

3.11.2              Until an Event of Default occurs, but subject to Clause 7.5
(Assigned Agreements and Insurances), the relevant Charger may continue to deal
with the counterparties to the relevant Assigned Agreements and Intra-Group
Loans.

 

3.12                        Insurances

 

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

 

3.12.1              Each Charger assigns absolutely all its rights and interests
in the Insurances.

 

3.12.2              Until an Event of Default occurs. but subject to Clause 7.5
(Assigned Agreements, Derivative Contracts and Insurances), the Chargors may
continue to deal with the counterparties to the Insurances.

 

3.13                        Contractual rights

 

Each Chargor charges by way of fixed charge all its rights under all deeds and
agreements to which it is a party other than:

 

(a)                                 the Assigned Agreements and Insurances which
are effectively assigned by Clauses 3.11 (Assigned Agreements) or 3.12
(Insurances); and

 

(b)                                 the Derivative Contracts.

 

3.14                        Other assets

 

3.14.1              Each Chargor charges by way of floating charge all its
present and future business, undertaking and assets which are not effectively
mortgaged, charged by way of fixed charge or assigned under this Clause 3.

 

3.14.2              Paragraph 14 of Schedule 81 to the Insolvency Act 1986 shall
apply to any floating charge created by this Debenture.

 

3.15                        Trust

 

3.15.1              Subject to Clause 3.15.2, if or to the extent that for any
reason the assignment or charging of any Security Asset is ineffective because
of a prohibition on that assignment or charging, the relevant Chargor holds it
on trust for the Lender.

 

3.15.2              If the reason referred to in Clause 3.15.1 is that:

 

(a)                                 a consent or waiver must be obtained: or

 

(b)                                 a condition must be satisfied,

 

then:

 

(i)                                     subject to Clause 3.15.3, the relevant
Charger shall apply for the consent or waiver: and

 

(ii)                                  that Charger shall use all reasonable
endeavours to satisfy the condition,

 

in each case as soon as possible or, if the Security Asset is acquired after the
date of this Debenture, as soon as possible following the date of acquisition.

 

3.15.3              Where the consent or waiver is not to be unreasonably
withheld, the relevant Charger shall:

 

(a)                                 use all reasonable endeavours to obtain it
as soon as possible: and

 

(b)                                 keep the Lender informed of the progress of
the negotiations to obtain it.

 

3.15.4              On the waiver or consent being obtained, or the condition
being satisfied, the Security Asset shall be mortgaged, charged or assigned (as
appropriate) under this Clause 3 and, in relation to such Security Asset, the
trust referred to in Clause 3.15.1 shall terminate.

 

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

 

4                                         Nature of Security created

 

4.1                               General

 

The Security created under this Debenture is created:

 

(a)                                 as a continuing security to secure the
payment and discharge of the Secured Liabilities;

 

(b)                                 (except in the case of assets which are the
subject of a legal mortgage under this Debenture) over all present and future
assets of the kind described which are owned by the relevant Chargor and, to the
extent that it does not own those assets, shall extend to any right or interest
which it may have in them;

 

(c)                                  in favour of the Lender; and

 

(d)                                 with full title guarantee.

 

4.2                               Security over Derivative Contracts

 

The Security created under this Debenture over any Derivative Contract shall
apply net of any set-off or combination of amounts owed under, and in accordance
with the terms of, that Derivative Contract.

 

5                                         Conversion of floating charge

 

5.1                               Conversion on notice

 

Subject to Clause 5.2 (Limitation). the Lender may by notice to a Chargor at any
time during the Security Period convert the floating charge created by that
Chargor under this Debenture into a fixed charge in respect of any Security
Asset specified in that notice if:

 

(a)                                 an Event of Default is continuing; or

 

(b)                                 the Lender considers that Security Asset to
be in danger of being seized, attached, charged, taken possession of or sold
under any form of distress, sequestration, execution or other process or
otherwise to be in jeopardy.

 

5.2                               Limitation

 

Clause 5.1 (Conversion on notice) shall not apply by reason only of a moratorium
being obtained, or anything being done with a view to a moratorium being
obtained, under section 1A of the Insolvency Act 1986.

 

5.3                               Automatic conversion

 

The floating charge created by a Chargor under this Debenture will convert
automatically into fixed charges:

 

(a)                                 if the Lender receives notice of an
intention to appoint an administrator of that Chargor;

 

(b)                                 if any steps are taken, (including the
presentation of a petition, the passing of a resolution or the making of an
application) to appoint a liquidator, provisional liquidator, administrator or
Receiver in respect of that Chargor over all or any part of its assets, or if
such person is appointed;

 

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

 

(c)                                  if that Chargor creates or attempts to
create Security over all or any of the Security Assets, other than Permitted
Security;

 

(d)                                 on the crystallisation of any other floating
charge over the Security Assets;

 

(e)                                  if any person seizes, attaches, charges,
takes possession of or sells any Security Asset under any form of distress,
sequestration, execution or other process, or attempts to do so; and

 

(f)                                   in any other circumstances prescribed by
law.

 

6                                         Representations and warranties

 

6.1                               General

 

The Lender has entered into this Debenture in reliance on the representations of
each Chargor set out in this Clause 6, and each Chargor or, in the case of
Clause 6.5 (Trade Marks) each Trade Mark Charger, warrants to the Lender on the
date of this Debenture, as set out in this Clause 6.

 

6.2                               Land

 

All Land beneficially owned by it as at the date of this Debenture is described
opposite its name in Schedule 2 (Land charged by way of legal mortgage).

 

6.3                               Shares

 

6.3.1                     All Shares beneficially owned by it as at the date of
this Debenture are described opposite its name  in Schedule 3 (Shares).

 

6.3.2                     All of the Shares and, to the extent applicable, all
Investments are fully paid.

 

6.4                               Accounts

 

As at the date of this Debenture, no Chargor holds any account with a bank or
financial institution other than the Current Accounts set out in Schedule 7.

 

6.5                               Trade Marks

 

6.5.1                     It is the legal, beneficial and registered proprietor
of each Trade Mark described opposite its name in Part 1 of Schedule 9 (Trade
Marks).

 

6.5.2                     It is not aware of any reason why any Trade Mark may
for any reason be invalid or incapable of being the subject of the Security
created by this Debenture.

 

6.5.3                     It is the applicant for each Trade Mark Application
described opposite its name in Part 2 of Schedule 9 (Trade Marks).

 

6.5.4                     It is not aware of any reason why its entitlement to
make any Trade Mark Application should be challenged.

 

6.5.5                     To the best of its knowledge, there is no reason why
any Trade Mark Application will not proceed to registration.

 

6.5.6                     It is not aware of any conduct, action or lack of
action which will or may have the effect of prejudicing the validity of any
Trade Mark Property or adversely affecting its value.

 

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

 

6.5.7                     Other than as disclosed in writing to the Lender on or
before the date of this Debenture:

 

(a)                                 it is not restricted in any material way in
its use or exercise of any Trade Mark Property; and

 

(b)                                 to the best of its knowledge, information
and belief (having made all reasonable enquiries), there are no licences,
agreements (whether registered user agreements or otherwise) or Security (other
than in favour of the Lender) which relate to or affect any Trade Mark Property
or the Security created by this Debenture.

 

6.5.8                     It is not aware of any claim from any third party
relating to ownership of any Trade Mark or Trade Mark Application, or of any
claim that any Trade Mark or Trade Mark Application infringes any trade mark
(whether registered or unregistered) or any other Intellectual Property of any
third party.

 

6.6                               Insurances

 

6.6.1                     It is the legal and beneficial owner of each Insurance
to which it is a party.

 

6.6.2                     All premiums and other moneys payable in respect of
each Insurance have been duly and promptly paid in full.

 

6.6.3                     Each Insurance is in full force and effect.

 

6.6.4                     It has not has made any false declaration or
mis-statement In support of obtaining any Insurance

 

6.6.5                     It has disclosed to the insurers of each Insurance all
material facts.

 

6.7                               Repetition

 

The representations and warranties set out in this Clause 6 shall survive the
execution of this Debenture and (other than the representation and warranty in
Clause 6.4 (Accounts)) are deemed to be repeated by reference to the facts and
circumstances then existing on each date on which the Repeating Representations
are deemed to be repeated.

 

7                                         Positive covenants

 

The covenants in this Clause 7 remain in force from the date of this Debenture
until the expiry of the Security Period.

 

7.1                               Preservation of the Security Assets

 

Each Charger shall:

 

(a)                                 keep all Land, all Equipment and all other
tangible assets which form part of the Security Assets in the same or better
condition as that in which it Is on the date of this Debenture and permit the
Lender free access at all reasonable times and on reasonable notice to view
their state and condition;

 

(b)                                 preserve, maintain and renew as and when
necessary all Intellectual Property which form part of the Security Assets;

 

(c)                                  observe and perform all covenants,
undertakings, laws and regulations from time to time affecting any Security
Asset or the use or enjoyment of it;

 

(d)                                 pay all Tax, rents, rates, duties, fees,
charges, assessments, impositions, calls, instalments and outgoings which are
properly payable at any time during the Security

 

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

 

Period In respect of any Security Asset or by the owner or occupier of it (and
if it fails to pay that amount when due, the Lender may pay it};

 

(e)                                  notify the Lender of any action commenced
by a third party to seize, attach, charge, take possession of or sell any
Security Asset which (to the best of its knowledge and belief} has been started
or threatened; and

 

(f)                                   at its own cost, defend any proceedings
(including proceedings to seize, attach, charge, take possession of or sell}
brought by a third party relating to any Security Asset.

 

7.2                               Land

 

7.2.1                     Each Charger shall promptly notify the Lender in
writing if it:

 

(a)                                 intends to acquire any estate or interest in
Land; or

 

(b)                                 acquires any estate or interest in Land.

 

7.2.2                     Each Charger shall remedy any material defect or want
of repair promptly after service by the Lender of notice of the defect or want
of repair.

 

7.2.3                     Each Charger shall give immediate notice in writing to
the Lender if:

 

(a)                                 it receives any notice under section 146 of
the Act; or

 

(b)                                 any proceedings are commenced against it for
the forfeiture of any lease of any Land.

 

7.2.4                     If a Charger acquires any freehold or leasehold
property after the date of this Debenture it shall:

 

(a)                                 immediately on request by the Lender and at
the cost of that Charger, execute and deliver to the Lender a legal mortgage in
favour of the Lender of that property in any form which the Lender may require;

 

(b)                                 if the title to that freehold or leasehold
property is registered at the Land Registry or required to be so registered,
apply to the Land Registry for registration of this Security; and

 

(c)                                  if applicable, ensure that the provisions
of Clause 16.1 (Application to Land Registrar) are complied with in relation to
that legal mortgage.

 

7.2.5                     If the consent of the landlord in whom the reversion
of a lease is vested Is required for a Charger to execute a legal mortgage over
it, that Charger shall:

 

(a)                                 not be required to perform that obligation
unless and until it has obtained the landlord’s consent; and

 

(b)                                 use its reasonable endeavours to obtain the
landlord’s consent.

 

7.2.6                     Each Charger shall:

 

(a)                                 perform all its obligations under any law or
regulation In any way related to or affecting its Land, except to the extent
that non-performance of those obligations would not materially adversely affect
the value or marketability of any of its Land; and

 

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

 

(b)                                 must, within 14 days after receipt by it of
any material application, requirement, order or notice served or given by any
public or local or any other authority with respect to its Land (or any part of
it):

 

(i)                                     deliver a copy to the Lender; and

 

(ii)                                  inform the Lender of the steps taken or
proposed to be taken to comply with the relevant requirements.

 

7.2.7                     Following an Event of Default or, in respect of any
Land acquired after the date of this Debenture, upon the request of the Lender,
each Charger shall:

 

(a)                                 grant the Lender or its lawyers on request
all facilities within the power of that Charger to enable the Lender or its
lawyers (at the expense of that Charger) to:

 

(i)                                     carry out investigations of title to the
Land; and

 

(ii)                                  make such enquiries in relation to any
part of the Land as a prudent mortgagee might carry out: and

 

(b)                                 if reasonably required by the Lender,
provide it with a report on title of that Charger to the Land concerning those
items which may properly be sought to be covered by a prudent mortgagee in a
lawyer’s report of that nature.

 

7.3                               Accounts

 

7.3.1                     If any Charger opens or otherwise acquires any Account
after the date of this Debenture, it shall notify the Lender immediately.

 

7.3.2                     After executing this Debenture (or in the case of any
Account opened after the date of this Debenture, after the date on which that
Account is opened), each Charger shall:

 

(a)                                 in respect of each of its Current Accounts
(if any) for which the Account Bank is not the Lender, promptly give notice to
the Account Bank in the form set out in Part 1 of Schedule 8 (Forms of letter to
and from Account Bank) and deliver to the Lender a certified copy of that
notice; and

 

(b)                                 use all reasonable endeavours to ensure that
the Account Bank acknowledges each notice served on it pursuant to paragraphs
(a) of Clause 7.3.2 in the form set out in Part 2 of Schedule 8 (Forms of Letter
to and from Account Bank) or other form approved by the Lender.

 

7.3.3                     Subject to the Facility Agreement, each Chargor may
receive, withdraw or transfer any credit balance on any Current Account unless
the Lender notifies it to the contrary at any time when an Event of Default has
occurred which is continuing.

 

7.3.4                     In addition to any rights of the Agent or the Lender
under the Facility Agreement, at any time after an Event of Default has occurred
which is continuing, the Lender may:

 

(a)                                 apply any amount standing to the credit of
any Current Account or any amount it receives in respect of any such Account
towards any amounts due and payable under the Finance Documents; and

 

(b)                                 may notify the Account Bank at which any
Current Account is held that the Chargors’ rights (or any of them) under Clause
7.3.3 cease to apply.

 

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

 

7.4                               Shares and Investments

 

7.4.1                     If any Chargor forms or acquires any Subsidiary after
the date of this Debenture, it shall notify the Lender immediately.

 

7.4.2                     Each Chargor shall (in the case of the Shares
specified in Schedule 3 (Shares) and its Investments as at the date of this
Debenture) immediately after entering into this Debenture or (in the case of any
other Shares and Investments) on such later date on which any Shares or
Investments are issued to or otherwise acquired by that Chargor, deposit with
the Lender, in respect of or in connection with its Shares and Investments:

 

(a)                                 all stock and share certificates and
documents of or evidencing title;

 

(b)                                 signed undated transfers, completed in
blank; and

 

(c)                                  any other documents which the Lender may
from time to time require for perfecting its title, or the title of any
purchaser,

 

all of which will be held by the Lender at the expense and risk of the relevant
Chargor.

 

7.4.3                     Each Chargor shall:

 

(a)                                 promptly following receipt, forward to the
Lender copies of all notices, documents and other communications received in
connection with the Shares and Investments;

 

(b)                                 promptly copy to the Lender, 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 articles of association or other constitutional document
relating to any of its Shares and Investments; and

 

(c)                                  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 Lender.

 

7.5                               Assigned Agreements, Derivative Contracts and
Insurances

 

7.5.1                     Each Chargor shall:

 

(a)                                 perform all its obligations under the
Assigned Agreements, Derivative Contracts and Insurances in a diligent and
timely manner.

 

(b)                                 promptly after the execution of this
Debenture, or (as the case may be} promptly after the execution of any Assigned
Agreement, Derivative Contract or Insurance entered into after the date of this
Debenture, give notice to the other parties to the Assigned Agreements,
Derivative Contracts and Insurances:

 

(i)                                     in the case of Assigned Agreements
substantially in the form set out in Schedule 4 (Form of notice for Assigned
Agreements); and

 

(ii)                                  in the case of Insurances, substantially
in the form set out in Schedule 5 (Form of notice for Insurances); and

 

(iii)                               in the case of Derivative Contracts,
substantially in the form set out in Schedule 6 (Form of notice for Derivative
Contracts),

 

and deliver to the Lender a copy of each notice; and

 

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

 

(c)                                  use all reasonable endeavours to procure
that each party served with a notice under paragraph (b) above countersigns and
retums it to the Lender within 14 days of the execution of this Debenture or in
the case of Assigned Agreements, Derivative Contracts and Insurances entered
into after the date of this Debenture, within 14 days of the date of the
execution of the Assigned Agreement, Derivative Contract or Insurance.

 

7.5.2                     Subject to the terms of the Facility Agreement
(including any obligations in it relating to the application of proceeds), while
no Event of Default is continuing, the relevant Charger may exercise all its
rights in respect of the Assigned Agreements, the Derivative Contracts and the
Insurances (in each case to which it is a party) including receiving and
exercising all rights relating to proceeds of those Assigned Agreements,
Derivative Contracts and Insurances.

 

7.5.3                     Each Charger which is the borrower of an Intra-Group
Loan acknowledges receipt of notice of assignment under Clause 3.11 (Assigned
Agreements) of the relevant Intra-Group Loan Agreement.

 

7.6                               Trade Marks

 

Each Trade Mark Charger shall at all times during the Security Period promptly
notify the Lender if it receives notification, or otherwise becomes aware, of:

 

(a)                                 any actual, alleged, threatened or suspected
infringement of any Trade Mark;

 

(b)                                 any actual, alleged, threatened or suspected
infringement of any third party’s trade marks or other intellectual or other
rights arising from the use of any Trade Mark; or

 

(c)                                  any actual, threatened or suspected
cancellation or other legal action in respect of any Trade Mark.

 

7.7                               Payments without deduction

 

Each Charger covenants with the Lender that all payments to be made by it under
this Debenture shall be calculated and be made without (and free and clear of
any deduction for) set-off or counterclaim.

 

8                                         Negative covenants

 

The covenants in this Clause 8 remain in force from the date of this Debenture
until the expiry of the Security Period.

 

8.1                               Disposals

 

No Charger shall enter Into a single transaction or a series of transactions
(whether related or not), whether voluntary or involuntary and whether at the
same time or over a period of time, to sell, lease, transfer, loan, nor
otherwise dispose of any Security Asset, nor enter into an agreement to make any
such disposal other than a Permitted Disposal.

 

8.2                               Negative pledge

 

No Charger shall create or permit to subsist any Security over any Security
Asset except for Permitted Security.

 

8.3                               Preservation of the Security Assets

 

No Charger shall, without the prior written consent of the Lender:

 

(a)                                 enter into any onerous obligation or
restriction affecting any Security Asset; or

 

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

 

(b)                                 in relation to any Land forming part of the
Security Assets:

 

(i)                                     part with possession of it, confer on
any other person any right or licence to occupy it or grant any licence to
assign, sub-let or create any Security over it;

 

(ii)                                  exercise any of the powers conferred by
sections 99 and 100 of the Act of leasing, letting, entering into agreements for
leases or lettings or accepting or agreeing to accept surrenders of leases:

 

(iii)                               vary, assign or otherwise dispose of or
allow to be forfeited any leasehold interest:

 

(iv)                              agree any rent review;

 

(v)                                 make any structural or material alteration,
or do or allow anything to be done which falls within the definition of
development in section 55 of the Town and Country Planning Act 1990;

 

(vi)                              allow any person other than itself to be
registered under the Land Registration Act 2002 as proprietor, or create or
permit to arise any interest which overrides under the Land Registration Act
2002 (and each Chargor shall reimburse the Lender for its reasonable costs of
lodging (aa) a caution against first registration of the tiUe to that Land or
(bb) if that Land is unregistered, a land charge):

 

(vii)                           make an application, consent to or acquiesce in
the application by any third party, to the Land Registry to enter any matter on
the register of tiUe; or

 

(c)                                  in relation to any uncalled capital of any
Chargor, call it up or receive it in advance of calls unless the Lender
otherwise directs, nor apply it, when paid, otherwise than in payment of the
Secured Liabilities or as the Lender otherwise directs; or

 

(d)                                 take any Security in connection with its
liability under this Debenture from any guarantor of, or provider of Security
for, any of the Secured Liabilities.

 

8.4                               Assigned Agreements, Derivative Contracts and
Insurances

 

No Chargor shall, without the prior written consent of the Lender:

 

(a)                                 make or agree to make any amendments to;

 

(b)                                 waive any of its rights under: or

 

(c)                                  exercise any right to terminate,

 

any of the Assigned Agreements, Derivative Contracts or the Insurances.

 

8.5                               Trade Marks

 

No Trade Mark Chargor shall:

 

(a)                                 permit any Trade Mark to lapse for
non-payment of any renewal or other fee necessary to maintain its registration
and validity or allow any thing to be done or left undone the effect of which
will, or may be to, imperil or prejudice any Trade Mark, its registration,
subsistence, validity, reputation or integrity;

 

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

 

(b)                                 permit any Trade Mark to fall into disuse or
to be used in such a way that they are put at risk by becoming generic or by
being identified as disreputable in any way;

 

(c)                                  without the prior written consent of the
Lender, assign, licence, sub-licence, sever, dispose of or otherwise part with
control of a Trade Mark or Trade Mark Application;

 

(d)                                 change the specification of any Trade Mark
or permit any disclaimer, condition, restriction or memorandum to be entered on
the Register of Trade Marks the effect of which will or may be to detrimentally
affect the value of any Trade Mark;

 

(e)                                  fail to continue to prosecute any Trade
Mark Application to registration or fail to take any steps necessary to ensure
so far as possible that any Trade Mark Application is accepted for registration
by the Trade Mark Registry; or

 

(f)                                   do or cause or permit to be done anything
which may in any way depreciate, jeopardise or otherwise prejudice the value to
the Lender of any Trade Mark Property and/or the Security over any Trade Mark
Property created by Clause 3.6 (Intellectual Property).

 

9                                         Voting and other rights

 

9.1                               Before demand by the Lender

 

Until such time as the Lender makes a demand under Clause 9.2, each Charger may
exercise any of its voting and other rights and powers aHached to the Shares and
Investments but shall not do so in a manner which may:

 

(a)                                 have the effect of changing the terms of
issue of any of the Shares or Investments (or any class of them) or any of the
Distribution Rights relating to them;

 

(b)                                 impair the value of any of the Shares or
Investments;

 

(c)                                  prejudice the security created by this
Debenture; or

 

(d)                                 otherwise prejudice the interests of the
Lender under the Finance Documents.

 

9.2                               After demand by the Lender

 

After the Lender so demands following the occurrence of an Event of Default,
each Charger shall:

 

(a)                                 promptly pay over to the Lender all moneys
arising from the Distribution Rights relating to the Shares and Investments
which it may receive; and

 

(b)                                 exercise all voting and other rights and
powers aHached to the Shares and Investments in any manner which the Lender may
direct.

 

9.3                               Completion of transfers

 

At any time following the occurrence of a Default which is continuing the Lender
may, without notice to any Charger:

 

(a)                                 complete and date any of the transfers and
other documents referred to in paragraphs (b) and (c) of Clause 7.4.2; and

 

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

 

(b)                                 transfer all or any of the Shares or
Investments to itself.

 

10           Enforcement

 

10.1                        When Security becomes enforceable

 

The Security created by a Chargor under this Debenture shall become enforceable:

 

(a)                                 on the occurrence of an Event of Default; or

 

(b)                                 if any Chargor so requests.

 

10.2                        Powers on enforcement

 

At any time after the Security created by a Chargor under this Debenture has
become enforceable, the Lender may (without prejudice to any other of its rights
and remedies and without notice to that Chargor) do all or any of the following:

 

(a)                                 sell or otherwise dispose of the Security
Assets, and exercise all the other powers and rights conferred on mortgagees by
the Act, as varied and extended by this Debenture, without the restrictions
contained in sections 103 or 109(1) of the Act;

 

(b)                                 exercise the power of leasing, letting,
entering into agreements for leases or lettings or accepting or agreeing to
accept surrenders of leases in relation to any Security Asset, without the
restrictions imposed by sections 99 and 100 of the Act;

 

(c)                                  to the extent that any Security Asset
constitutes Financial Collateral, as defined in the Regulations, appropriate it
and transfer the title in and to it to the Lender insofar as not already
transferred, subject to paragraphs (1) and (2) of Regulation 18;

 

(d)                                 subject to Clause 11.1.1 (Method of
appointment and removal), appoint one or more persons to be a Receiver or
Receivers of all or any of the Security Assets; and

 

(e)                                  appoint an administrator of any Chargor.

 

10.3                        Disposal of the Security Assets

 

In exercising the powers referred to in paragraph (a) of Clause 10.2 (Powers on
enforcement), the Lender or any Receiver may sell or dispose of all or any of
the Security Assets at the times, in the manner and order, on the terms and
conditions and for the consideration determined by it.

 

10.4                        Application of moneys

 

10.4.1              The Lender shall apply any moneys received or recovered by
it pursuant to this Debenture in accordance with the Facility Agreement.

 

10.4.2              Any Receiver shall apply any moneys received or recovered by
it pursuant to this Debenture:

 

(a)                                 first, in or towards the pro rata payment of
or provision for any sums owing to the Lender, any Receiver or any Delegate; and

 

(b)                                 secondly, to the Lender for application in
accordance with Clause 10.4.1,

 

and section 109(8) of the Act shall not apply.

 

10.4.3              Clauses 10.4.1 and 10.4.2 will override any appropriation
made by a Chargor.

 

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

 

11                                  Appointment and powers of Receivers

 

11.1                        Method of appointment and removal

 

11.1.1              The Lender may not appoint a Receiver by reason only of a
moratorium being obtained, or anything being done with a view to a moratorium
being obtained, under section 1A of the Insolvency Act 1986.

 

11.1.2              Every appointment or removal of a Receiver, of any delegate
or of any other person by the Lender pursuant to this Debenture may be made in
writing under the hand of any officer or manager of the Lender (subject to any
requirement for a court order in the removal of an administrative receiver).

 

11.2                        Powers of Receiver

 

Every Receiver shall have all the powers:

 

(a)                                 of the Lender under this Debenture;

 

(b)                                 conferred by the Act on mortgagees in
possession and on receivers appointed under the Act;

 

(c)                                  which are specified in Schedule 1 of the
Insolvency Act 1986 in relation to, and to the extent applicable to, the
Security Assets or any of them (whether or not the Receiver is an administrative
receiver within the meaning of that Act); and

 

(d)                                 in relation to any Security Asset, which he
would have if he were its only absolute owner.

 

11.3                        Joint or several

 

If two or more persons are appointed as Receivers of the same assets, they may
act jointly and/or severally so that (unless any instrument appointing them
specifies to the contrary) each of them may exercise individually an the powers
and discretions conferred on Receivers by this Debenture.

 

11.4                        Receiver as agent

 

Every Receiver shall be the agent of the relevant Chargor which shall be solely
responsible for his acts and defaults and for the payment of his remuneration.

 

11.5                        Receiver’s remuneration

 

Every Receiver shall be entitled to remuneration for his services at a rate to
be fixed by agreement between him and the Lender, and the maximum rate specified
in section 109(6) of the Act shall not apply.

 

12                                  Protection of purchasers

 

No purchaser or other person dealing with the Lender or any Receiver shall be
bound or concerned:

 

(a)                                 to see or enquire whether the right of the
Lender or any Receiver to exercise any of the powers conferred by this Debenture
has arisen or not;

 

(b)                                 with the propriety of the exercise or
purported exercise of those powers; or

 

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

 

(c)                                  with the application of any moneys paid to
the Lender, to any Receiver or to any other person.

 

13                                  Protection of the Lender

 

13.1                        Exclusion of liability

 

The Lender or any of its respective officers or employees shall have any
responsibility or liability:

 

(a)                                 for any action taken, or any failure to take
any action, in relation to all or any of the Security Assets;

 

(b)                                 to account as mortgagee in possession or for
any loss upon realisation of any Security Asset;

 

(c)                                  for any loss resulting from any fluctuation
in exchange rates in connection with any purchase of currencies under Clause 18
(Cu”ency); or

 

(d)                                 for the loss or destruction of, or damage
to, any of the Security Assets, or to any documents of or evidencing title to
them, which are in the possession or held to the order of any such person (and
which will be held by such persons at the expense and risk of the Chargors);

 

(e)                                  for any other default or omission in
relation to all or any of the Security Assets for which a mortgagee in
possession might be liable,

 

except in the case of gross negligence or wilful misconduct on the part of that
person.

 

13.2                        General Indemnity

 

13.2.1              Each Charger shall indemnify the Lender, and its respective
officers and employees against all actions, proceedings, demands, claims, costs,
expenses, and other liabilities incurred by them in respect of all or any of the
following:

 

(a)                                 any act or omission by any of them in
relation to all or any of the Security Assets;

 

(b)                                 any payment relating to or in respect of all
or any of the Security Assets which becomes payable at any time by any of them;

 

(c)                                  any stamp, registration or similar Tax or
duty which becomes payable in connection with the entry into, or the performance
or enforcement of, this Debenture;

 

(d)                                 carrying out or purporting to carry out any
of the rights, powers and discretions conferred on them by or permitted under
this Debenture; and

 

(e)                                  any breach by that Chargor of any of its
covenants or other obligations to the Lender, except in the case of gross
negligence or wilful misconduct on the part of that person.

 

13.2.2              Each Chargor shall pay interest at the Default Rate on the
sums payable under this Clause from the date on which the liability was incurred
to the date of actual payment (both before and after judgment).

 

13.3                        Indemnity out of the Security Assets

 

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

 

The Lender and its respective officers and employees shall be entitled to be
indemnified out of the Security Assets in respect of the actions, proceedings,
demands, claims, costs, expenses and liabilities referred to in Clause 13.2
(General indemnity).

 

14                                  Preservation of Security

 

14.1                        Reinstatement

 

If any payment by a Chargor or discharge given by the Lender (whether in respect
of the obligations of any Obligor or any Security for those obligations or
otherwise) is avoided or reduced as a result of insolvency, liquidation,
administration or any similar event:

 

(a)                                 the liabilities of that Chargor and the
Security created by that Chargor under this Debenture shall continue as if the
payment, discharge, avoidance or reduction had not occurred; and

 

(b)                                 the Lender shall be entitled to recover the
value or amount of that Security or payment from that Chargor, as if the
payment, discharge, avoidance or reduction had not occurred.

 

14.2                        Waiver of defences

 

Neither the Security created by this Debenture nor the obligations of any
Chargor under this Debenture will be affected by an act, omission, matter or
thing which, but for this Clause, would reduce, release or prejudice that
Security or any of those obligations (whether or not known to that Chargor or
the Lender) including:

 

(a)                                 any time, waiver or consent granted to, or
composition with, any Obligor or other person;

 

(b)                                 the release of any Obligor or any other
person under the terms of any composition or arrangement with any person;

 

(c)                                  the taking, variation, compromise,
exchange, renewal, enforcement or release of, or refusal or neglect to perfect,
take up or enforce, any rights against, or Security over, assets of any Obligor
or other person or any non-presentation or non-observance of any formality or
other requirement in respect of any instrument or any failure to realise the
full value of any Security;

 

(d)                                 any incapacity or lack of power, authority
or legal personality of or dissolution or change in the members or status of an
Obligor or any other person;

 

(e)                                  any amendment (however fundamental),
replacement, variation, novation, assignment or the avoidance or termination of
a Finance Document or any other document or Security;

 

(f)                                   any unenforceability, illegality or
invalidity of any obligation of, or any Security created by, any person under
any Finance Document or any other document; or

 

(g)                                  any insolvency, liquidation, administration
or similar procedure.

 

14.3                        Chargor Intent

 

Without prejudice to the generality of Clause 14.2 (Waiver of defences), each
Chargor expressly confirms that it intends that the Security created by this
Debenture shall extend

 

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

 

from time to time to any (however fundamental) variation, increase, extension or
addition of or to any of the Finance Documents and/or any facility or amount
made available under any of the Finance Documents for the purposes of or in
connection with any of the following:

 

(a)                                 acquisitions of any nature;

 

(b)                                 increasing working capital;

 

(c)                                  enabling investor distributions to be made;

 

(d)                                 carrying out restructurings;

 

(e)                                  refinancing existing facilities;

 

(f)                                   refinancing any other indebtedness;

 

(g)                                  making facilities available to new
borrowers;

 

(h)                                 any other variation or extension of the
purposes for which any such facility or amount might be made available from time
to time; and

 

(i)                                     any fees, costs and/or expenses
associated with any of the foregoing.

 

14.4                        Immediate recourse

 

Each Chargor waives any right it may have of first requiring the Lender (or any
trustee or agent on its behalf) to proceed against or enforce any other rights
or Security or claim payment from any person before claiming from the Chargors
under this Debenture.  This waiver applies irrespective of any law or any
provision of a Finance Document to the contrary.

 

14.5                        Appropriations

 

During the Security Period the Lender may:

 

(a)                                 refrain from applying or enforcing any
moneys, Security or rights held or received by it (or any trustee or agent on
its behalf) in respect of the Secured Liabilities, or, subject to Clause 10.4
(Application of moneys), apply and enforce the same in such manner and order as
it sees fit (whether against the Secured Liabilities or otherwise) and no
Charger shall be entitled to the benefit of the same; and

 

(b)                                 hold in an interest-bearing suspense account
any moneys received from any Charger or on account of the Secured Liabilities.

 

14.6                        Deferral of Chargors’ rights

 

During the Security Period and unless the Lender otherwise directs, no Charger
shall exercise any rights which it may have by reason of performance by it of
its obligations under this Debenture or the enforcement of the Security created
by this Debenture:

 

(a)                                 to receive or claim payment from, or be
indemnified by an Obligor;

 

(b)                                 to claim any contribution from any guarantor
of, or provider of Security in respect of, any Obligor’s obligations under the
Finance Documents;

 

(c)                                  to take the benefit (in whole or in part
and whether by way of subrogation or otherwise) of any rights of the Lender
under any Finance Document or of any guarantee or Security taken pursuant to, or
in connection with, the Finance Documents by the Lender;

 

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

 

(d)                                 to exercise any right of set-off against any
Obligor; and/or

 

(e)                                  to claim or prove as a creditor of any
Obligor in competition with the Lender.

 

14.7                        Additional Security

 

This Debenture is in addition to, is not in any way prejudiced by and shall not
merge with any contractual right or remedy or other Security now or in the
future held by or available to any Lender.

 

14.8                        New accounts

 

If the Lender receives notice (actual or otherwise) of any subsequent Security
over or affecting all or any of the Security Assets it may open a new account or
accounts with each Borrower and, if it does not do so, it shall nevertheless be
treated as if it had done so at the time when it received or was deemed to have
received notice of that subsequent Security, and as from that time all payments
made by a Borrower to the Lender:

 

(a)                                 shall be credited or be treated as having
been credited to the new account of that Borrower; and

 

(b)                                 shall not operate to reduce the Secured
Liabilities at the time when the Lender received or was deemed to have received
such notice.

 

15                                  Tacking

 

For the purposes of section 94(1) of the Act and section 49(3) of the Land
Registration Act 2002 the Lender confirms it shall make further advances to the
Borrower on the terms and subject to the conditions of the Finance Documents.

 

16                                  Further assurance

 

16.1                        Registration at Companies House

 

Each Chargor consents to the registration of this Debenture at Companies House
pursuant to Part 25 of the Companies Act 2006.

 

16.2                        Application to Land Registrar

 

Each Chargor consents to the registration against the registered titles
specified opposite its name in Schedule 2 (Land charged by way of legal
mortgage) of:

 

(a)                                 a restriction in the following terms:

 

“No disposition of the registered estate by the proprietor of the registered
estate [or by the proprietor of any registered charge, not being a charge
registered before the entry of this restriction] is to be registered without a
written consent signed by the proprietor for the time being of the charge dated
**               [date of Debenture] in favour of **         Pnsert name of
Lender] referred to in the charges register or their conveyancer. (Form Pt; and

 

(b)                                 a notice that the Lenders are under an
obligation to make further advances on the terms and subject to the conditions
of the Finance Documents.

 

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

 

16.3                        Further action

 

Each Chargor shall, at its own expense, promptly take any action and sign or
execute any further documents which the Lender may require in order to:

 

(a)                                 give effect to the requirements of this
Debenture;

 

(b)                                 protect, preserve and perfect the Security
intended to be created by or pursuant to this Debenture;

 

(c)                                  protect and preserve the ranking of the
Security intended to be created by or pursuant to this Debenture with any other
Security over any assets of any Chargor; or

 

(d)                                 facilitate the realisation of all or any of
the Security Assets or the exercise of any rights, powers and discretions
conferred on the Lender, any Receiver or any administrator in connection with
all or any of the Security Assets,

 

and any such document may disapply section 93 of the Act.

 

16.4                        Deposit of documents

 

Each Chargor covenants that, on the date of this Debenture and at all times
during the Security Period as soon as it receives them (and in any event as soon
as the Lender so requests), it shall deposit with the Lender, in respect of or
in connection with the Security Assets:

 

(a)                                 all deeds, certificates and other documents
of or evidencing title; and

 

(b)                                 any other documents which the Lender may
from time to time require for perfecting its title, or the title of any
purchaser.

 

16.5                        Registration of Trade Marks

 

16.5.1              Each Trade Mark Charger shall:

 

(a)                                 within ten Business Days of the date of this
Debenture, apply to the Comptroller- General of Patents, Designs and Trade Marks
to register the charge created by Clause 3.6 (Intellectual Property) pursuant to
the provisions of section 25 of the Trade Marks Act 1994; and

 

(b)                                 pay all fees necessary to make the
registrations required to be made under paragraph (a) before the latest time
provided for payment.

 

16.5.2              Each Trade Mark Charger acknowledges the right of the
Lender, or any duly authorised agent of the Lender, to apply to the
Comptroller-General of Patents, Designs and Trade Marks to register the charge
created by Clause 3.6 (Intellectual Property) pursuant to the provisions of
section 25 of the Trade Marks Act 1994 on or after any failure by the relevant
Charger to register the charge pursuant to paragraph (a) of Clause 16.5.1.

 

16.6                        Law of Property (Miscellaneous Provisions) Act 1994

 

The covenant set out in section 2(1)(b) of the Law of Property (Miscellaneous
Provisions) Act 1994 shall extend to the provisions set out in this Clause 16.

 

17                                  Power of attorney

 

Each Charger irrevocably and by way of security appoints each of:

 

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

 

(a)                                 the Lender;

 

(b)                                 any delegate or sub-delegate of, or other
person nominated in writing by, an officer of the Lender; and

 

(c)                                  any Receiver,

 

jointly and severally as its attorney, in its name, on its behalf and in such
manner as the attorney may in its or his absolute discretion think fit following
the occurrence of an Event of Default or following the failure by the relevant
Charger to comply with a request from the Lender, to take any action and sign or
execute any further documents which that Charger is required to take, sign or
execute in accordance with this Debenture.  Each Chargor agrees, promptly on the
request of the Lender or any Receiver, to ratify and confirm all such actions
taken and documents signed or executed.

 

18                                  Currency

 

18.1                        The Spot Rate

 

In this Clause 18, the Spot Rate means, in relation to the Lender, the spot rate
of exchange of the Lender for the purchase of any currency with any other
currency in the London foreign exchange market.

 

18.2                        Conversion of moneys received

 

The Lender may convert any moneys received, recovered or realised in any
currency under this Debenture (including the proceeds of any previous conversion
under this Clause 18.2)

 

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

 

from its existing currency into any other currency, by purchasing that other
currency at the Spot Rate.

 

19                                  Discharge of Security

 

Upon the irrevocable and unconditional payment and discharge in full of the
Secured Liabilities, the Lender shall, unless any third party has any
subrogation or other rights in respect of the Security created by this Debenture
at that time, or shall procure that its appointees will, at the request and cost
of the Chargors:

 

(a)                                 release the Security Assets from this
Debenture; and

 

(b)                                 re-assign to the relevant Charger those
Security Assets that have been assigned to the Lender under Clause 3 (Creation
of Security).

 

Section 93 of the Act shall not apply to this Debenture.

 

20                                  Costs and expenses

 

20.1                        Transaction expenses

 

The Chargors shall promptly on demand pay the Lender the amount of all costs and
expenses (including legal fees) reasonably incurred by it in connection with the
negotiation, preparation, printing and execution of this Debenture.

 

20.2                        Amendment costs

 

If any Charger requests an amendment, waiver, consent or release of or in
relation to this Debenture, the Chargors shall, within three Business Days of
demand, reimburse the Lender for the amount of all costs and expenses (including
legal fees) reasonably incurred by it in responding to, evaluating, negotiating
or complying with that request or requirement.

 

20.3                        Enforcement costs

 

The Chargors shall, within three Business Days of demand, pay to the Lender or
any Receiver or Delegate the amount of all costs and expenses (including legal
fees) incurred by the Lender or any Receiver or Delegate in connection with the
enforcement of, or the preservation of any rights under, this Debenture or the
investigation of any possible Default.

 

21                                  Additional Chargors

 

21.1                        Delivery of Security Accession Deed

 

21.1.1              The Company may request that any Subsidiary (the New
Chargor) becomes a Charger.

 

21.1.2              The New Charger shall become a Charger if:

 

(a)                                 the Company and the New Charger deliver to
the Lender a duly completed and executed Security Accession Deed; and

 

(b)                                 the Company confirms that no Default is
continuing or would occur as a result of the New Charger becoming a Charger.

 

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

 

21.2                        Repetition of representations

 

Delivery of a Security Accession Deed constitutes confirmation by the New
Charger that the Repeating Representations are true and correct to the extent
applicable to it as at the date of delivery as if made by reference to the facts
and circumstances then existing.

 

22                                  Notices

 

22.1                        Communications in writing

 

Any communication to be made under or in connection with this Debenture shall be
made in writing and, unless otherwise stated, must be made by letter.

 

22.2                        Addresses

 

22.2.1              The address (and the department or officer, if any, for
whose attention the communication is to be made) of each party for any
communication or document to be made or delivered under or in connection with
this Debenture is that identified with its name below or any substitute address,
or department or officer as either party may notify to the other by not less
than five Business Days’ notice.

 

22.2.2              The addresses referred to in Clause 22.2.1 are:

 

(a)                                 The Company:

 

As set out opposite its name in Schedule 1(Original Chargors).

 

With copy to:

 

Evolving Systems Inc.

9777 Pyramid Court, Suite 100

Englewood, CO 80112

 

Attention: the Directors

 

(b)                                 The Lender:

 

East West Bank

Technology & Commercial Banking Group

2350 Mission College Blvd., Suite 988

Santa Clara, CA 95054

 

Attention: Chris Hetterly

 

(c)                                  Each Original Charger

 

As set out opposite its name in Schedule 1 (Original Chargors).

 

22.3                        Delivery

 

22.3.1              Any communication or document made or delivered by one
person to another under or in connection with this Debenture will only be
effective:

 

(a)                                 when it has been left at the relevant
address: or

 

(b)                                 two Business Days (or, in the case of
airmail, five Business Days) after being deposited in the post postage prepaid
(or, as the case may be, airmail postage prepaid), in an envelope addressed to
it at that address,

 

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

 

and, if a particular department or officer is specified as part of its address
details provided under Clause 22.2 (Addresses), if addressed to that department
or officer.

 

22.3.2              Any communication or document to be made or delivered to the
Lender will be effective only when actually received by the Lender and then only
if it is expressly marked for the attention of the department or officer
identified in Clause 22.2.2 (or any substitute department or officer as the
Lender shall specify for this purpose).

 

22.4                        English language

 

22.4.1              Any notice given under or in connection with this Debenture
must be in English.

 

22.4.2              All other documents provided under or in connection with
this Debenture must be:

 

(a)                                 in English; or

 

(b)                                 if not in English, and if so required by the
Lender accompanied by a certified English translation and, in this case, the
English translation will prevail unless the document is a constitutional,
statutory or other official document.

 

23                                  Calculations and certificates

 

23.1                        Accounts

 

In any litigation or arbitration proceedings arising out of or in connection
with this Debenture, the entries made in the accounts maintained by the Lender
are prima facie evidence of the matters to which they relate.

 

23.2                        Certificates and determinations

 

Any certification or determination by the Lender of a rate or amount under this
Debenture is, in the absence of manifest error, conclusive evidence of the
matters to which it relates.

 

24                                  Partial Invalidity

 

If, at any time, any provision of this Debenture is or becomes illegal, invalid
or unenforceable in any respect under any law of any jurisdiction, neither the
legality, validity or enforceability of the remaining provisions nor the
legality, validity or enforceability of such provision under the law of any
other jurisdiction will in any way be affected or impaired.

 

25                                  Remedies and waivers

 

No failure to exercise, nor any delay in exercising, on the part of the Lender,
any right or remedy under this Debenture shall operate as a waiver, nor shall
any single or partial exercise of any right or remedy prevent any further or
other exercise or the exercise of any other right or remedy. The rights and
remedies provided in this Debenture are cumulative and not exclusive of any
rights or remedies provided by law.

 

26                                  Amendments and waivers

 

Any term of this Debenture may be amended or waived only with the written
consent of the Chargors and the Lender.

 

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

 

27                                  Counterparts

 

This Debenture may be executed in any number of counterparts, and this has the
same effect as if the signatures on the counterparts were on a single copy of
this Debenture.

 

28                                  Governing law and enforcement

 

28.1                        Governing law

 

English law governs this Debenture, its interpretation and any non-contractual
obligations arising from or connected with it.

 

28.2                        Jurisdiction

 

28.2.1              The courts of England have exclusive jurisdiction to settle
any dispute arising out of or in connection with this Debenture (Including a
dispute regarding the existence, validity or termination of this Debenture) (a
Dispute).

 

28.2.2              The parties agree that the courts of England are the most
appropriate and convenient courts to settle Disputes and accordingly no party
will argue to the contrary.

 

28.2.3              Notwithstanding Clause 28.2.1, the Lender shall not be
prevented from taking proceedings relating to a Dispute in any other courts with
jurisdiction. To the extent allowed by law, the Lender may take concurrent
proceedings in any number of jurisdictions.

 

Executed as a deed and delivered on the date appearing at the beginning of this
Debenture.

 

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

 

Schedule 1 - Original Chargors

 

 

 

Registered number (or

 

 

 

 

Name of Chargor

 

equivalent, if any)

 

Notice details

 

 

 

 

 

 

 

Evolving Systems Holdings Limited

 

05272751

 

Address:

 

2nd Floor, 31 Chertsey Street, Guildford, Surrey GU1 4HD

 

 

 

 

 

 

 

 

 

 

 

Attention

 

Directors

 

 

 

 

 

 

 

Evolving Systems BLS Limited

 

10723209

 

Address:

 

2nd Floor, 31 Chertsey Street, Guildford, Surrey GU1 4HD

 

 

 

 

 

 

 

 

 

 

 

Attention

 

Directors

 

 

 

 

 

 

 

Evolving Systems Limited

 

02325854

 

Address:

 

2nd Floor, 31 Chertsey Street, Guildford, Surrey GU1 4HD

 

 

 

 

 

 

 

 

 

 

 

Attention

 

Directors

 

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

 

Signatories to Security Accession Deed [do not sign]

 

New Charger

 

 

 

Executed as a deed by

)

 

••

[New Chargor]

)

 

acting by a Director in the presence of

)

 

 

 

 

Signature of witness:

 

 

 

 

 

Name of witness:

 

 

 

 

 

Address

 

 

 

The Company

Executed as a deed by

)

 

Evolving Systems Holdings Limited

)

 

acting by a Director

)

Richard A. Dinkel

in the presence of:

)

 

 

 

 

Signature of witness:

 

Alice M. Ahern

 

 

 

Name of witness:

 

 

 

 

Alice M. Ahern

Address

 

9777 Pyramid Ct.

Englewood, CO 80112

 

Lender

 

Executed for and on behalf of East West Bank

 

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

 

Signatories to Debenture

 

The Company

 

Executed as a deed by

)

 

 

 

 

Evolving Systems Holdings Limited

)

Richard A. Dinkel

 

 

 

acting by a director in the presence of:

)

 

 

 

 

Signature of Witness:

 

Alice M. Ahern

 

 

 

Name of witness:

 

Alice M. Ahern

 

 

 

Address

 

9777 Pyramid Ct.

 

 

Englewood, CO 80112

 

The Chargors

 

Executed as a deed by

)

 

Evolving Systems Holdings Limited

)

 

acting by a director

)

Richard A. Dinkel

in the presence of:

)

 

 

 

 

Signature of witness:

 

Alice M. Ahern

 

 

 

Name of witness:

 

Alice M. Ahern

 

 

 

Address

 

9777 Pyramid Ct.

 

 

Englewood, CO 80112

 

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

 

Executed as a deed by Evolving Systems BLS Limited acting by a director in the
presence of:

 

Richard A. Dinkel

 

 

 

Signature of witness

 

Alice M. Ahern

 

 

 

Name of witness:

 

Alice M. Ahern

 

 

 

Address

 

9777 Pyramid Ct.

Englewood, CO 80112

 

 

Executed as a deed by Evolving Systems Limited acting by a director in the
presence of:

 

Richard A. Dinkel

 

 

 

Signature of witness:

 

Alice M. Ahern

 

 

 

Name of witness:

 

Alice M. Ahern

 

 

 

Address

 

9777 Pyramid Ct.

Englewood, CO 80112

 

 

The Lender

 

 

 

Signed for and on behalf of

Chris Hetterly

 

Managing Director

East West Bank

 

 

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