Exhibit 10.4
 

Dated                                                                                    2014

(1) MUST HAVE LIMITED

- and -
 
(2)                                             (AS SECURITY TRUSTEE)

 
DEBENTURE
 

Mishcon de Reya
Summit House
12 Red Lion Square
London WC1R 4QD
Tel: 020 7440 7000
Fax: 020 7404 5982
Ref: KEM/SS/43296.1
E-mail: sarah.spurling@mishcon.com
 

 
 
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TABLE OF CONTENTS
 
No.
 
Heading
 
Page
         
1
 
Definitions and interpretation
 
3
2
 
Covenant to pay
 
7
3
 
Grant of security
 
7
4
 
Restrictions on dealing
 
9
5
 
positive covenants
 
9
6
 
Representations and warranties
 
11
7
 
Power to remedy
 
11
8
 
Enforcement
 
11
9
 
Administrator and Receiver
 
13
10
 
Scope and Powers of Administrator and Receiver
 
14
11
 
Amounts received
 
15
12
 
Power of attorney
 
15
13
 
Protection of security and further assurance
 
16
14
 
Costs and indemnity
 
16
15
 
Miscellaneous
 
17
16
 
Demands and notices
 
17
17
 
Assignment and transfer
 
18
18
 
Release of Security
 
18
19
 
Governing law and enforcement
 
18
20
 
Counterparts
 
19
Schedule 1 the beneficiaries
  20
Schedule 2 Properties
  21
Schedule 3 Securities
  22

 
 
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DEBENTURE
 
DATE                                                                2014
 
PARTIES
 
(1)  
MUST HAVE LIMITED incorporated in England and Wales with company number 05101019
whose registered office is at Unit 14, Dale Street Industrial Estate, Radcliffe,
Manchester M26 1AD  (the "Chargor");

 
(2)  
                                         as security agent and trustee for the
Beneficiaries (the "Security Trustee").

 
IT IS AGREED as follows:
 
1.  
DEFINITIONS AND INTERPRETATION

 
1.1  
Definitions

 
In this Deed, unless the context otherwise requires:
 
Accounts: means all accounts, and all moneys from time to time standing to the
credit (including any interest thereon) of such accounts and all rights in
relation thereto (including the right to interest), with any bank, financial
institution or other person in any jurisdiction now or at any time hereafter
(and from time to time) owned, operated or held by the Chargor or in which the
Chargor has an interest;
 
Administrator: means a person appointed in accordance with schedule B1 to the
Insolvency Act 1986 to manage the Chargor's affairs, business and property;
 
Beneficiaries: means the Security Trustee and the persons whose names and
addresses are set out in Schedule 1 (each a Beneficiary);
 
Business Day means a day (other than a Saturday or a Sunday) on which commercial
banks are open for general business in the City of London.
 
Charged Assets: means all the assets property and undertaking for the time being
subject to the Security Interests created by this Deed (and references to the
Charged Assets include references to any part of it);
 
Costs: means all present and future costs, charges, expenses and liabilities of
any kind including, without limitation, costs and damages in connection with
litigation, professional fees, disbursements and any value added tax charged on
such costs;
 
Debts: means all book and other debts of any kind whatsoever now or at any time
due, owing or payable to the Chargor or in which the Chargor has an interest and
the proceeds of the same, including the benefit of any judgement or order to pay
a sum of money, and the benefit of all rights, securities and guarantees of any
nature enjoyed or held by it in relation to the same;
 
Equipment: means all present and future equipment, plant, machinery, tools,
vehicles, furniture, furnishings, fittings, installations, apparatus and other
chattels and tangible moveable property now or at any time hereafter (and from
time to time) owned by the Chargor, and any part thereof, together with all
spare parts, replacements, modifications and additions and the benefit of all
contracts and warranties relating to the same;
 
Event of Default: means:
 
(i)  
if any of the Secured Obligations are not paid or discharged when the same ought
to be paid or discharged by the Chargor (whether at scheduled maturity or by
acceleration or otherwise as the case may be);

 
(ii)  
if any step is taken (including, without limitation, the making of an
application or the giving of any notice) by the Company or by any other person
to appoint an administrator in respect of the Company;

 
(iii)  
if any step is taken (including, without limitation, the making of an
application or the giving of any notice) by the Company or any other person to
wind up or dissolve the Company or to appoint a liquidator, trustee, receiver,
administrative receiver or similar officer to the Company or any part of its
undertaking or assets; and

 
 
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(iv)  
the making of a request by the Company for the appointment of a Receiver or
administrator.

 
Excluded Property: means each leasehold property held by the Chargor under a
lease which either precludes absolutely, or requires consent of a third party
to, the creation of a Security Interest over the Chargor's leasehold interest in
that property;
 
Finance Documents: means the Guarantee and this Deed;
 
Financial Collateral: shall have the meaning given to that expression in the
Financial Collateral Regulations;
 
Financial Collateral Regulations: means the Financial Collateral Arrangements
(No. 2) Regulations 2003;
 
Floating Charge Assets: means all the assets property and undertaking for the
time being subject to the floating charge created by this Deed (and references
to the Floating Charge Assets include references to any part of it);
 
Goodwill: means all goodwill now or at any time hereafter (and from time to
time) of or in the Chargor;
 
Guarantee: means the guarantee dated the date of this Deed and made between (1)
the Chargor and (2) the Beneficiaries (as therein defined) pursuant to which the
Chargor guarantees certain of the obligations of Victory Electronic Cigarettes
Corporation;
 
Insurance Policies: means all contracts and policies of insurance or assurance
effected or maintained by the Chargor from time to time or in which the Chargor
has an interest (including without limitation, insurances relating to the
Properties or the Equipment) and all moneys payable under or pursuant to such
policies and all rights and interests in such contracts and policies including
the right to the refund of any premium;
 
Intellectual Property: means the Chargor's present and future patents, rights to
inventions, copyright and related rights, trade marks, business names and domain
names, rights in get-up, goodwill and the right to sue for passing off, rights
in designs, database rights, rights to use, and protect the confidentiality of,
confidential information (including know-how), and all other intellectual
property rights, in each case whether registered or unregistered and including
all applications and rights to apply for and be granted, renewals or extensions
of, and rights to claim priority from, such rights and all similar or equivalent
rights or forms of protection which subsist or will subsist now or in the future
in any part of the world, together with all fees, royalties and other rights
derived from, or incidental to, these rights.
 
Intercreditor Deed: means the intercreditor deed between, amongst others, (1)
the Chargor; (2) the Beneficiaries; and (3) [                   ] dated on or
about the date of this Deed;
 
LPA: means the Law of Property Act 1925;
 
Permitted Security means:
 
(a)  
the Senior Security;

 
(b)  
any lien arising by operation of law and in the ordinary course of trading and
not as a result of any default or omission by any member of the Chargor; and

 
(c)  
any Security Interest arising under any retention of title, hire purchase or
conditional sale arrangement or arrangements having similar effect in respect of
goods supplied to the Chargor in the ordinary course of trading and on the
supplier's standard or usual terms and not arising as a result of any default or
omission by the Chargor;

 
Properties: means all estates or interests in any freehold and leasehold
properties (whether registered or unregistered) and all commonhold or other
immoveable properties now or at any time hereafter (and from time to time) owned
by the Chargor wherever situated and all buildings, structures and fixtures and
the proceeds of sale of all or any part thereof including (without limitation)
the properties which are briefly described in Schedule 1 (Properties);
 
 
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Property Interests: means all interests in or over the Properties and all
rights, licences, guarantees, rents, deposits, contracts, covenants and
warranties relating to the Properties, in each case, now or at any time
hereafter (and from time to time) owned or held by the Chargor;
 
Receiver: means a person appointed by the Security Trustee to be a receiver or
receiver and manager or (if permitted by law) an administrative receiver of all
or any part of the Charged Assets of the Chargor;
 
Rental Income: means the aggregate of all amounts payable to or for the account
of the Chargor in connection with the letting of all or part of a Property;
 
Secured Obligations: means all present and future moneys, obligations and
liabilities owed by the Chargor to the Beneficiaries under the Finance Documents
(whether actual or contingent and whether owed jointly or severally, as
principal or surety and/or in any other capacity whatsoever);
 
Securities: means all stocks, shares, loan capital, securities, bonds and
investments of any kind whatsoever now or at any time hereafter (and from time
to time) owned by the Chargor, or in which the Chargor has an interest, together
with all allotments offered or arising in respect thereof or incidental thereto
and all stocks, shares, loan capital, securities, bonds, investments, rights,
income, money or property accruing, deriving, offered or paid from time to time
by way of dividend, distribution, interest, exchange, capital reorganisation,
conversion, redemption, bonus, rights, preference, option or otherwise in
respect thereof (including the securities which are briefly described in
Schedule 3 (Securities));
 
Security Financial Collateral Arrangement: shall have the meaning given to that
expression in the Financial Collateral Regulations;
 
Security Interest:  means any mortgage, charge (whether fixed or floating, legal
or equitable), pledge, lien, assignment by way of security or other security
interest securing any obligation of any person or any other agreement or
arrangement having a similar effect;
 
Security Period: means the period starting on the date of this Deed and ending
on the date on which the Secured Obligations have been unconditionally and
irrevocably paid and discharged in full and no further Secured Obligations are
capable of being outstanding;
 
Senior Security: means the debenture between (1) the Chargor; and (2)
[                             ] dated on or about the date of this Deed; and
 
Uncalled Capital: means all the uncalled capital now or at any time hereafter
(and from time to time) of the Chargor.
 
1.2  
Construction

 
1.2.1  
In this Deed (unless the context requires otherwise) any reference to:

 
(a)  
the Chargor, the Security Trustee, any Administrator or Receiver or any other
person shall be construed so as to include their successors in title, permitted
assigns, permitted transferees and (in the case of any Administrator or
Receiver) lawful substitutes and/or replacements;

 
(b)  
an "amendment" includes a supplement, restatement, variation, novation or
re-enactment (and "amended" is to be construed accordingly);

 
(c)  
a Finance Document or any other agreement or instrument (or any specified
provision of it) is a reference to that Finance Document or other agreement or
instrument or provision as amended (however fundamentally, including any
amendment providing for any increase in the amount of any facility or other
liability) from time to time in accordance with the terms of the  relevant
agreement or instrument;

 
(d)  
any reference to the Security Interests constituted by this Deed becoming
"enforceable" shall mean that the Security Interests created under this Deed
have become enforceable under Clause 8.1 (Enforcement events);

 
(e)  
a reference to a person shall include a reference to an individual, firm,
corporation, unincorporated body of persons, or any state or any agency of a
person;

 
(f)  
"including" means "including without limitation";

 
 
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(g)  
"owned" includes having legal or equitable title to or a right to have legal or
equitable title transferred;

 
(h)  
a "law" includes a reference to the common law, any statute, bye-law, regulation
or instrument and any kind of subordinate legislation, and any order,
requirement, code of practice, circular, guidance note, licence, consent or
permission made or given pursuant to any of the foregoing;

 
(i)  
a provision of law is a reference to that provision as amended or re-enacted
from time to time;

 
(j)  
a time of day is a reference to London time;

 
(k)  
any gender includes a reference to the other genders;

 
(l)  
the singular includes a reference to the plural and vice versa; and

 
(m)  
a Clause or Schedule is to a Clause or Schedule (as the case may be) of or to
this Deed.

 
1.2.2  
Clause and Schedule headings are for ease of reference only.

 
1.2.3  
The Schedules form part of this Deed and shall have effect as if set out in full
in the body of this Deed.  Any reference to this Deed includes the Schedules,

 
1.3  
Nature of security over real property

 
A reference in this Deed to any freehold, leasehold or commonhold property
includes:
 
1.3.1  
all buildings and fixtures (including trade and tenant's fixtures) which are at
any time situated on that property;

 
1.3.2  
the proceeds of sale of any part of that property; and

 
1.3.3  
the benefit of any covenants for title given or entered into by any predecessor
in title of the Chargor in respect of that property or any monies paid or
payable in respect of those covenants.

 
1.4  
Rights of the Beneficiaries

 
1.4.1  
All of the representations, covenants and undertakings given by the Chargor
pursuant to this Deed are given to the Security Trustee for the benefit of each
Beneficiary.

 
1.4.2  
All of the security created by the Chargor pursuant to the terms of this Deed is
created in favour of the Security Trustee as security trustee for each of the
Beneficiaries and the Security Trustee holds the benefit of this Deed on trust
for itself and each of the other Beneficiaries.

 
1.5  
Intercreditor Deed

 
The provisions of this Deed are in all respects subject to the provisions of the
Intercreditor Deed and where a provision of this Deed conflicts with a provision
of the Intercreditor Deed then the relevant provision of the Intercreditor Deed
shall prevail.
 
 
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2.  
COVENANT TO PAY

 
The Chargor as principal debtor hereby covenants with the Security Trustee (for
the benefit of itself and the other Beneficiaries) that it will on demand pay
and discharge all Secured Obligations owing or incurred from or by it to the
Beneficiaries when the same become due whether by acceleration or otherwise.
 
3.  
GRANT OF SECURITY

 
3.1  
Fixed security

 
As a continuing security for the payment or discharge of the Secured
Obligations, the Chargor with full title guarantee hereby:
 
3.1.1  
grants to the Security Trustee, a charge by way of legal mortgage over all its
Properties which are listed in Schedule 2 (Properties), if any;

 
3.1.2  
charges to the Security Trustee, by way of fixed charge, all its:

 
(a)  
Properties acquired by it after the date of this Deed;

 
(b)  
Property Interests;

 
(c)  
Equipment;

 
(d)  
Securities (including but not limited to any Securities which are listed in
Schedule 2 (Securities) opposite its name (if any));

 
(e)  
Intellectual Property;

 
(f)  
Accounts;

 
(g)  
Debts;

 
(h)  
Rental Income;

 
(i)  
Goodwill and Uncalled Capital; and

 
3.1.3  
assigns to the Security Trustee by way of security, subject to a proviso for
reassignment on redemption, all of its right, title and interest in and to the
Insurance Policies.

 
3.2  
Floating Security

 
3.2.1  
Floating Charge

 
As a continuing security for the payment or discharge of the Secured
Obligations, the Chargor with full title guarantee hereby charges to the
Security Trustee, by way of floating charge, all of its undertaking, property,
assets and rights at any time not effectively mortgaged, charged or assigned
pursuant to Clauses 3.1.1 to 3.1.3 inclusive above.
 
 
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3.2.2  
Qualifying floating charge

 
Paragraph 14 of schedule B1 to 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.
 
3.2.3  
Automatic conversion of floating charge

 
The floating charge created by this Deed shall automatically and immediately
(without notice) be converted into a fixed charge over the relevant Charged
Assets if:
 
(a)  
the Chargor creates, or attempts to create, on all or any part of the Charged
Assets a Security Interest other than Permitted Security without the prior
written consent of the Security Trustee; or

 
(b)  
a receiver is appointed over all or any of the Charged Assets that is subject to
the floating charge; or

 
(c)  
any person levies (or attempts to levy) any distress, attachment, execution or
other process against all or any part of the Charged Assets; or

 
(d)  
the Security Trustee receives notice of the appointment of, or a proposal or an
intention to appoint, an administrator of the Chargor.

 
3.2.4  
Conversion of floating charge by notice

 
Notwithstanding anything express or implied in this Deed, if an Event of Default
has occurred the Security Trustee may at any time thereafter, by notice to the
Chargor, convert the floating charge created by this Deed with immediate effect
into a fixed charge over all or any of the Floating Charge Assets of the Chargor
specified in such notice (but without prejudice to the Security Trustee's rights
to serve a notice in respect of any other Floating Charge Assets and any other
rights of the Security Trustee whatsoever).
 
3.2.5  
Assets acquired after any floating charge conversion

 
Any asset acquired by the Chargor after any conversion of the floating charge
created under this Deed into a fixed charge which but for such conversion would
be subject to a floating charge shall, (unless the Security Trustee confirms in
writing to the contrary) be charged to the Security Trustee by way of fixed
charge.
 
3.2.6  
Reconversion of fixed charge assets into floating charge assets

 
The Security Trustee may at any time after any conversion of the floating charge
created under this Deed over any Charged Assets into a fixed charge reconvert
such fixed charge into a floating charge by notice to the Chargor.
 
3.3  
Leasehold security restrictions

 
3.3.1  
Subject to clauses 3.3.2 and 3.3.3 the security created by clause 3.1 and 3.2
shall not apply to an Excluded Property.

 
3.3.2  
In relation to each Excluded Property, the Chargor undertakes to:

 
(a)  
apply for the relevant consent or waiver of prohibition written 5 Business Days
of the date of this Deed and use its reasonable endeavours to obtain that
consent or waiver of prohibition as soon as possible;

 
(b)  
keep the Security Trustee informed of its progress in obtaining such consent or
waiver; and

 
(c)  
immediately on receipt of such consent or waiver, provide the Security Trustee
with a copy of that consent or waiver.

 
 
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3.3.3  
Immediately on receipt by the Chargor of the relevant consent or waiver, that
Excluded Property shall become the subject of a mortgage or charge (as
appropriate) pursuant to clause 3.1 or 3.2 (as appropriate).

 
4.  
RESTRICTIONS ON DEALING

 
4.1  
Negative pledge and restriction on disposal

 
The Chargor hereby covenants with the Security Trustee that it will not at any
time except with the prior written consent of the Security Trustee:
 
4.1.1  
create or purport to create or permit to subsist any Security Interest on or in
relation to the Charged Assets other than the Security Interests created by this
Deed and the Permitted Security; or

 
4.1.2  
enter into a single transaction or a series of transactions (whether related or
not) and whether voluntary or involuntary to sell, lease, transfer, factor,
surrender or otherwise dispose of or cease to exercise control of any interest
in any Charged Assets which are charged by way of legal mortgage or fixed charge
under this Deed.

 
5.  
POSITIVE COVENANTS

 
5.1  
Maintenance and Insurance

 
The Chargor hereby covenants with the Security Trustee that it will:
 
5.1.1  
keep the Charged Assets in good and substantial repair and condition (fair wear
and tear accepted) and not do, or permit to be done, any act or thing that would
or might jeopardise or otherwise prejudice the Security held by the Security
Trustee or the effectiveness of the security created by this Deed;

 
5.1.2  
maintain insurances on and in relation to the Charged Assets against those risks
and to the extent as is usual for companies carrying on the same or
substantially similar business as the Chargor with reputable independent
insurance companies or underwriters;

 
5.1.3  
promptly pay all taxes, fees, licence duties, registration charges, insurance
premiums and other outgoings in respect of the Charged Assets; and

 
5.1.4  
at the request of the Security Trustee, produce to or deposit with the Security
Trustee copies of all Insurance Policies and copies of the receipts for all
premiums and other payments necessary for effecting and keeping up the Insurance
Policies.

 
5.1.5  
at all times comply with the terms of this debenture;

 
5.1.6  
comply in all material respects with the terms of all applicable laws and
regulations including (without limitation) all environmental laws, legislation
relating to public health, town & country planning, control and handling of
hazardous substances or waste, fire precautions and health and safety at work;

 
5.1.7  
promptly notify the Security Trustee of the acquisition by the Company of any
estate or interest in any freehold or leasehold property;

 
5.1.8  
deposit with the Security Trustee all deeds, certificates and documents of title
relating to the Charged Assets or any part thereof charged by this debenture;

 
5.1.9  
promptly pay or cause to be paid and indemnify the Security Trustee and any
Receiver against all present and future rent, rates, taxes, duties, charges,
assessments, impositions and outgoings whatsoever now or at any time in the
future payable in respect of any of its properties (or any part thereof) or by
the owner or occupier thereof;

 
 
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5.1.10  
not make any structural or material alteration to or to the user of any of its
properties or do or permit to be done any act, matter or thing where to do so
would have a material and adverse effect on the value of any of its properties
or on the marketability of any of such properties;

 
5.1.11  
not grant any lease of, part with possession or share occupation of, the whole
or any part of any of its properties or confer any licence, right or interest to
occupy or grant any licence or permission to assign, under-let or part with
possession of the same in any way which is likely to have a material and adverse
effect upon the value of any of such properties;

 
5.1.12  
not vary, surrender, cancel or dispose of, or permit to be forfeit, any
leasehold interest in any of its properties;

 
5.1.13  
notify the Security Trustee immediately in the event of any creditor executing
diligence against the Company or any distress or execution is levied or enforced
against the Company or any third party debt order or freezing order is made and
served on the  Company;

 
5.1.14  
notify the Security Trustee immediately if any steps (including, without
limitation, the making of any application or the giving of any notice) are taken
by any person (including, without limitation, the Company) in relation to the
administration, receivership, winding-up or dissolution of the Company;

 
5.1.15  
not to allow any person other than itself to be registered under the Land
Registration Act 1925 or Land Registration Act 2002 (as appropriate) as
proprietor of any of its properties (or any part thereof) or create or permit to
arise any overriding interest (as specified in Section 70(1) of the Land
Registration Act 1925 or as specified in Schedule 1 or Schedule 3 to the Land
Registration Act 2002) affecting any such property; and

 
5.1.16  
not do or cause or permit to be done anything which may in any way depreciate,
jeopardise or otherwise prejudice the value or marketability of any of its
Assets.

 
5.2  
Properties

 
The Chargor hereby covenants with the Security Trustee that it will
 
5.2.1  
observe and perform all covenants, stipulations and conditions to which each
Property is now or may hereafter be subjected; and

 
5.2.2  
perform and observe all covenants and conditions on its part contained in any
lease, agreement for lease, licence or other agreement under which any Property
or part of any Property is held,

 
where a failure to do so has or is reasonably likely to have a material adverse
effect on the validity or enforceability of, or the effectiveness or ranking of
any Security Interests granted or purporting to be granted pursuant to this
Deed.
 
5.3  
Book Debts

 
The Chargor shall collect in and realise all Debts in the ordinary course of its
business in a proper and efficient manner.
 
5.4  
Intellectual Property

 
The Chargor shall:
 
5.4.1  
observe and perform all material covenants and stipulations form time to time
affecting the Intellectual Property or the way it is used or enjoyed;

 
5.4.2  
make all such payments, carry out and seek all registrations, grants or renewals
of the Intellectual Property, or of any licences or other interests affecting
such Intellectual Property;

 
5.4.3  
generally take all such steps necessary to preserve, maintain and renew when
necessary all of the Intellectual Property, present or future,

 
 
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where a failure to do so has or is reasonably likely to have a material adverse
effect on the validity or enforceability of, or the effectiveness or ranking of
any Security Interests granted or purporting to be granted pursuant to this
Deed.
 
5.5  
Provisions relating to the Securities

 
Subject to the Senior Security, the Security Trustee may at any time after the
occurrence of an Event of Default cause any or all of the Securities to be
registered in the name of the Security Trustee or its nominee.  The Chargor
agrees promptly to execute and deliver all such transfers and other documents
and do all such things as may be necessary or desirable to achieve such
registration.
 
6.  
REPRESENTATIONS AND WARRANTIES

 
The Chargor represents and warrants to the Security Trustee as follows:
 
6.1.1  
it is the legal and beneficial owner of the Charged Assets;

 
6.1.2  
the Charged Assets are free from any Security Interests other than the Security
Interests created by this Deed and the Permitted Security; and

 
6.1.3  
all authorisations required for the Chargor's entry into this Deed have been
obtained and are in full force and effect.

 
7.  
POWER TO REMEDY

 
If the Chargor is at any time in breach of any of its obligations contained in
this Deed, the Security Trustee shall be entitled (but shall not be bound) to
remedy such breach and the Chargor hereby irrevocably authorises the Security
Trustee and its agents to do all such things necessary or desirable in
connection therewith.  The Chargor shall be liable to the Security Trustee for
the expenses of the Security Trustee in so doing.  The rights of the Security
Trustee contained in this Clause 7 are without prejudice to any other rights of
the Security Trustee hereunder.  The exercise by the Security Trustee of its
rights under this Clause shall not make the Security Trustee liable to account
as a mortgagee in possession.
 
8.  
ENFORCEMENT

 
8.1  
Enforcement events

 
The security constituted by this Deed shall be immediately enforceable on the
occurrence of an Event of Default, and thereupon and at any time thereafter,
without prejudice to any other rights of the Security Trustee, the powers of
sale under the LPA and all other powers of the Security Trustee shall
immediately be exercisable and the Security Trustee may in its absolute
discretion enforce all or any part of the security created by this Deed as it
sees fit.
 
8.2  
Statutory power of sale

 
The statutory power of sale shall arise on the execution of this Deed (and the
Secured Obligations shall be deemed to have become due and payable for that
purpose) but shall not be exercised by the Security Trustee until the security
constituted by this Deed has become enforceable.
 
8.3  
Extension of statutory powers

 
8.3.1  
Any restriction imposed by law on the power of sale (including under section 103
of the LPA) or the right of a mortgagee to consolidate mortgages (including
under section 93 of the LPA) does not apply to the security constituted by this
Deed and the Security Trustee or any Receiver shall have the right to
consolidate all or any of the security constituted by this Deed with any other
Security Interests in existence at any time and to make any applications to the
Land Registry in support of the same.

 
8.3.2  
Any powers of leasing conferred on the Security Trustee or any Receiver by law
are extended so as to authorise the Security Trustee or any Receiver to lease,
make agreements for leases, accept surrenders of leases and grant options as the
Security Trustee or Receiver may think fit and without the need to comply with
any restrictions conferred by law (including under section 99 or 100 of the
LPA).

 
 
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8.4  
No obligation to enquire

 
No person dealing with the Security Trustee, any Administrator or any Receiver
appointed hereunder, or its agents or brokers, shall be concerned to enquire:
 
8.4.1  
whether the security constituted by this Deed has become enforceable;

 
8.4.2  
whether any power exercised or purported to be exercised has become exercisable;

 
8.4.3  
whether any money remains due under the Finance Documents;

 
8.4.4  
as to the necessity or expediency of the stipulations and conditions subject to
which any sale of any Charged Assets shall be made, or otherwise as to the
propriety or regularity of any sale of any of the Charged Assets; or

 
8.4.5  
how any money paid to the Security Trustee, Administrator or Receiver, or its
agents or brokers is to be applied.

 
8.5  
No liability as mortgagee in possession

 
None of the Security Trustee, any Administrator or any Receiver shall be liable
to account as mortgagee in possession in respect of all or any of the Charged
Assets.
 
8.6  
Redemption of Prior Security Interests

 
At any time after the security constituted by this Deed shall have become
enforceable the Security Trustee may:
 
8.6.1  
redeem any prior Security Interests;

 
8.6.2  
procure the transfer thereof to itself; and/or

 
8.6.3  
may settle and pass the accounts of the prior encumbrancer and any account so
settled and passed shall be conclusive and binding on the Chargor and all monies
paid by the Security Trustee to the prior encumbrancer in accordance with such
accounts shall as from such payment be due from the Chargor to the Security
Trustee on current account and shall bear interest and be secured as part of the
Secured Obligations.

 
8.7  
Right of appropriation

 
8.7.1  
To the extent that:

 
(a)  
the Charged Assets constitute Financial Collateral; and

 
(b)  
this Deed and the obligations or the Chargor hereunder constitute a Security
Financial Collateral Arrangement,

 
the Security Trustee shall have the right, at any time after the security
constituted by this Deed has become enforceable, to appropriate all or any of
those Charged Assets in or towards payment or discharge of the Secured
Obligations in such order as the Security Trustee may, in its absolute
discretion, determine.
 
 
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8.7.2  
The value of any Charged Assets appropriated in accordance with this clause
shall be the price of such Charged Assets at the time the right of appropriation
is exercised as listed on any recognised market index, or determined by such
other method as the Security Trustee may select (including independent
valuation).

 
8.7.3  
The Chargor agrees that the methods of valuation provided for in this clause are
commercially reasonable for the purposes of the Financial Collateral
Regulations.

 
9.  
ADMINISTRATOR AND RECEIVER

 
9.1  
Appointment of Administrator or Receiver

 
At any time after:
 
9.1.1  
the security constituted by this Deed becomes enforceable;

 
9.1.2  
any corporate action or any other steps are taken or legal proceedings started
by or in respect of the Chargor with a view to the appointment of an
Administrator; or

 
9.1.3  
at the request of the Chargor,

 
the Security Trustee may without further notice, under seal or by writing under
hand of a duly authorised officer of the Security Trustee:
 
(a)  
appoint any person or persons to be an Administrator of the Chargor; or

 
(b)  
appoint any person or persons to be a Receiver of all or any part of the Charged
Assets of the Chargor; and

 
(c)  
(subject to Section 45 of the Insolvency Act 1986) from time to time remove any
person appointed to be Receiver and appoint another in his place.

 
9.2  
More than one appointment

 
Where more than one person is appointed Administrator or Receiver, they will
have power to act separately (unless the appointment by the Security Trustee
specifies to the contrary).
 
9.3  
Additional powers

 
9.3.1  
The powers of appointing an Administrator or a Receiver conferred by this Deed
shall be in addition to all statutory and other powers of the Security Trustee
under the Insolvency Act 1986 and the LPA or otherwise and shall be exercisable
without the restrictions contained in Section 109 of the LPA or otherwise.

 
9.3.2  
The power to appoint an Administrator or a Receiver (whether conferred by this
Deed or by statute) shall be and remain exercisable by the Security Trustee
notwithstanding any prior appointment in respect of all or any part of the
Charged Assets.

 
9.4  
Agent of the Chargor

 
9.4.1  
Any Administrator or Receiver shall be the agent of the Chargor and the Chargor
shall be solely responsible for his acts and remuneration as well as for any
defaults committed by him.

 
9.4.2  
The Security Trustee will not incur any liability (either to the Chargor or to
any other person) by reason of the appointment of an Administrator or Receiver.

 
 
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10.  
SCOPE AND POWERS OF ADMINISTRATOR AND RECEIVER

 
10.1  
Powers of Administrators and Receiver

 
Any Administrator or Receiver shall in addition to the powers conferred on him
by the LPA and (if applicable) the Insolvency Act 1986 have power to do all such
acts and things as an absolute owner could do in the management of such of the
Charged Assets over which he is appointed and in particular:
 
10.1.1  
to undertake or complete any works of repair, building or development on the
Property;

 
10.1.2  
to grant or to accept surrenders of any leases or tenancies affecting the
Property upon such terms and subject to such conditions as he thinks fit;

 
10.1.3  
to provide services and employ or engage such managers, contractors and other
personnel and professional advisors on such terms as he deems expedient;

 
10.1.4  
to make such elections for value added tax purposes as he thinks fit;

 
10.1.5  
to charge and receive such sum by way of remuneration (in addition to all costs,
charges and expenses incurred by him) as the Security Trustee may prescribe or
agree with him;

 
10.1.6  
to collect and get in such Charged Assets or any part thereof and for that
purpose to make such demands and take any proceedings as may seem expedient and
to take possession of such Charged Assets with like rights;

 
10.1.7  
to carry on, manage, develop, reconstruct, amalgamate or diversify or concur in
carrying on, managing, developing, reconstructing, amalgamating or diversifying
the business of the Chargor;

 
10.1.8  
to grant options and licences over all or any part of such Charged Assets, sell
or concur in selling, assign or concur in assigning, lease or concur in leasing
and accept or concur in accepting surrenders of leases of, all or any of such
Charged Assets in such manner and generally on such terms and conditions as he
thinks fit (fixtures and plant and machinery may be severed and sold separately
from the premises in which they are contained without the consent of the
Chargor) and to carry any such sale, assignment, leasing or surrender into
effect.  Any such sale may be for such consideration as he shall think fit and
he may promote or concur in promoting a company to purchase the property to be
sold;

 
10.1.9  
to sell and assign all or any of the Debts in respect of which he is appointed
in such manner and generally on such terms and conditions as he thinks fit;

 
10.1.10  
to make any arrangement, settlement or compromise between the Chargor and any
other person which he may think expedient;

 
10.1.11  
to make and effect such substitutions of or improvements to the Equipment as he
may think expedient;

 
10.1.12  
to make calls conditionally or unconditionally on the members of the Chargor in
respect of the uncalled capital with such and the same powers for that purpose
and for the purpose of enforcing payments of any calls so made as are conferred
by the Articles of Association of the Chargor on its directors in respect of
calls authorised to be made by them;

 
10.1.13  
to appoint managers, officers, servants, workmen and agents for the aforesaid
purposes at such salaries and for such periods and on such terms as he may
determine;

 
10.1.14  
if he thinks fit, but without prejudice to the indemnity contained in Clause 14
(Costs and Indemnity), to effect with any insurer any policy or policies of
insurance either in lieu or satisfaction of or in addition to such indemnity;

 
10.1.15  
to exercise all powers provided for in the LPA in the same way as if he had been
duly appointed thereunder and to exercise all powers provided for an
administrative receiver in Schedule 1 to the Insolvency Act 1986;

 
10.1.16  
for any of the purposes authorised by this Clause to raise money by borrowing
from the Security Trustee or from any other person on the security of all or any
of the Charged Assets in respect of which he is appointed upon such terms
(including, if the Security Trustee shall consent, terms under which such
security ranks in priority to this Deed) as he shall think fit;

 
 
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10.1.17  
to redeem any prior Security Interest and to settle and pass the accounts to
which the Security Interest relates and any accounts so settled and passed will
be conclusive and binding on the Chargor and the moneys so paid will be deemed
to be an expense properly incurred by him;

 
10.1.18  
to acquire additional assets as necessary to enhance the value of the Charged
Assets; and

 
10.1.19  
to do all such other acts and things as he may consider to be incidental or
conducive to any of the matters or powers aforesaid or which he lawfully may or
can do as agent for the Chargor.

 
10.2  
Scope of powers

 
The Administrator or Receiver may exercise any of the above powers on behalf of
the Chargor or on his own behalf or in the case of the power contained in Clause
10.1.12 on behalf of the directors of the Chargor.
 
11.  
AMOUNTS RECEIVED

 
11.1  
Application of proceeds

 
The Receiver shall apply all monies received by him:
 
11.1.1  
first in paying all rents, taxes, rates and outgoings affecting any Charged
Assets;

 
11.1.2  
secondly in paying all costs, charges and expenses of and incidental to his
appointment and the exercise of his powers and all outgoings paid by him;

 
11.1.3  
thirdly in paying his remuneration (as agreed between him and the Security
Trustee);

 
11.1.4  
fourthly in or towards discharge of the Secured Obligations; and

 
11.1.5  
finally in paying any surplus to the Chargor or any other person entitled to it.

 
11.2  
Section 109(8) Law of Property Act 1925

 
Neither the Security Trustee nor any Receiver or Administrator shall be bound
(whether by virtue of Section 109(8) of the LPA, which is hereby varied
accordingly, or otherwise) to pay or appropriate any receipt or payment first
towards interest rather than principal or otherwise in any particular order as
between any of the Secured Obligations.
 
12.  
POWER OF ATTORNEY

 
12.1  
Power of attorney

 
The Chargor hereby by way of security irrevocably appoints the Security Trustee
and (jointly and severally) each and every Administrator or Receiver of this
Deed to be the attorney of the Chargor and in its name and on its behalf and as
its act and deed or otherwise at any time after the security constituted by this
Deed becomes enforceable, to sign, execute, seal, deliver, complete any blanks
in and otherwise perfect any deed, transfer, assurance, agreement, instrument or
act which such Administrator or Receiver or the Security Trustee may consider
expedient in the exercise of any of his or its powers or in respect of the
Chargor's obligations under this Deed.  The power of attorney hereby granted is
to secure the performance of obligations owed to the donees within the meaning
of the Powers of Attorney Act 1971.
 
 
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12.2  
Ratification

 
The Chargor ratifies and confirms, and agrees to ratify and confirm, anything
that any of its attorneys may do in the proper and lawful exercise, or purported
exercise, of all or any of the rights, powers, authorities and discretions
referred to in Clause 12.1 (Power of Attorney).
 
13.  
PROTECTION OF SECURITY AND FURTHER ASSURANCE

 
13.1  
Independent security

 
This Deed shall be in addition to and independent of every other security or
guarantee which the Security Trustee may at any time hold for any of the Secured
Obligations and it is hereby declared that no prior security held by the
Security Trustee over the whole or any part of the Charged Assets shall merge in
the security created by this Deed.
 
13.2  
Continuing security

 
This Deed shall remain in full force and effect as a continuing security for the
Secured Obligations, notwithstanding any settlement of account or intermediate
payment or discharge in whole or in part.
 
13.3  
Rights Cumulative

 
No failure to exercise, nor delay in exercising, on the part of the Security
Trustee, any right or remedy under this Deed 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 right or remedy. The rights and
remedies of the Security Trustee provided in this Deed are cumulative and not
exclusive of any rights or remedies provided by law.
 
13.4  
Further assurance

 
The Chargor must, promptly upon request by the Security Trustee or any Receiver
or Administrator, at its own expense, take whatever action the Security Trustee
or a Receiver or Administrator may reasonably require for:
 
13.4.1  
creating, perfecting or protecting any security intended to be created by or
pursuant to this Deed;

 
13.4.2  
facilitating the realisation of any Charged Asset at any time after the security
constituted by this Deed has become enforceable; or

 
13.4.3  
exercising any right, power or discretion conferred on the Security Trustee, or
any Receiver or any Administrator or any of their respective delegates or
sub-delegates in respect of any Charged Asset.

 
14.  
COSTS AND INDEMNITY

 
14.1  
Costs

 
The Chargor shall pay to, or reimburse, the Security Trustee and any Receiver on
demand, on a full indemnity basis, all Costs incurred by the Security Trustee or
any Receiver in connection with:
 
14.1.1  
protecting, perfecting, preserving, enforcing or discharging (or attempting to
do so) any of the Security Trustee's or Receiver's rights under this Deed;

 
14.1.2  
suing for, or recovering, any of the Secured Obligations,

 
(including, without limitation, the Costs of any proceedings in connection with
this debenture or the Secured Obligations) and the Costs shall form part of the
Secured Obligations.
 
 
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14.2  
Indemnity

 
The Security Trustee and any Receiver, and their respective employees and
agents, shall be indemnified on a full indemnity basis in respect of all
actions, liabilities and Costs incurred or suffered in or as a result of any
default by the Chargor in performing any of its obligations under this Deed.
 
15.  
MISCELLANEOUS

 
15.1  
Severability

 
If any of the provisions of this Deed is or becomes invalid or unenforceable,
the validity and enforceability of the remaining provisions shall not be
affected or impaired thereby.
 
15.2  
Third party rights

 
A third party (being any person other than the Chargor and the Security Trustee,
the Beneficiaries and their permitted successors and assigns) 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
 
15.3  
Perpetuity period

 
The perpetuity period applicable to all trusts declared by this Deed shall be
125 years.
 
15.4  
Trustee Act 2000

 
The Chargor and the Security Trustee agree that the Security Trustee shall not
be subject to the duty of care imposed on the trustees by the Trustee Act 2000.
 
16.  
DEMANDS AND NOTICES

 
16.1  
Form of notice

 
Any notice or other communication given or made in connection with this
Debenture must be in writing and in English.
 
16.2  
Addresses

 
Any demand for payment and any other demand, notice, consent or communication
hereunder must be served by delivering it personally or sending it by pre-paid
recorded or special delivery (or pre-paid international recorded airmail if
being sent to or from a place outside the United Kingdom) to the address of the
Chargor or the Security Trustee (as appropriate) set out on page 1 (or any other
address as may be notified by at least five Business Days' notice in writing
from time to time by the relevant party to the other parties in accordance with
this Clause 16).
 
16.3  
Delivery

 
Provided that it has been correctly addressed as set out in clause 16.2, the
notice or communication will (in the absence of earlier receipt) be deemed to
have been received:
 
16.3.1  
if delivered personally, at the time of delivery; and

 
16.3.2  
in the case of pre-paid first class post, two Business Days after the date of
posting or in the case of airmail five Business Days after the date of posting,

 
provided that if receipt would under this clause be deemed to occur outside 9.30
a.m. to 5.30 p.m. (London time) on a Business Day (Working Hours) the notice or
communication will instead be deemed to have been received at the start of the
next period of Working Hours.
 
 
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17.  
ASSIGNMENT AND TRANSFER

 
17.1  
Assignment by Security Trustee

 
The Security Trustee may not assign any of its rights or transfer any of its
obligations under this Deed or enter into any transaction which would result in
any of these rights or obligations passing to another person.
 
17.2  
Assignment by the Chargor

 
The Chargor may not assign any of its rights or transfer any of its obligations
under this Deed or enter into any transaction which would result in any of these
rights or obligations passing to another person.
 
18.  
RELEASE OF SECURITY

 
18.1  
Release

 
Subject to Clause 18.3 (Discharge conditional), upon the expiry of the Security
Period the Security Trustee shall at the request and cost of the Chargor, take
whatever action is necessary to release the Charged Assets from the security
constituted by this Deed.
 
18.2  
Avoidance of payments and reinstatement

 
If any payment by the Chargor or any discharge given by the Security Trustee
(whether in respect of the obligations of the Chargor or any security for those
obligations or otherwise) is (a) capable of being avoided or reduced or (b)
avoided or reduced in each case as a result of insolvency or any similar event:
 
18.2.1  
the liability of the Chargor will continue as if the payment, discharge,
avoidance or reduction had not occurred;

 
18.2.2  
the Security Trustee will be entitled to recover the value or amount of that
security or payment from the Chargor, as if the payment, discharge, avoidance or
reduction had not occurred; and

 
18.2.3  
the Security Trustee shall be entitled to enforce this Deed subsequently as if
such payment, discharge, avoidance or reduction had not occurred.

 
18.3  
Discharge conditional

 
Any release, discharge or settlement between the Chargor and the Security
Trustee shall be deemed conditional upon no payment or security received by the
Security Trustee in respect of the Secured Obligations being avoided or reduced
or ordered to be refunded pursuant to any provision of any enactment relating to
insolvency, bankruptcy, winding-up, administration or receivership and,
notwithstanding any such release, discharge or settlement:
 
18.3.1  
the Security Trustee or its nominee shall be at liberty to retain this Deed and
the security created by or pursuant to this Deed, including all certificates and
documents relating to the Charged Assets or any part thereof, for such period as
the Security Trustee shall deem necessary to provide the Security Trustee with
security against any such avoidance or reduction or order for refund; and

 
18.3.2  
the Security Trustee shall be entitled to recover the value or amount of such
security or payment from the Chargor subsequently as if such settlement,
discharge or release had not occurred and the Chargor agrees with the Security
Trustee accordingly and charges the Charged Assets and the proceeds of sale
thereof with any liability under this Clause, whether actual or contingent.

 
19.  
GOVERNING LAW AND ENFORCEMENT

 
19.1  
Governing law

 
This Deed and any non-contractual obligations arising out of or in connection
with it shall be governed by and construed in accordance with English law.
 
 
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19.2  
Enforcement

 
19.2.1  
The courts of England have exclusive jurisdiction to settle any dispute arising
out of or in connection with this Deed (including a dispute regarding the
existence, validity or termination of this Deed) (a Dispute).

 
19.2.2  
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.

 
20.  
COUNTERPARTS

 
This Deed may be executed and delivered in any number of counterparts, each of
which is an original and which, together, have the same effect as if each party
had signed the same document.
 
In Witness whereof this Deed has been executed by the parties and is intended to
be and is hereby delivered as a deed the day and year first above written.
 
.
 
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SCHEDULE 1
 
THE BENEFICIARIES
 
 
 
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SCHEDULE 2
 
PROPERTIES
 
(1)  
Lease of Unit 14 Dale Industrial Estate, Phoenix Way, Radcliffe, Manchester
between (1) Max Industrial LP and Max Industrial Nominee Limited as Landlord and
(2) Must Have Limited as Tenant for a term of 5 years from 16 November 2010.

 
(2)  
Sub-Sub-Underlease of Unit F5 MetroCentre, Swalwell, Gateshead, Tyne and Wear,
between (1) MetroCentre (Nominee No. 1) Limited and MetroCentre Nominee No. 2)
Limited as Landlord and (2) Must Have Limited as Tenant for a term of 5 years
from 28 August 2013.

 

 
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SCHEDULE 3
 
SECURITIES
 
None as at the date of this Deed.
 
SIGNATORIES TO DEED
 
THE CHARGOR
 
EXECUTED as a deed and DELIVERED when dated by MUST HAVE LIMITED acting by a
director in the presence of:
 
Signature
 
 
                                                      
     Director    
Witness signature
   
Name (in BLOCK CAPITALS)
   
Address
       

 
THE SECURITY TRUSTEE
 
SIGNED as a deed by                                              in the presence
of:
Signature
 
Witness signature
 
Name (in BLOCK CAPITALS)
 
Address
     

 

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