Document:

First Supplemental Indenture

 Exhibit 4.1 
  

EXECUTION COPY 
  
 FIRST SUPPLEMENTAL INDENTURE 
  
 Dated as of January 17, 2006 
  
 by and between 
  
 MOHAWK INDUSTRIES, INC., 
 as Issuer 
  
 and 
  
 SUNTRUST BANK, 
 as Trustee 
  

  
 $500,000,000 5.75% Senior Notes due 2011

  
 $900,000,000 6.125% Senior Notes due 2016 
  

 TABLE OF CONTENTS 
  

					
	ARTICLE I
	DEFINITIONS
			
	SECTION 1.1.	 	DEFINITIONS	  	2
	ARTICLE II
	ESTABLISHMENT OF SECURITIES
			
	SECTION 2.1.	 	TITLE OF SECURITIES	  	4
	SECTION 2.2.	 	AGGREGATE PRINCIPAL AMOUNT OF NOTES	  	4
	SECTION 2.3.	 	PAYMENT OF PRINCIPAL AND INTEREST ON THE NOTES	  	5
	SECTION 2.4.	 	DENOMINATIONS	  	5
	SECTION 2.5.	 	REDEMPTION	  	5
	SECTION 2.6.	 	SINKING FUND	  	6
	SECTION 2.7.	 	PAYING AGENT	  	6
	SECTION 2.8.	 	LIMITATION ON LIENS	  	6
	SECTION 2.9.	 	LIMITATION ON SALE AND LEASE-BACK TRANSACTIONS	  	7
	SECTION 2.10.	 	DEFEASANCE	  	9
	
	ARTICLE III
	MISCELLANEOUS PROVISIONS
			
	SECTION 3.1.	 	RECITALS BY COMPANY	  	9
	SECTION 3.2.	 	APPLICATION TO NOTES ONLY	  	9
	SECTION 3.3.	 	BENEFITS	  	9
	SECTION 3.4.	 	EFFECTIVE DATE	  	9
	SECTION 3.5.	 	RATIFICATION	  	9
	SECTION 3.6.	 	COUNTERPARTS	  	10
	SECTION 3.7.	 	GOVERNING LAW	  	10

  

 - i - 

 THIS FIRST SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”) is made as of
January 17, 2006, by and between MOHAWK INDUSTRIES, INC., a Delaware corporation (the “Company”), and SUNTRUST BANK, a national banking corporation associated under the laws of the State of Georgia, as Trustee (the
“Trustee”). 
  
 WHEREAS, the Company and the Trustee
entered into that certain Indenture dated as of January 9, 2006 (as supplemented or otherwise modified from time to time, the “Indenture”) which provides for the issuance by the Company from time to time of Securities, in one or more
series as provided therein; 
  
 WHEREAS, the Company has
determined to issue two series of Securities as provided herein; 
  
 WHEREAS, Section 3.1 of the Indenture provides that certain terms and conditions for each series of Securities issued by the Company thereunder may be set forth in an indenture supplemental to the Indenture; 
  
 WHEREAS, Section 11.1(9) of the Indenture provides for the Company and
the Trustee to enter into an indenture supplemental to the Indenture to establish the form or terms of Securities of any series as provided by Sections 2.1 and 3.1 of the Indenture; and 
  
 WHEREAS, all the conditions and requirements necessary to make this
Supplemental Indenture, when duly executed and delivered, a valid and binding agreement in accordance with its terms and for the purposes herein expressed, have been performed and fulfilled. 
  
 NOW, THEREFORE, in consideration of the agreements and obligations set forth
herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 
  
 ARTICLE I 
  
 DEFINITIONS 
  
 SECTION 1.1. DEFINITIONS 
  
 For all purposes of this
Supplemental Indenture, except as otherwise expressly provided for or unless the context otherwise requires: 
  
 (a) Capitalized terms used but not defined herein shall have the respective meanings given them in the Indenture; 
  
 (b) All references herein to Articles and Sections, unless otherwise
specified, refer to the corresponding Articles and Sections of this Supplemental Indenture; and 

 (c) The following terms shall have the indicated definitions and if the definition of any of the
following terms differs from its respective definition set forth in the Indenture, the definition set forth herein shall control: 
  
 “Attributable Debt” means, on the date of any determination, the present value of the obligation of the lessee for Net Rental Payments
during the remaining term of the lease included in a Sale and Lease-Back Transaction, including any period for which such lease has been extended or may, at the option of the lessor, be extended. Such present value shall be calculated using a
discount rate equal to the interest rate set forth or implicit in the terms of such lease or, if not practicable to determine such rate, the weighted average interest rate per annum borne by the Notes on such date of determination, in either case
compounded semi-annually. 
  
 “Business Day”
means any day, other than a Saturday or Sunday, that is not a day on which banking institutions in New York, New York are authorized or obligated by law or executive order to close. 
  
 “Comparable Treasury Issue” means the U.S. Treasury security or securities selected by an Independent
Investment Banker as having a maturity comparable to the remaining term of the applicable series of the Notes to be redeemed that would be used, at the time of selection and in accordance with customary market practice, in pricing new issues of
corporate debt securities of a comparable maturity to the remaining term of such Notes. 
  
 “Comparable Treasury Price” means, with respect to any Redemption Date, 
  
 (a) the average of the bid and asked prices for the Comparable Treasury Issue (expressed as a percentage of its principal amount) on the third Business
Day preceding the Redemption Date, as set forth in the daily statistical release (or any successor release) published by the Federal Reserve Bank of New York and designated “Composite 3:30 p.m. Quotations for U.S. Government Securities,”
or 
  
 (b) if such release (or any successor release) is not
published or does not contain such prices on such Business Day: 
  
 (i) the average of the Reference Treasury Dealer Quotations for that Redemption Date, after excluding the highest and lowest of the Reference Treasury Dealer Quotations, or 
  
 (ii) if the trustee obtains fewer than three Reference
Treasury Dealer Quotations, the average of all Reference Treasury Dealer Quotations so received. 
  
 “Consolidated Net Tangible Assets” means, on the date of any determination, the aggregate amount of assets, less applicable reserves and
other properly deductible items, after deducting from that net amount: 
  
 (a) all current liabilities, and 
  
 (b) all goodwill, trademarks, trade names, patents, unamortized debt-discount and other like intangibles, 
  
 in each case as set forth on the most recently available consolidated balance sheet of the Company and the Consolidated Subsidiaries, in accordance with GAAP. 

 

 2 

 “Funded Debt” means (a) all Debt for money borrowed having a maturity of more than
12 months from the date as of which the determination is made or having a maturity of 12 months or less but by its terms being renewable or extendible beyond 12 months from such date at the option of the borrower (excluding any amount thereof
included in current liabilities) and (b) all rental obligations payable more than 12 months from such date under leases that are capitalized in accordance with GAAP (such rental obligations to be included as Funded Debt at the amount so
capitalized). 
  
 “incur” means to, directly or
indirectly, issue, assume, guaranty, incur, become directly or indirectly liable with respect to (including as a result of an acquisition (by way of merger, consolidation or otherwise)), or otherwise become responsible for, contingently or
otherwise. 
  
 “Independent Investment Banker”
means one of the Reference Treasury Dealers selected by the Trustee after consultation with the Company. 
  
 “Net Proceeds” means, with respect to a Sale and Lease-Back Transaction, the aggregate amount of cash or cash equivalents received by the
Company or a Consolidated Subsidiary, less the sum of all payments, fees, commissions and expenses incurred in connection with such Sale and Lease-Back Transaction, and less the amount (estimated reasonably and in good faith by the Company) of
income, franchise, sales and other applicable taxes required to be paid by the Company or any Consolidated Subsidiary in connection with such Sale and Lease-Back Transaction in the taxable year that such Sale and Lease-Back Transaction is
consummated or in the immediately succeeding taxable year, the computation of which shall take into account the reduction in tax liability resulting from any available operating losses and net operating loss carryovers, tax credits and tax credit
carryforwards, and similar tax attributes. 
  
 “Net Rental
Payments” means, under any lease of any period, the total amount of rent payable by the lessee after excluding amounts required to be paid on account of maintenance and repairs, insurance, taxes, assessments, water rates and similar
charges. 
  
 “Notes” has the meaning specified in
Section 2.1. 
  
 “Principal Property” means
any mill, manufacturing plant, warehouse or other similar facility or any parcel of real estate or group of contiguous parcels of real estate owned or leased by the Company or any Consolidated Subsidiary and the gross book value, without deduction
of any depreciation reserves, of which on the date as of which the determination is being made exceeds 1% of Consolidated Net Tangible Assets. 
  
 “Reference Treasury Dealer” means each of Lehman Brothers Inc. and J.P. Morgan Securities Inc. and their respective successors, unless
any of them ceases to be a primary U.S. Government securities dealer in New York City (a “Primary Treasury Dealer”), in which case the Company will substitute another nationally recognized investment banking firm that is a Primary
Treasury Dealer. 
  
 “Reference Treasury Dealer
Quotations” means, with respect to each Reference Treasury Dealer and any Redemption Date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed as a percentage of its principal
amount) quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day preceding that Redemption Date. 
  

 3 

 “Sale and Lease-Back Transaction” means any arrangement whereby the Company or any of
its Subsidiaries has sold or transferred, or will sell or transfer, property and has or will take back a lease pursuant to which the rental payments are calculated to amortize the purchase price of the property substantially over the useful life of
such property. 
  
 “Treasury Rate” means, with
respect to any Redemption Date, the rate per year equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, calculated on the third Business Day preceding the Redemption Date, assuming a price for the Comparable
Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for that redemption date. 
  
 “2011 Notes” has the meaning specified in Section 2.1. 
  
 “2016 Notes” has the meaning specified in Section 2.1. 
  
 ARTICLE II 
  
 ESTABLISHMENT OF SECURITIES 
  
 The following provisions of this Article II are made pursuant to
Section 3.1 of the Indenture in order to establish and set forth the terms of the series of Securities described in Section 2.1. 
  
 SECTION 2.1. TITLE OF SECURITIES 
  
 There is hereby established a series of Securities designated the “5.75% Senior Notes due 2011” (the “2011 Notes”) and a
series of Securities designated the “6.125% Senior Notes due 2016” (the “2016 Notes”, and together with the 2011 Notes, the “Notes”). 
  
 SECTION 2.2. AGGREGATE PRINCIPAL AMOUNT OF NOTES 
  

(a) There are initially to be authenticated and delivered $500,000,000 principal amount of the 2011 Notes. Such principal amount of the
2011 Notes may be increased from time to time pursuant to Section 3.1 of the Indenture. 
  
 (b) There are initially to be authenticated and delivered $900,000,000 principal amount of the 2016 Notes. Such principal amount of the
2016 Notes may be increased from time to time pursuant to Section 3.1 of the Indenture. 
  
 All Notes of a given series need not be issued at the same time and such series may be reopened at any time, without the consent of any Holder, for
issuances of additional Notes of such series. Any such additional Notes will have the same ranking, interest rate, maturity date, redemption rights and other terms as the applicable series of Notes initially issued and any such additional Notes,
together with the applicable series of Notes initially issued, will constitute a single series of Securities under the Indenture. 
  

 4 

 Nothing contained in this Section 2.2 or elsewhere in this Supplemental Indenture, or in the Notes,
is intended to or shall limit execution by the Company or authentication or delivery by the Trustee of Notes under the circumstances contemplated by Sections 3.4, 3.7, 3.8 and 11.5 of the Indenture. 
  
 The Notes shall be issued in registered form without coupons. The
2011 Notes shall be in substantially the form of Exhibit A hereto and the 2016 Notes shall be in substantially the form of Exhibit B hereto. The form of the Trustee’s certificate of authentication for each
series of Notes shall be in substantially the form set forth in the applicable form of Note attached hereto. Each Note shall be dated the date of authentication thereof. The entire initially issued principal amount of each series of the Notes shall
initially be evidenced by one or more Global Securities registered in the name of Cede & Co., as nominee for The Depository Trust Company. The Notes shall not be issuable in definitive form except under the limited circumstances specified
in Section 3.7 of the Indenture. 
  
 SECTION 2.3. PAYMENT OF PRINCIPAL AND
INTEREST ON THE NOTES 
  
 The 2011 Notes will mature on
January 15, 2011 and will bear interest at the rate of 5.75% per annum, subject to adjustment as provided for in the terms of the 2011 Notes. The 2016 Notes will mature on January 15, 2016 and will bear interest at the rate
of 6.125% per annum, subject to adjustment as provided for in the terms of the 2016 Notes. Interest on each series of the Notes will be payable semi-annually, in cash, in arrears on January 15 and July 15 of each year, commencing
on July 15, 2006, to the Holders thereof at the close of business on the immediately preceding January 1 and July 1 of each year. Interest on the Notes will accrue from and including the most recent date to which interest has been
paid or, if no interest has been paid, from and including the date of issuance of the Notes. Interest on the Notes will be computed on the basis of a 360-day year comprised of twelve 30-day months. 
  
 SECTION 2.4. DENOMINATIONS 
  
 The Notes will be issued in denominations of $1,000 and integral multiples thereof. 
  
 SECTION 2.5. REDEMPTION 
  
 The Company may, at its option, redeem some or all of either series of the Notes at any time and from time to time at a
Redemption Price equal to the greater of the following amounts, plus, in each case, accrued and unpaid interest on the principal amount being redeemed to the applicable Redemption Date: 
  
 (a) 100% of the principal amount of the Notes to be redeemed; and 
  
 (b) as determined by an Independent Investment Banker, the
sum of the present values of the principal amount and the remaining scheduled payments of interest on the Notes to be redeemed (not including any portion of payments of interest accrued 
  

 5 

 as of the applicable Redemption Date), discounted to the applicable Redemption Date in accordance with
customary market practice on a semi-annual basis at a rate equal to the sum of the Treasury Rate plus 0.300% for the 2011 Notes and 0.375% for the 2016 Notes. 
  
 The Redemption Prices of Notes to be redeemed will be calculated assuming a 360-day year consisting of twelve 30-day months.
Notice of redemption of either series of Notes will be given as provided in Section 4.4 of the Indenture. If the Company redeems less than all of a particular series of Notes, the Trustee will select the particular Notes to be redeemed by lot,
on a pro rata basis or by another method the Trustee deems fair and appropriate and as otherwise provided in the Indenture. 
  
 Unless the Company defaults in the payment of the Redemption Price, on and after the applicable Redemption Date, interest will cease to accrue on the
Notes of the applicable series or portions of the Notes of the applicable series called for redemption. 
  
 SECTION 2.6. SINKING FUND 
  
 The
Notes shall not have the benefit of a sinking fund. 
  
 SECTION 2.7. PAYING AGENT

  
 The Trustee shall initially serve as Paying Agent with
respect to the Notes, with the Place of Payment for all Notes initially being the Corporate Trust Office of the Trustee. 
  
 SECTION 2.8. LIMITATION ON LIENS 
  
 (a) The Company shall not, and shall not permit any Consolidated Subsidiary to, incur any Debt secured by a Lien on any Principal Property or any shares
of capital stock of any Consolidated Subsidiary (in each case, whether now owned or hereafter acquired) without making effective provision that the Notes shall be secured equally and ratably with (or prior to) such secured Debt, unless, after giving
effect to such incurrence transaction and any simultaneous permanent repayment of any secured Debt (applying Article 11 of Regulation S-X to such transaction and repayment as and to the extent applicable), the aggregate amount of all Debt secured by
a Lien on any Principal Property or on any shares of capital stock of any Consolidated Subsidiary, together with all Attributable Debt of the Company and its Consolidated Subsidiaries in respect of Sale and Lease-Back Transactions involving
Principal Properties, would not exceed 10% of the Consolidated Net Tangible Assets of the Company and the Consolidated Subsidiaries. The aggregate amount of all secured Debt referred to in the preceding sentence shall exclude any then existing
secured Debt that has been secured equally and ratably with the Notes. 
  
 (b) The restriction set forth in paragraph (a) above shall not apply to, and there shall be excluded from secured Debt in any computation under the restriction in (a) above or under the restriction in Section 2.9(a)(1), Debt
secured by: 
  
 (1) Liens on any property
existing at the time of acquisition thereof; provided that (A) any such Lien was (i) in existence prior to the date of such acquisition, (ii) was not incurred in anticipation thereof and (iii) does not extend to any other
property, and (B) the principal amount of Debt secured by each such Lien does not exceed the cost to the Company or such Consolidated Subsidiary of the property subject to the Lien, as determined in accordance with GAAP; 
  

 6 

 (2) Liens in favor of the Company or a Consolidated Subsidiary; 
  
 (3) Liens in favor of governmental bodies to secure progress
or advance payments pursuant to any contract or provision of any statute; 
  
 (4) Liens created or incurred in connection with an industrial revenue bond, industrial development bond, pollution control bond or similar financing arrangement between the Company or a Consolidated Subsidiary and
any federal, state or municipal government or other governmental body or quasi-governmental agency; 
  
 (5) Liens on property to secure all or part of the cost of acquiring, substantially repairing or altering, constructing, developing or
substantially improving the property, or to secure Debt incurred for any such purpose; provided that (A) any such Lien relates solely to the property subject to the Lien and (B) the principal amount of Debt secured by each such Lien
(i) was incurred concurrently with, or within 18 months of, such acquisition, repair, alteration, construction, development or improvement and (ii) does not exceed the cost to the Company or such Consolidated Subsidiary of the property
subject to the Lien, as determined in accordance with GAAP; and 
  
 (6) any extension, renewal or replacement of any Lien referred to above; provided that (A) such extension, renewal or replacement Lien (i) will be limited to the same property that secured the Lien so
extended, renewed or replaced and (ii) will not exceed the principal amount of Debt so secured at the time of such extension, renewal or replacement and (B) such principal amount of Debt so secured shall continue to be included in the
computation in paragraph (a) of this Section 2.8 and in Section 2.9(a)(1) to the extent so included at the time of such extension, renewal or replacement. 
  
 For purposes of this Section 2.8, an “acquisition” of property (including real, personal or intangible
property or shares of capital stock or Debt) shall include any transaction or series of transactions by which the Company or a Consolidated Subsidiary acquires, directly or indirectly, an interest, or an additional interest (to the extent thereof),
in such property, including an acquisition through merger or consolidation with, or an acquisition of an interest in, a Person owning an interest in such property. 
  
 This Section 2.8 has been included in this Supplemental Indenture expressly and solely for the benefit of the Notes.

  
 SECTION 2.9. LIMITATION ON SALE AND LEASE-BACK TRANSACTIONS 
  
 (a) The Company shall not, and shall not permit any of its Consolidated
Subsidiaries to, enter into any Sale and Lease-Back Transaction with respect to any Principal Property unless: 
  
 (1) after giving effect thereto, the aggregate amount of all Attributable Debt with respect to Sale and Lease-Back Transactions plus the
aggregate amount of Debt secured by Liens incurred without equally and ratably securing the Securities pursuant to Section 2.8 would not exceed 10% of the Consolidated Net Tangible Assets of the Company and the Consolidated Subsidiaries; or

  

 7 

 (2) within 180 days of such Sale and Lease-Back Transaction, the Company or such
Consolidated Subsidiary applies to (A) the prepayment or retirement, and in either ease, the permanent reduction, of Funded Debt of the Company or any Consolidated Subsidiary (including that in the case of a revolver or similar arrangement that
makes credit available, such commitment is so permanently reduced by such amount); provided, however, that the amount to be applied to the prepayment or retirement of such Funded Debt of the Company or of a Consolidated Subsidiary
shall be reduced by an amount equal to the principal amount of any Notes (or other notes or debentures constituting such Funded Debt) delivered within such 180-day period to the Trustee or other applicable trustee for retirement and cancellation;
and provided further, however, that, notwithstanding the foregoing, no prepayment or retirement referred to in this clause (A) may be effected by payment at maturity or pursuant to any mandatory sinking fund payment or any other
mandatory prepayment or retirement provision, or (B) the purchase of other property that will constitute Principal Property having a fair market value, in the opinion of the Board of Directors, at least equal to the fair market value of the
Principal Property leased in such Sale and Lease-Back transaction, an amount not less than the greater of: 
  
 (i) the Net Proceeds of the Sale and Lease-Back Transaction; and 
  
 (ii) the fair market value (which shall be determined in a manner approved by the Board of Directors of the
Company) of the Principal Property so leased at the time of such transaction; 
  
 (b) The restriction set forth in paragraph (a) above shall not apply to any Sale and Lease-Back Transaction, and there shall be excluded from Attributable Debt in any computation described in this
Section 2.9 or in Section 2.8(a) with respect to any such transaction: 
  
 (1) solely between the Company and a Consolidated Subsidiary or solely between Consolidated Subsidiaries; 
  
 (2) financed through an industrial revenue bond, industrial
development bond, pollution control bond or similar financing arrangement between the Company or a Consolidated Subsidiary and any federal, state or municipal government or other governmental body or quasi-governmental agency; or 
  
 (3) in which the applicable lease is for a period, including
renewal rights, of three years or less. 
  
 This Section 2.9
has been included in this Supplemental Indenture expressly and solely for the benefit of the Notes. 
  

 8 

 SECTION 2.10. DEFEASANCE 
  
 The provisions of Sections 10.2 and 10.3 of the Indenture, together with the other provisions of Article X of the Indenture, shall be applicable
to both series of the Notes. The provisions of Section 10.3 of the Indenture shall apply to the covenants set forth in Sections 2.8 and 2.9 of this Supplemental Indenture and to those covenants specified in Section 10.3 of the
Indenture. 
  
 ARTICLE III 
  
 MISCELLANEOUS PROVISIONS 
  
 SECTION 3.1. RECITALS BY COMPANY 
  
 The recitals in this Supplemental Indenture are made by the Company only and
not by the Trustee, and all of the provisions contained in the Indenture in respect of the rights, privileges, immunities, powers and duties of the Trustee shall be applicable in respect of the Notes and of this Supplemental Indenture as fully and
with like effect as if set forth herein in full. 
  
 SECTION 3.2. APPLICATION TO
NOTES ONLY 
  
 Each and every term and condition contained in
this Supplemental Indenture that modifies, amends or supplements the terms and conditions of the Indenture shall apply only to the Notes established hereby and not to any future series of Securities established under the Indenture. 
  
 SECTION 3.3. BENEFITS 
  
 Nothing contained in this Supplemental Indenture shall or shall be construed to confer upon any person other than a Holder
of the Notes, the Company and the Trustee any right or interest to avail itself of any benefit under any provision of the Indenture, the Notes or this Supplemental Indenture. 
  
 SECTION 3.4. EFFECTIVE DATE 
  
 This Supplemental Indenture shall be effective as of the date first above written upon the execution and delivery hereof by each of the parties hereto.

  
 SECTION 3.5. RATIFICATION 
  
 As supplemented hereby, the Indenture is in all respects ratified and
confirmed and all the terms, provisions and conditions thereof remain in full force and effect. 
  

 9 

 SECTION 3.6. COUNTERPARTS 
  
 This Supplemental Indenture may be executed in multiple counterparts, each of which shall be deemed to be an original, and such counterparts shall
together constitute but one and the same instrument. 
  
 SECTION 3.7. GOVERNING
LAW 
  
 THIS SUPPLEMENTAL INDENTURE AND THE NOTES SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, INCLUDING, WITHOUT LIMITATION, SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS
LAW AND RULE 327(b) OF THE NEW YORK CIVIL PRACTICE LAWS AND RULES. 
  
 [Signatures on Next Page] 
  

 10 

 IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental Indenture to be duly executed
as of the date first written above. 
  

			
	MOHAWK INDUSTRIES, INC.,
	a Delaware corporation
		
	By:	 	 /s/ Scott R. Veldman

	Name:	 	Scott R. Veldman
	Title:	 	Vice President and Treasurer
	
	 SUNTRUST BANK,
 as
Trustee

		
	By:	 	 /s/ George Hogan

	Name:	 	George Hogan
	Title:	 	Vice President

  

 11 

 EXHIBIT A 
  
 FORM OF 
  
 5.75% SENIOR NOTE DUE 2011 
  
 [THIS NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A
PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE
DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY.]* 
  
 [UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY (AS DEFINED BELOW) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]* 
  

  
 MOHAWK INDUSTRIES, INC. 
  

  
 $500,000,000 
  
 5.75% SENIOR NOTE DUE 2011 
  

			
	No. R-            	 	CUSIP No. 608190AG9
	 	 	ISN No. US608190AG93

  
 Mohawk Industries,
Inc., a corporation organized and existing under the laws of the State of Delaware (herein called the “Company”, which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby
promises to pay to [Cede & Co.]*, or registered assigns (the “Holder”), the principal sum of
                         Dollars
                                        
     

	*	Insert in Global Securities 

  

 A-1 

 ($            ) on January 15, 2011 and to
pay interest thereon from the most recent Interest Payment Date to which interest has been paid or duly provided for, or if no interest has been paid, from and including the date of issuance, semi-annually, in cash, in arrears on January 15 and
July 15 of each year (each, an “Interest Payment Date”) commencing on July 15, 2006, at a rate of 5.75% per annum, subject to adjustment in accordance with the terms set forth on the reverse hereof, until the
principal hereof is paid or made available for payment. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this 2011 Note (or
one or more Predecessor Securities) is registered at the close of business on January 1 and July 1 of each year (each, a “Regular Record Date”); provided that the interest payable at Stated Maturity will be paid to the
Person to whom principal is payable. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this 2011 Note
(or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of 2011 Notes not less than
10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange or automated quotation system on which the 2011 Notes may be listed or traded, and
upon such notice as may be required by such exchange or automated quotation system, all as more fully provided in the Indenture. 
  
 Payments of interest on the 2011 Notes will include interest accrued to but excluding the respective Interest Payment Dates. Interest payments for
the 2011 Notes shall be computed on the basis of a 360-day year of twelve 30-day months. If any date on which interest is payable on the 2011 Notes is not a Business Day, then payment of the interest payable on such date will be made on
the next succeeding day that is a Business Day (and without any interest or payment in respect of any such delay), in each case with the same force and effect as if made on the date the payment was originally payable. 
  
 Payment of the principal of and interest on the 2011 Notes will be made
in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts, with any such payment that is due at the Stated Maturity of any 2011 Note being made upon surrender of
such 2011 Note to a Paying Agent; provided, however, that payment of interest, subject to such surrender where applicable, (i) may be made at the Company’s option by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register and (ii) in the case of any Global Security, must be made by wire transfer at such place and to such account at a banking institution in the United States as may be designated in writing to the
Trustee at least sixteen (16) days prior to the date for payment by the Person entitled thereto. 
  
 Reference is hereby made to the further provisions of this 2011 Note set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place. 
  

 A-2 

 Unless the certificate of authentication hereon has been executed by the Trustee referred to on the
reverse hereof by manual signature, this 2011 Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. 
  
 [Signatures on Next Page] 
  

 A-3 

 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed. 
  

					
	 Dated:                    
	 	MOHAWK INDUSTRIES, INC.
			
	 	 	By:	 	  

	 	 	Name:	 	 
	 	 	Title:	 	 
			
	 	 	By:	 	  

	 	 	Name:	 	 
	 	 	Title:	 	 

  
 [Trustee’s
Certificate of Authentication on Next Page] 
  

 A-4 

 CERTIFICATE OF AUTHENTICATION 
  
 This is one of the Securities of the series designated therein referred to in the within-mentioned
Indenture. 
  

					
	 	 	SUNTRUST BANK,
	 	 	as Trustee
			
	Dated:	 	By:	 	  

	 	 	 	 	Authorized Signatory

  

 A-5 

 REVERSE OF SENIOR 2011 NOTE 
  
 This Security is one of a duly authorized issue of securities of the Company (herein called the
“Securities”), issued and to be issued in one or more series under an Indenture dated as of January 9, 2006, as supplemented by a First Supplemental Indenture dated as of January 17, 2006 (collectively, as amended or
supplemented from time to time, herein called the “Indenture”, which term shall have the meaning assigned to it in such instrument), between the Company and SunTrust Bank, a national banking corporation associated under the laws of
the State of Georgia, as Trustee (herein called the “Trustee”, which term includes any successor trustee under the Indenture), and reference is hereby made to the Indenture for a statement of the respective rights, limitations of
rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. This Security is one of the series designated on the
face hereof (the “2011 Notes”) which is unlimited in aggregate principal amount. 
  
 If the debt rating applicable to the 2011 Notes from Moody’s Investors Service, Inc. (“Moody’s”) is decreased to a rating set
forth in the immediately following table, the interest rate on the 2011 Notes will increase from the interest rate set forth on the face of the 2011 Notes by the percentage set opposite that rating in such table: 
  

				
	 Rating

	  	Percentage

	 
	 Ba1
	  	0.25	%
	 Ba2
	  	0.50	%
	 Ba3
	  	0.75	%
	 B1 or below
	  	1.00	%

  
 If the debt rating
applicable to the 2011 Notes from Standard & Poor’s Ratings Services, a division of McGraw-Hill, Inc. (“S&P”) is decreased to a rating set forth in the immediately following table, the interest rate on the
2011 Notes will increase from the interest rate set forth on the face of the 2011 Notes by the percentage set opposite that rating in such table: 
  

				
	 Rating

	  	Percentage

	 
	 BB+
	  	0.25	%
	 BB
	  	0.50	%
	 BB-
	  	0.75	%
	 B+ or below
	  	1.00	%

  
 If Moody’s or
S&P subsequently increases its debt rating applicable to the 2011 Notes (each a “rating”) to any of the threshold ratings set forth in the applicable table above, the interest rate on the 2011 Notes will be decreased such
that the interest rate for the 2011 Notes equals the interest rate set forth on the face of the 2011 Notes plus the percentages set opposite the ratings from the tables above in effect immediately following the increase. Each adjustment
required by any decrease or increase in a rating set forth above, whether occasioned by the action of Moody’s or S&P, shall be made independent of any and all other adjustments. In no event shall (1) the interest rate for the
2011 Notes be reduced to below the interest rate set forth on the face of the 2011 Notes, and (2) the total increase in the interest rate on the 2011 Notes exceed 
  

 A-6 

 2.00% above the interest rate set forth on the face of the 2011 Notes. If Moody’s increases its rating to Baa2
and S&P increases its rating to BBB, the interest rate on the 2011 Notes will remain at, or be decreased to, as the case may be, the interest rate set forth on the face of the 2011 Notes and no subsequent downgrades in a rating by
either Moody’s or S&P shall result in an adjustment of the interest rate on the 2011 Notes as provided herein. 
  
 If either Moody’s or S&P ceases to provide a rating, any subsequent increase or decrease in the interest rate of the 2011 Notes necessitated
by a reduction or increase in the rating by the agency continuing to provide the rating shall be twice the percentage set forth in the applicable table above. No adjustments in the interest rate of the 2011 Notes shall be made solely as a
result of either Moody’s or S&P ceasing to provide a rating. 
  
 If both Moody’s and S&P cease to provide a rating, the interest rate of the 2011 Notes will increase to, or remain at, as the case may be, 2.00% above the interest rate set forth on the face of the 2011 Notes. 

 
 Any interest rate increase or decrease, as described above, will take
effect as of the most recent Interest Payment Date to which interest has been paid or duly provided for, or if no interest has been paid, from and including the date of issuance of this 2011 Note. The Company shall give the Trustee a notice in
writing should the interest rate on the 2011 Notes be required to be increased or decreased pursuant to the terms described above no later than the Business Day immediately following the date on which a change in the interest rate is required
to be made as provided above. 
  
 The 2011 Notes are
redeemable, in whole or in part, at any time, in the manner and with the effect provided in the Indenture. 
  
 If an Event of Default with respect to the 2011 Notes shall occur and be continuing, the principal of the 2011 Notes may be declared due and
payable in the manner and with the effect provided in the Indenture. 
  
 The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities of each series to be affected under
the Indenture at any time by the Company and the Trustee with the consent of the Holders of a majority in principal amount of the Securities at the time Outstanding of each series to be affected. The Indenture also contains provisions permitting the
Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive certain past defaults under the Indenture and their consequences. Any
such consent or waiver by the Holder of this 2011 Note shall be conclusive and binding upon such Holder and upon all future Holders of this 2011 Note and of any 2011 Note issued upon the registration of transfer hereof or in exchange
therefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this 2011 Note. 
  
 As provided in and subject to the provisions of the Indenture, the Holder of this 2011 Note shall not have the right to institute, or to order or
direct the Trustee to institute, any 
  

 A-7 

 proceeding, judicial or otherwise, with respect to the Indenture, or for the appointment of a receiver or trustee, or for
any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the 2011 Notes, the Holders of not less than 25% in aggregate principal amount of the
2011 Notes at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee security or indemnity reasonably satisfactory to it against the
costs, expenses and liabilities to be incurred or reasonably probable to be incurred in compliance with such request, the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such
proceeding and no direction inconsistent with such written request has been give to the Trustee during such 60-day period by the Holders of a majority in aggregate principal amount of the Outstanding 2011 Notes. The foregoing shall not apply to
any suit instituted by the Holder of this 2011 Note for the enforcement of any payment of principal hereof or premium, if any, or interest hereon on or after the respective due dates expressed or provided for herein. 
  
 No reference herein to the Indenture and no provision of the 2011 Notes
or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, premium, if any, and interest on the 2011 Notes at the times, place and rate, and in the coin or currency,
herein prescribed. 
  
 As provided in the Indenture and subject to
certain limitations therein set forth, the transfer of this 2011 Note is registrable in the Security Register, upon surrender of this 2011 Note for registration of transfer at the office or agency of the Company in a Place for Payment for
this 2011 Note, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more
new 2011 Notes and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. 
  
 The 2011 Notes are issuable only in registered form without coupons in denominations of $1,000 and integral multiples
thereof. As provided in the Indenture and subject to certain limitations therein set forth, the 2011 Notes are exchangeable for a like aggregate principal amount of 2011 Notes having the same Stated Maturity and of like tenor of any
authorized denominations as requested by the Holder upon surrender of the 2011 Note or 2011 Notes to be exchanged at the office or agency of the Company. 
  
 No service charge shall be made for any such registration of transfer or exchange of the 2011 Notes, but the Company
may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. 
  
 Prior to due presentment of this 2011 Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may
treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this 2011 Note be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

  
 All terms used in this 2011 Note that are defined in the
Indenture shall have the meanings assigned to them in the Indenture. 
  

 A-8 

 ABBREVIATIONS 
  
 The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to
applicable laws or regulations: 
  

					
		
	TEN COM -	 	as tenants in common
		
	TEN ENT -	 	as tenants by the entireties
		
	JT TEN -	 	as joint tenants with rights of survivorship and not as tenants in common
			
	UNIF GIFT MIN ACT -	 	__________________________________________    Custodian for	  	 
	 	 	(Cust)	  	 
		
	 	 	__________________________________________
	 	 	(Minor)	  	 
		
	 	 	Under Uniform Gifts to Minors Act of
		
	 	 	__________________________________________
	 	 	(State)

  
 Additional abbreviations may also be used though not on the above list. 
  

 A-9 

 To assign this 2011 Note, fill in the following form: 
  
 FOR VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s) unto

  
 _____________________________________________________________________________________________________ 
 (please insert Social
Security or other identifying number of assignee) 
  
 _____________________________________________________________________________________________________ 
 _____________________________________________________________________________________________________ 
 _____________________________________________________________________________________________________ 
  
 PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE OF ASSIGNEE 
  
 the within 2011 Note and all rights thereunder, hereby
irrevocably constituting and appointing 
  
 _____________________________________________________________________________________________________ 
 _____________________________________________________________________________________________________ 
 _____________________________________________________________________________________________________ 
  
 agent to transfer said 2011 Note on the books of the Company, with full power of substitution in the premises. 
  
 Dated:
                    ,               
  

	
	

  
 NOTICE: The signature to this
assignment must correspond with the name as written upon the face of the within instrument in every particular without alteration or enlargement, or any change whatsoever. 
  

 A-10 

 EXHIBIT B 
  
 FORM OF 
  
 6.125% SENIOR NOTE DUE 2016 
  
 [THIS NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A
PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE
DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY.]* 
  
 [UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY (AS DEFINED BELOW) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]* 
  

  
 MOHAWK INDUSTRIES, INC. 
  

  
 $900,000,000 
  
 6.125% SENIOR NOTE DUE 2016 
  

			
	No. R-            	  	CUSIP No. 608190AH7
	 	  	ISN No. US608190AH76

  
 Mohawk Industries,
Inc., a corporation organized and existing under the laws of the State of Delaware (herein called the “Company”, which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby
promises to pay to [Cede & Co.]*, or registered assigns (the “Holder”), the principal sum of                     
Dollars
                                        
                     

	*	Insert in Global Securities 

  

 B-1 

 ($            ) on January 15, 2016 and to pay
interest thereon from the most recent Interest Payment Date to which interest has been paid or duly provided for, or if no interest has been paid, from and including the date of issuance, semi-annually, in cash, in arrears on January 15 and
July 15 of each year (each, an “Interest Payment Date”) commencing on July 15, 2006, at a rate of 6.125% per annum, subject to adjustment in accordance with the terms set forth on the reverse hereof, until the
principal hereof is paid or made available for payment. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this 2016 Note (or
one or more Predecessor Securities) is registered at the close of business on January 1 and July 1 of each year (each, a “Regular Record Date”); provided that the interest payable at Stated Maturity will be paid to the
Person to whom principal is payable. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this 2016 Note
(or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of 2016 Notes not less than
10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange or automated quotation system on which the 2016 Notes may be listed or traded, and
upon such notice as may be required by such exchange or automated quotation system, all as more fully provided in the Indenture. 
  
 Payments of interest on the 2016 Notes will include interest accrued to but excluding the respective Interest Payment Dates. Interest payments for
the 2016 Notes shall be computed on the basis of a 360-day year of twelve 30-day months. If any date on which interest is payable on the 2016 Notes is not a Business Day, then payment of the interest payable on such date will be made on
the next succeeding day that is a Business Day (and without any interest or payment in respect of any such delay), in each case with the same force and effect as if made on the date the payment was originally payable. 
  
 Payment of the principal of and interest on the 2016 Notes will be made
in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts, with any such payment that is due at the Stated Maturity of any 2016 Note being made upon surrender of
such 2016 Note to a Paying Agent; provided, however, that payment of interest, subject to such surrender where applicable, (i) may be made at the Company’s option by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register and (ii) in the case of any Global Security, must be made by wire transfer at such place and to such account at a banking institution in the United States as may be designated in writing to the
Trustee at least sixteen (16) days prior to the date for payment by the Person entitled thereto. 
  
 Reference is hereby made to the further provisions of this 2016 Note set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place. 
  

 B-2 

 Unless the certificate of authentication hereon has been executed by the Trustee referred to on the
reverse hereof by manual signature, this 2016 Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. 
  
 [Signatures on Next Page] 
  

 B-3 

 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed. 
  

					
	Dated:                     	 	MOHAWK INDUSTRIES, INC.
			
	 	 	By:	 	  

	 	 	Name:	 	 
	 	 	Title:	 	 
			
	 	 	By:	 	  

	 	 	Name:	 	 
	 	 	Title:	 	 

  
 [Trustee’s
Certificate of Authentication on Next Page] 
  

 B-4 

 CERTIFICATE OF AUTHENTICATION 
  
 This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. 
  

					
	 	 	SUNTRUST BANK,
	 	 	as Trustee
			
	Dated:                             	 	By:	 	  

	 	 	 	 	Authorized Signatory

  

 B-5 

 REVERSE OF SENIOR 2016 NOTE 
  
 This Security is one of a duly authorized issue of securities of the Company (herein called the
“Securities”), issued and to be issued in one or more series under an Indenture dated as of January 9, 2006, as supplemented by a First Supplemental Indenture dated as of January 17, 2006 (collectively, as amended or
supplemented from time to time, herein called the “Indenture”, which term shall have the meaning assigned to it in such instrument), between the Company and SunTrust Bank, a national banking corporation associated under the laws of
the State of Georgia, as Trustee (herein called the “Trustee”, which term includes any successor trustee under the Indenture), and reference is hereby made to the Indenture for a statement of the respective rights, limitations of
rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. This Security is one of the series designated on the
face hereof (the “2016 Notes”) which is unlimited in aggregate principal amount. 
  
 If the debt rating applicable to the 2016 Notes from Moody’s Investors Service, Inc. (“Moody’s”) is decreased to a rating set
forth in the immediately following table, the interest rate on the 2016 Notes will increase from the interest rate set forth on the face of the 2016 Notes by the percentage set opposite that rating in such table: 
  

				
	 Rating

	  	Percentage

	 
	 Ba1
	  	0.25	%
	 Ba2
	  	0.50	%
	 Ba3
	  	0.75	%
	 B1 or below
	  	1.00	%

  
 If the debt rating
applicable to the 2016 Notes from Standard & Poor’s Ratings Services, a division of McGraw-Hill, Inc. (“S&P”) is decreased to a rating set forth in the immediately following table, the interest rate on the
2016 Notes will increase from the interest rate set forth on the face of the 2016 Notes by the percentage set opposite that rating in such table: 
  

				
	 Rating

	  	Percentage

	 
	 BB+
	  	0.25	%
	 BB
	  	0.50	%
	 BB-
	  	0.75	%
	 B+ or below
	  	1.00	%

  
 If Moody’s or
S&P subsequently increases its debt rating applicable to the 2016 Notes (each a “rating”) to any of the threshold ratings set forth in the applicable table above, the interest rate on the 2016 Notes will be decreased such
that the interest rate for the 2016 Notes equals the interest rate set forth on the face of the 2016 Notes plus the percentages set opposite the ratings from the tables above in effect immediately following the increase. Each adjustment
required by any decrease or increase in a rating set forth above, whether occasioned by the action of Moody’s or S&P, shall be made independent of any and all other adjustments. In no event shall (1) the interest rate for the
2016 Notes be reduced to below the interest rate set forth on the face of the 2016 Notes, and (2) the total increase in the interest rate on the 2016 Notes exceed 
  

 B-6 

 2.00% above the interest rate set forth on the face of the 2016 Notes. If Moody’s increases its rating to Baa2
and S&P increases its rating to BBB, the interest rate on the 2016 Notes will remain at, or be decreased to, as the case may be, the interest rate set forth on the face of the 2016 Notes and no subsequent downgrades in a rating by
either Moody’s or S&P shall result in an adjustment of the interest rate on the 2016 Notes as provided herein. 
  
 If either Moody’s or S&P ceases to provide a rating, any subsequent increase or decrease in the interest rate of the 2016 Notes necessitated
by a reduction or increase in the rating by the agency continuing to provide the rating shall be twice the percentage set forth in the applicable table above. No adjustments in the interest rate of the 2016 Notes shall be made solely as a
result of either Moody’s or S&P ceasing to provide a rating. 
  
 If both Moody’s and S&P cease to provide a rating, the interest rate of the 2016 Notes will increase to, or remain at, as the case may be, 2.00% above the interest rate set forth on the face of the 2016 Notes. 

 
 Any interest rate increase or decrease, as described above, will take
effect as of the most recent Interest Payment Date to which interest has been paid or duly provided for, or if no interest has been paid, from and including the date of issuance of this 2016 Note. The Company shall give the Trustee a notice in
writing should the interest rate on the 2016 Notes be required to be increased or decreased pursuant to the terms described above no later than the Business Day immediately following the date on which a change in the interest rate is required
to be made as provided above. 
  
 The 2016 Notes are
redeemable, in whole or in part, at any time, in the manner and with the effect provided in the Indenture. 
  
 If an Event of Default with respect to the 2016 Notes shall occur and be continuing, the principal of the 2016 Notes may be declared due and
payable in the manner and with the effect provided in the Indenture. 
  
 The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities of each series to be affected under
the Indenture at any time by the Company and the Trustee with the consent of the Holders of a majority in principal amount of the Securities at the time Outstanding of each series to be affected. The Indenture also contains provisions permitting the
Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive certain past defaults under the Indenture and their consequences. Any
such consent or waiver by the Holder of this 2016 Note shall be conclusive and binding upon such Holder and upon all future Holders of this 2016 Note and of any 2016 Note issued upon the registration of transfer hereof or in exchange
therefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this 2016 Note. 
  
 As provided in and subject to the provisions of the Indenture, the Holder of this 2016 Note shall not have the right to institute, or to order or
direct the Trustee to institute, any 
  

 B-7 

 proceeding, judicial or otherwise, with respect to the Indenture, or for the appointment of a receiver or trustee, or for
any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the 2016 Notes, the Holders of not less than 25% in aggregate principal amount of the
2016 Notes at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee security or indemnity reasonably satisfactory to it against the
costs, expenses and liabilities to be incurred or reasonably probable to be incurred in compliance with such request, the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such
proceeding and no direction inconsistent with such written request has been give to the Trustee during such 60-day period by the Holders of a majority in aggregate principal amount of the Outstanding 2016 Notes. The foregoing shall not apply to
any suit instituted by the Holder of this 2016 Note for the enforcement of any payment of principal hereof or premium, if any, or interest hereon on or after the respective due dates expressed or provided for herein. 
  
 No reference herein to the Indenture and no provision of the 2016 Notes
or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, premium, if any, and interest on the 2016 Notes at the times, place and rate, and in the coin or currency,
herein prescribed. 
  
 As provided in the Indenture and subject to
certain limitations therein set forth, the transfer of this 2016 Note is registrable in the Security Register, upon surrender of this 2016 Note for registration of transfer at the office or agency of the Company in a Place for Payment for
this 2016 Note, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more
new 2016 Notes and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. 
  
 The 2016 Notes are issuable only in registered form without coupons in denominations of $1,000 and integral multiples
thereof. As provided in the Indenture and subject to certain limitations therein set forth, the 2016 Notes are exchangeable for a like aggregate principal amount of 2016 Notes having the same Stated Maturity and of like tenor of any
authorized denominations as requested by the Holder upon surrender of the 2016 Note or 2016 Notes to be exchanged at the office or agency of the Company. 
  
 No service charge shall be made for any such registration of transfer or exchange of the 2016 Notes, but the Company
may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. 
  
 Prior to due presentment of this 2016 Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may
treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this 2016 Note be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

  
 All terms used in this 2016 Note that are defined in the
Indenture shall have the meanings assigned to them in the Indenture. 
  

 B-8 

 ABBREVIATIONS 
  
 The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to
applicable laws or regulations: 
  

			
	TEN COM -	 	as tenants in common
		
	TEN ENT -	 	as tenants by the entireties
		
	JT TEN -	 	as joint tenants with rights of survivorship and not as tenants in common
		
	UNIF GIFT MIN ACT -	 	_____________________________ Custodian for
	 	 	(Cust)
		
	 	 	 _____________________________
 (Minor)

		
	 	 	Under Uniform Gifts to Minors Act of
		
	 	 	 _____________________________
 (State)

  
 Additional abbreviations may also be used though not on the above list. 
  

 B-9 

 To assign this 2016 Note, fill in the following form: 
  
 FOR VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s) unto

  
 _____________________________________________________________________________________________________ 
 (please insert Social
Security or other identifying number of assignee) 
  
  
 _____________________________________________________________________________________________________ 
  
 _____________________________________________________________________________________________________ 
  
 _____________________________________________________________________________________________________ 
  
 PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE OF ASSIGNEE 
  
 the within 2016 Note and all rights thereunder, hereby irrevocably constituting and appointing 
  
  
 _____________________________________________________________________________________________________ 
  
 _____________________________________________________________________________________________________ 
  
 _____________________________________________________________________________________________________ 
  
 agent to transfer said 2016 Note on the books of the Company, with full power of substitution in the premises. 
  
 Dated:                         ,
             
  
  
  

	 	

  
 NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within instrument in every particular without alteration or enlargement, or any change whatsoever. 
  

 B-10United Kingdom Debenture

 Exhibit 10.13 
  

			
	DATED	  	JANUARY 9, 2006

  
 (1) i2 TELECOM
INTERNATIONAL LIMITED 
  
 (2) CORNELL CAPITAL PARTNERS, LP

  

  
 DEBENTURE 
  

 
 REED SMITH 
 RAMBAUD CHAROT LLP 
 Minerva House 
 5 Montague Close 
 London SE1 9BB

 Tel: +44 (0) 20 7403 2900 
 Fax: +44 (0) 20 7403 4221 
  
 Ref. DJR/CRJ/728098.99999 

 Index 
  

					
	 Clause No.

	 	 	  	Page No.

	1.	 	Definitions and Interpretations	  	1
			
	2.	 	Covenant to Pay	  	5
			
	3.	 	Fixed Security	  	5
			
	4.	 	Floating Security	  	6
			
	5.	 	Debts	  	7
			
	6.	 	Investments	  	7
			
	7.	 	Representations and Warranties	  	8
			
	8.	 	Negative Covenants	  	9
			
	9.	 	Covenants Relating to Business	  	9
			
	10.	 	Covenants Relating to the Charged Property	  	10
			
	11.	 	Enforcement of Security	  	14
			
	12.	 	Powers of Receiver and Cornell	  	15
			
	13.	 	Delegation of Powers by Cornell or Receiver	  	16
			
	14.	 	Exclusion of Liability	  	16
			
	15.	 	Reimbursement and Indemnity	  	17
			
	16.	 	Application of Sums Realised	  	18
			
	17.	 	Protection of Persons Dealing with Cornell or Receiver	  	18
			
	18.	 	Notice of Subsequent Charge	  	18
			
	19.	 	Further Assurance	  	18
			
	20.	 	Power of Attorney by Chargor	  	19
			
	21.	 	Set-off	  	19
			
	22.	 	Discharge of Security	  	20
			
	23.	 	Communications	  	20
			
	24.	 	Assignment and Transfer	  	21
			
	25.	 	Miscellaneous	  	21
			
	26.	 	Governing Law and Jurisdiction	  	23

 THIS DEBENTURE is made on January 9, 2006 BETWEEN: 
  

	(1)	i2 TELECOM INTERNATIONAL LIMITED (registered under number 5460716) and whose registered office address is at One London Wall, London, EC2Y 5EB England (the
“Chargor”); and 

  

	(2)	CORNELL CAPITAL PARTNERS, LP of 101 Hudson Street – Suite 3700, Jersey City, NJ 07303 (“Cornell”). 

  
 AGREED TERMS 
  

	1.	Definitions and Interpretations 

  

	1.1	Definitions 

  
 In this deed the following expressions have the following meanings: 
  
 “Building Contract” means any building contract entered into or to be entered into by the Chargor in
relation to or for the purposes of any Development. 
  
 “Charged Property” means all property mortgaged, charged or assigned by this deed. 
  
 “Debts” means all existing and future book and other debts and rights to money and income (including Rental Income) liquidated and
unliquidated owing to the Chargor including the benefit of all negotiable instruments, securities, guarantees and indemnities for such debts and rights but not including cash at bank. 
  
 “Designated Account” means any account of the Chargor with any bank which has been notified of the interest
of Cornell in such account and has agreed in writing not to permit withdrawals from such account except with the written consent of Cornell. 
  
 “Development” means: 
  

	 	(a)	any works of construction on any Real Property; or 

  

	 	(b)	any refurbishment of any Real Property 

  
 in accordance with the plans and specifications approved or to be approved by or on behalf of Cornell. 
  
 “Development Contracts” means any Building Contract, the
existing and future terms of appointment of any architects, quantity surveyors, engineers and other consultants or persons whose services are required for a Development, all existing and future warranty agreements in favour of the Chargor which
relate to a Development, and any other existing and future agreement relating to the acquisition, construction, management, design, servicing, marketing, development, operation and use of any Real Property. 

 “Encumbrance” means a mortgage, charge, assignment by way of security, pledge, lien, any
form of distress, attachment, execution or other legal process or any other type of encumbrance or security interest or any other type of arrangement (including any sale and leaseback or sale and repurchase arrangement) having or intended to have a
similar effect. 
  
 “Enforcement Event” means any
of the following events: 
  

	 	(a)	a failure by the Chargor to pay any Secured Liability on the date on which it is due; 

  

	 	(b)	a failure by the Chargor to pay on demand any Secured Liability which is payable on demand; or 

  

	 	(c)	any event by virtue of which any Secured Liability becomes due before the date on which it would otherwise be due for payment. 

  
 “Environmental Law” means any Law concerning the protection
of the environment or human health, the condition of any Real Property or of any place of work or the production, storage, treatment, transport or disposal of any substance capable of causing harm to any living organism or the environment.

  
 “Hedging Agreement” means any existing and
future interest rate exchange agreement or other contract the effect of which is or is intended to be to limit the net amount of interest payable by the Chargor in respect of the Secured Liabilities or any part thereof entered into by the Chargor
with Cornell or any other counterparty approved by Cornell. 
  
 “Intellectual Property” means any existing and future right in respect of any patent, copyright, trade mark, service mark, invention, design, know-how, confidential information or any other kind of intellectual property
whether registered or unregistered and any registration or application for registration, licence or permission relating to any of the foregoing. 
  
 “Investment” means any existing or future: 
  

	 	(a)	stock, share, bond or any form of loan capital of or in any legal entity; 

  

	 	(b)	unit in any unit trust or similar scheme; 

  

	 	(c)	warrant or other right to acquire any such investment, 

  
 and, to the extent not constituting a Debt, any income, offer, right or benefit in respect of any such investment. 
  
 “Law” includes common law, any statute, by-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 under any of the foregoing. 
  

 2 

 “Lease” includes any underlease, tenancy, letting, licence, any document supplemental or
collateral to any of them and any agreement to enter into any of them and the expression tenant will be construed accordingly. 
  
 “LPA” means the Law of Property Act 1925. 
  
 “Real Property” means all freehold or leasehold property forming part of the Charged Property. 
  
 “Receiver” means any receiver appointed over any Charged
Property whether under this deed or by order of the court on application by Cornell and includes a receiver and manager and an administrative receiver. 
  
 “Rental Income” means all amounts payable to or for the benefit of the Chargor in connection with the occupation of the Real Property
including each of the following amounts: 
  

	 	(a)	rent including any increase of rent or interim rent agreed by the Chargor or payable pursuant to any provisions of the Landlord and Tenant Act 1954 and all other sums payable under
any Lease; 

  

	 	(b)	sums payable from any deposit held as security for performance of any tenant’s obligations or by any guarantor of those obligations; 

  

	 	(c)	any other monies payable in respect of occupation and/or use of any Real Property including any fixture for display or advertisement; 

  

	 	(d)	(any profits, damages, compensation, settlement or expenses awarded or agreed as a result of any claim made by the Chargor in respect of any Real Property net of any costs, fees and
expenses incurred but not reimbursed to the Chargor in connection with such claim; 

  

	 	(e)	any monies payable under any policy of insurance in respect of loss of rent; 

  

	 	(f)	any sum payable or the value of any consideration to be given by or on behalf of a tenant for the surrender or variation of any occupational lease or occupancy agreement; and

  

	 	(g)	any interest payable on any sum referred to above; 

  
 “Secured Liabilities” means all liabilities of the Chargor owed or expressed to be owed to Cornell as principal or surety or in any other
capacity. 
  
 “Security Document” means any
document including this deed executed by the Chargor or any third party which grants security rights or rights by way of guarantee or indemnity in respect of the Secured Liabilities. 
  
 “Value Added Tax” or “VAT” means value added tax or any other tax substituted therefor or
in respect of turnover or value added sales. 
  

 3 

	1.2	Interpretation 

  
 In this deed (including any introduction): 
  

	 	(a)	the expression “Cornell” includes its respective successors and assigns; 

  

	 	(b)	the expression “Chargor” includes the person deriving title under the Chargor or entitled to redeem the charges created by this deed; 

  

	 	(c)	a reference to any statute or statutory provision includes that statute or statutory provision as amended, extended or re-enacted and to any by-law, regulation, order, instrument or
subordinate legislation made under the relevant statute or statutory provision; 

  

	 	(d)	any reference to any agreement or document is a reference to such agreement or document as it may have been or may from time to time be amended, novated, supplemented or replaced by
a document having a similar effect; 

  

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

  

	 	(f)	references to clauses and sub-clauses are to the clauses and sub-clauses of this deed; 

  

	 	(g)	reference to any gender includes other genders; 

  

	 	(h)	reference to persons includes individuals, bodies corporate, unincorporated associations, partnerships, governments, states and state agencies (whether or not having separate legal
personality) and any reference to any party who is an individual will include his personal representatives; 

  

	 	(i)	the words “including” and “in particular” are to be construed as being by way of illustration or emphasis only and are not to be construed so as to
limit the generality of any words preceding them; 

  

	 	(j)	the words “other” and “otherwise” are not to be construed as being limited by any words preceding them; 

  

	 	(k)	references to “property” include choses in action and other intangible property; 

  

	 	(l)	references to liabilities, property, rights, assets or other tangible or intangible things include the whole or any part of them, present and future, actual and contingent and in
any part of the world; 

  

	 	(m)	any reference to any property or interest in property includes any such interest or property acquired by the Chargor after the date of this deed; 

  

	 	(n)	any covenant made by or obligation imposed on the Chargor in this deed will continue in force until all the Secured Liabilities have been irrevocably paid in full; and

  

 4 

	 	(o)	the headings to clauses and sub-clauses are to be ignored in construing this deed. 

  

	2.	Covenant to Pay 

  
 The Chargor covenants with Cornell to pay the Secured Liabilities when due. 
  

	3.	Fixed Security 

  
 As continuing security for the payment of the Secured Liabilities the Chargor with full title guarantee until all the Secured Liabilities have been
irrevocably paid in full: 
  

	 	(a)	charges to Cornell by way of legal mortgage all freehold or leasehold property owned by the Chargor at the date of this deed; 

  

	 	(b)	charges to Cornell by way of equitable mortgage its interest in any freehold or leasehold property acquired by the Chargor after the date of this deed; 

  

	 	(c)	charges to Cornell by way of fixed charge its interest in: 

  

	 	(i)	all existing and future fittings, plant, equipment, machinery, tools, vehicles, furniture and other tangible movable property; 

  

	 	(ii)	any Investment; 

  

	 	(iii)	any Hedging Agreement; 

  

	 	(iv)	its existing and future goodwill and uncalled capital; 

  

	 	(v)	all existing and future cash at bank; 

  

	 	(vi)	any Intellectual Property; 

  

	 	(vii)	any money now or at any time after the date of this deed standing to the credit of any Designated Account; and 

  

	 	(viii)	to the extent not otherwise subject to any fixed security in favour of Cornell: 

  

	 	(A)	any existing and future proceeds of any insurance of any Charged Property; and 

  

	 	(B)	any sum now or at any time after the date of this deed received by the Chargor as a result of any order of the court under sections 213, 214, 238, 239 or 244 of the Insolvency Act
1986; 

  

	 	(d)	charges and assigns to Cornell by way of fixed security its interest in the Debts and the benefit of the Debts and any guarantee or security for the payment of any Debts provided
that if any such guarantee or security is expressed to be non-assignable then the Chargor charges to Cornell by way of fixed security its interest in and the benefit of it; 

  

 5 

	 	(e)	assigns to Cornell its interest in and the benefit of the Development Contracts and the benefit of any guarantee or security for the performance of any of the Development Contracts
provided that if any Development Contract is expressed to be non-assignable then the Chargor charges to Cornell by way of fixed charge its interest in and the benefit of it; and, 

  

	 	(f)	charges to Cornell by way of fixed charge, all other existing and future property of the Chargor not charged or assigned by the previous paragraphs of this clause (other than the
Chargor’s stock in trade or work in progress). 

  

	4.	Floating Security 

  

	4.1	Creation of floating charge 

  
 As continuing security for the payment of the Secured Liabilities until such Secured Liabilities are irrevocably paid in full, the Chargor charges to
Cornell by way of floating charge with full title guarantee the whole of its existing and future undertaking and property to the extent not otherwise at any time subject to any fixed charge in favour of Cornell. 
  

	4.2	Conversion 

  
 Subject to clause 4.3, Cornell may at any time by written notice to the Chargor convert the floating charge created under clause 4.1(Creation of
floating charge) into a fixed charge as regards any property specified in the notice if: 
  

	 	(a)	an Enforcement Event has occurred; or 

  

	 	(b)	in the opinion of a reasonable person such property is at risk of becoming subject to any Encumbrance (other than one in favour of Cornell) or is otherwise at risk of ceasing to be
within the ownership or control of the Chargor. 

  

	4.3	Moratorium under 1986 Act 

  
 Cornell shall not be entitled to convert the floating charge created by clause 4.1 into a fixed charge as a result only of the Chargor obtaining a
moratorium or anything done with a view to obtaining a moratorium under section 1A of and schedule A1 to the Insolvency Act 1986. 
  

	4.4	Qualifying floating charge 

  
 Section 14(2)(a) of schedule B1 to the Insolvency Act 1986 applies to the floating charge created by clause 4.1 which is a “qualifying floating
charge” for the purpose of section 14(1) of the Insolvency Act 1986. 
  

 6 

	5.	Debts 

  

	5.1	Dealings with debts 

  
 The Chargor will: 
  

	 	(a)	use its best endeavours to realise the Debts; 

  

	 	(b)	from time to time if required by Cornell provide Cornell with a list of the names and addresses of all debtors of the Chargor and the amount of the Debts owing from each of them and
all other information relating to the Debts as Cornell may require; 

  

	 	(c)	from time to time if required by Cornell execute a legal assignment of any Debt to Cornell in such terms as Cornell may require and give notice of such assignment to the debtor;

  

	 	(d)	pay, or procure that the proceeds of realisation of any Debt are paid into a Designated Account nominated by Cornell and pay or otherwise deal with such proceeds in any Designated
Account in accordance with any directions given by Cornell from time to time; and 

  

	 	(e)	permit any bank or other institution with which a Designated Account is held to furnish directly to Cornell from time to time upon request full particulars of all the Chargor’s
accounts with such bank or other institution and all other information relating to the Chargor as is available to such bank or other institution. 

  

	5.2	Prohibited dealings 

  
 The Chargor will not except with the prior written consent of Cornell sell, assign, charge, discount, factor or otherwise deal with any of the Debts, or
(save for minor bad debts) compound, release or do anything by virtue of which the collection and recovery of any of the Debts may be impeded, delayed or prevented. 
  

	5.3	No obligation to recover 

  
 Cornell will be under no obligation to take any steps to recover any of the Debts. 
  

	5.4	Notice of assignment 

  
 At any time Cornell may give notice of assignment of the Debts to any debtor of the Chargor. 
  

	6.	Investments 

  

	6.1	Uncertificated securities 

  
 If any Investment is an uncertificated unit of a security, the Chargor will upon the execution of this deed (or in the case of any Investment issued or
acquired after the date of this deed as soon as practicable after it is issued or acquired) send or procure 
  

 7 

 the sending to the operator of a relevant system in which title to that Investment is evidenced and
transferred of such instructions as Cornell may require to effect the transfer of that Investment into the escrow balance of the Chargor’s account with the said operator or after the occurrence of an Enforcement Event into an account in the
name of Cornell or a nominee for Cornell. 
  

	7.	Representations and Warranties 

  

	7.1	Representations and Warranties 

  
 The Chargor represents and warrants to Cornell as set out in clauses 7.3 (Charged Property), 7.4 (Avoidance) and 7.5 (Environmental Law). 
  

	7.2	Duration and Scope 

  

	 	(a)	The representations and warranties set out in clauses 7.3 (Charged Property), 7.4 (Avoidance) and 7.5 (Environmental Law) will be deemed to be repeated by the Chargor on each day
until the Secured Liabilities have been paid in full in relation to the then existing circumstances. 

  

	 	(b)	References to Charged Property in clause 7.3(a), (c) and (d) will not include property subject only to a floating charge in favour of Cornell. 

  

	7.3	Charged Property 

  

	 	(a)	The Chargor is the legal and beneficial owner of the Charged Property. 

  

	 	(b)	The Charged Property is free from any Encumbrance. 

  

	 	(c)	The Chargor has not received or acknowledged notice of any adverse claim by any person in respect of the Charged Property or any interest in it. 

  

	 	(d)	All the Charged Property of a repairable nature is in good and substantial repair. 

  

	 	(e)	There is no breach of any Law which materially adversely affects the Real Property. 

  

	 	(f)	There are no covenants, agreements, reservations, conditions, interest rights or other matters whatever which materially adversely affect the Real Property.

  

	 	(g)	No facility necessary for the enjoyment and use of the Real Property is subject to terms entitling any person to terminate or curtail its use. 

  

	 	(h)	Nothing has arisen or has been created or is subsisting which would be an overriding interest over the Real Property. 

  

 8 

	7.4	Avoidance 

  
 No charge expressed to be created pursuant to this deed is liable to be avoided or otherwise set aside on the liquidation or administration of the Chargor
or otherwise. 
  

	7.5	Environmental Law 

  
 The Chargor has at all times complied in all material respects with all applicable Environmental Law. 
  

	8.	Negative Covenants 

  
 The Chargor will not except with the prior written consent of Cornell: 
  

	 	(a)	dispose or purport or agree to dispose of any interest in or lend or grant any licence or other right over any property mortgaged, charged or assigned under clause 3 (Fixed
Security) or, save for full consideration in money or money’s worth and in the ordinary course of the Chargor’s business, dispose of any interest in or lend or grant any licence or other right over any of the property charged by way of
floating charge under clause 4 (Floating Security) ; 

  

	 	(b)	create, agree to create or allow to arise or remain outstanding any Encumbrance over any Charged Property; 

  

	 	(c)	redeem or purchase its own shares or provide financial assistance for such purposes or pay an abnormal sum by way of dividend; 

  

	 	(d)	terminate or amend in any material respect any Development Contract or release, settle or discharge any claim, right or entitlement which the Chargor may have under any Development
Contract, whether by assignment, transfer, novation or otherwise or 

  

	 	(e)	terminate or amend in any material respect any Hedging Document or release, settle or discharge any claim, right or entitlement which the Chargor may have under any Hedging
Document, whether by assignment, transfer, novation or otherwise. 

  

	9.	Covenants Relating to Business 

  
 The Chargor will: 
  

	 	(a)	carry on its business in a proper manner and not make any material alteration in the nature of its business; 

  

	 	(b)	keep proper accounting records and make all proper entries in relation to its affairs and make such records available for inspection by or on behalf of Cornell or any Receiver at
the cost of the Chargor at all reasonable times but in no case more than three times in any twelve month period; 

  

 9 

	 	(c)	give to Cornell or any Receiver such information relating to its undertaking or property or otherwise relating to its affairs as either of them reasonably requires; and

  

	 	(d)	observe and perform all Laws, covenants and stipulations from time to time affecting any Charged Property or otherwise relating to its business. 

  

	10.	Covenants Relating to the Charged Property 

  

	10.1	Repair 

  
 The Chargor will: 
  

	 	(a)	keep the Charged Property of a repairable nature in good and substantial repair and condition; and 

  

	 	(b)	not, without the prior written consent of Cornell, make any structural alterations or additions to or carry out any development (other than a Development) on or make any planning or
similar application relating to any of the Real Property. 

  
 If the Chargor fails to comply with the covenants in this clause Cornell will be entitled to repair and maintain the Real Property and carry out works of reinstatement at the cost of the Chargor and will for this
purpose have the rights of entry set out in clause 10.9 (Rights of entry). 
  

	10.2	Insurance 

  

	 	(a)	The Chargor will except as provided in clause 10.2(c) keep all Charged Property which is of an insurable nature insured in the joint names of Cornell and the Chargor against all
risks which a prudent person carrying on a business similar to that of the Chargor would reasonably insure against and such other risks as Cornell may from time to time specify (including terrorism): 

  

	 	(i)	in the case of Charged Property other than buildings to its full replacement value; and 

  

	 	(ii)	in the case of buildings on a full reinstatement basis and against all professional fees, Value Added Tax, demolition and site clearance charges and loss of rental and other income
derived from such buildings for at least three years (and ensure that the insurance on the buildings and works comprised in a Development is increased as the Development proceeds so that such buildings and works will at all times be and remain
insured to their full reinstatement value). 

  

	 	(b)	All such insurances will be in amount and form and with an insurance office acceptable to Cornell and the Chargor will as soon as requested produce the policy and the last receipt
for such insurances to Cornell and will apply all monies received by virtue of such insurances either in making good the loss or damage in respect of which the monies were received or at the option of 

  

 10 

	 	  	Cornell in or towards payment of the Secured Liabilities. If the Chargor fails to comply with this clause Cornell will be entitled to effect any relevant insurance at the cost of
the Chargor. 

  

	 	(c)	If the Real Property includes any leasehold property of which the Chargor is the tenant and the landlord under the lease (or any superior landlord) is responsible for the insurance
of any buildings on such Real Property and if the terms of such insurance are satisfactory to Cornell and the Chargor: 

  

	 	(i)	procures that the interest of Cornell is endorsed on every relevant policy; 

  

	 	(ii)	procures that every relevant policy contains a clause of the type referred to in clause 10.2(d); and 

  

	 	(iii)	provides a full copy of every relevant policy to Cornell once in every year together with a copy of the receipt for that year’s premium, 

  

	 	  	then such insurance will be deemed to have been accepted by Cornell in satisfaction of the obligation of the Chargor in this deed to insure the relevant buildings.

  

	 	(d)	The Chargor will ensure that every insurance policy contains a clause (in terms satisfactory to Cornell) under which such insurance will not be prejudiced, vitiated or avoidable as
against a mortgagee in the event of any misrepresentation, act or neglect or failure to disclose on the part of the insured party or parties (subject to the payment of any increased premium required by the insurer) and will not be invalidated as
against a mortgagee for failure to pay any premium owing without the insurer giving to Cornell ten working days prior written notice. 

  

	10.3	Compliance with obligations 

  
 The Chargor will in respect of the Real Property: 
  

	 	(a)	pay all rents, rates, outgoings and other sums payable and observe and comply with any covenants, stipulations and conditions binding on the Chargor; 

  

	 	(b)	enforce all tenant’s obligations under any Lease over any of the Real Property; 

  

	 	(c)	comply with all obligations under any Law and produce to Cornell within seven days of receipt every notice, order or proposal given or made by any competent authority and make any
objections and representations against it as Cornell may require or approve; 

  

	 	(d)	not commit any waste which injures or lessens the value of the Real Property; 

  

 11 

	 	(e)	not detach or allow any fixture to be detached from the Real Property except for the purpose of replacing it by another of at least equal value; and 

  

	 	(f)	not fix any Charged Property referred to in clause 3(c)(i) to any land other than the Real Property unless it has obtained the written consent of Cornell and obtained waivers
satisfactory to Cornell from all other persons interested in such land of any rights in respect of such Charged Property and has marked such Charged Property in a manner specified by Cornell to indicate it is charged to Cornell.

  

	10.4	Development 

  
 The Chargor will: 
  

	 	(a)	as soon as possible apply for and diligently take all steps necessary to obtain all permissions, consents, licences and approvals required by any by-laws, regulations, planning
permissions, orders or statutes from time to time in force for the construction or implementation of the Development and produce to Cornell true copies of all such permissions, consents, licences and approvals as soon as they are received;

  

	 	(b)	engage or employ all such architects, quantity surveyors, engineers and other consultants or other competent persons as may be requisite for the Development;

  

	 	(c)	complete the Development, or cause the Development to be completed with all due diligence to a high and substantial standard of construction in accordance with the agreed and
approved drawings and specifications and in conformity with the provisions of all statutes, orders, by-laws, planning permissions and building and other regulations and conditions and the requirements of the local and other competent authorities;

  

	 	(d)	diligently and promptly perform its obligations under any Development Contracts and promptly notify Cornell of any dispute or disagreement arising under any of the Development
Contracts. 

  

	10.5	Proprietorship 

  
 The Chargor will not permit any person: 
  

	 	(a)	to be registered as proprietor under the Land Registration Act 2002 of any Real Property nor create or permit to arise any interest with overriding status or which is capable of
registration under the Land Registration Act 2002 affecting the Real Property; or 

  

	 	(b)	to become entitled to any proprietary right or interest which might affect the value of the Real Property. 

  

 12 

	10.6	Notification of acquisitions and disposals 

  
 The Chargor will promptly notify Cornell of any proposal, contract, conveyance, option, transfer or other disposition involving the acquisition by the
Chargor of any interest in freehold or leasehold property or any disposal by the Chargor of an interest in any Real Property. 
  

	10.7	Environmental Law 

  
 The Chargor will properly discharge all duties of care and responsibilities placed upon it by Environmental Law and observe and perform all the
requirements of Environmental Law both in the conduct of its general business and in the management possession or occupation of the Real Property and will apply for and obtain all authorisations, licences and consents necessary to ensure that it
does not breach Environmental Law. 
  

	10.8	Powers of leasing 

  
 The Chargor’s statutory and any other powers of entering into Leases and accepting or agreeing to accept surrenders of Leases will be excluded and
will not be exercisable by the Chargor in relation to the Real Property and the Chargor will not without the prior written consent of Cornell: 
  

	 	(a)	part with possession or occupation of, confer any licence or right to occupy nor confer any interest in any Real Property; 

  

	 	(b)	grant any permission to assign, underlet or part with possession or occupation of any Real Property; 

  

	 	(c)	agree or permit any amendment to or waiver of the terms of any Lease (including any Lease under which the Chargor is tenant); or 

  

	 	(d)	exercise any power to determine any Lease. 

  

	10.9	Power of entry 

  
 The Chargor will permit Cornell, its agents and contractors at reasonable times and upon reasonable notice (or at any time without notice after the
occurrence of an Enforcement Event or in case of emergency) to enter into or upon the Real Property without becoming liable as mortgagee in possession: 
  

	 	(a)	to view the state and condition of or to value it; 

  

	 	(b)	to comply with or object to any direction or notice or other matter served upon the Chargor; and 

  

	 	(c)	to carry out at the expense of the Chargor any repairs or maintenance or to take any action which Cornell considers necessary or desirable in connection with the Real Property to
procure compliance with any covenant or obligation set out in this deed. 

  

 13 

	10.10	Identification plate 

  
 The Chargor will if so requested by Cornell, place and maintain on each item of property charged pursuant to clause 3(c)(i), in a conspicuous place, a
clearly legible identification plate containing the following wording: 
  
 “NOTICE OF CHARGE 
  
 This [description of item]
and ancillary equipment is subject to a fixed charge in favour of Cornell Capital Partners, LP for itself.” 
  

	11.	Enforcement of Security 

  

	11.1	Powers arising 

  
 Section 103 of the LPA will not apply to this deed and the power of sale and all other powers conferred by section 101 of the LPA as varied or
extended by this deed will arise upon execution of this deed by the Chargor. 
  

	11.2	Powers exercisable 

  
 The power of sale and all other powers conferred by section 101 of the LPA as varied or extended by this deed will be exercisable immediately upon or at
any time after an Enforcement Event has occurred. 
  

	11.3	Appointment of Receiver 

  

	 	(a)	At the request of the Chargor or, subject to paragraph (d) below, at any time after the occurrence of an Enforcement Event Cornell may, at any time when such Enforcement Event
is continuing, appoint by writing a Receiver of any Charged Property upon such terms as to remuneration and otherwise as Cornell thinks fit. 

  

	 	(b)	Any Receiver will be the agent of the Chargor for all purposes and the Chargor will be responsible for such Receiver’s acts and defaults and for his remuneration, costs, fees,
taxes and expenses to the exclusion of liability on the part of Cornell. 

  

	 	(c)	Where two or more persons are appointed as Receivers under or pursuant to this deed any act authorised to be done by the Receivers may be done by all of them acting jointly or by
any one or more of them acting severally. 

  

	 	(d)	Cornell shall not be entitled to appoint a Receiver as a result only of the Chargor obtaining a moratorium or anything done with a view to obtaining a moratorium under section 1A of
and schedule A1 to the Insolvency Act 1986. 

  

 14 

	11.4	Removal of Receiver 

  
 Cornell may at any time by writing remove any Receiver (subject to the obtaining of any required order of the court in the case of an administrative
receiver) whether or not Cornell appoints any other person as Receiver in his place. 
  

	12.	Powers of Receiver and Cornell 

  

	12.1	Statutory powers 

  
 A Receiver will be entitled to exercise all the powers conferred on a receiver by the LPA and, whether or not such a Receiver is an administrative
receiver, may exercise all the powers conferred upon an administrative receiver by the Insolvency Act 1986. 
  

	12.2	Additional powers 

  
 By way of addition to and without limiting the powers referred to in clause 12.1 (Statutory Powers) a Receiver will have power (both before and after the
commencement of any liquidation of the Chargor) to do every act and thing and exercise every power: 
  

	 	(a)	which the Chargor would have been entitled to do or exercise if no Receiver had been appointed; 

  

	 	(b)	which such Receiver in his absolute discretion considers necessary or desirable for maintaining or enhancing the value of any Charged Property or for or in connection with the
enforcement of the charges created by this deed or the realisation of any Charged Property; and 

  

	 	(c)	which such Receiver in his absolute discretion considers necessary or desirable for completing a Development including continuing and performing the Development, or any part of it,
or any other development, entering into a building contract or other contract or agreement for or relating to the Development, or any part of it, or any other development, purchasing such materials and other articles and things as he may think fit
in connection with the Development, discontinuing the Development or any part of it, or any other development, and repudiating and rescinding any building contract or other contract or agreement, 

  
 and may use the name of the Chargor in connection with any exercise of such
powers. 
  

	12.3	Exercise of powers by Cornell 

  
 After the occurrence of an Enforcement Event all the powers of a Receiver under clauses 12.1 (Statutory powers), 12.2 (Additional powers) and 12.3
(Uncharged property) may be exercised by Cornell whether or not Cornell goes into possession as mortgagee. 
  

 15 

	12.4	Prior encumbrances 

  
 At any time after the security given by this deed has become enforceable, Cornell may redeem any prior Encumbrance against the Charged Property or procure
a transfer of such Encumbrance to itself and may agree the accounts of the person entitled to that Encumbrance and any accounts so agreed will be binding on the Chargor. 
  

	13.	Delegation of Powers by Cornell or Receiver 

  

	13.1	Delegation 

  
 Cornell or any Receiver may from time to time delegate by power of attorney or in any other manner to any person the powers, authorities and discretions
which are for the time being exercisable by Cornell or a Receiver under this deed in relation to any Charged Property and any such delegation may be made upon such terms as Cornell or such Receiver may think fit. Neither Cornell nor any Receiver
will be in any way liable or responsible to the Chargor for any loss or damage arising from any act or omission on the part of any such delegate. 
  

	13.2	Possession 

  
 If Cornell, any Receiver or any delegate of Cornell or any Receiver enters into possession of any Charged Property any of them may from time to time go
out of possession. 
  

	14.	Exclusion of Liability 

  

	14.1	Liability to account 

  
 Cornell will not in any circumstances by reason of it taking possession of any Charged Property or for any other reason whatever, and whether as mortgagee
in possession or on any other basis whatever, be liable to account to the Chargor for anything except Cornell’s own actual receipts or be liable to the Chargor for any loss or damage arising from any realisation of any Charged Property or from
any act, default or omission of Cornell in relation to any Charged Property or from any exercise or non-exercise by Cornell of any power, authority or discretion conferred upon it in relation to any Charged Property by or pursuant to this deed or by
the LPA unless such loss or damage is caused by Cornell’s own fraud, gross negligence or wilful misconduct. 
  

	14.2	Losses on enforcement 

  
 Upon the sale of any Charged Property on enforcement of the charges created by this deed, the Chargor will not have any right or claim against Cornell in
respect of any loss arising out of such sale however such loss may have been caused and whether or not a better price could or might have been obtained on the sale of such Charged Property by either deferring or advancing the date of such sale or
for any other reason. 
  

 16 

	14.3	Application to Cornell and Receiver 

  
 The provisions of clauses 14.1 (Liability to account) and 14.2 (Losses on enforcement) will apply in relation to the liability of any Receiver and any
delegate of Cornell or any Receiver in all respects as though every reference in clauses 14.1 (Liability to account) and 14.2 (Losses on enforcement) to Cornell were reference to such Receiver or (as the case may be) to such delegate. 
  

	15.	Reimbursement and Indemnity 

  

	15.1	Reimbursement 

  
 Any sums paid or expended by Cornell or any Receiver either: 
  

	 	(a)	as a result of Cornell or any Receiver taking action which a reasonable person would consider necessary or desirable in connection with any Charged Property or to procure compliance
with any covenant or obligation on the part of the Chargor contained in any Security Document; or 

  

	 	(b)	which is in respect of any action or thing expressed in this deed to be done at the cost of the Chargor, 

  
 and all costs, fees, taxes and expenses incurred by Cornell or any Receiver under or in connection with this deed or its
enforcement and/or the preservation of Cornell’s rights under this deed will be reimbursed by the Chargor to Cornell on demand. Cornell will also be entitled to charge the Chargor a reasonable fee to recover the cost of management time spent in
connection with the preservation of its rights under this deed which will be payable by the Chargor on demand. 
  

	15.2	Indemnity 

  
 The Chargor will indemnify Cornell (whether or not acting as mortgagee in possession) and any Receiver against all liabilities, claims and expenses
whether arising out of contract or in tort or in any other way (including any liability of Cornell or any Receiver under any Environmental Law) which may at any time be incurred by either of them (or by any person for whom they may be vicariously
liable) in connection with this deed or for anything done or omitted to be done in the exercise or purported exercise of their powers pursuant to this deed. 
  

	15.3	Secured Liabilities 

  
 All monies payable by the Chargor under this clause will form part of the Secured Liabilities and if unpaid will bear interest (both before and after
judgment) at a rate equal to any default rate specified in any loan or facility or other agreement between the Chargor and Cornell and will form part of the Secured Liabilities. If there is more than one such agreement, then the default rate shall
be the highest rate payable. 
  

 17 

	16.	Application of Sums Realised 

  
 Subject to claims having priority to the charges created by this deed all monies received by a Receiver will be applied in the following order:

  

	 	(a)	in payment of all costs, fees, taxes and expenses incurred by the Receiver in or pursuant to the exercise of the powers set out in this deed and of all other outgoings properly
payable by the Receiver; 

  

	 	(b)	in payment of remuneration to the Receiver; 

  

	 	(c)	in payment of the Secured Liabilities to Cornell; and 

  

	 	(d)	the balance (if any) will be applied as required by law. 

  

	17.	Protection of Persons Dealing with Cornell or Receiver 

  
 A person dealing with Cornell or any Receiver shall not (unless that person is a director or employee or affiliate of Cornell or the Receiver) be
concerned to enquire: 
  

	 	(a)	whether any event has happened upon which any of the powers contained in this deed may have arisen or be exercisable; 

  

	 	(b)	otherwise as to the propriety or regularity of any exercise of the powers conferred by this deed or of any act purporting or intended to be in exercise of such powers; or

  

	 	(c)	whether any Secured Liabilities remain owing. 

  

	18.	Notice of Subsequent Charge 

  
 If Cornell receives notice of any subsequent charge or other interest affecting any Charged Property, it may open a new account for the Chargor in its
books and may transfer any outstanding balance owing by the Chargor to such new account. If Cornell does not do so then, unless it gives express written notice to the contrary to the Chargor, all payments made by the Chargor to Cornell will as from
the time of receipt of such notice by Cornell be treated as having been credited to a new account of the Chargor and not as having been applied in reduction of the Secured Liabilities. 
  

	19.	Further Assurance 

  

	19.1	Execution of further documents 

  
 As and when required by Cornell or any Receiver the Chargor, at its own cost, will (and will procure that every party other than Cornell to any Security
Document will): 
  

	 	(a)	execute such further legal or other mortgages, fixed or floating charges or assignments in favour of Cornell as Cornell or any Receiver from time to 

  

 18 

	 	    	time requires over any Charged Property to secure the Secured Liabilities such further mortgages, charges or assignments to be prepared at the cost of the Chargor and to contain a
power of sale which arises immediately upon execution, a clause excluding section 93 of the LPA and the restrictions contained in section 103 of the LPA and such other clauses for the benefit of Cornell as Cornell or any Receiver may reasonably
require; 

  

	 	(b)	execute and do all such assurances, deeds, documents, acts and things for perfecting or protecting the mortgages, charges and assignments created by this deed or any Security
Document and for facilitating or effecting any dealing by Cornell or any Receiver under any authorities or powers granted under any Security Document; and 

  

	 	(c)	upon or with a view to assisting in any enforcement of any mortgage, charge or assignment created by this deed convey, transfer, assign or otherwise deal with any Charged Property
in such manner as Cornell or any Receiver may require. 

  

	19.2	Documents of title 

  
 The Chargor undertakes to deposit with Cornell the deeds and documents of title relating to any property charged pursuant to clause 3(b) and, whenever
required by Cornell, the Investments and the Intellectual Property immediately after they come into the Chargor’s possession or control. 
  

	20.	Power of Attorney by Chargor 

  
 The Chargor irrevocably and by way of security appoints each of Cornell, any person authorised in writing by or on behalf of Cornell and any Receiver its
attorney in each case (with full power to appoint substitutes and to delegate) severally in its name and on its behalf to execute any document or do any act or thing which the Chargor is obliged to execute or do whether under any Security Document
or which Cornell or the Receiver (or any substitute or delegate) may in their absolute discretion consider appropriate: 
  

	 	(a)	in connection with the exercise of any of their rights or powers arising under or by virtue of any Security Document, the LPA or the Insolvency Act 1986; or

  

	 	(b)	to perfect, vest in or assure to Cornell any security for the Secured Liabilities granted to Cornell or which Cornell may require to have granted to it under any Security Document.

  

	21.	Set-off 

  

	21.1	Combination of accounts and set-off 

  
 Cornell may, at any time after an Enforcement Event has occurred and without notice to the Chargor: 
  

	 	(a)	combine or consolidate any of the accounts of the Chargor of any nature with Cornell; and/or 

  

 19 

	 	(b)	set-off or transfer any monies standing to the credit of any such accounts in or towards satisfaction of the Secured Liabilities. 

  

	21.2	Time deposits 

  
 Cornell may exercise its rights under clause 21.1 (Combination of accounts and set-off) even in a case where such monies have been deposited with Cornell
for a specific period and such period has not expired. 
  

	21.3	Currency conversion 

  
 Where such combination or set-off requires the conversion of one currency into another, such conversion will be calculated at Cornell’s spot rate of
exchange between the currencies at the time of the combination or set-off. 
  

	22.	Discharge of Security 

  

	22.1	Discharge conditional 

  
 Any discharge of the Chargor made by Cornell in reliance on a payment or Security Document given by another person will be of no effect if that payment or
Security Document is avoided, reduced or invalidated for any reason and Cornell will be entitled to recover from the Chargor on demand the amount of such payment or the value of any such Security Document. 
  

	23.	Communications 

  

	23.1	Demands and other communications 

  
 Any demand for payment or any other communication made or given on or to the Chargor under or in connection with this deed may be left at any address
referred to in clause 23.2 (Address for service) or sent there by first class post or facsimile. Any such demand will be validly made whether or not it contains a statement as to the amount of the relevant Secured Liabilities or an inaccurate or
incomplete statement of the Secured Liabilities. 
  

	23.2	Addresses for service 

  
 The addresses for service referred to in clause 23.1 (Demands and other communications) are: 
  

	 	(a)	the Chargor’s registered office; 

  

	 	(b)	any address at which the Chargor carries on business; 

  

	 	(c)	any address shown on any current letterhead of the Chargor; and 

  

 20 

	 	(d)	the address of the Chargor shown in this deed or, if the Chargor has given written notice to Cornell of any other address for service, the most recent address so notified.

  

	23.3	Facsimile service 

  
 A document served by facsimile may be sent to any facsimile number shown on any current letterhead of the Chargor or specified in any notice of the kind
referred to in clause 23.2(d). 
  

	23.4	Proof and time of service 

  
 In proving service of a document it will be sufficient to prove that it was: 
  

	 	(a)	left at the relevant location in which case it will be deemed to be received when so left; 

  

	 	(b)	properly addressed, stamped and posted in which case it will be deemed to be received on the next working day in the place of receipt following the day when it was posted; or

  

	 	(c)	transmitted by facsimile in which case it will be deemed to be received when the sending facsimile machine produces a print out which confirms that transmission has taken place.

  

	24.	Assignment and Transfer 

  

	24.1	Cornell 

  
 Cornell may at any time, with the prior consent of the Chargor, assign or transfer the whole of its rights under this deed to any person. 
  

	24.2	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. 
  

	24.3	Disclosure 

  
 Cornell may disclose any information about the Chargor to any person connected to or associated with them and (in the case of Cornell) to any person to
whom Cornell proposes to assign or transfer (or has assigned or transferred) any of its rights under this deed. 
  

	25.	Miscellaneous 

  

	25.1	Trust 

  
 This security is granted to Cornell. Cornell may make demand of the Chargor and otherwise exercise its rights under this deed. 
  

 21 

	25.2	Delay and Waiver 

  
 The rights of Cornell under this deed will not be prejudiced by any delay in exercising them or by any other act done or omitted by Cornell which but for
this clause might have been deemed a waiver of such rights nor will any exercise of any such right preclude any further exercise of such right or any other right. 
  

	25.3	Certificates 

  
 A certificate by Cornell as to any amount for the time being due to it by the Chargor will be evidence of the amount so due in the absence of any manifest
error. 
  

	25.4	Severability 

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

	25.5	Rights cumulative 

  
 All rights of Cornell are cumulative and any express right conferred on Cornell under this deed may be exercised without prejudicing or being limited by
any other express or implied right of Cornell. 
  

	25.6	Continuing Security 

  
 This deed is a continuing security and extends to the balance from time to time of the Secured Liabilities irrespective of any intermediate payment of
monies due to Cornell. 
  

	25.7	Other Security 

  
 This deed is in addition to and will not in any way be prejudiced or affected by the holding or release by Cornell or by any other person of any other
security at any time held by Cornell. 
  

	25.8	Consolidation 

  
 The restrictions on the right of consolidating mortgage securities contained in section 93 of the LPA will not apply to this deed. 
  

	25.9	Land Registry Consent 

  
 By executing this deed the Chargor consents to the entry of the following restriction against any registered titles (and any unregistered properties
subject to compulsory first registration) which are at any time subject to this deed: 
  
 “No disposition of the registered estate by the proprietor of the registered estate or by the proprietor of any registered charge is to be registered without a written consent signed by the proprietor for the
time being of the charge dated [date] in favour of Cornell Capital Partners, LP referred to in the charges register or, if appropriate, signed on such proprietor’s behalf by its duly authorised officer.” 
  

 22 

	26.	Governing Law and Jurisdiction 

  

	26.1	Law 

  
 This deed is governed by English law. 
  

	26.2	Courts of England 

  
 Without limiting clause 26.3, the courts of England will have jurisdiction to settle any disputes which may arise out of or in connection with this deed.

  

	26.3	Other courts 

  
 Clause 27.2 is for the exclusive benefit of Cornell which reserves the right to bring proceedings in respect of any matter which arises out of or in
connection with this deed in the courts of any country which have or claim jurisdiction in relation to that matter. 
  

	26.4	Waiver of objection 

  
 The Chargor waives any objection on the ground of inconvenient forum to any proceedings which relate to this deed being brought: 
  

	 	(a)	in the courts of England; and 

  

	 	(b)	in any other courts by virtue of clause 26.3. 

  

	26.5	Service of process 

  
 The Chargor agrees: 
  

	 	(a)	that any process or other document connected with proceedings in the English courts which relate to this deed will be treated for all purposes as having been duly served on the
Chargor if it is received by Osborne Clarke, One London Wall, London, England EC2Y 5EB, attn: Simon Rendell; and 

  

	 	(b)	that if, at any time, the Chargor fails to maintain a process agent in London authorised to receive such process and documents, Cornell may, on the Chargor’s behalf, appoint
any person whom Cornell thinks appropriate to be the Chargor’s process agent in London and that appointment will be, in every respect, as effective as if made by the Chargor itself. 

  

	26.6	No exclusion or limitation of rights 

  
 Nothing in this clause 27 excludes or limits any right which Cornell may have (whether under the law of any country, an international convention or
otherwise) with regard to the bringing of proceedings, the service of process, the recognition or enforcement of a judgment or any similar or related matter in any jurisdiction. 
  

 23 

	26.7	Proceedings in more than one jurisdiction 

  
 If Cornell commences proceedings in connection with this deed that will not prevent Cornell from commencing proceedings (whether concurrently or not) with
respect to this deed in another jurisdiction. 
  
 This deed has been executed and delivered as a deed on the date shown at the beginning of this deed. 
  

 24 

			
	 EXECUTED as a DEED by i2 TELECOM
 INTERNATIONAL LIMITED acting by 
 two Directors or one Director and a Company Secretary
	 	
 Paul Arena, Director

		
	 	 	  

 Oval
“2052”, Ltd., Secretary
 By:

	 EXECUTED as a DEED by
 CORNELL
CAPITAL PARTNERS, LP
  
	 	  

	 By: Yorkville Advisors, LLC
 Its: General
Partner
	 	 Mark Angelo
 Portfolio Manager

  

 25

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00096-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00096-of-00352.parquet"}]]