Document:

March
      27,
      2007

    

    Directors

    Jano
      Holdings Limited

    International
      Commercial Centre, Suite F8

    Main
      Road

    Casemates,
      Gibraltar

    

    Re:
      Facility Agreement, Debenture & Warrants for Advance Nanotech

    

    Dear
      Sirs:

    

    On
      May
      3rd
      2004,
      JANO HOLDINGS LIMITED (“JANO”) first made available to Advance Nanotech, Inc.
      (the “Company”) a senior secured facility (the “Credit Facility”), pursuant to
      which JANO made available to the Company one or more loans in the aggregate
      principal amount of up to Twenty Million Dollars ($20,000,000) dollars. The
      Company has repaid the principal and interest outstanding on the Credit
      Facility. 

     

    In
      exchange for good and valuable consideration, the receipt and sufficiency of
      which is hereby acknowledged, JANO and the Company mutually desire to cancel,
      effective immediately, the Credit Facility and associated security agreement
      (the “Security Agreement”) and warrants (the “Warrants”) to purchase 6,666,666
      shares of the Company’s common stock (the “Common Stock”), at $1.25.

     

    
      We
        kindly
        request that you sign this letter below to acknowledge your agreement to
        the
        above and your agreement to cancel the Credit Facility, associated Security
        Agreement and the Warrants.

    

     

    
      	
              Very
                truly yours, 

            	
              ACKNOWLEDGED
                AND AGREED

            
	 	 
	
              ADVANCE
                NANOTECH, INC.,

            	
              Jano
                Holdings Limited,

            
	
              a
                Delaware corporation

            	
              a
                Gibraltar corporation

            
	 	 
	 	 
	 	 
	
              By:
                _______________________________

            	
              By:
                _______________________________

            
	 	 
	
              Tony
                Goncalves

            	
              Director

            
	
              Chief
                Executive OfficerMarch
      28, 2007

    

     

    

     

    FACILITY
      AGREEMENT

     

    between

     

    Conquistador
      Investments Limited

     

    as
      the Lender

     

    and

     

    Advance
      Homeland Security PLC`

     

    as
      the Borrower

     

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Table
      of Contents

     

    
      	 	 	
              Page

            
	
              1.

            	
              DEFINITIONS
                AND INTERPRETATION

            	
              3

            
	
              2.

            	
              THE
                FACILITY

            	
              6

            
	
              3.

            	
              PURPOSE

            	
              7

            
	
              4.

            	
              CONDITIONS
                PRECEDENT

            	
              7

            
	
              5.

            	
              DRAWDOWN

            	
              8

            
	
              6.

            	
              INTEREST

            	
              8

            
	
              7.

            	
              DEFAULT
                INTEREST

            	
              8

            
	
              8.

            	
              REPAYMENT,
                PREPAYMENT AND CANCELLATION

            	
              9

            
	
              9.

            	
              PAYMENTS

            	
              10

            
	
              10.

            	
              FEES,
                CHARGES AND EXPENSES

            	
              11

            
	
              11.

            	
              SECURITY

            	
              11

            
	
              12.

            	
              REPRESENTATIONS
                AND WARRANTIES

            	
              11

            
	
              13.

            	
              NEGATIVE
                UNDERTAKINGS

            	
              14

            
	
              14.

            	
              AFFIRMATIVE
                UNDERTAKINGS

            	
              14

            
	
              15.

            	
              EVENTS
                OF DEFAULT

            	
              15

            
	
              16.

            	
              TERM
                AND TERMINATION

            	
              19

            
	
              17.

            	
              ASSIGNMENT
                AND TRANSFER

            	
              20

            
	
              18.

            	
              SET-OFF

            	
              20

            
	
              19.

            	
              REMEDIES,
                WAIVERS, AMENDMENTS AND CONSENTS

            	
              20

            
	
              20.

            	
              SEVERANCE

            	
              21

            
	
              21.

            	
              COUNTERPARTS

            	
              21

            
	
              22.

            	
              THIRD
                PARTY RIGHTS

            	
              21

            
	
              23.

            	
              NOTICES

            	
              21

            
	
              24.

            	
              CALCULATIONS
                AND CERTIFICATES

            	
              22

            
	
              25.

            	
              CONFIDENTIALITY

            	
              22

            
	
              26.

            	
              GOVERNING
                LAW

            	
              23

            
	
              27.

            	
              JURISDICTION
                AND SERVICE OF PROCESS

            	
              23

            
	 	 

    

    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    This
      FACILITY
      AGREEMENT
      is dated
      28th
      March,
      2007

    

    BETWEEN:

    

    
      	 	
              (1)

            	
              Advance
                Homeland Security PLC, a Public Limited Company registered in England
                (company number 5916772) having a Registered Office at Savannah House,
                5th
                Floor, 11 Charles II Street, London SW1Y 4QU (the
                “Borrower”);
                and 

            

    

    

    
      	 	
              (2)

            	
              Conquistador
                Investments Limited, a company incorporated in Gibraltar with a place
                of
                business at Suite F8, International Commercial, Centre, Main Road,
                Gibraltar (the
                “Lender”)
                (each a “Party,”
                and collectively, the “Parties”).

            

    

     

     

     

    BACKGROUND

     

    The
      parties wish to enter into this Facility Agreement. The Lender has agreed to
      provide the Borrower with a secured loan of up to GBP £6,000,000 on the
      following terms and subject to the following conditions.

     

     

    IN
      WITNESS WHEREOF it
      is
      hereby agreed as follows:

     

     

    1.
       DEFINITIONS
      AND INTERPRETATION

    
       

      
        	
                1.1 

              	
                Definitions:
                  In
                  this Agreement, unless the context otherwise requires, the following
                  terms
                  shall have the meanings assigned to them in this Clause
                  1.1:

              

      

       

    

    
      	 	 
	
              “Advances”

            	
              shall
                mean advances in GBP to be made by the Lender to the Borrower under
                this
                Agreement, or as the case may be, the principal amount outstanding,
                from
                time to time, of such advances;

               

            
	
              “Assets”

            	
              Shall
                mean such fixed and current assets that are legally and beneficially
                owned
                solely by the Borrower and over which no other third party has any
                control, lien, right, encumbrance, charge or otherwise (except with
                the
                agreement with the third party).

               

            
	
              “Availability
                Period”

            	
              shall
                mean the period commencing on the Drawdown Date and ending on the
                Maturity
                Date or such later date as the parties may agree in accordance with
                the
                provisions of Clause 16.2(c);

               

            
	
              “Borrower”

            	
              shall
                have the meaning assigned to such term in the preamble;

               

            
	“Business
              Day”	shall mean
              a day
              (other than a Saturday or a Sunday) on which commercial banks are open
              for
              the transaction of general banking business both in London and New
              York;

    

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    
      	
              “Budget”

            	
              shall
                mean a budget that is mutually agreed between the parties 

               

            
	
              “Change
                of Control”

            	
              shall
                mean:

              (a) any
                change in the legal or beneficial ownership of the shares of the
                Borrower
                after the date hereof or entry into any agreement which, in either
                case,
                results in the current investors (or funds managed, advised or controlled
                directly or indirectly by any of them) ceasing to:

              (i)   own
                more than 50% of the issued share capital  of
                the Borrower; 

              (ii) 
                own
                share capital having the right to cast more than 50% of the votes
                capable
                of being cast at a general meeting of the Borrower; or

              (iii) 
                be
                able to appoint the majority of the Board of Directors of the
                Borrower.

               

            
	
              “Conditions
                Precedent”

            	
              shall
                mean each and all of the conditions set out in Clause 4;

               

            
	
              “Debenture”

               

            	
              shall
                mean the debenture in the form set out in Schedule 1;

            
	“Default
              Interest”	
              shall
                have the meaning assigned to such term in Clause 7.1;

               

            
	
              “Default
                Interest Period”

            	
              shall
                mean in respect of any Unpaid Amount such period as maybe determined
                in
                accordance with Clause 7 (Default
                Interest);

               

            
	
              “Default
                Interest Rate”

            	
              shall
                mean 1.5% per month;

               

            
	
              “Drawdown
                Date”

            	
              shall
                mean the date on which all of the Conditions Precedent are satisfied
                or
                (in the absolute discretion of the Lender), waived;

               

            
	
              “Event
                of Default”

            	
              shall
                mean each of the events set out in Clause 15 (Events
                of Default);

               

            
	
              “Encumbrance”

            	
              shall
                mean any mortgage, charge (fixed or floating), pledge, lien,
                hypothecation, right of set-off, security trust, assignment by way
                of
                security, reservation of title or any other security interest whatsoever,
                howsoever created or arising or any other agreement or arrangement
                (including any sale and leaseback transaction) entered into for the
                purposes of conferring security and any agreement to enter into,
                create or
                establish any of the foregoing;

            

    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    
      	
              “Facility”

            	
              shall
                mean the secured term loan facility made available to the Borrower
                by the
                Lender pursuant to this Agreement;

               

            
	
              “Finance
                Documents”

            	
              means
                this Agreement and the Debenture;

               

            
	
              “GAAP”

            	
              shall
                mean accounting principles and practices which at the date hereof
                are
                generally accepted in the United Kingdom and approved by the Institute
                of
                Chartered Accountants of England and Wales;

               

            
	
              “GB
                Pounds” or“GBP”

               

            	
              shall
                mean the lawful currency for the time being of the United Kingdom,
                which
                is currently Pounds Sterling;

               

            
	
              “Indebtedness”

            	
              shall
                mean any obligation not disclosed in excess of £250,000 for the payment or
                repayment of money, whether as principal or surety and whether present
                or
                future, actual or contingent, sole or joint;

               

            
	
              “Interest
                Payment Date”

            	
              shall
                mean the last day of any Interest Period;

               

            
	
              “Interest
                Period”

            	
              shall
                mean in respect of the Advance, each period determined in accordance
                with
                Clause 6 (Interest);
                

               

            
	
              “Interest
                Rate”

            	
              shall
                mean 9.0% per annum;

               

            
	
              “Lender”

            	
              shall
                have the meaning assigned to such term in the preamble;

               

            
	“Lender’s
              Bank Account” 	
              Shall mean Lenders account held at Credit Suisse
                Gibraltar Limited; 

               

            
	
              “Loan”

            	
              shall
                mean the aggregate amount due and payable from the Borrower to the
                Lender
                under this Agreement from time to time including the Advance, all
                amounts
                of interest and Default Interest and any fees, commissions and other
                payments;

               

            
	
              “Material
                Adverse Effect”

            	
              shall
                mean any event or circumstance which, in the opinion of the Lender
                (acting
                reasonably), is likely to materially and adversely affect the ability
                of
                the Borrower to perform all or any of its obligations under, or otherwise
                comply with the terms and conditions of, this
                Agreement;

            
	
              “Maturity
                Date”

            	
              shall
                mean 31st
                December, 2010 or such later date as the parties may agree in accordance
                with Clause 16.2(c);

               

            
	
              “Ordinary
                Shares”

            	
              Shall
                mean the ordinary shares of the Borrower;

               

            
	
              “Permitted
                Indebtedness”

            	
              shall
                mean any indebtedness in the principal amount of less than GBP £250,000,
                incurred in the ordinary course of business;

               

            

    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      	
              “Prepayment
                Notice”

            	
              shall
                have the meaning assigned to such term in Clause 8.2;

               

            
	
              “Security”

            	
              shall
                mean collectively  the
                security over all the Assets of the Borrower as set out in the Debenture;
                

               

            
	
              “Term”

            	
              shall
                mean, in respect of the Facility, the period commencing on the date
                of
                this Agreement and ending on the date on which all amounts due and
                payable
                by the Borrower hereunder (whether representing principal, interest,
                fees,
                costs, expenses, commissions or other payments) have been paid and
                discharged in full;

               

            
	
              “Unpaid
                Amount”

            	
              shall
                mean any sum or amount which is not paid on the date on which such
                sum
                falls due under this Agreement;

               

            
	
              “Warranties”
                

            	
              shall
                mean the representations and warranties set out in Clause 12 (Representations
                and Warranties).

            

    

     

    1.2 Interpretation:
      In
      this Agreement,
      save where the context otherwise requires:

     

    
      	
              (a)

            	
              references
                to a “person”
                shall
                be interpreted broadly to include, without limitation, any corporation,
                association, partnership or individual. References to the singular
                shall
                include the plural. References to the masculine shall include all
                other
                genders and, unless the context otherwise requires, references to
                Clauses
                and Appendices are to Clauses of, and Appendices to this
                Agreement;

            

    

    
       

      
        	
                (b)

              	
                references
                  to a “party”
                  are to a party to this
                  Agreement;

              

      

       

    

    
      	
              (c)

            	
              Clause
                headings are for convenience only and shall have no bearing on the
                interpretation of this Agreement;

            

    

     

    
      	
              (d)

            	
              a
                reference to a statute or statutory provision shall be construed
                as a
                reference to the same as it may have been, or may from time to time
                be,
                amended modified or re-enacted, except where the amendment, modification
                or re-enactment would extend or increase the liability on either
                party;

            

    

     

    
      	
              (e)

            	
              any
                accounting terms that are not specifically defined shall be construed
                in
                accordance with GAAP; and 

            

    

     

    
      
        	
                (f)

              	
                a
                  reference to a time of day is to Greenwich Mean Time (“GMT”).

              

      

    

     

    2.
       THE
      FACILITY

     

    On
      the
      terms and subject to the conditions of this Agreement, the Lender agrees to
      make
      available to the Borrower a secured sterling term loan in an aggregate principal
      amount not exceeding GBP £6,000,000 which shall be made available in accordance
      with the Budget.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    3.
       PURPOSE

     

    
      	
              3.1 

            	
              The
                proceeds of the advance shall be applied by the Borrower only for
                the
                purpose of working capital and for general corporate purposes including
                growth and capital initiatives in accordance with the
                Budget.

            

    

     

    
      	
              3.2

            	
              The
                Borrower undertakes that the proceeds of the Advances shall be used
                only
                for the purposes permitted by this Clause 3 and shall not be used
                for any
                other purpose. For the avoidance of doubt, the Advance shall not
                be used
                in any way which would be illegal under, or would cause the invalidity
                or
                unenforceability (whether in whole or in part) of any Finance Document,
                under any applicable law.

            

    

     

    4.
       CONDITIONS
      PRECEDENT

     

    
      	
              4.1 

            	
              The
                Lender shall not be under any obligation to make any Advances available
                to
                the Borrower unless:

            

    

     

    
      	
              (a)

            	
              the
                Lender has received and approved the following documents, either
                in
                original or certified copy:

            

    

     

    
      	 	
              (i)

            	
              resolutions
                of the Borrower (i)
                authorising
                the entry into and performance of this Agreement; and (ii)
                authorising
                a specified person to execute the Finance Documents on its behalf
                and take
                all other action as may be necessary in connection the Finance Documents;
                

            

    

     

    
      	 	
              (ii)

            	
              the
                Budget

            

    

    
       

      
        	
                (b)

              	
                the
                  Lender has received copies of the following documents of the
                  Borrower:

              

      

       

      
        
          	 	
                  (i)

                	
                  Certificate
                    of Incorporation; 

                

        

        
           

        

      

    

    
      
        	 	
                (ii)

              	
                any
                  Certificates of Incorporation on Change of
                  Name;

              

      

      
         

      

    

    
      
        	 	
                (iii)

              	
                Memorandum
                  of Association; 

              

      

      
         

      

    

    
      
        	 	
                (iv)

              	
                Articles
                  of Association; 

              

      

      
         

      

    

    
      
        	 	
                (v)

              	
                
                  Share
                    Certificate in favour of the Lender for 8,000,000 Ordinary Shares
                    in the
                    Borrower.

                

              

      

      
         

      

    

    
      	
              4.2 

            	
              The
                obligation of the Lender to make the Advance is subject to the condition
                precedent that, on the Drawdown Dates:

            

    

     

    
      	
              (a)

            	
              the
                Warranties are true and correct and will be true and correct immediately
                after the making of the Advances;
                and

            

    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    
      	
              (b)

            	
              no
                Event of Default is continuing, or would result from the making of
                the
                Advances.

            

    

     

    
      	
              4.3 

            	
              The
                conditions specified in this
                Clause 4 are inserted solely for the benefit of the Lender and may
                be
                waived by the Lender, in whole or in part and with or without conditions,
                without prejudicing the Lender's right to require subsequent fulfilment
                of
                such conditions.

            

    

     

    5.
       DRAWDOWN

     

    Subject
      to the satisfaction of the Conditions Precedent, the Advances shall be made
      to
      the Borrower on, or within five (5) business days following receipt by Lender
      of
      a drawdown request from the Borrower, subject to the Budgets. 

     

    6.
       INTEREST

    
       

      
        	
                6.1 

              	
                Interest
                  Periods The
                  period for which the Advance is outstanding shall be divided into
                  successive periods each of which (other than the first period,
                  which shall
                  begin on the Drawdown Date) shall start on the last day of the
                  preceding
                  such period.

              

      

       

    

    6.2         
      Duration

     

    
      	
              (a)

            	
              The
                duration of each Interest Period shall be one month provided that
                the
                first Interest Period shall commence on the Drawdown Date and shall
                end on
                the last day of the month in which the Drawdown Date falls. No Interest
                Period shall extend after the Maturity Date. If an Interest Period
                would
                otherwise extend beyond the Maturity Date it shall be shortened so
                that it
                ends on the Maturity Date.

            

    

     

    
      	
              (b)

            	
              If
                any Interest Period would otherwise end on a day that is not a Business
                Day, the Interest Period shall instead end on the next Business Day
                in the
                same calendar month (if there is one) or the preceding Business Day
                (if
                there is not).

            

    

     

    6.3         
      Calculation
      and Payment of Interest 

     

    
      	
              (a)

            	
              The
                rate of interest applicable to the Advance for each Interest Period
                shall
                be the Interest Rate. Interest will accrue from day to day, shall
                be
                compounded at the end of each Interest Period and shall be calculated
                on
                the basis of the actual number of days elapsed and on the basis of
                a year
                of 360 days.

            

    

     

    
      	
              (b)

            	
              The
                Borrower shall pay all amounts of interest due to the Lender under
                this
                Agreement in arrears on the Maturity
                Date.

            

    

     

    
      	
              (c)

            	
              The
                determination by the Lender of any interest payable pursuant to this
                Clause 6 shall be prima
                facie
                evidence of the relevant amount payable and, in the absence of manifest
                error shall be binding on the
                parties.

            

    

     

    7.
       DEFAULT
      INTEREST

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    
      	
              7.1 

            	
              If
                the Borrower does not pay any sum payable under the Finance Documents
                when
                due for payment of such amount (including any amount due and payable
                pursuant to this Clause 7.1) within 5 Business Days of the payment
                due
                date, it shall pay interest on the Unpaid Amount from time to time
                outstanding from the period beginning on its due date for the payment
                thereof and ending on the date of its receipt by the Lender (both
                before
                and after judgment) calculated by reference to successive Interest
                Periods
                at the Default Interest Rate (“Default
                Interest”).

            

    

     

    
      	
              7.2 

            	
              Default
                Interest accruing on an Unpaid Amount shall, if unpaid, be compounded
                with
                such Unpaid Amount at the end of each Default Interest Period for
                such
                Unpaid Amount and shall be immediately payable by the Borrower on
                demand
                by the Lender. 

            

    

     

    
      	
              7.3

            	
              The
                first Default Interest Period shall begin on the due date for payment
                of
                the relevant Unpaid Amount and each succeeding Default Interest Period
                shall begin on the last day of the previous Default Interest
                Period.

            

    

     

    
      	
              7.4

            	
              The
                duration of each Default Interest Period shall be one week provided
                that
                if any Default Interest Period would otherwise end on a day that
                is not a
                Business Day, the Default Interest Period shall instead end on the
                next
                Business Day.

            

    

     

    
      	
              7.5

            	
              The
                determination by the Lender of any Default Interest payable pursuant
                to
                this Clause 7 shall be prima
                facie
                evidence of the relevant amount payable and, in the absence of manifest
                error shall be binding on the
                parties.

            

    

     

    8.
       REPAYMENT,
      PREPAYMENT AND CANCELLATION

    
       

      
        	
                8.1

              	
                Repayment The
                  Borrower shall repay the Loan in full on the Maturity
                  Date.

              

      

      
      

    

    
      
        
          	
                  8.2

                	
                  Voluntary
                    Prepayment The
                    Borrower may, by giving the Lender not less than 15 days' prior
                    written
                    notice (a “Prepayment
                    Notice”)
                    at any time, prepay the Advance in whole or in any part, subject
                    to the
                    following conditions: 

                

        

         

      

    

    
      	
              (a)

            	
              the
                date of the scheduled prepayment is
                not less than 15 days after the date of the Prepayment
                Notice;

            

    

     

    
      	
              (b)

            	
              the
                prepayment does not result in an Event of Default occurring;
                and

            

    

     

    
      	
              (c)

            	
              interest
                (and Default Interest, if applicable) shall accrue on the amount
                of such
                prepayment up to the date on which the prepayment is made and shall
                be
                payable concurrently with such prepayment, notwithstanding the fact
                that
                the date of such prepayment may not coincide with an Interest Payment
                Date.

            

    

     

    
      
        
          	
                  8.3

                	
                  Mandatory
                    Prepayment on Change of Control Notwithstanding
                    any other provisions
                    of this Clause 8, on any date on which a Change of Control occurs,
                    the
                    Loan shall be repaid in full. The Borrower shall, to the extent
                    possible,
                    provide the Lender with 15 days’ notice of any proposed Change of
                    Control.

                

        

      

    

    
      
         

        
          
            
            

          

          
            9

            
              

            

          

          
            
            

          

        

         

        
          	
                  8.4

                	
                  Illegality If,
                    at any time:

                

        

         

      

    
      	
              (a)

            	
              the
                introduction of, or any change in, any law or regulation or any change
                in
                the application or interpretation thereof by any court or regulatory
                authority; 

            

    

     

    
      	
              (b)

            	
              compliance
                with any direction, request or requirement (whether or not having
                the
                force of law) of any monetary agency, central bank or governmental
                or
                other regulatory authority; or

            

    

     

    
      	
              (c)

            	
              any
                judgment, order or direction of any court, tribunal or authority
                binding
                on the Lender, 

            

    

     

    renders
      it unlawful for the Lender to
      make the
      Advance or allow the Advance to remain outstanding, the
      Lender shall give notice to the Borrower, requiring the Borrower to prepay
      the
      Loan on the next Interest Payment Date or such earlier date as the Lender
      certifies to be the last date permitted for payment by such law, regulation,
      regulatory requirement, request, judgment, order or direction.

    
      
         

        
          	
                  8.5

                	
                  Prepayment
                    Notices to be revocable Any
                    Prepayment Notice given by the Borrower under this Agreement
                    shall be
                    revocable on a day’s notice and shall not oblige the Borrower to prepay
                    the Loan in accordance with that
                    notice.

                

        

        
          
             

            
              	
                      8.6

                    	
                      No
                        Ability to Re-draw The
                        Borrower may not re-draw any amount of the Loan which has
                        been either
                        repaid or prepaid in accordance with the terms of this Agreement.
                        

                    

            

            
              
                 

                
                  	
                          8.7

                        	
                          Consideration
                            to Enter into Facility As
                            consideration for this Facility, the Lender shall receive
                            8,000,000
                            Ordinary Shares of the
                            Borrower.

                        

                

              

          

        

      

    

     

    9.
       PAYMENTS

     

    
      	
              9.1

            	
              Subject
                to satisfaction (or waiver) of all the Conditions Precedent, the
                Lender
                shall pay the Advance or Advances to the Borrower’s Bank Account in
                immediately available cleared funds on the Drawdown Date or directly
                to
                Creditors as advised by the
                Borrower.

            

    

     

    
      	
              9.2 

            	
              The
                currency of the Loan shall be in GB Pounds and all payments from
                or by the
                Borrower under this Agreement shall be
                made:

            

    

     

    (a)           
      in
      full,
      without any deduction, set-off or counterclaim; and 

     

    
      	
              (b)

            	
              in
                immediately available cleared funds on the Lender’s Bank Account or such
                other account as the Lender may specify to the Borrower in
                writing.

            

    

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    
      	
              9.3 

            	
              Unless
                expressly stated to the contrary in any other Clause of this Agreement,
                any payment which is due to be made on a day which is not a Business
                Day,
                shall be made on the next Business Day in the same calendar month
                (if
                there is one) or the immediately preceding Business Day (if there
                is not).
                Any interest or other amount accruing on a daily basis shall be calculated
                accordingly.

            

    

     

    
      	
              9.4 

            	
              If
                the Lender receives a payment that is insufficient to discharge all
                the
                amounts then due and payable by the Borrower under this Agreement
                or any
                other Finance Document, the Lender shall apply that payment in settlement
                of those amounts in the order determined by the Lender in its absolute
                discretion.

            

    

     

    10.
       FEES,
      CHARGES AND EXPENSES

     

    Each
      party shall be responsible for their own legal fees, charges and expenses in
      relation to the preparation and execution of the Finance
      Documents.

     

    11. SECURITY

    
      
         

        
          	
                  ll.1

                	
                  General The
                    Assets of the Borrower shall be secured for the duration of the
                    Term by
                    the interests and rights granted in favour of the Lender in accordance
                    with the Finance Documents.

                

        

         

      

    

    12.
       REPRESENTATIONS
      AND WARRANTIES

    
      
         

        
          	
                  12.1

                	
                  The
                    Borrower represents and warrants to the Lender
                    that:

                

        

        
           

          
            	
                    (a)

                  	
                    Status  It
                      is a company, duly incorporated and validly existing under
                      the laws of the
                      jurisdiction of its incorporation, it possesses the capacity
                      to sue and be
                      sued in its own name and has the power to own its property
                      and Assets and
                      carry on its business as it is now being and will be
                      conducted.

                  

          

        

      

    

    
      
         

        
          	
                  (b)

                	
                  Powers
                    and Authority It
                    has the power to (i) execute,
                    deliver and exercise its rights and perform its obligations under
                    the
                    Finance Documents to which it is a party; (ii) carry
                    out the transactions contemplated by the Finance Documents and
                    has taken
                    all necessary corporate, shareholder and other action to authorise
                    the
                    execution, delivery and performance of those documents and transactions;
                    and (iii) make
                    each of the Finance Documents to which it is a party admissible
                    in
                    evidence in the courts of the jurisdiction to which it has submitted
                    in
                    such Finance Document.

                

        

         

        
          
            
              	
                      (c)

                    	
                      Legal
                        Validity This
                        Agreement constitutes, and any and each other Finance Document
                        to which it
                        is or will become a party (when executed by it or on its
                        behalf) will
                        constitute, its legal, valid, binding and enforceable obligations
                        and
                        (without limiting the generality of the foregoing) any Finance
                        Document
                        pursuant to which it is a party and which purports to create
                        Security,
                        creates the security interests which such Finance Document
                        purports to
                        create or, as the case may be, accurately evidences a security
                        interest
                        which has been validly
                        created.

                    

            

            
               

              
                
                  
                  

                

                
                  11

                  
                    

                  

                

                
                  
                  

                

              

               

              
                	
                        (d)

                      	
                        No
                          Conflict The
                          entry into and performance by it of this Agreement and
                          each other Finance
                          Document to which it is a party and the transactions to
                          be implemented
                          pursuant to those documents do not and will not conflict
                          with:
                          

                      

              

               

            

          

        

      

    

    
      	 	
              (i)

            	
              any
                applicable law or regulation or any order of any governmental, or
                other
                official authority, body or agency or any judgment, order or decree
                of any
                court having jurisdiction over it;

            

    

     

    
      	 	
              (ii)

            	
              the
                provisions of its constitutional or governing documents or any of
                its
                resolutions (having current effect); or

            

    

     

    
      	 	
              (iii)

            	
              any
                agreement or instrument to which it is a party or which is binding
                upon it
                or on its Assets; 

            

    

     

    in
      each
      case in such a manner or to such an extent as would reasonably be expected
      to
      have a Material Adverse Effect or in a manner or to an extent which is
      reasonably likely to result in any material liability on the part of the Lender
      to any third party by reason of any such conflict, nor will it result in the
      creation or imposition of any Encumbrance on any of its Assets (save for any
      Encumbrance created pursuant to the Finance Documents).

    

    
      	
              (e)

            	
              Insolvency
                The
                Borrower has not taken any corporate action nor have any steps been
                taken
                or legal proceedings started or threatened against it) or for the
                enforcement of any Encumbrance over all or any of its Assets or for
                the
                appointment of a receiver, administrator, administrative receiver
                or
                similar officer in respect of it or in respect of any or all of its
                Assets
                or revenues or any other similar events under any applicable law
                in any
                jurisdiction.

            

    

     

    
      	
              (f)

            	
              No
                Default

            

    

     

    (i)           
      No Event
      of
      Default has occurred and is continuing or is reasonably likely to result from
      the entry into, the performance of, or any transaction contemplated by, any
      Finance Document.

     

    (ii)          No
      other
      event or circumstance is outstanding that constitutes a default under any other
      agreement or instrument which is binding on it or to which its Assets are
      subject which would reasonably be expected to have a Material Adverse
      Effect.

     

    
      	
              (g)

            	
              Consents
                Any
                and all authorisations, approvals, consents, licences, exemptions,
                filings, registrations and other matters required on the part of
                the
                Borrower pursuant to any applicable law or in consequence of (i) the
                entry into and performance by it of and/or the validity of any of
                the
                Finance Documents to which it is a party or to carry out the transactions
                contemplated thereby and/or (ii) the
                continued carrying on of the business of the Borrower have been obtained
                or made and are in full force and effect or will be obtained or made
                and
                will be in full force and effect prior to the date required by applicable
                law and other than in the case of the Finance Documents save for
                (i) filings,
                records or registrations required in relation to the Security (the
                Borrower will take all necessary actions to enable the Lender to
                effect
                all such filings and registrations within the applicable time periods)
                and
                (ii) minor
                authorisations, consents and
                filings.

            

    

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    
      	
              (h)

            	
              Filing
                or stamp taxes Under
                the laws of its jurisdiction of incorporation the Borrower will make
                such
                filings as may be necessary to complete the transactions contemplated
                by
                the Finance Documents 

            

    

     

    
      	
              (i)

            	
              Encumbrances
                No
                Encumbrance (or agreement to create the same) exists on or over the
                Borrower’s Assets save as disclosed by the
                Borrower.

            

    

     

    
      	
              (j)

            	
              Indebtedness The
                Borrower has not incurred (or agreed to incur) any Indebtedness other
                than
                the Permitted Indebtedness save as disclosed by the
                Borrower.

            

    

     

    
      	
              (k)

            	
              Information
                All
                written information provided by or on behalf of the Borrower was
                true and
                accurate (or, in the case of information prepared and/or provided
                by any
                person other than the Borrower or its advisors, was true and accurate
                to
                the best of its knowledge and belief) in all material respects at
                the date
                (if any) ascribed thereto or (if none) at the date of the relevant
                component of the information. All expressions of opinion or intention
                and
                all forecasts and projections attributable to the Borrower contained
                in
                the information provided to the Lender were arrived at after careful
                consideration, were at the date made fair and were based on assumptions
                believed to be reasonable at the time made. The information provided
                to
                the Lender as of its date was not misleading in any material respect
                and
                did not omit to disclose or take into account any matter known to
                the
                Borrower where failure to disclose or take into account such matter
                would
                result in the information provided to the Lender (or any information
                or
                projection contained therein) being misleading in any material respect,
                and nothing has occurred or come to light since the date of any of
                such
                information which, insofar as the Borrower is aware, renders any
                material
                facts forming the basis thereof materially inaccurate or misleading
                or
                which makes any of the projections or forecasts contained therein
                materially unfair or unreasonable or renders any of the assumptions
                upon
                which the projections are based materially unfair or
                unreasonable.

            

    

    
       

      
        	
                (l)

              	
                No
                  breach of laws It
                  has not breached any law or regulation which breach has or is reasonably
                  likely to have a Material Adverse
                  Effect.

              

      

    

     

    
      	
              (m)

            	
              Ownership
                of Assets The
                Borrower has good title to or valid leases or licences of or is otherwise
                entitled to use all Assets necessary to properly conduct its business
                except to the extent the absence of which would not reasonably be
                expected
                to have a Material Adverse Effect.

            

    

     

    
      	
              (n)

            	
              Ranking The
                Security has or will have first ranking priority and it is not subject
                to
                any prior ranking or pari
                passu
                ranking Encumbrance.

            

    

     

    (o)          
      Documents The
      documents delivered to the Lender by or on behalf of the Borrower pursuant
      to
      Clause 4 (Conditions
      Precedent)
      and any
      other provision of the Finance Documents were genuine, and in the case of copy
      documents, were true, complete and accurate copies in all material respects
      of
      originals, which had not been amended, varied, supplemented or superseded in
      any
      way which would be likely to affect materially and adversely the interests
      of
      the Lender under the Finance Documents.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    (p)          
      Repetition The
      representations and warranties set out in this Clause 12.1 (Representations
      and Warranties)
      shall
      survive the execution of this Agreement and
      are made
      by the Borrower on the date of execution of this Agreement and on the date
      of
      the Drawdown Date.

     

    
      	
              12.2

            	
              The
                Borrower represents and warrants to the Lender that the Warranties
                are
                true and correct as at the date of this
                agreement.

            

    

     

    13.
       NEGATIVE
      UNDERTAKINGS

     

    Unless
      otherwise agreed in writing by the Lender, as long as any amount under the
      Loan
      remains outstanding, the Borrower agrees with the Lender that:

    

    
      	
              13.1

            	
              Negative
                Pledge It
                will not create, or permit to subsist, any Encumbrance on the whole
                or any
                part of its respective present or future business, Assets or undertaking
                other than the Security.

            

    

     

    
      	
              13.2

            	
              Transactions
                Similar to Security It
                will not enter into any arrangement with any person providing for
                the
                leasing by the Borrower of real or personal property that has been
                or is
                to be sold or transferred by the Borrower to such person or to any
                other
                person to whom funds have been or are to be advanced by such person
                on the
                security of such property or rental obligations of the Borrower
                . 

            

    

    
      
         

        
          	
                  13.3

                	
                  Disposals
                    The
                    Borrower will not, either in a single transaction or in a series
                    of
                    transactions whether related or not and whether voluntarily or
                    involuntarily, attempt to sell, transfer, lease or otherwise
                    dispose of
                    all or any part of the
                    Security.

                

        

        
          
             

            
              	
                      l3.4

                    	
                      Indebtedness
                        The
                        Borrower will not incur any Indebtedness other than Permitted
                        Indebtedness
                        following the date hereof.

                    

            

             

          

        

      

    

    
      	
              13.5

            	
              Administration
                and Winding-up Orders, etc. The
                Borrower will not make or join in making any application to any court
                for
                an administration, winding up, receivership or other similar order
                to be
                made in relation to the Borrower, other than where such application
                or the
                granting of any such application would not reasonably be expected
                to have
                a Material Adverse Effect.

            

    

    

    
      	
              13.6

            	
              Arm’s
                Length Terms
                The Borrower shall not enter into any arrangement or contract with
                any any
                shareholder of the Borrower save where
                such arrangement or contract is entered into on an arm’s length basis and
                is fair in the reasonable opinion of the
                Borrower.

            

    

    

    14. AFFIRMATIVE
      UNDERTAKINGS

    

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    Unless
      otherwise agreed in writing by the Lender, as long as any amounts remain
      outstanding under the Loan, without the written consent of the Lender, the
      Borrower agrees that:

    
      
         

        
          	
                  l4.1

                	
                  Pari
                    Passu Ranking The
                    Borrower undertakes that its obligations under this Agreement
                    rank and
                    will at all times rank at least pari passu in right and priority
                    of
                    payment and in point of security (save by reason of and to the
                    extent of
                    the security afforded thereto by the Finance Documents) with
                    all its other
                    present and future obligations, other than obligations applicable
                    generally to companies incorporated in its jurisdiction of incorporation
                    which have priority by operation of law (including in respect
                    of
                    employees’ remuneration, taxes and like
                    obligations).

                

        

         

      

    

    
      	
              14.2

            	
              Compliance
                with Laws
                The Borrower will comply in all material respects with all applicable
                laws, rules, regulations and orders of any governmental authority,
                whether
                domestic or foreign, having jurisdiction over it or any of its
                Assets.

            

    

    

    
      	
              14.3

            	
              Consents
                The Borrower will obtain, promptly renew from time to time and maintain
                in
                full force and effect, and if so requested promptly furnish certified
                copies to the Lender of all such material authorisations, approvals,
                consents, licences and exemptions as may be required under any applicable
                law or regulation: 

            

    

    

    
      	
              (a)

            	
              that
                enable the Borrower to enter into and perform its respective material
                obligations under the Finance Documents or are required for the validity
                or enforceability of such Finance Documents or of any security provided
                for thereby; and/or 

            

    

    

    
      	
              (b)

            	
              to
                carry on its business in the ordinary course as it is being conducted
                from
                time to time,

            

    

    

    in
      each
      case, where failure to obtain, renew or maintain any such authorisation,
      approval, consent, licence or exemption or non-compliance with the terms of
      the
      same would reasonably be expected to have a Material Adverse
      Effect.

    

    14.4       
      Security 

    

    
      	
              (a)

            	
              Without
                prejudice to the obligations of the Borrower under the other Finance
                Documents, the Borrower shall take all such action (the cost of such
                action to be borne by the
                Borrower):

            

    

    

    
      	 	
              (i)

            	
              as
                may be required
                in order to create, perfect and ensure that in all respects, all
                rights to
                the Assets in the Borrower vest in the Lender, in relation to the
                Security;

            

    

    

    
      	 	
              (ii)

            	
              as
                the Lender may require for the purpose of perfecting or protecting
                the
                Lender’s rights under and preserving the security interests intended to
                be
                created or evidenced by any of the Finance Documents including, without
                limitation, rights in relation to the Security;
                and

            

    

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (iii)

            	
              as
                the Lender may require following the making of any declaration pursuant
                to
                Clauses 16.1 (Acceleration
                and Cancellation)
                for facilitating the realisation of any such Security or any part
                thereof.

            

    

     

    
      	
              (b)

            	
              The
                Borrower shall ensure that each Finance Document to which it is a
                party
                creates each and every security interest which that Finance Document
                purports to create or, if that Finance Document purports to evidence
                a
                security interest, accurately evidences a security interest which
                has been
                validly created and that each security interest ranks in priority
                as
                specified in the Finance Document creating or evidencing that
                interest.

            

    

     

    15.
       EVENTS
      OF DEFAULT 

     

    Each
      of
      the following shall constitute an Event of Default for the purposes of this
      Agreement:

     

    
      
        
          	
                  l5.1

                	
                  Non-payment The
                    Borrower fails to pay any sum payable by it under the Finance
                    Documents
                    when due, unless its failure to pay is caused solely by an administrative
                    error or technical problem and payment is made within 15 Business
                    Days of
                    its due date

                

          
             

            
              	
                      l5.2

                    	
                      Breach
                        of Security Obligations The
                        Borrower, fails to comply with the requirements of Clause
                        11 (Security),
                        Clause 13.1 (Negative
                        Pledge)
                        or
                        Clause 14.4 (Security).

                    

            

          

        

      

    

    
      
         

        
          	
                  l5.3

                	
                  Breach
                    of Other Obligations The
                    Borrower fails to comply with any of its obligations (other than
                    those
                    specified in Clause 15.1 (Non-Payment)
                    or
                    Clause 15.2 (Breach
                    of Security Obligations)
                    under any of the Finance Documents and, if that failure is in
                    the opinion
                    of the Lender (acting reasonably) capable of remedy, it is not
                    remedied
                    with 15 Business Days of the earlier
                    of:

                

        

      

    

    
      
         

        
          	
                  (a)

                	
                  the
                    Lender notifying the Borrower of the default;
                    and

                

        

         

      

    

    
      
        
          	
                  (b)

                	
                  the
                    Borrower becoming aware of the
                    default.

                

        

      

     

    15.4       
      Misrepresentation Any
      representation, warranty or statement made, repeated or deemed made by the
      Borrower in, or pursuant to, any Finance Document is (or proves to have been)
      incomplete, untrue, incorrect or misleading when made, repeated or deemed made
      and, if the circumstances giving rise to that default are deemed, in the opinion
      of the Lender (acting reasonably) capable of remedy, they are not remedied
      with
      10 Business Days of the earlier of:

    
      
         

        
          	
                  (a)

                	
                  the
                    Lender notifying the Borrower of the default;
                    and

                

        

        
          
             

            
              	
                      (b)

                    	
                      the
                        Borrower becoming aware of the
                        default.

                    

            

             

            
              
                
                

              

              
                16

                
                  

                

              

              
                
                

              

            

             

          

        

      

    

    15.5 Invalidity
      and Unlawfulness

     

    
      	
              (a)

            	
              Any
                provision of any Finance Document (other than a provision of a minor
                technical or administrative nature) is or becomes invalid or unenforceable
                for any reason or is repudiated or the validity or enforceability
                of any
                provision of any Finance Document is contested by any party thereto
                (other
                than the Lender) or any party to any Finance Document (other than
                the
                Lender) denies the existence of any liability or obligation on its
                part
                under any Finance Document.

            

    

     

    
      	
              (b)

            	
              It
                is or becomes unlawful under any applicable jurisdiction for the
                Borrower
                to perform any of its obligations (other than of a minor technical
                or
                administrative nature) under any Finance
                Document.

            

    

     

    
      	
              (c)

            	
              Any
                act, condition or thing required to be done, fulfilled or performed
                in
                order to:

            

    

     

    
      	 	
              (i)

            	
              enable
                the Borrower to lawfully enter into, exercise its rights under and
                perform
                the obligations expressed to be assumed by it under any Finance Document
                to which it is party;

            

    

     

    
      	 	
              (ii)

            	
              ensure
                that the obligations expressed to be assumed by the Borrower under
                any
                Finance Document to which it is party are legal, valid and
                binding;

            

    

     

    
      	 	
              (iii)

            	
              make
                each Finance Document admissible in evidence in the courts of the
                jurisdiction to which the Borrower has submitted in that Finance
                Document;
                and

            

    

     

    
      	 	
              (iv)

            	
              create
                and perfect (within the time periods provided by applicable law or
                the
                relevant Finance Documents) the Security, 

            

    

     

    is
      not
      done, fulfilled or performed in all material respects.

    

    15.6       
      Insolvency

    

    
      	
              (a)

            	
              The
                Borrower stops or suspends or threatens, or announces an intention
                to stop
                or suspend, payment of its debts.

            

    

     

    
      	
              (b)

            	
              The
                Borrower is, for the purpose of section 123 of the Insolvency Act
                1986 (on
                the basis that the words “proved
                to the satisfaction of the court”
                are deemed omitted from sections 123(1)(e) and 123(2) of that Act)
                or any
                other applicable law, deemed to be insolvent or unable, or admits
                its
                inability, to pay its debts as they fall due or becomes insolvent
                or a
                moratorium is declared in relation to any Indebtedness of the
                Borrower.

            

    

     

    15.7 Receivership
      and Administration 

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    
      	
              (a)

            	
              Any
                encumbrancer takes possession of, or a receiver, administrative receiver
                or administrator or similar officer is appointed over or in relation
                to,
                all or any material part of the Assets of the
                Borrower.

            

    

     

    
      	
              (b)

            	
              A
                meeting is convened, an application is made or any other step is
                taken, or
                any notice is given of the intention to convene a meeting or take
                any
                other step, for the purpose of appointing a receiver, administrative
                receiver or other similar officer of or in relation to the
                Borrower.

            

    

     

    
      	
              (c)

            	
              An
                application is made or any other such document is issued, a meeting
                is
                convened, or any other step is taken, or any notice is given of the
                intention to convene a meeting or take any other step, for the purpose
                of
                appointing an administrator or other similar officer of, or for the
                making
                of an administration order in relation to the Borrower.

            

    

    

    15.8 Compositions
      and Arrangements 

    

    
      	
              (a)

            	
              The
                Borrower convenes a meeting of its creditors generally or takes any
                step
                with a view to a moratorium or proposes or makes any arrangement
                or
                composition or compromise with, or any assignment for the
                benefit of its creditors generally.

            

    

    

    
      	
              (b)

            	
              the
                Borrower proposes or enters into any negotiations for or in connection
                with the rescheduling, restructuring or re-adjustment of any Indebtedness
                by reason of, or with a view to avoiding, financial
                difficulties.

            

    

     

    15.9       
      Winding
      up

    

    
      	
              (a)

            	
              Any
                meeting of the Borrower is convened for the purpose of considering
                any
                resolution for (or to petition for) its winding up or the Borrower
                passes
                such a resolution.

            

    

    

    
      	
              (b)

            	
              A
                petition or any other such document is presented for the winding
                up of the
                Borrower or an order is made for the winding up of the Borrower (other
                than a frivolous or vexatious petition, or any other such document,
                dismissed, withdrawn or discharged within 10 Business Days of being
                presented or any other petition which is contested on bona fide grounds
                and dismissed, withdrawn or discharged prior to the winding-up order
                being
                made).

            

    

    

    
      	
              15.10

            	
              Attachment
                or Process A
                creditor attaches or takes possession of, or a distress, execution,
                sequestration or other process is levied or enforced upon or against
                all
                or any part of the Assets of the Borrower in respect of Indebtedness
                exceeding GBP £100,000 (or its equivalent in other currencies) in
                aggregate at any time and which is not discharged within 10 days
                of such
                act.

            

    

    

    
      	
              15.11

            	
              Suspension
                of Payments Any
                order is made, any resolution is passed or any other action is taken
                for
                the suspension of payments, protection from creditors or bankruptcy
                of the
                Borrower.

            

    

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    
      	
              15.12

            	
              Cessation
                of Business The
                Borrower suspends, ceases, or threatens or proposes to suspend or
                cease,
                to carry on all or a substantial part of its
                business.

            

    

    

    
      	
              15.13

            	
              Compulsory
                Acquisition All
                or any material part of the Assets of the Borrower are seized,
                nationalised, expropriated or compulsorily acquired by, or by the
                order
                of, any central or local governmental authority in relation to which
                full
                market value compensation is not paid and as a result the business
                of the
                Borrower is materially and adversely affected or
                curtailed.

            

    

    

    
      	
              15.14

            	
              Security
                Interests Any
                Encumbrance affecting the business, undertaking or any of the Assets
                of
                the Borrower and securing Indebtedness exceeding GBP £250,000 (or its
                equivalent in other currencies) in aggregate becomes enforceable,
                whether
                or not steps are taken to enforce the
                same.

            

    

    

    15.15 Cross
      Default  Any
      Indebtedness of the Borrower exceeding GBP £250,000 (or its equivalent in other
      currencies) in aggregate: 

     

    
      	
              (a)

            	
              is
                not paid when due or within any originally applicable grace period
                in any
                agreement relating to that Indebtedness;

            

    

     

    
      	
              (b)

            	
              becomes
                due and payable (or is capable of being declared by or on behalf
                of a
                creditor, due and payable) before its normal maturity; or
                

            

    

     

    
      	
              (c)

            	
              is placed
                on demand (or any commitments for any such Indebtedness are cancelled
                or
                suspended),

            

    

    

    in
      each
      case, by reason of an event of default (however described).

    

    
      	
              15.16

            	
              Litigation Any
                litigation, arbitration or administrative proceeding is commenced
                against
                the Borrower which is reasonably likely to be resolved against such
                person and
                if so resolved would reasonably be expected to have a Material Adverse
                Effect.

            

      	 	 

    

    
      	
              15.17

            	
              Material
                Adverse Effect
                Any event or series of events (related or not) occurs which, in the
                opinion of the Lender (acting reasonably), has or is reasonably likely
                to
                have a Material Adverse Effect.

            

    

     

    16 TERM
      AND TERMINATION

    
      
         

        
          	
                  l6.1

                	
                  Acceleration
                    and Cancellation Upon
                    the occurrence of an Event of Default which is continuing, the
                    Lender may
                    by written notice to the
                    Borrower:

                

        

         

      

    

    
      	
              (a)

            	
              declare
                the Loan to be immediately due and payable (whereupon the same shall
                become so payable); and/or

            

    

    

    
      	
              (b)

            	
              declare
                that the Security has become enforceable (in whole or in part)
                and take such action as may be necessary to enforce the
                Security.

            

    

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    16.2 Term
      and Renewal This
      Agreement shall terminate upon the later of:

    

    
      	
              (a)

            	
              the
                Maturity Date; 

            

    

    

    
      	
              (b)

            	
              the expiry
                of the Term; or

            

    

    

    (c)          
      such
      later date
      as
      the Lender may agree in writing at the lenders absolute discretion, prior to
      the
      date which falls 5 days prior to the Maturity Date.

     

    
      
        	
                16.3

              	
                Survival On
                  termination of this Agreement in accordance with this Clause 16,
                  all of
                  the rights and obligations of the parties hereunder shall cease
                  immediately provided that the provisions of Clause 1 (Definitions
                  and Interpretation), Clause
                  19 (Remedies,
                  Waivers, Amendments and Consents),
                  Clause 22 (Third
                  Party Rights),
                  Clause 23 (Governing
                  law)
                  and Clause 24 (Jurisdiction
                  and Service of Process)
                  shall remain in full force and effect. Termination shall not affect
                  any
                  rights of the parties accrued prior to the date of such
                  termination. 

              

      

       

    

    17.
       ASSIGNMENT
      AND TRANSFER 

     

    The
      Borrower may not assign any of its rights or transfer any rights or obligations
      under any of the Finance Documents without the prior written consent of the
      Lender.

     

    18.  SET-OFF
      

     

    
      	
              18.1 

            	
              The
                Borrower authorises the Lender to apply any credit balance (whether
                or not
                then due) to which the Borrower is at any time beneficially entitled
                on
                any account at the Lender in (or towards) satisfaction of any sum
                then due
                and payable by the Borrower to the Lender under any of the Finance
                Documents, but which is unpaid. If such balances are in different
                currencies, the Lender may convert either balance at a market rate
                of
                exchange for the purpose of the
                set-off.

            

    

     

    
      	
              18.2 

            	
              The
                Lender shall not be obliged to exercise any rights vested in it pursuant
                to Clause 18.1.

            

    

     

    19. REMEDIES,
      WAIVERS, AMENDMENTS AND CONSENTS

     

    
      	
              19.1 

            	
              Any
                amendment to this agreement shall be in writing and signed by or
                on behalf
                of each party.

            

    

     

    
      	
              19.2 

            	
              Any
                waiver of any right or consent given under this Agreement is only
                effective if it is in writing and signed by the waiving or consenting
                party, and applies only in the circumstances for which it is given
                and
                shall not prevent the party giving it from subsequently relying on
                the
                relevant provision.

            

    

     

    
      	
              19.3
                

            	
              No
                delay or failure to exercise any right under this Agreement shall
                operate
                as a waiver of that right.

            

    

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    
      	
              19.4
                

            	
              No
                single or partial exercise of any right under this Agreement shall
                prevent
                any further exercise of the same or any other right under this
                Agreement.

            

    

     

    
      	
              19.5
                

            	
              Rights
                and remedies under this agreement are cumulative and not exclusive
                of any
                other rights or remedies provided by law or
                otherwise.

            

    

     

    20. 
      SEVERANCE

     

    
      	
              20.1 

            	
              The
                invalidity, unenforceability or illegality of any provision (or part
                of a
                provision) of this Agreement under the laws of any jurisdiction shall
                not
                affect the validity, enforceability or legality of the other
                provisions.

            

    

     

    
      	
              20.2 

            	
              If
                any invalid, unenforceable or illegal provision would be valid,
                enforceable and legal if some part of it were deleted, the provision
                shall
                apply with whatever modification as is necessary to give effect to
                the
                commercial intention of the
                parties.

            

    

     

    21. 
      COUNTERPARTS

     

    This
      Agreement may be executed and delivered in any number of counterparts, each
      of
      which is an original and which together have the same effect as if each party
      had signed the same document.

     

    22. 
      THIRD PARTY RIGHTS

     

    A
      person
      who is not a party to this agreement shall have no rights to enforce or enjoy
      the benefit of any term of this Agreement under the Contracts (Rights of Third
      Parties) Act 1999.

     

    23. 
      NOTICES

     

    
      	
              23.1

            	
              Except
                as otherwise provided herein
                all communications hereunder shall be in writing and shall be provided
                by
                any of the following methods:

            

    

     

     

    
      	
              (a)

            	
              in
                writing and delivered in person or by courier, effective on the date
                it is
                delivered or its delivery is
                attempted;

            

    

     

     

    
      	
              (b)

            	
              by
                facsimile transmission, effective on the date it is received by a
                responsible employee of the recipient in legible
                form;

            

    

     

     

    
      	
              (c)

            	
              by
                certified or registered mail (airmail, if overseas) or the equivalent
                (return receipt requested), effective on the date it is delivered
                or its
                delivery is attempted; or

            

    

    
      

      
        	
                (d)

              	
                if
                  sent by e-mail, effective on the date it is
                  delivered.

              

      

       

      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

    

    

    
      	
              23.2

            	
              All
                notices and communications shall be addressed as
                follows:

            

    

    

    If
      to the
      Lender:

    

    Conquistador
      Investments Limited

    Suite
      F8,
      International Commercial Centre, 

    Main
      Road, Gibraltar

    

    If
      to the
      Borrower:

    

    Advance
      Homeland Security PLC

    Savannah
      House

    5th
      Floor

    11
      Charles II Street

    London
      SW1Y 4QU

    

    24. CALCULATIONS
      AND CERTIFICATES

    

    
      	
              24.1

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

            

    

    
      

      
        	
                24.2

              	
                Certificates
                  and Determinations Any
                  certification or determination by a Lender of a rate or amount
                  under any
                  Finance Document, constitutes prima facie evidence of the matters
                  to which
                  it relates.

              

      

       

    

    
      	
              24.3

            	
              Day
                Count Convention
                Any interest, commission or fee accruing under a Finance Document
                will
                accrue from day to day and is calculated on the basis of the actual
                number
                of days elapsed and a year of 360.

            

    

    

    25. CONFIDENTIALITY

    

    The
      parties will keep confidential the Finance Documents and all information which
      they acquire under or in connection with the Finance Documents save that such
      information may be disclosed:

    
       

      
        	
                25.1

              	
                if
                  so required by law or regulation or, if requested by any regulator
                  with
                  jurisdiction over the Lender;

              

      

      
        
           

          
            	
                    25.2

                  	
                    if
                      it comes into the public domain (other than as a result of
                      a breach of
                      this Clause 25);

                  

          

          
            
               

              
                	
                        25.3

                      	
                        to
                          auditors professional advisors or rating agencies;
                          

                      

              

               

            

            
              	
                      25.4

                    	
                      in
                        connection with any legal proceedings;

                    

            

            
              
                 

                
                  
                    
                    

                  

                  
                    22

                    
                      

                    

                  

                  
                    
                    

                  

                

                 

              

            

          

        

      

    

    
      	
              25.5

            	
              except
                to the extent reqired to create and perfect the Security specified
                in
                Clause 14.4 (Security)

            

    

    

    The
      provisions of this Clause 25 shall supersede any undertakings with respect
      to confidentiality previously given by either party.

     

    26.
       GOVERNING
      LAW 

     

    This
      Agreement and any dispute, controversy, proceedings or claim of whatever nature
      arising out of, or in connection with this Agreement shall be governed by and
      construed in accordance with the laws of England and Wales.

     

    27.
       JURISDICTION
      AND SERVICE OF PROCESS

     

    
      	
              27.1 

            	
              Each
                party irrevocably agrees to submit to the exclusive jurisdiction
                of the
                courts of England and Wales over any claim or matter arising out
                of or in
                connection with this agreement.

            

    

     

    27.2        
      The
      Borrower irrevocably and unconditionally:

     

    (a)
      appoints Advance Nanotech Limited as its agent to receive on its behalf in
      England or Wales service of any proceedings arising out of or in connection
      with
      this agreement; 

     

    (b)
      agrees that the failure of such agent to forward any process served on it to
      the
      Borrower shall not impair the validity of such service or any judgment based
      on
      such service; and

     

    (c)
      consents to the service of process in any proceedings being served on it in
      accordance with this Clause 27. 

     

    
      	
              27.3 

            	
              If,
                for any reason, such agent ceases to be able to act as agent or no
                longer
                has an address in England or Wales, the Borrower shall immediately
                appoint
                a substitute agent acceptable to the Lender and deliver to the Lender
                the
                new agent's name, address and fax
                number.

            

    

     

    
      	
              27.4 

            	
              Nothing
                contained in this agreement shall affect the right to serve process
                in any
                other manner permitted by law.

            

    

     

    IN
      WITNESS WHEREOF
      this
      Facility Agreement has been executed as of the date first written on the first
      page of this Agreement by:

    
 

    
      
        
          
          

        

        
          23

          
            

          

        

        
          
          

        

      

    

    

    Schedule
      1 Debenture

    

    

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    

    

    
      	
              Signed
                by MAGNUS
                R GITTINS

            	
              )

            	 
	
              for
                and on behalf of 

            	
              )

            	 
	
              ADVANCE
                HOMELAND SECURITY PLC

            	
              )

            	
              Director
                

            
	 	
              )

            	 

    

    

     

    

    

    

    
      	
              Signed
                by CONQUISTADOR
                INVESTMENTS LIMITED

            	
              )

            	 
	
              a
                company incorporated in Gibraltar acting

            	
              )

            	 
	
              by
                John
                Lister
                who, in

            	
              )

            	
              Authorised
                signatory

            
	
              accordance
                with the laws of that territory is

            	
              )
                

            	 
	
              acting
                under the authority of the company

            	
              )

            	 

    

    

     

     

    
      
        
        

      

      
        25

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