Document:

Agreement For The Sale And Purchase Of Shares

  
 EXHIBIT 10.12

  
 ORLA MACALLISTER AND UNA GILMORE 
  
 ALAN BATES 
  
 RICK PEEL 
  
 EFG READS TRUSTEES LIMITED 
  
 JOHN MERCHANT 
  
 CORBETT KEELING LIMITED 
  
 GARY RIMMER 
  
 AND 
  
 ACTIVCARD CORP 
  

  
 AGREEMENT FOR THE SALE AND 
 PURCHASE OF SHARES IN ASPACE SOLUTIONS LIMITED 
  

  

 -1- 

 CONTENTS 
  

					
	 Clause

	  	 	  	Page

			
	 1.
	  	 Interpretation
	  	4
			
	 2.
	  	 Sale And Purchase
	  	7
			
	 3.
	  	 Conditions
	  	7
			
	 4.
	  	 Completion
	  	8
			
	 5.
	  	 Warranties And Pre-Completion Conduct
	  	9
			
	 6.
	  	 The Buyer’s Remedies
	  	9
			
	 7.
	  	 Use Of Intellectual Property Rights
	  	10
			
	 8.
	  	 Further Undertakings By The Sellers
	  	10
			
	 9.
	  	 Confidential Information
	  	11
			
	 10.
	  	 Announcements
	  	12
			
	 11.
	  	 Costs
	  	12
			
	 12.
	  	 General
	  	12
			
	 13.
	  	 Entire Agreement
	  	13
			
	 14.
	  	 Assignment
	  	13
			
	 15.
	  	 Notices
	  	13
			
	 16.
	  	 Governing Law And Jurisdiction
	  	15
			
	 17.
	  	 Counterparts
	  	15
		
	 Schedule 1        COMPLETION REQUIREMENTS
	  	15
		
	 Schedule 2         WARRANTIES
	  	16
		
	 Schedule 3         THE SELLERS
	  	18

  

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 Agreed Form Documents 
  

	1.	Debenture 

  

	2.	Facility Agreement 

  

	3.	Investment Agreement 

  

 -3- 

 THIS AGREEMENT is made on 31st July 2003 
  
 BETWEEN: 
  

	(1)	The INDIVIDUALS whose names and addresses are set out in schedule 3 (the “Sellers”); and 

  

	(2)	ACTIVCARD CORP, a company incorporated in Delaware, USA, whose registered ffice is at 6623 Dumbarton Circle, Fremont, California, 94555, USA. (the “Buyer”).

  
 THE PARTIES AGREE as follows:

  

	1.	INTERPRETATION 

  

	1.1	In this Agreement: 

  
 “Accounts” means the Company’s statutory accounts for the financial period ending 31 March 2003; 
  
 “Act” means the Companies Act 1985; 
  
 “Business Day” means a day other than a Saturday or Sunday or
public holiday in England and Wales; 
  
 “Buyer’s
Advisors “ means Credo Corporate Finance Limited of 3rd Floor, 33 Margaret Street, London W1G OJD; 

 
 “Buyer’s Group” means the Buyer, and any holding company
of the Buyer and any subsidiaries of the Buyer and any such holding company as such terms are defined in Section 736 of the Companies Act 1985 (as amended), in each case, from time to time; 
  
 “Company”, means Aspace Solutions Limited, a company incorporated
in England and Wales, whose registered office is at Eagle House, 110 Jermyn Street, London SW1Y 6RH; 
  
 “Completion” means completion of the sale and purchase of the Shares in accordance with this Agreement; 
  
 “Completion Date” means the date of this Agreement; 
  
 “Condition” means a condition set out in clause 3.1 and
“Conditions” means all those conditions; 
  
 “Confidential Information” means all information which is used in or otherwise relates to the Company’s business, customers or financial or other affairs, including, without limitation, information relating to: 
  

	 	(a)	the marketing of goods or services including, without limitation, customer names and lists and other details of customers, sales targets, sales statistics, market share statistics,
prices, market research reports and surveys, and advertising or other promotional materials; or 

  

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	 	(b)	future projects, business development or planning, commercial relationships and negotiations; 

  
 but does not include information which: 
  

	 	(a)	is made public by, or with the consent of, the Buyer; 

  

	 	(b)	is in the public domain at the time of receipt by the Sellers; 

  

	 	(c)	comes into the public domain otherwise then through an unauthorized disclosure by any of the Sellers; or 

  

	 	(d)	which was lawfully in the possession of any of the Sellers prior to its being supplied to any of the Sellers by and on behalf of the Company; 

  
 “Debenture” means the agreed form debenture of even date granted
by the Company in favour of the Buyer; 
  
 “Debt” means
the amount (including accrued interest) lent to the Company by all or some of the Sellers pursuant to loan stock certificates dated 26 June 2002. 
  
 “Documents” means the Facility Agreement, the Debenture, the Investment Agreement and any other agreement referred to in such documents to be
signed or come into effect at Completion; 
  
 “Encumbrance” means a mortgage, charge, pledge, lien, option, restriction, right of first refusal, right of pre-emption, third-party right or interest, other encumbrance or security interest of any kind, or another type of
preferential arrangement (including, without limitation, a title transfer or retention arrangement) having similar effect; 
  
 “Facility Agreement” means the secured convertible loan agreement of even date between the Company and the Buyer; 
  
 “Intellectual Property” means: 
  

	 	(a)	software applications, information technology applications, source codes, patents, trade marks, service marks, registered designs, applications and rights to apply for any of those
rights, trade, business and company names, internet domain names and e-mail addresses, unregistered trade marks and service marks, copyrights (including those relating to the object code and source code for software programs), database rights,
knowhow, rights in designs and inventions and trade secrets; 

  

	 	(b)	rights under licences, consents, orders, statutes or otherwise in relation to a right in paragraph (a); 

  

	 	(c)	rights of the same or similar effect or nature as or to those in paragraphs (a) and (b) which now or in the future may subsist; and 

  

	 	(d)	the right to sue for past infringements of any of the foregoing rights; 

  
 “Intellectual Property Rights” means all Intellectual Property owned by the Company; 
  

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 “Investment Agreement” means the investment agreement of even date between the Company, the
Buyer and the Managers; 
  
 “Managers” means Steve
Keohane, Julian Lovelock and Paul Ryder; 
  
 “Resolutions” means the resolutions in the agreed form; 
  
 “Service Agreements” means the contracts of employment in the Agreed Form to be entered into by each of the Managers; 
  

“Shares” means fully-paid ordinary shares of the Sellers set out against their respective name in schedule 4 of 1p each of the Company
comprising 38.165 per cent. of the allotted and issued share capital of the Company; 
  
 “Warranty” means a statement contained in schedule 2 and “Warranties” means all those statements; 
  
 “Warranty Claim” means a claim by the Buyer under or pursuant to the provisions of clause 5. 1. 
  

	1.2	In this Agreement, a reference to: 

  

	 	1.2.1 	liability under, pursuant to or arising out of (or any analogous expression) any agreement, contract, deed or other instrument includes a reference to contingent liability under,
pursuant to or arising out of (or any analogous expression) that agreement, contract, deed or other instrument; 

  

	 	1.2.2	 a document in the “agreed form” is a reference to a document in a form approved and for the purposes of identification signed by or on behalf of each party;

  

	 	1.2.3	  a statutory provision includes a reference to the statutory provision as modified or re-enacted or both from time to time before the date of this Agreement and any
subordinate legislation made under the statutory provision (as so modified or re-enacted) before the date of this Agreement; 

  

	 	1.2.4. 	a person includes a reference to any individual, firm, company, corporation or other body corporate, government, state or agency of a state or any joint venture, association or
partnership (whether or not having separate legal personality); 

  

	 	1.2.5	  a person includes a reference to that person’s legal personal representatives and successors; 

  

	 	1.2.6	  a clause, paragraph or schedule, unless the context otherwise requires, is a reference to a clause or paragraph of, or schedule to, this Agreement; and

  

	 	1.2.7	   any English legal term for any action, remedy, method of judicial proceeding, legal document, legal status, court, official or any legal concept or thing
shall in respect of any jurisdiction other than England be deemed to include what most nearly approximates in that jurisdiction to the English legal term and to any 

  

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English statute shall be construed so as to include equivalent or analogous laws of any other jurisdiction. 

  

	1.3	The headings in this Agreement do not affect its interpretation. 

  

	2.	SALE AND PURCHASE 

  

	2.1	Subject to Clauses 3, the Sellers agree to sell with full title guarantee and the Buyer agrees to buy the Shares and each right attaching to the Shares at or after the date of this
Agreement, free of any Encumbrance. 

  

	2.2	The purchase price of the Shares is £954,125. 

  

	2.3	The Buyer shall not be responsible for the distribution of the purchase price for the Shares or the Debt amongst the Sellers. 

  

	2.4	Each Seller hereby waives any rights of pre-emption under the Articles of Association of the Company, statute or otherwise that it has or had in respect of any transfers or issue of
shares on or before Completion. 

  

	3.	CONDITIONS 

  

	3.1	Completion is conditional on the following Conditions being satisfied or waived by the Buyer, on or before the Completion Date; 

  

	 	3.1.1	 the Investment Agreement has been validly executed by the Company, the Managers and the Investor; 

  

	 	3.1.2	 the Facility Agreement and the Debenture has been validly executed by the Company and the Investor and the facility under it becomes fully available to the Company (subject
only to Completion); 

  

	 	3.1.3	 the Service Agreements have been validly executed by the Company and Managers; 

  

	 	3.1.4	 the Company’s shareholders passing the Resolutions without amendment; 

  

	 	3.1.5	 the Company effects and there is in force and on risk key man life insurance with an insurance company of good repute on the lives of the Managers (who shall co-operate in all
reasonable respects with the Company to obtain the same) in the sum of not less than £200,000; 

  

	 	3.1.6	 the Managers deliver a signed amendment in the Agreed Form of the Company’s engagement letter with CSTIM CFAS Limited; 

  

	 	3.1.7	 the Company repays the Debt to the relevant Sellers; 

  

	 	3.1.8	 the financial assistance approval in the Agreed Form; 

  

	 	3.1.9	 the letters of resignation in the Agreed Form from Alan Bates and Colin Fisher being signed and issued to the Company. 

  

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	3.2	The Parties shall make all reasonable efforts to achieve satisfaction of each Condition set out in clause 3 as soon as possible before the Completion Date provided that if,
notwithstanding such reasonable efforts, any of those Conditions have not been satisfied by that date then the Parties shall make all reasonable efforts to achieve satisfaction of those Conditions as soon as practicable thereafter and in any event
not later than 30 July 2003; 

  

	3.3	If, at any time, the Sellers or the Buyer becomes aware of a fact or circumstance that might prevent a Condition being satisfied, it shall immediately inform the other party.

  

	3.4	At any time on or before the Completion Date the Buyer may waive a Condition set out in clause 3 by notice to the Sellers on any terms it decides. 

  

	3.5	If a Condition set out in clause 3 has not been waived by the Buyer pursuant to clause 3.4 or has not been satisfied by 30 July 2003 this Agreement shall automatically terminate
with immediate effect. 

  

	3.6	Each party’s further rights and obligations cease immediately on termination, but termination does not affect a party’s accrued rights and obligations at the date of
termination. 

  

	4.	COMPLETION 

  

	4.1	Completion shall take place at the offices of Maclay Murray & Spens, London on the Completion Date. 

  

	4.2	At Completion the Parties shall do all those things respectively required of them in schedule 1 and the Buyer shall pay the price stated in clause 2.2 to the Sellers or as the
Sellers direct in writing by transfer of funds for same day value to such account as shall have been notified to the Buyer by the Sellers at least one Business Days before the Completion Date. 

  

	4.3	The Buyer is not obliged to complete this Agreement unless: 

  

	 	4.3.1	the Sellers comply with all its obligations under clause 4 and schedule 1; and 

  

	 	4.3.2	the purchase of all the Shares is completed simultaneously. 

  

	4.4	If Completion does not take place on the Completion Date because a Seller fails to comply with any of its obligations under clause 4 and schedule 2, the Buyer may by notice to the
Sellers: 

  

	 	4.4.1	proceed to Completion to the extent reasonably practicable (but if the Buyer exercises its right pursuant to clause 4.4.1, completion of the purchase of some of the Shares does not
affect the Buyer’s rights in connection with the others); 

  

	 	4.4.2	postpone Completion to a date not more than 15 Business Days after the Completion Date and not later than 1 August 2003; or 

  

	 	4.4.3	terminate this Agreement. 

  

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	4.5	If the Buyer postpones Completion to another date in accordance with clause 4.4.2, the provisions of this Agreement apply as if that other date is the Completion Date.

  

	4.6	If the Buyer terminates this Agreement pursuant to clause 4.4.3, each party’s further rights and obligations cease immediately on termination, but termination does not affect a
party’s accrued rights and obligations at the date of termination. 

  

	5.	WARRANTIES 

  

	5.1	Each of the Sellers severally warrant to the Buyer that each Warranty is true, accurate and not misleading at the date of Completion. 

  

	5.2	The Sellers acknowledges that the Buyer is entering into this Agreement in reliance on each Warranty. 

  

	5.3	The Sellers shall not invoke the Buyer’s knowledge (actual, constructive or imputed) of a fact or circumstance which might make a Warranty untrue, inaccurate or misleading as a
defence to a claim for breach of clause 5. 1. 

  

	5.4	The Sellers undertakes not to make any claim against the Company or a director, officer or employee of the Company which it may have in respect of a misrepresentation, inaccuracy or
omission in or from information or advice provided by the Company or a director, officer or employee of the Company for the purpose of assisting the Sellers to make a representation or give a Warranty. 

  

	5.5	Each Warranty is to be construed independently and (except where this Agreement provides otherwise) is not limited by a provision of this Agreement or another Warranty.

  

	6.	THE BUYER’S REMEDIES 

  

	6.1	The Buyer acknowledges and agrees that it shall have no remedy in respect of any misrepresentation or untrue statement (other than fraudulent misrepresentation) made by or on behalf
of any of the Sellers in Schedule 2 unless and to the extent that a claim lies for damages for breach of Warranty. 

  

	6.2	With effect from Completion, the Buyer hereby irrevocably and unconditionally waives any rights which it might otherwise have had to seek to rescind or terminate this agreement for,
or arising out of, a claim for breach or non-fulfilment of any of the Warranties. 

  

	6.3	If there is a Warranty Claim, the Sellers shall pay in full and final satisfaction of such Warranty Claim on demand (at the Buyer’s option) to the Buyer an amount equal to
either: 

  

	 	6.3.1	 the reduction caused in the value of the Shares; or 

  

	 	6.3.2	 if. 

  

	 	(a)	the value of an asset of the Company is or becomes less than the value would have been had the breach not occurred; or 

  

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	 	(b)	the Company is subject to or incurs a liability or an increase in a liability which it would not have been subject to or would not have incurred had the breach not occurred,

  
 38.165% of the reduction in the value of the
asset or, as the case may be, the amount of the liability or increased liability, 
  
 and in each case all reasonable costs (including legal fees) in connection with the Warranty Claim together with any interest accruing in connection with such Warranty Claim. 
  

	6.4	The maximum total aggregate liability of the Sellers under the Warranties (including any claim for costs and/or interest in respect of any Warranty Claims) shall not exceed the
aggregate amount of the purchase price of the Shares as stated in clause 2.2 of this Agreement and all reasonable costs (including legal fees) in connection with the Warranty Claim together with any interest accruing in connection with such Warranty
Claim. 

  

	7.	USE OF INTELLECTUAL PROPERTY RIGHTS 

  
 The Sellers shall not, either alone or jointly with, through or as manager, adviser, consultant or agent for a person, directly or indirectly use or
authorise, encourage or assist any person to use in connection with a business which competes, directly or indirectly, with a business of the Company as operated at the date of this Agreement, any of the Intellectual Property Rights (in particular,
a name consisting of or including any of the words “Aspace”) or use in that connection anything which is intended, or is likely to be, confused with any of the Intellectual Property Rights. 
  

	8.	FURTHER UNDERTAKINGS BY THE SELLERS 

  

	8.1	Subject to clause 8.2 of this Agreement, each of the Sellers severally undertake to the Buyer, for itself and as agent and trustee for the Company that it will not do any of the
following things: 

  

	 	8.1.1	 for a period of 2 years starting on the date of this Agreement, either alone or jointly with, through or as adviser to, or agent of, or manager for, any person directly or
indirectly carry on or be engaged, concerned or interested in or assist a business which competes, directly or indirectly, with the business of the Company as carried on at the date of this Agreement or at any time in the twelve months prior to that
date in a territory in which that business is or was carried on at any such date; 

  

	 	8.1.2	 for a period of 2 years starting on the date of this Agreement, do or say anything which is harmful to the Company’s goodwill (as subsisting at the date of this
Agreement) or which may lead a person who has dealt with the Company at any time during the twelve months prior to the date of this Agreement to cease to deal with the Company on substantially equivalent terms to those previously offered or at all;

  

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	 	8.1.3	 for a period of 2 years starting on the date of this Agreement on its own account or in conjunction with or on behalf of any other person in respect of the products or
services of the Company either seek to obtain orders from, or do business with, or encourage directly or indirectly another person to obtain orders from or do business with, a person who has been a customer of that business at any time during the
twelve months prior to the date of this Agreement for the products or services of that business in its territory of operation; or 

  

	 	8.1.4	 for a period of 2 years starting on the date of this Agreement, engage, employ, solicit or contact with a view to his engagement or employment by another person, a director,
officer, employee or manager of the Company or a person who was a director, officer, employee or manager of the Company at any time during the twelve months prior to the date of this Agreement, in either case where the person in question either has
Confidential Information or would be in a position to exploit the Company’s trade connections. 

  

	8.2	Each undertaking in clause 8.1 constitutes an entirely independent undertaking and if one or more of the undertakings is held to be against the public interest or unlawful or in any
way an unreasonable restraint of trade the remaining undertaking shall continue to bind the Sellers. Notwithstanding the provisions of Clause 8.1, the Sellers shall be entitled to purchase, hold or be beneficially interested in any class of
securities (or to hold loan stock of equivalent value) in any publicly listed company up to 5% of that company’s issued share capital from time to time. 

  

	8.3	On receiving the Buyer’s reasonable request the Sellers shall (at its cost): 

  

	 	8.3.1	 do and execute, or arrange to be done and executed, each act, document and thing necessary to implement this Agreement; and 

  

	 	8.3.2	 give to the Buyer all information it possesses or to which it has access relating to the Company’s business and allow the Buyer to copy any document containing that
information. 

  

	9.	CONFIDENTIAL INFORMATION 

  

	9.1	The Sellers undertakes to the Buyer, for itself and as agent and trustee for the Company, that before and after Completion the Sellers shall: 

  

	 	9.1.1 	not use or disclose to any person Confidential Information it has or acquires; and 

  

	 	9.1.2 	make every effort to prevent the use or disclosure of Confidential Information. 

  

	9.2	Clause 9.1 does not apply to disclosure of Confidential Information: 

  

	 	9.2.1	 to a director, officer or employee of the Buyer or of the Company whose function requires him to have the Confidential Information; 

  

	 	9.2.2	 required to be disclosed by law, by a rule of a stock exchange on which the Sellers’ shares are listed or traded or by a governmental authority or other

  

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authority with relevant powers to which the Sellers is subject or submits, whether or not the requirement has the force of law provided that the disclosure
shall so far as is practicable be made after consultation with the Buyer and after taking into account the Buyer’s reasonable requirements as to its timing, content and manner of making or despatch; or 

  

	 	9.2.3 	to an adviser for the purpose of advising the Sellers in connection with the transactions contemplated by this Agreement provided that such disclosure is essential for these
purposes and is on the basis that clause 9.1 applies to the disclosure by the adviser. 

  

	10.	ANNOUNCEMENTS 

  

	10.1	Subject to clause 10.2, neither party may, before or after Completion, make or send a public announcement, communication or circular concerning the transactions referred to in this
Agreement unless it has first obtained the other party’s written consent, which may not be unreasonably withheld or delayed. 

  

	10.2	Clause 10. 1 does not apply to a public announcement, communication or circular: 

  

	 	10.2.1 	made or sent by the Buyer after Completion to a customer, client or supplier of the Company informing it of the Buyer’s purchase of the Shares; or 

  

	 	10.2.2 	required by law, by a rule of a stock exchange on which either party’s shares are listed or traded or by a governmental authority or other authority with relevant powers to
which either party is subject or submits, whether or not the requirement has the force of law, provided that the public announcement, communication or circular shall so far as is practicable be made after consultation with the other party and after
taking into account the reasonable requirements of the other party as to its timing, content and manner of making or despatch. 

  

	11.	COSTS 

  
 Except where this Agreement provides otherwise, each party shall pay its own costs relating to the negotiation, preparation, execution and performance by it of this Agreement and of each document referred to in it.

  

	12.	GENERAL 

  

	12.1	A variation of this Agreement is valid only if it is in writing and signed by or on behalf of each party. 

  

	12.2	The failure to exercise or delay in exercising a right or remedy provided by this Agreement or by law does not constitute a waiver of the right or remedy or a waiver of other rights
or remedies. No single or partial exercise of a right or remedy provided by this Agreement or by law prevents further exercise of the right or remedy or the exercise of another right or remedy. 

  

	12.3	The Buyer’s rights and remedies contained in this Agreement are cumulative and not exclusive of rights or remedies provided by law. 

  

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	12.4	Except to the extent that they have been performed and except where this Agreement provides otherwise, the obligations contained in this Agreement remain in force after Completion.

  

	13.	ENTIRE AGREEMENT 

  

	13.1	This Agreement and each document referred to in it constitutes the entire agreement and supersedes any previous agreements between the parties relating to the subject matter of this
Agreement and each of the parties hereto hereby confirms that it has not entered into this Agreement in reliance upon any representation, warranty or undertaking which is not set out or referred to in this Agreement. For the avoidance of doubt this
Clause shall not prejudice any claim that the Buyer may have against any person under any of the Documents. 

  

	13.2	Nothing in this clause 13 shall have the effect of limiting or restricting any liability of the Sellers arising as a result of any fraud, wilful misconduct or wilful concealment.

  

	14.	ASSIGNMENT 

  
 Neither party may assign or transfer any of its rights under this Agreement in whole or in part without the consent of the other save that the Buyer may assign this Agreement to another member of the Buyer’s
Group without restriction provided always that prior to leaving the Buyer’s Group such assignees shall reassign to another member of the Buyer’s Group. 
  

	15.	NOTICES 

  

	15.1	A notice or other communication under or in connection with this Agreement (a “Notice”) shall be: 

  

	 	15.1.1 	in writing; 

  

	 	15.1.2 	in the English language; and 

  

	 	15.1.3 	delivered personally or sent by first class post (and air mail if overseas) or by fax to the party due to receive the Notice to the address set out in clause 15.3 or to another
address, person, or fax number notified by that party in accordance with this clause 15. 1. 

  

	15.2	Unless there is evidence that it was received earlier, a Notice is deemed given if: 

  

	 	15.2.1 	delivered personally, when left at the address referred to in clause 15.1.3; 

  

	 	15.2.2 	sent by mail, except air mail, two Business Days after posting it; 

  

	 	15.2.3 	sent by air mail, six Business Days after posting it; and 

  

	 	15.2.4 	sent by fax, when confirmation of its transmission has been recorded by the sender’s fax machine. 

  

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	15.3. 	The address referred to in clause 15.1.3 is: 

  

							
	 Name of party

	  	 Address

	  	 Facsimile No.

	  	 Marked for the attention of

	Orla Macallister and Una Gilmore	  	 59 Beresford Hill,
 Dromore, Belfast BT25 1HQ
	  	   0289 08 21 603
	  	Una Gilmore
				
	Alan Bates	  	 Barnfield, Fair Mile,
 Henley-on-Thames,
 Oxfordshire RG9 2JY
	  	 01491575366
	  	—  
				
	Rick Peel	  	327 Cromwell Tower, Barbican, London EC2 8DD	  	 020 7920 0498
	  	Nicola Hatton-Edge
				
	EFG Reads Trustees Limited	  	PO Box 1, Seaton Place, St Helier, Jersey	  	 01534 605600
	  	—  
				
	(Account 4634)	  	 	  	 	  	 
				
	John Merchant	  	The Gables, Peartwater Road, Spaxton, Bridgwater, Somerset	  	 01278 671325
	  	—  
				
	Corbett Keeling Limited	  	13 St. Swithin’s Lane, London EC4N 8AL	  	 020 7626 7005
	  	Jim Keeling
				
	Gary Rimmer	  	 5 Dalrymple Close,
 Chelmsford CM1 7RF
	  	 020 7930 8437
	  	—  
				
	ActivCard Corp	  	 6623 Dumbarton Circle,
 Fremont, California 94555,
USA
	  	 +1 (0) 510 574
 0128                
	  	Blair Geddes

  

	16.	BASIS OF SEVERAL LIABILITY 

  
 Unless expressly otherwise provided all agreements, undertakings, covenants, obligations, representations and warranties made, given or entered into in
this Agreement by the Sellers are made, given or entered into by each of the said persons severally in relation only to himself and the liability of each such person in respect of breach of any agreement, undertaking, covenant, obligation,
representation or warranty shall extend only to any loss or damage arising from his own breach, provided that, where more than one such person is in breach and liable in respect of the same loss or damage, liability for the total sum recoverable
shall be attributed to such persons in proportion to the number of Shares set opposite their name in Schedule 3 and each such person shall be liable only for his share of the total. 
  

 -14- 

	17.	GOVERNING LAW AND JURISDICTION 

  

	17.1	This Agreement is governed by English law. 

  

	17.2	The courts of England have exclusive jurisdiction to settle any dispute arising from or connected with this Agreement (a “Dispute”). 

  

	17.3	The parties agree that the courts of England are the most appropriate and convenient courts to settle any Dispute and, accordingly, that they will not argue to the contrary.

  

	17.4	The parties agree that the documents which start any Proceedings and any other documents required to be served in relation to those Proceedings may be served on the Sellers in
accordance with clause 17. These documents may, however, be served in any other manner allowed by law. 

  

	18.	COUNTERPARTS 

  
 This Agreement may be executed in any number of counterparts, each of which is an original and all of which together evidence the same agreement.

  

 -15- 

 SCHEDULE 1 
  
 COMPLETION REQUIREMENTS 
  
 At Completion the Sellers shall deliver to the Buyer: 
  

	 	(a)	duly executed transfer(s) in respect of the Shares to the Buyer or its nominee(s); 

  

	 	(b)	a copy of the minutes of a duly held meeting of the directors of Corbett Keeling Limited (or a duly constituted committee thereof) authorising the execution by Corbett Keeling
Limited of the document and, where such execution is authorised by a committee of the board of directors of Corbett Keeling Limited, a copy of the minutes of a duly held meeting of the directors constituting such committee or the relevant extract
thereof, 

  

	 	(c)	any waiver, consent, release or other document necessary to give the Buyer or its nominee(s) full legal and beneficial ownership of the Shares; 

  

	 	(d)	letters in the agreed form acknowledging that the Debt (together will all accrued interest) has been fully repaid and that they have no claims against the Company whatsoever;

  

	 	(e)	powers of attorney in favour of the Buyer enabling the Buyer to vote in relation to their Shares; and 

  

	 	(f)	evidence that the existing debenture will be released on receipt of sums to repay outstanding advances. 

  

 -16- 

 SCHEDULE 2 
  
 WARRANTIES 
  

	1.	CAPACITY AND AUTHORITY 

  

	1.1	Right, power, authority and action 

  
 Each of the Sellers have the right, power and authority, and has taken all action necessary, to execute, deliver and exercise its rights, and perform its
obligations, under this Agreement and each document to be executed at or before Completion. 
  

	1.2	Binding agreements 

  
 The Sellers’ obligations under this Agreement and each document to be executed at or before Completion by the Sellers as listed in Schedule 1 are, or
when the relevant document is executed will be, enforceable in accordance with their terms. 
  

	2.	SHARES AND SUBSIDIARY UNDERTAKINGS 

  

	2.1	Each of the Sellers is the sole legal and beneficial owner of the Shares (except EFG Reads Trustees Limited which is the sole legal owner of the Shares and Orla Macallister and Una
Gilmore who hold the relevant shares as Administrators of the Estate of Paul Gilmore) which are specified adjacent to each Sellers name in schedule 3. 

  

	2.2	The Shares comprise 38.165 per cent. of the Company’s allotted and issued share capital, have been properly allotted and issued and are fully paid or credited as fully paid.

  

	2.3	There is no Encumbrance, and there is no agreement, arrangement or obligation to create or give an Encumbrance, in relation to any of the Shares. No person has claimed to be
entitled to an Encumbrance in relation to any of the Shares. 

  

 -17- 

 SCHEDULE 3 
  
 THE SELLERS 
  

			
	 NAME OF SELLER

	  	 NO. OF SHARES

		
	 ORLA MACALLISTER AND UNA GILMORE
	  	 15,165 Ordinary
 Shares of lp each

		
	 ALAN BATES
	  	 5,000 Ordinary
 Shares of lp each

		
	 RICK PEEL
	  	 1,250 Ordinary
 Shares of lp each

		
	 EFG READS TRUSTEES LIMITED
	  	 8,750 Ordinary
 Shares of lp each

		
	 JOHN MERCHANT
	  	 5,000 Ordinary
 Shares of lp each

		
	 CORBETT KEELING LIMITED
	  	 1,800 A Ordinary
 Shares of Ip each

		
	 GARY RIMMER
	  	 1,200 A Ordinary
 Shares of lp each

  

 -18- 

 EXECUTED by the parties: 
  

							
	 Signed by ORLA MACALLISTER
	  	)	  	 Orla Macallister and

	 and UNA GILMORE as
	  	)	  	 Uma Gilmore as their

	 as administrators
	  	)	  	 attorney

	 of Paul Gilmore
	  	)	  	 Stephen John Keohane

	 deceased
	  	)	  	 
				
	 Signed by
	  	)	  	 	  	 Alan Bates by his

	 ALAN BATES
	  	)	  	 	  	 attorney Stephen John Keohane

				
	 Signed by
	  	)	  	 	  	 Rick Peel by his attorney

	 RICK PEEL
	  	)	  	 	  	 Stephen John Keohane

				
	 Signed by
	  	)	  	 	  	 EFG Reads Trustees Limited

	 for and on behalf of
	  	)	  	 	  	 by their attorney

	 EFG READS
	  	)	  	 	  	 Stephen John Keohane

	 TRUSTEES LIMITED
	  	)	  	 	  	 
				
	 Signed by
	  	)	  	 	  	 John Merchant by his

	 JOHN MERCHANT
	  	)	  	 	  	 attorney Stephen John Keohane

				
	 Signed by
	  	)	  	 	  	 Corbett Keeling Limited

	 a duly authorized
	  	)	  	 	  	 by their attorney

	 representative of/for
	  	)	  	 	  	 Stephen John Keohane

	 and on behalf of
	  	 	  	 	  	 
	 CORBETT KEELING
	  	)	  	 	  	 
	 LIMITED
	  	)	  	 	  	 
				
	 Signed by
	  	)	  	 	  	 Gary Rimmer by his

	 GARY RIMMER
	  	)	  	 	  	 attorney Stephen John Keohane

				
	 Signed by
	  	)	  	 	  	 
	 a duly authorized
	  	)	  	 	  	 
	 representative of/for
	  	)	  	 	  	 
	 and on behalf of)
	  	)	  	 	  	 
	 ACTIVCARD
	  	)	  	 	  	 
	 CORP)
	  	 	  	 	  	 

  

 -19- 

 EXECUTED by the parties: 
  

							
	 Signed by ORLA MACALLISTER
	  	)	  	 
	 and UNA GILMORE as
	  	)	  	 
	 as administrators
	  	)	  	 
	 of Paul Gilmore
	  	)	  	 
	 deceased
	  	)	  	 
				
	 Signed by
	  	)	  	 	  	 
	 ALAN BATES
	  	)	  	 	  	 
				
	 Signed by
	  	)	  	 	  	 
	 RICK PEEL
	  	)	  	 	  	 
				
	 Signed by
	  	)	  	 	  	 
	 for and on behalf of
	  	)	  	 	  	 
	 EFG READS
	  	)	  	 	  	 
	 TRUSTEES LIMITED
	  	)	  	 	  	 
				
	 Signed by
	  	)	  	 	  	 
	 JOHN MERCHANT
	  	)	  	 	  	 
				
	 Signed by
	  	)	  	 	  	 
	 a duly authorized
	  	)	  	 	  	 
	 representative of/for
	  	)	  	 	  	 
	 and on behalf of
	  	 	  	 	  	 
	 CORBETT KEELING
	  	)	  	 	  	 
	 LIMITED
	  	)	  	 	  	 
				
	 Signed by
	  	)	  	 	  	 
	 GARY RIMMER
	  	)	  	 	  	 
				
	 Signed by
	  	)	  	 	  	 /s/ Steven
Humphreys                        

	 a duly authorized
	  	)	  	 	  	 
	 representative of/for
	  	)	  	 	  	 
	 and on behalf of)
	  	)	  	 	  	 
	 ACTIVCARD
	  	)	  	 	  	 
	 CORP)
	  	 	  	 	  	 

  

 -20-Debenture

  
 EXHIBIT 10.13

  
 DATED
                     
  
 ACTTVCARD CORP 
  
 - and - 
  
 ASPACE SOLUTIONS LIMITED 
  

  
 DEBENTURE 
  

  

 Table of Contents 
  

					
	 	  	 	  	Page

	 1.
	  	DEFINITIONS AND INTERPRETATION	  	2
	 2.
	  	COVENANT TO PAY	  	11
	 3.
	  	INTEREST	  	11
	 4.
	  	SECURITY	  	11
	 5.
	  	CONVERSION OF FLOATING CHARGE	  	12
	 6.
	  	FURTHER ASSURANCE	  	13
	 7.
	  	DEPOSIT OF DOCUMENTS AND TITLE DEEDS	  	13
	 8.
	  	NEGATIVE PLEDGE	  	14
	 9.
	  	THE BOOK DEBTS ACCOUNT	  	14
	 10.
	  	DIVIDENDS, VOTING RIGHTS AND NOMINEES	  	15
	 11.
	  	REPRESENTATIONS AND WARRANTIES	  	16
	 12.
	  	UNDERTAKINGS	  	19
	 13.
	  	COSTS AND LENDER'S PERFORMANCE OF COVENANTS	  	22
	 14.
	  	DEFAULT	  	23
	 15.
	  	STATUTORY POWER OF SALE	  	25
	 16.
	  	RECEIVER	  	25
	 17.
	  	PROTECTION OF THIRD PARTIES	  	29
	 18.
	  	NO LIABILITY AS MORTGAGEE IN POSSESSION	  	30
	 19.
	  	REASSIGNMENT	  	30
	 20.
	  	POWER OF ATTORNEY	  	30
	 21.
	  	CUMULATIVE AND CONTINUING SECURITY	  	31
	 22.
	  	AVOIDANCE OF PAYMENTS	  	31
	 23.
	  	PRIOR CHARGES	  	32
	 24.
	  	OPENING A NEW ACCOUNT	  	Error!
Bookmark
not
defined!
	 25.
	  	SUSPENSE ACCOUNT	  	32
	 26.
	  	PAYMENTS AND WITHHOLDING TAXES	  	32
	 27.
	  	CURRENCY	  	32
	 28.
	  	SET-OFF	  	33
	 29.
	  	ASSIGNMENT	  	33
	 30.
	  	WAIVERS	  	33
	 31.
	  	SEVERABILITY	  	34
	 32.
	  	NOTICES	  	34
	 33.
	  	LAW AND JURISDICTION	  	34
	 34.
	  	COUNTERPARTS AND DELIVERY	  	35

  

 DEBENTURE 
  
 DATE 
  
 PARTIES 
  

	(1)	ASPACE SOLUTIONS LIMITED (registered in England under company number 3970100) the registered office of which is at Eagle House, 110 Jermyn Street, London SW1Y 6RH (the
“Borrower”); and 

  

	(2)	ACTIVCARD CORP (registered in Delaware, USA) the registered office of which is at 6623 Dumbarton Circle, Fremont, California 94555, USA (the “Lender”).

  
 RECITALS 
  
 The Borrower has agreed to enter into this Debenture for the purpose of providing security to
the Lender for the Secured Liabilities. 
  
 IT IS AGREED AS FOLLOWS: 

 

	1.	DEFINITIONS AND INTERPRETATION 

  

	1.1	Definitions 

  
 In this Debenture the following expressions have the following meanings, unless the context otherwise requires: 
  
 “Accounts” 
  
 means, in the case of the Borrower, the latest annual audited profit and loss account and audited balance sheet of the Borrower available from time to
time; 
  
 “Asset Insurance” 
  
 means the insurances referred to in Clause 12.10.1 (Property and Asset
Insurance) in respect of assets other than the Property; 
  
 “Authorities” 
  
 means all national and local
governments, government departments, supranational bodies, local or public authorities, statutory undertakings, states or agencies; 
  

 2 

 “Book Debts” 
  
 means: 
  

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

  

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

  
 “Book Debts Account”

  
 means such separate and denominated account or accounts with
the Lender or such bank as may be specified in writing by the Lender for the purpose of receiving payments of the proceeds of realisation and collection of Book Debts; 
  
 “Business Day” 
  
 means any day other than a Saturday, a Sunday, or public holiday in any part of the United Kingdom or the United. States of America; 
  
 “Business Operator” 
  
 means a person carrying out any business, process or other. undertaking
(whether currently operated by or under the control or with the consent of the Borrower, or otherwise) whether at the Property or elsewhere; 
  
 “Charged Property” 
  
 means the whole or any part of the property, assets, income and undertaking of the Borrower from time to time mortgaged, charged or assigned to the Lender
pursuant to this Debenture; 
  
 “Company” 

 
 means any person of whose share capital the Shares form all or any part;

  
 “Contracts” 
  
 means all the Borrower’s rights, title, interest and benefit in and to
any contract in respect of the whole or any part of the Charged Property to which the Borrower is a party; 
  

 3 

 “Convertible Loan Agreement” 
  
 means the secured convertible loan agreement of even date between the Borrower and the Lender 
  
 “Costs” 
  
 means all reasonable costs, charges or expenses of whatsoever nature
(including, without limitation, legal fees) including, without limitation, disbursements and any Value Added Tax to be charged on such costs, charges, expenses and disbursements; 
  
 “Default Rate” 
  
 means, on any day, the rate of 5 per cent per annum above Barclays Bank Plc’s base rate; 
  
 “Derivative Assets” 
  
 means all stocks, shares, warrants or other securities, rights, dividends,
interest or other property (whether of a capital or income nature) accruing, offered, issued, or deriving at any time by way of dividend, bonus, redemption, exchange, purchase, substitution, conversion, consolidation, subdivision, preference, option
or otherwise attributable to any of the Shares or any Derivative Assets previously described; 
  
 “Environment” 
  
 means
all of the air, water and land including air within buildings and other natural or man-made structures above or below ground; 
  
 “Environmental Authorisations” 
  
 means all permits, licences, consents or other authorisations or approvals required at any time under any Environmental Legislation for the operation of
any Business Operator and the occupation or use of the Property by any person; 
  
 “Environmental Claim” 
  
 means any claim, notice of violation, prosecution, demand, action, official warning, abatement or other order (conditional or otherwise) relating to Environmental Matters and any notification or order requiring compliance with the terms of
any Environmental Authorisation or Environmental Legislation; 
  
 “Environmental Legislation” 
  
 means all
applicable statutes, statutory instruments, common law, treaties, regulations, directives, codes of conduct, circulars, guidance notes, orders, notices, demands and other measures imposed by any Authority to which the Borrower or any Business
Operator or the Property is or has been or may be or may have been subject which relate to the pollution or protection of the 

  

 4 

 
Environment or the protection of the health of any living organism or the protection of public health or welfare; 
  
 “Environmental Matters” 
  
 means: 
  

	 	(a)	the generation, deposit, disposal, keeping, treatment, transportation, transmission, handling, importation, exportation, processing, collection, sorting, presence or manufacture of
any waste (as defined in the Environmental Protection Act 1990) or of any Relevant Substance; 

  

	 	(b)	public or private nuisance, noise, defective premises or health and safety at work; 

  

	 	(c)	the carrying out of any development (as defined in section 55(l) Town and Country Planning Act 1990); and 

  

	 	(d)	any act, default or phenomenon which is capable of causing harm to human health or welfare or harm to any other living organism or of damaging the Environment;

  
 “Event of Default” 
  
 means any of those events or circumstances set out in Clause 14.1 (Events of
Default); 
  
 “Exchange Rate” 
  
 means the prevailing spot rate of exchange of the Lender (as conclusively
determined by the Lender) at or around 11 a.m. on the date on which any conversion of currency is to be effected pursuant to this Debenture; 
  
 “Existing Property” 
  
 means all estates and other interests in any freehold, leasehold or other immovable property (including, without limitation, all Fixtures on such
property) which are the property of the Borrower at the date of this Debenture, all proceeds of sale derived from such property and the benefit of all covenants to which the Borrower is entitled in respect of such property; 
  
 “Fixtures” 
  
 means all assets of whatsoever nature, apart from land and buildings,
forming part of any freehold or leasehold property owned by the Borrower and deemed by law to be immovable property other than tenant’s fixtures; 
  
 “Future Plant and Machinery” 
  
 means all plant and machinery, equipment, fittings, installations, apparatus, tools, motor vehicles and all other such assets (other than Fixtures)
whatsoever, wherever situate, which become the property of the Borrower after the date of this Debenture; 
  

 5 

 “Future Property” 
  
 means all estates and other interests in any freehold, leasehold or other immovable property (including, without limitation,
all Fixtures on such property) which become the property of the Borrower after the date of this Debenture, all proceeds of sale derived from such property and the benefit of all covenants to which the Borrower is entitled in respect of such
property; 
  
 “Future Shares” 
  
 means all shares and other securities issued to the Borrower as a result of
its ownership of the Shares; 
  
 “Indebtedness”

  
 means any obligation of any person from time to time (present
or future, actual or contingent, as principal or surety or otherwise) for the payment or repayment of money including, but not limited to: 
  
 (a) under acceptances, bills, bonds, debentures, notes or similar instruments; 
  
 (b) under guarantees, indemnities or other assurances against financial loss; 
  
 (c) in respect of the purchase, hire or lease of any asset or services; and

 indebtedness of other persons secured by or benefitting from any Security Interest on the property of that person; 
  
 “Insolvency Act” 
  
 means the Insolvency Act 1986; 
  
 “Intellectual Property”, 
  
 means all subsisting patents and subsisting rights of a similar nature held
in any part of the world, applications for patents and such rights, divisions and continuations of such applications for patents, registered and unregistered trade marks, registered and unregistered service marks, registered designs, utility models
(in each case for their full period and all extensions renewals of them), applications for any of them and the right to apply for any of them in any part of the world, inventions, confidential information, Know-how, business names, trade names,
brand names, copyright (including relating to the source code and object code of software programs) and rights in the nature of copyright, design rights and get-up and any similar rights existing in any country; and the benefit (subject to the
burden) of any and all agreements, arrangements and licences in connection with any of the foregoing; 
  
 “Know-how” 
  
 means all the body of knowledge, technical experience, expertise and skills, technical processes, secret processes, formulae and technical information
held by the Borrower and relating to its business, which is not in the public domain; 
  

 6 

 “LPA” 
  

means the Law of Property Act 1925; 
  
 “Material Adverse Effect” 
  
 means, in relation to any person, a material adverse effect on any one or more of that person’s: 
  
 (a) financial condition; 
  
 (b) business; and 
  
 (c) ability to comply with any obligations under this Debenture; 

 
 “Material Environmental Effect” 
  
 means any effect on the Environment which is, or is reasonably likely in the
opinion of the Lender, in its sole discretion, to have a material adverse effect on: 
  
 (a) the financial condition of the Borrower; or 
  
 (b) the ability of the Borrower to perform its obligations under or otherwise comply with the terms of this Debenture; or 
  
 (c) the value or marketability of the Property; 
  
 “Nominees” 
  
 means the Lender, its agents, nominees and any other person holding the Shares and the Derivative Assets on behalf of the Lender from time to time;

  
 “Occupational Leases” 
  
 means all leasehold interests and other occupational rights whatsoever
(including, without limitation, all licences and agreements for leases) in existence from time to time relating to the whole or any part of the Property, the immediate-reversion to which is vested in the Borrower; 
  
 “Original Accounts” 
  
 means the statutory accounts for the Borrower’s financial period ended
31 March 2003; 
  
 “Permitted Security Interest”

  
 means: 
  
 (a) the security constituted by this Debenture; and 
  
 (b) liens arising by operation of law in the ordinary course of business;

  
 “Planning Acts” 
  
 means the Town and Country Planning Act 1990, the Planning (Listed Buildings
and Conservation Areas) Act 1990, the Planning (Hazardous Substances) Act 1990, the Planning and Compensation Act 1991, the Local 

  

 7 

 
Government Planning and Land Act 1980 and the Ancient Monuments and Archaeological Areas Act 1979; 
  
 “Plant and Machinery” 
  
 means all plant and machinery, equipment, fittings, installations and
apparatus, tools, motor vehicles and all other such assets (other than Fixtures) whatsoever, wherever situate, which are the property of the Borrower at the date of this Debenture; 
  
 “Property” 
  
 means the Existing Property and the Future Property; 
  
 “Property Insurance” 
  
 means the insurance referred to in Clause 12.10.1 (Property and Asset Insurance) in respect of the Property; 
  
 “Receiver” 
  
 means any receiver appointed pursuant to this Debenture; 
  
 “Relevant Jurisdiction” 
  
 in respect of any person means the jurisdiction in which such person is
incorporated or, if different, has its principal place of business; 
  
 “Relevant Substance” 
  
 means all substances
which are defined or regulated as toxic, hazardous, flammable, highly reactive and explosive, or any of these, pursuant to any Environmental Legislation (whether in a solid or liquid form or in the form of a gas or vapour and whether alone or in
combination with any other substance) and all radioactive, electrical or electromagnetic emissions which are capable of causing harm to human health or welfare or harm to any other living organism or of damaging the Environment; 
  
 “Rights” 
  
 means all the Borrower’s rights, title and interest from time to time
in any lease, licence or occupational right whatsoever together with the entire benefit of all the Borrower’s rights, title and interest from time to time in any renewal of, replacement of or variation to any such lease, licence or occupational
right (including, without limitation, all its rights, title and interest in any Occupational Lease, agreement for any Occupational Lease and any associated agreements which may be granted by the Borrower or any person deriving title from the
Borrower from time to time over or in respect of the whole or any part of the Property and any other properties (freehold or leasehold) in which the Borrower has an interest); 
  

 8 

 “Secured Liabilities” 
  
 means all moneys, debts and liabilities (including pursuant to the Convertible Loan Agreement) from time to time due, owing
or incurred by the Borrower to the Lender on any current or other account whatsoever or otherwise in any manner whatsoever, in each case: 
  

	 	(a)	whether present or future; 

  

	 	(b)	whether alone or jointly with any other person; 

  

	 	(c)	whether actual or contingent; 

  

	 	(d)	whether as principal or as surety; 

  

	 	(e)	in whatsoever name, firm or style; 

  

	 	(f)	in whatsoever currency denominated; or 

  

	 	(g)	otherwise; 

  
 including, without limitation, all liabilities in connection with foreign exchange transactions, accepting, endorsing or discounting notes or bills, under bonds, guarantees, indemnities, documentary or other credits
or any instruments from time to time entered into by the Lender for or at the request of the Borrower together with interest to the date of payment at such rates and upon such terms as may from time to time be agreed and all commission, fees, costs
and other charges (including, without limitation, legal fees) on a full indemnity basis; 
  
 “Security Interest” 
  
 means any mortgage, charge, assignment, pledge, lien, right of set-off, hypothecation, encumbrance, priority or other security interest (whether fixed or floating) including, without limitation, any “hold-back” or “flawed
asset” arrangement together with any preferential right, retention of title, deferred purchase, leasing, sale or purchase, sale and leaseback arrangement, trust agreement, declaration of trust, trust arising by operation of law, any option or
agreement for any of the same or any arrangement which has substantially the same commercial or substantive effect as the creation of security; 
  
 “Shares” 
  
 means all stocks, shares and other securities: 
  

	 	(a)	for which the stock or share certificates or other documents of title have been deposited by the Borrower with the Lender or its Nominees or which are held to the order of the
Lender; or 

  

	 	(b)	represented by any stock or share certificates or other documents of title from time to time in the future deposited by the Borrower with the Lender or its Nominees or held to the
order of the Lender or belonging to the Borrower and received by the Lender or its Nominees after the execution of this Debenture; 

  
 in each case whether held in the United Kingdom or elsewhere and irrespective of whether in any such case the deposit was made or the 

  

 9 

 
certificates or other documents were received by the Lender or its Nominees for the purposes of creating security, safe custody, collection or otherwise;

  
 “Subsidiary” 
  
 bears the same meaning as that contained in Section 736 of the Companies Act
1985 (Definition of “subsidiary”); and 
  
 “Taxes” 
  
 means all present and future
taxes, levies, duties, charges, assessments, deductions or withholdings whatsoever, including any interest thereon, and any penalties and fines with respect thereto, wherever imposed, levied, collected or withheld pursuant to any regulation having
the force of law and “Taxation” shall be construed accordingly. 
  

	1.2	Interpretation 

  

	1.2.1 	In this Debenture: 

  

	 	(a)	the Contents page and clause headings are included for convenience only and do not affect the construction of this Debenture; 

  

	 	(b)	words denoting the singular include the plural and vice versa; 

  

	 	(c)	words denoting one gender include each gender and all genders. 

  

	1.2.2 	In this Debenture, unless the context otherwise requires, references to: 

  

	 	(a)	persons include references to natural persons, firms, partnerships, companies, corporations, associations, organisations and trusts (in each case whether or not having a separate
legal personality); 

  

	 	(b)	documents, instruments and agreements (including, without limitation, this Debenture and any document referred to in this Debenture) are references to such documents, instruments
and agreements as modified, amended, varied, supplemented or novated from time to time; 

  

	 	(c)	receivers are references to receivers of whatsoever nature including, without limitation, receivers and managers and administrative receivers; 

  

	 	(d)	the terms the “Lender” and the “Receiver” include, where the context so admits, references to any delegate of any such person; 

  

	 	(e)	a party to this Debenture include references to its successors, transferees and assigns; 

  

	 	(f)	Recitals, Clauses and Schedules are references to recitals to this Debenture, clauses of this Debenture and schedules to this Debenture; 

  

	 	(g)	unless otherwise expressly provided, references to paragraphs are references to paragraphs of the Schedule in which the references appear; 

  

	 	(h)	 statutory provisions (where the context so admits and unless otherwise expressly provided) are construed as references to those provisions as respectively amended,
consolidated, extended or re-enacted from time to time, 

  

 10 

	 	 
and to any orders regulations instruments or other subordinate legislation made under the relevant statute; and 

  

	 	(i)	a time of day is a reference to London time. 

  

	1.3	Incorporation of Schedule 

  
 The Schedule to this Debenture forms part of this Debenture. 
  

	1.4	Conditions 

  
 The provisions of this Agreement (other than Clauses 29 to 34 which shall take immediate effect) shall be conditional upon the Acquisition Agreement of even date between the Lender, Orla Macallister and Una Gilmore as
the administrators of the Estate of Paul Gilmore, Alan Bates, Rick Peel, EFG Reads Trustees Limited, John Merchant, Corbett Keeling Limited and Gary Rimmer relating to a purchase of shares in the Company by the Lender being completed in all respects
by no later than 1 August 2003. 
  

	2.	COVENANT TO PAY 

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

  

	3.	INTEREST 

  
 The Borrower shall pay to the Lender interest on the Secured Liabilities (after as well as before any demand made or judgment obtained or the liquidation or administration of the Borrower) at the rate of 6 per cent.
per annum upon such days as the Lender may from time to time determine and such interest shall be compounded in the event of it not being punctually paid with quarterly rests. 
  

	4.	SECURITY 

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

  

	4.1	Existing Property and the Future Property 

  
 By way of first fixed charge: 
  

	4.1.1 	the Existing Property the Future Property; and 

  

 11 

	4.1.2 	all Rights relating to the Existing Property and the Future Property. 

  

	4.2	Contracts 

  
 By way of absolute legal assignment, the Contracts. 
  

	4.3	Book Debts 

  
 By way of first fixed charge, the Book Debts. 
  

	4.4	Intellectual Property 

  
 By way of first fixed charge, all the Intellectual Property owned, possessed or controlled by the Borrower. 
  

	4.5	Plant and Machinery 

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

	4.6	Future Plant and Machinery 

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

	4.7	Shares and Derivative Assets 

  
 Byway of first fixed charge, the Shares and Derivative Assets. 
  

	4.8	Goodwill 

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

	4.9	Floating charge 

  
 By way of first floating charge, all the undertaking and assets of the Borrower whatsoever, wherever situate, whether movable, immovable, present or
future (including, without Limitation, its uncalled capital for the time being and all the undertaking and assets of the Borrower referred to above which are, for any reason, not validly charged or assigned, pursuant to Clauses 4.1 (Existing
Property and the Future Property) to 4.8 (Goodwill) (inclusive) of this Debenture). 
  

	5.	CONVERSION OF FLOATING CHARGE 

  

	5.1	Conversion by notice 

  
 The Lender may by notice to the Borrower convert the floating charge contained in this Debenture into a fixed charge as regards such Charged Property as
the Lender may specify (whether generally or specifically) in that notice (i) if it considers that it would be desirable to do so in order to protect, preserve or supplement the charges over the Charged Property or the priority of those charges; or
(ii) on, or at any time following, 

  

 12 

 
the occurrence of an Event of Default (whether or not the Event of Default is continuing at the relevant time), or both. 
  

	5.2	Automatic conversion 

  
 If, without the prior written consent of the Lender, the Borrower creates any Security Interest over any of the Charged Property not expressed to be
subject to a fixed charge under this Debenture, or attempts to do so, or if any person levies or attempts to levy any distress, attachment, execution or other legal process against any of such Charged Property, the floating charge created by this
Debenture over the Charged Property the subject of such Security Interest or process will automatically, without notice, be converted into a fixed charge as soon as such event occurs. 
  

	6.	FURTHER ASSURANCE 

  
 The Borrower shall: 
  

	6.1	forthwith, at any time if so required by the Lender, at its own expense execute and deliver to the Lender such further legal or other mortgages, charges, assignments, securities,
authorities and documents as the Lender may in its reasonable discretion require of the whole or such part of the Charged Property as the Lender may specify, in such form, as the Lender may in its discretion require, to secure the payment or
discharge of the Secured Liabilities, including, without limitation, in order to vest the whole or such part of the Charged Property in the Lender, the nominee of the Lender or in any purchaser from the Lender or the Receiver;

  

	6.2	pending the execution and delivery of any such assignments, hold such Charged Property upon trust for the Lender subject to the provisions of this Debenture; and

  

	6.3	pending the execution and delivery of any such mortgages, charges, or other security, hold such Charged Property subject to the provisions of this Debenture.

  

	7.	DEPOSIT OF DOCUMENTS AND TITLE DEEDS 

  

	7.1	The Borrower shall deposit with the Lender (and the Lender during the continuance of this security may hold and retain): 

  

	7.1.1 	all deeds and documents of title relating to the Existing Property and the Future Property including, without limitation, all Occupational Leases; 

  

	7.1.2 	all stock or share certificates or other documents of title to or representing the Shares and the Derivative Assets together with such duly executed transfers or assignments with
the name of the transferee, date and consideration left blank as the Lender may require; 

  

	7.1.3 	all such deeds and documents of title (if any) relating to the Book Debts as the Lender may from time to time specify; and 

  

 13 

	7.1.4 	copies of all the Contracts certified to be true copies by one director of or solicitor acting for the Borrower. 

  

	7.2	The Borrower shall: 

  

	7.2.1 	after the occurrence of an Event of Default procure the registration in the books of the Company of the transfer of the Shares and the Derivative Assets to the Lender (or the
Nominees as the Lender may require), the entry of Lender (or the Nominees as the Lender may require) in the register of members of the Company as the holder or holders of the Shares and the Derivative Assets, and the issue of new share certificates
in respect of the Shares and the Derivative Assets to the Lender (or the Nominees as the Lender may require); and 

  

	7.2.2 	upon the accrual, offer, issue or receipt of any Derivative Assets deliver or pay to the Lender or procure the delivery or payment to the Lender of all such Derivative Assets or the
stock or share certificates or other documents of title to or representing them together with such duly executed transfers or assignments with the name of the transferee, date and consideration left blank as the Lender may require.

  

	8.	NEGATIVE PLEDGE 

  
 The Borrower shall not: 
  

	8.1	create, purport to create or allow to subsist, any Security Interest over the whole or any part of the Charged Property except for any Permitted Security Interest;

  

	8.2	convey, assign, transfer, or agree to convey, assign or transfer the whole or any part of the Charged Property; 

  

	8.3	permit or agree to any variation of the rights attaching to the whole or any part of the Charged Property; 

  

	8.4	do, cause or permit to be done anything which may in the opinion of the Lender, in any way depreciate, jeopardise or otherwise prejudice the value to the Lender (whether monetary or
otherwise) of the whole or any part of the Charged Property; or 

  

	8.5	release, exchange, compound, set off, grant time or indulgence in respect of, or in any other manner deal with, all or any of the Book Debts save as expressly provided in this
Debenture. 

  

	9.	THE BOOK DEBTS ACCOUNT 

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

	9.1	 collect and realise all Book Debts in the ordinary course of its business. For the avoidance of doubt, it is hereby declared that for the purposes of this
Debenture, the ordinary course of business of the Borrower does not include or extend to the selling, assigning or in any other way factoring or discounting any Book Debts. The Borrower 

  

 14 

	 	 
shall hold the proceeds of such collection and realisation of the Book Debts upon trust for the Lender pending payment of such proceeds into the Book Debts
Account; 

  

	9.2	if the Lender so requires, pay the proceeds of such collection and realisation into the Book Debts Account; 

  

	9.3	not except with the prior written consent of the Lender, withdraw from the Book Debts Account all or any monies standing to the credit of the Book Debts Account; and

  

	9.4	if called upon so to do by the Lender execute a legal assignment of the Book Debts to the Lender in such terms as the Lender may in its discretion require, give such notice of that
legal assignment to the debtors from whom the Book Debts are due, owing or incurred and take any such other step as the Lender may in its discretion require to perfect such legal assignment. 

  

	10.	DIVIDENDS, VOTING RIGHTS AND NOMINEES 

  

	10.1	Dividends and voting rights 

  
 For so long as no Event of Default has occurred, the Borrower may: 
  

	10.1.1 	subject to Clause 7.2.2 (Deposit of Documents and Title Deeds), receive and retain all dividends, interest and other income deriving from and received by it in respect of the Shares
and the Derivative Assets; and 

  

	10.1.2 	exercise all voting and other rights and powers attached to the Shares and the Derivative Assets PROVIDED THAT such exercise does not adversely affect the Shares and the Derivative
Assets and is not otherwise inconsistent with the Debenture and PROVIDED FURTHER THAT the Borrower shall: 

  

	 	(a)	give the Lender at least five Business Day’s written notice of the manner in which it intends to exercise, or its reasons for abstaining from exercising, such right; and

  

	 	(b)	not exercise any right or power if, in the Lender’s absolute discretion, such action would adversely affect the value of the Shares and the Derivative Assets or if such action
would be inconsistent with this Debenture. 

  

	10.2	Trustee powers 

  
 The Lender may at its discretion (in the name of the Borrower or otherwise, subject to Clause 10.1 (Dividends and voting rights), after the occurrence of
an Event of Default and without any consent or authority on the part of the Borrower) exercise all the powers given to trustees by Section 10(3) and (4) of the Trustee Act 1925 (as amended by Section 9 of the Trustee Investments Act 1961) in respect
of those Shares and the Derivative Assets subject to a trust. 
  

	10.3	Lender’s powers of enforcement over Shares and the Derivative Assets 

  

	10.3.1 	 Following the occurrence, of an Event of Default, all dividends, interest and other income forming part of the Shares and the Derivative Assets shall, unless
otherwise 

  

 15 

	 	 
agreed between the Lender and the Borrower, be paid without any set-off or deduction whatsoever to an interest bearing suspense account in the name of the
Lender and shall be retained by the Lender until applied as hereinafter provided as part of the Shares and the Derivative Assets and any such monies which may be received by the Borrower shall, pending such payment, be held in trust for the Lender.

  

	10.3.2 	The Lender shall not have any duty as to any Shares and Derivative Assets and shall incur no liability for: 

  

	 	(a)	ascertaining or taking action in respect of any calls instalments, conversions, exchanges, maturities, tenders or other matters in relation to any Shares and Derivative Assets or
the nature or sufficiency of any payment whether or not the Lender has or is deemed to have knowledge of such matters; or 

  

	 	(b)	taking any necessary steps to preserve rights against prior parties or any other rights pertaining to any Shares and Derivative Assets; or 

  

	 	(c)	for any failure to present any interest, coupon or any bond or stock drawn for repayment or for any failure to pay any call or instalment or to accept any offer or to notify the
Borrower of any such matter or for any failure to ensure that the correct amounts (if any) are paid or received in respect of the Shares and the Derivative Assets. 

  

	10.4	Custody 

  
 The Lender shall be entitled to provide for the safe custody by third parties of all stock and share certificates and documents of title deposited with the Lender or Nominees at the expense of the Borrower and shall
not be responsible for any loss of or damage to any such certificates or documents. 
  

	11.	WARRANTIES 

  

	11.1	The Borrower warrants to the Lender that: 

  

	11.1.1 	Status 

  
 it is duly incorporated an validly existing under the laws of its Relevant Jurisdiction and is fully qualified and empowered to own its assets and carry
out its business; 
  

	11.1.2 	Powers 

  
 it has power to enter this Debenture is to exercise its rights and perform its obligations hereunder, and has taken all necessary corporate and other
action to authorise the execution, delivery and performance and any other documents referred to herein; 
  

	11.1.3 	Authorisations: 

  
 all acts, conditions, authorisations and other things required to be done, fulfilled and Performed by it in order: 
  

 16 

	 	(a)	to enable it lawfully to enter into, exercise its rights under and perform and comply with the obligations expressed to be assumed by it in this Debenture; 

 

	 	(b)	to ensure that the obligations expressed to be assumed by it in this Debenture are legal, valid and binding; and 

  

	 	(c)	to make this Debenture admissible in evidence in the Relevant Jurisdiction have been done, fulfilled and performed and are in full force and effect; 

  

	11.1.4 	No filing 

  
 under the laws of the Relevant Jurisdiction in force at the date hereof, it is not necessary that this Debenture be filed, recorded or enrolled with any
court or other authority in the Relevant Jurisdiction or that any stamp, registration or similar tax be paid on of in relation to this Debenture (or where it is so required, this Debenture has been so filed, recorded or enrolled or such stamp,
registration or other tax has been paid); 
  

	11.1.5 	Legal validity 

  
 the obligations expressed to be assumed by it in this Debenture are legal and valid obligations binding on it in accordance with the terms of this
Debenture; 
  

	11.1.6 	Insolvency 

  
 neither it nor any other member of the Group has taken any corporate action nor have any other steps been taken or legal proceedings been started or
threatened against it or any other member of the Group for its winding-up, dissolution or re-organisation or for the appointment of a receiver, administrator, administrative receiver, trustee or similar officer of it or of any or all of its revenues
or assets; 
  

	11.1.7 	No default 

  
 no Event of Default is outstanding or might result from the execution and performance of this Debenture, nor is any other event outstanding which
constitutes (or, with the giving of notice, lapse of time, determination of materiality or the fulfillment of any other applicable condition or any combination of the foregoing, might constitute) a default under any document which is binding on it
or any other member of the Group, or on any of its revenues or assets or of any other member of the Group, to an extent or in a manner which might have a Material Adverse Effect in relation to it or any other member of the Group; 
  

	11.1.8 	Non-conflict 

  
 it does not require the consent, approval or authority of any other person to enter into or perform its obligations under this Debenture and its entry
into and performance of, and the transactions contemplated by, this Debenture will not: 
  

	 	(a)	constitute any breach of, or default under, any contractual, governmental or public obligation binding upon it; 

  

	 	(b)	conflict with its constitutional documents; nor 

  

 17 

	 	(c)	result in the creation or imposition of (or enforceability of) any Security Interest over the whole or any part of its undertaking or assets of the Borrower pursuant to the
provisions of any agreement or document other than this Debenture; 

  

	11.1.9 	No deduction 

  
 Save as may be required by law, it will not be required to make any deduction or withholding from any payment it may make under this Debenture;

  

	11.1.10 	Litigation 

  
 no action, arbitration or administrative proceeding of or before any court, tribunal or agency is current, pending or threatened which might, if adversely
determined have a Material Adverse Effect in relation to it; 
  

	11.1.11 	Original Accounts 

  
 the Original Accounts were prepared in accordance with accounting principles and practices generally accepted in England and Wales and consistently
applied and present fairly and accurately (in conjunction with the notes thereto) the financial condition of it and (if consolidated accounts) each other member of the Group at the date to which they were drawn up and the results of its operations
the financial year then ended; 
  

	11.1.12 	No change from date of Original Accounts 

  
 save as disclosed in the Disclosure Letter and the Disclosure Bundle (as those terms arc defined in the Investment Agreement of even date between the
Borrower, Steve Keohane, Paul Ryder, Julian Lovelock and the Lender), since publication of the Original Accounts, there has been no material adverse change in the business or financial condition of it or any other member of the Group; 
  

	11.1.13 	No undisclosed liabilities 

  
 save as disclosed in the Disclosure Letter and the Disclosure Bundle (as those terms are defined in the Investment Agreement of even date between the
Borrower, Steve Keohane, Paul Ryder, Julian Lovelock and the Lender), as at the date as of which the Original Accounts were prepared neither it nor any other member of the Group had any liabilities (contingent or otherwise) which were not disclosed
thereby (or by the notes thereto, or reserved against therein) nor any unrealised or anticipated losses arising from commitments entered into by it or by any other member of the Group which were not so disclosed or reserved against; 
  

	11.1.4 	No undisclosed Security Interest 

  
 save as disclosed to the Lender in the Disclosure Letter and the Disclosure Bundle (as those terms are defined in the Investment Agreement of even date
between the Borrower, Steve Keohane, Paul Ryder, Julian Lovelock and the Lender), no Security Interest exists over all or any of the present or future revenues or assets of it or of any other member of the Group; 
  

 18 

	11.1.15 	Future Security Interest 

  
 except as contemplated by this Debenture, the execution of this Debenture by it and its exercise of the rights and performance of its obligations
hereunder will not result in the existence of or oblige any other member of the Group to create any Security Interest over all or any of its present or future revenues or assets; 
  

	11.1.16 	Other information 

  
 save for the Original Accounts (as to which a representation is made in Clause 11.1.11 (Original Accounts)), all of the written information supplied by or
on behalf of the Borrower to the Lender is true and accurate in all material respects; 
  

	11.1.17 	Other circumstances 

  
 it is not aware of any facts or circumstances that have not been disclosed to the Lender which might have a Material Adverse Effect in relation to it;

  

	11.1.18 	Ownership of the Charged Property 

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

	11.1.19 	No disposal 

  
 it has not sold or agreed to sell or otherwise disposed of, or agreed to dispose of, the benefit of all or any of the Borrower’s right, title and
interest in and to the Charged Property. 
  

	11.2	The warranties set forth in this Clause are given and made on and as of the date of this Debenture, shall survive the execution of this Debenture and other than the warranty in
Clause 11.1.16 (Warranties - Other information) are continuing warranties which are deemed to be repeated during the continuance of the security constituted by this Debenture. 

  

	12.	UNDERTAKINGS 

  
 The Borrower gives each of the undertakings contained in this Clause to the Lender. 
  

	12.1	Duration 

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

	12.2	To comply with statutes 

  
 The Borrower shall comply with all requirements of any Authority, all obligations under any statute and all bylaws and regulations relating to the whole
or any part of the Charged Property. 
  

 19 

	12.3	Business 

  
 The Borrower shall carry on its business in a proper and efficient manner and, except with the prior written consent of the Lender, shall not make any alteration in the nature or mode of conduct of such business
(whether by acquisition or otherwise). 
  

	12.4	Books of account 

  
 The Borrower shall: 
  

	12.4.1 	keep, or cause to be kept, proper books of account relating to the business of the Borrower; and 

  

	12.4.2 	keep such books of account, and all other documents relating to the affairs of the Borrower, at the Borrower’s registered office. 

  

	12.5	To provide information 

  
 The Borrower shall furnish to the Lender forthwith on demand by the Lender such information and supply such documents or papers relating to the Charged
Property from time to time as the Lender may in its reasonable discretion require. 
  

	12.6	Access and information 

  
 The Borrower shall: 
  

	12.6.1 	upon reasonable prior written notice, permit the Lender, its representatives and agents free access at all reasonable times to examine and take copies and extracts from the records,
books of account and statutory books of the Borrower; 

  

	12.6.2 	furnish the Lender with all additional information which the Lender may in its reasonable discretion require in connection with such examination; and 

  

	12.6.3 	co-operate and comply with all reasonable requests relating to such examination. 

  

	12.7	Shares of Subsidiary 

  
 The Borrower shall not permit any Subsidiary of the Borrower to issue any shares except to the Borrower itself or to one of its other wholly owned
Subsidiaries. 
  

	12.8	Notification of Events of Default, 

  
 The Borrower shall forthwith notify the Lender in writing of the happening of any Event of Default. 
  

	12.9	Property and Asset Insurance 

  
 The Borrower shall: 
  

	12.9.1 	 insure and keep insured the Property and all of its undertaking and assets other than the Property with reputable and responsible insurers previously approved by
the Lender in such manner and to such extent as is reasonable and customary for an enterprise engaged in the same or a similar business and in the same or similar 

  

 20 

	 	 
localities such risks and contingencies as the Lender shall from time to time request; and 

	12.9.2 	effect the Property Insurance and the Asset Insurance and the Borrower shall procure that the interest of the Lender is noted on all policies of Property Insurance and Asset
Insurance in such manner as the Lender may in its absolute discretion require; 

  

	12.9.3 	duly and punctually pay all premiums and any other moneys necessary for maintaining the Property Insurance and the Asset Insurance in fall force and effect;

  

	12.9.4 	ensure that every policy of insurance relating to the Property Insurance and the Asset Insurance contains a first loss payee clause and a standard mortgagee clause, whereby such
insurance will not be invalidated, vitiated or avoided as against a mortgagee in the event of any misrepresentation, act, neglect or failure to disclose on the part of the insured; 

  

	12.9.5 	produce to the Lender on request copies of all policies and all receipts for the current premiums with respect to the Property Insurance and the Asset Insurance; and

  

	12.9.6 	immediately give notice to the Lender of any occurrence which gives rise, or might give rise, to a claim under any policy of insurance relating to the Property Insurance, the Asset
Insurance or both and, except with the prior written consent of the Lender, the Borrower shall not agree to settlement of any such claim. 

  
 If the borrower at any time fails to perform any of its obligations contained in this Clause, the Lender may effect or renew such insurance as the Lender
thinks fit and the Borrower shall reimburse the Lender for the Costs thereby incurred on demand. Such Costs will bear interest in accordance with Clause 3 (Interest) from the date of payment by the Lender until the date of reimbursement. 

 

	12.10 	Insurance monies 

  

	12.10.1 	Any monies received by virtue of any insurance relating to the whole or any part of the Charged Property (whether effected pursuant to this Debenture or otherwise) will be deemed to
be part of the Charged Property. The Borrower shall apply all such monies in making good, or in recouping expenditure incurred in making good, any loss or damage or, if the Lender in its discretion so requires, towards discharge of the Secured
Liabilities. 

  

	12.10.2 	The Borrower shall ensure that all such monies as are referred to in Clause 12. 11.1 which are not paid directly by the insurers to the Lender shall be held by the recipient upon
trust for the Lender and be applied by the Borrower in accordance with Clause 12.11.1. 

  

	12.10.3 	This Clause applies whether or not this Debenture has become enforceable. 

  

	12.11 	To repair 

  
 The Borrower shall: 
  
  

 21 

	12.11.1 	at all times keep in good and substantial repair and condition all the Charged Property including, without limitation, all buildings, erections and structures on and in the
Property; 

  

	12.11.2 	keep all Plant and Machinery and Future Plant and Machinery in good repair, working order and condition and fit for its purpose; and 

  

	12.11.3 	where it is uneconomic to repair any part of the Charged Property, replace such part by another similar asset of equal or greater quality and value. 

  

	12.12 	Environment 

  
 The Borrower shall: 
  

	12.12.1 	and shall procure that any Business Operator shall, obtain and maintain in full force and effect all Environmental Authorisations and ensure that the Property, itself and any
Business Operator complies with all Environmental Legislation; and 

  

	12.12.2 	promptly on becoming aware of it inform the Lender of any Environmental Claim which has been made or threatened against the Borrower or any Business Operator or any of the officers
of the Borrower or any Business Operator or any occupier of the Property or any requirement of any Authority, Environmental Authorisation or applicable Environmental Legislation to make any investment or expenditure or take or desist from taking any
action which might, if substantial, have a Material Environmental Effect. 

  

	13.	COSTS AND LENDER’S PERFORMANCE OF COVENANTS 

  

	13.1	Costs undertaking 

  
 The Borrower shall on demand pay to the. Lender or the Receiver, as the case may be, and discharge all Costs payable by it pursuant to this Debenture on a
full and unlimited indemnity basis, together with interest at the Default Rate calculated in accordance with Clause 3 (Interest) from the date the relevant Cost was expended, incurred or suffered (whichever is the earlier) by the Lender or the
Receiver, as the case may be, until full discharge of such Cost. 
  

	13.2	Lender’s performance of covenants 

  
 If the Borrower fails to perform either of the undertaking contained in Clause 12.12 (To repair) or Clause 12.13 (Environment) the Lender may perform any
such covenant at the Borrower’s expense and the Borrower shall reimburse the Lender for the Costs of such performance on demand. Nothing in this Debenture shall oblige the Lender to perform any covenant of the Borrower. 
  

 22 

	14.	DEFAULT 

  

	14.1	Events of Default 

  
 Each of the following events is an Event of Default: 
  

	14.1.1 	Non-payment 

  
 the Borrower fails to pay in full on the due date any sum due from it under this Debenture in the currency and in the manner specified herein; 

 

	14.1.2 	Breach of other obligations 

  
 the Borrower fails duly to perform or comply with any other obligation expressed to be assumed by it in this Debenture; 
  

	14.1.3 	Misrepresentation 

  
 any warranty or statement made by the Borrower in this Debenture (or in any notice or other document, certificate or statement delivered by it pursuant
hereto or in connection herewith) is, or proves to have been, materially incorrect or misleading when made; 
  

	14.1.4 	Cross-default 

  
 any Indebtedness of the Borrower or any other member of the Group is not paid when due, any indebtedness of the Borrower or any other member of the Group
is declared to be or otherwise becomes due and payable before its specified maturity, or any creditor or creditors of the Borrower or of any other member of the Group become entitled to declare any Indebtedness of the Borrower or any other member of
the Group due and payable before its specified maturity; 
  

	14.1.5 	Insolvency 

  
 the Borrower or any other member of the Group is deemed unable to pay its debts as they fall due, admits its inability to pay its debts as they fall due,
commences negotiations with any one or more of its creditors with a view to the general readjustment or rescheduling of its indebtedness, or makes a general assignment for the benefit of, or a composition with, its creditors; 
  

	14.1.6 	Insolvency proceedings 

  
 the Borrower or any other member of the Group takes any corporate action or other steps are taken or legal proceedings are started for its winding-up,
dissolution or re-organisation or for the appointment of a receiver, administrator, administrative receiver, trustee or similar officer of it or of any or all of its revenues and assets or distress is executed against, or an encumbrancer takes
possession of, any part of its revenues or assets; 
  

	14.1.7 	Repudiation 

  
 the Borrower repudiates this Debenture or does or causes to be done any act or thing evidencing an intention to repudiate this Debenture; 
  

 23 

	14.1.8 	Validity of agreement 

  
 at any time any act, condition or thing required to be done, fulfilled or performed in order: 
  

	 	(a)	to enable the Borrower lawfully to enter into, exercise its rights under or perform the obligations expressed to be assumed by it in this Debenture; 

  

	 	(b)	to ensure that the obligations expressed to be assumed by the Borrower in this Debenture are legal, valid and binding; or 

  

	 	(c)	to make this Debenture admissible in evidence in its Relevant Jurisdiction 

  
 is not done, fulfilled or performed within any time available to ensure compliance with the same; 
  

	14.1.9 	Unlawfulness 

  
 at any time it is or becomes unlawful for the Borrower to perform or comply with any or all of its obligations under this Debenture or any of the
obligations of the Borrower under this Debenture are not, or cease to be, legal, valid and binding; 
  

	14.1.10 	Analogous proceedings 

  
 there occurs, in relation to the Borrower, any event anywhere which, in the reasonable opinion of the Lender, appears to correspond with any of those
mentioned in Clauses 14.1.5 (Insolvency) and 14.1.6 (Insolvency proceedings); 
  

	14.1.11 	Litigation 

  
 any litigation, arbitration, or administrative proceedings are commenced which, in the reasonable opinion of the Lender, if adversely determined might
have a Material Adverse Effect in relation to the Borrower; or 
  

	14.1.12 	Material adverse change 

  
 any circumstances arise which give grounds in the reasonable opinion of the Lender for belief that the Borrower may not (or may be unable to) perform, or
comply with, its obligations under this Debenture. 
  

	14.2	Enforcement 

  
 This Debenture will become enforceable on the occurrence of any Event of Default or if the Borrower requests the Lender to appoint a receiver over the whole or any part of its undertaking or assets. 
  

	14.3	Consequences of default 

  
 On and at any time after the occurrence of an Event of Default, the Lender in its absolute discretion may by written notice to the Borrower; 

 

	14.3.1 	 declare the Secured Liabilities to be immediately due and payable, together with all accrued interest thereon and any other sums then owed by the Borrower under
this Debenture and, upon that declaration, such sums shall become immediately due and 

  

 24 

	 	 
payable without demand or notice of any kind, all of which are hereby expressly waived by the Borrower; or 

  

	14.3.2 	declare the Secured Liabilities to be due and payable on demand of the Lender; and/or 

  

	14.3.3 	declare the security constituted by this Debenture to be enforceable. 

  

	15.	STATUTORY POWER OF SALE 

  

	15.1	For the purposes of all powers implied by statute, and in particular the power of sale under Section 101 of the LPA (Powers incident to estate or interest in a mortgage), the
Secured Liabilities will be deemed to have become due when the security created by this Debenture becomes enforceable and Section 103 of the LPA (Regulation of exercise of power of sale) and Section 93 of the LPA (Restriction on consolidation of
mortgages) will not apply. 

  

	15.2	The statutory powers of leasing conferred on the Lender are extended so as to authorize the Lender to lease, make arrangements for leases, accept surrender of leases and grant
options on such terms and conditions as the Lender may in its discretion think fit. The Lender is not obliged to comply with any of the provisions of Section 99 (Leasing powers of mortgagor and mortgagee in possession) and Section 100 (Powers of
mortgagor and mortgagee in possession to accept surrenders of leases) of the LPA. 

  

	15.3	Each of the Lender and the Receiver may exercise such person’s statutory power of sale in respect of the whole or any part of the Property. 

  

	16.	RECEIVER 

  

	16.1	Appointment of Receiver 

  

	16.1.1 	At any time after the security constituted by this Debenture has become enforceable, whether or not the Lender has entered into or taken possession of the whole or any part of the
Charged Property pursuant to this Debenture: 

  

	 	(a)	the Lender may, by writing under the hand of any authorised officer of the Lender, appoint any person to be a receiver of the Charged Property and such person shall, with effect
from the date of such appointment, be a “Receiver”; 

  

	 	(b)	the Lender may, from time to time, in similar manner, remove the Receiver and appoint another in his place;, 

  

	 	(c)	the Lender may, either at the time of appointment or at any time thereafter, fix the remuneration of the Receiver; 

  

	 	(d)	 the Lender and any Nominee wheresoever situate may, without further notice and without the restrictions contained in Section 103 of the Law of Property Act 1925
(Regulation of exercise of power of sale), exercise in respect of all or any part of the Shares and the Derivative Assets all the powers and rights exercisable by the registered holder of the Shares and the Derivative Assets 

  

 25 

	 	 
and all other powers conferred on mortgagees by the Law of Property Act 1925 as varied or extended by this Debenture; and 

  

	 	(e)	the Lender and any Nominee wheresoever situate may apply any dividends, interest or other payments received or receivable by the Lender or by such Nominee in respect of the Shares
and the Derivative Assets as if they were proceeds of sale. 

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

	16.1.2 	The Receiver may from time to time delegate, by power of attorney or otherwise, to any person any of his powers and discretions, whether arising by statute, the provisions of this
Debenture or otherwise, upon such terms and for such periods of time as he may in his discretion think fit and may from time to time terminate any such delegation. The Leader shall not be liable to the Borrower for any loss or damage arising from
any such delegate’s act, default, neglect or misconduct of any nature whatsoever. 

  

	16.2	Powers of Receiver 

  
 The Receiver has all the powers to do or abstain from doing anything which the Borrower could do or abstain from doing in relation to the Charged Property
including, without limitation the powers conferred by Section 109 of the LPA (Appointment, powers, remuneration and duties of receivers) and, in the case of a Receiver who is an administrative receiver, the powers conferred by Section 29 of the
Insolvency Act (Definitions) and Schedule 1 to the Insolvency Act (Powers of administrator or administrative receiver), and in particular the Receiver may: 
  
 16.2.1  Carry on business 
  
 carry on, manage or concur in carrying on managing the whole or any part of the business of the Borrower as he may in his discretion think fit;

  

	16.2.2 	Protection of assets 

  

	 	(a)	manage, insure, repair, decorate, maintain, alter, improve, renew or add to the Charged Property or concur in so doing; 

  

	 	(b)	commence or complete any building operations on the Property; 

  

	 	(c)	apply for and maintain any planning permissions, building regulations, approvals and any other permissions, consents or licences, 

  
 in each case as he may in his discretion think fit; 
  

	16.2.3 	Realisation of assets 

  
 sell, exchange, convert into money and realise the Charged Property or concur in so doing by public auction or private contract and generally in such
manner and on such terms as he may in his discretion think fit. Without prejudice to the generality of the foregoing, he may do any of these things for any valuable consideration, including, without limitation, cash, shares, stock, debentures or
other obligations. 
  

 26 

 Any such consideration may be payable in a lump sum or by instalments spread over such period as he may
in his discretion think fit; 
  

	16.2.4 	Let, hire or lease 

  

	 	(a)	let, hire or lease (with or without premium) and accept surrenders of leases or tenancies or concur in so doing; 

  

	 	(b)	grant rights, options or easements over and otherwise deal with or dispose of, and exercise all rights, powers and discretions incidental to, the ownership of the Charged Property;

  

	 	(c)	exchange or concur in exchanging the Charged Property, 

  
 in each such case in such manner and generally on such terms as he may in his discretion think fit, with all the powers of an absolute beneficial owner.
The Receiver may exercise any such power by effecting such transaction in the name or on behalf of the Borrower or otherwise; 
  
 16.2.5  Borrowing 
  
 for the purpose of exercising any of the powers, authorities or discretions conferred on him by or pursuant to this Debenture or of defraying any Costs
(including, without limitation, his remuneration) which are incurred by him in the exercise of such powers, authorities or discretions or for any other purpose, to raise and borrow money or incur any other liability either unsecured or secured on
the Charged Property, either in priority to the security constituted by this Debenture or otherwise, and generally on such terms as he may in his discretion think fit. No person lending such money is to be concerned to enquire as to the propriety or
purpose of the exercise of such power or as to the application of any money so raised or borrowed; 
  

	16.2.6 	Make calls 

  
 make, or require the directors of the borrower to make, such calls upon the shareholders of the Borrower in respect of any uncalled capital of the
Borrower as the Receiver may in his discretion require and enforce payment of any call so made by action (in the name of the Borrower or the Receiver as the Receiver may in his discretion think fit) or otherwise; 
  

	16.2.7 	Compromise 

  

	 	(a)	settle or compromise any claim by, adjust any account with, refer to arbitration any dispute with, and deal with any question or demand from, any person who is, or claims to be, a
creditor of the Borrower, as he may in his discretion think fit; and 

  

	 	(b)	settle or compromise any claim, adjust any account, refer to arbitration any dispute and deal with any question or demand relating in any way to the Charged Property, as he may in
his discretion think fit; 

  

	16.2.8 	Proceedings 

  
 bring, prosecute, enforce, defend and abandon all such actions, suits and proceedings in relation to the Charged Property as he may in his discretion
think fit; 
  

 27 

	16.2.9 	Subsidiaries 

  

	 	(a)	promote the formation of any Subsidiary of the Borrower with a view to such Subsidiary purchasing, leasing, licensing or otherwise acquiring an interest in the Charged Property;

  

	 	(b)	arrange for the purchase, lease, licence or acquisition of an interest in the Charged Property by any such Subsidiary for any valuable consideration, including, without limitation,
cash, shares, debentures, loan stock, convertible loan stock or other securities, profits or a sum calculated by reference to profits, turnover, royalties, licence fees or otherwise, whether or not secured on the undertaking or assets of such
Subsidiary and whether or not such consideration is payable or receivable in a lump sum or at any time or any number of times by instalments spread over such period, as the Receiver may in his discretion think fit; and 

  

	 	(c)	arrange for such Subsidiary to trade or cease to trade as the Receiver may in his discretion think fit; 

  

	16.2.10 	Employees 

  
 appoint and discharge any manager, officer, agent, professional adviser, employee and any other person, upon such terms as he may in his discretion think
fit; 
  

	16.2.11 	Receipts 

  
 give valid receipts for all monies and execute all assurances and things which he may in his discretion think proper or desirable for realizing the
Charged Property; 
  

	16.2.12 	Environment 

  
 conduct and complete all investigations, studies, sampling and testing and all remedial, removal and other actions, whether required under Environmental
Legislation or by the Lender or otherwise and comply with all lawful orders and directives of all Authorities regarding Environmental Legislation; and 
  

	16.2.13 	General powers 

  
 do all such other, acts and things as the Receiver may in his discretion consider to be incidental or conducive to any of the matters or powers set out in
this Debenture or otherwise incidental or conducive to the preservation, improvement or realisation of the Charged Property. 
  

	16.3	Receiver as agent of the Borrower 

  
 The Receiver is at all times and for all purposes the agent of the Borrower. Subject to the provisions of the Insolvency Act, the Borrower is solely
responsible for all the Receiver’s acts, defaults, neglect and misconduct of any nature whatsoever and for his remuneration and Costs, to the exclusion of liability on the part of the Lender. 
  

	16.4	No obligation 

  
 The Receiver is not obliged to exercise any of the powers set out in this Clause. 
  

 28 

	16.5	Several power 

  
 Where more than one Receiver is appointed, each Receiver has the power to act severally unless the Lender specifies otherwise in the appointment of such
Receiver. 
  

	16.6	Powers exercisable by the Lender 

  

	16.6.1 	The Lender may exercise all powers granted to the Receiver by this Debenture, whether as attorney of the Borrower or otherwise. 

  

	16.6.2 	The powers of the Receiver set out above are in addition to, and without prejudice to, all statutory and other powers of the Lender as provided in Clause 15 (Statutory power of
sale) or otherwise and so that, inter alia, such powers are and remain exercisable by the Lender in respect of that part of the Charged Property in respect of which no appointment of a Receiver by the Lender is from time to time subsisting.

  

	16.7	Application of proceeds 

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

	16.7.1 	in full payment of his remuneration and the Costs of realisation including, without limitation, all Costs of, or incidental to, any exercise of any power referred to in this
Debenture, including, without limitation, all outgoings paid by the Receiver; 

  

	16.7.2 	providing for the matters specified in paragraphs (i) to (iii) inclusive of Section 109 (8) of the LPA (Appointment, powers, remuneration and duties of receiver);

  

	16.7.3 	in or towards satisfaction of any debts or other imposts which are by statute made payable in preference to the Secured Liabilities to the extent to which such debts or imposts are
made so payable; 

  

	16.7.4 	if so required by the Lender in its discretion, in or towards satisfaction of the Secured Liabilities; and 

  

	16.7.5 	to the person entitled to any surplus. 

  

	17.	PROTECTION OF THIRD PARTIES 

  

	17.1	Any person (including, without limitation, any purchaser, mortgagor or mortgagee) (in this Clause a “purchaser”) dealing with the Lender may assume without inquiry that:

  

	17.1.1 	some part of the Secured Liabilities has become due; 

  

	I7.1.2 	a demand for such Secured Liabilities has been duly made; and 

  

	17.1.3 	such Secured Liabilities have become due within the meaning of Section 101 of the LPA (Powers incident to estate or interest in a mortgage). 

  

	17.2	 No purchaser dealing with the Receiver or the Lender is to be concerned to enquire whether any power exercised or purported to be exercised by the Receiver or the
Lender has become exercisable, or as to the propriety or regularity of any sale by, 

  

 29 

	 	 
or other dealing with, the Receiver or the Lender. Any such sale or dealing is deemed to be within the powers conferred by this Debenture and to be valid and
effective accordingly. All the protection to purchasers contained in Section 104 (Conveyance on sale) and Section 107 (Mortgagee’s receipt, discharges etc.) of the LPA and Section 42(3) of the Insolvency Act (Prohibition upon enquiry into
administrative receiver’s powers) apply to any purchaser. 

  

	18.	NO LIABILITY AS MORTGAGEE IN POSSESSION 

  

	18.1	Mortgagee’s liability 

  
 Neither the Lender nor the Receiver is: 
  

	18.1.1 	liable to account as mortgagee in possession in respect of the Charged Property; nor 

  

	18.1.2 	liable for any loss upon realisation or exercise of any power, authority or right of the Lender or the Receiver arising under this Debenture, nor for any act, default, neglect, or
misconduct of any nature whatsoever. 

  

	18.2	Possession 

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

	19.	REASSIGNMENT 

  
 Subject to Clause 22.2 (Avoidance of payments), upon irrevocable discharge in full of the Secured Liabilities the Lender shall reassign to the Borrower
all the Borrower’s rights, title, interest and benefit in and to the Contracts. 
  

	20.	POWER OF ATTORNEY 

  

	20.1	The Borrower irrevocably appoints, by way of security the Lender, each person deriving title from the Lender and the Receiver, jointly and severally to be its attorney (with full
power to appoint substitutes and to sub-delegate) for it, in its name, on its behalf and as its act and deed or otherwise to sign or execute any deed or document or do any act or thing which the Borrower is, or may become, obliged to sign, execute
or do pursuant to this Debenture or which the Lender, the Receiver or any person deriving title from the Lender or the Receiver may in the discretion of such person think fit in connection with the exercise of any of the powers of such person or the
realisation of any security constituted by this Debenture. 

  

	20.2	Without prejudice to the generality of the foregoing, the Borrower unconditionally undertakes to the Lender, and separately to the Receiver and to each person deriving title from
the Lender or the Receiver, that it shall ratify and confirm anything done or purported to be done by any attorney appointed pursuant to this Clause. 

  

 30 

	21.	CUMULATIVE AND CONTINUING SECURITY 

  

	21.1	This Debenture is a continuing security to the Lender regardless of any intermediate payment or discharge of the whole or any part of the Secured Liabilities and will not be
prejudiced or affected by any act, omission or circumstance which, but for this Clause, might affect or diminish its effectiveness. 

  

	21.2	The security constituted by this Debenture is in addition to, is not in substitution for, is without prejudice to, and does not merge with, any rights whatsoever which the Lender
may have, whether in respect of the Secured Liabilities or otherwise, including, without limitation, any rights arising under any other Security Interest, any bill, note, guarantee, contract or applicable rule of law. 

  

	21.3	Any receipt, release or discharge of the security constituted by, or of any liability arising under, this Debenture shall not release or discharge the Borrower from any liability
which may exist independently of this Debenture to the Lender. 

  

	21.4	Where the security constituted by this Debenture initially takes effect as a collateral or further security to any other Security Interest held by the Lender then, notwithstanding
any receipt, release or discharge given in respect of such other Security Interest, this Debenture shall take effect as an independent security for any monies, liabilities or other sums secured by such other Security Interest.

  

	22.	AVOIDANCE OF PAYMENTS 

  

	22.1	No assurance, security or payment which may be avoided under the law or subject to an order of the court made under any law relating to bankruptcy, insolvency, administration or
winding-up, including, without limitation, the Insolvency Act, and no release, settlement or discharge given or made by the Lender on the faith of any such assurance, security or payment, prejudices or affects the right of the Lender:

  

	22.1.1 	to recover any monies from the Borrower (including, without limitation, any monies which it is compelled to refund under Chapter X (Malpractice before and during liquidation;
penalisation of companies and company officers; investigations and prosecutions) of the Insolvency Act and any Costs payable by it incurred in connection with such process); or 

  

	22.1.2 	to enforce the security constituted by this Debenture to the full extent of the Secured Liabilities. 

  

	22.2	The Leader may at its discretion retain the security so created as security for the Secured Liabilities for a period of one month plus any statutory period within which any such
assurance, security or payment can be avoided or invalidated notwithstanding any release, settlement, discharge or arrangement given or made by the Lender. 

  

	22.3	 If at any time within the period referred to in Clause 22.2 any person takes any step whatsoever relating to (i) the winding-up or administration of the Borrower;
or (ii) any arrangement with the creditors of the Borrower, the Lender may retain the whole or any part of the security constituted by this Debenture for such further period as the 

  

 31 

	 	 
Lender may in its discretion think fit. Such security will be deemed to have been held and remained held by the Lender as security for the payment to the
Lender of the Secured Liabilities. 

  

	23.	PRIOR CHARGES 

  

	23.1	If there subsists any prior Security Interest against the Charged Property and either, any step is taken to exercise any power or remedy conferred by such Security Interest or the
Lender or the Receiver exercises any power of sale pursuant to this Debenture, the Lender may redeem such prior Security Interest or procure the transfer of such Security Interest to itself and may settle and pass the accounts of the person entitled
to such Security Interest. Any accounts so settled and passed are conclusive and binding on the Borrower. 

  

	23.2	The Borrower shall reimburse the Lender for any Costs incurred by the Leader in exercise of its rights under this Clause. 

  

	24.	SUSPENSE ACCOUNT 

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

	25.	PAYMENTS AND WITHHOLDING TAXES 

  
 The Borrower shall pay and discharge the Secured Liabilities without any set-off, counterclaim, restriction or condition, without regard to any equities
between the Borrower and the Lender and free and clear of, and without deduction or withholding for, or on account of, any Taxes, except to the extent that the Borrower is required by law to deduct or withhold any Taxes on any amounts payable under
this Debenture. 
  

	26.	CURRENCY 

  

	26.1	All monies received or held by the Lender or any Receiver in respect of the Secured Liabilities may, from time to time after demand has been made, be converted into such other
currency as the Lender in its absolute discretion considers necessary or desirable to cover the obligations and liabilities actual or contingent of the Borrower in that other currency at the Exchange Rate for purchasing that other currency with the
existing currency. 

  

	26.2	 If and to the extent that the Borrower fails to pay the amount due on demand the Lender may in its absolute discretion without notice to the Borrower purchase, at
any 

  

 32 

	 	 
time thereafter so much of any currency as the Lender considers necessary or desirable to cover the obligations and liabilities of the Borrower in such
currency hereby secured at the Exchange Rate for purchasing such currency with sterling and the Borrower hereby agrees to indemnify the Lender against the full sterling cost incurred by the Lender for such purchase. 

  

	26.3	Neither the Lender nor any Receiver shall be liable to the Borrower for any loss resulting from any fluctuation in exchange rates before or after the exercise of the foregoing
powers. 

  

	26.4	No payment to the Lender (whether under any judgment or court order or otherwise) shall discharge the obligation or liability of the Borrower in respect of which it was made unless
and until the Lender shall have received payment in full in the currency in which such obligation or liability was incurred and to the extent that the amount of any such payment shall, on actual conversion into such currency, fall short of such
obligation or liability actual or contingent expressed in that currency the Lender shall have a further separate cause of action against the Borrower, shall be entitled to enforce the security constituted by this Debenture to recover the amount of
the shortfall and such amount will bear interest in accordance with Clause 3 (Interest) from the date of payment by the Lender until the date of reimbursement. 

  

	27.	SET-OFF 

  
 The Borrower agrees the Lender may at, any time without notice or further demand notwithstanding any settlement of account or other matter whatsoever, combine or consolidate all or any of its then existing accounts
wherever situate including any accounts in the name of the Lender or of the Borrower jointly with others (whether current, deposit, loan or of any other nature whatsoever whether subject to notice or not and whether in sterling or in any other
currency) and set-off or transfer any sum standing to the credit of any one or more such accounts in or towards satisfaction of the Secured Liabilities. Where such combination, set-off or transfer requires the conversion of one currency into
another, such conversion shall be calculated at the Exchange Rate for purchasing the currency for which the Borrower is liable, with the existing currency. 
  

	28.	ASSIGNMENT 

  
 Neither party may assign or transfer any of its rights under this Debenture in whole or in part without the consent of the other save that the Lender may assign to another member of its Group without restriction.

  

	29.	WAIVERS 

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

  

 33 

	 	 
exercise or waiver of any power, right or remedy preclude its further exercise or the exercise of any other power, right or remedy.

  

	30.	SEVERABILITY 

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

	31.	NOTICES 

  

	31.1	Each party may give any notice, demand or other communication under or in connection with this Debenture by letter, telex, facsimile or comparable means of communication addressed
to the other party at the address identified with its below. Any such communication will be deemed to be given as follows: 

  

	31.1.1 	if personally delivered, at the time of delivery; 

  

	31.1.2 	if by letter, at noon on the Business Day following the day such letter was posted (or in the case of airmail, seven days after the envelope containing the same was delivered into
the custody of the postal authorities); and 

  

	31.1.3 	if by telex, facsimile transmission or comparable means of communication during the business hours of the addressee then on the day of transmission, otherwise on the next following
Business Day. 

  

	31.2	In proving such service it shall be sufficient to prove that personal delivery was made or that such letter was properly stamped first class, addressed and delivered to the postal
authorities or that the telex was transmitted with a correct answerback or in the case of facsimile transmission or other comparable means of communication, that a confirming hard copy was provided promptly after transmission.

  

	32.	LAW AND JURISDICTION 

  

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

  

	32.2	The parties hereby agree that any legal action or proceedings arising out of or in connection with this Debenture is shall be brought in the High Court of Justice in England,
irrevocably and unconditionally submits to the jurisdiction of such Court and the Borrower irrevocably designates, appoints and empowers Maclay Murray & Spens at present of 10 Foster Lane, London EC2V 6HR and the Lender irrevocably designates,
appoints and empowers Credo Corporate Finance Limited at present of 33 Margaret Street, London WlG OJD to receive for it and on its behalf, service of process issued out of such Court in any such legal action or proceedings.

  

 34 

	33.	COUNTERPARTS AND DELIVERY 

  

	33.1	This Debenture may be executed in any number of counterparts, each of which is an original, and which together constitute one and the same document. 

  

	33.2	If this Debenture is executed in more than one counterpart, this Debenture is deemed to be delivered and has effect when: 

  

	33.2.1 	each party other than the Lender has executed a counterpart of this Debenture; 

  

	33.2.2 	each party other than the Lender has handed over such counterpart to one of the other parties to this Debenture; and 

  

	33.2.3 	each of the counterparts has been dated. 

  

	33.3	If this Debenture is not executed in more than one counterpart, this Debenture is deemed to be delivered and has effect when each party other than the Lender has executed this
Debenture and this Debenture has been dated. 

  

	33.4	The execution (whether under hand or as a deed) or sealing of this Debenture by or on behalf of a party constitutes an authority to the solicitors or legal counsel acting for that
party in connection with this Debenture, or any agent or employee of such solicitors or legal counsel, to deliver it as a deed on behalf of that party. 

  

	33.5	Each party to this Debenture agrees to be bound by this Debenture despite the fact that any other person which was intended to execute or to be bound does not do so or is not
effectually bound and despite the fact that any Security Interest contained in this Debenture is terminated or becomes invalid or unenforceable against any other person whether or not such termination, invalidity, or unenforceability is known to the
Lender. 

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

 35 

 The Schedule - The Scheduled Property 
  

 36 

					
	 EXECUTED and DELIVERED as a DEED
	 	)	 	 
	 for and on behalf of
	 	)	 	 
	 ASPACE SOLUTIONS LIMITED by:
	 	)	 	 
			
	 	 	Director	 	 
			
	 	 	Director/Secretary	 	 
			
	 Notice details
	 	 	 	 
		
	 Address:
	 	 Three Tuns House
 109 Borough High
Street
 London
 SE1 1NL

		
	 Fax No:
	 	020 7744 6249
		
	 Telephone No:
	 	020 7744 6248
		
	 Attention:
	 	Paul Ryder
			
	 EXECUTED and DELIVERED as a DEED
	 	) /s/    Steven Humphrey	 	 
	 for and on behalf of
	 	)	 	 
	 ACTIVCARD CORP by:
	 	)	 	 
			
	 	 	Director	 	 
			
	 	 	Director/Secretary	 	 

  
 Notice details 
  
 Address: 6623 Dumbarton Circle, Fremont, California 94555, USA 
  
 Fax No: + 1 (0)510 574 0128 
  
 Telephone No: +1 (0)510 574 0100 
  
 Attention: Blair Geddes 
  

 37

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