Document:

Exhibit 4.11

 

 

 

	

 

	
 

Dated

 

	 
	
(1)LOMBARD MEDICAL, INC.

(2)OXFORD FINANCE LLC

 

	 
	
 

DEBENTURE

 

	 
	
 

Relating to all assets of Lombard Medical, Inc.

	 

Clifton House

75 Fort Street

PO Box 190

Grand Cayman KY1-1104

Cayman Islands

BW/LR/423043.0003

CONTENTS

Clause                                                                                                                                                                        Page

	1.	Interpretation

	2.	Covenant to pay

	3.	Interest

	4.	Fixed and Floating Charges

	5.	Restrictions on the Chargor

	6.	Events of Default

	7.	Covenants by the Chargor

	8.	Further security

	9.	Powers of the Collateral Agent

	10.	Appointment and Powers of Receiver

	11.	Power of Attorney

	12.	Continuing Security

	13.	Currency

	14.	Indemnity

	15.	Miscellaneous

	16.	Governing Law

SIGNATORIES

THIS DEBENTURE is dated April 24 2015 (this Deed)

PARTIES

	(1)	LOMBARD MEDICAL, INC., an exempted company incorporated with limited liability under the laws of the Cayman Islands (Chargor);

	(2)	Oxford Finance LLC as security agent and collateral agent (Collateral Agent which expression shall include the Collateral Agent’s successors and assigns).

BACKGROUND

	
(A)

	
Pursuant to a loan and security agreement dated on or about the date of this Deed (Loan Agreement) and made between Lombard Medical Technologies, Inc. (Borrower), the Collateral Agent and the Lenders (as defined therein), the Lenders have agreed to make certain facilities to the Borrower.

	
(B)

	
The Borrower is an indirect, wholly-owned subsidiary of the Chargor.

	
(C)

	
It is a condition precedent to the making of facilities under the Loan Agreement that the Chargor enters into this Deed in favour of the Collateral Agent.

	
(D)

	
This Deed is given by the Chargor as continuing security for the Secured Liabilities (as defined below).

AGREED TERMS

	
1.

	
INTERPRETATION

	
1.1

	
The following terms and expressions shall have the following meanings, save where the context otherwise requires:

	
(a)

	
Charged Assets: the goodwill, undertaking, property, assets, revenues and rights charged under clause 5;

	
(b)

	
Charged Property: the property referred to in clause 5.1(a);

	
(c)

	
Default Rate: has the meaning given to it in the Loan Agreement;

	
(d)

	
Event of Default: has the meaning given to it in the Loan Agreement;

	
(e)

	
Liability: any present or future obligation or liability for the payment of money, whether in respect of principal, interest or otherwise, whether actual or contingent, whether owned jointly or severally and whether a principal or surety or in any other capacity and including any amount which would constitute such a liability but for any discharge, non-probability, unenforceability or non-allowability of the same in any insolvency or other proceedings;

	
(f)

	
Loan Agreement:  is defined at Recital (A);

	
(g)

	
Loan Documents: has the meaning given to it in the Loan Agreement;

	
(h)

	
Obligor: has the meaning given to it in the Loan Agreement;

	
(i)

	
Secured Liabilities: all present and future Liabilities of the Chargor and any other Obligor to the Secured Parties to or any of thereof under or in relation to any one or more of the Loan Documents (including, without limitation, all Liabilities arising out of any extension, variation, modification, restatement or novation (however fundamental) but excluding any money, obligation or liability which would cause the covenant set out in clause 2 or the security which would otherwise be constituted by this Deed to be unlawful or prohibited by any applicable law or regulation;

	
(j)

	
Receiver has the meaning given to it in clause 11.1 and shall include any substituted receiver(s) and manager(s);

	
(k)

	
Secured Party: means the Collateral Agent and each Lender together with any Receiver; and

	
(l)

	
Securities: the property referred to in clause 5.1(b).

	
1.2

	
In this Deed the expressions the “Chargor” and the “Collateral Agent” where the context admits include their respective successors and assigns whether immediate or derivative.

	
1.3

	
Words importing any gender shall include any other gender and words importing the singular number only shall include the plural number and vice versa and words importing persons and all references to persons shall include corporations and firms.

	
1.4

	
Unless the context otherwise requires, reference to clause, sub-clause or schedule is to a clause, sub-clause or schedule (as the case may be) of or to this Deed.

	
1.5

	
The clause headings do not form part of this Deed, are for convenience only and shall not be taken into account in its construction or interpretation.

	
1.6

	
Capitalised terms not otherwise defined in this Deed shall have the meanings given to them in the Loan Agreement.

	
2.

	
GUARANTEE AND INDEMNITY

	
2.1

	
The Chargor irrevocably and unconditionally:

	
(a)

	
guarantees to the Collateral Agent punctual performance by each other Obligor of all that Obligor's obligations under the Loan Documents;

	
(b)

	
undertakes with the Collateral Agent that whenever another Obligor does not pay any amount when due under or in connection with any Loan Document, the Chargor shall immediately on demand pay that amount as if it was the principal obligor; and

	
(c)

	
agrees with the Collateral Agent that if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal, it will, as an independent and primary obligation, indemnify the Collateral Agent immediately on demand against any cost, loss or liability it incurs as a result of an Obligor not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by it under any Loan Document on the date when it would have been due.  The amount payable by a Chargor under this indemnity will not exceed the amount it would have had to pay under this clause 2.1 if the amount claimed had been recoverable on the basis of a guarantee.

	
3.

	
COVENANT TO PAY

	
3.1

	
The Chargor hereby covenants to repay to the Collateral Agent on demand the Secured Liabilities when they become due.

	
4.

	
INTEREST

	
4.1

	
Any amount which is not paid under this Deed when due shall bear interest at the Default Rate (both before and after judgment and payable on demand) from its due date up to the date of a final payment, such interest to accrue at a daily basis.

	
5.

	
FIXED AND FLOATING CHARGES

	
5.1

	
As a continuing security for the payment of all money and the discharge of the Secured Liabilities, the Chargor as beneficial owner hereby charges to the Collateral Agent:

	
(a)

	
all freehold and leasehold property of the Chargor both present and future and all buildings and fixtures (including trade fixtures), plant machinery, vehicles, computers and office and other equipment of the Chargor both present and future (excluding stock in trade of the Chargor) from time to time on any such property with the benefit of all existing and future leases, underleases, tenancies and agreements relating to such property (including all rents and profits from such property) (Charged Property);

	
(b)

	
all stocks, shares, bonds and securities of any kind whether marketable or otherwise and all other interests including (but not limited to) loan capital of the Chargor both present and future in any company, firm, consortium or entity including all allotments, accretions, offices, rights, benefits and advantages at any time accruing, offered or arising in respect of or incidental to such stocks, shares, bonds and securities and all stocks, shares, rights, money or property accruing to them or offered at any time by way of conversion, redemption, bonus, preference, option or otherwise in respect of them (Securities);

	
(c)

	
all book and other debts, revenues and claims both present and future (including things in action which may give rise to a debt, revenue or claim) due or owing or which may become due or owing to or purchased or otherwise acquired by the Chargor and the full benefit of all rights and remedies in relation to such book and other debts, revenues and claims including (but not limited to) any negotiable or non-negotiable instruments, guarantees, indemnities, debentures, legal and equitable charges and other security reservation of proprietary rights, rights of tracing liens and all other rights and remedies of any nature in respect of such property;

	
(d)

	
the cash, uncalled capital, goodwill and all patents, patent applications, trademarks, trade names, registered designs and copyrights and all licences and ancillary and connected rights relating to the intangible property both present and future of the Chargor;

	
(e)

	
the undertaking and all other assets of the Chargor both present and future including (but not limited to) the stock in trade of the Chargor and the property described in clauses 5.1(a) – (d) (if and insofar as the charges on such property or on any part or parts of such property contained in this Deed shall for any reason be ineffective as fixed charges).

	
(f)

	
The charges created by clause 5.1 shall as regards the property described in clauses 5.1(a) – (d) be fixed charges and as to the property described in clause 5.1(e) shall be a first floating charge.

	
6.

	
RESTRICTIONS ON THE CHARGOR

	
6.1

	
The Chargor covenants that it will not (without the prior consent in writing of the Collateral Agent):

	
(a)

	
sell, assign, discount, part or pledge, charge or otherwise dispose of all or any part of the property described in clause 5.1(c) or deal with it save in accordance with clause 8.2(k); or

	
(b)

	
(except for charges in favour of the Collateral Agent created under this Deed) create or attempt to create or permit to subsist any mortgage, debenture, charge or pledge or permit any lien or other encumbrance (save a lien arising by operation of law in the ordinary course of trading) to arise on or affect all or any of the Charged Assets; or

	
(c)

	
part with possession or transfer, sell, lease or otherwise dispose of all or any of the Charged Assets or attempt so to do (save in the case of stock in trade charged by way of floating charge only which may be sold at market value in the usual course of trading conducted at the date of this Deed and for the purpose of carrying on its business).

	
6.2

	
Notwithstanding anything in this Deed, if the Chargor charges, pledges or otherwise encumbers, contrary to clause 6.1(b), any of the Charged Assets described in clause 5.1(e) or attempts to do so without the prior consent in writing of the Collateral Agent or if any creditor or other person attempts to bring any distress, execution, sequestration or other process against any of the Charged Assets described in clause 5.1(e) the floating charge created under this Deed over those assets shall automatically without notice operate as a fixed charge instantly on such event occurring.

	
6.3

	
During the continuance of this security the statutory and other powers of leasing, letting, entering into agreements for leases or lettings and accepting or agreeing to accept surrenders of leases or tenancies shall not in relation to all or any part of the Charged Assets be exercisable by the Chargor nor shall the Chargor part with possession of all or any part of the Charged Assets nor confer any licence, right or interest to occupy nor grant any licence or permission to assign, underlet or part with possession of all or any part of the Charged Assets nor agree, suffer or permit any variation or addition to the terms of any lease, tenancy or licence without in every such case obtaining the prior consent in writing of the Collateral Agent.

	
7.

	
EVENTS OF DEFAULT

	
7.1

	
All money and liabilities secured under this Deed shall immediately become due and payable on demand and the security shall become enforceable upon the occurrence of an Event of Default which is continuing.

	
7.2

	
The Chargor hereby covenants immediately to notify the Collateral Agent in writing of the occurrence of an Event of Default or of the occurrence of any event which with the lapse of time or giving of notice would or may constitute an Event of Default.

	
8.

	
COVENANTS BY THE CHARGOR

	
8.1

	
The Chargor hereby represents and warrants to the Collateral Agent and to each Secured Party that:

	
(a)

	
it is an exempted company incorporated and in good standing under the laws of the Cayman Islands,

	
(b)

	
it is duly qualified to do business wherever necessary to carry on its present operations,

	
(c)

	
the making and performance of this Deed is within its powers having been duly authorised by all necessary governmental and corporate approvals and does not contravene any law or any contractual restriction binding on the Chargor or its memorandum and articles of association,

	
(d)

	
this Deed is a legal, valid and binding obligation of the Chargor enforceable against the Chargor in accordance with its terms,

	
(e)

	
there are no pending or threatened actions or proceedings before any court or administrative agency which may materially adversely affect the Chargor or its financial conditions and operations, and

	
(f)

	
it has good title to, have rights in, and the power to transfer each item of the Charged Assets upon which it purports to grant a security interest under this Deed, free and clear of any and all security interests,

	
8.2

	
The Chargor hereby further covenants with the Collateral Agent that during the continuance of this security the Chargor will at all times and as applicable immediately:

	
(a)

	
notify the Collateral Agent by fax and confirm in writing of the occurrence of any event which will or may in due course constitute an Event of Default;

	
(b)

	
conduct and carry on its business in a proper, efficient and business-like manner and not make any substantial alteration in the nature of or mode of conduct of that business and keep or cause to be kept proper books of account relating to such business;

	
(c)

	
pay into such account as the Collateral Agent may direct all money which it shall receive in respect of book or other debts and, without prejudice to the provisions of this Deed, the Chargor shall not without the prior consent of the Collateral Agent sell, factor, discount, charge or assign any assets described in clause 5.1(c) or purport to do so and shall if called upon by the Collateral Agent from time to time execute legal assignments of any book or other debts to the Collateral Agent;

	
(d)

	
observe and perform all covenants and stipulations from time to time affecting its freehold or leasehold property or the mode of user or enjoyment of such property and not, without the prior consent in writing of the Collateral Agent, enter into any onerous or restrictive obligations affecting any such property nor do or suffer or omit to be done any act, matter or thing which would infringe any provision of any statute, order or regulation from time to time in force affecting any such property;

	
(e)

	
observe and perform all covenants and stipulations from time to time affecting its patents, patent applications, trademarks, trade names, registered designs and copyrights and all other industrial or intangible property or any licence or ancillary or connected rights from time to time relating to industrial or intangible property and preserve and maintain and renew when necessary or desirable all such licences and rights;

	
(f)

	
use its best endeavours to enforce and, at its own cost, institute, continue or defend all proceedings relating to any of the Charged Assets;

	
(g)

	
keep all buildings and erections and all plant, machinery, fixtures, fittings, vehicles, computers and office and other equipment and every part of such property in good and substantial repair and in good working order and condition and not pull down or remove or sell or otherwise dispose of any of such property without the prior consent in writing of the Collateral Agent except in the ordinary course of use, repair, maintenance or improvement. If the Chargor is at any time in default in complying with this covenant the Collateral Agent shall be entitled but not bound to repair and maintain such property with power for the Collateral Agent, its agents and their respective employees to enter any of the Chargor's property for that purpose or to inspect that property and any sum so expended by the Collateral Agent shall be repayable by the Chargor to the Collateral Agent on demand together with interest at the Default Rate from the date of payment by the Collateral Agent;

	
(h)

	
at its own expense insure and keep insured any of the Charged Assets of an insurable nature with insurers previously approved by the Collateral Agent in writing against loss or damage by fire, burglary, theft, civil commotion, explosion, aircraft, hurricane, flood, storm, tempest, lightning, burst pipes and such other risks and contingencies as the Collateral Agent shall from time to time request to the full replacement value of such assets from time to time including fees of architects, surveyors, engineers and all other professional fees and demolition charges together (in the case of leasehold properties) with loss of rent for 3 years in the joint names of the Chargor and the Collateral Agent or, at the option of the Collateral Agent, in the name of the Chargor. The interest of the Collateral Agent shall be noted on the policy and the policy shall contain such provisions for the protection of the Collateral Agent as the Collateral Agent may reasonably require. The Chargor must maintain such other insurance policies (with the interest of the Collateral Agent noted on such policies) containing like provisions for the protection of the Collateral Agent as are normally maintained by prudent companies carrying on similar businesses. The Chargor shall pay within one week of them becoming due all premiums and other money necessary for effecting and keeping up such insurances and on demand produce to the Collateral Agent the policies of such insurance and proof of such payments failing which the Collateral Agent may take our or renew such insurances in any sum which the Collateral Agent may think expedient and all money expended by the Collateral Agent under this provision shall be reimbursed by the Chargor on demand and bear interest at the Default Rate from the date of payment by the Collateral Agent. All money to be received by virtue of any insurance maintained or effected by the Chargor (whether or not in pursuance of the obligations under this sub-clause) shall be paid to the Collateral Agent (or if not paid by the insurers directly to the Collateral Agent held on trust for the Collateral Agent) and shall at the option of the Collateral Agent be applied in reduction of the money obligations and liabilities secured under this Deed or in replacing, restoring or reinstating the property or assets destroyed, damaged or lost (any deficiency being made good by the Chargor);

	
(i)

	
punctually pay and indemnify the Collateral Agent and any Receiver appointed by it against all existing and future rent, rates, taxes, duties, charges, assessments, impositions and outgoings (whether imposed by agreement, statute or otherwise and whether in the nature of capital or revenue and even if wholly novel) now or at any time during the continuance of this security payable in respect of all or any part of the Charged Assets or by the owner or occupier of those assets. If any such sums shall be paid by the Collateral Agent or by any such Receiver then the sums shall be repaid by the Chargor on demand with interest at the Default Rate from the date of payment by the Collateral Agent or any such Receiver;

	
(j)

	
not (without the prior written consent of the Collateral Agent) vary, surrender, cancel, assign, charge or otherwise dispose of or permit to be forfeit any lease of leasehold premises or any credit, sale, hire purchase, rental or like agreement for any equipment used in its business considered by the Collateral Agent to be material and generally fulfil its obligations under every such lease and agreement and when required, produce to the Collateral Agent proof of all payments from time to time due from the Chargor under such lease or agreement;

	
(k)

	
get in and realise all book and other debts and claims charged under this Deed in the ordinary course of its business and pay into such account as the Collateral Agent shall from time to time direct all money which it may receive in respect of those book and other debts and claims immediately on receipt and pending such payment hold such money on trust for the Collateral Agent and not (without the prior consent in writing of the Collateral Agent) charge or otherwise dispose of or release, exchange, compound, set off or grant time or indulgence or otherwise deal with all or any of those book and other debts and claims or purport so to do;

	
(l)

	
not (without the prior consent in writing of the Collateral Agent) form or co-operate in the formation of, purchase or acquire any new subsidiary, permit any subsidiary to issue any share or loan capital except to the Chargor or to a wholly-owned subsidiary of the Chargor or transfer assets hereby charged to any subsidiary save on terms previously approved in writing by the Collateral Agent;

	
(m)

	
not do or cause or permit to be done anything which may in any way depreciate, jeopardise or otherwise prejudice the value to the Collateral Agent of the security hereby charged and not (without the prior consent in writing of the Collateral Agent) incur any expenditure or liabilities of an exceptional or unusual nature;

	
(n)

	
deposit with the Collateral Agent, its solicitors or a nominee of the Collateral Agent and permit the Collateral Agent, its solicitors or its nominee during the continuance of this security to hold and retain the following:

	
(i)

	
all deeds and documents of title relating to all freehold and leasehold property from time to time belonging to the Chargor (and the insurance policies relating to such property);

	
(ii)

	
all stock and share certificates and documents of title relating to the Securities and such deeds of transfer in blank and other documents as the Collateral Agent may from time to time require for perfecting its title to the Securities (executed by or signed on behalf of the registered holder) or for vesting or enabling it to vest the Securities in itself or its nominees or in any purchaser;

	
(iii)

	
all assurance policies from time to time effected by the Chargor on the lives of key employees; and

	
(iv)

	
all such documents relating to the Charged Assets as the Collateral Agent may from time to time require; and

	
(v)

	
not (without the prior consent in writing of the Collateral Agent) permit any person

	
(A)

	
to be registered as proprietor of any freehold or leasehold property present or future from time to time hereby charged nor create or permit to arise any overriding interest affecting such property, or

	
(B)

	
to become entitled to any proprietary right or interest which might affect the value of any land, fixtures or fixed plant and machinery hereby charged.

	
9.

	
FURTHER SECURITY

The Chargor shall at any time if and when required by the Collateral Agent execute such further legal or other mortgages, fixed or floating charges or assignments in favour of the Collateral Agent as the Collateral Agent shall from time to time require over all or any of the Charged Assets both present and future to secure all moneys, obligations and liabilities covenanted under this Deed to be paid or otherwise secured under this Deed, such further mortgages, charges or assignments to be prepared by or on behalf of the Collateral Agent at the cost of the Chargor and to contain an immediate power of sale without notice and such other clauses for the benefit of the Collateral Agent as the Collateral Agent may reasonably require.

	
10.

	
POWERS OF THE COLLATERAL AGENT

	
10.1

	
At any time after the Collateral Agent shall have demanded payment or discharge of any money, obligation or liability hereby secured, in addition to all other powers or rights vested in it by law or otherwise, the Collateral Agent may, without any notice except as hereinafter provided and whether or not it shall have appointed a Receiver, enter into possession and sell all or any of the goodwill, undertaking, assets, rights and property hereby charged (provided that, in the case of the charge over the Charged Assets described in clause 5.1(e), such charge shall, prior to the exercise of such power, operate as a fixed charge) or any part thereof at public or private sale or in any other manner and for such consideration and generally on such terms and conditions as the Collateral Agent may think fit.  Upon any such sale, the Collateral Agent shall have the right to deliver, assign and transfer to each purchaser thereof such goodwill, undertaking, assets, rights or property in the name and on behalf of the Chargor.

	
10.2

	
Each purchaser at any such sale shall hold the property so sold absolutely free from any equity or right of redemption of the Chargor who hereby specifically waive all rights of redemption, stay or appraisal which the Chargor has or may have under any rule or law or statute now existing or hereinafter adopted. The Collateral Agent shall give to the Chargor ten days written notice of its intention to make any such public or private sale. Such notice in case of public sale shall state the time and place fixed for such sale and in case of private sale the day on which such goodwill, undertaking, assets, rights and property or that portion thereof so being sold will first be offered for sale. Any such public sale shall be held at such time or times within ordinary business hours and at such place as the Collateral Agent may fix in the notice of such sale. At such sale, such goodwill, undertaking, assets, rights and property may be sold in one lot as an entirety or in separate parcels as the Collateral Agent may determine. The Collateral Agent shall not be obliged to make any public or private sale and may cause the same to be adjourned from time to time by announcement at the time and place fixed for the sale and such sale may be made at any time or place to which the same may be so adjourned. In case of any sale on credit or for future delivery the undertaking, assets, rights and property so sold may be retained by the Collateral Agent until the selling price is paid by each purchaser thereof but the Collateral Agent shall incur no liability in the case of the failure of such purchaser to take up and pay for such undertaking, assets, rights and property so sold and in case of any such failing such undertaking, assets, rights and property may again be sold upon like notice. The Collateral Agent instead of exercising the power of sale herein conferred upon it may proceed by a suit or suits at law or in equity to foreclose this Deed and sell all or any of the goodwill, undertaking, property, assets and rights hereby charged or any part thereof under a judgment or decree of a court or courts of competent jurisdiction, the Chargor having been given due notice of all such action.

	
11.

	
APPOINTMENT AND POWERS OF RECEIVER

	
11.1

	
At any time after the Collateral Agent shall have demanded payment or discharge of any money, obligation or liability hereby secured or if requested by the Chargor, the Collateral Agent may in writing under its common seal or under the hand of any director, officer or manager for the time being of the Collateral Agent appoint any person to be a receiver (Receiver) of the undertaking, property, assets and rights hereby charged or any part thereof (with power to authorise any joint receiver to exercise any power independently of any other joint receiver) and may remove any Receiver so appointed and appoint another in his place.  In addition to all other powers vested in him by law or otherwise a Receiver shall have the power on behalf and at the cost of the Chargor to do or omit to do anything in relation to the undertaking, property or assets charged hereby or any part thereof and in particular (but without limitation), the following powers:

	
(a)

	
to take possession of, collect and get in and give receipts binding on the Chargor for all or any property, assets and rights hereby charged and to bring, defend or discontinue any proceedings or submit to arbitration in the name of the Chargor or otherwise as may seem expedient;

	
(b)

	
to make calls conditionally or unconditionally on the members of the Chargor in respect of uncalled capital;

	
(c)

	
to carry on, manage, develop, reconstruct, amalgamate or diversify or authorise or concur in any such action relating to, the business of the Chargor or any part thereof and to exercise in respect of the Securities, all voting or other powers or rights available to a registered holder thereof in such manner as he may think fit and to manage and conduct the same without being responsible for loss or damage and for any of those purposes to raise or borrow any money from or incur any liability to the Collateral Agent or others on such terms with or without security as he may think fit and so that any such security may be or include a charge on the whole or any part of the property hereby charged ranking in priority to this security or otherwise;

	
(d)

	
whether forthwith or later, to sell or concur in selling by public auction or private contract, and to let or concur in letting and to accept surrenders, grant licences or otherwise dispose of or deal with all or any of the goodwill, undertaking, assets, rights and property hereby charged in such manner and for such consideration and generally on such terms and conditions as the Receiver may think fit with full power to convey or otherwise transfer such goodwill, undertaking, assets, rights or property in the name and on behalf of the Chargor or other the estate owner and any such sale may be for cash, debentures or other obligations, shares, stocks or other valuable consideration and may be payable in a lump sum immediately or by instalments spread over such period as the Receiver shall think fit and so that any consideration received in a form other than cash shall ipso facto forthwith on receipt be and become charged with the payment of all moneys, obligations and liabilities secured hereby.  Plant, machinery and other fixtures may be severed and sold separately from the premises containing them without the consent of the Chargor being obtained thereto;

	
(e)

	
to make any arrangements or compromise, allow time for payment or enter into, abandon, cancel or disregard any contracts which he shall think expedient in the interests of the Collateral Agent;

	
(f)

	
to make and effect all repairs, improvements and renew such of the plant, machinery, chattels and property of the Chargor as he shall think fit and maintain, renew, take out or increase insurances;

	
(g)

	
to promote the formation of companies with a view to the same purchasing, leasing, licensing or otherwise acquiring all or any of the goodwill, undertaking, property, assets or rights of the Chargor or otherwise;

	
(h)

	
without any further consent by or notice to the Chargor, exercise on behalf of the Chargor all the powers, rights and provisions conferred on a landlord or a tenant at law or under any lease, sub-lease or other contract or agreement to which the Chargor is a party relating to rents or otherwise in respect of any part of the property hereby charged but without any obligation to exercise any of such powers and without any liability in respect of powers so exercised or omitted to be exercised;

	
(i)

	
to appoint managers, accountants, lawyers, agents, officers, servants and workmen for any of the aforesaid purposes at such salaries or remuneration and for such periods and upon such terms as he or they may determine; and

	
(j)

	
to sign any document, execute any deed and do all such other acts and things as may be considered to be incidental or conducive to any of the matters and powers aforesaid and which he may and can lawfully do as agent for the Chargor.

	
11.2

	
All money received by such Receiver or by the Collateral Agent in the exercise of any powers conferred by this Deed shall be applied after the discharge of any taxes or the remuneration and expenses of such Receiver and all liabilities having priority thereto in or towards satisfaction of such of the moneys, obligations and liabilities hereby secured and in such order as the Collateral Agent in its absolute discretion may from time to time conclusively determine.

	
11.3

	
A Receiver appointed by the Collateral Agent shall be the agent of the Chargor and the Chargor shall alone be solely responsible and liable for his acts, defaults or remuneration.

	
11.4

	
Neither the Collateral Agent nor any Receiver shall be liable to account as mortgagee in possession in respect of all or any of the property charged hereby nor be liable for any loss upon realisation or for any neglect or default or omission of any nature whatsoever for which a mortgagee in possession might be liable.

	
11.5

	
No purchaser, chargor or chargee or other person or company dealing with the Collateral Agent or with any Receiver appointed by it or with its or his, attorneys or agents shall be bound or concerned to see or  enquire whether the powers exercised or purported to be exercised have become exercisable or whether any money remains due actually or contingently on the security of this Deed or as to the necessity or expediency of the stipulations and conditions subject to which any sale shall have been made or otherwise as to the propriety or regularity of such sale, calling in, collection or conversion or to see to the application of any money paid to the Collateral Agent and in the absence of mala fides on the part of such purchaser, mortgagor, mortgagee or other person or company such dealing shall be deemed so far as regards the safety and protection of such purchaser, chargor, chargee person or company to be within the powers hereby conferred and to be valid and effectual accordingly.

	
11.6

	
The Chargor hereby covenants with the Collateral Agent on demand to pay all costs, charges and expenses incurred by the Collateral Agent or by any Receiver appointed by it in the exercise of any powers conferred by this Deed or which they or he shall properly incur in or about the preservation or attempted preservation of this security or of the goodwill, undertaking, property, assets and rights hereby charged with interest at the highest rate payable by the Chargor to the Collateral Agent.

	
12.

	
POWER OF ATTORNEY

The Chargor by way of security hereby irrevocably appoints the Collateral Agent and the persons deriving title under it and any Receiver appointed hereunder jointly and also severally to be its attorney to execute and complete in favour of the Collateral Agent or its nominees or of any purchaser any documents which the Collateral Agent may require for perfecting its title to or for vesting the Securities or any property, assets or rights hereby charged or agreed to be charged in the Collateral Agent or its nominees or in any purchaser and otherwise generally for it and in its name and on its behalf and as its act and deed or otherwise to execute, seal and deliver and otherwise perfect and do any such legal or other mortgage, charge or assignment as aforesaid and all such deeds, assurances, agreements, instruments, acts and things which may be required for the full exercise of all or any of the powers hereby conferred or which may be deemed proper on or in connection with any sale or other disposition thereof or any of the purposes aforesaid.  The Chargor hereby ratifies and confirms and agrees to ratify and confirm any instrument, act or thing which any such attorney may execute or do.

	
13.

	
CONTINUING SECURITY

	
13.1

	
This security shall be a continuing security notwithstanding any settlement of account or other matter whatsoever and is in addition to and shall not merge or otherwise prejudice or affect any other right or remedy of the Collateral Agent or the security created by any deposit of documents or any guarantee, lien, pledge, bill, note, mortgage or other security now or hereafter held by or available to the Collateral Agent and shall not be in any way prejudiced or affected thereby or by the invalidity thereof or by the Collateral Agent now or hereafter dealing with, exchanging, releasing, modifying or abstaining from, perfecting or enforcing any of the same or any rights which it may now or hereafter have or giving time for payment or indulgence or compounding with any other person liable.

	
13.2

	
It shall be lawful for but not obligatory on the Collateral Agent to advance and pay all sums of money necessary for the purpose of remedying any breach or breaches of covenants or obligations whether imposed on the Chargor under the provisions of this Deed or any collateral or additional charges or securities hereto or implied by law and all monies so paid and all costs and expenses incurred by the Collateral Agent in relation to any payment or act by or on behalf of the Collateral Agent shall be repayable on demand and in addition to the other monies hereby secured and shall bear interest at the Default Rate.

	
14.

	
CURRENCY

	
14.1

	
All moneys received or held by the Collateral Agent or by a Receiver under this Deed may from time to time after demand has been made by the Collateral Agent be converted into such other currency as the Collateral Agent considers necessary or desirable to cover the obligations and liabilities (actual or contingent) of the Chargor in that other currency at the then prevailing spot rate of exchange of the Collateral Agent (as conclusively determined by the Collateral Agent) for purchasing that other currency with the existing currency.

	
14.2

	
Neither the Collateral Agent nor any Receiver shall be liable to the Chargor for any loss resulting from any fluctuation in exchange rates before or after the exercise of any of the powers under this Deed.

	
14.3

	
No payment to the Collateral Agent (whether under any judgment or court order or otherwise) shall discharge the obligation or liability of the Chargor in respect of which it was made unless and until the Collateral Agent 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 Collateral Agent shall have a further separate cause of action against the Chargor and shall be entitled to enforce the charges hereby created to recover the amount of the shortfall.

	
15.

	
INDEMNITY

The Chargor hereby agrees to indemnify both the Collateral Agent and any Receiver against all losses, actions, claims, expenses, demands and liabilities whether in contract, tort, equity or otherwise now or hereafter incurred by it or him or by any manager, officer, director or employee for whose liability, act or omission it or he may be answerable, responsible or liable for anything done or omitted in the exercise or purported exercise of the powers herein contained or occasioned by any breach by the Chargor or any of its covenants or other obligations to the Collateral Agent. The Chargor shall so indemnify the Collateral Agent and any such Receiver on demand and shall pay interest on the sums demanded at the Default Rate.

	
16.

	
MISCELLANEOUS

	
16.1

	
Any statutory or other powers of granting or agreeing to grant or of accepting or agreeing to accept surrenders of leases or tenancies of the property hereby charged or any part thereof shall not during the continuance of this security be capable of being exercised by the Chargor without the prior written consent of the Collateral Agent.

	
16.2

	
No neglect, omission or forbearance on the part of the Collateral Agent to take advantage of or enforce any right or remedy arising out of any breach or non-observance or any covenant or condition herein or in any collateral or additional charges or securities hereto contained or implied shall be deemed to be or operate as a general waiver of such covenant or condition or the right to enforce or take advantage of the same in respect of any breach or non-observance thereof either original or recurring.

	
16.3

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

	
16.4

	
Any demand or notice hereunder may, without prejudice to any other effective mode of making the same, be deemed to have been properly and effectively made, given and served to and on the Chargor at any time by a letter sent to them by registered post addressed to its registered office and signed by the Collateral Agent or any manager, officer, director, secretary, attorney, agent or lawyer on its behalf and every such demand or notice posted in the Cayman Islands shall be deemed to have been given and served on the day following the posting thereof.  Any such notice or demand or any certificate as to the amount at any time secured hereby shall be conclusive and binding upon the Chargor if signed by an officer of the Collateral Agent.

	
16.5

	
The Chargor shall pay all stamp duty to which this Deed may at any time be subject and shall on demand indemnify the Collateral Agent against any losses resulting from any failure to pay or delay in paying the same.

	
17.

	
GOVERNING LAW

This Deed shall be governed and construed solely according to the laws of the Cayman Islands and the parties hereby submit to the non-exclusive jurisdiction of the Courts of the Cayman Islands.

[Signatures on following page]

IN WITNESS WHEREOF the Parties have duly executed this Debenture as a Deed on the date stated at the beginning of it.

SIGNATORIES

	
SIGNED by Lombard Medical, Inc. in the presence of:

 

 

 

 

 

	
)

)

)

 

	
 

 

By:

 

	 
	
)

)

 

	
Name:

Position:

 

	 
	
 

Witness signature

 

	 
	
Name:

 

	 
	
Address:

 

	 
	
Occupation:

 

	 

	
SIGNED by Oxford Finance LLC in the presence of:

 

 

 

 

 

	
)

)

)

 

	 	 
	
)

)

 

	 	 
	
 

Witness signature

 

	 
	
Name:

 

	 
	
Address:

 

	 
	
Occupation:Exhibit 4.12

 

 

 

DATED 29 APRIL 2015

	
 

LOMBARD MEDICAL, INC.

  AS CHARGOR

 

	
 

 AND

 

 

	
OXFORD FINANCE LLC

 AS COLLATERAL AGENT

 

CHARGE OVER SHARES

	
 

GREENBERG TRAURIG MAHER LLP

7th Floor

200 Gray's Inn Road

London WC1X 8HF

TABLE OF CONTENTS

1.      DEFINITIONS AND INTERPRETATION

2.      PAYMENT OF SECURED LIABILITIES

3.      GRANT OF SECURITY

4.      REPRESENTATIONS AND WARRANTIES

5.      COVENANTS

6.      ENFORCEMENT

7.      RIGHT OF APPROPRIATION

8.      DIVIDENDS AND VOTING RIGHTS

9.      APPOINTMENT OF RECEIVER

10.      APPLICATION OF PROCEEDS

11.      EFFECTIVENESS OF SECURITY

12.      RELEASE OF SECURITY

13.      POWER OF ATTORNEY

14.      GROSS-UP AND PAYMENTS

15.      COSTS AND EXPENSES

16.      ASSIGNMENTS AND TRANSFERS

17.      INDEMNITY

18.      SET-OFF

19.      NOTICES AND COMMUNICATIONS

20.      CALCULATIONS AND CERTIFICATES

21.      CURRENCY CONVERSION

22.      PARTIAL INVALIDITY

23.      REMEDIES AND WAIVERS

24.      AMENDMENTS AND WAIVERS

25.      TACKING

26.      COUNTERPARTS

27.      GOVERNING LAW

28.      JURISDICTION

SCHEDULE 1 THE INITIAL SHARES

SCHEDULE 2 REPRESENTATIONS AND WARRANTIES

SCHEDULE 3 COVENANTS

THIS DEED is dated 29 April 2015 and made between:

	
(1)

	
LOMBARD MEDICAL, INC., an exempted company incorporated under the laws of the Cayman Islands (company number 284377) whose registered office is at P.O. Box 2681, Cricket Square, Hutchins Drive, Grand Cayman, Cayman Islands

	
(2)

	
KY1-1111 (the "Chargor"); and

	
(3)

	
OXFORD FINANCE LLC as security agent and collateral agent (the "Collateral Agent").

BACKGROUND:

	
(4)

	
Pursuant to a loan and security agreement dated on or about the date of this Deed (the "Agreement "and made between Lombard Medical Technologies, Inc, (in its capacity as "Borrower"), the Collateral Agent and the Lenders (as defined therein), the Lenders have agreed to make certain facilities to the Borrower.

	
(5)

	
The Borrower is the 100% owned subsidiary of Lombard Medical Technologies Limited, which is in turn the 100% owned subsidiary of the Chargor.

	
(6)

	
It is a condition precedent to the making of facilities under the Agreement, that the Chargor enters into this Deed.

	
(A)

	
The Chargor and the Collateral Agent intend this Deed to take effect as a deed notwithstanding that a party may execute it under hand.

THIS DEED WITNESSES that:

	
1.

	
DEFINITIONS AND INTERPRETATION

	
1.1

	
In addition, in this Deed:

“A Deferred Shares” means all of the A deferred shares of 0.03789 per share in the Company as at the date of this Deed.

“B Deferred Shares” means all of the B deferred shares of 0.03927 per share in the Company as at the date of this Deed.

“C Deferred Shares” means all of the C deferred shares of 0.03827 per share in the Company as at the date of this Deed.

	

	
"Charged Investments" means:

	
(a)

	
the Initial Shares;

	
(b)

	
the Secondary Shares;

	
(c)

	
the Derivative Rights; and

	
(d)

	
all other shares and other assets and rights from time to time the subject of this Deed, including any monies from time to time charged to the Collateral Agent pursuant to clause 3.

References to the Charged Investments include references to all or any of them.

"Company" means Lombard Medical Technologies Limited (registered number 04636949) whose registered office is at Lombard Medical House, 4 Trident Park, Basil Hill Road Didcot, Oxfordshire, OX11 7HJ.

	

	
"Default Rate" has the meaning given to it in the Agreement.

	

	
"Derivative Rights" in relation to any Initial Shares or Secondary Shares means dividends, distributions, interest and other income paid or made in respect of them, voting rights and all benefits, money or property (including, all stocks, shares or other securities, rights or other property accruing, offered or issued at any time by way of bonus, redemption, exchange, purchase, substitution, conversion, preference, option, warrant or otherwise) in respect of any of them.

	

	
"Enforcement Event" that means the occurrence of an Event of Default (as such term is defined in the Agreement).

	

	
"Financial Collateral" shall have the meaning given to that expression in the Financial Collateral Regulations.

	

	
"Financial Collateral Regulations" means the Financial Collateral Arrangements (No. 2) Regulations 2003.

	

	
"Initial Shares" means all of the shares in the Company described and identified in Schedule 1 of which the Chargor is the beneficial or registered owner on the date of this Deed.

	

	
"IA" means the Insolvency Act 1986.

	

	
"Insolvency" of a person includes the dissolution, bankruptcy, insolvency, winding-up, liquidation, administration, examination, amalgamation, reconstruction, reorganisation, arrangement, adjustment, administrative or other receivership or dissolution of that person, the official management of all of its revenues or other assets or the seeking of protection or relief of debtors and any equivalent or analogous proceeding by whatever name known and in whatever jurisdiction.

	

	
"Instrument" means any document (which term includes any form of writing) under which any obligation is evidenced or undertaken or any Lien (or right in any Lien) is granted or perfected or purported to be granted or perfected.

	

	
"LPA" means the Law of Property Act 1925.

	

	
"Losses" means all losses (including loss of profit), claims, demands, actions, proceedings, damages and other payments, costs, charges, expenses and other liabilities of any kind.

	

	
"Liability" means any present or future obligation or liability for the payment of money, whether in respect of principal, interest or otherwise, whether actual or contingent, whether owned jointly or severally and whether a principal or surety or in any other capacity and including any amount which would constitute such a liability but for any discharge, non-probability, unenforceability or non-allowability of the same in any insolvency or other proceedings.

	

	
"Lien" means a claim, mortgage, deed of trust, levy, charge, pledge, security interest, or other encumbrance of any kind, whether voluntarily incurred or arising by operation of law or otherwise against any property.

	

	
"Loan Documents" has the meaning given to it in the Agreement.

	

	
"Obligor" means the Chargor, the Borrower and any other member of the Group providing a guarantee, indemnity or Lien for the obligations of the Borrower or any other member of the Group under or pursuant to the Loan Documents.

	

	
"Party" means a party to this Deed

	

	
"Receiver" means a receiver, receiver and manager or administrative receiver of any or all of the Charged Property appointed by the Collateral Agent under this Deed whether solely, jointly, severally or jointly and severally with any other person and includes any substitute for any of them appointed from time to time.

	

	
"Secondary Shares" means any shares (other than the Initial Shares) in the Company, of which the Chargor is or becomes the beneficial or registered owner.

	

	
"Secured Liabilities" means all present and future Liabilities of the Chargor or any other Obligor to the Secured Parties or any of them under or in relation to the Loan Documents (including, without limitation, all Liabilities arising out of any extension, variation, modification, reinstatement or novation (however fundamental) but excluding any money, obligation or liability which would cause the covenant set out in clause 2 or the security which would otherwise be constituted by this Deed to be unlawful or prohibited by any applicable law or regulation.  References to a Secured Liability includes references to any of them.

	

	
"Secured Parties" means the Collateral Agent and each Lender together with any Receiver.

	

	
"Security Period" means the period starting on the date of this Deed and ending on the date on which all of the Secured Liabilities have been unconditionally and irrevocably paid and discharged in full; and no further Secured Liabilities are capable of being outstanding.

	

	
"Tax" means any tax, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same).

	

	
“Tax Credit” means a credit against, relief or remission for, or repayment of any Tax.

"VAT" means the value added tax provided for in the Value Added Tax Act 1994 and any other tax of similar nature in any applicable jurisdiction.

	
1.2

	
Construction

	
1.2.1

	
Unless a contrary indication appears, a term defined in the Agreement has the same meaning in this Deed.

	
1.2.2

	
In addition, in this Deed, any reference to:

	
(a)

	
"assets" includes present and future properties, undertakings, revenues, rights and benefits of every description (and any reference to a particular type or category of assets includes any present or future assets of that type or category);

	
(b)

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

	
(c)

	
an "authorisation" includes an authorisation, consent, licence, approval, resolution, exemption, filing, registration and notarisation;

	
(d)

	
clauses or schedules are to the clauses of and schedules to this Deed and references to paragraphs are to paragraphs of the relevant Schedule unless the context requires otherwise;

	
(e)

	
this Deed includes the Schedules which form part of this Deed for all purposes;

	
(f)

	
a "disposal" includes any lease, licence, transfer, sale or other disposal of any kind (with related words being construed accordingly);

	
(g)

	
any Loan Document, other Instrument or other document is to that Loan Document, other Instrument or other document as supplemented, otherwise amended, replaced or novated from time to time (however fundamental that amendment, novation or replacement may be, even if it involves increased, new, additional and/or replacement facilities or an increase in any other amount or rate);

	
(h)

	
one gender shall include a reference to the other genders and words in the singular shall include the plural (and vice versa);

	
(i)

	
"including" means "including without limitation" (with related words being construed accordingly), "in particular" means "in particular but without limitation" and other general words shall not be given a restrictive interpretation by reason of their being preceded or followed by words indicating a particular class of assets, matters or things;

	
(j)

	
"indebtedness" includes any obligation for the payment or repayment of money, whether as principal or as surety and whether present or future, actual or contingent;

	
(k)

	
a "Party" or other "particular person" includes its successors in title, permitted assignees and permitted transferees in accordance with their respective interests; and this Deed shall be enforceable notwithstanding any change in the constitution of a Secured Party, its absorption in or amalgamation with any other person or the acquisition of all or part of its undertaking by any other person;

	
(l)

	
"person" includes any individual, firm, company or other corporation, unincorporated body of persons, government, state or any agency of a person, any association, trust or partnership (whether or not having separate legal personality) or two or more of them;

	
(m)

	
a "right" includes any title, estate, interest, claim, remedy, power, authority, discretion or other right of any kind, both present and future (and any reference to rights in a particular asset or type or category of assets includes any rights in the proceeds of any disposal of that asset or any assets within that type or category);

	
(n)

	
"regulation" includes any regulation, rule, official directive, notice, request, code of practice, guideline, demand or decision (in each case whether or not having the force of law) of any governmental, intergovernmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation;

	
(o)

	
a "statute" or "statutory provision" includes a reference to any subordinate legislation made under that statute or statutory provision, to any modification, re-enactment or extension of that statute or statutory provision and any former statute or statutory provision which it consolidated or re-enacted before the date of this Deed;

	
(p)

	
"this security" means the Lien constituted by or purported to be constituted by or pursuant to this Deed; and

	
(q)

	
an Event of Default is "continuing" if it has not been remedied or waived in writing.

	
1.2.3

	
The index and clause, schedule and paragraph headings are for ease of reference only and shall not affect the interpretation of this Deed.

	
1.3

	
Secured Liabilities not paid if avoided

If the Collateral Agent considers that an amount paid by the Chargor in respect of the Secured Liabilities is capable of being avoided, or otherwise set aside, on the liquidation or administration of the Chargor or otherwise, then that amount shall not be considered to have been irrevocably paid for the purposes of this Deed.

	
1.4

	
Third party rights

Other than a Receiver, an Indemnified Person or any delegate, save where the contrary appears, a person who is not a Party to this Deed has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Deed.  The consent of any person who is not a Party is not required to rescind or vary this Deed at any time.

	
1.5

	
Trust

The Collateral Agent holds the benefit of this Deed, including the rights granted in it, on trust for the Secured Parties on the terms set out in the Agreement.  To the extent of any inconsistency, the provisions of the Agreement shall prevail.

	
1.6

	
Perpetuity period

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

	
1.7

	
Nominees

If the Collateral Agent causes or requires any Charged Investments to be registered in the name of a nominee for the Collateral Agent, any reference in this Deed to the Collateral Agent shall if the context permits or requires, be construed as a reference to each of the Collateral Agent and such nominee.

	
1.8

	
Implied Covenants

The following provisions of the Law of Property (Miscellaneous Provisions) Act 1994 will not apply to clause 3:

	
1.8.1

	
The words "other than any charges, encumbrances or rights which that person does not and would not reasonably be expected to know about" in section 3(1);

	
1.8.2

	
The words "except to the extent that" and all the words thereafter in section 3(2); and

	
1.8.3

	
Section 6(2).

	
2.

	
PAYMENT OF SECURED LIABILITIES

	
2.1

	
Covenant to pay

The Chargor shall as principal obligor and not merely as a surety pay to the Collateral Agent and discharge the Secured Liabilities when they become due.

	
2.2

	
Interest

Any amount which is not paid under this Deed when due shall bear interest at the Default Rate (both before and after judgment and payable on demand) from its due date up to the date of a final payment, such interest to accrue at a daily basis.

	
3.

	
GRANT OF SECURITY

As continuing security for the payment and discharge of the Secured Liabilities, the Chargor with full title guarantee charges to the Collateral Agent by way of first fixed charge all of its rights, title, interest and benefit in and to:

	
3.1.1

	
the Initial Shares;

	
3.1.2

	
the Secondary Shares; and

	
3.1.3

	
the Derivative Rights.

	
4.

	
REPRESENTATIONS AND WARRANTIES

The Chargor represents and warrants to the Collateral Agent as set out in Schedule 2.

	
5.

	
COVENANTS

The Chargor covenants with the Collateral Agent in the terms set out in Schedule 3.

	
6.

	
ENFORCEMENT

	
6.1

	
This security shall become immediately enforceable if an Enforcement Event occurs and is continuing.

	
6.2

	
After the security has become enforceable, the Collateral Agent may in its absolute discretion enforce all or any of its rights under this Deed as it thinks fit.  In particular, it may without further notice, exercise in relation to the Charged Investments:

	
6.2.1

	
the power of sale and all other powers conferred on mortgagees by the LPA (or otherwise by law) or on an administrative receiver by the IA, in either case as extended or otherwise amended by this Deed;

	
6.2.2

	
to the extent that clause 7 applies, the power to appropriate the Charged Investments in or towards the payment and discharge of the Secured Liabilities in accordance with clause 7.2; and

	
6.2.3

	
(without first appointing a Receiver) any or all of the rights which are conferred by this Deed (whether expressly or by implication) on a Receiver.

	
6.3

	
LPA provisions

	
6.3.1

	
The Secured Liabilities shall be deemed for the purposes of all powers implied by statute to have become due and payable within the meaning of s101 LPA immediately on the execution of this Deed.

	
6.3.2

	
s93(1) LPA and s103 LPA shall not apply to this security or to any exercise by the Collateral Agent of its right to consolidate mortgages or its power of sale.

	
6.4

	
Protection of third parties

	
6.4.1

	
No purchaser, mortgagee or other person dealing with a Receiver or the Collateral Agent shall be bound to enquire whether its right to exercise any of its rights has arisen or become exercisable, or be concerned as to the application of any money paid, raised or borrowed or as to the propriety or regularity of any sale by or other dealing with that Receiver or the Collateral Agent.

	
6.4.2

	
All of the protection to purchasers contained in ss104 and 107 LPA and s42(3) IA shall apply to any person purchasing from or dealing with a Receiver or the Collateral Agent as if the Secured Liabilities had become due and the statutory powers of sale and of appointing a Receiver in relation to the Charged Investments had arisen on the date of this Deed.

	
6.5

	
Privileges

Each of the Collateral Agent and any Receiver is entitled to all the rights, powers privileges and immunities conferred by land (including the LPA) or mortgagees and receivers duly appointed under any law (including the LPA).

	
6.6

	
Delegation

	
6.6.1

	
The Collateral Agent and a Receiver may delegate to any person or persons all or any of the rights which are exercisable by it under this Deed.  A delegation under this paragraph may be made in any manner (including by power of attorney) and on any terms (including power to sub-delegate) which the Collateral Agent or Receiver may think fit.

	
6.6.2

	
A delegation under clause 6.6.1 shall not preclude the subsequent exercise of those rights by the Collateral Agent or Receiver itself nor preclude the Collateral Agent or Receiver from making a subsequent delegation of them to another person or from revoking that delegation.

	
6.6.3

	
Neither the Collateral Agent nor a Receiver shall be liable or responsible to the Chargor for any loss or damage arising from any act, default, omission or misconduct on the part of any delegate or sub-delegate except in the case of their gross negligence, fraud or wilful default.

	
6.7

	
No liability

	
6.7.1

	
The powers conferred on the Collateral Agent by this Deed are solely to protect its interests in the Charged Investments and shall not impose any duty on the Collateral Agent to exercise any of those powers.

	
6.7.2

	
The Collateral Agent shall not, in respect of any of the Charged Investments, have any duty or incur any liability for:

	
(a)

	
ascertaining or taking action in respect of any calls, instalments, conversions, exchanges, maturities, tenders or other matters relating to any Charged Investments or the nature or sufficiency of any payment whether or not the Collateral Agent 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 relating to any of the Charged Investments.

	
6.7.3

	
None of the Collateral Agent, any Receiver or any delegate shall be liable as a mortgagee in possession or otherwise to account in relation to all or any part of the Charged Investments for any loss on realisation or for any other action, default or omission for which it or he might be liable.

	
7.

	
RIGHT OF APPROPRIATION

	
7.1

	
Application of right of appropriation

This clause 7 applies to the extent the Charged Investments constitute "financial collateral" and the obligations of the Chargor under this Deed constitutes a "financial collateral arrangement" (within the meaning of the Financial Collateral Regulations).

	
7.2

	
Exercise of right of appropriation

If and to the extent that this clause 7 applies, the Collateral Agent may, following enforcement of this Deed, appropriate the Charged Investments in or towards the Secured Liabilities.  If the Collateral Agent exercises its right of appropriation then it shall for these purposes value any relevant Charged Investments by reference to an independent valuation or other procedure determined by the Collateral Agent at the time of the appropriation.

	
8.

	
DIVIDENDS AND VOTING RIGHTS

	
8.1

	
Before enforcement

Before the occurrence of an Enforcement Event:

	
8.1.1

	
the Chargor shall:

	
(a)

	
be entitled to all dividends, interest and other monies paid on and received by it in respect of the Chargor's Charged Investments; and

	
(b)

	
subject to clause 8.1.2 exercise all voting and other rights and powers attached to the Chargor's Charged Investments.

	
8.1.2

	
The Chargor shall not:

	
(a)

	
exercise any rights attached to the Charged Investments in any manner which in the Collateral Agent's reasonable opinion is prejudicial to this security;

	
(b)

	
act in a way which is in breach of the Loan Documents to which it is a party or which may reasonable by expected to adversely affect the validity or enforceability of the Charged Investments; and

	
(c)

	
without the prior written consent of the Collateral Agent, (such consent not to be unreasonably withheld, conditioned or delayed), permit or agree to any variation of the rights attaching to the Investments, participate in any rights issue, elect to receive or vote in favour of receiving any dividend other than in the form of cash or participate in any resolution concerning a winding-up, liquidation or administration.

	
8.2

	
After enforcement

After the occurrence of an Enforcement Event:

	
8.2.1

	
the Collateral Agent and its nominee(s) may at the Collateral Agent's discretion (and in the name of the Chargor or otherwise), exercise all voting and other rights and powers attached to the Charged Investments which may be exercised by a person in whose name the Charged Investments are registered and the Chargor shall procure that its nominees shall, comply with any directions the Collateral Agent and its nominee(s) may in its absolute discretion, give concerning the exercise of those rights and powers; and

	
8.2.2

	
all dividends, interest and other monies or distributions paid (or to be received) in respect of the Charged Investments and received by or on behalf of the Chargor shall be held on trust for the Collateral Agent and, if requested by the Collateral Agent, forthwith paid into an account designated by the Collateral Agent or, if received by the Collateral Agent, may be applied by the Collateral Agent as though they were the proceeds of sale.

	
9.

	
APPOINTMENT OF RECEIVER

	
9.1

	
Appointment of Receiver

Without prejudice to any statutory or other powers of appointment of the Collateral Agent under the LPA as extended by this Deed or otherwise, at any time after this security has become enforceable or if the Chargor so requests in writing at any time the Collateral Agent may without further notice to the Chargor do any of the following:

	
9.1.1

	
appoint by deed or otherwise (acting through a duly authorised officer) any one or more persons qualified to act as a Receiver to be a Receiver of all or any part of the Charged Investments;

	
9.1.2

	
either at the time of appointment or any time after that appointment fix his or their remuneration (without being limited by the maximum rate specified in s109(6) LPA) provided that such rate is reasonable in accordance with market standards; and

	
9.1.3

	
(except as otherwise required by statute) remove any Receiver and appoint another or others in his or their place.

	
9.2

	
Powers of Receiver

Every Receiver shall have in relation to the Charged Investments (every reference in this clause 9.2 to "Charged Investments" being a reference only to all or any part of the Charged Investments in respect of which that Receiver was appointed) the powers granted by the LPA to any receiver appointed under it or to any mortgagor or mortgagee in possession and (whether or not the Receiver is an administrative receiver) the powers granted by the IA to any administrative receiver, all as varied and extended by this Deed.  In addition, but without limiting the preceding sentence, every Receiver shall have power to do the following:

	
9.2.1

	
Compliance with Deed:  comply with and perform all or any of the acts, matters, omissions or things undertaken to be done or omitted by the Chargor under this Deed;

	
9.2.2

	
Management of business:  carry on, manage, develop, reconstruct, amalgamate or diversify the business of the Chargor or any part of it in such manner as he shall in his discretion think fit;

	
9.2.3

	
Dealing with Charged Investments:  sell or otherwise dispose of the Charged Investments.  This power may be exercised without the need to comply with ss99 and 100 LPA.  Any disposal or other dealing under this clause 9.2.3 may be effected in the manner and on the terms which he thinks fit, for consideration consisting of cash, debentures or other obligations, shares or other valuable consideration and this consideration may be payable in a lump sum or by instalments spread over a period as he may think fit;

	
9.2.4

	
Dealing with third parties:  appoint or dismiss officers, employees, contractors or other agents and employ professional advisers and others on such terms (as to remuneration and otherwise) as he may think fit;

	
9.2.5

	
Agreements:  perform, repudiate, terminate, amend or enter into any arrangement or compromise any contracts or agreements which he may consider expedient;

	
9.2.6

	
Proceedings:  settle, arrange, compromise or submit to arbitration any accounts, claims, questions or disputes which may arise in connection with the business of the Chargor or the Charged Investments and bring, prosecute, defend, enforce, compromise, submit to and discontinue any actions, suits, arbitrations or other proceedings;

	
9.2.7

	
Uncalled capital:  make calls on the shareholders of the Chargor in respect of any of its uncalled capital;

	
9.2.8

	
Rights in connection with Charged Investments:  exercise or permit the Chargor or any nominee of the Chargor to exercise any rights incidental to the ownership of the Charged Investments in such manner as he may think fit;

	
9.2.9

	
Raising money:  in the exercise of any of the rights conferred on him by this Deed or for any other purpose to raise and borrow money either unsecured or secured and either in priority to, pari passu with or subsequent to this security and generally on such terms as he may think fit;

	
9.2.10

	
Receipts and discharges:  give valid receipts for all monies and execute all discharges, assurances and other documents which may be proper or desirable for realising the Charged Investments and redeem, discharge or compromise any security interest whether or not having priority to the security or any part of it;

	
9.2.11

	
All other acts:  execute and do all such other acts, things and documents as he may consider necessary or desirable for the realisation or preservation of the Charged Investments or incidental or conducive to any of the rights conferred on or vested in him under or by virtue of this Deed or otherwise and exercise and do in relation to the Charged Investments, and at the cost of the Chargor, all the rights and things which he would be capable of exercising or doing if he were the absolute beneficial owner of the same; and

	
9.2.12

	
Name of Chargor:  use the name of the Chargor or his own name to exercise all or any of the rights conferred by this Deed.

	
9.3

	
Agent of the Chargor

Any Receiver appointed under this Deed whether acting solely or jointly shall be deemed to be the agent of the Chargor and to be in the same position as a receiver appointed under the LPA and the Chargor shall be solely responsible for his acts, omissions, defaults, losses and misconduct and for his remuneration and the Collateral Agent shall not be in any way liable or responsible either to the Chargor or to any other person for any Receiver.

	
9.4

	
Joint appointment

If at any time two or more persons have been appointed as Receivers of the same Charged Investments, each one of those Receivers shall be entitled to exercise individually all of the rights conferred on Receivers under this Deed to the exclusion of the other or others in relation to any of the Charged Investments in respect of which he has been appointed unless the Collateral Agent shall state otherwise in the document appointing him.

	
9.5

	
Relationship with Collateral Agent

To the fullest extent allowed by law, any right, power or discretion conferred by this Deed (either expressly or implicitly) or by law on a Receiver may after this security become enforceable be exercised by the Collateral Agent in relation to the Charged Investments without first appointing a Receiver or notwithstanding the appointment of a Receiver.

	
9.6

	
Personnel

The Collateral Agent may by writing under its hand (and to the extent it is lawful) remove any Receiver appointed by it and may whenever it thinks fit, appoint a new Receiver in place of any Receiver whose appointment may for any reason have terminated.

	
10.

	
APPLICATION OF PROCEEDS

Order of priority

Any monies received by the Collateral Agent or any Receiver under this Deed or under the rights conferred by this Deed shall, after the occurrence of an Enforcement Event and subject to payment of any claims having priority to this security, be applied in the following order, but without prejudice to the right of the Collateral Agent to recover any shortfall from the Chargor:

	
10.1.1

	
where applicable, in payment of all Losses of and incidental to the appointment of the Receiver and the exercise of all or any of his powers;

	
10.1.2

	
where applicable, in payment of the Receiver's remuneration at such rate as may reasonably be agreed with the Collateral Agent;

	
10.1.3

	
in or towards discharge of the Secured Liabilities; and

	
10.1.4

	
if the Chargor is not under any further actual or contingent liability under the Loan Documents, in payment of the surplus (if any) to the person or persons entitled to it.

	
11.

	
EFFECTIVENESS OF SECURITY

	
11.1

	
Continuing security

This Deed shall remain in full force and effect as a continuing security for the Secured Liabilities, despite any settlement of account or intermediate payment or discharge in whole or in part or any other matter or thing, unless and until the Collateral Agent discharges this Deed in writing.

	
11.2

	
Additional security

This Deed shall be in addition to, and independent of every, and shall not be prejudiced by any, other Lien or guarantee which the Collateral Agent may, at any time, hold for any of the Secured Liabilities.  No prior Lien held by the Collateral Agent over the whole or any part of the Charged Investments shall, by virtue of the entry into this Deed, merge in the security created by this Deed.

	
11.3

	
Waiver of defences

	
11.3.1

	
The liabilities and obligations of the Chargor under this Deed in respect of any Obligor shall not be discharged, prejudiced or affected by any act, omission, matter or thing which, but for this clause 11.3, would reduce, release or prejudice any of its liabilities and obligations under this Deed, including (whether or not known to it or the Collateral Agent):

	
(a)

	
any time, waive or consent granted to, or composition with, any Obligor  or other person;

	
(b)

	
the release of any other Obligor or any other person under the terms of any composition or arrangement with the Chargor, any other Obligor or any other person;

	
(c)

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

	
(d)

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

	
(e)

	
any amendment, novation, supplement, extension, restatement (however fundamental and whether or not more onerous) or replacement of any Loan Document or any other document or Lien;

	
(f)

	
any unenforceability, illegality or invalidity of any obligation of any person under any Loan Document or any other document or security;

	
(g)

	
any act, omission or circumstance which but for this clause 11.3.1, might operate to discharge, release, reliance, extinguish, impair or otherwise affect any of the obligations of the Chargor under this Deed or any of the rights and remedies of the Collateral Agent or any security; or

	
(h)

	
any Insolvency of an Obligor.

	
11.4

	
Immediate Recourse

The Chargor waives any right it may have of first requiring the Collateral Agent or any other Secured Party to enforce any Lien or other rights or claim any payment from or otherwise proceed against any other person before enforcing this Deed against the Chargor.  This waiver applies irrespective of any applicable law and regulation or any provision of any Loan Document to the contrary.

	
11.5

	
Discretion in enforcement

Until the expiry of the Security Period, the Collateral Agent or any Receiver may:

	
11.5.1

	
refrain from applying or enforcing any other monies, Lien or other rights held or received by it in respect of the Secured Liabilities or apply and enforce them in such manner and order as it sees fit (whether against the Secured Liabilities or otherwise) and the Chargor shall not be entitled to the benefit of the same; and

	
11.5.2

	
hold in an interest-bearing suspense account any monies received from the Chargor or on account of the Secured Liabilities.

	
11.6

	
Non-Competition

Unless:

	
11.6.1

	
all amounts which may be or become payable by the Obligor under or in connection with the Loan Documents have been irrevocably paid in full; or

	
11.6.2

	
the Collateral Agent otherwise directs,

the Chargor shall not, after a claim has been made or by virtue of any payment or performance by it under this Deed:

	
(a)

	
be subrogated to any rights, security or moneys held, received or receivable by any Secured Party (or any trustee or agent on its behalf);

	
(b)

	
be entitled to any right of contribution or indemnity in respect of any payment made or moneys received on account of the Chargor's liability under this clause;

	
(c)

	
claim, rank, prove or vote as a creditor of any Obligor or its estate in competition with any Secured Party (or any trustee or agent on its behalf); or

	
(d)

	
receive, claim or have the benefit of any payment, distribution or security from or on account of any Obligor, or exercise any right of set-off as against any Obligor.

The Chargor must hold in trust for and must immediately pay or transfer to the Collateral Agent for the Secured Parties any payment or distribution or benefit of security received by it contrary to this clause or in accordance with any directions given by the Collateral Agent under this clause.

	
11.7

	
Subsequent Security

	
11.7.1

	
At any time following:

	
(a)

	
the Collateral Agent's receipt of notice of any subsequent Lien affecting the Charged Investments;

	
(b)

	
the Insolvency of the Chargor; or

	
(c)

	
any disposal of all or any of the Charged Investments in breach of paragraph 2 of Schedule 3,

any Secured Party may open a new account or accounts in the name of the Chargor (whether or not it permits any existing account to continue).  If a Secured Party does not open such a new account, it shall nevertheless be treated as if it had done so at the time when the notice was received or was deemed to have been received or, as the case may be, the Insolvency commenced or the assignment or transfer occurred and from that time all payments made by the Chargor to, the Secured Party or received by the Secured Party for the account of the Chargor shall be credited or treated as having been credited to the new account and shall not operate to reduce the amount secured by this Deed at the time when the Secured Party received or was deemed to have received that notice or, as the case may be, the Insolvency commenced or the assignment or transfer occurred.

	
12.

	
RELEASE OF SECURITY

	
12.1

	
Release of Security

Subject to clause 12.2 following the expiry of the Security Period and at the request and cost of the Chargor, the Collateral Agent shall, as soon as reasonably practicable after receipt of that request, release and discharge this security, at all times without recourse, representation or warranty but subject to clause 12.2 and the rights of any person having prior rights over those assets.  Any release or discharge of this security shall not release or discharge the Chargor from any liability to the Collateral Agent or any other Secured Party for the Secured Liabilities or any other monies which exist independently of this Deed.

	
12.2

	
Reinstatement

	
12.2.1

	
Any release, settlement, discharge, re-assignment or arrangement (in this clause 12, a "release") made by the Collateral Agent on the faith of any assurance, security or payment shall be conditional on that assurance, security or payment not being avoided, reduced, clawed back or ordered to be repaid under any law relating to Insolvency.

	
12.2.2

	
If any avoidance, reduction or clawback occurs or order is made as referred to in clause 12.2.1, then the release given by the Collateral Agent shall have no effect and shall not prejudice the right of the Collateral Agent to enforce this Deed in respect of the Secured Liabilities.  As between the Chargor and the Collateral Agent, this Deed shall (notwithstanding the release) be deemed to have remained at all times in effect and held by the Collateral Agent as security for the Secured Liabilities.

	
12.3

	
Redemption

The Collateral Agent may at any time:

	
12.3.1

	
redeem, or procure the transfer to itself of, any such prior Lien over any Charged Investments; or

	
12.3.2

	
settle and pass the accounts of the holder of any prior Lien.  Any accounts so settled and passed shall be conclusive and binding on the Chargor.

	
12.4

	
Costs of redemption

All principal monies, interest, costs, expenses and other amounts incurred in and incidental to any redemption or transfer under clause 12.4 shall be paid by the Chargor to the Collateral Agent on demand, in each case together with interest calculated in the manner referred to in clause 15.

	
13.

	
POWER OF ATTORNEY

	
13.1

	
Appointment

The Chargor irrevocably and by way of security appoints the Collateral Agent and any Receiver and every delegate referred to in clause 6.6 and each of them jointly and also severally to be its attorney (with full powers of substitution and delegation) and in its name or otherwise and on its behalf and as its act and deed following the occurrence of an Enforcement Event to execute, deliver and perfect all Instruments and other documents and do any other acts and things which may be required or which the attorney may consider desirable:

	
13.1.1

	
to carry out any obligation imposed on it by this Deed or any other agreement binding on the Chargor to which the Collateral Agent is a Party (including the execution and delivery of any mortgages, deeds, charges, assignments or other transfers of the Charged Property);

	
13.1.2

	
to carry into effect any disposal or other dealing by the Collateral Agent or any Receiver;

	
13.1.3

	
to transfer any interest in any Charged Investments in the circumstances in which such transfer may be required under this Deed, including on an enforcement of the security over such Charged Investments;

	
13.1.4

	
in its name and on its behalf to exercise any right conferred on the Collateral Agent, any Receiver or any delegate in relation to the Charged Investments under this Deed or any other Loan Document or by law or regulation;

	
13.1.5

	
to realise in the Charged Investments;

	
13.1.6

	
to register or renew registration of the existence of the security or the restrictions on dealing with the Charged Investments in any register in which the Chargor is obliged (but has failed) to effect or maintain registration under the terms of this Deed; and

	
13.1.7

	
to enable the Collateral Agent and any Receiver to exercise the respective rights conferred on them by this Deed or by applicable law and regulation,

and the Chargor undertakes to ratify and confirm all acts and things done by an attorney in the exercise or purported exercise of its powers and all monies spent by an attorney shall be deemed to be expenses incurred by the Collateral Agent under this Deed.

	
13.2

	
Irrevocable power

The Chargor acknowledges that each power of attorney granted by clause 13.1 is granted irrevocably and for value as part of this security to secure a proprietary interest of, and the performance of obligations owed to, the donee within the meaning of s4 Powers of Attorney Act 1971.

	
14.

	
GROSS-UP AND PAYMENTS

	
14.1

	
Grossing Up

Each payment made by a Chargor to the Collateral Agent under this Deed shall be made free and clear of and without deduction for or on account of Tax unless such Chargor is required to make such payment subject to the deduction or withholding of Tax, in which case the sum payable by the Chargor in respect of which such deduction or withholding is required to be made shall be increased to the extent necessary to ensure that, after the making of the required deduction or withholding, the Collateral Agent receives and retains (free from any liability in respect of any such deduction or withholding) a net sum equal to the sum which it would have received and so retained had no such deduction or withholding been made or required to be made.

	
14.2

	
Tax Credit

If a Chargor makes an increased Tax payment to the Collateral Agent under Clause 14.1 and the Collateral Agent reasonably determines that:

(a)            a Tax Credit is attributable to that Tax payment; and

(b)            that Collateral Agent has obtained, utilised and retained that Tax Credit,

the Collateral Agent shall pay an amount to the Chargor which the Collateral Agent reasonably determines will leave it (after that payment) in the same after-Tax position as it would have been in had the increased Tax payment under Clause 14.1 not been made by the Chargor, provided that any costs of such determination reasonably incurred by the Collateral Agent shall be borne by the Chargor.

	
14.3

	
Payments without Set-Off

Any payment made by the Chargor under this Deed shall be made free and clear of and without any deduction for or on account of any set-off or counterclaim.

	
14.4

	
Manner of Payment

Each payment made by the Chargor under this Deed shall be paid in the manner reasonably required by the Collateral Agent.

	
15.

	
COSTS AND EXPENSES

	
15.1

	
Costs and expenses

The Chargor shall promptly pay or reimburse to the Collateral Agent on demand, on a full indemnity basis, for all Losses incurred by the Collateral Agent in relation to:

	
15.1.1

	
the negotiation, preparation and execution of this Deed;

	
15.1.2

	
any actual or proposed amendment of or waiver or consent under or in connection with this Deed requested by the Chargor;

	
15.1.3

	
any discharge or release of this Deed or the security;

	
15.1.4

	
the preservation or exercise (or attempted preservation or exercise) of any rights under or in connection with, and the enforcement (or attempted enforcement) of, this Deed and the perfection or enforcement of any other Security for or guarantee in respect of the Secured Liabilities;

	
15.1.5

	
the taking or holding of this Deed, any security or any proceedings in relation to it or to all or any of the Charged Investments; and

	
15.1.6

	
fees reasonably incurred in respect of any advice obtained in relation to any other matter or question arising out of or in connection with this Deed.

	
15.2

	
Taxes

The Chargor shall pay all stamp, registration and other Taxes to which this Deed, this security or any judgment or order given in connection with this Deed may at any time be subject and shall on demand indemnify the Collateral Agent against any Losses resulting from any failure to pay or delay in paying the same.

	
15.3

	
Value Added Tax

The following provisions shall apply:

	
15.3.1

	
all amounts expressed to be payable under this Deed shall be exclusive of any VAT;

	
15.3.2

	
if VAT is chargeable on any supply made by either Party to the other under this Deed (whether that supply is taxable pursuant to the exercise of an option or otherwise), the Party receiving the relevant supply shall pay to that Party making the supply (in addition to and at the same time as paying that consideration) an amount equal to the amount of the VAT as further consideration;

and

	
15.3.3

	
where this Deed requires the Chargor to reimburse a Secured Party for any costs or expenses, the Chargor shall also pay any amount of those costs or expenses incurred referable to VAT charged thereon.

	
16.

	
ASSIGNMENTS AND TRANSFERS

	
16.1

	
Collateral Agent

The Collateral Agent may assign any or all of its rights and transfer any or all of its obligations under this Deed without the consent of the Chargor being required.

	
16.2

	
Chargor

The Chargor may not assign any of its rights or transfer any of its rights or obligations under this Deed without the prior written consent of the Collateral Agent.

	
16.3

	
Disclosure of information

The Collateral Agent may disclose any information about the Chargor which it shall consider appropriate to any affiliate, any of its professional advisers, any person to whom it is proposing to assign or transfer, or has assigned or transferred, any of its rights and obligations under this Deed or to any person to whom information may be required to be disclosed by any applicable law and regulation.

	
17.

	
INDEMNITY

The Chargor shall on demand indemnify and keep indemnified the Collateral Agent and every Receiver, attorney, manager, agent or other person appointed by the Collateral Agent under this Deed and their respective employees (each one "Indemnified Person") in respect of all Losses incurred or suffered by any of them in or directly or indirectly as a result of the exercise or purported exercise of any of the rights vested in them under this Deed and against all Losses suffered or incurred by any of them in respect of any matter or thing done or omitted relating to the Charged Investments or occasioned by any breach of any of the Chargor's covenants or other obligations under this Deed or otherwise relating to all or any part of the Charged Investments, except to the extent such Losses have resulted from such Indemnified Person's gross negligence, fraud or wilful misconduct.

	
18.

	
SET-OFF

	
18.1

	
A Secured Party may set-off any matured obligation due from the Chargor under this Deed (to the extent beneficially owned by such Secured Party) against any obligation (whether or not matured) owed by that Secured Party to the Chargor, regardless of the place of payment, booking branch or currency of either obligation.  If the obligations are in different currencies, the Secured Party may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off.

	
18.2

	
No Obligation

No Secured Party shall be obliged to exercise any right given to it under clause 18.1.

	
19.

	
NOTICES AND COMMUNICATIONS

The provisions of clause 10 (Notices) of the Agreement shall be deemed incorporated herein, as if set out in this Deed, mutatis mutandis save that the address and details for the Chargor is as set out below its attestation clause, or such other address as the Chargor shall notify in writing to the Collateral Agent after the date of this Deed.

	
20.

	
CALCULATIONS AND CERTIFICATES

Any certificate or determination of the Collateral Agent as to any matter provided for in this Deed is, in the absence of manifest error, conclusive evidence of the matters to which it relates.

	
21.

	
CURRENCY CONVERSION

	
21.1

	
In order to apply any sum held or received by the Collateral Agent or a Receiver in or towards payment of the Secured Obligations, the Collateral Agent or such Receiver may purchase an amount in another currency and the rate of exchange to be used shall be that at which, at such time as it considers appropriate, the Collateral Agent or such Receiver is able to effect such purchase.

	
21.2

	
Currency Indemnity

If any sum due from the Chargor under this Deed or any order or judgment given or made in relation to this Deed has to be converted from the currency (the "first currency") in which the same is payable under this Deed or under such order or judgment into another currency (the "second currency") for the purpose of (a) making or filing a claim or proof against the Chargor, (b) obtaining an order or judgment in any court or other tribunal or (c) enforcing any order or judgment given or made in relation to this Deed, the Chargor shall indemnify and hold harmless each Secured Party from and against any loss it suffers or incurs as a result of any discrepancy between (i) the rate of exchange used for such purpose to convert the sum in question from the first currency into the second currency and (ii) the rate or rates of exchange at which such Secured Party may in the ordinary course of business purchase the first currency with the second currency upon receipt of a sum paid to it in satisfaction, in whole or in part, of any such order, judgment, claim or proof.

	
22.

	
PARTIAL INVALIDITY

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

	
23.

	
REMEDIES AND WAIVERS

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

	
24.

	
AMENDMENTS AND WAIVERS

Any term of this Deed may be amended or waived only with the written consent of the Collateral Agent and the Chargor and any such amendment or waiver will be binding on all Parties.

	
25.

	
TACKING

Each Lender must perform its obligation under the Loan Documents including any obligations to make available further advances.

	
26.

	
COUNTERPARTS

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

	
27.

	
GOVERNING LAW

This Deed, and any non-contractual obligations arising from this Deed are governed by and shall be construed in accordance with English law.

	
28.

	
JURISDICTION

	
28.1

	
Jurisdiction of English courts

	
28.1.1

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

	
28.1.2

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

	
28.2

	
This clause 28.2 is for the benefit of the Collateral Agent only.  As a result, the Collateral Agent shall not be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction.  To the extent allowed by law, the Collateral Agent may take concurrent proceedings in any number of jurisdictions.

	
28.3

	
Service of process

Without prejudice to any other mode of service allowed under any relevant law, the Chargor:

	
28.3.1

	
irrevocably appoints the Company as its agent for service of process in relation to any proceedings before the English courts in connection with this Deed; and

	
28.3.2

	
agrees that a failure by the process agent to notify it of the process will not invalidate the proceedings concerned.

	
28.4

	
If the appointment by the Chargor of the person mentioned in clause 28 ceases to be effective, it shall immediately appoint another person in England as its agent for service of process in relation to any proceeding before the English courts in connection with this Deed.  If it fails to do so (and that failure continues for a period of not less than 15 Business Days), the Collateral Agent shall be entitled to appoint such a person by notice to the Chargor.

EXECUTION

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

EXECUTION of the Deed:

THE CHARGOR

	
EXECUTED as a deed by

Director, duly authorised for and on behalf of LOMBARD MEDICAL, INC, in the presence of:

 

	
)

)            ................................................

 )

 

 

	
Signature of Witness:

 

	
................................................

 

	
Name of Witness:

 

	
................................................

 

	
Address of Witness:

 

	
................................................

................................................

 

	
Occupation of Witness:

 

	
................................................

 

	Address for notices:	Lombard Medical, Technologies Inc.

15420 Laguna Canyon Road, Suite. 260 Irvine,

CA 92618 USA

Bill.Kullback@lombardmedical.com

Fax number:                                                      (+1) 949 379 3760

For the attention of:                                                      Bill Kullback

THE COLLATERAL AGENT

	
EXECUTED as a deed by

a duly authorized signatory for and on behalf of OXFORD FINANCE LLC

 

	
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)            ..............................................

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