Document:

Exhibit
4.28

 

DATED 31 MARCH 2000

 

 

GEOLOGISTICS LIMITED

and others as
Chargors

 

 

and

 

 

BURDALE FINANCIAL LIMITED

 

 

GUARANTEE AND DEBENTURE

 

 

 

 

INDEX

 

	
  Clause

  	
   

  
	
   

  	
   

  	
   

  
	
  1.

  	
  INTERPRETATION

  	
   

  
	
  2.

  	
  FIXED SECURITY

  	
   

  
	
  3.

  	
  FLOATING CHARGE

  	
   

  
	
  4.

  	
  REPRESENTATIONS AND
  WARRANTIES

  	
   

  
	
  5.

  	
  UNDERTAKINGS AND GUARANTEE

  	
   

  
	
  6.

  	
  DEFAULT

  	
   

  
	
  7.

  	
  WHEN SECURITY BECOMES
  ENFORCEABLE

  	
   

  
	
  8.

  	
  ENFORCEMENT
  OF SECURITY

  	
   

  
	
  9.

  	
  RECEIVER

  	
   

  
	
  10.

  	
  POWERS OF
  RECEIVER

  	
   

  
	
  11.

  	
  APPLICATION
  OF PROCEEDS

  	
   

  
	
  12.

  	
  EXPENSES
  AND INDEMNITY

  	
   

  
	
  13.

  	
  DELEGATION

  	
   

  
	
  14.

  	
  FURTHER
  ASSURANCES

  	
   

  
	
  15.

  	
  POWER OF
  ATTORNEY

  	
   

  
	
  16.

  	
  MISCELLANEOUS

  	
   

  
	
  17.

  	
  RELEASE

  	
   

  
	
  18.

  	
  NOTICES

  	
   

  
	
  19.

  	
  GOVERNING LAW

  	
   

  

 

	
  Schedules

  	
   

  
	
   

  	
   

  	
   

  
	
  1.

  	
  The Chargors

  	
   

  
	
  2.

  	
  The Mortgaged Property

  	
   

  
	
  3.

  	
  Forms of Notice to Banks
  and Acknowledgement

  	
   

  
	
  4.

  	
  Group Shares

  	
   

  
	
  5.

  	
  Credit Insurance Policies

  	
   

  
	
  6.

  	
  Form of Notice to Insurers
  and Acknowledgement

  	
   

  
	
  7.

  	
  Form of Notice to be
  affixed to invoices and sent to Account Debtors

  	
   

  
	
  8.

  	
  Guarantee and Indemnity

  	
   

  
	
  9.

  	
  Other Accounts

  	
   

  
	
   

  	
   

  	
   

  
	
  Signatories

  	
   

  

 

 

THIS DEED OF GUARANTEE AND DEBENTURE is dated 31 MARCH 2000

 

BETWEEN:

 

(1)           GEOLOGISTICS LIMITED (Registered in England and Wales No.
00112456) (the “Company”);

 

(2)           THE COMPANIES (if any) identified in Schedule 1 (together
with the Company each a “Chargor” and
together the “Chargors”); and

 

(3)           BURDALE FINANCIAL LIMITED (Registered in England and Wales No. 2656007)
(“Burdale”).

 

BACKGROUND:

 

(A)          The Chargors enter into this Deed to secure
the repayment and satisfaction of the Secured Liabilities.

 

(B)           The Chargors and Burdale intend that this
document take effect as a deed notwithstanding that it may be executed under
hand.

 

IT IS AGREED:

 

1.             INTERPRETATION

 

1.1          Definitions

 

In this Deed:

 

“Account Banks” is defined in the Facility Agreement.

 

“Amounts” means the aggregate of the Blocked Amounts
and the Other Amounts.

 

“Assignable
Receivables” means
all Receivables which are not Unassignable Receivables or Purchased
Receivables.

 

“Blocked
Accounts” is defined
in the Facility Agreement.

 

“Blocked
Amounts” means all
sums from time to time standing to the credit of the Blocked Accounts, all
interest on such sums and all other amounts of whatever nature deriving
directly or indirectly from such sums, whether or not credited to the Blocked
Accounts.

 

“Book Debts” means:

 

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

 

1

 

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

 

“Charged Accounts” means the Blocked Accounts and the Other
Accounts.

 

“Equipment” means all present and future plant,
equipment, machinery, computers and computer hardware and software’(whether
owned or licensed), vehicles, tools, furniture and fixtures and all
attachments, accessories owned by any Chargor and property (other than
Fixtures) now or in future relating to it or used in connection with it and
replacements and substitutions for it wherever located.

 

“Event of Default” is defined in the Facility Agreement.

 

“Facility Agreement” means the facility agreement dated on or
about today’s date between Burdale and the Company.

 

“Fixtures” means all fixtures and fittings (including
those of trade) and fixed plant and machinery on the Mortgaged Property.

 

“Group Shares” means all shares specified in Schedule 4 or,
when used in relation to a particular Chargor, such of those shares as are
specified against its name in Schedule 4, together in each case with all other
stocks, shares, debentures, bonds, warrants, coupons or other securities and
investments now or in the future owned by any or (when used in relation to a particular
Chargor) that Chargor from time to time;

 

“Insurances” means all contracts and policies of
insurance taken out by or for a Chargor or in which any Chargor has an interest
(to the extent of that interest) including, without limitation, the credit insurance
policies specified in Schedule 5.

 

“Intellectual Property” means all subsisting patents and subsisting
rights of a similar nature held in any part of the world, applications for
patents and such rights, divisions and continuations of such applications for
patents, registered and unregistered trade marks, registered and unregistered
service marks, registered designs, utility models (in each case for their full
period and all extensions and renewals of them), applications for any of them
and the right to apply for any of them in any part of the world, inventions,
confidential information. Know-how, business names, trade names, brand names,
copyright and rights in the nature of copyright, design rights and get-up and
any similar rights existing in any country; and the benefit (subject to the
burden) of any and all agreements, arrangements and licences in connection with
any of the foregoing.

 

“Know-how” means all the body of knowledge, technical
experience, expertise and skills, technical processes, secret processes,
formulae and technical information held by any Chargor and relating to its
business, which is not in the public domain.

 

2

 

“Mortgaged Property” means any freehold or leasehold property
(including the Premises) the subject of the security created by this Deed.

 

“Obligors” is defined in the Facility Agreement.

 

“Other Accounts” means the bank accounts of the Chargors
specified in Schedule 9 and/or such other bank accounts of the Chargors with Account
Banks as Burdale may permit.

 

“Other Amounts” means all sums from time to time standing to
the credit of the Other Accounts, or withdrawn from the Blocked Accounts for
payment into (but not yet credited to) any of the Other Accounts, all interest
on such sums and all other amounts of whatsoever nature deriving directly or
indirectly from such sums, whether or not credited to the Other Accounts.

 

“Permitted Encumbrance” means any encumbrance which any Chargor is
permitted to create or maintain under the terms of the Facility Agreement.

 

“Planning Acts” means the Town and Country Planning Act
1990, the Planning (Listed Buildings and Conservation Areas) Act 1990, the
Planning (Hazardous Substances) Act 1990, the Planning (Consequential
Provisions) Act 1990 and the Planning and Compensation Act 1991 and all other
legislation regulating the use and development of land.

 

“Premises” means any building or other edifice on the
Mortgaged Property or other Security Asset.

 

“Purchased Receivables” is defined in the Facility Agreement.

 

“Receivable” is defined in the Facility Agreement.

 

“Receiver” means a receiver and manager or (if Burdale
so specifies in the relevant appointment) a receiver, in either case, appointed
under this Deed or pursuant to any statute.

 

“Related Rights” means, in relation to the Group Shares, all
dividends and other distributions paid or payable after today’s date on all or
any of the Group Shares and all stocks, shares, securities (and the dividends
or interest on them), rights, money or property accruing or offered at any time
by way of redemption, bonus, preference, option rights or otherwise to or in
respect of any of the Group Shares or in substitution or exchange for any of
the Group Shares.

 

“Secured Liabilities” means all present and future obligations and
liabilities, whether actual or contingent and whether owed jointly or severally
or in any other capacity whatsoever, of each Chargor to Burdale except for any
obligation which, if it were so included, would result in a contravention of
section 151 of the Companies Act 1985.

 

“Security Assets” means all assets of the Chargors the subject
of any security created by this Deed (and includes the Mortgaged Property).

 

3

 

“Security Period” means the period beginning on the date of
this Deed and ending on the date on which Burdale is satisfied that the Secured
Liabilities have been irrevocably and unconditionally satisfied in full. If
Burdale considers that any amount paid by any Chargor and/or in connection with
the satisfaction of the Secured Liabilities is capable of being avoided or
otherwise set aside on the liquidation or administration of such Chargor or
otherwise, then that amount shall not be considered to have been irrevocably
paid for the purpose of this Deed.

 

“Security Shares” means the Group Shares and the Related
Rights and, in the case of each Chargor, means such of the Group Shares as are
held by it at the relevant time, together with all Related Rights in respect of
such Group Shares.

 

“Unassignable Receivables” means any Receivables which are or become
unassignable or assignable only with the prior consent of the relevant Account
Debtor (where such consent has not been obtained) and which are not Purchased
Receivables.

 

1.2          Construction

 

(a)           Any reference in this Deed to any assets or accounts includes present
and future assets or accounts and any substitutes of such assets or accounts,
unless the context requires otherwise.

 

(b)           Any reference in this Deed, express or implied, to any enactment
includes references to any amendment, re-enactment, and/or legislation
subordinate to that enactment and/or any permission of whatever kind given
under that enactment.

 

(c)           The headings in this Deed do not affect its interpretation.

 

(d)           Any reference in this Deed to a charge or mortgage of any freehold or
leasehold property includes all Premises and Fixtures on that property, the
proceeds of sale of any part of that property, and the benefit of any covenants
for title (or any moneys paid or payable in respect of them) given or entered
into by any predecessor in title in respect of that property.

 

(e)           Any obligation in this Deed to commit or not to commit any act or thing
shall be deemed to include a like obligation to procure or not to permit any
such act or thing.

 

(f)            Any reference in this Deed to, and the
definition of, any document (including this Deed) is a reference to such
document as it may be amended, supplemented, modified and replaced (in whole or
in part), but disregarding any such change taking place otherwise than in
accordance with this Deed.

 

(g)           Any reference in this Deed to any party or person includes any person
deriving title from it or any successor, transferee or assignee.

 

4

 

(h)           Any reference in this Deed to a “person” includes
any individual, company, corporation, partnership, firm, joint venture,
association, organisation, trust, state or state agency (in each case, whether
or not having a separate legal personality).

 

(i)            Save where the context requires otherwise,
words in this Deed in the singular shall include the plural and vice versa.

 

(j)            A reference in this Deed to Clauses and
Schedules are a reference to the clauses of and schedules to this Deed.

 

(k)           Capitalised terms defined in the Facility Agreement have the same
meaning when used in this Deed unless the context requires otherwise.

 

(l)            In the event of any conflict between the
provisions of this Deed and the provisions of the Facility Agreement the
provisions of this Deed shall prevail.

 

2.             FIXED SECURITY

 

2.1          Creation

 

Each
Chargor, as security for the payment and performance of the Secured Liabilities
and in the manner specified in Clause 2.3 of this Deed:

 

(a)           charges in favour of Burdale by way of a first legal mortgage all the
property (if any) now belonging to it and specified in Schedule 2 and all other
interests in any freehold or leasehold property now or in the future belonging
to it; and

 

(b)           charges in favour of Burdale by way of a first fixed charge:

 

(i)            (to the extent that they are not within
paragraph 2.1(a)) all interests in any freehold or leasehold property now or in
the future belonging to it;

 

(ii)           all of its rights and benefit under any agreement relating to the
acquisition of the Mortgaged Property by it or for it and the benefit of all
agreements, contracts, deeds, undertakings, guarantees, warranties and other
documents now or hereafter in existence in relation to the Mortgaged Property;

 

(iii)          all Equipment and its interest in any such Equipment in its possession
now or in the future and in all Fixtures;

 

(iv)          all of its benefits, claims and returns of premiums in respect of the
Insurances;

 

(v)           all moneys standing to the credit of any account (including the Charged
Accounts and notwithstanding that the existence of such an account may be in
breach of this Deed) with any person and the debts represented by them
including, without limitation, the Blocked Amounts and the Other Amounts;

 

5

 

(vi)          its
goodwill and its uncalled capital;

 

(vii)         its
Book Debts, both uncollected and collected, the proceeds of the same and all
moneys otherwise due and owing to such Chargor;

 

(viii)        the
benefit of all rights, securities and guarantees of whatsoever nature enjoyed
or held by it in relation to anything in sub-paragraph 2. l(b)(vii);

 

(ix)           its
rights under any hedging arrangements;

 

(x)            any
of its beneficial interest, claim or entitlement in any pension fund;

 

(xi)           the
benefit of all permissions of whatsoever nature and whether statutory or
otherwise, held in connection with its business or the use of any Security
Asset and the right to recover and receive all compensation which may be
payable to it;

 

(xii)          its
Intellectual Property;

 

(xiii)         all
of its rights, title and interest and benefit in the Unassignable Receivables;

 

(c)           mortgages
and charges and agrees to mortgage and charge to Burdale all Group Shares held
now or in the future by it and/or any nominee on its behalf, the same to be a
security by way of a first mortgage; and

 

(d)           mortgages
and charges and agrees to mortgage and charge to Burdale all the Related Rights
accruing to all or any of the Group Shares held now or in the future by it
and/or any nominee on its behalf, the same to be a security by way of a first
mortgage or charge.

 

PROVIDED
THAT:

 

(i)            whilst
no Event of Default exists, all dividends and other distributions paid or
payable as referred to in paragraph (d) above may be paid directly to the
relevant Chargor; and

 

(ii)           subject
to Clause 5.4(c) whilst no Event of Default exists, all voting rights attaching
to the relevant Group Shares may be exercised by the relevant Chargor.

 

2.2          Assignments

 

Each Chargor, in the
manner specified in Clause 2.3 of this Deed, assigns to Burdale by way of security
for the payment and performance of the Secured Liabilities all of its right,
title and interest (if any) in and to:

 

(a)           all
rental income and any guarantee of any rental income contained in or relating
to any lease or other occupational arrangements affecting the Mortgaged
Property;

 

6

 

(b)           the
Insurances;

 

(c)           the
Assignable Receivables.

 

2.3          Title
Guarantee

 

(a)           Every
disposition effected by this Deed is made with full title guarantee.

 

(b)           The
other terms of this Deed do not limit or extend any of the covenants implied by
virtue of Part 1 of the Law of Property (Miscellaneous Provisions) Act 1994 but
create separate and independent obligations having effect cumulatively with
those implied covenants.

 

3.             FLOATING
CHARGE

 

3.1          Creation

 

Each Chargor as security
for the payment of the Secured Liabilities and in the manner specified in
Clause 2.3 of this Deed charges in favour of Burdale by way of a floating
charge all its assets not otherwise effectively mortgaged or charged by way of
fixed mortgage or charge by Clause 2.

 

3.2          Conversion by notice

 

Burdale may by notice to
any Chargor convert the floating charge created by this Deed into a fixed
charge in relation to all or any of such Chargor’s assets specified in the
notice if:

 

(a)           Burdale
has reasonable grounds for considering those assets to be in jeopardy, by legal
process or otherwise; or

 

(b)           an
Event of Default has occurred; or

 

(c)           Burdale
becomes aware or has reason to believe that steps have been taken which would,
in the reasonable opinion of Burdale, be likely to lead to the presentation of
a petition to appoint an administrator in relation to such Chargor (or such an
administrator has been appointed) or to wind up such Chargor (or that such a petition
has been presented).

 

3.3          No waiver

 

The giving by Burdale of
a notice pursuant to Clause 3.2 in relation to any class of any Chargor’s
assets, rights and property shall not be construed as a waiver or abandonment
of Burdale’s rights to give other similar notices in respect of any other class
of assets.

 

7

 

4.             REPRESENTATIONS AND
WARRANTIES

 

4.1          Making of representations

 

Each
Chargor makes the representations and warranties set out in this Clause 4 to Burdale and the Company repeats
the representations and warranties in Clause 13 of the Facility Agreement (the “Facility Agreement Representations”). The representations
and warranties so set out are made on the date of this Deed and are deemed to
be repeated by the Chargors on the date on which the Facility Agreement
Representations are repeated throughout the Security Period with reference to
the facts and circumstances then existing.

 

4.2          Capacity

 

Each
Chargor has the capacity, power and authority to enter into this Deed and the
obligations assumed by it are its legal, valid, binding and enforceable
obligations.

 

4.3          Mortgaged Property

 

(a)           The Chargor named as owner in respect of any Mortgaged Property is the
legal and beneficial owner of such Mortgaged Property.

 

(b)           Other than as notified in writing to Burdale, the Mortgaged Property is
free from any agreement for lease, lease, licence, tenancy, overriding lease or
other occupational arrangement or overriding interest.

 

(c)           The Premises are in good and substantial repair.

 

(d)           There subsists no breach of any law or regulation which could affect
materially the value of the Mortgaged Property.

 

(e)           There are no covenants, agreements, stipulations, reservations,
conditions, interests, rights or other matters whatsoever which could affect
adversely the Mortgaged Property so far as the Chargors are aware.

 

(f)            The Mortgaged Property is free from any
financial encumbrance of whatsoever nature other than Permitted Encumbrances.

 

(g)           No Chargor has received any notice of any adverse claim, nor has any
acknowledgement been given in respect of the ownership of the Mortgaged
Property, or any interest in it.

 

(h)           No facility necessary for the enjoyment and use of the Mortgaged
Property may be terminated or curtailed.

 

8

 

4.4          Security

 

This
Deed creates the various forms of security it purports to create and is not
liable to be avoided or otherwise set aside on the liquidation or
administration of any Chargor, or otherwise.

 

4.5          Security Shares

 

(a)           Each Chargor is and will remain the sole beneficial owner of the
Security Shares and, save where the Security Shares have been registered in the
name of Burdale or its nominee pursuant to this Deed and/or its nominee, is and
will remain the absolute legal owner of the Security Shares.

 

(b)           No Chargor will take any action whereby the rights attaching to the
Security Shares are altered or diluted.

 

(c)           The Group Shares are fully paid and non-assessable and neither the Group
Shares nor the Related Rights are subject to any options to purchase or similar
rights of any person.

 

4.6          Receivables, Amounts and
Insurances

 

(a)           Each Chargor is absolutely, solely and beneficially entitled to its
rights, interest and benefit under the Receivables, the Amounts and the
Insurances as from the date they or any part of them falls to be charged or
assigned under this Deed and its rights in respect of the Receivables, the
Amounts and the Insurances are free from any Encumbrance of any kind save for
any Permitted Encumbrances.

 

(b)           In relation to each Receivable and Insurance which is either stated to
be expressly assignable under the contractual terms governing it or in relation
to which such terms are silent regarding its assignability (i) it is, upon the
date it or any part of it falls to be assigned under this Deed, freely
assignable (ii) no consents are required in order to perfect the assignment
constituted by Clause 2.2 of this Deed over such Receivable and such Insurance
(respectively) and (iii) the Chargors know of no reason why such Receivable or
Insurance should not be assignable on such date.

 

(c)           Each Chargor has to the best of its knowledge and belief after due and
careful enquiry disclosed or provided to Burdale or its agents, legal advisers
or representatives all the documentation or other information requested of it
relating to Receivables and Insurances, it is not aware, after reasonable
enquiry, of any further such documentation or information in its possession
and, in relation to the documentation which it has so disclosed, such
documentation governs the whole of the value of the Receivables or Insurances
to which it relates.

 

(d)           So far as each Chargor is aware (after due and careful enquiry) the
creation of a fixed charge over Receivables in accordance with Clause 2.1(b)
will not breach the contractual terms upon which such Receivables are based.

 

9

 

(e)           No Chargor has sold or agreed to sell or otherwise disposed of or
agreed to dispose of, the benefit of all or any of its rights, title, interest
and benefit in the Receivables (other than pursuant to the Facility Agreement),
the Amounts or the Insurances.

 

(f)            Each of the Receivables and Insurances is in
full force and legal effect, valid and binding on both parties thereto, with no
default having occurred thereunder or claim threatened, pending or subsisting
in respect thereof, and all premiums have been fully and timeously paid in
respect of the Insurances.

 

5.             UNDERTAKINGS AND GUARANTEE

 

5.1          Duration

 

The
undertakings in this Clause 5 shall remain in force throughout the Security
Period and are given by each Chargor to Burdale.

 

5.2          General

 

(a)           Facility Agreement:
The Company repeats the undertakings set out in Clause 14 of the Facility
Agreement as if they were set out in full in this Deed.

 

(b)           Book debts find receipts: Each Chargor shall collect and realise the following and, save to the
extent that Burdale otherwise agrees, pay the proceeds thus realised into the
Blocked Accounts (in the case of the Company) or an Other Account (in the case
of any other Chargor):

 

(i)            rent and other moneys due from tenants or
other occupiers of the Mortgaged Property;

 

(ii)           Book Debts and other moneys; and

 

(iii)          securities to the extent held by way of temporary investment,

 

and,
pending such payment into the Blocked Accounts or Other Account (as the case
may be), hold the proceeds thus realised upon trust for Burdale.

 

(c)           Covenant to perform:
Each Chargor shall continuously comply with the terms (both express and
implied) of this Deed and any contracts relating to the Secured Liabilities.

 

(d)           Notice to insurers:
Each Chargor shall, today, give notice to any relevant insurers in respect of
each policy of credit insurance to which such Chargor is party that the Chargor
has assigned those rights by way of security to Burdale in substantially the
form set out in Schedule 6 and shall use its reasonable endeavours to procure
that the relevant insurer acknowledges receipt of such notice in substantially the
form set out in Schedule 6 or such other form acceptable to Burdale in its
absolute discretion.

 

10

 

(e)           Restrictions on dealings: No Chargor shall:

 

(i)            create or permit to subsist any Encumbrance
of whatsoever nature on any
Security Asset other than a Permitted Encumbrance or as created by this Deed, or

 

(it)           sell, transfer, grant, lease or otherwise dispose of any Security
Asset, except for the disposal in the ordinary course of trade of any Security
Asset subject to the floating charge created by Clause 3.1 and except as
provided for under the Facility Agreement.

 

(f)            Provide information:
Each Chargor shall furnish to Burdale forthwith on demand by Burdale such
information and supply such documents or papers relating to the Security Assets
from time to time as Burdale may in its discretion reasonably require.

 

(g)           Debenture by Subsidiary:
The Company shall procure that any company incorporated in the United Kingdom
which may be or become a Subsidiary of the Company at any time during the
subsistence of this Deed shall provide in favour of Burdale such security in
such form as Burdale may in its discretion require but on terms no more onerous
than the terms of this Deed.

 

(h)           Shares of Subsidiary:
No Chargor shall permit any Subsidiary of the Company to issue any shares
except to the Company or to one of its other wholly owned Subsidiaries.

 

(i)            Dormant Subsidiaries:
If LEP (Bloodstock) Limited (Registered in England and Wales No.00654404). LEP
Project Services Limited (Registered in England and Wales No.01136199) and
Horse UK Limited (Registered in England and Wales No.02156451) (the “Dormant Subsidiaries”) are not dissolved and removed from
the register in accordance with S.652(1) of the Companies Act 1985 prior to 1
July 2000 then the Company shall procure in favour of Burdale such security
from the Dormant Subsidiaries in such form as Burdale may in its discretion
require but on terms no more onerous than the terms of this Deed.

 

5.3          Property

 

(a)           Access: At all
reasonable times, each Chargor shall permit Burdale and any person nominated by
it to enter and inspect any part of the Mortgaged Property or other Security
Asset.

 

(b)           Compliance with applicable laws: Each Chargor
shall perform all its obligations under any law or regulation in any way
affecting any Security Asset.

 

(c)           Deposit of Title Deeds:
Subject to the terms of the Deed
of Priorities, for the duration of the Security Period each Chargor shall
deposit with Burdale all deeds and documents of title relating to the Mortgaged
Property owned by it and any property comprised within Clause 5.3(e).

 

11

 

(d)           Development: No
Chargor shall:

 

(i)            make any application for planning permission
affecting any part of the Mortgaged Property or other Security Asset except
with the previous written consent of Burdale, or

 

(ii)           carry out any development on any part of the Mortgaged Property or
other Security Asset except with the previous written consent of Burdale (for
the purposes of this sub-clause development shall be defined as in the Planning
Acts as that for which the permission of the local planning authority is
required).

 

(e)           Future Acquisitions and Legal Mortgage: Each Chargor shall:

 

(i)            notify Burdale immediately upon the
acquisition by it of any freehold or leasehold or other interest in property
(and for the purposes of this Clause 5.3(e) the date of exchange of contracts
for such an acquisition shall be deemed the date of acquisition):

 

(ii)           at its cost, execute and deliver to Burdale, on demand, a legal
mortgage (on terms no more onerous than the terms of this Deed) in favour of
Burdale of any freehold or leasehold or other interest in property which
becomes vested in it after the date of this Deed; and

 

(iii)          in any event, if applicable, give H.M. Land Registry written notice of
this Deed and procure that notice of it be duly noted in the Registers to each
such title.

 

(f)            Insurance: Each
Chargor shall effect, in a form and with an insurance company or underwriters
acceptable to Burdale insurance of the Security Assets in accordance with the
terms of the Facility Agreement.

 

(g)           Investigation of Title:
Upon request, each Chargor shall grant Burdale or its lawyers all facilities
within its powers to enable Burdale or its lawyers to carry out such
investigations of title to and enquiries into the Mortgaged Property or other
Security Asset as may be carried out by a prudent mortgagee.

 

(h)           Lease and covenant compliance: Each Chargor shall;

 

(i)            perform all the terms on its pan contained in
any lease or agreement for lease comprising the Mortgaged Property or to which
the Mortgaged Property is subject;

 

(ii)           not do anything as a result of which any lease or agreement for lease
comprising Mortgaged Property or to which the Mortgaged Property is subject may
become forfeit or otherwise determinable;

 

(iii)          properly perform (and indemnify Burdale for any breach of) any
covenants and stipulation of whatsoever nature affecting the Mortgaged Property.

 

12

 

(i)            Notices: Within 10 days after the receipt by a Chargor of
any application, requirement, order or notice served or given by any public,
local or other authority relating to any Security Asset, such Chargor shall;

 

(i)            deliver
a copy to Burdale; and

 

(ii)           inform
Burdale of the steps taken or proposed to be taken by way of compliance.

 

(j)            Power to Remedy: In case of default by any Chargor in
performing any obligation or other covenant affecting the Mortgaged Property or
other Security Asset, each Chargor shall permit Burdale or its agents and
contractors:

 

(i)            to
enter on the Mortgaged Property or other Security Asset;

 

(ii)           to
comply with or object to any notice served on any Chargor relating to the
Mortgaged Property or other Security Asset; and

 

(iii)          to
take any action Burdale may reasonably consider expedient to prevent or remedy
any breach of any such term or to comply with or object to any such notice.

 

(k)           Repair: Each Chargor shall, and shall procure that each other
Chargor shall, keep:

 

(i)            the
Premises in good and substantial repair and condition and decorative order, and

 

(ii)           the
Fixtures and other plant, machinery, implements and other effects belonging to
it in a good state of repair, working order and condition.

 

Without prejudice to
Clause 5.3(k), if the Chargor fails to repair any damage, within 6 months of
its occurrence, to the satisfaction of Burdale, Burdale may, but shall not be
obliged and without liability, take any of the steps referred to in Clause
5.3(j).

 

(l)            Rental Income: Each Chargor shall, at the request of Burdale
at any time following the occurrence of an Event of Default and whilst the same
is continuing, serve notice of the assignment in Clause 2.2(a) upon the
relevant lessees or occupants of the Mortgaged Property in such form as Burdale
(acting reasonably) may require.

 

5.4          Deposit
of securities and registration

 

(a)           Each
Chargor shall forthwith deposit with Burdale or as Burdale may direct all
bearer instruments, share certificates and other documents of title or evidence
of ownership in relation to such Group Shares as  are owned by it
or in which it has or acquires an interest and their Related Rights and shall
execute and deliver to Burdale all such share transfers and other documents as
may be requested by

 

13

 

Burdale
in order to enable Burdale or its nominees to be registered as the owner or
otherwise to obtain a legal title to the same (at any time after the occurrence
of an Event of Default and whilst the same is continuing) and, without limiting
the generality of the foregoing, shall deliver to Burdale on today’s date
executed (and; if required to be stamped, pre-stamped) share transfers for all
Group Shares in favour of Burdale and/or its nominee(s) as transferees or, if
Burdale so directs, with the transferee left blank and shall procure that all
such share transfers are at the request of Burdale (at any time after the
occurrence of an Event of Default and whilst the same is continuing) forthwith
registered by the relevant company and that share certificates in the name of
Burdale and/or such nominee(s) in respect of all Group Shares are forthwith
delivered to Burdale.

 

(b)           Each Chargor shall provide Burdale with certified copies of all
resolutions and authorisations approving the execution of such transfer forms
and registration of such transfers as Burdale may reasonably require.

 

(c)           Burdale and its nominee may at any time after an Event of Default has
occurred and is continuing or in any other instance where Burdale is of the
reasonable opinion that it is necessary for the avoidance of an Event of
Default or necessary for the protection of its material interests exercise or
refrain from exercising (in the name of each Chargor, the registered holder or
otherwise and without any further consent or authority from each Chargor and
irrespective of any direction given by any Chargor) in respect of the Security
Shares any voting rights and any powers or rights under the terms of the Security
Shares or otherwise which may be exercised by the person or persons in whose
name or names the Security Shares are registered or who is the holder thereof,
including, without limitation, all the powers given to trustees by Section
10(3) and (4) of the Trustee Act 1925 as amended by Section 9 of the Trustee
Investments Act 1961 in respect of securities or property subject to a trust
PROVIDED THAT in the absence of notice from Burdale each Chargor may and shall
continue to exercise any and all voting rights with respect to the Group Shares
subject always to the terms of this Deed. No Chargor shall without the previous
consent in writing of Burdale exercise the voting rights attached to any of the
Group Shares in favour of resolutions having the effect of changing the terms
of the Group Shares (or any class of them) or any Related Rights or prejudicing
the security under this Deed or impairing the value of the Security
Shares.  Each Chargor hereby irrevocably
appoints Burdale or its nominees its proxy to exercise (as provided in or
permitted by this Deed) all voting rights so long as the Group Shares remain
registered in the names of the Chargors.

 

(d)           Each Chargor during the continuance of this security will make all
payments which may become due in respect of any of the Security Shares and, in
the event of default in making any such payment, Burdale may if it thinks fit
make such payment on behalf of each Chargor. Any sums so paid by Burdale shall
be repayable by the relevant Chargor to Burdale on demand and pending such
repayment shall constitute part of the Secured Liabilities.

 

(e)           It is expressly agreed that, notwithstanding anything to the contrary
contained in this Deed, each Chargor shall remain liable to observe and perform
all of the conditions and obligations assumed by it in respect of the Security
Shares and

 

14

 

Burdale
shall not be under any obligation or liability by reason of or arising out of
the security over the Security Shares conferred by this Deed. Burdale shall not
be required in any manner to perform or fulfil any obligation of any Chargor in
respect of the Security Shares, or to make any payment, or to receive any
enquiry as to the nature or sufficiency of any payment received by them, or to
present or file any claim or take any other action to collect or enforce the
payment of any amount to which they may have been or to which they may be
entitled under this Deed at any time or times.

 

(f)            Upon the occurrence of an Event of Default
and at any time thereafter while the same is continuing Burdale shall be
entitled to put into force and exercise immediately as and when it may see fit
any and every power possessed by Burdale by virtue of the security over the
Security Shares conferred by this Deed or available to a secured creditor (so
that Sections 93 and 103 of the Law of Property Act 1925 shall not apply to
this security) and in particular (without limitation):

 

(i)            to sell all or any of the Security Shares in
any manner permitted by law upon such terms as Burdale shall in its absolute
discretion determine;

 

(ii)           to collect, recover or compromise and give a good discharge for any
moneys payable to any Chargor in respect of the Security Shares or in
connection therewith; and

 

(iii)          to act generally in relation to the Security Shares in such manner as
Burdale acting reasonably shall determine.

 

For
the avoidance of doubt, each Chargor agrees that the enforceability of the
security over the Security Shares conferred by this Deed is not dependent on
the performance or non-performance by Burdale of its obligations under any
agreement with any Chargor.

 

(g)           Immediately on conversion of any of the Group Shares from certificated
to uncertificated form, and on the creation or conversion of any other securities
which are for the time being comprised in the Security Shares in or into
uncertificated form, each Chargor shall give such instructions or directions as
Burdale may require in order to protect or preserve its security.

 

(h)           Each Chargor shall, immediately upon receipt of any certificate or
other document evidencing any entitlement to further Security Shares, deposit
it with Burdale together with such share transfer forms in blank and other
documents as Burdale may require.

 

15

 

5.5          Opening of Accounts and Collection of
Receivables

 

(a)           Forthwith
upon the execution of this Deed, the Company shall open the Blocked Accounts,
and the Chargors shall maintain the Other Accounts and execute all deeds and
documents and do all other acts and things required by Burdale in connection
with them and the Chargors shall maintain such accounts throughout the
maintenance of this security.

 

(b)           Forthwith
upon the execution of this Deed, the Company shall serve notice upon the
Account Bank at which the Blocked Accounts are opened (in respect of the
Blocked Accounts) in substantially the form set out in Part I of Schedule 3 and
the Chargors shall serve notice upon each Account Bank at which any Other
Account is held (in respect of such Other Account(s)) in substantially the form
set out in Part II of Schedule 3, and shall use all reasonable endeavours to
procure the relevant Account Bank returns the acknowledgement in substantially
the form set out in the relevant Part of Schedule 3 or such other form
acceptable to Burdale in its absolute discretion.

 

(c)           Until
the security constituted by this Deed is discharged, each Chargor shall:

 

(i)            get
in and realise all Receivables in the ordinary course of its business save that
the expression “in the ordinary course of its business” shall not include or
extend to the selling or assigning or in any other way factoring or discounting
any Receivable save as permitted in this Deed;

 

(ii)           forthwith
upon the date of this Deed, pay the proceeds or procure the paying of proceeds
of such getting in and realisation directly into the Blocked Accounts (in the
case of the Company) or an Other Account (in the case of the other Chargors);
and

 

(iii)          maintain
no other bank accounts save for the Charged Accounts.

 

5.6          Operation of Blocked
Accounts

 

(a)           Until
the security constituted by this Deed is discharged, the Company shall not be
entitled to withdraw the whole or any part of the Blocked Amounts and shall
not, subject to paragraph (b) below, take any action, claim or proceedings
against Burdale or any other party for the return or payment to any person of
the whole or any part of the Blocked Amounts.

 

(b)           The
Company agrees that until the security constituted by this Deed is discharged,
Burdale shall be able to withdraw on a daily basis all deposits made into the
Blocked Accounts provided that the amount so withdrawn is credited to Burdale’s
loan account and applied towards the Secured Liabilities and the Company shall
direct the Blocked Bank to transfer the cleared balance of the Blocked Accounts
to such account as Burdale shall specify for the purpose from time to time at
the end of each Business Day.

 

16

 

(c)           Upon
the occurrence, and during the continuance of an Event of Default, Burdale
shall have the exclusive right to apply and determine the application of any
and all of the Blocked Amounts in or towards satisfaction of the Secured
Liabilities, whether by transfer into the Burdale’s loan account or otherwise.

 

5.7          Operation
of Other Accounts

 

Other than on the
occurrence, and during the continuance of a Default the Chargors shall be
entitled to operate the Other Accounts and shall be entitled to withdraw the
whole or any part of the Other Amounts PROVIDED THAT:

 

(a)           the
Other Accounts each retain a credit or zero balance at all times;

 

(b)           the
Chargors shall not and shall procure that no other person shall deposit or
transfer any monies into the Other Accounts other than those transferred from
the Blocked Accounts or any Other Account; and

 

(c)           the
Chargors shall not at any time transfer the whole or any part of the Other
Amounts to any other bank account other than to another Charged Account or to
the extent permitted under the Facility Agreement.

 

5.8          Receivables

 

(a)           Each
Chargor shall, upon a Default which is continuing, in respect of Assignable
Receivables then in existence serve notice of the assignment contained in
Clause 2.2 upon the relevant Account Debtor by written notice in substantially
the form set out in Part I of Schedule 7 and, in respect of Assignable Accounts
Receivable created after a Default, serve notice of the assignment contained in
this Clause by a notice, in the form set out in Part I of Schedule 7 on the
invoice itself forthwith upon the creation of such Receivable.

 

(b)           With
respect to any Unassignable Receivables coming into existence after the date of
this Deed, each Chargor shall, upon a Default which is continuing, in respect
of Unassignable Receivables then in existence serve notice of the charge
contained in Clause 2.1(b) upon the relevant Account Debtor in substantially
the form set out in Part I of Schedule 7 and, in respect of Unassignable
Receivables created after such a Default shall serve notice of the charge contained
in Clause 2.1(b) upon the relevant Account Debtor forthwith upon the creation
of such Receivable by notice in substantially the form Part I of Schedule 7 on
the invoice itself.

 

(c)           Each
Chargor covenants to Burdale that it will use its best endeavours to obtain the
necessary consents from the Account Debtors in respect of Unassignable
Receivables to the assignment contained in Clause 2.2 and where a Default which
is continuing has occurred shall forthwith upon obtaining such consents, serve
upon the relevant Account Debtors a written notice substantially in the form
set out in Part II of Schedule 7.

 

17

 

(d)           Each
Chargor covenants to Burdale that it will not serve upon any Account Debtor any
notice whose terms conflict with those of the notices in Schedule 7 until the
security constituted by this Deed has been released by Burdale.

 

5.9          Receivables,
Amounts and Insurances

 

Each Chargor undertakes to Burdale that:

 

(a)           subject
as otherwise provided in this Deed, it shall not take any action claim or
proceeding against Burdale or any other party for the return or payment to any
person of the Charged Accounts or the Amounts or any part thereof or permit
third party rights to arise over any of its rights, title, interest and benefit
in the Receivables (other than under the Facility Agreement), the Amounts or
the Insurance Policies or any part thereof, or attempt or agree so to do save
for Permitted Encumbrances;

 

(b)           it
shall not withdraw the whole or any part of the Amounts, or deal in any other
way with the Receivables, the Amounts or the Insurances except as provided in
this Deed;

 

(c)           subject
as otherwise provided in this Deed it shall not sell, release, exchange,
compound, set-off, assign, transfer, discount, charge or otherwise dispose of
or agree to sell, release, exchange, compound, set-off, assign, transfer,
discount, charge or otherwise dispose of or deal with any of its rights, title,
benefit and interest whether present or future in Receivables, the Amounts or
the Insurances nor do or omit to do anything which may delay or prejudice the
right of Burdale to utilise, withdraw, transfer or set-off the Receivables, the
Amounts or the Insurances in accordance with the provisions of this Deed
without prejudice to the foregoing, shall not without the prior written consent
of Burdale, settle or give credit against any Receivable or any Insurance and
shall deliver to Burdale on a weekly basis until the Secured Liabilities have
been irrevocably discharged in full, a schedule of all settlements and credit
proposed to be given by it, which Schedule shall set out the amount of the
invoice, the proposed amount of the settlement and/or credit and the name of
the debtor; and

 

(d)           it
shall do all such things and execute all such assignments charges authorities
and documents as Burdale may from time to time reasonably require to enable
Burdale to utilise, withdraw, transfer or set-off the Receivables, the Amounts
and the Insurances in accordance with the terms of this Deed, such documents to
be prepared by or on behalf of Burdale at the cost of the Company in such form
as Burdale may reasonably require.

 

5.10        Guarantee
and Indemnity

 

Each Chargor guarantees on the terms set out in Schedule 8 the
obligations of the Obligors under the Finance Documents.

 

18

 

6.             DEFAULT

 

6.1          Events of Default

 

Each of the events set out in Clause 15 of
the Facility Agreement is an Event of Default (howsoever caused).

 

6.2          Acceleration

 

On
and at any time after the occurrence of an Event of Default and at any time
whilst the relevant Event of Default is continuing Burdale may by notice to the
Chargors demand that all or part of the Secured Liabilities, together with
accrued interest and all other amounts accrued be immediately due and payable,
and upon the giving of such notice they shall become immediately due and
payable.

 

7.             WHEN SECURITY BECOMES ENFORCEABLE

 

The
security constituted by this Deed shall become immediately enforceable and the
power of sale and other powers conferred by section 101 of the Law of Property
Act 1925, as varied or amended by this Deed, shall be immediately exercisable
upon and at any time after the occurrence of any Event of Default which is
continuing after which Burdale may in its absolute discretion enforce all or
any part of the security in any manner it sees fit.

 

8.             ENFORCEMENT OF SECURITY

 

8.1          General

 

(a)           For the purposes of all powers implied by statute, the Secured
Liabilities are deemed to have become due on the date of this Deed.

 

(b)           Section 103 of the Law of Property Act (restricting the power of sale)
and section 93 of the Law of Property Act 1925 (restricting the right of
consolidation) do not apply to the security constituted by this Deed.

 

(c)           The statutory powers of leasing conferred on Burdale are extended so
that, without the need to comply with any provision of section 99 or 100 of the
Law of Property Act 1925, Burdale is empowered to lease, make agreements for
leases, accept surrenders of leases and grant options as Burdale may think fit.

 

8.2          Agent of the Chargors

 

For
all purposes each Receiver is deemed to be the agent of the relevant Chargor
and to be in the same position as a Receiver duly appointed by a mortgagee
under the Law of Property Act 1925. The relevant Chargor alone shall be
responsible for the receiver’s contracts, engagements, commissions, omissions,
defaults and losses and for liabilities incurred by him. Burdale shall not
incur any liability of whatsoever nature (either to the Chargors or to any
other person) by reason of Burdale making his appointment as a Receiver or for
any other reason.

 

19

 

8.3          Contingencies

 

If
Burdale enforces the security constituted by this Deed at a time when no amounts
are due to Burdale under the Finance Documents but at a time when amounts may
or will become so due. Burdale (or the Receiver) may pay the proceeds of any
recoveries effected by it into the Blocked Accounts (in the case of the
Company) or an Other Account (in the case of any other Chargor).

 

8.4          Mortgagee in Possession - No Liability

 

Neither
Burdale nor any Receiver or Manager will be liable, by reason of entering into
possession of a Security Asset, to account as mortgagee in possession or for
any loss on realisation or for any default or omission for which a mortgagee in
possession might otherwise be liable.

 

8.5          Privileges

 

Each
Receiver and Burdale is entitled to all the rights, powers, privileges and
immunities conferred by the Law of Property Act 1925 on mortgagees and
receivers when such receivers have been duly appointed under that Act, except
that section 103 of that Act does not apply.

 

8.6          Protection of third parties

 

No
person (including a purchaser) dealing with Burdale or a Receiver or its or his
agents need enquire:

 

(a)           whether the Secured Liabilities have become payable; or

 

(b)           whether any power purported to be exercised has become exercisable; or

 

(c)           whether any money remains due; or

 

(d)           how any money paid to Burdale or to the Receiver is to be applied.

 

8.7          Redemption of prior Mortgages

 

At
any time after the security constituted by this Deed has become enforceable,
Burdale may, at the sole cost of the Chargors (payable to Burdale on demand):

 

(a)           redeem any prior form of security against any Security Asset; and/or

 

(b)           procure the transfer of that form of security to itself; and/or

 

(c)           settle and pass the accounts of any prior mortgagee, chargee or
encumbrancer which once so settled and passed shall be conclusive and binding
on the Chargors.

 

20

 

9.             RECEIVER

 

9.1          Appointment of Receiver

 

(a)           At any time after the security constituted by
this Deed becomes enforceable, or, at any time if so requested by any Chargor
in writing, without further notice Burdale may appoint under seal or in writing
under its hand any one or more qualified persons to be a Receiver of all or any
part of the Security Assets as if Burdale had become entitled under the Law of
Property Act 1925 to exercise the power of sale conferred under that Act.

 

(b)           In this Deed “qualified person”
means a person who, under the Insolvency Act 1986, is qualified to act as a
receiver of the property of any company with respect to which he is appointed
or as an administrative receiver of any such company.

 

9.2          Relationship with Burdale

 

To
the fullest extent permitted by law, any right, power or discretion conferred
by this Deed (be it express or implied) upon a Receiver of any Security Assets
may, after the security created by this Deed has become enforceable, be
exercised by Burdale in relation to any Security Asset either:

 

(a)           without first appointing a Receiver; or

 

(b)           notwithstanding the appointment of a Receiver.

 

9.3          Removal

 

Burdale
may by writing under its hand (subject to any requirement for any order of the
court in the case of an administrative receiver):

 

(a)           remove any Receiver appointed by it; and

 

(b)           whenever it deems it expedient, appoint a new Receiver in the place of
any Receiver whose appointment may for any reason have terminated.

 

9.4          Remuneration

 

Burdale may fix the remuneration of any
Receiver appointed by it.

 

10.          POWERS OF RECEIVER

 

10.1        General

 

(a)           In addition to those conferred by the Law of Property Act 1925 on any
receiver appointed under that Act, each Receiver has, and is entitled to
exercise, all of the rights, powers and discretions set out below in this
Clause 10.

 

21

 

(b)           If there is more than one Receiver holding office at the same time,
unless the document appointing him states otherwise, each Receiver may exercise
all of the powers conferred on a Receiver under this Deed individually and to
the exclusion of any other Receivers.

 

(c)           A Receiver who is an administrative receiver of a Chargor has all the
rights, powers and discretions of an administrative receiver under the
Insolvency Act 1986.

 

(d)           A Receiver may, in the name of the relevant Chargor if he so wishes:

 

(i)            do all other acts and things which he may
consider expedient for realising any Security Asset or incidental or conducive
to any of the rights, powers or discretions conferred on a Receiver under or by
virtue of this Deed; and

 

(ii)           exercise in relation to any Security Asset all the powers, authorities
and things which he would be capable of exercising as if he were its absolute
beneficial owner.

 

10.2        Borrow Money

 

A
Receiver may raise and borrow money (either unsecured or on the security of any
Security Asset, either in priority to the security constituted by this Deed or
otherwise) on any terms and for whatever purpose which he thinks fit. No person
lending that money need enquire as to the propriety or purpose of the exercise
of that power or to check the application of any money so raised or borrowed.

 

10.3        Carry on Business

 

A
Receiver may carry on the business of any relevant Chargor as he thinks fit.

 

10.4        Compromise

 

A
Receiver may settle, adjust, refer to arbitration, compromise and arrange any
claims, accounts, disputes, questions and demands with or by any person who is
or claims to be a creditor of the relevant Chargor or relating in any way to
any Security Asset.

 

10.5        Delegation

 

A
Receiver may delegate his powers in accordance with Clause 13.

 

10.6        Employees

 

For
the purposes of this Deed, a Receiver may:

 

(a)           appoint and discharge managers, officers, agents, accountants,
servants, workmen and others upon such terms as to remuneration or otherwise as
he may think proper; and

 

(b)           discharge any such persons appointed by the relevant Chargor.

 

22

 

10.7        Leases

 

A
Receiver may let any Security Asset for any term and at any rent (with or
without a premium) which he thinks proper and may accept a surrender of any
lease or tenancy of any Security Asset on any terms which he thinks fit
(including the payment of money to a lessee or tenant on a surrender).

 

10.8        Legal actions

 

A
Receiver may bring, prosecute, enforce, defend and abandon all actions, suits
and proceedings in relation to any Security Asset as he considers expedient.

 

10.9        Possession

 

A
Receiver may take immediate possession of, get in and collect any Security
Asset.

 

10.10      Protection
of Assets

 

A
Receiver may, in each case as he may think fit:

 

(a)           make and effect all repairs and insurances and do all other acts which
the relevant Chargor might do in the ordinary conduct of its business be they
for the protection or for the improvement of the Security Assets;

 

(b)           commence and/or complete any building operations on the Mortgaged
Property or other Security Asset; and

 

(c)           apply for and maintain any planning permission, building regulation
approval or any other permission, consent or licence.

 

10.11      Receipts

 

A
Receiver may give valid receipts for all moneys and execute all assurances and
things which may be expedient for realising any Security Asset.

 

10.12      Sale of assets

 

A
Receiver may sell, exchange, convert into money and realise any Security Asset
by public auction or private contract in any manner and on any terms which he
thinks proper. The consideration for any such transaction may consist of cash,
debentures or other obligations, shares, stock or other valuable consideration
and any such consideration may be payable in a lump sum or by instalments
spread over such period as he thinks fit. Fixtures may be severed and sold
separately from the property containing them without the consent of the
relevant Chargor.

 

23

 

10.13      Subsidiaries

 

A
Receiver may form a subsidiary of the relevant Chargor and transfer to that
subsidiary any Security Asset.

 

11.          APPLICATION OF PROCEEDS

 

Any
moneys received by Burdale or any Receiver after this Deed has become
enforceable shall be applied in the following order of priority (but without
prejudice to the right of Burdale to recover any shortfall from the Chargors):

 

(a)           in satisfaction of or provision for all costs and expenses incurred by
Burdale or any Receiver and of all remuneration due to any Receiver under this
Deed;

 

(b)           in or towards payment of the Secured Liabilities or such part of them
as is then due and payable to Burdale, and

 

(c)           in payment of the surplus (if any) to any Chargor or other person
entitled to it.

 

12.          EXPENSES
AND INDEMNITY

 

Immediately
upon demand, each Chargor shall pay all other costs and expenses (including legal
fees and VAT) incurred from time to time in connection with the enforcement of
or preservation of rights under this Deed by Burdale, or any Receiver,
attorney, manager, agent or other person appointed by Burdale under this Deed
or by statute, and keep each of them indemnified against any failure or delay
in paying the same.

 

13.          DELEGATION

 

Burdale
and any Receiver may delegate by power of attorney or in any other manner to
any person any right, power or discretion exercisable by Burdale under this
Deed. Any such delegation may be made upon the terms (including power to
sub-delegate) and subject to any regulations which Burdale or such Receiver (as
the case may be) may think fit. Neither Burdale nor any Receiver will be in any
way liable or responsible to any Chargor for any loss or liability arising from
any act, default, omission or misconduct on the part of any such delegate or
sub-delegate.

 

14.          FURTHER ASSURANCES

 

Each
Chargor shall, at its own expense, take whatever action (including payment of
all stamp duties and other registration fees) Burdale or a Receiver may
reasonably require for:

 

(a)           perfecting or protecting the security intended to be created by this
Deed over any Security Asset; and

 

(b)           facilitating the realisation of any Security Asset or the exercise of
any right, power or discretion exercisable, by Burdale or any Receiver or any
of its or their delegates or sub-delegates in respect of any Security Asset,
including the execution of any

 

24

 

transfer,
conveyance, assignment or assurance of any property whether to Burdale or to
its nominees, and the giving of any notice, order or direction and the making
of any registration, which in any such case, Burdale may think expedient.

 

15.          POWER OF ATTORNEY

 

Each
Chargor, by way of security, irrevocably and severally appoints Burdale, each
Receiver and any of their delegates or sub-delegates to be its attorney to take
any action which such Chargor is obliged to take under this Deed. Each Chargor
ratifies and confirms whatever any attorney does or purports to do pursuant to
its appointment under this Clause.

 

16.          MISCELLANEOUS

 

16.1        Additional Security

 

The
security constituted by this Deed is in addition to and is not in any way
prejudiced by any other security now or subsequently held by Burdale for any of
the Secured Liabilities.

 

16.2        Continuing Security

 

The
security constituted by this Deed is continuing and will extend to the ultimate
balance of all the Secured Liabilities, regardless of any intermediate payment
or discharge in whole or in part.

 

16.3        Covenant
to pay

 

Each
Chargor shall pay or discharge the Secured Liabilities in the manner provided
for in any document creating or evidencing the Secured Liabilities and/or
otherwise as agreed from time to time.

 

16.4        H.M. Land Registry

 

Each
Chargor applies to the Chief Land Registrar for a restriction in the following
terms to be entered on the Register of Title relating to any property
registered at H.M. Land Registry in its name and against which this Deed may be
noted:

 

“Except
under an order of the Registrar, no disposition or dealing by the proprietor of
the land is to be registered without the consent of the proprietor for the time
being of the Deed dated         March 2000
between, amongst others, [the relevant Chargor] and Burdale Financial Limited.”

 

16.5        New Accounts

 

If
Burdale receives, or is deemed to be affected by, notice, whether actual or
constructive, of any subsequent charge or other interest affecting any Security
Asset and/or the proceeds of sale of any Security Asset, Burdale may open a new
account with any Chargor. If Burdale does not open a new account, it shall
nevertheless be treated as

 

25

 

if
it had done so at the time when it received or was deemed to have received
notice. As from that time all payments made to Burdale will be credited or be
treated as having been credited to the new account and wilt not operate to
reduce any amount for which this Deed is security.

 

16.6        Tacking

 

Burdale
covenants with each Chargor that it shall perform its obligations under any
document creating or evidencing the Secured Liabilities (including any
obligation to make available further advances).

 

17.          RELEASE

 

Upon
the expiry of the Security Period (but not otherwise), Burdale shall, at the
request and cost of the Chargors, take whatever action is necessary to release
the Security Assets from the security constituted by this Deed and/or reassign
the benefit of the Security Assets to the Chargors.

 

18.          NOTICES

 

18.1        Delivery and Receipt

 

All
notices pertaining to this Deed shall be given in writing or facsimile and
shall be deemed to be given as follows:

 

(a)           if in writing, when delivered; and

 

(b)           if by facsimile, when received.

 

save
that any notice delivered or received on a non-working day or after business
hours shall be deemed to be given on the next working day at the place of
delivery or receipt.

 

18.2        Addresses

 

(a)           The Chargors’ respective addresses and facsimile numbers for notices
are as set out in Schedule I.

 

(b)           Burdale’s address and facsimile number for notices are:

 

	
  53 Queen Anne Street

  	
   

  	
   

  
	
  London W1M 0HP

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Facsimile no:

  	
   

  	
  020 7935 5445

  
	
  For the attention of:

  	
   

  	
  Company Secretary

  

 

or
such as Burdale may notify to the Chargors by not less than 10 days’ notice.

 

26

 

19.          GOVERNING
LAW

 

This Deed is governed by
English law and the parties submit to the non-exclusive jurisdiction of the
English courts.

 

This Deed has been entered into as a deed on the date
stated at the beginning of this Deed.

 

27

 

SCHEDULE 1

The Chargors

 

The Company

 

GEOLOGIST1CS LIMITED

 

	
  Registered Number:

  	
  00112456

  
	
   

  	
   

  
	
  Address:

  	
  Royal Court

  
	
   

  	
  81 Tweedy Road

  
	
   

  	
  Bromley

  
	
   

  	
  Kent

  
	
   

  	
  BR1 1TW

  
	
   

  	
   

  
	
  Facsimile No:

  	
  020 8626 6855

  
	
  Attention:

  	
  David Lund

  
	
   

  	
   

  
	
   

  	
   

  
	
  The other Chargors

  
	
   

  
	
  ACI INC. LIMITED

  
	
   

  	
   

  
	
  Registered Number:

  	
  01707113

  
	
   

  	
   

  
	
  Address:

  	
  Royal Court

  
	
   

  	
  81 Tweedy Road

  
	
   

  	
  Bromley

  
	
   

  	
  Kent

  
	
   

  	
  BR1 1TW

  
	
   

  	
   

  
	
  Facsimile No:

  	
  020 8626 6855

  
	
  Attention:

  	
  David Lund

  
	
   

  	
   

  
	
   

  	
   

  
	
  LEP
  TRANSPORT LIMITED

  
	
   

  	
   

  
	
  Registered Number:

  	
  01822696

  
	
   

  	
   

  
	
  Address:

  	
  Royal Court

  
	
   

  	
  81 Tweedy Road

  
	
   

  	
  Bromley

  
	
   

  	
  Kent

  
	
   

  	
  BR1 1TW

  
	
   

  	
   

  
	
  Facsimile No:

  	
  020 8626 6855

  
	
  Attention:

  	
  David Lund

  

 

28

 

GEOLOGISTICS EXPO SERVICES LIMITED

 

	
  Registered Number:

  	
  00862896

  
	
   

  	
   

  
	
  Address:

  	
  Royal Court

  81 Tweedy Road

  Bromley

  Kent

  BR1 1TW

  
	
   

  	
   

  
	
  Facsimile No:

  	
  020 8626 6855

  
	
   

  	
   

  
	
  Attention:

  	
  David Lund

  

 

or in each case, such other address or facsimile number as a Chargor may
notify to Burdale by not less than 10 days’ notice.

 

29

 

SIGNATORIES

 

 

	
  The Company

  	
   

  
	
   

  	
   

  
	
  Executed as a deed by

  	
   

  
	
  GEOLOGISTICS LIMITED

  	
   

  
	
  acting by two of its directors

  	
   

  
	
  or one director and its secretary

  	
  /s/ GEORGE PAPAGEORGHIOU

  	
   

  
	
   

  	
  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ DAVID LUND

  	
   

  
	
   

  	
  Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
  The other Chargors

  	
   

  
	
   

  	
   

  
	
  Executed as a deed by

  	
   

  
	
  ACI INC. LIMITED

  	
   

  
	
  acting by two of its directors

  	
   

  
	
  or one director and its secretary

  	
  /s/ GEORGE PAPAGEORGHIOU

  	
   

  
	
   

  	
  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ DAVID LUND

  	
   

  
	
   

  	
  Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
  Executed as a deed by

  	
   

  
	
  LEP TRANSPORT LIMITED

  	
   

  
	
  acting by two of its directors

  	
   

  
	
  or one director and its secretary

  	
  /s/ GEORGE PAPAGEORGHIOU

  	
   

  
	
   

  	
  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ DAVID LUND

  	
   

  
	
   

  	
  Secretary

  

 

30

 

	
  Executed as a deed by

  	
   

  
	
  GEOLOGISTICS
  EXPO SERVICES LIMITED

  	
   

  
	
  acting by two of its
  directors

  	
   

  
	
  or one director and its
  secretary

  	
  /s/ GEORGE PAPAGEORGHIOU

  	
   

  
	
   

  	
  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ DAVID LUND

  	
   

  
	
   

  	
  Secretary

  
	
  Burdale

  	
   

  
	
   

  	
   

  
	
  BURDALE
  FINANCIAL LIMITED

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ [ILLEGIBLE]

  	
   

  	
  By:

  	
  /s/ [ILLEGIBLE]

  	
   

  
						

 

31LETTER OF COMMITMENT BETWEEN

EXHIBIT 10.1

LETTER OF COMMITMENT BETWEEN

York International Corporation

Unitary Products Group

&

PowerCold ComfortAir Solutions, Inc.

This Letter of Commitment ("Letter") is entered into this 9th day of August, 2004 ("Effective Date"), by and between York International Corporation, Unitary Products Group (“York”) and PowerCold ComfortAir Solutions, Inc. (“PowerCold”), which parties are collectively referred to herein as the "Companies."

PowerCold desires to use and promote the commercial HVAC products of York to specific customers and accounts, all in accordance with the terms of this Letter.

York agrees to supply equipment and provide other support to PowerCold in connection with certain customers and accounts, all in accordance with the terms of this Letter.

For and in consideration of Ten Dollars ($10.00), the mutual obligations as set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Companies hereby agree as follows:

1.

COMMITMENT.

1.1

PowerCold agrees that it will use its best commercial efforts to promote York commercial HVAC products ("York Products") for sale to the customers and accounts set out on the attached Exhibit "A" ("Target Customers") as amended or added to from time to time.

1.2

York agrees to provide PowerCold with York Products and related performance software for the Target Customers in accordance with the terms of this Letter. In addition, York agrees to provide PowerCold with promotional literature, specifications and electronic product presentations to the extent reasonably necessary to support PowerCold's promotion and utilization of York Products to the Target Customers.  York also agrees that it will provide plant tours for the Target Customers and will participate in joint sales calls with PowerCold to the Target Customers to the extent reasonably necessary to support PowerCold's promotion and utilization of York Products to the Target Customers.

2.

TERM.  Unless sooner terminated as set out below, this Letter shall be in effect for a period of five (5) years commencing on the Effective Date ("Term"). Every twelve (12) months following the Effective Date of this Letter, York and PowerCold will meet to review the previous year’s progress and formulate a joint business plan ("Plan") for the following year ("Business Year").  When developing the Plan for the following year, the Companies will discuss and negotiate in good faith.  This agreement may be terminated by either party with sixty (60) days written notice. All quotations, customer purchase orders, or open orders will be honored for six (6) months from the date of written notification of termination.  York will not sell direct to the Target Customers for six (6) months from the date of written notification of termination.

3.

DIRECT ACCESS.  Notwithstanding anything in this Letter, York shall have the right to maintain access to the Target Customers and the Target Customer's sales representatives and distributors to develop and maintain customer loyalty to York Products and to maintain an intimate understanding of the customer’s changing needs. It is also agreed that this Letter is not intended to limit or prohibit York's right to sell its products in any way and that York shall always have the right to sell its entire product line to all customers, except Target Customers, through existing or any other sales channels.  York does agree to notify PowerCold in advance of visiting any Target Customer and PowerCold may or may not attend the meeting based solely upon PowerCold’s discretion.

4.

MARKETING EFFORTS.  It is understood that PowerCold will maintain a product neutral stance in its HVAC business, pursuing the best alternative of product and service solutions for its customers. However, PowerCold agrees to exclusively sell York Products to the Target Customers.

5.

PRICING.  The pricing for the York Products to be sold by PowerCold in accordance with this Letter will be based upon, agreed to Target Customer price schedule, then current market levels and / or other competitive factors as determined by York.  On a customer specific basis and upon PowerCold's request, York will supply PowerCold with up-to-date pricing for York Products.  However, it is understood that in some instances a competitor may choose to engage in predatory pricing for specific Target Customers that may result in pricing below acceptable profit margins.  PowerCold will provide York Notice of such predatory pricing issues at which time the Companies will consult and attempt to negotiate an acceptable price for such Target Customer; provided, however that nothing shall obligate the Companies to negotiate a price which is less than that set in the first sentence of this Section 5.  The Companies' prior written approval is required for any price below accepted profit margins.  Except as set out above, the pricing for the York Products to PowerCold for the Target Customers shall be firm.

6.

SERVICE & INSTALLATION.  PowerCold has installation and service capabilities for York Products, which can be purchased from PowerCold by the Target Customers. The Companies will coordinate efforts to further develop and reduce life cycle costs using audit and commissioning services in combination with controls and monitoring. When necessary, and for the Term of this Letter, York shall provide training for PowerCold service technicians. Additionally, and for the Term of this Letter, York will provide consulting support when needed for the development of design competencies for the York Products.

7.

INTELLECTUAL PROPERTY.  It is further understood that as a result of this relationship PowerCold will obtain or develop knowledge of many HVAC control systems and products developed by York. This knowledge is, and will remain, the exclusive proprietary property of York. Except as otherwise required by applicable law, or judicial, administrative or governmental action, PowerCold agrees that it will not use or disclose to any third party in any way any Confidential Information of York.  For purposes of this Letter the term "Confidential Information" includes any business, marketing, promotional, or technical information of York provided by York or otherwise obtained by PowerCold.

It is likewise understood that PowerCold will expose to York confidential information in the normal course of doing business and that this information will remain the exclusive proprietary of PowerCold. Except as otherwise required by applicable law, or judicial, administrative or governmental action, York agrees that it will not use or disclose to any third party in any way any Confidential Information of PowerCold.  

8.

AFTERMARKET PARTS.  For the Term of this Letter, aftermarket parts for York Products will be made available by York to PowerCold for those products bought and resold by PowerCold. 

9.

TARGET CUSTOMERS.  Target Customers will be regularly evaluated by the Companies for their product sales potential.  PowerCold will establish target account plans. York will assist PowerCold as needed with advanced product and technical discussions to help secure business for York Products to the existing Target Customers as well as to evaluate potential new Target Customers. The Companies will, at a minimum, annually evaluate existing and potential customers when creating the Plan described in Section 2 of this Letter. The Companies must mutually agree to include a new Target Customer or to remove an existing Target Customer from the Target Customer listing in Exhibit "A".

10.

ARBITRATION AND MEDIATION.  In the event of a dispute, controversy, or claim (the "Dispute") arising between the Companies in connection with this Letter, any such Dispute shall be submitted to and settled by arbitration in the City of San Antonio, Texas, pursuant to the American Arbitration Association rules then in effect, unless prior to arbitration another location or mediation is mutually acceptable to the Companies. Any award rendered under arbitration shall be final and conclusive upon the parties, and the judgment thereon may be entered in the highest court of the forum (state or federal) having jurisdiction over the issues addressed in the arbitration. The expense of the arbitration shall be borne equally by the parties to the arbitration, provided that each party shall pay for and bear the cost of its own experts, evidence, and attorneys fees, except that, in the discretion of the arbitrator, any award may include the cost of a party's counsel and/or its share of the expenses of arbitration, if the arbitrator expressly determines that an award of such costs is appropriate to a party whose position prevails in such arbitration.  To submit a matter to arbitration or mediation, the party seeking redress ("Plaintiff") shall provide Notice in writing to the party against whom such redress is sought ("Defendant").  The Notice shall describe the nature of such claim, the provision of this Letter allegedly violated by the Defendant, and the material facts surrounding such claim. Unless expressly prohibited by the American Arbitration Association rules, the Plaintiff shall appoint one arbitrator and the Defendant shall appoint one arbitrator. The Companies shall appoint such arbitrators within thirty (30) days of the date of the foregoing described Notice. Within thirty (30) days of appointment, such arbitrators shall appoint a third arbitrator.  Within thirty (30) days of the appointment of the foregoing described arbitrators, the Companies shall hold an arbitration hearing before such arbitrators.  Unless expressly prohibited by the rules for the American Arbitration Association, at such arbitration hearing the Texas Rules of Evidence shall control the admissibility of evidence. Within ten (10) days of the conclusion of such arbitration hearing, the arbitrators shall render a written decision. The decision of the arbitrators shall be binding upon the Plaintiff and Defendant and after the completion of such arbitration, the Plaintiff or Defendant may institute litigation for the sole purpose of enforcing the determination of the arbitration hearing. The above notwithstanding, any party seeking redress for a Dispute shall always have the right to obtain temporary injunctive relief, if necessary, without first submitting the Dispute to arbitration hereunder.

11.

NOTICES.  Any notices to be given hereunder shall be given in writing by placing the notice in the United States mail, certified or registered, properly stamped and addressed to the address shown below or such other addresses as the respective party may direct in writing to the other, by facsimile, by overnight delivery service, or by personal delivery to such address ("Notice").  Each party is responsible for assuring that the information provided in this section is kept current.  Notice shall be deemed effective if it is sent to the address provided in this section, or to the address subsequently amended by the party receiving such Notice. Additionally, Notice is deemed effective, upon such placing in the mail—return receipt requested—on the next business day following delivery and acceptance; on the next business day following delivery by facsimile or any overnight delivery service; or upon the actual delivery date if by personal delivery:

If to York:

Mark Ritz

National Account Sales manager

York International

5005 York Drive

Norman, OK 73069

405-419-6537

405-419-6408 (fax)

If to PowerCold:

Mr. Robert Yoho

President

12345 Starkey Road, Suite A

Largo, Florida  33773

727-327-1778

727-327-1887 (fax)

12.

ENTIRE AGREEMENT.  This Letter embodies the entire agreement and is an integration of the agreement and understanding between the Companies. It supersedes all prior agreements and understandings, if any, relating to the subject matter hereof. Any representation, promise or condition, whether written or oral, not specifically incorporated herein shall not be binding upon the Companies.

13.

SEVERABILITY AND GOVERNING LAW.  If any section or clause of this Letter should be found unenforceable, it shall be severed from the Letter and the remaining sections and clauses shall be enforced in accordance with the intent of this Letter. Texas law shall govern the validity and interpretation of this Letter.

14.

MODIFICATION.  This Letter cannot be amended, modified or supplemented except by a writing executed by the Companies. No waiver of any provision of this Letter shall be binding in any event, unless executed in writing by the party making the waiver.

15.

AUTHORITY.  The Companies hereby acknowledge, represent and warrant that they have the requisite power and authority to execute this Letter.

16.

COUNTERPARTS.  This Letter may be executed in one or more identical counterparts, and when the Companies have signed this Letter, each counterpart shall constitute for all purposes a duplicate original. All of the counterparts collectively shall constitute one agreement.

17.

DESCRIPTIVE HEADINGS.  The descriptive headings of the various sections and subsections of this Letter are inserted for convenience and reference only and do not constitute a part of this Letter, and no inference is to be drawn from such headings.

18.

CONFIDENTIALITY.  York and PowerCold agree not to disclose or make available for use for any purpose other than for the sale of their respective Products any of the Companies proprietary information, including, information relating to the Products or to the operations or business of the Companies, and agrees to provide reasonable security measures to prevent unauthorized persons from obtaining any such information. York and PowerCold shall not, directly or indirectly, or any individual, officer, director, employee, agent, affiliate, subsidiary, licensee, transferee, or recipient of proprietary information or principal of another manufacturing or related business firm, use the proprietary information, by any means whatsoever, within a five-year (5) period immediately subsequent to this Letter of Commitment. York and PowerCold shall have no license or other rights to the others proprietary information nor is any granted or implied hereby. During the term of this Letter of Commitment and for the period of five (5) years hereafter, York and PowerCold will not, directly or indirectly, solicit the employment of or employ, for itself or for any other person or business, any other employee or any person who was an employee at any time during the five (5) year period preceding the termination of this Letter of Commitment.

19.

GOVERNING LAW.  This Letter of Commitment shall be governed by and construed in accordance with the laws of the State of Texas applicable to agreements made and to be entirely performed within such State. Any controversy arising out of, connected to, or relating to any matters herein of the transactions between York and PowerCold and its Affiliates (including for purposes of arbitration, officers, directors, employees, controlling persons, affiliates, professional advisors, agents or promoters of the respect Companies and its Affiliates), on behalf of the undersigned, or this Letter of Commitment, or the breach thereof, including, but not limited to any claims or violations of Federal and/or State Securities Acts, Banking Statutes, Consumer Protection Statutes, Federal and/or State anti-racketeering (e.g. RICO) claims as well as any common law claims and any State Law claims of fraud, negligence, negligent misrepresentations, conversion, unlawful termination, shall be settled by arbitration; and in accordance with this paragraph and judgment on the arbitrator's award may be entered in any court having jurisdiction thereof in accordance with the provisions of  the State of Texas.

York International Corporation

PowerCold ComfortAir Solutions, Inc. 

Unitary products Group

By:

By: 

Its: Vice – President- National Account

Its: 

President

Date: 

Date: 

Approved: PowerCold Corporation

By: 

Its:  

Corporate Secretary

Date: 

-1-

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