IP/AMN/CKKM
Debenture
between
CTI Group (Holdings), Inc.
as Company
and
National City Bank
as Bank
relating to
USD $ 10,600,000 Loan Agreement
(XXXXXXX & XXXXXXX LOGO)
XxxxXxxxx Xxx Xxxxxxxxx Xxxxxx Xxxxxx XX0X 0XX
T x00 (0)00 0000 0000 F x00 (0)00 0000 0000 DX Box No 12
CONTENTS
1. Definitions and Construction........................................... 1
2. Covenant to Pay........................................................ 8
3. Creation of Security................................................... 9
4. Conversion of Floating Charge.......................................... 11
5. Restrictions on Dealing................................................ 12
6. Rights Attaching to Certain Assets..................................... 12
7. Perfection of Security................................................. 14
8. Representations and Warranties......................................... 17
9. Covenants.............................................................. 19
10. Leases................................................................. 26
11. Insurances............................................................. 28
12. Monitoring the Security................................................ 31
13. Extension and Variation of the Law of Property Act 1925................ 32
14. Enforcement............................................................ 32
15. Powers of Receiver..................................................... 34
16. Application of Moneys.................................................. 39
17. Protection of Third Parties............................................ 40
18. Delegation............................................................. 40
19. Power of Attorney...................................................... 40
20. Effectiveness of Security.............................................. 41
21. Redemption of Security................................................. 43
22. Avoidance of Payments.................................................. 43
23. Retention of Security.................................................. 44
24. Set-Off................................................................ 44
25. New Accounts........................................................... 44
26. Currency............................................................... 45
27. Assignment............................................................. 45
28. Costs and Expenses..................................................... 46
i
29. Indemnity.............................................................. 47
30. Restrictions on Liability.............................................. 47
31. Payments Free of Deduction............................................. 48
32. Value Added Tax........................................................ 48
33. Notices................................................................ 48
34. Discretion............................................................. 50
35. Certificate............................................................ 50
36. Counterparts........................................................... 50
37. Ownership of Debenture................................................. 50
38. Law.................................................................... 50
39. Jurisdiction........................................................... 51
40. Deed................................................................... 51
SCHEDULE 1 : DETAILS OF REAL PROPERTY...................................... 53
PART 1 : Registered Land................................................... 53
PART 2 : Unregistered Land................................................. 53
SCHEDULE 2 : DETAILS OF CHARGED INTELLECTUAL PROPERTY...................... 55
PART 1 : PATENTS........................................................... 55
PART 2 : Registered Trade and Service Marks and Applications therefor...... 55
PART 3 : OTHER INTELLECTUAL PROPERTY....................................... 55
SCHEDULE 3 :INTELLECTUAL PROPERTY LITIGATION............................... 56
SCHEDULE 4 : DETAILS OF INVESTMENTS........................................ 57
PART 1 : Shares in the Company's Subsidiaries.............................. 57
PART 2 : Other Shares...................................................... 57
PART 3 : Other Investments................................................. 57
SCHEDULE 5 : DETAILS OF ASSIGNED ASSETS.................................... 58
PART 1 : Life Policies..................................................... 58
PART 2 : Non-Life Policies................................................. 58
PART 3 : Rental Income..................................................... 58
PART 4 : Contracts......................................................... 58
ii
SCHEDULE 6 : DETAILS OF ACCOUNTS........................................... 59
PART 1 : Controlled Accounts with the Bank................................. 59
PART 2 : Controlled Accounts with other banks.............................. 59
PART 3 : Operating Accounts with the Bank.................................. 59
PART 4 : Operating Accounts with other banks............................... 59
SCHEDULE 7 : FORMS OF NOTICE............................................... 60
PART 1 : Form of Notice of Assignment of Life Policy....................... 60
PART 2 : Form of Notice of Assignment of Non-Life Policy................... 62
PART 3 : Form of Notice of Assignment of Rental Income..................... 64
PART 4 : Form of Notice of Assignment of Contract.......................... 66
PART 5 : Form of Notice of Assignment of Controlled Account................ 68
PART 6 : Form of Notice of Charge of Operating Account..................... 70
SCHEDULE 8 : DETAILS OF EXISTING PERMITTED ENCUMBRANCES.................... 72
iii
THIS DEBENTURE is dated December 22, 2006 and made
BETWEEN:
(1) CTI GROUP (HOLDINGS), INC., (the "Company"), a Delaware corporation in the
United States having its principal office at 000 Xxxxx Xxxxxxx Xxxxxx,
Xxxxx 000, Xxxxxxxxxxxx, Xxxxxxx 00000; and
(2) NATIONAL CITY BANK, a national banking association in the United States and
having its principal place of business at Xxx Xxxxxxxx Xxxx Xxxxxx, Xxxxx
000X, Xxxxxxxxxxxx, Xxxxxxx 00000 (the "Bank").
BACKGROUND:
(A) The Bank has agreed to make certain loan facilities in the aggregate
principal amount of Ten Million Six Hundred Thousand U.S. Dollars (USD
$10,600,000) available to the Obligor on and subject to the terms and
conditions of the Loan Agreement.
(B) It is a condition precedent to the availability of such facilities that the
Company enters into this Debenture for the purpose of securing the
obligations of the Obligor to the Bank under the Loan Agreement and the
other Finance Documents.
NOW IT IS AGREED AS FOLLOWS:
1. DEFINITIONS AND CONSTRUCTION
1.1 In this Debenture, unless the context otherwise requires:
"Appointee" means:
(A) each delegate or sub-delegate of the Bank or any Receiver appointed in
accordance with clause 18.1;
(B) each manager, agent, adviser or other person appointed by the Bank or
any Receiver in relation to this Debenture; and
(C) each officer and employee of the Bank or of any Receiver or of any
other person mentioned in paragraph (A) or paragraph (B) of this
definition;
"Charged Intellectual Property" means all Intellectual Property now or at
any time hereafter belonging to the Company, including any Intellectual
Property specified in schedule 2;
"Charged Property" means the undertaking, property, assets, rights and
revenues of the Company (whether present or future) from time to time
charged in favour of, or assigned (whether at law or in equity) to, the
Bank by or pursuant to this Debenture, including (for the avoidance of
doubt) the Charged Intellectual Property;
"Chattels" means all plant and machinery not charged pursuant to clause
3.1(A) and all other chattels now or at any time hereafter belonging to the
Company or in which the Company has, now or in the future, any right, title
or interest;
"Contracts" means the contracts or agreements, if any, listed in part 4 of
schedule 5;
1
"Controlled Accounts" means all accounts (other than any of the Operating
Accounts) now or at any time hereafter opened or maintained by the Company
with the Bank or any other bank including all accounts specified in part 1
and part 2 of schedule 6 and all accounts referred to in clause 16.3;
"CTI Charge Over Shares" means the charge by the Company (as chargor) to
the Bank of its shareholding in CTI Data Solutions Ltd. dated of even date
herewith;
"Debts" means:
(A) all present and future book and other debts and other moneys of any
nature whatsoever now or at any time hereafter due, owing, payable or
incurred to the Company, including those referred to, or deriving from
the assets referred to, in clause 3.1 but excluding any moneys now or
at any time hereafter standing to the credit of any of the Operating
Accounts or any of the Controlled Accounts;
(B) all claims and other things in action which may give rise to any such
debts or moneys;
(C) the benefit of all bills of exchange, promissory notes and negotiable
instruments of any description now or at any time hereafter enjoyed or
held by the Company in relation to any of the foregoing; and
(D) all rights of any nature whatsoever relating to any of the foregoing
including any security (whether in the form of guarantees,
indemnities, insurances or otherwise) and any remedies therefor;
"Encumbrance" means:
(A) any mortgage, charge, pledge, lien, assignment, hypothecation or other
priority or security interest;
(B) any deferred purchase, title retention, trust, sale-and-repurchase,
sale-and-leaseback, hold back or flawed asset arrangement or right of
set-off;
(C) any other agreement or arrangement whatsoever having the same
commercial or economic effect as security; and
(D) any agreement for any of the foregoing;
"Enforcement Event" means any of the following events:
(A) an Event of Default as defined in the Loan Agreement;
(B) the Company fails to pay any sum referred to in clause 2.1 at the time
or in the manner specified in this Debenture or any of the other
Finance Documents;
(C) subject to any notice or cure periods in the Loan Agreement, the
Company fails to perform or observe any of the other obligations or
undertakings expressed to be binding on or undertaken by the Company
in or pursuant to this Debenture or any of the other Finance
Documents;
2
(D) the Bank is of the opinion that any representation or warranty given
or made by the Company in or pursuant to this Debenture or any of the
other Finance Documents is incorrect or untrue in any material
respect; or
(E) any event occurs or any information is received by the Bank or any
other matter or thing whatsoever comes to the attention of the Bank
which causes the Bank to believe that:
(1) any or all of the Company's obligations under this Debenture or
any of the Finance Documents are not or have ceased to be legal,
valid, binding and enforceable; or
(2) all or any part of the Charged Property is in imminent danger of
seizure, or distress; or
(3) all or any part of the Security, or any guarantee, indemnity or
other security for any of the Secured Liabilities is not
continuing, invalid, unenforceable or otherwise not in full force
and effect;
"Environment" means all or any of the media of air, water and land
(wherever occurring) and in relation to the media of air and water includes
the air and water within buildings or natural or man-made structures above
or below ground;
"Environmental Law" means all or any applicable European Community,
national or local law or regulation arising through statute, subordinate
legislation or common law or any relevant code of practice, guidance, note,
standard or other advisory material issued by any competent authority
relating to Environmental Matters;
"Environmental Liability" means all costs, expenses, liabilities, claims,
damages, penalties or fines arising from:
(A) any legal requirement, direction, notice, order or obligation served
or imposed by any competent authority or court of competent
jurisdiction under Environmental Law, or
(B) the carrying out of any investigatory, monitoring, precautionary,
remedial or engineering works (whether on the Charged Property or
elsewhere) which are necessary to avoid the issue, service or
imposition of any legal requirement, direction, notice, order or
obligation by any competent authority or court of competent
jurisdiction under Environmental Law, or
(C) the carrying out of any investigatory, monitoring, precautionary,
remedial or engineering works (whether on the Charged Property or
elsewhere) which are necessary or desirable in order to ensure the
continued operation of the business of the Company or the protection
of the Company's goodwill or which are otherwise for the benefit of
the Company, or
(D) the repair, replacement or rebuilding of any part of the Charged
Property or any disruption of the business of the Company caused or
necessitated by the carrying out of any investigatory, monitoring,
precautionary, remedial or engineering works (whether on the Charged
Property or elsewhere) in connection with Environmental Matters,
3
including in each case all reasonable legal, consulting, monitoring,
laboratory and other professional fees and other reasonable costs and
expenses associated therewith;
"Environmental Matters" means the pollution of the Environment, the
protection of the Environment, ecosystems or human health, the health and
safety of employees in the workplace, the protection of natural amenity,
the presence, production, disposal, release, use, storage, spillage,
deposit, escape, discharge, leak, emission, recovery or transport of, or
radiation from, any Hazardous Material or Waste and issues relating to
noise and genetically modified organisms;
"Environmental Permits" means the permits, licences, consents or
authorisations required under Environmental Law in relation to the carrying
on of any business from, or the occupation or use of, any part of the
Charged Property;
"Event of Default" means any event, howsoever described, specified in any
of the Finance Documents as an event upon the occurrence of which (subject
to any applicable notice and cure period):
(A) the Bank becomes entitled to call for early repayment of all or any of
the Secured Liabilities or to call for the provision of full or
partial cash collateral in respect of any of the Secured Liabilities
which are at such time contingent; or
(B) the Company and Obligor becomes automatically obliged to prepay all or
any of the Secured Liabilities or to provide any such cash collateral;
"Finance Documents" means the Loan Agreement, the Notes, the U.S. Security
Agreements, the U.S. Guaranties, this Debenture, the Ryder Charge Over
Shares, the CTI Charge Over Shares and "Finance Document" means any one of
them;
"Hazardous Material" means any pollutant or contaminant, or any hazardous,
toxic, radioactive, noxious, corrosive or caustic substance, whether wholly
or partly in solid, liquid or gaseous form;
"Intellectual Property" means patents, supplementary protection
certificates, trade marks, service marks, rights (whether registered or
unregistered) in any designs, applications for any of the foregoing, trade
or business names and copyright (including rights in the Software and any
other computer software) and topography rights, inventions, know-how,
secret formulae and processes, lists of suppliers and customers and other
confidential and proprietary knowledge and information, rights protecting
goodwill and reputation, database rights and rights under licences and
consents in relation to any of the above and all rights or forms of
protection of a similar nature or having equivalent effect anywhere in the
world;
"Investments" means all shares, stocks, debentures, bonds, warrants and
securities of any kind whatsoever whether marketable or otherwise and any
certificates representing any of the same and all other interests both
present and future held by or on behalf of the Company in any person
(including any subsidiary of the Company) and includes all allotments,
rights, benefits and advantages whatsoever at any time accruing, offered or
arising in respect of or incidental to the same and all money or property
offered at any time by way of dividend, conversion, redemption, bonus,
preference, option or otherwise in respect thereof, including any shares in
the Company's subsidiaries specified in part 1 of schedule 4 and any shares
and other investments specified in part 2 and part 3 of schedule 4;
4
"Land Registration Acts" means the Land Registration Acts 1925 to 1988;
"Life Policies" means any policies of life insurance or assurance in which
the Company may now or at any time hereafter have an interest, including
any specified in part 1 of schedule 5;
"Loan Agreement" means that certain Loan Agreement, of even date herewith,
entered into by and between the Obligor and the Bank;
"LPA" means the Law of Property Xxx 0000;
"Non-Life Policies" means any policies of insurance (other than the Life
Policies) in which the Company may now or at any time hereafter have an
interest, including any specified in part 2 of schedule 5;
"Notes" means, collectively, (i) that certain Acquisition Loan Promissory
Note issued by the Obligor in favour of the Bank of even date herewith, and
(ii) that certain Revolving Loan Promissory Note issued by the Obligor in
favour of the Bank of even date herewith;
"Notice of Assignment" means:
(A) in relation to a Life Policy, a notice of assignment in substantially
the form set out in part 1 of schedule 7,
(B) in relation to a Non-Life Policy, a notice of assignment in
substantially the form set out in part 2 of schedule 7,
(C) in relation to rental income, a notice of assignment in substantially
the form set out in part 3 of schedule 7,
(D) in relation to a Contract, a notice of assignment in substantially the
form set out in part 4 of schedule 7, and
(E) in relation to a Controlled Account, a notice of assignment in
substantially the form set out in part 5 of schedule 7,
or, in relation to any of the foregoing, a notice of assignment in such
other form as may be specified by the Bank;
"Notice of Charge" means a notice of charge in substantially the form set
out in part 6 of schedule 7 or in such other form as may be specified by
the Bank;
"Obligor" means CTI Group (Holdings), Inc., a Delaware corporation in the
United States;
"Operating Accounts" means such separate and denominated account or
accounts opened or maintained by the Company with the Bank or such other
bank or banks as may from time to time be specified in writing by the Bank
as the account or accounts into which the proceeds of the getting in or the
realisation of the Debts are to be paid in accordance with clause 9.5(B),
being at the date hereof the accounts specified in part 3 and part 4 of
schedule 6;
"Permitted Encumbrance" means:
5
(A) any Encumbrance created by or pursuant to this Debenture;
(B) any other Encumbrance in favour of the Bank;
(C) any Encumbrance arising solely by operation of law, or constituted by
retention of title arrangements made, in the ordinary course of the
Company's business securing amounts not more than 90 days overdue; and
(D) any Encumbrance created, granted, extended or subsisting with the
Bank's prior written consent;
"Planning Acts" means the Town and Country Planning Xxx 0000, the Planning
(Listed Buildings and Conservation Areas) Xxx 0000, the Planning (Hazardous
Substances) Xxx 0000, the Planning (Consequential Provisions) Xxx 0000, the
Planning and Compensation Xxx 0000 and any other legislation from time to
time in force of a like nature or relating to town and country planning;
"Policies" means the Life Policies and the Non-Life Policies, including
those effected or maintained by the Company in compliance with clause 11.1;
"Real Property" means:
(A) all freehold or leasehold property wheresoever situate (including any
property in England and Wales specified in schedule 1) now or at any
time hereafter belonging to the Company together with all rights,
easements and privileges from time to time attached or appurtenant
thereto or benefiting the same; and
(B) all buildings, erections and structures (whether in the course of
construction or otherwise) and fixtures and fittings and fixed plant
and machinery from time to time therein or thereon;
"Receiver" means any person appointed by the Bank pursuant to any power of
appointment contained or referred to in this Debenture to be a receiver or
a receiver and manager or an administrative receiver of the whole or any
part of the Charged Property (whether alone or jointly with any other
person) and includes any other or additional person appointed or
substituted as receiver, receiver and manager or administrative receiver
and "Receivers" shall be construed accordingly;
"Ryder Charge Over Shares" means the charge by CTI Data Solutions Ltd. (as
chargor) to the Bank of its shareholding in Ryder Systems Ltd. dated of
even date herewith;
"Secured Liabilities" means all sums and liabilities covenanted to be paid
and discharged by the Company in clause 2.1;
"Security" means the security from time to time constituted by or pursuant
to this Debenture;
"Software" means the software, computer data and databases created by or on
behalf of the Company or in respect of which the Company otherwise owns any
Intellectual Property, including but not limited to SmartBill, SmartBill
Connect, EmPulse, Proteus Office, Proteus Trader and Proteus Enterprise and
all software that is ancillary thereto, together with all updates, upgrades
and modifications thereto, and the benefit of all software licensed to the
Company by third parties, where such benefit is transferable; and
6
"U.S. Guaranties" means those certain Guaranties, of even date herewith,
entered into for the benefit of the Bank by each of CTI Data Solutions
(USA) Inc., CTI Billing Solutions, Inc., CTI Delaware Holdings, Inc.,
Centillion Data Systems, LLC, CTI Data Solutions Ltd, CTI Billing Solutions
Ltd. and Ryder Systems Ltd.;
"U.S. Security Agreements" means those certain Security Agreements, of even
date herewith, entered into for the benefit of the Bank by each of the
Obligor, CTI Data Solutions (USA) Inc., CTI Billing Solutions, Inc., CTI
Delaware Holdings, Inc., Centillion Data Systems, LLC and Ryder Systems
Ltd.;
"Waste" includes any unwanted or surplus substance, whether wholly or
partly in solid, liquid or gaseous form, irrespective of whether it is
capable of being recycled or recovered.
1.2 Terms and expressions defined in the Loan Agreement shall, where the
context so admits and unless otherwise defined in this Debenture, have the
same meanings when used in this Debenture.
1.3 Unless the context otherwise requires, any reference in this Debenture to:
the "Bank", the "Company" or the "Obligor" shall be construed so as to
include their respective successors and any successor of such a successor;
a "clause" or a "schedule" shall be construed as a reference to a clause
hereof or a schedule hereto;
the "floating charge" shall mean the floating charge created by clause
3.1(M) and shall be construed so as to include any floating charge referred
to in clause 4.3;
a "person" shall be construed as a reference to any individual, company,
body corporate, corporation sole or aggregate, government, state or agency
of a state, firm, partnership, joint venture, association, organisation,
trust or entity (in each case, whether or not having separate legal
personality and irrespective of the jurisdiction in or under the law of
which it was incorporated or exists) and a reference to any of them shall
include a reference to the others;
a "subsidiary" of any person shall be construed as a reference to any
person which is a "subsidiary undertaking" of the first-mentioned person
within the meaning ascribed to that term by Section 258 of the Companies
Xxx 0000 as it is in force at the date hereof;
a "successor" of any person shall mean an assignee, a transferee or a
successor in title of such person or any person who, under the laws of its
jurisdiction of incorporation or domicile, shall have assumed the rights
and obligations of such person or to whom under such laws the same shall
have been assigned or transferred;
"tax" shall be construed so as to include any present or future tax, levy,
impost, duty, charge, fee, deduction or withholding of any nature and
whatever called, by whomsoever, on whomsoever and wherever imposed, levied,
collected, withheld or assessed (including any penalty or interest payable
in connection with any failure to pay or delay in paying any of the same)
and "taxes" and "taxation" shall be construed accordingly; and
"VAT" shall be construed so as to mean value added tax and any similar or
replacement tax which may be imposed from time to time.
7
1.4 In this Debenture the word "including" shall be construed as meaning
"including without limitation" and the words "other" and "otherwise" shall
not be construed eiusdem generis with any foregoing words where a wider
construction is possible.
1.5 Unless the context otherwise requires, any reference in this Debenture to:
(A) this Debenture or any other agreement or document, including any other
Finance Document, shall be construed as a reference to this Debenture
(including its schedules) or, as the case may be, such other agreement
or document as the same may have been, or may from time to time be,
amended, varied, modified, supplemented or novated (and so that any
reference to this Debenture or to any other agreement or document,
including any other Finance Document, shall include, unless the
context otherwise requires, any agreement or document expressed to be
supplemental hereto or thereto or expressed to be collateral herewith
or therewith or which is otherwise entered into pursuant to or in
accordance with the provisions hereof or thereof); and
(B) a statute or statutory provision shall be construed as a reference to
such statute or statutory provision as the same may have been, or may
from time to time be, amended or re-enacted or as its application is
modified by other provisions from time to time and all instruments,
orders, plans, regulations, bye-laws, permissions and directions at
any time made thereunder or deriving validity therefrom.
1.6 The headings and sub-headings are inserted for convenience only and shall
not affect the construction of this Debenture.
1.7 Words denoting the singular shall include the plural and vice versa.
1.8 Words denoting one gender shall include each other gender.
1.9 The obligations expressed to be assumed by the Company in this Debenture
are not conditional on any circumstances or events having occurred or
occurring in the future except as expressly stated in this Debenture. The
Company is not relying on any statement made to the Company or any
information given to the Company by the Bank or any person on the Bank's
behalf. No provision of this Debenture is or will be revocable by the
Company.
1.10 Each term in any document relating to the Secured Liabilities or the
Security is, to the extent not set out in or otherwise incorporated into
this Debenture, incorporated into this Debenture in so far as is necessary
to comply with Section 2 of the Law of Property (Miscellaneous Provisions)
Xxx 0000 but if there is any conflict between that term and any other term
of this Debenture the Bank may determine which of the two will prevail and
such determination will be fully binding on the Company.
2. COVENANT TO PAY
2.1 This Debenture is given for good consideration and the Company shall on
demand by the Bank discharge each and every liability, of any kind
whatsoever and howsoever arising, which the Company and the Obligor may now
or at any time hereafter have to the Bank whether (a) present or future (b)
actual or contingent (c) incurred by the Company and/or the Obligor alone
or jointly with another person or other persons and/or (d) incurred by the
Company and/or the Obligor as principal or as surety or in some other
capacity under or pursuant to, or in respect of or in connection with, the
Finance Documents including (i) any
8
liability in respect of any further advances made thereunder and (ii) any
liability in respect of any breach of any obligation, undertaking,
representation or warranty contained therein or herein and pay to the Bank
every sum (of principal, interest or otherwise) now or at any time
hereafter due, owing, payable or incurred from or by the Company and/or the
Obligor to the Bank under or pursuant to, or in respect of or in connection
with, any such liabilities.
2.2 In a case where the due date for the discharge of any liability or for the
payment of any sum referred to in clause 2.1 has been agreed or specified,
a demand under clause 2.1 may be made on or at any time after such due
date, provided that if such due date has been accelerated or deferred, such
demand may be made on or at any time after such accelerated or deferred due
date. In any other case, such a demand may be made at any time and the
liability or sum in question will become due for discharge or payment upon
such demand being made.
2.3 If the Company fails to pay any sums referred to in clause 2.1 on the due
date for the payment thereof, the Company shall pay interest to the Bank
thereon calculated at the rate and in the manner agreed in the Finance
Documents (other than this Debenture) under or pursuant to which, or in
respect of or in connection with which, such sums are payable.
2.4 In the absence of any such agreement, or in the case of any interest
payable under any provision of this Debenture, the Company shall pay such
interest from the date on which the relevant sums shall become due (or any
other date specified in this Debenture) until the date of payment as set
forth in the Loan Agreement.
2.5 Unless the Bank otherwise agrees in writing, each payment by the Company
under clause 2.4 will be made in the same currency as that in which the sum
in respect of which it accrued was due.
3. CREATION OF SECURITY
3.1 As a continuing security for the payment and discharge of the Secured
Liabilities, the Company hereby with full title guarantee:
(A) REAL PROPERTY
(1) charges in favour of the Bank by way of legal mortgage all Real
Property situated in England and Wales and belonging to the
Company at the date hereof (including any property specified in
schedule 1);
(2) charges in favour of the Bank by way of fixed charge all Real
Property situated outside England and Wales and belonging to the
Company at the date hereof; and
(3) charges in favour of the Bank by way of fixed charge all Real
Property acquired by the Company at any time after the date
hereof;
(B) CHATTELS
charges in favour of the Bank by way of fixed charge all right, title
and interest of the Company to and in the Chattels;
9
(C) POLICIES
(1) assigns absolutely to the Bank all right, title and interest of
the Company to and in the Life Policies; and
(2) assigns absolutely to the Bank all right, title and interest of
the Company to and in all rights and claims to which the Company
is now or may at any time hereafter become entitled in relation
to the proceeds of any of the Non-Life Policies;
(D) INTELLECTUAL PROPERTY
charges in favour of the Bank by way of fixed charge all right, title
and interest of the Company to and in the Charged Intellectual
Property;
(E) INVESTMENTS
charges in favour of the Bank by way of fixed charge all right, title
and interest of the Company to and in the Investments;
(F) ACCOUNTS
(1) charges in favour of the Bank by way of fixed charge all right,
title and interest of the Company to and in all rights and claims
to which the Company is now or may at any time hereafter become
entitled in relation to all moneys now or at any time hereafter
standing to the credit of any of the Controlled Accounts opened
or maintained with the Bank together with all rights relating or
attaching thereto (including the right to interest accruing
thereon); and
(2) assigns absolutely to the Bank all right, title and interest of
the Company to and in all rights and claims to which the Company
is now or may at any time hereafter become entitled in relation
to all moneys now or at any time hereafter standing to the credit
of any of the Controlled Accounts opened or maintained with any
bank other than the Bank together with all rights relating or
attaching thereto (including the right to interest accruing
thereon);
(G) RENTAL INCOME
assigns absolutely to the Bank all right, title and interest of the
Company to and in all rights and claims to which the Company is now or
may at any time hereafter become entitled against the lessees or any
guarantors or sureties for the obligations of such lessees in relation
to all rents and other moneys now or at any time hereafter payable
under or in respect of the leases, if any, listed in part 3 of
schedule 5;
(H) CONTRACTS
assigns absolutely to the Bank all right, title and interest of the
Company to and in all rights and claims to which the Company is now or
may at any time hereafter become entitled under or in respect of the
Contracts;
10
(I) DEBTS
charges in favour of the Bank by way of fixed charge all right, title
and interest of the Company to and in all the Debts which are not
otherwise subject to a fixed charge or assigned (whether at law or in
equity) to the Bank by or pursuant to this Debenture;
(J) GOODWILL
charges in favour of the Bank by way of fixed charge all goodwill now
or at any time hereafter belonging to the Company;
(K) UNCALLED CAPITAL
charges in favour of the Bank by way of fixed charge all rights and
claims to which the Company is now or may at any time hereafter become
entitled in relation to its uncalled capital;
(L) ORDERS UNDER INSOLVENCY ACT
charges in favour of the Bank by way of fixed charge all right, title
and interest of the Company to and in all moneys and other assets now
or at any time hereafter due, owing, payable or transferable to the
Company or any administrator or liquidator thereof pursuant to any
order or declaration of the court made pursuant to any provision of
the Insolvency Xxx 0000; and
(M) FLOATING CHARGE
charges in favour of the Bank by way of floating charge the whole of
the Company's property, undertaking and assets, present and future,
including, (for the avoidance of doubt) the Company's Intellectual
Property, other than any property or assets for the time being
effectively charged to the Bank by way of fixed charge or effectively
assigned (whether at law or in equity) to the Bank or otherwise
subject to an effective fixed security in favour of the Bank pursuant
to this Debenture.
3.2 Each legal mortgage, fixed charge and assignment created or effected by
clause 3.1 shall be a first fixed security.
3.3 The floating charge shall be a first floating charge.
3.4 Where the effect of Schedule B1 to the Insolvency Act 1986 is not excluded
by section 249 of the Enterprise Xxx 0000 with respect to the Company and
without prejudice to any power of appointment which the Bank may have under
clause 14.1(A), paragraph 14 of Schedule B1 to the Insolvency Xxx 0000
shall apply to the floating charge.
4. CONVERSION OF FLOATING CHARGE
4.1 The Bank may at any time by notice in writing to the Company convert the
floating charge with immediate effect into a fixed charge as regards any
property or assets specified in the notice.
4.2 Notwithstanding clause 4.1, if:
11
(A) the Company creates or permits to subsist any Encumbrance (other than
a Permitted Encumbrance) on, over or with respect to any of the
Charged Property subject to the floating charge, or attempts to do so,
or
(B) any person carries out, or attempts to carry out, any enforcement or
process (including any distress, execution, taking of possession,
forfeiture or sequestration) against any of the Charged Property
subject to the floating charge,
the floating charge over the Charged Property the subject of such
Encumbrance, enforcement or process shall be deemed to have been
automatically converted into a fixed charge, without any notice from the
Bank to the Obligor, immediately before such event occurs.
4.3 The Bank may at any time by notice in writing to the Company reconvert,
with immediate effect, any fixed charge referred to in clause 4.1 or clause
4.2 into a floating charge as regards any property or assets specified in
the notice.
5. RESTRICTIONS ON DEALING
Except as otherwise set forth in the Loan Agreement:
5.1 The Company hereby undertakes that at no time during the subsistence of the
Security will the Company create, grant, extend or attempt to create, grant
or extend or permit to subsist any Encumbrance (other than a Permitted
Encumbrance) on or over all or any part of the Charged Property.
5.2 The Company hereby undertakes that at no time during the subsistence of the
Security will the Company, except with the prior written consent of the
Bank and except for disposals of property for the time being subject to the
floating charge in the ordinary and usual course of and for the purposes of
its business as permitted by clause 9.2(D):
(A) sell, transfer, assign, lease or otherwise dispose of all or any part
of the Charged Property; or
(B) dispose of, or create, any estate, interest or right in or over, or
relating to the use, occupation, possession or enjoyment of, all or
any part of the Charged Property or permit the acquisition by any
person of any proprietary interest or any right in or over, or which
may affect the value of, any of the Charged Property; or
(C) grant any right of pre-emption or any option in respect of or in
connection with any of the foregoing;
(D) agree to do any of the foregoing.
5.3 None of the foregoing restrictions in this clause 5 shall be construed as
limiting any powers exercisable by any Receiver appointed by the Bank under
or pursuant to this Debenture.
6. RIGHTS ATTACHING TO CERTAIN ASSETS
INVESTMENTS
6.1 Prior to the occurrence of an Enforcement Event:
12
(A) all voting and other rights relating to any of the Investments may be
exercised by the Company or as it may direct provided that:
(1) such rights shall not be exercised in any manner which, in the
opinion of the Bank, would breach the terms of any of the Finance
Documents or is or may be inconsistent with or prejudicial to the
security intended to be conferred on the Bank by or pursuant to
this Debenture or any other Finance Document; and
(2) the Company shall not, without the prior written consent of the
Bank, permit or agree to any variation of the rights attaching to
or conferred by any of the Investments; and
(B) all principal, interest, dividends and other money paid on or in
respect of any of the Investments to the Company or its nominee(s)
shall be dealt with in accordance with the provisions of clauses 9.5
to 9.8 (inclusive). Any such money paid to the Bank or its nominee(s)
shall be dealt with in accordance with the provisions of clause 9.9.
6.2 After the occurrence of an Enforcement Event:
(A) all voting and other rights relating to any of the Investments may be
exercised by the Bank or any Receiver or as it or he may direct;
(B) the Company shall comply or procure the compliance with any direction
of the Bank or, as the case may be, any Receiver in respect of the
exercise of such voting and other rights and shall deliver to the Bank
or, as the case may be, such Receiver such forms of proxy or other
appropriate forms of authorisation as will enable the Bank or, as the
case may be, such Receiver to exercise such voting and other rights;
(C) all principal, interest, dividends and other money paid on or in
respect of any of the Investments to the Company or its nominee(s)
shall be dealt with in such manner as the Bank or any Receiver shall
direct (and the Company shall comply or procure compliance with any
such direction) and (until so dealt with) shall be held upon trust for
the Bank; and
(D) all principal, interest, dividends and other money paid on or in
respect of any of the Investments to the Bank or any Receiver or its
or his nominee(s) (whether directly or pursuant to a direction given
under clause 6.2(C)) may be applied in accordance with clause 16.
ACCOUNTS
6.3 All moneys now or at any time hereafter standing to the credit of any
Controlled Accounts or any Operating Accounts (whether deposit or current
accounts or otherwise howsoever designated) opened or maintained by the
Company with the Bank and all or any rights and benefits relating thereto
shall be incapable of assignment (and each deposit of any such moneys shall
be made on such terms accordingly) and the Company shall not purport to
assign or otherwise dispose of any interest in any such moneys or any such
rights and benefits.
13
6.4 During the subsistence of the Security (and if an Enforcement Event shall
have occurred) the Bank may, in its absolute discretion, from time to time
apply any part of the moneys standing to the credit of the Controlled
Accounts in accordance with clause 16.2.
7. PERFECTION OF SECURITY
REAL PROPERTY - HM LAND REGISTRY
7.1 In the case of any Real Property title to which is now or at any time
hereafter registered or required to be registered under the Land
Registration Acts, the Company hereby applies to the Chief Land Registrar:
(A) to enter a notice of this Debenture on the register; and
(B) to enter the following restriction in the register:
"Except under an Order of the Registrar no transfer, disposition, dealing,
charge or mortgage by the proprietor of the land or made in the exercise of
the power of sale possessed by the holder of any subsequent charge is to be
registered or noted without the consent of the proprietor for the time
being of [insert details of this Debenture]".
7.2 The Bank hereby covenants with the Company, for the purpose of Section
94(1) of the LPA, that it will make further advances to the Obligor on the
terms and subject to the conditions of the Loan Agreement. The Company
hereby applies to the Chief Land Registrar for a note to that effect to be
entered on the register of any Real Property title to which is now or at
any time hereafter registered or required to be registered under the Land
Registration Acts.
7.3 In respect of any part of the Real Property registered or to be registered
as aforesaid the Company hereby certifies that the security created by this
Debenture does not contravene any of the provisions of its Memorandum or
Articles of Association or of its charter or any other governing instrument
or constitutional document.
POLICIES
7.4 The Company shall:
(A) forthwith deliver to the Bank, or procure the delivery to the Bank of,
Notices of Assignment duly executed by the Company or on its behalf
and acknowledged by each of the insurers liable on the Policies, if
any, listed in part 1 and part 2 of schedule 5; and
(B) if so requested by the Bank, forthwith deliver to the Bank, or procure
the delivery to the Bank of, Notices of Assignment duly executed by
the Company or on its behalf and acknowledged by each of the insurers
liable on any other Policies specified by the Bank.
INTELLECTUAL PROPERTY
7.5 The Company shall from time to time upon demand of the Bank promptly
execute any documents, pay any fees, taxes or other costs or do any thing
which may be necessary to enable the Bank to apply (in such form as the
Bank may require) to the relevant authorities to register, record or enter
a memorandum in respect of this Debenture and/or the Security
14
and/or any of the restrictions contained in this Debenture in any relevant
register relating to the Charged Intellectual Property.
INVESTMENTS
7.6 If so requested by the Bank, the Company shall deliver to the Bank (or
procure delivery to the Bank of), and the Bank shall be entitled to hold
and retain, all (or such part thereof as may from time to time be specified
by the Bank) of the Investments or the certificates and other documents of
title to or representing the same held or acquired by the Company or its
nominee(s) together with such declarations of trust, instruments of
transfer or assignment and other documents or things which the Bank may
specify with a view to perfecting or improving its security over the
Investments, in each case in form and substance satisfactory to the Bank.
7.7 Upon the occurrence of an Enforcement Event, the Bank may at any time and
from time to time have any of the Investments registered in its name or in
the name of, or otherwise have the same held by, one or more nominees on
its behalf.
7.8 Upon the occurrence of an Enforcement Event, in the event that any of the
Investments are at any time held in an account maintained by the Company or
by a nominee on its behalf with the operator for the time being of the
CREST system (the "Crest Operator"), the Company shall, if so requested by
the Bank:
(A) transfer or procure the transfer of such Investments into an escrow
account maintained by the Company or by a nominee on its behalf with
the Crest Operator, the operating procedures for which permit only the
Bank or its nominee(s) to give instructions to the Crest Operator in
respect of the Investments for the time being held therein (including
instructions to transfer the same out of such account); or
(B) transfer or procure the transfer of such Investments into an account
maintained by the Bank or by a nominee on its behalf with the Crest
Operator.
ACCOUNTS
7.9 The execution of this Debenture by the Company shall constitute notice to
the Bank of the charges created by clause 3.1(F)(1).
7.10 The Company shall, if so requested by the Bank, forthwith deliver to the
Bank, or procure the delivery to the Bank of:
(A) Notices of Assignment duly executed by the Company or on its behalf
and acknowledged by each of the banks other than the Bank (or such of
them as may be specified by the Bank) with which any of the Controlled
Accounts have been opened or are being maintained; and
(B) Notices of Charge duly executed by the Company or on its behalf and
acknowledged by each of the banks other than the Bank (or such of them
as may be specified by the Bank) with which any of the Operating
Accounts have been opened or are being maintained.
RENTAL INCOME AND CONTRACTS
15
7.11 The Company shall, if so requested by the Bank, forthwith deliver to the
Bank, or procure the delivery to the Bank of, Notices of Assignment duly
executed by the Company or on its behalf and acknowledged by each of the
parties (or such of them as may be specified by the Bank) against whom the
Company is entitled to assert the rights and claims referred to in clauses
3.1(G) and 3.1(H).
GENERAL
7.12 The Company shall immediately notify the Bank of:
(A) any acquisition or proposed acquisition by the Company, or any nominee
on its behalf, of any property which falls (or, upon being so
acquired, would fall) within the definitions of "Real Property",
"Charged Intellectual Property", or "Investments" contained in clause
1.1;
(B) any opening or proposed opening by the Company of any bank account;
and
(C) the taking out by the Company of, or any proposal made by the Company
for the issue to it of, any insurance or assurance policy.
7.13 The Company confirms that prior to entering into this Debenture the Company
has deposited with the Bank all documents that relate to the Company's
rights, titles, estates or interests to or in any part of the Charged
Property (including documents constituting or evidencing title) other than
those documents which the Bank has agreed in writing need not be so
deposited. On each occasion that the Company obtains or receives other such
documents, the Company will immediately deposit them with the Bank unless
the Company obtains the Bank's written consent not to do so. At the Bank's
request, the Company will immediately produce any such documents which have
not been required to be deposited with the Bank.
7.14 The Bank shall be entitled to provide for the safe custody by third parties
of all or any of the documents deposited with it in accordance with clause
7.13 and shall not be responsible for any loss or damage occurring to or in
respect thereof.
7.15 The Company shall, if so requested by the Bank, affix to such items of the
Charged Property and write on such documents as the Bank shall in each case
stipulate notices of the Security in such form or forms as the Bank shall
require.
7.16 The Company shall from time to time, at the request of the Bank but at the
cost of the Company, do any act or execute any document which the Bank may
consider appropriate in order:
(A) to maintain, preserve, protect, perfect or improve the security
created or intended to be created by or pursuant to this Debenture;
(B) to give the Bank security over any of the property or assets of the
Company in addition to that created or intended to be created by or
pursuant to this Debenture; or
(C) to facilitate the realisation of any of the property or assets of the
Company or the exercise of any and all powers, authorities and
discretions intended to be conferred on the Bank or any Receiver by or
pursuant to this Debenture.
16
Each such document will be in such form and on such terms as the Bank may
require.
7.17 The obligations of the Company under this clause 7 shall be in addition to
and not in substitution for the covenants for further assurance deemed to
be included in this Debenture by virtue of Section 2 of the Law of Property
(Miscellaneous Provisions) Xxx 0000.
8. REPRESENTATIONS AND WARRANTIES
8.1 The Company hereby represents and warrants to the Bank that:
(A) the Company is duly incorporated in England and Wales, has the
capacity to xxx or be sued in its own name and has the power to carry
on its business as now being conducted and to own its property and
assets;
(B) the Company has full power to enter into, and to perform the
obligations expressed to be assumed by it in, this Debenture;
(C) this Debenture constitutes legal, valid, binding and enforceable
obligations of the Company and each mortgage, charge and/or other
security interest created pursuant to the terms of this Debenture has
the ranking it is expressed to have and each is an effective security
over the Charged Property in respect of which it is expressed to be
granted;
(D) all corporate and other actions and all conditions and things required
to be taken, fulfilled or done (including the obtaining of any
necessary consents, approvals and authorisations) in order:
(1) to enable the Company duly and lawfully to enter into, and to
perform and comply with the obligations expressed to be assumed
by it in, this Debenture and to ensure that those obligations are
valid, legally binding and enforceable,
(2) to enable it to create the Security and to ensure that (subject
to all necessary registrations thereof being made) the Security
is valid, legally binding and enforceable and has and will have
the ranking which it is expressed to have, and
(3) to make this Debenture admissible in evidence in the courts of
England and (if different) its jurisdiction of incorporation and
each other jurisdiction in which any part of the Charged Property
is located,
have been duly taken, fulfilled or, as the case may be, done, and all
such consents, approvals and authorisations are in full force and
effect;
(E) the Company's entry into, and the performance of and compliance with
the obligations expressed to be assumed by it in, this Debenture and
the creation of the Security pursuant to this Debenture do not
violate, contravene or constitute a default under, or exceed any
borrowing or other powers or restrictions granted or imposed by, under
or pursuant to:
(1) any existing law, statute, rule or regulation, any judgment,
order or award or any consent, approval or authorisation to which
the Company is subject; or
17
(2) any provision of the Company's Memorandum or Articles of
Association or of its charter or any other governing instrument
or constitutional document; or
(3) the terms of any agreement or document to which the Company is a
party or which is binding on it or any of its assets;
(F) such entry, performance, compliance and creation do not result in:
(1) any party to any agreement or arrangement entered into by the
Company becoming entitled to terminate the same; or
(2) the existence of or oblige the Company to create any Encumbrance
(otherwise than in favour of the Bank) over its undertaking or
any of its present or future revenues or assets;
(G) neither the Company nor any majority of its directors has taken any
corporate or other action, nor have any other steps been taken, any
petition or application been filed, or any other legal proceedings
been started or, to the best of its knowledge and belief, threatened
against it for its winding-up, liquidation, administration,
dissolution or re-organisation (or any analogous process) or for the
appointment of a receiver, receiver and manager, administrative
receiver, trustee or similar officer of it or of all or any part of
its property assets or revenues;
(H) the Company has legal title to and is entitled to the entire
beneficial interest in the Charged Property free from any Encumbrance
other than any Permitted Encumbrance;
(I) except in accordance with the provisions of this Debenture or as
otherwise disclosed in writing by the Company to the Bank, no person
(other than the Company) has any estate, interest or right in or over,
or relating to the use, occupation, possession or enjoyment of, all or
any part of the Charged Property which could have a material adverse
effect on the value thereof or on the ability of the Bank or any
Receiver to realise the same, nor has any such person any right or
option (including any pre-emption right) to acquire any of the same
which could have such an effect;
(J) the Real Property (if any) specified in schedule 1 comprises the only
freehold or leasehold property in England and Wales owned by the
Company as at the date of this Debenture and there are no proceedings,
actions or circumstances relating to any such Real Property which
materially and adversely affects its value or the ability of the
Company to use it for the purposes for which it is currently used;
(K) the Company has complied in full and is in full compliance with all
laws (including the Planning Acts) relating to the Charged Property or
any part thereof, or to the occupation or use of the Charged Property
or any part thereof, and it has obtained and maintained, and has
complied in full and is in full compliance with, all consents,
approvals and authorisations (including all permissions under the
Planning Acts) required in connection therewith;
(L) the Company has complied at all times with Environmental Law;
(M) all Environmental Permits currently held by the Company have been
lawfully obtained and are in full force and effect;
18
(N) there are no circumstances which would make it impossible or difficult
for the Company to comply with the conditions or limitations in any
Environmental Permits currently held by the Company and the Company
has received no communication revoking, suspending, modifying or
varying any such Environmental Permits and is not aware of any
circumstances which might give rise to any such communication being
received;
(O) the Company is not engaged in any litigation (other than frivolous or
vexatious litigation which is dismissed within 28 days), arbitration
proceedings or negotiations with any person or body relating to any
Environmental Liability and no litigation, arbitration proceedings or
negotiations with any person or body relating to any actual or
potential Environmental Liability are pending or threatened against or
envisaged by the Company;
(P) the Company has not received at any time any communication failure to
comply with which at any time hereafter would constitute a breach of
Environmental Law or compliance with which could be secured by further
proceedings under Environmental Law or which relates in any way to any
actual or potential Environmental Liability on the part of the Company
and there are no circumstances which might give rise to any such
communication being received;
(Q) where any of the Charged Intellectual Property is capable of
registration the Company is the registered proprietor thereof and the
Company is not aware of any facts or matters which will have a
material adverse effect on the value of the Charged Intellectual
Property;
(R) except to the extent disclosed to the Bank in schedule 3, the Company
is not engaged in any litigation (other than frivolous or vexatious
litigation which is dismissed within 28 days), or in any arbitration
proceedings or negotiations with any person or body relating to any
Intellectual Property outside of the normal course of the Company's
business and, to the best knowledge of the Company, no litigation,
arbitration proceedings or negotiations with any person or body
relating to Intellectual Property are pending or threatened against or
envisaged by the Company;
(S) the Company has no bank accounts other than those specified in
schedule 6; and
(T) except to the extent disclosed by the Company to the Bank in writing,
the Company has not:
(1) exercised any option, election or discretion to charge VAT or to
treat supplies made by it as taxable supplies for the purposes of
VAT nor is it bound by the exercise of any such option, election
or discretion by any other person (including any other member of
any group of companies of which the Company is or has been
treated as a member for the purposes of Section 43 of the Value
Added Tax Act 1994); or
(2) transferred the right to recover any VAT.
9. COVENANTS
REAL PROPERTY AND CHATTELS
19
9.1 The Company shall during the subsistence of the Security:
(A) keep all buildings, erections, structures, fixtures, fittings, fixed
and movable plant and machinery, implements, utensils and other
effects forming part of the Charged Property in good and substantial
repair to the satisfaction of the Bank and, where applicable, in good
working order and condition and when necessary rebuild, renew or
replace the same;
(B) permit the Bank and all persons authorised by it to enter and view the
state and condition of the foregoing upon reasonable notice to the
Company by the Bank and, forthwith after the service by the Bank of
notice of any defect or want of repair, well and substantially repair
and make good the same;
(C) not without the previous consent in writing of the Bank (and then only
to the extent that such consent permits and in accordance with any
conditions thereof and with plans, elevations and specifications
previously submitted to and, at the cost of the Company, approved in
writing by the Bank):
(1) erect any buildings or structures on the Real Property,
(2) demolish all or any part of the Real Property,
(3) make any alterations or additions to the Real Property,
(4) do anything in relation to the Real Property which constitutes
development (as defined in the Planning Acts), or
(5) permit any of the foregoing,
and, if any erection, demolition, alteration, addition or development
(as aforesaid) is commenced, effected, carried out or permitted in
breach of this covenant, the Company shall cease or remove (as the
case may be) the same forthwith upon the Bank giving notice to that
effect to the Company;
(D) not without the previous consent in writing of the Bank (and then only
to the extent that such consent permits and in accordance with any
conditions thereof):
(1) make any application for planning permission or implement any
planning permission obtained or enter or agree to enter into any
agreement under Section 38 of the Xxxxxxxx Xxx 0000 or Section 33
of the Local Government (Miscellaneous Provisions) Xxx 0000 or
Section 106 of the Town and Country Xxxxxxxx Xxx 0000 or any
similar act or acts;
(2) use or suffer to be used the whole or any part of any Real
Property belonging to the Company at the date hereof other than
for its existing use at the date hereof or use or suffer to be
used the whole or any part of any Real Property acquired by the
Company at any time after the date hereof other than for its
existing use at the date of such acquisition;
(3) sever, unfix or remove any of the fixtures, fittings or fixed
plant and machinery forming part of the Charged Property from the
Real Property to which the same is for the time being affixed or
permit the same to be so severed, unfixed or removed; or
20
(4) remove any of the Chattels (not being a Chattel for the time
being forming part of the Company's stock in trade or work in
progress) which the Bank may from time to time, by notice to the
Company, specify for the purposes of this clause from the
location or locations specified therefor in such notice, or
permit the same to be so removed, save for the purpose of
effecting any necessary repairs thereto or of replacing the same
with new or improved models or substitutes;
(E) not do or suffer to be done any act, matter or thing prohibited by, or
omit or suffer to be omitted any act, matter or thing required to be
done by, the Planning Acts or any building or other regulations or
bye-laws or any notice, order, direction, licence, consent or
permission given or made thereunder;
(F) comply with any conditions attaching to any planning permissions
relating to or affecting the Real Property;
(G) comply with all Environmental Law and maintain at all times in full
force and effect all Environmental Permits;
(H) not allow any circumstances to arise which could lead to any actual or
potential Environmental Liability on the part of the Company or in
connection with any of the Charged Property;
(I) within 4 days of the receipt of notice of the same, give full
particulars (and, if requested, a copy of any written particulars
received by the Company) to the Bank of any notice, order, direction,
designation, resolution or proposal having application to all or any
part of the Charged Property or to the area in which it is situate or
any aspect of the business of the Company given or made by any
planning authority, other public or competent body or court of
competent jurisdiction whatsoever under or by virtue of, or in
pursuance of the powers conferred by, the Planning Acts or
Environmental Law or any other statutory powers whatsoever and,
without delay take all reasonable or necessary steps to comply
therewith and/or, at the request of the Bank, without delay make or
join with the Bank in making such objections to or representations
against or in respect of the same as the Bank shall deem expedient;
and
(J) ensure that all outgoings in relation to the Charged Property
(including rents, rent charges, service charges, general and water
rates, taxes, charges, assessments and impositions), whether
parliamentary, municipal, parochial or otherwise, which are now or
become payable, charged or assessed on or in respect of any part of
the Charged Property, or the owner, user or occupier of any part of
the Charged Property, will be fully and punctually paid.
INTELLECTUAL PROPERTY
9.2 The Company shall during the subsistence of the Security:
(A) promptly notify the Bank of the acquisition or creation of any
Intellectual Property by the Company (whether by its officers,
employees or otherwise) that may be or become relevant to the
Company's business, take all steps necessary to ensure that such
Intellectual Property is properly vested in the Company and, in the
case of any such Intellectual Property which is capable of being
protected by patent,
21
registered trade xxxx or registered design, promptly and at its own
expense apply to the proper authority for registration thereof;
(B) take all steps necessary to ensure that the Charged Intellectual
Property remains valid and subsisting including using its best
endeavours to protect them from theft, attack, loss or destruction,
unauthorised use, unauthorised copying or unauthorised access by any
third party;
(C) use its reasonable endeavours to detect infringement of the Charged
Intellectual Property and forthwith give notice (setting out all
relevant details) to the Bank of any infringement of or challenge to
the Charged Intellectual Property and at the direction of the Bank but
at the cost of the Company take such steps as the Bank shall in its
discretion reasonably direct in relation to any such infringement or
challenge (including prosecuting or defending any proceedings).
Subject to any such directions of the Bank, the Company shall not be
precluded from taking such steps as it considers necessary or
desirable in relation to any infringement of or challenge to the
Charged Intellectual Property provided that the Company shall not
grant any licence or concede the invalidity or unenforceability of any
of the Charged Intellectual Property without the prior written consent
of the Bank;
(D) without prejudice to the generality of the foregoing:
(1) pay all renewal fees, costs, taxes and other expenses which may
fall to be payable in respect of any of the Charged Intellectual
Property before or when the same shall become due and produce to
the Bank on demand evidence of payment thereof;
(2) only deal with the Charged Intellectual Property in the ordinary
course of operating its business;
(3) not grant any licence or consent in respect of Intellectual
Property (or agree or purport to agree to any of the foregoing)
other than non-exclusive licences on arms' length commercial
terms in the ordinary and usual course of and for the purposes of
its business and subject to the other provisions of this clause
9.2;
(4) keep confidential all trade secrets and other confidential
information relating to its business or potential future business
and not knowingly authorise or permit any steps or knowingly omit
to take any steps which the Company knows or which it reasonably
ought to know would be liable to result in the disclosure of any
such information unless the person receiving such information is
bound by written obligations of confidentiality no less stringent
than the provisions contained in this clause 9.2(D)(4).
(5) not (whether by the doing of any act or the failure to do any
act) abandon, cancel or allow to become void or lapse or to
become liable to any attack (including but not limited to an
attack for non-use) any of the Charged Intellectual Property and
shall forthwith upon any of the Charged Intellectual Property
becoming void or lapsing do all things and incur all expenses
necessary to restore the same to the Company;
(6) promptly notify the Bank of any application to amend the
specification drawings or claims of any of the patents or patent
applications or any
22
application to alter the specification of any of the trade or
service marks or applications for the same forming part of the
Charged Intellectual Property and not without the prior written
consent of the Bank, which consent shall not unreasonably be
withheld, enter into any conditions, restrictions or disclaimers
in relation to any of the Charged Intellectual Property which is
registered;
(7) not use or allow to be used, do any act or omit to do any act or
enter into any arrangement with any third party in relation to,
any of the Charged Intellectual Property in any manner which may
materially adversely affect its value; and
(8) if the fixed or floating charge taken over the Charged
Intellectual Property is not effective under local law in respect
of any designation in any country outside the UK of European
Patent EP 0 541 535 or any such designations of other European
Patents owned by the Company from time to time (the "European
Patents"), the Company agrees to grant such security in the
country or countries concerned as may be permissible under local
law over those designations of the European Patents, so as to
permit a Receiver to exercise the powers in clause 15 of this
Debenture in relation to all designations of the European Patents
on the occurrence of an Enforcement Event.
INVESTMENTS
9.3 The Company shall during the subsistence of the Security pay on the same
becoming due all calls or other payments which may be or become due in
respect of any of the Investments. If the Company fails to make any such
payment, the Bank may if it thinks fit (it being acknowledged by the
Company that the Bank will incur no liability to the Company if it does
not) make such payment on behalf of the Company. The Company shall
reimburse any sums so paid by the Bank to the Bank on demand and shall pay
interest thereon from the date of payment by the Bank until such sums are
reimbursed at the rate and otherwise as mentioned in clause 2.4.
CONTRACTS
9.4 The Company shall during the subsistence of the Security:
(A) observe and perform, and remain liable to observe and perform, all the
obligations on its part contained in and assumed by it under the
Contracts (and the Bank shall be under no obligation by virtue of this
Debenture in respect of any failure by the Company so to observe or
perform such obligations);
(B) diligently pursue any remedies available to it in respect of any
breach thereof or in respect of any claim arising thereunder or in
relation thereto; and
(C) not, without the prior written consent of the Bank, such consent not
to be unreasonably withheld, make or agree to make any amendment,
waiver or release of, or determine, any of the Contracts or permit any
breach or default thereof or thereunder to exist.
DEBTS
9.5 The Company shall at all times during the subsistence of the Security:
23
(A) subject to any directions given in accordance with clause 9.8, get in
and realise the Debts on behalf of the Bank and hold the proceeds of
the getting in and realisation thereof (until payment into the
Operating Accounts or, following the occurrence of an Enforcement
Event, the Controlled Accounts or as the Bank may otherwise require as
hereinafter provided) upon trust for the Bank;
(B) subject to clause 9.5(C), pay the proceeds of the getting in and
realisation of the Debts (or such of them as the Bank may specify), or
ensure that such proceeds are paid, into the Operating Accounts (or
such of them as the Bank may specify);
(C) following the occurrence of an Enforcement Event and if the Bank shall
so require in writing, pay the proceeds of the getting in and
realisation of the Debts (or such of them as the Bank may specify), or
ensure that such proceeds are paid, into the Controlled Accounts (or
such of them as the Bank may specify) or as the Bank may otherwise
require;
(D) unless the Bank otherwise agrees in writing (and then only on such
terms and in such manner as the Bank may require) not be entitled to
withdraw or transfer from the Controlled Accounts any moneys standing
to the credit thereof or direct any payment to be made therefrom to
any person; and
(E) in the event that any of the Operating Accounts or the Controlled
Accounts are opened or maintained with a bank other than the Bank:
(1) permit and instruct such bank to furnish directly to the Bank
from time to time upon request full statements and particulars of
any Operating Accounts and any Controlled Accounts opened or
maintained with such bank and such other financial statements and
information with respect to the assets and liabilities of the
Company as are from time to time available to such bank; and
(2) furnish to the Bank evidence satisfactory to the Bank that any
bank with which any of the Controlled Accounts has been opened or
is being maintained has been notified of, and has agreed to
operate such account in accordance with, any procedures
stipulated by the Bank.
9.6 Any proceeds of such getting in and realisation of the Debts received by
the Company and paid, in accordance with clause 9.5(B), into any of the
Operating Accounts shall upon such payment in (and provided that the
Operating Account concerned is subject to the floating charge at the time
of such payment in) stand released from any fixed security on such Debts
created by this Debenture and shall instead stand subject to the floating
charge. Any such release shall in no respects derogate from the subsistence
and continuance of the fixed charges over and/or the assignments of all
other Debts for the time being outstanding.
9.7 The Company will do everything necessary or that the Bank considers
appropriate (including issuing written instructions to the debtors or other
obligors) to ensure that such proceeds are paid directly or transferred
into the Operating Accounts or the Controlled Accounts, or as the Bank may
otherwise require, in accordance with clauses 9.5(B) and 9.5(C).
9.8 The Company shall at all times during the subsistence of the Security deal
with the Debts in accordance with any directions from time to time given in
writing by the Bank and in
24
default of and subject to such directions shall not at any such time
without the prior written consent of the Bank deal with the Debts otherwise
than by getting in and realising the same in the ordinary and usual course
of the Company's business. Without prejudice to the generality of the
foregoing, the Company shall not at any such time without such a direction
or consent compound, release, exchange, set-off, factor or discount the
whole or any part of any Debt, or grant time or indulgence in respect
thereof or enter into any agreement for any of the foregoing or do anything
whereby the recovery of the whole or any part of any Debt may be impeded,
delayed or prevented.
9.9 If the proceeds of any Debts are receivable or are received by the Bank or
any nominee thereof (whether as a result of any notice of assignment having
been given to the relevant debtor or obligor or otherwise) the Bank may
deal with such Debts and their proceeds as it shall from time to time
decide. In particular, but without limitation, it may pay the proceeds of
any such Debts, or ensure that such proceeds are paid, into any of the
Operating Accounts or, following the occurrence of an Enforcement Event,
into any of the Controlled Accounts. If it does so, the provisions of
clauses 9.5 to 9.8 (inclusive), insofar as they are relevant, shall apply
to such proceeds to the same extent as if they had been so paid in by, or
at the direction of, the Company.
GENERAL
9.10 The Company will ensure that each of the representations and warranties set
out in clauses 8.1(A), 8.1(B), 8.1(C), 8.1(D), 8.1(E), 8.1(F), 8.1(H),
8.1(I), 8.1(K), 8.1(L), 8.1(M), 8.1(N), 8.1(O), 8.1(P), 8.1(Q), 8.1(R),
8.1(S) and 8.1(T) will be correct in all respects at all times during the
continuance of the Security as if repeated at all such times by reference
to the then existing circumstances.
9.11 The Company shall during the subsistence of the Security:
(A) conduct and carry on each part of the Company's business in a proper
and efficient manner and keep or cause to be kept proper books of
account relating thereto;
(B) not, without the Bank's prior written consent, change the nature of,
or cease to carry on, any part of the Company's business or announce
an intention to do so;
(C) punctually pay, as the same become due, all debts and liabilities
which by virtue of the provisions of any law relating to liquidation,
bankruptcy, insolvency or creditors' rights generally would have
priority to all or any part of the Security;
(D) not take any step or omit to take any step the taking or omission of
which might have a material adverse effect on the value of the
Company's goodwill;
(E) fully and punctually comply in all respects with:
(1) each law for the time being in force (including all bye-laws,
regulations and requirements of any competent authority), and
(2) each notice, order, direction, licence, approval, consent,
permission and condition given, made, granted or imposed under or
pursuant to that law,
in each case to the extent that it relates to the Charged Property or
anything done on the Charged Property by the Company or any user or
occupier;
25
(F) except to the extent that the Bank permits otherwise by means of a
prior written consent:
(1) comply with all covenants, restrictions, requirements,
provisions, regulations and conditions affecting the Charged
Property or any part thereof (including the use or enjoyment
thereof); and
(2) fully and punctually perform each of the Company's obligations in
relation to each Permitted Encumbrance and, if the Bank so
requests, immediately produce to the Bank evidence of such
performance (including receipt of any payment made by the
Company); and
(G) obtain valid VAT invoices in respect of all supplies made to the
Company for VAT purposes and comply with all its obligations in
relation to VAT including maintaining all accounts and making all
returns and claims for credit or repayment of input tax (as defined in
Section 24 of the Value Added Tax Act 1994).
9.12 The Company shall if required by the Bank during the subsistence of the
Security:
(A) provide the Bank with such information in writing concerning the
Company's business and affairs or all or any part of the Charged
Property as the Bank may from time to time require;
(B) permit the Bank, its agents, representatives and advisers free access
at all reasonable times to inspect and take copies and extracts from
the books, accounts and records of the Company and such other
documents as the Bank may require and furnish the Bank with all
information and facilities which it may require and pay all expenses
incurred by the Bank in connection therewith; and
(C) grant the Bank or its solicitors all reasonable facilities to enable
it or them to carry out at the Company's expense such investigation of
title to any part of the Charged Property and enquiries into matters
in connection therewith as would be carried out by a prudent mortgagee
or chargee.
9.13 The Company will notify the Bank in writing immediately upon each occasion
that the Company becomes aware that:
(A) an Event of Default, or
(B) any other Enforcement Event, or
(C) any other event which, with the giving of notice or lapse of time or
both, might constitute an Event of Default or any other Enforcement
Event,
has occurred, and at the same time inform the Bank of any action taken or
proposed to be taken in connection therewith.
10. LEASES
10.1 The Company hereby undertakes with the Bank that in relation to any lease
or agreement for lease to which all or any part of the Charged Property may
for the time being be subject (including any leases listed in part 3 of
schedule 5) the Company will:
26
(A) observe and perform all of the covenants, conditions, agreements and
obligations on the part of the lessor contained therein;
(B) duly enforce all of the covenants, conditions, agreements and
obligations on the part of the lessee contained therein;
(C) duly and promptly implement any provision therein for the review of
any rent thereby reserved and not agree to any revised rent or appoint
or agree to the appointment of any third party to determine such rent
without the prior written consent of the Bank such consent not to be
unreasonably withheld;
(D) not, without the prior written consent of the Bank:
(1) accelerate or defer payment of, or serve or permit the service of
any notice pursuant to Section 17 of the Landlord and Tenant
(Covenants) Xxx 0000 in respect of, any moneys due thereunder;
(2) waive, release, relax or vary any of the material terms thereof;
(3) exercise any right to determine or extend the same;
(4) grant any licence, consent or approval thereunder;
(5) accept a surrender of the whole or any part thereof; or
(6) agree to do any of the foregoing; and
(E) supply to the Bank from time to time on demand such information in
relation to any of the foregoing matters as the Bank shall require.
10.2 The Company hereby undertakes with the Bank that in relation to any lease
or agreement for lease under which all or any part of the Charged Property
is held by the Company the Company will:
(A) punctually pay the rents reserved by and perform and observe all of
the covenants, conditions, agreements and obligations on the part of
the lessee contained therein;
(B) duly enforce all of the covenants, conditions, agreements and
obligations on the part of the lessor contained therein;
(C) duly and promptly deal with any review of any rent reserved by such
lease and not agree to any revised rent or appoint or agree to the
appointment of any third party to determine such rent without the
prior written consent of the Bank;
(D) forthwith notify the Bank of any matter or event by reason of which
such lease has or may become subject to determination or to the
exercise by the lessor of any right of re-entry or forfeiture;
(E) if so required by the Bank, commence and pursue diligently
applications for relief from forfeiture of any lease;
(F) not, without the prior written consent of the Bank:
27
(1) accelerate or defer payment of any moneys due thereunder;
(2) waive, release, relax or vary any of the terms thereof;
(3) exercise any right to determine or extend the same;
(4) apply for any licence, consent or approval thereunder;
(5) surrender, assign, charge or otherwise dispose of the whole or
any part thereof; or
(6) agree to do any of the foregoing; and
(G) supply to the Bank from time to time on demand such information in
relation to any of the foregoing matters as the Bank shall require.
11. INSURANCES
11.1 The Company shall at all times during the subsistence of the Security:
(A) comply with all obligations with respect to insurance of or relating
to any part of the Charged Property imposed by the terms of any
contract between the Company and any person other than the Bank and at
the request of the Bank produce evidence satisfactory to the Bank that
such terms are being complied with;
(B) notwithstanding clause 11.1(A), and except to the extent that the Bank
agrees otherwise in writing, insure and keep insured, with an insurer
approved by the Bank, each part of the Charged Property as is of an
insurable nature:
(1) against loss or damage by fire and by terrorist activity,
(2) against all other usual risks and contingencies which are insured
against in accordance with sound commercial practice, and
(3) against all such other risks and contingencies which the Bank may
specify at any time,
for the amount of its full reinstatement or replacement cost, or in
such other amount as the Bank may require with, if so required by the
Bank, adequate provision also being made for architects' and other
professional fees, the expense of demolition, site clearance and
shoring-up, VAT and for three years (or such longer or shorter period
as the Bank considers appropriate) loss of rent (taking into account
potential increases as a result of rent reviews) and forward
inflation; and
(C) except to the extent that the Bank permits otherwise by means of a
prior written consent, also insure and keep itself and key persons in
relation to its business insured, with an insurer approved by the
Bank, against all other risks (including employer's liability, public
liability, liability under the Defective Premises Xxx 0000 and all
forms of consequential loss), and in such amounts, as the Bank may
require at any time.
11.2 The Company will, at the request of the Bank made at any time, ensure that
each Policy is on such of the following terms as the Bank requires:
28
(A) the Policy is in the joint names of the Company and the Bank (with the
Bank noted as first loss payee) and such other name or names as the
Bank may approve;
(B) the Policy is not capable of cancellation by the insurer (whether at
the Company's request or otherwise) other than after giving 30 days'
prior written notice to the Bank;
(C) the Policy provides that the insurer will notify the Bank promptly in
writing if the premium or other moneys payable thereunder are not paid
when due and will refrain from cancelling such Policy by reason only
of the non-payment of such moneys for a period of at least 30 days
from the date on which such notice is given;
(D) the Policy provides that the insurance effected shall not be
invalidated or prejudiced so far as the Bank is concerned by any
breach of the insuring conditions or any other act or omission unknown
to or beyond the control of the Bank on the part of the Company or any
other person;
(E) the Policy provides that the insurer will waive any rights of
subrogation against the Bank or to any rights of the Bank against the
Company;
(F) the Policy provides that the insurance is primary and without right of
contribution from any other insurance policy (whether or not the Bank
has any interest (including any interest as mortgagee, chargee or
first loss payee) in such other policy);
(G) the Policy provides that the proceeds of the insurance are payable to
the Bank; and
(H) such other terms as the Bank may specify from time to time.
11.3 The Company will, if so requested by the Bank, cause the interest of the
Bank in each part of the Charged Property which is for the time being
insured otherwise than in the Bank's own name or in joint names in
accordance with clause 11.2(A) (or, as the case may be, each such part as
may be specified by the Bank) to be noted by indorsement on the Policy or
Policies relating thereto.
11.4 The Company will not effect any insurance policy if a claim thereunder
would result in the operation of any average clause in that or any other
insurance policy.
11.5 Except to the extent that the Bank permits otherwise by means of a prior
written consent the Company will:
(A) do everything necessary (or which the Bank considers appropriate) to
maintain each Policy in full force and effect and to ensure that no
part of any Policy becomes void, voidable or unenforceable (including
the punctual payment of all premiums before they become overdue); and
(B) forthwith (at the Company's cost) do all things necessary or which the
Bank considers appropriate for restoring any part of any Policy which
is or becomes void, voidable or unenforceable or to effect a new
insurance policy to replace any part of any Policy which is or becomes
void, voidable or unenforceable and to ensure that
29
any such new insurance policy forms part of the Charged Property and
is subject to this Debenture.
11.6 On the Bank's request the Company will immediately:
(A) deposit with the Bank each document relating to any insurance effected
or maintained by the Company (whether or not effected or maintained in
compliance with clause 11.1), including each Policy and each receipt
or other evidence of payment of premiums and other amounts; and
(B) produce to the Bank any such insurance documents which have not been
required to be deposited with the Bank and provide the Bank with
copies of the same.
11.7 If the Company becomes aware that any Policy has been or is about to be
cancelled or materially modified, the Company will immediately inform the
Bank in writing and provide such details or evidence as the Bank may
request.
11.8 The Company will procure that those parts of the Charged Property which are
to be insured in accordance with this clause 11 are valued (at the
Company's expense) annually or at such longer intervals as the Bank may
agree in writing, in each case by competent professional valuers approved
by the Bank, to determine their full reinstatement or replacement cost and
will produce a copy of such valuation to the Bank within 14 days of it
being received by the Company.
11.9 The Company shall reimburse the Bank on demand for all costs and expenses
incurred by it in connection with any other review of the insurances in
respect of the Charged Property or any part thereof which review may be
conducted at any time and from time to time after the date hereof.
11.10 If the Company becomes aware of the occurrence of any event which may,
ought to or would give rise to a claim under any Policy, the Company will
immediately give written notice to the Bank of such event.
11.11 The Company will make or assist in the making of any appropriate claim
under any Policy in such manner as the Bank may require. The Company will
not, without the Bank's prior written consent, in any way admit, compromise
or settle any claim or any liability or any matter which may be the subject
of a claim under any Policy.
11.12 The Company authorises the Bank in the Company's name and on the Company's
behalf to make any claim against the insurer under any part of any Policy
and to admit, compromise or settle such claim and/or any liability relating
to any such claim and/or any potential claim.
11.13 The Company also authorises the Bank to receive any amounts payable in
respect of any Policy and/or any claim under any Policy and give a good
discharge to the insurer in respect of such amounts.
11.14 The Company declares that it will hold all moneys received under any
Policy relating to the Charged Property (whether or not it is one for the
maintenance of which the Company is liable under this Debenture and whether
the event by virtue of which such moneys became payable occurred before, on
or after the date of this Debenture) on trust for the Bank to be applied:
30
(A) in or towards making good the loss in respect of which such moneys
were received, or
(B) in accordance with clause 16.2,
as the Bank may in its absolute discretion require except to the extent
that a different application is required by law. Any such application
required by the Bank (but not the creation of the trust) is subject to the
rights of any person with a lawful claim upon such moneys, but in each case
only insofar as the law requires the Bank to take account of those rights.
11.15 The Company hereby waives any right it may have to require that insurance
proceeds be applied in reinstatement of any property or assets forming part
of the Charged Property.
11.16 If default shall be made by the Company in complying with this clause 11,
the Bank may, but shall not be required to, effect or renew any such
insurance as is mentioned therein in such sum as the Bank shall think fit
either in its own name or in the joint names of the Company and the Bank
(with the Bank noted as first loss payee) and such other name or names as
the Bank may approve or in the name of the Company with an indorsement of
the Bank's interest. The Company shall reimburse all moneys expended by the
Bank in so effecting or renewing any such insurance to the Bank on demand
and shall pay interest thereon from the date of payment by the Bank until
such sums are reimbursed at the rate and otherwise as mentioned in clause
2.4.
12. MONITORING THE SECURITY
12.1 The Company will permit the Bank to take any action which the Bank
considers appropriate to ascertain whether or not the Company has fully
complied with each of the Company's obligations under this Debenture and/or
the extent to which the Charged Property remains an appropriate and/or
adequate security for the Secured Liabilities. In particular:
(A) if the Bank so requests, the Company will immediately produce to the
Bank such evidence in relation to those matters as the Bank reasonably
considers appropriate; and
(B) the Company will permit the Bank to view, analyse and assess the state
of repair and condition of any part of the Charged Property.
12.2 If at any time the Company fails, or is believed by the Bank to have
failed, to perform or comply with any of its obligations under this
Debenture, it shall be lawful for the Bank, but the Bank shall be under no
obligation, to:
(A) enter all or any part of the Charged Property with agents appointed by
it and architects, surveyors, contractors, workmen and others and to
execute such works and do such other things as may in the opinion of
the Bank be required to prevent, reduce the effect of or remedy such
failure; and/or
(B) take such other steps on or in relation to the Charged Property
(including the payment of money) as may in the opinion of the Bank be
required for any of such purposes.
31
The Company shall reimburse to the Bank on demand all sums expended by the
Bank in executing such works, doing such things and taking such steps and
shall pay interest thereon from the date of such demand until such sums are
reimbursed at the rate and otherwise as mentioned in clause 2.4.
13. EXTENSION AND VARIATION OF THE LAW OF PROPERTY ACT 1925
13.1 The restriction on the consolidation of mortgages imposed by Section 93(1)
of the LPA shall not apply to this Debenture or the Security.
13.2 The powers of leasing, letting, entering into agreements for leases or
lettings and accepting and agreeing to accept surrenders of leases
conferred by Sections 99 and 100 of the LPA may be exercised by the Bank at
any time on or after the occurrence of an Enforcement Event on such terms
as the Bank shall in its absolute discretion think fit and without the need
for the Bank to comply with any restrictions imposed by or any other
provisions of the said Sections 99 and 100. The Bank may delegate the
powers conferred by Sections 99 and 100 of the LPA, as varied and extended
by this Debenture, to any person and any such delegation shall neither
preclude the subsequent exercise of such powers by the Bank itself nor the
subsequent delegation thereof to some other person or any revocation of
such delegation.
13.3 Notwithstanding any other provisions of this Debenture, the Secured
Liabilities shall be deemed for the purposes of Section 101 of the LPA to
have become due and payable, and all the powers referred to in clause 14.1
shall arise, on the date of this Debenture.
13.4 Sections 103 and 109(1) of the LPA shall not apply to the charges created
by this Debenture. All the powers referred to in clause 14.1 may be
exercised by the Bank without notice to the Company on or at any time after
the occurrence of an Enforcement Event.
14. ENFORCEMENT
14.1 On or at any time after the occurrence of an Enforcement Event the Bank
may, without notice to the Company:
(A) take possession of and hold all or any part of the Charged Property;
and/or
(B) appoint one or more persons to be:
(1) a receiver; and/or
(2) a receiver and manager; and/or
(3) (except to the extent that such appointment is or would be
prohibited by section 72A of the Insolvency Act 1986) an
administrative receiver,
in each case, of the whole or any part of the Charged Property; and/or
(C) exercise in any manner it considers appropriate all or any of the
powers, authorities and discretions:
(1) conferred on mortgagees by the LPA as varied or extended by this
Debenture;
32
(2) conferred by this Debenture expressly or by implication on any
Receiver; and
(3) otherwise conferred by statute or common law on mortgagees or
receivers (including in the circumstances referred to by way of
exception in clause 14.1(B), the appointment of an administrator
under the Insolvency Act 1986).
14.2 The Bank may (subject to paragraph 17 of Schedule B1 to the Insolvency Act
1986) exercise any of its powers under clauses 14.1(A) and 14.1(C) whether
or not it shall have previously appointed any person to be a Receiver.
14.3 The Bank may:
(A) (so far as it is lawfully able) remove any Receiver; and
(B) appoint another person or other persons as Receiver or Receivers
either in the place of a Receiver who has been so removed or who has
ceased to act or to act jointly with any other Receiver.
14.4 The Bank's powers to appoint a person to be a Receiver shall:
(A) be in addition to, and not to the prejudice of, all statutory and
other powers of appointment of the Bank to appoint a Receiver under
the LPA as extended by this Debenture or otherwise;
(B) be and remain exercisable by the Bank in respect of any part of the
Charged Property in respect of which no appointment of any person as a
Receiver by the Bank shall from time to time be subsisting and
notwithstanding that an appointment by the Bank shall have subsisted
and been withdrawn in respect of any part of the Charged Property
and/or shall be subsisting in respect of any other part of the Charged
Property; and
(C) be without prejudice to any statutory power which the Bank may have to
appoint an administrator of the Company under the Insolvency Xxx 0000
or any other applicable enactment.
14.5 Every appointment of any person to be a Receiver and every removal of any
Receiver may be made by deed or by instrument in writing under the hand of
any officer or manager of the Bank or any person authorised for such
purpose by the Bank or any such officer or manager.
14.6 If at any time two or more persons shall hold office as Receivers of the
same part of the Charged Property, each such Receiver shall be entitled
(unless the contrary shall be stated in the instrument appointing him) to
exercise individually as well as jointly (and to the exclusion of the other
or others of them) all the powers and discretions conferred on Receivers by
this Debenture or by law.
14.7 Except (a) as provided by law, (b) for any liability of the Bank resulting
from any appointment made by it in accordance with this clause and (c) for
any liability of the Receiver resulting from any exercise by him of any
powers on his own behalf in accordance with clause 15.2(Z)(3), each
Receiver shall be deemed at all times and for all purposes to be the agent
of the Company which shall be solely responsible for his acts, omissions,
defaults, losses and misconduct, for all obligations and liabilities
entered into, incurred or adopted by him and for the payment of his
remuneration and the Bank will not
33
be responsible, in any circumstances whatsoever, to the Company or to any
other person for any of them. No Receiver shall at any time act as agent
for the Bank unless the Bank shall expressly appoint the Receiver in
writing to be its agent.
14.8 If the Bank or any Receiver shall enter (or shall be deemed to have
entered) into possession of the Charged Property or any part thereof, it or
he may from time to time and at any time go out of such possession.
14.9 Every Receiver shall be entitled to remuneration for his services. The
amount of such remuneration shall:
(A) be settled from time to time by agreement between him and the Bank or,
failing any such agreement, fixed by the Bank; and
(B) not be limited to the maximum rate specified in Section 109(6) of the
LPA.
The foregoing shall be subject to Section 36 of the Insolvency Xxx 0000.
14.10 DISCLOSURE OF SOFTWARE AND INFORMATION
(A) Without prejudice to the foregoing, if the Bank exercises any of its
rights and/or powers pursuant to clause 14.1, the Bank may serve a
written notice upon the Company to provide to the Bank a copy of the
Software;
(B) Following receipt of any such notice delivered pursuant to clause
14.10(A) the Company shall provide to the Bank a copy of the Software
in both source code and object code format (the "Disclosed Code")
within five (5) Business Days of receipt of such notice;
(C) Upon any exercise by the Bank of any of its rights pursuant to clause
14.1 neither the Bank nor any Receiver shall be required to keep any
information relating to the Company (including but not limited to
information relating to any Charged Intellectual Property and any
software code disclosed pursuant to clause 14.10(A)) confidential.
15. POWERS OF RECEIVER
15.1 Every Receiver shall, in relation to the Charged Property in respect of
which he is appointed and subject to any limitations or restrictions
expressed in the instrument appointing him but notwithstanding any
winding-up or dissolution of the Company, have:
(A) all the powers conferred by the LPA on mortgagors and on mortgagees in
possession and on receivers appointed under that Act, as varied and
extended by the provisions of this Debenture;
(B) whether or not the Receiver is in fact an administrative receiver, all
the powers of an administrative receiver set out in Schedule 1 to the
Insolvency Xxx 0000 as varied and extended by the provisions of this
Debenture and all other powers conferred on or exercisable by him by
virtue of the provisions of the Insolvency Xxx 0000;
(C) all the powers otherwise conferred by statute or common law on
mortgagees in possession or receivers; and
34
(D) power in the name or otherwise on behalf of and at the cost of the
Company to exercise all the powers and rights of an absolute owner and
to do or omit to do anything which the Company itself could do or omit
to do.
15.2 In addition and without prejudice to the generality of the foregoing, every
Receiver shall (subject to any limitations or restrictions expressed in the
instrument appointing him but notwithstanding any winding-up or dissolution
of the Company) have the following powers (and every reference in this
clause 15.2 to the "Charged Property" shall be read as a reference to that
part of the Charged Property in respect of which such Receiver was
appointed):
(A) TAKE POSSESSION
to enter upon, take possession of, collect and get in all or any part
of the Charged Property including rents and other income whether
accrued before or after the date of his appointment and, for those
purposes, to make such demands and to take such proceedings as he may
think fit;
(B) DEAL WITH CHARGED PROPERTY
to sell, transfer, assign, convey, exchange, surrender or otherwise
dispose of or deal with and/or grant options in respect of each and
every part of the Charged Property in such manner (whether by public
auction, private contract or otherwise) on such terms and for such
consideration as he may in his absolute discretion think fit
including, without the consent of the Company, the severing and
separate disposal from the premises to which they were affixed of
fixtures, fittings and plant and machinery;
(C) BORROWING
subject to clause 5.1, to raise or borrow money from any person
(including the Bank) on either a secured or an unsecured basis for any
of the purposes set out in this clause on such terms and in such
manner as he shall think fit, including terms whereby the obligations
incurred thereby and/or any security therefor will rank either in
priority to, pari passu with or subsequent to the Secured Liabilities
and/or the Security or any part thereof (and no person lending such
money shall be concerned to see or enquire as to the propriety or
purpose of the exercise of such power or the application of money so
raised or borrowed);
(D) ASSISTANCE
without prejudice to the generality of clause 15.2(K), to appoint a
solicitor, accountant or other professionally qualified person to
assist him in the performance of his functions;
(E) PROCEEDINGS AND CLAIMS
to bring, prosecute, enforce, defend and abandon applications, claims,
disputes, actions, suits and proceedings in connection with the
business of the Company or all or any part of the Charged Property or
the Security and to negotiate, compromise and settle any of the same;
35
(F) ARBITRATION
to refer to arbitration any question affecting the Company, including
any applications, claims, disputes, actions, suits or proceedings
referred to in clause 15.2(E), and to take any action referred to
therein in connection with any question referred (whether by the
Receiver or any other person) to arbitration;
(G) INSURANCE
to arrange, effect, obtain, maintain, renew, replace, vary and/or
terminate and claim, settle claims and/or exercise all other rights
under, any policies of insurance, bonds or performance guarantees (or
arrangements having a similar effect) in respect of all or any part of
the Charged Property, the Company's business and/or any other matter
or thing in relation to his powers as he may think fit;
(H) SEAL
to use the Company's seal or, if the Company has more than one seal,
any of the Company's seals;
(I) EXECUTE DOCUMENTS
to execute and deliver any deed, receipt, letter or other document;
(J) NEGOTIABLE INSTRUMENTS
to draw, make, accept and endorse any xxxx of exchange, promissory
note or negotiable instrument;
(K) EMPLOYEES AND AGENTS
(1) to employ, hire and appoint officers, employees, workmen,
contractors, agents, managers and advisers of all kinds, whether
or not professionally qualified, including his own firm and
partners and employees of that firm, on such terms as to
remuneration and otherwise as he shall think fit; and
(2) to vary the terms of the employment, hiring and appointment of,
and dismiss, discharge and terminate the appointment of, any such
persons and any such persons employed, hired or appointed by the
Company;
(L) REPAIRS AND IMPROVEMENTS
to start, continue, carry out, complete and/or terminate any repair,
refurbishment, renewal, maintenance, management, decoration,
alteration, building, improvement and/or development of, and/or any
other works on, all or any part of the Charged Property and, in
connection therewith or otherwise, to apply for and obtain any
approval, permission, consent and licence (including any planning
permission, building regulation approval and Environmental Permit),
all as he may think fit or expedient;
36
(M) PAYMENTS
to make any payment which is, or which the Receiver may consider to
be, necessary or incidental to the performance of his functions or
needed to effect, maintain or satisfy any liability or obligation of
the Company;
(N) CARRY ON BUSINESS
to commence, carry on, manage, develop, reconstruct, amalgamate,
diversify and/or terminate any trade or business whatsoever, and/or to
concur in any of the foregoing, in such manner as he shall think fit;
(O) NEW SUBSIDIARY
to promote or procure the formation of any body corporate with a view
to such body corporate becoming a subsidiary of the Company or
otherwise;
(P) TRANSFERS
without prejudice to the generality of clause 15.2(B), to transfer or
grant any interest in the whole or any part of the Charged Property
and/or of the business of the Company to subsidiaries of the Company
or any other person in such manner and generally on such terms as he
thinks fit;
(Q) LANDLORD AND TENANT
without restriction, to grant, vary the terms of, determine, surrender
or accept surrenders of leases or tenancies of, or licences, easements
and/or options in respect of, each and every part of the Charged
Property to, with or from such person (including the Bank) in such
manner and generally on such terms and conditions as he thinks fit;
(R) ARRANGEMENTS AND COMPROMISES
(1) to enter into any arrangement or compromise with any person; and
(2) to allow time for payment by or to the Company of any debts
either with or without security;
(S) CALLS
to make, or to require the directors of the Company to make, such
calls in respect of any uncalled capital of the Company as he may
think expedient;
(T) CLAIMING IN INSOLVENCIES
to rank and/or claim and/or prove in the bankruptcy, insolvency,
sequestration or liquidation of any person indebted to the Company and
to receive dividends, and to accede to trust deeds or other
arrangements for or with the creditors of any such person;
37
(U) WINDING-UP PETITIONS
to present or defend a petition for the winding-up of the Company;
(V) REGISTERED OFFICE
to change the situation of the Company's registered office;
(W) ACQUISITIONS
to purchase, take a lease or tenancy of, hire or otherwise acquire any
properties, assets, interests or rights of any description which he
shall consider necessary or desirable for any of the purposes set out
in this clause or otherwise for the benefit of the whole or any part
of the Charged Property;
(X) REDEMPTION OF SECURITY
to redeem, discharge, compromise or acquire any security, whether or
not having priority to the Security or any part of it, on such terms
as he may think fit;
(Y) LIABILITIES AND OBLIGATIONS
(1) to enter into such contracts, bonds, covenants, guarantees,
commitments, indemnities and other liabilities or obligations as
he shall think fit; and
(2) to perform, rectify, complete, repudiate, rescind, disclaim,
abandon, disregard, determine, enforce, vary, assign, novate or
otherwise dispose of any of the Company's contracts or any of its
rights, liabilities or obligations (whether arising under a
contract or otherwise); and
(Z) OTHER POWERS
(1) to (a) exercise any option, election or discretion to charge VAT
or to treat supplies made by the Company as taxable supplies for
the purposes of VAT (and neither the Bank nor the Receiver shall
be liable for any loss resulting from such exercise) and (b)
transfer to any person the right of the Company to recover any
VAT;
(2) to do all such other things as may seem to him to be necessary or
desirable for the maintenance, preservation, protection,
perfection, improvement and/or realisation of all or any part of
the Charged Property and/or of the Security or to be incidental
or conducive to any of the functions, powers, authorities or
discretions conferred on or vested in him under or by virtue of
this Debenture or by law; and
(3) to exercise any of the powers set out in this clause 15.2 in the
name or otherwise on behalf of the Company (notwithstanding any
winding-up of the Company) or in his own name or otherwise on his
own behalf.
15.3 In making any sale or other disposal of any of the Charged Property or any
acquisition in the exercise of their respective powers, any Receiver or the
Bank may accept or dispose of such consideration as he or it shall think
fit or, if thought expedient by such Receiver or the Bank, may effect such
sale, disposal or acquisition for no consideration. Without
38
prejudice to the generality of the foregoing, any such consideration may be
wholly or partly:
(A) in the form of cash (in any currency) or of shares, securities,
obligations or other non-cash assets of any nature whatsoever;
(B) payable or receivable in a lump sum or in a single tranche (whether or
not deferred) or by instalments; and
(C) quantified after the sale, disposal or acquisition has taken place
(whether by a third party or by reference to future results or events
or otherwise howsoever).
Any contract for any such sale, disposal or acquisition by any Receiver or
the Bank may contain conditions excluding or restricting the personal
liability of such Receiver or the Bank.
15.4 Each Receiver may choose when, where, how and how often to exercise each of
his rights, powers and remedies as provided by this Debenture or by law.
None of those rights, powers and remedies will, except where stated
otherwise, be restricted in any respect by reference to any other such
power, right or remedy.
16. APPLICATION OF MONEYS
16.1 All moneys received by any Receiver pursuant to this Debenture shall
(subject to the rights and claims of any person having prior rights
thereto) be applied in the following order:
(A) firstly, in the payment and discharge of the costs, charges and
expenses of and incidental to the Receiver's appointment, of any
liabilities incurred or payable by him whether on his own account or
on behalf of the Company in the exercise of any of his powers
including the costs of realisation of that part of the Charged
Property in respect of which he was appointed and of all other
outgoings properly payable by him;
(B) secondly, in the payment of his remuneration; and
(C) thirdly, in payment to the Bank, whereupon the Bank may apply the same
in accordance with clause 16.2.
Section 109(8) of the LPA will not apply in relation to any Receiver.
16.2 All moneys from time to time received or recovered by the Bank from the
Company or from any person or persons liable to pay the same or from any
Receiver or otherwise pursuant to this Debenture or standing to the credit
of any account of the Company with the Bank (including the proceeds of any
conversion of currency) may (subject to the rights and claims of any person
having prior rights thereto), in the absence of any contrary application in
accordance with any of the other provisions of this Debenture, be applied
by the Bank (and notwithstanding any purported appropriation by the
Company) either as a whole or in such proportions and in such order and at
such time or times and otherwise in such manner as the Bank shall think
fit:
(A) in or towards the discharge of all or any of the Secured Liabilities
which at the time of such application are due and payable; or
39
(B) in accordance with clause 16.3.
16.3 Any moneys referred to in clause 16.2 which are to be applied in accordance
with this clause 16.3 may be paid by the Bank to the credit of any suspense
or other account after which they may be held in such account for so long
as the Bank shall think fit pending any further application from time to
time of such moneys (as the Bank shall be entitled, but not obliged, to do
in its discretion) in accordance with the provisions of clause 16.2.
17. PROTECTION OF THIRD PARTIES
17.1 The protection given to purchasers from a mortgagee in Sections 104 and 107
of the LPA and to persons dealing with an administrative receiver in
Section 42(3) of the Insolvency Xxx 0000 shall apply equally to purchasers
and any other persons dealing with the Bank or a Receiver and no purchaser
or other person dealing with the Bank or any Receiver shall be:
(A) bound to see or enquire whether any of the Secured Liabilities have
become due and payable or whether any money is due under this
Debenture;
(B) bound to see or enquire whether any of the powers of the Bank or such
Receiver have become exercisable;
(C) concerned with any propriety or regularity of any dealing by or with
the Bank or such Receiver; or
(D) concerned as to the application of any money or other asset paid or
transferred to or at the direction of the Bank or such Receiver.
18. DELEGATION
18.1 The Bank and any Receiver may at any time and from time to time delegate by
power of attorney or in any other manner to any person or persons all or
any of the powers authorities and discretions which are for the time being
exercisable by the Bank or such Receiver under this Debenture or by law in
relation to the Charged Property or any part of it. Any such delegation may
be made upon such terms (including power to sub-delegate) and subject to
such regulations as the delegator may think fit.
18.2 The Bank shall not be in any way liable or responsible to the Company for
any liabilities, losses, costs or expenses arising from any act or omission
on the part of any delegate or sub-delegate appointed in accordance with
clause 18.1 except to the extent that they shall be caused by the fraud,
negligence or wilful misconduct of any person who is both (a) a delegate or
a sub-delegate and (b) an officer or an employee, of the Bank.
18.3 No Receiver shall be in any way liable or responsible to the Company for
any liabilities, losses, costs or expenses arising from any act or omission
on the part of any delegate or sub-delegate appointed in accordance with
clause 18.1 except to the extent that they shall be caused by the fraud,
negligence or wilful misconduct of any person who is both (a) a delegate or
a sub-delegate and (b) and officer or an employee, of such Receiver.
19. POWER OF ATTORNEY
19.1 The Company hereby by way of security for the performance of the Company's
obligations under this Debenture irrevocably (within the meaning of Section
4 of the Powers of
40
Attorney Act 1971) appoints the Bank and any Receiver jointly and also
severally to be the attorney or attorneys of the Company and in its name
and as its act and deed or otherwise on its behalf to sign, seal, execute,
deliver, perfect and do all deeds, instruments, acts and things which may
be required or which the attorney shall consider desirable:
(A) for carrying out any obligation imposed on the Company by or pursuant
to this Debenture (including the obligations of the Company under
clause 7 and the statutory covenant referred to in that clause);
(B) for carrying any sale, lease or other dealing whatsoever by the Bank
or any Receiver into effect;
(C) for conveying or transferring any legal estate or other interest in
land or any other property whatsoever;
(D) for getting in all or any part of the Charged Property; and
(E) generally for enabling the Bank and any Receiver to exercise the
respective powers, authorities and discretions conferred on them by or
pursuant to this Debenture or by law.
Each of the Bank and any Receiver shall have full power to delegate the
power conferred on it or him by this clause 19.1 in accordance with clause
18.1 but no such delegation shall preclude the subsequent exercise of such
power by the Bank or the Receiver itself or himself or preclude the Bank or
the Receiver from making a subsequent delegation thereof to some other
person. Any such delegation may be revoked by the Bank or the Receiver at
any time.
19.2 The Company agrees to ratify and confirm all things done or purported to be
done by such attorney in the exercise or purported exercise of its or his
powers.
20. EFFECTIVENESS OF SECURITY
20.1 The Security shall be a continuing security for the Secured Liabilities and
shall not be considered as satisfied or discharged by any intermediate
payment or settlement of the whole or any part of the Secured Liabilities
or any other matter or thing whatsoever.
20.2 The Security shall be in addition to and independent of any other security
which the Bank may now or at any time in the future hold or take (whether
from the Company, the Obligor or any other person) for or in respect of the
Secured Liabilities or any of them or any other obligations whatsoever and:
(A) shall not operate so as in any way to prejudice, determine, affect or
merge in or with any such other security; and
(B) shall not be prejudiced, determined or affected by any such other
security or by any release, reassignment or discharge thereof.
The Company confirms that it is not relying on or expecting the Bank to
obtain and/or enforce any such security.
41
20.3 Any release or discharge of the Security or of any of the Secured
Liabilities shall not release or discharge the Company from any liability
to the Bank for the same or any other moneys which may exist independently
of this Debenture.
20.4 Any waiver, consent or approval given by the Bank in relation to this
Debenture shall only be effective if given in writing and then only for the
purpose and upon any terms and conditions on which it is given.
20.5 Neither the Security nor any remedy of the Bank in respect thereof shall be
prejudiced by:
(A) any time or indulgence granted to the Company and/or the Obligor or
any other person; or
(B) any delay or abstention by the Bank in perfecting or enforcing any
remedies, securities, guarantees or rights it may now or in the future
have from or against the Company and/or the Obligor or any other
person; or
(C) any waiver, release, variation, act, omission, forbearance,
unenforceability, indulgence or invalidity of or relating to any such
remedy, security, guarantee or right; or
(D) any amendment, variation, waiver or release of any of the Secured
Obligations; or
(E) any of the Secured Obligations being at any time illegal, invalid,
unenforceable or ineffective; or
(F) any winding-up, dissolution, administration or re-organisation of or
other change in the Obligor or any other company, corporation,
partnership or other person; or
(G) any other act or thing whatsoever which, but for this clause 20.5,
would or might prejudice the Security or the right of the Bank to any
such remedy except for a reassignment, release or discharge in
accordance with the provisions of clause 21.
20.6 The Bank may choose when, where, how and how often to exercise each of its
rights, powers and remedies as provided by this Debenture or by law. No
failure on the part of the Bank to exercise, or any delay on its part in
exercising, any such right, power or remedy shall impair the same or
operate or be construed as a waiver thereof, nor shall any single, partial
or defective exercise of any such right, power or remedy preclude any
further or other exercise thereof or the exercise of any other such right,
power or remedy. The rights and remedies provided in this Debenture are
cumulative and not exclusive of any rights or remedies provided by law.
20.7 If, at any time, any provision of this Debenture is or becomes illegal,
invalid or unenforceable in any respect (or any of the security intended to
be created by or pursuant to this Debenture is ineffective) under any law
of any jurisdiction, such illegality, invalidity, unenforceability or
ineffectiveness shall not affect or impair:
(A) the legality, validity or enforceability of the remaining provisions
or the effectiveness of any of the remaining security under such law;
or
(B) the legality, validity or enforceability of such provision or the
effectiveness of such security under the law of any other
jurisdiction.
42
20.8 Without prejudice to the generality of this Clause 20, the Company
expressly confirms that it intends that the provisions of this Debenture
and the sums covenanted to be paid and discharged by the Company pursuant
to this Debenture shall extend from time to time to any variation,
increase, extension or addition of or to the Finance Documents (however
fundamental) and/or any facility or amount made available under the Finance
Documents for the purposes of or in connection with any of the following:
acquisitions of any nature; increasing working capital; enabling investor
distributions to be made; carrying out restructurings; refinancing existing
facilities; refinancing any other indebtedness; making facilities available
to new persons; any other variation or extension of the purposes for which
any such facility or amount might be made available from time to time; and
any fees, costs and/or expenses associated with any of the foregoing.
21. REDEMPTION OF SECURITY
21.1 Upon and subject to the Bank being satisfied that:
(A) it is under no commitment, obligation or liability (whether actual or
contingent) to make advances or provide other financial accommodation
to the Obligor under or pursuant to the Finance Documents or to any
other person in respect of whose liabilities the Company has
undertaken a liability to the Bank under or pursuant to the Finance
Documents or which could otherwise lead to the Company incurring any
further obligation to the Bank under or pursuant to the Finance
Documents,
(B) the Company has no liability (whether actual or contingent) to the
Bank under or pursuant to the Finance Documents in respect of any
matter or thing whatsoever, and
(C) the Bank has no right, or does not intend to exercise any right, to
retain the Security in accordance with clause 23.1,
as soon as reasonably practicable thereafter and at the request and cost of
the Company, the Bank shall (but subject to the rights and claims of any
person having prior rights thereto) reassign the property and assets
assigned to the Bank by or pursuant to this Debenture and release or
otherwise discharge the Security but any such reassignment, release or
discharge shall be subject to clause 22. Each such reassignment, release
and discharge will be in such form as the Bank considers appropriate
(including on a without recourse and a without warranty basis).
22. AVOIDANCE OF PAYMENTS
22.1 Any settlement, reassignment, release or discharge between (a) the Company
and (b) the Bank or any Receiver shall (whether or not so expressed) be
deemed to be conditional upon no right, security, disposition or payment
granted or made to the Bank or such Receiver (as the case may be) by the
Company or any other person being void, avoided or set aside, either wholly
or in part, for any reason whatsoever, including by virtue of any
provisions or enactments relating to bankruptcy, insolvency, administration
or liquidation for the time being in force.
22.2 In the event of the whole or any part of any such right, security,
disposition or payment being so void, avoided or set aside, the Bank or
such Receiver (as the case may be) shall be entitled to enforce this
Debenture against the Company subsequently as if such settlement,
reassignment, release or discharge had not occurred and such right,
security,
43
disposition or payment (or, as the case may be, the part thereof so void,
avoided or set aside) had not been granted or made.
23. RETENTION OF SECURITY
23.1 Notwithstanding any other provision of this Debenture or any settlement,
reassignment, release, discharge or arrangement given or made by the Bank
pursuant to a discharge in full of the Secured Liabilities, the Bank may
retain the Security and all documents of title relating to, and
certificates or other documents representing or evidencing ownership of,
the Charged Property or any part thereof deposited with it pursuant to this
Debenture until the later to occur of (a) the Bank being satisfied that the
conditions set out in clauses 21.1(A) and 21.1(B) have been met and (b) the
expiry of the Retention Period relating to such discharge or, if
applicable, of the further period referred to in clause 23.2.
23.2 If at any time during the said Retention Period a petition shall be
presented for an order for the winding-up of the Company or for the making
of an administration order in respect of the Company or the Company shall
commence to be wound-up voluntarily or any analogous proceedings shall be
commenced in respect of the Company, the Bank may continue to retain the
Security and the documents aforesaid for such further period as the Bank
may determine and the Security and such documents shall be deemed to have
continued to have been held as security for the Secured Liabilities.
23.3 As used in this clause 23, the expression "Retention Period" means, in
relation to any discharge in full of the Secured Liabilities, the period
beginning on the date on which that discharge was made and ending on the
date falling one month after the expiration of the maximum period within
which that discharge can be declared void, avoided or reduced by virtue of
any applicable law or for any other reason whatsoever.
24. SET-OFF
24.1 Without prejudice to any rights the Bank may have at law or in equity or
otherwise, the Company authorises the Bank to apply any credit balance (in
whatever currency denominated) to which the Company is now or may at any
time hereafter become entitled on any account with any office or branch of
the Bank in any jurisdiction in accordance with clause 16.2. The Bank may
make such application at any time or times notwithstanding any specified
maturity of any deposits standing to the credit of any such account. The
Bank shall not be obliged to exercise any right given to it by this clause
24.1 or to notify the Company before exercising any such right.
25. NEW ACCOUNTS
25.1 If the Bank shall at any time receive or be deemed to have received notice
of any Encumbrance affecting the whole or any part of the Charged Property
which is prohibited by the terms of this Debenture:
(A) the Bank may open a new account or accounts for the Company in its
books, and
(B) if the Bank does not in fact open any such new account, then unless it
gives express written notice to the Company to the contrary, the Bank
shall be treated as if it had in fact opened such account or accounts
at the time when it received or was deemed to have received such
notice,
44
and as from such time and unless such express written notice shall be given
to the Company, all payments by or on behalf of the Company to the Bank
shall be credited or treated as having been credited to such new account or
accounts and not as having been applied in reduction of the Secured
Liabilities at such time.
26. CURRENCY
26.1 Without prejudice to clause 26.4, the Bank may, in connection with any
application of such moneys pursuant to clause 16.2 and whether for the
purpose of or pending the discharge of any of the Secured Liabilities,
convert any moneys referred to therein (including the proceeds of any
previous conversion under this clause 26.1) from their existing currency of
denomination into the currency of denomination (if different) of any of the
Secured Liabilities.
26.2 Any such conversion from one currency to another shall be made at the
Bank's then prevailing spot rate for the purchase of that other currency
with the first-mentioned currency at the office of the Bank by which such
conversion is made.
26.3 In the event that any such conversion is made for the purposes of the
discharge of any of the Secured Liabilities in accordance with clause
16.2(A), such Secured Liabilities shall only be discharged to the extent of
the proceeds of such conversion actually received by the Bank (net of any
premiums, commissions or other charges paid or incurred in connection
therewith).
26.4 If for any reason any person receives in respect of any obligation of the
Company under this Debenture or any order or judgment given or made in
relation hereto an amount (the "received amount") in a currency other than
the currency (the "contractual currency") in which such obligation is
payable under this Debenture or such order or judgment, the received amount
shall only constitute a discharge to the Company to the extent of the
amount (the "converted amount") in the contractual currency which such
person is able to purchase with the received amount at the prevailing
market rate in the normal course of business as soon as reasonably possible
after receipt. If the converted amount is less than the amount in the
contractual currency due to such person under this Debenture or such order
or judgment, the Company shall, as a separate and independent obligation,
forthwith on demand:
(A) pay to such person an amount in the contractual currency equal to the
deficit; and
(B) indemnify and keep indemnified such person from and against any
liability, loss, cost or expense which such person may incur or suffer
as a result of receiving the received amount or of converting it into
the contractual currency.
27. ASSIGNMENT
27.1 The Bank shall have a full and unfettered right to assign or transfer the
whole or any part of the benefit of this Debenture.
27.2 The Company may not assign or transfer any of the Company's rights or
obligations under this Debenture or enter into any transaction or
arrangement which would result in any of those rights or obligations
passing to or being held in trust for or for the benefit of another person.
45
27.3 The Bank shall be entitled to disclose any information concerning the
Company and any person connected or associated with it to:
(A) any person connected or associated with the Bank; and/or
(B) any actual or potential assignee or transferee of the whole or any
part of the benefit of this Debenture and/or any other Finance
Document; and/or
(C) any other successor or proposed successor of the Bank; and/or
(D) any person who has otherwise entered into or may otherwise enter into
contractual relations with the Bank in relation to this Debenture
and/or any other Finance Document.
The Company represents and warrants that it has (and subject to any
contrary requirement of law will maintain) any necessary authority by or on
behalf of any person connected or associated with it to agree to the
provisions of this clause.
27.4 The Company will, on the Bank's request, immediately execute and deliver to
the Bank any form of instrument required by the Bank to confirm or
facilitate any such assignment and/or transfer and/or contractual
relations.
28. COSTS AND EXPENSES
28.1 The Company shall on demand on a full indemnity basis pay to the Bank the
amount of all costs and expenses (including any tax liability, legal costs
and out-of-pocket expenses and, in each case, VAT or any similar tax
charged or chargeable in respect thereof) incurred by the Bank in
connection with:
(A) the preparation, negotiation, execution and delivery of this Debenture
and the completion of the transactions contemplated herein,
(B) any stamping or registration of this Debenture or any judgment given
in connection herewith,
(C) the preservation or exercise of any of the rights, powers and remedies
conferred on the Bank by this Debenture or the perfection or
enforcement of any other security for or guarantee in respect of the
Secured Liabilities,
(D) or as a consequence of taking or holding the Security or any claims or
proceedings in relation thereto or to any of the Charged Property
(including any proceedings instituted by or against the Bank in
relation to the title to the whole or any part of the Charged
Property),
(E) any actual or proposed amendment, supplement, waiver, consent,
reassignment, release or discharge in relation to this Debenture, and
(F) any dealing with or obtaining advice about any matter or question
arising out of or in connection with this Debenture,
together with interest from the date of such demand until the date of
payment by the Company at the rate and otherwise as mentioned in clause
2.4.
46
28.2 The Company shall pay all stamp, registration and other taxes to which this
Debenture or any judgment given in connection herewith is or at any time
may be subject (either directly or by reimbursing the Bank in accordance
with clause 28.1(B)) and shall indemnify the Bank against any liabilities,
costs, claims and expenses resulting from any failure to pay or delay in
paying any such tax.
28.3 The cost of the Company complying with any of its obligations under this
Debenture (including its obligations under clause 7) shall be borne by the
Company.
29. INDEMNITY
29.1 The Company agrees to indemnify and keep indemnified the Bank, each
Receiver and each Appointee from and against all liabilities, losses, costs
and expenses incurred or suffered by any such person in or in connection
with or directly or indirectly as a result of:
(A) any of the obligations or undertakings expressed to be binding on or
undertaken by the Company in or pursuant to this Debenture not being
performed or observed fully and punctually, and/or
(B) any representation or warranty given or made by the Company in or
pursuant to this Debenture being incorrect, untrue or misleading in
any respect, and/or
(C) the exercise or purported exercise of any of the powers, authorities
or discretions vested in any such person under or pursuant to this
Debenture, and/or
(D) any matter or thing done or omitted by any such person in any way
relating to the Charged Property or the Security,
save where such liabilities, losses, costs and expenses arise as a result
of the fraud, negligence or wilful misconduct of the person claiming to be
so indemnified or any of its officers or employees.
30. RESTRICTIONS ON LIABILITY
30.1 Except to the extent that any such exclusion will be prohibited or rendered
invalid by law, the Bank will not in any circumstances whatsoever (whether
by reason of taking possession of the Charged Property or any part thereof
or for any other reason whatsoever and whether as a mortgagee in possession
or on any other basis whatsoever):
(A) be liable to account to the Company or any other person as a mortgagee
in possession;
(B) be liable to account to the Company or any other person for anything
except the Bank's own actual receipts;
(C) be liable to the Company or any other person for any liabilities,
losses, costs or expenses arising from or connected with:
(1) any realisation of the Charged Property or any part thereof, or
(2) any act or omission of the Bank or its employees or agents in
relation to the Charged Property or any part thereof,
47
except to the extent that they shall be caused by the fraud,
negligence or wilful misconduct of the Bank or any of its officers or
employees.
30.2 All the provisions of clause 30.1 shall apply, mutatis mutandis, in respect
of the liability of any Receiver or any Appointee.
31. PAYMENTS FREE OF DEDUCTION
31.1 All payments to be made by the Company under this Debenture shall be made
in full without set-off or counter-claim and free and clear of and without
deduction for or on account of tax unless the Company is required to make
such payment subject to the deduction or withholding of tax, in which case
the sum payable by the Company 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 such deduction or
withholding, the Bank or other recipient receives and retains (free from
any liability in respect of any such deduction or withholding) a net sum
equal to the sum which it or he would have received and so retained had no
such deduction or withholding been made or required to be made. The Company
shall:
(A) account in full for the amount so deducted or withheld to the relevant
taxation or other competent authority on or before its due date; and
(B) furnish to the Bank or other recipient on or before such due date an
official receipt of the relevant taxation or other competent authority
for the amount so deducted or withheld or if such receipts are not
issued by the authority concerned a certificate of deduction or
equivalent evidence relating to such amount.
32. VALUE ADDED TAX
32.1 All sums payable by the Company under or pursuant to this Debenture are
exclusive of VAT. Accordingly, the Company shall pay such VAT in addition
to any sum which would otherwise be due. Where the Company belongs to a
different member state of the European Union from the payee for the
purposes of the supply in respect of which the payment is made, the Company
shall provide to the payee prior to the due date for payment or the raising
of any invoice (whichever is the earlier) details of the Company's own VAT
registration number.
33. NOTICES
33.1 Any notice (which term shall in this clause include any demand and any
other communication) to be given under this Debenture or in connection with
the matters contemplated by it shall, except where otherwise specifically
provided, be in writing.
33.2 Any such notice shall be delivered or sent to the intended recipient at its
address or facsimile or telex number, and marked for the attention of its
department or officer, as provided in clause 33.3 and may be:
(A) personally delivered, in which case it shall be deemed to have been
given upon delivery at the relevant address but, if it is so delivered
other than between 9.00 a.m. and 5.00 p.m. on a working day, it shall
be deemed to have been given when 9.00 a.m. on a working day next
occurs following such delivery; or
48
(B) if sent from and addressed to places within the United Kingdom, sent
by first class pre-paid post, in which case, if sent by the Bank to
the Company, it shall be deemed to have been given at 9.00 a.m. on the
second working day after the date of such posting or, if sent by the
Company to the Bank, it shall be deemed to have been given when
received by the Bank at such address but, if it is so received other
than between 9.00 a.m. and 5.00 p.m. on a working day, it shall be
deemed to have been given when 9.00 a.m. on a working day next occurs
following such receipt; or
(C) if sent from or addressed to any place outside the United Kingdom,
sent by pre-paid airmail, in which case, if sent by the Bank to the
Company, it shall be deemed to have been given at 9.00 a.m. on the
seventh working day after the date of such posting or, if sent by the
Company to the Bank, it shall be deemed to have been given when
received by the Bank at such address but, if it is so received other
than between 9.00 a.m. and 5.00 p.m. on a working day, it shall be
deemed to have been given when 9.00 a.m. on a working day next occurs
following such receipt; or
(D) sent by facsimile or telex, in which case, subject to confirmation of
uninterrupted transmission by a transmission report (in the case of a
facsimile) or to the recipient's answerback code having been duly
received by the sender at the start and end of the message (in the
case of a telex), such notice shall be deemed to have been given upon
the completion of its despatch, provided that if such completion takes
place other than between 9.00 a.m. and 5.00 p.m. on a working day it
shall (subject as aforesaid) be deemed to have been given when 9.00
a.m. on a working day next occurs following such completion.
33.3 The addresses and other details referred to in clause 33.2 are, subject to
clause 33.4:
Name: CTI Group (Holdings), Inc.
Address: 000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxxxx, XX 00000
Facsimile number: (000) 000 0000
For the attention of: Xxxx Xxxxxxx
Name: National City Bank
Address: Xxx Xxxxxxxx Xxxx Xxxxxx, Xxxxx 000X, Xxxxxxxxxxxx, Xxxxxxx 00000
Facsimile number: (000) 000-0000
Telephone number: (000) 000-0000
For the attention of: Xxxx X. Xxxxxxxxxxx
33.4 Either the Company or the Bank may notify the other of any change to the
address or any of the other details specified in clause 33.3, provided that
such notification shall only be effective on the date specified in such
notice or five working days after the notice is given, whichever is later.
49
33.5 Each communication and document made or delivered by either the Company or
the Bank to the other pursuant to this Debenture shall be in the English
language or accompanied by a translation thereof into English certified (by
an officer of the person making or delivering the same) as being a true and
accurate translation thereof.
33.6 As used in this clause 33, the expression "working day" means any day which
is not a Saturday or a Sunday or a public holiday in the place to which the
relevant notice is sent and the expression "working days" shall be
construed accordingly. All references therein to times of day are
references to times in that place.
33.7 The Company will not attempt to prevent, delay or evade the service of any
such notice.
33.8 The Bank may, but shall not be obliged to, (i) treat any notice given to it
otherwise than in accordance with this clause (including any notice given
orally) as a notice for the purposes of this Debenture and (ii) rely upon
and act in accordance with any notice which may be or purport to be given
by telephone or telex or facsimile transmission on behalf of the Company by
any person notified to the Bank by the Company as being authorised to give
such communication without enquiry as to the authority and identity of the
person making or purporting to make such communication. The Company shall
indemnify and keep the Bank indemnified on a full indemnity basis against
all liabilities, losses, costs and expenses incurred or suffered by the
Bank as a result of relying upon or acting in accordance with any such
notice.
34. DISCRETION
34.1 Except when stated otherwise in this Debenture, any liberty or power which
may be exercised, any determination which may be made and any opinion which
may be formed hereunder by the Bank or any Receiver may be exercised, made
and formed in its or his absolute and unfettered discretion without any
obligation to give reasons therefor.
35. CERTIFICATE
35.1 Any certificate or determination of the Bank as to the amount of all or any
part of the Secured Liabilities or any other matter referred to in this
Debenture shall, save for manifest error, be conclusive and binding on the
Company.
36. COUNTERPARTS
36.1 This Debenture may be executed in any number of counterparts, in which case
this Debenture will be as effective as if all signatures on the
counterparts were on a single copy of this Debenture.
37. OWNERSHIP OF DEBENTURE
37.1 This Debenture is and will remain the property of the Bank.
38. LAW
38.1 This Debenture shall be governed by, and construed in accordance with,
English law.
50
39. JURISDICTION
39.1 Subject to clause 39.2, the parties irrevocably agree that the English
courts shall have exclusive jurisdiction in relation to any legal action or
proceedings arising out of or in connection with this Debenture
("Proceedings") and waive any objection to Proceedings in such courts on
the grounds of venue or on the grounds that Proceedings have been brought
in an inappropriate forum.
39.2 The parties agree that clause 39.1 operates for the benefit of the Bank and
accordingly the Bank shall be entitled to take Proceedings in any other
court or courts having jurisdiction.
39.3 To the extent that the Company may be entitled in any jurisdiction to claim
for itself or its assets immunity from any suit, execution, attachment
(whether provisional or final, in aid of execution, before judgment or
otherwise) or other legal process or to the extent that in any jurisdiction
such immunity (whether or not claimed) may be attributed to it or its
assets, the Company irrevocably agrees not to claim and irrevocably waives
such immunity to the fullest extent permitted by the laws of such
jurisdiction.
40. DEED
40.1 Each of the Company and the Bank intends this document to be a deed and the
Company executes and delivers it as its deed.
40.2 The execution of this Deed by its signing by officers of the Company shall
also constitute its signing by the Company for the purposes of Section 2 of
the Law of Property (Miscellaneous Provisions) Xxx 0000.
40.3 The signing of this Deed by an officer of the Bank shall constitute its
signing by the Bank for the purposes of Section 2 of the Law of Property
(Miscellaneous Provisions) Xxx 0000.
IN WITNESS WHEREOF this Debenture has been executed as a deed by the Company and
has been signed by or on behalf of the Bank and is intended to be and is hereby
delivered on the date first above written.
51
COMPANY
EXECUTED as a deed by )
CTI GROUP (HOLDINGS), INC. )
acting by
/s/ Xxxx Xxxxxxx
-------------------------------------
Director
/s/ Xxxxxxx Xxxxxxxxx
-------------------------------------
Director/Secretary
BANK
NATIONAL CITY BANK,
a national banking association in the
United States
by /s/ Xxxx X. Xxxxxxxxxxx
----------------------------------
Xxxx X. Xxxxxxxxxxx
Vice President
52
SCHEDULE 1 : DETAILS OF REAL PROPERTY
PART 1 : REGISTERED LAND
(Freehold or leasehold property (if any) in England
and Wales belonging to the Company title to which
is registered at H.M. Land Registry)
County and District/ Description of
London Borough Property Title Number
-------------------- -------------- ------------
NONE
PART 2 : UNREGISTERED LAND
(Freehold or leasehold property (if any) in England and Wales
belonging to the Company title to which is not
registered at H.M. Land Registry)
(a) The freehold/leasehold property known as:
NONE
and comprised in the following title deed(s) or other document(s) of title:
Date Document Parties
---- -------- -------
NONE
53
(b) The freehold/leasehold property known as:
NONE
and comprised in the following title deed(s) or other document(s) of title:
Date Document Parties
---- -------- -------
NONE
54
SCHEDULE 2 : DETAILS OF CHARGED INTELLECTUAL PROPERTY
PART 1 : PATENTS
Territory Description Patent No. Date of Grant
--------- ----------- ---------- -------------
European patent Billing System EP 0 541 535 09.07.97
designating: AT, BE,
CH, DE, DK, ES, FR,
XX, XX, XX, XX, XX, SE
PART 2 : REGISTERED TRADE AND SERVICE MARKS AND APPLICATIONS THEREFOR
Territory Trade/ Service Xxxx Class No. Application No. Date of Application
--------- ------------------- --------- --------------- -------------------
United Kingdom SMARTRECORD 09 2429635 11.08.06 (Pending)
Community Trade PROTEUS 09 3677218 18.02.04 (Pending)
Xxxx
PART 3 : OTHER INTELLECTUAL PROPERTY
Intellectual Property rights in the Software.
55
SCHEDULE 3 : INTELLECTUAL PROPERTY LITIGATION
Qwest Corporation and Qwest Communications Corporation, Case No.
2:04-cv-01088-JCC (W.D. Wash., filed 12 May 2004)
Qwest Corporation Case No. 1:104-cv-02076-JDT-TAB (S.D. Ind., filed 21 December
2004)
British Telecommunications PLC, Claim No. XXX 04041 (Great Britain: Patents
County Court, filed 5 October 2004)
56
SCHEDULE 4 : DETAILS OF INVESTMENTS
PART 1 : SHARES IN THE COMPANY'S SUBSIDIARIES
Description and Number
Name of Subsidiary Issued Share Capital of Shares Held Share Certificate Number(s)
------------------ -------------------- ---------------------- ---------------------------
CTI Data Solutions Ltd. 700,002 700,000 Ordinary
Redeemable L1
2 Ordinary L1
PART 2 : OTHER SHARES
Description and Number
Name of Company Issued Share Capital of Shares Held Share Certificate Number(s)
--------------- -------------------- ---------------------- ---------------------------
NONE
PART 3 : OTHER INVESTMENTS
Name of Issuer/ Obligor Description of Investment Document Evidencing or Indicating Title
----------------------- ------------------------- ---------------------------------------
NONE
57
SCHEDULE 5 : DETAILS OF ASSIGNED ASSETS
PART 1 : LIFE POLICIES
Insurer Policy No. Life Assured Sum Assured Date of Policy and Duration of Cover
------- ---------- ------------ ----------- ------------------------------------
NONE
PART 2 : NON-LIFE POLICIES
Insurer Policy No. Insured Risks Sums Payable Date of Policy and Duration of Cover
------- ---------- ------------- ------------ ------------------------------------
NONE
PART 3 : RENTAL INCOME
PAYABLE UNDER THE LEASES DESCRIBED BELOW:
Date Parties Subject Matter
---- ------- --------------
NONE
PART 4 : CONTRACTS
Date Parties Details
---- ------- -------
NONE
58
SCHEDULE 6 : DETAILS OF ACCOUNTS
PART 1 : CONTROLLED ACCOUNTS WITH THE BANK
Branch Sort Code Account Number
------ --------- --------------
NONE
PART 2 : CONTROLLED ACCOUNTS WITH OTHER BANKS
Name of bank Branch Sort Code Account Number
------------ ------ --------- --------------
NONE
PART 3 : OPERATING ACCOUNTS WITH THE BANK
Branch Sort Code Account Number
------ --------- --------------
NONE
PART 4 : OPERATING ACCOUNTS WITH OTHER BANKS
Name of bank Branch Sort Code Account Number
------------ ------ --------- --------------
NONE
59
SCHEDULE 7 : FORMS OF NOTICE
PART 1 : FORM OF NOTICE OF ASSIGNMENT OF LIFE POLICY
To: [name of insurer]
Date: _____
Dear Sirs,
We hereby give you notice that by an assignment contained in a Debenture entered
into by us in favour of [name of Bank] (the "Bank") dated _____ we have assigned
absolutely to the Bank (subject to a provision for reassignment) all our right,
title and interest to and in the insurance policy (the "Policy") details of
which are set out below.
After your receipt of this notice:
(a) all payments under or arising from the Policy should be made to the Bank or
to its order;
(b) all remedies provided for in the Policy or available at law or in equity
are exercisable by the Bank;
(c) all rights to compel performance of your obligations under the Policy are
exercisable by the Bank;
(d) all rights, interests and benefits whatsoever accruing to or for the
benefit of ourselves arising from the Policy belong to the Bank;
(e) no amendment, waiver or release of any such rights, interests or benefits
shall be effective without the prior written consent of the Bank;
(f) no termination of such rights, interests or benefits shall be effective
unless you shall have given the Bank 30 days written notice of the proposed
termination specifying the action necessary to avoid such termination; and
(g) no breach or default on our part of any of the terms of the Policy shall be
deemed to have occurred unless you shall have given the Bank 30 days
written notice of the potential breach or default specifying how to make
good such breach or default.
Please acknowledge receipt of this notice by signing the acknowledgement on the
enclosed copy of this letter and returning the same to the Bank at _____ marked
for the attention of _____.
Details of the Policy:
Yours faithfully,
60
-------------------------------------
for and on behalf of
[name of Company]
[On copy only:
To: [name of Bank] (the "Bank") Date: _____
We acknowledge receipt of a notice in the foregoing terms, agree to the contents
thereof and to comply therewith and confirm that we have not received notice of
any previous assignments, charges or other encumbrances of or over any of the
right, title and interest, or any of the rights, interests or benefits, referred
to in such notice.
We are aware that you are relying on this acknowledgement in connection with
your rights under the Debenture.
For and on behalf of
[name of insurer]
-------------------------------------
[name in block capitals]
Authorised signatory]
61
PART 2 : FORM OF NOTICE OF ASSIGNMENT OF NON-LIFE POLICY
To: [name of insurer]
Date: _____
Dear Sirs,
We hereby give you notice that by an assignment contained in a Debenture entered
into by us in favour of [name of Bank] (the "Bank") dated _____ we have assigned
absolutely to the Bank (subject to a provision for reassignment) all our right,
title and interest to and in all rights and claims to which we are now or may at
any time hereafter become entitled in relation to the proceeds of the insurance
policy (the "Policy") details of which are set out below.
After your receipt of this notice:
(a) all payments under or arising from the Policy should be made to the Bank or
to its order;
(b) all remedies provided for in the Policy or available at law or in equity in
relation to such payments are exercisable by the Bank;
(c) all rights to compel performance of your obligations under the Policy to
make such payments are exercisable by the Bank;
(d) all rights, interests and benefits whatsoever accruing to or for the
benefit of ourselves arising from the Policy in relation to such
obligations and payments belong to the Bank;
(e) no amendment, waiver or release of any such rights, interests or benefits
shall be effective without the prior written consent of the Bank;
(f) no termination of such rights, interests or benefits shall be effective
unless you shall have given the Bank 30 days written notice of the proposed
termination specifying the action necessary to avoid such termination; and
(g) no breach or default on our part of any of the terms of the Policy shall be
deemed to have occurred unless you shall have given the Bank 30 days
written notice of the potential breach or default specifying how to make
good such breach or default.
Please acknowledge receipt of this notice by signing the acknowledgement on the
enclosed copy of this letter and returning the same to the Bank at _____ marked
for the attention of _____.
Details of the Policy:
Yours faithfully,
62
-------------------------------------
for and on behalf of
[name of Company]
[On copy only:
To: [name of Bank] (the "Bank") Date: _____
We acknowledge receipt of a notice in the foregoing terms, agree to the contents
thereof and to comply therewith and confirm that we have not received notice of
any previous assignments, charges or other encumbrances of or over any of the
right, title and interest, or any of the rights, claims, interests or benefits,
referred to in such notice.
We are aware that you are relying on this acknowledgement in connection with
your rights under the Debenture.
For and on behalf of
[name of insurer]
-------------------------------------
[name in block capitals]
Authorised signatory]
63
PART 3 : FORM OF NOTICE OF ASSIGNMENT OF RENTAL INCOME
To: [name of lessee/guarantor/surety]
Date: _____
Dear Sirs,
We hereby give you notice that by an assignment contained in a Debenture entered
into by us in favour of [name of Bank] (the "Bank") dated _____ we have assigned
absolutely to the Bank (subject to a provision for reassignment) all our right,
title and interest to and in all rights and claims to which we are now or may at
any time hereafter become entitled against the lessees or any guarantors or
sureties for the obligations of such lessees in relation to all rents and other
moneys now or at any time hereafter payable under or in respect of the lease
(the "Lease") details of which are set out below.
After your receipt of this notice:
(a) all payments to be made by you under or arising from the Lease should be
made to the Bank or to its order;
(b) all remedies provided for in the Lease or available at law or in equity in
relation to such payments are exercisable by the Bank;
(c) all rights to compel performance of your obligations under the Lease to
make such payments are exercisable by the Bank;
(d) all rights, interests and benefits whatsoever accruing to or for the
benefit of ourselves arising from the Lease in relation to such obligations
and payments belong to the Bank;
(e) no amendment, waiver or release of any such rights, interests or benefits
shall be effective without the prior written consent of the Bank;
(f) no termination of such rights, interests or benefits shall be effective
unless you shall have given the Bank 30 days written notice of the proposed
termination specifying the action necessary to avoid such termination; and
(g) no breach or default on our part of any of the terms of the Lease shall be
deemed to have occurred unless you shall have given the Bank 30 days
written notice of the potential breach or default specifying how to make
good such breach or default.
Please acknowledge receipt of this notice by signing the acknowledgement on the
enclosed copy of this letter and returning the same to the Bank at _____ marked
for the attention of _____.
Details of the Lease:
64
Yours faithfully,
-------------------------------------
for and on behalf of
[name of Company]
[On copy only:
To: [name of Bank] (the "Bank") Date: _____
We acknowledge receipt of a notice in the foregoing terms, agree to the contents
thereof and to comply therewith and confirm that we have not received notice of
any previous assignments, charges or other encumbrances of or over any of the
right, title and interest, or any of the rights, claims, interests or benefits,
referred to in such notice.
We are aware that you are relying on this acknowledgement in connection with
your rights under the Debenture.
For and on behalf of
[name of lessee/guarantor/surety]
-------------------------------------
[name in block capitals]
Authorised signatory]
65
PART 4 : FORM OF NOTICE OF ASSIGNMENT OF CONTRACT
To: [name of counterparty]
Date: _____
Dear Sirs,
We hereby give you notice that by an assignment contained in a Debenture entered
into by us in favour of [name of Bank] (the "Bank") dated _____ we have assigned
absolutely to the Bank (subject to a provision for reassignment) all our right,
title and interest to and in all rights and claims to which we are now or may at
any time hereafter become entitled under or in respect of the contract (the
"Contract") details of which are set out below.
After your receipt of this notice:
(a) all payments under or arising from the Contract should be made to the Bank
or to its order;
(b) all remedies provided for in the Contract or available at law or in equity
are exercisable by the Bank;
(c) all rights to compel performance of your obligations under the Contract are
exercisable by the Bank;
(d) all rights, interests and benefits whatsoever accruing to or for the
benefit of ourselves arising from the Contract belong to the Bank;
(e) no amendment, waiver or release of any such rights, interests or benefits
shall be effective without the prior written consent of the Bank;
(f) no termination of such rights, interests or benefits shall be effective
unless you shall have given the Bank 30 days written notice of the proposed
termination specifying the action necessary to avoid such termination; and
(g) no breach or default on our part of any of the terms of the Contract shall
be deemed to have occurred unless you shall have given the Bank 30 days
written notice of the potential breach or default specifying how to make
good such breach or default.
Please acknowledge receipt of this notice by signing the acknowledgement on the
enclosed copy of this letter and returning the same to the Bank at _____ marked
for the attention of _____.
Details of the Contract:
Yours faithfully,
66
-------------------------------------
for and on behalf of
[name of Company]
[On copy only:
To: [name of Bank] (the "Bank") Date: _____
We acknowledge receipt of a notice in the foregoing terms, agree to the contents
thereof and to comply therewith and confirm that we have not received notice of
any previous assignments, charges or other encumbrances of or over any of the
right, title and interest, or any of the rights, claims, interests or benefits,
referred to in such notice.
We are aware that you are relying on this acknowledgement in connection with
your rights under the Debenture.
For and on behalf of
[name of counterparty]
-------------------------------------
[name in block capitals]
Authorised signatory]
67
PART 5 : FORM OF NOTICE OF ASSIGNMENT OF CONTROLLED ACCOUNT
To: [name of bank]
Date: _____
Dear Sirs,
We hereby give you notice that by an assignment contained in a Debenture entered
into by us in favour of [name of Bank] (the "Bank") dated _____ we have assigned
absolutely to the Bank (subject to a provision for reassignment) all our right,
title and interest to and in all rights and claims to which we are now or may at
any time hereafter become entitled in relation to all moneys now or at any time
hereafter standing to the credit of the account (the "Account") details of which
are set out below together with all rights relating or attaching thereto
(including the right to interest accruing thereon).
Accordingly, unless and until you receive instructions from the Bank to the
contrary:
(a) all our rights, powers and discretions in relation to the Account shall be
exercisable solely by the Bank;
(b) no moneys may be released from the Account without the prior written
consent of the Bank; and
(c) you should apply any amount standing to the credit of the Account in
accordance with the instructions from time to time given to you by the
Bank.
This authority and instruction is irrevocable without the prior written consent
of the Bank.
Please acknowledge receipt of this notice by signing the acknowledgement on the
enclosed copy of this letter and returning the same to the Bank at _____ marked
for the attention of _____.
Details of the Account:
Yours faithfully,
-------------------------------------
68
for and on behalf of
[name of Company]
[On copy only:
To: [name of Bank] (the "Bank") Date: _____
We acknowledge receipt of a notice in the foregoing terms, agree to the contents
thereof and to comply therewith and confirm that we have not received notice of
any previous assignments, charges or other encumbrances of or over any of the
right, title and interest, or any of the rights and claims, referred to in such
notice.
We further confirm that:
(a) we shall not exercise any right of combination, consolidation or set-off
which we may have in respect of the Account referred to in such notice; and
(b) we shall send you copies of such statements, orders and notices issued or
given by us relating to such Account, and provide you with such other
information relating thereto, as you may from time to time request.
We are aware that you are relying on this acknowledgement in connection with
your rights under the Debenture.
For and on behalf of
[name of bank]
-------------------------------------
[name in block capitals]
Authorised signatory]
69
PART 6 : FORM OF NOTICE OF CHARGE OF OPERATING ACCOUNT
To: [name of bank]
Date: _____
Dear Sirs,
We hereby give you notice that by a charge contained in a Debenture entered into
by us in favour of [name of Bank] (the "Bank") dated _____ we have charged in
favour of the Bank by way of floating charge, inter alia, all our right, title
and interest to and in all rights and claims to which we are now or may at any
time hereafter become entitled in relation to all moneys now or at any time
hereafter standing to the credit of the account (the "Account") details of which
are set out below together with all rights relating or attaching thereto
(including the right to interest accruing thereon).
Unless and until you receive notification from the Bank in accordance with the
following paragraph you should operate the Account upon our instructions in
accordance with the terms of your mandate.
The Bank may at any time notify you that our authority to give you instructions
in connection with the operation of the Account has been terminated.
After you receive such a notification, unless and until you receive further
instructions from the Bank to the contrary:
(a) all our rights, powers and discretions in relation to the Account shall be
exercisable solely by the Bank;
(b) no moneys may be released from the Account without the prior written
consent of the Bank; and
(c) you should apply any amount standing to the credit of the Account in
accordance with the instructions from time to time given to you by the
Bank.
This authority and instruction is irrevocable without the prior written consent
of the Bank.
Please acknowledge receipt of this notice by signing the acknowledgement on the
enclosed copy of this letter and returning the same to the Bank at _____ marked
for the attention of _____.
Details of the Account:
Yours faithfully,
70
-------------------------------------
for and on behalf of
[name of Company]
[On copy only:
To: [name of Bank] (the "Bank") Date: _____
We acknowledge receipt of a notice in the foregoing terms, agree to the contents
thereof and to comply therewith and confirm that we have not received notice of
any previous assignments, charges or other encumbrances of or over any of the
right, title and interest, or any of the rights and claims, referred to in such
notice.
We further confirm that:
(a) we shall not, after we receive such a notification as is referred to in the
third paragraph of such notice, exercise any right of combination,
consolidation or set-off which we may have in respect of the Account
referred to therein; and
(b) we shall (both before and after receiving such a notification) send you
copies of such statements, orders and notices issued or given by us
relating to such Account, and provide you with such other information
relating thereto, as you may from time to time request.
We are aware that you are relying on this acknowledgement in connection with
your rights under the Debenture.
For and on behalf of
[name of bank]
-------------------------------------
[name in block capitals]
Authorised signatory]
71
SCHEDULE 8 : DETAILS OF EXISTING PERMITTED ENCUMBRANCES
Date Parties Description Maximum Amount
---- ------- ----------- --------------
NONE
72
