EXHIBIT 10.31
Date: December 27, 1999
GUILDSOFT LIMITED
(as Chargor)
SILICON VALLEY BANK
(as Bank)
Mortgage Debenture
FIELD FISHER WATERHOUSE 35 Vine Street London EC3N 2AA
Contents
NO HEADING PAGE
CLAUSES
1. Definitions and interpretation 1
2. Covenant to pay 5
3. Mortgages and Charges 5
4. Restrictions on other Securities and Disposals 10
5. Perfection of the Bank's Security 11
6. Collection of Debts 13
7. Conversion of Floating Charge 13
8. Insurance 15
9. Undertakings by the Chargor 18
10. Extension and Variation of the Law of Property Act 1925 26
11. Appointment of Receiver 28
12. No Liability as Mortgagee in Possession 37
13. Expenses 38
14. Power of Attorney 39
15. Protection of Purchasers 41
16. Subsequent Charges 41
17. Redemption of Prior Mortgages 42
18. Set-Off 42
19. Payments 43
20. Currency 45
21. Suspense Account 46
22. The Bank's Remedies 47
23. Provisions Severable 49
24. The Bank's Discretion 49
25. Certificates 49
26. Assignment; Successors 49
27. Discharge 50
28. Law and Jurisdiction 50
29. Constitutional Documents 51
30. Counterparts 51
31. Notices 51
Schedule 1 Details of the Property 54
THIS MORTGAGE DEBENTURE is made on December 27, 1999
BETWEEN
(1) GUILDSOFT LIMITED (Company No. 02567531) whose registered office is at
Unit A, The Software Centre, East Way, Lee Mill Industrial Estate,
Ivybridge, Devon PL21 9PE (the "CHARGOR"); and
(2) SILICON VALLEY BANK a California chartered bank having its principal
place of business at 3003 Tasman Drive, Santa Clara, California 95054,
United States of America (the "BANK").
WITNESSES as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 DEFINED TERMS
In this Mortgage Debenture:-
"BANK'S RIGHTS" means any of the rights, powers and remedies provided
by this Mortgage Debenture or by law;
"BANK" means Silicon Valley Bank (and includes its successors in title
and assigns);
"CHARGED DEBTS" means the book and other debts and liabilities hereby
charged as more particularly referred to in Clause 3.1(B)(ii);
"COLLATERAL" means the property, assets and income of the Chargor for
the time being mortgaged, assigned or charged (whether by way of fixed
or floating charge) to the Bank by or pursuant to this Mortgage
Debenture and each and every part thereof;
"DEFAULT RATE" means the rate of interest described under the heading
"Default Rate" in Section 1 of the Loan Agreement;
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"ENVIRONMENTAL LAWS" means all laws (statutory, common or otherwise)
including, without limitation, circulars, guidance notes and codes of
practice from time to time relating to the protection of the
environment (including, without limitation, any laws requiring the
remediation of contaminated land or water), or regulating the carrying
on of any process or activity on premises and any emissions from, and
all waste produced by, such process or activity and any such chemicals
or substances relating to the same whether relating to health and
safety, the workplace, the environment or the provision of energy
(including without limitation the Health and Safety at Work etc Act
1974, the Control of Pollution Act 1974, the Environmental Protection
Act 1990, the Environment Act 1995, the Water Industry Act 1991, the
Water Resources Act 1991, the Statutory Water Companies Act 1991, the
Water Consolidation (Consequential Provisions) Act 1991, the Clean Air
Acts, the Alkali & c. Works Regulation Act 1906, the Planning Hazardous
Substances Act 1990, the Public Health Acts and the Radioactive
Substances Act 1960 and any European Community legislation regarding
the same) from time to time in force and any other instrument, plan,
regulation, permission, authorisation and direction made or issued
thereunder or deriving validity therefrom;
"ENVIRONMENTAL LICENCE" means any permit, licence, authorisation,
consent or other approval required by or given pursuant to any
Environmental Laws;
"GUARANTEE" means the Guarantee dated of even date herewith and made
between the Chargor as guarantor and the Bank in respect of Datawatch
Corporation;
"PERMITTED ENCUMBRANCES" means any lien arising in the ordinary course
of business of the Chargor
2
which is discharged in the ordinary course of such business;
"PROPERTY" means all the freehold and/or leasehold properties (if any)
more particularly described in the Schedule which is the subject of
this security and refers to each and every part of the Property
including all buildings, fixtures and fittings and fixed plant and
machinery from time to time thereon owned by the Chargor and the
proceeds of sale of all or any part thereof, and the benefit of any
covenants for title given or entered into by any predecessor in title
of the Chargor and any moneys paid or payable in respect thereof;
"RECEIVER" means a receiver receivers or receiver and manager or
administrative receiver or receivers appointed by the Bank under this
Mortgage Debenture;
"SECURED OBLIGATIONS" means all monies which now are or at any time
hereafter may be or become due or owing by the Chargor to the Bank
under or in connection with the Guarantee and all other liabilities
(including, without limitation, liability to pay liquidated or
unliquidated damages), whether actual or contingent, now existing or
hereafter incurred by the Chargor to the Bank anywhere and in any
manner whatever (and in either case whether due, owing or incurred by
the Chargor alone or jointly with any other person(s) and in whatever
name, form or style and whether as principal or surety) and all other
monies and liabilities payable or to be discharged by the Bank under or
pursuant to this Mortgage Debenture;
"SECURITY INTEREST" means any mortgage, charge, pledge, lien,
hypothecation, encumbrance, assignment, trust arrangement, title
retention, or other security interest (other than a lien arising in the
ordinary course of business by operation of law);
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"SECURITY PERIOD" means the period commencing on the date of this
Mortgage Debenture and ending on the date upon which all the Secured
Obligations have been unconditionally and irrevocably paid and
discharged in full; and
"VAT" means Value Added Tax payable pursuant to the provisions of the
Value Added Tax Act 1994 or any other tax amending, replacing or
substituting the same.
1.2 TERMS DEFINED IN GUARANTEE
Terms defined in the Guarantee shall unless otherwise defined in this
Mortgage Debenture or unless the context otherwise requires, have the
same meaning when used herein.
1.3 CONSTRUCTION OF CERTAIN TERMS
In this Mortgage Debenture:
(a) Clause headings are inserted for convenience only and shall
not affect the construction of this Mortgage Debenture and
unless otherwise specified, all references to Clauses and to
Schedules (if any) are to clauses of, and the schedules to,
this Mortgage Debenture and references to Sub-clauses are to
sub-clauses of the Clause in which the reference appears;
(b) Section 61 of the Law of Property Act 1925 shall govern the
construction hereof, and where the context so admits, any
reference herein to any statute or any provision of any
statute shall be deemed to include reference to any statutory
modification or re-enactment thereof and to any regulations or
orders made thereunder and from time to time in force;
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(c) the masculine gender shall include the feminine and neuter
genders and the singular shall include the plural and vice
versa;
(d) references to persons shall include references to bodies
corporate and unincorporate;
(e) references to any document are to be construed as references
to such document as amended or supplemented from time to time;
and
(f) references to the Bank include references to any person or
persons to whom the Bank may dispose of this Mortgage
Debenture or any interest or right created by or existing
under it and the successors in title to any such person in
respect of any such interest or right.
1.4 EFFECT AS A DEED
It is intended that this Mortgage Debenture take effect as a deed
notwithstanding the fact that the Bank may only execute this document
under hand.
2. COVENANT TO PAY
The Chargor covenants with the Bank that it will pay and discharge to
the Bank the Secured Obligations on the due date therefor in the
currency specified and otherwise in all respects in the manner provided
in the Guarantee.
3. MORTGAGES AND CHARGES
3.1 MORTGAGES AND FIXED AND FLOATING CHARGES
The Chargor, with full title guarantee, hereby (and to the intent that
the security so constituted shall be a continuing security in
5
favour of the Bank) charges with the payment and discharge of the
Secured Obligations:
(A) by way of first legal mortgage the Property.
(B) by way of first fixed charge (which so far as it relates to
land in England and Wales and Northern Ireland vested in the
Chargor at the date hereof shall be a charge by way of legal
mortgage) the following namely:-
(i) all estates and other interests in freehold,
leasehold and other immovable property wheresoever
situate now or hereafter belonging to the Chargor
(including, without limitation, all its right, title
and interest in the Property (other than so far as
the same is charged by way of first legal mortgage
under sub-clause (A)) and all buildings, trade and
other fixtures, fixed plant and machinery belonging
to the Chargor from time to time on any such
freehold, leasehold and other immovable property;
(ii) all book and other debts and monetary claims now or
at any time hereafter due or owing or incurred to the
Chargor including all accounts with banks (including
but not limited to the account referred to in Clause
6.1) and the moneys deposited therein and interest
accruing the arrears and claims arising in respect of
accounts, together with the full benefit of all
guarantees and securities therefor and indemnities in
respect thereof and all liens, reservations of title,
rights of tracing and other rights enabling the
Chargor to enforce any such debts or claims;
(iii) the benefit of all insurance policies and contracts
of insurance
6
relating to the Property and all moneys payable under
any such policies and contracts and all VAT payable
on the same;
(iv) the benefit of all rentals, rents, service charges
and licence fees (if any) payable under or in respect
of any lease, underlease, tenancy or agreement for
lease affecting the Property and all VAT payable on
the same, and of all personal covenants given by any
tenant or occupier of the Property or guarantor of
such tenant or occupier to the Chargor;
(v) the Chargor's rights now or hereafter to recover any
VAT on any supplies made to it relating to the
Property and any sums so recovered;
(vi) the benefit of all contracts, deeds, undertakings,
agreements, rights, warranties, securities,
covenants, guarantees, bonds and indemnities of any
nature now or at any time enjoyed or held by the
Chargor and relating to the Property (including but
without limitation any deposit or other sum paid by
way of security or paid under any contract for the
sale of the Property or any part thereof or under any
option contract relating to the Property (whether or
not such deposit is forfeited), and all compensation
paid in relation to the Property) and all VAT payable
on the same;
(vii) all stocks, shares, debentures, loan capital, rights
to subscribe for, convert other securities into or
otherwise acquire any stocks, shares, debentures and
loan capital of any other body corporate now or at
any time
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hereafter belonging to the Chargor, together with all
dividends, interest and other income and all other
rights of whatsoever kind deriving from or incidental
to any of the foregoing;
(viii) the goodwill of the Chargor and its uncalled capital
now or at any time hereafter in existence and future
calls (whether made by the directors of the Chargor
or by a Receiver appointed hereunder or a
liquidator);
(ix) all and any sums payable, by purchasers or others,
upon the disposal (whether by transfer, assignment or
otherwise) of, or the grant or creation of, any
interest in the Property or any part thereof, and
including any other sums of a capital nature derived
from the Property or any part thereof, and including,
compensation or damages received for any use or
disturbance, blight or compulsory purchase in respect
of the Property or any part thereof, after deduction
in each case of all reasonable costs and expenses
directly and properly incurred in connection with
such disposal, grant or creation;
(x) all chattels now or at any time hereafter hired,
leased or rented by the Chargor to any other person
together in each case with the benefit of the related
hiring, leasing or rental contract and any guarantee,
indemnity or other security for the performance of
the obligations of any person under or in respect of
such contract insofar as the same are capable of
being charged; and
(xi) all present and future copyrights, patents and all
registered patents owned
8
by the Chargor from time to time and all applications
for registration of any patent owned by the Chargor
from time to time, design rights and all registered
designs owned by or licenced by or to the Chargor
from time to time, trademarks and all applications
for trademarks (and all goodwill associated
therewith), service marks and all applications for
service marks, brand names and/or business names,
inventions, design rights, all trade secrets and
know-how and all other intellectual property rights
whatsoever without limitation, whether registered or
unregistered in all or any part of the world in which
the Chargor is legally, beneficially or otherwise
interested and the benefit of any pending
applications for the same and all benefits deriving
therefrom and thereunder including but not limited to
royalties, fees, profit sharing agreements and income
arising therefrom and all licences in respect of or
relating to any intellectual property rights, whether
such licences are granted to the Chargor or granted
by the Chargor.
(C) By way of first floating charge the whole of the Chargor's
undertaking and all its property, rights and assets whatsoever
and wheresoever, present and future, other than any property
or assets from time to time or for the time being effectively
charged to the Bank by way of the legal mortgage or fixed
charge or assigned to the Bank by sub-clauses (A) or (B) of
Clause 3.1 respectively or otherwise pursuant to this Mortgage
Debenture.
3.2 CONTINUING SECURITY
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The security from time to time constituted by or pursuant to this
Mortgage Debenture shall:-
(a) be in addition to and shall be independent of every bill,
note, guarantee, mortgage or other security which the Bank may
at any time hold for any of the Secured Obligations and it is
hereby declared that no prior or other security or other
interest held by the Bank over the Collateral or any part
thereof shall merge in the security created hereby or pursuant
thereto; and
(b) remain in full force and effect as a continuing security until
the discharge and satisfaction of all the Secured Obligations
and the Chargor is under no further obligation actual or
contingent under this Mortgage Debenture.
4. RESTRICTIONS ON OTHER SECURITIES AND DISPOSALS
4.1 NEGATIVE PLEDGE
The Chargor shall not at any time without the prior written consent or
agreement of the Bank (and to the intent that any purported dealing in
contravention of this Clause shall be void and of no effect):-
(a) create, or purport to create, extend or permit to subsist any
mortgage or other fixed security, floating charge, pledge,
hypothecation or lien (other than a lien arising by operation
of law) or other security interest of any kind, whether in any
such case ranking in priority to or PARI PASSU with or after
the fixed and floating charges created by the Chargor under
Clause 3.1 above or any other security of the Bank created
pursuant to this Mortgage Debenture other than the Permitted
Encumbrances; or
10
(b) sell, transfer, lease, lend or otherwise dispose of, whether
by means of one or a number of transactions related or not and
whether at one time or over a period of time, the whole or any
material part of the Chargor's undertaking or of its assets,
or enter into an agreement for sale, transfer, lease, loan or
other disposal of the whole or any such part.
4.2 RESTRICTION AT HM LAND REGISTRY
In the case of any part of the Property consisting of land which is for
the time being registered at HM Land Registry, the Chargor and the Bank
jointly apply to the Chief Land Registrar to enter a restriction in the
Proprietorship Register of the relevant title or titles in the
following terms:
"EXCEPT UNDER AN ORDER OF THE REGISTRAR NO DEALING BY THE PROPRIETOR OF
THE PROPERTY COMPRISED IN THIS TITLE OR MADE IN EXERCISE OF A POWER OF
SALE UNDER ANY CHARGE SUBSEQUENT TO CHARGE NUMBER [ o ] IN THE CHARGES
REGISTER IS TO BE REGISTERED WITHOUT THE CONSENT OF THE PROPRIETOR FOR
THE TIME BEING OF THE CHARGE NUMBER [ o ] IN THE CHARGES REGISTER".
The "charge number [ o ]" referred to above will be the entry number in
the Charges Register of the relevant title which relates this Mortgage
Debenture."
5. PERFECTION OF THE BANK'S SECURITY
5.1 FURTHER ASSURANCE
The Chargor shall from time to time, whensoever requested by the Bank
and at the Chargor's cost, execute in favour of the Bank, or as it may
direct, such further or other legal assignments, transfers, mortgages,
legal or other charges or
11
securities as in each such case the Bank shall reasonably stipulate
over the Chargor's estate or interest in any property or assets of
whatsoever nature or tenure and wheresoever situate and forming part of
the Collateral for perfecting the security intended to be created by
this Mortgage Debenture and for facilitating the realisation of the
Collateral. Without prejudice to the generality of the foregoing, such
assignments, transfers, mortgages, legal or other charges, or
securities shall be in such form as shall be prepared on behalf of the
Bank and may contain provisions such as are herein contained or
provisions to the like effect and/or such other provisions of
whatsoever kind as the Bank shall reasonably consider requisite for the
improvement or perfection of the security constituted by or pursuant to
this Mortgage Debenture (but not otherwise). The obligations of the
Chargor under this Clause 5.1 shall be in addition to and not in
substitution for the covenants for further assurance deemed to be
included herein by virtue of the Law of Property (Miscellaneous
Provisions) Act 1994.
5.2 DEPOSIT OF TITLE DEEDS
The Chargor shall immediately upon the execution of this Mortgage
Debenture (or upon becoming possessed thereof at any time hereafter)
deposit with the Bank all deeds, certificates and other documents
constituting or evidencing title to the Collateral or any part thereof.
5. 3 AFFIXING OF NOTICES
The Chargor shall, whenever requested by the Bank and at the Chargor's
cost, affix to such items of the Collateral or register, endorse or
cause to be registered or endorsed on such documents as are referred to
in Clause 5.2 as the Bank shall in each case stipulate, labels, signs
or memoranda in such form as the Bank shall reasonably require
referring or drawing attention
12
to the security constituted by or pursuant to this Mortgage Debenture.
5.4 NOTICES TO THIRD PARTIES
The Chargor will from time to time as requested by the Bank deliver any
notices to any third party having rights or liabilities in or to any of
the Collateral will procure the issue by such third party of
acknowledgements reasonably required by the Bank.
6. COLLECTION OF DEBTS
6.1 COLLECTION AND PAYMENT INTO DESIGNATED ACCOUNT
The Chargor shall at all times during the continuance of the security
constituted by or pursuant to this Mortgage Debenture get in and
realise and pay into a designated account in the name of the Chargor
with such bank as the Bank may stipulate all monies which the Chargor
may receive in respect of the Charged Debts, and if its authority to do
so is terminated by the Bank giving notice following an Event of
Default under either of the Loan Agreements, shall not draw money from
such account.
6.2 NOT TO DEAL
The Chargor shall not at any time following an Event of Default under
either of the Loan Agreements without the prior written consent of the
Bank deal with the Charged Debts or other monies otherwise than by
getting in the same and making payment thereof into such designated
account referred to in Clause 6.1. Without prejudice to the generality
of the foregoing, the Chargor shall not at any such time factor or
discount any of such debts or claims or enter into any agreement for
such factoring or discounting.
7. CONVERSION OF FLOATING CHARGE
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7.1 BY NOTICE
The Bank shall be entitled immediately upon the occurrence of any Event
of Default under either of the Loan Agreements or at any time
thereafter or if the Bank reasonably considers such assets to be in
danger of being seized or sold under any form of distress, attachment,
execution or other legal process or to be otherwise in jeopardy, by
notice in writing to the Chargor to convert the floating charge created
by Clause 3.1(C) into a fixed charge affecting all the property and
assets which for the time being are the subject of such floating charge
or, as the case may be, such of the said property and assets as are
specified by such notice. This provision shall not preclude the
floating charge from becoming fixed in any of the events in which under
this Mortgage Debenture or under the general law it would do so.
7.2 AUTOMATIC CONVERSION
The floating charge hereby created shall (in addition to the
circumstances in which the same will occur under general law)
automatically be converted into a fixed charge:
(a) on the convening of any meeting of the members of the Chargor
to consider a resolution to wind the Chargor up (or not to
wind the Chargor up);
(b) on the presentation of a petition (other than a frivolous or
vexatious petition) to wind the Chargor up; or
(c) if the Chargor fails to comply with its obligations under
Clause 4.1.
7.3 Service by the Bank of a notice pursuant to Clause 7.1 in relation to
any class of the
14
Chargor's assets shall not be construed as a waiver or abandonment of
the Bank's rights to serve similar notices in respect of any other
class of assets or of any other of the rights of the Bank.
8. INSURANCE
8.1 REQUIRED COVER
The Chargor shall at all times during the subsistence of the security
constituted by or pursuant to this Mortgage Debenture comply with all
covenants, undertakings and conditions as to insurance of any part of
the Collateral in any of the Loan Documents and/or required by the
terms of any lease, agreement for lease or tenancy granted by the
Chargor or to which any of the Collateral is for the time being subject
or under which the Chargor derives its estate or interest therein and,
subject to the foregoing and so far as this Clause is not inconsistent
with the said terms of such lease, agreement for lease or tenancy, the
Chargor shall at all such times:-
(a) cause all buildings, trade and other fixtures, fixed and other
plant and machinery forming part of the Collateral (if any) to
be insured and to be kept insured:-
(i) (if the Bank shall so stipulate) in an insurance
office or with underwriters approved by the Bank
against loss or damage by fire, and all such other
risks which it is usual to insure against in the case
of the relevant Collateral (including, in the case of
the Property, full cover against terrorism to the
extent available) and against such other or
additional risks as the Bank shall direct, to the
full reinstatement value thereof (together in the
case of the Property with additional amounts
estimated as sufficient to cover
15
architects', surveyors' and other requisite
professional advisers' fees in relation to the
reinstatement of the Property and five years' loss of
rent and Service Charge in respect of the Property
and the costs of demolition, site clearance and
shoring-up and VAT on the cost of reinstatement) and
with the interest of the Bank noted on the policy of
insurance and providing for the Bank to be the loss
payee thereunder (or, if the Bank shall so direct, in
the joint names of the Chargor and the Bank); or
(ii) (if and to the extent that the Bank does not so
stipulate) in such insurance office of repute as
shall have been selected by the Chargor or with
Lloyd's underwriters on the same basis as insurances
are maintained by prudent companies carrying on
businesses comparable with that of the Lessee and on
a comparable scale as regards the property and assets
insured, the insured risks and the classes of risk to
be covered; and
(iii) procure that any such policy of insurance contains a
Bank protection clause whereby the insurance effected
will not be vitiated or avoidable as against a
mortgagee in the event of any misrepresentation act
or neglect or failure to disclose on the part of the
Chargor (subject to the payment of any increased
premium required by the insurer) and a Landlord
protection clause whereby the insurance will not be
vitiated or avoidable as against the Chargor or the
mortgagee as a result of anything done or omitted by
a tenant of the Property without the knowledge of the
Chargor and the mortgagee (subject
16
to usual terms as to notification and payment of
additional premiums),
(b) procure that there are maintained such other insurances as are
normally maintained by prudent persons carrying on similar
businesses to the Lessee or which may be required by the Bank
(acting reasonably) including without limitation insurance
against liability to third parties arising out of the
ownership or occupation of the Property or the state or
condition thereof;
(c) duly and punctually pay all premiums and other moneys payable
under all such insurances as aforesaid and as soon as
reasonably practicable following written request by the Bank
produce to the Bank the premium receipts or other evidence of
the payment thereof; and
(d) (if so required by the Bank) deposit all policies and other
contracts of insurance relating to the Collateral or any part
thereof with the Bank or produce the same to the Bank for
inspection.
8.2 BANK'S RIGHT TO INSURE
If default shall be made by the Chargor in complying with Clause 8.1
after a reasonable demand regarding such has been made by the Bank to
the Chargor in writing it shall be lawful for the Bank, but not
obligatory on the Bank, to insure and keep insured such Collateral
either in its own name or in its name and that of the Chargor jointly
or in the name of the Chargor with an endorsement of the Bank's
interest. The monies expended by the Bank on so effecting or renewing
any such insurance shall be reimbursed by the Chargor to the Bank on
demand and until so reimbursed shall carry interest from the date of
payment to the date of reimbursement at the Default Rate.
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8.3 TRUST
All claims and monies received or receivable under any such insurance
as aforesaid shall (subject to the rights and claims of and obligations
of the Chargor to any prior mortgagee or chargee or any lessee, lessor
or landlord of any part of the Collateral) be held by the Chargor in
trust for the Bank and shall be applied by the Chargor in repaying or
reducing the Secured Obligations or, if the Bank shall so require, in
repairing, replacing, restoring or rebuilding the property damaged or
destroyed.
8.4 NO AVOIDANCE OF INSURANCE
The Chargor shall not do any act or commit any default by which any
policy of insurance may become void or voidable.
8.5 PAYMENT OF PROCEEDS
The Chargor shall not do any act or commit any default by which the
Bank may be prevented from receiving all monies payable under any
policy of insurance relating to the Collateral and shall ensure that
all sums at any time payable under any of such policies of insurance of
the Collateral shall be paid to the Bank.
9. UNDERTAKINGS BY THE CHARGOR
The Chargor hereby undertakes with the Bank that the Chargor will at
all times while there shall subsist any security constituted by or
pursuant to this Mortgage Debenture:-
(a) INFORMATION
provide the Bank, its employees, professional advisers and
agents with all such information respecting the Chargor's
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business and affairs as the Bank may from time to time
require;
(b) PAY OUTGOINGS
punctually pay or cause to be paid all rents, rates, taxes,
duties, assessments and other outgoings payable in respect of
the Collateral or any part thereof;
(c) REPAIR
keep all buildings and erections on or forming part of the
Property or any other freehold or leasehold property hereby
charged in good and substantial repair and condition and
adequately and properly painted and decorated and keep the
fixtures and fittings thereon and all plant, machinery,
implements and other effects for the time being owned by it in
a good state of repair and in good working order and condition
(in each case replacing, rebuilding, and renewing the same
when necessary);
(d) RIGHT OF ENTRY
permit the Bank and such persons as the Bank may from time to
time for that purpose appoint at reasonable times and upon
reasonable notice to enter and inspect and view the state and
condition of the Property and if any unauthorised alterations
or additions or any defects or disrepair are found upon such
inspection the Bank may enter onto the Property and execute
such replacements or removals, repairs or works as may be
necessary, the cost of which shall be paid by the Chargor to
the Bank on demand. The Chargor shall not be in breach of this
undertaking where the terms of any lease prohibit such entry
and the Chargor, having used all reasonable endeavours to
19
obtain the relevant tenant's consent to such entry, has failed
to obtain the requisite permission;
(e) LEASES AND USE
not without the prior written consent of the Bank:
(i) grant or agree to grant (whether in exercise of any
statutory power or otherwise) any lease, underlease,
tenancy or agreement for lease affecting the
Collateral;
(ii) confer or agree to confer on any other person any
other right or licence to occupy any land or
buildings forming part of the Collateral or grant any
licence to assign or sub-let the Collateral or any
part thereof;
(iii) waive, release or vary or agree to waive, release or
vary any of the terms of any lease, underlease,
tenancy or agreement for lease affecting the
Collateral including the determination or review of
any rent payable thereunder nor exercise any power to
terminate or extend the same;
(iv) forfeit nor commence proceedings for forfeiture nor
exercise any right of re-entry nor accept the
surrender of any lease, underlease, tenancy or
agreement for lease affecting the Collateral; or
(v) change or permit or suffer to be changed the present
user of any part of the Collateral,
(f) ENVIRONMENTAL
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not cause, permit or suffer any substance, the presence of
which may require work of containment, restoration or clean up
to be undertaken under any applicable law whether on or off
the Collateral, or which causes or threatens to cause either a
nuisance under the provisions of the Environmental Protection
Act 1990 or the Environment Act 1995, or the presence of which
on adjacent properties could constitute a trespass by the
Chargor or which in an uncontained form may cause pollution of
the environment or harm to human health or detriment to the
amenities of the locality or which is otherwise toxic,
explosive, corrosive, radioactive, carcinogenic or mitogenic,
to be brought upon, treated, kept, stored, disposed of,
discharged, released, processed, produced, manufactured,
generated, refined or used upon, above or beneath any freehold
or leasehold forming part of the Collateral;
(g) PERFORM LEASE COVENANTS
observe and perform or (as the case may be) enforce the
observance and performance of all regulations, covenants and
provisions reserved by or contained in any lease, agreement
for lease or tenancy agreement affecting the Collateral and
neither take any step nor omit to take any step whatsoever if
in consequence of the taking or omission to take such step
such lease, agreement for lease or tenancy agreement may be
surrendered or forfeited or the rent thereunder may be
increased;
(h) PERFORM RESTRICTIVE AND OTHER COVENANTS
observe and perform all restrictive and other covenants and
stipulations for the time being affecting any part of the
21
Collateral or the use or the enjoyment of the same or any part
thereof;
(i) INDEMNITY AGAINST OUTGOINGS
indemnify the Bank (and as a separate covenant any Receiver or
Receivers appointed by it) against all existing and future
rents, taxes, duties, fees, renewal fees, charges,
assessments, impositions and outgoings whatsoever (whether
imposed by deed or statute or otherwise and whether in the
nature of capital or revenue and even though of a wholly novel
character) which now or at any time during the continuance of
the security constituted by or pursuant to this Mortgage
Debenture are payable in respect of the Collateral or any part
thereof or by the owner or occupier thereof and so that if any
such sums as are referred to in this sub-paragraph (i) of
Clause 9.1 shall be paid by the Bank (or any such Receiver or
Receivers) the same shall be repaid by the Chargor on demand
with interest from the time or respective times of the same
having been paid at the Default Rate;
(j) COMPLY WITH STATUTORY PROVISIONS
comply or cause compliance in all respects with the provisions
of all statutes for the time being in force and requirements
of any competent authority relating to the Collateral or
anything done thereon by the Chargor and in particular (but
without prejudice to the generality of the foregoing) to
observe and perform or cause to be observed and performed all
the provisions and requirements of the Town and Country
Planning Act 1990, the Planning (Listed Buildings and
Conservation Areas) Act 1990, the Planning (Hazardous
Substances) Act 1990, the Planning
22
(Consequential Provisions) Act 1990, the Planning and
Compensation Act 1991 and any Act amending, replacing or
modifying such Acts and all regulations and orders thereunder
(together, the "PLANNING ACTS") and the Registered Homes Act
1984 and all regulations and orders thereunder and before the
Chargor serves any discretionary notices the Chargor will
obtain the Bank's consent and to obtain or cause to be
obtained any development or other consent which may be
requisite by reason of the development of or on any of the
Collateral;
(k) VAT
not without the prior written consent of the Bank to exercise
any option to waive exemption from VAT in relation to the
Collateral or any part thereof and to give to the Bank on
demand all such details of the Chargor's registration for VAT
purposes as the Bank shall require;
(l) SUPPLY DETAILS OF NOTICES RECEIVED
give full particulars to the Bank of any notice or order or
proposal for a notice or order made, given or issued to the
Chargor under or by virtue of any statute including (without
prejudice to the generality of the foregoing) the Planning
Acts, or any regulation or order issued thereunder, within
seven days of receipt of such notice, order or proposal by the
Chargor and, if so required by the Bank, to produce such
notice, order or proposal to the Bank or its agents and also
as soon as practicable take all reasonable and necessary steps
to comply with any such notice, order or proposal or (if
required to do so by the Bank) to join with the Bank at the
cost of the Chargor in making such representation or appeals
as the Bank may deem fit in respect of any such
23
notice, order or proposal and (without prejudice to the
generality of the foregoing) at all times during the
continuance of this security to give to the Bank or its agents
such information as they shall reasonably require as to all
matters relating to the Collateral;
(m) NOT TO WASTE
not do or permit or suffer to be done in or upon the
Collateral any waste, spoil or destruction nor to make or
permit any development, alteration or addition whatsoever,
structural, external, internal or otherwise, or any change of
user, to the Collateral without the consent in writing of the
Bank (which shall not be withheld where the Chargor cannot
withhold it under the terms of any Lease) and in the event of
the Bank giving any such consent as aforesaid to carry out all
such works in accordance with the provisions and conditions of
the consent and to the reasonable satisfaction of the Bank;
provided that the consent of the Bank shall not be required in
the case of minor alterations to shop fronts or fascias nor in
the case of internal non-structural alterations;
(n) CHARGED DEBTS
not without the prior written consent of the Bank release,
exchange, compound set-off, grant time or indulgence in
respect of or in any other manner, deal with all or any of the
Charged Debts otherwise than in the ordinary course of its
business or except as expressly provided for herein;
(o) NOTIFY MATERIAL MATTERS
notify the Bank of any matters materially affecting the value,
enforceability or
24
collectability of any part of the Collateral and of all
material disputes, counterclaims, returns and rejections by or
of customers of the Company;
(p) COMPLIANCE WITH ENVIRONMENTAL LICENCES
obtain all requisite Environmental Licences applicable to the
Collateral and comply with the terms and conditions of the
same;
(q) COMPLIANCE WITH ENVIRONMENTAL LAWS
comply with all Environmental Laws applicable to the
Collateral and not permit a contravention of the same;
(r) NOTIFY CLAIMS
notify the Bank of the receipt of and contents of all claims,
notices or other communications in respect of any alleged
breach of any Environmental Licences or any Environmental Laws
which may, if substantiated, have a material adverse effect on
the market value of the Collateral and shall forthwith take
such steps as the Bank may reasonably direct to remedy and/or
cease the continuation of any such alleged breach;
(s) PAY ENVIRONMENTAL LICENCE FEES
promptly pay all fees and other charges in respect of any
Environmental Licence applicable to the Collateral;
(t) NOTIFY NOTICES CONCERNING ENVIRONMENTAL LICENCES
forthwith notify the Bank of the receipt of and the contents
of any notices or other communications varying or suspending
any Environmental Licence relating to the
25
Collateral and forthwith take such steps as the Bank may
reasonably direct to reinstate in full force and effect any
Environmental Licence so varied or suspended;
(u) SUPPLY ENVIRONMENTAL REPORTS
forthwith supply the Bank with copies of any environmental
reports, audits or studies undertaken in relation to the
Collateral; and
(v) ENVIRONMENTAL INDEMNITY
indemnify the Bank and each Receiver appointed under this
Mortgage Debenture and their respective officers, employees,
agents and delegates (together the "INDEMNIFIED PARTIES")
against any cost or expense suffered or incurred by them
which:-
(i) arises by virtue of any actual or alleged breach of
any Environmental Laws (whether by the Chargor, an
Indemnified Party or any other person);
(ii) would not have arisen if this Mortgage Debenture had
not been executed; and
(iii) was not caused by the negligence or wilful default of
the relevant Indemnified Party.
10. EXTENSION AND VARIATION OF THE LAW OF PROPERTY ACT 1925
10.1 POWER OF SALE
Section 103 of the Law of Property Act 1925 shall not restrict the
exercise by the Bank of the statutory power of sale conferred on it by
section 101 of such Act, which power shall arise and may be exercised
by the Bank immediately upon and at any time after the the Bank has
made demand under the Guarantee and the provisions of
26
the said Act relating to and regulating the exercise of the said power
of sale shall, so far as they relate to the security constituted by or
pursuant to this Mortgage Debenture, be varied and extended
accordingly.
10.2 STATUTORY POWERS OF LEASING
The statutory 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 said Act shall not be
exercisable by the Chargor in relation to any part of the Collateral
without the prior written consent of the Bank, but the foregoing shall
not be construed as a limitation of the powers of any Receiver
appointed hereunder and being an agent of the Chargor. Such statutory
powers shall be exercisable by the Bank upon or at any time after the
occurrence of an Event of Default and, whether or not the Bank shall
then be in possession of the premises proposed to be leased, so as to
authorise the Bank to make a lease or agreement for lease at a premium
and for any length of term and generally without any restriction on the
kinds of leases and agreements for lease that the Bank may make and
generally without the necessity for the Bank to comply with any
restrictions imposed by or the other provisions of the said Sections 99
and 100. The Bank may delegate such powers to any person and no such
delegation shall preclude the subsequent exercise of such powers by the
Bank itself or preclude the Bank from making a subsequent delegation
thereof to some other person; and any such delegation may be revoked.
10.3 CONSOLIDATION OF MORTGAGES
The restriction on the right of consolidating mortgage securities
contained in Section 93 of the Law of Property Act 1925 shall not apply
to this Mortgage Debenture.
27
11. APPOINTMENT OF RECEIVER
11.1 TIMING OF APPOINTMENT AND JOINT RECEIVERS
At any time after having been requested so to do by the Chargor or at
any time after making demand under the Guarantee following an Event of
Default, the Bank may appoint one or more persons to be a Receiver or
Receivers of the whole or any part of the Collateral. The Bank may:-
(i) remove any Receiver previously appointed hereunder; and
(ii) appoint another person or other persons as Receiver or
Receivers, either in the place of a Receiver so removed or who
has otherwise ceased to act or to act jointly with a Receiver
or Receivers previously appointed hereunder.
If at any time and by virtue of any such appointment(s) any two or more
persons shall hold office as Receivers of the same assets or income,
each one of such Receivers shall be entitled (unless the contrary shall
be stated in any of the deed(s) or other instrument(s) appointing them)
to exercise all powers and discretions hereby or by law conferred on
Receivers individually and to the exclusion of the other or others of
them.
11.2 FORM OF APPOINTMENT AND REMOVAL
Every such appointment or removal, and every delegation, appointment or
removal by the Bank in the exercise of any right to delegate its power
or to remove delegates herein contained, may be made either by deed or
by instrument in writing under the hand of any officer of the Bank or
any person authorised in writing in that behalf by any such officer.
28
11.3 POWERS OF RECEIVER - STATUTORY
Every Receiver for the time being holding office by virtue of an
appointment made by the Bank hereunder shall (subject to any
limitations or restrictions expressed in the deed or other instrument
appointing him but notwithstanding any winding-up or dissolution of the
Chargor) have, in relation to the Collateral, or as the case may be,
that part of the Collateral in respect of which he was appointed:-
(a) all the powers (as varied and extended by the provisions
hereof) conferred by the Law of Property Act 1925 on
mortgagors and on mortgagees in possession and receivers
appointed under the Act; and
(b) power in the name or on behalf and at the cost of the Chargor
to exercise all powers and rights of an absolute owner and do
or omit to do anything which the Chargor itself could do.
11.4 POWERS OF RECEIVER - SPECIFIC
In addition and without prejudice to the generality of the foregoing or
any other provision of this Mortgage Debenture, every Receiver for the
time being holding office by virtue of an appointment made by the Bank
hereunder shall (notwithstanding any winding-up or dissolution of the
Chargor) have the following powers, namely:-
(i) TAKE POSSESSION
power to take possession of, collect and get in all or any
part of the Collateral and for that purpose to make, or to
require the directors of the Chargor to make, calls upon the
holders of the Chargor's share capital in respect of any such
capital of the Chargor which remains uncalled and to
29
enforce payment of calls so made and any previous unpaid calls
by taking proceedings in the name of the Chargor or by his own
name;
(ii) CARRY ON BUSINESS
power to carry on, manage, develop, amalgamate, reconstruct or
diversify the whole or any part of the Chargor's business,
including the power where the Chargor has one or more
subsidiaries of supervising, controlling and financing such
subsidiary or subsidiaries (inclusive of any bodies corporate
as are referred to in sub-paragraph (iv) below) and its or
their business or businesses and the conduct thereof;
(iii) SELL ASSETS
power to sell or assign all or any of the Charged Debts or
Collateral in such manner and generally upon such terms and
conditions as he thinks fit and to convey the same in the name
of the Chargor;
(iv) FORM SUBSIDIARIES
power to promote, or subscribe for or otherwise acquire the
share capital of any body corporate with a view to such body
corporate becoming a subsidiary of the Chargor and purchasing,
leasing or otherwise acquiring an interest in the whole or any
part of the Collateral or carrying on any business in
succession to the Chargor or any subsidiary of the Chargor;
30
(v) SEVER
power to sever and sell separately from the Collateral all or
any fixed plant and machinery and other fixtures and fittings
relevant thereto;
(vi) IMPROVE, DEVELOP OR REPAIR
power to alter, improve, develop, complete, construct, modify,
refurbish or repair any building or land and to complete or
undertake or concur in the completion or undertaking (with or
without modification), of any project in which the Chargor was
concerned or interested prior to his appointment being a
project for the alteration, improvement, development,
completion, construction, modification, refurbishment or
repair of any building or land;
(vii) NO STATUTORY RESTRICTION ON SALE ETC
power to sell, lease or otherwise dispose of or concur in
selling, leasing, accepting surrenders or otherwise disposing
of the whole or any part of the Collateral without the
restriction imposed by Section 103 of the Law of Property Act
1925 or the need to observe any of the restrictions or other
provisions of Section 99 or 100 of the said Act and upon such
terms as he shall think fit;
(viii) METHOD OF SALE OR DISPOSAL
power to carry any sale, lease or other disposal of any land
or buildings and other property and assets into effect by
conveying, transferring, assigning or leasing in the name of
the Chargor and for that purpose to enter into covenants and
31
other contractual obligations in the name of and so as to bind
the Chargor;
(ix) CONSENTS AND LICENCES
power to apply for and obtain any appropriate consents,
licences or approval in relation to the Collateral, its use or
development;
(x) ADDITIONAL LAND AND EASEMENTS
power to acquire additional land or any interest therein and/
or easements for the benefit of any of the Collateral and
power to grant easements or rights over the Collateral;
(xi) CHARGOR'S NAME
power to use the Chargor's name for registration and to effect
any necessary election for tax or other purposes;
(xii) COMPROMISE
power to make any arrangement or compromise or settlement of
claims or enter into any contracts or arrangements as he shall
think fit;
(xiii) INSURANCES
power to effect and renew insurances;
(xiv) PROCEEDINGS
power to take or defend proceedings in the name of the Chargor
including proceedings for the compulsory winding-up of the
Chargor and proceedings for directions under Section 35(1) of
the Insolvency Act 1986 and power to settle and compromise any
proceedings;
32
(xv) EMPLOYEES
power to employ, engage and appoint such managers, agents,
servants and other employees and professional advisers on such
terms as he shall think fit including without limitation power
to engage his own firm in the conduct of the receivership;
(xvi) BORROW MONEY
power to raise or borrow money from the Bank or any other
person to rank for payment in priority to the security
constituted by or pursuant to this Mortgage Debenture and with
or without a mortgage or mortgage debenture on the Collateral
or any part of it;
(xvii) GENERAL POWERS
power to do all such other things as may seem to the Receiver
to be incidental or conducive to any other power vested in him
or to be conducive to the realisation of the security
constituted by or pursuant to this Mortgage Debenture as if he
were the absolute beneficial owner of the Collateral;
(xviii) PROTECTION OF ASSETS
to make and effect all repairs and insurances and do all other
acts which the Company might do in the ordinary conduct of its
business as well for the protection as for the improvement of
the Collateral and to commence and/or complete any building
operations on the Collateral and to apply for and maintain any
planning permissions, building regulation approvals and any
other permissions, consents or licences, in each case as he
may in his absolute discretion think fit;
33
(xix) LEASES
to let all or any part of the Collateral for such term and at
such rent (with or without a premium) as he may think proper
and to accept a surrender of any lease or tenancy thereof on
such terms as he may think fit (including the payment of money
to a lessee or tenant on a surrender); and
(xx) RECEIPTS
to give valid receipts for all moneys and execute all
assurances and things which may be proper or desirable for
realising the Collateral.
34
11.5 CONSIDERATION ON DISPOSAL
In making any sale or other disposal of any of the Collateral in the
exercise of their respective powers (including a disposal by the
Receiver to any such subsidiary as is referred to in Clause 11.4 (iv))
the Receiver or the Bank may accept, by way of consideration for such
sale or other disposal, cash, shares, loan capital or other
obligations, including without limitation consideration fluctuating
according to or dependent upon profit or turnover and consideration the
amount whereof is to be determined by a third party. Any such
consideration may be receivable in a lump sum or by instalments and
upon receipt by the Receiver shall IPSO FACTO be and become charged
with the payment of the Secured Obligations. Any contract for any such
sale or other disposal by the Receiver or the Bank may contain
conditions excluding or restricting the personal liability of the
Receiver or the Bank. Plant, machinery and other fixtures may be
severed and sold in the exercise of their respective powers by the
Receiver or the Bank separately from the premises to which they are
attached without any consent being obtained from the Chargor.
11.6 APPLICATION OF PROCEEDS
All monies received by the Bank or any Receiver appointed under this
Mortgage Debenture shall (subject to the rights and claims of any
person having a security ranking in priority to the security
constituted by or pursuant to this Mortgage Debenture) be applied in
the following order:
(i) in the payment of or provision for all costs, charges and
expenses incurred and payments made by the Bank and in the
payment of all costs, charges and expenses of and
35
incidental to the Receiver's appointment and the payment of
his remuneration;
(ii) in the payment and discharge of any liabilities incurred by
the Receiver on the Chargor's behalf in the exercise of any of
the powers of the Receiver;
(iii) in providing for the matters (other than the remuneration of
the Receiver) specified in the first three paragraphs of
Section 109(8) of the Law of Property Act 1925;
(iv) in or towards payment of any debts or claims which are by
statute payable in preference to the Secured Obligations but
only to the extent to which such debts or claims have such
preference;
(v) in or towards the satisfaction of the Secured Obligations,
and any surplus shall be paid to the Chargor or other person entitled
thereto.
The provisions of this Clause 11.6 and of Clause 11.8 shall take effect
as and by way of variation and extension to the provisions of the said
section 109, which provisions as so varied and extended shall be deemed
incorporated herein.
11.7 RECEIVER AS AGENT
Every Receiver so appointed shall be deemed at all times and for all
purposes to be the agent of the Chargor which shall be solely
responsible for his acts and defaults and liable on any contracts or
engagements made or entered into by him and for the payment of his
remuneration. The Bank shall not be responsible for his misconduct,
negligence or default.
36
11.8 RECEIVER'S REMUNERATION
Every Receiver so appointed shall be entitled to remuneration for his
services at a rate to be fixed by agreement between him and the Bank
(or, failing such agreement, to be fixed by the Bank) appropriate to
the work and responsibilities involved upon the basis of charging from
time to time adopted in accordance with his current practice or the
current practice of his firm and without being limited to the maximum
rate specified in Section 109(6) of the Law of Property Act 1925. The
amount of such remuneration may be debited by the Bank to the Chargor,
but shall in any event form part of the Secured Obligations.
11.9 MONIES ACTUALLY RECEIVED
Only monies actually paid by the Receiver to the Bank in satisfaction
or discharge of the Secured Obligations and unconditionally and
irrevocably retained by the Bank shall be capable of being applied by
the Bank in satisfaction thereof.
11.10 RECEIVER'S INDEMNITY
The Chargor agrees to indemnify and hold harmless the Receiver from and
against all actions, claims, expenses, demands and liabilities (save
where the same is due to gross negligence or wilful misconduct of the
Receiver) whether arising out of contract or tort or in any other way
incurred or which may at any time be incurred by him or by any manager,
agent, servant or other employee for whose debt, default or miscarriage
he may be answerable for anything done or omitted to be done in the
exercise or purported exercise of his powers under the provisions of
this deed or pursuant hereto.
12. NO LIABILITY AS MORTGAGEE IN POSSESSION
37
The Bank shall not nor shall any Receiver appointed as aforesaid by
reason of it or such Receiver entering into possession of the
Collateral or any part thereof be liable to account as mortgagee in
possession or be liable for any loss on realisation or for any default
or omission which mortgagee in possession might be liable except for
its gross negligence or wilful misconduct.
13. EXPENSES
13.1 UNDERTAKING TO PAY
All costs, charges and expenses incurred and all payments made by the
Bank or any Receiver appointed hereunder in the lawful exercise of the
powers hereby conferred whether or not occasioned by any act, neglect
or default of the Chargor shall carry interest (as well after as before
judgment) at the Default Rate from the date of the same being incurred
or becoming payable until the date the same are unconditionally and
irrevocably paid and discharged in full.
The amount of such costs, charges, expenses and payments and all such
interest thereon and all remuneration payable hereunder shall be
payable by the Chargor on demand. All such costs, charges, expenses and
payments shall be paid and charged as between the Bank and the Chargor
on the basis of a full indemnity and not on the basis of party and
party or any other kind of taxation.
13.2 INDEMNITY
The Bank and every Receiver, attorney, manager, agent or other person
appointed by the Bank hereunder shall be entitled to be indemnified out
of the Collateral in respect of all liabilities and expenses properly
incurred by them in the execution or purported execution of any of the
powers, authorities or discretions vested in them
38
pursuant hereto and against all actions, proceedings, costs, claims and
demands in respect of any matter or thing done or omitted in any way
relating to the Collateral and the Bank and any such Receiver may
retain and pay all sums in respect of the same out of any monies
received under the powers hereby conferred.
13.3 STAMP DUTIES
The Chargor shall pay and, forthwith on demand, indemnify the Bank
against any liability it incurs in respect of any stamp, registration
and similar tax which is or becomes payable in connection with the
entry into, performance or enforcement of this Mortgage Debenture.
14. POWER OF ATTORNEY
14.1 APPOINTMENT AND POWERS
The Chargor hereby irrevocably appoints the following, namely:-
(i) the Bank,
(ii) each and every person whom the Bank shall from time to time
nominate in writing under the hand of any officer of the Bank,
and
(iii) each and any Receiver appointed hereunder and for the time
being holding office as such,
jointly and also severally its attorney and attorneys for it and in the
name of the Chargor and otherwise on its behalf and as its act and deed
to sign, seal, execute, deliver, perfect and do all deeds, instruments,
acts and things which may be required (or which the Bank or any
Receiver appointed hereunder shall consider requisite) for carrying out
any obligation imposed on the Chargor by or pursuant to this Mortgage
Debenture (including but not limited to
39
the obligations of the Chargor under Clause 5.1 and the statutory
covenant referred to in such Clause), for carrying any sale, lease or
other dealing by the Bank or such Receiver into effect, for conveying
or transferring any legal estate or other interest in land or other
property or otherwise howsoever, for getting in the Collateral, and
generally for enabling the Bank and the Receiver to exercise the
respective powers conferred on them by or pursuant to this Mortgage
Debenture by law. The Bank shall have full power to delegate the power
conferred on it by this Clause, but no such delegation shall preclude
the subsequent exercise of such power by the Bank itself or preclude
the Bank from making a subsequent delegation thereof to some other
person; and any such delegation may be revoked by the Bank at any time.
All money properly expended by any attorney shall be deemed to be
expenses incurred by the Bank under this Mortgage Debenture.
14.2 RATIFICATION
The Chargor shall ratify and confirm all transactions entered into by
the Bank or such Receiver or delegate of the Bank in the exercise or
purported exercises of the Bank's or such Receiver's respective powers
and all transactions entered into, documents executed and things done
by the Bank or such Receiver or delegate by virtue of the power of
attorney given by Clause 14.1.
14.3 IRREVOCABLE
The power of attorney hereby granted is as regards the Bank, its
delegates and (so far as permitted by law) any such Receiver (and as
the Chargor hereby acknowledges) granted irrevocably and for value as
part of the security constituted by this Mortgage Debenture to secure
proprietary interests of and the performance of obligations
40
owed to, the respective donees within the meaning of the Powers of
Attorney Act 1971.
15. PROTECTION OF PURCHASERS
No purchaser or other person dealing with the Bank or its delegate or
any Receiver appointed hereunder shall be bound to see or inquire
whether the right of the Bank or such Receiver to exercise any of its
or his powers has arisen or become exercisable or be concerned with
notice to the contrary, or be concerned to see whether any such
delegation by the Bank shall have lapsed for any reason or been
revoked.
16. SUBSEQUENT CHARGES
If the Bank shall at any time receive notice of any subsequent
mortgage, charge, assignment, hypothecation, pledge or other like
interest, matter, event or transaction affecting the Collateral or any
part of it (otherwise than with the prior written consent of the Bank
as permitted by this Mortgage Debenture) or that a receiver has been
appointed to all or any part of the Chargor's assets or that a petition
for an administration order or for compulsory liquidation has been
presented or a resolution for voluntary liquidation has been passed in
relation to the Chargor, the Bank may open a new account or accounts
for the Chargor in its books. If the Bank does not in fact open any
such new account then, unless it gives express written notice to the
Chargor 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 such
notice. As from that time and unless such express written notice shall
be given to the Chargor, all payments by or on behalf of the Chargor to
the Bank shall (in the absence of any express contrary appropriation by
the Chargor) be credited, or treated as having been credited, to the
new account(s) of the Chargor opened or deemed to have been opened and
not as having been
41
applied in reduction of the Chargor's indebtedness and other
liabilities to the Bank at the time when the Bank received such notice.
17. REDEMPTION OF PRIOR MORTGAGES
The Bank may, at any time after the security hereby constituted has
become enforceable, redeem any prior security interest against the
Collateral or any part thereof or procure the transfer thereof to
itself and may settle and pass the accounts of the prior mortgagee,
chargee or encumbrancer. Any accounts so settled and passed shall be
conclusive and binding on the Chargor. All principal moneys, interest,
costs, charges and expenses of, and incidental to, such redemption and
transfer shall be paid by the Chargor to the Bank on demand.
18. SET-OFF
18.1 CONSOLIDATION OF ACCOUNTS
In addition to any general lien or similar right to which it may be
entitled by operation of law, the Bank shall have the right upon or at
any time after the occurrence of an Event of Default and with notice to
the Chargor to combine or consolidate all or any of the Chargor's then
existing accounts opened pursuant to this Mortgage Debenture with any
liabilities of the Chargor to the Bank and to set-off or transfer any
sum or sums standing to the credit of any one or more of such accounts
in or towards satisfaction of any of the liabilities of the Chargor to
the Bank on any other such account or in any other respect. The
liabilities referred to in this Clause may be actual, contingent,
primary, collateral, several or joint liabilities, and the accounts,
sums and liabilities referred to in this Clause may be denominated in
any currency.
42
18.2 SET-OFF
The Bank may set-off any Secured Obligations owed by the Chargor
against any obligation (whether or not matured) owed by the Bank to the
Chargor regardless of the place of payment or currency of either
obligation. If the obligations are in different currencies, the Bank
may convert either obligation in the manner provided in Clause 20.
19. PAYMENTS
19.1 MANNER OF PAYMENT
All payments to be made by the Chargor hereunder shall be made in the
same currency in which the Secured Obligations are expressed to be
payable under the Loan Agreement.
19.2 TAXES
All payments by the Chargor under or in connection with this Mortgage
Debenture shall be made without set-off or counterclaim, free and clear
of and without deduction for or on account of all taxes. All taxes in
respect of this Mortgage Debenture and payments hereunder shall be for
the account of and shall be paid by the Chargor for its own account
prior to the date on which penalties attach thereto. If the Chargor is
compelled by law to make payment subject to any tax and the Bank does
not actually receive for its own benefit on the due date a net amount
equal to the full amount provided for hereunder, the Chargor will pay
all necessary additional amounts to ensure receipt by the Bank of the
full amounts so provided for, provided that the Chargor shall have no
liability to the Bank under this Clause 19.2 if and to the extent that
such liability would not have been incurred or arisen if the Bank had
retained its rights under the Loan Agreement and/or had not changed its
lending office. The Chargor will indemnify the Bank in respect of all
such taxes upon the Bank providing
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to the Chargor evidence that the Bank has suffered or incurred any
liability to pay such taxes.
19.3 TAX CREDITS
If the Bank receives the benefit of a tax credit or an allowance
resulting from a payment which includes an additional amount paid by
the Chargor under Clause 19.2, it shall (to the extent that it can do
so without prejudice to the retention of such credit or allowance and
to the extent that it is not unlawful or contrary to any official
directive for it to do so) pay to the Chargor such part of that benefit
as is, in the reasonable opinion of the Bank, attributable to the
withholding or deduction giving rise to payment of that additional
amount, provided that the Bank shall:
(i) be the sole judge of the amount of any such benefit to be so
paid to the Chargor and of the date on which it is received by
the Bank;
(ii) have an absolute discretion as to the order and manner in
which it employs or claims tax credits and allowances
available to it;
(iii) not be obliged to disclose to the Chargor or any other person
any confidential information regarding its tax affairs or tax
computations.
19.4 APPROPRIATION OF PAYMENTS
The Bank shall have an absolute and unfettered right to appropriate any
payments received from the Chargor, or otherwise recovered under the
Loan Documents to such indebtedness of the Chargor hereunder or
thereunder as the Bank may determine, to the exclusion of any right on
the
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part of the Chargor to make an appropriation in respect of such
payments.
20. CURRENCY
20.1 CURRENCY CONVERSION
(a) The Chargor's liability hereunder shall be to pay to the Bank the full
amount of the Principal's Obligations in such currency in which they
are for the time being denominated provided that if and to the extent
the Chargor shall not pay such amount in such currency the Bank may
accept payment of all or part of such amount in any other currency
and/or require the Chargor , in substitution for its liability to pay
such amount in such currency, to pay an amount in pounds Sterling which
is equivalent to the amount of such currency remaining unpaid (and in
either case the provisions of Clause 20.1(b) below shall apply);
(b) The equivalent on any day in one currency of any amount denominated in
another currency shall be an amount in the first currency equal to the
amount which the Bank would have received if the Bank had on such day
(or, if such day shall not be a business day, on the next succeeding
business day) made a purchase of the first currency with such amount of
such other currency at the then prevailing spot rate of exchange of the
Bank less all costs, charges and expenses normally incurred by the Bank
in connection with such a purchase.
20.2 CURRENCY INDEMNITY
If the Bank receives an amount in respect of the Chargor's liability
under this Mortgage Debenture or if that liability is converted into a
claim, proof, judgment or order in a currency other than the currency
(the "CONTRACTUAL CURRENCY") in which the amount is expressed to be
payable under this Mortgage Debenture (as the case may be):-
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(a) the Chargor shall indemnify the Bank as an independent
obligation against any loss or liability arising out of or as
a result of the conversion;
(b) if the amount received by the Bank, when converted into the
contractual currency at a market rate in the usual course of
its business is less than the amount owed in the contractual
currency, the Chargor shall forthwith on demand pay to the
Bank an amount in the contractual currency equal to the
deficit and to the extent that such conversion results in the
Chargor receiving more than the amount owed in the contractual
currency the amount of such excess (as conclusively determined
by the Bank) shall be paid to the Chargor; and
(c) the Chargor shall pay to the Bank forthwith on demand any
exchange costs and taxes payable in connection with any such
conversion.
20.3 WAIVER
The Chargor waives any right it may have in any jurisdiction to pay any
amount under this Mortgage Debenture in a currency other than that in
which it is expressed to be payable.
21. SUSPENSE ACCOUNT
All monies received, recovered or realised by the Bank under this
Mortgage Debenture (including the proceeds of any conversion of
currency) may in the discretion of the Bank be credited to any suspense
or impersonal account and may be held in such account for so long as
the Bank may think fit. The Bank shall not charge interest on so much
of the Chargor's indebtedness to the Bank as otherwise accrued under
the Principal's Obligations as is equal to the credit balance
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from time to time on such separate suspense account.
22. THE BANK'S REMEDIES
22.1 EFFECT OF RELEASE
Any receipt, release or discharge of the security provided by, or of
any liability arising under, this Mortgage Debenture shall not release
or discharge the Chargor from any liability to the Bank for the same or
any other liability which may exist independently of this Mortgage
Debenture.
22.2 ARRANGEMENTS WITH THIRD PARTIES
The Bank may in its discretion grant time or other indulgence, or make
any other arrangement, variation or release with, any person or persons
not party hereto (whether or not such person or persons are jointly
liable with the Chargor) in respect of any of the Secured Obligations
or of any other security therefor or guarantee in respect thereof
without prejudice either to the security constituted by or pursuant to
this Mortgage Debenture or to the liability of the Chargor for the
Secured Obligations or the exercise by the Bank of any rights, remedies
and privileges conferred upon it by this Mortgage Debenture.
22.3 RIGHTS CUMULATIVE
The rights, powers and remedies provided in this Mortgage Debenture are
cumulative and are not, nor are they to be construed as, exclusive of
any rights, powers or remedies provided by law, or under any of the
other Loan Documents.
22.4 WAIVER
No failure on the part of the Bank to exercise, or delay on its part in
exercising, any of the
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powers and remedies provided by this deed or by law, shall operate as a
waiver thereof, nor shall any single or partial waiver of such rights,
powers and remedies preclude any further or other exercise of that one
of such rights, powers and remedies concerned or the exercise of any
other of such rights, powers and remedies.
22.5 COSTS
All the costs, charges and expenses of the Bank in relation to this
Mortgage Debenture or for the Secured Obligations (including, without
limitation, the costs, charges and expenses incurred in the carrying
out of this Mortgage Debenture into effect or in the exercise of any of
the rights, remedies and powers conferred on the Bank hereby or in the
perfection or enforcement of the security constituted hereby or
pursuant hereto or in the perfection or enforcement of any other
security for or guarantee in respect of the Secured Obligations) shall
be reimbursed by the Chargor to the Bank on demand on a full indemnity
basis provided always that any costs, charges and expenses incurred by
the Bank prior to an Event of Default shall be reasonable.
22.6 INSOLVENCY RELATION BACK
Any settlement or discharge between the Bank and the Chargor shall be
conditional upon no security of, or payment to, the Bank (whether by
the Chargor or otherwise) being avoided or reduced or required to be
paid away by virtue of any requirement (whether or not having the force
of law) or enactment, whether relating to bankruptcy, insolvency,
liquidation, administration or otherwise, at any time in force or by
virtue of any obligation to give effect to any preference or priority
and the Bank shall be entitled to recover the value or amount of any
such security or payment from the Chargor as if such settlement or
discharge had not occurred.
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23. PROVISIONS SEVERABLE
Every provision contained in this Mortgage Debenture shall be severable
and distinct from every other provision and if at any time any one or
more of such provisions is or becomes invalid, illegal or
unenforceable, the validity, legality and enforceability of the
remaining such provisions shall not in any way be affected thereby.
24. THE BANK'S DISCRETION
Any power which may be exercised or any determination which may be made
hereunder by the Bank may be exercised or made in the absolute and
unfettered discretion of the Bank.
25. CERTIFICATES
A certificate of the Bank setting out the amount of any Secured
Obligation due from the Chargor shall be prima facie evidence of such
amount against the Chargor in the absence of manifest error.
26. ASSIGNMENT; SUCCESSORS
26.1 SUCCESSORS
The expression the "BANK" wherever used herein shall be deemed to
include the assignees and other successors, whether immediate or
derivative, of the Bank, who shall be entitled to enforce and proceed
upon this Mortgage Debenture in the same manner as if named herein.
26.2 ASSIGNMENT
The Bank shall be entitled at any time to assign all or any of its
rights and benefits hereunder to any person to whom the rights and
benefits of the Bank under the Loan Agreements are assigned
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in accordance with the terms thereof and this Mortgage Debenture shall
remain in full force and effect after, and shall continue to secure the
Secured Obligations after and resulting from, any such assignment.
27. DISCHARGE
If the Chargor shall have unconditionally and irrevocably paid and
discharged the Secured Obligations in full (which event shall not occur
until all contingent liabilities have either crystallised or expired)
and the Bank will at the request and cost of the Chargor duly discharge
this Mortgage Debenture and re-assign to the Chargor or as it shall
direct such of the Collateral as is hereby assigned to the Bank.
28. LAW AND JURISDICTION
28.1 LAW
This Mortgage Debenture shall be governed by and construed in
accordance with English law.
28.2 SUBMISSION TO JURISDICTION
For the exclusive benefit of the Bank, the Chargor irrevocably agrees
that the courts of England are to have jurisdiction to settle any
disputes which may arise out of or in connection with this Mortgage
Debenture and the other Loan Documents and irrevocably submits to the
jurisdiction of such courts and agrees that accordingly any suit,
action or proceeding arising out of or in connection with this Mortgage
Debenture (together in this Clause referred to as "PROCEEDINGS") may be
brought in such courts.
28.3 OTHER JURISDICTIONS
Nothing contained in this Clause shall limit the right of the Bank to
take Proceedings against the
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Chargor in any other court of competent jurisdiction, nor shall the
taking of Proceedings in one or more jurisdictions preclude the taking
of Proceedings in any other competent jurisdiction, whether
concurrently or not.
28.4 WAIVER OF OBJECTION
The Chargor irrevocably waives any objection which it may have now or
hereafter to the laying of the venue of any Proceedings in any such
court as is referred to in Clause 28.2 and any claim that any such
Proceedings have been brought in any inconvenient forum and further
irrevocably agrees that a final judgment in any Proceedings brought in
the English courts shall be conclusive and binding and may be enforced
in the courts of any other competent jurisdiction.
29. CONSTITUTIONAL DOCUMENTS
The Chargor hereby certifies that its creation by this Mortgage
Debenture of charges in favour of the Bank does not contravene any of
the provisions of its constitutional documents.
30. COUNTERPARTS
This Mortgage Debenture may be executed in any number of counterparts
and by the different parties on separate counterparts and this will
have the same effect as if the signatures on the counterparts were on a
single copy of this Mortgage Debenture and each such counterpart shall
be treated as an original.
31. NOTICES
Any notice or other communication required or permitted to be given by
this Mortgage Debenture or by applicable law shall be in writing and
shall be deemed received (a) on the date delivered, if sent by hand
delivery (to the person or department if one is specified below),
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(b) three (3) days following the date deposited in U.S. mail, certified
or registered, with return receipt requested, or (c) one (1) day
following the date deposited with Federal Express or other national
overnight carrier, and in each case addressed as follows:
IF TO THE CHARGOR:
The Company Secretary
Guildsoft Limited
Unit A
The Software Centre
East Way
Lee Mill Industrial Estate
Ivybridge
Plymouth
PL21 9PE
IF TO THE BANK:
Mr Andrew H Tsao, Senior Vice President
Silicon Valley Bank
40 William Street
Suit 350
Wellesley
Massachusetts 02481
USA
WITH COPY TO:
Mr James Krumsiek
Rieimer & Braunstein LLP
Counselors at Law
Three Centre Plaza
Boston
Massachusetts 02108
USA
Fax: 001 (617) 723 6831
Failure to provide any courtesy copy shall not invalidate any notice
otherwise properly given to the designated party set out above. Any
party
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may change its address to another single address by notice given as
herein provided, except any change of address notice must be actually
received in order to be effective.
IN WITNESS whereof this Mortgage Debenture has been executed as a deed and
delivered by the parties hereto on the day and the year first before written.
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SCHEDULE 1
DETAILS OF THE PROPERTY
PROPERTY INTEREST TITLE NUMBER/DESCRIPTION
Unit A Leasehold a lease over the Property
The Software Centre between Hopkins Developments
East Way Limited and the Chargor
Lee Mill Industrial Estate commencing 18 September 1998
Ivybridge for the period to 31
Plymouth December 2017
PL21 9PE
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EXECUTED and DELIVERED .......... )
AS A DEED BY GUILDSOFT LIMITED... )
Acting by:
Bruce R. Gardner Director /s/ Bruce R. Gardner
John F. Cave Director/Secretary /s/ John F. Cave
EXECUTED and DELIVERED .......... )
AS A DEED by SILICON VALLEY ..... )
BANK............................. )
By: Heidi Fetty Assistant Vice President /s/ Heidi Fetty
A person authorised under the laws of California to execute and deliver as a
deed.
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