1.
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Definitions
and Interpretation
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1
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2.
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Covenant
to Pay
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3
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3.
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Charging
Provision
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4
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4.
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Negative
Pledge and Ranking of Charge
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4
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5.
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Continuing
Obligations
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4
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6.
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Appointment
of Receiver or administrator
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6
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7.
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Security
Protection
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7
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8.
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Company
to meet expenses of the Subscriber
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7
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9.
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Further
Assurance
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7
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10.
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Power
of Attorney
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7
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11.
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Power
to grant the Charge
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7
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12.
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Demands
or Notices
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8
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13.
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Assignation
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8
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14.
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Currency
Clauses
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8
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15.
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Miscellaneous
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9
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16.
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Governing
Law
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9
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17.
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Consent
to Registration
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10
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(1)
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CODA
OCTOPUS PRODUCTS LIMITED
(Registered Number SC151068) having its registered office at Anderson
House, Breadalbane Street, Edinburgh EH6 5JR ("Company");
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(2)
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THE
ROYAL BANK OF SCOTLAND PLC (registered
in Scotland with Registered Number 90312) acting through its London
offices located at 135 Bishopsgate, London EC2M 3UR ("Subscriber”
which expression includes its successors in title, assignees and
transferees).
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(A)
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The
Company owes various obligations to the Subscriber under the Deed
of
Guarantee, and the Subscriber wishes to secure these and any future
obligations against all of the Assets of the Company from time
to time;
and
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(B)
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The
Company has therefore agreed to enter into this Charge in favour
of the
Subscriber on the following terms and
conditions.
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1.
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Definitions
and Interpretation
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1.1
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In
the interpretation of this Charge:-
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1.2
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The
expressions "holding company" and "subsidiary" shall have the meanings
given to them in Section 736 of the Companies Act
1985.
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1.3
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References
to this Charge and to any provisions of it shall be construed as
references to it in force for the time being and as amended, varied,
supplemented, substituted or novated from time to
time.
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1.4
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References
to statutes, statutory provisions and other legislation shall include
all
amendments, modifications and re-enactments for the time being
in force
and shall include any orders, regulations, instruments or subordinate
legislation under or deriving from the relevant statute or statutory
provision.
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1.5
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Words
importing the singular are to include the plural and vice
versa.
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1.6
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A
Receiver shall include a reference to joint receivers and any reference
to
the appointment of a person as receiver shall include a reference
to the
appointment of two or more persons as joint receivers.
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1.7
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References
to a person are to be construed to include references to a corporation,
firm, company, partnership, joint venture, unincorporated body
of persons,
individual or any state or any agency of a state, whether or not
a
separate legal entity.
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1.8
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References
to any person are to be construed to include that person's assignees
or
transferees or successors in title, whether direct or
indirect.
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1.9
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Clause
headings are for ease of reference only and are not to affect the
interpretation of this Charge.
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1.10
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Any
phrase introduced by the terms “including”, “include”, “in particular” or
any similar expression shall be construed as illustrative.
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1.11
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Any
reference to a "fixed security" shall be construed as a reference
to a
fixed security as defined in Section 486 of the Companies Act
1985.
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1.12
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Unless
the context requires otherwise, or unless otherwise defined in
this
Charge, words and expressions defined in the Transaction Documents
shall
have the same meanings when used in this
Charge.
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2.
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Covenant
to Pay
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2.1
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The
Company covenants to pay and discharge in full on demand to the
Subscriber
the Secured Liabilities when they fall due and
payable.
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2.2
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Any
amount not paid in accordance with this Charge when due shall (subject
to
Clause 2.3 below) carry interest at the rate of 2% per annum above
the
base rate quoted by The Royal Bank of Scotland plc from time to
time or at
such other rate as may be agreed between the Company and the Subscriber
from time to time. In each case, interest shall accrue on a day
to day
basis until the date of irrevocable and unconditional repayment
in full
and, if unpaid, shall be compounded on the terms so agreed or (in
the
absence of such agreed terms) with quarterly rests on 31 March,
30 June,
30 September and 31 December in each year. Interest shall continue
to be
charged and compounded on this basis after as well as before any
demand or
judgment.
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2.3
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Clause
2.2 above shall not apply to the extent that default interest on
such
amount for such period is charged pursuant to the relevant Transaction
Document and itself constitutes part of the Secured
Liabilities.
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3.
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Charging
Provision
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3.1
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The
Company grants a floating charge over the Assets to the
Subscriber as a continuing security for the payment and discharge
of the
Secured Liabilities.
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3.2
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Paragraph
14 of Schedule B1 to the Insolvency Act 1986 (incorporated by Schedule
16
to the Enterprise Act 2002) shall apply to this
Charge.
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3.3
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The
security constituted by or pursuant to this Charge shall be in
addition to
and independent of, and shall not in any way prejudice or be prejudiced
by, any other security, right or remedy against any person which
the
Subscriber may at any time hold for the satisfaction of the Secured
Liabilities or any part thereof.
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4.
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Negative
Pledge and Ranking of
Charge
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4.1
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The
Company agrees that it shall be prohibited from granting or creating
subsequent to the date of this Charge any fixed security or any
other
floating charge (as defined by the Companies Act 1985) having priority
over or ranking pari passu with this Charge, other than in favour
of the
Subscriber.
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4.2
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In
the event that the Company grants or creates any fixed security
or
floating charge in breach of the prohibition in Clause 4.1 above,
this
Charge shall rank in priority to that fixed security or floating
charge.
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4.3
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The
Subscriber by acceptance of this Charge hereby acknowledges the
existence
of the Permitted Encumbrance and that the Permitted Encumbrance
has
priority over the security of the Subscriber in all respects and
the
rights and powers of the Subscriber under this Charge shall always
be
subject to the Permitted Encumbrance for so long as the Permitted
Encumbrance remains outstanding.
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5.
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Continuing
Obligations
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5.1
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in
accordance with the terms of the Permitted Encumbrance the Company
shall
take all steps required by contract and law to satisfy its indebtedness
to
FGI secured by the Permitted Encumbrance no later than 31 January
2009 and
to secure the discharge of the registered charges no later than
28
February 2009.
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5.2
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to
register this Charge with the Registrar of Companies for Scotland
no later
than 21 days after the date of execution of this
Charge.
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5.3
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upon
discharge of the Permitted Encumbrance the Company shall take all
steps
required under the laws of Scotland to ensure that the Subscriber
has a
first ranking security interest in the
Assets.
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5.4
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if
required by the Subscriber to forthwith deposit with the Subscriber
all or
any documents, deeds, or other papers whatsoever relating to the
Assets as
the Subscriber may require.
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5.5
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to
make timely payment of all lawful amounts in respect of the Assets
when
due including all rents, periodic charges and outgoings of any
nature.
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5.6
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to
keep all of the Assets in a good state of repair and in proper
and good
working order and condition and to permit the Subscriber and such
other
persons as the Subscriber may from time to time appoint for the
purpose to
enter and view the state and condition of the Assets on reasonable
notice.
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5.7
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to
insure and keep insured all of the Assets which are of an insurable
nature
against loss or damage by fire and all other usual risks as the
Subscriber
may require in the full amount of their reinstatement value in
such name
and in such offices as the Subscriber shall approve in terms not
permitting the insurers to cancel the policy of insurance without
giving
at least 14 days’ notice to the Company and to pay when due all premiums
and any other charges necessary for effecting and maintaining such
insurance and, if requested by the Subscriber, to have the interest
of the
Subscriber noted on any policy or policies and if required to deliver
to
the Subscriber such policy or policies and the receipt for every
premium
payable in respect of such policy or
policies.
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5.8
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to
hold all monies received on any insurance whatsoever in respect
of loss,
damage or destruction of the Assets whether under the covenant
in
paragraph 5.7 or otherwise on trust for the Subscriber to be applied
in
making good the loss or damage in respect of which the monies are
received
or in or towards discharge of the sums for the time being owing
to the
Subscriber under this Charge as the Subscriber may in its absolute
discretion require.
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5.9
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not
without the previous written consent of the Subscriber to create
or
attempt to create any mortgage, pledge, fixed or floating charge
or other
encumbrance or security interest on or over any of the
Assets.
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5.10
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except
for the Permitted Encumbrance, not to take or omit to take any
action that
might or would have the result of materially impairing the security
interests created by this Charge. The Company will not grant to
any person
other than the Subscriber and the Noteholders any interest whatsoever
in
the Assets.
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5.11
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to
inform the Subscriber immediately on becoming bound to complete
the
purchase of any estate or interest in any heritable or leasehold
property
after the date of this floating charge and to deposit with the
Subscriber
the deeds and documents of title relating to such
property.
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5.12
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to
execute at any time upon request over all or any of the property
referred
to in paragraph 5.11 and which is capable of being so charged,
a standard
security in favour of the Subscriber in such form as the Subscriber
shall
require.
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5.13
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to
execute and do all such assurances and things including (without
prejudice
to the generality of the foregoing) charges and assignations as
the
Subscriber may require for perfecting the security constituted
by this
Charge and for facilitating the realisation of the Assets and for
exercising all powers, authorities and discretions conferred by
this
Charge upon the Subscriber or any receiver appointed by the Subscriber
and
to give notice of any such assurance or other thing to any person
the
Subscriber may require.
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5.14
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to
comply with any and all covenants and undertakings which the Company
has
entered into in the other Transaction
Documents.
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6.
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Appointment
of Receiver or
administrator
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6.1
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All
monies secured by this Charge shall be immediately payable on demand
by
the Subscriber in accordance with the provisions of the Loan Note
Instrument and the other Transaction Documents and failing payment
immediately of any monies so demanded this security shall become
immediately enforceable and the Subscriber shall be entitled to
appoint in
writing a Receiver of all or any of the Assets and/or an Administrator
of
the Company (in each case in accordance with and to the extent
permitted
by applicable laws) either immediately or at any time thereafter.
In
addition, all monies secured by this Charge shall also become payable
without any demand and this security will become immediately enforceable
in the same manner as if demanded either immediately or at any
time
after:
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6.1.1
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if
the Company shall request that the Subscriber shall appoint a Receiver
or
an administrator; or
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6.1.2
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if
there is an Event of Default (as detailed in Condition 9.1 of the
Loan
Note Instrument) which has not been remedied as provided for in
Condition
9.2 of the Loan Note Instrument; or
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6.1.3
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if
the Company fails to observe or commits any breach of any of the
covenants
undertakings conditions or provisions of this Charge provided always
that
(save for a breach of Paragraphs 5.1 or 5.2 of this Charge or a
breach of
Condition 9.1 (e) of the Loan Note Instrument) before this security
becomes enforceable the Company shall have a period of 30 days
(or such
longer period as is reasonable in the circumstances and which is
agreed
between the Company and the Subscriber, both parties acting reasonably)
from the earlier of (i) the date the Company becomes aware, or
ought
reasonably to be aware, of the failure to observe or commission
of the
breach and (ii) the date the Company is given notice by either
the
Subscriber or a majority (by value) of the Noteholders in which
to remedy
any failure to observe or breach. If the Company remedies the failure
to
observe or breach in accordance with this Paragraph 6.1.3 then
this
security shall not become immediately enforceable as a result of
the
failure to observe or breach which has been
remedied;
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6.1.4
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if
an order is made for the winding up of the Company by the court
or if an
effective resolution is passed for the members’ or creditors’ voluntary
winding up of the Company; or
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6.1.5
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if
a petition is presented for an administration order to be made
in relation
to the Company pursuant to the Insolvency Act 1986;
or
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6.1.6
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if
a receiver is appointed to all or any part of the property and
assets of
the Company.
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6.2
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After
this Charge shall have become enforceable the Subscriber may in
its
absolute discretion enforce all or any part of the security constituted
hereby in such manner as it sees
fit.
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7.
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Security
Protection
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8.
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Company
to meet expenses of the
Subscriber
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9.
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Further
Assurance
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10.
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Power
of Attorney
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11.
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Power
to grant the Charge
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11.1
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The
Company represents and warrants to the Subscriber
that:-
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11.1.1
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it
is duly incorporated and validly existing in the United Kingdom
and has
full authority to enter into this Charge and to perform its obligations
hereunder;
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11.1.2
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this
Charge constitutes its legal, valid and binding obligation and
is an
effective security over the Assets;
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11.1.3
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that
neither the execution of this Charge nor the creation of any security
under or pursuant to it contravenes or will contravene the provisions
of
the memorandum or articles of association of the Company or any
equivalent
constitutional documents governing the Company;
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11.1.4
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the
Company is the sole legal and beneficial owner of the Assets subject
to
the Permitted Encumbrance or any other security interests disclosed
in the
Disclosure Letter;
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11.1.5
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the
Company has not stopped payment on any debts and is not insolvent
or
unable to pay its debts for the purpose of Section 123 of the
Act;
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11.1.6
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all
approvals required to be obtained whether under the provisions
of the
Companies Act 1985 or any other enactment have been duly obtained
and that
it is in a position to enter into this
Charge.
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11.1.7
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11.2
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The
Company agrees and undertakes to indemnify the Subscriber on a
full
indemnity basis from and against all and any liabilities arising
as a
result of any breach of the warranties set out in Paragraph
11.1.
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12.
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Demands
or Notices
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12.1
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A
demand for payment or any other demand or notice under this Charge
shall
either be delivered personally or sent by first class recorded
delivery
post, tested telex or facsimile transmission. The address of the
service
of each party shall be the address stated in this Charge or such
other
address as it shall have from time to time notified to the other
party. A
notice shall be deemed to have been served as
follows:-
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12.1.1
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if
personally delivered, at the date of
delivery;
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12.1.2
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if
posted, at the expiration of 48 hours after the envelope containing
the
same was delivered into the custody of the postal authority;
and
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12.1.3
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if
sent by facsimile transmission, at the time of
transmission.
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12.2
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A
certificate by any manager or officer of the Subscriber as to the
amount
of the Secured Liabilities or any part of them shall in the absence
of
manifest error, be conclusive and binding on the
Company.
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13.
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Assignation
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13.1
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The
Subscriber may assign and transfer the benefit of this Charge to
any
person acting for the benefit of the Noteholders and all references
in
this Charge to the Subscriber shall be deemed to include its assignees
and
other successors.
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13.2
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The
Company shall not be entitled to assign or transfer all or any
of its
rights in respect of this Charge to any person without the prior
written
consent of the Subscriber.
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14.
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Currency
Clauses
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14.1
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All
monies received or held by the Subscriber, a Receiver or an administrator
under this Charge may from time to time after demand has been made
by the
Subscriber be converted into such other currency as the Subscriber
considers necessary or desirable to cover the obligations and liabilities
actual or contingent of the Company in that other currency at the
then
prevailing spot rate of exchange obtainable by the Subscriber (as
conclusively determined by the Subscriber) for purchasing that
other
currency with the existing
currency.
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14.2
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If
and to the extent that the Company fails to pay the amount due
on demand
the Subscriber may in its absolute discretion without notice to
the
Company purchase at any time thereafter so much of any currency
as the
Subscriber considers necessary or desirable to cover the obligations
and
liabilities of the Company in such currency hereby secured at the
then
prevailing spot rate of exchange obtainable by the Subscriber (as
conclusively determined by the Subscriber) for purchasing such
currency
with sterling and the Company hereby agrees to indemnify the Subscriber
against the full sterling cost incurred by the Subscriber for such
purchase.
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14.3
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No
payment to the Subscriber (whether under any judgement or court
order or
otherwise) shall discharge the obligation or liability of the Company
in
respect of which it was made unless and until the Subscriber shall
have
received payment in full in the currency in which such obligation
or
liability was incurred and to the extent that the amount of any
such
payment shall on actual conversion into such currency falls short
of such
obligation or liability actual or contingent expressed in that
currency
the Subscriber shall have a further separate cause of action against
the
Company and shall be entitled to enforce the charges hereby created
to
recover the amount of the
shortfall.
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15.
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Miscellaneous
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15.1
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All
the provisions of this Charge are severable and distinct from one
another
and if at any time one or more of such provisions is or becomes
invalid
illegal or unenforceable the validity legality and enforceability
of the
remaining provisions hereof shall not in any way be affected or
impaired
thereby.
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15.2
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No
payment to the Subscriber (whether under any judgment or order
of any
Court or otherwise) shall discharge the obligation or liability
of the
Company in respect of which it was made unless and until the Subscriber
shall have received payment in full and to the extent that the
amount of
any such payment shall fall short of such obligation or liability
the
Subscriber shall have a further separate cause of action against
the
Company and shall be entitled to enforce the charges hereby created
to
recover such sum as shall pay the amount of the
shortfall.
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15.3
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No
failure or delay by the Subscriber in exercising any right or remedy
shall
operate as a waiver thereof nor shall any single or partial exercise
or
waiver of any right or remedy preclude its further exercise or
the
exercise of any other right or remedy as though no waiver had been
made
and no relaxation or indulgence
granted.
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15.4
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Any
change in the constitution of the Subscriber or its absorption
in or
amalgamation with any other person or the acquisition of all or
part of
its undertaking by any other person shall not in any way prejudice
or
affect its rights hereunder.
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16.
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Governing
Law
|
17. |
17. Consent
to Registration
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.................................................Director
Jason
Lee Reid
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...........................................Director
(Signature)
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.................................................Director/
Jody
Frank Secretary
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............................................Director/
(Signature)
Secretary
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