0001805833FALSE4235 Redwood AvenueMarina Del ReyCalifornia00018058332023-10-122023-10-120001805833us-gaap:CommonStockMember2023-10-122023-10-120001805833sst:RedeemableWarrantsMember2023-10-122023-10-12
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): October 6, 2023
System1, Inc.
(Exact name of registrant as specified in its charter)
| | | | | | | | | | | | | | |
| Delaware | | 001-39331 | | 92-3978051 |
(State or other jurisdiction of incorporation or organization) | | (Commission File Number) | | (I.R.S. Employer Identification Number) |
| | | | |
4235 Redwood Avenue Marina Del Rey, California | | | | 90066 |
(Address of principal executive offices) | | | | (Zip Code) |
(310) 924-6037(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| | | | | |
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| | | | | | | | | | | | | | |
Title of each class | | Trading Symbol | | Name of each exchange on which registered |
| Class A Common Stock, $0.0001 par value per share | | SST | | New York Stock Exchange |
| Redeemable warrants, each whole warrant exercisable for one Class A Common Stock share at an exercise price of $11.50 per share | | SST.WS | | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 - Entry Into A Material Definitive Agreement.
Term Loan Note
On October 6, 2023, Orchid Merger Sub II, LLC (“Orchid Sub”), a wholly-owned subsidiary of System1, Inc. (the “Company”), entered into a $2.5 million Term Loan Note (the “Term Note”) with Openmail2, LLC, a Delaware limited liability company (“OM2” or the “Term Lender”), which is principally owned and managed by trusts established for the benefit of the Company’s co-founders, Michael Blend and Charles Ursini, in a private transaction approved by the independent and non-interested members of the Company’s Board of Directors (the “Board”). Pursuant to the Term Note, the Term Lender provided a fixed $2.5 million term loan to Orchid Sub.
The amounts outstanding under the Term Note accrue interest at the rate per annum equal to the Secured Overnight Financing Rate (“SOFR”) as administered by the Federal Reserve Bank of New York plus 5.75%. The maturity date under the Term Note is December 31, 2024. The Lender is also entitled to a closing fee equal to 10.0% the principal amount of the Term Note, payable within 180 days of October 6, 2023. In addition, Orchid Sub agreed to reimburse the Lender for its reasonable and documented costs expenses incurred in connection with the negotiation, documentation and execution of the Term Note.
Secured Facility
On October 6, 2023, Total Security Limited (“Total Security”), an indirect wholly-owned subsidiary of the Company, entered into a Secured Facility Agreement providing for a $10.0 million term loan (the “Secured Facility”) with Onyx Asset Finance Limited, a company organized under the laws of England & Wales (“Onyx” or the “Secured Lender”) and a subsidiary of Just Develop It Limited, one of the Company’s significant shareholders, in a private transaction approved by the independent and non-interested members of the Company’s Board. Pursuant to the Security Facility, the Secured Lender provided a $10.0 million commitment to Total Security under the Secured Facility (the “Secured Commitment”), which amount was (i) drawn down in full on the closing date and (ii) secured by the assets of Total Security pursuant to a deed granted in favor of the Secured Lender pursuant to a Debenture between Total Security and the Secured Lender, dated October 6, 2023.
The amounts outstanding under the Secured Facility accrue interest at the rate of 8.5% per annum. The amounts outstanding under the Secured Facility are due upon the earlier of (i) October 6, 2024 or (ii) the date on which Total Security undergoes a Change of Control (as such term is defined in the Secured Facility). The Secured Lender was also entitled to a closing fee equal to 12.0% the principal amount of the borrowings under the Secured Facility, which was paid in full on the closing date. In addition, Total Security agreed to reimburse the Secured Lender for its reasonable and documented costs expenses incurred in connection with the negotiation, documentation and execution of the Secured Facility.
Item 2.03 - Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement.
As described above under Item 1.01, on October 6, 2023, Orchid Sub entered into a $2.5 million Term Note with the Lender party thereto.
As described above under Item 1.01, on October 6, 2023, Total Security entered into a $10.0 million Secured Facility with the Secured Lender party thereto.
For a summary description of the terms of the Term Note and the Secured Facility, see the descriptions set forth above under Item 1.01 – Entry Into A Material Definitive Agreement.
Item 9.01 - Financial Statements and Exhibits
(d) Exhibits.
| | | | | |
| Exhibit No. | Description |
| |
| |
| |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| | | | | | | | | | | |
| | System1, Inc. |
| | | |
| Date: | October 12, 2023 | By: | /s/ Tridivesh Kidambi |
| | Name: | Tridivesh Kidambi |
| | Title: | Chief Financial Officer |
TERM LOAN NOTE
US $2,500,000 October 6, 2023
FOR VALUE RECEIVED, OPENMAIL2, LLC, a Delaware limited liability company (the “Lender”) agrees to make a loan (the “Loan”) to ORCHID MERGER SUB II, LLC, a Delaware limited liability company (the “Borrower”), in an aggregate outstanding amount not to exceed the principal sum of $2,500,000 (the “Commitment”), on the terms set forth below.
1. Definitions: As used in this note (this “Note”), the following terms shall have the meanings set forth below:
“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the laws of, or are in fact closed in, any of the states where the Lender’s office is located; provided that when used in connection with the determination of Daily Simple SOFR, the term “Business Day” shall also exclude any day that is not a U.S. Government Securities Business Day.
“Borrower” has the meaning assigned to such term in the preamble to this Note.
“Closing Date” has the meaning specified in Section 11.
“Closing Fee” has the meaning specified in Section 10.
“Commitment” has the meaning assigned to such term in the preamble to this Note.
“Daily Simple SOFR” means, with respect to any applicable determination date, the greater of (a) the SOFR published on such date on the NYFRB’s website (or any successor source) and (b) 0.00%.
“Dollar” and “$” mean lawful money of the United States.
“Debtor Relief Laws” means the Bankruptcy Code of the United States of America, and all other liquidation, conservatorship, bankruptcy, general assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States of America or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.
“Default Rate” means an interest rate equal to (i) Daily Simple SOFR, plus (ii) 5.75% per annum plus (iii) 2.0% per annum.
“Event of Default” has the meaning specified in Section 13.
“Existing Credit Agreement” means that certain Credit and Guaranty Agreement, dated as of January 27, 2022, among the Borrower, Bank of America, N.A., as administrative agent, and the other parties from time to time party thereto.
“Lender” has the meaning assigned to such term in the preamble to this Note.
“Loan” has the meaning assigned to such term in the preamble to this Note.
“Maturity Date” has the meaning specified in Section 4(a).
“Note” has the meaning assigned to such term in the preamble to this Note.
“NYFRB” means the Federal Reserve Bank of New York.
“Obligations” means all advances to, and debts, liabilities and monetary obligations of, the Borrower to the Lender arising under this Note, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising, including interest and fees that accrue after the commencement by or against the Borrower of any proceeding under any Debtor Relief Laws naming the Borrower as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.
“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, governmental authority or other entity.
“SOFR” means the Secured Overnight Financing Rate as administered by the NYFRB (or a successor administrator).
“Strategic Transaction” means (a) a “Change of Control” (as defined in the Existing Credit Agreement in effect as of the Closing Date) or (b) any non-ordinary course sale of assets of the Borrower (in one transaction or multiple transactions) resulting in net cash proceeds to the Borrower in excess of $100,000,000; provided, that with respect to clause (b), any receivables, factoring and/or securitization facility, arrangement or program in an amount not greater than $40,000,000 shall be deemed an ordinary course sale of assets of the Borrower.
“U.S. Government Securities Business Day” means any Business Day, except any Business Day on which any of the Securities Industry and Financial Markets Association, the New York Stock Exchange or the NYFRB is not open for business because such day is a legal holiday under the federal laws of the United States of America or the laws of the State of New York, as applicable.
2. Loan. Subject to the terms and conditions contained in this Note, the Lender agrees to make a Loan to the Borrower in a single drawing on the Closing Date in an aggregate principal amount equal to $2,500,000. By executing and delivering this Note, the Borrower hereby requests the Lenders to make the Loan under this Note on the Closing Date.
3. [Reserved].
4. Repayment; Optional Prepayments.
(a) Mandatory Repayment. The Borrower shall repay to the Lender the aggregate outstanding principal amount of the Loan, together with all accrued and unpaid interest and all other amounts payable hereunder, on the earliest of (i) the consummation by the Borrower of any Strategic Transaction, (ii) the refinancing in full and termination of the Existing Credit Agreement and (iii) December 31, 2024 (the “Maturity Date”); provided, that with respect to clause (iii), such date shall be automatically extended for additional three (3) month terms on each subsequent anniversary date, unless the Borrower or the Lender in its sole discretion provides written notice, at least five (5) Business Days prior to such anniversary date, that the maturity of the Loan shall not be extended.
(b) Optional Prepayments. The Borrower shall have the right to prepay, at any time and from time to time, a partial portion of the outstanding principal amount hereunder, without premium or penalty. Borrower may prepay, at any time and from time to time upon two (2) Business Days’ prior written notice to the Lender, the outstanding principal balance of this Note, without fee, premium, or penalty; provided, however, that such prepayment also shall include any and all accrued but unpaid interest through and including the date of prepayment, plus any other sums which have become due to the Lender under this Note on or before the date of prepayment but which have not been fully paid (other than, for the avoidance of doubt, the Closing Fee (as defined below) which shall not become due until the date that is the first anniversary of the Closing Date in accordance with Section 10). Amounts repaid under this Note shall not be available to be re-borrowed.
(c) Application of Payments. Except as may be expressly provided in this Note to the contrary, all payments made with respect to this Note shall be applied in the following order of priority: (i) the payment or reimbursement of any expenses, costs, or obligations (other than the outstanding principal balance of this Note and accrued but unpaid interest on this Note) for which Borrower shall be obligated to pay or reimburse, as applicable, or to which each Lender shall be entitled pursuant to the provisions of this Note, (ii) the payment of accrued but unpaid interest on this Note, and (iii) the payment of all or any portion of the then-outstanding principal balance of this Note. If an Event of Default exists under this Note, then the Lender may, in its sole and absolute discretion, apply any such payments, at any time and from time to time, to any of the items specified in clauses (i), (ii), or (iii) above without regard to the order of priority otherwise specified in this Section.
(d) Rescission of Payments; Unconditional Payments. If at any time any payment made by Borrower under this Note is rescinded or must otherwise be restored or returned upon the insolvency, bankruptcy, or reorganization of Borrower, or for any other reason, Borrower’s obligation to make such payment shall be reinstated as though such payment had never been made. Borrower is obligated to pay all principal, interest, costs, fees, expenses and any other obligations as specified under this Note, absolutely and
unconditionally, without any abatement, postponement, diminution, deduction, offset, demand, counterclaim, or recoupment (each of which is hereby waived). Acceptance by the Lender of any payment in an amount less than the amount then due on any obligations shall be deemed an acceptance on account only, notwithstanding any notation on or accompanying such partial payment to the contrary, and shall not in any way (i) waive or excuse the existence of an Event of Default, (ii) waive, impair or extinguish any right or remedy available to the Lender hereunder, or (iii) waive the requirement of punctual payment and performance or constitute a novation in any respect.
5. Use of Proceeds. Borrower agrees that no advances under this Note shall be used for personal, family, or household purposes, and that all advances under this Note shall be used solely for business, commercial, investment or other similar purposes and in accordance with the terms and provisions of this Note, and specifically Borrower shall use such proceeds solely and exclusively to provide ongoing working capital and for other general corporate purposes of the Borrower and its subsidiaries.
6. Expenses. Borrower shall reimburse the Lender (or other holder of this Note) for all reasonable and documented out-of-pocket costs and expenses (including the reasonable and documented out-of-pocket fees and expenses of one law firm) incurred by the Lender (or other holder of this Note) in connection with the transactions contemplated by this Note, including the negotiation, documentation and execution of this Note and the enforcement of the rights of the Lender (or other holder of this Note) under this Note.
7. Place of Payment. All amounts payable hereunder shall be payable to the Lender by wire transfer of immediately available funds into an account or accounts designated by the Lender in writing from time to time. All payments shall be made in lawful money of United States and shall include all fees and costs, including any currency exchange costs, applicable to such payments.
8. Interest.
(a) Subject to the provisions of subsection (b) below, the Loan shall bear interest on the outstanding principal amount thereof at a rate per annum equal to Daily Simple SOFR plus 5.75%.
(b) (i) If any amount of principal of the Loan is not paid when due (without regard to any applicable grace periods, if any), whether at stated maturity, by acceleration or otherwise, such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate, to the fullest extent permitted by applicable laws.
(ii) If any amount (other than principal of the Loan) payable by the Borrower under this Note is not paid when due (without regard to any applicable grace periods, if any), whether at stated maturity, by acceleration or otherwise, then upon the request of the Lender, such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate, to the fullest extent permitted by applicable laws.
(iii) Upon the request of the Lender, while any Event of Default exists (other than as set forth in clauses (b)(i) and (b)(ii) above), the Borrower shall pay interest on the principal amount of all outstanding Obligations hereunder at a fluctuating interest rate per annum at all times equal to the Default Rate, to the fullest extent permitted by applicable laws.
(iv) Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due and payable upon demand.
(c) Interest on the Loan shall be due and payable in arrears on the last Business Day of each fiscal quarter occurring prior to the Maturity Date (commencing with the first fiscal quarter ending after the Closing Date) and at such other times as may be specified herein, in each case, in cash. Interest hereunder shall be due and payable in accordance with the terms hereof before and after judgment, and before and after the commencement of any proceeding under any Debtor Relief Laws.
(d) Interest Rate Limitation. Notwithstanding anything in this Note to the contrary, Borrower and the Lender intend to strictly conform to all applicable usury laws. In no event, whether by reason of demand for payment or acceleration of the maturity of this Note or otherwise, shall the interest contracted for, charged, or received by the Lender under this Note, or otherwise exceed the maximum interest permitted by applicable laws. If, from any circumstance whatsoever, interest would otherwise be payable to the Lender in excess of the maximum interest permitted by applicable laws, the interest payable to the Lender shall be reduced automatically to the maximum interest permitted by applicable laws. If the Lender shall ever receive anything
of value deemed interest under applicable laws which would, apart from this paragraph, be in excess of the maximum interest permitted by applicable laws, an amount equal to any amount which would have been excessive interest shall be applied to the reduction of the principal amount owing on this Note in the inverse order of its maturity and not to the payment of interest, or if such amount of interest which would have been in excess of the maximum interest permitted by applicable laws exceeds the unpaid principal balance of this Note, such excess amount shall be promptly refunded to Borrower. All interest paid or agreed to be paid pursuant to this Note to the Lender shall, to the extent permitted by applicable laws, be amortized, prorated, allocated, and spread throughout the full stated term of this Note (including any renewal or extension, if applicable) so that the amount of interest on account of such indebtedness does not exceed the maximum interest permitted by applicable laws.
10. Closing Fee. On the date that is the six (6) month anniversary of the Closing Date (or the next succeeding Business Day if such date is not a Business Day), the Borrower shall pay to the Lender a closing fee in cash in an amount equal to 10% of the Lender’s Commitment on the Closing Date (the “Closing Fee”).
11. Condition Precedent. The effectiveness of this Note is subject to the Lender’s receipt of executed counterparts of this Note signed on behalf of the Borrower and the Lender (the date of such effectiveness, the “Closing Date”).
13. Events of Default. Each of the following shall constitute an event of default (“Event of Default”) under this Note:
(a)Payment Default. Borrower fails to make any payment of (i) principal of the Loan when due or (ii) interest or other amounts payable within five (5) Business Days after the same becomes due, in each case, under this Note.
(b)Other Defaults. Borrower fails to comply with or to perform any other term, obligation, covenant or condition contained in this Note and such failure continues for 30 days after notice thereof by the Lender to the Borrower.
(c)Acceleration of the Obligations under the Existing Credit Agreement. An event of default under the Existing Credit Agreement that results in the acceleration and termination, as applicable, of the loans, commitments and other obligations in full thereunder.
(d)Insolvency. The dissolution or termination of Borrower’s existence as a going business, the insolvency of Borrower, the appointment of a receiver over any part of Borrower’s property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding, whether voluntary or involuntary, under any bankruptcy or insolvency laws by or against Borrower.
(e)Continuity of Operations. Borrower ceases operations, liquidates or dissolves.
(f)Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or any governmental agency, which is not dismissed within forty-five (45) days. However, there shall be no Event of Default under this clause (f) if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding.
14. Lender’s Rights. Upon the occurrence of an Event of Default specified herein (after any applicable cure period has expired), the Lender (or other holders of this Note) may, at its option and without notice or demand, (i) declare the outstanding principal balance of, and accrued but unpaid interest on, this Note at once due and payable, (ii) refuse to advance any additional amounts under this Note, including but not limited to permanently terminating Borrower's ability to borrow under this Note, (iii) pursue any and all other rights, remedies and recourse available to Lender (or other holder of this Note), at law or in equity, or (iv) pursue any combination of the foregoing.
15. Waiver. Borrower expressly waives presentment and demand for payment, notice of default, notice of intent to accelerate maturity, notice of acceleration of maturity, protest, notice of protest, notice of dishonor, and all other notices and demands for which waiver is not prohibited by applicable laws, and diligence in the collection of this Note. No delay or omission of Lender in exercising any right under this Note or under applicable laws shall be a waiver of such right or any other right under this Note or applicable laws.
16. Successors and Assigns. This Note may not be assigned or transferred by the Lender to any person or third party without the prior written consent from the Borrower, which shall not be unconditionally withheld, conditioned or delayed. The Lender shall provide Borrower at least 30 days prior notice to any proposed assignment by the Lender of this Note. Borrower may not assign or transfer this Note or any of Borrower’s rights under this Note without the prior written consent of Lender. Subject to the foregoing, this Note and every part hereof shall be binding upon the undersigned and their respective successors and assigns, and shall inure to the benefit of and be enforceable by the Lender and any of their respective successors and assigns.
17. Financial Information. Borrower agrees to furnish such financial information and statements, including financial statements, lists of assets and liabilities, agings of receivables and payables, inventory schedules, budgets, forecasts, tax returns, and other reports, as the Lender may reasonably request from time to time and only to the extent the same is provided to all lenders under the Existing Credit Agreement in their capacities as such and in the same form provided thereunder.
18. Miscellaneous.
(a) Submission to Jurisdiction; Waivers; Amendments. THE LENDER AND THE BORROWER HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT SITTING IN THE STATE OF DELAWARE, AND THEY HEREBY IRREVOCABLY AGREE THAT ANY ACTION MAY BE HEARD AND DETERMINED IN SUCH DELAWARE STATE OR FEDERAL COURT. THE LENDER AND THE BORROWER HEREBY WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING OF ANY KIND OR NATURE IN ANY COURT OR TRIBUNAL IN WHICH AN ACTION MAY BE COMMENCED BY OR AGAINST THE BORROWER ARISING OUT OF THIS NOTE OR BY REASON OF ANY OTHER CAUSE OR DISPUTE WHATSOEVER BETWEEN THE BORROWER AND THE LENDER OF ANY KIND OR NATURE. No delay or failure on the part of the Lender in the exercise of any right or remedy shall operate as a waiver thereof, and no single or partial exercise by the Lender of any right or remedy shall preclude other or further exercise thereof or the exercise of any other right or remedy. The rights, remedies, powers and privileges provided herein are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law. Time is of the essence in respect of the performance of all payment obligations under this Note. The Borrower hereby waives presentment and demand for payment, notice of dishonour, protest and notice of protest of this Note. No modification or waiver of any provision of this Note or consent to departure therefrom shall be effective unless in writing and signed by the Borrower and the Lender.
(b) Governing Law. THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK AND NO CONFLICTS OF LAW PRINCIPLES WILL APPLY TO THIS NOTE.
(c) Severability. In the event that any provision of this Note would be held in any jurisdiction to be invalid, prohibited or unenforceable for any reason, such provision, as to such jurisdiction, shall be ineffective, without invalidating the remaining provisions of this Note or affecting the validity or enforceability of such provision in any jurisdiction.
(d) Counterparts. This Note may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original but all of which when taken together shall constitute a single contract.
(e) Notice. All notices, demands, requests and other communications required or permitted hereunder, shall be in writing and shall be deemed to be given and delivered when received, or if earlier and regardless of whether or not actually received, five (5) days after deposit in a regularly maintained receptacle for the United States mail, registered or certified, postage fully prepaid, return receipt requested, addressed to Borrower or the Lender, as the case may be, at its address specified below, or at such other address as such party may have specified theretofore by notice delivered in accordance with this section and actually received by the other party. To the extent actual receipt is required, rejection or other refusal to accept or the inability to deliver because of changed address of which no notice was received shall be deemed to be receipt of the notice, demand, request or other communication.
Addresses for Notice:
Borrower:
Orchid Merger Sub II, LLC
4235 Redwood Avenue
Los Angeles, CA 90066
Attn: Tridivesh Kidambi
Lender:
OpenMail2, LLC
4235 Redwood Avenue
Los Angeles, CA 90066
Attn: Michael Blend
(f) Lost Note. Borrower will issue a replacement note in the event of the loss, theft, destruction or mutilation of this Note, upon the request of the Lender after receipt by Borrower of a notarized lost note affidavit in form and substance reasonably acceptable to Borrower.
(g)INDEMNIFICATION OF LENDER. BORROWER SHALL INDEMNIFY AND HOLD THE LENDER, ITS AFFILIATES AND LENDER'S SUCCESSORS AND ASSIGNS (EACH SUCH PERSON HEREIN REFERRED TO AS AN "INDEMNITEE") HARMLESS FROM AND AGAINST ALL CLAIMS, LIABILITIES, LOSSES, DAMAGES, OBLIGATIONS OR RELATED EXPENSES INCURRED BY OR IMPOSED UPON OR ALLEGED TO BE DUE OF INDEMNITEE IN CONNECTION WITH (a) THE EXECUTION OR DELIVERY OF THIS NOTE, OR ANY OTHER AGREEMENT OR INSTRUMENT, THE PERFORMANCE BY THE PARTIES HERETO OF THEIR RESPECTIVE OBLIGATIONS HEREUNDER, THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY, OR, IN THE CASE OF THE LENDER, THE ADMINISTRATION OF THIS NOTE, (b) THE LOAN OR THE USE OF THE PROCEEDS THEREFROM OR (c) ANY ACTUAL OR PROSPECTIVE CLAIM, LITIGATION, INVESTIGATION OR PROCEEDING RELATING TO ANY OF THE FOREGOING, WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY BROUGHT BY A THIRD PARTY OR BY THE BORROWER, AND REGARDLESS OF WHETHER ANY INDEMNITEE IS A PARTY THERETO, IN ALL CASES, WHETHER OR NOT CAUSED BY OR ARISING, IN WHOLE OR IN PART, OUT OF THE COMPARATIVE, CONTRIBUTORY OR SOLE NEGLIGENCE OF THE INDEMNITEE OR STRICT LIABILITY OF THE INDEMNITEE; PROVIDED, HOWEVER, THAT SUCH INDEMNITY SHALL NOT, AS TO ANY INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT SUCH CLAIMS, LIABILITIES, LOSSES, DAMAGES, OBLIGATIONS OR RELATED EXPENSES (i) ARE DETERMINED BY A COURT OF COMPETENT JURISDICTION BY A FINAL AND NONAPPEALABLE JUDGMENT TO HAVE RESULTED BY A MATERIAL BREACH OF THIS NOTE, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNITEE OR (ii) RESULT FROM A CLAIM BROUGHT BY BORROWER AGAINST AN INDEMNITEE FOR BREACH IN BAD FAITH OF SUCH INDEMNITEE’S OBLIGATIONS HEREUNDER, IF BORROWER HAS OBTAINED A FINAL AND NONAPPEALABLE JUDGMENT IN ITS FAVOR ON SUCH CLAIM AS DETERMINED BY A COURT OF COMPETENT JURISDICTION. IN THE EVENT OF COURT ACTION IN CONNECTION WITH ANY SUCH CLAIM OR DEMAND, BORROWER WILL ASSUME, TO THE EXTENT REQUESTED BY LENDER, THE RESPONSIBILITY FOR THE DEFENSE OF ANY SUCH ACTION AND WILL PROMPTLY SATISFY AND DISCHARGE ANY FINAL DECREE OR JUDGMENT RENDERED THEREIN. THE LENDER MAY ELECT, IN ITS SOLE DISCRETION, TO MAKE ANY PAYMENTS SUSTAINED OR INCURRED BY REASON OF ANY OF THE FOREGOING, AND BORROWER WILL PROMPTLY REPAY TO LENDER IN CASH THE AMOUNT OF SUCH PAYMENT. ALL AMOUNTS DUE UNDER THIS SECTION SHALL BE PAID WITHIN THIRTY DAYS OF RECEIPT BY THE BORROWER OF AN INVOICE IN REASONABLE DETAIL; AND ANY PAYMENT RECEIVED AFTER SUCH THIRTY DAY PERIOD SHALL ACCRUE INTEREST AT THE DEFAULT RATE. NOTWITHSTANDING THE FOREGOING, THE LENDER SHALL BE OBLIGATED TO REFNUD OR RETURN ANY AND ALL AMOUNTS PAID BY THE BORROWER UNDER THIS SECTION TO THE LENDER FOR ANY CLAIMS, LIABILITIES, LOSSES, DAMAGES, OBLIGATIONS OR RELATED EXPENSES TO THE EXTENT THE LENDER IS DETERMINED NOT TO BE ENTITLED TO PAYMENT OF SUCH AMOUNTS IN ACCORDANCE WITH THE TERMS HEREOF.
THIS NOTE REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
[Remainder of page intentionally left blank; signature page follows.]
IN WITNESS WHEREOF, the undersigned have executed this Note as of the date first written above:
BORROWER:
ORCHID MERGER SUB II, LLC
a Delaware limited liability company
By: __/s/ Tridivesh Kidambi_______
Name: Tridivesh Kidambi
Title: CFO
LENDER:
OPENMAIL2, LLC
a Delaware limited liability company
By:__/s/ Michael Blend __________
Name: Michael Blend
Title: Manager
Date: 6 October 2023
| | | | | |
| (1) | Onyx Asset Finance Limited |
| (2) | Total Security Limited
|
| |
| | |
| Secured Facility Agreement |
| in the sum of |
| USD10,000,000 |
The Pavilion
Botleigh Grange Business Park
Hedge End
Southampton
SO30 2AF
Ref: SWC/ONY4/23
CONTENTS
THIS AGREEMENT is dated 6 October 2023
PARTIES
(1)ONYX ASSET FINANCE LIMITED incorporated and registered in England and Wales with company number 11872340 whose registered office is at Larch House, Parklands Business Park, Denmead, Hampshire PO7 6XP (the Lender); and
(2) TOTAL SECURITY LIMITED incorporated and registered in England and Wales with company number 10161957 whose registered office is at 16-18 Barnes Wallis Road Segensworth, Fareham, Hampshire, England, PO15 5TT (the Borrower).
BACKGROUND
The Lender has agreed to lend to the Borrower and the Borrower has agreed to accept a loan facility in the sum of USD10,000,000 on the terms and subject to the conditions set out in this agreement.
AGREED TERMS
1DEFINITIONS AND INTERPRETATION
22.1In this agreement, the following definitions apply:
Acquisition means the sale of equity interests of the Borrower such that there is a Change of Control of the Borrower;
Arrangement Fee has the meaning set out in clause 7.1;
Borrowings means any indebtedness of the Borrower of any kind or in any form whatsoever, including (but not limited to);
(a)moneys borrowed and debit balances at banks or other financial institutions;
(b)any acceptances under any acceptance credit or bill discount facility (or dematerialised equivalent);
(c)any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;
(d)any finance lease;
(e)receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis); and
(f)any counter-indemnity obligation in respect of a guarantee, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution in respect of an underlying liability of an entity which is not the Borrower;
Business Day means a day (other than a Saturday or Sunday) on which banks are open for general business in each of London and New York;
Change of Control means where a person or persons (including a body corporate) who have Control of any undertaking cease to do so if another person or persons acquires Control of it;
Control means the ability to direct the affairs of another whether by the ownership of at least 50% of the voting rights exercisable at general meetings, or by contract or otherwise;
Debenture means a debenture, in agreed form, to be granted by the Borrower to the Lender over its entire assets and undertaking;
Disruption Event means either or both of:
(a)a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the Facility (or otherwise in order for the transactions contemplated by the Finance Documents to be carried out) which disruption is not caused by, and is beyond the control of, any of the Parties; or
(b)the occurrence of any other event which results in a disruption (of a technical or systems-related nature) to the treasury or payments operations of a Party preventing that, or any other Party from performing its payment obligations under the Finance Documents and which (in either such case) is not caused by, and is beyond the control of, the Party whose operations are disrupted;
Drawdown Date means the date on which a Loan is made, or is to be made;
Drawdown Request means a drawdown request, substantially in the form set out in Schedule 1 (Drawdown Request);
Encumbrance means any mortgage, charge (whether fixed or floating), option, pledge, lien, hypothecation, assignment, trust arrangement, title retention (other than title retention arising in the ordinary course of trading as a result of a supplier’s standard terms of business) or other right having the effect of constituting security and any agreement, whether conditional or otherwise, to create any of the foregoing;
Environment means the natural and man-made environment including all or any of the following media, namely air, water and land (including air within buildings and other natural or man-made structures above or below the ground) and any living organisms (including man) or systems supported by those media;
Environmental Law means all applicable laws, statutes, regulations, secondary legislation, bye-laws, common law, directives, treaties and other measures, judgments and decisions of any court or tribunal, codes of practice and guidance notes insofar as they relate to or apply to the Environment;
Event of Default means an event or circumstance listed in Clause 10 (Events of Default);
Facility means the term loan facility made available under this agreement;
FATCA means:
(a)sections 1471 to 1474 of the US Internal Revenue Code of 1986 or any associated regulations;
(b)any treaty, law or regulation of any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in
either case) facilitates the implementation of any law or regulation referred to in paragraph (a) above; or
(c)any agreement pursuant to the implementation of any treaty, law or regulation referred to in paragraphs (a) or (b) above with the US Internal Revenue Service, the US government or any governmental or taxation authority in any other jurisdiction;
FATCA Deduction means a deduction or withholding from a payment under a Finance Document required by FATCA;
Finance Document means this agreement, the Debenture and any other document designated as such by the Lender and the Borrower;
Group means in relation to a company, that company, any subsidiary or any holding company from time to time of that company, and any subsidiary from time to time of a holding company of that company and each company in a Group is a member of the Group;
Legal Fees has the meaning set out in clause 11.1.1;
Loan means (subject to clause 5.3) the principal amount outstanding from the Borrower to the lender from time to time pursuant to this agreement;
Material Adverse Effect means in the reasonable opinion of the Lender a material adverse effect on:
(a)the business, operations, property, condition (financial or otherwise) or prospects of the Borrower; or
(b)the ability of the Borrower to perform its obligations under the Finance Documents; or
(c)the validity or enforceability of, or the effectiveness or ranking of, any Security granted or purporting to be granted pursuant to any of the Finance Documents or the rights or remedies of the Lender under any of the Finance Documents;
Perfection Requirements means the making of the appropriate registrations, payment of any applicable stamp duty, filings or notifications in respect of Security as contemplated by any legal opinion delivered pursuant to this agreement or any Finance Document;
Permitted Borrowings means Borrowings:
(a)incurred under the Finance Documents;
(b)incurred pursuant to BACS, corporate and purchasing card facilities in the ordinary course of its business; and
(c)arising under a foreign exchange transaction for spot or forward delivery entered into in connection with protection against fluctuation in currency rates where that foreign exchange exposure arises in the ordinary course of trade, but not a foreign exchange transaction for investment or speculative purposes;
Permitted Encumbrances means;
(a) the Security constituted by the Finance Documents;
(b) any netting or set-off arrangement entered into by the Borrower in the ordinary course of its banking arrangements; and
(c) any lien arising by operation of law and/or in the ordinary course of business and not as a result of any default or omission by the Borrower;
Potential Event of Default means any event, act or condition which would, on the giving of notice and/or lapse of time will, or is likely to, in the reasonable opinion of the Lender, constitute an Event of Default;
Prepayment Date means the date that the Loan is prepaid pursuant to clause 5.2;
Purpose has the meaning set out in clause 2.2;
Relevant Jurisdiction means, in relation to the Borrower,
(a) the jurisdiction under whose laws the Borrower is incorporated as at the date of this agreement;
(b) any jurisdiction where any asset subject to or intended to be subject to the Security pursuant to the Finance Documents is situated; and
(c) any jurisdiction where it conducts its business;
Repayment Date means the earlier of;
(a) date falling twelve (12) months after the date of this agreement; and
(b) the completion of the Acquisition;
Reservations means:
(a) the principle that equitable remedies are remedies which may be granted or refused at the discretion of the court, the principle of reasonableness and fairness, the limitation of enforcement by laws relating to bankruptcy, insolvency, liquidation, court protection, examinership, reorganisation, court schemes, moratoria, administration and other laws generally affecting the rights of creditors;
(b) the time barring of claims under applicable limitation laws (including the Limitation Act 1980), the possibility that an undertaking to assume liability for or to indemnify a person against non-payment of stamp duty may be void and defences of set-off or counterclaim; and
(c) any other general principles which are set out as qualifications as to matters of law in the legal opinions delivered pursuant to this agreement or any Finance Documents;
Security means a mortgage, charge, pledge, lien or other security interest securing any obligation of any person or any other agreement or arrangement having a similar effect;
Spot Rate of Exchange means
(a)the available spot rate of exchange of Barclays Bank plc; or
(b)(if Barclays Bank plc does not have an available spot rate of exchange) any other publicly available spot rate of exchange selected by the Lender (acting reasonably),
for the purchase of USD with GBP in the London foreign exchange market at or about 11:00 a.m. on a particular day; and
Tax Deduction means a deduction or withholding for or on account of Tax from a payment under a Finance Document, other than a FATCA Deduction.
22.2Unless the context otherwise requires words denoting the singular shall include the plural and vice versa, references to any gender shall include all other genders and references to persons shall include bodies corporate, unincorporated associations and partnerships in each case whether or not having a separate legal personality.
22.3Unless the context otherwise requires, a reference to a clause or Schedule is to a clause of, or Schedule to, this agreement and a reference to a paragraph is to a paragraph of the Schedule. Clause and Schedule headings shall not affect the interpretation of this agreement.
22.4References to the word include or including (or similar phrases) are to be construed without limitation.
22.5References in this agreement to any statute, statutory provision or treaty include a reference to that statute, statutory provision or treaty as amended, extended, consolidated or replaced from time to time (whether before or after the date of this agreement) and include any order, regulation, instrument or other subordinate legislation made under the relevant statute, statutory provision or treaty.
22.6Any reference to a statute or statutory provision is a reference to such statute or provision in the United Kingdom and not any other jurisdiction.
22.7A reference to a holding company or a subsidiary means a holding company or a subsidiary (as the case may be) as defined in section 1159 of the Companies Act 2006 and for the purposes only of the membership requirement contained in sections 1159(1)(b) and (c), a company shall be treated as a member of another company even if its shares in that other company are registered in the name of:
21.2.1another person (or its nominee), by way of security or in connection with the taking of security; or
21.2.2its nominee.
22.8Any reference to writing or written excludes fax (unless otherwise expressly provided in this agreement).
22.9Any reference to a “Party” or “Parties” means a person who has signed this agreement.
22.10References to times of the day are to London time and references to a day are to a period of 24 hours running from midnight on the previous day.
22.11References to indebtedness includes any obligation to pay or repay money, present or future, whether actual or contingent, sole or joint and any guarantee or indemnity of any of those obligations.
22.12References to a document in the agreed form are to that document in the form agreed by the parties and initialled by them or on their behalf for identification.
22.13If any payment becomes due on a day which is not a Business Day under this agreement, the due date of such payment will be extended to the next Business Day.
22.14"$", "USD" and "dollars" denote the lawful currency of the United States of America and "£", "GBP" and "sterling" denote the lawful currency of the United Kingdom
2THE FACILITY
22.1The Lender grants to the Borrower a secured term loan facility of a total principal amount of USD10,000,000 on the terms and subject to the conditions of this agreement.
22.2The Borrower shall use the Loan (the Purpose) as follows:
21.2.1an amount equal to the Arrangement Fee and Legal Fees shall be applied in accordance with clause 3.1.2; and
21.2.2the balance shall be used exclusively for working capital purposes.
22.3The Lender is not obliged to (but may) monitor or verify how the Loan is used.
3CONDITIONS OF DRAWDOWN
22.1The Lender’s obligation to make the Loan is subject to the prior satisfaction by the Borrower of the relevant conditions set out in this clause 3 (Conditions of Drawdown).
Conditions to Availability
The Lender will not be obliged to advance the Loan unless on the date of this agreement and before the Drawdown Date, the Lender has received all of the documents and other evidence listed in Part 1 of Schedule 2 (Conditions precedent to Drawdown) in form and substance satisfactory to the Lender.
22.2Other conditions
The Lender’s obligation to make the Loan under the Facility is subject to the further condition precedent that on the date of the Drawdown Request and the Drawdown Date,
21.2.1no Event of Default or Potential Event of Default is continuing or would result from the proposed Loan; and
21.2.2all the representations and warranties in Clause 9 (Representations and warranties) are true.
4DRAWDOWN
22.1The Borrower may request a Loan by delivering a completed Drawdown Request to the Lender by no later than five (5) Business Days (or one (1) Business Day for a proposed
drawdown on the date of this agreement) before the proposed Drawdown Date (or, in each case, such shorter time as may be agreed by the Lender).
22.2A Drawdown Request:
21.2.1may only specify a single Loan; and
21.2.2shall only be regarded as having been completed if the Loan requested is for the full amount of the Facility:
22.3Once a Drawdown Request has been delivered, it is irrevocable.
22.4Subject to the Borrower complying with its obligations set out in this clause 4, the Lender shall on the date of this agreement:
21.2.1advance the Loan to the Borrower in one amount by payment to account notified to the Lender in the Drawdown Request; and
21.2.2retain an amount equal to the Legal Fees (in satisfaction of the Borrower’s obligation to pay such fees in accordance with clause 11.1.1), the Arrangement Fee (in satisfaction of the Borrower’s obligation to pay such fee in accordance with clause 7.1) , which shall all, for the avoidance of doubt, still form part of the Loan, which the Borrower hereby acknowledges.
5REPAYMENT
22.1The Borrower shall repay the Loan on the Repayment Date.
22.2The Borrower may at any time on giving five (5) Business Days’ notice to that effect to the Lender prepay the Loan in whole (but not in part). The prepayment of the Loan shall be made together with all accrued but unpaid interest on the Loan at such date but otherwise without fee or penalty. For the avoidance of doubt, the Borrower may not reborrow the Loan if so prepaid.
22.3The amount of the Loan repaid or prepaid to the Lender on the Repayment Date (or the Prepayment Date as applicable) shall be the amount of USD that is necessary to ensure that at the Spot Rate of Exchange for the Loan on the Repayment Date (or the Prepayment Date as applicable) the Lender shall be able on the Repayment Date (or the Prepayment Date as applicable) to purchase the same amount of GBP that it used to make the Loan on the Drawdown Date.
22.4If the Lender receives a payment that is insufficient to discharge all the amounts then due and payable under the Finance Documents, the Lender shall (to the extent lawfully possible) apply that payment towards the obligations under the Finance Documents in the following order:
21.2.1firstly, in or towards payment pro rata of any unpaid fees, costs and expenses of the Lender under the Finance Documents;
21.2.2secondly, in or towards payment pro rata of any accrued interest or fee due but unpaid under this agreement;
21.2.3thirdly, in or towards payment pro rata of any other sum due but unpaid under the Finance Documents; and
21.2.4fourthly, towards repayment of the Loan.
22.5The Lender may, at its sole discretion, vary the order set out in clause 5.5.
6INTEREST
22.1Subject to clause 5.2, the Borrower shall pay interest on the outstanding principal amount of the Loan at the rate of 8.5% per annum and such interest shall accrue from day to day and shall be calculated on the basis of the number of days elapsed and a year of 365 days.
22.2Interest shall be paid by the Borrower to the Lender as follows:
21.2.1payable per month based upon the outstanding principal amount of the Loan as of such date of payment (with the first payment falling due one month following the date that the Loan is drawn); and
21.2.2the accrued and unpaid interest in full on the Repayment Date.
22.3If the Borrower fails to pay any amount under this agreement on its due date:
21.2.1interest shall accrue daily on the overdue amount from the due date up to the date of actual payment (both before and after judgment) at a rate of 6.5% per annum above the rate set out in clause 6.1 during the period of non-payment. Any interest which accrues under this clause 6.3 shall be immediately payable by the Borrower on demand by the Lender; and
21.2.2interest arising on an overdue amount shall be compounded monthly but will remain immediately due and payable.
7FEES
22.1The Borrower shall pay to the Lender on the date of this agreement a fee of setting up the Facility of USD 1,200,000 (the Arrangement Fee), which the Borrower hereby directs the Lender to retain from the amount of the Loan drawn by the Borrower in settlement of the Borrower’s obligation to pay the Arrangement Fee (but shall, for the avoidance of doubt, still form part of the Loan).
8WARRANTIES AND REPRESENTATIONS
22.1The Borrower represents and warrants to the Lender on the date of this Agreement on the Drawdown Date and on the last Business Day of each month as follows:
21.2.1it is a limited liability corporation, duly incorporated and validly existing under its Relevant Jurisdiction;
21.2.2subject to the Reservations and Perfection Requirements, the execution of this agreement on its behalf has been validly authorised and the obligations expressed as being assumed by it under this agreement and under the Finance Documents to which they are a party constitute valid, legal and binding obligations of it which are enforceable against it in accordance with their terms;
21.2.3neither the execution and delivery of this agreement and the Finance Documents by it nor the borrowing of the Loan in full hereunder nor the performance or observance of any obligations hereunder will:
(a)conflict with, or result in any breach of, any law, statute, regulation, indenture, mortgage, trust deed, agreement or other instrument, arrangement, obligation or duty by which it is bound; or
(b)cause any limitation on any of their powers whatsoever, howsoever imposed, or on the right or ability of their directors to exercise such powers, to be exceeded,
in each case, to the extent that it would have a Material Adverse Effect;
21.2.4it is not in default under any law, statute, regulation, indenture, mortgage, trust deed, agreement or other instrument, arrangement, obligation or duty by which it is bound which has or will have a Material Adverse Effect;
21.2.5there exists no Encumbrance (other than Permitted Encumbrances) over the whole or any part of their undertaking or assets, present or future (including uncalled capital) other than pursuant to the Permitted Encumbrances; and
21.2.6that no Event of Default or Potential Event of Default has occurred or is continuing.
22.2The representations and warranties set out in clause 8.1 shall survive the execution of this agreement and the making of the Loan hereunder and shall be deemed to be repeated in each case with reference to the facts and circumstances then subsisting as if made at each such time.
9COVENANTS
22.1General
The Borrower hereby undertakes and covenants with the Lender from the date of this agreement:
21.2.1to ensure that subject to the Reservations:
(a) the obligations expressed to be assumed by it in each Finance Document are legal, valid, binding and enforceable obligations; and
(b) (without limiting the generality of Clause 9.1.1 (a) above), each Finance Document creates the security interests which that Finance Document purports to create and those security interests are valid and effective;
21.2.2to comply in all material respects with laws to which it is subject and to promptly obtain all consents or authorisations under any law or regulation (and do all that is needed to maintain them in full force and effect) to enable it to perform its obligations under the Finance Documents if failure to do so would have a Material Adverse Effect;
21.2.3to use the Loan exclusively for the Purpose;
21.2.4to carry on and conduct its business in a proper and efficient manner and not to make any material changes to the general nature or scope of its business as carried on at the date of this agreement;
21.2.5to not incur or permit to subsist, any obligation for Borrowings (other than Permitted Borrowings) or:
(a)sell, transfer or otherwise dispose of any of its assets on terms whereby such assets are or may be leased to or re-acquired or acquired by it;
(b)sell, transfer or otherwise dispose of any of its receivables on recourse terms;
(c)enter into any arrangement under which money or the benefit of a bank or other account may be applied, set-off or made subject to a combination of accounts; or
(d)enter into any other preferential arrangement having a similar effect,
in circumstances where the arrangement or transaction is entered into primarily as a method of raising Borrowings or of financing the acquisition of an asset;
21.2.6to not sell, assign, lease, transfer or otherwise dispose of in any manner (or purport to do so) all or any part of, or any interest in, its assets other than:
(a)in the ordinary course of its business;
(b)assets exchanged for other assets comparable or superior as to type, value and quality; or
(c)assets whose market value is worth less than USD50,000 (or its equivalent in another currency or currencies);
21.2.7to not create or permit to subsist any Security over any of its assets other than pursuant to the Finance Documents other than Permitted Encumbrances;
21.2.8to not be a creditor in respect of any financial indebtedness;
21.2.9to not declare, make or pay any dividend, charge, fee or other distribution (or interest on any unpaid dividend, charge, fee or other distribution) (whether in cash or in kind) on or in respect of its share capital (or any class of its share capital); and
21.2.10to properly and adequately insure with insurers of good repute against such risks, in such manner and to such extent as is prudent having regard to the nature and extent of its business and duly pay all premiums or other sums payable in respect of any such insurance;
provided that, it is understood and agreed that this Section 9.1 shall not restrict any transactions made by the Borrower in the ordinary course of business.
22.2[Not used]
22.3Information
The Borrower hereby undertakes and covenants with the Lender from the date of this agreement:
21.2.1to provide the Lender promptly with such other financial or anti money laundering information relating to the Borrower as the Lender may from time to time require including (including, but not limited to confirmations of outstanding financial indebtedness, management or audited accounts or otherwise);
21.2.2on request to provide the Lender with copies of their bank statements within 14 days of the end of each calendar month; and;
21.2.3to provide the Lender with such information as it may reasonably require to ensure compliance with FATCA; and
21.2.4to immediately notify the Lender if an Event of Default or Potential Event of Default occurs.
10EVENTS OF DEFAULT
Each of the events or circumstances set out in this clause 10 (Events of Default) is an Event of Default (save for clause 10.14 (Acceleration)).
22.1Non-payment
21.2.1The Borrower does not pay on the due date any amount payable pursuant to a Finance Document at the place at and in the currency in which it is expressed to be payable unless:
(a) its failure to pay is caused by:
(i) administrative or technical error; or
(ii) a Disruption Event; and
(b) payment is made within three (3) Business Days of its due date.
22.2[Not used]
22.3Other Obligations
21.2.1The Borrower does not comply with any provision of the Finance Documents (other than those referred to in clause 10.1 (Non-payment).
21.2.2No Event of Default under clause 10.3.1 above will occur if the failure to comply is capable of remedy and is remedied within ten (10) Business Days of the earlier of (i) the Lender giving notice to the Borrower and (ii) the Borrower becoming aware of the failure to comply.
22.4Misrepresentation
Any representation or statement made or deemed to be made by the Borrower in the Finance Documents or any other document delivered by or on behalf of the Borrower under or in connection with any Finance Document is, or proves to have been incorrect in any material respect when made or deemed to be made unless the circumstances giving rise to
the misrepresentation are, in the opinion of the Lender (in its absolute discretion), capable of remedy and are remedied within ten Business Days of the earlier of (i) the Lender giving notice to the Borrower and (ii) the Borrower becoming aware of the misrepresentation.
22.5Cross Default
21.2.1Any Borrowings are not paid when due or within any originally applicable grace period.
21.2.2Any Borrowings becomes due, or capable of being declared due and payable prior to its stated maturity by reason of an event of default (howsoever described).
21.2.3Any commitment for any Borrowings is cancelled or suspended by a creditor of the Borrower by reason of an event of default (howsoever described).
21.2.4Any creditor of the Borrower becomes entitled to declare any Borrowings due and payable prior to its stated maturity by reason of an event of default (howsoever described).
21.2.5An event or circumstance referred to in this clause 10.5 (Cross default) shall not constitute an Event of Default if the aggregate amount of the Borrowings or commitment for Borrowings affected is less than USD 100,000.
22.6Insolvency
21.2.1The Borrower stops or suspends payment of any of its debts, or is unable to, or admits its inability to pay its debts as they fall due.
21.2.2The Borrower suspends or ceases to carry on (or threatens to suspend or cease to carry on) all or a material part of its business.
21.2.3The Borrower commences negotiations, or enters into any composition or arrangement, with one or more of its creditors with a view to rescheduling any of its indebtedness (because of actual or anticipated financial difficulties).
21.2.4A moratorium is declared over any of the Borrowings.
21.2.5Any action, proceedings, procedure or step is taken for:
(a)the suspension of payments, winding up, dissolution, administration or reorganisation (using a voluntary arrangement, scheme of arrangement or otherwise) of the Borrower; or
(b)a composition, compromise, assignment or arrangement with any creditor of the Borrower; or
(c)the appointment of a liquidator, receiver, administrative receiver, administrator, compulsory manager or other similar officer in respect of the Borrower or any of its assets.
21.2.6The value of the Borrower’s assets is less than its liabilities (taking into account contingent and prospective liabilities).
21.2.7Any event occurs in relation to the Borrower that is analogous to those set out in clauses 10.6.1 to 10.6.6 in England and Wales or any Relevant Jurisdiction.
21.2.8An event or circumstance referred to in clauses 10.6.1 to 10.6.7 shall not apply to any winding-up petition which is frivolous or vexatious and such a winding up petition is discharged, stayed or dismissed within ten (10) Business Days of commencement or, if earlier, the date on which it is advertised. The ending of any moratorium referred to in clause 10.6.4 shall not remedy any Event of Default caused by that moratorium.
22.7Distress
A distress, attachment, execution, expropriation, sequestration or other legal process is levied, enforced or sued out on, or against, the Borrower’s assets having an aggregate value of USD 100,000 and is not discharged or stayed within ten (10) Business Days.
22.8Repudiation
Any party (other than the Lender) repudiates (or shows an intention to repudiate) a Finance Document.
22.9Material Adverse Effect
Where any event occurs or circumstances exist which has or will have any effect which is reasonably likely to have a Material Adverse Effect.
22.10Environmental
In the reasonable opinion of the Lender, at any time after the date of this agreement:
21.2.1there is a risk of material liability to the Lender under Environmental Law including because it has taken Security pursuant to a Debenture or the Share Charge; or
21.2.2the value of any property subject to the Security created by the Finance Documents may be diminished in any material way because of Environmental Law.
22.11Litigation
Any litigation, arbitration, administrative, governmental, regulatory or other investigations, proceedings or disputes are commenced or threatened, or any judgement or order of a court, arbitral tribunal or other tribunal or any order or sanction of any government or other regulatory body is made in relation to the Finance Documents or the transactions contemplated in the Finance Documents or against the Borrower or its assets which have or has or are or is reasonably likely to have a Material Adverse Effect.
22.12Change of Control
The Borrower undergoes a Change of Control.
22.13Acceleration
Notwithstanding the remaining provisions of this agreement, on and at any time after the occurrence of an Event of Default and whilst it is continuing the Lender may:
21.2.1declare that all or part of the Loan, accrued interest and/or fees and/or any other amounts accrued or outstanding under the Finance Documents be immediately due and payable;
21.2.2declare that all or any part of the Loans be payable on demand by the Lender;
21.2.3exercise any and all of its rights, remedies, powers or discretions under the Finance Documents; and/or
21.2.4apply the interest rate under clause 6.3 to the Loans or any part of them as if it were due but unpaid.
11COSTS
22.1The Borrower shall pay:
21.2.1on the date of this agreement, a sum equal to the Lender’s reasonable legal fees in connection with and for the preparation of this agreement and the documents referred to in it (together with any value added tax on them – to the extent applicable (the Legal Fees) which the Borrower hereby directs the Lender to retain from the Loan amount to be advanced (but shall, for the avoidance of doubt, still form part of the Loan) in settlement of the Borrower’s obligation to pay the Legal Fees; and
21.2.2on demand and on a full indemnity basis all costs and expenses (together with any value added tax on them, to the extent applicable) that the Lender incurs in connection the amendment, extension, alteration, discharge and/or enforcement of this agreement and/or any other of the Finance Documents; and
21.2.3pay to the Lender the amount of all reasonable expenses (including legal and valuation fees) incurred by it in connection with the issue and consideration of amendments, consents, waivers; and
21.2.4pay to the Lender the amount of all expenses (including legal, insolvency practitioner and valuation fees) incurred by it in connection with the enforcement of or the preservation of any rights under any Finance Document and any proceedings instituted by or against it as a consequence of or enforcing these rights.
12CURRENCY INDEMNITY
22.1If any sum due from the Borrower under the Finance Documents (a “Sum”), or any order, judgment or award given or made in relation to a Sum, has to be converted from the currency (the “First Currency”) in which that Sum is payable into another currency (the “Second Currency”) for the purpose of:
21.2.1making or filing a claim or proof against the Borrower; or
21.2.2obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,
the Borrower shall as an independent obligation, within three (3) Business Days of demand, indemnify the Lender against any cost, loss or liability arising out of or as a result of the
conversion including any discrepancy between (A) the rate of exchange used to convert that Sum from the First Currency into the Second Currency and (B) the rate or rates of exchange available to that person at the time of its receipt of that Sum.
22.2The Borrower waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency or currency unit other than that in which it is expressed to be payable.
13[NOT USED]
14TAX DEDUCTIONS
22.1The Borrower shall make all payments to be made by it without any Tax Deduction, unless a Tax Deduction is required by law. If a Tax Deduction is required by law, the Borrower shall be required to increase any payment in respect of which it makes such a Tax Deduction or otherwise compensate the recipient of the payment for that Tax Deduction (including but not limited to payments of interest to the Lender).
22.2A Party may make any FATCA Deduction it is required by FATCA to make, and any payment required in connection with that FATCA Deduction, and it shall not be required to increase any payment in respect of which it makes such a FATCA Deduction or otherwise compensate the recipient of the payment for that FATCA Deduction.
22.3If a Party becomes aware that it must make a Tax Deduction or FATCA Deduction in respect of any payment to another Party as contemplated above, it shall promptly notify the other Parties.
15REMEDIES, WAIVERS, AMENDMENTS AND CONSENTS
22.1Any amendment to this agreement shall be in writing and signed by, or on behalf of, each party.
22.2Any waiver of any right or consent given under this agreement is only effective if it is in writing and signed by the waiving or consenting party. It shall apply only in the circumstances for which it is given and shall not prevent the party giving it from subsequently relying on the relevant provision.
22.3No delay or failure to exercise any right under this agreement shall operate as a waiver of that right and no single or partial exercise of any right under this agreement shall prevent any further exercise of that right (or any other right under this agreement).
22.4Rights and remedies under this agreement are cumulative and do not exclude any other rights or remedies provided by law or otherwise.
16INVALIDITY
22.1If any provision of this agreement (the Void Provision) is found by any court or administrative body of competent jurisdiction to be invalid or unenforceable:
21.2.1such invalidity or unenforceability shall not affect the other provisions of this agreement which shall remain in full force and effect;
21.2.2if the Void Provision would be valid or enforceable if some part of it were deleted, the Void Provision shall apply with such modification as may be necessary to make it valid and enforceable; and
21.2.3if that is not possible, the parties shall attempt to substitute for the Void Provision a valid and enforceable provision which achieves to the greatest extent possible the same effect as would have been achieved by the Void Provision.
17COUNTERPARTS
This agreement may be executed and delivered in any number of counterparts, each of which is an original and which, together, have the same effect as if each party had signed the same document.
18ASSIGNMENT
The Borrower shall not assign any of its rights or transfer any of its rights or obligations under this agreement. The Lender may assign the benefit of this agreement and/or any other Finance Document to any member of its Group.
19ENTIRE AGREEMENT
This agreement (together with the documents referred to in it) constitutes the entire agreement between the parties and supersedes and extinguishes all previous discussions, correspondence, negotiations, drafts, agreements, promises, assurances, warranties, representations and undertakings between them, whether written or oral, relating to its subject matter.
20THIRD PARTY RIGHTS
A person who is not a party to this agreement cannot enforce, or enjoy the benefit of, any term of this agreement under the Contracts (Rights of Third Parties) Act 1999.
21NOTICES
22.1Any notice or other communication to be served under this agreement must be in writing and may be:
21.2.1delivered personally;
21.2.2sent by first class “Royal Mail Signed For” (or any successor service);
21.2.3sent by electronic mail:
(a)in the case of notice to the Lender, to Dan Richards at dan.richards@justdevelop.it (or such other email address as is notified by the Lender to the Borrower from time to time); or
(b)in the case of notice to the Borrower, to Tridivesh Kidambi at tridi@system1.com (or such other email addresses as is notified by the Borrower to the Lender from time to time),
and, unless otherwise stated above, shall be served on the party at its address appearing in this agreement or at such other address as it may have notified to the other parties in accordance with this clause 18.
22.2Any notice or document shall be deemed to have been served:
21.2.1if delivered personally, at the time of delivery if delivered during a Business Day or at the start of the next Business Day if delivered at any other time;
21.2.2if posted by first class “Royal Mail Signed For” (or any successor service), at 10.00 a.m. on the second Business Day after it was put into the post; or
21.2.3if sent by electronic mail, at the time that a message confirming delivery has been received.
22.3References in this clause 18 to a particular time of day are references to that time of day at the address for service of the recipient party.
22GOVERNING LAW AND JURISDICTION
22.1This agreement and any dispute or claim (including non-contractual disputes or claims) arising out of or in connection with it or its subject matter or formation shall be governed by and construed in accordance with the law of England and Wales.
22.2Each party irrevocably agrees that, subject as provided below, the courts of England and Wales shall have exclusive jurisdiction over any dispute or claim (including non-contractual disputes or claims) that arises out of or in connection with this agreement or its subject matter or formation.
This agreement has been executed as a deed by each of the parties and delivered on the date set out at the beginning of it.
Schedule 1
Form of Drawdown Request
| | | | | |
| To: | The Lender |
| Attention: | Dan Richards |
| Date: | [DATE] |
Total Security Limited
USD10,000,000 Facility Agreement dated [DATE] between Onyx Asset Finance Limited (1) [●] (2) (Facility Agreement)
We refer to the Facility Agreement. This is a Drawdown Request. Words and expressions defined in the Facility Agreement have the same meaning in this Drawdown Request unless given a different meaning in this Drawdown Request.
We give you notice that we wish to draw down the following Loan:
| | | | | |
| Amount: | USD[AMOUNT] |
| Drawdown Date: | [DATE] |
| Purpose: | PAYMENT OF [●] |
The Loan is to be made available by credit to [ACCOUNT DETAILS] [save for the Arrangement [and Legal Fees] which you shall retain.
We confirm that, on today’s date and the proposed Drawdown Date no Event of Default or Potential Event of Default is continuing or would result from the proposed Loan.
This Drawdown Request is irrevocable.
This Drawdown Request is a Finance Document.
| | |
| ................................. |
| For and on behalf of |
| Total Security Limited |
Schedule 2
Part 1 - Conditions Precedent to Drawdown
The Borrower shall deliver (or procure that there is delivered) to the Lender in form and substance satisfactory to the Lender:
(a)a Drawdown Request in respect of the Drawdown;
(b)a director’s certificate, attaching the incorporation documents of the Borrower, a certified copy of the board minutes and specimen signatures in the agreed form, approving the entry into by the Borrower of this agreement and the Debenture;
(c)a legal opinion from the Lender’s lawyers in respect of the Borrower;
(d)this agreement and the Debenture, duly executed by the Borrower; and
(e)a copy of any other authorisation or other document, opinion or assurance which the Lender reasonably considers to be necessary or desirable (if it has notified the Borrower accordingly) in connection with the entry into and performance of the transactions contemplated by any Finance Document or for the validity and enforceability of any Finance Document.
LENDER
| | | | | | | | | | | |
Executed as a Deed by ONYX ASSET FINANCE LIMITED acting by
in the presence of: | | /s/ Dan Richards |
| Witness’s signature | /s/ Shane Crossan | Director
Full Name: Dan Richards |
| Name | Shane Crossan | |
| Address | 24 Noble Road | |
| Fareham, UK | |
| PO144FJ | |
| Occupation | VP of Engineering | |
BORROWER
| | | | | | | | | | | |
Executed as a Deed by TOTAL SECURITY LIMITED acting by
in the presence of: | | /s/ Tridivesh Kidambi |
| Witness’s signature | /s/ Stewart Marlborough | Director
Full Name: Tridivesh Kidambi |
| Name | Stewart Marlborough | |
| Address | 515 Loma Vista Street | |
| El Segundo, CA 90245 | |
| | |
| Occupation | President, Commerce System1 | |
Date: 6 October 2023
| | | | | |
| (1) | Total Security Limited |
| (2) | Onyx Asset Finance Limited |
| | |
| Debenture |
| relating to |
| Total Security Limited |
The Pavilion
Botleigh Grange Business Park
Hedge End
Southampton
SO30 2AF
Ref: SWC01/ONY4/23
CONTENTS
THIS DEED is dated 6 October 2023
PARTIES
(1)TOTAL SECURITY LIMITED incorporated and registered in England and Wales with company number 10161957 whose registered office is at 16-18 Barnes Wallis Road Segensworth, Fareham, Hampshire, England PO15 5TT (Chargor); and
(2)ONYX ASSET FINANCE LIMITED, incorporated and registered in England and Wales with company number 11872340 whose registered office is at Larch House, Parklands Business Park, Denmead, Hampshire PO7 6XP (Lender).
BACKGROUND
Under this debenture, the Chargor provides security to the Lender for all its present and future obligations and liabilities to the Lender.
1DEFINITIONS AND INTERPRETATION
15.1In this debenture unless the context otherwise requires:
Administrator means an administrator appointed to manage the affairs, business and property of the Chargor pursuant to paragraph 15 of Schedule 3;
Business Day means a day (other than a Saturday, Sunday or public holiday in England) when banks in London are open for business;
Charged Property means all the assets, property and undertaking for the time being subject to the security interests created by this debenture (and references to the Charged Property include references to any part of it);
Costs means all costs, charges, expenses and liabilities of any kind including costs and damages in connection with litigation, professional fees, disbursements and any value added tax charged on Costs;
Encumbrance means any mortgage, charge (whether fixed or floating, legal or equitable), option, pledge, lien, hypothecation, assignment by way of security, licence, trust arrangement, title retention (other than title retention arising in the ordinary course of trading as a result of a supplier’s standard terms of business) or other security interest securing any obligation of any person or any other agreement or arrangement, whether conditional or otherwise, having a similar effect;
Equipment means all present and future computer and other equipment, plant, machinery, tools, vehicles, furniture, furnishings, fittings, installations, consumables, devices and apparatus and other tangible moveable property and chattels for the time being owned by the Chargor, wherever situated, including any part of it and all spare parts, replacements, modifications and additions;
Event of Default means the occurrence of an Event of Default under the Facility Agreement;
Facility Agreement means the facility agreement dated on or about the date of this debenture between Onyx Asset Finance Limited as lender, and Total Security Limited as borrower;
Finance Document has the meaning given to such term in the Facility Agreement;
Financial Collateral shall have the meaning given to that expression in the Financial Collateral Regulations;
Financial Collateral Regulations means the Financial Collateral Arrangements (No. 2) Regulations 2003 (SI 2003/3226);
Group means in relation to a company, that company, any subsidiary or any holding company from time to time of that company, and any subsidiary from time to time of a holding company of that company. Each company in a Group is a member of the Group;
Intellectual Property means all patents, patent applications, trade marks, trade mark applications, trading names, brand names, service marks, copyrights, rights in the nature of copyright, moral rights, inventions, design rights, registered designs, all trade secrets and know-how, computer rights, programmes, systems, tapes, disks, software, all applications for registration of any of them and other intellectual property rights held or to be held by the Chargor or in which it may have an interest and the benefit of all present and future agreements relating to the use of or licensing or exploitation of any such rights (owned by the Chargor or others);
Properties means all freehold and leasehold properties (whether registered or unregistered) and all commonhold properties, now or in the future (and from time to time) owned by the Chargor or in which the Chargor holds an interest and, in the case of leasehold property only, which comprises a leasehold interest of 7 years or more as at the date of this debenture or at the date of the acquisition (as relevant) and Property means any of them;
Receiver means a receiver and/or manager of any or all of the Charged Property appointed under paragraph 6 of Schedule 3;
Restriction means in relation to any asset of the Chargor, any legal requirement or third party arrangement (including shareholder agreements, landlord consent requirements, contracts, leases, licensing arrangements or joint venture arrangements) which would prevent, prohibit, restrict, limit or condition absolutely or conditionally (whether by contract or otherwise) such asset from being subject to legal, valid, binding and enforceable Security (or if secured, would give a third party the right to terminate or otherwise amend any rights, benefits and/or obligations of the Chargor in respect of those assets or require the Chargor to take any action materially adverse to its interests);
Secured Liabilities means all present and future monies, obligations and liabilities owed by the Chargor to the Lender, whether actual or contingent and whether owed jointly or severally, as principal or surety and/or in any other capacity whatsoever (including those arising under clause 13.3) together with all interest (including default interest) accruing in respect of such monies or liabilities. As of the date hereof, the only monies, obligations and liabilities owed by Chargor to the Lender are those under the Finance Document.
Security Financial Collateral Arrangement shall have the meaning given to that expression in the Financial Collateral Regulations; and
Security Period means the period starting on the date of this debenture and ending on the date on which all the Secured Liabilities have been unconditionally and irrevocably paid and discharged in full and no further Secured Liabilities are capable of being outstanding.
15.2Unless the context otherwise requires a reference to a clause or Schedule is to a clause or Schedule of or to this debenture and headings shall not affect the interpretation of this debenture.
15.3Unless the context otherwise requires words denoting the singular shall include the plural and vice versa, references to any gender shall include all other genders and references to persons shall include bodies corporate, unincorporated associations and partnerships in each case whether or not having a separate legal personality.
15.4Unless otherwise defined in this debenture, words and expressions defined in the Facility Agreement shall have the same meanings when used in this debenture. In the event of any conflict or inconsistency between the terms of this debenture and the terms of the Facility Agreement, the terms of the Facility Agreement will prevail.
15.5A reference to party shall include that party’s successors, permitted assigns and permitted transferees.
15.6References in this debenture to any statute, statutory provision, EC Directive or treaty include a reference to that statute, statutory provision, EC Directive or treaty as amended, extended, consolidated or replaced from time to time (whether before or after the date of this debenture) and include any order, regulation, instrument or other subordinate legislation made under the relevant statute, statutory provision, EC Directive or treaty. Any reference to a statute or statutory provision is a reference to such statute or provision in the United Kingdom and not any other jurisdiction.
15.7Any reference to writing or written excludes faxes and email (unless otherwise expressly provided in this debenture).
15.8A reference to this debenture (or any provision of it) or to any other agreement or document referred to in this debenture is a reference to this debenture, that provision or such other agreement or document as amended (in each case, other than in breach of the provisions of this debenture) from time to time.
15.9Any references to the word include or including (or similar phrases) are to be construed without limitation.
15.10A reference to a holding company or a subsidiary means a holding company or a subsidiary (as the case may be) as defined in section 1159 of the Companies Act 2006 and for the purposes only of the membership requirement contained in sections 1159(1)(b) and (c), a company shall be treated as a member of another company even if its shares in that other company are registered in the name of:
14.2.1another person (or its nominee), by way of security or in connection with the taking of security; or
14.2.2its nominee.
15.11A reference to:
14.2.1an amendment includes a novation, re-enactment, supplement or variation (and amended shall be construed accordingly);
14.2.2assets includes present and future properties, undertakings, revenues, rights and benefits of every description;
14.2.3authorisation includes an authorisation, consent, licence, approval, resolution, exemption, filing, registration and notarisation; or
14.2.4a regulation includes any regulation, rule, official directive, request or guideline (whether or not having the force of law) of any governmental, inter-governmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation
15.12Clawback: If the Lender considers that an amount is capable of being avoided or otherwise set aside on liquidation or administration of the Chargor or otherwise, then that amount shall not be considered to have been irrevocably paid for the purposes of this debenture.
15.13Nature of security over real property: A reference in this debenture to a charge or mortgage of any freehold, leasehold or commonhold property includes:
14.2.1all buildings and fixtures (including trade and tenant’s fixtures) which are at any time situated on that property;
14.2.2the proceeds of sale of any part of that property; and
14.2.3the benefit of any covenants for title given or entered into by any predecessor in title of the Chargor in respect of that property or any monies paid or payable in respect of those covenants.
15.14Law of Property (Miscellaneous Provisions) Act 1989: For the purposes of section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 the terms of the Finance Documents and of any side letters between any parties in relation to the Finance Documents are incorporated in this debenture.
15.15Insolvency Act 1986: Paragraph 14 of Schedule B1 to the Insolvency Act 1986 (as inserted by section 248 of, and Schedule 16 to, the Enterprise Act 2002) applies to the floating charge created by this debenture and each such floating charge is a qualifying floating charge for the purposes thereof.
2COVENANT TO PAY
15.1The Chargor shall on demand pay to the Lender and discharge the Secured Liabilities when they become due.
3GRANT OF SECURITY
15.1Charging clause: As a continuing security for the payment and discharge of the Secured Liabilities, the Chargor with full title guarantee:
14.2.1charges to the Lender, by way of first legal mortgage, all the Properties and the fixed plant and machinery owned by the Chargor and from time to time in or on such properties and the proceeds of sale of such assets;
14.2.2charges to the Lender, by way of first fixed charge:
(a)all Properties acquired by the Chargor in the future;
(b)all present and future rights, licences, guarantees, rents, deposits, contracts, covenants and warranties relating to the Properties;
(c)all licences, consents and authorisations, statutory or otherwise, held or required in connection with the Chargor’s business or the use of any Charged Property and all rights in connection with them;
(d)all present and future goodwill and uncalled capital for the time being of the Chargor;
(e)all Intellectual Property and all present and future fees, royalties or similar income derived from or incidental to any Intellectual Property;
(f)all contracts, customer contracts, book debts and other debts of the Chargor present and future and the proceeds of payment or realisation of each of them; and
(g)all Equipment; and
14.2.3charges to the Lender, by way of first floating charge, all the undertaking, property, assets and rights of the Chargor at any time not effectively mortgaged, charged or assigned pursuant to clause 3.1.1 and clause 3.1.2.
15.2Automatic conversion of floating charge: The floating charge created by clause 3.1.3 shall automatically and immediately (without notice) be converted into a fixed charge over the relevant Charged Property if:
14.2.1the Chargor:
(a)creates, or attempts to create, over all or any part of the Charged Property an Encumbrance without the prior written consent of the Lender or any trust in favour of another person (other than any Encumbrance permitted under the terms of the Finance Documents or created with the prior written consent of the Lender); or
(b)disposes or attempts to dispose of all or any part of the Charged Property (other than any disposal permitted under the terms of the Finance Documents or for which the Lender has provided prior written consent of the Lender, or in respect of property subject only to the floating charge while it
remains uncrystallised which property may be disposed of in the ordinary course of business); or
14.2.2a receiver is appointed over all or any of the Charged Property that is subject to the floating charge; or
14.2.3any person levies or attempts to levy any distress, attachment, execution or other process against all or any part of the Charged Property; or
14.2.4the Lender receives notice of the appointment of, or a proposal or an intention to appoint, an administrator of the Chargor.
15.3The obtaining of a moratorium under section 1A of the Insolvency Act 1986, or anything done with a view to obtaining such a moratorium (including any preliminary decision or investigation), shall not be an event causing any floating charge created by this debenture to crystallise or causing restrictions which would not otherwise apply to be imposed as the disposal or property by any Chargor or a ground for the appointment of a receiver provided that this clause 3.3 ;
14.2.1does not apply to any floating charge referred to in section A52(4) of Part A1 of the Insolvency Act 1986; and
14.2.2shall have no effect on any statutory notice requirements in favour of the Lender.
15.4Conversion of floating charge by notice: The Lender may in its sole discretion at any time after the occurrence of an Event of Default by written notice to the Chargor convert the floating charge created under this debenture into a fixed charge as regards any part of the Charged Property specified by the Lender in that notice.
15.5Assets acquired after any floating charge crystallisation: Any asset acquired by the Chargor after any crystallisation of the floating charge created under this debenture which but for such crystallisation would be subject to a floating charge shall (unless the Lender confirms in writing to the contrary) be charged to the Lender by way of first fixed charge.
4DUE DILIGENCE
15.1
15.2The Chargor shall not have any obligation to investigate title, review documentation (including in relation to leases, trade receivables or inventory) or review registers (including in relation to Intellectual Property), provide surveys or other insurance, environmental or other due diligence or diligence of any potentially applicable Restriction, in each case prior to, or as a condition of, entering into this Deed or at any time thereafter.
5LIABILITY OF CHARGOR
15.1Liability not discharged: The liability of the Chargor under this debenture in respect of any of the Secured Liabilities shall not be discharged, prejudiced or affected by:
14.2.1any security, guarantee, indemnity, remedy or other right held by or available to the Lender being or becoming wholly or partially illegal, void or unenforceable on any ground;
14.2.2the Lender renewing, determining, varying or increasing any facility or other transaction in any manner or concurring in, accepting or varying any compromise, arrangement or settlement or omitting to claim or enforce payment from any other person; or
14.2.3any other act or omission which but for this provision might have discharged or otherwise prejudiced or affected the liability of the Chargor.
15.2Immediate recourse: The Chargor waives any right it may have of requiring the Lender to enforce any security or other right or claim any payment from or otherwise proceed against any other person before enforcing this debenture against the Chargor.
6REPRESENTATIONS AND WARRANTIES
15.1The Chargor represents and warrants to the Lender on the following terms:
14.2.1the Chargor is the legal and beneficial owner of the Charged Property free from any Encumbrance other than the Encumbrances created by this debenture;
14.2.2the Chargor has not received or acknowledged notice of any adverse claim by any person in respect of the Charged Property or any interest in it;
14.2.3there are no covenants, agreements, reservations, conditions, interests, rights or other matters whatever, which materially adversely affect the Charged Property;
14.2.4there is no breach of any law or regulation, which materially adversely affects the Charged Property;
14.2.5no facility necessary for the enjoyment and use of the Charged Property is subject to terms entitling any person to terminate or curtail its use;
14.2.6nothing has arisen or has been created or is subsisting, which would be an overriding interest in any Property; and
14.2.7no Encumbrance expressed to be created by this debenture is liable to be avoided or otherwise set aside on the liquidation or administration of the Chargor or otherwise.
15.2The representations and warranties set out in 5.1 are made on the date of this debenture and shall be deemed to be made on each day of the Security Period with reference to the facts and circumstances then existing.
7COVENANTS
15.1The Chargor covenants with the Lender during the continuance of the security constituted by this debenture in the terms set out in Schedule 1.
8POWERS OF THE LENDER
15.1The Lender shall have the powers set out in Schedule 2.
9ENFORCEMENT
15.1Enforcement events: The security constituted by this debenture shall be immediately enforceable following the occurrence of an Event ofDefault. The parties to this debenture agree that the provisions of Schedule 3 shall apply to this debenture and shall be binding between them.
15.2Receiver’s powers: A Receiver shall have, in addition to the powers conferred on receivers by statute, the further powers set out in Schedule 4.
15.3Right of appropriation: To the extent that the Charged Property constitutes Financial Collateral and this debenture and the obligations of the Chargor hereunder constitute a Security Financial Collateral Arrangement, the Lender shall have the right, at any time after the security constituted by this debenture has become enforceable, to appropriate all or any of that Charged Property in or towards the payment and/or discharge of the Secured Liabilities in such order as the Lender in its absolute discretion may from time to time determine. The value of any Charged Property appropriated in accordance with this clause shall be the price of that Charged Property at the time the right of appropriation is exercised as listed on any recognised market index, or determined by such other method as the Lender may select (including independent valuation). The Chargor agrees that the methods of valuation provided for in this clause are commercially reasonable for the purposes of the Financial Collateral Regulations.
10COSTS AND INDEMNITY
15.1Costs: The Chargor shall pay to or reimburse the Lender and any Receiver on demand, on a full indemnity basis, all Costs incurred by the Lender and/or any Receiver in relation to:
14.2.1protecting, perfecting, preserving or enforcing (or attempting to do so) any of the Lender’s or the Receiver’s rights under this debenture; or
14.2.2suing for, or recovering, any of the Secured Liabilities,
(including, without limitation, the Costs of any proceedings in relation to this debenture or the Secured Liabilities) together with, in the case of clause 10.1.1 and clause 10.1.2, interest on the amount due at the relevant default rate(s) of interest of the principal sum to which the demand most directly relates under the Facility Agreement or otherwise (as the case may be).
15.2Indemnity: The Lender and any Receiver and their respective employees and agents shall be indemnified on a full indemnity basis out of the Charged Property in respect of all actions, liabilities and Costs incurred or suffered in or as a result of:
14.2.1the exercise or purported exercise of any of the powers, authorities or discretions vested in them under this debenture;
14.2.2any matter or thing done or omitted to be done in relation to the Charged Property under those powers; or
14.2.3any default or delay by the Chargor in performing any of its obligations under this debenture.
11RELEASE
15.1Release: Subject to clause 13.3, upon the expiry of the Security Period (but not otherwise) the Lender shall, at the request and cost of the Chargor, take whatever action is necessary to release the Charged Property from the security constituted by this debenture.
12ASSIGNMENT AND TRANSFER
15.1The Chargor shall not assign any of its rights or transfer any of its rights or obligations under this debenture. The Lender may assign the benefit of this debenture and any document referred to in to any member of its Group.
13FURTHER PROVISIONS
15.1Independent security: This debenture shall be in addition to and independent of every other security or guarantee which the Lender may at any time hold for any of the Secured Liabilities and no prior security held by the Lender over the whole or any part of the Charged Property shall merge in or prejudice the security created by this debenture or any other contractual or legal rights of the Lender.
15.2Continuing security: This debenture shall remain in full force and effect as a continuing security for the Secured Liabilities, notwithstanding any settlement of account or intermediate payment or other matter or thing whatsoever, unless and until the Lender discharges this debenture in writing.
15.3Discharge conditional: Any release, discharge or settlement between the Chargor and the Lender shall be deemed conditional upon no payment or security received by the Lender in respect of the Secured Liabilities being avoided, reduced or ordered to be refunded pursuant to any law relating to insolvency, bankruptcy, winding-up, administration, receivership or otherwise and, notwithstanding any such release, discharge or settlement:
14.2.1the Lender or its nominee shall be at liberty to retain this debenture and the security created by or pursuant to this debenture, including all certificates and documents relating to the whole or any part of the Charged Property, for such period as the Lender shall deem necessary to provide the Lender with security against any such avoidance, reduction or order for refund; and
14.2.2the Lender shall be entitled to recover the value or amount of such security or payment from the Chargor subsequently as if such release, discharge or settlement had not occurred.
15.4Certificates: A certificate or determination by the Lender as to any amount for the time being due to it from the Chargor shall (in the absence of any manifest error) be conclusive evidence of the amount due.
15.5Rights cumulative: The rights and powers of the Lender conferred by this debenture are cumulative, may be exercised as often as the Lender considers appropriate, and are in addition to its rights and powers under the general law.
15.6Waivers: Any waiver or variation of any right by the Lender (whether arising under this debenture or under the general law) shall only be effective if it is in writing and signed by the
Lender and applies only in the circumstances for which it was given and shall not prevent the Lender from subsequently relying on the relevant provision.
15.7Further exercise of rights: No act or course of conduct or negotiation by or on behalf of the Lender shall in any way preclude the Lender from exercising any right or power under this debenture or constitute a suspension or variation of any such right or power.
15.8Delay: No delay or failure to exercise any right or power under this debenture shall operate as a waiver.
15.9Single or partial exercise: No single or partial exercise of any right under this debenture shall prevent any other or further exercise of that or any other such right.
15.10Consolidation: The restriction on the right of consolidation contained in section 93 of the Law of Property Act 1925 shall not apply to this debenture.
15.11Partial invalidity: The invalidity, unenforceability or illegality of any provision (or part of a provision) of this debenture under the laws of any jurisdiction shall not affect the validity, enforceability or legality of the other provisions. If any invalid, unenforceable or illegal provision would be valid, enforceable or legal if some part of it were deleted, the provision shall apply with any modification necessary to give effect to the commercial intention of the parties.
15.12Counterparts: This debenture may be executed and delivered in any number of counterparts, each of which is an original and which together have the same effect as if each party had signed the same document.
15.13Third party rights: Except as expressly set out in this debenture, a third party has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce, or to enjoy the benefit of, any term of this debenture.
15.14Perpetuity period: If the rule against perpetuities applies to any trust created by this debenture, the perpetuity period shall be 125 years (as specified by section 5(1) of the Perpetuities and Accumulations Act 2009).
14NOTICES
15.1Any notice or other communication to be served under this debenture must be in writing and may be:
14.2.1delivered personally;
14.2.2sent by sent by first class “Royal Mail Signed For” service or any successor service; or
14.2.3sent by electronic mail:
(a)in the case of notice to the Lender, to notices@onyxmoney.co.uk (or such other email address as is notified by the Lender to the Chargor from time to time); or
(b)in the case of notice to the Chargor, to Tridivesh Kidambi at tridi@system1.com (or such other email address as is notified by the Chargor to the Lender from time to time),
and, unless otherwise stated above, shall be served on the party at its address appearing in this debenture or at such other address as it may have notified to the other parties in accordance with this clause 14.
15.2Any notice or document shall be deemed to have been served:
14.2.1if delivered personally, at the time of delivery if delivered during a Business Day or at the start of the next Business Day if delivered at any other time; or
14.2.2if posted by first class “Royal Mail Signed For” service (or any successor service), at 10.00 a.m. on the second Business Day after it was put into the post; or
14.2.3if sent by electronic mail, at the time that a message confirming delivery has been received.
15.3References in this clause 14 to a particular time of day are references to that time of day at the address for service of the recipient party.
15GOVERNING LAW AND JURISDICTION
15.1This debenture and any dispute or claim (including non-contractual disputes or claims) arising out of or in connection with it or its subject matter or formation shall be governed by and construed in accordance with the law of England and Wales.
15.2Each party irrevocably agrees that, subject as provided below, the courts of England and Wales shall have exclusive jurisdiction over any dispute or claim (including non-contractual disputes or claims) that arises out of or in connection with this debenture or its subject matter or formation.
This document has been executed as a deed and is delivered and takes effect on the date stated at the beginning of it.
.
Schedule 1
Covenants
1NEGATIVE PLEDGE AND DISPOSAL RESTRICTIONS
6.1The Chargor shall not at any time, except as permitted by the Finance Documents or with the prior written consent of the Lender:
6.1.1create, purport to create or permit to subsist any Encumbrance on, or in relation to, any Charged Property other than any Encumbrances created by this debenture; or
6.1.2sell, assign, transfer, part with possession of or otherwise dispose of in any manner (or purport to do so) all or any part of, or any interest in, the Charged Property, except for the disposal in the ordinary course of business of any of the Charged Property subject to the floating charge created under this debenture; or
6.1.3create or grant (or purport to create or grant) any interest in any Charged Property in favour of a third party.
2TRADING AND PRESERVATION OF CHARGED PROPERTY
6.1The Chargor shall:
6.1.1carry on its trade and business in accordance with the standards of good management from time to time current in such trade or business on those parts (if any) of the Properties as are, or may be, used for the purposes of trade or business;
6.1.2not deal with its book debts and other debts otherwise than by collecting them in the ordinary course of its business; and
6.1.3not do, or permit to be done, any act or thing which will or might depreciate, jeopardise or otherwise prejudice the security held by the Lender or materially diminish the value of any of the Charged Property or the effectiveness of the security created by this debenture.
3[NOT USED]
4PROVISION OF INFORMATION
6.1The Chargor shall:
6.1.1 promptly provide to the Lender whatever information, documents or papers relating to the Charged Property as the Lender may from time to time reasonably request; and
6.1.2inform the Lender promptly of any acquisition by the Chargor of, or contract made by the Chargor to acquire, any freehold, leasehold or other interest in Property.
5INSURANCE
6.1The Chargor shall:
6.1.1insure and keep insured all of its undertaking and assets with reputable and responsible insurers previously approved by the Lender for their full reinstatement cost and otherwise in such manner and to such extent as is reasonable and customary for an enterprise engaged in the same or similar business and in the same or similar localities against such risks and contingencies as the Lender shall from time to time request;
6.1.2procure that the interest of the Lender is noted on all its policies of insurance in such manner as the Lender may in its absolute discretion require; and
6.1.3duly and punctually pay all premiums and any other monies necessary for maintaining its insurance in full force and effect.
6.2The Chargor shall hold in trust for the Lender all money received under any insurance of the whole or any part of the Charged Property and apply all monies received by virtue of any such insurance in making good or in recouping expenditure incurred in making good any loss or damage, or in such other manner as the Chargor and the Lender shall agree.
6REPAIR
6.1The Chargor shall, provided it is practicable to do so (and where it is uneconomic to repair any part of the Charged Property, such part shall instead be replaced by another similar asset of equal or greater quality and value):
6.1.1subject to paragraph 6.1.2 below (the provisions of which shall take precedence over this paragraph), except with prior written consent of the Lender and subject to such conditions imposed by such consent, at all times keep in good and substantial repair and condition all the Charged Property including, without limitation, all buildings, erections, structures and fixtures and fittings on and in the Property; and
6.1.2keep all Equipment in good repair, working order and condition and fit for its purpose.
7NOT USED
8TITLE DOCUMENTS
The Chargor shall promptly after the execution of this debenture (or, if later, the date of acquisition of the relevant Charged Property) deposit with the Lender and the Lender shall during the continuance of this debenture be entitled to hold all deeds and documents of title relating to the Charged Property which are in the possession or control of the Chargor (and, if not within the possession and/or control of the Chargor, the Chargor undertakes to obtain possession of all such deeds and documents of title).
9FURTHER ASSURANCE
The Chargor, at its own cost, shall prepare and execute such further legal or other mortgages, charges or transfers (containing a power of sale and such other provisions as the Lender may reasonably require) in favour of the Lender as the Lender shall in its absolute
discretion from time to time require over all or any part of the Charged Property and give all notices, orders and directions which the Lender may require in its absolute discretion for perfecting, protecting or facilitating the realisation of its security over the Charged Property.
10INSPECTION
The Chargor shall permit the Lender and any Receiver and any person appointed by either of them to enter upon and inspect any Property during normal business hours upon reasonable prior notice.
11CHARGOR’S WAIVER OF SET-OFF
The Chargor waives any present or future right of set-off it may have in respect of the Secured Liabilities (including sums payable by the Chargor under this debenture).
Schedule 2
Powers of Lender
1POWER TO REMEDY
The Lender shall be entitled (but shall not be bound) to remedy a breach at any time by the Chargor of any of its obligations contained in this debenture and the Chargor irrevocably authorises the Lender and its agents to do all such things as are necessary or desirable for that purpose.
2EXERCISE OF RIGHTS
The rights of the Lender under paragraph 1 of this Schedule 2 are without prejudice to any other rights of the Lender under this debenture or otherwise and the exercise of those rights shall not make the Lender liable to account as a mortgagee in possession.
3POWER TO DISPOSE OF CHATTELS
5.1At any time after the security constituted by this debenture shall have become enforceable, the Lender or any Receiver:
5.1.1may dispose of any chattels or produce found on any Property as agent for the Chargor; and
5.1.2without prejudice to any obligation to account for the proceeds of any sale of such chattels or produce, shall be indemnified by the Chargor against any liability arising from such disposal.
4PRIOR ENCUMBRANCES
5.1At any time after the security constituted by this debenture shall have become enforceable or after any powers conferred by any Encumbrance having priority to this debenture shall have become exercisable, the Lender may:
5.1.1redeem such or any other prior Encumbrance or procure its transfer to itself; and
5.1.2settle any account of the holder of any prior Encumbrance.
Any accounts so settled and passed shall be, in the absence of any manifest error, conclusive and binding on the Chargor and all monies paid by the Lender to an encumbrancer in settlement of such an account shall, as from its payment by the Lender, be due from the Chargor and shall bear interest and be secured as part of the Secured Liabilities.
5LENDER’S SET-OFF RIGHTS
5.1If the Lender shall have more than one account for the Chargor in its books the Lender may at any time after:
5.1.1the security constituted by this debenture has become enforceable; or
5.1.2the Lender has received notice of any subsequent Encumbrance or other interest affecting all or any part of the Charged Property
transfer, without prior notice, all or any part of the balance standing to the credit of any account to any other account which may be in debit but the Lender shall notify the Chargor of the transfer once made.
6INDULGENCE
The Lender may in its discretion grant time or other indulgence or make any other arrangement, variation or release with any person or persons not being a party to this debenture (whether or not such person or persons are jointly liable with the Chargor) in respect of any of the Secured Liabilities or of any other security for them without prejudice either to this debenture or to the liability of the Chargor for the Secured Liabilities.
Schedule 3
Enforcement
1NOT USED
2STATUTORY POWER OF SALE
The powers of sale conferred upon mortgagees under the Law of Property Act 1925 shall, as between the Lender and a purchaser from the Lender, arise on and be exercisable at any time after the execution of this debenture, but the Lender shall not exercise such power of sale until the security constituted by this debenture has become enforceable following an Event of Default.
3EXTENSION OF STATUTORY POWERS
The statutory powers of sale, leasing and accepting surrenders conferred upon mortgagees under the Law of Property Act 1925 and/or by any other statute shall be exercisable by the Lender under this debenture and are extended so as to authorise the Lender whether in its own name or in that of the Chargor to make any lease or agreement for lease, accept surrenders of lease or grant any option of the whole or any part or parts of the freehold and leasehold property of the Chargor with whatever rights relating to other parts of it and containing whatever covenants on the part of the Chargor and generally on such terms and conditions (including the payment of money to a lessee or tenant on a surrender) and whether or not at a premium as the Lender thinks fit.
4PROTECTION OF THIRD PARTIES
15.1No purchaser, mortgagee or other person dealing with the Lender or any Receiver shall be concerned:
15.2.1to enquire whether any of the Secured Liabilities have become due or payable or remain unpaid or undischarged, or whether the power the Lender or a Receiver is purporting to exercise has become exercisable; or
15.2.2to see to the application of any money paid to the Lender or any Receiver.
5NO LIABILITY AS MORTGAGEE IN POSSESSION
Neither the Lender nor any Receiver nor any Administrator shall be liable to account as mortgagee in possession in respect of all or any of the Charged Property nor shall any of them be liable for any loss upon realisation of, or for any neglect or default of any nature whatsoever in connection with, all or any of the Charged Property for which a mortgagee in possession might as such be liable.
6APPOINTMENT OF RECEIVER
15.1At any time after the security constituted by this debenture has become enforceable, or at the request of the Chargor, the Lender may without further notice:
15.2.1appoint by way of deed, or otherwise in writing, any one or more person or persons to be a receiver or a receiver and manager of all or any part of the Charged Property; and
15.2.2(subject to section 45 of the Insolvency Act 1986) from time to time by way of deed, or otherwise in writing, remove any person appointed to be Receiver and may in like manner appoint another in his place.
Where more than one person is appointed Receiver, they will have power to act separately (unless the appointment by the Lender specifies to the contrary).
15.2The Lender may fix the remuneration of any Receiver appointed by it without the restrictions contained in section 109 of the Law of Property Act 1925 and the remuneration of the Receiver shall be a debt secured by this debenture which shall be due and payable by the Chargor immediately upon its being paid by the Lender.
7POWERS ADDITIONAL
15.1The powers of sale and appointing a Receiver conferred by this debenture shall be in addition to all statutory and other powers of the Lender under the Insolvency Act 1986, the Law of Property Act 1925 or otherwise and shall be exercisable without the restrictions contained in sections 103 and 109 of the Law of Property Act 1925 or otherwise.
15.2The power to appoint a Receiver (whether conferred by this debenture or by statute) shall be and remain exercisable by the Lender notwithstanding any prior appointment in respect of all or any part of the Charged Property.
8AGENT OF THE CHARGOR
Any Receiver appointed by the Lender under this debenture shall be the agent of the Chargor and the Chargor shall be solely responsible for his acts and remuneration as well as for any defaults committed by him.
9POWERS OF RECEIVER
Any Receiver appointed by the Lender under this debenture shall in addition to the powers conferred on him by the Law of Property Act 1925 and the Insolvency Act 1986 have power to do all such acts and things as an absolute owner could do in the management of such of the Charged Property over which the Receiver is appointed and in particular the powers set out in Schedule 4.
10ORDER OF APPLICATION OF PROCEEDS
15.1All monies received by the Lender or a Receiver in the exercise of any enforcement powers conferred by this debenture shall be applied:
15.2.1first in paying all unpaid fees, costs and other liability incurred by or on behalf of the Lender (and any Receiver, attorney or agent appointed by it);
15.2.2second in paying the remuneration of any Receiver (as agreed between him and the Lender);
15.2.3third in or towards discharge of the Secured Liabilities in such order and manner as the Lender shall determine; and
15.2.4finally in paying any surplus to the Chargor or any other person entitled to it.
11SECTION 109(8) LAW OF PROPERTY ACT 1925
Neither the Lender nor any Receiver shall be bound (whether by virtue of section 109(8) of the Law of Property Act 1925, which is varied accordingly, or otherwise) to pay or appropriate any receipt or payment first towards interest rather than principal or otherwise in any particular order as between any of the Secured Liabilities.
12SUSPENSE ACCOUNT
All monies received by the Lender or a Receiver under this debenture may, at the discretion of the Lender or Receiver, be credited to any suspense or securities realised account and shall bear interest at such rate, if any, as may be agreed in writing between the Lender and the Chargor and may be held in such account for so long as the Lender or Receiver thinks fit.
13POWER OF ATTORNEY
15.1By way of security the Chargor irrevocably appoints the Lender and every Receiver separately to be the attorney of the Chargor and in its name and on its behalf and as its act and deed to execute any documents, and do any acts and things after the occurrence of an Event of Default which:
15.2.1the Chargor is required to execute and do under this debenture; and/or
15.2.2any attorney may deem proper or desirable in exercising any of the powers, authorities and discretions conferred by this debenture or by law on the Lender or any Receiver.
14RATIFICATION OF ACTS OF ATTORNEY
The Chargor ratifies and confirms and agrees to ratify and confirm anything which any of its attorneys may do in the proper and lawful exercise or purported exercise of all or any of the powers, authorities and discretions referred to in paragraph 13 of this Schedule 3.
15APPOINTMENT OF AN ADMINISTRATOR
15.1The Lender may without notice to the Chargor appoint any one or more persons to be an administrator of the Chargor pursuant to paragraph 14 Schedule B1 of the Insolvency Act 1986 if this debenture becomes enforceable.
15.2Any appointment under this paragraph 15 shall:
15.2.1be in writing signed by a duly authorised signatory of the Lender; and
15.2.2take effect, in accordance with paragraph 19 of Schedule B1 of the Insolvency Act 1986, when the requirements of paragraph 18 of that Schedule B1 are satisfied.
15.3The Lender may (subject to any necessary approval from the court) end the appointment of an Administrator by notice in writing in accordance with this paragraph 15 and appoint under that paragraph a replacement for any Administrator whose appointment ends for any reason.
Schedule 4
Further Powers of Receiver
1TO REPAIR AND DEVELOP PROPERTIES
A Receiver may undertake or complete any works of repair, building or development on the Properties.
2TO SURRENDER LEASES
A Receiver may grant or accept surrenders of any leases or tenancies affecting the Properties upon such terms and subject to such conditions as he thinks fit.
3TO EMPLOY PERSONNEL AND ADVISORS
A Receiver may provide services and employ, or engage, such managers, contractors and other personnel and professional advisors on such terms as he deems expedient.
4TO MAKE VAT ELECTIONS
A Receiver may make such elections for value added tax purposes as he thinks fit.
5TO CHARGE REMUNERATION
A Receiver may charge and receive such sum by way of remuneration (in addition to all costs, charges and expenses incurred by him) as the Lender may prescribe or agree with him.
6TO REALISE CHARGED PROPERTY
A Receiver may collect and get in the Charged Property in respect of which he is appointed or any part thereof and for that purpose make such demands and take any proceedings as may seem expedient and to take possession of the Charged Property with like rights.
7TO MANAGE OR RECONSTRUCT THE CHARGOR’S BUSINESS
A Receiver may carry on, manage, develop, reconstruct, amalgamate or diversify or concur in carrying on, managing, developing, reconstructing, amalgamating or diversifying the business of the Chargor.
8TO DISPOSE OF CHARGED PROPERTY
A Receiver may grant options and licences over all or any part of the Charged Property, sell or concur in selling, assign or concur in assigning, lease or concur in leasing and accept or concur in accepting surrenders of leases of, all or any of the property of the Chargor in respect of which he is appointed in such manner and generally on such terms and conditions as he thinks fit (fixtures and plant and machinery may be severed and sold separately from the premises in which they are contained without the consent of the Chargor) and to carry any such sale, assignment, leasing or surrender into effect. Any such sale may be for such consideration as he shall think fit and he may promote or concur in promoting a company to purchase the property to be sold.
9TO MAKE SETTLEMENTS
A Receiver may make any arrangement, settlement or compromise between the Chargor and any other person which he may think expedient.
10TO IMPROVE EQUIPMENT
A Receiver may make substitutions of, or improvements to, the Equipment as he may think expedient.
11TO MAKE CALLS ON CHARGOR MEMBERS
A Receiver may make calls conditionally or unconditionally on the members of the Chargor in respect of the uncalled capital with such and the same powers for that purpose and for the purpose of enforcing payments of any calls so made as are conferred by the articles of association of the Chargor on its directors in respect of calls authorised to be made by them.
12TO APPOINT STAFF AND AGENTS
A Receiver may appoint managers, officers, servants, workmen and agents for the aforesaid purposes at such salaries and for such periods and on such terms as he may determine.
13TO INSURE
A Receiver may, if he thinks fit effect with any insurer any policy or policies of insurance either in lieu or satisfaction of, or in addition to, such insurance.
14LAW OF PROPERTY ACT 1925
A Receiver may exercise all powers provided for in the Law of Property Act 1925 in the same way as if he had been duly appointed under that act and exercise all powers provided for an administrative receiver in Schedule 1 of the Insolvency Act 1986.
15TO BORROW
A Receiver may for any of the purposes authorised by this Schedule 4 raise money by borrowing from the Lender or from any other person on the security of all or any of the Charged Property in respect of which he is appointed upon such terms (including if the Lender shall consent to terms under which such security ranks in priority to this debenture) as he shall think fit.
16TO REDEEM PRIOR ENCUMBRANCES
A Receiver may redeem any prior Encumbrance and settle and pass the accounts to which the Encumbrance relates and any accounts so settled and passed shall be, in the absence of any manifest error, conclusive and binding on the Chargor and the monies so paid will be deemed to be an expense properly incurred by him.
17INCIDENTAL POWERS
A Receiver may do all such other acts and things as he may consider incidental or conducive to any of the matters or powers in this Schedule 4 or which he lawfully may or can do as agent for the Chargor.
18SCOPE OF POWERS
Any exercise of any of these powers may be on behalf of the Chargor, the directors of the Chargor (in the case of the power contained in paragraph 11 of this Schedule 4) or himself.
| | | | | | | | | | | |
Executed as a Deed by Total Security Limited acting by
in the presence of: | | /s/ Tridivesh Kidambi |
Witness’s signature | /s/ Stewart Marlborough | Director
Name: Tridivesh Kidambi |
| Name | Stewart Marlborough | |
| Address | 515 Loma Vista Street | |
| El Segundo, CA 90245 | |
| | |
| Occupation | President, Commerce System1 | |
| | | | | | | | | | | |
Signed as a Deed by Onyx Asset Finance Limited acting by
in the presence of: | | /s/ Dan Richards |
Witness’s signature | /s/ Shane Crossan | Director
Name: Dan Richards |
| Name | Shane Crossan | |
| Address | 24 Noble Road | |
| Fareham, UK | |
| PO144FJ | |
| Occupation | VP of Engineering | |
v3.23.3
Cover
|
Oct. 12, 2023 |
| Document Information [Line Items] |
|
| Document Type |
8-K
|
| Document Period End Date |
Oct. 06, 2023
|
| Entity Registrant Name |
System1, Inc.
|
| Entity Incorporation, State or Country Code |
DE
|
| Entity File Number |
001-39331
|
| Entity Tax Identification Number |
92-3978051
|
| Entity Address, Address Line One |
4235 Redwood Avenue
|
| Entity Address, City or Town |
Marina Del Rey
|
| Entity Address, State or Province |
CA
|
| Entity Address, Postal Zip Code |
90066
|
| City Area Code |
310
|
| Local Phone Number |
924-6037
|
| Written Communications |
false
|
| Soliciting Material |
false
|
| Pre-commencement Tender Offer |
false
|
| Pre-commencement Issuer Tender Offer |
false
|
| Entity Emerging Growth Company |
true
|
| Entity Ex Transition Period |
false
|
| Entity Central Index Key |
0001805833
|
| Amendment Flag |
false
|
| Class A Common Stock, $0.0001 par value per share |
|
| Document Information [Line Items] |
|
| Title of 12(b) Security |
Class A Common Stock, $0.0001 par value per share
|
| Trading Symbol |
SST
|
| Security Exchange Name |
NYSE
|
| Redeemable warrants, each whole warrant exercisable for one Class A Common Stock share at an exercise price of $11.50 per share |
|
| Document Information [Line Items] |
|
| Title of 12(b) Security |
Redeemable warrants, each whole warrant exercisable for one Class A Common Stock share at an exercise price of $11.50 per share
|
| Trading Symbol |
SST.WS
|
| Security Exchange Name |
NYSE
|
| X |
- DefinitionBoolean flag that is true when the XBRL content amends previously-filed or accepted submission.
| Name: |
dei_AmendmentFlag |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionFor the EDGAR submission types of Form 8-K: the date of the report, the date of the earliest event reported; for the EDGAR submission types of Form N-1A: the filing date; for all other submission types: the end of the reporting or transition period. The format of the date is YYYY-MM-DD.
| Name: |
dei_DocumentPeriodEndDate |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:dateItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionThe type of document being provided (such as 10-K, 10-Q, 485BPOS, etc). The document type is limited to the same value as the supporting SEC submission type, or the word 'Other'.
| Name: |
dei_DocumentType |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:submissionTypeItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionAddress Line 1 such as Attn, Building Name, Street Name
| Name: |
dei_EntityAddressAddressLine1 |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:normalizedStringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- Definition
+ References
+ Details
| Name: |
dei_EntityAddressCityOrTown |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:normalizedStringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionCode for the postal or zip code
| Name: |
dei_EntityAddressPostalZipCode |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:normalizedStringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionName of the state or province.
| Name: |
dei_EntityAddressStateOrProvince |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:stateOrProvinceItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionA unique 10-digit SEC-issued value to identify entities that have filed disclosures with the SEC. It is commonly abbreviated as CIK. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
| Name: |
dei_EntityCentralIndexKey |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:centralIndexKeyItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionIndicate if registrant meets the emerging growth company criteria. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
| Name: |
dei_EntityEmergingGrowthCompany |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionCommission file number. The field allows up to 17 characters. The prefix may contain 1-3 digits, the sequence number may contain 1-8 digits, the optional suffix may contain 1-4 characters, and the fields are separated with a hyphen.
| Name: |
dei_EntityFileNumber |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:fileNumberItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionTwo-character EDGAR code representing the state or country of incorporation.
| Name: |
dei_EntityIncorporationStateCountryCode |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:edgarStateCountryItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionThe exact name of the entity filing the report as specified in its charter, which is required by forms filed with the SEC. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
| Name: |
dei_EntityRegistrantName |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:normalizedStringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionThe Tax Identification Number (TIN), also known as an Employer Identification Number (EIN), is a unique 9-digit value assigned by the IRS. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
| Name: |
dei_EntityTaxIdentificationNumber |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:employerIdItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionLocal phone number for entity.
| Name: |
dei_LocalPhoneNumber |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:normalizedStringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 13e
-Subsection 4c
| Name: |
dei_PreCommencementIssuerTenderOffer |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 14d
-Subsection 2b
| Name: |
dei_PreCommencementTenderOffer |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionTitle of a 12(b) registered security. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b
| Name: |
dei_Security12bTitle |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:securityTitleItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionName of the Exchange on which a security is registered. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection d1-1
| Name: |
dei_SecurityExchangeName |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:edgarExchangeCodeItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as soliciting material pursuant to Rule 14a-12 under the Exchange Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Section 14a
-Number 240
-Subsection 12
| Name: |
dei_SolicitingMaterial |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionTrading symbol of an instrument as listed on an exchange.
| Name: |
dei_TradingSymbol |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:tradingSymbolItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as written communications pursuant to Rule 425 under the Securities Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Securities Act
-Number 230
-Section 425
| Name: |
dei_WrittenCommunications |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- Details
| Name: |
us-gaap_StatementClassOfStockAxis=us-gaap_CommonStockMember |
| Namespace Prefix: |
|
| Data Type: |
na |
| Balance Type: |
|
| Period Type: |
|
|
| X |
- Details
| Name: |
us-gaap_StatementClassOfStockAxis=sst_RedeemableWarrantsMember |
| Namespace Prefix: |
|
| Data Type: |
na |
| Balance Type: |
|
| Period Type: |
|
|
System1 (NYSE:SST)
Gráfica de Acción Histórica
De Abr 2024 a May 2024
System1 (NYSE:SST)
Gráfica de Acción Histórica
De May 2023 a May 2024
