The Bond will be secured by a debenture over all
the assets, present and future, of Heritage Financial Holdings. Heritage
Financial Holdings’ assets will be its equity investments in the target companies
and the loan obligations and security it will hold over the assets of the
target companies in respect of the debt investments.
If there is a default on the Bond, LCF Trustees as
Security Trustee will have the right on behalf of the Bondholders to take
control of the assets of Heritage Financial Holdings i.e. the Security Trustee
will have the right to sell the equity held in the target companies and enforce
the debentures held and other security if possible, to repay the Bondholders.
The Bondholders will rank pari passu with the bondholders of other Heritage
Bond Series so, if Heritage Financial Holdings defaults on the other Bond
Series, the Bondholders of all the Heritage Bond Series will rank pari passu
and be compensated pro rata. Heritage Financial Holdings will usually rank
ahead of any other creditors and shareholders of the target companies.