EXHIBIT 10.31
DEBENTURE
THIS DEBENTURE is made the day of 2002 BETWEEN:
(1) OCEAN CONVERSION (BVI) LTD., a company incorporated under the laws of
the British Virgin Islands, whose registered office is at the offices
of XxXxxxxx Corporate Services Limited, 0xx Xxxxx, 000 Xxxx Xxxxxx,
P O Box 3342, Road Town, Torto1a, British Virgin Islands (the
"BORROWER"); and
(2) THE BANK OF N.T. XXXXXXXXXXX & SON LIMITED, a bank organised and
existing under the laws of the island of Bermuda, whose registered
office is at 00 Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxx (xxx "BANK").
NOW THIS DEBENTURE WITNESSES and IT IS AGREED as follows:
1 COVENANT TO PAY
1.1 The Borrower covenants to pay and discharge to the Bank on demand all
moneys obligations and liabilities whether principal interest or
otherwise which may now or at any time in the future be due owing or
incurred by the Borrower to the Bank whether actual or contingent and
whether alone severally or jointly as principal guarantor surety or
otherwise and in whatever name or style and whether on any current or
other account or in any other manner together with interest charges and
other expenses so that interest shall be calculated and compounded as
may be agreed from time to time between the parties or, if not agreed,
in accordance with the usual practice of the Bank from time to time as
well after as before any demand made or judgment obtained hereunder.
2 CHARGE
2.1 The Borrower as beneficial owner hereby charges with the payment or
discharge of all moneys obligations and liabilities hereby covenanted
to be paid or discharged by the Borrower including an initial facility
in the sum of Xxx Xxxxxxx Xxx Xxxxxxx xxx Xxxxx Xxxxxxxx Xxxxxx Xxxxxx
Dollars (US$1,250,000) together with all costs and expenses incurred by
the Bank in relation to this Debenture or the moneys obligations and
liabilities hereby secured:
(a) by way of first fixed charge:
(i) all mechanical, electrical and other equipment and
all civil engineering works or plant including
appurtenances thereto now or in the future belonging
to the Borrower and used or to be used in the supply
construction operation and otherwise in connection
with any reverse osmosis desalination plant and all
parts chemicals and supplies which may from time to
time be used in connection with the plant;
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(ii) all other plant and machinery computers office and
other equipment now or in the future belonging to the
Borrower and the full benefit of any warranties or
maintenance contracts for any of the same;
(iii) all cash at bank, book debts and other debts
including rents now or in the future due or owing to
the Borrower;
(iv) all stocks shares bonds and other securities now or
in the future belonging to the Borrower together with
all dividends and other rights deriving therefrom;
(v) the goodwill of the Borrower and its uncalled capital
for the time being;
(vi) the benefit of any licences and all patent
applications inventions trade marks service marks
designs and trade names copyright knowhow and other
intellectual property rights and all fees, royalties
and other rights of every kind deriving therefrom now
or in the future belonging to the Borrower;
(vii) all other fixed assets of the Borrower to include all
undertaking and all other property assets and rights
whatsoever and wheresoever present and future not
hereby effectively charged by way of first fixed
charge;
(b) by way of first floating charge the whole of the Borrower's
undertaking and all its property and assets whatsoever and
wheresoever present and future other than the property and
assets from time to time effectively charged to the Bank by
way of legal mortgage or fixed charge by this Debenture.
Nothing herein shall be construed as creating a charge over any land or
interest therein, unless the Bank shall have first obtained a requisite
non-belonger land holding licence under the provisions of the
Non-Belongers Land Holding Regulation Act (Cap. 122) to hold such
charge.
2.2 The Bank may convert the floating charge at any time by notice in
writing to the Borrower into a fixed charge as regards all the property
and assets which for the time being are the subject of such floating
charge or, as the case may be, such of the said property and assets as
are specified by such notice. The floating charge created by this
Debenture shall unless otherwise agreed in writing by the Bank
automatically and without notice immediately be converted into a fixed
charge in the event that the Borrower shall create or permit to subsist
any mortgage charge pledge lien or other security interest other than
this Debenture or if any person takes any step to levy any distress
attachment execution or other legal process against any of the said
property or assets.
2.3 The security from time to time constituted by or pursuant to this
Debenture shall be in
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addition to and shall not prejudice determine or affect any other
security which the Bank may from time to time hold for or in respect of
all or any part of the moneys obligations and liabilities hereby
secured. No prior security held by the Bank over the property charged
by this Debenture or any part of it shall merge in the security created
hereby or pursuant hereto which will remain in force and effect as a
continuing security until discharged by the Bank.
3 RESTRICTIONS ON DEALING
3.1 The Borrower shall not without the prior written consent of the Bank:
(a) create or permit to subsist any mortgage debenture charge
pledge lien (other than a lien arising by operation of law in
the ordinary course of trading) or other encumbrance or
security interest on any of its assets other than this
Debenture;
(b) sell transfer lease lend or otherwise dispose of the whole or
any part of its undertaking or (save in the normal course of
trading at not less than market value) of its assets or enter
into any agreement or grant any option for any such sale
transfer lease loan or other disposal;
(c) part with possession of any freehold or leasehold property
grant or agree to grant any option or any licence tenancy or
other right of occupation to any person or exercise the powers
of leasing or agreeing to lease or of accepting or agreeing to
accept surrenders provided that such restrictions shall not be
construed as a limitation on the powers of any receiver
appointed under this Debenture and being an agent of the
Borrower;
(d) pull down or remove or redevelop or make any material
alteration to the whole or any part of any buildings or sever
unfix or remove any fixtures or remove any plant or machinery
belonging to or in use by the Borrower except for the purpose
of effecting repairs or replacing the same;
(e) redeem or purchase its own shares, or pay dividend and profit
shares unless there is a minimum cash flow of US$500,000 after
debit service is retained to support the operating costs of
the reverse osmosis plant of the Borrower, and
(f) amend or waive any of its rights under the agreement to
produce portable water from sea water between the Borrower and
the Government of the British Virgin Islands as amended by a
supplemental agreement dated 14 March 1991 and a further
supplemental agreement dated 24 January 1992 (hereinafter the
"CONTRACT").
4 REPRESENTATIONS WARRANTIES AND COVENANTS BY THE BORROWER
4.1 The Borrower represents and warrants to the Bank as at the date of this
Debenture and so long as any sums secured by this Debenture remain
outstanding and undertakes that:
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(a) it is duly incorporated validly existing and in good standing
under the laws of the British Virgin Islands;
(b) it has and will at all times have the necessary power to enter
into and perform its obligations under this Debenture;
(c) this Debenture constitutes its legal valid binding and
enforceable obligations and is a first priority security over
the assets charged hereunder and every part thereof effective
in accordance with its terms;
(d) all necessary authorisations and consents to enable or entitle
it to enter into this Debenture have been obtained and will
remain in full force and effect during the subsistence of the
security constituted by this Debenture;
(e) the entry into and performance by it of, and the
transactions contemplated by, this Debenture do not and will
not:
(a) conflict with any law or regulation or judicial or
official order;
(b) conflict with the constitutional documents of the
Borrower; or
(c) conflict with any document which is binding upon the
Borrower or any of its assets;
(f) all approval from any government, tax monetary or other
authorities have been obtained and are in full force and
effect;
(g) the execution of this Debenture and the borrowings and
repayment of the loan will not contravene any agreement to
which the Borrower is a party;
(h) it is not in default under any agreement to which it is a
party nor is it the subject of any actual, pending or
threatened legal proceedings either of which has or may have a
material adverse effect on the Borrower's financial condition;
(i) the financial statements and all other financial and other
information delivered to the Bank are true and accurate, do
not omit any material facts or other information which might
make them misleading and no material change has occurred since
the date of those valuations or the dates when such other
financial and other information was delivered to the Bank;
(j) the Startup Date (as defined in the Contract) of the Contract
is 31 May 1992 and the termination date is 31 May 2006,
there have been no amendments to the Contract since the
Supplemental Agreement # 2 dated 24 January 1992, and there
have been no defaults under the Contract;
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(k) other than this Debenture, it has not assigned or agreed to
assign, charge or in any way encumber any of its present or
future rights, title and interest in and to the Contract or
any of its other assets (other than a lien arising by
operation of law in the ordinary course of trading);
(l) no right of action is vested in any party under the Contract
in respect of any representation, breach of condition, breach
of warranty or breach of any other express or implied term by
the Borrower thereunder; and
(m) it has no knowledge of any fact that would or might prejudice
or affect any right, power or ability of the Bank to enforce
this Debenture or condition thereof.
4.2 The Borrower shall:
(a) conduct and carry on its business in a proper and efficient
manner and not make any substantial alteration in the nature
of or mode of conduct of that business and keep or cause to be
kept proper books of account and records relating to such
business;
(b) perform its obligations in a prompt and efficient manner and
maintain and enforce its rights under the Contract and not do
or omit to do anything in relation thereto which may
reasonably be expected adversely and materially to affect the
ability of the Borrower to perform its obligations under the
Contract this Debenture or any agreement with the Bank;
(c) keep all buildings and all plant machinery fixtures and
fittings in good repair and condition and permit any person or
persons nominated by the Bank free access at all times to view
the state and condition thereof;
(d) insure and keep insured such of its property as is insurable
with such insurer and against such risks and in such amounts
and otherwise in such terms as the Bank may require and will
maintain such other insurances as are normally maintained by
prudent companies carrying on similar businesses with the
interest of the Bank noted upon all policies of such insurance
or, if the Bank shall require, in the joint names of the
Borrower and the Bank and will produce or deposit with the
Bank all such policies and receipts for all premium and other
payments necessary for effecting and maintaining such
insurances;
(e) apply any insurance proceeds in making good the loss or damage
or at the Bank's option in or towards the discharge of the
moneys obligations and liabilities secured by this Debenture;
(f) punctually pay all rents taxes duties assessments and other
outgoings and observe and perform all restrictive and other
covenants under which any of the property subject to this
Debenture is held;
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(g) pay into its account with the Bank all moneys which it may
receive in respect of its book or other debts and all licence
fees, royalties and other moneys deriving from its
intellectual property and until such payment hold all such
moneys on trust for the Bank;
(h) deal with its book or other debts and all licence fees,
royalties and other moneys deriving from its intellectual
property in accordance with any directions from time to time
given in writing by the Bank and in default of and subject to
any such directions not release factor sell at discount charge
assign or otherwise deal with such debts, licence fees,
royalties or other moneys otherwise than by getting in and
paying the same into such account;
(i) deposit with the Bank all deeds certificates and documents
constituting or evidencing title to the property or any part
thereof charged by this Debenture and all insurance policies;
(j) comply with the provisions of all present or future statutes
and directives and every notice order or directions made under
any of the foregoing;
(k) not do or cause or permit to be done anything which may in any
way depreciate, jeopardise or otherwise prejudice the value to
the Bank of the security hereby charged;
(l) provide the Bank with all financial and other information with
respect to the assets, liabilities and affairs of the Borrower
and its subsidiaries and associated companies (if any) that
the Bank may form time to time require.
(m) if required by the Bank, procure that each subsidiary of the
Borrower shall guarantee to the Bank payment of all moneys,
obligations and liabilities hereby covenanted to be paid and
charge all its undertaking, property and assets to secure the
same in such manner as the Bank shall from time to time
require;
(n) if required by the Bank, will cause each of its subsidiaries
to, permit the Bank or any agent or representative of the
Bank, examine and make copies of and abstracts from the
records and books of account of the Borrower and visit the
premises and properties of the Borrower and to discuss the
affairs, finances and accounts of the Borrower and its
subsidiaries with any of the officers or knowledgeable
employees of the Borrower or such subsidiaries.
4.3 The Borrower hereby further covenants with the Bank that during the
continuance of the security constituted by this Debenture the Borrower
will:
(a) furnish to the Bank copies of the profit and loss account,
balance sheet and directors' report in respect of each
financial year of the Borrower, its holding companies and such
of the subsidiaries of the Borrower or its holding companies
as the Bank may from time to time require showing a true and
fair view of their
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respective affairs, profit or loss and source and application
of funds certified by duly qualified auditors approved by the
Bank forthwith upon the same becoming available and not in any
event later than the expiration of ninety (90) days from the
end of such financial year and also at the time of issue
copies of all, annual reports and other information of a
financial or business nature circulated to shareholders or to
any class of creditors and from time to time such other
information, statements, forecasts and projections of the
Borrower, its holding companies and the subsidiaries of the
Borrower as the Bank may require;
(b) at the request of the Bank furnish copies of annual financial
statements of its shareholders, and promptly inform the Bank
of its financial position generally which would be material to
be known to a director or a lender;
(c) furnish the Bank with copies of all notices given to or
received from any person in relation to the Contract promptly
after the same are given or as the case may be received;
(d) notify the Bank immediately of any default or event likely to
cause a default of the Borrower or the Government of the
British Virgin Islands under the terms of the Contract, and of
any action taken by any party or any act or event which could
terminate or invalidate the Contract;
(e) maintain in full force and effect all government tax monetary
and other approval consents and licences required to enable
the Borrower to maintain its corporate status to continue to
carry on its business and affairs.
4.4 If the Borrower shall fail to satisfy the Bank that it has performed
any of its obligations under clauses 4.2 and 4.3, then the Bank may
take such steps as it considers appropriate procure the performance of
such obligation and shall not thereby be deemed to be a mortgagee in
possession and the moneys expended by the Bank shall be reimbursed by
the Borrower on demand and until so reimbursed shall carry interest as
mentioned in clause 1 from the date of payment to the date of
reimbursement.
5 ENFORCEMENT
5.1 This Debenture shall become enforceable:
(a) upon demand by the Bank;
(b) if any of the moneys obligations and liabilities secured by
this Debenture shall not be paid or discharged by the Borrower
in accordance with clause 1 immediately upon it coming due; or
(c) if the Borrower shall be in breach of any provision of this
Debenture or of any agreement containing any terms and
conditions of or applicable to the moneys obligations and
liabilities secured by this Debenture; or
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(d) upon the presentation of a petition for the winding up of the
Borrower or an order made or the passing by the Borrower of a
resolution for voluntary winding up; or
(e) if an encumbrancer shall take possession of or a receiver
shall be appointed over or any secured creditor of the
Borrower shall seek to enforce his security in respect of all
or any of the property or assets charged by this Debenture; or
(f) if the Borrower shall enter into any composition or
arrangement for the benefit of its creditors; or
(g) if any information, representation, warranty or undertaking
from time to time provided or made to the Bank by the Borrower
is or becomes incorrect or misleading in a material respect;
or
(h) if the Borrower defaults under the Contract, or any trust
deed, loan agreement, debenture or other agreement or
obligation relating to borrowing (which expression includes
all liabilities in respect of accepting, endorsing or
discounting any notes or bills, all unpaid rental and other
liabilities, present and future, under hire-purchase, credit
sale, conditional sale, leasing and similar agreements the
purchase price or charge for all acquisitions or services
payment of which is deferred for three months or more and all
liabilities under debt purchase, factoring and like agreements
contingent on non-payment of any debt) or under any guarantee
(which expression includes all contingent liabilities
undertaken in respect of the obligations or liabilities of any
third party including all guarantees, indemnities or bonds
whether constituting primary or secondary obligations or
liabilities) or if any borrowing or other money payable under
any of the foregoing becomes or is capable of being declared
payable prior to its stated maturity or is paid when due or if
any debenture, mortgage, charge or other security from time to
time created by the Borrower becomes enforceable; or
(i) if any judgment or order made against the Borrower is not
complied with within seven days from the date of entry thereof
or if an execution, distress, sequestration or other process
is levied or enforced upon or sued out against any part of the
undertaking, property, assets or revenues of the Borrower; or
(j) if the Borrower stops payment or agrees to declare a
moratorium or becomes or is deemed to be insolvent or unable
to pay its debts within the meaning of the Companies Act
(British Virgin Islands) or when they fall due or if a notice
is issued convening a meeting of or the Borrower proposes to
enter into any composition or arrangement with its creditors
or any class of its creditors; or
(k) if any material part of the assets or revenues of the Borrower
is sold or disposed of or threatened to be sold or disposed of
(otherwise than in the normal course of trading) whether in a
single transaction or a number of transactions or is
nationalised, compulsorily acquired, seized or appropriated or
if any partnership
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of which the Borrower is or becomes a partner is dissolved; or
(l) if any part of the security hereby created or any guarantee,
indemnity or other security for any money obligation or
liability hereby secured fails or ceases in any respect to
have full force and effect or to be continuing or is
terminated or disputed or becomes in jeopardy, invalid or
unenforceable; or
(m) if any licence, authorisation, consent or registration at any
time necessary or desirable to enable the Borrower to comply
with its obligations to the Bank or to carry on its business
in the normal course shall be revoked, withheld or materially
modified or shall fail to be granted or perfected or shall
cease to remain in full force and effect; or
(n) if control of the Borrower is acquired by any person or group
of connected persons not having control of the Borrower at the
date hereof (unless with the prior consent in writing of the
Bank); or
(o) if it becomes illegal under any law applying to the Bank for
it to make or maintain any credit facility secured by this
Debenture; or
(p) if:
(i) any of the foregoing events occurs without the prior
consent in writing of the Bank in relation to: (A)
any third party which now or hereafter has guaranteed
or provided security for or given an indemnity in
respect of any obligation and liabilities hereby
secured; or (B) any subsidiary or holding company of
the Borrower of any such third party or any
subsidiary of any such holding company; or
(ii) any individual now or hereafter liable as such third
party shall commit an act of bankruptcy, die or
become of unsound mind;
(q) the Borrower shall have failed to repay, forthwith, any
obligation or liability which has become illegal for the Bank
to continue to hold, fund or maintain due to a change in, or
in the interpretation of, any law or regulation or compliance
with any guidelines or request from any governmental authority
(whether or not having the force of law); or
(r) if the Borrower shall cease or threaten to cease to carry on
its business, or any other event shall take place which in the
opinion of the Bank puts in jeopardy all or any part of the
security created by this Debenture.
5.2 The Borrower hereby covenants to immediately notify the Bank in writing
of the occurrence of any enforceable event specified in clause 5.1 or
of the occurrence of any event or circumstance which with the lapse of
time will or may constitute an enforceable event.
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6. RECEIVER
6.1 At any time after this Debenture has become enforceable or if the
Borrower so requests in writing the Bank may without further notice to
the Borrower appoint by writing under hand or under seal any one or
more persons (whether an officer of the Bank or not) either singly
jointly severally or jointly and severally to be a receiver, receiver
and manager or administrative receiver (each a "Receiver") of all or
any part of the property charged by this Debenture and either at the
time or appointment or any time thereafter may fix his or their
remuneration and except as otherwise required by statute may remove
any such Receiver and appoint another or others in his or their place.
6.2 Any Receiver shall be the agent of the Borrower which shall be solely
responsible for his acts and defaults and the payment of his
remuneration,
6.3 Any Receiver shall:
(a) take possession of collect and get in all or any part of the
property in respect of which he is appointed and for that
purpose to take any proceedings in the name of the Borrower or
otherwise as may seem expedient;
(b) carry on or concur in carrying on the business of the Borrower
and to raise money from the Bank or others on the security of
any property charged by this Debenture;
(c) purchase or acquire any land and purchase, acquire and grant
any interest in or right over land;
(d) sell or concur in selling let or concur in letting and
terminate or accept surrenders of leases or tenancies or any
of the property charged by this Debenture and to carry any
such transactions into effect;
(e) sell, assign let or otherwise dispose of or concur in selling,
assigning, letting or otherwise disposing of all or any of the
debts and any other property in respect of which he is
appointed;
(f) make any arrangement or compromise between the Borrower and
any other person which he may think expedient;
(g) make and effect all repairs improvement and insurances;
(h) purchase materials tools equipment goods or supplies;
(i) call up any uncalled capital of the Borrower with all the
powers conferred by the Memorandum and Articles of Association
of the Borrower in relation to calls;
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(j) employ engage and appoint managers and other employees and
professional advisers;
(k) do all such other acts and things as may be considered to be
incidental or conducive to any other matters or powers
aforesaid or to the realisation of the security constituted by
this Debenture and which he lawfully may or can do.
7 APPLICATION OF PROCEEDS
7.1 Any moneys received by the Bank or any Receiver shall subject to the
repayment of any claims having priority to the charges created by this
Debenture be applied in the following order but without prejudice to
the right of the Bank to recover any shortfall from the Borrower:
(a) in the payment of all costs charges and expenses of and
incidental to the appointment of the Receiver and the exercise
of all or any of his powers and of all outgoings paid by him;
(b) in the payment of the Receiver's remuneration;
(c) in or towards the satisfaction of the moneys obligations and
liabilities secured by Debenture in such order as the Bank in
its absolute discretion thinks fit;
(d) in payment of the surplus (if any) to the person or persons
entitled to it.
7.2 All moneys received recovered or realised by the Bank under this
Debenture may be credited at the discretion of the Bank to any suspense
or impersonal account and may be held in such account for so long as
the Bank shall think fit pending its application from to time in or
towards the discharge of any of the moneys obligations and liabilities
secured by this Debenture.
8 PROTECTION OF THIRD PARTIES
8.1 No person dealing with a Receiver or the Bank shall be concerned to
enquire whether any power which he or it is purporting to exercise has
become exercisable or whether any money is due under this Debenture or
as to the application of any money paid raised or borrowed or as to the
propriety or regularity of any sale by or other dealing with such
Receiver or the Bank. All the protection to purchasers contained in any
statute shall apply to any person purchasing from or dealing with a
Receiver or the Bank.
9 ENTRY INTO POSSESSION
9.1 If the Bank or any Receiver shall enter into possession of the property
hereby charged or any part thereof it or he may from time to time and
at any time go out of such possession. Neither the Bank nor any
Receiver shall in any circumstances (either by reason of any entry into
or taking of possession of any such property or for any other reason
and
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whether as mortgagee in possession or on any other basis) be liable to
account to the Borrower for anything except its or his actual receipts
or be liable to the Borrower for any loss or damage arising from any
realisation of the property hereby charged or from any act default or
omission in relation thereto.
10 POWER OF ATTORNEY
10.1 the Borrower irrevocably appoints the Bank any Receiver and any person
nominated by the Bank jointly and also severally to be the attorney of
the Borrower with the power of substitution and in its name and
otherwise on its behalf and as its act and deed to sign or execute all
deeds instruments and documents which the Bank or any Receiver may
require or deem proper for any of the purposes of or which the Borrower
ought to do under this Debenture. The Borrower agrees to ratify and
confirm anything such attorney shall lawfully and properly do.
11 CURRENCY INDEMNITY
11.1 For the purpose of or pending the discharge of any of the moneys
obligations and liabilities secured by this Debenture the Bank may
convert any moneys received recovered or realised by the Bank under
this Debenture (including the proceeds of any previous conversion) from
their existing currency into such other currency as the Bank may think
fit and any such conversion shall be effected at the Bank's then
prevailing spot selling rate of exchange for such other currency
against the existing currency. As a separate and independent obligation
the Borrower agrees to indemnify and hold harmless the Bank against any
shortfall between any amount received or recovered by it in respect of
any payment due under this Debenture and converted in accordance with
the clause into the currency in which such amount was payable and the
amount in such currency which was due and payable to the Bank under
this Debenture.
12 NEW ACCOUNTS
12.1 If the Bank shall at any time receive actual or constructive notice of
any charge or other interest affecting any part of the property hereby
charged then the Bank may open a new account or accounts for the
Borrower and if the Bank does not do so then the Bank shall be treated
as if it had in fact done so at the time when it received or was deemed
to receive notice and as from that time all payments made by the
Borrower to the Bank shall be credited or treated as having been
credited to the new account and shall not operate to reduce the amount
secured by this Debenture at the time when the Bank received or was
deemed to received such notice.
13 PRIOR CHARGES
13.1 If there is any encumbrance over any of the property charged by this
Debenture which ranks in priority to this Debenture and any
proceedings or steps are taken to exercise or enforce any powers or
remedies conferred by such prior encumbrance the Bank or any Receiver
appointed under this Debenture in respect or such property may (but
without
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prejudice to any rights the Receiver) redeem such prior encumbrance or
procure its transfer to itself and may settle and pass the accounts of
any prior mortgagee, chargee or encumbrancer. Any account so settled
and passed shall be conclusive and binding on the Borrower and all the
principal interest costs charges and expenses of and incidental to such
redemption or transfer shall be secured on the property charged by this
Debenture and all the powers conferred by any prior encumbrance upon
the encumbrancer or any receiver thereunder shall be exercisable by the
Bank or a Receiver in like manner as if the same were expressly
included in this Debenture.
14 FURTHER ASSURANCE
14.1 The Borrower shall at its own cost whenever requested by the Bank
immediately execute and sign all such deeds and documents and do all
such things as the Bank may require for the purpose of perfecting or
more effectively providing security to the Bank for the payment and
discharge of the moneys obligations and liabilities secured by this
Debenture or to facilitate the realisation of the property and assets
mortgaged and charged by this Debenture or the exercise of any rights
vested in the Bank or any Receiver.
15 SET-OFF
15.1 The Bank may at any time and without notice to the Borrower combine or
consolidate all or any of the Borrower's then existing accounts with
and liabilities to the Bank and set off or transfer any sum or sums
standing to the credit of any one or more of such accounts in or
towards satisfaction of any of the liabilities of the Borrower to the
Bank on any other account or in any other respects. The Bank shall
notify the Borrower that such a transfer has been made.
16 COSTS AND INDEMNITY
16.1 All reasonable costs, expenses and disbursements incurred by the Bank
in relation to this Debenture or the moneys obligations and liabilities
hereby secured including for the avoidance of doubt all amounts the
Bank may incur in the negotiation, preparation and completion, and in
the maintenance, protection and enforcement of any of its rights, and
may from time to time require to compensate it for its internal
management and administrative costs and expenses, stamp duty and legal
fees (attorney-and-own-client basis), and any amount which the Bank may
certify to be necessary to compensate the Bank for any increased costs
or reduction in return resulting from compliance with any change in, or
in the interpretation of any law or regulation of any official
directive or request (whether or not having the force of law), shall be
reimbursed by the Borrower to the Bank on demand on a full indemnity
basis and until so reimbursed shall carry interest in accordance with
the provisions set out in clause 1 from the date of payment to the date
of reimbursement and be secured on the property charged by this
Debenture. A certificate signed by the Bank as to the amount of such
costs and expenses shall be conclusive and binding upon the Borrower.
13
16.2 The Bank and every Receiver attorney or other person appointed by the
Bank under this Debenture and their respective employees shall be
entitled to be indemnified on a full indemnity basis out of the
property charged by this Debenture in respect of all liabilities and
expenses incurred by any of them in or directly or indirectly as a
result of the exercise or purported exercise of any of the powers
authorities or discretions vested in them under this Debenture and
against all actions proceedings losses costs claims and demands in
respect of any matter or thing done or omitted in any way relating to
the property charged by this Debenture and the Bank and any such
Receiver may retain and pay all sums in respect of the same out of the
moneys received under the powers conferred by this Debenture.
17 MISCELLANEOUS
17.1 The Bank may without discharging or in any way affecting the security
created by this Debenture or any remedy of the Bank grant time or other
indulgence or abstain from exercising or enforcing any remedies
securities guarantees or other rights which it may now or in the future
have from or against the Borrower and may make any arrangement
variation or release with any person or persons without prejudice
either to this Debenture or the liability of the Borrower for the
moneys obligations and liabilities secured by this Debenture.
17.2 The Borrower shall not assign or transfer any rights or obligation
under this Debenture. The Bank shall have a full and unfettered right,
on giving written notice to the Borrower, to assign the whole or any
part of the benefit and/or obligations of this Debenture and the
expression "the Bank" shall include its successors and assigns and the
Bank shall be entitled to disclose any information to any actual or
prospective assignee successor or participant.
17.3 The provisions of this Debenture shall be severable and if at any time
any one or more such provisions is or becomes invalid illegal or
unenforceable the validity legality and enforceability of the remaining
provisions shall not in any way be impaired.
17.4 The rights and remedies of the Bank provided by this Debenture are
cumulative and are not exclusive of any rights powers or remedies
provided by law and may be exercised from time to time and as often as
the Bank may deem expedient.
17.5 Any reference in this Debenture to any statute or any section of any
statute shall be deemed to include reference to any statutory
modification or re-enactment thereof for the time being in force.
18 NOTICES
18.1 Any demand or notice under this Debenture shall be in writing and may
be served personally on any director or the secretary of the Borrower
or may be sent by post telex or facsimile or may be delivered to the
registered office of the Borrower or its last known place of business.
If such demand or notice is sent by post it shall be deemed to have
14
been received seven days after it was posted and shall be effective
notwithstanding that it was not in fact delivered or was returned
undelivered. If sent by telex or facsimile it shall be deemed to have
been received (whether or not actually received) at the time of
dispatch.
19 GOVERNING LAW AND JURISDICTION
19.1 This Debenture shall be governed by and construed in accordance with
the laws of the British Virgin Islands and the Borrower irrevocably
submits to the non-exclusive jurisdiction of the courts of the British
Virgin Islands and the courts of Bermuda.
IN WITNESS WHEREOF this Debenture has been executed as a deed the day and year
first above written.
THE COMMON SEAL of Ocean ) /s/ [ILLEGIBLE]
Conversion (BVI) Ltd was hereunto affixed ) ---------------------------
and attested to by Xxxxx Xxxxxxxx and Director
Romney Penn, directors ) /s/ [ILLEGIBLE]
in the presence of: ) ---------------------------
) Director
/s/ [ILLEGIBLE]
-------------------------
Witness
THE COMMON SEAL of The Bank of ) /s/ [ILLEGIBLE]
N.T. Xxxxxxxxxxx and Son Limited was ) ---------------------------
hereunto affixed and attested to by ) Authorised Signatory
______________________________
in the presence of:
/s/ [ILLEGIBLE]
--------------------------------
Witness
[SEAL]
15
AFFIDAVIT
I Xxxxxxx Xxxxxxx of McNamara, Tortola, British Virgin Islands, make
OATH and SAY as follows:-
1. I was present at Road Town, Tortola, British Virgin Islands on the 15th
day of July, 2002 and did then and there see Xxxxx Xxxxxxxx and Xxxxxx Penn as
Directors of OCEAN CONVERSION (BVI) LTD duly sign the foregoing Debenture and
affix the Company's Seal thereto.
2. The signatures "Xxxxx Xxxxxxxx" and "Romney Penn" duly set and
subscribed to the said Debenture at the foot or end thereof opposite the Seal of
the party of the One Part executing the same are of the proper handwritings of
Xxxxx Xxxxxxxx and Xxxxxx Penn aforesaid and the signature "Xxxxxxx Xxxxxxx"
thereto also set and subscribed as that of the witness attesting the due
execution thereof by Xxxxx Xxxxxxxx and Xxxxxx Penn on behalf of OCEAN
CONVERSION (BVI) LTD aforesaid is of the proper handwriting of me this
deponent.
SWORN at Road Town, Tortola )
British Virgin Islands ) /s/ [ILLEGIBLE]
-----------------------------
this 15th day of July, 2002 )
)
BEFORE ME:
/s/ [ILLEGIBLE]
-----------------------------
NOTARY PUBLIC
[SEAL] [SEAL]
16
AFFIDAVIT
I XXXX XXXXXX XXXXX of 2 Cherry Dale, Smith's, Bermuda, make
OATH and SAY as follows:-
1. I was present at the offices of the Bank of N.T. Xxxxxxxxxxx & Son Ltd.
on the 22nd day of august, 2002 and did then and there see Xxxxxxx X. XxXxxx &
Xxxxxx X. Xxxxx an authorised signatory of THE BANK OF N.T. XXXXXXXXXXX & SON
LIMITED duly sign the foregoing Debenture and affix the Company's Seal thereto.
2. The signature "[ILLEGIBLE]" duly set and subscribed to the said
Debenture at the foot or end thereof opposite the Seal of the party of the One
Part executing the same is of the proper handwriting of Xxxxxxx XxXxxx & Xxxxxx
Xxxxx aforesaid and the signature "[ILLEGIBLE]" thereto also set and subscribed
as that of the witness attesting the due execution thereof by [ILLEGIBLE]
Xxxxxxx XxXxxx, Xxxxxx X. Xxxxx on behalf of THE BANK OF N.T. XXXXXXXXXXX & SON
LIMITED aforesaid is of the proper handwriting of me this deponent.
SWORN at City of Xxxxxxxx, )
Island of Bermuda )
/s/ [ILLEGIBLE]
this 22nd day of August, 2002 ) -----------------------------
)
BEFORE ME:
/s/ [ILLEGIBLE]
--------------------------
NOTARY PUBLIC
Seal
XXXX XXXXXXX
NOTARY PUBLIC
"CEDAR HOUSE"
00 XXXXX XXXXXX
XXXXXXXX, XXXXXXX [SEAL]
17
