EXHIBIT 10.30
DEBENTURE
THIS DEBENTURE is made the 29th day of May Two Thousand and Two
BETWEEN: OCEAN CONVERSION (CAYMAN) LIMITED, a company incorporated under the
Laws of the Cayman Islands, the registered office of which is at
Xxxxxxxx Corporate Services Ltd. P.O. Box 268GT, Scotiabank Building,
Cardinal Avenue, Xxxxxx Town, Grand Cayman (hereinafter called "the
Borrower")
of the One Part
AND: THE BANK OF N. T. XXXXXXXXXXX & SON LTD., a bank registered in Bermuda,
of P. X. Xxx XX 000, 00 Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxx (hereinafter
called "the Bank")
of the Other part
WHEREAS:
(A) The Bank has agreed to grant a loan to the Borrower in the amount of
US$2.4 million upon having the same secured in the manner hereinafter
appearing.
(B) The proceeds of the loan shall be used by the Borrower to finance the
cost of constructing a new reverse osmosis plant on land owned by the
Water Authority of the Cayman Islands and described as the title to
Cayman Islands registered Parcel 34 of Block 20B in the Xxxxxx Town
East Registration Section of Grand Cayman. In order to secure
repayment of the said sum, the Borrower has agreed to enter into this
Debenture.
NOW THIS DEED WITNESSETH as follows:-
1. INTERPRETATIONS AND DEFINITIONS
(a) In this Deed:
(i) "Charged Assets" means the goodwill,
undertaking, property, assets,
revenues and rights charged
under sub-clause 4(a);
(ii) "Charged Property" means the property referred to
in sub-clause 4(a)(i);
(iii) "Default Rate" means such rate of interest as
shall be calculated by the Bank
from time to time to be the sum
of the Interest Rate, plus the
excess cost of interest that
the Bank would incur in funding
the overdue amount in the London
Interbank Market for such period
as the Bank determines to be
reasonable in the circumstances
(as to which a certificate of
the Bank shall be conclusive
evidence) plus two Percentum
[SEAL] (2%)Per annum;
(iv) "Credit Facility" Means the corresponding Credit
Facility made available under
the Loan Agreement;
(v) "Events of Default" means the events of default set
out in clause 6; .
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(vi) "Interest Rate" means the interest rate set out
in sub-clause 3(a);
(vii) "Loan Agreement" means the Bank's commitment
letter to the Borrower dated 2
January 2002 (and agreed and
accepted on behalf of the
Borrower on 21 January 2002) as
amended or substituted by
agreement in writing by the Bank
and the Borrower from time to
time;
(viii) "Principal Sum" shall mean the demand loan in
the sum of US$2,400,000.00 or
so much thereof as is
outstanding from time to time;
(ix) "Receiver" has the meaning given to it in
sub-clause 10(a) and shall
include any substituted
receiver(s) and manager(s); and
(x) "Securities" means the property referred to
in sub-clause 4(a)(ii).
(b) In this deed the expressions "the Borrower" and "the Bank"
where the context admits include their respective successors
and assigns whether immediate or derivative.
(c) Words importing any gender shall include any other gender and
words importing the singular number only shall include the
plural number and vice versa and words importing persons and
all references to persons shall include corporations and
firms.
(d) Unless the context otherwise requires, reference to clause,
sub-clause or schedule is to a clause, sub-clause or schedule
(as the case may be) of or to this deed.
(e) The clause headings do not form part of this deed, are for
convenience only and shall not be taken into account in its
construction or interpretation.
2. COVENANT TO PAY MONEY
(a) The Borrower hereby covenants to repay to the Bank on demand
the Principal Sum together with:
(i) interest to the date of repayment at such rates and
upon such terms as may from time to time be payable
hereunder;
(ii) any commissions, fees and other charges charged by
the Bank to the Borrower; and
(iii) all expenses incurred by the Bank in relation to the
Borrower or the preparation or enforcement of any
guarantees or security for any moneys, obligations or
liabilities hereby secured including legal and other
costs on a full indemnity basis.
(b) Pending the aforementioned demand, commencing 31st December
2002, the Borrower shall repay the aforementioned amounts by
way of equal semi-annual instalments of US$240,000.00 each
over a term of five (5) years. In the event a balance remains
at the end of the said term, the Bank reserves the right to
require a balloon payment.
3. INTEREST
(a) The Interest Rate for each Interest Period shall be such rate
as shall be calculated by the Bank (as well after as before
judgement) to be one and one-half percent (1.5%) above the
three (3) month rate the Bank is offered funds in the London
Interbank Euro Dollar market in the approximate amount of
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the monies drawn or to be drawn by the Borrower under the Loan
Agreement on or immediately before the date which is two (2)
business days before the beginning of such Interest Period.
The Interest Rate shall be established two (2) business days
Prior to each Interest Period "Interest Period" shall mean
each successive period of 90 days calculated from the date of
initial drawdown.
(b) The Borrower shall pay interest at the Interest Rate (or at
the Default Rate during the continuation of any Event of
Default) whether before or after judgement to the date of
payment on (i) all commission, fees and other charges and any
legal and other costs, charges and expenses incurred by the
Bank in relation to the Borrower or the assets charged under
this deed or in enforcing the security charged under this
deed; and (ii) all money and liabilities due under this deed;
(c) The aforementioned interest shall be paid quarterly in arrears
calculated from the date of initial drawdown on the basis of a
360 day year; provided that if any such interest payment
should fall due and payable on a day which is not a business
day, the payment shall be made on the next following business
day.
4. FIXED AND FLOATING CHARGES
(a) As a continuing security for the payment of all money and the
discharge of all obligations and liabilities covenanted to be
paid or met or otherwise secured by the Borrower under this
deed the Borrower as beneficial owner hereby charges to the
Bank:
(i) all freehold and leasehold property of the Borrower
(excluding the Borrower's Cayman Islands leasehold
property interest in Cayman Islands registered Parcel
34 of Block 20B in the Xxxxxx Town East Registration
Section of Grand Cayman (the "Red Gate Road Plant
Property") and Parcel 219 of Block 32B in the Lower
Valley Registration Section of Grand Cayman (the
"Lower Valley Plant Property")) both present and
future and all buildings and fixtures (including
trade fixtures), plant machinery, vehicles, computers
and office and other equipment of the Borrower
(which for the avoidance of doubt excludes the
seawater desalination plants operated by the Borrower
but which are not its property such as, at the date
hereof, the seawater desalination plants at the Red
Gate Road Property and the Lower Valley Property)
both present and future (excluding stock in trade of
the Borrower) from time to time on any such property
with the benefit of all existing and future leases,
underleases, tenancies and agreements relating to
such property (including all rents and profits from
such property) ("the Charged Property");
(ii) all stocks, shares, bonds and securities of any kind
whether marketable or otherwise and all other
interests including (but not limited to) loan capital
of the Borrower both present and future in any
company, firm, consortium or entity including all
allotments, accretions, offices, rights, benefits and
advantages at any time accruing, offered or arising
in respect of or incidental to such stocks, shares,
bonds and securities and all stocks, shares, rights,
money or property accruing to them or offered at any
time by way of conversion, redemption, bonus,
preference, option or otherwise in respect of them
("the Securities");
(iii) all book and other debts, revenues and claims both
present and future (including things in action which
may give rise to a debt, revenue or claim) due or
owing or which may become due or owing to or
purchased or otherwise acquired by the Borrower
(including, without limitation, all payments due to
the Borrower from the Water Authority of the Cayman
Islands under a 26 October 2001 Contract with respect
to the procurement of and operating contract for a
sea water desalination plant at Red Gate Road, Xxxxxx
Town, Grand
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Cayman) and the full benefit of all rights and
remedies relation to such book and other debts,
revenues and claims including (but not limited to)
any negotiable or non-negotiable instruments,
guarantees, indemnities, debentures, legal and
equitable charges and other security reservation of
proprietary rights, rights of tracing liens and all
other rights and remedies of any nature in respect of
such property;
(iv) the uncalled capital, goodwill and all patents,
patent applications, trade marks, trade names,
registered designs and copyrights and all licences
and ancillary and connected rights relating to the
intangible property both present and future of the
Borrower;
(v) the undertaking and all other assets of the
Borrower both present and future including (but not
limited to) the stock in trade of the Borrower and
the property described in sub-clauses 4(a)(i) to
4(a)(iv) (if and insofar as the charges on such
property or on any part or parts of such property
contained in this deed shall for any reason be
ineffective as fixed charges).
(b) The charges created by sub-clause 4(a) shall as regards the
property described in sub-clauses 4(a)(i) to 4(a)(iv) be fixed
charges and as to the property described in sub-clause
4(a)(v) shall be a first floating charge.
5. RESTRICTIONS ON THE BORROWER
(a) The Borrower covenants that it will not (without the prior
consent in writing of the Bank):
(i) sell, assign, discount, part or pledge, charge or
otherwise dispose of all or any part of the property
described in sub-clause 4(a)(iii) or deal with it
save in accordance with sub-clause 7(b)(xi); or
(ii) (except for charges in favour of the Bank created
under this deed) create or attempt to create or
permit to subsist any mortgage, debenture, charge or
pledge or permit any lien or other incumbrance (save
a lien arising by operation of law in the ordinary
course of trading) to arise on or affect all or any
of the Charged Assets; or
(iii) part with possession or transfer, sell, lease or
otherwise dispose of all or any of the Charged Assets
or attempt so to do (save in the case of assets
charged by way of floating charge only which may be
sold or otherwise disposed of in the usual course of
trading conducted at the date of this deed and for
the purpose of carrying on its business).
(b) Notwithstanding anything in this deed, if the Borrower
charges, pledges or otherwise incumbers, contrary to
sub-clause 5(a)(ii), any of the Charged Assets described in
sub-clause 4(a)(v) or attempts to do so without the prior
consent in writing of the Bank or if any creditor or other
person attempts to bring any distress, execution,
sequestration or other process against any of the Charged
Assets described in sub-clause 4(a)(v) the floating charge
created under this deed over those assets shall automatically
without notice operate as a fixed charge instantly on such
event occurring.
(c) During the continuance of this security the statutory and
other powers of leasing, letting, entering into agreements for
leases or lettings and accepting or agreeing to accept
surrenders of leases or tenancies shall not in relation to all
or any part of the Charged Assets be exercisable by the
Borrower nor shall the Borrower part with possession of all or
any part of the Charged Assets nor confer any licence, right
or interest to occupy nor grant any licence or permission to
assign, underlet or part with possession of all or any part
of the Charged Assets nor agree, suffer or permit any
variation or addition to the terms of any lease, tenancy or
licence without in every such case obtaining the prior consent
in writing of the Bank, save as permitted by sub-clause
5(a)(iii) above.
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6. EVENTS OF DEFAULT
(a) The Bank shall cease to be under any further commitment to the
Borrower and all money and liabilities secured under this deed
shall immediately become due and payable on demand and the
security shall become enforceable and if so required by the
Bank the Borrower shall immediately provide cash cover on
demand or a guarantee acceptable to the Bank for all
contingent liabilities of the Borrower to the Bank and for all
notes or bills, bonds, guarantees, indemnities and all
instruments entered into or agreed to be entered into by the
Bank for or at the request of the Borrower on the occurrence
of any of the following Events of Default:
(i) if the Borrower fails to pay any sum which may from
time to time become due to the Bank on the due date
or fails to comply with any provision or to meet any
obligation or liability contained or incorporated
herein or in any facility from or other agreement
with the Bank;
(ii) if the Borrower is in breach of any agreement,
covenant, condition or other provision, express or
implied, in or under any other agreement, deed or
document from time to time entered into between the
Borrower and the Bank (including without limitation
under the Loan Agreement or under any charge
registered in favour of the Bank over the Charged
Property pursuant to the Registered Land Law (1995
Revision) or any statutory modification or
re-enactment thereof) or any other obligation or duty
it may from time to time be under to the Bank
generally;
(iii) if any representation, warranty, certificate or
undertaking made by the Borrower to the Bank from
time to time is or becomes incorrect or misleading in
any material respect;
(iv) if the Borrower defaults or receives notice of
default under any trust deed, loan agreement,
debenture or any other agreement, deed or document or
any other obligation relating to borrowing or under
any guarantee or indemnity or if any borrowing or
other money payable under any borrowing or guarantee
or indemnity becomes or is capable of being declared
payable prior to its stated maturity or is not paid
when due or any incumbrances from time to time
created by the Borrower become enforceable;
(v) if a petition is presented or an order made or a
resolution passed or analogous proceedings are taken
for appointing an inspector of or winding up the
Borrower or for dissolution or if the Borrower is
struck off the Register of Companies or a notice is
issued convening a meeting for the purpose of passing
any such resolution (save for the purpose of and
followed by an amalgamation or reconstruction not
involving insolvency on terms previously approved in
writing by the Bank);
(vi) if an encumbrancer shall take possession or exercise
or attempt to exercise any power of sale or a
Receiver shall be appointed of the whole or any part
of the undertaking, property or assets of the
Borrower;
(vii) if any judgment or order made against the Borrower is
not complied with within seven days or if an
execution, distress, sequestration or other process
is levied or enforced upon or sued out against any
part of the undertaking, property or assets or
revenues of the Borrower;
(viii) if the Borrower fails to pay its debts as and when
they fall due or becomes or is deemed to be insolvent
or unable to pay its debts whether within the meaning
of Section 95 of the Companies Law (2001 Second
Revision) or otherwise or the Borrower proposes or
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enters into any composition or arrangement with its
creditors generally or any class of its creditors;
(ix) if the Borrower without the prior written consent of
the Bank ceases or threatens to cease to carry on its
business or any part thereof the Bank considers
material in the normal course or changes the nature
or mode of conduct of its trading in any respect
which the Bank may consider material;
(x) if the undertaking, property or assets of the
Borrower or any part thereof from time to time
considered by the Bank to be material is sold,
disposed of or compulsorily acquired (otherwise than
in the normal course of trading for the purpose of
carrying on business or on terms previously approved
in writing by the Bank) whether in a single
transaction or a number of transactions or is
nationalised, seized, forfeited or appropriated;
(xi) if any guarantee, indemnity or other security created
in favour of the Bank is in jeopardy or is not or
ceases to be in full force and effect or is voidable
or unenforceable or is disputed, revoked or
terminated or it becomes unlawful or impossible for
the Bank to exercise any right or power vested in it
under any such security and is considered by the Bank
to be material;
(xii) if any licence, authorisation, consent or
registration 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, materially modified or
fail to be granted or perfected or shall cease to
remain in full force and effect;
(xiii) if by or under the operation of any Government the
management of the Borrower or its authority in the
conduct of its business is curtailed to the point of
making it effectively inoperative by any seizure or
intervention or proceedings of any nature;
(xiv) If the Borrower makes or attempts to make any
alterations to the provisions of its Memorandum or
Articles of Association which might, in the opinion
of the Bank, affect its interests hereunder or shall
fail or neglect to comply with any or all of the
provisions of the Companies Law (2001 Second
Revision) or any statutory modification or
re-enactment thereof or any other of the laws of the
Cayman Islands in so far as the same may relate to
it;
(xv) if the Borrower shall without obtaining the prior
written consent of the Bank by its directors,
shareholders or otherwise declare and pay any
dividends or capital distributions or repay any
shareholder loans or any capital or make any capital
expenditure whatever or make any other expenditures
otherwise than in the ordinary course of business or
permit or cause to be done anything that will result
in any change in the shareholdings as constituted on
the date hereof;
(xvi) if control of the Borrower is acquired by any person
or company 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 not to
be unreasonably withheld) where "control" means the
power of any person or company or group of connected
persons to control the composition of the Board of
Directors of the Borrower or otherwise secure
(whether through the holding of shares directly or
through nominees, the possession of voting power or
by virtue of any powers conferred by the Memorandum
or Articles of Association of the Borrower or any
other document or agreement) that the affairs of the
Borrower are conducted in accordance with the wishes
of that person or company or group of connected
persons;
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(xvii) if any of the foregoing events occurs in relation to
(i) any third party which now or hereafter has
guaranteed or provided security for or given an
indemnity in respect of any money, obligation or
liability hereby secured or (ii) any subsidiary or
holding company of the Borrower or of any such third
party or (iii) any subsidiary of any such holding
company or if any individual now or hereafter liable
as such third party shall commit an act of
bankruptcy, die or become of unsound mind;
(xviii) if the Borrower shall without the prior consent in
writing of the Bank create or purport or attempt to
create any mortgage, pledge, lien, charge, assignment
or other encumbrance ranking or which by any means
may come to rank in whole or in part pari passu with
or in priority to or subordinate to any of the
charges hereby created;
(xix) if in any country in which the Borrower carries on
business or has assets any event occurs which
corresponds with or has an effect similar to any of
the foregoing events or if the Borrower becomes
subject to proceedings or an order, appointment or
filing under the insolvency laws of such country, or
(xx) if at any time the Borrower shall in good faith
determine that a material adverse change in the
financial condition of the Borrower has occurred or
that the Borrower is unlikely to be able to meet any
of its obligations hereunder.
(b) The Borrower hereby covenants immediately to notify the Bank
in writing of the occurrence of any of the Events of Default
specified in clause 6(a) or of the occurrence of any event
which with the lapse of time or giving of notice would or may
constitute an Event of Default.
7. COVENANTS BY THE BORROWER
(a) The Borrower hereby represents and warrants to the Bank that
(i) it is a duly organised corporation existing in good
standing under the Laws of the Cayman Islands, (ii) it is duly
qualified to do business wherever necessary to carry on its
present operations, (iii) the making and performance of this
Debenture is within its powers having been duly authorised by
all necessary governmental and corporate approvals and does
not contravene any law or any contractual restriction binding
on the Borrower or the Memorandum and Articles of Association
of the Borrower, (iv) this Debenture is a legal, valid and
binding obligation of the Borrower enforceable against the
Borrower in accordance with its terms, and (v) there are no
pending or threatened actions or proceedings before any court
or administrative agency which may materially adversely affect
the Borrower or its financial conditions and operations.
(b) The Borrower hereby further covenants with the Bank that
during the continuance of this security the Borrower will at
all times and as applicable immediately:
(i) notify the Bank by fax and confirm in writing of the
occurrence of any event which will or may in due
course constitute an Event of Default;
(ii) conduct and carry on its business in a proper,
efficient and business-like 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 relating to such business;
(iii) pay into such account as the Bank may direct all
money which it shall receive in respect of book or
other debts and without prejudice to the provisions
of this deed the Borrower shall not without the prior
consent of the Bank sell, factor, discount, charge or
assign any assets described in sub-clause 4(a)(iii)
or purport to do so and shall if called
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upon by the Bank from time to time execute legal
assignments of any book or other debts to the Bank;
(iv) observe and perform all covenants and stipulations
from time to time affecting its freehold or leasehold
property or the mode of user or enjoyment of such
property and not, without the prior consent in
writing of the Bank, enter into any onerous or
restrictive obligations affecting any such property
nor do or suffer or omit to be done any act, matter
or thing which would infringe any provision of any
statute, order or regulation from time to time in
force affecting any such property;
(v) observe and perform all covenants and stipulations
from time to time affecting its patents, patent
applications, trade marks, trade names, registered
designs and copyrights and all other industrial or
intangible property or any licence or ancillary or
connected rights from time to time relating to
industrial or intangible property and preserve and
maintain and renew when necessary or desirable all
such licences and rights;
(vi) use its best endeavours to enforce and, at its own
cost, institute, continue or defend all proceedings
relating to any of the Charged Assets;
(vii) keep all buildings and erections and all plant,
machinery, fixtures, fittings, vehicles, computers
and office and other equipment and every part of such
property in good and substantial repair and in good
working order and condition and not pull down or
remove or sell or otherwise dispose of any of such
property without the prior consent in writing of the
Bank except in the ordinary course of use, repair,
maintenance or improvement. If the Borrower is at any
time in default in complying with this covenant the
Bank shall be entitled but not bound to repair and
maintain such property with power for the Bank, its
agents and their respective employees to enter any of
the Borrower's property for that purpose or to
inspect that property and any sum so expended by the
Bank shall be repayable by the Borrower to the Bank
on demand together with interest at the Default Rate
from the date of payment by the Bank;
(viii) at its own expense insure and keep insured any of the
Charged Assets of an insurable nature with insurers
previously approved by the Bank in writing against
loss or damage by fire, burglary, theft, civil
commotion, explosion, aircraft, flood, xxxxx,
xxxxxxx, lightning, burst pipes and such other risks
and contingencies as the Bank shall from time to time
request to the full replacement value of such assets
from time to time including fees of architects,
surveyors, engineers and all other professional fees
and demolition charges together (in the case of
leasehold properties) with loss of rent for 3 years
in the joint names of the Borrower and the Bank or,
at the option of the Bank, in the name of the
Borrower. The interest of the Bank shall be noted on
the policy and the policy shall contain such
provisions for the protection of the Bank as the
Bank may reasonably require. The Borrower must
maintain such other insurance policies (with the
interest of the Bank noted on such policies)
containing like provisions for the protection of the
Bank as are normally maintained by prudent companies
carrying on similar businesses. The Borrower shall
pay within one week of them becoming due all premiums
and other money necessary for effecting and keeping
up such insurances and on demand produce to the Bank
the policies of such insurance and proof of such
payments failing which the Bank may take out or renew
such insurances in any sum which the Bank may think
expedient and all money expended by the Bank under
this provision shall be reimbursed by the Borrower on
demand and bear interest at the Default Rate from the
date of
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payment by the Bank up to the date of payment by the
Borrower. All money to be received by virtue of any
insurance maintained or effected by the Borrower on
the Charged Assets (whether or not in pursuance of
the obligations under this sub-clause) shall be paid
to the Bank (or if not paid by the insurers directly
to the Bank held on trust for the Bank) and shall at
the option of the Bank be applied in reduction of the
money obligations and liabilities secured under this
deed or in replacing, restoring or reinstating the
property or assets destroyed, damaged or lost (any
deficiency being made good by the Borrower);
(ix) punctually pay and indemnify the Bank and any
Receiver appointed by it against all existing and
future rent, rates, taxes, duties, charges,
assessments, impositions and outgoings (whether
imposed by agreement, statute or otherwise and
whether in the nature of capital or revenue and even
if wholly novel) now or at any time during the
continuance of this security payable in respect of
all or any part of the Charged Assets or by the owner
or occupier of those assets. If any such sums shall
be paid by the Bank or by any such Receiver then the
sums shall be repaid by the Borrower on demand with
interest at the Default Rate from the date of
payment by the Bank or any such Receiver;
(x) not (without the prior written consent of the Bank)
vary, surrender, cancel, assign, charge or otherwise
dispose of or permit to be forfeit any lease of
leasehold premises or any credit, sale, hire
purchase, rental or like agreement for any equipment
used in its business considered by the Bank to be
material and generally fulfil its obligations under
every such lease and agreement and when required,
produce to the Bank proof of all payments from time
to time due from the Borrower under such lease or
agreement;
(xi) get in and realise all book and other debts and
claims charged under this deed in the ordinary
course of its business and pay into such account as
the Bank shall from time to time direct all money
which it may receive in respect of those book and
other debts and claims immediately on receipt and
pending such payment hold such money on trust for the
Bank (provided that the Company may use the same in
the usual course of trading conducted at the date of
this deed and for the purposes of carrying on the
business) and not (without the prior consent in
writing of the Bank) charge or otherwise dispose of
or release, exchange, compound, set off or grant time
or indulgence or otherwise deal with all or any of
those book and other debts and claims or purport so
to do;
(xii) not (without the prior consent in writing of the
Bank) form or co-operate in the formation of,
purchase or acquire any new subsidiary, permit any
subsidiary to issue any share or loan capital except
to the Borrower or to a wholly-owned subsidiary of
the Borrower or transfer assets hereby charged to any
subsidiary save on terms previously approved in
writing by the Bank;
(xiii) 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 and not (without the prior consent in
writing of the Bank) incur any expenditure or
liabilities of an exceptional or unusual nature;
(xiv) deposit with the Bank, its solicitors or a nominee of
the Bank and permit the Bank, its solicitors or its
nominee during the continuance this security to hold
and retain the following:
I. all deeds and documents of title relating to
all freehold and leasehold property from
time to time belonging to the
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Borrower (and the insurance policies
relating to such property) excluding any in
respect of the Red Gate Road Plant Property
and the Lower Valley Plant Property;
II. all stock and share certificates and
documents of title relating to the
Securities and such deeds of transfer in
blank and other documents as the Bank may
from time to time require for perfecting its
title to the Securities (executed by or
signed on behalf of the registered holder)
or for vesting or enabling it to vest the
Securities in itself or its nominees or in
any purchaser;
III. all assurance policies from time to time
effected by the Borrower on the lives of key
employees; and
IV. all such documents relating to the Charged
Assets as the Bank may from time to time
require; and
(xv) not (without the prior consent in writing of the
Bank) permit any person (i) to be registered as
proprietor of any freehold or leasehold property
present or future from time to time hereby charged
nor create or permit to arise any overriding interest
affecting such property, or (ii) to become entitled
to any proprietary right or interest which might
affect the value of any land, fixtures or fixed plant
and machinery hereby charged.
8. FURTHER SECURITY
The Borrower shall at any time if and when required by the Bank execute
such further legal or other mortgages, fixed or floating charges or
assignments in favour of the Bank as the Bank shall from time to time
require over all or any of the Charged Assets both present and future
to secure all moneys, obligations and liabilities covenanted under this
deed to be paid or otherwise secured under this deed, such further
mortgages, charges or assignments to be prepared by or on behalf of the
Bank at the cost of the Borrower and to contain an immediate power of
sale without notice and such other clauses for the benefit of the Bank
as the Bank may reasonably require.
9. Powers of the Bank
At any time after the Bank shall have demanded payment or discharge of
any money, obligation or liability hereby secured, in addition to all
other powers or rights vested in it by law or otherwise, the Bank may,
without any notice except as hereinafter provided and whether or not it
shall have appointed a Receiver, enter into possession and sell all or
any of the goodwill, undertaking, assets, rights and property hereby
charged (provided that, in the case of the charge over the Charged
Assets described in clause 4(a)(v), such charge shall, prior to the
exercise of such power, operate as a fixed charge) or any part thereof
at public or private sale or in any other manner and for such
consideration and generally on such terms and conditions as the Bank
may think fit. Upon any such sale, the Bank shall have the right to
deliver, assign and transfer to each purchaser thereof such goodwill,
undertaking, assets, rights or property in the name and on behalf of
the Borrower. Each purchaser at any such sale shall hold the property
so sold absolutely free from any equity or right of redemption of the
Borrower who hereby specifically waives all rights of redemption, stay
or appraisal which the Borrower has or may have under any rule or law
or statute now existing or hereinafter adopted. The Bank shall give to
the Borrower ten days written notice of its intention to make any such
public or private sale. Such notice in case of public sale shall state
the time and place fixed for such sale and in case of private sale the
day on which such goodwill, undertaking, assets, rights and property or
that portion thereof so being sold will first be offered for sale. Any
such public sale shall be held at such time or times within ordinary
business hours and at such place as the Bank may fix in the notice of
such sale. At such sale, such goodwill, undertaking, assets, rights and
property may be sold in one lot as an entirety or in separate parcels
as the Bank may determine. The Bank shall not be obliged to make any
public or private sale and may cause the same to be adjourned from time
to time by announcement at the time and place fixed for the
- 11 -
sale and such sale may be made at any time or place to which the same
may be so adjourned. In case of any sale on credit or for future
delivery the undertaking, assets, rights and property so sold may be
retained by the Bank until the selling price is paid by each purchaser
thereof but the Bank shall incur no liability in the case of the
failure of such purchaser to take up and pay for such undertaking,
assets, rights and property so sold and in case of any such failing
such undertaking, assets, rights and property may again be sold upon
like notice. The Bank instead of exercising the power of sale herein
conferred upon it may proceed by a suit or suits at law or in equity to
foreclose this Debenture and sell all or any of the goodwill,
undertaking, property, assets and rights hereby charged or any part
thereof under a judgment or decree of a court or courts of competent
jurisdiction, the Borrower having been given due notice of all such
action.
10. APPOINTMENT AND POWERS OF RECEIVER
(a) At any time after the Bank shall have demanded payment or
discharge of any money, obligation or liability hereby secured
and the same shall not have been satisfied in full or if
requested by the Borrower, the Bank may in writing under its
common seal or under the hand of any director, officer or
manager for the time being of the Bank appoint any person to
be a Receiver of the undertaking, property, assets and rights
hereby charged or any part thereof (with power to authorise
any joint receiver to exercise any power independently of any
other joint receiver) and may remove any Receiver so appointed
and appoint another in his place. In addition to all other
powers vested in him by law or otherwise a Receiver shall have
the power on behalf and at the cost of the Borrower to do or
omit to do anything in relation to the undertaking, property
or assets charged hereby or any part thereof and in particular
(but without limitation), the following powers:-
(i) to take possession of, collect and get in and give
receipts binding on the Borrower for all or any
property, assets and rights hereby charged and to
bring, defend or discontinue any proceedings or
submit to arbitration in the name of the Borrower or
otherwise as may seem expedient;
(ii) to make calls conditionally or unconditionally on the
members of the Borrower in respect of uncalled
capital;
(iii) to carry on, manage, develop, reconstruct, amalgamate
or diversify or authorise or concur in any such
action relating to, the business of the Borrower or
any part thereof and to exercise in respect of the
Securities, all voting or other powers or rights
available to a registered holder thereof in such
manner as he may think fit and to manage and conduct
the same without being responsible for loss or damage
and for any of those purposes to raise or borrow any
money from or incur any liability to the Bank or
others on such terms with or without security as he
may think fit and so that any such security may be
or include a charge on the whole or any part of the
property hereby charged ranking in priority to this
security or otherwise;
(iv) whether forthwith or later, to sell or concur in
selling by public auction or private contract, and to
let or concur in letting and to accept surrenders,
grant licences or otherwise dispose of or deal with
all or any of the goodwill, undertaking, assets,
rights and property hereby charged in such manner and
for such consideration and generally on such termS
and conditions as the Receiver may think fit with
full power to convey or otherwise transfer such
goodwill, undertaking, assets, rights or property in
the name and on behalf of the Borrower or other the
estate owner and any such sale may be for cash,
debentures or other obligations, shares, stocks or
other valuable consideration and may be payable in a
lump sum immediately or by instalments spread over
such period as the Receiver shall think fit and so
that any consideration received in a form other than
cash shall ipso facto forthwith on receipt be and
become charged with the payment
- 12 -
of all moneys, obligations and liabilities secured
hereby. Plant, machinery and other fixtures may be
severed and sold separately from the premises
containing them without the consent of the Borrower
being obtained thereto;
(v) to make any arrangements or compromise, allow time
for payment or enter into, abandon, cancel or
disregard any contracts which he shall think
expedient in the interests of the Bank;
(vi) to make and effect all repairs, improvements and
renew such of the plant, machinery, chattels and
property of the Borrower as he shall think fit and
maintain, renew, take out or increase insurances;
(vii) to promote the formation of companies with a view to
the same purchasing, leasing, licensing or otherwise
acquiring all or any of the goodwill, undertaking,
property, assets or rights of the Borrower or
otherwise;
(viii) without any further consent by or notice to the
Borrower, exercise on behalf of the Borrower all the
powers, rights and provisions conferred on a landlord
or a tenant at law or under any lease, sub-lease or
other contract or agreement to which the Borrower is
a party relating to rents or otherwise in respect of
any part of the property hereby charged but without
any obligation to exercise any of such powers and
without any liability in respect of powers so
exercised or omitted to be exercised;
(ix) to appoint managers, accountants, lawyers, agents,
officers, servants and workmen for any of the
aforesaid purposes at such salaries or remuneration
and for such periods and upon such terms as he or
they may determine; and
(x) to sign any document, execute any deed and do all
such other acts and things as may be considered to be
incidental or conducive to any of the matters and
powers aforesaid and which he may and can lawfully do
as agent for the Borrower.
(b) All money received by such Receiver or by the Bank in the
exercise of any powers conferred by this Debenture shall be
applied after the discharge of any taxes or the remuneration
and expenses of such Receiver and all liabilities having
priority thereto in or towards satisfaction of such of the
moneys, obligations and liabilities hereby secured and in such
order as the Bank in its absolute discretion may from time to
time conclusively determine.
(c) A Receiver appointed by the Bank shall be the agent of the
Borrower and the Borrower shall alone be solely responsible
and liable for his acts, defaults or remuneration.
(d) Neither the Bank nor any Receiver shall be liable to account
as mortgagee in possession in respect of all or any of the
property charged hereby nor be liable for any loss upon
realisation or for any neglect or default or omission of any
nature whatsoever for which a mortgagee in possession might be
liable.
(e) No purchaser, chargor or chargee or other person or company
dealing with the Bank or with any Receiver appointed by it or
with its or his, attorneys or agents shall be bound or
concerned to see or enquire whether the powers exercised or
purported to be exercised have become exercisable or whether
any money remains due actually or contingently on the security
of this Debenture or as to the necessity or expediency of the
stipulations and conditions subject to which any sale shall
have been made or otherwise as to the propriety or regularity
of such sale, calling in, collection or conversion or to see
to the application of any money paid to the Bank and in the
absence of mala fides on the part of such purchaser,
mortgagor, mortgagee or other
- 13 -
person or company such dealing shall be deemed so far as
regards the safety and protection of such purchaser, chargor,
chargee person or company to be within the powers hereby
conferred and to be valid and effectual accordingly.
(f) The Borrower hereby covenants with the Bank on demand to pay
all costs, charges and expenses incurred by the Bank or by any
Receiver appointed by it in the exercise of any powers
conferred by this Debenture or which they or he shall properly
incur in or about the preservation or attempted preservation
of this security or of the goodwill, undertaking, property,
assets and rights hereby charged with interest at the highest
rate payable by the Borrower to the Bank.
11. POWER OF ATTORNEY
The Borrower by way of security hereby irrevocably appoints the Bank
and the persons deriving title under it and any Receiver appointed
hereunder jointly and also severally to be its attorney to execute and
complete in favour of the Bank or its nominees or of any purchaser any
documents which the Bank may require for perfecting its title to or for
vesting the Securities or any property, assets or rights hereby charged
or agreed to be charged in the Bank or its nominees or in any purchaser
and otherwise generally for it and in its name and on its behalf and as
its act and deed or otherwise to execute, seal and deliver and
otherwise perfect and do any such legal or other mortgage, charge or
assignment as aforesaid and all such deeds, assurances, agreements,
instruments, acts and things which may be required for the full
exercise of all or any of the powers hereby conferred or which may be
deemed proper on or in connection with any sale or other disposition
thereof or any of the purposes aforesaid. The Borrower hereby ratifies
and confIrms and agrees to ratify and confirm any instrument, act or
thing which any such attorney may execute or do.
12. CONTINUING SECURITY
(a) This security shall be a continuing security notwithstanding
any settlement of account or other matter whatsoever and is in
addition to and shall not merge or otherwise prejudice or
affect any other right or remedy of the Bank or the security
created by any deposit of documents or any guarantee, lien,
pledge, xxxx, note, mortgage or other security now or
hereafter held by or available to the Bank and shall not be in
any way prejudiced or affected thereby or by the invalidity
thereof or by the Bank now or hereafter dealing with,
exchanging, releasing, modifying or abstaining from,
perfecting or enforcing any of the same or any rights which it
may now or hereafter have or giving time for payment or
indulgence or compounding with any other person liable.
(b) It shall be lawful for but not obligatory on the Bank to
advance and pay all sums of money necessary for the purpose of
remedying any breach or breaches of covenants or obligations
whether imposed on the Borrower under the provisions of this
Debenture or any collateral or additional charges or
securities hereto or implied by law and all monies so paid and
all costs and expenses incurred by the Bank in relation to any
payment or act by or on behalf of the Bank shall be repayable
on demand and in addition to the other monies hereby secured
and shall bear interest at the Default Rate.
13. CURRENCY
(a) All moneys received or held by the Bank or by a Receiver under
this Debenture may from time to time after demand has been
made by the Bank be converted into such other currency as the
Bank considers necessary or desirable to cover the obligations
and liabilities (actual or contingent) of the Borrower in that
other currency at the then prevailing spot rate of exchange of
the Bank (as conclusively determined by the Bank) for
purchasing that other currency with the existing currency.
(b) Neither the Bank nor any Receiver shall be liable to the
Borrower for any loss resulting from any fluctuation in
exchange rates before or after the exercise of any of the
powers under this Debenture.
- 14 -
(c) No payment to the Bank (whether under any judgment or court
order or otherwise) shall discharge the obligation or
liability of the Borrower in respect of which it was made
unless and until the Bank shall have received payment in full
in the currency in which such obligation or liability was
incurred and to the extent that the amount of any such payment
shall on actual conversion into such currency fall short of
such obligation or liability (actual or contingent) expressed
in that currency, the Bank shall have a further separate cause
of action against the Borrower and shall be entitled to
enforce the charges hereby created to recover the amount of
the shortfall.
14. INDEMNITY
The Borrower hereby agrees to indemnify both the Bank and any Receiver
against all losses, actions, claims, expenses, demands and liabilities
whether in contract, tort, equity or otherwise now or hereafter
incurred by it or him or by any manager, officer, director or employee
for whose liability, act or omission it or he may be answerable,
responsible or liable for anything done or omitted in tile exercise or
purported exercise of the powers herein contained or occasioned by any
breach by the Borrower or any of its covenants or other obligations to
the Bank. The Borrower shall so indemnify the Bank and any such
Receiver on demand and shall pay interest on the sums demanded at the
Default Rate.
15. MISCELLANEOUS
(a) Any statutory or other powers of granting or agreeing to grant
or of accepting or agreeing to accept surrenders of leases or
tenancies of the property hereby charged or any part thereof
shall not during the continuance of this security be capable
of being exercised by the Borrower without the prior written
consent of the Bank.
(b) No neglect, omission or forbearance on the part of the Bank to
take advantage of or enforce any right or remedy arising out
of any breach or non-observance or any covenant or condition
herein or in any collateral or additional charges or
securities hereto contained or implied shall be deemed to be
or operate as a general waiver of such covenant or condition
or the right to enforce or take advantage of the same in
respect of any breach or non-observance thereof either
original or recurring.
(c) Each of the provisions of this Debenture is severable and
distinct from the others and if at any time one or more of
such provisions is or becomes invalid, illegal or
unenforceable, the validity, legality and unenforceability of
the remaining provisions hereof shall not in any way be
affected or impaired thereby.
(d) Any demand or notice hereunder may, without prejudice to any
other effective mode of making the same, be deemed to have
been properly and effectively made, given and served to and on
the Borrower at any time by a letter sent to them by
registered post addressed to its registered office and signed
by the Bank or any manager, officer, director, secretary,
attorney, agent or lawyer on its behalf and every such demand
or notice posted in the Cayman Islands shall be deemed to have
been given and served 7 days following the posting thereof.
Any such notice or demand or any certificate as to the amount
at any time secured hereby shall be conclusive and binding
upon the Borrower if signed by an officer of the Bank.
(e) This Debenture shall, at the Borrower's expense, be impressed
in the first instance with the stamp duty due under the Stamp
Duty Law (2001 Revision) as amended as at the date hereof) to
cover the Principal Sum of US$2,400,000.00 secured hereby but
the Bank shall be at liberty and is hereby empowered at any
time or times hereafter (without any further licence or
consent on the part of the Borrower) to impress additional
stamp duty hereon or on any collateral or additional charges
or securities hereto at the Borrower's own cost and expense to
cover any sum or sums by which the Borrower's indebtedness to
the Bank may exceed the said amount and in the event of such
upstamping as aforesaid the Borrower hereby covenants and
agrees with the Bank that this Debenture and the property
hereby charged
- 15 -
and the properties comprised in any collateral or additional
charges or securities hereto shall stand security for such
additional sum or sums and be charged with the payment thereof
and all other monies including interest due hereunder.
16. GOVERNING LAW
This Debenture shall be governed and construed solely according to the
laws of the Cayman Islands and the parties hereby submit to the
non-exclusive jurisdiction of the Courts of the Cayman Islands.
- 16 -
IN WITNESS WHEREOF the parties hereto have caused this Debenture to be executed
as a Deed the day and the year first above written.
EXECUTED AS A DEED by )
OCEAN CONVERSION ) /s/ [ILLEGIBLE]
(CAYMAN) LIMITED in the ) -------------------------
presence of:- ) Director
)
/s/ [ILLEGIBLE] ) /s/ [ILLEGIBLE] for XXXXXXXX SECRETARIES LIMI
----------------------------- ) --------------------------
Witness Assistant Secretary
EXECUTED AS A DEED by The )
Bank of N.T. Xxxxxxxxxxx & ) /s/ [ILLEGIBLE]
Son Ltd. ) --------------------------
in the presence of:- ) Director Officer
)
/s/ [ILLEGIBLE] ) __________________________
------------------------------ ) Director/Secretary
Witness )
[SEAL]
- 17 -
I, Xxxx Xxxx of Campbells, 0xx Xxxxx, Xxxxxxxxxx Xxxxxxxx, X.X. Xxx 000XX,
Xxxxxx Town, Grand Cayman, make oath and say:-
1. That the foregoing Debenture bearing the date 29th day of May, 2002
between Ocean Conversion (Cayman) Limited ("the Borrower") of the one
part and The Bank of N. T. Xxxxxxxxxxx & Son Ltd. of the other part
was executed by the Borrower on the 11th day of April 2002.
2. I was present and did see Xxxxxxx X. Xxxxxxx a duly authorised Director
and Xxxxxxx Xxxxxxx for and on behalf of Xxxxxxxx Secretaries Limited
the duly authorised Assistant Secretary of the Borrower execute the
said Debenture as a deed for the purposes therein mentioned on the 11th
day of April 2002 between the hours of 4.00 p.m. and 4.30 p.m. in the
afternoon at Xxxxxx Town, Grand Cayman, Cayman Islands.
3. The Borrower is a company formed under the Companies Law of the Cayman
Islands with registered office situate at Xxxxxxxx Corporate Services
Ltd., X.X. Xxx 000 GT, Scotiabank Building, Xxxxxx Town, Grand Cayman,
Cayman Islands.
4. That the name subscribed as a witness attesting to tile due execution
of the said Debenture by the Borrower is of the proper handwriting of
me this deponent and I reside at No. 13 Pirates Lair, South Sound,
Grand Cayman, Cayman Islands and I am an attorney-at-law.
_______________________________
Witness
SWORN at Xxxxxx Town, Grand Cayman, Cayman Islands this 29th day of May 2002
before me.
_____________________________________
NOTARY PUBLIC - CAYMAN ISLANDS
