Exhibit 10.4

 

EXECUTION VERSION

 

11 February 2005

 

DEBENTURE

 

between

 

CONSTAR INTERNATIONAL U.K. LIMITED

as Chargor

 

and

 

CITIBANK, N.A., LONDON BRANCH

as Security Trustee

 

This Debenture is entered into subject to and with the benefit of the terms of a
Security Trust

Deed (as defined herein)

 

WEIL, GOTSHAL & MANGES

 

ONE SOUTH PLACE LONDON EC2M 2WG

020 7903 1000

WWW.WEIL.COM

 

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TABLE OF CONTENTS

 

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1    INTERPRETATION    1 2    COVENANT TO PAY    4 3    CREATION OF FIXED
SECURITY    4 4    ASSIGNMENTS    7 5    FLOATING CHARGE    8 6    CONTINUING
SECURITY    9 7    REPRESENTATIONS AND WARRANTIES    12 8    UNDERTAKINGS OF
CHARGOR    14 9    PROVISIONS RELATING TO SHARES    17 10    ACCOUNT BANK    19
11    ENFORCEMENT OF SECURITY    20 12    RECEIVER    21 14    POWER OF ATTORNEY
   24 15    DELEGATION    24 16    NO LIABILITY AS MORTGAGEE IN POSSESSION    24
17    PROTECTION OF THIRD PARTIES    25 18    STAMP DUTIES    25 19   
ADDITIONAL PROVISIONS    25 20    REMEDIES AND WAIVERS    26 21    NOTICES    26
22    COSTS AND EXPENSES    27 23    CURRENCY OF ACCOUNT    27 24   
ASSIGNMENTS, ETC.    28 25    SET-OFF    28 26    COVENANT TO RELEASE    28 27
   GOVERNING LAW    29 28    JURISDICTION OF ENGLISH COURTS    29 29   
COUNTERPARTS AND EFFECTIVENESS    29 SCHEDULE 1 PART I INTELLECTUAL PROPERTY
RIGHTS    30

 

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TABLE OF CONTENTS

 

(continued)

 

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SCHEDULE 1 PART II CHARGED SHARES

   31

SCHEDULE 2 NOTICE OF ASSIGNMENT OF INSURANCES PART I FORM OF NOTICE OF
ASSIGNMENT OF INSURANCES

   32

SCHEDULE 2 NOTICE OF ASSIGNMENT OF INSURANCES PART II FORM OF ACKNOWLEDGEMENT OF
ASSIGNMENT OF INSURANCES

   34

SCHEDULE 3 NOTICE TO ACCOUNT BANK PART I FORM OF NOTICE OF CHARGE OVER BANK
ACCOUNTS

   35

SCHEDULE 3 NOTICE TO ACCOUNT BANK PART II FORM OF ACKNOWLEDGEMENT OF CHARGE OVER
BANK ACCOUNTS

   37

SCHEDULE 4 NOTICE OF ASSIGNMENT OF MATERIAL CONTRACT PART I FORM OF NOTICE OF
ASSIGNMENT

   39

SCHEDULE 4 NOTICE OF ASSIGNMENT OF MATERIAL CONTRACT PART II FORM OF
ACKNOWLEDGEMENT OF ASSIGNMENT OF MATERIAL CONTRACTS

   41

SIGNATORIES

   42

 

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THIS DEBENTURE (this “Debenture”) is made as a deed on the 11th day of February
2005

 

BETWEEN:

 

(1) CONSTAR INTERNATIONAL U.K. LIMITED, a company incorporated under the laws of
England and Wales with registered number 02407933 (the “Chargor”); and

 

(2) CITIBANK, N.A., LONDON BRANCH, acting as trustee for the Secured Parties
pursuant to the terms of the Security Trust Deed (together with its successors
and assigns, the “Security Trustee”).

 

WHEREAS:

 

(A) The Secured Parties have entered into the Facility Agreement pursuant to
which Loans and other financial accommodations will be made available to the
Borrower subject to certain conditions, one of which is that the Chargor enter
into this Debenture.

 

(B) The Sole Director of the Chargor is satisfied that the Chargor will receive
direct and indirect economic benefits from the loans and other extensions of
credit under the Facility Agreement and that entering into the Guaranty and this
Debenture is for the purposes and to the benefit of the Chargor and its
business.

 

(C) The Security Trustee and the Chargor intend this Debenture to, and it shall,
take effect as a deed.

 

(D) The Security Trustee is holding the benefit of this Debenture on trust for
the Secured Parties in accordance with the terms of the Security Trust Deed.

 

1 INTERPRETATION

 

1.1 Definitions In this Debenture the following terms have the meanings given to
them in this Clause 1.1, except where the context otherwise requires.

 

“Account Bank” means such bank or financial institution with which the Security
Accounts are from time to time maintained pursuant to Clause 10 (Account Bank).

 

“Charged Assets” means all the assets, rights and property of the Chargor which
are the subject of any security constituted or intended to be constituted by
this Debenture.

 

“Collateral Account” means each account maintained from time to time by the
Chargor for the purposes of Clause 8.5(a) (Book Debts and Receipts) at such
branch of the Account Bank as the Security Trustee may from time to time approve
(acting reasonably).

 

“Default Interest” is the rate of interest as set out in Section 2.10(c)
(Default Interest) of the Facility Agreement.

 

“Excluded Property” has the meaning given to it in Clause 3.2 (Material
Contracts Containing Prohibition on Charging).

 

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“Facility Agreement” means the credit agreement dated on or about the date
hereof among the Borrower, the original lenders and issuers party thereto and
Citicorp USA, Inc. as agent for the lenders and issuers party thereto.

 

“Financial Collateral Assets” means the Shares, the Related Rights, the Security
Collateral and all moneys standing from time to time to the credit of each
Security Account in each case mortgaged or charged under this Debenture.

 

“Financial Collateral Regulations” means the Financial Collateral Arrangements
(No. 2) Regulations 2003 (SI 2003 No. 3226).

 

“First Mortgage Collateral” has the meaning given to it in the Intercreditor
Agreement.

 

“Floating Charge Assets” has the meaning given to it in Clause 5.1 (Creation of
Floating Charge).

 

“Insurances” means all contracts and policies of insurance (including, for the
avoidance of doubt, all cover notes) of whatever nature which are, from time to
time, taken out by or on behalf of the Chargor or (to the extent of such
interest) in which the Chargor has an interest (and including key man policies)
other than those directly relating to the First Mortgage Collateral.

 

“Intellectual Property Rights” means all know-how, patents, trade marks, service
marks, designs, utility models, business names, domain names, topographical or
similar rights, copyrights (including rights in computer software), moral
rights, inventions, confidential information and other intellectual property
monopoly rights and all interests (including by way of licence) subsisting
anywhere in the world in any of the foregoing (in each case whether registered
or not and including all applications for the same) other than those directly
relating to the First Mortgage Collateral.

 

“Issuer” means each company listed in Part II (Charged Shares) of Schedule 1
hereto.

 

“Material Contracts” means:

 

(a) the Sale and Purchase Agreement dated 1 December 2004 between the Chargor
and Britvic Soft Drinks Limited in relation to the Britvic Huddersfield plant;

 

(b) the Sale and Purchase Agreement dated 1 December 2004 between the Chargor
and Britvic Soft Drinks Limited in relation to the Britvic Rugby plant;

 

(c) the Supply Agreement dated 27 February 2002 between Coca-Cola Enterprises
Limited and the Chargor;

 

(d) the Supplemental Letter Agreement dated 7 December 2001 between Cott
Beverages Limited and the Chargor to the Asset Sale Agreement, Supply Agreement
and Marketing Support Agreement; and

 

(e) Sale and Purchase Letter Agreement dated 13 October 2004 between Coca-Cola
Enterprises Limited, the Chargor and Constar International Holland (Plastics)
B.V.

 

and any other agreement that the Security Trustee in its good faith judgment
deems to be material.

 

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“Realisations Accounts” means each account maintained from time to time by the
Security Trustee for the purposes of Clause 11.5 (Contingencies) at such branch
of the Account Bank as the Security Trustee may from time to time approve.

 

“Receiver” means a receiver and manager or other receiver, in either case,
appointed pursuant to this Debenture.

 

“Related Rights” means:

 

(a) any dividend or interest paid or payable in relation to any of the Shares;

 

(b) any stock, shares, securities, rights, moneys or property accruing or
offered at any time, (whether by way of redemption, substitution, exchange,
bonus or preference, under option rights or otherwise) to or in respect of any
of the Shares or in substitution or exchange for or otherwise derived from any
of the Shares; and

 

(c) any dividend, interest or other income in respect of any asset referred to
in paragraph (b) above.

 

“Secured Obligations” has the meaning set out in the Facility Agreement,
PROVIDED THAT no obligation or liability shall be included in the definition of
“Secured Obligations” to the extent that, if it were so included, this Debenture
(or any part thereof) would constitute unlawful financial assistance within the
meaning of Sections 151 and 152 of the Companies Act 1985.

 

“Security Accounts” means the Collateral Accounts and the Realisations Accounts.

 

“Security Collateral” has the meaning set out in Clause 3.1(a)(iii)(Fixed
Charges).

 

“Security Period” means the period beginning on the date of this Debenture and
ending on the date upon which the Security Trustee is satisfied that:

 

(a) no Secured Party is under any commitment, obligation or liability (whether
actual or contingent) to make Loans or provide other financial accommodation to
the Borrower under any of the Loan Documents; and

 

(b) all the Secured Obligations have been unconditionally and irrevocably paid
and discharged in full in cash or the security interests contemplated to be
created hereby have been unconditionally and irrevocably released and discharged
in full.

 

“Security Trust Deed” means the security trust deed dated on or about the date
hereof between, inter alios, the Security Trustee, the Lenders named therein
from time to time and the Chargor.

 

“Shares” means the shares (if any) specified in Part II (Charged Shares) of
Schedule 1 hereto.

 

1.2 Interpretation

 

(a)

Unless expressly defined in this Debenture, capitalised terms defined in the
Facility Agreement or in the Security Trust Deed have the same meanings in this
Debenture and the construction rules set out in Section 1.5 (Certain Terms) of
the Facility

 

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Agreement shall apply to this Debenture as though they were set out in full in
this Debenture except that references to “this Agreement” shall be construed as
references to this Debenture.

 

(b) The terms of the other Loan Documents and of any side letters between the
parties hereto in relation to the Loan Documents are incorporated into this
Debenture to the extent required for any purported disposition of the Charged
Assets to be a valid disposition in accordance with Section 2(1) of the Law of
Property (Miscellaneous Provisions) Act 1989.

 

1.3 Certificates A certificate of the Security Trustee or any Secured Party
setting forth the amount of any Secured Obligation due from the Chargor shall be
prima facie evidence of such amount in the absence of manifest error.

 

1.4 Third Party Rights A person who is not a party to this Debenture has no
rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any
term of this Debenture.

 

2 COVENANT TO PAY

 

2.1 Covenant to Pay The Chargor, as primary obligor and not merely as surety,
hereby undertakes to the Security Trustee that it will pay or discharge each of
the Secured Obligations when due and payable in the manner provided for in the
Loan Documents.

 

2.2 Default Interest The Chargor agrees to pay Default Interest on any amount
not paid when due under this Debenture (after as well as before judgment) from
the due date until the date such amount is unconditionally and irrevocably paid
and discharged in full.

 

2.3 Covenant to Make Facility Available For the purposes of Section 94(1)(c) of
the Law of Property Act 1925, each Lender and Issuer, by the Security Trustee’s
execution of this Debenture, hereby covenants with and undertakes to the
Chargor, to the intent that each such covenant and undertaking shall be binding
on each Lender and Issuer severally in accordance with Article II (The Facility)
of the Facility Agreement as if the same applied to this Clause 2.3 mutatis
mutandis, that each Lender will perform its obligations under the Facility
Agreement to make the Facility available to the Borrower on and conditional to
the terms set forth in the Facility Agreement.

 

3 CREATION OF FIXED SECURITY

 

3.1 Fixed Charges The Chargor, as continuing security for the payment, discharge
and performance of all the Secured Obligations, hereby charges and agrees to
charge in favour of the Security Trustee with full title guarantee in accordance
with the Law of Property (Miscellaneous Provisions) Act 1994:

 

(a) by way of first fixed charge:

 

  (i)

all of the Chargor’s present and future book and other debts, and all other
moneys due and owing to the Chargor or which may become due and owing to it at
any time in the future and the benefit of all rights, securities and guarantees
of any nature whatsoever now or at any time enjoyed or held by it in relation to
any of the foregoing including, in each case, the proceeds of the same, all
liens, reservations of title, rights of tracing and other rights enabling the
Chargor to enforce such debts provided that without prejudice to any other

 

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provision of this Clause 3 (including paragraph (a)(ii) hereof) such proceeds
shall be released automatically from the fixed charge effected by this paragraph
(i) upon these proceeds being credited to any Realisations Account;

 

  (ii) all moneys (including interest) from time to time standing to the credit
of each of the Chargor’s present and future accounts (including each Security
Account) with any bank, financial institution or other person in any
jurisdiction and all rights in relation thereto and the debts represented
thereby provided that without prejudice to any other provision of this Clause 3,
any monies paid out of such accounts without breaching the terms of any Loan
Document and not paid into another such account in the name of the Chargor shall
be released from the fixed charge hereby effected upon the proceeds so being
paid out;

 

  (iii) its present and future interest in all stocks, shares, debentures,
notes, bonds, warrants, coupons or other securities and investments now or in
the future owned by the Chargor from time to time together with all Related
Rights accruing thereto not charged pursuant to Clause 3.3 (Charge on Shares)
(the “Security Collateral”);

 

  (iv) to the extent not effectively assigned under Clause 4.1 (Assignments) all
rights, interests and benefits to and in respect of the Insurances and all
claims (and proceeds thereof) and returns of premiums in respect thereof to
which the Chargor is now or may at any future time become entitled;

 

  (v) (to the extent that the same do not fall within any other sub-paragraph of
this paragraph (a) and are not effectively assigned under Clause 4.1
(Assignments)) all of the Company’s rights and benefits under all Material
Contracts;

 

  (vi) any beneficial interest, claim or entitlement of the Chargor to any
assets in any pension fund;

 

  (vii) the Chargor’s present and future goodwill (including all brand names not
otherwise subject to a fixed charge under this Debenture);

 

  (viii) the benefit of all present and future licences, consents and
authorisations (statutory or otherwise) held in connection with the Chargor’s
business or the use of any of the Charged Assets other than those directly
relating to the First Mortgage Collateral and the right to recover and receive
all compensation which may at any time become payable to it in respect thereof;

 

  (ix) the Chargor’s present and future uncalled capital; and

 

  (x)

all the Chargor’s present and future Intellectual Property Rights (including the
Intellectual Property Rights, if any, specified in Part I of Schedule 1
(Intellectual Property Rights)), subject to any necessary third party’s consent
to such charge being obtained. To the extent that any such Intellectual Property
Rights are not capable of being charged (whether by reason of lack of any such
consent as aforesaid or otherwise) and, if the same is required, pending the
grant of any such consent as aforesaid or otherwise the charge thereof purported
to be effected by this sub-paragraph (xi) shall operate as an

 

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assignment of any and all damages, compensation, remuneration, profit, rent or
income which the Chargor may derive therefrom or be awarded or entitled to in
respect thereof, as continuing security for the payment, discharge and
performance of the Secured Obligations.

 

3.2 Material Contracts Containing Prohibition on Charging

 

(a) Until the relevant consent has been obtained, there shall be excluded from
the charge created by Clause 3.1 (Fixed Charges) without prejudice to Clause 4.2
(Non-Assignable Material Contracts), any Material Contract which by its terms
either precludes absolutely the Chargor from creating any charge over such
Material Contract or requires the consent of any third party prior to the
creation of such Charge, and such consent has not previously been obtained (each
an “Excluded Property”).

 

(b) With regard to each Excluded Property the Chargor undertakes to (i) (A)
provide the Security Trustee with a list of all consents needed as soon as
practicable after the date hereof and (B) make an application for the consent of
the relevant third party to the creation of the charge contained in Clause 3.1
(Fixed Charges) or to be created pursuant to Clause 8.8 (Maintenance of
Property) or Clause 13 (Further Assurances) within 14 days of the date hereof,
or if later within 14 days of the date on which the obligation to create such
charge arises, and (ii) use all reasonable endeavours to obtain such consent as
soon as possible and keep the Security Trustee informed of the progress of the
Chargor’s negotiations with each such third party.

 

(c) Forthwith, upon receipt of the relevant third party’s consent as aforesaid,
the relevant Excluded Property shall thereupon stand charged to the Security
Trustee pursuant to the terms of Clause 3.1 (Fixed Charges) above. If required
by the Security Trustee at any time following receipt of such consent, the
Chargor will execute a valid charge or assignment in such form as the Security
Trustee shall reasonably require.

 

3.3 Charge on Shares The Chargor, as continuing security for the payment,
discharge and performance of all the Secured Obligations, hereby with full title
guarantee:

 

(a) mortgages and charges and agrees to mortgage and charge to the Security
Trustee the Shares held now or in the future by it and/or any nominee on its
behalf, by way of first legal mortgage; and

 

(b) mortgages and charges and agrees to mortgage and charge to the Security
Trustee the Related Rights held now or in the future by it and/or any nominee on
its behalf, by way of first legal mortgage; and

 

(c) (to the extent they are not effectively mortgaged or charged pursuant to
paragraph (a) or (b) above), charges the Shares and the Related Rights held now
or in the future by it and/or any nominee on its behalf, by way of first fixed
charge,

 

PROVIDED THAT:

 

  (i)

whilst no Event of Default has occurred which is continuing, the Chargor shall
be entitled (notwithstanding the security contemplated to be created hereby) to

 

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receive all dividends, interest and income from and any property accruing or in
respect of the Charged Assets; and

 

  (ii) whilst no Event of Default has occurred which is continuing, the Chargor
shall be entitled (notwithstanding the security contemplated to be created
hereby) to exercise, any voting or other rights attached to any of the Charged
Assets, provided that it shall not exercise any voting rights in a manner which
would prejudice the security created under this Debenture.

 

3.4 Financial Collateral The parties agree and acknowledge that:

 

(a) the Financial Collateral Assets constitute financial collateral, and

 

(b) this Debenture and the obligations of the Chargor under this Debenture are a
security financial collateral arrangement,

 

(in each case) for the purposes of the Financial Collateral Regulations.

 

4 ASSIGNMENTS

 

4.1 Assignments Subject to Clause 4.2 (Non-Assignable Material Contracts), the
Chargor hereby assigns and agrees to assign to the Security Trustee, with full
title guarantee in accordance with the Law of Property (Miscellaneous
Provisions) Act 1994 and as continuing security for the payment, discharge and
performance of all Secured Obligations:

 

(a) all of its rights, title, interests (if any) to all proceeds of the
Insurances received by the Chargor; and

 

(b) (to the extent the same do not fall within any other provision of this
Clause 4 or within the definition of Excluded Property) all of its rights,
title, interest and benefits under the Material Contracts, any letters of credit
issued in its favour and all bills of exchange and other negotiable instruments
held by it,

 

in each case, together with the benefit of all powers and remedies for enforcing
the same.

 

4.2 Non-Assignable Material Contracts To the extent that any such right, title
and interest described in Clause 4.1(b) (Assignments) is not assignable or
capable of assignment:

 

(a) the assignment purported to be effected by Clause 4.1(b) (Assignments) shall
operate as an assignment of any and all damages, compensation, remuneration,
profit, rent or income which the Chargor may derive therefrom or be awarded or
entitled to in respect thereof, with full title guarantee as continuing security
for the payment, discharge and performance of the Secured Obligations; and

 

(b) the Chargor shall hold the benefit of any such right, title and interest on
trust for the Security Trustee.

 

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4.3 Insurances and Material Contracts Whilst no Event of Default has occurred
which is continuing (and subject always to the terms of the Facility Agreement):

 

(a) the Chargor may exercise its rights under the Insurances and the Material
Contracts, provided that the exercise of those rights in the manner proposed
would not result in a Default; and

 

(b) any payments received by the Chargor under or in respect of the Material
Contracts shall be paid by the Chargor into a Collateral Account and be subject
to the provisions of Clause 8.5 (Book Debts and Receipts) pending application in
accordance with the terms of this Debenture.

 

5 FLOATING CHARGE

 

5.1 Creation of Floating Charge The Chargor, as owner with full title guarantee
in accordance with the Law of Property (Miscellaneous Provisions) Act 1994 and
by way of a first floating charge, charges in favour of the Security Trustee (as
trustee for the Secured Parties) as continuing security for the payment,
discharge and performance of the Secured Obligations, all its undertaking,
property, assets and rights (for the avoidance of doubt including, without
limitation, all inventory, work in progress, raw materials, investment property
and instruments) whatsoever and wheresoever both present and future to the
extent such assets have not otherwise been validly and effectively mortgaged or
charged pursuant to Clause 3 (Creation of Fixed Security) or Clause 4
(Assignments) (the “Floating Charge Assets”) provided that such Floating Charge
Assets shall not include any First Mortgage Collateral.

 

5.2 Conversion of Floating Charge

 

(a) Notwithstanding anything expressed or implied in this Debenture, the
Security Trustee may, by notice to the Security Trustee, convert the floating
charge created by Clause 5.1 (Creation of Floating Charge) with immediate effect
into a fixed charge as regards all or any of the Floating Charge Assets
specified in such notice if:

 

  (i) an Event of Default has occurred and is continuing;

 

  (ii) the Chargor creates or attempts to create any Lien over all or any of the
Floating Charge Assets save as permitted by the Facility Agreement;

 

  (iii) the Security Trustee considers such Floating Charge Assets to be in
danger of being seized or sold under or pursuant to any form of distress,
attachment, execution or other legal process or otherwise to be in jeopardy;

 

  (iv) the Security Trustee becomes aware or has reason to believe that bona
fide and non-vexatious steps have been or are being taken which, in the opinion
of the Security Trustee, are reasonably likely to lead to the making of an
application to appoint an administrator in relation to the Chargor (or such
administrator has been appointed) or the making of a petition to wind up the
Chargor or that any application has been made or any petition has been
presented, which in the reasonable opinion of the Security Trustee is reasonably
likely to result in the winding up of the Chargor or the appointment of such
administrator; or

 

  (v)

the Chargor fails to comply, or takes or threatens to take any action which in
the reasonable opinion of the Security Trustee is likely to result in the
Chargor

 

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failing to comply with its obligations under Clause 8.4 (Restrictions on
Dealing).

 

(b) The floating charge hereby created may not be converted into a fixed charge
solely by reason of:

 

  (i) the obtaining of a moratorium; or

 

  (ii) anything done with a view to obtaining a moratorium,

 

under the Insolvency Act 2000.

 

(c) The floating charge created by Clause 5.1 (Creation of Floating Charge)
shall (in addition to the circumstances in which the same will occur under
general law) automatically be converted into a fixed charge:

 

  (i) if an administrator is appointed or the Security Trustee receives notice
of an intention to appoint an administrator; or

 

  (ii) upon the convening of any meeting of the members of the Chargor to
consider a resolution to voluntarily wind up the Chargor (or not to wind up the
Chargor); or

 

  (iii) upon the presentation of a petition to compulsorily wind up the Chargor
(save for a petition which is frivolous, vexatious or an abuse of process which
is dismissed within 14 days); or

 

  (iv) if there occurs in relation to the Chargor or any of its assets in any
country or territory in which it is incorporated or carries on business or to
the jurisdiction of whose courts it or any of its assets is subject any event
which corresponds in that country or territory with any of those mentioned in
paragraphs (i) to (iii) (inclusive) of this Clause 5.2(c); or

 

  (v) if the Chargor fails to comply with its obligations under Clause 8.4
(Restrictions on Dealing).

 

(d) Service by the Security Trustee of a notice pursuant to Clause 5.2(a)
(Conversion of Floating Charge) in relation to any of the Floating Charge Assets
shall not be construed as a waiver or abandonment of the Security Trustee’s
rights to serve similar notices in respect of any other of the Floating Charge
Assets or of any other of the rights of the Secured Parties (or any of them)
under any Loan Document and shall remove from the Chargor any right which the
Chargor has to deal with the relevant assets without the prior written
permission (in the case of dealing) of the Security Trustee.

 

6 CONTINUING SECURITY

 

6.1 Continuing Security The security constituted by this Debenture shall be
continuing security which shall extend to all the Secured Obligations and shall
not be considered as satisfied or discharged by any intermediate payment or
settlement of all or any of the Secured Obligations.

 

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6.2 Breaking of Accounts If for any reason the security constituted hereby
ceases to be a continuing security in respect of the Chargor (other than by way
of discharge of such security in accordance with the terms of this Debenture) or
the Security Trustee or any other Secured Party receives, or is deemed to be
affected by, notice, whether actual or constructive of any Lien affecting the
Charged Assets, the Security Trustee may open a new account with or continue any
existing account with the Chargor. If the Security Trustee does not open a new
account, it shall nevertheless be treated as if it had done so at the date of
such cessation or the time when it received or was deemed to have received
notice. As from that time all payments made to the Security Trustee will be
deemed to be credited or treated as being credited to the new account and the
liability of the Chargor in respect of the Secured Obligations relating to it at
the date of such cessation or the time when notice was received or deemed
received shall remain and shall not be reduced regardless of any payments into
or out of any such account.

 

6.3 Avoided Payments Where any release or discharge or other arrangement in
respect of all or part of the Secured Obligations (or in respect of any security
for those Secured Obligations including the security created under this
Debenture) is made in reliance on any payment, security or other disposition
which is avoided or must be restored in an insolvency, liquidation or otherwise
and whether or not the Security Trustee has conceded or compromised any claim
that any payment, security or other disposition will or should be avoided, the
liability of the Chargor for the payment of the Secured Obligations and the
obligations of the Chargor under this Debenture shall continue as if such
release, discharge or other arrangement had not been made.

 

6.4 Waiver of Defences The obligations of the Chargor hereunder will not be
affected by any act, omission, circumstance, matter or thing which but for this
provision would release or prejudice any of its obligations hereunder or
prejudice or diminish such obligations in whole or in part, including (whether
or not known to the Chargor or the Security Trustee or any other person
whatsoever):

 

(a) any time, indulgence or waiver granted to, or composition with, any Loan
Party or any other person; or

 

(b) the taking, variation, compromise, exchange, renewal or release of, refusal
or neglect to perfect, take up or enforce any rights or remedies against, or any
security over assets of any Loan Party or any other person or any
non-presentment or non-observance of any formality or other requirement in
respect of any instruments or any failure to realise the full value of any other
security; or

 

(c) any incapacity or lack of powers, authority or dissolution or change in the
members or status of any Loan Party or any other person; or

 

(d) any variation (however fundamental and whether or not involving any increase
in the liability of any Loan Party or any other person thereunder) or
replacement of any Loan Document or any other document or security so that
references to that Loan Document or other document or security in this Debenture
shall include each such variation or replacement; or

 

(e) the unenforceability, illegality or invalidity of any obligation of any Loan
Party or any other person under any Loan Document or of any other security the
Security Trustee may hold in respect of the Secured Obligations (or any of them)
or otherwise; or

 

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(f) any postponement, discharge, reduction, non-provability or other similar
circumstances affecting any obligation of any Loan Party or any other person
under any Loan Document resulting from any insolvency, liquidation or
dissolution proceedings or from any law, regulation or order or otherwise.

 

The Security Trustee shall not be concerned to see or investigate the powers or
authorities of any Loan Party or any of its respective officers or agents, and
moneys obtained or Secured Obligations incurred in the purported exercise of
such powers or authorities or by any person purporting to be such Loan Party
shall be deemed to form a part of the Secured Obligations, and “Secured
Obligations” shall be construed accordingly.

 

6.5 Immediate Recourse Neither the Security Trustee nor any Secured Party shall
be required to proceed against or enforce any other rights or security it may
have or hold in respect of the Secured Obligations or claim payment from any
other person before enforcing the security constituted by this Debenture and the
Chargor waives any right it may have of first requiring the Security Trustee or
any other Secured Party to do so.

 

6.6 No Competition Until all the Secured Obligations have been unconditionally
and irrevocably discharged in full, any rights (if any) which the Chargor may
have:

 

(a) to be subrogated to any rights or security of or moneys held, received or
receivable by the Security Trustee or any other Secured Party (or any agent or
trustee on its behalf) with respect to the Secured Obligations; or

 

(b) to be entitled to any right of contribution or indemnity from any other
person; or

 

(c) to claim, rank, prove or vote as a creditor of such other person or its
estate in competition with the Security Trustee or any other Secured Party (or
any agent or trustee on its behalf),

 

shall be exercised by the Chargor only if and to the extent that the Security
Trustee so requires and in such manner and upon such terms as the Security
Trustee may specify and the Chargor shall hold any moneys, rights or security
held or received by it as a result of the exercise of any such rights on trust
for the Security Trustee for application in accordance with the terms hereof as
if such moneys, rights or security were held or received by the Security Trustee
under this Debenture.

 

6.7 Appropriations Until all the Secured Obligations have been unconditionally
and irrevocably paid and discharged in full in cash, the Security Trustee and
each other Secured Party (or any agent or trustee on its behalf) may:

 

(a) refrain from applying or enforcing any other moneys, security or rights held
or received by it in respect of the Secured Obligations or apply and enforce the
same in such manner and order as it sees fit (whether against the Secured
Obligations or otherwise) and the Chargor shall not be entitled to the benefit
of the same; and

 

(b) hold in a suspense account any moneys received from the Chargor or any other
person in respect of the Secured Obligations.

 

6.8 Additional Security This Debenture is in addition to and shall not in any
way be prejudiced by, prejudicial to or affect or merge with any other security
now or hereafter held

 

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by the Security Trustee or any other Secured Party (or any agent or trustee on
behalf of any of them) for the Secured Obligations or any of them.

 

6.9 Security Held by Chargor The Chargor will not without the prior written
consent of the Security Trustee hold any security, guarantee, indemnity, bond or
other assurance from any other person in respect of the Chargor’s liabilities
hereunder. The Chargor will hold any security held by it in breach of this
provision on trust for the Security Trustee (as trustee as aforesaid) and shall
on request promptly deposit the same and/or charge the same to the Security
Trustee in such a manner as the Security Trustee may require as security for due
and punctual performance and discharge by the Chargor of the Secured
Obligations.

 

6.10 Remedies Not Exclusive

 

(a) The rights and remedies of the Security Trustee and any Receiver provided
for in this Debenture:

 

  (i) may be exercised as often as necessary;

 

  (ii) are cumulative and not exclusive of any rights or remedies provided by
law; and

 

  (iii) may be waived only in writing and specifically.

 

Delay in exercising or non-exercise of any such right is not a waiver of that
right.

 

(b) The Security Trustee may waive any breach by the Chargor of any of its
obligations hereunder.

 

6.11 Protection of the Security Trustee The Security Trustee shall not be liable
in respect of any loss or damage which arises out of the exercise, or the
attempted or purported exercise of, or the failure to exercise any of its
powers, unless such loss or damage is caused by its gross negligence or wilful
default.

 

7 REPRESENTATIONS AND WARRANTIES

 

The Chargor makes each of the representations and warranties set out in this
Clause 7 and acknowledges that the Security Trustee and the Secured Parties have
entered into the Loan Documents in reliance on those representations and
warranties. Where there is a conflict between the representations and warranties
set out in this Clause 7 and those appearing in Article IV (Representations and
Warranties) of the Facility Agreement as to the Chargor, the representations and
warranties in the Facility Agreement shall prevail.

 

7.1 No Filing or Stamp Taxes Under the laws of England in force at the date
hereof, it is not necessary that this Debenture be filed, recorded or enrolled
with any court or other authority (save for registration under Section 395 of
the Companies Act 1985 or at any Intellectual Property registry pursuant to the
terms of Clause 8.12 (Intellectual Property)) or that any stamp, registration or
similar tax be paid on or in relation to this Debenture.

 

7.2 Shares

 

(a)

If the Chargor is listed in Part II of Schedule 1 as an owner of any Shares, it
is and, from and after the date hereof will (subject to the terms of the
Facility Agreement)

 

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remain the legal and beneficial owner of the Shares and the Related Rights and
it or its nominee is and will remain the absolute legal owner of the Shares and
the Related Rights and, with full title guarantee, it is able to mortgage and
has so mortgaged the Shares and the Related Rights;

 

(b) the security created over the Shares and the Related Rights under this
Debenture constitutes a first priority security interest over the Shares and the
Related Rights;

 

(c) the Shares and the Related Rights are within the Chargor’s disposition and
control and neither the terms of the Shares and the Related Rights nor of the
Memorandum and Articles of Association of any Issuer restrict or otherwise limit
the right to mortgage, charge or pledge the Shares and the Related Rights in
favour of the Security Trustee;

 

(d) the Shares are duly authorised, validly issued, fully paid or credited as
fully paid and no calls have been made in respect thereof which remain unpaid or
can be made in respect thereof in the future;

 

(e) except as stated in Clause 3 (Creation of Fixed Security), the Chargor has
not sold or granted any rights of pre-emption over or agreed to sell or grant
any right of pre-emption over or otherwise disposed of or agreed to dispose of
the benefit of all or any of its rights, title and interest in and to all or any
part of the Shares or Related Rights; and

 

(f) the Shares are non-assessable and neither the Shares nor the Related Rights
are subject to any options to purchase or similar rights of any person.

 

7.3 Material Contracts Each of the Material Contracts is in full force and
effect. The obligations of the Chargor in the Material Contracts are legal,
valid, binding and enforceable obligations of the Chargor subject to equitable
remedies and matters affecting creditors’ rights generally. The Chargor is not
in default under any Material Contract and, to the best of its knowledge, no
other party to a Material Contract is in default under such Material Contract.

 

7.4 Intellectual Property Rights

 

(a) The Intellectual Property Rights owned by or licensed to the Chargor
(including the Intellectual Property Rights specified in Part I (Intellectual
Property Rights) of Schedule 1) are all of the Intellectual Property Rights
required by it in order for it to carry on its business as it is being conducted
and to the Chargor’s knowledge, the Chargor, in carrying on its business does
not infringe any Intellectual Property Rights of any third party in a manner
which would have a Material Adverse Effect.

 

(b) Except as disclosed in writing to the Security Trustee prior to the date
hereof, the Intellectual Property Rights owned by or licensed to the Chargor
(including the Intellectual Property Rights listed in Part I (Intellectual
Property Rights) of Schedule 1) are free of any Liens (except for any Liens
created by or pursuant to this Debenture or permitted by the terms of the
Facility Agreement) and any other rights or interests (including any licences)
in favour of third parties.

 

(c)

None of the Intellectual Property Rights owned by or licensed to the Chargor
(including the Intellectual Property Rights listed in Part I (Intellectual
Property

 

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Rights) of Schedule 1) is being infringed in a manner which would have a
Material Adverse Effect and there is no threatened such infringement of any such
Intellectual Property Right.

 

7.5 Charged Assets

 

(a) The Chargor has not received notice of any adverse claim in respect of any
of the Charged Assets (including the Shares and the Related Rights).

 

(b) Except for any Liens granted to the Security Trustee pursuant to this
Debenture and any other Liens permitted to exist on the Charged Assets under the
Facility Agreement:

 

  (i) the Chargor is the legal and beneficial owner of the Charged Assets which
it purports to charge on the date hereof and, with full title guarantee, is able
to mortgage or charge and has so mortgaged or charged such Charged Assets.

 

  (ii) the Charged Assets are within the Chargor’s disposition and control and
the terms of the Charged Assets do not restrict or otherwise limit the right to
transfer, mortgage, charge or pledge the Charged Assets in favour of the
Security Trustee.

 

7.6 Financial Assistance There is no obligation or liability which is included
in the definition of “Secured Obligations” to the extent that, if it were so
included, this Debenture (or any part thereof) would constitute unlawful
financial assistance within the meaning of Sections 151 and 152 of the Companies
Act 1985.

 

7.7 Representations and Warranties in the Facility Agreement The Chargor repeats
the representations and warranties as to it given by the Borrower in Article IV
(Representations and Warranties) of the Facility Agreement.

 

7.8 Times of Making Representations and Warranties The representations and
warranties set out in this Clause 7:

 

(a) will survive the execution of each Loan Document and each drawdown under the
Facility Agreement; and

 

(b) are made on the date hereof and are deemed to be repeated on and as of each
date required by Subsection (i) of Section 3.2(b) (Representations and
Warranties; No Defaults) of the Facility Agreement during the Security Period
with reference to the facts and circumstances then existing.

 

8 UNDERTAKINGS OF CHARGOR

 

8.1 Duration The undertakings in this Clause 8 shall remain in force throughout
the Security Period.

 

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8.2 Maintenance of Legal Validity The Chargor shall obtain, comply with the
terms of and do all that is necessary to:

 

(a) maintain in full force and effect all authorisations, approvals, licences
and consents required in or by the laws and regulations of England to enable it
lawfully to enter into and perform its obligations under this Debenture; and

 

(b) ensure the legality, validity, enforceability or admissibility in evidence
of this Debenture and that otherwise than permitted by the Security Trustee
(acting in its absolute discretion) the Charged Assets remain subject to the
laws and regulations of England.

 

8.3 Untrue Representations The Chargor shall notify the Security Trustee of the
occurrence of any event which results in or may reasonably be expected to result
in any of the representations and warranties contained in Clause 7
(Representations and Warranties) being untrue in any material respect.

 

8.4 Restrictions on Dealing The Chargor undertakes that, except as permitted
under the terms of this Debenture or any other Loan Document it will not:

 

(a) create or permit to subsist any Lien over all or any of its assets, rights
or property other than the Liens created pursuant to this Debenture or any other
Loan Document; or

 

(b) lease, sell, transfer, assign or otherwise dispose of or agree to lease,
sell, transfer, assign or otherwise dispose of, all or any part of its assets,
rights or property, including the Charged Assets or any interest therein.

 

8.5 Book Debts and Receipts The Chargor shall:

 

(a) get in and realise its:

 

  (i) securities to the extent held by way of temporary investment;

 

  (ii) book and other debts and other moneys, including, but without prejudice
to the generality of the foregoing, debts and moneys arising from any Material
Contract; and

 

  (iii) royalties, fees and income of like nature in relation to any
Intellectual Property Right owned by it,

 

in each case, in the ordinary course of its business and pay the proceeds of
such getting in and realisation into such Collateral Account(s) as the Security
Trustee may from time to time specify and, pending such payment, hold the
proceeds of such getting in and realisation upon trust for the Security Trustee;

 

(b) not withdraw all or any moneys (including interest) standing to the credit
of any Collateral Account following notice from the Security Trustee during the
continuance of an Event of Default; and

 

(c) not assign or otherwise transfer, and not create or permit to exist any Lien
(other than a Permitted Lien) over any Collateral Account or any interest
therein.

 

8.6 Material Contracts No Chargor shall amend (except for amendments of a minor
technical or administrative nature), terminate or waive any provision of any
Material Contract

 

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and the Chargor shall duly and promptly perform its obligations under each
Material Contract and diligently pursue its rights and remedies thereunder
except where any of the foregoing would not result either individually or in
aggregate in a Material Adverse Effect.

 

8.7 Intellectual Property Rights The Chargor shall:

 

(a) take all reasonable steps and practical steps to preserve and enforce all of
the Intellectual Property Rights which are used or useful to the conduct of the
Chargor’s business or which are required by it in order to carry on its
business; and

 

(b) not without the prior written consent of the Security Trustee (acting on the
instructions of the Requisite Lenders):

 

  (i) sell, transfer, license or otherwise dispose of all or any part of its
Intellectual Property Rights; or

 

  (ii) permit any such Intellectual Property Rights which are registered to be
abandoned or cancelled, to lapse or to be liable to any claim of abandonment for
non-use or otherwise.

 

8.8 Maintenance of Property The Chargor shall (except as otherwise permitted
pursuant to the terms of the Facility Agreement):

 

(a) Noting of Interest procure that a note of the Security Trustee’s interest is
endorsed upon all policies of insurance which shall at any time during the
subsistence of this security be effected, maintained or held by the Chargor or
any person on its behalf pursuant to Clause 7.5 (Maintenance of Insurance) of
the Facility Agreement;

 

(b) Maintenance of Insurances (i) not do or permit anything to be done in or
upon or relating to the Charged Assets or any part thereof which may make void
or voidable any Insurance in connection therewith, (ii) comply with obligations
as to insurance as set out in the Loan Documents and (iii) comply with any
insurance obligations under leases and do all things reasonable to ensure that
the landlord maintains adequate insurances of any leasehold property;

 

(c) Premiums pay or procure the payment of all premiums and do all other things
reasonably necessary to keep all of the Insurances in force and, on demand of
the Security Trustee (acting reasonably) and, where practicable, produce, or
procure the production to the Security Trustee the receipt for the payment of
each such premium;

 

(d) Taxes and Outgoings pay as and when the same shall become due and payable by
it all taxes, rates, duties, charges, assessments and outgoings whatsoever
(whether parliamentary, parochial, local or of any other description) which
shall be assessed, charged or imposed upon or payable in respect of the Charged
Assets or any part thereof (save to the extent that payment of the same is being
contested in good faith by proper proceedings and adequate reserves have been
set aside for the payment thereof);

 

(e)

Notices as soon as reasonably practicable after the receipt by the Chargor and
in any event within 14 days from such receipt of any application, requirement,
order or notice served or given by any public or local or any other authority
with respect to the Charged Assets (or any part thereof), give written notice
thereof to the Security

 

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Trustee and within 14 days after demand therefor produce the same or a copy
thereof to the Security Trustee and inform it of the steps taken or proposed to
be taken to comply with any such requirement thereby made or implicit therein or
how and why the Chargor, acting in good faith, intends to dispute such
application, order or notice;

 

(f) Statutes duly and punctually perform and observe in all material respects
all its material obligations in connection with the Charged Assets under any
present or future statue or any regulation, order or notice made or given
thereunder;

 

8.9 Shares No Chargor will take any action whereby the rights attaching to the
Shares or the Related Rights are altered or diluted except to the extent
permitted by the Security Trustee.

 

8.10 Notice of Assignment The Chargor shall promptly give notice of the
assignment pursuant to Clause 4 (Assignments) of this Debenture of its rights,
title and interest (if any):

 

(a) in and to the Insurances, by sending a notice in the form of Part I (Form of
Notice of Assignment of Insurances) of Schedule 2 duly completed to each of the
other parties to the Insurances; and

 

(b) in and to the Material Contracts, by sending a notice in the form of Part I
(Form of Notice of Assignment) of Schedule 4 duly completed to each of the other
parties to the Material Contracts,

 

and the Chargor shall use its reasonable endeavours to procure (i) in the case
of Insurances, that each such other party acknowledges such notice in the form
of Part II (Form of Acknowledgement of Assignment of Insurances) of Schedule 2
and (ii) in the case of Material Contracts, that each such other party
acknowledges such notice in the form of Part II (Form of Acknowledgement of
Assignment of Material Contracts) of Schedule 4.

 

8.11 Notice of Charge over Bank Account The Chargor will forthwith give notice
to each Account Bank (and forthwith on any change in the identity of any Account
Bank shall give notice to the new Account Bank) of this Debenture in the form of
Part I (Form of Notice of Charge over Bank Accounts) of Schedule 3 and shall use
its reasonable endeavours to procure that the Account Bank or new Account Bank
(as the case may be) acknowledges such notice in the form of Part II (Form of
Acknowledgement of Charge over Bank Accounts) of Schedule 3.

 

8.12 Intellectual Property In respect of the Intellectual Property Rights
specified in Part I (Intellectual Property Rights) of Schedule 1 the title to
which is registered with the Trade Marks Registry and in respect of any other
registered trademarks of the Chargor against which this Debenture may be noted,
the Chargor shall forthwith file such form with the Trade Marks Registry as
necessary to register its interest within any applicable time periods.

 

9 PROVISIONS RELATING TO SHARES

 

9.1 Deposit of Certificates The Chargor shall, as soon as reasonably
practicable:

 

(a)

deposit with the Security Trustee (or as the Security Trustee may direct) all
bearer instruments, share certificates and other documents of title or evidence
of ownership in relation to the Shares and their Related Rights and/or the
Security Collateral, as are

 

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owned by it or in which it has or acquires an interest entitling it to control
such documents;

 

(b) execute and deliver to the Security Trustee all such stock transfer forms
and other documents as may be reasonably requested by the Security Trustee in
order to enable the Security Trustee (or its nominee), in accordance with
paragraph (c) below, to be registered as the owner or otherwise to obtain a
legal title to the Shares and their Related Rights and/or the Security
Collateral; and

 

(c) at any time following the occurrence of an Event of Default which is
continuing, if the Security Trustee so requests, procure that all such stock
transfer forms are forthwith registered with the relevant person and that share
certificates in the name of the Security Trustee (or such nominee) in respect of
the Shares and their Related Rights and/or the Security Collateral are forthwith
delivered to the Security Trustee.

 

9.2 Registration on Transfer The Chargor hereby authorises the Security Trustee:

 

(a) to arrange for any of the Shares and their Related Rights and/or the
Security Collateral to be registered in the name of the Security Trustee (or its
nominee) at any time following an Event of Default which is continuing; or

 

(b) (under its powers of realisation) upon enforcement of the security created
hereby following the occurrence of an Event of Default which is continuing, to
transfer or cause the Shares and their Related Rights and/or the Security
Collateral to be transferred to and registered in the name of the Security
Trustee (or its nominee) or any purchaser or transferee,

 

and each the Chargor undertakes from time to time promptly to execute and sign
all transfers, contract notes, powers of attorney and other documents (and to
procure the registration of any such transfer of the Shares and their Related
Rights and/or the Security Collateral in the relevant shareholders’ or other
register) that may be required by the Security Trustee in connection therewith.

 

9.3 Liability to Perform Notwithstanding anything to the contrary herein
contained, the Chargor shall remain liable to observe and perform all of the
conditions and obligations assumed by it in respect of the Charged Assets and,
without limitation, to pay all calls or other payments that may become due in
respect of any of the Charged Assets. Notwithstanding the provisions of Clause
9.6 (Calls), the Security Trustee shall not be required in any manner to perform
or fulfil any obligation of the Chargor in respect of the Charged Assets, or to
make any payment, or to make any enquiry as to the nature or sufficiency of any
payment received by it, or to present or file any claim or take any other action
to collect or enforce the payment of any amount to which it may have been or to
which it may be entitled hereunder at any time or times.

 

9.4 Subsequently Acquired Security Collateral The Chargor shall, as soon as
reasonably practicable, upon it (or any nominee of the Chargor) becoming the
registered owner of and receiving share certificates in respect of any Shares
and their Related Rights and/or the Security Collateral after the date hereof,
deliver to the Security Trustee all share certificates in respect thereof
together with share transfer documentation in respect of such Shares and their
Related Rights and/or the Security Collateral duly executed in blank by or on
behalf of the Chargor (or such nominee) as appropriate.

 

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9.5 Powers

 

(a) At any time after an Event of Default has occurred which is continuing and
without any further consent or authority on the part of the Chargor, the
Security Trustee may exercise (or refrain from exercising) at its discretion in
the name of the Chargor (or the registered holder) in respect of the Shares and
their Related Rights and/or the Security Collateral any voting rights and any
powers or rights under the terms thereof or otherwise which may be exercised by
the person or persons in whose name or names the Charged Assets are registered
or who is the holder thereof.

 

(b) If the Security Trustee takes any such action as is referred to in paragraph
(a) above, it shall give notice to the Chargor as soon as practicable.

 

(c) For the purposes of giving effect to this Clause 9.5 (Powers) and to the
extent that the Shares and their Related Rights and/or the Security Collateral
remain registered in the name of the Chargor, the Chargor hereby irrevocably
appoints the Security Trustee (or its nominee) as its proxy to exercise all
voting and other rights in respect thereof.

 

9.6 Calls To the extent that the Chargor fails to comply with its obligations
under Clause 9.3 (Liability to Perform) the Security Trustee may (if it thinks
fit) make such payment on behalf of the Chargor. Any sums so paid by the
Security Trustee shall be repayable by the Chargor to the Security Trustee on
demand (which demand shall be made promptly following the making of the payment
by the Security Trustee) together with interest at the Default Rate from the
date of such payment by the Security Trustee until the date of payment by the
Chargor, and pending such repayment shall constitute part of the Secured
Obligations.

 

9.7 Provision of Information The Chargor shall, within such time as required of
the Borrower pursuant to Article VI (Reporting Covenants) of the Facility
Agreement, or if not so referenced, promptly, send to the Security Trustee,
following receipt by the Chargor, a copy of every balance sheet, profit and loss
account, report or other notice, statement or circular sent or delivered by each
Issuer to its members.

 

10 ACCOUNT BANK

 

10.1 Identity of Account Bank The initial Account Bank is National Westminster
Bank plc. The Account Bank may be changed at any time:

 

(a) to any alternative that the Security Trustee reasonably requires; and

 

(b) to any other bank or financial institution with the agreement of the Chargor
and the Security Trustee,

 

but, in each case, provided that such change shall only become effective upon
the proposed new Account Bank agreeing with the Security Trustee and the
Chargor, in a manner satisfactory to the Security Trustee, to fulfil the role of
Account Bank hereunder.

 

10.2 Transfer of Balances Forthwith upon any change to the Account Bank pursuant
to Clause 10.1 (Identity of Account Bank) becoming effective, any amounts
standing to the credit of each Collateral Account maintained with the old
Account Bank shall be transferred to the corresponding Collateral Account
maintained with the new Account Bank appointed

 

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pursuant to Clause 10.1 (Identity of Account Bank). The Chargor hereby
irrevocably agrees to give all authorisations and instructions necessary for any
such transfer to be made.

 

10.3 Further Perfection The Chargor shall do all such things (including the
execution of bank mandate forms) as the Security Trustee may reasonably request
in order to facilitate any change of Account Bank pursuant to Clause 10.1
(Identity of Account Bank) or any transfer of credit balances pursuant to Clause
10.2 (Transfer of Balances).

 

11 ENFORCEMENT OF SECURITY

 

11.1 Security Enforceable The security constituted hereby shall become
immediately enforceable at any time after an Event of Default has occurred which
is continuing.

 

11.2 Enforcement After the security constituted hereby has become enforceable in
accordance with the terms of this Debenture the Security Trustee may, in its
absolute discretion, enforce all or any part of the security created hereby and
exercise any other rights or remedies conferred on it hereunder or by law in
such manner as it sees fit and may, without notice to the Chargor and without
demand for payment, apply the proceeds of such enforcement in or towards
discharge of the Secured Obligations in such order and in such amounts as the
Security Trustee sees fit or otherwise in accordance with the terms hereof.

 

11.3 Law of Property Act Sections 93 and 103 of the Law of Property Act 1925
shall not apply to this Debenture.

 

11.4 Statutory Powers The powers conferred on mortgagees or receivers by the Law
of Property Act 1925, the Insolvency Act 1986 and the Financial Collateral
Regulations shall apply to this Debenture except insofar as they are expressly
or impliedly excluded and, where there is ambiguity or conflict between the
powers contained in such Acts and those contained in this Debenture, those
contained in this Debenture shall prevail. For the purposes of all powers
implied by statute, the Secured Obligations shall be deemed to have become due
and payable on the date hereof. Such powers and rights shall, for the avoidance
of doubt, include the right to appropriate all or any part of the Financial
Collateral Assets in or towards the satisfaction of the Secured Obligations and,
for this purpose, the value of such Financial Collateral Assets so appropriated
shall be such amount as the Security Trustee so determines having taken into
account advice obtained by it from an independent investment or accountancy firm
of national standing selected by it.

 

11.5 Contingencies

 

(a) If the Security Trustee enforces the security constituted by this Debenture
(whether by the appointment of a Receiver or otherwise) at a time when no
amounts are due under any of the Loan Documents (but at a time when amounts may
become so due), the Security Trustee (or such Receiver) may pay the proceeds of
any recoveries effected by it into such number of Realisations Accounts as it
considers appropriate.

 

(b) The Security Trustee (or such Receiver) may (subject to the payment of any
claims having priority to the security constituted by this Debenture) withdraw
amounts standing to the credit of the Realisations Accounts to:

 

  (i) meet all costs, charges and expenses incurred and payments made by the
Security Trustee (or such Receiver) in the course of such enforcement;

 

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  (ii) pay remuneration to the Receiver as and when the same becomes due and
payable;

 

  (iii) satisfy the Secured Obligations as and when the same become due and
payable; and

 

in each case, together with interest thereon (after, as well as before, judgment
and payable on demand) at the Default Rate from the date the same become due and
payable until the date the same are unconditionally and irrevocably paid and
discharged in full.

 

12 RECEIVER

 

12.1 Appointment of Receiver

 

(a) At any time after the security constituted by this Debenture becomes
enforceable in accordance with its terms or if an application is made for the
appointment of or notice is given of intention to appoint an administrator in
respect of the Chargor or if requested by the Chargor, the Security Trustee may
without further notice appoint under seal or in writing under its hand any one
or more qualified persons to be a Receiver of all or any part of the Charged
Assets in like manner in every respect as if the Security Trustee had become
entitled under the Law of Property Act 1925 to exercise the power of sale
thereby conferred.

 

(b) The Security Trustee is not entitled to appoint a Receiver solely as a
result of the obtaining of a moratorium (or anything done with a view to
obtaining a moratorium) under the Insolvency Act 2000 except with leave of the
court.

 

(c) As used in this clause “qualified person” means a person who, under the
Insolvency Act 1986, is qualified to act as a receiver of the property of the
Chargor with respect to which he is appointed.

 

12.2 Powers of Receiver

 

(a) Every Receiver appointed in accordance with Clause 12.1 (Appointment of
Receiver) shall have and be entitled to exercise all of the powers set out in
paragraph (b) of this Clause 12.2 in addition to those conferred by the Law of
Property Act 1925 on any receiver appointed thereunder. If at any time there is
more than one Receiver of all or any part of the Charged Assets, each such
Receiver may (unless otherwise stated in any document appointing him) exercise
all of the powers conferred on a Receiver under this Debenture individually and
separately from each other Receiver.

 

(b) The powers referred to in the first sentence of paragraph (a) of this Clause
12.2 above are:

 

  (i) Take Possession to take immediate possession of, get in and collect the
Charged Assets or any part thereof;

 

  (ii) Carry on Business to carry on the business of the Chargor as such
Receiver may think fit;

 

21

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  (iii) Protection of Assets to make and effect all insurances and do all other
acts which the Chargor might do in the ordinary conduct of its business or is
obliged to do under the terms of this Debenture as well for the protection as
for the improvement of the Charged Assets and any permissions, consents or
licences, in each case as such Receiver may in its absolute discretion think
fit;

 

  (iv) Employees to appoint and discharge managers, officers, agents,
accountants, servants, workmen and others for the purposes hereof upon such
terms as to remuneration or otherwise as such Receiver may think proper and to
discharge any such persons appointed by the Chargor;

 

  (v) Borrow Money for the purpose of exercising any of the powers, authorities
and discretions conferred on him by or pursuant to this Debenture and/or of
defraying any costs, charges, losses or expenses (including his remuneration)
which shall be incurred by such Receiver in the exercise thereof or for any
other purpose, to raise and borrow money either unsecured or on the security of
the Charged Assets or any part thereof either in priority to the security
constituted by this Debenture or otherwise and generally on such terms and
conditions as such Receiver may think fit and no person lending such money shall
be concerned to enquire as to the propriety or purpose of the exercise of such
power or to see to the application of any money so raised or borrowed;

 

  (vi) Sell Assets to sell, exchange, convert into money and realise all or any
part of the Charged Assets by public auction or private contract and generally
in such manner and on such terms as such Receiver shall think proper. Without
prejudice to the generality of the foregoing, such Receiver may do any of these
things for a consideration consisting of cash, debentures or other obligations,
shares, stock or other valuable consideration and any such consideration may be
payable in a lump sum or by instalments spread over such period as such Receiver
may think fit;

 

  (vii) Compromise to settle, adjust, refer to arbitration, compromise and
arrange any claims, accounts, disputes, questions and demands with or by any
person who is or claims to be a creditor of the Chargor or relating in any way
to the Charged Assets or any part thereof;

 

  (viii) Legal Actions to bring, prosecute, enforce, defend and abandon any
actions, suits and proceedings in relation to the Charged Assets or any part
thereof as may seem to such Receiver to be expedient;

 

  (ix) Receipts to give valid receipts for all moneys and execute all assurances
and things which may be proper or desirable for realising the Charged Assets;

 

  (x) Subsidiaries to form a subsidiary or subsidiaries of the Chargor and
transfer to any such subsidiary all or any part of the Charged Assets; and

 

  (xi)

General Powers to do all such other acts and things as such Receiver may
consider desirable or necessary for realising the Charged Assets or any part
thereof or incidental or conducive to any of the matters, powers or authorities
conferred on a Receiver under or by virtue of this Debenture; to exercise in
relation to the Charged Assets or any part thereof all such powers, authorities

 

22

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and things as such Receiver would be capable of exercising if such Receiver were
the absolute beneficial owner of the same; and to use the name of the Chargor
for all or any of such purposes.

 

12.3 Removal and Remuneration The Security Trustee may from time to time by
writing under its hand remove any Receiver appointed by it and may, whenever it
may deem it expedient, appoint a new Receiver in the place of any Receiver whose
appointment may for any reason have terminated and may from time to time fix the
remuneration of any Receiver appointed by it.

 

12.4 Security Trustee May Exercise Powers of Receiver To the fullest extent
permitted by law, all or any of the powers, authorities and discretions which
are conferred by this Debenture (either expressly or implied) upon a Receiver
may be exercised by the Security Trustee at any time after the security
constituted by this Debenture has become enforceable in accordance with its
terms in relation to the whole of such Charged Assets or any part thereof
without first appointing a Receiver of such property or any part thereof or
notwithstanding the appointment of a Receiver of such property or any part
thereof.

 

12.5 Application of Proceeds Any moneys received by the Security Trustee or by
any Receiver appointed by it pursuant to this Debenture and/or under the powers
hereby conferred shall, after the security constituted in this Debenture shall
have become enforceable in accordance with its terms, but subject to the payment
of any claims having priority to the security constituted by this Debenture and
to the Security Trustee’s and such Receiver’s rights under Clauses 11.5
(Contingencies) and 12.2 (Powers of Receiver), be applied against the amounts
due and payable under the Loan Documents in accordance with the provisions of
Clause 5 (Application of Proceeds) of the Security Trust Deed.

 

13 FURTHER ASSURANCES

 

13.1 The Chargor shall, at its own expense from time to time, execute and give
all such assurances and do all acts and things as the Security Trustee may
require or consider desirable under the laws of any jurisdiction governing the
Charged Assets to enable the Security Trustee to perfect or protect the security
intended to be created hereby over the Charged Assets or any part thereof or to
facilitate the sale of the Charged Assets or any part thereof or the exercise by
the Security Trustee of any of the rights, powers, authorities and discretions
vested in it or any Receiver of the Charged Assets or any part thereof or any
such delegate or sub-delegate as aforesaid, including to facilitate vesting all
or part of such assets in the name of the Security Trustee or in the names of
its nominee, agent or any purchaser. To that intent, without prejudice to the
generality of the foregoing and subject to the terms and conditions set out in
the other Clauses of this Debenture, the Chargor shall execute all transfers,
sales, dispositions and appropriations (whether to the Security Trustee or
otherwise) and shall give all notices, orders and directions and make all
registrations which the Security Trustee may (in its absolute discretion)
consider expedient.

 

13.2 Without prejudice to the generality of Clause 13.1 but subject to the other
terms and conditions of this Debenture, the Chargor will forthwith at the
request of the Security Trustee execute a legal mortgage, charge or other
security at any time over all or any of the Charged Assets subject to or
intended to be subject to the security constituted by this Debenture in such
form as the Security Trustee may require but containing terms no more onerous
than those in this Debenture.

 

23

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14 POWER OF ATTORNEY

 

14.1 Appointment The Chargor hereby, by way of security and in order more fully
to secure the performance of its obligations hereunder, irrevocably appoints the
Security Trustee and every Receiver of the Charged Assets (or any part thereof)
appointed hereunder and any person nominated for the purpose by the Security
Trustee or any Receiver in writing under hand by an officer of the Security
Trustee or any Receiver severally as its attorney and on its behalf and in its
name or otherwise to execute and do all such assurances, acts and things which
the Chargor is required to do under the covenants and provisions contained in
this Debenture (including to make any demand upon or to give any notice or
receipt to any person owing moneys to the Chargor and to execute and deliver any
charges, legal mortgages, assignments or other security and any transfers of
securities) and generally in its name and on its behalf to exercise all or any
of the powers, authorities and discretions conferred by or pursuant to this
Debenture or by statute on the Security Trustee or any such Receiver, delegate
or sub-delegate and (without prejudice to the generality of the foregoing) to
seal and deliver and otherwise perfect any deed, assurance, agreement,
instrument or act which it may reasonably deem proper in or for the purpose of
exercising any of such powers, authorities and discretions provided that the
power of attorney granted pursuant to this Clause 14.1 shall not be exercisable
until the occurrence of an Event of Default which is continuing.

 

14.2 Ratification The Chargor hereby ratifies and confirms and agrees to ratify
and confirm whatever any such attorney as is mentioned in Clause 14.1
(Appointment) shall do or purport to do in good faith in the exercise or
purported exercise of all or any of the powers, authorities and discretions
referred to in such Clause 14.1 (Appointment).

 

15 DELEGATION

 

The Security Trustee or any Receiver appointed hereunder may at any time and
from time to time delegate by power of attorney or in any other manner to any
properly qualified person or persons all or any of the powers, authorities and
discretions which are for the time being exercisable by the Security Trustee or
such Receiver under this Debenture in relation to the Charged Assets or any part
thereof. Any such delegation may be made upon such terms (including power to
sub-delegate) and subject to such regulations as the Security Trustee or such
Receiver may think fit. Neither the Security Trustee nor any Receiver shall be
in way liable or responsible to the Chargor for any loss or damage arising from
any act, default, omission or misconduct on the part of any such delegate or
sub-delegate.

 

16 NO LIABILITY AS MORTGAGEE IN POSSESSION

 

Neither the Security Trustee nor its nominee nor any Receiver shall by reason of
entering into possession of the Charged Assets or any of them be liable to
account as mortgagee in possession or be liable for any loss on realisation or
for any default or omission for which a mortgagee in possession might otherwise
be liable. Every Receiver duly appointed by the Security Trustee under the
powers set forth herein shall be deemed to be the agent of the Chargor for all
purposes and shall as such agent for all purposes be deemed to be in the same
position as a Receiver duly appointed by a mortgagee under the Law of Property
Act 1925. The Chargor alone shall be responsible for each Receiver’s contracts,
engagements, acts, omissions, defaults and losses and for all liabilities
incurred by him and neither the Security Trustee nor the Receiver shall incur
any liability therefor (either to the Chargor or to any other person whatsoever)
or for any other reason whatsoever other than for their gross negligence or
wilful default.

 

24

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17 PROTECTION OF THIRD PARTIES

 

No purchaser, mortgagee or other person or company dealing with the Security
Trustee or the Receiver or its or his agents shall be concerned to enquire
whether the Secured Obligations have become due and payable or whether any power
which the Receiver is purporting to exercise has become exercisable or whether
any of the Secured Obligations remains outstanding or to see to the application
of any money paid to the Security Trustee or to such Receiver.

 

18 STAMP DUTIES

 

The Chargor shall pay and, forthwith on demand, indemnify the Security Trustee
against any liability it incurs in respect of any stamp, registration and
similar tax which is or becomes payable in connection with the entry into,
performance or enforcement of this Debenture.

 

19 ADDITIONAL PROVISIONS

 

19.1 Redemption of Prior Mortgages The Security Trustee may, at any time after
the security constituted by this Debenture has become enforceable in accordance
with its terms, redeem any prior Lien against the Charged Assets or any part
thereof or procure the transfer thereof to itself and may settle and pass the
accounts of the prior mortgagee, chargee or encumbrancer. Any accounts so
settled and passed shall be conclusive and binding on the Chargor. All principal
moneys, interest, costs, charges and expenses of and incidental to such
redemption and transfer shall be paid by the Chargor to the Security Trustee on
demand.

 

19.2 Provisions Severable

 

(a) If a provision of this Debenture is, or but for this Clause 19.2 would be,
held to be illegal, invalid or unenforceable, in whole or in part, in any
jurisdiction the provision shall be ineffective to the extent of such
illegality, invalidity or unenforceability without rendering the remaining
provisions of this Debenture illegal, invalid or unenforceable, and any such
illegality, invalidity or unenforceability in any jurisdiction shall not
invalidate or render invalid or unenforceable such provisions in any other
jurisdiction.

 

(b) If a provision of this Debenture is held to be illegal, invalid or
unenforceable, in whole or in part and paragraph (a) of this Clause 19.2 cannot
be used to make it legal, valid and enforceable, either party to this Debenture
may require the other party to enter into a deed under which that other party
undertakes in the terms of the original provision, but subject to such
amendments as are necessary or required in order to make the provision legal,
valid and enforceable. No party will be obliged to enter into a deed that would
increase its liability beyond that contained in this Debenture had all its
provisions been legal, valid and enforceable.

 

19.3 Potentially Avoided Payments If the Security Trustee considers that an
amount paid to the Security Trustee or any Secured Party under any Loan Document
is capable of being avoided or otherwise set aside on the liquidation or
administration of the person by whom such amount is paid, then for the purposes
of this Debenture, such amount shall be regarded as not having been paid.

 

25

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19.4 Variation This Debenture shall not be varied except by an agreement in
writing between the parties of even date herewith or later.

 

20 REMEDIES AND WAIVERS

 

A delay in exercising, or failure to exercise, any right or remedy under this
Debenture does not constitute a waiver of such or other rights or remedies and
does not operate to prevent the exercise or enforcement of any such right or
remedy. No single or partial exercise of any right or remedy under this
Debenture prevents further exercise of such or other rights or remedies. The
rights, powers and remedies provided in this Debenture are cumulative and not
exclusive of any rights and remedies provided by law. The Security Trustee may,
in connection with the exercise of its powers, join or concur with any person in
any transaction scheme or arrangement whatsoever. A waiver given or consent
granted by the Security Trustee under this Debenture will be effective only if
given in writing and then only in the instance and for the purpose for which it
is given.

 

21 NOTICES

 

21.1 Communications in Writing A notice, other communication or document given
under this Debenture other than as set out in Section 11.8 (Notices, Etc.) of
the Facility Agreement shall be in writing and signed by or on behalf of the
person giving it and, unless otherwise stated, may be made or delivered
personally, posted or faxed in accordance with Clause 21.3 (Delivery).

 

21.2 Addresses The address and fax number (and the department or officer, if
any, for whose attention the notice, other communication or document is to be
made or delivered) of each party for any notice, communication or document to be
made or delivered under or in connection with this Debenture is that identified
with its name below, or any substitute address, fax number or department or
officer as the relevant party notifies to the other party by not less than five
Business Days notice.

 

21.3 Delivery

 

(a) Any notice, other communication or document so addressed shall be deemed to
have been received:

 

  (i) if personally delivered, at the time of delivery;

 

  (ii) if sent by pre-paid, recorded delivery or registered post, two Business
Days (in the place where the notice was received) after the date of posting to
the relevant address;

 

  (iii) if sent by registered air-mail, (in the place where the notice was
received) five Business Days (in the place where the notice was received) after
the date of posting to the relevant address; and

 

  (iv) if sent by fax, as per the transmission report from the machine from
which the fax was sent received in legible form, save that if such notice,
communication or document is received after normal working hours (which shall be
deemed to be 8.30 a.m. and 5.30 p.m. on any Business Day in the country of the
recipient), such notice, communication or document shall be deemed to have been
received on the next Business Day,

 

26

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and, if a particular department or officer is specified as part of its address
details provided under Clause 21.2 (Addresses), if addressed to that department
or officer.

 

(b) Any communication or document to be made or delivered to the Security
Trustee shall be effective only when actually received by the Security Trustee
and then only if the same is expressly marked for the attention of the
department or officer identified with the Security Trustee’s signature below or
such other department or officer as the Security Trustee shall from time to time
specify for this purpose.

 

(c) For the avoidance of doubt, notice given under this Debenture shall not be
validly served if given by e-mail.

 

22 COSTS AND EXPENSES

 

22.1 Costs and Expenses The Chargor shall, on demand of the Security Trustee,
reimburse to the Security Trustee all costs and expenses (including reasonable
legal fees), and any VAT thereon, reasonably and properly incurred by the
Security Trustee in connection with the negotiation, preparation, execution,
modification, amendment, release and/or preservation of any of its rights under
this Debenture.

 

22.2 Indemnity The Chargor shall indemnify the Security Trustee on demand
against any and all properly incurred costs, claims, losses, expenses (including
reasonable legal fees) and liabilities, and any VAT thereon, which the Security
Trustee may incur as a result of the occurrence of any Event of Default or the
exercise by the Security Trustee of any of its rights and powers under this
Debenture.

 

22.3 Interest The amounts payable under Clauses 22.1 (Costs and Expenses) and
22.2 (Indemnity) above shall bear Default Interest (compounded monthly) (payable
after as well as before judgment), from the dates on which they were paid or
incurred by the Security Trustee to the date of payment thereof by the Chargor.

 

23 CURRENCY OF ACCOUNT

 

23.1 Currency of Account All payments hereunder shall be made in immediately
available funds in the currency and to the account specified by the Security
Trustee in the corresponding demand.

 

23.2 Currency Conversion If notwithstanding Clause 23.1 (Currency of Account)
any monies are received or held by the Security Trustee in a currency other than
that specified in such demand, such monies may be converted into the currency
specified in the demand issued by the Security Trustee pursuant to Clause 23.1
(Currency of Account) to cover the Secured Obligations in that other currency at
the spot rate of exchange quoted by a prime clearing bank selected by the
Security Trustee (acting reasonably) then prevailing for purchasing that other
currency with the existing currency.

 

23.3 No Discharge No payment to the Security Trustee (whether under any judgment
or court order or otherwise) shall discharge the obligation or liability of the
Chargor unless and until the Security Trustee shall have received payment in
full in the currency in which the 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

 

27

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expressed in that currency the Security Trustee shall have a further separate
cause of action against the Chargor to recover the amount of the shortfall.

 

23.4 Currency Indemnity If any sum due from the Chargor under this Debenture or
any order or judgment given or made in relation hereto has to be converted from
the currency (the “first currency”) in which the same is payable hereunder or
under such order or judgment into another currency (the “second currency”) for
the purpose of (1) making or filing a claim or proof against the Chargor; (2)
obtaining an order or judgment in any court or other tribunal; or (3) enforcing
any order or judgment given or made in relation hereto, the Chargor shall
indemnify and hold harmless the Security Trustee from and against any loss
suffered or incurred as a result of any discrepancy between (A) the rate of
exchange used for such purpose to convert the sum in question from the first
currency into the second currency and (B) the rate or rates of exchange at which
the Security Trustee may in the ordinary course of business purchase the first
currency with the second currency upon receipt of a sum paid to it in
satisfaction, in whole or in part, of any such order, judgment, claim or proof.

 

24 ASSIGNMENTS, ETC.

 

24.1 The Security Trustee The Security Trustee may assign and transfer all of
its respective rights and obligations hereunder to a replacement Security
Trustee appointed in accordance with the terms of the Facility Agreement. Upon
such assignment and transfer taking effect, the replacement Security Trustee
shall be and be deemed to be acting as Security Trustee for the Secured Parties
for the purposes of this Debenture in place of the old Security Trustee.

 

24.2 The Chargor No Chargor shall be entitled to transfer or assign all or any
of its rights or obligations in respect of this Debenture without the prior
written consent of the Security Trustee.

 

25 SET-OFF

 

Where an Event of Default has occurred and is continuing unwaived, the Security
Trustee may (but shall not be obliged to) set off any obligation which is due
and payable by the Chargor and unpaid against any obligation (whether or not
matured) owed by the Security Trustee to the Chargor, regardless of the place of
payment, booking branch or currency of either obligation. If the obligations are
in different currencies, the Security Trustee may convert either obligation at a
market rate of exchange in its usual course of business for the purpose of the
set-off. If either obligation is unliquidated or unascertained, the Security
Trustee may set off in an amount estimated by it in good faith to be the amount
of that obligation.

 

26 COVENANT TO RELEASE

 

Upon the expiry of the Security Period or as otherwise permitted under the terms
of the Facility Agreement (but not otherwise), the Security Trustee shall (or
procure that its nominees shall), at the request and cost of the Chargor,
execute and do all such deeds, acts and things as may be necessary to release
the relevant Charged Assets from the security constituted hereby including the
payment of any moneys standing to the credit of the Realisations Accounts to the
Chargor. The Security Trustee shall not be bound to return the identical Shares
which were deposited, held or transferred and each Chargor shall accept Shares
of the same class and denomination.

 

28

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27 GOVERNING LAW

 

This Debenture is governed by, and shall be construed in accordance with,
English law.

 

28 JURISDICTION OF ENGLISH COURTS

 

28.1 The courts of England have exclusive jurisdiction to settle any dispute
arising out of or in connection with this Debenture (including a dispute
regarding the existence, validity or termination of this Debenture).

 

28.2 The parties to this Debenture agree that the courts of England are the most
appropriate and convenient courts to settle such disputes and accordingly no
party shall argue to the contrary.

 

28.3 This Clause 28 is for the benefit of the Secured Parties only. As a result,
no Secured Party shall be prevented from taking proceedings relating to such a
dispute in any other court with jurisdiction. To the extent allowed by law, the
Secured Parties may take concurrent proceedings in any number of jurisdictions.

 

29 COUNTERPARTS AND EFFECTIVENESS

 

29.1 Counterparts This Debenture may be executed in any number of counterparts,
each of which when executed and delivered constitutes an original of this
Debenture, but all the counterparts shall together constitute one and the same
agreement.

 

29.2 Effectiveness This Debenture shall come into effect as a Deed on the date
set forth above.

 

IN WITNESS WHEREOF this Debenture has been executed as a Deed by the parties
hereto on the date stated at the beginning of this Debenture.

 

29

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SCHEDULE 1

 

PART I

 

INTELLECTUAL PROPERTY RIGHTS

 

None

 

--------------------------------------------------------------------------------

 

SCHEDULE 1

 

PART II

 

CHARGED SHARES

 

None

 

31

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SCHEDULE 2

 

NOTICE OF ASSIGNMENT OF INSURANCES

 

PART I

 

FORM OF NOTICE OF ASSIGNMENT OF INSURANCES

 

To: [Insert name of Insurer]

 

[Date]

 

Dear Sirs

 

We hereby give you notice that, by a Debenture dated 11 February 2005 (the
“Debenture”), Constar International U.K. Limited (the “Company”) charged (by way
of a first fixed charge) to Citibank, N.A., London Branch (as security trustee,
the “Security Trustee”) all of its rights, title, interest and benefits in
respect of the Insurances (as defined in the Debenture) (which includes the
insurance policies with you set out below) and all claims and returns of
premiums in respect thereof to which the Company is or may at a future time
become entitled. Pursuant to the terms of the Debenture and the Facility
Agreement (as defined in the Debenture) please note the name and details of the
Security Trustee (details of whom are set out in the schedule attached hereto)
and the Security Trustee (as trustee and loss payee). The Security Trustee, by
its counter-signature hereto, hereby directs that all rights accruing to it
under the Debenture relating to the Insurances be exercised as set out below.

 

1 After your receipt of this notice we hereby request that following the
occurrence of an Event of Default which is continuing (as defined in the
Debenture and as notified to you by the Security Trustee):

 

(a) all payments under or arising from the Insurances should be made to the
Security Trustee or to its order;

 

(b) all remedies provided for in the Insurances or available at law or in equity
are exercisable by the Security Trustee; and

 

(c) all rights to compel the performance of the Insurances are exercisable by
the Security Trustee;

 

(d) all rights, interests and benefits whatsoever accruing to or the benefit of
ourselves arising from the Insurances belong to the Security Trustee;

 

2 You will give notice to the Security Trustee in writing:

 

(a) if the Company proposes to cancel or gives notice of cancellation of any
Insurance at least 30 days before such cancellation is to take effect;

 

(b) of any material alteration or, the termination or expiry of any such
Insurance at least 30 days before such alteration, termination or expiry is to
take effect; and

 

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(c) promptly of any default in the payment of any premium or failure to renew
any such Insurance and shall give the Security Trustee not less than 30 days in
which to pay the defaulted premium without cancelling the policy during such 30
days period.

 

This letter shall be governed by and construed in accordance with English law.

 

Would you please confirm your agreement to the above by sending the enclosed
acknowledgement to the Security Trustee with a copy to ourselves.

 

The Insurances to which this letter relates are, as at the date hereof as
follows:

 

[Insert details of insurance policies]

 

Yours faithfully    (Authorised signatory) Constar International U.K. Limited

 

   Citibank, N.A., London Branch as Security Trustee

 

Encs

 

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SCHEDULE 2

 

NOTICE OF ASSIGNMENT OF INSURANCES

 

PART II

 

FORM OF ACKNOWLEDGEMENT OF ASSIGNMENT OF INSURANCES

 

To: Citibank, N.A., London Branch (as Security Trustee)

 

Citibank Centre

Canada Square

Canary Wharf

London

E14 5LB

 

338 Greenwich Street

19th Floor

New York

New York 10013

 

Attention: David Jaffe, Director

 

[Date]

 

Dear Sirs

 

We confirm receipt from Constar International U.K. Limited (the “Company”) of a
notice dated [            ] February 2005 (the “Notice”) of a charge upon the
terms of a Debenture dated 11 February 2005 (the “Debenture”) of all of its
rights, title, interest and benefits in respect of the Insurances (as defined in
the Debenture) (which includes the insurance policies set out in the Notice) and
all claims and returns of premiums in respect thereof to which the Company is or
may at a future time become entitled.

 

We confirm that we shall hereafter act in accordance with the Notice and that we
have not received notice of any third party interests in the Insurances (as
defined in the Notice).

 

This letter shall be governed by construed in accordance with English law.

 

Yours faithfully    (Authorised signatory) [Insert name of Insurer]

 

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SCHEDULE 3

 

NOTICE TO ACCOUNT BANK

 

PART I

 

FORM OF NOTICE OF CHARGE OVER BANK ACCOUNTS

 

To: National Westminster Bank plc

Bishopsgate

London

EC2P 2AP

 

Sort Code 50-00-00

 

[Date]

 

Dear Sirs

 

We hereby give you notice that, by a Debenture dated 11 February 2005 (the
“Debenture”), Constar International U.K. Limited have charged (by way of a first
fixed charge) to Citibank, N.A., London Branch (as security trustee, the
“Security Trustee”) all moneys (including interest) from time to time standing
to the credit of each of its present and future accounts with any bank,
financial institution or other person, which includes the accounts numbered
20501102, 23500077 and 23500069 (GBP, Euro and USD accounts respectively) held
with you (the “Accounts”) and the debt or debts represented thereby.

 

We hereby irrevocably instruct and authorise you to:

 

(a) disclose to the Security Trustee without any reference to or further
authority from us and without any inquiry by you as to the justification for
such disclosure, such information relating to any of the Accounts maintained
with you from time to time as the Security Trustee may, at any time and from
time to time, request you to disclose to it; and

 

(b) following notice from the Security Trustee of the occurrence of an Event of
Default (as such term is defined in the Debenture) which is continuing, act
solely in accordance with the instructions of the Security Trustee which
include, but are not limited to, the following:

 

  (i) hold all sums from time to time standing to the credit of the Accounts
maintained with you in our name to the order of the Security Trustee;

 

  (ii) pay or release all or any part of the sums from time to time standing to
the credit of the Accounts maintained with you in our name in accordance with
the written instructions of the Security Trustee at any time or times; and

 

  (iii)

comply with the terms of any written notice or instructions in any way relating
to or purporting to relate to the assignment specified above, the sums standing
to the credit of the Accounts maintained with you in our name from time to

 

35

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time or the debts represented thereby which you receive at any time from the
Security Trustee without any reference to or further authority from us and
without any inquiry by you as to the justification for or validity of such
notice or instructions.

 

Please also note that these instructions are not to be revoked or varied without
the prior written consent of the Security Trustee.

 

This letter shall be governed by and construed in accordance with English law.

 

Would you please confirm your agreement to the above by sending the enclosed
acknowledgement to the Security Trustee with a copy to ourselves.

 

Yours faithfully    (Authorised signatory) Constar International U.K. Limited

 

Encs

 

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SCHEDULE 3

 

NOTICE TO ACCOUNT BANK

 

PART II

 

FORM OF ACKNOWLEDGEMENT OF CHARGE OVER BANK ACCOUNTS

 

To: Citibank, N.A., London Branch (as Security Trustee)

 

Citibank Centre

Canada Square

Canary Wharf

London

E14 5LB

 

338 Greenwich Street

19th Floor

New York

New York 10013

 

Attention: David Jaffe, Director

 

[Date]

 

Dear Sirs

 

We confirm receipt from Constar International U.K. Limited (the “Company”) of a
notice dated [        ] of a charge upon the terms of a Debenture dated 11
February 2005 (the “Debenture”) of all moneys (including interest) from time to
time standing to the credit of each of the Company’s present and future accounts
with us (the “Accounts”) and the debt or debts represented thereby.

 

We confirm that we accept the instructions and authorisations contained in that
notice and we undertake to act in accordance with the terms of that notice.

 

We further wish to advise you that:

 

(i) we have not received notice of the interest of any third party in the
Accounts;

 

(ii) subject to your letter to us of [date] (i.e. the letter of operation) we
have neither claimed or exercised nor will claim or exercise any security
interest, set-off, counterclaim or other rights in respect of the Accounts, the
sums therein or the debts represented thereby without your prior written
consent;

 

(iii) we shall pay all monies received by us for the account of the Company to
(and only to) the credit of the Accounts in the name of the Company specified in
that notice unless otherwise consented to by you; and

 

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(iv) following notice from you of the occurrence of an Event of Default (as
defined in the Debenture) which is continuing we shall not permit any amount to
be withdrawn from any of the Accounts without your prior written consent.

 

This letter shall be governed by construed in accordance with English law.

 

Yours faithfully    (Authorised signatory) National Westminster Bank plc

 

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SCHEDULE 4

 

NOTICE OF ASSIGNMENT OF MATERIAL CONTRACT

 

PART I

 

FORM OF NOTICE OF ASSIGNMENT

 

To: [Insert Name and Address of Counterparty to Material Contract]

 

[Date]

 

We refer to the [Describe Material Contract] between [Insert name of
counterparty] and Constar International U.K. Limited (the “Company”) dated
[                                ] (the “Contract”).

 

We hereby inform you that by a Debenture dated 11 February 2005 (the
“Debenture”), the Company charged (by way of first ranking fixed and floating
charges) to Citibank, N.A., London Branch (the “Security Trustee”, as security
trustee for various lenders under a credit agreement dated 11 February 2005 (as
amended from time to time the “Facility Agreement”)) all its benefits in respect
of the Contract and all moneys due in respect thereof to which the Company is or
may at a future time become entitled as security for its obligations under the
guarantee in substantially the form attached as Exhibit H (Form of Guaranty) to
the Facility Agreement (the “Guarantee”).

 

By this letter the Company requests you to recognise the Security Trustee’s
right to payment in respect of and security interest in the Contract.

 

The Company requests that after your receipt of this notice, all payments by you
to the Company under or arising from the Contract should be made to a
collections account of the Company approved by the Security Trustee which, as at
the date of the Debenture, is the account held by the Company at National
Westminster Bank plc, Bishopsgate, London EC2P 2AP, Sort Code 50-00-00, and
includes accounts numbered 20501102, 23500077 and 23500069 (GBP, Euro and USD
accounts respectively), and if you are notified by the Security Trustee that an
Event of Default (as defined in the Debenture) has occurred which is continuing:

 

(a) all payments by you to the Company under or arising from the Contract should
be made to the Security Trustee (being Citibank, N.A., London Branch) or to its
order as it may specify in writing from time to time;

 

(b) all remedies provided for in the Contract or available at law or in equity
are exercisable by the Security Trustee;

 

(c) all rights to compel performance of the Contract are exercisable by the
Security Trustee although the Company shall remain liable to perform all the
obligations undertaken by it in the Contract;

 

(d)

all rights, interests and benefits whatsoever accruing to or for the benefit of
the Company arising from the Contract belong to the Security Trustee and no
changes

 

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may be made to the terms of the Contract nor may the Contract be terminated
without the Security Trustee’s consent; and

 

(e) you are authorised and instructed, without requiring further approval from
the Company, to provide the Security Trustee with such information relating to
the Contract as it may from time to time request and to send it copies of all
notices issued by you under the Contract to the Security Trustee as well as to
the Company.

 

These instructions may not be revoked, varied or waived without the prior
written consent of the Security Trustee.

 

Kindly acknowledge receipt of this notice by signing the attached
Acknowledgement and Confirmation and returning the same to the Security Trustee
at Citibank, N.A., London Branch, Citibank Centre, Canada Square, Canary Wharf,
London E14 5LB and 338 Greenwich Street, 19th Floor, New York, New York 10013.

 

For and on behalf of

 

Constar International U.K. Limited

 

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SCHEDULE 4

 

NOTICE OF ASSIGNMENT OF MATERIAL CONTRACT

 

PART II

 

FORM OF ACKNOWLEDGEMENT OF ASSIGNMENT OF MATERIAL CONTRACTS

 

To: Citibank, N.A., London Branch as Security Trustee for and on behalf of the
Secured Parties

 

Citibank Centre

Canada Square

Canary Wharf

London

E14 5LB

 

338 Greenwich Street

19th Floor

New York

New York 10013

 

Attention: David Jaffe, Director

 

[Date]

 

Notice of Assignment

 

We hereby acknowledge receipt of the Notice of Assignment dated [        ] (the
“Notice”) (a copy of which is attached hereto) from Constar International U.K.
Limited ( the “Company”).

 

We hereby acknowledge the Notice and confirm that we shall hereafter act in
accordance with the terms of the Notice.

 

For and on behalf of

 

[Insert Name of Counterparty]

 

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SIGNATORIES

 

Executed as a deed by

   ) CONSTAR INTERNATIONAL U.K. LIMITED    )

 

/s/ F. E. GREGORY

  Signature of director   /s/ I. ATKINSON   Signature of secretary

Frank Edward Gregory

  Name of director   Ian Michael Atkinson   Name of secretary

 

Address:

 

Moore Lane Trading Estate

Sherburn-in-Elmet

North Yorkshire L S25 6ES

 

Fax number: 01977 882090

 

Attn

 

THE SECURITY TRUSTEE CITIBANK, N.A., LONDON BRANCH By:   /s/ DAVID JAFFE
Address: Fax No: Attn:

 

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