Exhibit 10.45


 


	
  

  	
   

  	
  

  



 


EXECUTION COPY


 


 


DATED 12 JANUARY, 2010


 


 


SUPERPORT
LIMITED


as Chargor


 


 


in favour of


 


 


DB TRUSTEES
(HONG KONG) LIMITED


as Security Agent


 


 






 


HOLDCO
DEBENTURE


 






 

















 


CONTENTS


 


	
  Clause

  	
   

  	
  Page

  
	
   

  	
   

  
	
  1.

  	
  Definitions And
  Interpretation

  	
  1

  
	
   

  	
   

  	
   

  
	
  2.

  	
  Payment Of Secured
  Obligations

  	
  3

  
	
   

  	
   

  	
   

  
	
  3.

  	
  Fixed Charges, Assignments
  And Floating Charge

  	
  4

  
	
   

  	
   

  	
   

  
	
  4.

  	
  Crystallisation Of Floating
  Charge

  	
  5

  
	
   

  	
   

  	
   

  
	
  5.

  	
  Perfection Of Security

  	
  6

  
	
   

  	
   

  	
   

  
	
  6.

  	
  Further Assurance

  	
  11

  
	
   

  	
   

  	
   

  
	
  7.

  	
  Negative Pledge And
  Disposals

  	
  12

  
	
   

  	
   

  	
   

  
	
  8.

  	
  Investments

  	
  13

  
	
   

  	
   

  	
   

  
	
  9.

  	
  Accounts

  	
  14

  
	
   

  	
   

  	
   

  
	
  10.

  	
  Monetary Claims

  	
  15

  
	
   

  	
   

  	
   

  
	
  11.

  	
  Insurances

  	
  16

  
	
   

  	
   

  	
   

  
	
  12.

  	
  Real Property

  	
  19

  
	
   

  	
   

  	
   

  
	
  13.

  	
  General Undertakings

  	
  20

  
	
   

  	
   

  	
   

  
	
  14.

  	
  Enforcement Of Security

  	
  21

  
	
   

  	
   

  	
   

  
	
  15.

  	
  Powers Of Sale

  	
  21

  
	
   

  	
   

  	
   

  
	
  16.

  	
  Appointment Of Receiver Or
  Administrator

  	
  22

  
	
   

  	
   

  	
   

  
	
  17.

  	
  Powers Of Receiver

  	
  23

  
	
   

  	
   

  	
   

  
	
  18.

  	
  Application Of Monies

  	
  26

  
	
   

  	
   

  	
   

  
	
  19.

  	
  Receipt And Protection Of
  Purchasers

  	
  27

  
	
   

  	
   

  	
   

  
	
  20.

  	
  Power Of Attorney

  	
  27

  
	
   

  	
   

  	
   

  
	
  21.

  	
  Representations

  	
  28

  
	
   

  	
   

  	
   

  
	
  22.

  	
  Effectiveness Of Security

  	
  30

  
	
   

  	
   

  	
   

  
	
  23.

  	
  Release Of Security

  	
  32

  
	
   

  	
   

  	
   

  
	
  24.

  	
  Subsequent Security
  Interests

  	
  33

  
	
   

  	
   

  	
   

  
	
  25.

  	
  Currency Conversion And
  Indemnity

  	
  33

  
	
   

  	
   

  	
   

  
	
  26.

  	
  Costs, Expenses And
  Indemnity

  	
  33

  
	
   

  	
   

  	
   

  
	
  27.

  	
  Payments Free Of Deduction

  	
  34

  
	
   

  	
   

  	
   

  
	
  28.

  	
  Discretion And Delegation

  	
  34

  
	
   

  	
   

  	
   

  
	
  29.

  	
  Set-Off

  	
  35

  
	
   

  	
   

  	
   

  
	
  30.

  	
  Changes To Parties

  	
  35

  
	
   

  	
   

  	
   

  
	
  31.

  	
  Amendments And Waivers

  	
  36

  
	
   

  	
   

  	
   

  
	
  32.

  	
  Perpetuity Period

  	
  36

  
				



 


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  33.

  	
  Notices

  	
  36

  
	
   

  	
   

  	
   

  
	
  34.

  	
  Counterparts

  	
  36

  
	
   

  	
   

  	
   

  
	
  35.

  	
  Governing Law

  	
  36

  
	
   

  	
   

  	
   

  
	
  36.

  	
  Jurisdiction

  	
  36

  
	
   

  	
   

  	
   

  
	
  Schedule
  1 FORM OF NOTICE OF ASSIGNMENT OF INSURANCE

  	
  38

  
	
   

  	
   

  
	
  Schedule
  2 FORM OF NOTICE OF CHARGE OF ACCOUNTS

  	
  42

  
	
   

  	
   

  
	
  Schedule
  3 PARTICULARS OF THE SHARES

  	
  45

  
	
   

  	
   

  
	
  Schedule
  4 FORM OF SHARE TRANSFER

  	
  46

  
	
   

  	
   

  
	
  Schedule
  5 FORM OF ACKNOWLEDGMENT FROM NOMINEE

  	
  47

  
	
   

  	
   

  
	
  Schedule
  6 FORM OF LETTER OF RESIGNATION

  	
  49

  
	
   

  	
   

  
	
  Schedule
  7 FORM OF WRITTEN RESOLUTIONS

  	
  50

  
	
   

  	
   

  
	
  Schedule
  8 FORM OF LETTER OF UNDERTAKING AND AUTHORISATION

  	
  52

  



 


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THIS DEBENTURE is made on 12 January, 2010


 


BY


 


(1)                            SUPERPORT LIMITED, a BVI Business Company  incorporated
in the British Virgin Islands (the “Chargor”) in
favour of


 


(2)                            DB TRUSTEES (HONG KONG) LIMITED  as security trustee for the Secured Parties on the terms and conditions
set out in the Security Trust Deed (the “Security Agent”,
which expression shall include its successors, assigns and transferees).


 


NOW THIS DEBENTURE WITNESSES as follows:


 


1.                                 DEFINITIONS
AND INTERPRETATION


 


1.1                           Definitions


 


Unless otherwise defined in this Debenture or
unless the context otherwise requires, terms and expressions defined in or
construed for the purposes of the Security Trust Deed shall bear the same
meanings when used herein.  In addition:


 


“Account” means
any account (including, without limitation, any subdivision or sub-account
thereof) opened or maintained by the Chargor with any bank, financial
institution or other person (and any replacement, renewal and/or re-designation
thereof), the debt or debts represented thereby together with (in each case)
all Related Rights.


 


“Charged Property”
means all the assets and/or undertaking of the Chargor which from time to time
are the subject of the security created or expressed to be created in favour of
the Security Agent by or pursuant to this Debenture.


 


“Collateral Rights”
means all rights, powers and remedies of the Security Agent provided by or
pursuant to this Debenture or by law.


 


“Company”
means International Petroleum Services Corporation Limited, a limited liability
company incorporated under the laws of Hong Kong, with registered number
1165755;


 


“Facility Agreement”
means the facility agreement dated 8 January 2010 made between, among others,
Tianjin New Highland Science and Technology Development Co., Ltd. as borrower,
the Chargor, the Company, Deutsche Bank AG, Hong Kong Branch as arranger,
calculation agent and facility agent and DB Trustees (Hong Kong) Limited as
security agent, as amended and restated by an amendment agreement dated     
           
              made
between, among others, Tianjin New Highland Science and Technology Development
Co., Ltd. as borrower and Deutsche Bank AG, Hong Kong Branch as facility agent.


 


“Fixed Charge
Property” has the meaning ascribed thereto in Clause 7.2 (No Disposal of Interests).


 


“Insurance Policy”
means any policy of insurance in which the Chargor may from time to time have
an interest.


 


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“Intellectual Property”
means any patents, trade marks, service marks, designs, business names,
copyrights, design rights, moral rights, inventions, confidential information,
knowhow and other intellectual property rights and interests, whether
registered or unregistered, the benefit of all applications and rights to use
such assets and all Related Rights.


 


“Investments”
means:


 


(a)                                      any stocks, shares, debentures, securities and/or other investments;


 


(b)                                     all interests in collective investment schemes;


 


(c)                                      all warrants, options and/or other rights to subscribe for or acquire
any Investments; and/or


 


(d)                                     all other Equity Interests in any person,


 


(in each case) whether held directly by or to
the order of the Chargor or by any trustee, nominee, fiduciary or clearance
system on its behalf (including, without limitation, the Shares) and all
Related Rights (including without limitation all rights against any such
trustee, nominee, fiduciary or clearance system).


 


“Monetary Claims”
means any book and/or other debts and/or monetary claims owing to the Chargor
and any proceeds thereof (including without limitation any claims or sums of
money deriving from or in relation to any Intellectual Property, any
Investment, the proceeds of any Insurance Policy, any court order or judgment,
any other contract or agreement to which the Chargor is a party and any other
assets, property, rights or undertaking of the Chargor).


 


“Real Property”
means:


 


(a)                                      any real or immovable property (whether freehold, leasehold or
otherwise); and/or


 


(b)                                     any buildings, fixtures, fittings, fixed plant or machinery from time to
time situated on or forming part of such real or immovable property,


 


and includes all Related Rights.


 


“Receiver” means
a receiver or receiver and manager or an administrative receiver of the whole
or any part of the Charged Property and that term will include any appointee
made under a joint and/or several appointment.


 


“Related Rights”
means, in relation to any asset:


 


(a)                                      the proceeds of sale of any part of that asset;


 


(b)                                     all rights under any licence, agreement for sale, lease or other
disposal in respect of that asset;


 


(c)                                      all rights, powers, benefits, claims, contracts, warranties, remedies,
Security, guarantees, indemnities and/or covenants for title in respect of that
asset;


 


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(d)                                     any moneys and proceeds paid or payable in respect of that asset; and/or


 


(e)                                      (in the case where such asset comprises any share, equity interest or
other security) all dividends, distributions, interest and monies payable in
respect thereof and any rights, assets, shares and/or securities deriving
therefrom or accruing thereto whether by way of redemption, bonus, preference,
option, substitution, conversion or otherwise.


 


“Secured Obligations” has the meaning given to it in the
Security Trust Deed.


 


“Security Trust Deed” means the security
trust deed dated          
         
        between, among others, Tianjin New
Highland Science and Technology Development Co., Ltd., Deutsche Bank AG, Hong
Kong Branch as Facility Agent and DB Trustees (Hong Kong) Limited as Security
Agent.


 


“Shares”
means all of the shares in the share capital of the Company held by, to the
order or on behalf of the Chargor at any time, including without limitation
those set out in Schedule 3 (Particulars of
the Shares).


 


“Tangible Moveable Property”
means any plant, machinery, office equipment, computers, vehicles and other
chattels (excluding any for the time being forming part of the Chargor’s stock
in trade or work in progress) and all Related Rights.


 


1.2                           Construction


 


In this Debenture:


 


1.2.1                            the rules of construction set out in clauses 1.3 (Construction) of the Security Trust Deed
shall apply to this Debenture mutatis
mutandis;


 


1.2.2                            any reference to the Chargor, the Facility Agent, the
Security Agent or any or all of the Secured Parties shall be construed so as to
include its or their (and any subsequent) successors and any permitted assigns
and transferees in accordance with their respective interests;


 


1.2.3                            any reference to the Security Trust Deed or any other
agreement or instrument shall be a reference to the Security Trust Deed or that
other agreement or instrument as amended or novated from time to time; and


 


1.2.4                            save where the context otherwise requires, references
in this Debenture to any Clause or Schedule shall be to a clause or schedule
contained in this Debenture.


 


1.3                           Designation


 


This is the Holdco Debenture as defined in the
Security Trust Deed.


 


2.                                 PAYMENT
OF SECURED OBLIGATIONS


 


2.1                           Covenant
to Pay


 


The Chargor covenants with the Security Agent
that it shall pay, discharge and satisfy each of the Secured Obligations on
their due date in accordance with their respective terms provided that neither
such covenant nor the Security constituted by this Debenture 


 


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shall extend to or include any liability or sum
which would, but for this proviso, cause such covenant or Security to be unlawful
or prohibited by any applicable law.


 


2.2                           Interest
on Demands


 


If the Chargor fails to pay any sum on the due
date for payment of that sum the Chargor shall pay interest on such sum (before
and after any judgment and to the extent interest at a default rate is not
otherwise being paid on such sum) from the date of demand until the date of
payment of such sum in full by the Chargor, calculated on a daily basis at the
rate determined in accordance with the provisions of clause 9.3 (Default Interest) of the Facility Agreement (for such
purpose only, in the form subsisting as at the date of this Debenture).


 


3.                                 FIXED
CHARGES, ASSIGNMENTS AND FLOATING CHARGE


 


3.1                           Fixed
Charges


 


The Chargor hereby charges as beneficial owner
with full title guarantee in favour of the Security Agent as trustee for the
Secured Parties, as security for the payment and discharge of the Secured
Obligations, by way of first fixed charge (which so far as it relates to land
in Hong Kong shall be and take effect as a charge by way of legal charge to the
extent that the Chargor’s interest therein constitutes a legal estate) all the
Chargor’s right, title and interest from time to time in and to each of the
following assets:


 


3.1.1                            the Real Property;


 


3.1.2                            the Tangible Moveable Property;


 


3.1.3                            the Accounts;


 


3.1.4                            any and all goodwill of the Chargor and rights in
relation to the uncalled capital of the Chargor;


 


3.1.5                            the Intellectual Property;


 


3.1.6                            the Investments and all Related Rights (excluding any
equity interest in any entity established in the PRC but including, to the
extent permitted under applicable PRC laws and regulations, Related Rights
relating to such equity interest); and


 


3.1.7                            all Monetary Claims and all Related Rights other than
those which are otherwise subject to a valid assignment (at law or in equity)
pursuant to this Debenture.


 


3.2                           Assignments


 


The Chargor hereby assigns and agrees to assign
absolutely as beneficial owner with full title guarantee to the Security Agent
as trustee for the Secured Parties as security for the payment and discharge of
the Secured Obligations, by way of security with first ranking priority, all
the Chargor’s right, title and interest from time to time in and to the
Insurance Policies and all Monetary Claims and Related Rights in relation
thereto.


 


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3.3                           Floating
Charge


 


3.3.1                            The Chargor hereby charges as beneficial owner with
full title guarantee in favour of the Security Agent as trustee for the Secured
Parties, as security for the payment and discharge of the Secured Obligations,
by way of first floating charge, all present and future assets and undertaking
of the Chargor.


 


3.3.2                            The floating charge created by Clause 3.3.1 above
shall be deferred in point of priority to all fixed Security (whether by way of
charge or assignment) validly and effectively created by the Chargor under the
Transaction Finance Documents in favour of the Security Agent as trustee for
the Secured Parties as security for the Secured Obligations.


 


4.                                 CRYSTALLISATION
OF FLOATING CHARGE


 


4.1                           Crystallisation:  By Notice


 


The Security Agent may at any time by notice in
writing to the Chargor convert any floating charge created under this Debenture
with immediate effect into a fixed charge as regards any property or assets
specified in the notice if:


 


4.1.1                            an Event of Default has occurred and is continuing; or


 


4.1.2                            the Security Agent considers that any of the Charged
Property may be in jeopardy or in danger of being seized or sold pursuant to
any form of legal process; or


 


4.1.3                            the Security Agent considers that it is desirable in
order to protect the priority of the Security constituted by this Debenture.


 


4.2                           Crystallisation:  Automatic


 


Notwithstanding Clause 4.1 (Crystallisation: 
By Notice) and without prejudice to any law which may have a
similar effect, any floating charge created by this Debenture will
automatically be converted (without notice) with immediate effect into a fixed
charge as regards all the assets subject to the floating charge if:


 


4.2.1                            the Chargor creates or attempts to create any Security
(other than Security that is permitted under this Debenture and that is
permitted under the Facility Agreement), over any of the Charged Property; or


 


4.2.2                            any person levies or attempts to levy any distress,
execution or other process against any of the Charged Property; or


 


4.2.3                            a petition is presented for the compulsory winding-up
of the Chargor; or


 


4.2.4                            a meeting is convened for the passing of a resolution
for the voluntary winding-up of the Chargor; or


 


4.2.5                            an application is presented or made for a warrant of
execution, writ of fieri facias,
garnishee order or charging order in respect of any of the assets of the
Chargor; or


 


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4.2.6                            a resolution is passed or an order is made for the
winding-up, dissolution, administration or re-organisation of the Chargor; or


 


4.2.7                            any event occurs under the laws of any jurisdiction
having a similar or analogous effect to any of those events referred to in
sub-clauses 4.2.3 to 4.2.6.


 


5.                                 PERFECTION
OF SECURITY


 


5.1                           Perfection


 


5.1.1                            The Chargor shall:


 


(a)                     immediately
after the execution of this Debenture, instruct its registered agent to create
and maintain a Register of Charges for the Chargor in accordance with Section
162 of the Business Companies Act 2004 of the British Virgin Islands (the “Register of Charges”) and to enter particulars of the
security interests created pursuant to this Debenture in the Register of
Charges, and the Chargor shall instruct its registered agent to effect
registration of this Debenture at the Registry of Corporate Affairs pursuant to
Section 163 of the Business Companies Act 2004 of the British Virgin Islands;
and


 


(b)                    immediately
after becoming available, deliver or procure to be delivered to the Security
Agent the certificate of registration of charge issued by the Registry of
Corporate Affairs and the filed and stamped copy of the Register of Charges.


 


5.1.2                            If at any time after the date of this Debenture, the
Chargor applies to have itself registered as a non-Hong Kong company under Part
XI of the Companies Ordinance (Cap. 32), it shall forthwith notify the Security
Agent.  Without prejudice to the
foregoing, upon its being registered as a non-Hong Kong company under Part XI
of the Companies Ordinance (Cap. 32), it shall (a) forthwith notify the
Security Agent and provide the Security Agent with the details of such
registration and (b) promptly (and in any case within five weeks after the date
of such registration) take all steps to comply with the requirements under
section 91(5) of the Companies Ordinance (Cap. 32) in respect of this Debenture
and the security created hereby.


 


5.2                           Notices
of Assignment


 


The Chargor shall deliver to the Security Agent
(or procure the delivery to the Security Agent of):


 


5.2.1                             (in respect of each Insurance Policy subsisting at
the date of this Debenture) on or prior to the Initial Utilisation Date:


 


(a)                     a
notice of assignment to the insurer(s) under such Insurance Policy
substantially in the form of Schedule 1 (Form
Of Notice Of Assignment Of Insurance) (or otherwise in form and
substance satisfactory to the Security Agent) duly executed by, or on behalf
of, the Chargor and each other insured party under such Insurance Policy; and


 


6














 


(b)                    an
acknowledgment to such notice of assignment, duly executed by or behalf of each
such insurer, in the form of the acknowledgment attached to such notice of
assignment;


 


5.2.2                            (in respect of each Insurance Policy effected or
coming into existence after the date of this Debenture) forthwith upon the
effecting or coming to existence of such Insurance Policy:


 


(a)                     a
notice of assignment to the insurer(s) under such Insurance Policy
substantially in the form of Schedule 1 (Form Of
Notice Of Assignment Of Insurance) (or otherwise in form and
substance satisfactory to the Security Agent) duly executed by, or on behalf
of, the Chargor and each other insured party under such Insurance Policy; and


 


(b)                    an
acknowledgment to such notice of assignment, duly executed by or behalf of each
such insurer, in the form of the acknowledgment attached to such notice of
assignment; and


 


5.2.3                            in respect of any other asset which is the subject of
an assignment pursuant to Clause 3.2 (Assignments)
promptly upon the request of the Security Agent from time to time, a notice of
assignment in respect of such asset in such form as the Security Agent may
require, and the Chargor shall procure that such notice is promptly
acknowledged (in accordance with the terms of such notice) by each person to
whom such notice is expressed to be given and promptly deliver such executed
acknowledgment to the Security Agent.


 


5.3                           Notices
of Charge


 


5.3.1                            The Chargor shall deliver to the Security Agent (or
procure the delivery to the Security Agent of):


 


(a)                     in
respect of each Account that has already been established on or before the
Initial Utilisation Date (other than any Account opened or maintained by the
Chargor with the Security Agent), a notice of charge substantially in the form
of Schedule 2 (Form Of Notice Of charge
of Accounts) (or otherwise in form and substance satisfactory to the
Security Agent) on or prior to the Initial Utilisation Date, duly executed by
or on behalf of the Chargor, and the acknowledgement thereto (in accordance
with the terms of such notice) duly executed by or on behalf of each of the
banks, financial institutions and/or persons with which such Account is opened
or maintained; and


 


(b)                    in
respect of each Account that is established after the Initial Utilisation Date,
a notice of charge substantially in the form of Schedule 2 (Form Of Notice Of charge of Accounts)
(or otherwise in form and substance satisfactory to the Security Agent)
promptly upon such establishment, duly executed by or on behalf of the Chargor,
and the Chargor shall ensure that such notice is promptly duly acknowledged (in
accordance with the terms of such notice) by or on behalf of each of the banks,
financial institutions and/or persons with which such Account is opened or 


 


7

















 


maintained and promptly deliver a copy of such acknowledgement to the
Security Agent.


 


5.3.2                            The execution of this Debenture by the Chargor and the
Security Agent shall constitute notice to the Security Agent of the charge
created over any Account opened or maintained with the Security Agent from time
to time.


 


5.3.3                            The Chargor shall deliver to the Security Agent (or
procure the delivery to the Security Agent of), in respect of any other asset
which is the subject of a charge pursuant to Clause 3.3 (Floating Charge) or any fixed charge
arising from conversion (whether automatic or by notice) of any floating charge
created hereunder a notice of charge in respect of such asset in such form as
the Security Agent may require from time to time promptly upon demand of the
Security Agent, and procure that such notice is promptly duly acknowledged (in
accordance with the terms of such notice) by or on behalf of each person to
whom such notice is expressed to be given, and shall promptly deliver such
executed acknowledgment to the Security Agent.


 


5.4                           Real
Property:  Delivery of Documents of Title


 


The Chargor shall:


 


5.4.1                            on or prior to the Initial Utilisation Date, deliver
to the Security Agent (or procure the delivery to the Security Agent of) all
deeds, certificates and other documents of title relating to all Real Property
held by or on behalf of the Chargor at the date of this Debenture; and


 


5.4.2                            forthwith upon the acquisition by the Chargor of any
interest in any Real Property, deliver to the Security Agent (or procure the
delivery to the Security Agent of) all deeds, certificates and other documents
of title relating to such interest and execute in favour of the Security Agent
such charge or Security over such Real Property in such form as the Security
Agent may require as security for the Secured Obligations (in addition to this
Debenture).


 


The Security Agent shall be entitled to hold
and retain all such deeds, certificates and other documents of title delivered
pursuant to this Clause 5.4 (Real
Property:  Delivery of Documents of Title)
during the subsistence of this Debenture.


 


5.5                           Further
Advances


 


Subject
to the terms of the Facility Agreement each Lender is under an obligation to
make further advances to the Borrower in accordance with the provisions of the
Facility Agreement and that obligation will be deemed to be incorporated into
this Debenture as if set out in this Debenture.


 


5.6                           Insurance:  Delivery of Insurance Policies


 


The Chargor shall, promptly upon the request of
the Security Agent, deposit or procure the deposit of all Insurance Policies
with the Security Agent.


 


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5.7                           Investments:  Delivery of Documents of Title


 


The Chargor shall:


 


5.7.1                            on or prior to the Initial Utilisation Date, deposit
with the Security Agent (or procure the deposit with the Security Agent of) the
following in respect of the Investments existing as at the date of this
Debenture (including without limitation, for the avoidance of doubt, the Shares
but excluding any Investment in the form of equity interest in any entity
established in the PRC):


 


(a)                     all
certificates or other documents of title to such Investments;


 


(b)                    undated
share transfer forms or, as the case may be, other appropriate instruments of
transfer in respect of such Investments executed in blank by or on behalf of
the Chargor:


 


(i)                       (in the case of any of the Shares) substantially in
the form set out in Schedule 4 (Form of
Share Transfer); and


 


(ii)                    (in the case of other Investments) in such form as the
Security Agent may request;


 


(c)                     (in
the case of any Investments constituting any shares in any company incorporated
in Hong Kong (including without limitation the Shares)) undated sold notes in
respect of such Investments executed in blank by or on behalf of the Chargor;


 


(d)                    an
acknowledgment from each person (if any) holding any of the Investments as its
nominee:


 


(i)                       (in the case of any of the Shares) substantially the
form set out in Schedule 5 (Form of
acknowledgment from nominee); and


 


(ii)                    (in the case of other Investments) in such form as the
Security Agent may request;


 


(e)                     (in
the case of any Investments constituting any shares in any company incorporated
in Hong Kong (including without limitation the Shares)) an undated letter of
resignation executed by each director of the Company in substantially the form
set out in Schedule 6 (Form of letter
of resignation);


 


(f)                       (in
the case of any Investments constituting any shares in any company incorporated
in Hong Kong (including without limitation the Shares)) undated written
resolutions of the board of directors of the Company executed by all of the
directors of the Company in substantially the form set out in Schedule 7 (Form of written resolutions); and


 


(g)                   (in
the case of any Investments constituting any shares in any company incorporated
in Hong Kong (including without limitation the Shares)) a letter of undertaking
and authorisation executed by each director of the 


 


9

















 


Company in substantially the form set out in Schedule 8 (Form of letter of undertaking and authorisation);


 


5.7.2                            promptly upon any acquisition of any Investments
and/or the accrual, offer or issue of any stocks, shares, warrants or other
securities in respect of or derived from any Investments (excluding any such
items in the form of equity interest in any entity established in the PRC),
notify the Security Agent of that occurrence and procure the delivery to the
Security Agent of:


 


(a)                     all
certificates and other documents of title representing such items;


 


(b)                    undated
share transfer forms or, as the case may be, other appropriate instruments of
transfer in respect of such items executed in blank by or on behalf of the
Chargor, in each case in such form as the Security Agent shall request;


 


(c)                     (in
the case of any shares in any company incorporated in Hong Kong) undated sold
notes in respect of such shares executed in blank by or on behalf of the
Chargor; and


 


(d)                    an
acknowledgment from each person (if any) holding such items as its nominee in
such form as the Security Agent shall request;


 


5.7.3                            promptly upon any change in any director of the
Company after the date of this Debenture, procure the delivery to the Security
Agent of:


 


(a)                     (in
the case of a new director) an undated letter of resignation executed by such
director of such Company in substantially the form set out in Schedule 6 (Form of letter of resignation);


 


(b)                    undated
written resolutions of the board of directors of the Company executed by all of
the directors of such Company in substantially the form set out in Schedule 7 (Form of written resolutions); and


 


(c)                     (in
the case of a new director) a letter of undertaking and authorisation executed
by such director of the Company in substantially the form set out in Schedule 8
(Form of letter of undertaking and
authorisation); and


 


5.7.4                            procure that, where any nominee holding any Investment
(excluding any equity interest in any entity established in the PRC) ceases to
be or act as such, the successor nominee (or, if more than one, each successor
nominee) shall forthwith execute and deliver to the Security Agent an
acknowledgment in respect of such Investment in substantially the form set out
in Schedule 5 (Form of acknowledgment
from nominee).


 


5.8                           Intellectual
Property


 


The
Chargor shall, if requested by the Security Agent, execute all such documents
and do all acts that the Security Agent may require to record the interest of
the Security Agent in any registers relating to any registered Intellectual
Property.


 


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6.                                 FURTHER
ASSURANCE


 


6.1                           Further
Assurance:  General


 


6.1.1                            The Chargor shall promptly at its own cost do all such
acts and/or execute all such documents (including without limitation
assignments, transfers, mortgages, charges, notices and instructions) as the
Security Agent may specify (and in such form as the Security Agent may require
in favour of the Security Agent or its nominee(s)):


 


(a)                     to
perfect the Security created or intended to be created in respect of the
Charged Property (which may include, without limitation, the execution by the
Chargor of a mortgage, charge or assignment over all or any of the assets
constituting, or intended to constitute, any part of Charged Property) or for
the exercise of the Collateral Rights;


 


(b)                    to
confer on the Security Agent Security over any property and assets of the
Chargor located in any jurisdiction outside Hong Kong equivalent or similar to
the Security intended to be conferred by or pursuant to this Debenture;


 


(c)                     to
confer on the Security Agent the Security contemplated herein over any Real
Property (or any interest therein) acquired after the date hereof; and/or


 


(d)                    to
facilitate the realisation of the Charged Property.


 


6.2                           Necessary
Action


 


The Chargor shall from time to time take all
such action (whether or not requested to do so by the Security Agent) as is or
shall be available to it (including without limitation obtaining and/or
effecting all Authorisations) as may be necessary for the purpose of the creation,
perfection, protection or maintenance of any Security conferred or intended to
be conferred on the Security Agent by or pursuant to this Debenture.


 


6.3                           Consents


 


The Chargor shall:


 


6.3.1                            deliver to the Security Agent promptly upon execution
of this Debenture, all consents necessary to enable the assets (which are in
existence at the date of this Debenture and expressed to be subject to a fixed
charge or an assignment pursuant to Clause 3 (Fixed
Charges, Assignments and Floating Charge)  to be the subject of an effective fixed
charge or, as the case may be, assignment pursuant to Clause 3 (Fixed Charges, Assignments and Floating Charge);
and


 


6.3.2                            obtain and deliver to the Security Agent, promptly
upon acquisition of any assets or the coming into existence of any assets of
the Chargor after the date of this Debenture (which assets, in either case, are
expressed to be subject to a fixed charge or an assignment pursuant to Clause 3
(Fixed Charges, Assignments and Floating
Charge), all consents necessary to enable such assets to be the
subject of an effective fixed charge or, as the case may be, assignment
pursuant to Clause  3 (Fixed Charges, Assignments and Floating Charge).


 


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6.4                           Implied
Covenants for Title


 


The obligations of the Chargor under this
Debenture shall be in addition to any covenants for title deemed to be included
in this Debenture under the Conveyancing and Property Ordinance (Cap. 219)
and/or general law.


 


7.                                 NEGATIVE
PLEDGE AND DISPOSALS


 


7.1                           Negative
Pledge


 


The Chargor undertakes that it shall not, at
any time during the subsistence of this Debenture, create or permit to subsist
any Security or Quasi-Security over all or any part of the Charged Property,
except (only in the case of any asset that does not constitute Fixed Charge
Property or any part thereof) Permitted Security.


 


7.2                           No
Disposal of Interests


 


The Chargor undertakes that, save as permitted
under the Facility Agreement, it shall not and shall not agree to at any time during
the subsistence of this Debenture:


 


7.2.1                            execute or enter into any conveyance, transfer, lease,
assignment or disposal of, or other right to use or occupy, all or any part of
the Charged Property which is expressed to be subject to any fixed charge or
assignment pursuant to Clause 3.1 (Fixed
Charges) or 3.2 (Assignments)
or any fixed charge arising upon any crystallisation of any floating charge
created hereunder (collectively the “Fixed
Charge Property”) or any agreement for any of the foregoing;


 


7.2.2                            create any legal or equitable estate or other interest
in, or over, or otherwise relating to, all or any part of the Fixed Charge
Property;


 


7.2.3                            grant or vary, or accept any surrender, or
cancellation or disposal of, any lease, tenancy, licence, consent or other
right to occupy in relation to all or any part of the Fixed Charge Property;


 


7.2.4                            allow any person any right to use or occupy or to
become entitled to assert any proprietary interest in, or right over, all or
any of the Fixed Charge Property;


 


7.2.5                            sell, transfer or otherwise dispose of any Charged
Property (other than any Fixed Charge Property) other than as permitted under
the Facility Agreement (in the form subsisting as at the date of this
Debenture); or


 


7.2.6                            assign or otherwise dispose of any interest in any
Account (and, without prejudice to the foregoing, no right, title or interest
in relation to any Account maintained with the Security Agent, or the credit
balance standing to any such Account shall be capable of assignment or other
disposal).


 


7.3                           Other
adverse actions


 


The Chargor undertakes that it shall not, at
any time during the subsistence of this Debenture:


 


7.3.1                            create, grant or permit to subsist any restriction on
the ability of the Security Agent to transfer or realise, all or any of his
right, title and interest in the Charged Property or any part thereof; or


 


12

















 


7.3.2                            do or permit to be done any act or thing which could
reasonably be expected to jeopardise the rights of the Security Agent in the
Charged Property or any part thereof or which could reasonably be expected to
adversely and affect or diminish the value of the Charged Property or any part
thereof.


 


8.                                 INVESTMENTS


 


8.1                           Investments:
dividends


 


8.1.1                            Any and all dividends and/or distributions received,
recovered, paid or delivered to the order of the Chargor in respect of any or
all of the Investments (including, without limitation, any equity interest in
any entity established in the PRC) at any time on or after the occurrence of an
Event of Default (as long as any Event of Default is continuing) shall be
promptly paid and delivered to (and the Chargor shall promptly deliver such
dividends and/or distributions to) the Security Agent for application in
accordance with this Debenture.


 


8.1.2                            Without prejudice to the foregoing, the Chargor shall
promptly inform the Security Agent of the receipt of any dividend or
distribution (whether or not in cash) in respect of any or all of the
Investments (including, without limitation, any equity interest in any entity
established in the PRC).


 


8.2                           Investments:  Before Event of Default


 


Prior to the occurrence of an Event of Default
which is continuing the Chargor shall be entitled to exercise all voting rights
in relation to any or all of the Investments (excluding any equity interest in
any entity established in the PRC) provided that
the Chargor shall not exercise such voting rights in any manner, or otherwise
permit or agree to any (a) variation of the rights attaching to or conferred
by any of the Investments or (b) increase in the issued share capital,
registered capital or equity interest of any company, corporation or entity
whose shares/securities/equity interests are charged or subject to security
under this Debenture, except (in the case of such increase) where such increase
is permitted under the Facility Agreement and any and all such additional
shares, registered capital or equity interests are paid for in full and
immediately made subject to the security constituted under this Debenture upon
their issuance.


 


8.3                           Investments:  After Event of Default


 


The Security Agent may, upon and/or after the
occurrence of an Event of Default (as long as any Event of Default is
continuing), at its discretion (in the name of the Chargor or otherwise and
without any further consent or authority from the Chargor):


 


8.3.1                            exercise (or refrain from exercising) any voting
rights in respect of the Investments (excluding any Investment in the form of
any equity interest in any entity established in the PRC);


 


8.3.2                            apply all dividends, distributions, interest and other
monies arising from all or any of the Investments (including without
limitation, any Investment in the form of any equity interest in any entity
established in the PRC to the extent permitted under applicable laws and
regulations of the PRC) in accordance with Clause 18 (Application of Monies);


 


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8.3.3                            transfer all or any of the Investments (excluding any
Investment in the form of any equity interest in any entity established in the
PRC) into the name of such nominee(s) of the Security Agent as it shall
think fit; and


 


8.3.4                            exercise (or refrain from exercising) the powers and
rights conferred on or exercisable by the legal or beneficial owner of the
Investments, including without limitation the right, in relation to any
company, corporation or entity whose shares, equity interests or other
securities are included in the Charged Property or any part thereof, to concur
or participate in:


 


(a)                     the
reconstruction, amalgamation, sale or other disposal of such company,
corporation or entity or any of its assets or undertaking (including without
limitation the exchange, conversion or reissue of any shares, equity interests
or securities as a consequence thereof);


 


(b)                    the
release, modification or variation of any rights or liabilities attaching to
such shares, equity interests or securities; and


 


(c)                     the
exercise, renunciation or assignment of any right to subscribe for any shares,
equity interests or securities,


 


in
each case in such manner and on such terms as the Security Agent may think fit,
and the proceeds of any such action shall form part of the Charged Property and
may be applied by the Security Agent in accordance with Clause 18 (Application of Monies).


 


8.4                           Investments:  Payment of Calls


 


The Chargor shall pay when due all calls or
other payments which may be or become due in respect of any of the Investments,
and in any case of default by the Chargor in such payment, the Security Agent
may, if it thinks fit, make such payment on behalf of the Chargor in which case
any sums paid by the Security Agent shall be reimbursed by the Chargor to the
Security Agent on demand and shall carry interest from the date of payment by
the Security Agent until reimbursed in full at the rate and in accordance with
Clause 2.2 (Interest on Demands).


 


8.5                           Investments:  Exercise of Rights


 


The Chargor shall not exercise any of its
rights and powers in relation to any of the Investments in any manner which, in
the opinion of the Security Agent, would prejudice the value of, or the ability
of the Security Agent to realise, the Security created by this Debenture.


 


9.                                 ACCOUNTS


 


9.1                           Accounts:  Notification and Variation


 


The Chargor, during the subsistence of this
Debenture:


 


9.1.1                            shall deliver to the Security Agent on the date of
this Debenture (and, if any change occurs thereafter, on the date of such
change), details of each Account maintained by it with any bank, financial
institution or entity (other than those maintained with the Security Agent);
and


 


14

















 


9.1.2                            shall not, without the Security Agent’s prior written
consent, permit or agree to any variation of the rights attaching to any
Account or close any Account.


 


9.2                           Accounts:  Operation Before Default


 


Without prejudice to the Collateral Rights, as
long as no Default is continuing, the Chargor may from time to time withdraw
amounts from any Account subject to the terms of the Finance Documents.


 


9.3                           Accounts:  Operation After Default


 


9.3.1                            At any time while any Default is continuing, the
Chargor may not withdraw or transfer any amount from any Account except with
the prior written consent of the Security Agent.


 


9.3.2                            Without prejudice to any other Collateral Rights, the
Security Agent shall, as long as any Default is continuing, be entitled without
notice or further demand, immediately to exercise all the rights, powers and
remedies possessed by it according to law as legal and beneficial owner of any
and all amounts standing to the credit of the Accounts (and as assignee and/or
chargee of the Chargor’s right, title and interest therein and thereto) and to:


 


(a)                     demand
and receive all and any monies standing to the credit of any or all of the
Accounts; and/or


 


(b)                    apply,
transfer or set-off any or all of the credit balances from time to time on any
or all of the Accounts in or towards the payment or other satisfaction of all
or part of the Secured Obligations in accordance with Clause 18 (Application of Monies).


 


9.4                           Accounts:
set-off


 


Without prejudice to any other Collateral
Rights, the Security Agent shall from time to time be entitled, without notice
or demand to or on the Chargor, to set-off, apply or transfer any or all of the
amounts standing to the credit of any or all of the Accounts (held or
maintained by the Chargor with the Security Agent) against, or in or towards
the satisfaction of all or any part of the Secured Obligations when such
Secured Obligations are due and payable but unpaid.


 


10.                           MONETARY
CLAIMS


 


The Chargor shall not at any time during the
subsistence of the Debenture, without the prior written consent of the Security
Agent:


 


(a)                                      deal with any Monetary Claims except that the Chargor may (subject to
the other provisions of the Finance Documents) get in and realise any Monetary
Claims in a prudent manner and pay the proceeds of those Monetary Claims into
an Account or as the Security Agent may require (and such proceeds shall be
held upon trust by the Chargor for the Security Agent on behalf of the Secured
Parties prior to such payment in); or


 


(b)                                     factor or discount any of the Monetary Claims or enter into any
agreement for such factoring or discounting.


 


15

















 


11.                           INSURANCES


 


11.1                     Insurance:
Insurances Required to be Effected


 


The Chargor shall at all times during the
subsistence of this Debenture effect and maintain insurance in accordance with
the provisions of the Facility Agreement.


 


11.2                     Insurance:
Terms of Insurance


 


The Chargor undertakes with the Security Agent
(for and on behalf of the Secured Parties) that it shall ensure that each of
the insurances required to be effected and maintained pursuant to Clause 11.1 (Insurance: Insurances Required to be Effected)
and/or any other provision of the Transaction Documents shall be:


 


11.2.1                      effected in the name of the Chargor or, if required by
the Security Agent, in the joint names of the Chargor and the Security Agent
(and/or such other person(s) as the Security Agent may nominate), provided
that (in each case) the interest of the Security Agent shall be duly noted on
such insurance;


 


11.2.2                      endorsed with appropriate “loss-payee” clauses to the
effect that the proceeds of such insurance shall be paid in accordance with
Clause 11.3 (Insurance: 
Payment of Proceeds);


 


11.2.3                      on terms that the relevant insurer undertakes to
notify the Security Agent of:


 


(a)                     any
amendment, variation, cancellation, suspension, termination or expiry of such
insurance at least fourteen (14) days before such amendment, variation,
cancellation, suspension, termination or expiry (as the case may be) is due to
take effect;


 


(b)                    without
prejudice to sub-Clause 11.2.3(a), any default by any insured party in the
payment of any premium or other sum payable by it under such insurance as soon
as reasonably practicable after such default; and


 


(c)                     any
failure by any insured party to renew such insurance due to expire at least
fourteen (14) days prior to such expiry;


 


11.2.4                      on terms that none of the Security Agent or any other
Secured Party shall be liable for the payment of any premium or other sum
payable in connection with, or for any obligation of the Chargor under or in
connection with, such insurance;


 


11.2.5                      on terms that such insurance shall not be invalidated
or prejudiced as against a mortgagee or security holder by any
misrepresentation, act, omission, neglect or failure to make disclosure on the
part of any insured person or its agents or any tenant, lessee, licensee or
occupier of any of the Charged Property or by any circumstances beyond the
control of any insured party;


 


11.2.6                      on terms that each relevant insurer waives any and all
rights of subrogation which it may otherwise have against any or all of the
Security Agent (as loss payee or otherwise), the insured parties and/or their
respective subsidiaries, affiliates, officers and employees; and


 


16














 


11.2.7                      on terms that (other than any unpaid premium) each
relevant insurer waives any and all rights of set-off, deduction and/or
counterclaim which it may otherwise have in respect of any insurance proceeds
payable (or payable but for such right of set-off, deduction and/or
counterclaim) to any insured party and/or the Security Agent (as loss-payee or
otherwise).


 


11.3                     Insurance:  Payment of Proceeds


 


In relation to each Insurance Policy, the
Chargor shall procure that, subject to the provisions of the Facility
Agreement:


 


11.3.1                      at all times prior to the service of a notice by or on
behalf of the Security Agent on the relevant insurer to the effect that an
Event of Default has occurred and is continuing or this Debenture has become
enforceable, the proceeds of:


 


(a)                     any
third party liability insurance which provides for direct payment of the
relevant proceeds to the relevant third party shall be paid to such third
party, unless the Chargor shall have otherwise discharged its liability to such
third party in which case such proceeds shall be paid to the Chargor for its
reimbursement; and


 


(b)                    any
other insurance shall be paid:


 


(i)                       to the Chargor (subject to the provisions of the
Facility Agreement) for application towards the repair, replacement, rebuilding
and/or reinstatement of the Charged Property and/or making good the loss or
damage in respect of which such insurance has been effected within 3 Months of
its receipt of such proceeds; or


 


(ii)                    if so directed by the Security Agent, to the Security
Agent; and


 


11.3.2                      at all times after the service of a notice by or on
behalf of the Security Agent on the relevant insurer to the effect that an
Event of Default has occurred and is continuing or this Debenture has become
enforceable, the proceeds of:


 


(a)                     any
third party liability insurance which provides for direct payment of the
relevant proceeds to the relevant third party shall be paid to such third
party, unless the Chargor shall have otherwise discharged its liability to such
third party in which case such proceeds shall be paid to the Security Agent;
and


 


(b)                    any
other insurance shall be paid to the Security Agent.


 


11.4                     Insurance:  General Undertakings


 


At all times during the subsistence of this
Debenture, the Chargor shall:


 


11.4.1                      promptly pay all premiums and other moneys payable
under all Insurance Policies and promptly upon request, produce to the Security
Agent a copy of each Insurance Policy and evidence (acceptable to the Security
Agent) of the payment of such premiums and monies;


 


17

















 


11.4.2                      do all such things and take such steps as may be
necessary to ensure that all insurances required to be effected pursuant to any
or all of the Transaction Documents (including without limitation this Debenture)
are so effected and remain in full force and effect;


 


11.4.3                      not at any time do or omit to do anything whereby any
Insurance Policy would be likely to be rendered invalid, void, voidable,
unenforceable, suspended, impaired or liable to forfeiture, cancellation or
termination or render any sum paid out thereunder repayable in whole or in part
or otherwise prejudice or materially adversely affect the Security Agent’s
rights in connection therewith;


 


11.4.4                      procure that no material amendment or variation to the
terms of any insurance required to be effected pursuant to the Transaction
Documents (including without limitation this Debenture) shall be made without
the prior written consent of the Security Agent and that, without prejudice to
the foregoing, no reduction in limit or coverage or increase in deductibles or
excesses in relation to any such insurance shall be made without the prior
written consent of the Security Agent;


 


11.4.5                      notify the Security Agent of any circumstance of which
the Chargor has knowledge (giving full details thereof) which give rise or may
give rise to a claim under any Insurance Policy which exceeds or is likely to
exceed USD1,000,000 (or the equivalent thereof) and thereafter from time to
time inform the Security Agent as to the conduct and progress of each such
claim; and


 


11.4.6                      upon the request of the Security Agent, provide such
information as the Security Agent may require in connection with any Insurance
Policy.


 


11.5                     Application
of Insurance Proceeds


 


Where the Chargor shall have received any
proceeds of any Insurance Policy which ought to have been paid to the Security
Agent pursuant to Clause 11.3 (Insurance:  Payment of Proceeds), the Chargor
shall promptly pay over such proceeds to the Security Agent and shall at all
times prior to such payment hold the same on trust for the Security Agent.


 


11.6                     Insurance:
Handling of Claims


 


The Chargor shall, at all times prior to the
occurrence of an Event of Default which is continuing, be entitled to make and
deal with all claims in respect of any or all of the Insurance Policies except
for any settlement, waiver, discontinuance of compromise of any claim in an
amount of not less than USD1,000,000 (or the equivalent thereof) which shall
require the prior written consent of the Security Agent.  After the occurrence of an Event of Default
(as long as any Event of Default is continuing), the Chargor shall cease to be
entitled to make or deal with any claim in respect of any Insurance Policy and
the Security Agent shall be entitled to (but shall not be obliged to) make or
deal with any such claim at its discretion to the exclusion of the Chargor.


 


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11.7                     Insurance:
Default


 


If the Chargor defaults in complying with any
of the foregoing provisions of this Clause 11 (Insurances),
the Security Agent may effect or renew any relevant insurance on such terms, in
such name(s) and in such amount(s) and/or take any steps to remedy
such default as it considers appropriate, and all moneys expended by the
Security Agent in doing so shall be reimbursed by the Chargor to the Security
Agent on demand and shall carry interest from the date of payment by the
Security Agent until reimbursed in full at the rate specified in
Clause 2.2 (Interest on Demands).


 


12.                           REAL
PROPERTY


 


12.1                     General
Property Undertaking


 


The Chargor shall:


 


12.1.1                      repair and keep in good and substantial repair and
condition to the satisfaction of the Security Agent all the Real Property at
any time forming part of the Charged Property;


 


12.1.2                      not at any time without the prior written consent of
the Security Agent sever or remove any of the fixtures forming part of such
Real Property or any fitting, plant or machinery (other than work in progress)
on or in the Charged Property (except for the purpose of any necessary repairs
or replacement thereof);


 


12.1.3                      not, except with the prior written consent of the
Security Agent, use or permit the use of such Real Property or any part thereof
for purposes other than those for which it may be lawfully used;


 


12.1.4                      comply with and observe and perform (i) all
applicable laws and all applicable requirements of all planning and
environmental legislation, regulations and bye-laws relating to such Real
Property or any part thereof, (ii) any conditions attaching to any
planning permissions and/or consents relating to or affecting such Real
Property or any part thereof, (iii) any notices, orders and/or directives
orders made or issued by any planning, environmental or other public body in
respect of such Real Property or any part thereof and (iv) all restrictive
and other covenants, stipulations and obligations now or at any time affecting
such Real Property or any part thereof insofar as they are subsisting and
capable of being enforced; and


 


12.1.5                      within fourteen days after the receipt by the Chargor
of any material application, requirement, demand, order, directive or notice
served or given by any government department or any other competent authority
with respect to such Real Property or any part thereof give notice of and
deliver a copy of the same to the Security Agent, and thereafter keep the
Security Agent informed from time to time of the steps/actions taken in
relation to the same.


 


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12.2                     Lease
Covenants


 


The Chargor shall, in relation to any lease,
agreement for lease or other right to occupy to which all or any part of the
Charged Property is at any time subject:


 


12.2.1                      pay the rents (if the Chargor is the lessee or the
beneficiary of such right to occupy) and observe and perform in all material
respects the covenants, conditions and obligations imposed (if the Chargor is
the lessor or the grantor of such right to occupy) on the lessor or, (if the
Chargor is lessee or the beneficiary of such right to occupy) on the lessee;


 


12.2.2                      (where the Chargor is the lessor or the grantor of
such right to occupy) duly and efficiently enforce all of its rights and
remedies against any tenant, lessee, licensee or occupier of all of any part of
such Charged Property; and


 


12.2.3                      (where the Chargor is the lessee or the beneficiary of
such right to occupy) not do any act or thing whereby any lease or other
document which gives any right to occupy any part of the Charged Property
becomes or may become subject to determination or any right of re-entry or
forfeiture prior to the expiration of its term.


 


12.3                     Entitlement
to Remedy


 


If the Chargor fails to comply with any of the
undertakings contained in this Clause 12 (Real
Property), the Security Agent shall be entitled (with such agents,
contractors and others as it sees fit), without becoming a mortgagee in
possession, to do such things as may in the opinion of the Security Agent be
required to remedy such failure and all monies spent by the Security Agent in
doing so shall be reimbursed by the Chargor on demand with interest from the
date of payment by the Security Agent until reimbursed in full in accordance
with Clause 2.2 (Interest on Demands).


 


13.                           GENERAL
UNDERTAKINGS


 


13.1                     Intellectual
Property


 


The Chargor shall during the subsistence of
this Debenture in respect of any and all Intellectual Property (including,
including without limitation, the Relevant Trademarks):


 


13.1.1                      take all such steps and do all such acts as may be
necessary to preserve and maintain the subsistence and the validity of any such
Intellectual Property;


 


13.1.2                      use reasonable endeavours to prevent any infringement
in any material respect of such Intellectual Property;


 


13.1.3                      make registrations and pay all registration fees and
taxes necessary to maintain such Intellectual Property in full force and effect
and record its interest in such Intellectual Property;


 


13.1.4                      not use or permit any such Intellectual Property to be
used in any way or take any step or omit to take any step in respect of such
Intellectual Property which could reasonably be expected to materially and
adversely affect the existence or value of such Intellectual Property or
imperil the right of any member of the Group to use such Intellectual Property;


 


20

















 


13.1.5                      not discontinue the use of such Intellectual Property;
and


 


13.1.6                      not sell, lease, license or otherwise dispose of any
its rights in respect of such Intellectual Property.


 


13.2                     Information
and Access


 


The Chargor shall from time to time on request
of the Security Agent, furnish the Security Agent with such information as the
Security Agent may require about the Chargor’s business and affairs, the
Charged Property and/or the Chargor’s compliance with the terms of this Debenture
and the Chargor shall permit the Security Agent, its representatives,
professional advisers and contractors, free access at all reasonable times and
on reasonable notice to (a) inspect and take copies and extracts from the
books, accounts and records of the Chargor and (b) to view the Charged
Property or any part thereof (without becoming liable as mortgagee in
possession).


 


14.                           ENFORCEMENT
OF SECURITY


 


14.1                     Enforcement


 


Upon and after the occurrence of an Event of
Default (as long as any Event of Default is continuing) or if the Chargor
requests the Security Agent to exercise any of its powers under this Debenture,
the Security created by or pursuant to this Debenture is immediately
enforceable and the Security Agent may, without notice to the Chargor or prior
authorisation from any court, in its absolute discretion:


 


14.1.1                      enforce all or any part of such Security (at the
times, in the manner and on the terms it thinks fit) and take possession of and
hold or dispose of all or any part of the Charged Property; and


 


14.1.2                      whether or not it has appointed a Receiver, exercise
all or any of the powers, authorities and discretions conferred by the
Conveyancing and Property Ordinance (Cap. 219) (as varied or extended by this
Debenture) on mortgagees and by this Debenture on any Receiver or otherwise
conferred by law on mortgagees and/or Receivers.


 


14.2                     No
Liability as Mortgagee in Possession


 


Neither the Security Agent nor any Receiver
shall be liable to account as a mortgagee in possession in respect of all or
any part of the Charged Property or be liable for any loss upon realisation or
for any neglect, default or omission in connection with the Charged Property to
which a mortgagee or a mortgagee in possession might otherwise be liable.


 


15.                           POWERS
OF SALE


 


15.1                     Extension
of Powers


 


The power of sale or other disposal conferred
on the Security Agent and on any Receiver by this Debenture shall operate as a
variation and extension of the statutory power of sale under Sections 51 and 53
of the Conveyancing and Property Ordinance (Cap. 219) and such power shall
arise (and the Secured Obligations shall be deemed due and payable for that
purpose) on execution of this Debenture.


 


21

















 


15.2                     Restrictions


 


The restrictions contained in paragraph 11 of
the Fourth Schedule to the Conveyancing and Property Ordinance (Cap. 219) shall
not apply to this Debenture or to the exercise by the Security Agent of its
right to consolidate all or any of the Security created by or pursuant to this
Debenture with any other Security in existence at any time or to its power of
sale, which powers may be exercised by the Security Agent without notice to the
Chargor on or at any time after the occurrence of an Event of Default (as long
as any Event of Default is continuing). Any restrictions on the consolidation
of Security shall be excluded to the fullest extent permitted by law.


 


15.3                     Power
of Leasing


 


The statutory powers of leasing, surrendering
leases and accepting surrenders of leases conferred by the Fourth Schedule to
the Conveyancing and Property Ordinance (Cap. 219) may be exercised by the
Security Agent at any time on or after the occurrence of an Event of Default
(as long as any Event of Default is continuing) and, without prejudice to the
foregoing, the Security Agent and/or any Receiver may, whether or not the
Security Agent and/or such Receiver shall then be in possession of the relevant
property proposed to be leased/let/made subject to the relevant option, make
any lease or agreement for lease, accept surrenders of leases and/or grant
options on such terms (including without limitation as to premium and length of
term) as it shall think fit, without the need to comply with any
requirements/restrictions imposed by the Fourth Schedule to the Conveyancing
and Property Ordinance (Cap. 219).


 


16.                           APPOINTMENT
OF RECEIVER OR ADMINISTRATOR


 


16.1                     Appointment
and Removal


 


Upon and after the occurrence of an Event of
Default (as long as any Event of Default is continuing) or if requested to do
so by the Chargor, the Security Agent may by deed or otherwise (acting through
an authorised officer of the Security Agent), without prior notice to the
Chargor:


 


16.1.1                      appoint one or more persons to be a Receiver of the
whole or any part of the Charged Property;


 


16.1.2                      appoint two or more Receivers of separate parts of the
Charged Property;


 


16.1.3                      remove (so far as it is lawfully able) any Receiver so
appointed; and/or


 


16.1.4                      appoint another person(s) as an additional or
replacement Receiver(s).


 


16.2                     Capacity
of Receivers


 


Each person appointed to be a Receiver pursuant
to Clause 16.1 (Appointment and Removal)
shall be:


 


16.2.1                      entitled to act individually or together with any
other person appointed or substituted as Receiver;


 


16.2.2                      for all purposes deemed to be the agent of the Chargor
which shall be solely responsible for his acts, defaults and liabilities and
for the payment of his 


 


22

















 


remuneration and no Receiver shall at any time
act as agent for the Security Agent; and


 


16.2.3                       entitled to remuneration for his services at a rate to
be fixed by the Security Agent from time to time.


 


16.3                     Statutory
Powers of Appointment


 


The powers of appointment of a Receiver herein
contained shall be in addition to all statutory and other powers of appointment
of the Security Agent under the Conveyancing and Property Ordinance (Cap. 219)
(as varied and extended by this Debenture) or otherwise and such powers shall
remain exercisable from time to time by the Security Agent in respect of all or
any part of the Charged Property.


 


17.                           POWERS
OF RECEIVER


 


17.1                     Powers
of Receiver


 


Every Receiver shall (subject to any
restrictions in the instrument appointing him but notwithstanding any
winding-up or dissolution of the Chargor) have and be entitled to exercise, in
relation to the Charged Property (and any assets of the Chargor which, when got
in, would be Charged Property) or that thereof in respect of which he was
appointed, and as varied and extended by the provisions of this Debenture (in
the name of or on behalf of the Chargor or in his own name and, in each case,
at the cost of the Chargor):


 


17.1.1                      all the powers conferred by the Conveyancing and
Property Ordinance (Cap. 219) on mortgagors and on mortgagees in possession
and on receivers appointed under that Ordinance;


 


17.1.2                      all the powers and rights of an absolute owner and
power to do or omit to do anything which the Chargor itself could do or omit to
do; and


 


17.1.3                      the power to do all things (including without limitation
bringing or defending proceedings in the name or on behalf of the Chargor)
which seem to the Receiver to be incidental or conducive to (a) any of the
functions, powers, authorities or discretions conferred on or vested in him or (b) the
exercise of any Collateral Rights (including without limitation realisation of
all or any part of the Charged Property) or (c) bringing to his hands any
assets of the Chargor forming, or which when got in would be, part of the
Charged Property.


 


17.2                     Additional
Powers of Receiver


 


In addition to and without prejudice to the
generality of the foregoing, every Receiver shall (subject to any limitations
or restrictions expressed in the instrument appointing him but notwithstanding
any winding-up or dissolution of the Chargor) have the following powers in
relation to the Charged Property (and any assets of the Chargor which, when got
in, would be part of the Charged Property), in respect of which he was
appointed (and every reference in this Clause 17.2 to the “Charged Property”
shall be read as a reference to that part of the Charged Property in respect of
which such Receiver was appointed):


 


23

















 


17.2.1                      Take Possession


 


power to enter upon, take immediate possession
of, collect and get in the Charged Property including without limitation rents
and other income whether accrued before or after the date of his appointment
and for that purpose to make, or to require the directors of the Chargor to
make, calls conditionally or unconditionally upon the holders of the Chargor’s
share capital in respect of any such capital of the Chargor which remains
uncalled and to enforce payment of calls so made and any previous unpaid calls
by taking proceedings in the name of the Chargor or in his own name;


 


17.2.2                      Proceedings and Claims


 


power to bring, prosecute, enforce, defend and
abandon applications, claims, disputes, actions, suits and proceedings in
connection with the business of the Chargor or all or any part of the Charged
Property or the Debenture in the name of the Chargor or in his own name and to
submit to arbitration, negotiate, compromise and settle any such applications,
claims, disputes, actions, suits or proceedings and in addition to take or
defend proceedings for the compulsory winding-up of the Chargor and proceedings
for directions under Section 255 of the Companies Ordinance (Cap. 32);


 


17.2.3                      Carry on Business


 


power to carry on and manage, or concur in the
carrying on and management of or to appoint a manager of, the whole or any part
of the Chargor’s business in such manner as he shall in his absolute discretion
think fit including without limitation the power to enter into any contract or
arrangement and to perform, repudiate, rescind or vary any contract to which
the Chargor is a party and power to supervise, control and finance any
subsidiary of the Chargor or any other body corporate (including without
limitation any referred to in Clause 17.2.6 below) and its business and the
conduct thereof and to change the situation of the registered office of the
Chargor or any such subsidiary or other body corporate;


 


17.2.4                      Deal with Charged Property


 


without the need to observe the restrictions
imposed by paragraph 11 of the Fourth Schedule to the Conveyancing and Property
Ordinance (Cap. 219), power, in relation to the Charged Property and each and
every part thereof, to sell, transfer, convey, grant or accept surrenders of
leases, vary, terminate or surrender leases, grant, vary or terminate licences
or rights of user (in each case with or without consideration) or concur in any
of the foregoing by the Chargor or any other receiver or manager of the Chargor
(including without limitation to or in relation to the Security Agent or any of
the other Secured Parties) in such manner and generally on such terms as he
thinks fit including without limitation, without the consent of the Chargor,
the severing and separate disposal from the premises to which they were affixed
of fixtures and plant and machinery;


 


24

















 


17.2.5                      Acquisitions


 


power to purchase, lease, hire or otherwise
acquire any assets or rights of any description which he shall in his absolute
discretion consider necessary or desirable for the carrying on, improvement or
realisation of the whole or any part of the Charged Property or the business of
the Chargor or otherwise for the benefit of the whole or any part of the
Charged Property;


 


17.2.6                      New Subsidiary


 


power to promote, procure the formation or
otherwise acquire the share capital of, any body corporate with a view to such
body corporate becoming a subsidiary of the Chargor or otherwise and
purchasing, leasing or otherwise acquiring an interest in the whole or any part
of the Charged Property or carrying on any business in succession to the
Chargor or any subsidiary of the Chargor;


 


17.2.7                      Landlord and Tenant


 


power to make allowances to and re-arrangements
with any lessees, tenants or other persons from whom any rents and profits may
be receivable (including granting any licences and operating any rent reviews)
and to exercise any powers and discretions conferred on a landlord or a tenant
by any statutory provision or by general law from time to time in force in
relation to all or any part of the Charged Property;


 


17.2.8                      Repairs etc


 


power to undertake, effect or complete any work
of repair, refurbishment, decoration, modification, building, improvement or
development of all or any part of the Charged Property as he may think
expedient and to apply for and obtain any planning permissions, building
regulation approvals and any other permissions, consents or licences in each
case as he may in his absolute discretion think fit and to acquire (or acquire
an interest in) any such property as he may think expedient;


 


17.2.9                      Insurance


 


power to effect, maintain or renew indemnity
and other insurances and to obtain bonds and performance guarantees;


 


17.2.10                Employment


 


power to employ, engage, dismiss or vary the
terms of employment or engagement of such employees, workmen, servants, officers,
managers, agents and advisers on such terms as to remuneration and otherwise as
he shall think fit including without limitation power to engage his own firm in
the conduct of the receivership;


 


25














 


17.2.11    Borrowing


 


power to raise or borrow money from the
Security Agent or any of the other Secured Parties or any other person to rank
either in priority to the Security constituted by this Debenture or any part of
it or otherwise and with or without a mortgage or charge on the Charged
Property or any part of it on such terms as he shall in his absolute discretion
think fit (and no person lending such money shall be concerned to see or
enquire as to the propriety or purpose of the exercise of such power or the
application of money so raised or borrowed);


 


17.2.12    Redemption
of Security


 


power to redeem, discharge or compromise any
Security whether or not having priority to the Security constituted by this
Debenture or any part of it;


 


17.2.13    Covenants,
Guarantees and Indemnities


 


power to enter into bonds, covenants,
guarantees, commitments, indemnities and other obligations or liabilities as he
shall think fit, to make all payments needed to effect, maintain or satisfy
such obligations or liabilities and to use the company seal of the Chargor; and


 


17.2.14    Exercise
of Powers in the Chargor’s Name


 


power to exercise any or all of the above
powers on behalf of and in the name of the Chargor (notwithstanding any
winding-up or dissolution of the Chargor) or on his own behalf.


 


17.3       Terms of
Disposition


 


In making any sale or other disposal of all or
any part of the Charged Property or any acquisition in the exercise of their
respective powers (including without limitation a disposal by a Receiver to any
subsidiary of the Chargor or other body corporate as is referred to in Clause
17.2.6) a Receiver or the Security Agent may accept or dispose of as, and by
way of consideration for, such sale or other disposal or acquisition, cash,
shares, loan capital or other obligations, including without limitation
consideration fluctuating according to or dependent upon profit or turnover and
consideration the amount whereof is to be determined by a third party.  Any such consideration may, if thought
expedient by the Receiver or the Security Agent, be nil or may be payable or
receivable in a lump sum or by instalments. 
Any contract for any such sale, disposal or acquisition by the Receiver
or the Security Agent may contain conditions excluding or restricting the
personal liability of the Receiver or the Security Agent.


 


18.         APPLICATION
OF MONIES


 


18.1       Order of
Application


 


Save as otherwise expressly provided in this
Debenture, all moneys received or recovered by the Security Agent or any
Receiver pursuant to this Debenture or the powers conferred by it shall
(subject to the claims of any person having prior rights thereto and subject to
Clause 18.2 (Suspense Account), and by way of
variation of the 


 


26

















 


Conveyance and Property Ordinance (Cap. 219))
be applied in accordance with clause 6 (Application of Proceeds)
of the Security Trust Deed.


 


18.2       Suspense
Account


 


All monies received, recovered or realised
under this Debenture by the Security Agent or any Receiver or the powers
conferred by it (including the proceeds of any conversion of currency) may in
its discretion be credited to and held in any suspense or impersonal account
pending their application from time to time in or towards the discharge of any
of the Secured Obligations in accordance with Clause 18.1 (Order of Application).


 


18.3       Application
by the Chargor


 


Any application under this Clause 18 shall
override any application by the Chargor.


 


19.         RECEIPT
AND PROTECTION OF PURCHASERS


 


19.1       Receipt
and Consideration


 


The receipt of the Security Agent or any
Receiver shall be conclusive discharge to a purchaser of any part of the
Charged Property from the Security Agent or such Receiver and in making any
sale or disposal of any part of the Charged Property or making any acquisition,
the Security Agent or any Receiver may do so for such consideration, in such
manner and on such terms as it thinks fit.


 


19.2       Protection
of Purchasers


 


No purchaser or other person dealing with the
Security Agent or any Receiver shall be bound to inquire whether the right of
the Security Agent or such Receiver to exercise any of its powers has arisen or
become exercisable or be concerned with any propriety or regularity on the part
of the Security Agent or such Receiver in such dealings.  The protection given to purchasers from a
mortgagee in Sections 52 and 55 of the Conveyancing and Property Ordinance
(Cap. 219) shall apply equally to purchaser(s) and other person(s) dealing
with the Security Agent or any Receiver.


 


20.         POWER OF
ATTORNEY


 


20.1       Appointment
and Powers


 


The Chargor by way of security irrevocably
(within the meaning of Section 4 of the Powers of Attorney Ordinance (Cap.
31)) appoints the Security Agent and any Receiver severally, upon or after the
occurrence of an Event of Default (as long as any Event of Default is
continuing), to be its attorney and in its name, on its behalf and as its act
and deed to execute, deliver and perfect all documents and do all things which
the Security Agent or such Receiver may consider to be necessary for:


 


20.1.1       carrying out any
obligation imposed on the Chargor by this Debenture or any other agreement
binding on the Chargor to which the Security Agent is party (including without
limitation the execution and delivery of any deeds, charges, assignments or
other Security and any transfers of the Charged Property or any part thereof);
and


 


20.1.2       enabling the Security
Agent and any Receiver to exercise, or delegate the exercise of, any of the
rights, powers and authorities conferred on them by or pursuant to this
Debenture or by law (including, without limitation, upon or 


 


27

















 


after the occurrence of an Event of Default (as long as any Event of
Default is continuing), the exercise of any right of a legal or beneficial
owner of the Charged Property or any part thereof).


 


20.2       Ratification


 


The Chargor shall ratify and confirm all things
done and all documents executed by any attorney in the exercise or purported
exercise of all or any of his powers.


 


21.         REPRESENTATIONS


 


21.1       Representations


 


The Chargor represents and warrants to the
Security Agent that:


 


21.1.1       it is a limited liability company incorporated and validly existing
under the laws of the British Virgin Islands; and


 


21.1.2       subject to any general principles of law as at the date of this
Debenture limiting its obligations which are specifically referred to in any
legal opinion delivered pursuant to Clause 5 (Conditions
of Utilisation) of the Facility
Agreement:


 


(a)       each of the
obligations expressed to be assumed by it in this Debenture  are legal, valid, binding and enforceable
obligations; and


 


(b)       (without limiting the
generality of Clause 21.1.2(a) above), this Debenture creates the security
interests which it purports to create and such security interests are valid and
effective;


 


21.1.3       the entry into and performance by it of, and the transactions
contemplated by, this Debenture do not and will not:


 


(a)       conflict with any law
or regulation applicable to it;


 


(b)       conflict with its
constitutional documents;


 


(c)       conflict with any
agreement or instrument binding upon it or any of its assets; or


 


(d)       result in the
existence of or oblige it to create any Security over all or any of its assets
(other than the Security constituted pursuant to this Debenture);


 


21.1.4       it has the power to enter into, perform and deliver, and has taken all
necessary action to authorise its entry into, performance and delivery of, this
Debenture;


 


21.1.5       no limit on its powers will be exceeded as a result of the grant of Security
contemplated by this Debenture;


 


21.1.6       all Authorisations required or desirable:


 


(a)       to enable it lawfully
to enter into, exercise its rights and comply with its obligations in this
Debenture;


 


28

















 


(b)       to make this
Debenture admissible in evidence in its jurisdiction of incorporation and/or
Hong Kong; and/or


 


(c)       to enable it to
create the Security expressed to be created by it pursuant to this Debenture
and to ensure that such Security has the priority and ranking it is expressed
to have,


 


have been obtained or effected and are in full
force and effect;


 


21.1.7       the choice of the laws of Hong Kong as the governing law of this
Debenture will be recognised and enforced in its jurisdiction of incorporation
and in the Hong Kong courts;


 


21.1.8       any judgment obtained in the Hong Kong courts in relation to this
Debenture will, subject to the legal qualifications specifically referred to in
any legal opinion delivered pursuant to Clause 5 (Conditions of Utilisation) of the Facility Agreement, be
recognised and enforced in its jurisdiction of incorporation and/or Hong Kong;


 


21.1.9       under the law of its jurisdiction of incorporation it is not necessary
that this Debenture be filed, recorded or enrolled with any court or other
authority in that jurisdiction or that any stamp, registration or similar tax
be paid on or in relation to this Debenture;


 


21.1.10     there are no restrictions on the Chargor’s ability to assign all or any
of its rights under any Insurance Policy, whether contained in any Insurance
Policy or in any other document (except any Finance Document, and except for
any consent of any counterparty to any Insurance Policy which has already been
obtained);


 


21.1.11     all consents necessary to enable any asset that is expressed to be
subject to any fixed charge or assignment under Clause 3 (Fixed Charges, Assignments and Floating Charge)
to be the subject of an effective fixed charge or, as the case may be,
assignment pursuant to Clause 3 (Fixed
Charges, Assignments and Floating Charge) have been obtained and are
in full force and effect;


 


21.1.12     it has obtained all consents necessary to ensure that no other party to
any agreement or arrangement entered into by the Chargor becomes or shall
become entitled to terminate or rescind such agreement or arrangement as a
consequence of the Chargor entering into this Debenture;


 


21.1.13     it is, and will be, the sole legal and beneficial owner of the Charged
Property (subject to the Security constituted pursuant to this Debenture);


 


21.1.14     it has not sold or otherwise disposed of, or created, granted or
permitted to subsist any Security over, all or any of its right, title and
interest in the Charged Property (other than the Security constituted pursuant
to this Debenture and other than as expressly permitted under this Debenture);


 


21.1.15     the particulars of the Shares as at the date of this Debenture as set
out in Schedule 3 (Particulars of the Shares)
are accurate in all respects;


 


29

















 


21.1.16     the Shares have been validly issued by the Company and are fully paid up
and there are no monies or liabilities payable or outstanding in relation to
any of the Shares;


 


21.1.17     the Chargor legally and beneficially owns all of the Shares, free and
clear of all Security, except for any Security constituted hereby, and
exercises management control over the Company; and


 


21.1.18     as at the date of this Debenture, the Chargor is not registered as a
non-Hong Kong company under Part XI of the Companies Ordinance (Cap. 32)
nor has it made any application to be so registered.


 


21.2       Repetition


 


All of the representations and warranties in
Clause 21.1 (Representations) are
made by the Chargor to the Security Agent on the date of this Debenture and
each of the representations and warranties set out in sub-Clauses 21.1.1 to
21.1.18 (except sub-Clauses 21.1.15 and 21.1.18) above shall be deemed to be
repeated by the Chargor on the date of each Utilisation Request, on each
Utilisation Date and on the first day of each Interest Period relating to each
Loan and (for so long as the Release Date has not occurred) on each date
falling on the last day of each successive period of three Months from and
including the Facility Release Date, in each case by reference to the facts and
circumstances existing at the date on which such representation or warranty is
deemed to be made or repeated.


 


22.         EFFECTIVENESS
OF SECURITY


 


22.1       Continuing
Security


 


The Security created by or pursuant to this
Debenture shall remain in full force and effect as a continuing security for
the Secured Obligations unless and until discharged by the Security Agent.  No part of the Security from time to time
intended to be constituted by this Debenture will be considered satisfied or
discharged by any intermediate payment, discharge or satisfaction of the whole
or any part of the Secured Obligations.


 


22.2       Cumulative
Rights


 


The Security created by this Debenture and the
Collateral Rights shall be cumulative, in addition to and independent of every
other Security which any or all of the Secured Parties may at any time hold for
any or all of the Secured Obligations or any rights, powers and remedies
provided by law.  No prior Security held
by any Secured Party over the whole or any part of the Charged Property shall
merge into the Security constituted by this Debenture.


 


22.3       Chargor’s
Obligations


 


None of the obligations of the Chargor under
this Debenture or the Collateral Rights shall be affected by an act, omission,
matter, thing or event which, but for this Clause 22.3, would reduce, release
or prejudice any of its obligations under this Debenture (without limitation
and whether or not known to it or any Secured Party) including:


 


22.3.1       any time, waiver or consent granted to, or composition with, any Obligor
or other person;


 


30

















 


22.3.2       the release of any Obligor or any other person under the terms of any
composition or arrangement with any creditor of any member of the Group;


 


22.3.3       the taking, variation, compromise, exchange, renewal or release of, or
refusal or neglect to perfect, take up or enforce, any rights against, or
Security over assets of, any Obligor or other person or any non-presentation or
non-observance of any formality or other requirement in respect of any
instrument or any failure to realise the full value of any Security;


 


22.3.4       any incapacity or lack of power, authority or legal personality of or
dissolution or change in the members or status of any Obligor or any other person;


 


22.3.5       any amendment (however fundamental) or replacement of a Transaction
Document or any other document or Security or of the Secured Obligations;


 


22.3.6       any variation of the terms of the trust upon which the Security Agent
holds any Transaction Security;


 


22.3.7       any unenforceability, illegality or invalidity of any obligation of any
person under any Transaction Document or any other document or Security;


 


22.3.8       any insolvency or similar proceedings;


 


22.3.9       any claims or set-off right that the Chargor may have; or


 


22.3.10     any law, regulation or decree or order of any jurisdiction affecting any
Obligor.


 


22.4       Remedies
and Waivers


 


No failure on the part of the Security Agent to
exercise, or any delay on its part in exercising, any Collateral Right shall
operate as a waiver thereof, nor shall any single or partial exercise of any
Collateral Right preclude any further or other exercise of that or any other
Collateral Right.


 


22.5       No
Liability


 


None of the Security Agent, its nominee(s) or
any Receiver shall be liable by reason of (a) taking any action permitted
by this Debenture or (b) any neglect or default in connection with all or
any part of the Charged Property or (c) taking possession of or realising
all or any part of the Charged Property, except in the case of gross negligence
or wilful default upon its part (as finally judicially determined).


 


22.6       Partial
Invalidity


 


If, at any time, any provision of this
Debenture is or becomes illegal, invalid or unenforceable in any respect under
the law of any jurisdiction, neither the legality, validity or enforceability
of the remaining provisions of this Debenture under such laws nor of such
provision under the laws of any other jurisdiction shall in any way be affected
or impaired thereby and, if any part of the Security intended to be created by
or pursuant to this Debenture is invalid, unenforceable or ineffective for any
reason, that shall not affect or impair any other part of that Security.


 


31

















 


22.7       No Prior
Demand


 


The Security Agent shall not be obliged to make
any demand of or enforce any rights or claim against any Obligor or any other
person, to take any action or obtain judgment in any court against any Obligor
or any other person or to make or file any proof or claim in a liquidation,
bankruptcy or insolvency of any Obligor or any other person or to enforce or
seek to enforce any other Security in respect of any or all of the Secured
Obligations before exercising any Collateral Right.


 


22.8       Deferral
of rights


 


Until the occurrence of the Release Date, the
Chargor will not (unless the Security Agent otherwise directs) exercise any
rights which it may have by reason of performance by it of its obligations
under this Debenture:


 


22.8.1       to be indemnified by any Obligor;


 


22.8.2       to claim any contribution from any guarantor of any Obligor’s
obligations under any or all of the Transaction Documents; and/or


 


22.8.3       to take the benefit (in whole or in part and whether by way of
subrogation or otherwise) of any rights of the Secured Parties under the
Transaction Documents or of any other guarantee or Security taken pursuant to,
or in connection with, the Transaction Documents by any Secured Party.


 


22.9       Settlement
conditional


 


Any settlement, discharge or release hereunder
in relation to the Chargor or all or any part of the Charged Property shall be
conditional upon no Security or payment by any or all of the Obligors to, or
recovery from any or all of the Obligors by, any or all of the Secured Parties
being avoided or reduced by virtue of any bankruptcy, insolvency, liquidation
or similar laws of general application or any similar event or for any other
reason and shall in those circumstances be void.


 


23.         RELEASE
OF SECURITY


 


23.1       Redemption
of Security


 


After the occurrence of the Release Date, the
Security Agent shall, at the request (with reasonable notice) and cost of the
Chargor, release and cancel the Security constituted by this Debenture and
procure the reassignment to the Chargor of the property and assets assigned to
the Security Agent pursuant to this Debenture (to the extent not otherwise
sold, assigned or otherwise disposed of or applied in accordance with this
Debenture), in each case subject to Clauses 23.2 (Avoidance of Payments) and 22.9 (Settlement conditional) and without recourse to, or any
representation or warranty by, the Security Agent or any of its nominees.


 


23.2       Avoidance
of Payments


 


If the Security Agent considers that any amount
paid or credited to or recovered by any Secured Party by or from any Obligor is
capable of being avoided or reduced by virtue of any bankruptcy, insolvency,
liquidation or similar laws, the liability of the Chargor under this Debenture
and the Security constituted by this Debenture shall continue and such amount
shall not be considered to have been irrevocably paid.


 


32

















 


24.         SUBSEQUENT
SECURITY INTERESTS


 


If the Security Agent (acting in its capacity
as security agent or trustee or otherwise) or any of the other Secured Parties
at any time receives or is deemed to have received notice of any subsequent
Security or other interest affecting all or any part of the Charged Property or
any assignment or transfer of the Charged Property which is prohibited by the terms
of this Debenture or any Transaction Document, all payments thereafter by or on
behalf of any or all of the Obligors to the Security Agent (whether in its
capacity as security agent or trustee or otherwise) or any of the other Secured
Parties shall be treated as having been credited to a new account of the
Security Agent or, as the case may be, that other Secured Party and not as
having been applied in reduction of the Secured Obligations as at the time when
(or at any time after) the Security Agent or any other Secured Party received
such notice of such subsequent Security or other interest or such assignment or
transfer.


 


25.         CURRENCY
CONVERSION AND INDEMNITY


 


25.1       Currency
Conversion


 


For the purpose of or pending the discharge of
any of the Secured Obligations the Security Agent may convert any money
received, recovered or realised or subject to application by it under this
Debenture from one currency to another, as the Security Agent may think fit,
and any such conversion shall be effected at the Security Agent’s spot rate of
exchange (or, if so such spot of exchange is quoted by the Security Agent, such
other rate of exchange as may be available to the Security Agent) for the time
being for obtaining such other currency with such first-mentioned currency.


 


25.2       Currency
Indemnity


 


If any sum (a “Sum”)
owing by the Chargor under this Debenture or any order or judgment given or
made in relation to this Debenture has to be converted from the currency (the “First Currency”) in which such Sum is payable into another
currency (the “Second Currency”) for the purpose
of:


 


25.2.1       making or filing a claim or proof against the Chargor;


 


25.2.2       obtaining an order or judgment in any court or other tribunal;


 


25.2.3       enforcing any order or judgment given or made in relation to this
Debenture; or


 


25.2.4       applying the Sum in satisfaction of any of the Secured Obligations,


 


the Chargor shall indemnify the Security Agent
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 such Sum
from the First Currency into the Second Currency and (b) the rate or rates
of exchange available to the Security Agent at the time of such receipt or
recovery of such Sum.


 


26.         COSTS,
EXPENSES AND INDEMNITY


 


26.1       Costs and
expenses


 


The Chargor shall, on demand of the Security
Agent, reimburse the Security Agent on a full indemnity basis for all costs and
expenses (including legal fees and any value added 


 


33

















 


tax) incurred by the Security Agent in
connection with (a) the execution of this Debenture or otherwise in
relation to this Debenture, (b) the perfection or enforcement of the
Security constituted by this Debenture and/or (c) the exercise of any
Collateral Right, together with interest from the date such costs and expenses
were incurred to the date of reimbursement of the same by the Chargor,
calculated in accordance with the provisions of the Facility Agreement
(applying mutatis mutandis as if
the same were an Unpaid Sum thereunder).


 


26.2       Stamp
taxes


 


The Chargor shall pay all stamp, registration
and other Taxes to which this Debenture, the Security contemplated in this
Debenture and/or any judgment given in connection with this Debenture is, or at
any time may be, subject and shall, from time to time, indemnify the Security
Agent on demand against any liabilities, costs, claims and/or expenses
resulting from any failure to pay or delay in paying any such Tax.


 


26.3       Indemnity


 


The Chargor shall, notwithstanding any release
or discharge of all or any part of the Security constituted by this Debenture,
indemnify the Security Agent and each other Secured Party (through the Security
Agent), their respective agents, attorneys and any Receiver against any action,
proceeding, claims, losses, liabilities and costs which it may sustain as a
consequence of any breach by the Chargor of the provisions of this Debenture,
the exercise or purported exercise of any of the rights and powers conferred on
any of them by this Debenture or otherwise relating to the Charged Property or
any part thereof.


 


27.         PAYMENTS
FREE OF DEDUCTION


 


All payments to be made to the Security Agent
under this Debenture shall be made free and clear of and without deduction for
or on account of Tax unless the Chargor is required to make such payment
subject to the deduction or withholding of Tax, in which case the sum payable
by the Chargor in respect of which such deduction or withholding is required to
be made shall be increased to the extent necessary to ensure that, after the
making of such deduction or withholding, the person on account of whose
liability to Tax such deduction or withholding has been made receives and
retains (free from any liability in respect of any such deduction or withholding)
a net sum equal to the sum which it would have received and so retained had no
such deduction or withholding been made or required to be made.


 


28.         DISCRETION
AND DELEGATION


 


28.1       Discretion


 


Any liberty or power which may be exercised or
any determination which may be made under this Debenture by the Security Agent
or any Receiver may, subject to the terms and conditions of the Facility
Agreement, be exercised or made in its absolute and unfettered discretion
without any obligation to give reasons.


 


28.2       Delegation


 


Each of the Security Agent and any Receiver
shall have full power to delegate (either generally or specifically) the
powers, authorities and discretions conferred on it by this 


 


34

















 


Debenture (including without limitation the
power of attorney under Clause 20 (Power of
Attorney)) on such terms and conditions as it shall see fit which
delegation shall not preclude any subsequent exercise, any subsequent
delegation or any revocation of such power, authority or discretion by the
Security Agent or any Receiver.


 


29.         SET-OFF


 


The Security Agent may set off any matured
obligation due from the Chargor under any or all of the Transaction Documents
(to the extent beneficially owned by the Security Agent) against any matured
obligation owed by the Security Agent to the Chargor, regardless of the place
of payment, booking branch or currency of either obligation.  If such obligations are in different
currencies, the Security Agent may convert either obligation at a market rate
of exchange in its usual course of business for the purpose of such set-off.


 


30.         CHANGES
TO PARTIES


 


30.1       Successors


 


This Debenture shall be binding upon and enure
to the benefit of each party hereto and its and/or any subsequent successors
and permitted assigns and transferees. 
Without prejudice to the foregoing, this Debenture shall remain in
effect despite any amalgamation or merger (however effected) relating to the
Security Agent; and references to the Security Agent herein shall be deemed to
include any person who, under the laws of its jurisdiction of incorporation or
domicile, has assumed the rights and obligations of the Security Agent under
this Debenture or to which, under such laws, those rights and obligations have
been transferred.


 


30.2       No
Assignment or Transfer by the Chargor


 


The Chargor may not assign or transfer any or
all of its rights (if any) and/or obligations under this Debenture.


 


30.3       Assignment
and Transfer by Security Agent to Successor


 


The Security Agent may:


 


30.3.1       assign all or any of its rights under this Debenture; and


 


30.3.2       transfer all or any of its obligations (if any) under this Debenture,


 


to any successor Security Agent in accordance
with the provisions of the Security Trust Deed provided that it is acknowledged
that such transfer shall not in any way prejudice the priority of the Security
constituted by this Debenture (which shall be assigned to such successor
Security Agent pursuant to the terms of the Security Trust Deed).  Upon such assignment and transfer taking
effect, the successor Security Agent shall be and be deemed to be acting as
security agent and trustee for the Secured Parties for the purposes of this
Debenture and in place of the former Security Agent.


 


30.4       Assignment
by other Secured Parties


 


Each Secured Party (other than the Security
Agent) may assign all or any of its rights under this Debenture (whether direct
or indirect).  The Chargor irrevocably
and unconditionally confirms that:


 


35














 


30.4.1       it consents to any assignment or transfer by any Secured Party of its
rights and/or obligations made in accordance with the provisions of the
applicable Transaction Documents;


 


30.4.2       it shall continue to be bound by the terms of this Debenture, notwithstanding
any such assignment or transfer; and


 


30.4.3       the assignee or transferee of such Secured Party shall acquire an
interest in this Debenture upon such assignment or transfer taking effect.


 


30.5       Disclosure


 


The Chargor agrees to any disclosure of any
information made in accordance with clause 23.9 (Disclosure of information) of the Facility Agreement.


 


31.         AMENDMENTS AND WAIVERS


 


Any provision of this Debenture may be amended or
waived only by agreement in writing between the Chargor and the Security Agent.


 


32.         PERPETUITY
PERIOD


 


The perpetuity period under the rule against
perpetuities, if applicable to this Debenture, shall be the period of eighty
years from the date of the Facility Agreement.


 


33.         NOTICES


 


The provisions of Clause 30 (Notices) of the Facility Agreement (in the
form subsisting as at the date of this Debenture) shall apply to this Debenture
mutatis mutandis.


 


34.         COUNTERPARTS


 


This Debenture may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument.


 


35.         GOVERNING
LAW


 


This Debenture is governed by the laws of Hong
Kong.


 


36.         JURISDICTION


 


36.1       Hong Kong
Courts


 


The courts of Hong Kong have exclusive
jurisdiction to settle any dispute (a “Dispute”)
arising out of, or connected with this Debenture (including a dispute regarding
the existence, validity or termination of this Debenture or the consequences of
its nullity).


 


36.2       Convenient
Forum


 


The parties hereto agree that the courts of
Hong Kong are the most appropriate and convenient courts to settle Disputes
between them and, accordingly, that they will not argue to the contrary.


 


36.3       Exclusive
Jurisdiction


 


This Clause 36 (Jurisdiction) is for the benefit of the Security Agent
only.  As a result and notwithstanding Clause
36.1 (Hong Kong Courts), nothing
herein shall prevent the 


 


36

















 


Security Agent from taking proceedings relating
to a Dispute in any other courts with jurisdiction.  To the extent allowed by law the Security
Agent may take concurrent proceedings in any number of jurisdictions.


 


36.4       Service
of process


 


Without prejudice to any other mode of service
allowed under any relevant law, the Chargor:


 


36.4.1       irrevocably appoints International Petroleum Services Corporation
Limited of 1/F., Sunning Plaza, 10 Hysan Avenue, Causeway Bay, Hong Kong as its
agent for service of process in relation to any proceedings before the Hong
Kong courts in connection with this Debenture; and


 


36.4.2       agrees that failure by a process agent to notify the Chargor of any
process will not invalidate the proceedings concerned.


 


36.5       Waiver of
immunity


 


The Chargor waives generally all immunity it or
its assets or revenues may otherwise have in any jurisdiction, including
immunity in respect of:


 


36.5.1       the giving of any relief by way of injunction or order for specific
performance or for the recovery of assets or revenues; and/or


 


36.5.2       the issue of any process against its assets or revenues for the
enforcement of a judgment or, in an action in
rem, for the arrest, detention or sale of any of its assets and
revenues.


 


IN WITNESS WHEREOF this Debenture has been signed on behalf of the Security Agent and executed as a deed
by the Chargor and is intended to be and is hereby delivered by it as a deed on
the date specified above.


 


37

















 


SCHEDULE 1


FORM OF NOTICE OF ASSIGNMENT OF INSURANCE


 


To:          [name of insurer under relevant Insurance Policy]


 


Date: [            ]


 


Dear Sirs,


 


We hereby give you notice that [name of Chargor] (the “Chargor”) has assigned, absolutely and by way of security
with first-ranking priority, to [name of
Security Agent] in its capacity as security trustee for and on
behalf of certain creditors (the “Security Agent”,
which expression shall include its subsequent successors, assigns and
transferees) pursuant to a debenture entered into by the Chargor in favour of
the Security Agent dated                      (as amended from time to
time, the “Debenture”) all of the
Chargor’s rights, title and interests under, in and to [insert
details of relevant insurance policy] and all renewals and/or
extensions thereof (collectively the “Policy of Insurance”),
including without limitation all proceeds thereof or thereunder.


 


With effect from your receipt of this notice we
irrevocably and unconditionally instruct you to:


 


1.           note
the interest of the Security Agent on the Policy of Insurance;


 


2.           notify
the Security Agent of:


 


(a)             any
amendment, variation, cancellation, suspension, termination or expiry of the
Policy of Insurance at least fourteen (14) days before such amendment,
variation, cancellation, suspension, termination or expiry (as the case may be)
is due to take effect;


 


(b)            without
prejudice to paragraph 2(a), any default by any insured party under the Policy
of Insurance in the payment of any premium or other sum payable by any insured
party under the Policy of Insurance as soon as reasonably practicable after
such default; and


 


(c)             any
failure by any insured party under the Policy of Insurance to renew the Policy
of Insurance at least fourteen (14) days prior to the expiry thereof;


 


3.           pay
all proceeds of the Insurance Policy as follows (and that the Policy of
Insurance shall contain appropriate endorsements and loss-payable clauses to
such effect):


 


(a)             at
all times prior to the service of a notice by or on behalf of the Security
Agent on you to the effect that an “Event of Default” for the purposes of the
Debenture has occurred or the Debenture has become enforceable (an “Enforcement Notice”), the proceeds of the Policy of
Insurance shall:


 


(i)        (in the case where
the Policy of Insurance is a third party liability insurance which provides for
direct payment of the relevant proceeds to the relevant third party) be paid to
such third party, unless the Chargor shall have otherwise discharged its
liability to such third party in which 


 


38

















 


case such proceeds shall be paid to the Chargor
at the following account of the Chargor (which has been charged by the Chargor
in favour of the Security Agent):  [insert details of the relevant Account] (the “Chargor Account”); or


 


(ii)       (in any other case)
be paid to:


 


(1)       the Chargor at the
above-mentioned account of the Chargor Account; or


 


(2)       if so directed by the
Security Agent, the Security Agent; and


 


(b)                                     at all times after the service of an Enforcement
Notice by or on behalf of the Security Agent on you, the proceeds of the Policy
of Insurance shall:


 


(i)        (in the case where
the Policy of Insurance is a third party liability insurance which provides for
direct payment of the relevant proceeds to the relevant third party) be paid to
such third party, unless we shall have otherwise discharged our liability to
such third party in which case such proceeds shall be paid to the Security
Agent; or


 


(ii)       (in any other case)
be paid to the Security Agent;


 


4.           treat:


 


(a)             us
as being entitled to make and deal with all claims in respect of the Policy of
Insurance at all times prior to the service of an Enforcement Notice by or on
behalf of the Security Agent on you, except that any settlement, waiver,
discontinuance of compromise of any claim in an amount of not less than
USD1,000,000 (or the equivalent thereof) shall require the prior written
consent of the Security Agent; and


 


(b)            the
Security Agent as the sole person being entitled to make and deal with any
claim in respect of the Policy of Insurance (to the exclusion of us) at all
times after the service of an Enforcement Notice by or on behalf of the
Security Agent on you;


 


5.           treat
us as being solely liable to perform any or all of our obligations (including
without limitation the payment of any premium) under the Policy of Insurance
and that the Security Agent shall not in any way be responsible or liable in
respect of any such obligation or any failure by us to perform any such
obligation; and


 


6.           disclose
to the Security Agent, without further approval from us, such information
regarding the Policy of Insurance as the Security Agent may from time to time
request and to send it copies of all notices issued by you under the Policy of
Insurance.


 


Neither this notice nor any of the instructions
contained herein may be revoked or varied without the prior written consent of
the Security Agent.


 


39

















 


Please acknowledge receipt of this notice and
your agreement to the terms hereof by signing the acknowledgement on a copy of
this notice and returning it to the Security Agent at
[       ] marked for the attention of [    ].


 


This notice and/or the acknowledgment hereto
may be executed in any number of counterparts, and this has the same effect as
if signatures on such counterparts were on a single copy of this letter and the
acknowledgment hereto.


 


This notice is governed by the laws of Hong
Kong.


 


Yours faithfully,


 


 


	
   

  	
   

  
	
   

  	
   

  
	
  For and on behalf of

  	
   

  
	
  [Chargor]

  	
   

  



 






 


Acknowledgment


 


To:          [insert name of Security Agent] as Security Agent


 


[name of
Chargor] (the “Chargor”)


 


We acknowledge receipt of a notice (the “Notice”) in the terms set out above from the Chargor and
confirm that we have not received notice of any previous assignments or charges
of or over any of the rights, title and interests and benefits under, in or to
the Policy of Insurance or any proceeds thereof or thereunder and that we
consent to the assignment referred to in the Notice and that we will comply
with the terms of the Notice.  Unless
otherwise defined herein, terms and expressions defined in the Notice shall
have the same meaning herein.


 


Without prejudice to the foregoing, we further
confirm and agree that:


 


1.           no
amendment, variation, cancellation, suspension, termination or expiry of the
Policy of Insurance (as defined in the Notice) shall be effective unless we
have given the Security Agent at least fourteen (14) days prior written notice
thereof;


 


2.           the
Policy of Insurance has been endorsed with appropriate endorsements and
loss-payee clauses to the effect of paragraph 3 of the Notice;


 


3.           the
Security Agent shall not be liable for the payment of any premium or other sum
payable in connection with, or for any obligation of any insured party under or
in connection with, the Policy of Insurance;


 


4.           the
Policy of Insurance shall not be invalidated or prejudiced as against a
mortgagee or security holder (including without limitation the Security Agent)
by any misrepresentation, act, omission, neglect or failure to make disclosure
on the part of any 


 


40

















 


insured
person or its agents or any tenant, lessee, licensee or occupier of any
property the subject of the Policy of Insurance or by any circumstances beyond
the control of any insured party;


 


5.           we
hereby waive any and all rights of subrogation which we may otherwise have
against any or all of the Security Agent (as loss payee or otherwise), the
insured parties under the Policy of Insurance and/or their respective
subsidiaries, affiliates, officers and employees; and


 


6.           (other
than any unpaid premium) we hereby waive any and all rights of set-off,
deduction and/or counterclaim which we may otherwise have in respect of any
insurance proceeds payable (or payable but for such right of set-off, deduction
and/or counterclaim) to any insured party and/or the Security Agent (as
loss-payee or otherwise) in respect of the Policy of Insurance.


 


This acknowledgement is governed by the laws of
Hong Kong.  The Notice and this
acknowledgment may be executed in any number of counterparts, and this has the
same effect as if signatures on such counterparts were on a single copy of the
Notice and this acknowledgment.


 


For and on behalf of


[insert name of relevant
insurer]


 


 


	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
   

  



 


41

















 


SCHEDULE 2

FORM OF NOTICE OF CHARGE OF ACCOUNTS


 


To:          [bank, financial
institution or person with whom the relevant Account(s) are maintained]


 


Date: [                                        ]


 


Dear Sirs,


 


We hereby give you notice that by a debenture
(as amended from time to time, the “Debenture”)
dated                               between
(1) [name of Chargor] (the “Chargor”) and (2) [name of Security Agent] as security
trustee (the “Security Agent” which expression
shall include its successors, assigns and transferees), the Chargor has charged
to the Security Agent all of the Chargor’s right, title and interest in and to
each of the accounts maintained with you listed below (including any
replacement, renewal or re-designation thereof) and all monies standing to the
credit of such account(s) from time to time (the “Charged
Account(s)”).


 


	
  NAME OF ACCOUNT

  	
   

  	
  ACCOUNT NUMBER

  	
   

  
	
  [   ·   ]

  	
   

  	
  [   ·   ]

  	
   

  



 


With effect from the date of your receipt of
this notice, the terms and conditions of any or all of the Charged Account(s) (and
the rights of the Chargor relating thereto) may not be varied or waived without
the Security Agent’s consent.


 


With effect from the time when you receive a
notice from the Security Agent to the effect that a “Default” for the purposes
of the Debenture has occurred and is continuing or the security created by the
Debenture has become enforceable (an “Enforcement
Notice”):


 


(a)         any
existing payment instructions affecting any or all of the Charged Account(s) are
to be terminated and all payments and communications in respect of any or all
of the Charged Account(s) should be made, or sent, to the Security Agent
or as it shall direct; and


 


(b)         all
rights, interests and benefits whatsoever accruing to or for the benefit of the
Chargor arising from any or all of the Charged Account(s) belong to the
Security Agent.


 


The Chargor hereby irrevocably authorises and
instructs you, with effect from your receipt of an Enforcement Notice from the
Security Agent:


 


(i)          to
hold all sums from time to time standing to the credit in the Charged Account(s) to
the order of the Security Agent;


 


(ii)         to
pay, transfer or release all or any part of the sums from time to time standing
to the credit of the Charged Account(s) in accordance with (and only in
accordance with) the written instructions of the Security Agent at any time or
times (to the exclusion of the Chargor);


 


42

















 


(iii)        to comply with the
terms of any written notice or instructions in any way relating to, or
purporting to relate to, the Debenture, the sums standing to the credit of the
Charged Account(s) from time to time or the debts represented thereby
which you receive at any time from the Security Agent without any reference to
or further authority from the Chargor and without any enquiry by you as to the
justification for or validity of such notice or instruction; and


 


(iv)        not to comply with
the terms at any written notice or instructions in any way relating to, or
purporting to relate to, the Debenture, the sums standing to the credit of the
Charged Account(s) from time to time or the debts represented thereby
which you receive from any other person (including the Chargor) other than the
Security Agent.


 


We also hereby irrevocably authorise and
instruct you to disclose to the Security Agent without any reference to or
further authority from us and without any enquiry by you as to the
justification of such disclosure, such information relating to any or all of
the Charged Account(s) and the sums therein as the Security Agent may at
any time and from time to time request.


 


Neither this notice nor any of the instructions
herein may be revoked or varied without the prior written consent of the
Security Agent.


 


Without prejudice to the validity of this
notice and the instructions contained herein, please acknowledge receipt of
this notice and your agreement to the terms hereof by signing the
acknowledgement on a copy of this notice and returning it to the Security Agent
at [       ] marked for the attention of
[    ].


 


This notice and/or the acknowledgment hereto
may be executed in any number of counterparts, and this has the same effect as
if signatures on such counterparts were on a single copy of this letter and the
acknowledgment hereto.


 


This notice is governed by the laws of Hong
Kong.


 


	
  Yours faithfully

  
	
   

  
	
   

  
	
   

  	
   

  
	
  for and on behalf of

  	
   

  
	
  [Chargor]

  	
   

  



 






 


Acknowledgment


 


To:          [name of Security Agent] as Security Agent


 


[name of
Chargor] (the “Chargor’)


 


Date:       [           ]


 


43

















 


At the request of the Chargor we acknowledge
receipt of the notice of charge from the Chargor dated [·] (the “Notice”) in respect
of the Charged Account(s).  Unless
otherwise defined herein, terms and expressions herein shall have the meaning
ascribed to them in the Notice.


 


We confirm that:


 


(i)          we
consent to the charge over the Charged Account(s) referred to in the
Notice.  We accept the instructions and
authorisations contained in the Notice and we undertake to act in accordance
with the terms of the Notice;


 


(ii)         the
balance standing to each of the Charged Account(s) at today’s date is as
follows [   ·   ];


 


(iii)        no fees or periodic
charges are payable in respect of any of the Charged Account(s) and there
are no restrictions on (a) the payment of the credit balance on any of the
Charged Account(s) (except, in the case of a time deposit, the expiry of the
relevant period) or (b) the assignment or charge of the Charged Account(s) to
the Security Agent or any third party;


 


(iv)        we have not received
notice of any previous assignments of, charges over or trusts in respect of,
any of the Charged Account(s) and we will not, without the Security Agent’s
prior written consent (a) exercise any right of combination, consolidation
or set-off which we may have in respect of any of the Charged Account(s) or
(b) amend or vary any rights attaching to any of the Charged Account(s);


 


(v)         with
effect from our receipt of an Enforcement Notice from the Security Agent, we
will act only in accordance with the instructions given by persons authorised
by the Security Agent in respect of any or all of the Charged Account(s);


 


(vi)        we shall send all
statements and other notices given by us relating to the Charged Account(s) to
the Security Agent as well as to the Chargor; and


 


(vii)       at all times after we
receive an Enforcement Notice from the Security Agent, we shall not permit any amount
to be withdrawn from any of the Charged Account(s) without the prior
written consent of the Security Agent.


 


The Notice and this acknowledgment may be
executed in any number of counterparts, and this has the same effect as if
signatures on such counterparts were on a single copy of the Notice and this
acknowledgment.


 


This acknowledgment is governed by the laws of
Hong Kong.


 


For and on behalf of


[                                    ]


 


44

















 


SCHEDULE 3

PARTICULARS OF THE SHARES


 


 


	
  Beneficial owner

  	
   

  	
  Shares
  (ordinary shares of HK$1.00 each in 

  the issued capital of the Company)

  	
   

  	
  Registered
  holder

  	
   

  
	
  Superport Limited

  	
   

  	
  250,000

  	
   

  	
  Superport Limited

  	
   

  



 


45














 


SCHEDULE 4


FORM OF SHARE TRANSFER


 


[                    ]
(the “Company”)


 


SHARE
TRANSFER FORM


 


We, [          ]
(the “Transferor”), for good and valuable
consideration received by us from


[leave blank]


 


(the “Transferee”),
do hereby:


 


1.                                       transfer to the Transferee [leave blank]


 


share(s) (the “Shares”) standing in our name in the register of the Company
to hold unto the Transferee, his executors, administrators and assigns, subject
to the several conditions on which we held the same at the time of execution of
this Share Transfer Form; and


 


2.                                       consent that our name remains on the register of the
Company until such time as the Company enters the Transferee’s name in the
register of the Company.


 


And we, as Transferee, do hereby agree to take
the Shares subject to the same conditions.


 


 


As Witness Our Hands


 


	
  Signed by the Transferor on 

  	
  )

  
	
  in the presence of:

  	
  )

  
	
   

  	
   

  
	
   

  	
   

  
	
  Witness

  	
   

  



 


 


	
  Signed by the Transferee on 

  	
  )

  
	
  in the presence of:

  	
  )

  
	
   

  	
   

  
	
   

  	
   

  
	
  Witness

  	
   

  



 


46

















 


SCHEDULE 5


FORM OF ACKNOWLEDGMENT FROM NOMINEE


 


To:                              [the Security Agent]
(the “Security Agent”, which
expression shall include its successors, assigns and transferees)


 


 


Dear Sirs,


 


At the request of [              ]
(the “Chargor”), I/we hereby:


 


1.                             warrant and confirm that I am/we are the registered
holder(s) of [insert number and
description of relevant Investments] in [                  ]
(the “Share[s]”) and am/are holding the
Share[s] as nominee for and on behalf of the Chargor;


 


2.                             acknowledge that the Chargor has, pursuant to a
debenture (as amended from time to time, the “Debenture”)
dated                      by
the Chargor in favour of the Security Agent, charged the Share[s] in favour of
you as security upon the terms and conditions specified therein;


 


3.                             undertake that I/we shall, upon and at all times after
the security constituted by the Debenture in respect of the Share[s] becomes
enforceable, hold the Share[s] on trust for you (or any other person whom you
may nominate);


 


4.                             undertake that I/we shall, upon and at all times after
the security constituted by the Debenture in respect of the Share[s] becomes
enforceable, transfer the legal title in the Share[s] to you (or any other
person whom you may nominate) and do all acts and execute all documents as may
be necessary and/or as you may require for such purpose; and


 


5.                             irrevocably and unconditionally appoint each of you
and any Receiver (as defined in the Debenture) severally, upon and after the
occurrence of an Event of Default (as long as any Event of Default is
continuing) to be my/our attorney on the terms of Clause 20 (Power of Attorney) of the Debenture
(applying mutatis mutandis) as if I was/we were
the Chargor, and undertake to execute such further powers of attorney in such
form as you may reasonably require from time to time.


 


This acknowledgment is governed by and shall be
construed in accordance with the laws of Hong Kong.


 


Dated:


 


IN WITNESS WHEREOF this deed has been executed
the day and year above written.


 


[in the case where the relevant
nominee is a company incorporated in Hong Kong or that has a seal]


 


	
  THE COMMON SEAL of  

  	
  )

  
	
  [relevant nominee]  

  	
  )

  
	
  was hereunto affixed in the presence of:

  	
  )

  



 


47

















 


	
   

  	
   

  	
  Signature

  
	
   

  	
   

  	
  Name

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature

  
	
   

  	
   

  	
  Name

  



 


[in the case where the
relevant nominee is a company incorporated outside Hong Kong without a seal]


 


	
  SIGNED, SEALED and DELIVERED by 

  	
  )

  	
   

  
	
  [insert name of relevant signatory]

  	
  )

  	
   

  
	
  for
  and on behalf of

  	
  )

  	
  L.S.

  
	
  [insert name of relevant nominee]

  	
  )

  	
   

  
	
  in the presence of:

  	
  )

  	
   

  



 


 


	
   

  	
   

  	
  Signature of witness

  
	
   

  	
   

  	
  Name of witness

  
	
   

  	
   

  	
  Address of witness

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Occupation of witness

  



 


 


[in the case where the
relevant nominee is an individual]


 


	
  SIGNED, SEALED and DELIVERED by 

  	
  )

  	
   

  
	
  [insert name of relevant nominee] in the 

  	
  )

  	
  L.S.

  
	
  presence
  of:

  	
  )

  	
   

  



 


 


	
   

  	
   

  	
  Signature of witness

  
	
   

  	
   

  	
  Name of witness

  
	
   

  	
   

  	
  Address of witness

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Occupation of witness

  



 


48

















 


SCHEDULE 6


FORM OF LETTER OF RESIGNATION


 


	
  To:

  	
  The Board of Directors

  
	
   

  	
  [                  ]
  (the “Company”)

  
	
   

  	
  [insert address of
  registered office of the Company]

  
	
   

  	
   

  
	
  Date:

  	
  [to be left blank]

  



 


 


Dear Sirs,


 


Resignation


 


I hereby tender my unconditional and
irrevocable resignation as a director of the Company with effect from the date
of this letter.  I confirm that:


 


1.                             I have no claims whatsoever against the Company or any
of its subsidiaries or associated companies (if any) on any account (whether
for loss of office, for accrued remuneration or for fees or otherwise
howsoever); and


 


2.                             there is no outstanding agreement or arrangement with
the Company or any of its subsidiaries or associated companies (if any) under
which the Company or any of such subsidiaries or associated companies has or
would have any obligation to me whether now or in the future or under which I
would derive any benefit.


 


This
letter is governed by and shall be construed in accordance with the laws of
Hong Kong.


 


IN WITNESS WHEREOF this deed has been executed
the day and year above written.


 


	
  SIGNED, SEALED and DELIVERED by 

  	
  )

  	
   

  
	
  [insert name of relevant director] in the 

  	
  )

  	
  L.S.

  
	
  presence
  of:

  	
  )

  	
   

  



 


 


	
   

  	
   

  	
  Signature of witness

  
	
   

  	
   

  	
  Name of witness

  
	
   

  	
   

  	
  Address of witness

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Occupation of witness

  



 


49

















 


SCHEDULE 7


FORM OF WRITTEN RESOLUTIONS


 


[                      ]
(the “Company”)


 


WRITTEN
RESOLUTIONS OF THE BOARD OF DIRECTORS OF [        ]


 


Dated:   [to be left blank]


 


IT IS RESOLVED THAT:


 


1.                             each of the following transfers of the shares in the
Company be approved and that, upon the delivery to any director of the Company
of a duly completed instrument of transfer in respect of any of the following
transfers, the name of the relevant transferee be entered forthwith in the
register of members of the Company in respect of the relevant shares so
transferred and that new share certificates in respect of such shares be issued
forthwith to such transferee in accordance with the Articles of Association
of  the Company:


 


[to be left
blank]


 


2.                             each of the following persons be appointed as an
additional director of the Company with immediate effect:


 


[to be left blank]


 


3.                             the resignation of the following persons as directors
of the Company be accepted with immediate effect:


 


[to be left blank]


 


50

















 


4.                             the above changes in directorships of the Company be
notified to [each relevant registry] as soon
as shall be practicable and that any director or the secretary of the Company
be authorised to sign and deliver any relevant return in connection therewith.


 


[all the
directors of the Company to
state their names and sign]


 


51

















 


SCHEDULE 8


FORM OF LETTER OF UNDERTAKING AND AUTHORISATION


 


To:                                       [the Security Agent]
as Security Agent (including its successors, assigns and transferees)


 


 


Dear Sirs,


 


Debenture dated
                                
by [         ] in favour of DB
Trustees (Hong Kong) Limited as Security Agent (as amended from time to time,
the “Debenture”)


 


I hereby unconditionally and irrevocably:


 


1.                             undertake to procure, to the extent of my powers as a
director of [           ]
(the “Company”), that any or all
of the shares in the Company which are charged to you pursuant to the Debenture
shall upon your request at any time after the security constituted by the
Debenture shall have become enforceable in accordance with its terms be
promptly registered in the name of yourself or (at your request) any person(s) whom
you may nominate;


 


2.                             authorise each of you and any other person(s) authorised
by you severally to complete, date and put into effect:


 


(a)                        the attached letter of resignation signed by me;


 


(b)                       the attached written resolutions of the board of
directors of the Company signed by me[; and


 


(c)                        any other document signed by me and delivered pursuant
to Clause 5.7 (Investments:  Delivery of Documents of Title) of
the Debenture,


 


at any time after the
security constituted by the Debenture shall have become enforceable in
accordance with its terms.


 


This letter is governed by and shall be
construed in accordance with the laws of Hong Kong.


 


Dated:


 


IN WITNESS WHEREOF this deed has been executed
the day and year above written.


 


	
  SIGNED, SEALED and DELIVERED by 

  	
  )

  	
   

  
	
  [insert name of relevant director] in the 

  	
  )

  	
  L.S.

  
	
  presence
  of:

  	
  )

  	
   

  



 


 


	
   

  	
   

  	
  Signature of witness

  
	
   

  	
   

  	
  Name of witness

  
	
   

  	
   

  	
  Address of witness

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Occupation of witness

  



 


52

















 


EXECUTION


 


THE CHARGOR


 


	
  SIGNED, SEALED AND DELIVERED

  	
  )

  	
   

  
	
  as a DEED for
  and on behalf of

  	
  )

  	
   

  
	
  and EXECUTED AS A DEED
  by

  	
  )

  	
  L.S    

  	
  /s/
  Qingzeng Liu

  
	
  SUPERPORT LIMITED

  	
  )

  	
   

  
	
  by

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
  in the presence of:

  	
  )

  	
   

  



 


 


	
  /s/ Bowen Ma

  	
   

  
	
  Signature of witness

  	
   

  
	
   

  	
   

  
	
  Name: Ivy Bowen Ma

  	
   

  



 


	
  Address:

  	
  

  



 


 


	
  Address:

  	
  

  
	
   

  	
   

  
	
  Telephone:

  	
  +86-22-6635-1185

  
	
   

  	
   

  
	
  Fax:

  	
  +86-22-6635-1181

  
	
   

  	
   

  
	
  Attention:

  	
  Mr
  Liu Qingzeng

  



 


SIGNATURE PAGE TO THE HOLDCO DEBENTURE


 

















 


The Security Agent


 


	
  SIGNED for and on behalf of

  	
  )

  	
   

  
	
  DB TRUSTEES (HONG KONG)
  LIMITED

  	
  )

  	
  /s/ Chiu Kin Wing Edward

  
	
  By:

  	
  )

  	
   

  
	
   

  	
  )

  	
  /s/ Choi Siu Ling

  



 


 


	
  Address:

  	
  48/F, Cheung Kong Center, 2 Queen’s Road
  Central, Hong Kong

  
	
   

  	
   

  
	
  Fax:

  	
  +852 2203 7320/7323

  
	
   

  	
   

  
	
  Attention:

  	
  Managing
  Director

  



 


 


SIGNATURE PAGE TO THE HOLDCO DEBENTURE