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                                                                   EXHIBIT 10.31

                                   DEBENTURE

THIS DEBENTURE is made the           day of                        2002 BETWEEN:

(1)      OCEAN CONVERSION (BVI) LTD., a company incorporated under the laws of
         the British Virgin Islands, whose registered office is at the offices
         of McNamara Corporate Services Limited, 2nd Floor, 116 Main Street,
         P O Box 3342, Road Town, Torto1a, British Virgin Islands (the
         "BORROWER"); and

(2)      THE BANK OF N.T. BUTTERFIELD & SON LIMITED, a bank organised and
         existing under the laws of the island of Bermuda, whose registered
         office is at 65 Front Street, Hamilton, Bermuda (the "BANK").

NOW THIS DEBENTURE WITNESSES and IT IS AGREED as follows:

1        COVENANT TO PAY

1.1      The Borrower covenants to pay and discharge to the Bank on demand all
         moneys obligations and liabilities whether principal interest or
         otherwise which may now or at any time in the future be due owing or
         incurred by the Borrower to the Bank whether actual or contingent and
         whether alone severally or jointly as principal guarantor surety or
         otherwise and in whatever name or style and whether on any current or
         other account or in any other manner together with interest charges and
         other expenses so that interest shall be calculated and compounded as
         may be agreed from time to time between the parties or, if not agreed,
         in accordance with the usual practice of the Bank from time to time as
         well after as before any demand made or judgment obtained hereunder.

2        CHARGE

2.1      The Borrower as beneficial owner hereby charges with the payment or
         discharge of all moneys obligations and liabilities hereby covenanted
         to be paid or discharged by the Borrower including an initial facility
         in the sum of One Million Two Hundred and Fifty Thousand United States
         Dollars (US$1,250,000) together with all costs and expenses incurred by
         the Bank in relation to this Debenture or the moneys obligations and
         liabilities hereby secured:

         (a)      by way of first fixed charge:

                  (i)      all mechanical, electrical and other equipment and
                           all civil engineering works or plant including
                           appurtenances thereto now or in the future belonging
                           to the Borrower and used or to be used in the supply
                           construction operation and otherwise in connection
                           with any reverse osmosis desalination plant and all
                           parts chemicals and supplies which may from time to
                           time be used in connection with the plant;

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                  (ii)     all other plant and machinery computers office and
                           other equipment now or in the future belonging to the
                           Borrower and the full benefit of any warranties or
                           maintenance contracts for any of the same;

                  (iii)    all cash at bank, book debts and other debts
                           including rents now or in the future due or owing to
                           the Borrower;

                  (iv)     all stocks shares bonds and other securities now or
                           in the future belonging to the Borrower together with
                           all dividends and other rights deriving therefrom;

                  (v)      the goodwill of the Borrower and its uncalled capital
                           for the time being;

                  (vi)     the benefit of any licences and all patent
                           applications inventions trade marks service marks
                           designs and trade names copyright knowhow and other
                           intellectual property rights and all fees, royalties
                           and other rights of every kind deriving therefrom now
                           or in the future belonging to the Borrower;

                  (vii)    all other fixed assets of the Borrower to include all
                           undertaking and all other property assets and rights
                           whatsoever and wheresoever present and future not
                           hereby effectively charged by way of first fixed
                           charge;

         (b)      by way of first floating charge the whole of the Borrower's
                  undertaking and all its property and assets whatsoever and
                  wheresoever present and future other than the property and
                  assets from time to time effectively charged to the Bank by
                  way of legal mortgage or fixed charge by this Debenture.

         Nothing herein shall be construed as creating a charge over any land or
         interest therein, unless the Bank shall have first obtained a requisite
         non-belonger land holding licence under the provisions of the
         Non-Belongers Land Holding Regulation Act (Cap. 122) to hold such
         charge.

2.2      The Bank may convert the floating charge at any time by notice in
         writing to the Borrower into a fixed charge as regards all the property
         and assets which for the time being are the subject of such floating
         charge or, as the case may be, such of the said property and assets as
         are specified by such notice. The floating charge created by this
         Debenture shall unless otherwise agreed in writing by the Bank
         automatically and without notice immediately be converted into a fixed
         charge in the event that the Borrower shall create or permit to subsist
         any mortgage charge pledge lien or other security interest other than
         this Debenture or if any person takes any step to levy any distress
         attachment execution or other legal process against any of the said
         property or assets.


2.3      The security from time to time constituted by or pursuant to this
         Debenture shall be in

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         addition to and shall not prejudice determine or affect any other
         security which the Bank may from time to time hold for or in respect of
         all or any part of the moneys obligations and liabilities hereby
         secured. No prior security held by the Bank over the property charged
         by this Debenture or any part of it shall merge in the security created
         hereby or pursuant hereto which will remain in force and effect as a
         continuing security until discharged by the Bank.

3        RESTRICTIONS ON DEALING

3.1      The Borrower shall not without the prior written consent of the Bank:

         (a)      create or permit to subsist any mortgage debenture charge
                  pledge lien (other than a lien arising by operation of law in
                  the ordinary course of trading) or other encumbrance or
                  security interest on any of its assets other than this
                  Debenture;

         (b)      sell transfer lease lend or otherwise dispose of the whole or
                  any part of its undertaking or (save in the normal course of
                  trading at not less than market value) of its assets or enter
                  into any agreement or grant any option for any such sale
                  transfer lease loan or other disposal;

         (c)      part with possession of any freehold or leasehold property
                  grant or agree to grant any option or any licence tenancy or
                  other right of occupation to any person or exercise the powers
                  of leasing or agreeing to lease or of accepting or agreeing to
                  accept surrenders provided that such restrictions shall not be
                  construed as a limitation on the powers of any receiver
                  appointed under this Debenture and being an agent of the
                  Borrower;

         (d)      pull down or remove or redevelop or make any material
                  alteration to the whole or any part of any buildings or sever
                  unfix or remove any fixtures or remove any plant or machinery
                  belonging to or in use by the Borrower except for the purpose
                  of effecting repairs or replacing the same;

         (e)      redeem or purchase its own shares, or pay dividend and profit
                  shares unless there is a minimum cash flow of US$500,000 after
                  debit service is retained to support the operating costs of
                  the reverse osmosis plant of the Borrower, and

         (f)      amend or waive any of its rights under the agreement to
                  produce portable water from sea water between the Borrower and
                  the Government of the British Virgin Islands as amended by a
                  supplemental agreement dated 14 March 1991 and a further
                  supplemental agreement dated 24 January 1992 (hereinafter the
                  "CONTRACT").

4        REPRESENTATIONS WARRANTIES AND COVENANTS BY THE BORROWER

4.1      The Borrower represents and warrants to the Bank as at the date of this
         Debenture and so long as any sums secured by this Debenture remain
         outstanding and undertakes that:

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         (a)      it is duly incorporated validly existing and in good standing
                  under the laws of the British Virgin Islands;

         (b)      it has and will at all times have the necessary power to enter
                  into and perform its obligations under this Debenture;

         (c)      this Debenture constitutes its legal valid binding and
                  enforceable obligations and is a first priority security over
                  the assets charged hereunder and every part thereof effective
                  in accordance with its terms;

         (d)      all necessary authorisations and consents to enable or entitle
                  it to enter into this Debenture have been obtained and will
                  remain in full force and effect during the subsistence of the
                  security constituted by this Debenture;

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

                  (a)      conflict with any law or regulation or judicial or
                           official order;

                  (b)      conflict with the constitutional documents of the
                           Borrower; or

                  (c)      conflict with any document which is binding upon the
                           Borrower or any of its assets;

         (f)      all approval from any government, tax monetary or other
                  authorities have been obtained and are in full force and
                  effect;

         (g)      the execution of this Debenture and the borrowings and
                  repayment of the loan will not contravene any agreement to
                  which the Borrower is a party;

         (h)      it is not in default under any agreement to which it is a
                  party nor is it the subject of any actual, pending or
                  threatened legal proceedings either of which has or may have a
                  material adverse effect on the Borrower's financial condition;

         (i)      the financial statements and all other financial and other
                  information delivered to the Bank are true and accurate, do
                  not omit any material facts or other information which might
                  make them misleading and no material change has occurred since
                  the date of those valuations or the dates when such other
                  financial and other information was delivered to the Bank;

         (j)      the Startup Date (as defined in the Contract) of the Contract
                  is 31 May 1992 and the termination date is 31 May 2006,
                  there have been no amendments to the Contract since the
                  Supplemental Agreement # 2 dated 24 January 1992, and there
                  have been no defaults under the Contract;

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         (k)      other than this Debenture, it has not assigned or agreed to
                  assign, charge or in any way encumber any of its present or
                  future rights, title and interest in and to the Contract or
                  any of its other assets (other than a lien arising by
                  operation of law in the ordinary course of trading);

         (l)      no right of action is vested in any party under the Contract
                  in respect of any representation, breach of condition, breach
                  of warranty or breach of any other express or implied term by
                  the Borrower thereunder; and

         (m)      it has no knowledge of any fact that would or might prejudice
                  or affect any right, power or ability of the Bank to enforce
                  this Debenture or condition thereof.

4.2      The Borrower shall:

         (a)      conduct and carry on its business in a proper and efficient
                  manner and not make any substantial alteration in the nature
                  of or mode of conduct of that business and keep or cause to be
                  kept proper books of account and records relating to such
                  business;

         (b)      perform its obligations in a prompt and efficient manner and
                  maintain and enforce its rights under the Contract and not do
                  or omit to do anything in relation thereto which may
                  reasonably be expected adversely and materially to affect the
                  ability of the Borrower to perform its obligations under the
                  Contract this Debenture or any agreement with the Bank;

         (c)      keep all buildings and all plant machinery fixtures and
                  fittings in good repair and condition and permit any person or
                  persons nominated by the Bank free access at all times to view
                  the state and condition thereof;

         (d)      insure and keep insured such of its property as is insurable
                  with such insurer and against such risks and in such amounts
                  and otherwise in such terms as the Bank may require and will
                  maintain such other insurances as are normally maintained by
                  prudent companies carrying on similar businesses with the
                  interest of the Bank noted upon all policies of such insurance
                  or, if the Bank shall require, in the joint names of the
                  Borrower and the Bank and will produce or deposit with the
                  Bank all such policies and receipts for all premium and other
                  payments necessary for effecting and maintaining such
                  insurances;

         (e)      apply any insurance proceeds in making good the loss or damage
                  or at the Bank's option in or towards the discharge of the
                  moneys obligations and liabilities secured by this Debenture;

         (f)      punctually pay all rents taxes duties assessments and other
                  outgoings and observe and perform all restrictive and other
                  covenants under which any of the property subject to this
                  Debenture is held;

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         (g)      pay into its account with the Bank all moneys which it may
                  receive in respect of its book or other debts and all licence
                  fees, royalties and other moneys deriving from its
                  intellectual property and until such payment hold all such
                  moneys on trust for the Bank;

         (h)      deal with its book or other debts and all licence fees,
                  royalties and other moneys deriving from its intellectual
                  property in accordance with any directions from time to time
                  given in writing by the Bank and in default of and subject to
                  any such directions not release factor sell at discount charge
                  assign or otherwise deal with such debts, licence fees,
                  royalties or other moneys otherwise than by getting in and
                  paying the same into such account;

         (i)      deposit with the Bank all deeds certificates and documents
                  constituting or evidencing title to the property or any part
                  thereof charged by this Debenture and all insurance policies;

         (j)      comply with the provisions of all present or future statutes
                  and directives and every notice order or directions made under
                  any of the foregoing;

         (k)      not do or cause or permit to be done anything which may in any
                  way depreciate, jeopardise or otherwise prejudice the value to
                  the Bank of the security hereby charged;

         (l)      provide the Bank with all financial and other information with
                  respect to the assets, liabilities and affairs of the Borrower
                  and its subsidiaries and associated companies (if any) that
                  the Bank may form time to time require.

         (m)      if required by the Bank, procure that each subsidiary of the
                  Borrower shall guarantee to the Bank payment of all moneys,
                  obligations and liabilities hereby covenanted to be paid and
                  charge all its undertaking, property and assets to secure the
                  same in such manner as the Bank shall from time to time
                  require;

         (n)      if required by the Bank, will cause each of its subsidiaries
                  to, permit the Bank or any agent or representative of the
                  Bank, examine and make copies of and abstracts from the
                  records and books of account of the Borrower and visit the
                  premises and properties of the Borrower and to discuss the
                  affairs, finances and accounts of the Borrower and its
                  subsidiaries with any of the officers or knowledgeable
                  employees of the Borrower or such subsidiaries.

4.3      The Borrower hereby further covenants with the Bank that during the
         continuance of the security constituted by this Debenture the Borrower
         will:

         (a)      furnish to the Bank copies of the profit and loss account,
                  balance sheet and directors' report in respect of each
                  financial year of the Borrower, its holding companies and such
                  of the subsidiaries of the Borrower or its holding companies
                  as the Bank may from time to time require showing a true and
                  fair view of their

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                  respective affairs, profit or loss and source and application
                  of funds certified by duly qualified auditors approved by the
                  Bank forthwith upon the same becoming available and not in any
                  event later than the expiration of ninety (90) days from the
                  end of such financial year and also at the time of issue
                  copies of all, annual reports and other information of a
                  financial or business nature circulated to shareholders or to
                  any class of creditors and from time to time such other
                  information, statements, forecasts and projections of the
                  Borrower, its holding companies and the subsidiaries of the
                  Borrower as the Bank may require;

         (b)      at the request of the Bank furnish copies of annual financial
                  statements of its shareholders, and promptly inform the Bank
                  of its financial position generally which would be material to
                  be known to a director or a lender;

         (c)      furnish the Bank with copies of all notices given to or
                  received from any person in relation to the Contract promptly
                  after the same are given or as the case may be received;

         (d)      notify the Bank immediately of any default or event likely to
                  cause a default of the Borrower or the Government of the
                  British Virgin Islands under the terms of the Contract, and of
                  any action taken by any party or any act or event which could
                  terminate or invalidate the Contract;

         (e)      maintain in full force and effect all government tax monetary
                  and other approval consents and licences required to enable
                  the Borrower to maintain its corporate status to continue to
                  carry on its business and affairs.

4.4      If the Borrower shall fail to satisfy the Bank that it has performed
         any of its obligations under clauses 4.2 and 4.3, then the Bank may
         take such steps as it considers appropriate procure the performance of
         such obligation and shall not thereby be deemed to be a mortgagee in
         possession and the moneys expended by the Bank shall be reimbursed by
         the Borrower on demand and until so reimbursed shall carry interest as
         mentioned in clause 1 from the date of payment to the date of
         reimbursement.

5        ENFORCEMENT

5.1      This Debenture shall become enforceable:

         (a)      upon demand by the Bank;

         (b)      if any of the moneys obligations and liabilities secured by
                  this Debenture shall not be paid or discharged by the Borrower
                  in accordance with clause 1 immediately upon it coming due; or

         (c)      if the Borrower shall be in breach of any provision of this
                  Debenture or of any agreement containing any terms and
                  conditions of or applicable to the moneys obligations and
                  liabilities secured by this Debenture; or

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         (d)      upon the presentation of a petition for the winding up of the
                  Borrower or an order made or the passing by the Borrower of a
                  resolution for voluntary winding up; or

         (e)      if an encumbrancer shall take possession of or a receiver
                  shall be appointed over or any secured creditor of the
                  Borrower shall seek to enforce his security in respect of all
                  or any of the property or assets charged by this Debenture; or

         (f)      if the Borrower shall enter into any composition or
                  arrangement for the benefit of its creditors; or

         (g)      if any information, representation, warranty or undertaking
                  from time to time provided or made to the Bank by the Borrower
                  is or becomes incorrect or misleading in a material respect;
                  or

         (h)      if the Borrower defaults under the Contract, or any trust
                  deed, loan agreement, debenture or other agreement or
                  obligation relating to borrowing (which expression includes
                  all liabilities in respect of accepting, endorsing or
                  discounting any notes or bills, all unpaid rental and other
                  liabilities, present and future, under hire-purchase, credit
                  sale, conditional sale, leasing and similar agreements the
                  purchase price or charge for all acquisitions or services
                  payment of which is deferred for three months or more and all
                  liabilities under debt purchase, factoring and like agreements
                  contingent on non-payment of any debt) or under any guarantee
                  (which expression includes all contingent liabilities
                  undertaken in respect of the obligations or liabilities of any
                  third party including all guarantees, indemnities or bonds
                  whether constituting primary or secondary obligations or
                  liabilities) or if any borrowing or other money payable under
                  any of the foregoing becomes or is capable of being declared
                  payable prior to its stated maturity or is paid when due or if
                  any debenture, mortgage, charge or other security from time to
                  time created by the Borrower becomes enforceable; or

         (i)      if any judgment or order made against the Borrower is not
                  complied with within seven days from the date of entry thereof
                  or if an execution, distress, sequestration or other process
                  is levied or enforced upon or sued out against any part of the
                  undertaking, property, assets or revenues of the Borrower; or

         (j)      if the Borrower stops payment or agrees to declare a
                  moratorium or becomes or is deemed to be insolvent or unable
                  to pay its debts within the meaning of the Companies Act
                  (British Virgin Islands) or when they fall due or if a notice
                  is issued convening a meeting of or the Borrower proposes to
                  enter into any composition or arrangement with its creditors
                  or any class of its creditors; or

         (k)      if any material part of the assets or revenues of the Borrower
                  is sold or disposed of or threatened to be sold or disposed of
                  (otherwise than in the normal course of trading) whether in a
                  single transaction or a number of transactions or is
                  nationalised, compulsorily acquired, seized or appropriated or
                  if any partnership

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                  of which the Borrower is or becomes a partner is dissolved; or

         (l)      if any part of the security hereby created or any guarantee,
                  indemnity or other security for any money obligation or
                  liability hereby secured fails or ceases in any respect to
                  have full force and effect or to be continuing or is
                  terminated or disputed or becomes in jeopardy, invalid or
                  unenforceable; or

         (m)      if any licence, authorisation, consent or registration at any
                  time necessary or desirable to enable the Borrower to comply
                  with its obligations to the Bank or to carry on its business
                  in the normal course shall be revoked, withheld or materially
                  modified or shall fail to be granted or perfected or shall
                  cease to remain in full force and effect; or

         (n)      if control of the Borrower is acquired by any person or group
                  of connected persons not having control of the Borrower at the
                  date hereof (unless with the prior consent in writing of the
                  Bank); or

         (o)      if it becomes illegal under any law applying to the Bank for
                  it to make or maintain any credit facility secured by this
                  Debenture; or

         (p)      if:

                  (i)      any of the foregoing events occurs without the prior
                           consent in writing of the Bank in relation to: (A)
                           any third party which now or hereafter has guaranteed
                           or provided security for or given an indemnity in
                           respect of any obligation and liabilities hereby
                           secured; or (B) any subsidiary or holding company of
                           the Borrower of any such third party or any
                           subsidiary of any such holding company; or

                  (ii)     any individual now or hereafter liable as such third
                           party shall commit an act of bankruptcy, die or
                           become of unsound mind;

         (q)      the Borrower shall have failed to repay, forthwith, any
                  obligation or liability which has become illegal for the Bank
                  to continue to hold, fund or maintain due to a change in, or
                  in the interpretation of, any law or regulation or compliance
                  with any guidelines or request from any governmental authority
                  (whether or not having the force of law); or

         (r)      if the Borrower shall cease or threaten to cease to carry on
                  its business, or any other event shall take place which in the
                  opinion of the Bank puts in jeopardy all or any part of the
                  security created by this Debenture.

5.2      The Borrower hereby covenants to immediately notify the Bank in writing
         of the occurrence of any enforceable event specified in clause 5.1 or
         of the occurrence of any event or circumstance which with the lapse of
         time will or may constitute an enforceable event.

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6.       RECEIVER

6.1      At any time after this Debenture has become enforceable or if the
         Borrower so requests in writing the Bank may without further notice to
         the Borrower appoint by writing under hand or under seal any one or
         more persons (whether an officer of the Bank or not) either singly
         jointly severally or jointly and severally to be a receiver, receiver
         and manager or administrative receiver (each a "Receiver") of all or
         any part of the property charged by this Debenture and either at the
         time or appointment or any time thereafter may fix his or their
         remuneration and except as otherwise required by statute may remove
         any such Receiver and appoint another or others in his or their place.

6.2      Any Receiver shall be the agent of the Borrower which shall be solely
         responsible for his acts and defaults and the payment of his
         remuneration,

6.3      Any Receiver shall:

         (a)      take possession of collect and get in all or any part of the
                  property in respect of which he is appointed and for that
                  purpose to take any proceedings in the name of the Borrower or
                  otherwise as may seem expedient;

         (b)      carry on or concur in carrying on the business of the Borrower
                  and to raise money from the Bank or others on the security of
                  any property charged by this Debenture;

         (c)      purchase or acquire any land and purchase, acquire and grant
                  any interest in or right over land;

         (d)      sell or concur in selling let or concur in letting and
                  terminate or accept surrenders of leases or tenancies or any
                  of the property charged by this Debenture and to carry any
                  such transactions into effect;

         (e)      sell, assign let or otherwise dispose of or concur in selling,
                  assigning, letting or otherwise disposing of all or any of the
                  debts and any other property in respect of which he is
                  appointed;

         (f)      make any arrangement or compromise between the Borrower and
                  any other person which he may think expedient;

         (g)      make and effect all repairs improvement and insurances;

         (h)      purchase materials tools equipment goods or supplies;

         (i)      call up any uncalled capital of the Borrower with all the
                  powers conferred by the Memorandum and Articles of Association
                  of the Borrower in relation to calls;

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         (j)      employ engage and appoint managers and other employees and
                  professional advisers;

         (k)      do all such other acts and things as may be considered to be
                  incidental or conducive to any other matters or powers
                  aforesaid or to the realisation of the security constituted by
                  this Debenture and which he lawfully may or can do.

7        APPLICATION OF PROCEEDS

7.1      Any moneys received by the Bank or any Receiver shall subject to the
         repayment of any claims having priority to the charges created by this
         Debenture be applied in the following order but without prejudice to
         the right of the Bank to recover any shortfall from the Borrower:

         (a)      in the payment of all costs charges and expenses of and
                  incidental to the appointment of the Receiver and the exercise
                  of all or any of his powers and of all outgoings paid by him;

         (b)      in the payment of the Receiver's remuneration;

         (c)      in or towards the satisfaction of the moneys obligations and
                  liabilities secured by Debenture in such order as the Bank in
                  its absolute discretion thinks fit;

         (d)      in payment of the surplus (if any) to the person or persons
                  entitled to it.

7.2      All moneys received recovered or realised by the Bank under this
         Debenture may be credited at the discretion of the Bank to any suspense
         or impersonal account and may be held in such account for so long as
         the Bank shall think fit pending its application from to time in or
         towards the discharge of any of the moneys obligations and liabilities
         secured by this Debenture.

8        PROTECTION OF THIRD PARTIES

8.1      No person dealing with a Receiver or the Bank shall be concerned to
         enquire whether any power which he or it is purporting to exercise has
         become exercisable or whether any money is due under this Debenture or
         as to the application of any money paid raised or borrowed or as to the
         propriety or regularity of any sale by or other dealing with such
         Receiver or the Bank. All the protection to purchasers contained in any
         statute shall apply to any person purchasing from or dealing with a
         Receiver or the Bank.

9        ENTRY INTO POSSESSION

9.1      If the Bank or any Receiver shall enter into possession of the property
         hereby charged or any part thereof it or he may from time to time and
         at any time go out of such possession. Neither the Bank nor any
         Receiver shall in any circumstances (either by reason of any entry into
         or taking of possession of any such property or for any other reason
         and

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         whether as mortgagee in possession or on any other basis) be liable to
         account to the Borrower for anything except its or his actual receipts
         or be liable to the Borrower for any loss or damage arising from any
         realisation of the property hereby charged or from any act default or
         omission in relation thereto.

10       POWER OF ATTORNEY

10.1     the Borrower irrevocably appoints the Bank any Receiver and any person
         nominated by the Bank jointly and also severally to be the attorney of
         the Borrower with the power of substitution and in its name and
         otherwise on its behalf and as its act and deed to sign or execute all
         deeds instruments and documents which the Bank or any Receiver may
         require or deem proper for any of the purposes of or which the Borrower
         ought to do under this Debenture. The Borrower agrees to ratify and
         confirm anything such attorney shall lawfully and properly do.

11       CURRENCY INDEMNITY

11.1     For the purpose of or pending the discharge of any of the moneys
         obligations and liabilities secured by this Debenture the Bank may
         convert any moneys received recovered or realised by the Bank under
         this Debenture (including the proceeds of any previous conversion) from
         their existing currency into such other currency as the Bank may think
         fit and any such conversion shall be effected at the Bank's then
         prevailing spot selling rate of exchange for such other currency
         against the existing currency. As a separate and independent obligation
         the Borrower agrees to indemnify and hold harmless the Bank against any
         shortfall between any amount received or recovered by it in respect of
         any payment due under this Debenture and converted in accordance with
         the clause into the currency in which such amount was payable and the
         amount in such currency which was due and payable to the Bank under
         this Debenture.

12       NEW ACCOUNTS

12.1     If the Bank shall at any time receive actual or constructive notice of
         any charge or other interest affecting any part of the property hereby
         charged then the Bank may open a new account or accounts for the
         Borrower and if the Bank does not do so then the Bank shall be treated
         as if it had in fact done so at the time when it received or was deemed
         to receive notice and as from that time all payments made by the
         Borrower to the Bank shall be credited or treated as having been
         credited to the new account and shall not operate to reduce the amount
         secured by this Debenture at the time when the Bank received or was
         deemed to received such notice.

13       PRIOR CHARGES

13.1     If there is any encumbrance over any of the property charged by this
         Debenture which ranks in priority to this Debenture and any
         proceedings or steps are taken to exercise or enforce any powers or
         remedies conferred by such prior encumbrance the Bank or any Receiver
         appointed under this Debenture in respect or such property may (but
         without

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<PAGE>

         prejudice to any rights the Receiver) redeem such prior encumbrance or
         procure its transfer to itself and may settle and pass the accounts of
         any prior mortgagee, chargee or encumbrancer. Any account so settled
         and passed shall be conclusive and binding on the Borrower and all the
         principal interest costs charges and expenses of and incidental to such
         redemption or transfer shall be secured on the property charged by this
         Debenture and all the powers conferred by any prior encumbrance upon
         the encumbrancer or any receiver thereunder shall be exercisable by the
         Bank or a Receiver in like manner as if the same were expressly
         included in this Debenture.

14       FURTHER ASSURANCE

14.1     The Borrower shall at its own cost whenever requested by the Bank
         immediately execute and sign all such deeds and documents and do all
         such things as the Bank may require for the purpose of perfecting or
         more effectively providing security to the Bank for the payment and
         discharge of the moneys obligations and liabilities secured by this
         Debenture or to facilitate the realisation of the property and assets
         mortgaged and charged by this Debenture or the exercise of any rights
         vested in the Bank or any Receiver.

15       SET-OFF

15.1     The Bank may at any time and without notice to the Borrower combine or
         consolidate all or any of the Borrower's then existing accounts with
         and liabilities to the Bank and set off or transfer any sum or sums
         standing to the credit of any one or more of such accounts in or
         towards satisfaction of any of the liabilities of the Borrower to the
         Bank on any other account or in any other respects. The Bank shall
         notify the Borrower that such a transfer has been made.

16       COSTS AND INDEMNITY

16.1     All reasonable costs, expenses and disbursements incurred by the Bank
         in relation to this Debenture or the moneys obligations and liabilities
         hereby secured including for the avoidance of doubt all amounts the
         Bank may incur in the negotiation, preparation and completion, and in
         the maintenance, protection and enforcement of any of its rights, and
         may from time to time require to compensate it for its internal
         management and administrative costs and expenses, stamp duty and legal
         fees (attorney-and-own-client basis), and any amount which the Bank may
         certify to be necessary to compensate the Bank for any increased costs
         or reduction in return resulting from compliance with any change in, or
         in the interpretation of any law or regulation of any official
         directive or request (whether or not having the force of law), shall be
         reimbursed by the Borrower to the Bank on demand on a full indemnity
         basis and until so reimbursed shall carry interest in accordance with
         the provisions set out in clause 1 from the date of payment to the date
         of reimbursement and be secured on the property charged by this
         Debenture. A certificate signed by the Bank as to the amount of such
         costs and expenses shall be conclusive and binding upon the Borrower.

                                       13

<PAGE>

16.2     The Bank and every Receiver attorney or other person appointed by the
         Bank under this Debenture and their respective employees shall be
         entitled to be indemnified on a full indemnity basis out of the
         property charged by this Debenture in respect of all liabilities and
         expenses incurred by any of them in or directly or indirectly as a
         result of the exercise or purported exercise of any of the powers
         authorities or discretions vested in them under this Debenture and
         against all actions proceedings losses costs claims and demands in
         respect of any matter or thing done or omitted in any way relating to
         the property charged by this Debenture and the Bank and any such
         Receiver may retain and pay all sums in respect of the same out of the
         moneys received under the powers conferred by this Debenture.

17       MISCELLANEOUS

17.1     The Bank may without discharging or in any way affecting the security
         created by this Debenture or any remedy of the Bank grant time or other
         indulgence or abstain from exercising or enforcing any remedies
         securities guarantees or other rights which it may now or in the future
         have from or against the Borrower and may make any arrangement
         variation or release with any person or persons without prejudice
         either to this Debenture or the liability of the Borrower for the
         moneys obligations and liabilities secured by this Debenture.

17.2     The Borrower shall not assign or transfer any rights or obligation
         under this Debenture. The Bank shall have a full and unfettered right,
         on giving written notice to the Borrower, to assign the whole or any
         part of the benefit and/or obligations of this Debenture and the
         expression "the Bank" shall include its successors and assigns and the
         Bank shall be entitled to disclose any information to any actual or
         prospective assignee successor or participant.

17.3     The provisions of this Debenture shall be severable and if at any time
         any one or more such provisions is or becomes invalid illegal or
         unenforceable the validity legality and enforceability of the remaining
         provisions shall not in any way be impaired.

17.4     The rights and remedies of the Bank provided by this Debenture are
         cumulative and are not exclusive of any rights powers or remedies
         provided by law and may be exercised from time to time and as often as
         the Bank may deem expedient.

17.5     Any reference in this Debenture to any statute or any section of any
         statute shall be deemed to include reference to any statutory
         modification or re-enactment thereof for the time being in force.

18       NOTICES

18.1     Any demand or notice under this Debenture shall be in writing and may
         be served personally on any director or the secretary of the Borrower
         or may be sent by post telex or facsimile or may be delivered to the
         registered office of the Borrower or its last known place of business.
         If such demand or notice is sent by post it shall be deemed to have

                                       14

<PAGE>

         been received seven days after it was posted and shall be effective
         notwithstanding that it was not in fact delivered or was returned
         undelivered. If sent by telex or facsimile it shall be deemed to have
         been received (whether or not actually received) at the time of
         dispatch.

19       GOVERNING LAW AND JURISDICTION

19.1     This Debenture shall be governed by and construed in accordance with
         the laws of the British Virgin Islands and the Borrower irrevocably
         submits to the non-exclusive jurisdiction of the courts of the British
         Virgin Islands and the courts of Bermuda.

IN WITNESS WHEREOF this Debenture has been executed as a deed the day and year
first above written.

THE COMMON SEAL of Ocean                  )    /s/ [ILLEGIBLE]
Conversion (BVI) Ltd was hereunto affixed )    ---------------------------
and attested to by Glenn Harrigan and                Director
Romney Penn, directors                    )    /s/ [ILLEGIBLE]
in the presence of:                       )    ---------------------------
                                          )    Director
/s/ [ILLEGIBLE]
-------------------------
Witness

THE COMMON SEAL of The Bank of            )    /s/ [ILLEGIBLE]
N.T. Butterfield and Son Limited was      )    ---------------------------
hereunto affixed and attested to by       )    Authorised Signatory

______________________________
in the presence of:

/s/ [ILLEGIBLE]
--------------------------------
Witness

                                                                          [SEAL]

                                       15

<PAGE>

                                    AFFIDAVIT

         I Carlene Herbert of McNamara, Tortola, British Virgin Islands, make
OATH and SAY as follows:-

1.       I was present at Road Town, Tortola, British Virgin Islands on the 15th
day of July, 2002 and did then and there see Glenn Harrigan and Romney Penn as
Directors of OCEAN CONVERSION (BVI) LTD duly sign the foregoing Debenture and
affix the Company's Seal thereto.

2.       The signatures "Glenn Harrigan" and "Romney Penn" duly set and
subscribed to the said Debenture at the foot or end thereof opposite the Seal of
the party of the One Part executing the same are of the proper handwritings of
Glenn Harrigan and Romney Penn aforesaid and the signature "Carlene Herbert"
thereto also set and subscribed as that of the witness attesting the due
execution thereof by Glenn Harrigan and Romney Penn on behalf of OCEAN
CONVERSION (BVI) LTD aforesaid is of the proper handwriting of me this
deponent.

SWORN at Road Town, Tortola     )

British Virgin Islands          )       /s/ [ILLEGIBLE]
                                        -----------------------------
this 15th day of July, 2002     )

                                )

         BEFORE ME:

/s/ [ILLEGIBLE]
-----------------------------
NOTARY PUBLIC

[SEAL]       [SEAL]

                                       16

<PAGE>

                                    AFFIDAVIT

         I BETH TAYLOR VESEY of 2 Cherry Dale, Smith's, Bermuda, make
OATH and SAY as follows:-

1.       I was present at the offices of the Bank of N.T. Butterfield & Son Ltd.
on the 22nd day of august, 2002 and did then and there see Michael A. McWatt &
Philip C. Jones an authorised signatory of THE BANK OF N.T. BUTTERFIELD & SON
LIMITED duly sign the foregoing Debenture and affix the Company's Seal thereto.

2.       The signature "[ILLEGIBLE]" duly set and subscribed to the said
Debenture at the foot or end thereof opposite the Seal of the party of the One
Part executing the same is of the proper handwriting of Michael McWatt & Philip
Jones aforesaid and the signature "[ILLEGIBLE]" thereto also set and subscribed
as that of the witness attesting the due execution thereof by [ILLEGIBLE]
Michael McWatt, Philip C. Jones on behalf of THE BANK OF N.T. BUTTERFIELD & SON
LIMITED aforesaid is of the proper handwriting of me this deponent.

SWORN at City of Hamilton,    )

Island of Bermuda             )

                                      /s/ [ILLEGIBLE]
this 22nd day of August, 2002 )       -----------------------------

                              )

         BEFORE ME:

/s/ [ILLEGIBLE]
--------------------------
NOTARY PUBLIC

Seal

         JOHN BARRITT
         NOTARY PUBLIC
         "CEDAR HOUSE"
        41 CEDAR AVENUE
        HAMILTON, BERMUDA                                                 [SEAL]

                                       17