Exhibit
10.17


 


Second Priority
Mortgage of Shares


 


in


 


Seagate
Technology International


 


 


1 March 2010


 


 


Seagate HDD
Cayman


 


(as Mortgagor)


 


and


 


Wells Fargo Bank,
National Association


 


(as Mortgagee)


 

















 


TABLE OF CONTENTS


 


	
  CLAUSE

  	
   

  	
   

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
  DEFINITIONS
  AND INTERPRETATION

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  REPRESENTATION
  AND WARRANTIES

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  COVENANT
  TO PAY

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  SECURITY

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  RIGHTS
  IN RESPECT OF MORTGAGED PROPERTY

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  PRESERVATION
  OF SECURITY

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  ENFORCEMENT
  OF SECURITY

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  APPOINTMENT
  OF A RECEIVER

  	
   

  	
  13

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
   

  	
  POWERS
  OF A RECEIVER

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
   

  	
  FURTHER
  ASSURANCES

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
   

  	
  INDEMNITIES

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
   

  	
  POWER
  OF ATTORNEY

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
   

  	
  EXPENSES

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
   

  	
  RELEASE

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  15.

  	
   

  	
  NOTICES

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  16.

  	
   

  	
  ASSIGNMENTS

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  17.

  	
   

  	
  COLLATERAL
  AGENT

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  18.

  	
   

  	
  SET-OFF

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  19.

  	
   

  	
  SUBSEQUENT
  SECURITY INTERESTS

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  20.

  	
   

  	
  MISCELLANEOUS

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  21.

  	
   

  	
  RELEASE
  OF EXISTING SECURITY OVER THE MORTGAGED PROPERTY

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  22.

  	
   

  	
  LAW
  AND JURISDICTION

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  23.

  	
   

  	
  INTERCREDITOR
  AGREEMENT

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE 1

  	
   

  	
  23

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 2

  	
   

  	
  25

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 3

  	
   

  	
  27

  



 


i

















 


THIS
EQUITABLE SHARE MORTGAGE is made on 1 March 2010


 


BETWEEN


 


(1)                                SEAGATE
HDD CAYMAN, an exempted company with limited liability incorporated under the
laws of the Cayman Islands with company number 237305 and having its
registered office at P.O. Box 309, Ugland House, George Town, Grand Cayman
KY1-1104, Cayman Islands (the “Mortgagor”);
and


 


(2)                                WELLS
FARGO BANK, NATIONAL ASSOCIATION, a company established under the laws of
the United States of America as Collateral Agent and trustee for and on behalf
of the Secured Parties (the “Collateral Agent”
or “Mortgagee”).


 


WHEREAS


 


(A)                            Pursuant to the Indenture,
Seagate Technology International, an exempted company with limited liability
incorporated under the laws of the Cayman Islands, as Issuer (the “Issuer”) issued USD430,000,000 in aggregate
principal amount of 10.00% Senior Secured Second-Priority Notes due 2014 (the “Notes”) 
guaranteed by Seagate Technology HDD Holdings as Guarantor.


 


(B)                              The Mortgagor
holds legal and beneficial title to the entire issued capital of the Company,
currently 6,441 fully paid Class A shares of US$1.00 par value (the “Initial Shares”).


 


(C)                              In order to
secure the Obligations of Seagate Technology HDD Holdings under the Note
Guaranty, the Indenture and the Notes, the Mortgagor has agreed to grant
security over the Mortgaged Shares in favour of the Collateral Agent for the
benefit of the Secured Parties in respect of the Secured Obligations.


 


(D)                             The Security
Interests granted hereunder in respect of the Mortgaged Shares are subject to
the terms, conditions and provisions of the Intercreditor Agreement in all
respects.


 


NOW
THIS MORTGAGE WITNESSETH


 


1.                                    DEFINITIONS AND INTERPRETATION


 


1.1                               In
this Mortgage, unless the context otherwise requires, words and expressions
which are capitalised but not defined herein (including in the recitals hereto)
shall have the same meanings as are given to them in the Indenture.  In addition, the following definitions shall
apply:


 


“Companies Law”
means the Companies Law (as amended) of the Cayman Islands;


 


“Company” means Seagate Technology International, an exempted
company with limited liability incorporated under the laws of the
Cayman Islands with a company number 20423 and having its registered
office at P.O. Box 309, Ugland House, George Town, Grand Cayman KY1-1104,
Cayman Islands;


 


“Event of Default” means the occurrence of an Event of Default
as defined in the Indenture and/or the failure by the Mortgagor to observe or
perform any covenant or agreement contained in this Mortgage or any default in
the payment of any of the Secured Obligations;


 


“First Priority Obligation” has the meaning given to it in
the Intercreditor Agreement;


 


“First Priority Secured Party” means JPMorgan Chase Bank,
N.A. as administrative agent under the Senior Credit Facility or any other
administrative agent under a Senior Credit Facility that is a First Priority Obligation;


 


2

















 


“First Priority Share Mortgage” means the Equitable Share
Mortgage dated 1 March 2010 between the Mortgagor and the First Priority
Secured Party as varied from time to time;


 


“gross negligence” shall be interpreted according to the laws
of the State of New York, United States of America;


 


“Guarantor” means each of Seagate Technology, Seagate
Technology HDD Holdings, the Company and certain other subsidiaries of Seagate
Technology, all of which entities have guaranteed the Notes under the
Indenture;


 


“Indenture” means the Indenture dated as of 1 May 2009
and made among the Issuer, Seagate Technology, Wells Fargo Bank, N.A. as
trustee and the other guarantors party thereto as varied from time to time;


 


“Indenture Documents”
has the meaning given to it in the U.S. Security Agreement;


 


“Intercreditor Agreement” means the Intercreditor Agreement
dated 1 May 2009 among the Collateral Agent, JPMorgan Chase Bank, N.A.,
Seagate Technology HDD Holdings, the Issuer and the other parties thereto as
varied from time to time;


 


“Mortgage” means this share mortgage;


 


“Mortgaged Property” means the Mortgaged Shares and all
rights, benefits and advantages now or at any time in the future deriving from
or incidental to any of the Mortgaged Shares including:


 


(a)                                all
dividends or other distributions (whether in cash, securities or other
property), interest and other income paid or payable in relation to any
Mortgaged Shares;


 


(b)                               all
shares, securities, rights, monies or other property whether certificated or
uncertificated accruing, offered or issued at any time by way of redemption,
conversion, exchange, substitution, preference, option, bonus issue or
otherwise in respect of any Mortgaged Shares (including but not limited to
proceeds of sale); and


 


(c)                                all
certificates or other evidence of title to any of the Mortgaged Shares now and
from time to time hereafter deposited with the Collateral Agent;


 


“Mortgaged Shares”
means:


 


(a)                                the
Initial Shares;


 


(b)                               any
shares acquired in respect of Mortgaged Shares by reason of a stock split,
stock dividend, reclassification or otherwise; and


 


(c)                                all
other shares in the Company from time to time legally or beneficially owned by
the Mortgagor;


 


“Note Guaranty”
means the guaranty of the Notes by the Mortgagor as Guarantor pursuant to the
Indenture as varied from time to time;


 


“Other Guarantor”
means any of the Guarantors other than the Mortgagor;


 


“Original Share Mortgage”
has the meaning given to that term in Clause 21 of this Mortgage;


 


“Parties” means the parties to this Mortgage;


 


[Signature
Page to Second Priority Mortgage of Shares in Seagate Technology International]


 


3

















 


“Register of Charges” means the register of charges of the
Mortgagor maintained by the Mortgagor in accordance with Section 54 of the
Companies Law;


 


“Register of Members” means the register of members of the
Company maintained by the Company in accordance with the Companies Law;


 


“Secured Obligations” has the meaning given to it in the U.S.
Security Agreement;


 


“Secured Party” or “Secured Parties”
has the meaning given to it in the U.S. Security Agreement;


 


“Security Interest” means:


 


(a)                                a
mortgage, charge, pledge, lien, assignment by way of security or other
encumbrance or security arrangement (including any hold back or “flawed asset” arrangement) securing any obligation of any
person;


 


(b)                               any
arrangement under which money or claims to, or the benefit of, a bank or other
account may be applied, set off or made subject to a combination of accounts so
as to effect discharge of any sum owed or payable to any person;


 


(c)                                any
other type of arrangement having a similar effect; or


 


(d)                               agreements
to create the foregoing;


 


“Security Period” means the period commencing on the date of
execution of this Mortgage and terminating on the date when all the Secured
Obligations have been discharged in full;


 


“Share Purchase Agreement” means the share purchase agreement
dated 1 March 2010 between Seagate Technology HDD Holdings and the
Mortgagor; and


 


“U.S. Security Agreement” means the Second Lien U.S. Security
Agreement among Seagate Technology, the Issuer and each of the subsidiaries
listed in Schedule I thereto and the Collateral Agent and supplemented by
Seagate Technology plc and the Mortgagor on or about the date hereof and as
further varied from time to time.


 


1.2                               In
construing this Mortgage (including the recitals), unless otherwise specified:


 


(a)                                references
to any Party shall be construed so as to include that Party’s respective
successors in title, permitted assigns and permitted transferees;


 


(b)                               “including” and “in particular”
shall not be construed restrictively but shall mean respectively “including,
without prejudice to the generality of the foregoing” and “including, without
limitation”, and “in particular, but without prejudice to the generality
of the foregoing”;


 


(c)                                references
to a “person” shall be construed
so as to include any individual, firm, company or other body corporate,
government, state or agency of a state, local or municipal authority or
government body or any joint venture, association or partnership (whether or
not having separate legal personality); and in each case, its successors and
assigns and persons deriving title under or through it, in whole or in part,
and any person which replaces any party to any document in its respective role
thereunder, whether by assuming the rights and obligations of the party being
replaced or whether by executing a document in or substantially in the form of the
document it replaces;


 


4

















 


(d)                               “variation” includes any variation, amendment, accession,
novation, restatement, modification, assignment, transfer, supplement,
extension, deletion or replacement however effected and “vary”
and “varied” shall be construed accordingly;


 


(e)                                “writing” includes facsimile transmission legibly received
except in relation to any certificate, notice or other document which is
expressly required by this Mortgage to be signed and “written”
has a corresponding meaning;


 


(f)                                  references
to the “consent” of the Collateral Agent shall
be construed as the consent of the Collateral Agent acting in its absolute
discretion;


 


(g)                               subject
to Clause 20.3, references to this Mortgage or to any other document
include references to this Mortgage or such other document as varied in any
manner from time to time, even if changes are made to:


 


(i)                                   the
composition of the parties to this Mortgage or such other document or to the
nature or amount (including any increase) of any facilities made available
under such other document; or


 


(ii)                                the
nature or extent of any obligations under such other document;


 


(h)                               references
to uncertificated shares are to shares the title to which can be transferred by
means of an electronic or other entry and references to certificated shares are
to shares which are not uncertificated shares;


 


(i)                                   references to the singular shall include the plural
and vice versa and references to the masculine shall include the feminine or
neuter and vice versa;


 


(j)                                   references
to clauses and schedules are to clauses of, and schedules to, this Mortgage;


 


(k)                                references
to any statute or statutory provision shall be construed as a reference to the
same as it may have been, or may from time to time be amended, modified or
re-enacted;


 


(l)                                   headings
and titles are for convenience only and do not affect the interpretation of
this Mortgage;


 


(m)                             an
Event of Default is “continuing” if
it has not been remedied or waived; and


 


(n)                               this
Mortgage is a “Security Agreement” under the
terms of the Indenture.


 


2.                                    REPRESENTATION AND WARRANTIES


 


2.1                               The
Mortgagor hereby represents and warrants to the Collateral Agent and each
Secured Party on the date of this Mortgage that:


 


(a)                                the
Mortgagor is the sole legal and beneficial owner of the Mortgaged Property free
from any Security Interest (other than that created by the First Priority Share
Mortgage and this Mortgage) or other interest and any options or rights of
pre-emption;


 


(b)                               the
Mortgaged Shares represent 100% (one hundred percent) of the issued shares
of the Company;


 


(c)                                any
Mortgaged Shares are, or will be when mortgaged and charged, duly authorised,
validly issued, fully paid, non-assessable, freely transferable and constitute
shares in the 


 


5

















 


capital of a Cayman Islands
exempted company.  To the extent they are
in existence there are no moneys or liabilities outstanding or payable in
respect of any such shares nor will there be any and they have not been redeemed
nor cancelled in any way nor will they be;


 


(d)                               no
person has or is entitled to any conditional or unconditional option, warrant
or other right to subscribe for, purchase or otherwise acquire any issued or
unissued shares, or any interest in shares, in the capital of the Company;


 


(e)                                the
Mortgaged Shares are not issued with any preferred, deferred or other special
rights or restrictions whether in regard to dividends, voting, return of any
amount paid on account of shares or otherwise which are not expressly set out
in the memorandum and articles of association of the Company;


 


(f)                                  there
are no covenants, agreements, conditions, interest, rights or other matters
whatsoever which adversely affect the Mortgaged Property;


 


(g)                               the
Mortgagor has not received any notice of an adverse claim by any person in
respect of the ownership of the Mortgaged Property or any interest in the
Mortgaged Property;


 


(h)                               the
Mortgagor has full power and authority to:


 


(i)                                   execute
and deliver this Mortgage and the other Indenture Documents to which it is a
party;


 


(ii)                                be
the legal and beneficial owner of the Mortgaged Property; and


 


(iii)                             comply
with the provisions of, and perform all its obligations under this Mortgage and
the other Indenture Documents to which it is a party;


 


(i)                                   it
is able to pay its debts as they fall due and it has not taken any action nor
have any steps been taken or legal proceedings been started or threatened in
writing against it for:


 


(i)                                   winding
up, dissolution or reorganisation;


 


(ii)                                the
enforcement of any Security Interest over its assets; or


 


(iii)                             the
appointment of a liquidator, receiver, administrative receiver, administrator,
trustee or similar officer of it or of any or all of its assets;


 


(j)                                   it
is not in breach (nor would be in breach with the giving of notice, passing of
time, or satisfaction of any other condition) or in default under any deed,
instrument or any agreement to which it is a party or which is binding on it or
any of its assets;


 


(k)                                it
has not taken any action whereby the rights attaching to the Mortgaged Property
are altered or diluted save to the extent such alteration or dilution is
expressly permitted under this Mortgage or any other Indenture Document; and


 


(l)                                   this
Mortgage is effective to create a valid and enforceable second priority
equitable mortgage and second priority fixed charge upon the Mortgaged Property
in favour of the Collateral Agent ranking in priority to any claims by any
liquidator (or similar officer) or creditor of the Mortgagor other than the
parties secured by the First Priority Share Mortgage.


 


6

















 


2.2                               The
Mortgagor also represents and warrants to and undertakes with the Collateral
Agent that the foregoing representations and warranties will be true and
accurate throughout the continuance of this Mortgage with reference to the
facts and circumstances subsisting from time to time.


 


3.                                    COVENANT TO PAY


 


The Mortgagor
hereby covenants with the Collateral Agent as primary obligor and not merely as
surety to pay and discharge the Secured Obligations in the manner provided in
the relevant Indenture Documents.


 


4.                                    SECURITY


 


4.1                               Subject
to the release of security in accordance with the terms of Clause 21 (Release
of Existing Security over the Mortgaged Property) and the transfer of the
Mortgaged Shares from the Seagate Technology HDD Holdings to the Mortgagor
pursuant to the Share Purchase Agreement, as a continuing security for the
payment and discharge of the Secured Obligations, the Mortgagor as legal and
beneficial owner hereby:


 


(a)                                mortgages
to the Collateral Agent, by way of a second equitable mortgage, the
Mortgaged Shares;


 


(b)                               charges
to the Collateral Agent, by way of a second fixed charge, all of its right,
title and interest in and to the Mortgaged Property including all benefits,
present and future, actual and contingent accruing in respect of the Mortgaged
Property; and


 


(c)                                assigns,
and agrees to assign, absolutely by way of security to the Collateral Agent all
its rights, present and future, relating to any of the Mortgaged Property.


 


4.2                               The
Mortgagor hereby agrees to deliver, or cause to be delivered, to the Collateral
Agent on the date hereof:


 


(a)                                copies
of the memorandum and articles of association and board and committee
resolutions of the Mortgagor required to authorise the execution of this
Mortgage;


 


(b)                               an
executed but undated share transfer certificate in respect of the Initial
Shares in the form set out in Schedule 1 to this Mortgage and any other
documents which from time to time may be requested by the Collateral Agent in
order to enable the Collateral Agent or its nominees to be registered as the
owner or otherwise obtain legal title to the Mortgaged Shares;


 


(c)                                all
share certificates (if any) representing the Mortgaged Shares (when a share
certificate is so issued by the Company and is not in the possession of the
First Priority Secured Party) and a certified copy of the Register of
Members of the Company showing the Mortgagor as registered owner of the
Mortgaged Shares;


 


(d)                               an
executed irrevocable proxy and power of attorney made in respect of the
Mortgaged Shares in favour of the Collateral Agent in the form set out in
Schedule 2 to this Mortgage;


 


(e)                                an
executed irrevocable letter of instructions from the Company to its registered
office provider appointing an instructing party for the Company in the form set
out in Schedule 3 of this Mortgage;


 


7

















 


(f)                                  a
copy of the special resolution passed by the Mortgagor on the form agreed by
the parties;


 


(g)                               a
certified copy of the Mortgagor’s Register of Mortgages and Charges which has
been updated to record the particulars of this Mortgage in a form satisfactory
to the Administrative Agent; and


 


(h)                               a
certified copy of the Borrower’s Register of Mortgages and Charges which has
been updated to record the discharge of the Original Share Mortgage.


 


4.3                               The
Mortgagor will procure that there shall be no increase in the issued share
capital of the Company (other than by way of an issuance of further shares to
the person in whose name the Mortgaged Shares are registered) without the prior
consent in writing of the Collateral Agent subject to the terms, conditions and
provisions of the Intercreditor Agreement.


 


4.4                               The
Mortgagor will deliver, or cause to be delivered, to the Collateral Agent
immediately upon (without prejudice to Clause 4.3) the issue of any
further Mortgaged Shares, the items listed in Clauses 4.2(b) and 4.2(c) in
respect of all such further Mortgaged Shares.


 


4.5                               The
Mortgagor shall, immediately after execution of this Mortgage procure that any
existing notation be deleted and that the following notation be entered on the
Register of Members of the Company:


 


“All the Class A shares issued as fully paid up and registered in
the name of Seagate HDD Cayman are subject to a second priority mortgage and
charge in favour of Wells Fargo Bank, National Association pursuant to a share
mortgage dated 1 March 2010, as amended from time to time.”


 


4.6                               The
Mortgagor shall, immediately after execution of this Mortgage, provide the
Collateral Agent with a certified true copy of the Register of Members of the
Company with the annotation referred to in Clause 4.5 which has been
updated to record the particulars of the transfer of shares pursuant to the
Share Purchase Agreement.


 


5.                                    RIGHTS IN RESPECT OF MORTGAGED PROPERTY


 


5.1                               Unless
and until the declaration by the Collateral Agent of an occurrence of an Event
of Default:


 


(a)                                the
Mortgagor shall be entitled to exercise all voting and consensual powers
pertaining to the Mortgaged Property or any part thereof for all purposes not
inconsistent with the terms of this Mortgage or the other Indenture Documents;
and


 


(b)                               the
Mortgagor shall be entitled to receive and retain any dividends, interest or
other moneys or assets accruing on or in respect of the Mortgaged Property or
any part thereof.


 


5.2                               The
Collateral Agent shall not have any duty to ensure that any dividends, interest
or other moneys and assets receivable in respect of the Mortgaged Property are
duly and punctually paid, received or collected as and when the same become due
and payable or to ensure that the correct amounts (if any) are paid or received
on or in respect of the Mortgaged Property or to ensure the taking up of any
(or any offer of any) stocks, shares, rights, moneys or other property paid,
distributed, accruing or offered at any time by way of redemption, bonus,
rights, preference, or otherwise on or in respect of, any of the Mortgaged
Property.


 


5.3                               Subject
to the Intercreditor Agreement, the Mortgagor hereby authorises the Collateral
Agent to arrange at any time and from time to time after the occurrence of an
Event of Default for the 


 


8

















 


Mortgaged Property or any part thereof
to be registered in the name of the Collateral Agent (or its nominee) thereupon
to be held, as so registered, subject to the terms of this Mortgage and,
at the request of the Collateral Agent, the Mortgagor shall without delay
procure that the foregoing shall be done.


 


6.                                    PRESERVATION OF SECURITY


 


6.1                               It
is hereby agreed and declared that:


 


(a)                                the
security created by this Mortgage shall be held by the Collateral Agent as a
continuing security for the payment and discharge of the Secured Obligations
and the security so created shall not be satisfied by any intermediate payment
or satisfaction of any part of the Secured Obligations;


 


(b)                               the
Collateral Agent shall not be bound to enforce any other security before
enforcing the security created by this Mortgage;


 


(c)                                no
delay or omission on the part of the Collateral Agent in exercising any right,
power or remedy under this Mortgage shall impair such right, power or remedy or
be construed as a waiver thereof nor shall any single or partial exercise of
any such right, power or remedy preclude any further exercise thereof or the
exercise of any other right, power or remedy. 
The rights, powers and remedies herein provided are cumulative and not
exclusive of any rights, powers and remedies provided by law and may be
exercised from time to time and as often as the Collateral Agent may deem
expedient; and


 


(d)                               any
waiver by the Collateral Agent of any terms of this Mortgage shall only be
effective if given in writing and then only for the purpose and upon the terms
for which it is given.


 


6.2                               Any
settlement or discharge under this Mortgage between the Collateral Agent and
the Mortgagor shall be conditional upon no security or payment to the
Collateral Agent by the Company or the Mortgagor or any other person
(including, without limitation, any Other Guarantor) being avoided or set aside
or ordered to be refunded or reduced by virtue of any provision or enactment
relating to bankruptcy, insolvency, administration or liquidation for the time
being in force and, if such condition is not satisfied, the Collateral Agent
shall be entitled to enforce this Mortgage as if such settlement or discharge
had not been made, provided that such settlement or discharge shall become
unconditional six months and one day after the date of such settlement or
discharge.


 


6.3                               The
rights of the Collateral Agent under this Mortgage and the security hereby
constituted shall not be affected by any act, omission, matter or thing which,
but for this provision, might operate to impair, affect or discharge such
rights and security, in whole or in part, including without limitation, and
whether or not known to or discoverable by the Company, the Mortgagor, the
Collateral Agent or any other person:


 


(a)                                any
time or waiver granted to or composition with the Company, the Mortgagor or any
other person;


 


(b)                               the
taking, variation, compromise, renewal or release of or refusal or neglect to
perfect or enforce any rights, remedies or securities against the Company, the
Mortgagor or any other person;


 


(c)                                any
legal limitation, disability, incapacity or other circumstances relating to the
Company, the Mortgagor or any other person;


 


(d)                               any
amendment or supplement to any Indenture Document or any other document or
security (including any amendment the effect of which is to change the nature
or amount 


 


9

















 


of any facilities made available
thereunder or to change the nature or extent of any obligations thereunder);


 


(e)                                the
dissolution, liquidation, amalgamation, reconstruction or reorganisation of the
Company, the Mortgagor or any other person; or


 


(f)                                  the
unenforceability, invalidity or frustration of any obligations of the Company,
the Mortgagor or any other person under any Indenture Document or any
other document or security.


 


6.4                               During
the Security Period, the Mortgagor shall not by virtue of any payment made
hereunder on account of the Secured Obligations or by virtue of any enforcement
by the Collateral Agent of its rights under, or the security constituted by,
this Mortgage or any Indenture Document or by virtue of any relationship
between or transaction involving the Mortgagor and/or the Company (whether such
relationship or transaction shall constitute the Mortgagor a creditor of the
Company, a guarantor of the obligations of the Company or in part subrogated to
the rights of others against the Company or otherwise howsoever and whether or
not such relationship or transaction shall be related to, or in connection
with, the subject matter of this Mortgage):


 


(a)                                exercise
any rights of subrogation against the Company or any other person in relation
to any rights, security or moneys held or received or receivable by the
Collateral Agent or any person;


 


(b)                               exercise
any right of contribution from any co-surety liable in respect of such moneys
and liabilities under any other guarantee, security or agreement;


 


(c)                                exercise
any right of set-off or counterclaim against the Company or any such co-surety;


 


(d)                               receive,
claim or have the benefit of any payment, distribution, security or indemnity
from the Company or any such co-surety; or


 


(e)                                unless
so directed by the Collateral Agent (when the Mortgagor will prove in
accordance with such directions), claim as a creditor of the Company or any
such co-surety in competition with the Collateral Agent.


 


The Mortgagor
shall hold in trust for the Collateral Agent and forthwith pay or transfer
(as appropriate) to the Collateral Agent any such payment (including an
amount to any such set-off), distribution or benefit of such security,
indemnity or claim in fact received by it.


 


6.5                               During
the Security Period, the Collateral Agent may at any time keep in a separate
account or accounts (without liability to pay interest thereon) in the name of
the Collateral Agent for as long as it may think fit, any moneys received
recovered or realised under this Mortgage or under any other guarantee,
security or agreement relating in whole or in part to the Secured Obligations
without being under any intermediate obligation to apply the same or any part
thereof in or towards the discharge of the Secured Obligations or any other
amount owing or payable under the Indenture Documents; provided that the
Collateral Agent shall be obliged to apply amounts standing to the credit of
such account or accounts once the aggregate amount held by the Collateral Agent
in any such account or accounts opened pursuant hereto is sufficient to satisfy
the outstanding amount of the Secured Obligations in full.


 


6.6                               Subject
to the Intercreditor Agreement, except as otherwise permitted by the First
Priority Share Mortgage, the Mortgagor shall not, without the prior written
consent of the Collateral Agent:


 


(a)                                cause
or permit any rights attaching to the Mortgaged Property to be varied or
abrogated;


 


10






 












 


(b)           cause
or permit any of the Mortgaged Property to be consolidated, sub-divided or
converted or the capital of the Company to be re-organised, exchanged or
repaid; or


 


(c)           cause
or permit anything to be done which may depreciate, jeopardise or otherwise
prejudice the value of the security hereby given.


 


6.7           The
Mortgagor hereby covenants that during the Security Period it will remain the
legal and beneficial owner of the Mortgaged Property (subject to the Security
Interests hereby created) and that it will not (other than as permitted by the
Indenture Documents):


 


(a)           create
or suffer the creation of any Security Interests (other than those created by
this Mortgage and the First Priority Share Mortgage) or any other interest on
or in respect of the whole or any part of the Mortgaged Property or any of
its interest therein;


 


(b)           sell,
assign, transfer or otherwise dispose of any of its interest in the Mortgaged
Property without the prior consent in writing of the Collateral Agent; or


 


(c)           permit
the Register of Members to be maintained outside of the Cayman Islands or by a
service provider other than the person to whom the letter of instructions in
Schedule 3 has been given (unless in the later case, the Mortgagor has provided
a new letter of instructions substantially in the form of Schedule 3 by the new
service provider).


 


6.8           The
Mortgagor shall remain liable to perform all the obligations assumed by it in
relation to the Mortgaged Property and the Collateral Agent shall be under no
obligation of any kind whatsoever in respect thereof or be under any liability
whatsoever in the event of any failure by the Mortgagor to perform its
obligations in respect thereof.


 


6.9           The
Mortgagor shall ensure that it shall not, without the prior written consent of
the Collateral Agent, use its voting rights to permit the Company to amend its
memorandum or articles of association in a way which could be expected to
adversely affect the interests of the Collateral Agent or any of the Secured
Parties.


 


6.10         The
Mortgagor shall procure that the Company shall not:


 


(a)           create
or permit to subsist any Security Interest upon the whole or any part of its
assets, except as permitted by the Indenture Documents;


 


(b)           register
any transfer of the Mortgaged Shares to any person (except (i) to the
Collateral Agent or its nominees pursuant to the provisions of this Mortgage
and (ii) as permitted by the Indenture Documents);


 


(c)           issue
any replacement share certificates in respect of any of the Mortgaged Shares;


 


(d)           continue
its existence under the laws of any jurisdiction other than the
Cayman Islands;


 


(e)           do
anything which might result in the Company being struck off the register as an
exempted company;


 


(f)            issue,
allot or grant warrants or options with respect to any additional shares;


 


(g)           exercise
any rights of forfeiture over any of the Mortgaged Shares; or


 


(h)           purchase,
redeem, otherwise acquire, cancel, sub-divide, amalgamate, reclassify or
otherwise restructure any of the Mortgaged Property,


 


11

















 


during the
Security Period without the prior written consent of the Collateral Agent.


 


6.11         The
Mortgagor shall procure that the Company shall irrevocably consent to any
transfer of the Mortgaged Shares by the Collateral Agent or its nominee to any
other person pursuant to the exercise of the Collateral Agent’s rights under
this Mortgage.


 


6.12         The
Mortgagor shall not, without the prior written consent of the Collateral Agent,
participate in any vote concerning a members’ liquidation or compromise
pursuant to the Companies Law.


 


7.             ENFORCEMENT OF SECURITY


 


7.1           At
any time after the occurrence of an Event of Default or if a demand is made for
the payment of the Secured Obligations, the security hereby constituted shall
become immediately enforceable and the rights of enforcement of the Collateral
Agent under this Mortgage shall be immediately exercisable upon and at any time
thereafter and, without prejudice to the generality of the foregoing, the
Collateral Agent without further notice to the Mortgagor may, whether acting on
its own behalf or through a receiver or agent:


 


(a)           solely
and exclusively exercise all voting and/or consensual powers pertaining to the
Mortgaged Property or any part thereof and may exercise such powers in such
manner as the Collateral Agent may think fit;


 


(b)           date
and present to the Company or any other person any undated documents provided
to it pursuant to Clause 4 or any other provision of this Mortgage;


 


(c)           receive
and retain all dividends, interest or other moneys or assets accruing on or in
respect of the Mortgaged Property or any part thereof, such dividends, interest
or other moneys or assets to be held by the Collateral Agent, as additional
security mortgaged and charged under and subject to the terms of this Mortgage
and any such dividends, interest and other moneys or assets received by
the Mortgagor after such time shall be held in trust by the Mortgagor for the
Collateral Agent and paid or transferred to the Collateral Agent on demand;


 


(d)           take
possession of, get in, assign, exchange, sell, transfer, grant options over or
otherwise dispose of the Mortgaged Property or any part thereof at such place
and in such manner and at such price or prices as the Collateral Agent may deem
fit, and thereupon the Collateral Agent shall have the right to deliver, assign
and transfer in accordance therewith the Mortgaged Property so sold,
transferred, granted options over or otherwise disposed of including by way of
changing the ownership of the Mortgaged Shares as shown on the Register of
Members;


 


(e)           borrow
or raise money either unsecured or on the security of the Mortgaged Property
(either in priority to the Mortgage or otherwise);


 


(f)            settle,
adjust, refer to arbitration, compromise and arrange any claims, accounts, disputes,
questions and demands with or by any person who is or claims to be a creditor
of the Mortgagor or relating to the Mortgaged Property;


 


(g)           bring,
prosecute, enforce, defend and abandon actions, suits and proceedings in
relation to the Mortgaged Property or any business of the Mortgagor;


 


(h)           redeem
any security (whether or not having priority to the Mortgage) over the
Mortgaged Property and to settle the accounts of any person with an
interest in the Mortgaged Property;


 


12

















 


(i)            exercise
and do (or permit the Mortgagor or any nominee of the Mortgagor to exercise and
do) all such rights and things as the Collateral Agent would be capable of
exercising or doing if it were the absolute beneficial owner of the Mortgaged
Property;


 


(j)            do
anything else it may think fit for the realisation of the Mortgaged Property or
incidental to the exercise of any of the rights conferred on the Collateral
Agent under or by virtue of any document to which the Mortgagor is party; and


 


(k)           exercise
all rights and remedies afforded to it under this Mortgage and applicable law.


 


7.2           The
Collateral Agent shall not be obliged to make any enquiry as to the nature or
sufficiency of any payment received by it under this Mortgage or to make any
claim or to take any action to collect any moneys assigned by this Mortgage or
to enforce any rights or benefits assigned to the Collateral Agent by this
Mortgage or to which the Collateral Agent may at any time be entitled
hereunder.


 


7.3           Upon
any sale of the Mortgaged Property or any part thereof by the Collateral Agent,
the purchaser shall not be bound to see or enquire whether the Collateral Agent’s
power of sale has become exercisable in the manner provided in this Mortgage
and the sale shall be deemed to be within the power of the Collateral Agent,
and the receipt of the Collateral Agent for the purchase money shall
effectively discharge the purchaser who shall not be concerned with the manner
of application of the proceeds of sale or be in any way answerable therefor.


 


7.4           Any
money received or realised by the Collateral Agent under the powers conferred
by this Mortgage shall be paid or applied in a manner consistent with Section 6.02
of the U.S. Security Agreement.


 


7.5           During
the Security Period, the Collateral Agent may refrain from applying or
enforcing any other moneys, security or rights held by it in respect of the
Secured Obligations or may apply and enforce such moneys, security or
rights in such manner and in such order as it shall decide in its unfettered
discretion.


 


7.6           Neither
the Collateral Agent nor its agents, managers, officers, employees, delegates
and advisers shall be liable for any claim, demand, liability, loss, damage,
cost or expense incurred or arising in connection with the exercise or
purported exercise of any rights, powers and discretions hereunder in the
absence of dishonesty or wilful default.


 


7.7           The
Collateral Agent shall not, by reason of the taking of possession of the whole
or any part of the Mortgaged Property or any part thereof, be liable to account
as mortgagee-in-possession or for anything except actual receipts or be liable
for any loss upon realisation or for any default or omission for which a
Collateral Agent-in-possession might be liable.


 


8.             APPOINTMENT OF A RECEIVER


 


8.1           At
any time after:


 


(a)           the
occurrence of an Event of Default; or


 


(b)           a
request has been made by the Mortgagor to the Collateral Agent for the
appointment of a receiver over its assets or in respect of the Mortgagor,


 


then notwithstanding
the terms of any other agreement between the Mortgagor and any person, the
Collateral Agent may (unless precluded by law) appoint in writing any person or
persons to be a receiver or receiver and manager of all or any part of the
Mortgaged Property as the Collateral Agent may choose in its entire discretion.


 


13

















 


8.2           Where
more than one receiver is appointed, the appointees shall have power to act
jointly or separately unless the Collateral Agent shall specify to the
contrary.


 


8.3           The
Collateral Agent may from time to time determine the remuneration of a
receiver.


 


8.4           The
Collateral Agent may remove a receiver from all or any of the Mortgaged
Property of which he is the receiver and after the receiver has vacated office
or ceased to act in respect of any of the Mortgaged Property, appoint a further
receiver over all or any of the Mortgaged Property in respect of which he shall
have ceased to act.


 


8.5           Such
an appointment of a receiver shall not preclude:


 


(a)           the
Collateral Agent from making any subsequent appointment of a receiver over all
or any Mortgaged Property over which a receiver has not previously been
appointed or has ceased to act; or


 


(b)           the
appointment of an additional receiver to act while the first receiver continues
to act.


 


8.6           The
receiver shall be the agent of the Mortgagor (which shall be solely liable for
his acts, defaults and remuneration) unless and until the Mortgagor is
placed into liquidation, after which time he shall act as principal. The
receiver shall not at any time become the agent of the Collateral Agent.


 


9.             POWERS OF A RECEIVER


 


9.1           Subject
to the terms of the Intercreditor Agreement, in addition to those powers
conferred by law, a receiver shall have and be entitled to exercise in relation
to the Mortgagor all the powers set forth below:


 


(a)           to
exercise all rights of the Collateral Agent under or pursuant to this Mortgage,
including all voting and other rights attaching to the Mortgaged Property;


 


(b)           to
make any arrangement or compromise with others as he shall think fit;


 


(c)           to
appoint managers, officers and agents for the above purposes at such
remuneration as the receiver may determine;


 


(d)           to
redeem any prior encumbrance and settle and pass the accounts of the
encumbrancer and any accounts so settled and passed shall (subject to any
manifest error) be conclusive and binding on the Mortgagor and the money so
paid shall be deemed an expense properly incurred by the receiver;


 


(e)           to
pay the proper administrative charges in respect of time spent by its agents
and employees in dealing with matters raised by the receiver or relating to the
receivership of the Mortgagor; and


 


(f)            to
do all such other acts and things as may be considered by the receiver to be
incidental or conducive to any of the above matters or powers or otherwise
incidental or conducive to the preservation, improvement or realisation of the
Mortgaged Property or the value thereof.


 


10.           FURTHER ASSURANCES


 


10.1         The
Mortgagor shall at its own expense promptly do all such acts or execute all
such documents (including assignments, transfers, mortgages, charges, notices
and instructions) as the Collateral 


 


14

















 


Agent may reasonably specify and in
such form as the Collateral Agent may reasonably require in order to:


 


(a)           perfect
or protect the security created or intended to be created under or evidenced by
this Mortgage (which may include the execution of a charge, assignment or other
security over all or any of the assets which are, or are intended to be, the
subject of this Mortgage) or for the exercise of any rights, powers and
remedies of the Collateral Agent provided by or pursuant to this Mortgage, the
Indenture Documents or by law; or


 


(b)           following
an Event of Default, subject to the Intercreditor Agreement, facilitate the
realisation of the assets which are, or are intended to be, the subject of this
Mortgage.


 


10.2         Without
limiting the other provisions of this Mortgage, the Mortgagor shall at its own
expense take all such action as is available to it (including making all
filings and registrations) 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 Collateral Agent by or pursuant to this Mortgage.


 


11.           INDEMNITIES


 


11.1         The
Mortgagor will indemnify and save harmless the Collateral Agent, any receiver
and each agent or attorney appointed under or pursuant to this Mortgage from
and against any and all reasonable expenses, claims, liabilities, losses,
taxes, costs, duties, fees and charges suffered, incurred or made by the
Collateral Agent or such agent or attorney other than as a result of the gross
negligence or wilful default of the Mortgagee:


 


(a)           in
the exercise or purported exercise of any rights, powers or discretions vested
in them pursuant to this Mortgage;


 


(b)           in
the preservation or enforcement of the Collateral Agent’s rights under this
Mortgage or the priority thereof;


 


(c)           on
the release of any part of the Mortgaged Property from the security created by
this Mortgage; or


 


(d)           arising
out of any breach by the Mortgagor of any term of this Mortgage,


 


and the
Collateral Agent or such receiver, agent or attorney may retain and pay all
sums in respect of the same out of money received under the powers conferred by
this Mortgage.  All amounts suffered,
incurred or paid by the Collateral Agent or such receiver, agent or attorney or
any of them shall be recoverable on a full indemnity basis provided that nothing
in this Clause 11.1 shall require the Mortgagor to indemnify and save
harmless the Collateral Agent from and against any expenses, claims,
liabilities, losses, taxes, costs, duties, fees and charges suffered, incurred
or made by the Collateral Agent as a result of the Collateral Agent’s
dishonesty or wilful default.


 


11.2         If,
under any applicable law or regulation, and whether pursuant to a judgment
being made or registered against the Mortgagor or the bankruptcy or liquidation
of the Mortgagor or for any other reason any payment under or in connection
with this Mortgage is made or fails to be satisfied in a currency (the “Payment Currency”) other than the currency in which such
payment is due under or in connection with this Mortgage (the “Contractual Currency”), then to the extent that the amount
of such payment actually received by the Collateral Agent when converted into
the Contractual Currency at the rate of exchange, falls short of the amount due
under or in connection with this Mortgage, the Mortgagor, as a separate and
independent obligation, shall indemnify and hold harmless the Collateral Agent
against the amount of such shortfall. 
For the purposes of this Clause 11.2, “rate of
exchange” means the rate at which the Collateral Agent is 


 


15

















 


able on or about the date of such
payment to purchase the Contractual Currency with the Payment Currency and
shall take into account any premium and other costs of exchange with respect
thereto.


 


12.           POWER OF ATTORNEY


 


12.1         The
Mortgagor, by way of security and in order more fully to secure the performance
of its obligations hereunder, hereby irrevocably appoints the Collateral Agent
and the persons deriving title under it (including, but without any limitation,
any receiver) jointly and also severally (with full power of substitution and
delegation) to be its attorney-in-fact:


 


(a)           to
execute and complete in favour of the Collateral Agent or its nominees or of
any purchaser any documents which the Collateral Agent may from time to time
require for perfecting the Collateral Agent’s title to, for vesting any of the
assets and property hereby mortgaged, or charged in the Collateral Agent
or its nominees or in any purchaser or for any of the purposes contemplated in
Clause 7.1 hereof;


 


(b)           after
the occurrence of an Event of Default, to give effectual discharges for
payments, to take and institute on non-payment (if the Collateral Agent in its
sole discretion so decides) all steps and proceedings in the name of the Mortgagor
or of the Collateral Agent for the recovery of such moneys, property and assets
hereby mortgaged or charged;


 


(c)           after
the declaration by the Collateral Agent of an Event of Default, to agree
accounts and make allowances and give time or other indulgence to any surety or
other person liable;


 


(d)           so
as to enable the Collateral Agent to carry out in the name of the Mortgagor any
obligation imposed on the Mortgagor by this Mortgage (including the execution
and delivery of any deeds, charges, assignments or other security and any
transfers of the Mortgaged Property and the exercise of all the Mortgagor’s
rights and discretions in relation to the Mortgaged Property);


 


(e)           so
as to enable the Collateral Agent and any receiver or other person to exercise,
or delegate the exercise of, any of the rights, powers and authorities
conferred on them by or pursuant to this Mortgage or by law (including, after
the occurrence of an Event of Default, the exercise of any right of a legal and
beneficial owner of the Mortgaged Property), and


 


(f)            generally
for it and in its name and on its behalf and as its act and deed or otherwise
execute, seal and deliver and otherwise perfect and do any such legal
assignments and other assurances, charges, authorities and documents over the
moneys, property and assets hereby charged, and all such deeds, instruments,
acts and things which may be required for the full exercise of all or any of
the powers conferred or which may be deemed proper on or in connection with any
of the purposes aforesaid,


 


in each case, subject to the terms,
conditions and provisions of the Intercreditor Agreement.


 


12.2         Notwithstanding
any other provision of Clause 12.1, the power of attorney created by Clause
12.1 shall not be exercisable by or on behalf of the Collateral Agent as the
case may be until an Event of Default has occurred.


 


12.3         The
power hereby conferred shall be a general power of attorney and the Mortgagor
hereby ratifies and confirms and agrees to ratify and confirm any instrument,
act or thing which any attorney appointed pursuant hereto may execute or
do.  In relation to the power referred to



 


16

















 


herein, the exercise by the Collateral
Agent of such power shall be conclusive evidence of its right to exercise the
same.


 


13.           EXPENSES


 


13.1         The
Mortgagor shall pay to the Collateral Agent on demand all reasonable costs,
fees and expenses (including, but not limited to, properly incurred legal
fees and expenses) and taxes thereon incurred by the Collateral Agent or for
which the Collateral Agent may become liable in connection with:


 


(a)           the
negotiation, preparation and execution of this Mortgage;


 


(b)           the
preserving or enforcing of, or attempting to preserve or enforce, any of its
rights under this Mortgage or the priority hereof;


 


(c)           any
variation of, or amendment or supplement to, any of the terms of this Mortgage;
or


 


(d)           any
consent or waiver required from the Collateral Agent in relation to this
Mortgage,


 


and in the case
referred to in Clauses 13.1(c) and 13.1(d), regardless of whether the
same is actually implemented, completed or granted, as the case may be.


 


13.2         The
Mortgagor shall pay promptly all registration, stamp, documentary and other
like duties and taxes to which this Mortgage may be subject or give rise and
shall indemnify the Collateral Agent on demand against any and all liabilities
with respect to or resulting from any delay or omission on the part of the
Mortgagor to pay any such duties or taxes.


 


14.           RELEASE


 


14.1         Subject
to Clause 14.2, when all the Secured Obligations have been paid in full in
cash or the Security Interest created by this Mortgage is automatically
released pursuant to Section 11.04 of the Indenture, the Collateral
Agent shall (at the request and cost of the Mortgagor) execute such documents
and do all such reasonable acts as may be necessary to release the Mortgaged
Property from the security constituted by this Mortgage.  Such release shall not prejudice the rights
of the Collateral Agent under Clause 11.


 


14.2         If
the Collateral Agent considers in good faith that any amount received in
payment or purported payment of the Secured Obligations (whether received from
or paid by the Company, any Other Guarantor or any other relevant person) is
capable of being avoided or reduced by virtue of any insolvency or other
similar laws:


 


(a)           the
liability of the Mortgagor under this Mortgage and the security constituted by
this Mortgage shall continue and such amount shall not be considered to have
been irrevocably paid; and


 


(b)           the
Collateral Agent may keep any security held by it in respect of the Mortgagor’s
liability under the Indenture Documents in order to protect the Secured Parties
against any possible claim under insolvency law for up to six years after all
Secured Obligations have been satisfied. 
If a claim is made against a Secured Party within that period,
the Collateral Agent may keep the security until that claim has finally
been dealt with.


 


17

















 


15.           NOTICES


 


Any notice or
other communication given or made under or in connection with the matters
contemplated by this Mortgage shall be provided in accordance with Section 12.03
of the Indenture.


 


16.           ASSIGNMENTS


 


16.1         This
Mortgage shall be binding upon and shall enure to the benefit of the Mortgagor,
the Collateral Agent and each of their respective successors and (subject
to clauses 16.2 and 16.3) assigns and references in this Mortgage to any of
them shall be construed accordingly.


 


16.2         The
Mortgagor may not assign or transfer all or any part of its rights and/or
obligations under this Mortgage.


 


16.3         The
Collateral Agent may assign and transfer its rights pursuant to this Mortgage
in accordance with the terms of Section 7.05 of the U.S. Security
Agreement.


 


17.           COLLATERAL AGENT


 


17.1         The
Collateral Agent holds the benefit of this Mortgage (and any other
security created in its favour pursuant to this Mortgage) as agent for and on
behalf of the Secured Parties pursuant to the terms of the Indenture and the
U.S. Security Agreement. 
The retirement of the person for the time being acting as
Collateral Agent and the appointment of a successor shall be effected in the
manner provided for in the Indenture.


 


17.2         Nothing
in this Mortgage shall constitute or be deemed to constitute a partnership
between any of the Secured Parties and the Collateral Agent.


 


18.           SET-OFF


 


18.1         The
Mortgagor authorises the Collateral Agent (but the Collateral Agent shall not
be obliged to exercise such right), after the occurrence of an Event of Default
to set off against the Secured Obligations any amount or other obligation
(contingent or otherwise) owing by the Collateral Agent to the Mortgagor.


 


19.           SUBSEQUENT SECURITY INTERESTS


 


19.1         If
the Collateral Agent at any time receives or is deemed to have received notice
of any subsequent Security Interest affecting all or any part of the Mortgaged
Property or any assignment or transfer of the Mortgaged Property which is
prohibited by the terms of this Mortgage, all payments thereafter by or on behalf
of the Mortgagor to the Collateral Agent shall be treated as having been
credited to a new account of the Mortgagor and not as having been applied in
reduction of the Secured Obligations as at the time when the Collateral Agent
received such notice.


 


18

















 


20.           MISCELLANEOUS


 


20.1         The
Collateral Agent, at any time and from time to time, may delegate by power of
attorney or in any other manner to any person or persons all or any of the
powers, authorities and discretions which are for the time being exercisable by
the Collateral Agent under this Mortgage in relation to the Mortgaged Property
or any part thereof.  Any such delegation
may be made upon such terms and be subject to such regulations as the
Collateral Agent may think fit.  The
Collateral Agent shall not be in any way liable or responsible to the Mortgagor
for any loss or damage arising from any act, default, omission or misconduct on
the part of any such delegate provided the Collateral Agent has acted
reasonably in selecting such delegate.


 


20.2         If
any of the clauses, conditions, covenants or restrictions (the “Provision”) of this Mortgage or any deed or document
emanating from it shall be found to be void but would be valid if some part
thereof were deleted or modified, then the Provision shall apply with such
deletion or modification as may be necessary to make it valid and effective.


 


20.3         This
Mortgage (together with any documents referred to herein) constitutes the whole
agreement between the Parties relating to its subject matter and no variations
hereof shall be effective unless made in writing and signed by each of the
Parties.


 


20.4         Each
document, instrument, statement, report, notice or other communication
delivered in connection with this Mortgage shall be in English or where not in
English shall be accompanied by a certified English translation which
translation shall with respect to all documents of a contractual nature and all
certificates and notices to be delivered hereunder be the governing version and
upon which in all cases the Collateral Agent and the Secured Parties shall be
entitled to rely.


 


20.5         This
Mortgage may be executed in counterparts each of which when executed and
delivered shall constitute an original but all such counterparts together shall
constitute one and the same instrument.


 


20.6         The
parties intend that this Mortgage take effect as a deed notwithstanding the
fact that the Collateral Agent may only execute it under hand.


 


20.7         Whenever
reference is made in this Mortgage to any action by, consent, designation,
specification, requirement or approval of, notice, request or other
communication from, or other direction given or action to be undertaken or to
be (or not to be) suffered or omitted by the Collateral Agent or to any
election, decision, opinion, acceptance, use of judgment, expression of
satisfaction or other exercise of discretion, rights or remedies to be made (or
not to be made) by the Collateral Agent, it is understood that in all
cases the Collateral Agent shall be acting, giving, withholding,
suffering, omitting, taking or otherwise undertaking and exercising the same
(or shall not be undertaking and exercising the same) as directed in accordance
with the Indenture.  This provision is
intended solely for the benefit of the Collateral Agent and its
successors and permitted assigns and is not intended to and will not entitle
the other parties hereto to any defense, claim or counterclaim, or confer any
rights or benefits on any party hereto.


 


21.           RELEASE OF EXISTING SECURITY OVER THE MORTGAGED PROPERTY


 


21.1         Pursuant
to an equitable share mortgage dated 1 March 2009 between Seagate
Technology HDD Holdings as mortgagor and the Mortgagee, (the “Original Share Mortgage”), the Borrower agreed to secure the
Secured Obligations (as defined in the Original Share Mortgage) due, owing or
payable by the Borrower by granting a security interest in favour of the
Mortgagee over the Mortgaged Property.


 


19

















 


21.2         In
order to permit the transfer of the Mortgaged Shares from Seagate Technology
HDD Holdings to the Mortgagor pursuant to the Share Purchase Agreement, the
Mortgagee has agreed to release all the security created by the Original Share
Mortgage over and in respect of the Mortgaged Property.


 


21.3         The
Mortgagee immediately prior to the grant of the security interest pursuant to
Clause 4.1 and the transfer of the Mortgaged Shares from Seagate Technology HDD
Holdings to the Mortgagor pursuant to the Share Purchase Agreement hereby:


 


(a)           releases
the Mortgaged Property from the Original Share Mortgage;


 


(b)           agrees
to delivers to Seagate Technology HDD Holdings an executed share transfer form
and share certificate in respect of the shares subject to the Original Share
Mortgage; and


 


(c)           agrees
that the irrevocable share proxy dated 1 May 2009 granted by the Seagate
Technology HDD Holdings in favour of the Mortgagee in respect of the shares in
the Company terminates upon the discharge and release of the Original Share
Mortgage and, as soon as is practicable, shall add a notation to the
proxy noting such termination.


 


22.           LAW AND JURISDICTION


 


22.1         This
Mortgage shall be governed by and construed in accordance with the laws of the
Cayman Islands and the Parties hereby irrevocably submit to the
non-exclusive jurisdiction of the courts of the Cayman Islands, provided
that nothing in this clause shall affect the right of the Collateral Agent to
serve process in any manner permitted by law or limit the right of the
Collateral Agent to take proceedings with respect to this Mortgage against the
Mortgagor in any jurisdiction nor shall the taking of proceedings with respect
to this Mortgage in any jurisdiction preclude the Collateral Agent from taking
proceedings with respect to this Mortgage in any other jurisdiction,
whether concurrently or not.


 


23.           INTERCREDITOR AGREEMENT


 


23.1         The
Security Interests created by this Mortgage on the property described herein
are subordinate to the Security Interests on such property created by any
similar instrument already granted to any First Priority Secured Party, in such
property, in accordance with the provisions of the Intercreditor
Agreement.  Notwithstanding anything to
the contrary, the exercise of any right or remedy by the Collateral Agent
hereunder is subject to the provisions of the Intercreditor Agreement.  In the event of any conflict between the
terms of the Intercreditor Agreement and this Mortgage, the terms of the
Intercreditor Agreement shall govern.


 


20
















 


IN
WITNESS whereof this Equitable Share Mortgage has been
entered into by the parties and executed as a deed on the day and the year
first before written.


 


	
  EXECUTED AS A DEED by SEAGATE HDD CAYMAN:

  	
  )

  	
  /s/
  Kenneth M. Massaroni

  
	
   

  	
  )

  	
  Duly
  Authorised Signatory

  
	
   

  	
  )

  	
   

  
	
   

  	
  )

  	
  Name:

  	
  Kenneth
  M. Massaroni

  
	
   

  	
  )

  	
   

  	
   

  
	
   

  	
  )

  	
  Title:

  	
  Director

  
	
   

  	
  )

  	
   

  



 


 


	
  in
  the presence of:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/
  Demetrios N. Mavrikis

  	
   

  
	
  Signature
  of Witness

  	
   

  
	
   

  	
   

  
	
  Name:

  	
  Demetrios
  N. Mavrikis

  	
   

  
	
   

  	
   

  
	
  Address:

  	
  920
  Disc Dr, Scotts Valley, CA 95066

  	
   

  
	
   

  	
   

  	
   

  
	
  Occupation:

  	
  Executive
  Assistant

  	
   

  



 


[Signature
Page to Second Priority Mortgage of Shares in Seagate Technology International]


 


21

















 


	
  EXECUTED AS A DEED by WELLS FARGO

  	
  )

  	
  /s/
  Maddy Hall

  
	
  BANK, NATIONAL ASSOCIATION

  	
  )

  	
  Duly
  Authorised Signatory

  
	
   

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  



 


 


	
  in the presence of:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/
  Brian A. Buchanan

  	
   

  
	
  Signature
  of Witness

  	
   

  
	
   

  	
   

  
	
  Name:

  	
  Brian
  A. Buchanan, Vice President

  	
   

  
	
   

  	
   

  
	
  Address:

  	
  Wells Fargo Bank, N.A.

  Corporate Trust Services

  707 Wilshire Blvd, 17th Floor

  Los
  Angeles, CA 90017

  	
   

  
	
   

  	
   

  	
   

  
	
  Occupation:

  	
  Corporate
  Trust Officer

  	
   

  



 


[Signature
Page to Second Priority Mortgage of Shares in Seagate Technology International]


 


22

















 


SCHEDULE 1


 


SEAGATE TECHNOLOGY INTERNATIONAL


 


(THE “COMPANY”)


 


SHARE TRANSFER CERTIFICATE


 


[LEFT UNDATED]


 


SHARE TRANSFER CERTIFICATE DATED                              


 


(the “Transferor”) does hereby transfer
to
                                                              
(the “Transferee”)
                                                                      
(the “Shares”) of a par value of
                
each.


 


 


	
  SIGNED by the Transferor by:

  	
  )

  	
   

  
	
   

  	
  )

  	
  Duly
  Authorised Signatory

  
	
   

  	
  )

  	
   

  
	
   

  	
  )

  	
  Name:

  	
   

  
	
   

  	
  )

  	
   

  
	
   

  	
  )

  	
  Title:

  	
   

  
	
   

  	
  )

  	
   

  



 


 


	
  in
  the presence of:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Signature
  of Witness

  	
   

  
	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
  Address:

  	
   

  	
   

  
	
   

  	
   

  
	
  Occupation:

  	
   

  	
   

  



 


23

















 


And I/we do
hereby agree to take the Shares.


 


 


	
  SIGNED by the Transferee by:

  	
  )

  	
   

  
	
   

  	
  )

  	
  Duly
  Authorised Signatory

  
	
   

  	
  )

  	
   

  
	
   

  	
  )

  	
  Name:

  	
   

  
	
   

  	
  )

  	
   

  
	
   

  	
  )

  	
  Title:

  	
   

  
	
   

  	
  )

  	
   

  



 


 


	
  in
  the presence of:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Signature
  of Witness

  	
   

  
	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
  Address:

  	
   

  	
   

  
	
   

  	
   

  
	
  Occupation:

  	
   

  	
   

  



 


24

















 


SCHEDULE 2


 


IRREVOCABLE
APPOINTMENT OF PROXY


 


SEAGATE TECHNOLOGY INTERNATIONAL


(THE “COMPANY”)


 


This Irrevocable
Appointment of Proxy shall not become effective until the Irrevocable
Appointment of Proxy dated 1 March 2010 granted by the Companies in favour
of JPMorgan Chase Bank, N.A. as first priority secured party has been
terminated pursuant to and in accordance with the Articles of Association of
the respective Companies.


 


The undersigned
being the legal and beneficial owner of all
of the issued and outstanding shares of US$1.00 par value
each (the “Initial Shares”) in the Company,
an exempted company incorporated with limited liability in the Cayman Islands,
hereby irrevocably, with respect to the Company:


 


1.                                       makes,
constitutes and appoints WELLS FARGO BANK, NATIONAL
ASSOCIATION as collateral agent and trustee for and on behalf of the
Secured Parties (as defined in the Mortgages) (the “Proxy”)
as the irrevocable proxy of the undersigned with full power to appoint a
nominee or nominees to act hereunder from time to time and to have all other
rights and entitlements of an “Irrevocable Proxy” (as such term is defined in
the Articles of Association of the Company) under the Articles of Association
of the Company, including to vote the Initial Shares and all other shares in
the Company from time to time legally owned by each of the undersigned (the “Shares”) registered in its name at all general meetings of
shareholders of the Company with the same force and effect as the undersigned
might or could do and to requisition and convene a meeting or meetings of the
shareholders of the Company for the purpose of considering  any
resolution of the members of the Company in respect of any proposal to amend
the Memorandum of Association and/or the Articles of Association with respect
to those provisions inserted pursuant to Special Resolutions of the Company
passed on 27 April 2009 or about the [1st] March 2010 (the “Reserved Matter”);


 


2.                                       makes,
constitutes and appoints the Proxy as the true and lawful attorney-in-fact of
the undersigned to approve, complete, amend, execute and deliver any resolution
in writing concerning any Reserved Matter or sign any approval in writing
concerning any Reserved Matter as contemplated in the Articles of Association
of the Company in the name of and on behalf of the undersigned, and the
undersigned hereby ratifies and confirms all that the said Proxy or its nominee
or nominees shall do or cause to be done by virtue hereof.


 


The Shares are
the subject of a mortgage (the “Mortgage”)
dated 1 March 2010, between the Proxy and Seagate HDD Cayman as mortgagor.


 


The power of
attorney hereby granted is granted irrevocably for full value as part of the
security constituted hereby to secure proprietary interests of and the
performance of obligations owed to Wells Fargo Bank, National Association
within the meaning of the Powers of Attorney Law (1996 Revision) of the Cayman
Islands and the undersigned hereby acknowledges the same.


 


The power of
attorney granted hereunder (and the appointment of the Proxy as irrevocable
proxy of each of the undersigned) shall be governed by and construed in accordance
with the laws of the Cayman Islands and shall be irrevocable until the
discharge and release of the Mortgage.


 


25

















 


IN
WITNESS whereof this Instrument is executed as a deed the
day and year first above written.


 


 


	
  EXECUTED AS A DEED by SEAGATE HDD CAYMAN:

  	
  )

  	
   

  
	
   

  	
  )

  	
  Signature

  
	
   

  	
  )

  	
   

  
	
  in
  the presence of:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Signature
  of Witness

  	
   

  
	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
  Address:

  	
   

  	
   

  
	
   

  	
   

  
	
  Occupation:

  	
   

  	
   

  



 


26

















 


SCHEDULE 3


 


FORM OF LETTER OF
INSTRUCTIONS TO REGISTERED OFFICE PROVIDER APPOINTING INSTRUCTING PARTY


 


SEAGATE HDD CAYMAN


(THE “COMPANY”)


PO Box 309, Ugland House


George Town, Grand Cayman KY1-1104


Cayman Islands


 


1 March 2010


 


MAPLES
CORPORATE SERVICES LIMITED (“MCS”)


PO Box 309,
Ugland House


George Town,
Grand Cayman KY1-1104


Cayman Islands


 


Dear Sirs


 


INSTRUCTIONS TO THE REGISTERED OFFICE PROVIDER APPOINTING
INSTRUCTING PARTY


 


These
Instructions to the Registered Office Provider Appointing Instructing Party
dated 1 March 2010 from the Companies to MCS shall not become effective
until the discharge and release of the mortgages dated 1 March 2010
between JPMorgan Chase Bank, N.A. as first priority secured party and Seagate
HDD Cayman as mortgagor.


 


We hereby
notify you that pursuant to a mortgage (the “Mortgage”) dated 1 March 2010 between Wells
Fargo Bank, National Association as Collateral Agent (the “Collateral Agent” or “Mortgagee”) and Seagate HDD Cayman as mortgagor (the “Mortgagor”), the Mortgagor has granted a second
priority security interest in favour of the Mortgagee over all the shares
standing in its name in the Company identified in the Mortgage and all other
shares in the Company from time to time legally or beneficially owned by the
Mortgagor (the “Shares”).


 


We refer to the
registered office agreement each dated 1 January 2002 between MCS and the
Company (the “RO Agreement”) and hereby
agree that Clause 9.1 (Instructions and Reliance) of the agreement shall be
deemed to be amended by the following. At any time after the Mortgagee notifies
you in writing that an Event of Default (as defined in the Mortgage) has
occurred you are hereby authorised and entitled to rely upon the instructions
of the Mortgagee to register the Mortgagee or its nominee (as the Mortgagee may
direct) as the registered holder of the Shares pursuant to the Mortgage and to
otherwise comply with any directions or instructions from the Mortgagee in
relation thereto.


 


Such
authorisation and entitlement to rely upon the instructions of the Mortgagee
shall terminate upon the discharge and release of the Mortgage.


 


27

















 


Please confirm by
countersigning below that you agree to such amendment of the RO Agreement.


 


Yours faithfully


 


 


	
   

  	
   

  	
   

  
	
  Authorised Signatory for and on behalf of the Company

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Acknowledged
  and agreed.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Authorised Signatory for and on
  behalf of Maples Corporate Services Limited

  



 


28