Exhibit 10.4


 


COMMONWEALTH OF THE BAHAMAS


New Providence


 


THIS SUPPLEMENTAL DEBENTURE is made the        day
of           A. D. 2007


 


BETWEEN:


 


(1)      ROYAL
ISLAND BAHAMAS LTD., a company incorporated under the laws of the Commonwealth
of The Bahamas whose registered office is at Suite 400, The British Colonial
Hilton, Centre of Commerce, No.1 Bay Street, P.O. Box N-9740, Nassau, Bahamas
(“the Company”)


 


AND


 


(2)      iSTAR
FINANCIAL INC., a Maryland corporation, as agent on behalf of the Lenders (as
defined in the Credit Agreement), having an office at 1114 Avenue of the
Americas, New York, New York 10036 (“the Agent” which expression where the
context so admits shall include its successors and assigns)


 


WHEREAS:


 


(A)          1. This deed is
supplemental to a Promissory Note (hereinafter referred to as the “Note”) dated
the 20th day of December A.D., 2007 and made between the Company, as
Borrower of the one part and the Agent of the other part and now about to be
lodged for record at the Registry of Records in the City of Nassau in the
Island of New Providence one of the Islands of the Commonwealth of The Bahamas
whereunder the Agent agreed to advance to the Company the sum of Sixty Million
Dollars in the currency of the United States of America (US$60,000,000.00)
(hereinafter referred to as “the said currency”) and interest thereon as
therein provided subject to and upon the terms and conditions therein
contained.


 


(B)           Upon treaty of the said advance it was
agreed that in addition to the Note the Company should enter into this
Supplemental Debenture and charge the property described in Clause 2 hereof with
the payment of principal and interest thereon and all other manner due to the Agent
under the Note as collateral security to the Note in the manner hereinafter
appearing and also upon the condition that the Company shall enter into the
covenants hereinafter contained;


 


NOW THIS DEBENTURE WITNESSES as follows:


 


1.             Interpretation
and definitions


 


Capitalized terms used herein but not otherwise
defined shall have the meanings set forth for such terms in a Credit Agreement
dated the 20th day of December A.D. 2007 and made between (i) the Company,
Royal Island Golf Club Bahamas Ltd., and RIBL US Borrower LLC, as Borrowers of
the one part, (ii) the banks and financial institutions and other entities
listed therein, as Lenders and (iii) iStar Financial Inc., as Agent of the
other part (hereinafter “the “Credit Agreement”).


 

















 


In this Debenture:


 


1.1           “the
Charged Assets” means the goodwill, undertaking, property, assets, revenues, rights
and other assets charged under clause 2.1;


 


1.2           “the Charged Property” means the property
referred to in clauses 2.1.1 and 2.1.2;


 


1.3           “control” means owning (whether as registered
holders of shares or as beneficiary under any trust for the same) or being
entitled to acquire or so own a majority of the share capital or voting power
of the Company or through being entitled to the greater part of the assets of
the Company on a winding up;


 


1.4           “the Default Rate” means
default rate of interest charged pursuant to Section 2.5B of the Credit
Agreement;


 


1.5           “an
Event of Default” means an Event of Default as defined in the Credit Agreement;


 


1.6           “financial
year” means the Fiscal Year of the Company as defined in the Credit Agreement ;


 


1.7           “the
Incumbrances” means all covenants restrictions stipulations exceptions
reservations and rent charges to which the Charged Property is subject and any
Permitted Encumbrances as defined in the Credit Agreement;


 


1.8           “the
Receiver” has the meaning given to it in clause 11.1 and includes any
substituted receiver(s) and manager(s);


 


1.9           “the
Securities” means the property referred to in clause 2.1.4;


 


1.10         “subsidiary” has the meaning given to it in
the Companies Act 1992 section 2


 


1.11         the expressions “the Company” and “the Agent”,
where the context admits, include their respective successors and assigns,
whether immediate or derivative;


 


1.12         reference to any statute or statutory
provision includes a reference to:


 


1.12.1          that statute or statutory provision as from
time to time amended extended or re-enacted or consolidated, and


 


1.12.2          all statutory instruments or orders made
pursuant to it;


 


1.13         words denoting the singular number only
include the plural and vice versa;


 


1.14         words denoting any gender include all the
genders, and words denoting persons include firms and corporations and vice
versa;


 


1.15         unless the context otherwise requires,
reference to a clause or schedule is to a clause or schedule of this Debenture;
and


 


1.16         the clause headings do not form part of this
Debenture, are for convenience only, and shall not be taken into account in its
construction or interpretation.


 


2.             Fixed and
floating charges


 


2.1           As a
continuing security for the payment of all money and the discharge of all
obligations and liabilities covenanted to be paid or met or otherwise secured
under this Debenture, the Company, as beneficial owner, hereby:


 


2.1.1            grants and conveys to the Agent the Company’s
right, title and interest in ALL THAT the freehold property more particularly
described in the First Schedule TO HOLD the same unto and to the use of the Agent
in accordance with this Debenture, the Credit Agreement and other Loan
Documents in fee simple subject only to the Incumbrances;


 


2.1.2            assigns to the Agent the Company’s right,
title and interest in ALL THAT the leasehold property of the Company more
particularly described in the Second Schedule TO HOLD 


 


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the same unto the Agent in accordance with this Debenture, the Credit
Agreement and other Loan Documents for all the unexpired residue of the term of
any lease or tenancy in respect of the same and any renewal thereof subject
only to the terms and conditions of any lease or tenancy agreement of the same;


 


2.1.3            charges to the Agent all other freehold and leasehold property of
the Company both present and future and all buildings, improvements (including
all infrastructure improvements and public improvements) and fixtures
(including trade fixtures), plant, machinery, vehicles, computers and office
and other equipment of the Company both present and future (excluding stock in
trade of the Company) from time to time on that property or the Charged
Property or used in connection with that property or the Charged Property ,
with the benefit of all existing and future leases, under leases, tenancies and
agreements relating to such property or the Charged Property (including all
rents and profits from all such property including the Charged Property );


 


2.1.4            charges all stocks, shares, bonds and
securities of any kind whether marketable or otherwise, and all other interests
including (but not limited to) loan capital of the Company both present and
future in any company, firm, consortium or entity including all allotments,
accretions, offices, rights, benefits and advantages at any time accruing,
offered or arising in respect of or incidental to such stocks, shares, bonds
and securities and all stocks, shares, rights, money or property accruing to
them or offered at any time by way of conversion, redemption, bonus,
preference, option or otherwise in respect of them;


 


2.1.5            charges all book and other debts, revenues
and claims both present and future (including things in action which may give
rise to a debt, revenue or claim) due or owing or which may become due or owing
to, or be purchased or otherwise acquired by, the Company, and the full benefit
of all rights and remedies relating to such book and other debts, revenues and
claims including (but not limited to) any negotiable or non-negotiable
instruments, guarantees, indemnities, debentures, legal and equitable charges
and other security, reservation of proprietary rights of tracing, liens and all
other rights and remedies of any nature in respect of such property;


 


2.1.6            charges the uncalled capital, goodwill and
all patents, patent applications, trade marks, trade names, registered designs
and copyrights, and all licences and ancillary and connected rights relating to
the intangible property both present and future of the Company;


 


2.1.7            charges all of the Company’s right, title and interest in water and
water rights, timber crops, and mineral interests pertaining to the Charged
Property;


 


2.1.8            charges to the extent assignable, all entitlements, permits,
approvals, franchises, certificates and all other rights, privileges and
entitlements obtained now or in the future in connection with the Charged
Property and the property described in clause 2.1.3;


 


2.1.9            charges any contracts relating to the Charged Property and property
described in clause 2.1.3 (including all construction related agreements,
license agreements, service agreements, maintenance agreements, management
agreements and other agreements relating to the development of the Charged
Property);


 


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2.1.10         charges all deposits, Lender accounts, financial assets, funds,
instruments, investment property, notes or chattel paper arising from or by
virtue of any transactions related to the Charged Property and property
described in clause 2.1.3;


 


2.1.11         charges all proceeds arising from or by virtue of the sale, lease or
other disposition of the Charged Property and property described in clause
2.1.3;


 


2.1.12         charges all proceeds (including premium refunds) of each policy of
insurance relating to the Charged Property and property described in clause
2.1.3;


 


2.1.13         charges all proceeds from the taking or condemnation of any of the
Charged Property or property described in clause 2.1.3 or any rights
appurtenant thereto by right of eminent domain or by private or other purchase
in lieu thereof, including change of grade of streets, curb cuts or other
rights of access, for any public or quasi-public use under any law;


 


2.1.14         charges all of the Company’s right, title and interest in all
streets, roads, public places, easements and rights-of-way, existing or
proposed, public or private, adjacent to or used in connection with, belonging
or pertaining to the Charged Property;


 


2.1.15         charges all of the Company’s right title and interest in all right,
hereditaments and appurtenances pertaining to the foregoing;


 


2.1.16         charges other interests of every kind and character that the Company
now has or at any time hereafter acquires in and to the Charged Property and
property described in clause 2.1.3 and in and to all other real property,
personal property and other property that is used or useful in connection
therewith, including rights of ingress and egress and all reversionary rights
or interests of the Company with respect to such property; and


 


2.1.17         charges the undertaking and all other assets of the Company both
present and future, including (but not limited to) the stock in trade of the
Company, which are or may be from time to time while this Debenture is in force
comprised in the property and undertaking of the Company, and the property
described in clauses 2.1.3 to 2.1.6 if and in so far as the charges on that
property, or on any part or parts of that property, contained in this Debenture
are for any reason ineffective as fixed charges.


 


2.2           The
charges created by clause 2.1 shall as regards the property described in
clauses 2.1.1 and 2.1.2 be first legal mortgages and the charges created by
clauses 2.1.3 to 2.1.15 be fixed charges and as to the property described in
clauses 2.1.16 and 2.1.17 shall be a first floating charge (subject to clause
3.2), and in all such instances shall be subject to any Permitted Encumbrances.


 


3.             Restrictions on the Company


 


3.1           The Company covenants that it will not
(without the prior consent in writing of the Agent), except to the extent
permitted under the Credit Agreement:


 


3.1.1           sell, assign, discount, part
with, pledge, charge or otherwise dispose of all or any part of the property
described in clause 2.1.5 or deal with it save in accordance with clause 8.15;
or


 


3.1.2           (except
for charges in favour of the Agent created under this Debenture) create,
attempt to create, assume, suffer to exist or permit to subsist any mortgage,
debenture, charge 


 


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or pledge or permit any lien or other
Incumbrance (save a lien arising by operation of law in the ordinary course of
trading) to arise on or affect all or any of the Charged Assets; or


 


3.1.3            part with possession or
transfer, sell, lease or otherwise dispose of all or any of the Charged Assets
or attempt or agree so to do (save in the case of stock in trade charged by way
of floating charge only which may be sold at market value in the usual course
of trading conducted at the date of this Debenture and for the purpose of
carrying on its business to the extent permitted by the Credit Agreement).


 


3.1.4            create or issue any loan capital paid up
or credited as paid up in whole or part from a capitalisation of profits or
reserves, issue any further shares, except to the present shareholders, or
register any transfer of shares, except to a spouse, child or personal representative of an existing shareholder or
beneficiary under his or her will or intestacy; or


 


3.1.5            vary,
surrender, cancel, assign, charge or otherwise dispose of or permit to be
forfeited its leasehold interest in any part of the Charged Property or any
credit sale, hire purchase, leasing, rental, licence or like agreement for any
material equipment used in its business or agree any rent review but shall
generally fulfil its obligations under every such lease and agreement and when
required produce to the Agent proof of all payments from time to time due from
the Company under such lease or agreement.


 


3.2           Notwithstanding anything in
this Debenture, if, contrary to clause 3.1.2 the Company charges, pledges or
otherwise incumbers any of the Charged Assets described in clause 2.1.17
without the prior consent in writing of the Agent, or attempts to do so, or if
any creditor or other person attempts to bring any distress, execution,
sequestration or other process against any of the Charged Assets described in
clause 2.1.17, the floating charge created under this Debenture over those
assets shall automatically, without notice, operate as a fixed charge instantly
on such event occurring.


 


3.3           Except in every such case as
may be permitted under the Credit Agreement, during the continuance of this
security the statutory and any other powers of leasing, letting, entering into
agreements for leases or lettings, and accepting or agreeing to accept
surrenders of leases or tenancies shall not in relation to all or any part of
the Charged Assets be exercisable by the Company, nor shall the Company part
with possession of all or any part of the Charged Assets, confer any licence,
right or interest to occupy, grant any licence or permission to assign,
underlet or part with possession of all or any part of the Charged Assets, or
agree suffer or permit any variation or addition to the terms of any lease,
tenancy or licence or otherwise without in every such case obtaining the prior
consent in writing of the Agent under the hand of an Officer of the Agent.


 


4.             Recording at the
Registry of Records


 


The Company will lodge for record in the
Registry of Records all deeds and documents relating to the Charged Assets from
time to time and will direct the Registrar General to return the same upon
proper recording to the Agent.


 


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5.             Ranking


 


This Debenture
shall constitute a first priority incumbrance on the property described herein,
subject to any Permitted Encumbrances.


 


6.             Lender accounts


 


The Company agrees that the Agent may, at any time without notice,
after an Event of Default, notwithstanding any settlement of account or other
matter, combine or consolidate all or any of its then existing accounts at any
branch of the Agent, including accounts in the name of the Agent or of the
Company jointly with others, and set-off or transfer any sum standing to the
credit of any one or more such accounts in or towards satisfaction of any money
due or obligations or liabilities of the Company to the Agent, whether such
liabilities are existence at the date of this Debenture or at the relevant
time, actual, contingent, primary, collateral, several or joint.


 


7.             Events of Default


 


The Agent shall cease to be under any further commitment to the
Company, all money and liabilities secured under this Debenture shall
immediately become due and payable on demand, and the security shall become
enforceable if, pursuant to the terms of the Credit Agreement an Event of
Default shall have occurred.


 


8.             Covenants by the
Company


 


The Company covenants
with the Agent, to the extent required by and except as provided in the Credit
Agreement, that during the continuance of this security the Company and each of
its subsidiaries (if any) will at all times and, where applicable immediately,
observe the obligations and restrictions set out below.


 


8.1           Events of default


 


To the extent required by the Credit
Agreement, the Company will notify the Agent by fax or telex, confirmed in
writing, of the occurrence of any event which will or may in due course
constitute an Event of Default.


 


8.2           Conduct
of business


 


The Company will conduct and carry on its business in a proper,
efficient and business-like manner, in accordance with the Credit Agreement.


 


8.3           Accounts


 


The Company
will furnish to the Agent financial statements and reports as the Agent may
reasonably require.


 


8.4           Book
debts


 


The Company will pay all money which it receives in respect of book or
other debts as required under the Credit Agreement, and without prejudice to
the provisions of this Debenture, the Company will not without the prior
consent of the Agent (unless otherwise permitted under the Credit Agreement)
sell, factor, discount, charge, or assign any assets described in clause 2.1.5,
or purport to do so, and will if called upon by the Agent from time to time
execute legal assignments of any book or other debts to the Agent.


 


8.5           Covenants


 


The Company will observe and perform all covenants and stipulations
from time to time affecting its freehold and leasehold or the mode of use or
enjoyment of such property, and will not enter into any obligations affecting
any such property except in accordance with the Credit Agreement or erect, or
commence to erect, or cause or procure to be erected or commenced, or remove or
demolish, any building as defined in, or otherwise in contravention of, the
Town Planning Act 1961, or do or suffer or 


 


6

















 


omit to be done any act, matter or thing which would infringe any
provision of any statute, order or regulation of a Governmental Authority from
time to time in force affecting any such property.


 


8.6           Intellectual
and other property


 


The
Company will observe and perform all covenants and stipulations from time to
time affecting its patents, patent applications, trade marks, trade names,
registered designs and copyrights and all other industrial or intangible
property, or any licence, distributorship or franchise agreement or ancillary
or connected rights from time to time relating to industrial or intangible
property, and preserve, maintain and renew when necessary or desirable all such
licences, distributorship or franchise agreements and rights, in any case in
accordance with the Credit Agreement.


 


8.7           Proceedings


 


The Company will use its best endeavours to enforce and at its own cost
institute, continue or defend all proceedings relating to any of the Charged
Assets.


 


8.8           Repairs


 


The
Company will keep all buildings and erections and all plant, machinery,
fixtures, fittings, vehicles, computers and office and other equipment, and
every part of such property, in good and substantial repair and in good working
order and condition and not pull down or remove, or sell or otherwise dispose
of any of such property except as permitted in the Credit Agreement or
otherwise without the prior consent in writing of the Agent except in the
ordinary course of use, repair, maintenance or improvement. If the Company is
at any time in default in complying with this covenant, the Agent may, but is
not bound to, repair and maintain such property, with power for the Agent, its
agents, and their respective employees to enter any of the Company’s property
for that purpose or to inspect the property. Any sum so expended by the Agent
shall be repayable by the Company to the Agent in accordance with the Credit
Agreement.


 


8.9           Insurance


 


The Company shall at its own expense insure
and keep insured any of the Charged Assets in accordance with the Credit
Agreement.


 


8.10         Outgoings


 


The
Company will punctually pay, and indemnify the Agent and any receiver appointed
by it against, all existing and future rent, rentcharges, fees, rates, taxes,
duties, charges, assessments, impositions and outgoings (whether imposed by
agreement statute or otherwise and whether in the nature of capital or revenue
and even if wholly novel) now or at any time during the continuance of this
security payable in respect of all or any part of the Charged Assets or by the
owner or occupier of those assets if and to the extent required under the
Credit Agreement. If any such sums are paid by the Agent or by any receiver the
sums must be repaid by the Company in accordance with the Credit Agreement.


 


8.11         Subsidiaries


 


Except as provided in the Credit Agreement, the Company will not
(without the prior consent in writing of the Agent) form or acquire any
subsidiary or transfer, sell, lease or otherwise dispose of any Charged Assets
to any subsidiary save on terms previously approved in writing by the Agent.


 


8.12         Notices


 


To the extent required under the Credit
Agreement, the Company will, upon receipt of it, produce to the Agent a copy
and full details of any notice, order or proposal given, issued or made by any
Government or local or other authority relating to any of the Charged Assets,
and without delay take all necessary steps to comply with the notice or order
(or if the Agent so agrees or 


 


7

















 


stipulates, appeal against it), or serve any appropriate counter-notice
so as to protect the Charged Assets, and also, at the request of the Agent (but
at the expense of the Company), make or join with the Agent in making any
objections or representations in relation to the notice or order that the Agent
considers or agrees are expedient. Any compensation received by the Company as
a result of such notice or order shall be applied in the reduction of the money
due to the Agent from the Company unless the Agent otherwise agrees.


 


8.13         Debts


 


The Company will get in and realise all book and other debts and claims
charged under this Debenture in the ordinary course of its business, and pay
all money which it may receive in respect of those book and other debts and
claims into its account with the Agent or to such account as the Agent from
time to time directs immediately on receipt, and pending such payment will hold
such money on trust for the Agent. Except as provided in the Credit Agreement,
the  Company will not (without the prior consent in writing of the Agent)
charge or otherwise dispose of or release, exchange, compound, set off or grant
time or indulgence in respect of, or otherwise deal with all or any of those
book and other debts and claims, or purport so to do.


 


 


8.14         Encroachments and Title


 


Except as provided in the Credit Agreement,
the Company will prevent any encroachments, easements or other rights,
possessory or otherwise, from arising or being made or acquired over the
Charged Property.  The Company warrants
that it holds and will maintain good and marketable title to the Charged
Property and property described in provisions 2.1.3, subject to the Permitted
Encumbrances.


 


8.15         Redemption of shares


 


The Company will not (without the prior consent in writing of the Agent)
redeem or purchase its own shares.


 


8.16         Deposit of documents


 


To the extent required under the Credit Agreement or the other Loan Documents,
the Company will deposit with the Agent or a nominee of the Agent, and permit
the Agent or its nominee during the continuance of this security to hold and
retain:


 


8.16.1          all deeds and documents of title relating to
all freehold and leasehold property from time to time belonging to the Company
(and the insurance policies relating to such property);


 


8.16.2          all stock and share certificates and
documents of title relating to the Securities, and such deeds of transfer in
blank and other documents as the Agent may from time to time require for
perfecting its title to the Securities (executed by or signed on behalf of the
registered holder) or for vesting or enabling it to vest the Securities in
itself or its nominees or in any purchaser;


 


8.16.3          all assurance policies from time to time
effected by the Company on the lives of key employees; and


 


8.17.4          all such documents relating to the Charged
Assets as the Agent may from time to time require.


 


8.17         Dividends


 


Except to the extent permitted under the
Credit Agreement, the Company will not, without the written consent of the
Agent withdraw from its business any amounts or declare any dividends on its
share capital or pay or agree to pay to its directors or officers fees or other
emoluments or remuneration.


 


8.18         Capital Works


 


Except as contemplated by the Development
Budget (as defined in the Credit Agreement) or as permitted by the Credit
Agreement, the 


 


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Company will not, without the written consent of the Agent (and then
only to the extent that such consent permits and in accordance with any
condition attached to such consent), incur or enter into any works of a capital
nature in respect of the Charged Property of a significant amount in each
calendar year, or make or incur any expenditure or liabilities of an
exceptional or unusual nature.


 


8.19         Loans


 


Except to the extent permitted by the
Credit Agreement, the Company will not, without the written consent of the
Agent make, waive or forgive the repayment of any loans by the Company, or give
or extend any credit, or make or cause to be made any repayment of, or otherwise
reduce, any loans (whether in existence at the date hereof or during the
continuance of the present security) to or on behalf of the Company or its
business from shareholders or others, or other reduction, discharge or
satisfaction of the Company’s indebtedness to such persons, or other
withdrawals of capital, or give any guarantee or provide any credit.


 


8.20         Licences


 


The Company will use its best endeavours to obtain all licences and
renewals of licences necessary or desirable in relation to the carrying on of
the business of the Company and (if and when required by the Agent) to obtain a
transfer of such licences or any of them to the Agent or its nominee.


 


8.21         Value


 


The Company will not do or cause or permit to be done anything which
may in any way prejudice the value to the Agent of the Charged Assets.


 


9.             Further security


 


The Company will at any time, if and when required by the Agent,
execute any further legal or other mortgages, fixed or floating charges or
assignments in favour of the Agent over all or any of the Charged Assets, both
present and future, that the Agent from time to time requires to secure all
money, obligations and liabilities secured under this Debenture. Such further
mortgages charges or assignments are to be prepared by or on behalf of the Agent
at the cost of the Company and must contain an immediate power of sale without
notice, a clause excluding the Conveyancing and Law of Property Act 1909
section 19 and the restrictions contained in section 22 of that Act, and such
other clauses for the benefit of the Agent as the Agent may reasonably require.


 


10.          Powers of the Agent


 


10.1         At any time after the Agent has demanded
payment of any money or the discharge of any obligation or liability secured by
this Debenture (to the extent Agent is permitted to do so under the Credit
Agreement) the Agent may exercise, without further notice, without the
restrictions contained in the Conveyancing and Law of Property Act 1909 section
22, and whether or not it has appointed a receiver, all the powers conferred on
mortgagees by that Act as varied or extended by this Debenture and all the
powers and discretions conferred by this Debenture either expressly or by
reference to a receiver appointed under this Debenture.


 


10.2         The Conveyancing and Law of Property Act 1909
section 19 shall not apply to this security or to any security given to the Agent
under this Debenture.


 


10.3         The statutory powers of leasing conferred on
the Agent shall be extended so as to authorise the Agent to lease and make agreements
for leases, at a premium or otherwise, and accept surrenders of leases and
grant options as the Agent considers expedient and without the need to observe
any of the provisions of 


 


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the Conveyancing and Law of Property Act 1909 section 20, but in any
event only to the extent that Agent is permitted to exercise remedies under the
Credit Agreement.


 


11.             Receiver


 


11.1         Appointment


 


At any time after the Agent’s demand for payment of any money under the
Credit Agreement (to the extent Agent is permitted to do so under the Credit
Agreement), the Agent may, in writing under the hand of any officer of the Agent,
appoint any person or persons (“the Receiver”) to be an administrative receiver
or manager and receiver or manager, or any combination of those things, of all
or any part of the Charged Assets. The Agent may authorise any joint receiver
or manager to exercise any power independently of any other joint receiver or
manager, may from time to time fix the remuneration of the Receiver, and may
remove the Receiver and appoint another in his place.


 


11.2         Agency


 


After and during the continuation of an Event of Default, the Receiver
and any Manager shall be the agent of the Company, and the Company shall be solely
responsible for his acts or defaults and for his remuneration.


 


11.3         Powers


 


The Receiver shall have all the powers conferred from time to time on
receivers by statute, in the case of the powers conferred by the Conveyancing
and Law of Property Act 1909 without the restrictions contained in section 22
of that Act, and in addition power on behalf and at the cost of the Company
(notwithstanding liquidation of the Company) to do or omit to do anything which
the Company could do or omit to do in relation to all or any part of the
Charged Assets, but in any case only to the extent permitted under the Credit
Agreement. In particular (but without limitation) the Receiver may, to the
extent Agent is permitted to exercise remedies under the Credit Agreement:


 


11.3.1       take possession of collect and get in all or
any of the Charged Assets, exercise in respect of the Securities all voting or
other powers or rights available to a registered holder of the Securities as he
may think fit, and bring defend or discontinue any proceedings or submit to
arbitration in the name of the Company or otherwise as may seem expedient to
him;


 


11.3.2       carry on, manage, develop, reconstruct,
amalgamate or diversify all or any part of the business of the Company or
concur in so doing, lease or otherwise acquire and develop or improve
properties or other assets without being responsible for loss or damage, and
raise or borrow any money (including money for the completion with or without
modification of any building in the course of construction and any development
or project in which the Company was engaged) from or incur any other liability
to the Agent or others on such terms with or without security as he may think
fit, so that any such security may be or include a charge on the whole or any
part of the Charged Assets ranking in priority to this security or otherwise;


 


11.3.3       (without the restrictions imposed by the
Conveyancing and Law of Property Act 1909 section 22 or the need to observe any
of the provisions of section 20 of that Act) sell by public auction or private
contract, let, surrender or accept surrenders, grant licences or otherwise
dispose of or deal with all or any of the Charged Assets, or concur in so
doing, in any manner, for any consideration and generally on any 


 


10

















 


terms and conditions he thinks fit, with full power to convey, let,
surrender, accept surrenders or otherwise transfer or deal with the Charged
Assets in the name, and on behalf, of the Company or otherwise, and so that
covenants and contractual obligations may be granted and assumed in the name of
and so as to bind the Company (or other the estate owner) if he considers it
necessary or expedient so to do;


 


11.3.4       promote the formation of a subsidiary company
of the Company with a view to the subsidiary purchasing, leasing, licensing or
otherwise acquiring interests in all or any of the Charged Assets, and arrange
for the subsidiary to trade or cease to trade on such terms and conditions as
he may think fit;


 


11.3.5       make any arrangement or compromise or enter
into or cancel any contracts that Agent thinks expedient;


 


11.3.6       make and effect any repairs, renewals and
improvements to all or any part of the Charged Assets as he thinks fit and
maintain, renew take out or increase insurances;


 


11.3.7       appoint managers, agents, officers and
employees for any of the above purposes or to guard or protect the Charged
Assets at such salaries and commissions and for such periods and on such terms
as he may determine, with power to dismiss them;


 


11.3.8       make calls conditionally or unconditionally
on the members of the Company in respect of uncalled capital;


 


11.3.9       without any further consent by or notice to
the Company, exercise on behalf of the Company all the powers and provisions
conferred on a landlord or a tenant in respect of any part of the property
charged by this Debenture, but without any obligation to exercise any of these
powers and without any liability in respect of powers so exercised or omitted
to be exercised; and


 


11.3.10     sign any document, execute any deed and do
all other acts and things that may be considered by him to be incidental or
conducive to any of the matters or powers referred to in this clause 11 or to
the realisation of the Agent’s security, and use the name of the Company for
all the purposes referred to in this clause 11.


 


11.4         Application of money


 


All money received by the Agent or by the
Receiver shall be applied, after the discharge of the remuneration and expenses
of the Receiver and all liabilities having priority to such costs, in or
towards satisfaction of such of the money, obligations and liabilities secured
by this Debenture in accordance with the terms of the Credit Agreement (save
that the Agent may credit the money to a suspense account for so long and in
such manner as it may from time to time determine and the Receiver may retain
the money for such period as he and the Agent consider expedient).


 


11.5         Protection of third parties


 


No
purchaser or other person shall be bound or concerned to see or enquire whether
the right of the Agent or any receiver appointed by it to exercise any of the
powers conferred by this Debenture has arisen or not, or be concerned with
notice to the contrary or with the propriety of the exercise or purported
exercise of such powers or to see to the application of any money paid to the Agent
or any receiver.


 


11.6         Costs


 


The Company covenants with the Agent to pay on demand all costs,
charges and expenses properly incurred by the Agent or by any receiver in or
about the enforcement, preservation or attempted preservation of this security
or of all or any of the Charged Assets in accordance with the Credit Agreement.
Any receiver shall be 


 


11

















 


entitled to remuneration appropriate to the work and responsibilities
involved upon the basis of charging from time to time adopted by the receiver
in accordance with the current practice of him or his firm.


 


11.7         Liability to account


 


Neither the Agent nor any receiver shall be liable to account as
mortgagee in possession in respect of all or any of the Charged Assets, or be
liable for any loss upon realisation of, or for any neglect or default of any
nature in connection with, the Charged Assets for which a mortgagee in possession
may be liable as such, or for anything except actual receipts.


 


11.8         [Intentionally
deleted]


 


12.          Power of attorney


 


The Company, by way of security, irrevocably appoints the Agent and the
persons deriving title under it and separately any receiver, jointly and
severally, to be, after and during the continuation of an Event of Default, its
attorney, in its name, on its behalf and as its act and deed or otherwise, to
execute and complete in favour of the Agent or its nominees or of any purchaser
any documents which the Agent may require for perfecting its title to or for
vesting the Charged Assets both present and future in the Agent or its nominees
or in any purchaser, and to do all such acts and things as may be required for
the full exercise of all or any of the powers conferred by this Debenture or
which may be deemed expedient by the receiver on or in connection with any
sale, lease, disposition, realisation or getting in by the Agent or any
receiver of all or any part of the Charged Assets, or in connection with any
other exercise of any power under this Debenture and this appointment shall
operate as a general power of attorney.  The Company covenants with the Agent and
separately with any receiver that on request it will ratify and confirm all security
agreements, documents, acts and things and all transactions entered into by the
Agent or receiver, or by the Company at the instance of the Agent or receiver
in the exercise or purported exercise of its or his powers, and the Company
irrevocably acknowledges and agrees that this power of attorney is inter alia
given to secure the performance of the obligations owed by the Company to the Agent
and any receiver.


 


13.          Continuing security


 


13.1         This security shall be a continuing security
notwithstanding any settlement of account or other matter and is in addition to
and shall not merge with or otherwise prejudice or affect any contractual or
other right or remedy or any guarantee, lien, pledge, bill, note, mortgage or
other security (whether created by the deposit of documents or otherwise) now
or after the date of this Debenture held by or available to the Agent. This
security shall not be in any way prejudiced or affected by (or by the
invalidity of) any other right or remedy or any guarantee, lien, pledge, bill,
note, mortgage or other security, or the Agent now or in future dealing with,
exchanging, releasing, varying or abstaining from perfecting or enforcing any
other right or remedy or any guarantee, lien, pledge, bill, note, mortgage or
other security or any rights which it may now or after the date of this
Debenture have, or giving time for payment or indulgence or compounding with
any other person liable.


 


13.2         The Agent may on receiving actual notice that
the Company has encumbered the Charged Assets close any account with the
Company and open a new account and, without prejudice to any right of the Agent
to combine accounts, no money paid in or carried to the Company’s credit in any
such new account shall be appropriated towards or have the effect of
discharging any part of the amount due to the Agent on any such closed account.


 


12

















 


13.3         If the Agent does not open a new account or
accounts immediately on receipt of such notice it shall nevertheless be treated
as if it had done so at the time when it received such notice and as from that
time all payments made by the Company shall be credited or be treated as having
been credited to the new account or accounts and shall not operate to reduce
the amount due from the Company to the Agent at the time when it received such
notice.


 


14.          Money/currency


 


14.1         All money received or held by the Agent or a
receiver under this Debenture may from time to time, after demand has been
made, be converted into such other currency as the Agent considers necessary or
desirable to cover the obligations and liabilities of the Company in that
currency at the then prevailing rate of exchange of a Bank designated by the Agent
(as conclusively determined by the Agent) for purchasing the currency to be
acquired.


 


14.2         If, and to the extent that, the Company fails
to pay the amount due on demand, the Agent may in its absolute discretion
without notice to the Company purchase at any time after that time so much of a
currency as the Agent considers necessary or desirable to cover the obligations
and liabilities of the Company in that currency secured by this Debenture at
the then prevailing rate of exchange of a Bank designated by the Agent (as
conclusively but reasonably determined by the Agent) for purchasing that
currency, and the Company agrees to indemnify the Agent against any costs and
expenses and loss occasioned by the Agent.


 


14.3         No payment to the Agent (whether under any
judgement or court order or otherwise) shall discharge the obligation or
liability of the Company in respect of which it was made unless and until the Agent
has received payment in full in the currency in which the obligation or
liability was incurred. To the extent the amount of any payment, on actual conversion
into that currency falls short of the obligation or liability expressed in that
currency, the Agent shall have a further separate cause of action against the
Company and shall be entitled to enforce the charges created by this Debenture
to recover the amount of the shortfall; provided, however, if such actual
conversion results in an overpayment of all monies due to Agent in the currency
in which the obligation or liability was incurred, the amount of any such
excess payment shall be returned to the Company.


 


15.          Discharge


 


If the Company shall pay to the Agent all the money
and liabilities representing the Obligations (as defined in the Credit
Agreement) hereby secured the Agent at any time thereafter at the request and
cost of the Company will reconvey or reassign the Charged Property to the
Company or as the Company shall direct and otherwise discharge this security.


 


16.          Indulgence


 


The Agent may at any time or times, without discharging or in any way
prejudicing this security or any remedy of the Agent under this Debenture,
grant to the Company or to any other person time or indulgence or further
credit, loans or advances, enter into any arrangement or variation of rights or
abstain from perfecting or enforcing any remedies, securities, guarantees or
rights it may now or subsequently have from or against the Company or any other
person.


 


13

















 


17.          Miscellaneous


 


17.1         Failure or delay by the Agent in exercising
any right or remedy shall not operate as a waiver, and single or partial
exercise or waiver of any right or remedy shall not preclude its further
exercise or the exercise of any other right or remedy.


 


17.2         Each of the provisions of this Debenture is
severable and distinct from the others and if at any time one or more of such
provisions is or becomes invalid, illegal or unenforceable the validity,
legality and enforceability of the remaining provisions of this Debenture shall
not in any way be affected or impaired.


 


17.3         The Company certifies that neither the
execution of this Debenture nor the creation of the charges contained in this
Debenture contravenes any of the provisions of the memorandum and articles of
association of the Company, or other documents comprising the constitution or
incorporation of the Company, or the Companies Act 1992 sections 30, 31 and
156.


 


17.4         Any notice or demand for payment by the Agent
under this Debenture shall (without prejudice to any other effective mode of
making such notice or demand) be deemed to have been properly served on the
Company if served on any one of the directors or on the secretary of the
Company or if delivered or sent by letter post, fax or e-mail to the Company at
its registered office or at any of its principal places of business. Any such
notice or demand sent by post shall be deemed to have been served on the
addressee on the fifth succeeding business day following the day of posting
notwithstanding that it be undelivered or returned undelivered, and in proving
such service it shall be sufficient to prove that the notice or demand was
properly addressed and posted. Any notice or demand sent by fax or e-mail on a
business day shall be deemed to have been served at the time of dispatch. Any
such notice or demand or any certificate as to the amount at any time secured
by this Debenture shall be conclusive and binding upon the Company if signed by
an officer or manager of the Agent.


 


17.5         The Company represents and warrants to the Agent that the Company is
not aware of any Incumbrance affecting the Charged Property which may not be
otherwise disclosed or permitted in the Credit Agreement or revealed by an
examination of the title documents to the same and the execution of this charge
and the observance and performance of the Company’s obligations under this
Debenture does not contravene any charge, mortgage, lease, loan facility or
other agreement.


 


17.6         Each and every right, power and remedy hereby granted to the Agent
shall be cumulative and not exclusive, and each and every right, power and
remedy, whether specifically hereby granted or otherwise existing, may be
exercised from time to time and as often and in such order as may be deemed
expedient by the Agent and the exercise of any such right, power or remedy will
not be deemed a waiver of the right to exercise, at the same time or
thereafter, any other right, power or remedy. 
No delay or omission by the Agent in the exercise of any right, power or
remedy will impair any such right, power or remedy or operate as a waiver
thereof or of any other right, power or remedy then or thereafter
existing.  Any and all covenants of the
Company in this Debenture may from time to time, by instrument in writing
signed by the Agent, be waived to such extent and in such manner as Agent may
desire, but no such waiver will ever affect or impair the rights of the Agent
hereunder, except to the extent specifically stated in such written
instrument.  All changes to and
modifications of this Debenture must be in writing and signed by the Company
and the Agent.


 


17.7         Without regard to principles of conflicts of law, this Debenture
shall be construed under and governed by the laws of the 


 


14

















 


Commonwealth
of The Bahamas applicable to contracts made and to be performed entirely within
such country.


 


17.8         Notwithstanding
anything to the contrary provided herein, to the extent any of the terms or
provisions of this Debenture are inconsistent with the terms and provisions of
the Credit Agreement, the terms and provisions of the Credit Agreement shall
control.


 


FIRST SCHEDULE


 


All Those Islands or Cays known as Royal
Island, Chicken Cay and Rat Cay together comprising Four Hundred and Thirty-one
and Thirty-one hundredths (431.31) acres which said Islands and Cays are
situate between Spanish Wells and Egg Island and within the Eleuthera chain of
islands, one of the islands of The Commonwealth of The Bahamas and which said
Islands and Cays have such positions, shapes, boundaries, marks and dimensions
as are shown onn the diagram or plan attached to an Indenture of Conveyance
dated the 21st day of February, A.D., 2006 made between Evelyn S.
Guyton of the one part and Royal Island Bahamas Limited of the other part and
now of record in the Registry of Record in The Commonwealth of The Bahamas in
Volume 9568 at pages 530 to 541.


 


SECOND SCHEDULE


 


A.            All
That certain lot piece or parcel of land containing by admeasurement seven
Thousand Two Hundred and Fifteen (7,215) Square Feet situated immediately South
of The Government Dock in the settlement of The Bluff on the Island of
Eleuthera in the Commonwealth of The Bahamas, ABUTTING AND BOUNDING towards the
North by the Public Dock, towards the East partly by the main Government Road
and partly by land now or formerly the school lot, towards the South by sea
towards the West by sea or however else the same may abut and about which said
lot piece or parcel of land has such position, shape, boundaries, marks and
dimensions as is shown on the diagram or plan attached to Deed of Lease dated
the      day of         ,A.D., 200 made between The Minister
with Responsibility for Lands   of the
one part and Royal Island Bahamas Limited of the other part and recorded in the
Registry of Record in The Commonwealth of The Bahamas in Volume      at pages     to


 


B.            All
That certain lot piece or parcel of land containing by admeasurement Thirty
Nine and Fifty Nine Hundredths (39.59) acres situated within Royal Island
Harbour at Royal Island in the Commonwealth of The Bahamas ABUTTING AND
BOUNDING towards the North by property of Royal Island Bahamas Limited towards
the East by the sea (Royal Island Harbour) towards the South by the sea (Royal
Island Harbour) torwards the West by the sea (Royal Island Harbour) or however
else the same may abut and abound which said lot piece or parcel of land has
such position, shape, boundaries, marks and dimensions as is shown on the
diagram or plan attached to Deed of Lease date the      day of   
, A.D., 200    made between The
Minister with Responsibility for Lands of the one part and Royal Island Bahamas
Limited of the other part and recorded in the Registry of Record in The
Commonwealth of The Bahamas in Volume   
at pages     to


 


15

















 


	
   

  	
  IN WITNESS WHEREOF

  
	
   

  	
  the Company has caused its

  
	
   

  	
  Common Seal to be hereunto

  
	
   

  	
  affixed the day and year first

  
	
   

  	
  hereinbefore written

  
	
   

  
	
   

  
	
   

  	
  The Common Seal of the Company

  	
  )

  
	
   

  	
  was affixed hereto by Brian Parro

  	
  )

  
	
   

  	
  the Vice-President of the Company

  	
  )

  
	
   

  	
  and the said Brian Parro affixed his

  	
  )

  
	
   

  	
  signature hereto in the presence of:

  	
  )

  	
        /s/ Brian Parros

  	
   

  
	
   

  
	
   

  
	
   

  	
              /s/
  Russell B. Shelton

  	
   

  
							



 


16

















 


COMMONWEALTH OF THE BAHAMAS


 


Grand Bahama


 


I, Russell Shelton of Dallas, Texas, United States
of America, Secretary of Royal Island Bahamas Limited (hereinafter called “the
Company”) make oath and say that I was present and saw the Common Seal of the
Company affixed to the annexed Supplemental Debenture dated the day of           A.D.,
2007 by Brian Parro the Vice-President of the Company and that I saw the said
Brian Parro sign, execute and deliver the said Supplemental Debenture as and
for the Act and Deed of the Company and for the purposes therein mentioned; and
that I subscribed my name as the Witness to the due execution thereof.  And Further that the Seal affixed and
impressed at the foot or end of the said Supplemental Debenture is the Common
Seal of the Company and was affixed and impressed thereto by the said           by
order and with the authority of the Board of Directors of the Company and in
conformity with the Articles of Association of the Company.


 


 


	
  SWORN at Nassau, Bahamas

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
  this                        day

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
  of                                 A.D.
  2007

  	
  )

  	
         /s/
  Russell B. Shelton

  	
   

  
	
   

  
	
   

  
	
                          Before
  me,

  	
   

  	
   

  
	
   

  
	
   

  
	
                        NOTARY PUBLIC

  	
   

  	
   

  
					



 


17