DEBENTURE

PPPPPP CARDS LIMITED

to

GGGGG, .

THIS DEBENTURE is issued under

Clause ..... of the Company's
Memorandum of Association and
Article ....... of the Company's Articles of
Association and in pursuance of a
Resolution of the Directors of the
Company dated the ... day of ........ 1997.

DEBENTURE KENYA SHILLINGS FIFTY MILLION

(KShs.50,000,000/=) (Maximum)

This DEBENTURE is made the day of One Thousand Nine

Hundred and Ninety-seven BETWEEN PPPPPP LIMITED a Limited Liability

Company incorporated in the Republic of Kenya and of Post Office Box Number

Nairobi in the said Republic (hereinafter called "the Company") of the one part

and GGGGG, also a limited liability company incorporated in the said

Republic and registered as a bank pursuant to the provisions of the Banking Act

(Chapter 488, Laws of Kenya) and whose postal address for the purpose of this

instrument is Post Office Box Number , Nairobi (hereinafter called "the Lender"

which expression shall where the context so admits include its successors and

assigns) of the other part:

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WHEREAS:

1. The Lender has at the request of the Company agreed to make available

to the Company an over-draft facility in an aggregate sum not exceeding

the sum of Kenya shillings Fifty Million (KShs.50,000,000/=) (hereinafter

referred to as "the Lender's Facilities") exclusive of interest and other

charges and upon having the repayment thereof with interest and other

charges as hereinafter provided and upon having the same secured in the

manner as hereinafter appearing.

2. The parties have agreed that the Lender's Facilities may be terminated by

the Lender at any time in accordance with the Lender's normal practices

whereupon they will become repayable by the Company to the Lender on

demand.

NOW IN CONSIDERATION of the premises THIS DEBENTURE

WITNESSETH as follows:-

1. The Company hereby covenants and agrees with the Lender that the

Company shall:-

On demand pay and discharge all monies and liabilities now or

hereinafter due and owing to the Lender by the Company pursuant to the

Lender's Facilities whether in respect of monies advanced or paid to or for

2
the use of the Company or charges incurred on its account or for any

monies whatsoever which may then be due and owing by the Company

to the Lender as principal or surety and either solely, severally or jointly

with any other company society corporation person or persons in

partnership or otherwise current banking account or upon loans or bills of

exchange or promissory notes draft orders for payment or delivery of

money bills of lading or other negotiable or mercantile instruments

drawn accepted or endorsed by or on behalf of the Company and

discounted or paid or held by the Lender either at the request of the

Company or in the course of business or otherwise or in respect of bills of

exchange accepted by the Lender on the instructions of the Company or

in respect of monies which the Company has or shall become liable to pay

the Lender in any manner whatsoever including all liabilities in

connection with foreign exchange transactions on any rates bills

guarantees or other instruments accepted endorsed discussed or entered

with by the Lender at the request of the Company and whether any such

monies shall be paid to or incurred on behalf of the Company or any

other company society corporation person or persons in partnership or

otherwise at the request of the Company or for any other account

whatsoever or for any actual or contingent liability or otherwise

howsoever together with commission and the Lender's charges and other

3
 charges and expenses and together with interest at the rate hereinafter

provided;

AND in default of payment as above the Company HEREBY UNDERTAKES

that it will on demand in writing made to it by the Lender pay to the Lender the

whole amounts as the case may be together with interest thereon and other

liabilities as prescribed herein.

2. The Company shall pay interest on all the monies and liabilities from

time to time whether for principal interest or otherwise in whatever

currency which may now or at any time in the future be owing and

payable to the Lender at the rate of twenty-seven per cent (27%) per

annum payable monthly in arrears and to be reviewed periodically in

line with the market trends or such other rate or rates as the Lender shall

in its sole discretion from time to time decide with full power to the

Lender to charge different rates for different accounts such interest to be

calculated on daily balances and debited monthly in accordance with the

normal practices of the Lender PROVIDED ALWAYS:

(i) That the Lender shall not be required to advise the Company prior

to any change in the rate of interest so payable nor shall any

failure by the Lender to advise the Company as aforesaid

prejudice in any way howsoever the recovery by the Lender

of interest charged subsequent to any such change;

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 (ii) That the rate of interest payable as aforesaid may from time to

time be increased by the Lender at the Lender's sole

discretion:

(iii) That notwithstanding sub-clause (ii) above in the case of any such

monies or liabilities being also secured to the Lender under

an agreement or instrument reserving a higher rate of

interest than as aforesaid nothing herein contained shall

prejudice the right of the Lender to recover such higher rate

of interest or (as the case may be) the difference between

such higher rate and the rate or rates payable hereunder;

PROVIDED that if the balance of the facility hereby secured does

not exceed the limit authorised by the Lender and the Company

complies with all conditions imposed by the Lender including

(without limitation) the condition relating to the period of the

facility, then the rate of interest charged on the facility will not

exceed the maximum rate which the Lender for the time being

charges on such facilities as may be determined by the prevailing

market rates.

3. (a) The Charges created by this Debenture shall secure the due repayment

by the Company of interest on the said Lender's Facilities and all

monies and liabilities payable hereunder (including but not limited

5
 to all costs and expenses which may be incurred by the Lender in

obtaining payment thereof or in maintaining or realising this

security or any security herein mentioned).

(b) The principal sums secured by the Lender's Facilities under this

Debenture may, by written agreement between the Company and

the Lender, be increased subject to the up-stamping hereof to the

satisfaction of the Lender and the payment of all stamp duties

registration legal and other charges in connection therewith all of

which shall be for the account of the Company.

4. The Company as beneficial owner and as a continuing security for the

payment and discharge of all monies and liabilities hereby agreed to be

paid or discharged or intended to be hereby secured (including all

expenses and charges arising out of or in connection with any of the acts

authorised by this Debenture) HEREBY CHARGES in favour of the

Lender:-

(i) all right title estate and other interests of the Company in all

immoveable properties now or in future registered in the name of

the Company whether under leasehold or freehold title;

(ii) all its undertaking goodwill assets book debts income and property

whatsoever and wheresoever both present and future including

uncalled capital for the time being of the Company;

6
(iii) all the right title and interest of the Company to and in all plant and

machinery now or at any time hereafter vested in or held by or on

behalf of the Company and all related spare parts fuels equipment

and tools;

(iv) all rights in intellectual property or similar rights now or hereafter

belonging to the Company;

(v) all the right title and interest of the Company to and in book debts

and the benefit of all rights securities and guarantees of any nature

whatsoever now or at any time enjoyed or held by the Company;

(vi) all bills of exchange promissory notes and negotiable instruments of any

description now or at any time hereinafter beneficially owned by

the Company;

(vii) any deposits margins commissions or other rights of the Company to any

commodities and any contract or option relating thereto (whether

present or future) and any guarantee or security relating thereto

whether held or placed or contracted with the Lender or any other

person from time to time;

(viii) all loan capital indebtedness or liabilities both present and future in any

account or in any manner owing to the Company from any

company which now is or may in the future become a subsidiary of

the Company;

7
(ix) all amounts realised by an administrator or liquidator of the Company

upon the enforcement or execution of any order of a court of law;

(x) the benefit to the Company of all rights to which the Company is

now or may in the future become entitled in relation to all

immoveable properties it now or in future owns including (but

without limitation) all rights and claims of the Company against all

persons who now are or who at any time have been or may become

lessees sub-lessees licensees or occupiers of the whole or any part

or parts of such immoveable properties and all guarantors and

sureties for the obligations of any such person;

(xi) the benefit to the Company of all guarantees warranties and

representations given or made by, and any rights or remedies to

which the Company is now or may in the future be entitled against,

all or any professional advisers and contractors in relation to any

immoveable properties it now or in future owns and the

manufacturers suppliers or installers of all plant machinery fixtures

fittings or other items now or from time to time in the buildings

erected or to be erected on any such immoveable properties and

any other person now or from time to time under contract with or

under a duty to the Company including (without limitation) the

right to prosecute in the name of the Company any proceedings

8
 against any such person in respect of any act omission neglect

default breach of contract or breach of duty whether relating to the

design construction inspection or supervision of the construction of

any of the said buildings or to the quality or fitness for use of such

plant machinery fixtures fittings and other items or otherwise and

the benefit of all sums recovered in any proceedings against all or

any of such persons;

(xii) the benefit of all and any licences now or at any time during the

continuance of this Debenture held by the Company.

5. The charges created by this Debenture shall rank as first charges on all

the properties hereby charged and as regards all immovable properties of

the Company shall constitute a fixed charge and as regards all other

property hereby charged shall constitute a floating security but so that the

Company is not to be at liberty to create any mortgage or charge or other

encumbrance upon any of the property and assets hereby charged to rank

either in priority to or pari passu with or subsequent to the charge hereby

created (without the prior written consent of the Lender) it being the

intention that the Company shall have no power without the consent of

the Lender to part with dispose of or alienate any part of the property and

assets hereby charged except by way of sale in the ordinary course of

9
 business and that the proceeds of any and all such sales shall be paid into

the Company's account or accounts with the Lender.

6. (a) Forthwith upon the execution of this Debenture the Company shall

if required by the Lender for the purpose of perfecting this

Debenture execute and deliver or cause to be executed and

delivered to the Lender first legal mortgages or charges as the

Lender may require over all immovable properties now held by

Company upon any freehold or leasehold title or right of

occupancy or otherwise howsoever;

(b) Forthwith upon acquisition by the Company of any further such

immovable property the Company shall if required by the Lender

for the same purpose execute and deliver to the Lender the like

first legal mortgages or charges thereover;

(c) The Lender in its absolute discretion at any time either may waive

entirely the compliance by the Company with the foregoing

obligations of this Clause (whether generally or in respect of any

specified immovable property or properties) or may accept in lieu

of such first legal mortgages or charges as aforesaid (whether

generally or in respect of any specified immovable property or

properties) EITHER the deposit with the Lender by way of

equitable mortgage or charge of the title deeds of such property or

10
 properties accompanied by all such memorandum of mortgage or

charge as are required by law and/or demanded by the Lender OR

second or subsequent legal mortgages or charges PROVIDED

THAT any such indulgence granted by the Lender may at any time

be revoked by the Lender who shall not be precluded at any time

or times thereafter from requiring the execution of such first legal

mortgages or charges as aforesaid over all or any such immovable

properties;

(d) All legal and equitable mortgages and charges created by the

Company in accordance with this Clause:-

(i) shall be in such form as the Lender shall in its discretion

require and in the case of legal mortgages and charges shall

include (in addition to the powers conferred on mortgagees

and chargees by law) such powers and provisions as the

Lender shall require including an unrestricted power of sale;

(ii) shall extend to and include all buildings and other improvements

from time to time or at any time in existence on the

immovable properties concerned;

(iii) shall secure to the Lender the payment and discharge to the

Lender of all principal monies and interest and other monies

and liabilities whatsoever as hereinbefore in this Debenture

11
 set out or such portion thereof as the Lender shall in its

discretion determine; and

(iv)shall be made drawn executed stamped and registered at the sole

cost of the Company which cost shall be recoverable by the

Lender from the Company on demand and pending

payment bear interest and be secured by this Debenture in

the same manner as the principal monies hereby secured.

7. During the continuance of this security the Lender shall if the parties

agree be appointed and act as the main banker (or if so agreed between

the parties the sole banker) of the Company of all sums received by the

Company in the course of its business or in respect of subscriptions or

calls upon their shares or otherwise howsoever shall be paid by the

Company to the Lender for the credit of the Company in an account or

accounts opened or to be opened in the name of the Company and the

Company shall make all payments by cheques drafts promissory notes or

bills of exchange drawn on the Lender and all costs and expenses

incurred by the Lender in acting as such banker of the Company as

aforesaid shall be debited to the Company and constitute a first charge

upon all the property and assets hereby charged.

8. The securities hereby given and covenanted to be given to the Lender

shall be without prejudice and in addition to any other security legal or

12
 equitable of whatsoever nature which the Lender may now or at any time

hereafter hold on the property and assets of the Company or any part

thereof or from any third party for or in respect of all or any part of the

indebtedness of the Company to the Lender howsoever arising or any

interest thereon.

9. The Lender may at any time and without notice to the Company combine

or consolidate all or any of the Company's accounts with and liabilities to

the Lender and set off or transfer any sum or sums standing to the credit

of any one or more of such accounts in or towards satisfaction of any of

the Company's liabilities to the Lender on any other account or in any

other respect whether such liabilities be actual or contingent primary or

collateral joint or several and whether such accounts and liabilities be at

or to one or more branches of the Lender.

10. The Company represents warrants and undertakes to the Lender that

save with the prior written consent of the Lender:-

(a) it is and will be the sole beneficial owner of all the securities listed

and or set out in the Debenture free from encumbrances and will

not create or attempt to create or permit to arise or subsist any

encumbrance on any of the said assets;

(b) it has not (and none of its Subsidiaries have) sold or agreed to sell

or otherwise disposed of or agreed to dispose of and will not and

13
 none of its Subsidiaries will at any time during the subsistence of

this Debenture sell assign part with transfer lease licence or

otherwise dispose of the benefit of all or any of the Lender's right

title and interest in and to the said assets or any part of them (save

for sales of their stock in trade at not less than market value and the

use of cash in the acquisition of goods or services, in either case in

the ordinary course of its trading business) and;

(c) it will pay into its account or accounts with the Lender or such

other account as the Lender may from time to time specify all

monies which it may receive in respect of monies lent to it for

whatever purpose forthwith on receipt and until such payment will

hold all such monies on trust for the Lender and it will not release

set off compound or deal with these monies and debts otherwise

than by getting in and realising the same in the ordinary and

proper course of its trading business and shall at any time on

demand by the Lender execute a legal assignment to the Lender of

any of the Company's debtor(s) in the form required by the Lender.

11(A) The Company represents warrants and undertakes to the Lender that:-

(a) it has and will at all times have the necessary power to enter

into and perform its obligations under this Debenture;

14
 (b) this Debenture constitutes its legal valid binding and

enforceable obligation and is a security over the assets set

out in this Debenture and every part thereof effective in

accordance with its terms;

(c) all necessary authorizations and consents to enable or entitle

it to enter into this Debenture and to enable it its Subsidiaries

to carry on its/their respective businesses as they are

currently being conducted have been obtained and will

remain in full force and effect during the subsistence of the

security constituted by this Debenture.

11(B) The Company covenants with the Lender that it shall keep its books of

account and prepare all financial statements to be delivered under

this Debenture in accordance with accounting principles generally

accepted in the Republic of Kenya consistently applied and procure

that they are furnished to the Lender:-

(a) as soon as practicable and in any event not later than after

the end of each financial year, the audited financial

statements of the Company for and as at the end of the

financial year then ended which shall be prepared so as to

give a true and fair view of the financial condition of the

Company as at the end of the period to which those financial

15
 statements relate and of the results of its operations during

such period;

(b) with reasonable promptness, details of any litigation,

arbitration or administrative proceedings in progress

pending or, to the knowledge of the Company, against it

which might have a material adverse in effect on its ability to

perform its obligations under this Debenture.

11(C) The Company hereby further covenants and agrees with the Lender: -

(a) To carry on and conduct the business of the Company in a

proper efficient and businesslike manner;

(b) To keep proper books of accounts and therein to make true

and perfect entries of all dealings and transactions of and in

relation to the said business and to keep the said books of

account and all other registers books and documents relating

to the affairs of the Company at its registered office or other

place or places where the same should properly be kept and

to procure that the same shall at all reasonable times be open

for the inspection of the Lender or such person or persons as

the Lender shall from time to time appoint;

(c) To furnish or (as the case may be) cause to be furnished to

the Lender annually or oftener if required at any time give to

16
 the Lender or to such other person or persons as aforesaid

such all matters relating to the businesses or any existing or

after acquired property or assets of the Company or

otherwise relating to the affairs thereof;

(d) To keep the Company's property and assets including but

not limited to vehicles machinery works fixtures fittings

implements utensils stock-in-trade plant stores and other

effects in a good state of repair and in proper working order

and condition;

(e) To permit the Lender and such person or persons as the

Lender shall from time to time in writing for that purpose

appoint to enter into and upon the Company's property to

view the state and condition of the property and assets

hereby charged;

(f) To insure and keep insured with an Insurance Company

approved by the Lender and if required by the Lender either

in the name of the Lender or name the Lender as the sole

beneficiary of such of the property and assets hereby charged

as are of an insurable nature against loss damage or

destruction by fire and such other risks as the Lender may

from time to time require to the full value thereof as

17
determined by the Lender from time to time and punctually

to pay all premiums and other monies payable for that

purpose and to produce to the Lender on demand the policy

or policies for such insurance and the receipts for the current

premiums thereon and at the discretion of the Lender either

to apply all monies received or receivable by virtue of any

such policy in making good any loss or damage which may

so arise to the Company's property and assets or any of them

as the Lender may direct or in or towards liquidation of the

amount for the time being due to the Lender and if default

shall be made in keeping such property and assets in proper

working order and condition and so insured as aforesaid or

in depositing any such policies or delivering any such

receipts as aforesaid the Lender may (but without being

bound to do so) repair the same or such of them as shall in

the opinion of the Lender require repair and may insure and

keep insured the same or such of them as the Lender may

deem fit and the Company will on demand repay to the

Lender every sum of money so expended by the Lender for

the above purposes or any of them together with interest

thereon at such rate or rates as aforesaid from the time of the

18
 same having been expended until the actual payment thereof

and until such repayment the same shall be a first charge

upon the property and assets hereby charged and may be

debited to any account of the Company with the Lender;

(g) To pay the rents reserved by and to perform and observe the

covenants agreements and conditions contained in or

implied by the grant conveyance transfer assignment lease or

other title under which any immovable property is held by

the Company and also to pay all rates and taxes and other

outgoings which are now or may hereafter be imposed on

such immovable property or any part thereof by any

government municipal or local or other authority and to

produce to the Lender on demand receipts for such rents

taxes and other outgoings;

(h) Not to assign alienate sub-let or part with the possession of

any of the property and assets hereby charged or covenanted

to be mortgaged or charged or any part thereof without the

consent in writing of the Lender first had and obtained and

then only on the condition that the consideration received by

the Company in connection with the assignment alienation

letting sub-letting or parting with possession will be

19
 remitted to the Lender in reduction of the amount for the

time being owing under this Debenture;

(i) To comply with and observe all the provisions of the

Companies Act (Chapter 486) or any amendment or

re-enactment thereof for the time being in force;

(j) To deposit with the Lender complete and true copies of the

Company's Memorandum and Articles of Association in

force on the date hereof and of any amendment or

amendments made from time to time thereto and not to

make or attempt to make any alteration or alterations thereto

or to the capital structure of the Company without the prior

consent in writing of the Lender;

(k) To advise the Lender of all countries in which the Company

now is registered or carries on business and immediately of

any change therein;

(l) That if the Company extends its business to any other

country or countries then it will at its own expense procure

the registration of this Debenture contemporaneously with

the registration of the Company in such country or countries

in such manner as is required by the law of such country or

20
 countries to the intent that this Debenture shall be fully

effective and enforceable therein;

(m) Not to remove or permit to be removed any property or

assets belonging to or in the lawful possession of the

Company to any country where this Debenture is not

registered as aforesaid without the prior written consent of

the Lender;

(n) If and for so long as the Company is a private company not

to permit any allotment or transfer of shares or change in any

of its Directors without the prior written consent of the

Lender (which consent shall not be unreasonably withheld);

(o) That any capital of the Company now or hereafter being

uncalled shall not be called up or received in advance of calls

without the prior written consent of the Lender;

(p) To give proper and reasonable notice to the Lender of all

meetings of the members or directors of the Company and to

permit any person or persons nominated by the Lender in

that behalf to attend all or any of such meetings;

(q) To advise the Lender promptly in writing of any event or

situation tending or likely to have a substantially adverse

21
 effect on the Company's business or on the security hereby

created.

12. The Company hereby warrants that at the date of execution hereof and

except as notified in writing to the Lender prior to the date hereof it

neither holds nor has in its possession control or reputed ownership any

goods in respect of which the vendor thereof has reserved either title

thereto or any right of disposal after delivery of possession thereof and

the Company hereby undertakes that if and whenever they order or

receive any goods in respect of which title thereto or any right of disposal

thereof has been or will be reserved the Company will forthwith advise

the Lender in writing of all the details thereof.

13. The principal monies and interest and other monies and liabilities hereby

secured shall immediately become payable and fall due to be discharged

without demand:-

(a) If a distress or execution either by Court order decree or process or

otherwise is levied upon any part of the property and assets of the

Company or the Company commits any act or default by reason of

which any such distress or execution might be levied; or

(b) If any government or any other competent authority (be the same local or

foreign) nationalises seizes or otherwise expropriates or assumes

custody or control of all or any substantial part of the share capital

22
 property assets business or operations of the Company or takes any

action for the dissolution of the Company or any action (including

but not limited to the withdrawal cancellation refusal or non

renewal of any licence or permission required by the Company)

which would prevent the Company from carrying on its operations

or a substantial part thereof; or if any Government or any such

authority give notice of their or any of their intention to perform

any such action as hereinbefore in this sub-clause set out; or

(c) If a receiver is appointed by any Court (be the same local or foreign) or

by any other person over any part of the property and assets of the

Company; or

(d) If an order is made or a resolution is passed for the winding up of

the Company or a petition for such winding up is filed or notice of

a meeting to pass such a resolution is issued; or

(e) If the Company without the consent of the Lender ceases to carry on its or

any of its business or threatens to cease to carry on the same; or

(f) If the Company commits or attempts or purports to commit any

breach of the covenants herein;

(g) If the Company fails to pay any sums payable by it from time to

time to the Lender on the due date therefor or fail to comply with

any term condition covenant or other provision of this Debenture

23
 or of any facility from the Lender or to perform any of its

obligations or liabilities to the Lender or if any representation or

warranty from time to time made to the Lender by the Company is

or becomes incorrect or misleading in a material respect;

(h) If any financial indebtedness of the Company becomes due or

capable of being declared due before its specified maturity date by

reason of breach or default on the part of the Company or any of

them under the terms of any agreement or instrument creating or

evidencing the same or is otherwise not paid when due (or within

any applicable period of grace) or any guarantee or indemnity

given by the Company is not honoured when due and called;

(i) If the Company is deemed unable to pay its debts within the

meaning of Section 220 of the Companies Act (Chapter 486) or

commences negotiations with any one or more of its creditors with

a view to the general readjustment or rescheduling of its

indebtedness or makes a general assignment for the benefit of or a

composition with its creditors;

(j) If the Company takes any corporate action or other steps are taken

or legal proceedings are started for its winding-up dissolution or

reorganisation (otherwise than for the purpose of an amalgamation

or reconstruction while solvent on terms previously approved in

24
 writing by the Lender) or for the appointment of a receiver

administrator trustee or similar officer of it or of all or a material

part of its revenues or assets;

(k) If the Company suspends or threatens to suspend a substantial part

of its business operations (otherwise than for the purposes of a

reconstruction or amalgamation on terms previously approved in

writing by the Lender) or any governmental authority permits or

procures or threatens to permit or procure any reorganisation

transfer or expropriation (whether with or without compensation)

of a substantial part of the business or assets of the Company or

any of them;

(l) If any guarantee indemnity or other security for any of the assets

listed as set out in this Debenture fails or ceases in any respect to

have full force and effect or to be continued or it is terminated or

disputed or in the opinion of the Lender is in jeopardy invalid or

unenforceable or if the charges and covenants pursuant to this

Debenture or the security created by any of them is disputed or in

the opinion of the Lender is in jeopardy;

(m) If at any time it is or becomes unlawful for the Company to

perform or comply with any or all of its obligations under this

Debenture or any security document or any other agreement

25
 between the Company and the Lender or any of such obligations of

the Company are not or cease to be legal valid binding and

enforceable or;

(n) If control or the power to take control of the Company is or are

acquired by any person or company or group of associates not

having control of the Company at the date of this Debenture

(unless with the prior consent in writing of the Lender) or;

(o) If in the opinion of the Lender a material adverse change occurs in

the financial condition results of operations or business of the

Company.

14. At any time after the principal monies hereby secured become payable

either as a result of lawful demand being made by the Lender or under

the provisions of Clause 13 hereof the Lender or any officer of the Lender

duly authorised in that regard may appoint in writing any person or

persons whether an officer or officers of the Lender or not to be a receiver

and manager or receivers and managers of the property and assets hereby

charged or any part thereof upon such terms as to remuneration or

otherwise as the Lender shall think fit and may in like manner from time

to time remove any receiver and manager or receivers and managers so

appointed and appoint another or others in his or their stead.

26
15. Every receiver and manager so appointed (hereinafter called a

"Receiver") shall be the agent of the Company and the Company shall

alone be liable for his acts defaults and remuneration and he shall have

authority and be entitled to exercise in his discretion any or all of the

powers hereinafter set forth in addition to and without limiting any

general powers conferred on him by law:-

(a) To enter (either personally or by his servants or agents and either

accompanied by workmen and others or not so accompanied) upon

any land or buildings where any property or assets hereby charged

may for the time being be or upon any other land or buildings

owned or occupied by the Company;

(b) To take possession of collect and get in all or any part of the

property and assets hereby charged and for that purpose to take

proceedings in the name of the Company or otherwise as he may

deem expedient;

(c) To sell or let or concur in selling or letting any property or assets

hereby charged in such manner and generally on such terms and

conditions as he shall think fit and to carry any such sale or letting

into effect;

27
(d) To carry on or manage or concur in carrying on or managing the

business of the Company and for any of those purposes to raise

money from the Lender or from other sources with the written

consent of the Lender either on the security of any property and

assets now or hereafter charged or otherwise in priority to this

Debenture;

(e) To make any arrangement or compromises which the Lender or the

Receiver in the interest of the Lender shall think expedient;

(f) To make and effect all repairs improvements and insurances

which the Receiver shall deem expedient and to renew such of the

plant machinery and effects of the Company as shall be worn out

lost or otherwise become unserviceable;

(g) To appoint dismiss and remove managers accountants workmen

servants and agents upon such terms as to remuneration or

otherwise as the Receiver may determine;

(h) To purchase instal and work such new or additional machinery

plant equipment and effects as the Receiver shall deem necessary

or conducive towards the proper and efficient running of the

Company businesses;

28
(i) Perform repudiate rescind vary or enter into any arrangement or

compromise any contracts or agreements which he may consider

expedient;

(j) Settle arrange compromise and submit to arbitration any accounts

claims questions or disputes whatsoever which may arise in

connection with the business of the Company or any of the assets

secured by this Debenture or in any way relating to the securities

constituted by this Debenture and bring prosecute defend enforce

compromise submit to and discontinue any actions suits

arbitrations or proceedings whatsoever whether civil or criminal;

(k) Enter into complete disclaim abandon or disregard determine or

rectify all or any of the outstanding contracts or arrangements of

the Company and allow time for payment of any debts either with

or without security;

(l) Make calls upon the shareholders of the Company in respect of any

capital of the Company which may be uncalled;

(m) Use the name of the Company in the exercise of all or any of the

powers conferred by this Debenture;

(n) Exercise or permit the Company or any nominee of the Company

to exercise any powers or rights incidental to the ownership of the

29
 assets secured by this Debenture or any part of them in such

manner as he may think fit;

(o) Form a subsidiary or Subsidiaries of the Company and transfer

lease or licence to any such Subsidiary or any other person all or

any part of the assets secured by this Debenture on such terms and

conditions as he may think fit;

(p) In the exercise of any of the powers authorities and discretions

conferred on him in this Debenture or for any other purpose to

raise and borrow money either unsecured or secured and either in

priority to, pari passu with or subsequent to the security

constituted by this Debenture and generally on such terms and

conditions as he may think fit;

(q) Give valid receipts for all monies and execute all discharges

assurances and things which may be proper or desirable for

realising the assets secured by this Debenture or any part of them;

and

(r) Execute and do all such other acts things and deeds as he may

consider necessary or desirable for realising or preserving the

assets secured by this Debenture or any part of them or incidental

or conducive to any of the matters powers or authorities conferred

on a Receiver under or by virtue of this Debenture or otherwise

30
 and exercise in relation to the aforesaid assets or any part of them

all such powers authorities and things as he would be capable of

exercising if he were the absolute beneficial owner of them.

16. (a) All monies received by the Lender or any Receiver after the

security hereby created has become enforceable shall after paying

or providing for all sums or claims required by the Companies Act

(Chapter 486) or any other law to be preferential and after

providing for all costs and expenses incurred in carrying out the

sale or disposal of the property and assets hereby charged and in

carrying on the business of the Companies be applied in the

following order but without prejudice to the Lender to recover any

shortfalls from the Company:-

FIRST in payment of all costs charges and expenses of and incidental to

the appointment of the Receiver and the exercise by him of all or

any of the powers aforesaid including the remuneration of the

Receiver;

SECONDLY in or towards payment to the Lender of all interest and other

charges unpaid in respect of this Debenture;

THIRDLY in or towards payment to the Lender of all principal monies owing

on any account in respect of this Debenture and remaining unpaid;

and

31
FOURTHLY in payment of any surplus (if any) to the person or persons

entitled to it.

(b) All monies received by the Company by virtue of any insurance on

the assets secured by this Debenture, whether or not effected

pursuant to this Debenture and whether the event by virtue of

which such monies became payable occurred before on or after the

date of this Debenture, shall be deemed part of the aforesaid assets

and (subject to any rights of third parties arising under any statute

for the time being relating to the application of insurance monies

and under any leases under which any of the properties (which

may be situate on any of the securities) are demised or let to or by

the Company or under the terms of any insurances if such terms

are incorporated therein in order to comply with the provisions of

any such leases) shall unless the Lender shall confirm otherwise in

writing be paid to the Lender and any monies so paid to the Lender

or otherwise received by the Lender by virtue of any such

insurance shall be applied at the discretion of the Lender either in

reduction of any of the liabilities incurred by the Company or in or

towards making good the loss or damage in respect of which they

become payable and any monies received by the Company by

32
 virtue of any insurance on the aforesaid assets shall be held on trust

for payment to the Lender in accordance with this clause.

(c) The Lender or any Receiver may credit any monies to a suspense

account for so long and in such manner as the Lender or any

Receiver may from time to time determine and the Receiver may

retain the same for such period as the Receiver and the Lender

consider expedient.

17. No purchaser mortgagor mortgagee or other person or company dealing

with the Lender or a Receiver or with its or his attorneys or agents shall

be concerned to enquire whether the powers exercised or purported to be

exercised have become exercisable or whether any money remains due on

the security of this Debenture or as to the necessity or expediency of the

stipulations and conditions subject to which any sale or other disposition

shall have been made or otherwise as to the propriety or regularity of

such sale or other disposition calling in collection or conversion or to see

to the application of any money paid to the Lender or the Receiver and in

the absence of mala fides on the part of such purchaser mortgagor

mortgagee or other person or company such dealing shall be deemed so

far as regards the safety and protection of such purchaser mortgagor or

mortgagee or other person or company to be within the powers hereby

conferred and to be valid and effectual accordingly.

33
18. Neither the Lender nor a Receiver shall by reason of the Lender or such

Receiver entering into possession of the property and assets hereby

charged or any part of them 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 mortgagee in

possession might be liable.

19. After the security hereby constituted has become enforceable the

Company shall from time to time and at all times execute and do all such

assurances acts and things as the Lender may require for facilitating the

realisation of the property and assets hereby charged (including the

calling up of any uncalled capital for the time being of the Company) and

for exercising all the powers authorities and discretions hereby conferred

on the Lender or a Receiver.

20. The Company hereby irrevocably appoints the Lender or the duly

constituted attorney or attorneys of the Lender for the time being or any

Receiver or Receivers appointed by the Lender to be the attorney or

attorneys of the Company and in the name and on behalf of the Company

to execute and do any assurances acts and things which the Company

ought to execute and do under the covenants herein contained and

generally to use the name of the Company in the exercise of all or any of

the powers hereby conferred on the Lender or any Receiver or Receivers

34
 appointed by the Lender and covenants that it will when called upon by

the Lender so to do execute a further Power of Attorney in such form as

the Lender may require in favour of the Lender or the duly constituted

attorney or attorneys of the Lender for the time being or any Receiver or

Receivers appointed by the Lender.

21. Upon the final balance of the principal monies and liabilities hereby

secured having been paid off and satisfied by the Company to the Lender

together with all interest due thereon and upon payment by the Company

to the Lender of all costs charges and expenses incurred by the Lender in

relation to this Debenture the Lender shall if requested by the Company

and at the cost of the Company execute a discharge of this Debenture and

all other securities granted to the Lender under the provisions in that

behalf hereinbefore contained.

22. It is hereby agreed and declared that this Debenture shall be a continuing

security notwithstanding any settlement of account or other matter or

thing whatsoever and shall not prejudice or affect any agreement which

may have been made with the Lender prior to the execution hereof

relating to any security which the Lender may now or hereafter hold in

respect of the monies hereby secured or any part thereof.

35
23. (a) The principal monies and interest hereby secured shall be payable

at such Branch or Branches of the Lender within Kenya as the

Lender may reasonably require.

(b) Upon demand being made by the Lender for payment of the

monies hereby secured or upon such monies for any other reason

becoming immediately payable the Lender shall be under no

obligation to make any further advances or grant any further

facility to the Company.

(c) In respect of any part of the properties registered or to be registered

as aforesaid the Company hereby certifies that the charge created

by this Debenture does not contravene any of the provisions of its

Memorandum or Articles of Association.

24. The Lender shall be entitled to provide for the safe custody by third

parties of all certificates and documents of title relating to the assets

secured by this Debenture and shall not be responsible for any loss or

damage occurring to or in respect thereof.

25. The Company shall on demand and on a full indemnity basis pay to the

Lender the amount of all costs and expenses (including legal and out-of-

pocket expenses and any Value Added Tax on such costs and expenses)

which the Lender incurs in connection with:-

36
 (a) the preparation negotiations execution and delivery of this

Debenture and other security documents;

(b) any stamping or registration of this Debenture and other security

documents;

(c) any actual or proposed amendment of or waiver or consent under

or in connection with this Debenture;

(d) any discharge or release of this Debenture;

(e) the preservation or exercise (or attempted preservation or exercise)

of any rights under or in connection with the enforcement (or

attempted enforcement) of this Debenture or any of the security

documents);

(f) dealing with or obtaining advise about any other matter or

question arising out of or in connection with this Debenture or any

of the security documents together with interest at the rates

provided elsewhere in this Debenture from the earlier of the date of

demand and the date of payment by the Lender until the date of

payment by the Company whether before or after judgement.

26. The Lender and every Receiver attorney manager agent or other person

appointed by the Lender under this Debenture and their respective

employees shall be entitled to be indemnified on a full indemnity basis

out of the assets secured by this Debenture in respect of all liabilities and

37
expenses incurred or suffered by any of them in or directly or indirectly

as a result of the exercise or purported exercise of any of the powers

authorities or discretions vested in them under this Debenture and

against all actions proceedings losses costs claims and demands suffered

or incurred by the Lender in respect of any matter or thing done or

omitted in any way relating to the assets secured by this Debenture and

the Lender and any such Receiver may retain and pay all sums in respect

of the same out of any monies received under the powers conferred by

this Debenture.

(a) The Lender may without notice to the Company combine or

consolidate all or any sums standing to the credit of the Company's

accounts with the Lender and/or set off or transfer any such sums

in or towards the satisfaction of any of the Company's liabilities to

the Lender, and may do so notwithstanding that the balances on

such accounts and such liabilities may not be expressed in the same

currency, and for the purpose of exercising any rights under this

clause or rights under general law the Lender is authorised to effect

any necessary conversions at the Lender's own rate of exchange

then prevailing;

(b) The Company irrevocably authorises the Lender in its name and at

its expense to perform such acts and sign such documents as may

38
 be required to give effect to any set-off or transfer pursuant to

clause 26(a) including the purchase with the money standing to the

credit of any such account of such other currencies as may be

necessary to effect such set-off or transfer.

(c) In this clause `right under the general law' means any right of set

off, combination or consolidation of

accounts, lien or similar right which the Lender has under any

applicable law.

27. (a) Every notice demand or other communication under this

Debenture shall be in writing and may be delivered personally or

by letter telex or facsimile transmission dispatched as follows:-

(i) if to the Lender to its address specified at the head of this

Debenture for the attention of: The Managing Director;

ii) if to the Company to its address specified at the head of this

Debenture or its registered or principal offices for the time

being for the attention of: The Managing Director;

or to such other address telex number (or facsimile number) as may

be notified in accordance with this Clause by the relevant party to

the other party for such purpose;

(b) Every notice demand or other communication shall be deemed to

have been received (if sent by post) 48 hours after being posted

39
 postage prepaid (if posted from and to an address within the

Republic of Kenya) or 5 working days after being posted prepaid

airmail (if posted from or to an address outside the Republic of

Kenya) and (if delivered personally or dispatched by telex (subject

to receiving the correct telex answerback) or by facsimile

transmission at the time of delivery or dispatch if during normal

business hours on a working day in the place of intended receipt

and otherwise at the opening of business in that place on the next

succeeding such working day;

(c) The Lender and any Receiver may but shall not be obliged to rely

upon and act in accordance with any communication which may be

or purport to be given by telephone or telex (or facsimile

transmission) on behalf of the Company by any person notified to

the Lender by the Company as being authorised to give such

communication without enquiry as to the authority and identity of

the person making or purporting to make such communication.

The Company shall indemnify and keep the Lender or any

Receiver indemnified on a full indemnity basis against all losses

claims actions proceedings damages costs and expenses incurred or

sustained by the Lender as a result of relying upon or acting in

accordance with any such communication;

40
 (d) All notices demands or other communications under or in

connection with this Debenture shall be in English.

28. (a) This Debenture is freely assignable or transferable by the Lender;

(b) The Company may not assign or transfer any of its obligations

under this Debenture or enter into any transaction which would

result in any of those obligations passing to another person;

(c) The Lender may disclose to any person related to the Lender and or

any person to whom it is proposing to transfer or assign or has

transferred or assigned this Debenture any information about the

Company and any person connected or associated with it. The

Company represents and warrants that it has (and subject to any

contrary requirement of law will maintain) any necessary authority

by or on behalf of any such persons to agree to the provisions of

this clause;

29. (a) If under any applicable law or regulation or pursuant to a

judgment or order being made or registered against the Company

or the liquidation of the Company or without limitation for any

other reason any payment under or in connection with this

Debenture is made or falls to be satisfied in a currency (the

`payment currency') other than the currency in which such

payment is expressed to be due under or in connection with this

41
 Debenture (the `contractual currency') then to the extent that the

amount of such payment actually received by the Lender when

converted into the contractual currency at the rate of exchange falls

short of the amount due under or in connection with this

Debenture the Company as a separate and independent obligation

shall indemnify and hold harmless the Lender against the amount

of such shortfall. For the purposes of this clause `rate of exchange'

means the rate at which the Lender is able on or about the date of

such payment to purchase, in accordance with its normal practice,

the contractual currency with the payment currency and shall take

into account (and the Company shall be liable for) any premium

and other costs of exchange including any taxes or duties incurred

by reason of any such exchange;

30. (a) No delay or omission on the part of the Lender in exercising any

right or remedy under this Debenture shall impair that right or

remedy or operate as or be taken to be a waiver of it nor shall any

single partial or defective exercise of any such right or remedy

preclude any other or further exercise under this Debenture of that

or any other right or remedy;

42
(b) The Lender's rights under this Debenture are cumulative and not

exclusive of any rights provided by law and may be exercised from

time to time and as often as the Lender deems expedient;

(c) Any waiver by the Lender of any terms of this Debenture or any

consent or approval given by the Lender under it shall only be

effective if given in writing and then only for the purpose and upon

the terms and conditions if any on which it is given;

(d) The security constituted by this Debenture shall be in addition to

and shall not be prejudiced determined or affected by nor operate

so as in any way to determine prejudice affect or merge in any

encumbrance which the Lender may now or at any time in the

future hold for or in respect of the liabilities of the Company and

shall not be prejudiced by time or indulgence granted to any

person or any abstention by the Lender in perfecting or enforcing

any remedies securities guarantees or rights it may now or in the

future have from or against the Company or any other person or

any waiver release variation act omission forbearance

unenforceability indulgence or invalidity of any such remedy

security guarantee or right;

43
 (e) Any certificate or determination of the Lender as to any matter

provided for in this Debenture shall in the absence of a manifest

error be conclusive and binding on the Company;

(f) If at any time any one or more of the provisions of this Debenture is

or becomes illegal invalid or unenforceable in any respect under

any law of any jurisdiction neither the legality validity or

enforceability of the remaining provisions of this Debenture nor the

legality validity or enforceability of such provision under the law

of any other jurisdiction shall be in any way affected or impaired as

a result;

(g) This Debenture may be executed in any number of counterparts in

which case this Debenture will be as effective as if all signatures on

the counterparts were on a single copy of this Debenture;

(h) This Debenture is and will remain the property of the Lender.

31. (a) This Debenture is governed by and shall be construed in

accordance with Kenyan Law;

(b) The Company irrevocably agrees for the exclusive benefit of the

Lender that the courts of Kenya shall have jurisdiction to hear and

determine any suit action or proceeding and to settle any dispute

which may arise out of or in connection with this Debenture and

44
 for such purposes irrevocably submit to the jurisdiction of such

courts;

(c) Nothing contained in this clause shall limit the right of the Lender

to take proceedings against the Company in any other court of

competent jurisdiction nor shall the taking of any such proceedings

in one or more jurisdictions preclude the taking of proceedings in

any other jurisdiction whether concurrently or not (unless

precluded by applicable law);

(d) The Company irrevocably waives any objection which it may have

now or in the future to the courts of Kenya being nominated for the

purpose of this clause on the ground of venue or otherwise and

agrees not to claim that any such court is not a convenient or

appropriate forum;

32. (a) References to clauses paragraphs and Schedules are to the clauses

and paragraphs of and Schedules of this Debenture;

(b) Except to the extent the context otherwise requires any reference in

this document to `this Debenture' and any other document referred

to in it includes any document expressed to be supplemental to or

collateral with or which is entered into pursuant to or in

accordance herewith or therewith and shall be deemed to include

45
 any instruments amending varying supplementing novating or

relating the terms of any such documents from time to time;

(c) References to a person are to be construed to include corporations

firms companies partnerships individuals associations states and

administrative and governmental and other entities whether or not

a separate legal entity;

(d) References to any person are to be construed to include references

to that person's successors transferees and assigns whether direct or

indirect;

(e) References to any statutory provision are to be construed as

references to that statutory provision as amended supplemented

re-enacted or replaced from time to time (whether before or after

the date of this Debenture) and are to include any orders

regulations instruments or other subordinated legislation made

under or deriving validity from that statutory provision;

(f) The words `other' and `otherwise' are not to be construed ejusdem

generis with any foregoing words whether a wider construction is

possible;

(g) The words `including' and `in particular' are to be construed as

being by way of illustration or emphasis only and are not to be

46
 construed as, nor shall they have effect as, limiting the generality of

any foregoing words.

IN WITNESS WHEREOF the Company has caused its Common Seal to be

hereunto affixed the day and year first hereinbefore written.

SEALED with the Common Seal of )

PPPPPP LIMITED )

in the presence of:- )

Director )

Director/Secretary )

47