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EXHIBIT 10.79
DATED 14 December 2000
FUTURELINK CORP.
(as the Chargor)
and
FOOTHILL CAPITAL CORPORATION
(in its capacity as Lender)
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SHARE CHARGE
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TABLE OF CONTENTS
CLAUSE PAGE
1. DEFINITIONS AND INTERPRETATION ....................................... 1
2. COVENANT TO PAY ...................................................... 4
3. CHARGING CLAUSE ...................................................... 4
4. DOCUMENTS AND VOTING RIGHTS .......................................... 5
5. NEGATIVE PLEDGE AND OTHER RESTRICTIONS ............................... 7
6. FURTHER ASSURANCE .................................................... 7
7. CONTINUING SECURITY .................................................. 8
8. POWERS OF SALE ....................................................... 9
9. OPENING OF NEW ACCOUNTS .............................................. 9
10. ENFORCEMENT .......................................................... 9
11. POWER OF ATTORNEY .................................................... 10
12. APPLICATION OF MONEY RECEIVED ........................................ 11
13. COSTS AND INTEREST ON OVERDUE AMOUNTS ................................ 11
14. SET-OFF .............................................................. 13
15. TRANSFER ............................................................. 13
16. DISCLOSURE ........................................................... 13
17. FORBEARANCE AND SEVERABILITY ......................................... 14
18. VARIATIONS AND CONSENTS .............................................. 14
19. SERVICE OF DEMANDS AND NOTICES ....................................... 14
20. COUNTERPARTS ......................................................... 15
21. ADJUSTMENT OF ACCOUNT ................................................ 15
22. REPRESENTATIONS AND WARRANTIES ....................................... 16
23. GOVERNING LAW AND SUBMISSION TO JURISDICTION ......................... 17
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24. THIRD PARTIES ........................................................ 18
THE FIRST SCHEDULE ........................................................ 19
Securities ................................................................ 19
THE SECOND SCHEDULE ....................................................... 20
The Chargor ............................................................... 20
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THIS SHARE CHARGE is made the 14 December 2000
BETWEEN:
(1) FUTURELINK CORP., a Delaware corporation incorporated under the laws of
Delaware with its principal place of business at ▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "CHARGOR"); and
(2) FOOTHILL CAPITAL CORPORATION, a Californian corporation with its
principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ West,
Santa ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ as Lender (as defined in
the Loan Agreement referred to below).
WITNESSES as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS: In this Share Charge, words or expressions defined
in the Loan Agreement (as defined below) shall, unless otherwise
defined below, bear the same meaning in this Share Charge and,
in addition, in this Share Charge (unless the context otherwise
requires) the following expressions have the following meanings:
"BUSINESS DAY" means a day on which banks generally are open for
business (other than a day on which banks are only open for
business in Euros) in California (excluding Saturdays, Sundays
and bank or public holidays in those places);
"CHARGED PROPERTY" means all Investments from time to time
charged in favour of, or assigned to, the Lender by or pursuant
to this Share Charge;
"DEFAULT" has the meaning given to it in the Loan Agreement;
"EVENT OF DEFAULT" has the meaning given to it in the Loan
Agreement;
"GROUP" means together the Chargor and its subsidiaries from
time to time and "GROUP Company" means any of such entities;
"INVESTMENTS" means:
(a) the Securities;
(b) all stocks, shares or other securities, rights, monies
or other property (together the "DERIVATIVE ASSETS")
accruing, offered, issued or otherwise derived at any
time by way of bonus, redemption, exchange, purchase,
substitution, conversion, preference, option or
otherwise in respect of any of the Securities or in
respect of any stocks, shares or other securities,
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rights, monies or other property previously accruing,
offered or issued as mentioned in this paragraph (b);
and
(c) all dividends, interest and other distributions paid or
payable in respect of or deriving from any of the
Securities or the Derivative Assets or deriving from any
investment of any such dividends, interest or other
income
provided however that the Investments shall at no time exceed
65% of the entire issued ordinary share capital of KNS Holdings
Limited;
"LENDER" shall have the meaning given to it in the Loan
Agreement and shall include (where the context permits or
requires) any successor, assignee or transferee lender permitted
under the Loan Agreement;
"LIEN" means any lien, mortgage, charge, standard security,
pledge, hypothecation, security trust, assignment by way of
security, or any other security interest whatsoever, howsoever
created or arising or any other agreement or arrangement, having
the commercial effect of conferring security and any agreement
to enter into, create or establish any of the foregoing;
"LOAN AGREEMENT" means the Loan Agreement of even date herewith
between Futurelink Europe Limited as Subsidiary Borrower and the
Lender;
"SUBSIDIARY LOAN DOCUMENTS" has the meaning given to it in the
Loan Agreement;
"PERMITTED LIEN" has the meaning given to it in the Loan
Agreement;
"SECURED SUMS" means all money and liabilities covenanted to be
paid or discharged by the Chargor to the Lender under Clause 2.1
(Covenant to Pay);
"SECURITIES" means the securities described in the First
Schedule and all other stocks, shares or other securities or
investments now or in the future owned at law or in equity by
the Chargor constituting 65% of the issued share capital of KNS
Holdings Limited; and
"UNITED KINGDOM" and "UK" means the United Kingdom of Great
Britain and Northern Ireland.
1.2 INTERPRETATION: In this Share Charge, unless the context
otherwise requires:
(a) words denoting the singular number only shall include
the plural number also and vice versa; words denoting
the masculine gender only shall also include the
feminine gender; words denoting persons only shall
include corporations, partnerships and unincorporated
associations;
(b) references to clauses, paragraphs and Schedules are to
be construed as references to clauses, paragraphs and
Schedules of this Share Charge;
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(c) references to any party shall, where relevant, be deemed
to be references to or to include, as appropriate, their
respective successors or permitted assigns;
(d) references in this Share Charge to this Share Charge or
any other document include references to this Share
Charge or such other document as varied, supplemented,
restated and/or replaced in any manner from time to time
and/or any document which varies, supplements, restates
and/or replaces it;
(e) references to "INCLUDING" and "IN PARTICULAR" shall not
be construed restrictively but shall be construed as
meaning "including, without prejudice to the generality
of the foregoing" and "in particular, but without
prejudice to the generality of the foregoing"
respectively;
(f) references to moneys, obligations and liabilities due,
owing or incurred under the Subsidiary Loan Documents
shall include money, obligations and liabilities due,
owing or incurred in respect of any extensions or
increases in the amount of the facilities provided for
therein or the obligations and liabilities imposed
thereunder;
(g) expressions defined in the Companies ▇▇▇ ▇▇▇▇ shall have
the same meanings in this Share Charge, except that the
expression "COMPANY" shall include a body corporate
established outside Great Britain;
(h) any reference to any statute or any section of any
statute shall be deemed to include reference to any
statutory modification or re-enactment of it for the
time being in force;
(i) the limitation on liability conferred by section 6(2) of
the Law of Property (Miscellaneous Provisions) ▇▇▇ ▇▇▇▇
shall not apply to the covenants for title implied on
the part of the Chargor by its execution and delivery of
this Share Charge;
(j) references to "LAW" shall include any present or future
common law, statute, statutory instrument, treaty,
regulation, directive, order, decree, other legislative
measure, code, circular, notice, demand, or injunction
binding on the persons to whom it is directed to comply;
(k) a "PERSON" includes any person, individual, firm,
company, corporation, government, state or agency of a
state or any undertaking (within the meaning of Section
259(1) of the Companies Act 1985) or other association,
organisation, trust or agency (whether or not having
separate legal personality) or any two or more of the
foregoing;
(l) "WINDING-UP" of any person includes its dissolution
and/or termination and/or any equivalent or analogous
proceedings under the law of any
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jurisdiction in which the person concerned is
incorporated, registered, established or carries on
business or to which that person is subject;
(m) reference to "WRITING" include any telex and facsimile
transmission legibly received, except, unless the Lender
otherwise agrees, in relation to any certificate,
forecast, report, notice, resolution or other document
which is expressly required by this Agreement to be
signed, and "WRITTEN" has corresponding meaning; and
(n) a time of day is a reference to London time, unless
otherwise stated.
1.3 INDEX AND HEADINGS: The index to and the headings in this Share
Charge are inserted for convenience and shall not affect its
interpretation.
2. COVENANT TO PAY
2.1 COVENANT TO PAY: The Chargor hereby covenants that it will, on
demand in writing made to it by the Lender, pay or discharge to
the Lender all money and liabilities now or in the future due,
owing or incurred to the Lender pursuant to the Subsidiary Loan
Documents by the Chargor as and when the same fall due for
payment, whether on or after such demand, whether actually or
contingently, whether solely or jointly with any other person,
whether as principal or surety and whether or not a Lender was
an original party to the relevant transactions, including all
interest accrued thereon and all commission, fees, charges,
costs and expenses which the Lender may in the course of their
business properly charge or incur in respect of the Chargor or
its affairs or for the Lender to enforce its rights hereunder
(to the extent the Lender is entitled to recover the same under
the Subsidiary Loan Documents) and so that interest shall be
computed and compounded in accordance with the Subsidiary Loan
Documents (after as well as before any demand or judgment).
2.2 DEMANDS FROM THE LENDER: The making of one demand under this
Share Charge will not preclude the Lender from making any
further demands.
3. CHARGING CLAUSE
3.1 CHARGING CLAUSE: The Chargor with full title guarantee hereby
charges to the Lender as security for the payment or discharge
of all Secured Sums by way of first fixed charge, all the
Chargor's interest in the Investments.
3.2 PROVISO FOR REDEMPTION: On irrevocable and unconditional payment
and discharge of all the Secured Sums by the Chargor and upon
the Lender being under no further obligation to provide
financial accommodation to the Group pursuant to the Subsidiary
Loan Documents, the Lender will at the request and cost of the
Chargor execute such documents (or procure that its nominees
execute such documents) as the Chargor may reasonably request
which may be required to discharge the security created by this
Share Charge.
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4. DOCUMENTS AND VOTING RIGHTS
4.1 DEPOSIT OF DOCUMENTS: Except as otherwise expressly agreed in
writing by the Lender, the Chargor shall:
(a) upon executing this Share Charge and, in relation to
after acquired Charged Property, within 30 Business Days
of receipt by the Chargor of the relevant documents of
title, deposit with the Lender, and the Lender shall be
entitled to retain all stock and share certificates and
other documents evidencing, or documents of title
relating to, the Charged Property together with stock
transfer forms (or equivalent instruments of transfer),
with the name of the transferee, the consideration and
the date left blank, but otherwise duly completed and
executed by the person in whose name such certificate or
document is, on the basis that the Lender (or its
nominee) shall be entitled to hold such certificates,
documents, power off attorney and stock transfer forms
(or equivalent instruments of transfer) until the
Secured Sums have been irrevocably and unconditionally
discharged in full (in accordance with Clause 3.2
(Proviso for Redemption)) and shall be entitled at any
time to complete (pursuant to its powers in Clause 11
(Power of Attorney)) the stock transfer forms (or
equivalent instruments of transfer) on behalf of the
Lender in favour of itself or such other person as it
shall select; and
(b) execute and deliver to the Lender such documents and
transfers and give such instructions and perform such
other acts as the Lender may reasonably require at any
time to constitute or perfect an equitable or legal
charge (at the Lender's option) over registered
Securities or Derivative Assets or a pledge over bearer
Securities or Derivative Assets, including any
Securities or Derivative Assets which the Chargor elects
to hold in any paperless transfer and settlement system
or held in a clearing system.
4.2 VOTING RIGHTS:
(a) Unless and until a Default or an Event of Default occurs
and is continuing:
(i) all voting and other rights attaching to any
Charged Property shall continue to be exercised
by the Chargor for so long as it remains the
registered owner and the Chargor shall not
permit any person other than itself or a
reputable paperless transfer and settlement or
clearing system, the Lender or the Lender's
nominee to be registered as holder of any
Charged Property; and
(ii) if Securities charged under this Share Charge
are registered in the name of the Lender or its
nominee, all voting and other rights attaching
to them shall be exercised by the Lender or its
nominee
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in accordance with instructions in writing from
time to time received from the Chargor;
provided that the Chargor shall not exercise such voting
rights in a manner which adversely affects the validity
or enforceability of the security created by this Share
Charge or would result in the Lender or its nominee
incurring any cost or expense or being subject to any
liability unless previously indemnified to its
satisfaction.
(b) Unless a Default or an Event of Default occurs and is
continuing, the Chargor shall be entitled to receive and
retain all dividends, distributions and other monies
paid on or derived from the Charged Property.
(c) After a Default or an Event of Default occurs and for so
long as such an Event of Default is continuing, the
Lender shall be entitled to:
(i) receive and retain all dividends, distributions
and other monies paid on the Charged Property;
and
(ii) exercise or direct the exercise of the voting
rights attached to any of the Charged Property
in such manner as it considers fit. The Chargor
shall after such time:
(A) comply, or procure the compliance, with
any directions of the Lender in respect
of the exercise of the voting rights
attached to such Investments; and
(B) if the Lender so requires by notice to
the Chargor, immediately deliver to the
Lender a form of proxy or other
authority (in each case, in such form as
the Lender shall reasonably require)
appointing such person as the Lender
shall select as proxy of the Chargor or,
as the case may be, its nominee or
otherwise enabling such person as the
Lender shall select to exercise such
voting rights as shall be specified
(whether generally or specifically) in
the relevant notice.
4.3 PAYMENT OF COSTS ON SECURITIES: The Chargor shall duly and
promptly pay all costs, instalments or other payments which from
time to time become due in respect of any Charged Property. In
the case of any default by the Chargor in this respect the
Lender may, if it thinks fit, make any such payments on behalf
of the Chargor, in which event any sums so paid shall be
reimbursed on demand by the Chargor to the Lender and until
reimbursed shall bear interest in accordance with Clause 13.3
(Overdue Amounts) and shall be secured on the Charged Property.
4.4 COLLECTION OF DISTRIBUTIONS: At any time following the
registration of the Securities or Derivative Assets in the name
of the Lender or its nominee in accordance with Clause 4.2(a),
the Lender shall not be under any duty to ensure
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that any dividends, distributions or other monies payable in
respect of the Securities or Derivative Assets are duly or
promptly paid or received by it or its nominee, or to verify
that the correct amounts are paid or received, or to take any
action in connection with the taking up of any (or any offer of
any) stocks, shares, rights, monies or other property paid,
distributed, accruing or offered at any time by way of interest,
dividend, redemption, bonus, rights, preference, option, warrant
or otherwise on, or in respect of or in substitution for, any of
the Securities.
4.5 MAINTENANCE OF LEGAL VALIDITY: The Chargor shall obtain, comply
with the terms of and do all that is necessary to maintain in
full force and effect all authorisations, approvals, licences
and consents required in or by the laws and regulations of its
jurisdiction of incorporation and England and Wales to enable it
lawfully to enter into and perform its obligations under this
Share Charge and to ensure the legality, validity,
enforceability or admissibility in evidence in its jurisdiction
of incorporation and England and Wales of this Share Charge.
5. NEGATIVE PLEDGE AND OTHER RESTRICTIONS
The Chargor shall not, without the prior written consent of the Lender
(save as otherwise permitted by any Loan Document):
(a) create, or agree or attempt to create, or permit to arise or
subsist, any lien of any kind (save for Permitted Liens) or any
trust over any of the Charged Property;
(b) sell, transfer, assign or otherwise dispose of any of the
Charged Property or the equity of redemption in respect of the
Charged Property; or
(c) do or cause or permit to be done anything which may in any way
materially depreciate, jeopardise or otherwise materially
prejudice the market value or collateral value of the Charged
Property or the rights of the Lender hereunder.
6. FURTHER ASSURANCE
To the extent required to comply with the Loan Agreement, the Chargor
shall, promptly following demand by the Lender in writing, execute and
deliver to the Lender at the cost of the Chargor and in such form as the
Lender may reasonably require, such other documents as the Lender may
reasonably require to secure the payment of the Secured Sums, or to
perfect or protect this Share Charge or facilitate its realisation or
the exercise of the Lender's rights thereunder, or following a Default
or an Event of Default which is continuing, to vest title to any Charged
Property in itself or its nominee or any purchaser and/or to create a
legal mortgage over the Securities or Derivative Assets and to register
such security or title in any applicable register in each case
consistent with the jurisdiction in which such asset is situate and/or
to facilitate the realisation of this security or the Lender's rights
under this Share Charge.
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7. CONTINUING SECURITY
7.1 CONTINUING SECURITY: This Share Charge shall be a continuing
security, notwithstanding any intermediate payment or settlement
of account or any other matter whatever, and shall be in
addition to and shall not prejudice or be prejudiced by any
right of Lien, set-off or other rights exercisable by the Lender
or the Lender as banker against any Group Company or any Lien,
guarantee, indemnity and/or negotiable instrument now or in the
future held by the Lender. The Lender shall not be bound to
enforce any other Lien before enforcing the security created by
this Share Charge. Section 93 of the Law of Property Act 1925
shall not apply to this Share Charge.
7.2 SUBROGATION: During the continuance of this Share Charge:
(a) any rights of the Chargor, by reason of the performance
of any of its obligations under this Share Charge, the
enforcement of any of the charges contained herein or
any action taken pursuant to any rights of any person
conferred by or pursuant to this Share Charge or by law
(so far as they relate to any of the Charged Property,
the Lender as the person entitled to any of the charges
contained herein, any receiver or any delegate of the
Chargor):
(i) to be indemnified by any person; or
(ii) to prove in respect of any liability in the
winding-up of any person; or
(iii) to take the benefit of or enforce any security
interest or guarantees or to exercise any rights
of contribution,
(all such rights the "SUBROGATION RIGHTS") shall be
exercised and enforced by the Chargor in such manner and
on such terms, and only in such manner and on such
terms, as the Lender may require (and, without
limitation, the Lender shall be entitled to require the
Chargor not to exercise or enforce any Subrogation
Rights);
(b) any amount received by the Chargor as a result of any
exercise of any Subrogation Rights shall be held in
trust for and immediately paid to the Lender;
Provided that no Subrogation Rights shall arise or exist, which
if they did exist would constitute a right to be indemnified by,
to prove in the winding-up of, to take the benefit of any Lien
or guarantee granted by, or to exercise any rights of
contribution against, KNS Holdings Limited, and the Chargor
waives all its entitlement and rights to or in respect of any
such Subrogation Rights.
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8. POWERS OF SALE
8.1 STATUTORY POWER OF SALE TO ARISE ON ENFORCEMENT: Section 103 of
the Law of Property Act 1925 shall not apply to this Share
Charge, but the statutory power of sale (as varied and extended
by this Share Charge) shall (as between the Lender and a
purchaser from the Lender), and the statutory power of
appointing a receiver of the Charged Property (or the income
thereof) shall, arise immediately on the execution of this Share
Charge without the restrictions contained in the Law of Property
▇▇▇ ▇▇▇▇ as to the giving of notice or otherwise. However, the
Lender shall not exercise such powers until the non-payment of
all or part of the Secured Sums following a demand in accordance
with the relevant Loan Document or a receiver has been
appointed, but this provision shall not affect a purchaser or
require him to ask whether a demand or appointment has been
made.
8.2 THIRD PARTIES NOT TO BE CONCERNED WITH VALIDITY OF DEMAND: No
person dealing in good faith and for value with the Lender, its
agents or brokers, shall be concerned to enquire whether this
Share Charge has become enforceable, or whether any power
exercised or purported to be exercised has become exercisable,
or whether any Secured Sums remain due upon this Share Charge or
have been validly demanded, or as to the necessity or expediency
of any stipulations and conditions subject to which the sale of
any Charged Property shall be made, or otherwise as to the
propriety or regularity of the sale of any Charged Property, or
to see to the application of any money paid to the Lender, or
its agents or brokers, and each such dealing shall be deemed to
be within the powers hereby conferred and to be valid and
effective accordingly.
9. OPENING OF NEW ACCOUNTS
9.1 RULING OFF OF ACCOUNTS: On receiving notice that the Chargor has
encumbered or disposed of any of the Charged Property, the
Lender may rule off such Chargor's account or accounts and open
a new account or accounts in the name of the Chargor.
9.2 CREDITS NOT TO REDUCE INDEBTEDNESS OF CHARGOR: If the Lender
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 Chargor to the Lender shall
be treated as having been credited to such new account or
accounts and shall not operate to reduce the amount owing from
the Chargor to the Lender at the time when it received such
notice.
10. ENFORCEMENT
10.1 STATUTORY POWERS: The powers conferred on mortgagees or
receivers by the Law of Property ▇▇▇ ▇▇▇▇ and the Insolvency ▇▇▇
▇▇▇▇ shall apply to the security constituted by this Share
Charge except insofar as they are expressly or impliedly
excluded and where there is ambiguity or conflict between the
powers contained
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in such statutes, in which case those powers contained in this
Share Charge shall prevail.
10.2 LIABILITY OF LENDER: Neither the Lender nor any receiver or
delegate shall be liable to account as mortgagee in possession
or otherwise for any money not actually received by it.
10.3 REDEMPTION OF PRIOR CHARGES: The Lender at any time following
the security constituted by this Share Charge becoming
enforceable may redeem any and all prior Liens on or relating to
the Charged Property or any part thereof or procure the transfer
of such Liens to itself and may settle and pass the accounts of
the person or persons entitled to the prior Liens. Any account
so settled and passed shall be conclusive and binding on the
Chargor.
10.4 RIGHTS OF LENDER: All or any of the rights which are conferred
by this Share Charge (either expressly or impliedly) upon a
receiver may be exercised after the Share Charge becomes
enforceable by the Lender irrespective of whether the Lender
shall have taken possession or appointed a receiver of the
Charged Property.
11. POWER OF ATTORNEY
11.1 POWER OF ATTORNEY: The Chargor by way of security hereby
irrevocably appoints the Lender (whether or not a receiver has
been appointed), and any receiver separately, as the attorney of
the Chargor (with full power to appoint substitutes and to
delegate), in its name and on its behalf, and as its act and
deed or otherwise, at any time during the continuance of a
Default or Event of Default to:
(a) execute and deliver and otherwise perfect any agreement,
assurance, deed, instrument or document; or
(b) perform any act;
which may be required of the Chargor under this Share Charge, or
may be deemed necessary by such attorney, acting reasonably, for
any purpose of this Share Charge or to enhance or perfect the
security intended to be constituted by it or following a Default
or an Event of Default, to convey or transfer legal ownership of
any of the Charged Property (including the completion of the
stock transfer forms referred to in Clause 4.1 (Deposit of
Documents)).
11.2 RATIFICATION: The Chargor undertakes, if so required, to ratify
and confirm all acts done and transactions entered into by any
attorney appointed under Clause 11.1 (Power of Attorney) in the
proper exercise of its powers in accordance with this Share
Charge.
11.3 DELEGATION: The Lender may delegate by power of attorney or in
any other manner all or any of the powers, authorities and
discretions which are for the time being exercisable by the
Lender under this Share Charge to any person or persons
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which it shall think fit and on such terms and conditions as it
shall think fit (including power to sub-delegate) without
liability for any act or omission by such delegate.
12. APPLICATION OF MONEY RECEIVED
12.1 APPLICATION OF RECOVERIES: Any money received under the powers
conferred by this Share Charge shall, subject to the discharge
of any prior-ranking claims, be paid or applied in the following
order of priority:
(a) in satisfaction of all costs, charges and expenses
incurred, and payments made by the Lender in connection
with the exercise of its rights under this Share Charge
(including any costs, charges and expenses incidental to
the appointment of a receiver and the exercise of a
receiver's rights and all remuneration payable to a
receiver or liabilities of a receiver);
(b) in or towards satisfaction of the Secured Sums in the
manner applicable under the Subsidiary Loan Documents;
and
(c) as to the surplus (if any), to the person or persons
entitled to it.
12.2 SUSPENSE ACCOUNT: The Lender may, in its absolute discretion on
or at any time or times pending the payment to the Lender of the
whole of the Secured Sums, place and keep to the credit of a
separate or suspense account, bearing interest, any money
received, recovered or realised by the Lender by virtue of this
Share Charge in such manner as the Lender may determine without
any obligation to apply it in or towards the discharge of any
Secured Sum. That amount may be kept there (with any interest
earned being credited to that account) until the Lender is
satisfied that all the Secured Sums have been discharged in full
and that all facilities which might give rise to Secured Sums
have terminated.
13. COSTS AND INTEREST ON OVERDUE AMOUNTS
13.1 INDEMNITY: All costs, charges and liabilities (including all
properly incurred professional fees and disbursements and value
added tax and/or any similar tax) and all other sums paid or
incurred by the Lender under or in connection with this Share
Charge or the Subsidiary Loan Documents, shall be recoverable
(on a full indemnity basis) as a debt payable on demand from the
Chargor, may be debited following non-payment of such sum(s) by
the Chargor when due, or, if relevant, when demanded, without
notice to any account of the Chargor, shall bear interest in
accordance with the provisions of the Subsidiary Loan Documents
and shall be charged on the Charged Property. The Chargor shall
indemnify the Lender against all properly incurred costs,
charges and expenses arising out of any proceedings referable to
the Chargor brought against the Lender or to which the Lender
may be a party whether as plaintiff or defendant or otherwise
and which relate to any Charged Property. All amounts paid by
the Chargor under this Share Charge shall be paid free and clear
of any deduction or withholding on account of tax or any other
amount (save to the extent required by law) and free of any
set-off or
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counterclaim or otherwise. If the Chargor is required to make
any deduction or withholding by law on any sum paid or payable
by it to the Lender under this Share Charge the sum payable by
the Chargor in respect of which the deduction or withholding is
required shall be increased to the extent necessary to ensure
that the Lender receives on the due date and retains (free of
any liability in respect of such deduction or withholding) a net
sum equal to the sum it would have received and retained had no
such deduction or withholding been required or made.
13.2 TYPES OF COSTS RECOVERABLE: The costs recoverable by the Lender
under this Share Charge shall include:
(a) all costs properly incurred in preparing and
administering this Share Charge or perfecting the
security created by it;
(b) all costs (whether or not allowable on a taxation by the
court) of all proceedings for the enforcement of this
Share Charge or for the recovery or attempted recovery
of the Secured Sums;
(c) all money properly expended and all properly incurred
costs arising out of the exercise of any power, right or
discretion conferred by this Share Charge; and
(d) all costs and losses arising from any default by the
Chargor in the payment when due of any Secured Sums or
the performance of its obligations under this Share
Charge.
13.3 OVERDUE AMOUNTS: Any overdue amounts secured by this Share
Charge shall carry interest at the rate and in accordance with
the terms contained in the Subsidiary Loan Documents in relation
to overdue sums provided under Section 2.6(c) of the Loan
Agreement or at such other rate agreed between the Chargor and
the Lender from time to time. In each case, such interest shall
accrue on a day to day basis to the date of repayment in full
and, if unpaid, shall be compounded on the terms so agreed (or
in the absence of such agreed terms with monthly rests on the
Lender's usual monthly interest days). Interest shall continue
to be charged and compounded on this basis after as well as
before any demand or judgment.
13.4 CURRENCY INDEMNITY:
(a) Moneys received or held by the Lender pursuant to this
Share Charge may, from time to time after demand has
been made, be converted into such currency as the Lender
considers necessary or desirable to discharge the
Secured Sums in that currency at such rate of exchange
as may be applicable under the Loan Agreement or, if
there is none, the prevailing spot rate of exchange of
▇▇▇▇▇ Fargo Bank, N.A. or any successor thereto (as
conclusively determined by the Lender in accordance with
the Loan Agreement) for purchasing the currency to be
acquired with the existing currency.
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(b) No payment to the Lender (whether under any judgment or
court order or otherwise) shall discharge the obligation
or liability in respect of which it was made unless and
until the Lender shall have received payment in full in
the currency in which such obligation or liability was
incurred, and to the extent that the amount of any such
payment shall on actual conversion into such currency
fall short of such obligation or liability expressed in
that currency, the Lender shall have a further separate
cause of action against the Chargor and shall be
entitled to enforce this security to recover the amount
of the shortfall.
To the extent that the amount of any such payment shall on
actual conversion into such currency exceed such obligation or
liability expressed in that currency, the Lender shall repay
that excess to the Chargor.
14. SET-OFF
(a) The Lender may at any time or times during the continuance of a
Default or an Event of Default retain any money standing to the
credit of the Chargor in any currency upon any account or
otherwise (in any country and whether or not in the Chargor's
name) as cover for any Secured Sums and at any time after a
Default or an Event of Default without notice to the Chargor,
and may set off, combine and/or consolidate all or any of such
money with all or such part of the Secured Sums as the Lender
may select (whether presently payable or not), and purchase with
any such money any other currency required to effect such
combination.
(b) The Chargor irrevocably authorises the Lender in its name and at
its expense to perform such acts and sign such documents as may
be required to give effect to any set-off or transfer pursuant
to Clause 14(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) The foregoing provisions of this clause shall be in addition to
and without prejudice to such rights of set off, combination,
consolidation, lien and other rights whatsoever conferred on the
Lender by law.
15. TRANSFER
The Lender may transfer all or any part of its rights in relation to
this Share Charge and the Secured Sums or otherwise grant an interest in
them to any person to which they are entitled to make such a transfer
under the Loan Agreement.
16. DISCLOSURE
The Chargor irrevocably authorises the Lender, at its discretion, at any
time or from time to time, to disclose any information concerning the
Chargor, this Share Charge and the Secured Sums to any prospective
transferee or grantee referred to in Clause 15 (Transfer), subject to
such person undertaking to the Chargor, in manner, form and substance
reasonably satisfactory to such Chargor, to keep such information
confidential. Both
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Lender and any prospective transferee or grantee shall be entitled to
diclose such information to their professional advisers.
The above authority is without prejudice to any obligation of the Lender
to make disclosure imposed by law.
17. FORBEARANCE AND SEVERABILITY
17.1 NO WAIVERS: All rights, powers and privileges under this Share
Charge shall continue in full force and effect, regardless of
the Lender exercising, delaying in exercising or omitting to
exercise any of them.
17.2 INVALIDITY AND SEVERABILITY:
(a) None of the covenants and guarantees given and none of
the charges created by the Chargor under this Share
Charge shall be avoided or invalidated by reason only of
one other or more of such covenants, guarantees or
charges being invalid or unenforceable.
(b) Any provision of this Share Charge which for any reason
is or becomes illegal, invalid or unenforceable shall be
ineffective only to the extent of such illegality,
invalidity and unenforceability, without invalidating
the remaining provisions of this Share Charge or the
effectiveness of any provisions of this Share Charge
under the laws of any jurisdiction.
18. VARIATIONS AND CONSENTS
18.1 VARIATIONS IN WRITING: No variation of this Share Charge shall
be considered valid and as constituting part of this Share
Charge, unless such variation shall have been made in writing
and signed by the Lender and the Chargor.
18.2 VARIATION: The expression "variation" shall include any
variation, supplement, extension, deletion or replacement
however effected.
18.3 CONDITIONAL CONSENTS: Save as otherwise expressly specified in
this Share Charge or the Loan Agreement, any consent of the
Lender may be given absolutely or on any terms and subject to
any conditions as the Lender may determine in its entire
discretion.
19. SERVICE OF DEMANDS AND NOTICES
19.1 NOTICES TO THE CHARGOR: A demand for payment or any other
communication to be given to the Chargor under this Share Charge
may be made or given by any manager or officer of the Lender and
must be in writing addressed to the Chargor served on it at the
address for service of the Chargor stated in the Second
Schedule, or to the address last notified to the Lender by the
Chargor, or by facsimile transmission to the facsimile number
stated in the Second Schedule, or
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to the facsimile number last notified to the Lender by the
Chargor or by any other form of electronic communication which
may be available.
19.2 NOTICES TO LENDER: Any communication to be given to the Lender
under this Share Charge must be given to the Lender in writing
served on it at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ West, Santa
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ (marked for the
attention of Business Finance Division Manager) or by facsimile
to facsimile number 00 1 310 453 7413 or the address or
facsimile number last notified to the Chargor by the Lender in
writing.
19.3 DEEMED SERVICE: A notice or demand shall be deemed to be duly
served on the Chargor:
(a) if delivered by hand, at the time of actual delivery;
(b) if transmitted by facsimile, at the time the facsimile
transmission report (or other appropriate evidence)
confirming that the facsimile has been transmitted to
the addressee is received by the sender; or
(c) if sent by first class prepaid post, at noon on the
third Business Day (or if sent by airmail, the fifth
Business Day) following the day of posting and shall be
effective even if it is misdelivered or returned
undelivered;
provided that, where delivery or transmission occurs after 6.00
pm in the place of delivery on a Business Day or on a day which
is not a Business Day, service shall be deemed to occur at 9.00
am in the place of delivery on the next Business Day.
In proving such service, it shall be sufficient to prove that
personal delivery was made or that the envelope containing the
communication was correctly addressed and posted or that a
facsimile transmission report (or other appropriate evidence)
was obtained that the facsimile had been transmitted to the
addressee.
19.4 SERVICE ON LENDER: Any communication to the Lender shall be
deemed to have been given only on actual receipt by it.
20. COUNTERPARTS
This Share Charge may be executed by the parties in any number of
copies, all of which taken together shall constitute a single Share
Charge.
21. ADJUSTMENT OF ACCOUNT
If the statement of account between the Lender and the Chargor by
reference to which any Secured Sums are calculated for the purposes of
this Share Charge requires adjustment at any time because of any claim
made against the Lender by an officeholder (within the meaning of
Section 234 of the Insolvency Act 1986) then, notwithstanding any other
provision of this Share Charge:
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(a) the Chargor's liability to the Lender will be correspondingly
adjusted;
(b) the Lender may treat any release or settlement made by it with
the Chargor before any such adjustment is required as being of
no effect; and
(c) the Lender may recover from the Chargor such sum as will place
the Lender in the same position as if such release or settlement
had not been made.
If any claim is made against the Lender under any insolvency law with
reference to this Share Charge, the Lender may agree the claim or settle
it on any terms it chooses without asking for the Chargor's agreement.
If the Lender does agree or settle such claim, the Chargor will be
liable under this Share Charge as if a court order had been made
containing the terms which the Lender agreed or settled. The Chargor
will be responsible for all costs and expenses which the Lender properly
incur in defending such a claim.
22. REPRESENTATIONS AND WARRANTIES
22.1 REPRESENTATIONS AND WARRANTIES: The Chargor represents and
warrants to the Lender that:
(a) the Chargor is the sole, absolute and beneficial owner of the
Charged Property, that no person save the Chargor has any right
or interest of any sort whatsoever in or to the Charged Property
and that there are no agreements or arrangements (including any
restrictions on transfer or rights of pre-emption) affecting the
Charged Property which would in any way ▇▇▇▇▇▇ the rights of the
Chargor under this Share Charge;
(b) the Securities are duly authorised, validly issued and fully
paid and there are no monies or liabilities outstanding in
respect of any of the Securities;
(c) the Securities constitute 65% of the entire issued ordinary
share capital of KNS Holdings Limited, and constitute 65% of all
of the shares in KNS Holdings Limited owned legally or
beneficially by the Chargor;
(c) the transfer of the Securities or the charge over the
Securities, each as contemplated by this Share Charge, is not
prohibited by the constitutional documents of the Chargor;
(d) the Chargor is validly incorporated under the laws of the state
of Delaware, USA and has the power and authority to enter into,
perform and deliver this Share Charge and the arrangements
contemplated hereby;
(e) this Share Charge constitutes its legal, valid and binding
obligations, enforceable (subject to the paragraph below) in
accordance with its terms;
(f) in any proceedings taken in its jurisdiction of incorporation in
relation to this Share Charge, the choice of English law as the
governing law of this Share Charge and any judgment obtained in
England will be recognised and enforced;
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(g) the Chargor has not taken any corporate action nor have any
other steps been taken or legal proceedings been started or (to
the best of its knowledge and belief) threatened against it for
its winding-up, dissolution, administration or re-organisation
or for the appointment of a receiver, administrator,
administrative receiver, trustee or similar officer of it or of
any or all of its assets or revenues;
(h) its execution of this Share Charge and exercise of its rights
and performance of its obligations hereunder will not result in
the existence of nor oblige it to create any Lien over all or
any of its present or future revenues or assets otherwise than
as contemplated hereby; and
(i) its execution of this Share Charge constitutes, and its exercise
of its rights and performance of its obligations hereunder will
constitute, private and commercial acts done and performed for
private and commercial purposes.
22.2 TIMES OF MAKING REPRESENTATIONS AND WARRANTIES: The
representations and warranties set out in Clause 22.1
(Representations and Warranties):
(a) will survive the execution of each Loan Document and
each drawdown under the Loan Agreement; and
(b) are made on the date hereof and are deemed to be
repeated in accordance with Section 3.3(a) (Conditions
Precedent to all Extensions of Credit) of the Loan
Agreement with reference to the facts and circumstances
then existing.
23. GOVERNING LAW AND SUBMISSION TO JURISDICTION
23.1 GOVERNING LAW: Any dispute, controversy, proceedings or claim of
whatever nature arising out of or relating to, or breach of,
this Share Charge shall be governed by and this Share Charge
shall be construed in all respects in accordance with English
law.
23.2 SUBMISSION TO JURISDICTION:
(a) The Chargor irrevocably submits for the benefit of the
Lender to the non-exclusive jurisdiction of the courts
of England for the purpose of hearing and determining
any proceedings arising out of this Share Charge.
(b) The Chargor hereby designates, appoints and empowers
FutureLink Europe Limited at The Chestnuts, ▇ ▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, (▇▇ such other
address in England as it may notify to the Lender),
marked for the attention of the company secretary, as
its process service agent to accept service of process
in England in any proceedings, and agrees that failure
by such agent to give notice of such service of process
to the Chargor shall not impair or affect the validity
of such
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service or any judgment based on it. If the appointment
ceases to be effective in respect of the Chargor, the
Chargor shall immediately appoint a further person in
England to accept service of process on its behalf in
England and, if it fails to make such appointment within
15 days, the Lender shall be entitled to appoint such
person by notice to the Chargor.
(c) The Chargor irrevocably agrees not to claim that any
such court is not a convenient or appropriate forum and
agrees that a judgment in proceedings brought in such
courts shall be conclusive and binding upon them and may
be enforced in any other jurisdiction.
23.3 FREEDOM OF CHOICE: The submission to the jurisdiction of the
courts referred to in Clause 23.2 (Submission to Jurisdiction)
shall not (and shall not be construed so as to) limit the right
of the Lender to take proceedings against the Chargor in the
courts of any country in which the Chargor has assets or in any
other court of competent jurisdiction nor shall the taking of
proceedings in any one or more jurisdictions preclude the taking
of proceedings in any other jurisdiction (whether concurrently
or not) if and to the extent permitted by applicable law.
23.4 TRIAL BY JURY: Each of the parties to this Share Charge waives
trial by jury in any proceedings arising out of or related to
this Share Charge whether arising before or at any time after
the date of this Share Charge.
24. THIRD PARTIES
Save as expressly provided herein, a person who is not a party to this
Share Charge has no right under the Contracts (Rights of Third Parties)
▇▇▇ ▇▇▇▇ to enforce or enjoy the benefit of this Share Charge.
THIS SHARE CHARGE has been executed by the Chargor as a Deed and signed by the
Lender but shall only be treated as having been executed and delivered to take
effect on the day and year first above written.
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THE FIRST SCHEDULE
SECURITIES
13,371,428 ordinary shares of nominal value L0.01 each of KNS Holdings Limited
(a company incorporated under the laws of England and Wales and registered with
company number 3471603).
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THE SECOND SCHEDULE
THE CHARGOR
NAME OF CHARGOR CHIEF EXECUTIVE OFFICE ADDRESS FOR SERVICE AND FAX OR TELEX NUMBER
--------------- --------------------------------- -------------------------------------------
Futurelink Corp ▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇: ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ FuturelLink Corp.
▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇ ▇▇▇ ▇▇▇▇
address and fax number
for service in the United Kingdom:
c/o Company Secretary/Chief Financial
Officer
c/o FutureLink Europe Limited
The Chestnuts
▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
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CHARGOR
EXECUTED and DELIVERED as a )
Deed by FUTURELINK CORP. )
(pursuant to a resolution of its board )
of directors) acting by: )
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
(Authorised Officer)
-----------------------------------------
(Authorised Officer)
LENDER
SIGNED by )
for and on behalf of )
FOOTHILL CAPITAL )
CORPORATION as Lender )
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------------
(Authorised Officer)
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