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EXHIBIT 10.77
DATED 14 DECEMBER 2000
FUTURELINK EUROPE LIMITED
AND
KNS HOLDINGS LIMITED
(as the Charging Companies)
and
FOOTHILL CAPITAL CORPORATION
(as Lender)
-------------------------------
DEBENTURE
-------------------------------
XXXXXXX XXXX AND XXXX
Park Gate
00 Xxxxxx Xxxx
Xxxxxx XX00 0XX
Tel: x00 (0)0000 000000
Fax: x00 (0)0000 000000
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TABLE OF CONTENTS
Clause Page
1. DEFINITIONS AND INTERPRETATION 1
2. COVENANT TO PAY 7
3. CHARGING CLAUSE 8
4. TITLE DOCUMENTS AND SECURITIES 12
5. COLLECTION OF RECEIVABLES 14
6. NEGATIVE PLEDGE AND OTHER RESTRICTIONS 14
7. FURTHER ASSURANCE 15
8. CONTINUING SECURITY 16
9. GENERAL COVENANTS 16
10. INSURANCE COVENANTS 17
11. COVENANTS RELATING TO INTELLECTUAL PROPERTY 18
12. PROPERTY COVENANTS AND CONSOLIDATION OF MORTGAGES 19
13. POWERS OF SALE, LEASING AND ACCEPTING SURRENDERS 19
14. OPENING OF NEW ACCOUNTS 20
15. APPOINTMENT AND POWERS OF A RECEIVER 20
16. POWER OF ATTORNEY 24
17. OTHER POWERS EXERCISABLE BY THE LENDER 25
18. APPLICATION OF MONEY RECEIVED BY THE LENDER OR A RECEIVER 25
19. COSTS AND INTEREST ON OVERDUE AMOUNTS 26
20. SET OFF 27
21. TRANSFER 27
22. DISCLOSURE 27
23. PERPETUITY PERIODS 28
24. FORBEARANCE AND SEVERABILITY 28
25. VARIATIONS AND CONSENTS 28
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26. SERVICE OF DEMANDS AND NOTICES 29
27. COUNTERPARTS 29
28. ADJUSTMENT OF ACCOUNT 29
29. PROVISO FOR REDEMPTION AND RELEASES 30
30. SECURITY TRUSTEESHIP 30
31. GOVERNING LAW AND SUBMISSION TO JURISDICTION 30
THE FIRST SCHEDULE
The Charging Companies 32
THE SECOND SCHEDULE
The Properties 33
THE THIRD SCHEDULE
Collection Account Side Letters 34
THE FOURTH SCHEDULE
The Patents and Trade Marks 39
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THIS DEBENTURE made the fourteenth day of December 2000
BETWEEN:
(1) FUTURELINK EUROPE LIMITED a company incorporated under the laws of
England and Wales with registered number 03159433, whose registered
office is at 19th Floor, Tower 42, International Financial Centre, 00
Xxx Xxxxx Xxxxxx, Xxxxxx XX0X 0XX ("FUTURELINK");
(2) KNS HOLDINGS LIMITED a company incorporated under the laws of England
and Wales with registered number 03471603 whose registered office is at
19th Floor, Tower 42, International Financial Centre, 00 Xxx Xxxxx
Xxxxxx, Xxxxxx XX0X 0XX ("KNS") (Details of KNS and FutureLink are set
out in the First Schedule. They are together referred to as the
"CHARGING COMPANIES" and each individually as a "CHARGING COMPANY");
(3) FOOTHILL CAPITAL CORPORATION, a Californian corporation with its
principal place of business at 0000 Xxxxxxxx Xxxxxx, Xxxxx 0000 Xxxx,
Xxxxx Xxxxxx, Xxxxxxxxxx 00000 (the "LENDER");
WITNESSES AS FOLLOWS:
1. DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS: In this Debenture, words or expressions defined in the Loan
Agreement (as defined below) shall, unless otherwise defined below, bear
the same meaning in this Debenture and, in addition, in this Debenture
(unless the context otherwise requires) the following expressions have
the following meanings:
"ACCOUNT DEBTORS" bears the meaning set out in the Loan Agreement;
"ASSETS" means all the undertakings, property, assets, rights and
revenues of the Charging Companies whatsoever, present or future,
wherever situated in the world and includes each or any of them;
"BUSINESS DAY" means any day that is not a Saturday, Sunday or other day
on which banks are generally open for business (other than a day on
which banks are only open for business in Euros) in California];
"CHARGED PROPERTY" means any assets charged, secured or assigned,
whether in law or in equity, to the Lender pursuant to this Debenture;
"COLLECTION ACCOUNT" has the meaning given to it by clause 5.1
(Treatment of Receivables);
"THIS DEBENTURE" means this Guarantee and Debenture;
"DEFAULT RATE" means the rate specified in Clause 2.6(c)(i) of the Loan
Agreement;
"DEFAULT" has the meaning given to it in the Loan Agreement;
"EMPLOYEE LIFE ASSURANCE POLICIES" means all assurance policies relating
to accident or permanent health taken out for the purpose of benefiting
any employee or his dependents to
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the extent that either Charging Company is legally obliged to pay out
the benefit of such policies to the relevant employees or their
dependents;
"EVENT OF DEFAULT" has the meaning given to it in the Loan Agreement;
"FLOATING CHARGE ASSETS" means Assets for the time being comprised
within a floating charge created under Clause 3.2(xiii);
"GROUP" means together the Principal Borrower and its Subsidiaries and
"GROUP COMPANY" means any one or more of them;
"HOLDING COMPANY" means a parent undertaking within the meaning of
Section 258 of the Companies Xxx 0000;
"INDEBTEDNESS" includes any obligation in any currency, whether incurred
as principal of borrower, debtor or surety, for the payment or repayment
of money, whether present or future, actual or contingent;
"INTELLECTUAL PROPERTY RIGHTS" means, in relation to each Charging
Company, all patents and trade marks (including but not limited to the
Patents and Trade Marks), service marks (and all goodwill associated
with them), all rights in passing off, all brand and trade names, all
copyrights (including copyrights in computer software) and rights in the
nature of copyright, semiconductor topography rights, design rights and
registered designs, utility models, all documented trade secrets and
know-how and all other intellectual property rights now or in the future
owned or enjoyed by each Charging Company, including the right to apply
for and all applications for the protection of any such rights in any
part of the world and the benefit of all agreements, licences and
permissions now or in the future entered into or enjoyed by the Charging
Company relating to the use or exploitation of any such rights and
includes each or any of them and "INTELLECTUAL PROPERTY RIGHT" shall be
construed accordingly;
"LAND" includes freehold and leasehold land in England and Wales and
immovable property in Scotland and in each case all buildings and
structures upon and all things affixed or annexed to Land (including
trade and tenants' fixtures);
"LIEN" has the meaning given to it in the Loan Agreement;
"LOAN AGREEMENT" means the loan agreement to be made between, amongst
others, FutureLink as Subsidiary Borrower (as defined therein) and
Foothill Capital Corporation (as lender) (as amended, supplemented
and/or restated from time to time, including in relation to an increase
in the facilities provided thereunder);
"SUBSIDIARY LOAN DOCUMENTS" has the meaning given to it in the Loan
Agreement;
"PATENTS" means the patents and trade marks listed in the Fourth
Schedule;
"PERMITTED LIEN" has the meaning given to it in the Loan Agreement;
"PRINCIPAL" means any Group Company insofar only as it owes money or has
incurred liabilities to the Lender;
"PRINCIPAL BORROWER" means FutureLink Corp., a Delaware corporation;
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"PROPERTIES" means the freehold, leasehold or immovable properties
listed in the Second Schedule
"RECEIVABLES" means all sums of money receivable by either Charging
Company now or in the future consisting of or payable under or derived
from any of its Assets;
"RECEIVER" means any receiver and manager or receivers and managers
appointed under clause 16.1 (Appointment of Receiver) and (where the
context requires or permits) includes any substituted receiver and
manager or receivers and managers;
"SECURED SUMS" means all money and liabilities covenanted and/or
guaranteed to be paid or discharged or indemnified by the Charging
Companies to the Lender under clause 2.1 (Covenant to Pay) or 2.2
(Indemnity);
"SECURITIES" means all stocks, shares, debentures and loan stocks issued
by any company or person and all other investments (whether or not
marketable) now or in the future owned at law or in equity by either
Charging Company, including all interests in investment funds and all
rights and benefits arising and all money payable in respect of any of
them, whether by way of conversion, redemption, bonus, option, dividend,
interest or otherwise, and including all Securities owned by a Charging
Company in any other company and including in particular the 500,002
Ordinary Shares of Foothill owned by KNS representing 100% of the share
capital of Foothill;
"SUBSIDIARY" means a subsidiary undertaking within the meaning of
Section 258 of the Companies Xxx 0000;
"TRADEMARKS" means the trademarks listed in the Fourth Schedule;
"UK GUARANTY" bears the meaning given to it in the Loan Agreement;
"WRITING" includes telex, facsimile transmission and any other mode of
representing or reproducing words in a legible and non-transitory form,
except in relation to any certificate, notice or other document which is
expressly required by this Debenture to be signed, and "WRITTEN" has a
corresponding meaning.
1.2 INTERPRETATION: In this Debenture, unless the context otherwise
requires:
(a) words denoting the singular number only shall also include the
plural number 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 Debenture;
(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 Debenture to this Debenture or any other
document include references to this Debenture 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;
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(e) references to "INCLUDING" shall not be construed restrictively
but shall be construed as meaning "including, without prejudice
to the generality of the foregoing";
(f) references to moneys, obligations and liabilities due, owing or
incurred under the Subsidiary Loan Documents shall include
moneys, 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 Xxx 0000 shall have the
same meanings in this Debenture, except that the expression
"company" shall include a body corporate established outside
Great Britain and except where expressions are defined in this
Debenture or the context otherwise requires;
(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) references to trade marks, patents, service marks or
applications therefor or to brand names and trade names or any
intellectual property rights shall include, where the context
permits, the equivalent in other jurisdictions; and
(j) the limitation on liability conferred by section 6(2) of the Law
of Property (Miscellaneous Provisions) Xxx 0000 shall not apply
to the covenants for title implied on the part of the Charging
Companies.
1.3 HEADINGS: Headings in this Debenture are inserted for convenience and
shall not affect its interpretation.
2. COVENANT TO PAY
2.1 COVENANT TO PAY: Each Charging Company 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 by that Charging Company under or pursuant to the
Subsidiary Loan Documents 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, and whether as
principal, guarantor, surety and whether on any current or other account
or in any manner whatsoever including all interest, commission, fees,
charges, costs and expenses which the Lender may in the course of its
business properly charge or incur in respect of the Charging Company or
its affairs and so that interest shall be computed and compounded to the
date of payment or discharge in accordance with the Subsidiary Loan
Documents or other document under which the liability arises or was
incurred or, if no such rate or rates are specified, at the Default Rate
(after as well as before any demand or judgement).
2.2 INDEMNITY: Each Charging Company further agrees as a separate and
independent primary obligation to indemnify the Lender on demand in
writing made to it by the Lender for and against any loss, cost,
expenses or liability of any kind incurred as a result of any of the
obligations hereby guaranteed by such Charging Company being or becoming
void, unenforceable or ineffective against a Principal for any reason
whatsoever whether known to the Lender or not and for all other amounts
expressed to be guaranteed but which are not recovered from a Charging
Company on the footing of a guarantee for any reason whatsoever.
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2.3 If so directed by the Lender but not otherwise KNS shall claim or prove
in FutureLink's liquidation for the whole or any part of the money due
or owing to KNS from FutureLink under a right to reclaim any sum claimed
against KNS under the UK Guaranty or any other sum due in any manner
whatever and the benefit of such proof and of all money received by KNS
in respect of it shall be held on trust for the Lender and applied in
reduction of the Secured Sums.
2.4 DEMANDS FROM THE LENDER: The making of one demand under this Debenture
will not preclude the Lender from making any further demands. The Lender
may only make a demand under this Debenture for repayment of the Secured
Sums following the occurrence and during the continuance of a Default or
an Event of Default or if otherwise entitled to do so under the Loan
Agreement
2.5 THIRD PARTIES: No demand may be made under this Debenture in respect of
sums due, owing or incurred under the Subsidiary Loan Documents except
to the extent that the Lender has become entitled to make such demand
under the relevant Loan Document, but any third party dealing with the
Lender or any Receiver appointed under this Debenture shall not be
concerned to see or enquire as to the validity of any demand under this
Debenture.
2.6 Subject to any provision to the contrary in the Subsidiary Loan
Documents all sums payable by the Charging Companies under this
Debenture shall be paid without any set off, counterclaim, withholding
or deduction whatsoever unless required by law in which event the
Charging Company making the payment will simultaneously with making the
relevant payment under this Debenture pay to the Lender such additional
amount as will result in the receipt by the Lender of the full amount
which would otherwise have been receivable and will supply the Lender
promptly with evidence satisfactory to the Lender that the Charging
Company has accounted to the relevant authority for the sum withheld or
deducted.
3. CHARGING CLAUSE
3.1 CHARGING CLAUSE: Each Charging Company with full title guarantee (but
subject to any Permitted Liens) hereby charges to the Lender as security
for the payment or discharge of all Secured Sums:
(a) By way of legal mortgage all rights, title, estate and other
interests of such Charging Company in each of the Properties
referred to in the Second Schedule;
(b)
(i) By way of first fixed charge all right title estate and
other interests of such Charging Company in the
Properties not effectively mortgaged under clause
3.1(a);
(ii) by way of first fixed charge, all plant and machinery of
such Charging Company and all related spare parts,
fuels, equipment and tools now or in the future vested
in or held by or on behalf of the Charging Company and
not charged in paragraph (a) and all rights and
interests of such Charging Company under all present and
future agreements for the purchase, maintenance or use
of plant and machinery;
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(iii) by way of first fixed charge, all rental and other
income and all debts and claims now or in the future due
or owing to such Charging Company under or in connection
with any lease, agreement or licence relating to Land;
(iv) by way of first fixed charge, all Securities relating to
any Subsidiary which such Charging Company may from time
to time have and all other Securities belonging to such
Charging Company;
(v) by way of first fixed charge, all contracts and policies
of insurance and assurance (or any interest therein) now
or in the future held by such Charging Company and all
rights and interests of the Charging Company in every
such contract and policy (including the benefit of all
claims arising and all money payable under such
contracts and policies) (but excluding Employee Life
Assurance Policies);
(vi) by way of first fixed charge, all the present and future
goodwill and uncalled capital from time to time of such
Charging Company;
(vii) by way of first fixed charge, all Intellectual Property
Rights of such Charging Company capable of being validly
charged by way of fixed charge and the benefit of any
present or future agreement or licence relating to such
rights;
(viii) by way of first fixed charge, all book and other debts
now or in the future owing to such Charging Company and
all rights and claims of such Charging Company against
third parties, present and future, capable of being
satisfied by the payment of money (except rights and
claims effectively charged under the preceding
provisions of this clause 3.1) with the benefit of any
security or guarantees of any nature whatsoever now or
at any time enjoyed, held or owned by such Charging
Company;
(ix) by way of first fixed charge, the benefit of all
negotiable instruments, guarantees, bonds, debentures,
legal or equitable charges and all other security,
reservation of proprietary rights, rights of tracing,
unpaid vendor's liens and all other rights and remedies
now or in the future available to such Charging Company
whether as security for any Receivable or for the
performance by any third party of any obligation now or
in the future owed to such Charging Company or
otherwise;
(x) by way of first fixed charge, all money at any time
standing to the credit of any Collection Account
relating to such Charging Company, including the
proceeds of all its Receivables, which proceeds shall,
for the avoidance of doubt, on payment into such
Collection Account, cease to be subject to the charges
contained in the preceding provisions of this clause 3.1
but shall be subject to the fixed charge contained in
this paragraph (x);
(xi) by way of first fixed charge, all money at any time
standing to the credit of any realisation account
relating to such Charging Company;
(xii) by way of first fixed charge, all money at any time
standing to the credit of any other bank account
relating to such Charging Company; and
(xiii) by way of first floating charge, all Assets now or in
the future owned by such Charging Company except to the
extent that such Assets are for the time
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being effectively charged by any fixed charge contained
in the preceding provisions of this clause 3.1 or
validly assigned under clause 3.2, including any Assets
comprised within a charge which is reconverted under
clause 3.7 (Decrystallisation of Floating Charge); but
in each case so that such Charging Company shall not
(save if and to the extent permitted by the Loan
Agreement) create any Lien over any Floating Charge
Asset (whether having priority over, or ranking pari
passu with or subject to, this floating charge) or take
any other step referred to in clause 6(a) (Negative
Pledge and other Restrictions) with respect to any
Floating Charge Asset and such Charging Company shall
not, without the prior written consent of the Lender,
sell, transfer, part with or dispose of any Floating
Charge Asset except by way of sale in the ordinary
course of its business or as permitted under the Loan
Agreement.
3.2 ASSIGNMENT OF RIGHTS: Each Charging Company with full title guarantee
hereby assigns by way of security (but subject to any Permitted Liens)
in favour of the Lender (but subject to the right of the Charging
Company to redeem such assignment upon the full payment or discharge of
all Secured Sums):
(a) the benefit to each Charging Company of all rights and claims to
which such Charging Company is now or may in the future become
entitled in relation to the Properties including (but without
limitation) all rights and claims of such Charging 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 the Properties and all guarantors
and sureties for the obligations of any such person;
(b) the benefit to each Charging Company of all guarantees,
warranties and representations given or made by, and any rights
or remedies to which such Charging Company is now or may in the
future be entitled against, all or any professional advisers and
contractors in relation to any of their Properties 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 of the Properties
and any other person now or from time to time under contract
with or under a duty to the Charging Company;
(c) the benefit of all rights and claims to which the Charging
Company is now or in the future entitled under or in respect of
any joint venture, partnership or similar arrangement or
agreement insofar as they are capable of being assigned by way
of security and such assignment does not breach the terms of
such agreement or arrangement; and
(d) the benefit of all rights and claims to which such Charging
Company is now or in the future entitled under or in respect of
any joint venture, partnership or similar arrangement or
agreement insofar as they are capable of being assigned by way
of security and such assignment does not breach the terms of
such agreement or arrangement.
The Charging Companies covenant to join with the Lender in giving notice
of the assignments contained in clause 3.2 to all other relevant parties
and to procure an acknowledgement of such notice from them.
If for any reason the assignment of any of the Assets or bank accounts
under clause 3.2 is found to be ineffective and/or if any sums payable
in respect of such Assets are received by a Charging
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Company, the Charging Company shall hold the benefit of such Assets or
bank accounts with any such sums received by it or held on such bank
account in trust for the Lender and shall account to the Lender for or
otherwise apply all such sums as the Lender may direct and shall
otherwise at its own cost take such action and execute such documents as
the Lender may require.
3.3 CRYSTALLISATION OF FLOATING CHARGE: The floating charge created by each
Charging Company in clause 3.1 (b) (Charging Clause) may be crystallised
into a fixed charge by notice in writing given at any time as regards
any Asset which the Lender may consider to be in jeopardy or which is in
danger of seizure by the Lender to such Charging Company and (whether or
not a Default or on Event of Default has occurred) may at any time
appoint a Receiver thereof.
Such crystallisation shall take effect over such Floating Charge Assets
or class or classes of Floating Charge Assets as shall be specified in
the notice. If no Floating Charge Assets are so specified, it shall take
effect over all Floating Charge Assets of such Charging Company.
3.4 AUTOMATIC CRYSTALLISATION:
(a) Without prejudice to any rule of law which may have a similar
effect, if either Charging Company, without the Lender's prior
written consent, resolves to take or takes any step to charge
(whether by way of fixed or floating charge) or otherwise
creates any Lien (other than any Permitted Lien) over (or to
create a trust over) any of its Floating Charge Assets or to
dispose of any such Floating Charge Assets except by way of sale
or other disposition in the ordinary course of such Charging
Company's business (or as permitted by the Loan Agreement); or
(b) if any person resolves to take or takes any step to levy any
distress, execution, sequestration or other process against any
Floating Charge Asset relating to a liability of such Charging
Company; or
(c) if a Default or Event of Default takes place or if any of the
Secured Sums become due and outstanding prior to their stated
maturity;
then the floating charge created by clause 3.1 (b) (Charging Clause)
shall be automatically crystallised (without the necessity of notice)
into a fixed charge over such Floating Charge Assets instantly on the
occurrence of such event.
3.5 FLOATING CHARGE ASSETS ACQUIRED AFTER CRYSTALLISATION: Except as
otherwise stated in any notice given under clause 3.3 (Crystallisation
of Floating Charge) or unless such notice relates to all Floating Charge
Assets, Floating Charge Assets acquired by either Charging Company after
crystallisation has occurred under clause 3.3 (Crystallisation of
Floating Charge) or 3.4 (Automatic Crystallisation) shall continue to be
subject to the floating charge created by clause 3.1(b) (Charging
Clause), so that the crystallisation shall be effective only as to its
Floating Charge Assets in existence at the date of crystallisation.
3.6 DECRYSTALLISATION OF FLOATING CHARGE: Any charge by either Charging
Company which has crystallised under clause 3.3 (Crystallisation of
Floating Charge) or 3.4 (Automatic Crystallisation) may, by notice in
writing given at any time by the Lender to such Charging Company, be
reconverted into a floating charge in relation to the Assets or class or
classes of Assets specified in such notice.
3.7 PRIORITY OF FIXED SECURITY: Any mortgage, fixed charge or other fixed
security whenever and however created by the Charging Companies and
subsisting in favour of the Lender shall
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(save as the Lender may otherwise declare at or after the time of its
creation) have priority over the floating charge created by clause 3.1
(b)(xiii) (Charging Clause).
3.8 DEBENTURE TO HAVE PRIORITY: Any debentures, mortgages or charges (fixed
or floating) created in the future by either Charging Company (except
those in favour of the Lender) shall be expressed to be subject to this
Debenture and shall rank in order of priority behind the charges created
by this Debenture.
3.9 CONSENTS REQUIRED FOR CHARGES OVER INTELLECTUAL PROPERTY RIGHTS: The
Charging Companies shall use all reasonable endeavours promptly to
obtain any consent required for:
(a) the creation of a fixed charge over any interest in Intellectual
Property Rights material to the business operated by any Group
Company otherwise excluded under clause 3.1 (Charging Clause)
and to produce to the Lender a copy of each consent forthwith
upon receipt thereof; and
(a) the creation of an assignment of its rights and claims under any
joint venture, partnership or similar arrangement or agreement
otherwise excluded under Clause 3.2 (Assignment of Rights).
3.10 CHARGES OVER RECEIVABLES TO INCLUDE INTRA-GROUP RECEIVABLES: It is
hereby agreed, for the avoidance of doubt, that the fixed charges given
by the Charging Companies over their Receivables under clause 3.1
(Charging Clause) shall apply to all Receivables owing to such Charging
Company by any other Group Company.
4 TITLE DOCUMENTS AND SECURITIES
4.1 DEPOSIT OF TITLE DEEDS AND OTHER DOCUMENTS: Except as otherwise
expressly agreed in writing by the Lender, the Charging Companies shall:
(a) deposit with the Lender, and the Lender shall be entitled to
retain, all deeds and documents of title relating to all its
Assets charged by way of fixed charge under clause 3.1 (Charging
Clause) (including policies of insurance and assurance); and
(a) 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 its registered Securities or a pledge over its bearer
Securities.
4.2 SECURITIES:
(a) Unless and until the occurrence of a Default or an Event
of Default and for so long as it is continuing or the
Lender otherwise directs in any case:
(1) all voting and other rights attaching to
Securities charged under this Debenture shall
continue to be exercised by the Charging
Companies for so long as they remain their
registered owner and each Charging Company shall
not permit any person other than such Charging
Company, the Lender or the Lender's nominee to
be registered as holder of any Securities or any
part thereof; and
(2) if Securities of the Charging Company charged
under this Debenture are registered in the name
of the Lender or the Lender's nominee, all
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voting and other rights attaching to them shall
be exercised by the Lender or the Lender's
nominee in accordance with instructions in
writing from time to time received from such
Charging Company,
provided that such Charging Company undertakes not to give any
instructions to exercise any voting or other rights in a way
which might reasonably be expected to prejudice the value of the
Securities or otherwise jeopardise the security created by this
Debenture, and in the absence of any such instructions, the
nominee shall refrain from exercising any such rights.
(b) The Charging Companies shall be entitled to receive and
retain all dividends, distributions and other monies
paid on or derived from the Securities to the extent
permitted by the Loan Agreement.
(c) After a Default or an Event of Default occurs and for so
long as such Default or Event of Default is continuing,
the Lender shall be entitled to:
(1) receive and retain all dividends, distributions
and other monies paid on the Securities to the
extent permitted by the Subsidiary Loan
Documents; and
(2) exercise or direct the exercise of the voting
rights attached to any Securities which comprise
part of the Charged Property in such manner as
it considers fit.
The Charging Companies shall after such time:
(aa) comply, or procure the compliance, with any
directions of the Lender in respect of the
exercise of the voting rights attached to such
Securities; and
(bb) if the Lender so requires by notice to a
Charging Company, 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 such
Charging Company 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: Unless the Lender otherwise agrees, the
Charging Companies shall duly and promptly pay all costs, calls,
instalments or other payments which from time to time become due in
respect of any Securities.
5. COLLECTION OF RECEIVABLES
5.1 TREATMENT OF RECEIVABLES: The Charging Companies shall collect and
realise all Receivables in the ordinary and usual course of its business
on behalf of the Lender and shall request in writing and shall otherwise
take all reasonable steps to ensure that Receivables are paid into such
account or accounts as the Lender may direct from time to time
(together, the "COLLECTION ACCOUNT") all money which they may receive in
respect of the Receivables immediately on receipt. The Charging
Companies shall, pending such payment, hold all money so received upon
trust for the Lender and in accordance with the Lender's instructions
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from time to time. The Charging Companies shall procure that any bank
which maintains a Collection Account shall hold all credit balances
thereon to the order of the Lender. The Charging Companies shall procure
that the authorised signatories of the Collection Account shall at all
times be such persons as Lender shall direct and no other persons shall
have authority to operate the Collection Account.
5.2 PRESERVATION OF CHARGES: The Charging Companies shall procure that each
bank which holds a Collection Account into which it is required to pay
its Receivables shall enter into such collection account agreements as
the Lender may require under the terms of the Loan Agreement and shall
not modify such arrangements without the Lender's prior written consent.
In the event that the Lender does not require a Charging Company to
enter into any specific form of collection account agreement, such
Charging Company shall instead promptly give notice to any bank or
financial institution (other than Lender) with which it holds a
Collection Account in the form set out in the Third Schedule and use all
reasonable endeavours to ensure that the relevant bank or financial
institution acknowledges such notice in the prescribed form.
5.3 PRESERVATION OF CHARGES UPON FACTORING: If Lender releases, waives or
postpones its rights in respect of any Receivables for the purpose of
enabling either Charging Company to factor or discount them to a third
party, the charges created by this Debenture shall in all other respects
remain in full force and effect. In particular, all amounts becoming due
to a Charging Company from the third party and any Receivables
re-assigned, or due to be re-assigned, by the third party to the
relevant Charging Company shall be subject to the relevant fixed charge
created by clause 3.1 (Charging Clause), subject only to any defences or
rights of set-off which the third party may have against such Charging
Company.
5.4 DELIVERY OF PARTICULARS OF RECEIVABLES: The Charging Company shall
deliver to Lender such particulars as to the amount and nature of its
Receivables as Lender may from time to time reasonably require taking
into account the requirements of the Loan Agreement.
6 NEGATIVE PLEDGE AND OTHER RESTRICTIONS
Neither Charging Company shall, without the prior written consent of the
Lender or save as otherwise permitted under the Subsidiary Loan
Documents (and, for the avoidance of doubt, with the exception of any
Permitted Liens):
(a) create, or agree or attempt to create, or permit to subsist, any
Lien of any kind (including any security conferring power to
convert a floating charge into a fixed charge in relation to any
Asset) or any trust over any of its Assets or permit any lien
(other than a lien arising by operation of law in the ordinary
course of its business) to arise or subsist over any such
Assets;
(b) sell, or agree to sell, assign, lease, license or sub-license,
or grant any interest in, or otherwise part with possession of,
dispose of, or cease to control, any of its Charged Property, or
the right to receive or be paid the proceeds arising on disposal
of the same or purport to do any such act (save that, unless
otherwise prohibited by the Loan Agreement, it may deal with its
Floating Charge Assets in the ordinary course of its business)
or allow any third party to do any such thing;
(c) do or cause or permit to be done anything which may in any way
materially depreciate, jeopardise or otherwise prejudice the
market value or collateral value of Securities or the rights of
Lender hereunder in respect of such Securities; or
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(d) dispose of the equity of redemption in respect of any Charged
Property.
7. FURTHER ASSURANCE
To the extent required to comply with the Loan Agreement or any of the
other Subsidiary Loan Documents, the Charging Companies shall, and shall
procure that their Subsidiaries shall, on demand by Lender in writing,
execute and deliver to Lender at the cost of such Charging Company and
in such form as Lender may reasonably require:
(a) a fixed charge over any interest, not capable of being charged
by way of legal mortgage, in any Land now or in the future
belonging to such Charging Company;
(b) a legal assignment or other fixed security over all or any of
its Intellectual Property Rights and a fixed charge over its
Receivables or claims or the accounts into which Receivables
have or are to be paid and, following the occurrence of a
Default or Event of Default which is continuing, unless Lender
otherwise agrees, shall give a legal assignment of its
Receivables and/or give notice to the relevant debtor or account
holding bank in such form as Lender has previously approved;
(c) without prejudice to clause 4.2 (Voting Rights), a legal charge
over all or any of its Securities;
(d) a chattel mortgage over such of its chattels, plant, machinery,
computers and/or other equipment of such Charging Company as
Lender may reasonably specify;
(e) at any time whilst a Default or Event of Default is continuing
or the security over such Floating Charge Assets is in jeopardy
or such Floating Charge Assets are in danger of seizure, a fixed
charge or other fixed security over any of its Floating Charge
Assets;
(f) where any of its Assets (other than land) are situated outside
England and Wales, such fixed security under the law of the
place where the Asset is situated as the Lender may reasonably
require;
(g) a notice to any third party of any of the charges or assignments
contained in this Debenture; and
(h) such other documents as Lender may reasonably require further to
secure the payment of the Secured Sums, or to perfect or protect
this Debenture or facilitate its realisation on the exercise of
the Lender's rights thereunder, or to vest title to any Asset in
itself or its nominee or any purchaser and to register such
security or title in any applicable register, in each case
consistent with the jurisdiction in which such asset is situate
with such legal opinions (if any) as the Lender may reasonably
require from lawyers acceptable to it in relation to such new or
additional charge or other security.
8. CONTINUING SECURITY
This Debenture shall be a continuing security to the Lender,
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, combination or
other rights exercisable by the Lender as bankers against any Group
Company or any Lien, guarantee, indemnity and/or negotiable instrument
now or in the future held by the Lender.
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9. GENERAL COVENANTS
9.1 FutureLink will request in writing and otherwise take reasonable steps
to ensure that all of its Account Debtors forward payment of the amounts
owed by them directly to a Cash Management Bank and will comply with its
other obligations set out in clause 2.7 of the Loan Agreement.
9.2 NOTIFICATION OF ACQUISITION OF ASSETS: The Charging Companies shall at
all times immediately notify the Lender in writing of any acquisition by
either of them of any interest or right in or to any Land or any
Intellectual Property Rights material to the operation of any Group
Company's business.
9.3 NEGATIVE COVENANTS REGARDING RECEIVABLES: Save as permitted by the Loan
Agreement, neither Charging Company shall, without the prior written
consent of the Lender (and other than to offer trade credit in the
ordinary course of its business, charge, factor, assign, postpone,
subordinate, set off, release, compound, settle, cease to collect or
waive its rights of action in connection with any of its Receivables, do
or omit to do anything which is likely materially to delay or prejudice
the full recovery of its Receivables or otherwise deal with its
Receivables save than by collecting in and realising the same (to the
extent required to do so under clause 5.1 (Treatment of Receivables) and
paying the proceeds into the Collection Account.
9.4 NOTIFICATION OF ACQUISITION OF LAND: The Charging Companies covenant
with the Lender to notify the Lender of any agreement proposed or made
by it (whether now subsisting or made hereafter) for the acquisition by
it or any person on its behalf of any Land, or any estate or interest in
any Land;
10. INSURANCE COVENANTS
10.1 COVENANT TO INSURE: FutureLink shall ensure, that its insurance is such
that the insurance covenants contained in clause 6.8 of the Loan
Agreement are complied with.
10.2 INSURANCE POLICIES: Foothill shall effect such insurances in the joint
names of the Lender and the Group Company concerned (or, if that is not
possible or required under the terms of the Loan Agreement, shall cause
the interest of the Lender to be noted on such insurance policies) and
use all reasonable endeavours to ensure that each such insurance policy
contains a mortgagee's protection payee clause in such form as the
Lender (acting reasonably) may require and a loss payee clause (which
shall provide that all moneys payable under such insurance policies
shall be paid to the Lender which shall alone be entitled to give good
discharge or shall otherwise be in such form as the Lender shall
reasonably require).
10.3 PAYMENT OF PREMIUMS: The Charging Companies shall ensure that all
premium and other payments necessary for effecting or maintaining such
insurances are made punctually and promptly after demand (and in any
event within 7 days) produce to the Lender details of the policies and
the receipts for such payments and, if default shall at any time be made
by a Charging Company or Group Company in effecting or maintaining the
insurance required to be maintained under this clause 10 or producing
any such receipt to the Lender promptly after demand or depositing any
policy with the Lender pursuant to clause 4.1 (Deposit of Title Deeds
and other Documents), the Lender may take out or renew such insurances
in such sums and on such terms as the Lender may think expedient and all
money so expended by the Lender shall be recoverable by the Lender under
clause 19 (Costs and Interest on Overdue Amounts).
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10.4 PERMITTED USES AND ACTS: Neither Charging Company shall do or omit or
permit to be done anything which may render any policy of insurance to
be rendered void or voidable.
10.5 INSURANCE BROKER'S UNDERTAKING: The Charging Companies shall use all
reasonable endeavours to procure that each relevant insurer or, at the
Lender option, such Charging Company's or Group Company's insurance
broker, undertakes in writing to the Lender:
(a) that if a Charging Company or Group Company defaults in the
payment of any premium or fails to renew any such insurance, as
soon as such default or non-renewal comes to the insurer's
knowledge, to advise the Lender and (pending receipt of
instructions from the Lender) to keep the Lender's interest in
such insurance in force up to the full sum insured and for the
same risks (subject to the premium for any such period of
extended cover being payable);
(b) to advise the Lender of any proposed termination, expiry,
cancellation or material alteration of any insurance policy at
least 30 days before such cancellation is due to take effect;
(c) that if the insurance cover is to be reduced or any insured
risks are to be restricted, to advise the Lender at least 30
days before such reduction or restriction is due to take effect;
(d) to advise the Lender of any act or omission or any event which
comes to the knowledge of the insurer or the broker (as the case
may be) and which would be reasonably likely to invalidate or
render unenforceable the insurance in whole or in part and to
agree that no breach of any terms of any such insurance or
failure to give notice of an event giving rise to a claim by
such Charging Company or Group Company will invalidate any such
insurance in whole or in part as regards the Lender and the
Lender shall not be liable for any relevant premium (which shall
be for the account of the Charging Company or Group Company
concerned).
10.6 APPLICATION OF INSURANCE PROCEEDS: All moneys received by a Charging
Company, Group Company or the Lender on any policies of insurance
relating to any Charged Property shall be applied in the manner
specified in clause 6.8 of the Loan Agreement and, if any moneys payable
under any policies of insurance are paid to a Charging Company or Group
Company, Charging Company shall procure that such moneys will be held on
trust pending their application for such purposes.
11. COVENANTS RELATING TO INTELLECTUAL PROPERTY
11.1 INTELLECTUAL PROPERTY COVENANTS: The Charging Companies shall, during
the continuance of this security, unless the Lender otherwise agrees in
writing, ensure, so far as it is able, that the covenants in relation to
Intellectual Property Rights contained in the Subsidiary Loan Documents
are complied with and in addition shall:
(a) not assign, transfer, license or agree to licence (other than
any non-exclusive licence granted in the ordinary course of its
business and consistent with its past practice) any Intellectual
Property Right material to the operation of the business of any
Group Company (a "MATERIAL INTELLECTUAL PROPERTY RIGHT") or any
interest therein or permit any third party to use any Material
Intellectual Property Rights except for any licences which are
in existence at the date of this Debenture and have been
assigned to the Lender;
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(b) not alter any specification for which any Material Intellectual
Property Right has been registered or give its consent to the
registration by any third party of any trade xxxx the same as or
confusingly similar to any Material Intellectual Property Right
charged under this Debenture;
(c) where reasonably practicable to do so, diligently commence and
prosecute all proceedings as may be necessary to prevent
infringement or as applicable the continued infringement of all
Material Intellectual Property Rights belonging to such Charging
Company; and
(d) not without the Lender's consent use the Lender's name or join
the Lender to any proceedings relating to the infringement of
any Material Intellectual Property Rights.
11.2 THE LENDER AS AUTHORISED AGENT: The Charging Companies hereby appoint
the Lender as their authorised agent and hereby irrevocably authorises
the Lender:
(a) if such Charging Company shall during the continuance of this
Debenture make default in carrying out any of its obligations
under clause 11.1 (Intellectual Property Covenants), to effect
such filings, registrations, renewals, payments and
notifications at the Trade Marks Registry or Patent Registry or
otherwise as shall be necessary to give effect to clause 11.1
(Intellectual Property Covenants) or carry out such acts or
things at the expense of such Charging Company as shall be
necessary to protect the Lender's interest hereunder or to
protect or maintain the Intellectual Property Rights in question
or any of them; and
(b) to apply for the particulars of this Deed and of the Lender's
interest in the Intellectual Property Rights and any other or
future trade marks or patents or trade xxxx applications or
patent applications or similar Intellectual Property Rights
registered or to be registered in the United Kingdom in the name
of such Charging Company to be made on the Register of Trade
Marks or the Register of Patents or any similar register and
hereby agrees to execute all documents and forms required to
enable such particulars to be entered on such registers.
12. PROPERTY COVENANTS AND CONSOLIDATION OF MORTGAGES
12.1 The Secured Sums shall be deemed for the purpose of all powers implied
by statute to have become due and payable within the meaning of Section
101 of the Law of Property Xxx 0000 immediately on the execution of this
Debenture and Sections 109 (restricting the power to appoint a receiver)
and 93 of the Law of Property Act (restricting the right of
consolidation) shall not apply to this Debenture.
12.2 PARTING WITH POSSESSION: NEITHER Charging Company shall part with
possession (except on the determination of any lease, tenancy or licence
granted to the Charging Company) of any Properties or share the
occupation of them with any other person, or agree to do so, without the
prior written consent of the Lender.
13. POWERS OF SALE, LEASING AND ACCEPTING SURRENDERS
13.1 STATUTORY POWER OF SALE TO ARISE ON ENFORCEMENT: Section 103 of the Law
of Property Act 1925 shall not apply to this Debenture, but the
statutory power of sale (as varied or extended by this Debenture) shall
(as between the Lender and a purchaser from the Lender) arise on, and be
exercisable at any time after, the execution of this Debenture. However,
the Lender shall not exercise such power of sale until the payment of
all or part of the Secured Sums has
19
been demanded, 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.
13.2 The Charging Companies shall neither exercise the powers of leasing or
accepting surrenders or leases conferred upon a mortgagor in possession
by Sections 99 and 100 of the Law of Property Xxx 0000 nor any other
powers of leasing, surrendering or accepting surrenders of leases vested
in a Charging Company nor shall a Charging Company confer on any person
any contractual licence to occupy or any other right or interest in any
of the Properties or grant any licence or consent to assign, underlet or
part with possession or occupation of the whole or any part of them
without the prior written consent of the Lender. In granting its consent
the Lender shall be entitled to require that an order be obtained under
Section 38(4) of the Landlord and Xxxxxx Xxx 0000 (as amended) excluding
the security of tenure provisions of the act as a pre-condition to the
granting of any lease.
13.3 POWER OF THE LENDER TO GRANT LEASES: The statutory powers of sale,
leasing and accepting surrenders under the Law of Property Xxx 0000
exercisable by the Lender by virtue of this Debenture are extended so as
to authorise the Lender (whether in its own name or that of a Charging
Company) to accept any surrenders of any lease or vary the terms of any
lease as the Lender may see fit or to grant a lease or leases of or any
options in respect of any Charged Property vested in a Charging Company
or in which it has an interest, with such rights relating to other such
Charged Property, and containing such covenants on the part of such
Charging Company, and generally on such terms and conditions, as the
Lender shall think fit.
13.4 THE LENDER MAY SEVER FIXTURES: The statutory power of sale exercisable
by the Lender is extended so as to authorise the Lender to sever any
fixtures from the Properties or Land and sell them separately.
13.5 THIRD PARTIES NOT TO BE CONCERNED WITH VALIDITY OF DEMAND: No person
dealing in good faith and for value with the Lender or any Receiver, its
agents or brokers, shall be concerned to enquire whether this Debenture
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 Debenture, or as to the necessity or expediency of any
stipulations and conditions subject to which the sale of any Assets
shall be made, or otherwise as to the propriety or regularity of the
sale of any Asset, or to see to the application of any money paid to the
Lender or such Receiver, 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.
14. OPENING OF NEW ACCOUNTS
14.1 RULING OFF OF ACCOUNTS: On receiving notice that a Charging Company has
encumbered or disposed of any of its Assets (other than as permitted
under the Loan Agreement), the Lender may rule off such Charging
Company's account or accounts and open a new account or accounts with
such Charging Company.
14.2 CREDITS NOT TO REDUCE INDEBTEDNESS OF CHARGING COMPANY: 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 such Charging Company 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 such Charging Company to the Lender at the
time when it received such notice.
15. APPOINTMENT AND POWERS OF A RECEIVER
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15.1 APPOINTMENT OF RECEIVER: At any time:
(a) after the security constituted by this Debenture has become
enforceable; or
(b) if Charging Company so requests in writing at any time; or
(c) after failure by a Charging Company to pay any Secured Sum due
from it on the due date for payment; or
(d) following the occurrence and during the continuance of a Default
or an Event of Default; or (notwithstanding the terms of any
other agreement between a Charging Company and the Lender),
after a proposal has been made for a voluntary arrangement or a
petition has been presented for the compulsory winding up of a
Charging Company or an administration order in relation to a
Charging Company pursuant to Part I or II of the Insolvency Xxx
0000 or any equivalent event occurs under any applicable law; or
(e) if at any time the Lender shall be of the reasonable opinion
that any material part of the Charged Property is in imminent
danger of seizure, distress or other legal process;
the Lender may appoint by writing any person or persons duly qualified
to be receiver, receiver and manager or administrative receiver of all
or any part of the Assets of the relevant Charging Company.
15.2 POWERS OF RECEIVERS (JOINT AND SEVERAL OR SEVERAL): Where more than one
Receiver is appointed, they shall have power to act separately unless
the Lender shall in the appointment specify to the contrary.
15.3 REMUNERATION OF RECEIVERS: The Lender may from time to time determine
the remuneration of the Receiver.
15.4 POWER OF THE LENDER TO REMOVE RECEIVER: The Lender may (subject to
Section 45 of the Insolvency Act 1986) remove the Receiver from all or
any of the Assets of which he is the Receiver.
15.5 FURTHER APPOINTMENT: Such an appointment shall not preclude:
(a) The Lender from making any subsequent appointment of a Receiver
over all or any of the Assets over which a Receiver has not
previously been appointed by the Lender or has been removed or
otherwise ceased to act; or
(b) a Receiver, while continuing to act, consenting to the
appointment of an additional Receiver to act with him.
15.6 STATUS OF RECEIVER: The Receiver of a Charging Company shall be the
agent of that Charging Company (which shall be solely liable for his
acts, defaults and remuneration) unless and until such Charging Company
goes into liquidation, after which he shall act as principal, and shall
not in either case become the agent of the Lender.
15.7 POWERS OF RECEIVER: The Receiver of a Charging Company shall have and be
entitled to exercise in relation to the relevant Charging Company all
the powers set out in the Law of
21
Property Xxx 0000 and Schedule 1 to the Insolvency Xxx 0000 (whether or
not the Receiver is in fact an administrative receiver) and, if the
Receiver is an administrative receiver, in addition to all other powers
exercisable by an administrative receiver by virtue of the Insolvency
Xxx 0000 and, in particular, by way of addition and without limiting
such powers (and without prejudice to the powers of the Lender), the
Receiver shall have power:
(a) to take possession of, collect and get in all or any part of the
Assets of the Charging Company concerned and to take and defend
any proceedings (including proceedings for its winding up or
proceedings by way of arbitration) in its name or otherwise as
he shall think fit;
(b) to comply with and perform all or any of the acts, matters,
omissions or things covenanted to be done or omitted by the
Charging Company concerned under this Debenture;
(c) to sell by public auction or private contract or let all or any
part of the Charged Property and to let on hire lease, surrender
and accept surrenders of leases and tenancies, grant rights,
licences, options or easements or exchange all or any part of,
and otherwise deal with or dispose of and exercise all rights,
powers and discretions incidental to the ownership of, any of
the Charged Property in the name of and on behalf of the
Charging Company concerned or otherwise concur in doing any of
the foregoing in such manner and generally on such terms and
conditions and for such consideration (whether in cash,
debentures or other obligations, shares, stocks, securities or
other valuable consideration and whether payable by a lump sum
or by instalments) as he may think fit and carry out any such
sale by conveying by deed or transferring in the name and on
behalf of the Charging Company concerned or otherwise, and so
that plant machinery and other fixtures and fittings may be
severed and sold separately from the premises containing them,
and the Receiver may apportion any rent and the performance of
any obligations;
(d) to repair, decorate, furnish, maintain, alter, improve, renew or
add to the Charged Property or any part of it as he shall think
fit and effect, maintain, renew or increase indemnity insurance
and other insurances and obtain bonds;
(e) to appoint or dismiss managers, agents, officers, employees,
servants, builders or workmen and employ professional advisers
and others at such salaries or for such remuneration as he may
think fit;
(f) to perform, repudiate, rescind, vary or enter into any
arrangement or compromise any contracts or agreements which he
may consider expedient;
(g) to settle, arrange, compromise and submit to arbitration any
accounts, claims, questions or disputes whatsoever which may
arise in connection with the business of such Charging Company
or any of the Charged Property or in any way relating to the
security 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;
(h) to use the name of such Charging Company in the exercise of all
or any of the powers conferred by this Debenture;
(i) to exercise or permit such Charging Company or any nominee of
the Charging Company to exercise any powers or rights incidental
to the ownership of the Charged
22
Property or any part of it in such manner as he may think fit;
(j) to give valid receipts for all monies and execute all
discharges, assurances and things which may be proper or
desirable for realising the Security Assets or any part of them;
(k) to carry on or concur in carrying on the business of the
Charging Company and raise money or others without security or
on the security of all or any of its Assets;
(l) to sell or concur in selling (where necessary with the leave of
a court), lease or concur in leasing, licence or concur in
licensing, grant options over and, without the need to observe
any of the provisions of Section 99 and 100 of the Law of
Property Xxx 0000, let or concur in letting and to terminate or
to accept surrenders of leases, licences or tenancies of all or
any of the Assets of such Charging Company in such manner and
generally on such terms and conditions as he shall think fit in
his absolute and unfettered discretion and any such sale or
disposition may be for cash, debentures, securities or other
valuable consideration (in each case payable in a lump sum or by
instalments) and to carry any such transactions into effect in
the name of and on behalf of such Charging Company;
(m) to promote the formation of a Subsidiary or Subsidiaries of such
Charging Company with a view to such Subsidiary or Subsidiaries
purchasing, leasing, licensing or otherwise acquiring interests
in all or any of the Assets of such Charging Company on such
terms as the Receiver thinks fit;
(n) to arrange for the purchase, lease, licence or acquisition of
all or any Assets of such Charging Company by any such
Subsidiary on a basis whereby the consideration may be for cash,
shares, debentures, loan stock, convertible loan stock or other
securities, shares of profits or sums calculated by reference to
profits or turnover or royalties or licence fees or otherwise,
whether or not secured on the assets of such Subsidiary and
whether or not such consideration is payable or receivable in a
lump sum or by instalments over such period as the Receiver may
think fit;
(o) to arrange for such Subsidiary or Subsidiaries to trade or cease
to trade as the Receiver may think fit from time to time;
(p) to sever any fixtures from the Properties or Land of which they
form part;
(q) to exercise all voting and other rights attaching to Securities
owned by such Charging Company;
(r) to make any arrangement or compromise with the Lender as he
shall think fit;
(s) to make and effect all repairs, renewals and improvements to the
Assets of such Charging Company and to effect, renew or increase
insurances on such terms and against such risks as he shall
think fit;
(t) to appoint managers, officers and agents for the above purposes
at such salaries as the Receiver may determine;
(u) to call up all or any portion of the uncalled capital of such
Charging Company;
(v) to redeem any prior Lien and to settle and pass the accounts of
the Lien, and any
23
accounts so settled and passed shall (subject to any manifest
error) be conclusive and binding on such Charging Company and
the money so paid shall be deemed an expense properly incurred
by the Receiver;
(w) to pay the proper administrative charges of the Lender in
respect of time spent by their agents and employees in dealing
with matters raised by the Receiver or relating to the
receivership of such Charging Company;
(x) to commence and/or complete any building operations upon any
Land or Properties of such Charging Company and to apply for and
obtain any planning permissions, building regulation consents or
licences in each case as he may in his absolute discretion think
fit;
(y) to vary the terms of the leases of any Land or Properties;
(z) to take all steps necessary to effect all registrations,
renewals, applications and notifications as the Receiver in his
discretion thinks prudent to maintain in force or protect any of
such Charging Company's Intellectual Property Rights; and
(aa) to do all such other acts and things as may be considered by the
Receiver to be incidental or conducive to any of the above
matters or powers or otherwise incidental or conducive to the
preservation, improvement or realisation of any or all of the
relevant Assets.
15.8 THIRD PARTIES: Neither the Lender nor the Receiver shall be liable to
account as mortgagee in possession or otherwise for any money not
actually received by it or him respectively.
16. POWER OF ATTORNEY
16.1 POWER OF ATTORNEY: The Charging Companies by way of security hereby
irrevocably appoint the Lender (whether or not a Receiver has been
appointed) and any Receiver separately the attorney of each Charging
Company (with full power to appoint substitutes and to delegate) for
such Charging Company, 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 such Charging Company under this Debenture, or
may be deemed by such attorney necessary or desirable for any purpose of
this Debenture or to enhance or perfect the security intended to be
constituted by it or to convey or transfer legal ownership of any Assets
or in exercise of all or any powers, authorities and discretions
conferred by or pursuant to this Debenture or by the Law of Property Xxx
0000 on the Lender or any Receiver.
16.2 RATIFICATION: Without prejudice to the generality of the provisions
contained in clause 16.1 (Power of Attorney), the Charging Companies
hereby covenant with the Lender and separately with any Receiver that if
required so to do such Charging Company will ratify and confirm:
24
(a) all transactions entered into by it or (as the case may be) them
at its or (as the case may be) their instance in the proper
exercise of its or (as the case may be) their powers in
accordance with this Debenture; and
(b) all transactions entered into by it or (as the case may be) them
in signing, sealing, delivering and otherwise perfecting any
assignment, mortgage, charge, security, deed, assurance,
document or act as aforesaid;
and the Charging Companies irrevocably acknowledge and agree that such
power of attorney is (inter alia) given to the Lender, or, as the case
may be, the Receiver, or both, to secure the performance of the
obligations owed to him or them by each such Charging Company.
17. OTHER POWERS EXERCISABLE BY THE LENDER
17.1 THE LENDER MAY EXERCISE RECEIVER'S POWERS: All powers of the Receiver
conferred by this Debenture may be exercised by the Lender following
demand by the Lender whether as attorney of a Charging Company or
otherwise and whether or not the Receiver shall have been appointed and
so that clause 15.7(v) (Powers of Receiver) shall be read and construed
as if the words "be charged on the Assets of such Charging Company" were
substituted for the words "be deemed an expense properly incurred by the
Receiver".
17.2 THE LENDER EMPOWERED TO RECEIVE BOOK DEBTS: The Lender or any manager or
officer of the Lender is hereby irrevocably empowered:
(a) to receive all book debts and other debts and claims which may
be assigned to the Lender pursuant to clause 7 (Further
Assurance); and
(b) on payment to give an effectual discharge for them and on
non-payment (whilst a Default or Event of Default is continuing,
at its discretion or otherwise in accordance with the
instructions of the relevant Charging Company) to take and
institute (if the Lender in its sole discretion so decides) all
steps and proceedings either in the name of the relevant
assignor or in the name of the Lender for their recovery and
also to agree accounts and to make allowances and to give time
to any surety. The relevant assignor hereby undertakes to ratify
and confirm whatever the Lender or any manager or officer of the
Lender shall do or purport to do under this clause 17.
17.3 EXCLUSION OF THE LENDER'S LIABILITY: Neither the Lender, nor any of its
agents, managers or officers, shall have any liability or responsibility
to either Charging Company arising out of the exercise or non-exercise
of the rights conferred on it by this clause 17.
17.4 THE LENDER NOT OBLIGED TO TAKE ACTION RELATING TO BOOK DEBTS: The Lender
shall not be obliged to make any enquiry as to the sufficiency of any
sums received by it in respect of any book debts or other debt or claim
so assigned to it or to make any claim or take any other action to
collect in or enforce them.
18. APPLICATION OF MONEY RECEIVED BY THE LENDER OR A RECEIVER
18.1 APPLICATION OF RECOVERIES: Any money received under the powers conferred
by this Debenture shall, subject to the discharge of any prior-ranking
claims but without prejudice to
25
the rights of the Lender to recover any shortfall from a Charging
Company, 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 and/or the Receiver, and of the
remuneration of the Receiver;
(b) in or towards satisfaction of the Secured Sums in the manner
applicable under the Loan Agreement; and
(c) as to the surplus (if any), to the person or persons entitled to
it.
18.2 SUSPENSE ACCOUNT: The Lender may, in its absolute discretion on or at
any time or times after demand and 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 at a commercial rate any
money received, recovered or realised by the Lender by virtue of this
Debenture for so long and in such manner as the Lender may determine
without any intermediate obligation to apply it in or towards the
discharge of any Secured Sum.
19. COSTS AND INTEREST ON OVERDUE AMOUNTS
19.1 INDEMNITY: All costs, charges and liabilities (including all
professional fees and disbursements and value added tax and/or any
similar tax) and all other sums paid or incurred by the Lender and/or
any Receiver under or in connection with this Debenture or the Group
Companies' affairs shall be recoverable (on a full indemnity basis) as a
debt payable on demand from both Charging Companies, may be debited
without notice to any account of either Charging Company, shall bear
interest accordingly and shall be charged on the Assets of both Charging
Companies. The Charging Companies shall indemnify the Lender against all
and any costs, charges and expenses arising:
(a) out of any of the property charged or purported to be charged
pursuant to clause 3 (Charging Clause) or clause 7 (Further
Assurance) referable to it infringing or allegedly infringing
any third party rights; and
(b) in relation to any proceedings referable to a Charging Company
brought against the Lender or to which the Lender may be joined
whether as plaintiff or defendant which relate to any of such
Charged Property.
19.2 TYPES OF COSTS RECOVERABLE: Without prejudice to the generality of
clause 19.1 (Indemnity), the costs recoverable by the Lender and/or any
Receiver under this Debenture shall to the extent the same are
recoverable under the Loan Agreement include:
(a) all costs properly incurred by the Lender in preparing and
administering this Debenture 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 Debenture or for
the recovery or attempted recovery of the Secured Sums;
(c) all money properly expended and all costs arising out of the
exercise of any power, right or discretion conferred by this
Debenture; and
26
(d) all costs and losses arising from any default by a Charging
Company in the payment when due of any Secured Sums or the
performance of its obligations under this Debenture.
19.3 OVERDUE AMOUNTS: Any overdue amounts secured by this Debenture shall
carry interest at the rate and in accordance with the terms contained in
the Loan Agreement in relation to overdue sums or such other rate as may
be agreed between the Charging Companies and the Lender. 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.
19.4 CURRENCY INDEMNITY: Moneys received or held by the Lender pursuant to
this Debenture 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 none, the
then prevailing spot rate of exchange of Xxxxx Fargo Bank, N.A or any
successor thereto (as conclusively determined by the Lender) for
purchasing the currency to be acquired with the existing currency.
20. SET-OFF
(a) The Lender may apply any money standing to the credit of the
Charging Companies with the Lender in any currency upon any
account or otherwise (in any country and whether or not in the
relevant Charging Company's name) in or towards satisfaction of
any Secured Sums at any time after a Default or an Event of
Default has occurred without notice to such Charging Company and
may set off, combine 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 the Lender may
purchase with any such money any other currency required to
effect such combination.
(b) The Charging Companies each irrevocably authorise 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 20(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.
21. TRANSFER
The Lender may at any time transfer all or any part of its rights in
relation to this Debenture and the Secured Sums to any person or
otherwise grant an interest in them to any person.
22. DISCLOSURE
27
The Charging Companies each irrevocably authorise the Lender, at its
discretion, at any time or from time to time, to disclose any
information concerning the Charging Companies, this Debenture and the
Secured Sums:
(a) to any Affiliate of the Lender; and
(b) to any actual or prospective transferee or grantee referred to
in clause 21 (Transfer).
The above authority is without prejudice to any obligation of the Lender
to make disclosure imposed by law.
23. PERPETUITY PERIODS
The perpetuity period applicable to the trusts hereby constituted shall
be 80 years.
24. FORBEARANCE AND SEVERABILITY
24.1 NO WAIVERS: All rights, powers and privileges under this Debenture shall
continue in full force and effect, regardless of the Lender exercising,
delaying in exercising or omitting to exercise any of them.
24.2 INVALIDITY AND SEVERABILITY:
(a) None of the covenants and guarantees given and none of the
charges created by the Charging Companies under this Debenture
shall be avoided or invalidated by reason only of any other of
such covenant or covenants, guarantees or charges being invalid
or unenforceable.
(b) Any provision of this Debenture 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 Debenture.
25. VARIATIONS AND CONSENTS
25.1 VARIATIONS IN WRITING: No variation of this Debenture shall be
considered valid and as constituting part of this Debenture, unless such
variation shall have been made in writing and signed by the Lender and
the Charging Companies.
25.2 VARIATION: The expression "variation" shall include any variation,
supplement, extension, deletion or replacement however effected.
25.3 CONDITIONAL CONSENTS: Save as otherwise expressly specified in this
Debenture 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.
28
26. SERVICE OF DEMANDS AND NOTICES
26.1 NOTICES TO COMPANIES: A demand for payment or any other communication to
be given to a Charging Company under this Debenture may be made or given
by any manager or officer of the Lender and must be in writing addressed
to such Charging Company and served on it at the address for service of
such Charging Company stated in the First Schedule or to the address
last notified to the Lender by the Charging Company or its existing or
last known place of business (or, if more than one, any one of such
places), or by facsimile transmission to the facsimile number stated in
the First Schedule or to the facsimile number last notified to the
Lender by the Charging Company or by any other form of electronic
communication which may be available.
26.2 NOTICES TO LENDER: Any communication to be given to the Lender under
this Debenture must be given to the Lender in writing served on it at
0000 Xxxxxxxx Xxxxxx, Xxxxx 0000 Xxxx, Xxxxx Xxxxxx, Xxxxxxxxxx 00000
(marked for the attention of the Business Finance Division Manager), or
by facsimile to facsimile number 001 310 453 7413 or the address last
notified to either Charging Company by the Lender in writing.
26.3 DEEMED SERVICE: A notice or demand shall be deemed to be duly served on
a Charging Company:
(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; and/or
(c) if sent by first class prepaid post, at noon on the third
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 receipt 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 receipt of delivery on the next Business Day.
In proving such service on the Charging Companies 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.
26.4 SERVICE ON LENDER: Any communication to the Lender shall be deemed to
have been given only on actual receipt by it.
27. COUNTERPARTS
This Debenture may be executed by the parties in any number of copies,
all of which taken together shall constitute a single Debenture.
28. ADJUSTMENT OF ACCOUNT
29
If the state of account between the Lender and a Charging Company by
reference to which any Secured Sums are calculated for the purposes of
this Debenture 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 Debenture:
(a) that Charging Company's liability to the Lender will be
correspondingly adjusted; and
(b) the Lender may treat any release or settlement made by it with
that Charging Company before any such adjustment is required as
being of no effect; and
(c) the Lender may recover from that Charging Company 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 Debenture, the Lender may agree the claim or settle it
on any terms it chooses without asking for the Charging Company's
agreement. If the Lender does agree or settle such claim, the Charging
Company concerned will be liable under this Debenture as if a court
order had been made containing the terms which the Lender agreed or
settled. The relevant Charging Company will be responsible for all costs
and expenses which the Lender properly incurs in defending such a claim.
29. PROVISO FOR REDEMPTION AND RELEASES
Following payment and discharge in full of the Secured Sums to be paid
or discharged by a Charging Company under this Debenture or if a
Charging Company wishes to dispose of an Asset charged by way of fixed
charge under this Debenture where such disposal is permitted under this
Debenture the Lender will, at the request and cost of the Charging
Companies, execute a release and reassignment of all or the relevant
part of the security given by such Charging Company comprised in this
Debenture in such form as the Charging Company may reasonably require.
30. SECURITY TRUSTEESHIP
The Lender shall not have (or be deemed to have) any obligation to, or
trust or fiduciary relationship with, any person other than any for
which specific provision is made in any Relevant Document or the Loan
Agreement.
31. GOVERNING LAW AND SUBMISSION TO JURISDICTION
31.1 GOVERNING LAW: This Debenture shall be governed by and construed in all
respects in accordance with English law.
31.2 SUBMISSION TO JURISDICTION:
(a) The Charging Companies irrevocably submit for the benefit of the
Lender to the non-exclusive jurisdiction of the courts of
England for the purpose of hearing and determining any dispute
arising out of this Debenture.
(b) For the purpose of enforcement of any judgement against its
assets, without prejudice to any other permitted mode of
service, the Charging Companies agree that service of any writ,
notice or other document for the purpose of any proceedings in
such courts
30
shall be duly served upon it if delivered or sent by registered
post to such Charging Company at the address for notices
specified in Clause 26 (Service of Demands and Notices) or such
other address in England or Wales as such Charging Company may
notify from time to time to the Lender.
(c) The Charging Companies irrevocably agree not to claim that any
such court is not a convenient or appropriate forum and agree
that a judgment in proceedings brought in such courts shall be
conclusive and binding upon them and may be enforced in any
other jurisdiction.
31.3 FREEDOM OF CHOICE: The submission to the jurisdiction of the courts
referred to in Clause 31.2 (Submission to Jurisdiction) shall not (and
shall not be construed so as to) limit the right of the Lender to take
proceedings against either Charging Company in the courts of any country
in which such Charging Company 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.
THIS DEBENTURE has been executed by each Charging Company 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.
31
CHARGORS
EXECUTED and DELIVERED as a )
Deed by KNS HOLDINGS LIMITED )
)
(pursuant to a resolution of its Board )
of Directors) acting by: )
Director /s/ XXXXX XXXXXX
Director /s/ YURI PASEA
OR BY ITS ATTORNEY
EXECUTED and DELIVERED as a )
Deed by FUTURELINK EUROPE LIMITED )
(pursuant to a resolution of its Board )
of Directors) acting by: )
Director /s/ XXXXX XXXXXX
Director /s/ YURI PASEA
OR BY ITS ATTORNEY
LENDER
SIGNED by )
for and on behalf of )
FOOTHILL CAPITAL CORPORATION )
/s/ XXXXXXX XXXXX
32
THE FIRST SCHEDULE
THE CHARGING COMPANIES
NAME OF CHARGING COMPANY REGISTERED NUMBER ADDRESS FOR SERVICE AND FAX OR TELEX NUMBER
------------------------ ----------------- -------------------------------------------
KNS HOLDINGS LIMITED 03471603 KNS Holdings Limited
C/o FutureLink Europe Limited
The Chestnuts
0 Xxx Xxxx Xxxx
Xxxxxxx
Xxxxxxxxx XX00 0XX
Fax: 00000 00000
Attention: Company Secretary/Chief
Financial Officer
With copies to:
Xxxx Xxxxxxxx Xxxxxxxx & Xxxxxx
Tower 42
00 Xxx Xxxxx Xxxxxx
Xxxxxx XX0X 0XX
Fax: 0000 000 0000
Re: KNS Holdings Limited
FUTURELINK EUROPE LIMITED 03159433 FutureLink Europe Limited
The Chestnuts
0 Xxx Xxxx Xxxx
Xxxxxxx
Xxxxxxxxx XX00 0XX
Fax: 00000 00000
Attention: Company Secretary/Chief
Financial Officer
With copies to:
Xxxx Xxxxxxxx Xxxxxxxx & Xxxxxx
Tower 42
00 Xxx Xxxxx Xxxxxx
Xxxxxx XX0X 0XX
Fax: 0000 000 0000
Re: FutureLink Europe Limited
33
THE SECOND SCHEDULE
THE PROPERTIES
PREMISES DEMISED BY AND MORE PARTICULARLY DESCRIBED IN AN UNDERLEASE DATED 9
FEBRUARY BETWEEN (1) TARMAC HEAVY BUILDING MATERIALS UK LIMITED, AND (20
KERRIDGE COMPUTER COMPANY LIMITED AND SHORTLY KNOWN AS 0 XXX XXXX XXXX, XXXXXXX
34
THE THIRD SCHEDULE
COLLECTION ACCOUNT SIDE LETTERS
[*FORM OF NOTICE TO BE SERVED BY BOTH OF THE CHARGING COMPANIES TO BANK HOLDING
THE COLLECTION ACCOUNT TOGETHER WITH THE FORM OF ACKNOWLEDGEMENT REQUIRED FROM
THAT BANK*]
To: [ ]
[*branch address*]
For the attention of [ ]
[* date *]
We refer to the debenture (the "DEBENTURE") dated on or around the date of this
notice and made between ourselves (1) and Foothill Capital Corporation (as the
Lender as defined in the Debenture) (2).
We each hereby give you notice that pursuant to the Debenture we, with full
title guarantee, have charged by way of first fixed charge to the Lender all our
rights, title and interest in and to all sums which may at any time be standing
to the credit of the accounts listed in the table below, which were opened by us
in your books and any other accounts which we may open in your books (the
"COLLECTION ACCOUNTS" and each one of them a "COLLECTION ACCOUNT").
COMPANY/ACCOUNT DESCRIPTION COLLECTION ACCOUNT NUMBER BANK SORT CODE
--------------------------- ------------------------- --------------
In connection therewith and by way of security for the Secured Sums (as defined
in the Debenture) we hereby irrevocably and unconditionally instruct and
authorise you (notwithstanding any previous instructions whatsoever which we may
have given you to the contrary):
(a) to disclose to the Lender without any reference to or further authority
from us and without any enquiry by you as to the justification for such
disclosure, such information relating to the Collection Accounts or any
other accounts opened by us in your books (the "ACCOUNTS"), the amount
from time to time standing to the credit thereof and the debts
represented thereby as the Lender may, at any time and from time to
time, request you to disclose to it; and
(b) unless the Lender so authorises you, not to permit withdrawals from the
Collection Accounts and to hold all moneys from time to time standing to
the credit of the Collection Accounts to the order of the Lender and pay
all or any part of those moneys to the Lender (or as it may direct)
promptly following receipt of written instructions from the Lender to
that effect.
35
The arrangements and authorisations contained in this letter may not be modified
without the Lender's consent.
[The Lender by countersigning this letter permits you to debit
outstanding charges due to you by the Charging Company for operation of
the Collection Accounts from the Collection Account.]
This letter shall be governed by and construed in accordance with the laws of
England.
Please confirm your acknowledgement of the terms of this Notice by signing the
acknowledgements set out at the foot of the enclosed duplicate hereof and by
returning the same to legal adviser to the Lender, Xxxxxxx Xxxx and Xxxx, and to
Foothill Capital Corporation at 0000 Xxxxxxxx Xxxxxx, Xxxxx 0000 Xxxx, Xxxxx
Xxxxxx, Xxxxxxxxxx 00000 (marked for the attention of Business Finance Division
Manager).
Signed by: [CHARGING COMPANY]
acting by:
Signed by: FOOTHILL CAPITAL CORPORATION
acting by
36
To: [ ]
For the attention of: [ ]
Foothill Capital Corporation
0000 Xxxxxxxx Xxxxxx,
Xxxxx 0000 Xxxx,
Xxxxx Xxxxxx,
Xxxxxxxxxx 00000
For the attention of: Business Finance Division Manager
We, , hereby acknowledge receipt of a notice of charge from Foothill
Capital Corporation of which the attached is a copy (the "Notice of Charge").
We confirm that:
(a) we accept the instructions and authorisations contained in the
Notice of Assignment;
(b) we have not received notice of any other assignment of or charge
over or other third party right in the book debts and other
monetary debts and claims described or any interest therein and
will notify you if we do receive notice; and
(c) we will hold all moneys standing to the credit of the Collection
Accounts to the order of the Lender and we will not exercise any
right to combine accounts or any rights of set-off, counterclaim
or lien or any similar rights in relation to the moneys standing
to the credit of the Collection Accounts or the other Accounts
(except for the netting of credit and debt balances pursuant to
any current account netting arrangements previously approved in
writing by the Lender).
Signed by
------------------------
for and on behalf of
[name of Account Bank]
37
[TO BE TYPED ON THE HEADED NOTEPAPER OF THE LENDER]
To: The Directors
[Charging Companies]
[Date]
Dear Sirs
COLLECTION ACCOUNT LETTER
We refer to the guarantee and debenture of [date] (the "DEBENTURE") granted by
FutureLink Europe Limited and KNS Holdings Limited (the "CHARGING COMPANIES") to
ourselves as the Lender (as defined in the Debenture).
1. The terms defined in the Debenture shall, where the context so admits,
have the same meanings in this letter.
2. We refer in particular to the following provisions of the Debenture:
(a) by sub-clause 3.1(b)(viii) (Charging Clause), the Charging
Companies created first fixed charges over book and other debts
and monetary claims (present and future);
(b) by sub-clause 3.1(b)(x) and 3.1(b)(xii) (Charging Clause), the
Charging Companies created first fixed charges over any cash
balances standing to the credit of any bank account relating to
each Charging Company, including the proceeds of book debts and
other debts and claims charged pursuant to sub-clause
3.1(b)(viii) (Charging Clause) of the Debenture; and
(c) by sub-clause 5.1 (Treatment of Receivables), the Charging
Companies are required to pay into such account as the Lender
nominates, pursuant to this letter, all debts and claims charged
by it pursuant to the Debenture.
3. In accordance with sub-clause 5.1 (Treatment of Receivables) of the
Debenture, we set out below details of the Charging Companies' operating
account which is to be their Collection Account for the purposes of the
Debenture and hereby require that the Charging Company pays into its
Collection Account all moneys which it may henceforth receive in respect
of Receivables and other debts and claims charged by the Debenture until
further instructed by us to the contrary.
38
COMPANY/ACCOUNT DESCRIPTION COLLECTION ACCOUNT NUMBER BANK SORT CODE
--------------------------- ------------------------- --------------
4. [We confirm that you may continue to operate all bank accounts in the
ordinary course of business without seeking any further consent from us
provided that we shall be entitled to terminate this authority by notice
in writing to you at any time but it is not our present intention to
terminate such authority unless and until a Default or an Event of
Default occurs which is continuing.]
Please sign and return the enclosed copy of this letter to indicate your
agreement to its terms.
Yours faithfully
----------------------------------
For and on behalf of
FOOTHILL CAPITAL CORPORATION
We hereby acknowledge and agree to the foregoing terms of this letter.
----------------------------------
For and on behalf of
FUTURELINK EUROPE LIMITED
Dated:
----------------------------------
For and on behalf of
KNS Holdings Limited
Dated:
39
THE FOURTH SCHEDULE
THE PATENTS AND TRADE MARKS
PATENTS AND PATENT APPLICATIONS
None
TRADE MARKS AND TRADE XXXX APPLICATIONS (IF ANY)
XXXX COUNTRY APPLICATION NO REGISTRATION NO REGISTERED PROPRIETOR
---- ------- -------------- --------------- ---------------------
KNS UK 2202357 FutureLink Europe
Limited
