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EXHIBIT 10.4
THE RIGHTS OF THE SECURED PARTY UNDER THIS SECURITY AGREEMENT SHALL BE
SUBORDINATED TO THE EXTENT AND IN THE MANNER PROVIDED IN THAT CERTAIN PEQUOT
SUBORDINATION AGREEMENT BETWEEN THE SECURED PARTY AND FOOTHILL CAPITAL
CORPORATION, A CALIFORNIA CORPORATION (THE "SUBORDINATION AGREEMENT"). THE
SECURED PARTY AND SUBSEQUENT HOLDER OF THE NOTE (AS DEFINED BELOW), BY
ACCEPTANCE OF THEREOF, ACKNOWLEDGE AND AGREE TO BE BOUND BY THE SUBORDINATION
AGREEMENT.
SECURITY AGREEMENT
SECURITY AGREEMENT dated as of April 20, 2001 ("Security
Agreement"), between FUTURELINK CORP., a Delaware corporation (the "Borrower"),
each of the subsidiaries of the Borrower listed under the caption "SUBSIDIARY
GUARANTORS" on the signature pages hereto (the "Subsidiary Guarantors" and
together with the Borrower, the "Securing Parties") and PEQUOT PRIVATE EQUITY
FUND II, L.P., a Delaware limited partnership (the "Secured Party").
PRELIMINARY STATEMENTS.
1. The Borrower has entered into a Secured Subordinated
Convertible Promissory Note in favor of the Secured Party, dated the date hereof
(as modified and supplemented and in effect from time to time, the "Note"),
which evidences one or more loans to be to be made by the Secured Party to the
Borrower in an aggregate principal amount of up to $5,000,000. Capitalized terms
used in this Security Agreement and not otherwise defined herein shall have the
meanings set forth in the Note.
2. Each Subsidiary Guarantor will receive direct and indirect
benefits by reason of the availability of the loan extended pursuant to the
Note.
3. It is a condition precedent to the obligation of the Secured
Party to enter into the Note and to provide a loan to the Borrower pursuant to
the Note that the Borrower and the Subsidiary Guarantors shall have granted the
security interest contemplated by this Security Agreement.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Secured Party to provide a loan to the Borrower as provided in the
Note, the Securing Parties hereby agree as follows:
SECTION 1. Grant of Security. Each Securing Party hereby grants to
the Secured Party a security interest in and on all of such Securing Party's
right, title and interest in and to all of the following, whether now owned or
hereafter acquired or existing (the "Collateral"):
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(a) The shares of capital stock of the respective corporations
identified on Schedule I hereto under the caption "Issuer" (the "Issuers")
represented by the certificates identified on Schedule I hereto under the name
of such Securing Party and all other shares of capital stock of whatever class
of the Issuers, now or hereafter owned by such Securing Party, in each case
together with the certificates evidencing the same (collectively, the "Pledged
Stock");
(b) All shares, securities, money or property representing a
dividend on any of the Pledged Stock, or representing a distribution or return
of capital upon or in respect of the Pledged Stock, or resulting from a
split-up, revision, reclassification or other like change of the Pledged Stock
or otherwise received in exchange therefor, and any subscription warrants,
rights or options issued to the holders of, or otherwise in respect of, the
Pledged Stock;
(c) Without affecting the obligations of such Securing Party under
any provision prohibiting such action hereunder or under the Note, in the event
of any consolidation or merger in which an Issuer is not the surviving
corporation, all shares of each class of the capital stock of the successor
corporation (unless such successor corporation is such Securing Party itself)
formed by or resulting from such consolidation or merger (the Pledged Stock,
together with all other certificates, shares, securities, properties or moneys
as may from time to time be pledged hereunder pursuant to clause (a) or (b)
above and this clause (c) being herein collectively called the "Stock
Collateral")
(d) Except for the equipment subject to liens set forth on
Schedule 1(d) hereto in an aggregate amount not to exceed $23,000,000 and
Permitted Purchase Money Liens (as defined in Section 4(b)) (for so long as such
lessors and/or lenders set forth on Schedule 1(d) hereto maintain a security
interest in such equipment), all equipment in all of its forms, wherever
located, including, without limitation, all machinery and other goods,
furniture, furnishings, fixtures, office supplies and all other similar types of
tangible personal property and all parts thereof and all accessions thereto,
together with all parts, fittings, special tools, alterations, substitutions,
replacements and accessions thereto (any and all such equipment, parts and
accessions being the "Equipment");
(e) All inventory in all of its forms, wherever located,
including, but not limited to, (i) all raw materials and work in progress,
finished goods, and materials used or consumed in manufacture or production,
(ii) goods in which such Securing Party has an interest in mass or a joint or
other interest or right of any kind (including, without limitation, goods in
which such Securing Party has an interest or right as consignee), and (iii)
goods which are returned to or repossessed by such Securing Party, and all
accessions thereto and products thereof and all documents and documents of title
relating to or covering any of the foregoing or any other assets ("Documents")
(any and all such inventory, accessions, products and Documents being the
"Inventory");
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(f) All accounts, accounts receivable, contract rights, chattel
paper, instruments, acceptances, drafts, and other obligations of any kind,
whether or not arising out of or in connection with the sale or lease of goods
or the rendering of services, together with all ledger sheets, files, records
and documents relating to any of the foregoing, including all computer records,
programs, storage media and computer software useful or required in connection
therewith (the "Receivables"), and all rights now or hereafter existing in and
to all security agreements, leases, and other contracts securing or otherwise
relating to any such Receivables, and any and all such leases, security
agreements and other contracts (the "Related Contracts");
(g) All rights under all contracts or agreements to which such
Securing Party is a party (other than contracts or agreements which by their
terms expressly prohibit the granting of any lien, charge, claim or encumbrance
of any nature whatsoever ("Lien") thereon);
(h) All trademarks, trade names, trade styles, service marks,
prints and labels on which said trademarks, trade names, trade styles and
service marks have appeared or appear, designs and general intangibles of like
nature, now existing or hereafter adopted, all right, title and interest therein
and thereto, and all registrations and recordings thereof, including, without
limitation, applications, registrations and recordings in the United States
Patent and Trademark Office or in any similar office or agency of the United
States, any State thereof, or any other country or any political subdivision
thereof, together with the goodwill associated therewith, and all reissues,
amendments, extensions or renewals thereof and all licenses thereof (the
"Trademarks");
(i) All copyrights, copyrighted works or any item which embodies
such copyrighted work of the United States or any other country, all
applications therefor, all right, title and interest therein and thereto, and
all registrations and recordings thereof, including, without limitation,
applications, registrations and recordings in the United States Copyright Office
or in any similar office or agency of the United States, any State thereof or
any other country or any political subdivision thereof, and all derivative
works, extensions or renewals thereof (the "Copyrights");
(j) All letters patent of the United States or any other country,
and all applications therefor, all right, title and interest therein and
thereto, and all registrations and recordings thereof, including, without
limitation, applications, registrations and recordings in the United States
Patent and Trademark Office or in any similar office or agency of the United
States, any State thereof or any other country or any political subdivision
thereof, and all reissues, continuations, divisionals, continuations-in-part or
extensions thereof and all licenses thereof (the "Patents");
(k) All other tangible and intangible personal property and
fixtures; and
(l) All proceeds of any and all of the foregoing Collateral
(including, without limitation, proceeds which constitute property of the types
described in clauses (a) through (k) of this Section 1) and, to the extent not
otherwise included, all payments under insurance (whether or not the Secured
Party is the loss payee thereof), or any
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indemnity, warranty or guaranty, payable by reason of loss or damage to or
otherwise with respect to any of the foregoing items.
Notwithstanding the foregoing, the Collateral does not and shall
not include any shares of capital stock of or other equity interests in KNS
Holdings Ltd. and FutureLink Europe Limited, each a company organized under the
laws of England and Wales.
SECTION 2. Security for Obligations. The Collateral secures the
prompt and complete payment when due of (i) the outstanding principal and
interest on the Note, (ii) all other obligations of the Borrower under the Note,
and (iii) all obligations of the Borrower to the Secured Party specifically set
forth in this Security Agreement and not obligations under any agreement entered
into prior to the effective date of this Security Agreement (collectively, the
"Secured Obligations").
SECTION 3. The Securing Parties Remain Liable. Anything herein to
the contrary notwithstanding, (a) each Securing Party shall remain liable under
the contracts and agreements included in the Collateral to the extent set forth
therein to perform all of its duties and obligations thereunder to the same
extent as if this Security Agreement had not been executed, (b) the exercise by
the Secured Party of any of the rights hereunder shall not release such Securing
Party from any of its duties or obligations under the contracts and agreements
included in the Collateral, and (c) the Secured Party shall not have any
obligation or liability under the contracts and agreements included in the
Collateral by reason of this Security Agreement, nor shall the Secured Party be
obligated to perform any of the obligations or duties of such Securing Party
thereunder or to take any action to collect or enforce any claim for payment
assigned hereunder.
SECTION 4. Representations and Warranties. Each Securing Party
represents and warrants to the Secured Party as follows:
(a) All of the Equipment and Inventory (i) were acquired in the
ordinary course of business and (ii) are owned by one of the Securing Parties
and located at the places specified on Schedule II hereto. The chief place of
business and chief executive office of each Securing Party and the office where
such Securing Party keeps its records concerning Receivables are located at the
address specified on Schedule II hereto. All originals of all chattel paper
which evidence Receivables shall be delivered to the Secured Party upon
termination of the Senior Indebtedness that is secured by such Receivables. None
of the Receivables is evidenced by a promissory note or other instrument.
(b) Each Securing Party owns the Collateral free and clear of any
Lien, except for the Permitted Liens. As used herein, "Permitted Liens" shall
mean the security interest created by this Security Agreement, the security
interests existing in respect of the Senior Indebtedness, the liens listed on
Schedule 4(b) hereto, liens for unpaid taxes not yet delinquent, interests of
lessors under operating leases, purchase money liens, so long as such lien
attaches only to the asset purchased or acquired and the proceeds thereof and in
an aggregate amount not to exceed $2,000,000 as contemplated by the
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Secured Parties' budget for the next six months from the date of this Security
Agreement, which has been provided to the Secured Party (the "Permitted Purchase
Money Liens"), liens arising by operation of law incurred in the ordinary course
of business and not in connection with the borrowing of money, liens arising
from deposits made in connection with obtaining worker's compensation or other
unemployment insurance, liens or deposits to secure performance of bids,
tenders, or leases incurred in the ordinary course of business and not in
connection with the borrowing of money, liens granted a security for surety or
appeal bonds in connection with obtaining such bonds in the ordinary course of
business, liens resulting from any judgment or award that is not a default and
easements, rights of way and zoning restrictions that do not materially
interfere with or impair the use or operation of the subject property. No
effective financing statement or other instrument similar in effect covering all
or any part of the Collateral is on file in any recording office, except for
financing statements filed with respect to the Permitted Liens.
(c) No Securing Party conducts business under any name or trade
name other than its proper corporate name or FutureLink.
(d) Each Securing Party has exclusive possession and control of
its respective Equipment and Inventory.
(e) All material Related Contracts of each Securing Party are in
full force and effect, and such Securing Party and, to the such Securing Party's
knowledge, the other persons to each such Related Contract have performed in all
material respects their respective obligations under each such Related Contract.
(f) Schedule III sets forth a complete and correct list of all
registered Patents, Trademarks and Copyrights and applications therefor owned by
each Securing Party on the date hereof. Such Securing Party has the right to use
all Patents, Trademarks, and Copyrights and all computer programs and other
rights, free from materially burdensome restrictions, which are necessary for
the operation of its business as presently conducted. There is not pending or
threatened any claim or litigation against or affecting such Securing Party
contesting the validity of any of the Patents, Trademarks or Copyrights or
computer program or other right.
(g) This Security Agreement creates a valid Lien in the
Collateral, securing the payment of the Secured Obligations, and all other
actions necessary or desirable to perfect and protect such security interest as
requested by the Lender have been duly taken.
(h) No authorization, approval or other action by, and no notice
to or filing with, any governmental or regulatory agency or authority is
required (1) for the grant by each Securing Party of the security interest
granted hereby or (2) for the execution, delivery or performance of this
Security Agreement by such Securing Party or (3) other than such filings as may
be required to be made with the United States Patent and Trademark Office,
United States Copyright Office or under the Uniform Commercial Code (the
"Code"), or with the Canadian federal and provincial governmental authorities,
for the perfection of or the exercise by the Secured Party of their respective
rights and
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remedies hereunder.
SECTION 5. Further Assurances.
(a) After the Senior Indebtedness that is secured by the Stock
Collateral either (i) has been paid in full and the commitments to advance loans
thereunder have been terminated or (ii) the pledge of such Stock Collateral has
been released thereunder, each Securing Party shall, if any of the shares,
securities or moneys or property required to be pledged by such Securing Party
under clauses (a), (b) or (c) of Section 1 hereof are received by such Securing
Party, forthwith either (i) transfer and deliver to the Secured Party such
shares or securities so received by such Securing Party (together with the
certificates for such shares and securities duly endorsed in blank or
accompanied by undated stock powers duly executed in blank), all of which
thereafter shall be held by the Secured Party, pursuant to the terms of this
Security Agreement, as part of the Collateral, or (ii) take such other action as
the Secured Party shall deem necessary or appropriate to duly record the Lien
created hereunder in such shares, securities, moneys or property in said clauses
(a), (b) and (c).
(b) Each Securing Party will cause the Stock Collateral to
constitute at all times the percentage of the total number of shares of each
class of capital stock of each Issuer then outstanding as set forth on Schedule
I hereto.
(c) So long as no Default shall have occurred and be continuing,
the Securing Parties shall have the right to exercise all voting, consensual and
other powers of ownership pertaining to the Stock Collateral for all purposes
not inconsistent with the terms of this Security Agreement or the Note.
(d) Unless and until a Default has occurred and is continuing, the
Securing Parties shall be entitled to receive and retain any dividends on the
Stock Collateral paid in cash out of earned surplus.
(e) If any Default shall have occurred and the Senior Indebtedness
that is secured by the Stock Collateral either (i) has been paid in full and the
commitments to advance loans thereunder have been terminated, or (ii) the pledge
of such Stock Collateral has been released thereunder, then so long as such
Default shall continue, all dividends and other distributions on the Stock
Collateral shall be paid directly to the Secured Party to apply to payment of
the Secured Obligations.
(f) Each Securing Party agrees that from time to time, at the
expense of such Securing Party, such Securing Party will promptly execute and
deliver all further instruments and documents, and take all further action, that
may be necessary or desirable, or that the Secured Party may reasonably request,
in order to perfect and protect any security interest granted or purported to be
granted hereby or to enable the Secured Party to exercise and enforce its rights
and remedies hereunder with respect to any Collateral, including, but not
limited to, the filing of any additional financing statements that may be
required by the adoption of Revised Article 9 of the Uniform Commercial Code in
the State of New York. Without limiting the generality of the
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foregoing, such Securing Party will: (1) subject to the termination of the
security interests existing under the Senior Indebtedness that is secured by
Receivables, if any Receivable shall be evidenced by a promissory note or other
instrument or chattel paper, deliver such promissory note or other instrument or
chattel paper to the Secured Party duly endorsed and accompanied by duly
executed instruments of transfer or assignment, all in form and substance
satisfactory to the Secured Party; and (2) execute and file such financing or
continuation statements, or amendments thereto, and such other instruments or
notices, as may be necessary or desirable, or as the Secured Party may request,
in order to perfect and preserve the security interest granted or purported to
be granted hereby.
(g) Each Securing Party hereby authorizes the Secured Party to
file one or more financing or continuation statements, and amendments thereto,
relative to all or any part of the Collateral without the signature of such
Securing Party where permitted by law. A carbon, photographic or other
reproduction of this Security Agreement or any financing statement covering the
Collateral or any part thereof shall be sufficient as a financing statement
where permitted by law.
(h) Each Securing Party will furnish to the Secured Party from
time to time statements and schedules further identifying and describing the
Collateral and such other reports in connection with the Collateral as the
Secured Party may reasonably request, all in reasonable detail.
(i) Subject to any claims under the Senior Indebtedness, each
Securing Party will defend the Collateral against all claims and demands of all
persons (other than the Secured Party) claiming an interest therein. Such
Securing Party will pay promptly when due all property and other taxes,
assessments and governmental charges or levies imposed upon, and all claims
(including claims for labor, materials and supplies) against, the Collateral,
except to the extent where there is a good faith contest to the validity
thereof. In connection with any such good faith contest such Securing Party
will, at the request of the Secured Party, promptly provide a bond, cash deposit
or other security reasonably satisfactory to protect the security interest of
the Secured Party should such good faith contest be unsuccessful.
SECTION 6. As to Equipment, Inventory and Trademarks. Each
Securing Party shall:
(a) Keep the Equipment and Inventory (other than Inventory sold in
the ordinary course of business) at the places therefor specified in Schedule II
hereto or, upon 30 days' prior written notice to the Secured Party, at such
other places in jurisdictions where all action required by Section 5 shall have
been taken with respect to the Equipment and Inventory;
(b) Cause the Equipment necessary for the conduct of its business
to be maintained and preserved in the same condition, repair and working order
as when new, ordinary wear and tear excepted, and shall forthwith, or in the
case of any loss or damage to any of the Equipment as quickly as practicable
after the occurrence thereof, make or cause to be made all repairs,
replacements, and other improvements in connection
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therewith which are necessary or desirable to such end;
(c) Permit the Secured Party or any agent thereof to have access
to the Inventory and Equipment for purposes of inspection during normal business
hours and upon reasonable notice to the Securing Party;
(d) Promptly notify the Secured Party in writing of any material
loss or damage to the Inventory or Equipment;
(e) Not sell, assign, lease, mortgage, transfer or otherwise
dispose of any interest in the Inventory or Equipment, except in the ordinary
course of business;
(f) Not use or permit the Inventory or Equipment to be used for
any unlawful purpose or in violation of any law or for hire;
(g) Not permit the Equipment to become a part of or to be affixed
to any real property of any person;
(h) Advise the Secured Party of all Trademarks, Patents and
Copyrights or applications for or registration of the same, created or obtained
by a Securing Party on or after the date of this Security Agreement; and
(i) Take all reasonable steps to maintain and enforce the
Trademarks, Patents and Copyrights material to the conduct of its business,
including but not limited to (1) payment of all fees, (2) prosecuting infringers
if failure to do so would materially and adversely affect the business of a
Securing Party and (3) diligently pursuing any application or registration
material to the business of a Securing Party.
SECTION 7. Insurance.
(a) The Securing Parties shall, at their own expense, maintain
insurance with respect to the Equipment and Inventory in such amounts, against
such risks, in such form and with such insurers, as shall be reasonably
satisfactory to the Secured Party from time to time.
(b) Reimbursement under any liability insurance maintained by such
Securing Party pursuant to this Section 7 may be paid directly to the person who
shall have incurred liability covered by such insurance. In case of any loss
involving damage to Equipment or Inventory when subsection (c) of this Section 7
is not applicable, such Securing Party shall make or cause to be made the
necessary repairs to or replacements of such Equipment or Inventory, and any
proceeds of insurance maintained by such Securing Party pursuant to this Section
7 shall be paid to such Securing Party as reimbursement for the costs of such
repairs or replacements.
(c) Subject to the terms of the Senior Indebtedness, upon the
occurrence of any Default (as defined in the Note), all insurance payments in
respect of such Equipment or Inventory shall be paid to the Secured Party to be
applied to payment of the amounts due under the Note and hereunder.
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SECTION 8. As to Receivables.
(a) Each Securing Party shall keep the Receivables (except the
originals of all chattel paper which evidences such Receivables, which after the
Senior Indebtedness that is secured by such Receivables is paid in full and the
commitments to advance loans thereunder have been terminated, shall promptly
deliver to the Secured Party) at its chief place of business and chief executive
office and the office where it keeps its records concerning the Receivables, at
the location therefor specified in Schedule II hereto or, upon 30 days' prior
written notice to the Secured Party, at such other locations in a jurisdiction
where all action required by Section 5 shall have been taken with respect to
Receivables. Such Securing Party will hold and preserve such records and will
permit representatives of the Secured Party to inspect and make abstracts from
such records.
(b) Except as otherwise provided in this subsection (b), each
Securing Party shall continue to collect, at its own expense, all amounts due or
to become due to such Securing Party under the Receivables. In connection with
such collections, such Securing Party may take (and, at the discretion of the
Secured Party, shall take) such action as such Securing Party or the Secured
Party may deem necessary or advisable to enforce collection of the Receivables;
provided, however, that the Secured Party shall have the right at any time, upon
the occurrence and during the continuance of a Default upon written notice to
such Securing Party of its intention to do so, to notify the account debtors or
obligors under any Receivables of the assignment of such Receivables to the
Secured Party and to direct such account debtors or obligors to make payment of
all amounts due or to become due to such Securing Party thereunder directly to
the Secured Party and, upon such notification and at the expense of such
Securing Party, to enforce collection of any such Receivables, and to adjust,
settle or compromise the amount or payment thereof, in the same manner and to
the same extent as such Securing Party might have done. After receipt by such
Securing Party of the notice from the Secured Party referred to in the proviso
to the preceding sentence and as long as there is a Default, (1) all amounts and
proceeds (including instruments) received by such Securing Party in respect of
the Receivables shall be received in trust for the benefit of the Secured Party
hereunder, shall be segregated from other funds of such Securing Party and shall
be forthwith paid over to the Secured Party in the same form as so received
(with any necessary endorsement) to be held as cash collateral, or be applied as
provided by Section 13(b), as determined by the Secured Party, and (2) such
Securing Party shall not adjust, settle or compromise the amount or payment of
any Receivable, or release wholly or partly any account debtor or obligor
thereof, or allow any credit or discount thereon, other than any discount
allowed for prompt payment.
SECTION 9. Transfer and Other Liens. Each Securing Party shall
not:
(a) Sell, assign (by operation of law or otherwise) or otherwise
dispose of any of the Collateral, except in the ordinary course of business.
(b) Except for purchase money financing in the ordinary course of
business, create or suffer to exist any Lien upon or with respect to any of the
Collateral to
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secure debt of any person.
SECTION 10. Secured Party Appointed Attorney-in-Fact. Each
Securing Party hereby irrevocably appoints each Secured Party as such Securing
Party's attorney-in-fact, with full authority in the place and stead of such
Securing Party and in the name of such Securing Party, the Secured Party or
otherwise, to, after the occurrence and during the continuance of a Default,
take any action and to execute any instrument which the Secured Party may deem
necessary or advisable to accomplish the purposes of this Security Agreement,
including, without limitation:
(a) to obtain and adjust insurance required to be paid to the
Secured Party pursuant to Section 7;
(b) to ask, demand, collect, xxx for, recover, compromise, receive
and give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral;
(c) to receive, endorse, assign, and collect any and all checks,
notes, drafts and other negotiable and non-negotiable instruments, documents and
chattel paper, in connection with clause (a) or (b) above, and such Securing
Party waives notice of presentment, protest and non-payment of any instrument,
document or chattel paper so endorsed or assigned;
(d) to file any claims or take any action or institute any
proceedings which the Secured Party may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of the
Secured Party with respect to any of the Collateral; and
(e) to sell, transfer, assign or otherwise deal in or with the
Collateral or the proceeds or avails thereof, as fully and effectually as if the
Secured Party were the absolute owner thereof.
Each Securing Party hereby ratifies and approves all acts, other
than those which result from the Secured Party's gross negligence or willful
misconduct, of the Secured Party, as its attorney in-fact, pursuant to this
Section 10; and the Secured Party, as its attorney in-fact, will not be liable
for any acts of commission or omission, nor for any error of judgment or mistake
of fact or law other than those which result from the Secured Party's gross
negligence or willful misconduct. This power, being coupled with an interest, is
irrevocable so long as this Security Agreement remains in effect.
Each Securing Party also authorizes the Secured Party, at any time
and from time to time, after the occurrence and during the continuance of a
Default, to communicate in its own name with any party to any contract,
agreement or instrument included in the Collateral with regard to the assignment
of such contract, agreement or instrument and other matters relating thereto.
SECTION 11. Secured Party May Perform. If a Securing Party fails
to perform any agreement contained herein, the Secured Party may itself perform,
or cause
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performance of, such agreement, and the expenses of the Secured Party incurred
in connection therewith shall be payable by the such Securing Party under
Section 14(b).
SECTION 12. The Secured Party's Duties. The powers conferred on
the Secured Party hereunder are solely to protect their interest in the
Collateral and shall not impose any duty upon them to exercise any such powers.
Except for the safe custody of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the Secured Party shall
not have any duty as to any Collateral or as to the taking of any necessary
steps to preserve rights against prior parties or any other rights pertaining to
any Collateral.
SECTION 13. Remedies. If any Default shall have occurred, then
during the continuance of such Default:
(a) The Secured Party may exercise in respect of the Collateral,
in addition to other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party on default under
the Code (whether or not the Code applies to the affected Collateral) and also
may (i) require each Securing Party to, and such Securing Party hereby agrees
that it will at its expense and upon the request of the Secured Party forthwith,
assemble all or part of the Collateral as directed by the Secured Party and make
it available to the Secured Party at a place to be designated by the Secured
Party which is reasonably convenient to both parties and (ii) to enter the
premises where any of the Collateral is located and take and carry away the
same, by any of its representatives, with or without legal process, to Secured
Party's place of storage, and (iii) without notice except as specified below,
sell the Collateral or any part thereof in one or more parcels at public or
private sale, at any of the Secured Party's offices or elsewhere, for cash, on
credit or for future delivery and upon such other terms as the Secured Party may
deem commercially reasonable. Each Securing Party agrees that, to the extent
notice of sale shall be required by law, at least five (5) days' notice to such
Securing Party of the time and place of any public or private sale is to be made
shall constitute reasonable notification. The Secured Party shall not be
obligated to make any sale of Collateral regardless of notice of sale having
been given. The Secured Party may adjourn any public or private sale from time
to time by announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place it was so adjourned.
(b) All cash proceeds received by the Secured Party in respect of
any sale of, collection from, or other realization upon all or any part of the
Collateral may, in the discretion of the Secured Party, be held by the Secured
Party as collateral for, and/or then or at any time thereafter applied (after
payment of any amounts payable to the Secured Party pursuant to Section 14) in
whole or in part by the Secured Party against, all or any part of Secured
Obligations in such order as the Secured Party shall elect. Any surplus of such
cash or cash proceeds held by the Secured Party and remaining after payment in
full of all the Secured Obligations to the Secured Party shall be paid over to
the respective Securing Party. If the proceeds of the sale of the Collateral are
insufficient to pay all of the Secured Obligations each Securing Party agrees to
pay upon demand any deficiency to the Secured Party.
11
12
SECTION 14. Indemnity and Expenses.
(a) Each Securing Party agrees to indemnify the Secured Party from
and against any and all claims, losses and liabilities arising out of or
resulting from this Security Agreement (including, without limitation,
enforcement of this Security Agreement), except claims, losses or liabilities
resulting from the Secured Party's gross negligence or willful misconduct.
(b) Each Securing Party will upon demand pay to the Secured Party
the amount of any and all expenses, including the reasonable fees and out of
pocket disbursements of its counsel and of any experts and agents, which the
Secured Party may incur in connection with (1) filing or recording fees incurred
in connection with this Security Agreement, (2) the custody, preservation, use
or operation of, or the sale of, collection from, or other realization upon, any
of the Collateral, (3) the exercise or enforcement of any of the rights of the
Secured Party, or (4) the failure by such Securing Party to perform or observe
any of the provisions hereof. The Secured Party shall not be liable to such
Securing Party for damages as a result of delays, temporary withdrawals of the
Equipment from service or other causes other than those caused by the Secured
Party's gross negligence or willful misconduct.
SECTION 15. Amendments; Etc. No amendment or waiver of any
provision of this Security Agreement nor consent to any departure by the
Securing Parties herefrom shall in any event be effective unless the same shall
be in writing and signed by the Secured Party, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given.
SECTION 16. Notices. All notices and other communications required
or permitted hereunder shall be in writing and shall be (i) mailed by registered
or certified mail, postage prepaid, (ii) delivered by reliable overnight courier
service, or (iii) otherwise delivered by hand or by messenger, addressed (A) if
to the Secured Party, to Pequot Capital Management, Inc., 000 Xxxxx Xxxx Xxxx,
Xxxxxxxx, Xxxxxxxxxxx 00000, Attention: Xxxxx Xxxxxx and Xxxxx Xxxxxx, or at
such other address as any Secured Party shall have furnished to the Securing
Parties in writing, or (B) if to a Securing Party, to FutureLink Corp., 0 Xxxxx
Xxxxxx Xxxxx, Xxxx Xxxxxx, Xxxxxxxxxx 00000, Attention: Chief Financial Officer
and General Counsel, or at such other address as such Securing Party shall have
furnished to the Secured Party in writing. All such notices and communications
shall be effective upon receipt.
SECTION 17. Continuing Security Interest; Transfer of Notes. This
Security Agreement shall create a continuing security interest in the Collateral
and shall (1) remain in full force and effect until payment in full of the
Secured Obligations, (2) be binding upon each Securing Party and its successors
and assigns, and (3) inure to the benefit of the Secured Party and its
respective successors, transferees and assigns. Without limiting the generality
of the foregoing clause (3), a Secured Party may assign or otherwise transfer
all or a portion of its rights and obligations under the Note to any other
person in accordance with the terms thereof, and such other person shall
thereupon become vested with all the benefits in respect thereof granted to the
Secured Party herein
12
13
or otherwise. Upon the payment in full of the Secured Obligation, the security
interest granted hereby shall terminate and all rights to the Collateral shall
revert to the Securing Parties. Upon any such termination, the Secured Party
will, at the Securing Parties' request, execute and deliver to the Securing
Parties such Uniform Commercial Code termination statements and such other
documentation as the Securing Parties shall reasonably request to effect the
termination and release of the Liens on the Collateral.
SECTION 18. Subordination. Notwithstanding anything to the
contrary in this Security Agreement and in the Note, the indebtedness evidenced
by the Note, and all rights of the Secured Party hereunder, shall be subordinate
to the rights of the Senior Indebtedness.
SECTION 19. Governing Law; Terms. This Security Agreement shall be
governed by and construed in accordance with the laws of the State of New York,
except to the extent that the validity or perfection of the security interest
hereunder, or remedies hereunder, in respect of any particular Collateral are
governed by the laws of a jurisdiction other than the State of New York. Unless
otherwise defined herein or in the Note, terms used in Article 9 of the Uniform
Commercial Code in the State of New York are used herein as therein defined.
SECTION 20. Miscellaneous. This Security Agreement is in addition
to and not in limitation of any other rights and remedies the Secured Party may
have by virtue of any other instrument or agreement heretofore,
contemporaneously herewith or hereafter executed by the Securing Parties or by
law or otherwise. If any provision of this Security Agreement is contrary to
applicable law, such provision shall be deemed ineffective without invalidating
the remaining provisions hereof. If and to the extent that applicable law
confers any rights in addition to any of the provisions of this Security
Agreement, the affected provision shall be considered amended to conform
thereto. The Secured Party shall not by any act, delay, omission or otherwise be
deemed to have waived any of its rights or remedies hereunder. A waiver by the
Secured Party of any right or remedy hereunder on any one occasion, shall not be
construed as a bar to or waiver of any such right or remedy which the Secured
Party would have had on any future occasion nor shall the Secured Party be
liable for exercising or failing to exercise any such right or remedy. This
Security Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one and the same instrument and the parties
hereto may execute this Security Agreement by signing any such counterpart.
Facsimile execution and delivery of this Security Agreement shall be legal,
valid and binding execution and delivery for all purposes.
[The remainder of this page has been intentionally left blank.]
13
14
IN WITNESS WHEREOF, the parties hereto have caused this Security
Agreement to be duly executed and delivered as of the date first above written.
BORROWER
FUTURELINK CORP., a Delaware corporation
By: /s/ XXXXXX X. XXXXXX
------------------------------------------
Xxxxxx X. Xxxxxx, President
and Chief Executive Officer
SUBSIDIARY GUARANTORS
FUTURELINK PLEASANTON CORP., a Delaware
corporation
By: /s/ XXXXXX X. XXXXXX
------------------------------------------
Xxxxxx X. Xxxxxx, President
and Chief Executive Officer
FUTURELINK MICRO VISIONS CORP., a Delaware
corporation
By: /s/ XXXXXX X. XXXXXX
------------------------------------------
Xxxxxx X. Xxxxxx, President
and Chief Executive Officer
FUTURELINK VSI CORP., a Maryland corporation
By: /s/ XXXXXX X. XXXXXX
------------------------------------------
Xxxxxx X. Xxxxxx, President
and Chief Executive Officer
14
15
FUTURELINK MADISON CORP., a Delaware
corporation
By: /s/ XXXXXX X. XXXXXX
------------------------------------------
Xxxxxx X. Xxxxxx, President
and Chief Executive Officer
FUTURELINK ASYNC CORP., a Delaware
corporation
By: /s/ XXXXXX X. XXXXXX
------------------------------------------
Xxxxxx X. Xxxxxx, President
and Chief Executive Officer
3045207 NOVA SCOTIA COMPANY, a Nova Scotia
corporation
By: /s/ XXXXXX X. XXXXXX
------------------------------------------
Xxxxxx X. Xxxxxx, President
and Chief Executive Officer
1423280 ONTARIO INC., an Ontario corporation
By: /s/ XXXXXX X. XXXXXX
------------------------------------------
Xxxxxx X. Xxxxxx, President
and Chief Executive Officer
FUTURELINK CANADA CORP., an Ontario
corporation
By: /s/ XXXXXX X. XXXXXX
------------------------------------------
Xxxxxx X. Xxxxxx, President
and Chief Executive Officer
15
16
SECURED PARTY
PEQUOT PRIVATE EQUITY FUND II, L.P.,
a Delaware limited partnership
By: Pequot Capital Management, Inc.,
its Investment Manager
By: /s/ XXXXX X. X'XXXXX
------------------------------------------
Xxxxx X. X'Xxxxx, General Counsel
16
17
SCHEDULE 1(d) TO THE SECURITY AGREEMENT
EXCLUDED LIENS
FUTURELINK CORP.
Transamerica Business Credit Corporation
- Reg. #9935160743; collateral: equipment sold by TBCC
- Reg. #0007461024; collateral: specific equipment
Compaq Financial Services Corporation
- Reg. #9934360283; collateral: equipment under lease
- Reg. #0197080; collateral: equipment under lease
- Reg. #1983803; collateral: equipment under lease
- Reg. #20010202 1443 1530 0023; collateral: equipment under equipment
schedule no. 100746000010
GATX Technology Services corporation
- collateral: equipment under lease
XXX Xxxxxxxxxxx
- Reg. #0001060733; collateral: specific equipment
- Reg. #0001060743; collateral: specific equipment
- Reg. #0007760039; collateral: specific equipment
- Reg. #0025061088; collateral: specific equipment
- Reg. #32260143; collateral: specific equipment
- Reg. #2007817; collateral: specific equipment
Fleet Business Credit Corporation
- Reg. #0001060738; collateral: specific equipment
Hewlett Packard Company
- Reg. #0016060387; collateral: equipment under lease
FUTURELINK MADISON CORP.
NIA National Leasing Inc.
- Reg. #001924 (assigned to Leasevest Capital Corp.);
collateral: specific equipment
- Reg. #001933 (assigned to Advanta Leasing Corp.);
collateral: specific equipment
- Reg. #00XX00000 (assigned to Advanta Leasing Corp.);
collateral: specific equipment
- Reg. #99PN01056 (assigned to Leasevest Capital Corp.);
collateral: specific equipment
Unicyn Financial Corporation
- Reg. #173465 (assigned Green Tree Vendor Services
Corporation); collateral:
18
specific equipment
- Reg. #00XX00000 (assigned Green Tree Vendor Services
- Corporation); collateral: specific equipment
FUTURELINK MICRO VISIONS CORP.
Hewlett Packard Company
- Reg. #9934260066; collateral: specific equipment
Transamerica Business Credit Corporation
- Reg. #9935160746; collateral: specific equipment
- Reg. #0000000000; collateral: specific equipment
- Reg. #0021760510; collateral: specific equipment
Data General Corporation
- Reg. #0006760426; collateral: specific equipment
FUTURELINK CANADA CORP.
Compaq Financial Services Canada Corporation
- Reg. #00071812051; collateral: computer equipment under
lease
- Reg. #20000203 1809 1531 0812; collateral: equipment under equipment
schedule no. 100746000002
- Reg. #20000927 1831 1531 1981; collateral: equipment under
equipment schedule no. 67440C
- Reg. #20000914 1810 1531 5881; collateral: equipment under
equipment schedule no. 67440B
- Reg. #20000921 1808 1531 5096; collateral: equipment under
lease no. 67280 dated 06/08/00
- Reg. #20000921 1808 1531 5097; collateral: equipment under
lease no. 67243 dated 05/04/00
- Reg. #20000921 1808 1531 5098; collateral: equipment under
lease no. 668890 dated 04/13/00
- Reg. #20000823 1756 1531 0470; collateral: equipment under
lease no. 67243 dated 05/04/00
- Reg. #20000921 1808 1531 8632; collateral: equipment under
lease no. 67280 dated 06/08/00
- Reg. #20000328 1802 1531 3186; collateral: equipment under
lease no. 666889
- Reg. #19990820 1204 7029 3124; collateral: all goods
provided by Compaq
- Reg. #20010226 1432 1530 1721; collateral: equipment under
lease no. 67440I dated 02/05/01
- Reg. # 20010108 1449 1530 5408; collateral: equipment under
lease no. 67440G dated 12/21/00
- Reg. #20010108 1449 1530 5411; collateral: equipment under
lease no. 67440H dated 12/21/00
- Reg. #20001201 1137 1529 5896; collateral: equipment under
lease no. 67440F dated 11/27/00
- Reg. #20001114 1117 1529 8113; collateral: equipment under
lease no. 67440D dated 11/02/00
- Reg. #00092207711; collateral: equipment under lease no.
100746 dated 11/15/99
19
- Reg. #01020209530; collateral: equipment under lease
no.100746 dated 11/1/5/99
- Reg. #00071812051; collateral: equipment under lease
no.100746 dated 11/15/99
Xxxxxx Micro Inc.
- Reg. #97101729933 (as amended); collateral: all present and
after acquired personal property
- Reg. #20000913 1536 1826 0812; collateral: inventory,
equipment, accounts
- Reg. #19931018 0901 0004 0957; collateral: general security
agreement
- Reg. #19961015 1711 1826 0223; collateral: renewal
- Reg. #19990928 1441 1826 0656; collateral: renewal
- Reg. #00122815939; collateral: all present and after
acquired personal property
Newcourt Financial Ltd.
- Reg. #98061517201; collateral: photocopier
- Reg. #00000000000; collateral: telephone system equipment
- Reg. #19990504 1811 1531 8522; collateral: inventory,
equipment, accounts, other
Merisel Canada Inc.
- Reg. #95050916808 (as amended); collateral: all present and
after acquired personal property
- Reg. #00050405422; collateral: computer hardware
- Reg. #19990315 0844 1192 0202; collateral: general security
agreement
- Reg. #19990205 0849 1192 9831; collateral: computer
equipment
- Reg. #19990315 0846 1192 0203; collateral: inventory,
accounts, other
Bayshore Leasing Corporation
- Reg. #19980625 1703 1672 4888; collateral: equipment
- Reg. #19980304 1617 1672 4549; collateral: equipment
Tech Data Canada Inc.
- Reg. #20000720 1105 9075 0327; collateral: general security
- agreement
- Reg. #19971031 1059 0043 6715; collateral: inventory,
accounts, other
National leasing Group Inc.
- Reg. #00000000000; collateral: telephone equipment system
Accel Capital Corp.
- Reg. #99033026792; collateral: office furniture
Hewlett Packard (Canada) Ltd.
- Reg. #99102217579; collateral: computer equipment described
in leases
Transamerica Business Credit Corporation
- Reg. #99112400579; collateral: computer equipment
- Reg. #20001221 1746 8028 0522; collateral: equipment and
other
Commcorp. Financial Services
- Reg. #97062504440; collateral: computer equipment
20
Ikon Office Solutions, Inc.
- Reg. #9905270453; collateral: photocopier
- Reg. #00000000000; collateral: fax machine
21
SCHEDULE 4(b) TO THE SECURITY AGREEMENT
PERMITTED LIENS
FUTURELINK CORP.
1. Transamerica Business Credit Corporation
- Reg. #9935160743; collateral: equipment sold by TBCC
- Reg. #0007461024; collateral: specific equipment
2. Compaq Financial Services Corporation
- Reg. #9934360283; collateral: equipment under lease
- Reg. #0197080; collateral: equipment under lease
- Reg. #1983803; collateral: equipment under lease
- Reg. #20010202 1443 1530 0023; collateral: equipment under
equipment schedule no. 100746000010
3. GATX Technology Services corporation - collateral: equipment under lease
4. Xxxxxx Xxxxxxxxxxx
- Reg. #0007460404; collateral: computer and other equipment
5. XXX Xxxxxxxxxxx
- Reg. #0001060733; collateral: specific equipment
- Reg. #0001060743; collateral: specific equipment
- Reg. #0007760039; collateral: specific equipment
- Reg. #0025061088; collateral: specific equipment
- Reg. #32260143; collateral: specific equipment
- Reg. #2007817; collateral: specific equipment
6. Fleet Business Credit Corporation
- Reg. #0001060738; collateral: specific equipment
7. Hewlett Packard Company
- Reg. #0016060387; collateral: equipment under lease
8. Foothill Capital Corporation
- Reg. #1141646; collateral: all assets
- Reg. #1141646; collateral: unspecified
- Reg. #1141859; collateral: unspecified
- Reg. #0015441; collateral: unspecified
- Reg. #0029360241; collateral: all assets
- Reg. #0069566; collateral: all assets
- Reg. #04400008334; collateral: unspecified
- Reg. #2352954; collateral: unspecified
- Reg. 181063737; collateral: unspecified
- Reg. #18103C; collateral: all assets
- Reg. #2003324; collateral: all assets
- Reg. #00199631; collateral: all assets
- Reg. #0010167815; collateral: all assets
- Reg. #103060179; collateral: unspecified
- Reg. #2028617; collateral: unspecified
- Reg. #236314; collateral: unspecified
22
- Reg. #102306; collateral: unspecified
- Reg. #96683; collateral: unspecified
- Reg. #20001208 1638 3033 0751; collateral: inventory, equipment,
accounts, other
9. Canon Financial Services, Inc.
- Reg. #0028860103; collateral: equipment under lease
10. Leasing Technologies International Inc.
- Reg. #103060179; collateral: unspecified
- Reg. #20010114749; collateral: unspecified
- Reg. #014842; collateral: unspecified
- Reg. #047874; collateral: unspecified
11. Macrolease International Corp.
- Reg. #103761012; collateral: unspecified
FUTURELINK PLEASANTON CORP.
1. Foothill Capital Credit Corporation
- Reg. #029360255; collateral: all assets
- Reg. #0069550; collateral: all assets
FUTURELINK VSI CORP.
1. Foothill Capital Credit Corporation
- Reg. #B2000-41064FS; collateral: all assets
- Reg. #0069516; collateral: all assets
- Reg. #04400008335; collateral: all assets
- Reg. #181063548; collateral: unspecified
- Reg. #0010167814; collateral: all assets
- Reg. #236316; collateral: unspecified
- Reg. #102305; collateral; unspecified
FUTURELINK MADISON CORP.
1. NIA National Leasing Inc.
- Reg. #001924 (assigned to Leasevest Capital Corp.);
collateral: specific equipment
- Reg. #001933 (assigned to Advanta Leasing Corp.);
collateral: specific equipment
- Reg. #00XX00000 (assigned to Advanta Leasing Corp.);
collateral: specific equipment
- Reg. #99PN01056 (assigned to Leasevest Capital Corp.);
collateral: specific equipment
2. Unicyn Financial Corporation
- Reg. #173465 (assigned Green Tree Vendor Services
Corporation); collateral: specific equipment
- Reg. #00XX00000 (assigned Green Tree Vendor Services
- Corporation); collateral: specific equipment
3. Foothill Capital Credit Corporation
- Reg. #0002028619; collateral: all assets
- Reg. #0069581; collateral: all assets
- Reg. #2003325; collateral: all assets
- Reg. #00199635; collateral: all assets
23
FUTURELINK ASYNC CORP.
1. Foothill Capital Corp.
- Reg. #004284186; collateral: all assets
- Reg. #1605053; collateral: unspecified
- Reg. #AP285614; collateral: unspecified
- Reg. #33190334; collateral: all assets
- Reg. #0029360247; collateral: all assets
- Reg. #0069574; collateral: all assets
- Reg. #2352955; collateral: all assets
- Reg. #18102C; collateral: all assets
FUTURELINK MICRO VISIONS CORP.
1. Hewlett Packard Company
- Reg. #9934260066; collateral: specific equipment
2. Transamerica Business Credit Corporation
- Reg. #9935160746; collateral: specific equipment
- Reg. #0000000000; collateral: specific equipment
- Reg. #0021760510; collateral: specific equipment
3. Data General Corporation
- Reg. #0006760426; collateral: specific equipment
4. Foothill Capital Credit Corporation
- Reg. #11418549; collateral: all assets
- Reg. #0015870; collateral: unspecified
- Reg. #0000530293; collateral: all assets
- Reg. #20002970037; collateral: all assets
- Reg. #0013960669; collateral; all accounts and chattel
paper including paper and proceeds
- Reg. #0029960597; collateral: all assets
- Reg. #0002029935; collateral: all assets
- Reg. #0071363; collateral: all assets
- Reg. #4400008521; collateral: all assets
- Reg. #0000609295; collateral: all assets
- Reg. #0000000000; collateral: all assets
- Reg. #00131175; collateral: all assets
- Reg. #241507; collateral: all assets
- Reg. #104727; collateral: unspecified
FUTURELINK CANADA CORP.
1. Compaq Financial Services Canada Corporation
- Reg. #00071812051; collateral: computer equipment under
lease
- Reg. #20000203 1809 1531 0812; collateral: equipment under
equipment schedule no. 100746000002
- Reg. #20000927 1831 1531 1981; collateral: equipment under
equipment schedule no. 67440C
- Reg. #20000914 1810 1531 5881; collateral: equipment under
equipment schedule no. 67440B
- Reg. #20000921 1808 1531 5096; collateral: equipment under
lease no. 67280 dated 06/08/00
24
- Reg. #20000921 1808 1531 5097; collateral: equipment under
lease no. 67243 dated 05/04/00
- Reg. #20000921 1808 1531 5098; collateral: equipment under
lease no. 668890 dated 04/13/00
-
- Reg. #20000823 1756 1531 0470; collateral: equipment under
lease no. 67243 dated 05/04/00
- Reg. #20000921 1808 1531 8632; collateral: equipment under
lease no. 67280 dated 06/08/00
- Reg. #20000328 1802 1531 3186; collateral: equipment under
lease no. 666889
- Reg. #19990820 1204 7029 3124; collateral: all goods
provided by Compaq
- Reg. #20010226 1432 1530 1721; collateral: equipment under
lease no. 67440I dated 02/05/01
- Reg. # 20010108 1449 1530 5408; collateral: equipment under
lease no. 67440G dated 12/21/00
- Reg. #20010108 1449 1530 5411; collateral: equipment under
lease no. 67440H dated 12/21/00
- Reg. #20001201 1137 1529 5896; collateral: equipment under
lease no. 67440F dated 11/27/00
- Reg. #20001114 1117 1529 8113; collateral: equipment under
lease no. 67440D dated 11/02/00
- Reg. #00092207711; collateral: equipment under lease no.
100746 dated 11/15/99
- Reg. #01020209530; collateral: equipment under lease
no.100746 dated 11/1/5/99
- Reg. #00071812051; collateral: equipment under lease
no.100746 dated 11/15/99
2. Xxxxxx Micro Inc.
- Reg. #97101729933 (as amended); collateral: all present and
after acquired personal property
- Reg. #20000913 1536 1826 0812; collateral: inventory,
equipment, accounts
- Reg. #19931018 0901 0004 0957; collateral: general security
agreement
- Reg. #19961015 1711 1826 0223; collateral: renewal
- Reg. #19990928 1441 1826 0656; collateral: renewal
- Reg. #00122815939; collateral: all present and after
acquired personal property
3. Newcourt Financial Ltd.
- Reg. #98061517201; collateral: photocopier
- Reg. #00000000000; collateral: telephone system equipment
- Reg. #19990504 1811 1531 8522; collateral: inventory,
equipment, accounts, other
4. Merisel Canada Inc.
- Reg. #95050916808 (as amended); collateral: all present and
after acquired personal property
- Reg. #00050405422; collateral: computer hardware
- Reg. #19990315 0844 1192 0202; collateral: general security
agreement
- Reg. #19990205 0849 1192 9831; collateral: computer
equipment
- Reg. #19990315 0846 1192 0203; collateral: inventory,
accounts, other
5. Maramello Motors Ltd.
- Reg. #199990205 1801 1531 9831; collateral: vehicle
6. The Bank of Nova Scotia;
- Reg. #000000000 1801 1531 9831; collateral: vehicle
7. Bayshore Leasing Corporation
- Reg. #19980625 1703 1672 4888; collateral: equipment
- Reg. #19980304 1617 1672 4549; collateral: equipment
25
8. Tech Data Canada Inc.
- Reg. #20000720 1105 9075 0327; collateral: general security
- agreement
- Reg. #19971031 1059 0043 6715; collateral: inventory,
accounts, other
9. National leasing Group Inc.
- Reg. #00000000000; collateral: telephone equipment system
10. Accel Capital Corp.
- Reg. #99033026792; collateral: office furniture
11. Hewlett Packard (Canada) Ltd.
- Reg. #99102217579; collateral: computer equipment described
in leases
12. Transamerica Business Credit Corporation
- Reg. #99112400579; collateral: computer equipment
- Reg. #20001221 1746 8028 0522; collateral: equipment and
other
13. Commcorp. Financial Services Inc.
- Reg. #97062504440; collateral: computer equipment
14. Ikon Office Solutions, Inc.
- Reg. #9905270453; collateral: photocopier
- Reg. #00000000000; collateral: fax machine
15. Foothill Capital Corporation
- Reg. #20001103 1705 3033 0693; collateral: equipment,
inventory, accounts
- Reg. #00-0000000-000; collateral: all present and after
acquired personal property
- Reg. #00110803343: collateral: all present and after
acquired personal property
3045207 NOVA SCOTIA COMPANY
1. Foothill Capital Corporation
- Reg.#3668864; collateral: all present and after acquired
personal property
1423280 ONTARIO INC.
1. Foothill Capital Corporation
- Reg. #20001122 1452 3033 0735; collateral: accounts, other
- Reg. #20001103 1705 3033 0694; collateral: inventory,
equipment, accounts, other
26
SCHEDULE I
TO
SECURITY AGREEMENT
Pledged Stock
-------------------------------------------------------------------------------------------------------------------------
TOTAL SHARES JURISDICTION
NO. OF OF CAPITAL PLEDGOR'S OF
SHARES HELD CERTIFICATE STOCK PERCENTAGE INCORPORATION
PLEDGOR ISSUER BY PLEDGOR CLASS NO.(S) OUTSTANDING OWNERSHIP
-------------------------------------------------------------------------------------------------------------------------
FutureLink FutureLink 500 Common 2 500 100% Delaware
Corp. Pleasanton
Corp.
-------------------------------------------------------------------------------------------------------------------------
FutureLink FutureLink 100 Common 1 100 100% Delaware
Corp. Madison Corp.
-------------------------------------------------------------------------------------------------------------------------
FutureLink FutureLink 500 Common 2 500 100% Delaware
Corp. Micro Visions
Corp.
-------------------------------------------------------------------------------------------------------------------------
FutureLink FutureLink 500 Common 2 500 100% Delaware
Corp. ASYNC Corp.
-------------------------------------------------------------------------------------------------------------------------
FutureLink FutureLink 500 Common 2 500 100% Maryland
Corp. VSI Corp.
-------------------------------------------------------------------------------------------------------------------------
FutureLink 3045207 Nova 7,500,100 Common 2,3 7,500,100 100% Nova Scotia,
Corp. Scotia Company Canada
-------------------------------------------------------------------------------------------------------------------------
1423280 FutureLink 000 Xxxxxx X-0 000 000% Xxxxxxx,
Xxxxxxx Inc. Canada Corp. Canada
-------------------------------------------------------------------------------------------------------------------------
3045207 1423280 7,500,000 Class C CCVP-16 12,161,156.387 61.85% Ontario,
Nova Scotia Ontario Inc. Voting Canada
Company
-------------------------------------------------------------------------------------------------------------------------
FutureLink 1423280 2,426,191.387 Common C-2 12,161,156.387 20.00% Ontario,
Corp. Ontario Inc. Canada
-------------------------------------------------------------------------------------------------------------------------
27
SCHEDULE II TO SECURITY AGREEMENT
LOCATIONS OF INVENTORY AND EQUIPMENT
AND PRINCIPAL PLACE OF BUSINESS
The (i) principal place of business for each secured party is and (ii) with
respect to each subsidiary, in addition to documents which may be maintained at
FutureLink Corp.'s principal place of business, documents related to and
evidence of Receivables is maintained at:
---------------------------------------------------------------------------------------------------------------------------------
ENTITY XXXXXX XXXX XXXXXX XXXXX XXX XXXXXXX
---------------------------------------------------------------------------------------------------------------------------------
FutureLink Corp. 0 Xxxxx Xxxxxx Xx. Xxxx Xxxxxx Xxxxxx Xxxxxxxxxx 00000 XXX
FutureLink Micro Visions Corp. 0 Xxxxx Xxxxxx Xx. Xxxx Xxxxxx Xxxxxx Xxxxxxxxxx 00000 XXX
FutureLink VSI Corp. 0000 Xxxxxxxx Xxxxxxx Xx. Xxxxxxxxxx Xxxxxx Xxxxxx'x Xxxxxxxx 00000 XXX
FutureLink Async Corp. 0000 X Xxxx Xxxxx Xx. Xxxxxx Xxxx Xxxxxxx Xxxxxxxx 00000 XXX
Ste C-304
FutureLink Madison Corp. 000 Xxxxxxxxx Xxx. Xxx Xxxx Xxx Xxxx Xxx Xxxx 00000 XXX
0xx Xxxxx
XxxxxxXxxx Xxxxxxxxxx Corp. 0000 X Xxx Xxxxxxx Xxxxxxxxxx Xxxxxxx Xxxxxxxxxx 00000 XXX
Blvd. Ste 122
FutureLink Canada Corp. 300, 000 0xx Xxxxxx XX Xxxxxxx X/X Xxxxxxx X0X 0X0 Xxxxxx
3045207 Nova Scotia Company 0 Xxxxx Xxxx Xxxxxxx X/X Xxxxxxx X0X0X0 Xxxxxx
1423280 Ontario Corp. 0 Xxxxx Xxxx Xxxxxxx X/X Xxxxxxx X0X0X0 Xxxxxx
In addition to the foregoing locations:
FutureLink Corp maintains Equipment and Inventory at the following locations:
000 Xxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxxxxxx Xxxxxx, XX 00000
FutureLink Micro Visions Corp. maintains Equipment and Inventory at the
following locations:
0000 X. Xxxxxxxxx Xxxx.
Xxx Xxxxxxx, Xxx Xxxxxxx Xxxxxx, Xxxxxxxxxx 00000
0000 X.X. 0xx Xxx, Xxxxx 0000
Xxxx Xxxxxxxxxx, Xxxxxxxx Xxxxxx, Xx 00000
28
000 Xxxxxxxxxx Xxxx
Xxxxxxx, Xx Xxxx Xxxxxx, XX 00000
29
FutureLink Canada Corp. maintains Equipment and Inventory at the following
Locations:
00 Xxx Xxxxx
Xxxxxx, Xxxxxxx, Xxxxxx X0X0X0
8585 Decarie, Bureau 000
Xxxxx Xxxx-Xxxxx, Xxxxxx, Xxxxxx X0X 0X0
0000, xxx Xxxxxxxx Est, Bureau 000
Xxxxxx, Xxxxxx, Xxxxxx X0X 0X0
0 Xxxxx Xx.
Xxxxxxx, Xxxxxxx, Xxxxxx X0X 0X0
FutureLink Madison Corp. maintains Equipment and Inventory at the following
location:
00 Xxxx Xxxx, Xxx. 000
Xxxxxx, Xxxxxx Xxxxxx, XX 00000
FutureLink Pleasanton Corp. maintains Equipment and Inventory at the following
location:
000 Xxxx Xx.
Xxxxxxxxxx, Xxxxxxx Xxxxxx, Xxxxxxxxxx 00000
FutureLink VSI Corp. maintains Equipment and Inventory at the following
location:
0000 Xxxxxxxx Xxxxx, Xxx. 000
Xxxx Xxxxx, Xxxxxxx Xxxxxx, XX 00000
0000 Xxxxxx Xxxx, 0xx Xxxxx
Xxxxxxxx, Xxxxxxxx Xxxxxx, XX 00000
30
SCHEDULE III TO SECURITY AGREEMENT
INTELLECTUAL PROPERTY
TRADEMARKS
Applications:
For U.S. applications the applicant FutureLink Distribution Corp. is now
FutureLink Corp.
For Canadian applications and registrations the applicant FutrueLink
Distribution
Corporation (Corp.) is now FutureLink Canada Corp.
-----------------------------------------------------------------------------------------------
APPLICATION APPLICATION
APPLICANT TYPE JURISDICTION XXXX DATE NO.
-----------------------------------------------------------------------------------------------
FutureLink Word U.S.A. APPLICATION PORTAL 3/26/99 75/669/151
Distribution
Corp.
-----------------------------------------------------------------------------------------------
FutureLink Word U.S.A. XXXXX 2/18/98 75/436/229
Distribution
Corp.
-----------------------------------------------------------------------------------------------
FutureLink Word U.S.A. FUTURELINK 2/18/98 75/436/228
DistributionCorp.
-----------------------------------------------------------------------------------------------
XxxxxxXxxx Xxxx U.S.A. FUTURELINK 4/1/9/00 76/029/805
Corp.
-----------------------------------------------------------------------------------------------
FutureLink Word U.S.A. FUTURESERVE 2/18/98 75/436/227
Distribution
Corp.
-----------------------------------------------------------------------------------------------
FutureLink Word U.S.A. THE COMPUTER 3/26/99 75/668/792
Distribution UTILITY CO
Corp.
-----------------------------------------------------------------------------------------------
FutureLink Word U.S.A. THE COMPUTER 3/26/99 75/669/152
Distribution UTILITY SERVICE
Corp.
-----------------------------------------------------------------------------------------------
FutureLink Word U.S.A. W.A.T.C.H. 9/10/98 75/551/171
Distribution
Corp.
-----------------------------------------------------------------------------------------------
FutureLink Word U.S.A. WIDE AREA THIN 9/10/98 75/551/172
Corp. CLIENT HOOKUP
-----------------------------------------------------------------------------------------------
FutureLink Word U.S.A. WORLD'S FIRST 9/10/98 75/551/170
Distribution COMPUTER UTILITY
Corp. COMPANY
-----------------------------------------------------------------------------------------------
FutureLink Word U.S.A. THE WORLD'S ASP 8/25/99 75/785/866
Distribution
Corp.
-----------------------------------------------------------------------------------------------
FutureLink Word U.S.A. KICKING ASP 8/25/99 75/785/867
Distribution
Corp.
-----------------------------------------------------------------------------------------------
31
-----------------------------------------------------------------------------------------------
APPLICATION APPLICATION
APPLICANT TYPE JURISDICTION XXXX DATE NO.
-----------------------------------------------------------------------------------------------
FutureLink Word Canada KICKING ASP 9/13/99 1028504
Distribution
Corporation
-----------------------------------------------------------------------------------------------
FutureLink Word Canada THE WORLD'S ASP 9/13/99 1028508
Distribution
Corporation
-----------------------------------------------------------------------------------------------
FutrueLink Word Canada WIDE AREA THIN 7/21/98 884924
Distribution CLIENT HOOKUP
Corp.
-----------------------------------------------------------------------------------------------
FutureLink Word Canada THE ASP 9/13/99 1028509
Distribution
Corporation
-----------------------------------------------------------------------------------------------
FutureLink Word Canada THE WORLD'S FIRST 3/1/99 1006728
Distribution COMPUTER UTILITY
Corporation COMPANY
-----------------------------------------------------------------------------------------------
Registrations:
-----------------------------------------------------------------------------------------------
REGISTRATION REGISTRATION
REGISTRANT TYPE JURISDICTION XXXX DATE NO.
-----------------------------------------------------------------------------------------------
FutureLink Word Canada FUTURESERVE 1/27/00 TMA522,392
Distribution
Corporation
-----------------------------------------------------------------------------------------------
FutureLink Word Canada XXXXX 9/7/00 TMA532,325
Distribution
Corporation
-----------------------------------------------------------------------------------------------
FutureLink Word Canada FUTURELINK 11/10/00 TMA537044
Distribution
Corporation
-----------------------------------------------------------------------------------------------
XxxxxxXxxx Xxxx Canada FUTURELINK DESIGN 11/10/00 TMA537045
Distribution
Corporation
-----------------------------------------------------------------------------------------------
XxxxxxXxxx Xxxx Canada FUTURELINK DESIGN 11/20/00 TMA537296
Distribution
Corporation
-----------------------------------------------------------------------------------------------
FutureLink Word Canada W.A.T.C.H. 11/23/00 TMA537673
Distribution
Corp.
-----------------------------------------------------------------------------------------------
32
Patents
Registered: None
Applications:
----------------------------------------------------------------------------------------
APPLICATION APPLICATION
APPLICANT RELATED TO JURISDICTION DATE NO.
----------------------------------------------------------------------------------------
Charon Systems UniPrint Software Canada
Inc. (Now
FutureLink
Canada Corp.)
----------------------------------------------------------------------------------------
Copy Rights
Registered: None
Applications: None
