Master Loan And Security Agreement - NetScreen Technologies Inc. and Wells Fargo Equipment
Master Loan And Security Agreement No. 83654
DEBTOR: NetScreen Technologies, Inc. SECURED PARTY: Wells Fargo Equipment
350 Oakmead Parkway Finance, Inc.
Sunnyvale, CA 94085 530 Fifth Avenue
New York, NY 10036
In consideration of the mutual covenants set forth herein, the above named
Debtor and the above named Secured Party hereby enter into this Master Loan and
Security Agreement and agree to the terms and conditions set forth herein. Each
Loan Schedule which may be executed by Debtor and Secured Party from time to
time pursuant to this Master Loan and Security Agreement shall be deemed to be a
separate loan transaction incorporating all of the terms and conditions of this
Master Loan and Security Agreement. References in this Master Loan and Security
Agreement to "Agreement", "hereunder" and "herein" shall mean a Loan Schedule
which incorporates this Master Loan and Security Agreement.
1. Loan Schedules. Debtor shall evidence its agreement to enter into each
Agreement incorporating the terms hereof by executing and delivering to Secured
Party a Loan Schedule in the form annexed hereto as Exhibit 1. Debtor's
execution of a Loan Schedule shall obligate Debtor to make all of the payments
set forth in the Schedule of Obligations as set forth in the Loan Schedule. The
Loan Schedule shall set forth the amount of the Loan, the Term of the Loan, the
number of payments to be made and the amount and dates upon which such payments
are due. The Loan Schedule shall also set forth the Time Balance which means the
aggregate amount of all payments which are payable under the Agreement evidenced
by such Loan Schedule. Secured Party will enter into one or more Loan Schedules
hereunder covering Equipment having an aggregate original Equipment cost
("Acquisition Cost") not in excess of Three Million Dollars ($3,000,000.00)
provided, that Secured Party shall have no obligation to enter into any Loan
Schedule if: (i) the Equipment to be covered thereunder is not reasonably
acceptable to Secured Party; or (ii) such Loan Schedule has not been signed by
Debtor and delivered to Secured Party on or before October 31, 2001; or (iii)
such Equipment has not been delivered to or accepted by Debtor by October 31,
2001 or Secured Party has determined that the scheduled dates for delivery and
installation of such Equipment makes acceptance of the Equipment by such date
impossible; or (iv) an Event of Default (or any other event which, after a lapse
of time, or notice, or both, would, with reasonable likelihood, become an Event
of Default) has occurred and is continuing hereunder or under any Loan Schedule;
or (v) Secured Party determines that Debtors' financial condition or business
operation (or that of any Guarantor,) has suffered any material adverse change
from the condition reported in, or in conjunction with, any credit application;
or (vi) the Acquisition Cost of the Equipment to be covered under such Loan
Schedule is less than $250,000; or (vii) the Acquisition Cost of the Equipment
to be covered under such Loan Schedule when added to the Acquisition Cost of the
Equipment covered under all other Loan Schedules would exceed Three Million
Dollars ($3,000,000.00); Provided further that any Loan Schedule to be executed
after October 31, 2001, shall be subject to Secured Party performing its
standard update credit review of Debtor to confirm the creditworthiness of the
Debtor. No Loan Schedule shall be binding upon Secured Party until accepted by
Secured Party which acceptance shall be evidenced only by the execution of such
Loan Schedule by Secured Party.
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2. Grant of Security Interest. Debtor hereby grants to Secured Party a
security interest in the personal property referred to and/or described in each
Loan Schedule (hereinafter with all renewals, substitutions and replacements and
all parts, repairs, improvements, additions and accessories incorporated therein
or affixed thereto referred to as the "Equipment"), together with any and all
proceeds thereof and any and all insurance policies and proceeds with respect
thereto.
3. Obligations Secured. The aforesaid security interest is granted by
Debtor as security for (a) the payment of the Time Balance (as set forth in the
Loan Schedule) and the payment and performance of all other indebtedness and
obligations now or hereafter owing by Debtor to Secured Party, of any and every
kind and description under the Agreement evidenced by such Loan Schedule, and
any and all renewals and extensions of the foregoing, and all interest, fees,
charges, expenses and attorneys' fees accruing or incurred in connection with
any of the foregoing (all of which Time Balance, indebtedness and obligations
are hereinafter referred to as the "Liabilities") and (b) the payment and
performance of all other indebtedness and obligations now or hereafter owing by
Debtor to Secured Party, of any and every kind and description, howsoever
arising or evidenced including without limitation those arising under other Loan
Schedules, (all of which indebtedness and obligations are hereinafter referred
to as the "Other Liabilities"). Subject to Paragraph 16, any nonpayment of any
installment or other amounts due hereunder shall result in the obligation on the
part of Debtor promptly to pay also an amount equal to five percent (5%), (or
the maximum rate permitted by law, whichever is less) of the installment or
other amounts overdue.
4. Disclaimer of Warranties. DEBTOR ACKNOWLEDGES THAT SECURED PARTY MAKES
NO WARRANTIES, EXPRESS OR IMPLIED, IN RESPECT OF THE EQUIPMENT, INCLUDING,
WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR OF FITNESS FOR ANY
PARTICULAR PURPOSE. Secured Party shall not be liable to Debtor for any loss,
damage or expense of any kind or nature caused, directly or indirectly, by any
Equipment secured hereunder or the use or maintenance thereof or the failure of
operation thereof, or the repair, service or adjustment thereof, or by any delay
or failure to provide any such maintenance, repairs, service or adjustment, or
by any interruption of service or loss of use thereof or for any loss of
business howsoever caused. The Equipment shall be shipped directly to Debtor by
the supplier thereof and Debtor agrees to accept such delivery. No defect or
unfitness of the Equipment, nor any failure or delay on the part of the
manufacturer or the shipper of the Equipment to deliver the Equipment or any
part thereof to Debtor, shall relieve Debtor of the obligation to pay the Time
Balance or any other obligation under this Agreement. Secured Party shall have
no obligation under this Agreement in respect of the Equipment and shall have no
obligation to install, erect, test, adjust or service the Equipment. Secured
Party agrees, so long as there shall not have occurred or be continuing any
Event of Default hereunder or event which with lapse of time or notice, or both,
would become an Event of Default hereunder, that Secured Party will permit
Debtor to enforce in Debtor's own name at Debtors sole expense any supplier's or
manufactures warranty or agreement in respect of the Equipment.
5. Assignment. Any transaction evidenced by a Loan Schedule shall be
assignable by Secured Party, and by its assigns, without the consent of Debtor,
but Debtor shall not be obligated to any assignee except upon written notice of
such assignment from Secured Party or
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such assignee. The obligation of Debtor to pay and perform the Liabilities to
such assignee shall be absolute and unconditional and shall not be affected by
any circumstance whatsoever, and such payments shall be made without
interruption or abatement notwithstanding any event or circumstance whatsoever,
including, without limitation, the late delivery, non-delivery, destruction or
damage of or to the Equipment, the deprivation or limitation of the use of the
Equipment, the bankruptcy or insolvency of Secured Party or Debtor or any
disaffirmance of this Agreement by or on behalf of Debtor and notwithstanding
any defense, set-off, recoupment or counterclaim or any other right whatsoever,
whether by reason of breach of this Agreement or of any warranty in respect of
the Equipment or otherwise which Debtor may now or hereafter have against
Secured Party, and whether any such event shall be by reason of any act or
omission of Secured Party (including, without limitation, any negligence of
Secured Party) or otherwise; provided, however, that nothing herein contained
shall affect any right of Debtor to enforce against Secured Party any claim
which Debtor may have against Secured Party in any manner other than by
abatement, attachment or recoupment of, interference with, or set-off,
counterclaim or defense against, the aforementioned payments to be made to such
assignee. Debtor's undertaking herein to pay and perform the Liabilities to an
assignee of Secured Party shall constitute a direct, independent and
unconditional obligation of Debtor to said assignee. Said assignee shall have no
obligations under this Agreement or in respect of the Equipment and shall have
no obligation to install, erect, test, adjust or service the Equipment. Debtor
also acknowledges and agrees that any assignee of Secured Party's interest in
this Agreement shall have the right to exercise all right, privileges and
remedies (either in its own name or in the name of Secured Party) which by the
terms of this Agreement are permitted to be exercised by Secured Party.
6. Damage to or Loss of the Equipment; Requisition. Debtor assumes and
shall bear the entire risk of loss or damage to the Equipment from any and every
cause, whatsoever. No loss or damage to the Equipment or any pad thereof shall
affect any obligation of Debtor with respect to the Liabilities and this
Agreement, which shall continue in full force and effect. Debtor shall advise
Secured Party in writing promptly of any item of Equipment lost or damaged and
of the circumstances and extent of such damage. If the Equipment is totally
destroyed, irreparably damaged, lost, stolen or title thereto shall be
requisitioned or taken by any governmental authority under the power of eminent
domain or otherwise, Debtor shall, at the option of Debtor, so long as no Event
of Default exists under this Agreement, otherwise at the option of Secured
Party, replace the same with like equipment in good repair, condition, working
order and value, or pay to Secured Party all Liabilities due and to become due,
less the net amount of the recovery, if any, actually received by Secured Party
from insurance or otherwise for such destruction, damage, loss, theft,
requisition or taking. Whenever the Equipment is destroyed or damaged and, in
the reasonable discretion of Debtor so long as no Event of Default exists under
this Agreement, otherwise in the sole discretion of Secured Party, such
destruction or damage can be repaired, Debtor shall, at its expense, promptly
effect such repairs as Secured Party shall deem necessary for compliance with
clause (a) of paragraph 8 below. In accordance with the foregoing, any proceeds
of insurance received by Secured Party with respect to such reparable damage to
the Equipment shall, at the election of Secured Party or Debtor (as the case may
be), be applied either to the repair of the Equipment by payment by Secured
Party directly to the party completing the repairs, or to the reimbursement of
Debtor for the cost of such repairs; provided, however, that Secured Party shall
have no obligation to make such payment or any part thereof until receipt of
such evidence as Secured Party shall deem satisfactory that such
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repairs have been completed and further provided that Secured Party may apply
such proceeds to the payment of any of the Liabilities or the Other Liabilities
due if at the time such proceeds are received by Secured Party there shall have
occurred and be continuing any Event of Default hereunder or any event which
with lapse of time or notice, or both, would become an Event of Default. Debtor
shall, when and as reasonably requested by Secured Party, undertake, by
litigation or otherwise, in Debtor's name, the collection of any commercially
reasonable claim against any person for such destruction, damage, loss, theft,
requisition or taking, but Secured Party shall not be obligated to undertake, by
litigation or otherwise, the collection of any claim against any person for such
destruction, damage, loss, theft, requisition or taking.
7. Representations and Warranties of Debtor. Debtor represents and
warrants that: it has the right, power and authority to enter into and carry out
the terms and provisions of this Agreement; this Agreement constitutes a valid
obligation of the Debtor and is enforceable in accordance with its terms; and
entering into this Agreement and carrying out its terms and provisions will not
violate the terms or constitute a breach of (a) any other material agreement to
which Debtor is a party or (b) any other agreement, material or otherwise,
affecting or relating to the Equipment.
8. Affirmative Covenants of Debtor. Debtor shall (a) cause the Equipment
to be kept in good condition and use the Equipment only in the manner for which
it was designed and intended so as to subject it only to ordinary wear and tear
and cause to be made all needed and proper repairs, renewals and replacements
thereto; (b) maintain at all times property damage, fire, theft and
comprehensive insurance for the full replacement value of the Equipment, with
loss payable provisions in favor of Secured Party and any assignee of Secured
Party as their interests may appear, and maintain public liability insurance in
amounts reasonably satisfactory to Secured Party, naming Secured Party and any
assignee of Secured Party as insureds with all of said insurance and loss
payable provisions to be in form, substance and amount and written by
financially sound, commercial insurers reasonably satisfactory to Secured Party,
and deliver the policies therefor, or duplicates thereof, to Secured Party; (c)
pay or reimburse Secured Party for any and all taxes, assessments and other
governmental charges of whatever kind or character, however designated (together
with any penalties, fines or interest thereon) levied or based upon or with
respect to the Equipment, the Liabilities or this Agreement or upon the
manufacture, purchase, ownership, delivery, possession, use, storage, operation,
maintenance, repair, return or other disposition of the Equipment, or upon any
receipts or earnings arising therefrom, or for titling or registering the
Equipment, or upon the income or other proceeds received with respect to the
Equipment or this Agreement provided, however, that Debtor shall pay taxes on or
measured by the net income of Secured Party and franchise taxes of Secured Party
only to the extent that such net income taxes or franchise taxes are levied or
assessed in lieu of any other taxes, assessments or other governmental charges
hereinabove described; (d) pay all shipping and delivery charges and other
expenses incurred in connection with the Equipment and, unless contested in good
faith by appropriate proceedings with adequate reserves, pay all lawful claims,
whether for labor, materials, supplies, rents or services, which might or could
if unpaid become a lien on the Equipment; (e) comply with all governmental laws,
regulations, requirements and rules, all instructions and warranty requirements
of the manufacturer of the Equipment, and with the conditions and requirements
of all policies of insurance with respect to the Equipment and this Agreement;
(f) mark and identify the Equipment with all information and in such manner as
Secured Party may reasonably request from time to time and replace promptly any
such marking
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or identification which are removed, defaced or destroyed; (g) at any and all
times during business hours, grant to Secured Party free access to enter upon
the premises wherein the Equipment shall be located and permit Secured Party to
inspect the Equipment; (h) reimburse Secured Party for all charges, costs and
expenses (including reasonable attorneys' fees) incurred by Secured Party in
defending or protecting its interests in the Equipment, in the attempted
enforcement or enforcement of the provisions of this Agreement or in the
attempted collection or collection of any of the Liabilities; (i) indemnify and
hold any assignee of Secured Party, and Secured Party, harmless from and against
all claims, losses, liabilities, damages, judgments, suits, and all legal
proceedings, and any and all costs and expenses in connection therewith
(including reasonable attorneys' fees) arising out of or in any manner connected
with the manufacture, purchase, ownership, delivery, possession, use, storage,
operation, maintenance, repair, return or other disposition of the Equipment or
with this Agreement, including, without limitation, claims for injury to or
death of persons and for damage to property (but excluding any of the foregoing
in connection with the gross negligence or willful misconduct of Secured Party
or any assignee), and give Secured Party prompt notice of any such claim or
liability; and (j) maintain a system of accounts established and administered in
accordance with generally accepted accounting principles and practices
consistently applied, and, within forty-five (45) days after the end of each
fiscal quarter, deliver to Secured Party a balance sheet as at the end of such
quarter and statement of operations for such quarter, and, within one hundred
and twenty (120) days after the end of each fiscal year, deliver to Secured
Party a balance sheet as at the end of such year and statement of operations for
such year, in each case prepared in accordance with generally accepted
accounting principles and practices consistently applied and certified by
Debtor's chief financial officer as fairly presenting the financial position and
results of operation of Debtor, and, in the case of year end financial
statements, certified by an independent accounting firm acceptable to Secured
Party.
9. Negative Covenants of Debtor. Debtor shall not (a) create, incur,
assume or suffer to exist any mortgage, lien, pledge or other encumbrance or
attachment of any kind whatsoever upon, affecting or with respect to the
Equipment or this Agreement or any of Debtor's interests hereunder; (b) make any
changes or alterations in or to the Equipment (collectively, the "Alterations")
except (i) as necessary for compliance with clause (a) of paragraph 8 above, or
(ii) such Alterations which may be removed without any material damage to the
Equipment or do not materially reduce the value of the Equipment; (c) permit the
name of any person, association or corporation other than Secured Party to be
placed on the Equipment as a designation that might be interpreted as a claim of
interest in the Equipment; (d) part with possession or control of or suffer or
allow to pass out of its possession or control any of the Equipment or, without
delivering twenty (20) days prior written notice to Secured Party, change the
location of the Equipment or any part thereof from the location shown above; (e)
assign or in any way dispose of all or any part of its rights or obligations
under this Agreement or enter into any lease of all or any part of the
Equipment; (f) change its name or address from that set forth above unless it
shall have given Secured Party no less than twenty (20) days prior written
notice thereof; (g) sell any shares of its capital stock or transfer any
ownership interest in the Debtor to any person, persons, entity or entities
(whether in one single transaction or in multiple transactions) which results in
a transfer of a majority interest in the ownership and/or the control of the
Debtor from the person, persons, entity or entities who hold ownership and/or
control of the Debtor as of the date of this Agreement; or (h) consolidate with
or merge into or with any other entity, or purchase or otherwise acquire all or
substantially all of the assets or stock or other
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ownership interest of any person or entity sell, transfer, lease or
otherwise dispose of all or substantially all of Debtor's assets to any person
or entity.
10. Equipment Personalty. The Equipment is, and shall at all times be and
remain, personal property notwithstanding that the Equipment or any part thereof
may now be, or hereafter become, in any manner affixed or attached to, or
imbedded in, or permanently resting upon, real property or attached in any
manner to real property by cement, plaster, nails, bolts, screws or otherwise.
If requested by Secured Party with respect to any item of Equipment, Debtor will
obtain and deliver to Secured Party waivers of interest or liens in recordable
form, satisfactory to Secured Party, from all persons claiming any interest in
the real property on which such item of Equipment is installed or located.
11. Events of Default and Remedies. If any one or more of the following
events ("Events of Default") shall occur:
(a) Debtor shall fail to make any payment in respect of the Liabilities
within five business (5) days of when due; or
(b) any written certification, statement, representation, warranty or
financial report or statement heretofore or hereafter furnished by or on behalf
of Debtor or any guarantor of any or all of the Liabilities proves to have been
false in any material respect at the time as of which the facts therein set
forth were stated or certified or has omitted any material contingent or
unliquidated liability or claim against Debtor or any such guarantor; or
(c) Debtor or any guarantor of any or all of the Liabilities shall fail to
perform or observe any covenant, condition or agreement to be performed or
observed by it hereunder or under any guaranty agreement, which has not been
cured within twenty (20) days (except for any Financial Covenant(s) contained in
any Rider of even date herewith), provided that Secured Party shall have no
obligation to enter into any additional Loan Schedules during such cure period;
or
(d) Debtor or any guarantor of any or all of the Liabilities shall be
in breach of or in default in the payment and performance of any obligation
relating to any of the Other Liabilities; or
(e) Debtor or any guarantor of any of Debtor's obligations hereunder shall
be in breach of or in default in the payment or performance of any obligation
owing to any bank, lender, lessor or financial institution in connection with a
transaction in excess of $100,000,00, howsoever arising, present or future,
contracted for or acquired, and whether joint, several, absolute, contingent,
secured, unsecured, matured or unmatured; or
(f) Debtor or any guarantor of any or all of the Liabilities shall cease
doing business as a going concern, make an assignment for the benefit of
creditors, admit in writing its inability to pay its debts as they become due,
file a petition commencing a voluntary case under any chapter of Title 11 of the
United States Code entitled "Bankruptcy" (the "Bankruptcy Code"), be adjudicated
an insolvent, file a petition seeking for itself any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
arrangement under any present or future statute, law, rule or regulation or file
an answer admitting the material allegations of a
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petition filed against it in any such proceeding, consent to the filing of such
a petition or acquiescence in the appointment of a trustee, receiver or
liquidator of it or of all or any part of its assets or properties, or take any
action looking to its dissolution or liquidation; or
(g) (i) an order for relief against Debtor or any guarantor of any or all
of the Liabilities shall have been entered under any chapter of the Bankruptcy
Code or a decree or order by a court having jurisdiction in the premises shall
have been entered approving as properly filed a petition seeking reorganization,
arrangement, readjustment, liquidation, dissolution or similar relief against
Debtor or any guarantor of any or all of the Liabilities under any present or
future statute, law, rule or regulation which shall not, in each case, have been
stayed or dismissed within sixty (60) days, or (ii) within forty-five (45) days
after the appointment without Debtor's or such guarantor's consent or
acquiescence of any trustee, receiver or liquidator of it or such guarantor or
of all or any part of its or such guarantor's assets and properties, such
appointment shall not be vacated, or (iii) an order, judgment or decree which
would reasonably be expected to have a material adverse effect on Debtor's
business or financial condition, shall be entered against Debtor or such
guarantor by a court of competent jurisdiction and shall continue in effect for
any period of fifteen (15) consecutive days without a stay of execution, or any
execution or writ or process shall be issued under any action or proceeding
against Debtor whereby the Equipment or its use may be taken or restrained; or
(h) Debtor or any guarantor of any or all of the Liabilities shall suffer
an adverse material change in its financial condition as compared to such
condition as at the date hereof, and as a result of such change in condition
Secured Party deems itself or any of the Equipment to be insecure;
then and in any such event, Secured Party may, at the sole discretion of Secured
Party, without notice or demand and without limitation of any rights and
remedies of Secured Party under the Uniform Commercial Code, take any one or
more of the following steps:
(1) Declare all of the Time Balance to be due and payable, whereupon the
same shall forthwith mature and become due and payable as provided for in
paragraph 16 below, provided, however, upon the occurrence of any of the events
specified in subparagraphs (f) and (g) above, all sums as specified in this
clause (1) shall immediately be due and payable without notice to Debtor (the
date on which Secured Party declares all of the Time Balance to be due and
payable is hereinafter referred to as the "Declaration Date");
(2) proceed to protect and enforce its rights by suit in equity, action at
law or other appropriate proceedings, whether for the specific performance of
any agreement contained herein, or for an injunction against a violation of any
of the terms hereof, or in aid of the exercise of any other right, power or
remedy granted hereby or by law, equity or otherwise; and
(3) at any time and from time to time, with or without judicial process
and the aid or assistance of others, enter upon any premises wherein any of the
Equipment may be located and, without resistance or interference by Debtor, take
possession of the Equipment on any such premises, and require Debtor to assemble
and make available to Secured Party at the expense of Debtor any part or all of
the Equipment at any place or time designated by Secured Party; and remove any
part or all of the Equipment from any premises wherein the same may be located
for
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the purpose of effecting the sale or other disposition thereof; and sell,
resell, lease, assign and deliver, grant options for or otherwise dispose of any
or all of the Equipment in its then condition or following any commercially
reasonable preparation or processing, at public or private sale or proceedings,
by one or more contracts, in one or more parcels, at the same or different
times, with or without having the Equipment at the place of sale or other
disposition, for cash and/or credit, and upon any terms, at such place(s) and
time(s) and to such persons, firms or corporations as Secured Party shall deem
commercially reasonable and satisfactory to it, all without demand for
performance or any notice or advertisement whatsoever, except that Debtor shall
be given ten (10) days' written notice of the place and time of any public sale
or of the time after which any private sale or other intended disposition is to
be made, which notice Debtor hereby agrees shall be deemed reasonable notice
thereof. If any of the Equipment is sold by Secured Party upon credit or for
future delivery, Secured Party shall not be liable for the failure of the
purchaser to pay for same and in such event Secured Party may resell such
Equipment. Secured Party may buy any part or all of the Equipment at any public
sale and if any part or all of the Equipment is of a type customarily sold in a
recognized market or which is the subject of widely distributed standard price
quotations Secured Party may buy at private sale and may make payment therefor
by application of all or a part of the Liabilities and of all or a part of any
Other Liabilities. Any personalty in or attached to the Equipment when
repossessed may be held by Secured Party without any liability arising with
respect thereto, and any and all claims in connection with such personalty shall
be deemed to have been waived unless notice of such claim is made by certified
or registered mail upon Secured Party within five business days after
repossession.
Secured Party shall apply the cash proceeds from any sale or other disposition
of the Equipment first, to the reasonable expenses of re-taking, holding,
preparing for sale; selling, leasing and the like, and to reasonable attorneys'
fees and other expenses which are to be paid or reimbursed to Secured Party
pursuant hereto, and second, to all outstanding portions of the Liabilities and
to any Other Liabilities in such order as Secured Party may elect, and third,
any surplus to Debtor, subject to any duty of Secured Party imposed bylaw to the
holder of any subordinate security interest in the Equipment known to Secured
Party; provided however, that Debtor shall remain liable with respect to unpaid
portions of the Liabilities owing by it and will pay Secured Party on demand any
deficiency remaining with interest as provided for in paragraph 16 below.
12. Secured Party's Right to Perform for Debtor. If Debtor fails to
perform or comply with any of its agreements contained herein Secured Party may
perform or comply with such agreement and the amount of any payments and
expenses incurred by Secured Party in connection with such performance or
compliance, together with interest thereon at the rate provided for in paragraph
16 below, shall be deemed a part of the Liabilities and shall be payable by
Debtor upon demand.
13. Further Assurances. Debtor will cooperate with Secured Party for the
purpose of protecting the interests of Secured Party in the Equipment,
including, without limitation, the execution of all Uniform Commercial Code
financing statements requested by Secured Party. Secured Party and any assignee
of Secured Party are each authorized to the extent permitted by applicable law
to file one or more Uniform Commercial Code financing statements disclosing any
security interest in the Equipment without the signature of Debtor or signed by
Secured Party or any assignee of Secured Party as attorney-in-fact for Debtor.
Debtor will pay all costs
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of filing any financing, continuation or termination statements with respect to
this Agreement, including, without limitation, any documentary stamp taxes
relating thereto. Debtor will do whatever may be necessary to have a statement
of the interest of Secured Party and of any assignee of Secured Party in the
Equipment noted on any certificate of title relating to the Equipment and will
deposit said certificate with Secured Party or such assignee. Debtor shall
execute and deliver to Secured Party, upon request, such other instruments and
assurances as Secured Party deems necessary or advisable for the implementation,
effectuation, confirmation or perfection of this Agreement and any rights of
Secured Party hereunder.
14. Non-Waiver; Etc. No course of dealing by Secured Party or Debtor or
any delay or omission on the part of Secured Party in exercising any rights
hereunder shall operate as a waiver of any rights of Secured Party. No waiver or
consent shall be binding upon Secured Party unless it is in writing and signed
by Secured Party. A waiver on any one occasion shall not be construed as a bar
to or a waiver of any right and/or remedy on any future occasion. To the extent
permitted by applicable law, Debtor hereby waives the benefit and advantage of,
and covenants not to assert against Secured Party, any valuation, inquisition,
stay, appraisement, extension or redemption laws now existing or which may
hereafter exist which, but for this provision, might be applicable to any sale
or other disposition made under the judgment, order or decree of any court or
under the powers of sale and other disposition conferred by this Agreement or
otherwise. Debtor hereby waives any right to a jury trial with respect to any
matter arising under or in connection with this Agreement.
15. Entire Agreement; Severability; Etc. This Agreement constitutes the
entire agreement between Secured Party and Debtor and all conversations,
agreements and representations relating to this Agreement or to the Equipment
are integrated herein. If any provision hereof or any remedy herein provided for
shall be invalid under any applicable law, such provision or remedy shall be
inapplicable and deemed omitted, but the remaining provisions and remedies
hereunder shall be given effect in accordance with the intent hereof. Neither
this Agreement nor any term hereof may be changed, discharged, terminated or
waived except in an instrument in writing signed by the party against which
enforcement of the change, discharge, termination or waiver is sought. This
Agreement shall in all respects be governed by and construed in accordance with
the internal laws of the State of New York, including all matters of
construction, validity and performance, and shall be deemed a purchase money
security agreement within the meaning of the Uniform Commercial Code. The
captions in this Agreement are for convenience of reference only and shall not
define or limit any of the terms or provisions hereof. This Agreement shall
inure to the benefit of and be binding upon Secured Party and Debtor and their
respective successors and assigns, subject, however, to the limitations set
forth in this Agreement with respect to Debtors assignment hereof. No right or
remedy referred to in this Agreement is intended to be exclusive but each shall
be cumulative and in addition to any other right or remedy referred to in this
Agreement or otherwise available to Secured Party at law or in equity, and shall
be in addition to the provisions contained in any instrument referred to herein
and any instrument supplemental hereto. Debtor shall be liable for all costs and
expenses, including reasonable attorneys' fees and disbursements, incurred by
reason of the occurrence of any Event of Default or the exercise of Secured
Party's remedies with respect thereto. Time is of the essence with respect to
this Agreement and all of its provision.
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16. Prepayment; Rebate; Interest. Except for the installment payments of
the Time Balance as set forth in the Schedule of Obligations or as otherwise
provided in the prepayment agreement of even date herewith, the Debtor may not
prepay the Time Balance, in whole or in part, at any time. In the event Secured
Party declares all of the Time Balance to be due and payable pursuant to clause
(1) of paragraph 11 above, Debtor shall pay to Secured Party an amount equal to
the sum of (a) all accrued and unpaid amounts as of the Declaration Date plus
interest thereon, and (b) the present value of all future installments set forth
in this Agreement over the remaining unexpired term of this Agreement discounted
to present value using a discount rate of five percent (5%) provided that the
amount of interest earned by Secured Party computed as aforesaid shall not
exceed the highest amount permitted by applicable law. The Time Balance as
reduced to present value in accordance with the preceding sentence shall bear
interest from and after the Declaration Date, and all other Liabilities due and
payable under this Agreement (including past due installments) shall bear
interest from and after their respective due dates until paid in full, at the
lesser of 1.5% per month or the highest rate permitted by applicable law,
provided, however, that Debtor shall have no obligation to pay any interest on
interest except to the extent permitted by applicable law.
17. Consent to Jurisdiction. Debtor hereby irrevocably consents to the
jurisdiction of the courts of the State of New York and of any federal court
located in such state in connection with any action or proceeding arising out of
or relating to this Agreement or the transactions contemplated hereby. Any such
action or proceeding will be maintained in the United States District Court for
the Southern District of New York or in any court of the State of New York
located in the County of New York and Debtor waives any objections based upon
venue or forum non conveniens in connection with any such action or proceeding.
Debtor consents that process in any such action or proceeding may be served upon
it by registered mail directed to Debtor at its address set forth at the head of
this Agreement or in any other manner permitted by applicable law or rules of
court. Debtor hereby irrevocably appoints Incorporating Services, Inc. 15 East
North Street, Dover, Delaware (Kent County) as its agent to receive service of
process in any such action or proceeding. If such entity will not accept process
for Debtor, Secured Party may serve process on the Secretary of State of the
State of New York and in such case, Debtor irrevocably appoints it as agent to
receive service of process in any such action or proceeding.
18. Notices. Notice hereunder shall be deemed given if served personally
or by certified or registered mail, return receipt requested, to Secured Party
and Debtor at their respective addresses set forth at the head of this
Agreement. Any party hereto may from to time by written notice to the other
change the address to which notices are to be sent to such party. A copy of any
notice sent by Debtor to Secured Party shall be concurrently sent by Debtor to
any assignee of Secured Party of which Debtor has notice.
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<PAGE>
The Debtor agrees to all the provisions set forth above. This Agreement is
executed pursuant to due authorization. DEBTOR ACKNOWLEDGES RECEIPT OF A SIGNED
TRUE COPY OF THIS AGREEMENT.
Date August 17, 2001 Accepted on ______________, 20___
NetScreen Technologies, Inc. (Debtor) Wells Fargo Equipment Finance, Inc.
(Signature of Proprietor or name of (Secured Party)
Corporation or Partnership)
BY: /s/ Paul J. Carney BY:
------------------------------ ------------------------------
Its: V.P. Corporate Controller Its:
----------------------------- ------------------------------
(if Corporation, President of Vice President should sign and give
official title; if Partnership, state partner, a LLC., state member
or manager)
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