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EXHIBIT 10.10
[FINOVA LETTERHEAD]
MASTER LOAN AND SECURITY AGREEMENT
Master Loan and Security Agreement No. S730 Dated May 19, 1999
FINOVA Capital Corporation ("we," "us" or "FINOVA"), having its principal place
of business at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ is willing to
make a loan (the "Loan") to CoSine Communications, Inc. ("you" or "Borrower"),
having its principal place of business at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇, in one or more advances made from time to time (individually, an
"Advance" and collectively, the "Advances"), in the aggregate principal amount
of up to Two-Million Five-hundred Thousand Dollars ($2,500,000.00), under the
terms and conditions contained in this Master Loan and Security Agreement (this
"Master Agreement"). The entire Loan will be "cross collateralized" and secured
by the collateral (the "Collateral") described in each schedule (individually,
a "Schedule" and collectively, "Schedules") which will be executed in
connection with each Advance and the related Note (as hereinafter defined). The
Collateral includes the Equipment hereinafter described and any and all
replacement parts, additions, accessories and accessions that you may add to
the Equipment, as well as all replacements and substitutions of the Equipment
and all proceeds of the Equipment, including, without limitation, insurance
proceeds. We may treat any Schedule as a separate loan and security agreement
containing all of the provisions of this Master Agreement.
1. THE CREDIT
(a) ADVANCES. Each Advance shall be evidenced by and the specific terms
applicable thereto set forth in a Note and related Schedule. All of the Notes
and Schedules, taken together, will evidence the entire Loan. We will only make
the Loan to you if all the conditions in this Master Agreement have been met to
our satisfaction. We will rely on your representations and warranties contained
in this Master Agreement, in making the Loan. The terms of this Master
Agreement will each apply to the entire Loan.
(b) USE OF PROCEEDS. The proceeds of the Advances will be used solely to
reimburse you for your payment of the purchase price for equipment which is
satisfactory to us and which is described in the applicable Schedule
("Equipment"). If you have not yet paid for the Equipment (but the same is
otherwise satisfactory to us), the proceeds of the Advance will be paid by us
directly to the supplier (which you have chosen) to pay the purchase price of
the Equipment.
(c) NOTES. Your obligation to repay the Advance and to pay interest
thereon will be evidenced by separate secured promissory notes (individually, a
"Note" and collectively, the "Notes'). Each Note will be dated the date of the
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Schedule to which the Advance evidenced by the Note is related. The related
Schedule will be deemed to be part of the Note.
(d) TERM. The term ("Term") of each Schedule (and the related Advance)
begins upon the date that we make payment for the Collateral covered under the
Schedule (the "Closing Date"). The Term continues until you fully perform all
of your obligations under this Master Agreement, each related Schedule and the
related Note(s).
(e) LOAN ACCOUNT. We will keep a loan account on our books and records
for the Loan. We will record all payments of principal and interest in the loan
account. Unless the entries in the loan account are clearly in error, the loan
account will definitively indicate the outstanding principal balance and
accrued interest on the Loan.
(f) PAYMENTS. The scheduled payments of principal and interest (the
"Payments") are indicated on and due and payable in accordance with the terms
and applicable Note and Schedule. The Payments are payable in advance and
otherwise on the dates and in the amounts set forth on the applicable Schedule.
(g) FIRST PAYMENT AND SUBSEQUENT PAYMENTS. The first payment under a Note
and Advance ("First Payment") is due at the beginning of its Term and shall, at
our option, either be deducted from the proceeds of the Advance or paid directly
to us by you. Subsequent Payments are due on the thirtieth (30th) day of each
successive month (28th in February) as set forth on the Schedule until you pay
to us in full all of the Payments and any other fees, costs, charges and
expenses that you owe us.
(h) INTEREST. Prior to Maturity of an Advance, you will pay us interest
on the Advance at the interest rate indicated in the applicable Schedule (the
"Interest Rate"). "Maturity" means the scheduled maturity or any earlier date
on which we accelerate the Loan. The Payment amount indicated in the Schedule
includes interest at the applicable Interest Rate. Interest is calculated in
advance using a year of 360 days with twelve months of 30 days.
(i) INTERIM INTEREST PAYMENT. If an Advance is made on a day other than
the thirtieth (30th) or thirty-first (31st) day of a month, you will also pay
to us, together with the First Payment, interest on the Advance at the
applicable interest rate for the period from the date the Advance is made until
the twenty-ninth (29th) day of the month in which the Advance is made. If an
Advance is made on the thirty-first (31st) day of a month, you will also
pay to us, together with the First Payment, interest on the Advance at the
applicable interest rate for the period from the date the Advance is made until
the twenty-ninth (29th) day of the following month. If an Advance is made on
the thirtieth (30th) day of a month, no interim interest will be due.
(j) DEFAULT INTEREST RATE. After Maturity of the Loan or any Advance, you
will pay us interest thereon at a rate of four (4%) percent per year above the
applicable Interest Rate. This is referred to as the "Default Rate."
(k) USURY. You and we intend to obey the law. If the Interest Rate
charged would exceed the maximum legal rate, you will only have to pay the
maximum legal rate. You do not have to pay any excess interest over and above
the maximum legal rate of interest. However, if it later becomes legal for you
to pay all or part of any excess interest, you will then pay it to us upon our
request.
(l) PAYMENT DETAILS. You will make all Payments due under this Master
Agreement by 12:00 P.M., Connecticut time, on the day they are due. You will
make all Payments in US Dollars (US$) in immediately available funds. We do not
have to make or give "presentment, demand, protest or notice" to get paid. You
waive "presentment, demand, protest and notice."
(m) APPLICATION OF PAYMENTS. Each Payment under this Master Agreement is
to be applied in the following order: first, to any fees, costs, expenses and
charges you may owe us; second, to any interest due; and third to the principal
balance.
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(n) PREPAYMENT. You may not prepay the Loan or any Advance, in whole or
in part.
(o) NO SETOFFS. Your obligation to pay us all Payments is absolute and
unconditional. You are not excused from making the Payments, in full, for any
reason. You agree that you have no defense for failure to make the Payments and
you will not make any counterclaims or setoffs to avoid making the Payments.
2. SECURITY INTEREST
(a) You grant us a first and only lien on and security interest in the
Collateral. The Collateral secures the full and timely payment and performance
of all of your now existing or hereafter arising indebtedness, liabilities and
obligations to us, whether under this Master Agreement, the Schedules, the
Notes and any other agreement, loan or lease that you may at any time or times
have with us or otherwise (collectively, the "Obligations"). You also grant us
a security interest in any additional collateral identified in any Schedule.
Any additional collateral is considered to be "Collateral" and it secures all
of the Obligations.
(b) If we request, you will put labels supplied by us stating "PROPERTY
SUBJECT TO A SECURITY INTEREST HELD BY FINOVA CAPITAL CORPORATION" on the
Collateral where they are clearly visible.
(c) You give us permission to add to this Master Agreement or any
Schedule the serial numbers and other information about the Collateral.
(d) You give us permission to file this Master Agreement or Uniform
Commercial Code financing statements, at your expense, in order to perfect our
security interest in the Collateral. You also give us permission to sign your
name on the Uniform Commercial Code financing statements where this is
permitted by law.
(e) You will pay our fees and costs for documentation, closing,
administration and termination of this Master Agreement, the Notes and
Schedules. These fees include such items as reasonable attorneys fees and
expenses incurred in preparing this Master Agreement and all agreements,
instruments and documents executed in connection herewith, and all amendments,
supplements and waivers hereto and thereto, as well as due diligence searches
and fees for preparing and filing UCC terminations and releases. You will also
pay any filing, recording or stamp fees or taxes resulting from filing this
Master Agreement or Uniform Commercial Code financing statements.
(f) At your expense, you will defend our first priority security interest
in the Collateral against, and keep the Collateral free of, any legal process,
liens, other security interests, attachments, levies and executions. You will
give us immediate written notice of any legal process, liens, attachments,
levies or executions, and you will indemnify us against any loss that results
to us from these causes.
(g) You will notify us at least 15 days before you change the address of
your principal executive office or principal place of business. Your principal
executive office and principal place of business are set forth at the beginning
of this Master Agreement.
(h) You will promptly sign and return additional documents that we may
reasonably request in order to protect our first priority security interest in
the Collateral.
(i) Except as set forth in a Schedule, the Collateral is personal
property and will remain personal property. Except as set forth in a Schedule,
you will not incorporate it into real estate and will not do anything that will
cause the Collateral to become part of real estate or a fixture.
3. CONDITIONS OF LENDING
(a) See our Commitment Letter to you dated May 10, 1999 (the "Commitment
Letter"), which you and we consider to be a part of this Master Agreement. The
terms and conditions of the Commitment Letter continue following the making of
the first Advance, including, without
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limitation, conditions to the Loan. However, if there is a conflict between the
terms and conditions of this Master Agreement, any Schedule or any Note and the
terms and conditions of the Commitment Letter, then you and we agree that the
terms and conditions of this Master Agreement, the Schedules and the Notes
control over the Commitment Letter terms and conditions.
(b) Before we disburse any proceeds of any Advance, we also require the
following:
(i) That no payment is past due to us under any other agreement,
loan or lease that you or any guarantor have with us.
(ii) That you are complying with all terms of this Master Agreement,
the Schedules and the Notes and there are no defaults hereunder or thereunder.
(iii) That we have received all the documents we requested, including
the signed Schedule and Note.
(iv) That there has been no material adverse change in your
financial condition, business or operations, or that any guarantor, from the
financial condition that you or any guarantor have disclosed to us.
(v) All conditions contained in the Commitment Letter have been
satisfied.
4. REPRESENTATIONS AND WARRANTIES
You represent and warrant to us as follows:
(a) You and each guarantor are duly organized, existing and in good
standing wherever you or it are required by law to be so qualified. You and
each guarantor have full power and authority to execute, deliver and carry out
the provisions of this Master Agreement, the Schedules and the Notes and to
borrow hereunder and thereunder. This Master Agreement, the Schedules and the
Notes are validly executed and delivered by you and the guarantors and are the
legal, valid and binding obligations of you and the guarantors, each
enforceable in accordance with its terms.
(b) Neither you nor any guarantor is a defendant under any material
litigation and there are no judgments outstanding against you or any guarantor.
(c) All of the Equipment with respect to each Schedule executed by you has
been delivered to you and installed at the location set forth on the Schedule
and you have accepted all of such Equipment for all purposes of this Master
Agreement.
(d) You have good title to all of your assets, including, without
limitation, the Collateral, and in the case of the Collateral, free and clear
of all security interests, liens and other encumbrances. Upon filing of UCC-1
financing statements in all applicable filing offices, we will be granted a
first and only perfected lien on and security interest in all of the Collateral.
There are no other security interests, liens or encumbrances covering the
Collateral.
(e) You have supplied us with information about the Collateral. You
promise to us that the amount of our Advance as to each item of Equipment is no
more than the fair and usual price for this kind of Equipment, taking into
account any discounts, rebates and allowances that you or any affiliate of
yours may have been given for the Equipment.
(f) The Collateral is located at the premises set forth on the Schedule.
(g) All financial information and other information that you or any
guarantor have given us is true and complete. You or any guarantor have not
failed to tell us anything that would make the financial information not
misleading. There has been no material adverse change in your financial
condition, business or operations, or the financial condition of any guarantor,
from the financial condition that you disclosed to us.
(h) You have complied with all "environmental laws" and will continue to
comply with all "environmental laws." No "hazardous substances" are used,
generated, treated, stored, or
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disposed of by you or at your properties except in compliance with all
environmental laws. "Environmental laws" mean all federal, state or local
environmental laws and regulations, including the following laws: CERCLA, RCRA,
Hazardous Materials Transport act and The Federal Water Pollution Control Act.
"Hazardous substances" means all hazardous or toxic wastes, materials or
substances, as defined in the environmental laws, as well as oil, flammable
substances, asbestos that is or could become friable, urea formaldehyde
insulation, polychlorinated biphenyls and radon gas.
5. COVENANTS
You agree to do the following things (or not to do the following things if so
stated) until full payment of all amounts due to us under this Master
Agreement, the Schedules and the Notes:
(a) CARE, USE, LOCATION, TRANSFER, ENCUMBRANCE AND ALTERATION OF THE
COLLATERAL.
(i) You will make sure that the Collateral is maintained in good
operating condition, and that it is serviced, repaired and overhauled when this
is necessary to keep the Collateral in good operating condition. All
maintenance must be done according to the Supplier's or Manufacturer's
requirements or recommendations. All maintenance must also comply with any
legal or regulatory requirements.
(ii) You will maintain service logs for the Collateral, if
applicable, and permit us or our agents to inspect the Collateral, the service
logs and service reports. You give us and our agents permission to make copies
of the service logs and service reports.
(iii) We will give you prior notice if we, or our agents, want to
inspect the Collateral or the service logs or service reports. We may inspect
it during regular business hours. If we find during an inspection that you are
not complying with this Master Agreement or if you are otherwise in default
under this Master Agreement, you (and not us) will pay our travel, meals and
lodging costs, our salary costs, and our costs and fees and those of our agents
for reinspection. You will promptly cure any problems with the Collateral that
are discovered during our inspections.
(iv) You will use the Collateral only for business purposes. You
will obey all legal and regulatory requirements in your use of the Collateral.
(v) You will make all additions, modifications and improvements to
the Collateral that are required by law or government regulation. Otherwise,
you will not alter the Collateral without our written permission. You will
replace all worn, lost, stolen or destroyed parts of the Collateral with
replacement parts that are as good or better than the original parts.
The new parts will become subject to our security interest upon replacement.
(vi) You will not remove the Collateral from the location indicated
in the Schedule.
(vii) You have and will have good and merchantable title to all of
the Collateral.
(viii) You will not convey, assign, sell, mortgage, transfer,
encumber, pledge, hypothecate, grant a security interest in, grant options with
respect to, lease or otherwise dispose of all or any part of any interest
whatsoever in or to any or all of the Collateral, or any interest therein.
(b) YEAR 2000 COMPLIANT.
You represent, warrant and agree to take all action necessary, including, but
not limited to, due inquiry and due diligence with critical business partners
to assure that there will be no material adverse change to your business by
reason of the advent of the year 2000, including, without limitation, that all
computer-based systems, embedded microchips and other processing capabilities
effectively recognize and process all dates before and after December 31, 1999
("Y2K Compliant"). At our request, you shall provide to us assurance reasonably
acceptable to us that your computer-based systems, embedded microchips and
other processing capabilities are Y2K Compliant.
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(c) RISK OF LOSS.
(i) You have the complete risk of loss or damage to the Collateral.
Loss or damage to the Collateral will not relieve you of your obligation to make
the Payments.
(ii) If any Collateral is lost or damaged, you have two choices
although if you are in default under this Master Agreement, we and not you will
have the two options. The choices are:
(A) Repair or replace the damaged or lost Collateral so that, once
again, the Collateral is in good operating condition and we have a perfected
first priority security interest in it.
(B) Pay us the present value (as of the date of payment) of the
remaining Payments. We will calculate the present value using a discount rate of
five (5%) percent per year. Once you have paid us this amount and any other
amount that you may owe us, we will release our security interest in the damaged
or lost Collateral and you (or your insurer) may keep the Collateral for salvage
purposes, on an "AS IS, WHERE IS" basis and without any representation or
warranty whatsoever.
(d) INSURANCE.
(i) Until you have made all Payments to us under this Master Agreement,
the Schedules and the Notes and all Obligations have been satisfied in full, you
will keep the Collateral insured. The amount of insurance, the coverage, and the
insurance company must be acceptable to us.
(ii) If you do not provide us with written evidence of insurance that
is acceptable to us, we may buy the insurance ourselves, at your expense. You
will promptly pay us the cost of this insurance. We have no obligation to
purchase any insurance. Any insurance that we purchase will be our insurance,
and not yours, and we may insure the Collateral beyond the date of satisfaction
of the Obligations.
(iii) Insurance proceeds may be used to repair or replace damaged or
lost Collateral or to pay us the present value of the Payments, as provided
above.
(iv) You appoint us as your "attorney-in-fact" to make claims under the
insurance policies, to receive payments under the insurance policies, and to
endorse your name on all documents, checks or drafts relating to insurance
claims for Collateral.
(e) TAXES.
(i) You will pay all sales, use, excise, stamp, documentary and ad
valorum taxes, license, recording and registration fees, assessments, fines,
penalties and similar charges imposed on the ownership, possession, use lease or
rental of the Collateral or on the Loan.
(ii) You will pay all taxes (other than our federal or state net income
taxes) imposed on you or on us regarding the Payments.
(iii) You will reimburse us for any of these taxes that we pay or
advance.
(vi) You will file and pay for any personal property taxes on the
Collateral.
(f) INFORMATION SUPPLIED BY YOU AND ANY GUARANTOR.
(i) During the Term you will promptly provide us with copies of any
current, quarterly and annual reports and all proxy (or information) statements
you or any guarantor file with the Securities and Exchange Commission ("SEC").
(ii) You and any guarantor will also provide us with the following
financial statements:
(A) Quarterly balance sheet and statements of earnings and cash flow -
within 45 days after the end of your first three fiscal quarters in each fiscal
year. These will be certified by the chief financial officer.
(B) Annual balance sheet and statements of earnings and cash flow -
within 90 days after the end of each fiscal year. These will be audited
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by independent auditors acceptable to us. Their audit report must be
unqualified.
All financial statements will be prepared according to generally accepted
accounting principles, consistently applied. All financial statements and SEC
filings that you or any guarantor provide us will be true and complete. They
will not fail to tell us anything that would make them not misleading.
(iii) At the same time you deliver the financial statements described in
paragraph 5(f)(ii)(A), you will also provide us with a certificate of your
chief financial officer stating that no default exists, or, if he cannot
certify this because a default does exist, he must specify in reasonable detail
the nature of the default.
(iv) The audited financial statements described in paragraph
5(f)(ii)(B), must be accompanied by a certificate of such independent auditor
stating that no default exists, or, if it cannot certify this because a default
does exist, it must specify in reasonable detail the nature of the default.
6. DEFAULTS
(a) DEFAULTS. You are in default if any of the following happens:
(i) You do not pay us, when it is due, any Payment or other
payment that you owe us under this Master Agreement, any Schedule or any Note
or that you owe under any other agreement, loan, lease or other financial
arrangement that you have with us.
(ii) Any of the financial information that you give us is not true
and complete, or you fail to tell us anything that would make the financial
information not misleading.
(iii) You do something you are not permitted to do, or you fail to
do anything that is required of you, under this Master Agreement, any Schedule
or any other lease, loan or other financial arrangement that you have with us.
(iv) An event of default occurs for any other lease, loan or
obligation of yours (or any guarantor) that exceeds $50,000 in the aggregate.
(v) You or any guarantor file bankruptcy, or involuntary
bankruptcy is filed against you or any guarantor and such involuntary
bankruptcy is not dismissed within sixty (60) days.
(vi) You or any guarantor are subject to any other insolvency
proceeding other than bankruptcy (for example, a receivership action or an
assignment for the benefit of creditors) and such proceeding that is
involuntary is not dismissed within sixty (60) days.
(vii) Without our permission, you or any guarantor sell all or a
substantial part of its assets, merge or consolidate, or a majority of your
voting stock or interests (or any guarantor's voting stock or interests) is
transferred.
(viii) There is a material adverse change in your financial
condition, business or operations, or that of any guarantor.
(b) REMEDIES, DEFAULT INTEREST, LATE FEES.
If you are in default we may exercise one or more of our
"remedies." Each of our remedies is independent. We may exercise any of our
remedies, all of our remedies or none of our remedies. We may exercise them in
any order we choose. Our exercise of any remedy will not prevent us from
exercising any other remedy or be an "election of remedies." If we do not
exercise a remedy, or if we delay in exercising a remedy, this does not mean
that we are forgiving your default or that we are giving up our right to
exercise the remedy. Our remedies allow us to do one or more of the following:
(i) "Accelerate" the Loan balance under any or all Notes. This
means that we may require you to immediately pay us the entire outstanding
principal balance of the entire Loan.
(ii) Require you to immediately pay us all amounts that you are
required to pay us for the entire Term of any other agreements, loan, leases or
financial arrangements that you have with us.
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(iii) ▇▇▇ you for the entire outstanding principal balance of the Loan
and all other amounts you owe us (including, without limitation, all accrued and
unpaid interest, including interest at the Default Rate), outstanding fees,
costs, expenses and charges, plus all prepayment premiums.
(iv) Require you at your expense to assemble the Collateral at a
location we request in the United States of America.
(v) Remove and repossess the Collateral from where it is located,
without demand or notice, or make the Collateral inoperable. We have your
permission to remove any physical obstructions to removal of the Collateral. We
may also disconnect and separate all Collateral from other property. No court
order, court hearing or "legal process" will be required for us to repossess the
Collateral. You will not be entitled to any damages resulting from removal or
repossession of the Collateral. We may use, ship, store, repair or lease any
Collateral that we repossess. We may sell any repossessed Collateral at private
or public sale. You give us permission to show the Collateral to buyers at your
location free of charge during normal business hours. If we do this, we do not
have to remove the Collateral from your location. If we repossess the Collateral
and sell it, we will give you credit for the net sale price, after subtracting
our costs of repossessing and selling the Collateral. If we rent the Collateral
to somebody else, we will give you credit for the net rent received, after
subtracting our costs of repossessing and renting the Collateral, but the credit
will be discounted to present value using a discount rate equal to the Default
Rate. The credit will be applied against what you owe us under this Master
Agreement, the Schedules, the Notes and any other agreements, loans, leases or
financial arrangements that you have with us, we will refund the amount of the
excess to you.
(vi) We will have all of our rights and remedies under this Master
Agreement, the Notes, the Schedules and all agreements, instruments and
documents executed in connection herewith and therewith and all of our rights
and remedies under applicable law, whether as a secured party or otherwise.
(vii) Return conditions:
(A) Following a default, at our request you will return the Collateral,
freight and insurance prepaid by you, to us at a location we request in the
United States of America. It will be returned in good operating condition, as
required by Section 5 above. The Collateral will not be subject to any liens
when it is returned.
(B) You will pack or crate the Collateral for shipping in the original
containers, or comparable ones. You will do this carefully and follow all
recommendations of the Supplier and the Manufacturer as to packing or crating.
(C) You will also return to us the plans, specifications, operating
manuals, software, documentation, discs, warranties and other documents
furnished by the Manufacturer or Supplier. You will also return to us all
service logs and service reports, as well as all written materials that you may
have concerning the maintenance and operation of the Collateral.
(D) At our request, you will provide us with up to 60 days free storage
of the Collateral at your location, and will let us (or our agent) have access
to the Collateral in order to inspect it, display it to others for purchase and
sell it.
(E) You will pay us what it costs us to repair the Collateral if you do
not return it in the required condition.
(viii) You will also pay us the following:
(A) All our expenses of enforcing our remedies. This includes all our
expenses to repossess, store, ship, repair and sell the Collateral.
(B) Our reasonable attorney's fees and expenses.
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(C) Default interest on everything you owe us from the date of your
default to the date on which we are paid in full at the Default Rate.
(D) A premium in the amount of five percent (5%) of the outstanding
principal balance of the Loan.
(ix) You will pay us a late fee whenever you pay any amount that you owe
us more than ten (10) days after it is due. You will pay the late fee within
one month after the late Payment was originally due. The late fee will be ten
(10%) percent of the late Payment. If this exceeds the highest legal amount we
can charge you, you will only be required to pay the highest legal amount. The
late fee is intended to reimburse us for our collection costs that are caused
by late Payment. It is charged in addition to all other amounts you are required
to pay us, including Default Interest.
(x) You realize that the damages we could suffer as a result of your
default are very uncertain. This is why we have agreed with you in advance on
the Default Rate to be used in calculating the payments you will owe us if you
default. You agree that, for these reasons, the payments you will owe us if you
default are "agreed" or "liquidated" damages. You understand that these payments
are not "penalties" or "forfeitures."
7. PERFORMING YOUR OBLIGATIONS IF YOU DO NOT
If you do not perform one or more of your obligations under this Master
Agreement of a Schedule or Note, we may perform it for you. We will notify you
in writing at least ten (10) days before we do this. We do not have to perform
any of your obligations for you. If we do choose to perform them, you will pay
us all of our expenses to perform the obligations. You will also reimburse us
for any money that we advance to perform your obligations, together with
interest at the Default Rate on that amount. These will be additional
"Payments" that you will owe us and you will pay them at the same time that
your next Payment is due.
8. INDEMNITY
(a) You will indemnify us, defend us and hold us harmless from and against
any and all claims, expenses and attorney's fees concerning or arising from the
Collateral, this Master Agreement, any Schedule or Note, or your breach of any
representation, warranty or covenant. It includes, without limitation, any
claims, losses or charges concerning, arising out of or in connection with the
manufacture, selection, delivery, possession, use, operation or return of the
Collateral and any claims, losses or damages concerning, arising out of or in
connection with this Master Agreement, any Schedule or the Notes.
(b) This obligation of yours to indemnify us continues even after the
Term is over.
9. MISCELLANEOUS
(a) ASSIGNMENT.
WE MAY ASSIGN OR GRANT A SECURITY INTEREST IN THIS MASTER AGREEMENT, ANY
SCHEDULE, ANY NOTE OR ANY PAYMENTS WITHOUT YOUR PERMISSION. THE PERSON TO WHOM
WE ASSIGN IS CALLED THE "ASSIGNEE." THE ASSIGNEE WILL NOT HAVE ANY OF OUR
OBLIGATIONS UNDER THIS MASTER AGREEMENT. YOU WILL NOT BE ABLE TO RAISE ANY
DEFENSE, COUNTERCLAIM OR OFFSET AGAINST THE ASSIGNEE. NOTWITHSTANDING ANY SUCH
ASSIGNMENT OR GRANTING OF A SECURITY INTEREST, WE WILL CONTINUE TO BE LIABLE
FOR ALL OF OUR OBLIGATIONS UNDER THIS MASTER AGREEMENT.
UNLESS YOU RECEIVE OUR WRITTEN PERMISSION, YOU MAY NOT ASSIGN OR TRANSFER YOUR
RIGHTS UNDER THIS MASTER AGREEMENT OR ANY SCHEDULE. YOU ALSO ARE NOT ALLOWED TO
LEASE OR RENT THE COLLATERAL OR LET ANYBODY ELSE USE IT UNLESS WE GIVE YOU OUR
WRITTEN PERMISSION.
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(b) ACCEPTANCE BY FINOVA, GOVERNING LAW, JURISDICTION, VENUE, SERVICE
OF PROCESS, WAIVER OF JURY TRIAL.
THIS MASTER AGREEMENT WILL ONLY BE BINDING WHEN WE HAVE ACCEPTED IT IN WRITING.
THIS MASTER AGREEMENT IS GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF
ARIZONA (NOT INCLUDING THE "CHOICE OF LAW" DOCTRINE), THE STATE IN WHICH OUR
OFFICE IS LOCATED IN WHICH FINAL APPROVAL OF THE TERMS OR CONDITIONS OF THIS
MASTER AGREEMENT OCCURRED AND FROM WHICH DISBURSEMENT OF THE LOAN PROCEEDS WILL
BE ORDERED. HOWEVER, IF THIS MASTER AGREEMENT IS UNENFORCEABLE UNDER ARIZONA
LAW, IT WILL INSTEAD BE GOVERNED BY THE LAWS OF THE STATE IN WHICH THE
COLLATERAL IS LOCATED.
YOU MAY ONLY ▇▇▇ US IN FEDERAL OR STATE COURT THAT IS LOCATED IN MARICOPA
COUNTY, ARIZONA. THIS APPLIES TO ALL LAWSUITS UNDER ALL LEGAL THEORIES,
INCLUDING CONTRACT, TORT AND STRICT LIABILITY. YOU CONSENT TO THE PERSONAL
JURISDICTION OF THESE ARIZONA COURTS. YOUR WILL NOT CLAIM THAT MARICOPA COUNTY,
ARIZONA, IS AN "INCONVENIENT FORUM" OR THAT IT IS NOT A PROPER "VENUE."
WE MAY ▇▇▇ YOU IN ANY COURT THAT HAS JURISDICTION. WE MAY SERVE YOU WITH
PROCESS IN A LAWSUIT BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO YOUR
ADDRESS INDICATED AFTER YOUR SIGNATURE BELOW.
YOU AND WE EACH WAIVE ANY RIGHT YOU OR WE MAY HAVE TO A JURY TRIAL IN ANY
LAWSUIT BETWEEN YOU AND US.
(c) NOTICES. Your address for notices is your address set forth below
your name on the signature page of this Master Agreement. We may give you
written notice in person, by mail, by overnight delivery service, or by fax.
Mail notice will be effective three (3) days after we deposit it with the U.S.
Postal Service. Overnight delivery notice requires a receipt and tracking
number. Fax notice requires a receipt from the sending machine showing that it
has been sent to your fax number and received.
Our address for notices if our address set forth below our name on the signature
page of this Master Agreement, with Attention: Director, Contract
Administration. You will also give copies of all notices to us at our principal
place of business at the address set forth in the opening paragraph of this
Master Agreement, with attention to Vice President, Law Department. You may
give us notice the same way that we may give you notice.
(d) GENERAL
This Master Agreement benefits our successors and assigns. This Master Agreement
benefits only those successors and assigns of yours that we have approved in
writing.
This Master Agreement binds your successors and assigns. This Master Agreement
binds only those successors and assigns of ours that clearly assume our
obligations in writing.
TIME IS OF THE ESSENCE OF THIS MASTER AGREEMENT.
This Master Agreement, all of the Schedules and the Notes and the Commitment
Letter are together the entire agreement between you and us concerning the
Collateral.
Only an employee of FINOVA who is authorized by corporate resolution or policy
may modify or amend this Master Agreement or any Schedule or Note on our
behalf, and this must be in writing. Only he or she may give up any of our
rights, and this must be in writing. If more than one person is the Borrower
under this Master Agreement, then each of you is jointly and severally liable
for your obligations under this Master Agreement and all Schedules and Notes.
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This Master Agreement is only for your benefit and for our benefit, as well as
our successors and assigns. It is not intended to benefit any other person.
If any provision in this Master Agreement is unenforceable, then that provision
must be deleted. Only unenforceable provisions are to be deleted. The rest of
this Master Agreement will remain as written.
We may make press releases and publish a tombstone announcing this transaction
and its total amount. You may publicize this transaction with our prior written
consent.
LENDER: BORROWER:
FINOVA CAPITAL CORPORATION COSINE COMMUNICATIONS, INC.
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
BY: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ BY: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------- -----------------------------------
PRINTED NAME: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ PRINTED NAME: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------ ------------------------
TITLE: Director - Contract Administration TITLE: CFO
-------------------------------- --------------------------------
FAX NUMBER: (▇▇▇) ▇▇▇-▇▇▇▇ Taxpayer ID# ▇▇-▇▇▇▇▇▇▇
-------------------------
DATE ACCEPTED: May 8, 2000
------------------------ FAX NUMBER: ▇▇▇.▇▇▇.▇▇▇▇
-------------------------
DATED: 5.2.00
--------------------------------
STATE OF CALIFORNIA
----------
COUNTY OF SAN MATEO
---------
I acknowledge that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ who stated that he is C.F.O. of the Borrower
named above, signed this Master Loan and Security Agreement in my presence
today: June 22, 1999. He acknowledged to me that his signature on this Master
Loan and Security Agreement was authorized by a valid resolution or other valid
authorization from Borrower's board of directors or other governing body.
[NOTARY PUBLIC SEAL]
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Commission # 1203924 ----------------------------------
Notary Public - California Notary Public
San Mateo County
My Comm. Expires JUNE 25, 2003 [SEAL]
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