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EQUIPMENT TERM NOTE NO. 1 OF 2
Not to Exceed $250,000 Rockville, Maryland
April 5, 1996
FOR VALUE RECEIVED, the undersigned, VISUAL NETWORKS, INC., a Delaware
corporation ("Borrower") promises to pay to the order of SILICON VALLEY BANK,
a California-chartered bank ("Bank"), at such place as the holder hereof may
designate, in lawful money of the United States of America, the aggregate
unpaid principal amount of all advances "Equipment Advances") made by Bank to
Borrower in accordance with the terms and conditions of the Loan and Security
Agreement between Borrower and Bank of even date herewith, as amended from
time to time (the "Loan Agreement"), up to a maximum principal amount of Two
Hundred Fifty Thousand Dollars ($250,000) ("Principal Sum"), or so much
thereof as may be advanced. Equipment Advances may be made under this Note
on or prior to June 30, 1996 (the "Tranche One End Date").
Borrower shall pay interest on the outstanding Principal Sum, as follows:
Commencing as of the date hereof and continuing until repayment in full
of all sums due hereunder, the unpaid Principal Sum shall bear interest at
the variable rate of interest, per annum, most recently announced by Bank as
its "prime rate," whether or not such announced rate is the lowest rate
available from Bank (the "Prime Rate") plus two percent (2.0%) per annum.
The rate of interest charged under this Note shall change immediately and
contemporaneously with any change in the Prime Rate. All interest payable
under the terms of this Note shall be calculated on the basis of a 360-day
year and the actual number of days elapsed.
The unpaid Principal Sum, together with interest thereon at the rate or
rates provided above, shall be payable as follows:
(a) Interest only on the unpaid principal amount shall be due and
payable monthly in arrears, commencing July 5, 1996, and continuing on the
same day of each calendar month thereafter to maturity; and
(b) In addition to the monthly payments of interest as set forth
above, the unpaid Principal Sum shall be due and payable in equal consecutive
monthly installments in an amount equal to one-thirty six of the unpaid
Principal Sum as of the Tranche One End Date, commencing on July 5, 1996 and
continuing on the same day of each calendar month thereafter to maturity; and
(c) Unless sooner paid, the unpaid Principal Sum, together with
interest accrued and unpaid thereon, shall be due and payable in full on June
5, 1999.
This Note is the "Equipment Term Note No. 1" described in the Loan
Agreement, to which reference is hereby made for a more complete statement of
the terms and conditions under
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which the loans and advance evidenced hereby are made. This Note is secured as
provided in the Loan Agreement. All capitalized terms used herein and not
otherwise defined shall have the meanings given to such terms in the Loan
Agreement.
Borrower irrevocably waives the right to direct the application of any
and all payments at any time hereafter received by Bank from or on behalf of
Xxxxxxxx and Borrower irrevocably agrees that Bank shall have the continuing
exclusive right to apply any and all such payments against the then due and
owing obligations of Borrower as Bank may deem advisable. In the absence of
a specific determination by Bank with respect thereto, all payments shall be
applied in the following order: (a) then due and payable fees and expenses;
(b) then due and payable interest payments and mandatory prepayments; and (c)
then due and payable principal payments and optional prepayments.
Bank is hereby authorized by Borrower to endorse on Bank's books and
records each Advance made by Bank under this Note and the amount of each
payment or prepayment of principal of each such Advance received by Bank; it
being understood, however, that failure to make any such endorsement (or any
error in notation) shall not affect the obligations of Borrower with respect
to Equipment Advances made hereunder, and payments of principal by Borrower
shall be credited to Borrower notwithstanding the failure to make a notation
(or any errors in notation) thereof on such books and records.
The occurrence of any one or more of the following events shall
constitute an event of default (individually, an "Event of Default" and
collectively, the "Events of Default") under the terms of this Note:
(a) The failure of Borrower to pay to Bank when due any and all
amounts payable by Borrower to Bank under the terms of this Note; or
(b) The occurrence of an Event of Default (as defined therein) under
the terms and conditions of any of the other Loan Documents.
Upon the occurrence of an Event of Default, at the option of Bank, all
amounts payable by Borrower to Bank under the terms of this Note shall
immediately become due and payable by Borrower to Bank without notice to
Borrower or any other person, and Bank shall have all of the rights, powers,
and remedies available under the terms of this Note, any of the other Loan
Documents and all applicable laws. Borrower and all endorsers, guarantors,
and other parties who may now or in the future be primarily or secondarily
liable for the payment of the indebtedness evidenced by this Note hereby
severally waive presentment, protest and demand, notice of protest, notice of
demand and of dishonor and non-payment of this Note and expressy agree that
this Note or any payment hereunder may be extended from time to time without
in any way affecting the liability of Borrower, guarantors and endorsers.
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Borrower promises to pay all costs and expense of collection of this
Note and to pay all reasonable attorneys' fees incurred in such collection,
whether or not there is a suit or action, or in any suit or action to collect
this Note or in any appeal thereof. Borrower waives presentment, demand,
protest, notice of protest, notice of dishonor, notice of nonpayment, and any
and all other notices and demands in connection with the delivery,
acceptance, performance default or enforcement of this Note, as well as any
applicable statutes of limitations. No delay by Bank in exercising any power
or right hereunder shall operate as a waiver of any power or right. Time is
of the essence as to all obligations hereunder.
This Note is issued pursuant to the Loan Agreement, which shall govern
the rights and obligations of Borrower with respect to all obligations
hereunder.
Xxxxxxxx acknowledges and agrees that this Note shall be governed by
the laws of the State of Maryland, excluding conflicts of laws principles,
even though for the convenience and at the request of Xxxxxxxx, this Note may
be executed elsewhere.
BORROWER ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT
OF COMPETENT JURISDICTION IN THE STATE OF MARYLAND IN ANY ACTION, SUIT, OR
PROCEEDING OF ANY KIND, AGAINST IT WHICH ARISES OUT OF OR BY REASON OF THIS
AGREEMENT; PROVIDED, HOWEVER, THAT IF FOR ANY REASON BANK CANNOT AVAIL ITSELF
OF THE COURTS OF MARYLAND, XXXXXXXX ACCEPTS JURISDICTION OF THE COURTS AND
VENUE IN SANTA XXXXX COUNTY, CALIFORNIA. BORROWER AND BANK EACH HEREBY WAIVE
THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS
CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. EACH PARTY RECOGNIZES
AND AGREES THAT THE FOREGOING WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR IT
TO ENTER INTO THIS AGREEMENT. EACH PARTY REPRESENTS AND WARRANTS THAT IT HAS
REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL.
IN WITNESS WHEREOF, Xxxxxxxx has caused this Note to be executed under
seal by its duly authorized officers as of the date first written above.
WITNESS OR ATTEST: VISUAL NETWORKS, INC.
/S Xxxxxxx Xxxxxx By: /S Xxxxx X. Xxxxxxxx (SEAL)
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Name: Xxxxx X. Xxxxxxxx
Title: President/CEO
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